Insurance sector

Insurance  activities  in Mongolia  are  regulated  by  the  Insurance Law of Mongolia, which was approved  in 2004 and enforced  in 2005, and  Insurance  Intermediaries Law and Driver’s  Insurance Law. Under these  laws,  the Financial Regulatory Commission  of Mongolia  (FRC) is  responsible  for  regulating  insurance companies  through  its adoption of regulations and issuing insurance contracts with insurance companies that have not obtained a license from the FRC, including foreign insurance companies, unless FRC approval is obtained. At present the regulatory minimum share capital is MNT 2,75 billion (approximately USD 1.6 million) and expected to increase to MNT 5 billion (approximately USD 3 million) in 2017.

The Mongolian  insurance market  is at an early  stage of development with  insurance penetration (premium  income as a share of GDP) of only 0.5%, though it is growing at fast rate. In the last fve years total assets have more than tripled, whilst the gross written premium has doubled. At present the insurance sector consists of 17 insurance companies; 16 general insurance and one life insurance Company. The top five largest  insurance companies  represent more  than 70% of gross written premium. The majority of insurance products cover property and liability insurance. As the size and financial strength of Mongolian insurance companies is limited, high risk and high value insurance policies are usually re-insured with international reinsurance companies.

Mining  sector  growth  is  expected  to  be  the  key  driving  force behind  the  expansion  of  the Mongolian  insurance  industry. Workers, equipment, infrastructure, and mines themselves will all need to be covered  as projects become operational. Rapid  expansion planned  for  the following years, however, necessitates  further  improvements  in capital management,  as well  as  insurance  and financial  risk management  and other internal process of insurance companies.

At present time, there are 17 insurance companies, 24 insurance broker firms, 17 insurance loss adjuster firms, 15 professional actuaries and 3,400 insurance agents are operating in Mongolia.

Financial Regulatory Commission of Mongolia (FRC) is responsible for supervision of financial institutions including insurance companies, savings and credit cooperatives and non- banking financial  institutions. http://www.frc.mn