Under the "Strengthening Budget and Financial Stability Project" implemented in cooperation with the World Bank, the Ministry of Finance, the Financial Regulatory Commission /FRC/, and the Mongolian Insurance Association have prepared the draft revisions to the Law on Insurance, the Law on Insurance Intermediation, and the Law on Drivers’ Insurance. Within the scope of gradually implementing legal reforms in the insurance sector, in accordance with the relevant policy and planning of the Parliament and Government of Mongolia, the draft revisions of the laws were published on the Ministry of Finance’s website in June 2022 and have carried out the public discussion step electronically, thus reflected 277 suggestions received from the professional associations, stakeholders and individuals. The revised versions of the laws were prepared for the next round of discussions.
Thus, on 17, 18, and 19 August 2022, the working group of the Financial Regulation Committee /FRC/ and the Mongolian Insurance Association held a joint vacuum meeting at the FRC building for 3 days. Shortly after the Pandemic, the Law on State Savings was approved in order to enforce financial discipline in the government, its organizations at all levels, public services, and their activities, and in connection with ensuring transparency, increasing efficiency, and limiting and monitoring waste. Therefore, these draft laws were prepared in an environmentally friendly manner, with 100% digital presentation of the drafts and information at zero cost without the use of paper handouts. In this way, the Ministry of Finance and other affiliated organizations have successfully organized a number of discussions to encourage others to set a good example of how any public discussion can be held in an environmentally friendly manner without spending budgetary money.
At the meeting, they got acquainted with the basis and research of the suggestions and were mutually agreed upon, 50 suggestions of which were related to the draft Law on Insurance Brokerage, 13 of which were related to the Law on insurance intermediation, and 10 suggestions of which were submitted on the draft Law on Driver's Insurance. Representing the Insurance Association of Mongolia, A. Anarmaa, lawyer of Mongolia Insurance LLC; J. Davaasuren, lawyer of Bod Insurance LLC; O. Gerelmaa, G. Anu-Ujin, lawyer of Monre Insurance LLC; S. Maralmaa, lawyer of Tenger Insurance LLC; and J. Batjargal, Executive Director of the Insurance Association of Mongolia; and Z. Batbold, Head of the Insurance Department, P. Tserendejid, Senior Referee, E. Sainzaya, Specialist, O. Byambasuren, Ts. Dolgorsuren, Specialist, N. Battsetseg, Senior Specialist, P. Monkhsaikhan, referent N. Dulamsuren, B. Nyam-Ochir, senior specialist of the Legal Department, who represented the Financial Regulatory Commission and N. Tuvshinjargal, senior specialist of the Ministry of Finance, project consultant B. Javkhlantsogt, representing the Ministry of Finance, held the discussion.
By including the relevant proposals in the revised draft of the insurance package laws, the boundaries of insurance categories will be clarified, the classification nomenclature will be formulated more clearly for the users, the insurance industry participants will be able to provide and develop insurance services based on advanced electronic technology, create a legal environment, develop life insurance, and compulsory insurance. Moreover, it will enable the creation of a unified system, support technology-based insurance products and services, create professional investor insurers, improve the optimal risk management system, and improve the legal environment to protect the interests of policyholders. Also, in order to improve the risk management system, legal provisions relating to the improvement of the reinsurance operation system, increasing the capacity of domestic insurers, and reducing the outflow of foreign currency by including the regulation of insuring a certain percentage of reinsurance to domestic reinsurers, enabling electronic and advanced insurance operations which creates the opportunity to use technology, develop, and create a legal environment, were all reflected in the revised draft of the Insurance Law.
By revising the Driver's Insurance Law, the quality and service of the insurance will be improved, insurance premiums and evaluations will be in line with international standards, based on actual values, government involvement will be reduced, the damage will be quickly assessed in the event of an insurance incident, compensation will be provided in a short period of time, and road accidents will be reduced and the rights of the victim will be protected in case of insurance events.
The driver's insurance fund was only responsible for providing insurance compensation to the victim due to the conditions stipulated by the law that the insurer would not provide compensation but the revised law stipulates that the insurers themselves would now be responsible for this activity, which means the victim would have the opportunity to receive insurance compensation regardless of whether the victim was insured or not. By reflecting such provisions, the reputation of the insurance industry will be increased and will enable the insurers to create a unit that is in charge of resolving the urgent services within the organizational structure and the package draft laws are being finalized to be submitted to the Parliament of Mongolia.
WORLD BANK WORKING GROUP MET WITH PIU AND IMPLEMENTING ORGANIZATIONS REGARDING THE COMPLETION REPORT OF THE STRENGTHENING GOVERNANCE IN MONGOLIA PROJECT
Concerning the Strengthening Governance in Mongolia project, which was completed on February 28, 2023, the World Bank working group to develop the project completion report had an official meeting with Project Implementation Unit (PIU) and implementing organizations on March 30, 2023. The purpose of the working group meeting is to review the implementation of the project, the results achieved, and the fulfillment of the project indicators.
PERFORMANCE BASED FINANCING: INSPIRING NEW APPROACHES TO PUBLIC FINANCIAL MANAGEMENT IN HEALTH AND EDUCATION
Performance based financing (PBF) links funds or payments to service providers to results achieved and gives them considerable autonomy in the use of these funds. The strategic approach is appealing to many individuals and organizations as it motivates them to perform better and channels resources directly to the frontlines. This in turn fosters greater accountability. Using this approach has been popular in different sectors with some promising results emerging.
AN INTEGRATED SYSTEM FOR RESULTS-BASED MEDIUM-TERM BUDGET PLANNING: IN ACHIEVING THE GOALS OF IMPROVING BUDGET PLANNING, BUDGET EFFICIENCY AND PROGRAM OUTCOME.
Under the scope of improving public financial management, Mongolia is aiming to introduce result-oriented medium-term budgeting, transitioning from the traditional input-based budgeting. This goal is aligned with development policy of Mongolia to shift from medium-term fiscal framework (MTFF) to medium-term expenditure framework (MTEF).
The MOF is entering the new phase of PFM Reform Action Plan
Within the framework of the European Union financed, World Bank managed “Strengthening Governance in Mongolia” project, the Ministry of Finance, in compliance with the “Sustainable Development Vision 2030” and the “Action Program of the Government of Mongolia for 2016-2020”, has approved and implemented the Public Financial Management (PFM) Reform Strategy and the Action Plan for 2018-2022. The overarching objective of the strategy was to improve governance and achieve effective resource allocation and efficient public service delivery. The implementation status of the PFM Action Plan is indicated as “Certain results have been achieved” at the rate of 85 percent.
LAUNCHED BETA VERSION OF THE REDEVELOPED GLASS ACCOUNT PORTAL
The Ministry of Finance Mongolia has developed and successfully launched the new version of the Glass Account Portal in 2023 within the framework of the Strengthening Governance in Mongolia Project jointly implemented by the EU and the World bank.
New systems and services are added in the Intermediate service platform for fiscal and financial systems
The Ministry of Finance Mongolia has developed and successfully launched the Intermediate Service Platform (ISP) in 2022 within the framework of the Strengthening Governance in Mongolia Project. The main purpose of the system is to provide a possibility of information /web services/ exchange between the independent systems of the Ministry of Finance and other organizations in a easy and flexible way. In addition, it is solving the issues of overlapping connections and development between many information systems and organizations, transferring them to a unified standard, making it has no complexity, and more secure.