ESTABLISHMENT OF A GREEN INSURANCE REGULATORY ENVIRONMENT

Like elsewhere, internationally, the Financial Regulatory Commission (FRC) is approving sustainable development policies, and implementing sustainable financing principles, to combat environmental degradation (such as environmental pollution, ozone depletion and global warming). Green insurance is a way of implementing the principle of sustainable financing; which includes green investment and green products. Green (eco-friendly) insurance and related products are designed to support reductions in climate change and environmental pollution.

In Mongolia, Parliament has approved the Green Development Policy and within the framework of this, a joint order has been adopted to approve the Green Taxonomy to lay the foundations for a green economy and green finance. The Order was initiated by the Chairman of the FRC, the Minister of Finance, the Governor of the Bank of Mongolia, and the CEO of the Deposit Insurance Corporation. Although the legal framework of the insurance industry does not define the term ‘green insurance’, insurance products related to environmentally-friendly products and services are sold. For example, environmentally friendly insurance-supported products, such as Practical Bicycle Insurance and Nomin Prius Car Insurance have been registered with the FRC. There is a demand for green insurance products and services to within the market, and they will provide a major impetus for the sustainable development and implementation of green economy policies in Mongolia.

Based on policies pursued by Parliament (the Government, international experience and current trends) the FRC is working to incorporate the name, terminology and regulation of Green Insurance into the legal environment of the insurance sector. In this context, a draft resolution has been developed to include regulations related to green insurance in relevant annexes and procedures of the Insurance Package Regulation (approved by the Commission's Resolution No. 02 of 2019).