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(2023.06.29-ний өдрийн орчуулга) Unofficial translation
LAW OF MONGOLIA
October 6, 2011 Ulaanbaatar city
ON DRIVER'S INSURANCE
CHAPTER ONE
GENERAL PROVISIONS
Article 1.Purpose of the Law
1.1.The purpose of this Law is to regulate relations in connection with covering the drivers under the mandatory insurance of liability, compensating for damages caused to the life, health and property of others as a result of traffic accidents, and protecting the victims' rights.
Article 2.Legislation on Driver's insurance
2.1.Legislation on mandatory insurance of the driver's liability /hereinafter referred to as "driver's insurance"/ shall consist of the Constitution of Mongolia, the Civil Code, the Law on the Legal Status of the Financial Regulatory Commission, the Law on Insurance, the Law on Insurance Intermediaries, the Law on Traffic Safety, Law on Auto Transportation, this Law and other legislative acts issued in conformity with them.
2.2.If an international treaty to which Mongolia is party provides otherwise than this Law, then the provisions of the international treaty shall prevail.
Article 3.Definitions of legal terms
3.1.The following terms used in this Law shall be interpreted as follows:
3.1.1."driver" shall mean a person driving an auto transportation vehicle and a motorcycle;
3.1.2."auto transportation vehicle" shall mean the definition specified in sub-paragraph 3.1.1 of the Law on Auto Transportation;
3.1.3."insurer" shall mean a legal entity permitted to engage in the activities of the driver's insurance by entering into insurance contracts with insureds and accepting the obligations to provide compensations to victims with the amount and conditions specified in such contracts;
3.1.4."insured" shall mean the person making a contract with an insurer and having insured the liability to be held before others during his/her participation in the traffic;
3.1.5."insured's trust/credit history" shall mean information on an insured being maintained by an insurer;
3.1.6."compensation of the driver's insurance" /hereinafter referred to as "compensation"/ shall mean monetary assets to be provided to a victim from an insurer in the case of occurrence of an insurance event as specified in an insurance contract and/or monetary assets to be provided to a victim from the driver's insurance fund where an insurance compensation according to an insurance contract cannot be provided;
3.1.7."driver's insurance fund" shall mean a fund established by variety of insurers in accordance with this Law for the purpose of compensating the damage caused to other persons by drivers where there is not covered by driver's insurance, or duration of the insurance contract has expired, as well as the driver has escaped after making an insurance event or an insurer has been bankrupted;
3.1.8."emergency service office of the driver's insurance fund" /hereinafter referred to as "emergency service office"/ shall mean an office engaging activities on providing assistance in the form of receiving information on events of the driver's insurance from insurers, insured, drivers, and victim citizens, and establishing possibilities for insurers, insured and victims to determine the insurance events promptly and accurately;
3.1.9."driver's insurance event" /hereinafter referred to as "insurance event"/ shall mean an event to be made by a driver during his/her participation in traffic causing damage to life, health and property of other persons and undertaking the responsibility;
3.1.10."victim" shall mean a person that has incurred damage to his/her health and property due to an insurance event or a person with a right to demand compensations for damages where an individual has died due to an insurance event.
Article 4.Principles of the insurance
4.1.The driver's insurance shall be based on the following principles:
4.1.1.to be covered under the mandatory insurance of driver by each owner of a transportation vehicle;
4.1.2.to provide compensation to the victims;
4.1.3.not to participate in traffic for a driver who has not covered under the driver's insurance;
4.1.4.to create financial source to restore the violated rights of citizens due to traffic accidents and to compensate the damages.
Article 5.Persons to be insured
5.1.Each owner of a transportation vehicle shall be covered under the mandatory driver's insurance.
5.2.If the owner of the transportation vehicle is not covered under the driver's insurance, it shall be prohibited to participate in traffic using the transportation vehicle, submit his/her transportation vehicles for technical inspection, and register it with the state registry.
5.3.Professional drivers specified in sub-paragraph 3.1.15 of the Law on Auto Transportation and a driver participating in traffic using transportation vehicles with the classification "C" and "D" shall be insured under the driver's insurance regardless of the ownership of a transportation vehicle.
Article 6.Conditions not to be covered under the insurance
6.1.A person insured in competent insurance organization of a member country to an international mandatory insurance association to which Mongolia is a party may not be covered under the insurance stipulated in this Law.
6.2.This Law shall not apply to special purpose warfare vehicles or transportation vehicles belonging to investigative services, police, intelligence agency, armed forces, border guards, court decision enforcement and emergency agencies those do not participate in traffic.
/This paragraph was amended by the law as of July 5, 2013/
/This paragraph was amended by the law as of May 10, 2018/
6.3.If the victims claim from the drivers or faulty person exceeding the amount specified by this Law and this Law shall not apply to such exceeding parts.
6.4.The competent person to be imposed an administrative liability specified in paragraph 28.1 of this Law shall not be covered under the insurance specified in this Law when performing his/her official duties upon driving the transportation vehicle of a driver who has violated this Law and the legislation on Traffic safety in order deliver, transport and transfer it to the state authorities.
/This paragraph was added by the law as of July 5, 2023/
CHAPTER TWO
INSURANCE CONTRACT
Article 7.An insurance contract and its terms
7.1.Drivers shall conclude an insurance contracts with insurers according to conditions specified in this Law for the purpose of compensating potential damage to life, health and property of others during their participation in traffic.
7.2.The insured shall fill and submit an application to the insurers according to the approved form.
7.3.The Insurance contracts shall be concluded in writing according to standard and template specified in paragraph 7.4 of this Law and shall be invalid where such requirements are not satisfied.
7.4.The Financial Regulatory Commission shall determine the format of the insurance application and the standard and template of the contract.
7.5.The insured shall have a right to freely and voluntarily select his/her insurers.
7.6.The insurance contract shall be effective for the period of up to one year and it shall enter into force with the payment of the insurance premium by the insured.
7.7.The insurer shall be obliged to provide all information related to the insurance contract those have been arisen during the term of the insurance contract at free of charge to insureds.
Article 8.Insurance guarantee
8.1.The insurer immediately upon concluding an insurance contract shall provide the insured with an insurance guarantee certifying the conclusion of the contract.
8.2.The drivers shall permanently place the guarantees in their auto transportation vehicles and be inspected by the competent authorities when it is required.
8.3.The Chairman of the Financial Regulatory Commission and Cabinet member in charge of legal affairs shall jointly approve the template and the application procedure of the insurance guarantee.
/This paragraph was amended by the law as of August 17, 2012/
CHAPTER THREE
ASSESSMENT OF THE INSURANCE AND ITS FEE
Article 9.Insurance assessment
9.1.The amount of the driver's insurance assessment or one-time compensation for each insurance event shall have the following amount:
9.1.1.up to five million tugrug for transportation vehicles specified in sub-paragraphs 10.1.1, 10.1.2 and 10.1.5 of this Law;
9.1.2.up to ten million tugrug for transportation vehicles specified in paragraphs 10.1.3 and 10.1.4 of this Law.
9.2.Insurers and insured may mutually agree to set the insurance assessment higher than the assessment specified in paragraph 9.1 of this Law and in this event the amount of the insurance fee can be determined differently from that specified in this Law in accordance insurance contract.
Article 10.Base fee of the insurance
10.1.The insured specified in paragraph 5.1 of this Law shall pay the following base fees:
10.1.1. 12,500 tugrug for transportation vehicles of the classification "A";
10.1.2. 33,000 tugrug for transportation vehicles of the classification "B";
10.1.3. 42,500 tugrug for transportation vehicles of the classification "C";
10.1.4. 53,000 tugrug for transportation vehicles of the classification "D";
10.1.5. 12,500 tugrug for transportation vehicles of the classification "mechanism".
10.2.Insured specified in paragraph 5.3 of this Law shall pay 33,000 tugrug as the base insurance fee.
Article 11.Insurance fee
11.1.In order to determine the insurance fee, the amount of base insurance fee shall be calculated upon increasing or decreasing by the following coefficients on:
11.1.1.the territorial location of using the transportation vehicle;
11.1.2.the number of insurance events occurred through the fault of the insured and amounts of the provided compensations during the period of previous contracts;
11.1.3.the age of the insured and experience of driving an auto transportation vehicle;
11.1.4.the period of the insurance contract;
11.1.5.whether false information is intentionally provided to affect the process to determine the insurance fee amount lower than the requirement in the procedure or to increase the insurance compensation;
11.1.6.the number of drivers using the transportation vehicle;
11.1.7.the capacity of the transportation vehicle, number of passenger seats and power or the engine;
11.1.8.the purpose of the transportation vehicle;
11.1.9.whether there is a trailer.
11.2.The Financial Regulatory Commission shall adopt a procedure on using the coefficient to calculate the insurance fee amount.
CHAPTER FOUR
INSURANCE EVENT AND COMPENSATION
Article 12.Damages not belonging to insurance events
12.1.The following damages shall not belong to insurance events:
12.1.1.psychological damages;
12.1.2.damages occurring from the pollution of the environment;
12.1.3.damages incurred to the auto transportation vehicle and luggage load of the insured;
12.1.4.damages exceeding the amount specified in this Law and the insurance contract.
12.2.The compensations for damages specified in paragraph 12.1 of this Law shall be decided in accordance with the procedures specified in the relevant legislation of Mongolia.
Article 13.Duties undertaken by drivers
13.1.The insured shall undertake the following duties in the occurrence of an insurance event:
13.1.1.to inform the victim with respect to his/her coverage under the driver's insurance;
13.1.2.to inform the insurer and police regarding the occurrence of the insurance event and to be inspected the insurance guarantee;
13.1.3.to provide the information required for determining the insurance event and amount of compensation within the period demanded by the insurer and competent persons;
13.1.4.to inform the emergency service office and, where necessary, police if the insurer is bankrupted.
13.2.Uninsured drivers shall immediately undertake the following duties in the occurrence of an insurance event:
13.2.1.to inform the victim with respect to not covered under the driver's insurance;
13.2.2.to inform the emergency service office and police regarding the insurance event.
13.3.The persons specified in paragraphs 13.1 and 13.2 of this Law shall immediately fill in and sign the insurance event description form immediately after occurrence of the insurance event.
13.4.If a driver and a victim have agreed to compensate the damage incurred due to the insurance event immediately after the occurrence of such insurance event, the insurer shall be notified in regards with it and the driver may compensate the damage according to the instruction of the insurer with the reimbursement by the insurer.
13.5.The insurer and the driver's insurance fund shall not bear any responsibility for consequences arising out of the insured's failure to implement the duties specified paragraphs 13.1 and 13.4 of this Law without reasonable excuse and the insured shall be liable for the damages on his/her own.
13.6.The insurer and the driver's insurance fund shall not bear any responsibility for consequences arising out of the uninsured driver's failure to implement the duties specified in paragraph 13.2 of this Law without reasonable excuse and the driver shall be liable for the damages on his/her own.
Article 14.Duties undertaken by a victim
14.1.A victim shall inform the emergency service office and police if a driver who made an insurance event is escaped.
14.2.A victim shall be obliged to provide all information proving the damages occurred to his/her life, health and property to the insurer, emergency service office and insurance damage assessor.
Article 15.Rights and duties of insurer and the driver's insurance fund
15.1.An insurer and the driver's insurance fund shall have a right to demand from the insureds and victims the information required for determining the insurance compensation or damages amount.
15.2.An insurer and the emergency service office shall have a duty to immediately send their representatives to the place of an insurance event immediately after receiving the information of the respective insurance event.
15.3.Insurers shall exempt the insureds from obligations before the third parties in an amount specified in the insurance contract after determining the insurance compensation amount and guilt of the insureds in instances other than those specified in paragraph 19.2 of this Law.
Article 16.Inspection of insurance events
16.1.The representatives of the insurer and the driver's insurance fund shall have a duty to inspect the insurance event and appoint an insurance damage assessor within three days after submitting an application by the victim, his/her lawful representative or the insured.
16.2.The representatives of the insurer and the driver's insurance fund may extend the period specified in paragraph 16.1 of this Law for up to ten days by taking into account of the territorial location of the insurance event with permission of the victim and the insured.
16.3.The competent persons specified in the law or insurance damage assessors may conduct a technical inspection of an auto transportation vehicle for the purpose of inspecting the insurance event and determining the damage amount.
16.4.If the representatives of the insurer and the driver's insurance fund failed to inspect the insurance event or to appoint an insurance damage assessor within the period specified in paragraph 16.1 of this Law, the insured, the driver and the victim shall have a right to apply to loss adjuster specified in sub-paragraph 3.2.4 of the Law on Insurance intermediaries.
16.5.Unless otherwise provided by the insurance contract, the insurer and the driver's insurance fund shall bear the expenses related to inspecting the insurance event, determining the compensation amount and evaluating the damage.
16.6.An insurance event shall be determined on the basis of an insurance event description specified in paragraph 16.6 of the Law on Traffic Safety.
Article 17.Determining the damage amount
17.1.Unless otherwise provided by the law, the insurer, insurance damage assessor and a competent person specified in the law shall determine the amount of damage incurred to life, health and property of victims in the following way:
17.1.1.according to Article 508 of the Civil Code in the case of a victim's death;
17.1.2.according to the amount mutually agreed to by the parties where the victim, insured and the insurer unanimously agreed regarding the amount of damages incurred to the victim's health and property;
17.1.3.according to Article 505 of the Civil Code if the victim, the insured and the insurer disagree on the amount of damages incurred to the health of the victim;
17.1.4.according to Article 510 of the Civil Code if the victim, the insured and the insurer disagree on the amount of damages incurred to the property of the victim.
Article 18.Providing compensations from the driver's insurance fund
18.1.The driver's insurance fund shall provide compensations to the victim based on his/her applications if one of the following grounds exists:
18.1.1.a person without insurance has committed an insurance event;
18.1.2.a person whose period of the insurance contract is expired has committed an insurance event;
18.1.3.a person incurred the damages to the life and health of others is unclear;
18.1.4.the insurer is bankrupted;
18.1.5.other grounds specified in the legislation.
Article 19.Providing compensation
19.1.The insurer and the driver's insurance fund shall determine the amount of compensation to be provided to the victim on the basis of opinions and conclusions of competent persons specified in the law or insurance damage assessors, and the grounds specified in Article 17 of this Law.
19.2.If the damages incurred to the life and health of the victim, the insurer and driver's insurance fund shall provide the compensation to the victim within ten business days since determining the amount of the compensation in accordance with the procedure specified in Articles 16 and 17 of this Law regardless of whether the guilty of the insured is proven or not.
19.3.If the damage incurred to the property of the victim and the guilty of the insured is proven, the compensation shall be provided to the victim within one month after determining the amount of the compensation in accordance with the procedure specified in Articles 16 and 17 of this Law.
19.4.The insurer and the driver's insurance fund may negotiate to repair the property within the scope of the insurance assessment upon agreeing with the victim when providing a compensation against the damage incurred to the property of the victim.
19.5.The compensation shall be partially provided on the basis of a request from the victim until the compensation amount is fully determined.
19.6.Where the compensation is to be partially provided on the request of several victims before the full determination of the compensation amount, it shall be provided to each victim in equal amounts at the first time, then after the full determination of the compensation amount, it shall be provided in proportion.
19.7.Where the amount of compensations provided to several victims exceeds the amount specified in Article 9 of this Law, the compensation shall be provided to each victim in proportion.
19.8.The insurer and the driver's insurance fund shall provide the police with information related to provision of compensations to victims, and the Financial Regulatory Commission and the state central administrative body in charge of legal affairs shall jointly approve a procedure on submitting the information and using it.
/This paragraph was amended by the law as of August 17, 2012/
19.9.Up to eighty percent of the compensation to the victim shall be provided for damage incurred to the life and health of the victim and up to twenty percent of the compensation for the damages incurred to the property of the victim.
19.10.The compensation for each insurance event occurred when the insured specified in Article 5.3 of this Law was driving a transportation vehicle of the insured specified in Article 5.1 of this Law shall be paid by each insurer according to the ratio of insurance fees paid by each of the insureds.
Article 20.Grounds to reclaim the compensations
20.1.The insurer shall exercise a right to reclaim the compensations provided to victims from the faulty persons on the following grounds:
20.1.1.from the guilty person if the conclusion and decision of competent persons specified in the law determines that the damage to the victim have not occurred due to the guilty of the insured;
20.1.2.from the insured and the driver if the occurrence of insurance events have not been notified to the persons specified in paragraphs 13.1 and 13.2. of this Law;
20.1.3.from the insured if the insured has escaped from the place of the insurance event;
20.1.4.from the insured if the insured has committed the insurance event during the usage of alcoholic beverages or narcotic substances;
20.1.5.from the guilty person in other instances specified in the law.
20.2.The driver's insurance fund shall exercise a right to reclaim the compensations to victims from the guilty persons on the following events:
20.2.1.from the guilty person if the conclusion and decision of competent persons specified in the law determine that the damage to the victim have not occurred due to the guilt of the driver;
20.2.2.from the driver if the conclusion and decision of competent persons specified in the law determine that the damage to the victim occurred due to the guilt of the driver without insurance;
20.2.3.from the driver regarding the damage caused by the driver who committed an insurance event and escaped;
20.2.4.from the persons inheriting the rights according to the law where the insurer is bankrupted;
20.2.5.other grounds specified in the law.
CHAPTER FIVE
COMPOSITION AND EXPENDITURE OF THE DRIVER'S INSURANCE FUND
Article 21.Driver's insurance fund
21.1.The driver's insurance fund shall be an integral part of the mandatory insurance fund specified in Article 121.3.3 of the Law on Insurance and shall possess an independent account and a registration separate from other forms of the mandatory insurance funds.
21.2.The mandatory insurance association specified in Article 121 of the Law on Insurance shall annually produce statements on the composition and expenditure of the fund, and the Financial Regulatory Commission shall oversee the activities and report of the fund.
21.3.The Financial Regulatory Commission shall adopt a procedure on the placement of the fund account, accumulation of the financing, transfer and expenditure of the fund assets of the driver's insurance fund.
Article 22.Composition of the driver's insurance fund
22.1.The fund shall consist of the following sources:
22.2.1.asset accumulated from each insurer engaging activities of the driver's insurance;
22.1.2.fifty percent of the income specified in paragraph 28.1 of this Law;
/This sub-paragraph was invalidated by the law as of November 13, 2019/
22.1.3.compensations re-claimed according to paragraph 20.2 of this Law;
22.1.4.ten percent of the tax on auto transportation and self-moving vehicles;
/This sub-paragraph was invalidated by the law as of November 13, 2019/
22.1.5.income from being used under payment the database specified in paragraph 24.6 of this Law;
22.1.6.income from loans, aid and donations.
22.2.The Financial Regulatory Commission and the state central administrative body in charge of finance and budget matters shall jointly determine annually the amount of the asset centralized in accordance with sub-paragraph 22.1.1 of this Law.
22.3.The Government member in charge of finance and budget and auto road matters shall jointly adopt the procedure on transferring the source specified in sub-paragraphs 22.1.2 and 22.1.4 of this Law to the account of the driver's insurance fund.
/This paragraph was invalidated by the law as of November 13, 2019/
22.4.If the assets of the fund have become insufficient for implementation of the primary objectives of the fund, the assets may be drawn from the association members according to the decision of the Governing board of the Mandatory insurance association.
Article 23.Expenditure of the driver's insurance fund
23.1.The assets of the fund may be expended for the following purposes:
23.1.1.to provide compensation specified in paragraph 18.1 of this Law;
23.1.2.to maintain the driver's insurance database specified in paragraph 24.1 of this Law;
23.1.3.to finance the activities of the emergency service office and the fund;
23.1.4.to finance of training and advertisements aimed at reducing traffic accidents.
23.2.The assets of the driver's insurance fund shall be prohibited to be used for purposes other than those specified in paragraph 23.1 of this Law.
23.3.The Mandatory insurance association shall determine the percentage and amount of assets from the driver's insurance fund intended to be spent for the activities specified in sub-paragraph 23.1.4 of this Law.
CHAPTER SIX
DATABASE AND EMERGENCY SERVICE OFFICE
Article 24.Driver's insurance database
24.1.The database of the driver's insurance /hereinafter referred to as "database"/ shall be an integral part of the consolidated mandatory insurance database specified in sub-paragraph 121.3.1 of the Law on Insurance and shall be an independent database with separate registration from other mandatory insurance databases.
24.2.The database shall include information on insurance contracts, insurance events, compensation provided to victims, an insurer, insured and victims, and other information related to the driver's insurance.
24.3.The information in the database shall be open and publicly accessible.
24.4.Members of the Association of Mandatory Insurers specified in Article 121 of the Law on Insurance, insurers and insured shall have a right to use free of charge the information related to themselves, as well as the state institutions and officials who are resolving cases and disputes in connection with the driver's insurance shall exercise a right to use the information of the database free of charge.
24.5.The information of the database shall be used on a paid basis in instances other than those specified in Paragraph 24.4 of this Law.
24.6.The Association of Mandatory Insurers shall determine the procedure on being used information in the database and the amount of service fee and its income shall be spent for financing the activities of the database.
Article 25.Emergency service office
25.1.The emergency service office shall be an integral part of the emergency service office specified in sub-paragraph 121.3.2 of the Law on Insurance and may be separate from other types of mandatory insurance emergency service offices.
25.2.The emergency service office shall receive information on traffic accidents due to the driver from insureds, insurer, drivers, victims and citizens, and work to establish for insurers, insured, drivers and victims the possibility to accurately and immediately determine the compensation to be provided to victims due to insurance events.
25.3.The Financial Regulatory Commission shall adopt an operational procedure, structure and composition of the emergency service office based on the opinion of the Association of Mandatory Insurers.
CHAPTER SEVEN
DATABASE, EMERGENCY SERVICE OFFICE
Article 26.Supervision on insurance activities
26.1.The Financial Regulatory Commission shall ensure the consolidated coordination of activities by the insurers engaging in the driver's insurance and supervise on their activities.
26.2.The Financial Regulatory Commission shall adopt a procedure to allocate the drivers who are failing to enter into insurance contracts on the grounds of their frequent incidences of insurance events to insurers.
26.3.The state inspection department for traffic safety and the state central administrative body in charge of auto transportation matters shall supervise on the implementation of provisions specified in paragraphs 5.1-5.3 of this Law.
26.4.The Government member in charge of border protection matters shall jointly with the Financial Regulatory Commission adopt a procedure on covering the transportation vehicles entering the territory of Mongolia on a transit or temporarily under the driver's insurance at the border area.
Article 27.Dispute settlement procedure
27.1.The disputes arisen in connection with the driver's insurance shall be settled in accordance with the procedure specified in Article 82 of the Law on Insurance.
Article 28.Liability for the violators of the law
28.1.In case the actions of a civil servant violating this Law does not constitute a criminal nature, they shall be subject to liability specified in the Law on Civil Service.
28.2.Any person or legal entity that violates this Law shall be subject to liability specified in the Criminal Code or the Law on Violations.
/This paragraph was modified by the law as of December 4, 2015/
Article 29.Entry into force of the Law
29.1.This Law shall be enter into force on January 1, 2012.
29.2.Article 18 of this Law concerning the compensations from the driver's insurance fund shall enter into force on January 1, 2013.
29.3.Sub-paragraph 28.1.1 of this Law shall enter into force on October 1, 2012.
