The National Insurance Commission (NAICOM) and the Bureau of Public Procurement (BPP) have signed a Memorandum of Understanding (MoU) aimed at harmonising requirements for issuing insurance bonds within Nigeria’s public procurement framework.
The agreement was formalised on Monday in Abuja by the heads of both agencies, marking a strategic partnership to enhance transparency and accountability in the sector.
Key Objectives of the MoU
- Standardising Insurance Bonds: Insurance bonds, also known as financial guarantee insurance, ensure that issuers—government agencies or corporations—repay principal and interest to investors in case of default.
- Regulatory Oversight: NAICOM will ensure insurance providers remain financially sound and capable of meeting obligations, particularly during crises.
- Guidelines Enforcement: Collaboration with the BPP will define and enforce proper procurement guidelines and requirements for insurance services.
- Consumer Protection and Stability: The partnership prioritises regulatory capacity building, consumer protection, and the financial stability of insurance firms.
Statements from Leadership
The Commissioner for Insurance, Olusegun Omosehin, emphasised that inter-agency cooperation is critical for tracking insurance procurements and ensuring compliance post-approval. “Insurance, being one of those services that will be procured, needs to be properly understood — the guidelines, the requirements, and what it should deliver,” he said.
BPP Director-General, Dr. Adebowale Adedokun, commended NAICOM’s reform efforts and highlighted the importance of a strong insurance sector for economic growth. He assured that BPP would leverage NAICOM’s technical expertise and data when reviewing insurance-related procurement requests. “This handshake today is to say that any time we have requests for insurance, we will seek your guidance to be sure we do not give approvals that we cannot defend,” he stated.
Both agencies underscored that unethical practices will not be tolerated, insisting that insurers adhere to governance standards and professional codes of conduct.
The MoU reflects a commitment to strengthen compliance, promote financial accountability, and support the administration’s broader reform agenda in public procurement.
