The National Insurance Commission (NAICOM) and the Bureau of Public Procurement (BPP) have signed a Memorandum of Understanding to harmonise requirements for issuing insurance bonds within Nigeria’s public procurement system.
The agreement was formalised on Monday in Abuja by the heads of both agencies.
Speaking at the signing ceremony, the Commissioner for Insurance, Olusegun Omosehin, said the partnership would enhance transparency and accountability in the sector.
“This will ensure that citizens benefit from the transformation in the sector,” he said.
Insurance bonds, also known as financial guarantee insurance, provide assurance that bond issuers, such as government entities or corporations, will repay principal and interest to investors in the event of default.
Omosehin noted that NAICOM is mandated to ensure insurance providers remain financially sound and capable of meeting their obligations, especially during crises.
He explained that since insurance services are part of public procurement, closer collaboration with the BPP was necessary to ensure guidelines and requirements are properly defined and enforced.
“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.
The commissioner added that consumer protection, regulatory capacity building, and financial stability of insurance firms remain top priorities for the Commission.
He stressed that achieving the administration’s broader reform agenda requires strong inter-agency cooperation, including the ability to track insurance procurements and ensure compliance after approvals are granted.
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Director-General of the BPP, Dr. Adebowale Adedokun, commended NAICOM’s reform efforts and described a strong insurance sector as essential to economic growth.
He said the BPP would rely on NAICOM’s technical expertise and data resources when reviewing insurance-related procurement requests.
“We receive requests for insurance procurement, and we do not have the total technical expertise,” Adedokun said.
“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 also warned that unethical practices would not be tolerated, insisting that insurers must adhere to governance standards and professional codes of conduct.
