NAICOM, BPP Partner to Standardise Bond Issuance

The National Insurance Commission and the Bureau of Public Procurement have entered into a Memorandum of Understanding to harmonise guidelines for issuing insurance bonds within Nigeria’s public procurement framework.

The agreement was formalised in Abuja by the heads of both agencies as part of efforts to enhance oversight and ensure consistency in the issuance of financial guarantee instruments.

Insurance bonds, also known as financial guarantee insurance, provide assurance that issuers, including government bodies and corporate organisations, will meet their financial obligations in the event of default.

Speaking at the signing ceremony, the Commissioner for Insurance, Olusegun Omosehin, said the collaboration would improve transparency and accountability within the sector. He noted that NAICOM is mandated to ensure that insurance companies remain financially stable and capable of fulfilling their obligations, especially during periods of economic stress.

He explained that since insurance services are part of public procurement, close coordination with the BPP is necessary to ensure that standards, requirements and expectations are clearly defined and effectively enforced. He added that consumer protection, regulatory capacity building and maintaining the financial soundness of insurers remain key priorities for the Commission.

Director-General of the BPP, Adebowale Adedokun, described the partnership as essential to strengthening Nigeria’s procurement system. He said the BPP would rely on NAICOM’s technical expertise and data when reviewing insurance-related procurement requests to ensure that approvals are sound and defensible.

He also cautioned against unethical conduct in the industry, stressing that insurers must adhere strictly to governance standards and professional codes of practice.

Data from the National Bureau of Statistics show that Nigeria’s finance and insurance sector recorded significant growth in 2025 compared to the previous year, with financial institutions accounting for the bulk of the sector’s output, while insurance contributed a smaller but notable share. Overall, the sector’s contribution to real GDP improved year-on-year, reflecting stronger performance across the financial services industry.