Abuja: The National Insurance Commission (NAICOM) and the Bureau of Public Procurement (BPP) have signed a Memorandum of Understanding (MoU) to standardise requirements for the issuance of insurance bonds and public procurement. Bond insurance, also known as financial guarantee insurance, is a type of coverage purchased by bond issuers, such as municipalities or corporations, that guarantees the repayment of principal and interest to investors if the issuer defaults.
According to News Agency of Nigeria, during the MoU signing in Abuja, Mr Olusegun Omosehin, the Commissioner for Insurance (CFI), emphasized that the agreement aims to ensure transparency in the sector and benefit citizens from the transformation within the industry. Omosehin highlighted that the Commission is mandated to ensure that insurance service providers are financially stable and able to support policyholders during pandemics.
Omosehin noted that the BPP’s role is to guide the procurement processes of public services, including insurance, which necessitates this collaboration. He stressed that insurance services, being part of procurement, require clear guidelines and requirements to deliver effectively. The Commission’s priorities include protecting insurance consumers, enhancing regulatory capacity, and ensuring the financial stability of insurance entities.
Omosehin mentioned the importance of collaboration for the transformation process, identifying BPP as a critical partner. The partnership aims to track insurance procurements and ensure transparency in the procurement process, aligning with the vision of the President.
Dr Adebowale Adedokun, Director-General of the BPP, praised NAICOM for its transformative efforts. He stated that a strong insurance sector with well-understood and implemented regulatory frameworks is crucial for any growing economy. The Bureau plans to rely on NAICOM’s data and expertise to improve the value for money in the insurance sector.
Adedokun acknowledged the need for insurance companies to update their procurement knowledge and emphasized the importance of ethical practices and good governance. He noted that the collaboration would allow BPP to seek NAICOM’s guidance for insurance procurement requests to ensure defensible approvals.