Liberian News: CBL Clarifies Insurance Bond Directive: Reform Initiated in 2022 to Strengthen Financial Integrity

Monrovia -The Central Bank of Liberia (CBL) clarifies a recent publication surrounding the issuance of Directive No. CBL/ID/DIR/001/2025, which introduces regulatory requirements for institutions issuing insurance-backed court bonds.

The formulation of this directive began as early as 2022, aimed at enhancing financial soundness, transparency, and accountability within Liberia’s financial sector.

Background and Consultation Process

This reform was first initiated following an invitation by the Supreme Court of Liberia on October 14, 2022. The Court expressed concern over the reliability of appellate bonds issued by insurance companies that lacked the financial standing to honor such obligations.

What followed was a comprehensive two-year consultation process involving the judiciary and insurance sector stakeholders. Key milestones include a meeting with industry players on December 23, 2024, a second invitation from the Supreme Court on March 4, 2025, and submission of the draft directive on March 7. After further discussions with the Full Bench of the Supreme Court on March 20, and additional consultations with insurers and brokers on March 25, the directive was finalized on May 2 and formally circulated on May 16, 2025. 

Purpose of the Directive

The directive introduces a set of compliance requirements to ensure that institutions issuing court bonds possess the necessary financial capacity and regulatory credibility. Under the new framework, any insurer or financial institution must submit certified, audited

financial statements and all outstanding bonds before receiving approval to issue new ones. These standards align with international best practices and seek to reinforce the integrity of the bond issuance process in Liberia.

Key Clarifications

• The directive does not prohibit the issuance of court bonds nor

does it impose a suspension.

• It introduces a pre-approval and accountability process to

ensure only financially sound institutions issue bonds.

• The directive does not infringe on constitutional rights,

including the right to bail.

CBL’s Commitment

The CBL reaffirms that its actions are guided solely by its legal

mandate to regulate Liberia’s financial and insurance sectors. The

Bank remains committed to strengthening institutional integrity,

enhancing transparency, and protecting the public interest. The CBL

continues to engage constructively with the judiciary, the legal

community, and financial institutions to ensure smooth

implementation of this reform.

The public and media are encouraged to contact the CBL’s

Communications Department for accurate information regarding the

Bank’s operations and regulatory decisions

New Republic Liberia

Alphonso Toweh

Has been in the profession for over twenty years. He has worked for many international media outlets  including: West Africa Magazine, Africa Week Magazine, African Observer and  did occasional reporting for CNN, BBC World Service, Sunday Times, NPR, Radio Deutchewells, Radio Netherlands. He is the current correspondent for Reuters 
 He holds first  MA with honors in International  Relations and a  candidate for second master in International Peace studies and Conflict  Resolution from the University of Liberia.