The Central Bank of Liberia has clarified that its new directive on insurance-backed court bonds does not prohibit or suspend the issuance of court bonds. Instead, it introduces a pre-approval and accountability framework under which only financially sound institutions can issue new bonds, and the bank said the measure does not infringe constitutional rights including the right to bail. The clarification says the reform began in 2022 after the Supreme Court of Liberia raised concerns about appellate bonds issued by insurance companies that lacked the financial capacity to honor them. Under the new framework, bond-issuing insurers must obtain written clearance from the Insurance Department before issuing court bonds, submit certified audited financial statements for verification and assessment, and provide an updated certified list of outstanding bonds issued before any new issuance. After those requirements are met, the Central Bank of Liberia may issue a Certification of Assets taking into account the cumulative total of bonds already issued. The bank said the directive was finalized on May 2 and formally circulated on May 16 following a two-year consultation process with the judiciary and insurance sector stakeholders, and the directive took immediate effect upon issuance.
Central Bank of Liberia2025-06-10
Central Bank of Liberia clarifies court bond directive and confirms pre approval requirements for insurers
The Central Bank of Liberia said its new court bond directive is not a ban or suspension, but a pre-approval regime for insurers issuing court bonds. Insurers must obtain written clearance, submit certified audited financial statements, and disclose outstanding bonds before issuing new ones. The reform began after the Supreme Court raised concerns that some insurers lacked the capacity to honor appellate bonds.