MONROVIA – Amid recent media reports alleging that the Central Bank of Liberia (CBL) has crafted Insurance Bond Directive to obstruct the legal defenses of certain individuals facing court proceedings, the Bank on Monday, June 9, 2025, issued a statement clarifying that the directive, officially labeled Directive No. CBL/ID/DIR/001/2025, is the result of a two-year reform process intended to strengthen financial transparency, enhance institutional integrity, and protect the credibility of Liberia’s financial and judicial systems.
According to the CBL, the directive introduces compliance requirements for institutions issuing insurance bonds for court proceedings and does not suspend or prohibit the issuance of such bonds.
The Bank said its primary objective is to ensure that only financially sound institutions are permitted to provide insurance-backed court bonds, aligning Liberia’s practices with international regulatory standards.
The Bank clarified that the directive does not infringe on constitutional rights, including the right to bail, and does not retroactively apply to previously issued bonds. It stressed that the directive is a forward-looking policy aimed at creating a robust and accountable framework for judicial bonding.
According to the CBL, the directive introduces compliance requirements for institutions issuing insurance bonds for court proceedings and does not suspend or prohibit the issuance of such bonds.
The Central Bank of Liberia (CBL) also dispelled rumors or the notion that surrounds a new regulatory directive on insurance-backed court bonds, pushing back against public speculation that the measure is politically motivated or aimed at targeting former House Speaker J. Fonati Koffa and other individuals.
According to the CBL, the process leading to the issuance of the directive began in October 2022, when the Supreme Court of Liberia raised concerns about the financial reliability of several insurance companies involved in issuing appellate bonds.
The Court, the Bank said, warned that these companies lacked the fiscal capacity to honor bond obligations, creating risks for judicial operations and the rule of law. Following that request, the Central Bank said it initiated a thorough consultation process involving multiple stakeholders, including the judiciary, insurance companies, and legal practitioners.
As part of this process, the Bank convened a major stakeholder engagement session on December 23, 2024, where key actors within the insurance sector acknowledged the need for tighter controls. Further meetings followed in early 2025, including a second formal invitation from the Supreme Court on March 4 and the submission of a draft directive on March 7. Additional reviews were held with the Full Bench of the Supreme Court on March 20, and further dialogue took place with insurance brokers and companies on March 25. The final version of the directive was completed on May 2 and officially circulated to stakeholders on May 16, 2025.
The directive introduces a pre-approval process requiring institutions to submit certified audited financial statements and clear all outstanding bond obligations before receiving permission to issue new bonds.
According to the Central Bank, these measures are designed to prevent bond fraud, ensure proper oversight, and avoid systemic risk to the financial sector.
“This reform is about protecting the rule of law and reinforcing public confidence in financial institutions,” the Bank stated in its release. “There is no provision in this directive that targets any individual or political figure. The Central Bank’s actions are guided strictly by its mandate to promote financial stability and ensure effective supervision of Liberia’s financial system.”
The Bank also reaffirmed its commitment to continued dialogue with key actors in the justice system, financial institutions, and civil society. It said these ongoing engagements are critical to ensuring that the new regulatory requirements are understood and implemented without disrupting access to justice or undermining due process.
In addressing the political undertones that have emerged around the directive, the Bank urged media institutions and the public to rely on verified information and to avoid mischaracterizing technical policy decisions as political manoeuvres. The CBL reiterated that its core mission remains focused on maintaining the integrity of the financial system, not participating in partisan debates. “As a Central Bank, our focus is not politics. It is financial stability, institutional integrity, and the protection of public interest,” the statement concludes.
