NPM 013-2010

Requesting Entity: Department of Public Works and Highways

Issues Concern: Certification from the Insurance Commission



Clarification on the certification that must be issued by the Insurance Commissioner if a bidder opts to submit a surety bond as a form of bid, performance, or warranty security.

One of the problems commonly raised by procuring entities is the submission of surety bonds by unauthorized insurance or surety companies. Accordingly, relevant provisions of the implementing rules were revised by the Government Procurement Policy Board to ensure that bidders submit surety bonds by insurance or surety companies duly authorized to issue said securities by the Insurance Commission.

In view of said objective, it is our considered opinion that the certification which must be submitted by the bidder together with the surety bond must (i) unequivocally state that the surety or insurance company is specifically authorized to issue surety bonds callable on demand, and (ii) must be issued by the Insurance Commission.