We demonstrate that reduced density matrix functional theory (RDMFT), in conjunction with the power functional, can successfully treat the nonmagnetic insulating state of the transition metal oxides NiO and MnO, finding for both a gapped single particle spectrum. While long-range spin order is thus not necessary for qualitative agreement with experiment, we find that it is required for good agreement with the X-ray photoemission spectroscopy and Bremsstrahlung isochromat spectroscopy data. We further examine the nature of the natural orbitals in the materials, finding that they display significant Hubbard localization and are, as a consequence, very far from the corresponding Kohn-Sham orbitals. This contrasts with the case of the band insulator Si, in which the Kohn-Sham orbitals are found to be very close to the RDMFT natural orbitals.