Tokyo - In accordance with a supervisory order issued to all Japanese life insurers by the Financial Service Agency (hereinafter “FSA”) pursuant to Clause 1, Article 128 of the Insurance Business Law, Manulife Life Insurance Company (hereinafter “Manulife Japan”; President and CEO: Geoff Crickmay) has completed a thorough review of all claims the Company paid over the five-year period from April 2001 to March 2006. The review was completed on November 30, 2007.
Through this review, Manulife Japan has identified some cases in which it made errors, and as a result, did not make full claims and benefits payments to customers. Manulife Japan sincerely apologizes to every customer who was affected. In response to these findings, Manulife Japan is contacting customers and making payments to those who are entitled to receive additional benefits. In addition, in order to prevent the recurrence of these errors, Manulife Japan is rigorously implementing thorough preventive measures. These efforts include, but are not limited to, increasing the quality of the Company’s claim payment operations, enhancing the system of senior management oversight, and improving the user-friendliness of Company notices to customers.
Manulife Japan will continue to accept without deadline any claims made by policyholders who did not file a claim during the review period, and process those claims appropriately.
Results of Review
In thoroughly reviewing all paid claims during the period under review to determine if there were any cases in which customers were underpaid, a total of 30,274 cases, amounting to 1.047 billion yen, were confirmed as requiring additional payment. As of November 30, 2007, 843.6 million yen of this amount (80.6%) had been already paid, as shown in the chart below.
1. Claims and Benefits Payments
In the review, in addition to underpaid cases that could be determined by reviewing claim forms and related documentation on hand, Manulife Japan also looked for any possible cases in which additional claims and benefits could be paid if additional information were received from customers. Including all these types of possible cases, Manulife Japan conducted extensive verification of 195,246 individual insurance policies to ensure unclaimed claims and benefits were fully identified. Manulife Japan also sent notices to customers with policies containing dread disease or outpatient riders, as these policies had a higher likelihood of unclaimed benefits. In addition, the Company extended its verification process to corporate insurance, contacting corporate customers to confirm whether there were any underpaid cases in 21 corporate insurance policies that had a possibility of requiring additional payments.
As a result, Manulife Japan confirmed a total of 3,996 cases requiring additional payment of either claims or benefits, amounting to 499.3 million yen. As of November 30, 2007, Manulife Japan had completed the payment of additional claims and benefits of 310.6 million yen (62.2%). Manulife Japan will continue its efforts to settle all relevant cases as quickly as possible.
2. Other Payments (Non-Claims or Benefits Payments)
As a result of verification of cases involving interest arrears, Manulife Japan confirmed a total of 9,777 cases requiring additional payments of 56.1 million yen. Manulife Japan is currently making every effort to complete the payment of these cases as early as possible.
Lapsed cash value:
In recognition that measures to encourage policyholders to make a claim for lapsed cash value may have been insufficient, Manulife Japan expanded the scope of its verification to include all policies with any amount of lapsed cash value during the period in review. These efforts enabled the Company to confirm a total of 16,501 cases that required additional payment, amounting to 491.6 million yen. These additional payments were fully completed by November 30, 2007.
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Manulife Life Insurance Company (“Manulife Japan”), a member company of the Manulife Financial group, holds the highest level "AAA" financial strength rating from Standard & Poor’s, one of the world’s most reliable credit rating agencies (as of the end of November 2007).
Manulife Financial is a leading Canadian-based financial services group serving millions of customers in 19 countries and territories worldwide. Operating as Manulife Financial in Canada and Asia, and primarily through John Hancock in the United States, the Company offers clients a diverse range of financial protection products and wealth management services through its extensive network of employees, agents and distribution partners. Funds under management by Manulife Financial and its subsidiaries were Cdn$399 billion (US$400.5 billion) as at September 30, 2007.
Manulife Financial Corporation trades as ‘MFC’ on the TSX, NYSE and PSE, and under ‘0945’ on the SEHK. Manulife Financial can be found on the Internet at www.manulife.com. Manulife Japan can be found on the Internet at www.manulife.co.jp.
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For information related to this press release please contact:
Manulife Life Insurance Company