October 30, 2018
Toronto – Manulife Financial Corporation (“Manulife” or the “Company”) today addressed the expected impact of new regulations to the Saskatchewan Insurance Act made by the Government of Saskatchewan.
The Saskatchewan regulations, published yesterday on the website of the Financial and Consumer Affairs Authority of Saskatchewan, limit the amount of premiums a life insurer may receive or accept for deposit in life insurance policies and associated side accounts. The basis of the claims by Mosten Investment LP (“Mosten”) against Manulife has been that life insurers can be compelled to accept unlimited premium payments. In effect, Mosten is seeking to use insurance policies to invest sizeable sums that have no connection to the insurance coverage.
As previously stated, Manulife believes Mosten’s position is legally unfounded and that consumers purchasing universal life policies, and the insurers issuing these policies, never intended to have the policies function as deposit or securities contracts. Manulife has always been confident it would prevail with respect to this matter, and that this lawsuit would not have any material impact on the Company’s business operations or its ability to meet its obligations to customers, employees, vendors and other key stakeholders.
Given the new Saskatchewan regulations, Manulife and the other life insurers involved in similar matters plan to make submissions to the court, asking it to dismiss the claims that life insurers can be compelled to accept unlimited premium payments. Manulife believes these regulations should accelerate the resolution, in its favour, of the principal matters in the Mosten litigation in Saskatchewan. With respect to any possible remaining ancillary matters in the litigation, Manulife continues to believe that it will prevail and that those matters are insignificant in any event.
Because the public policy concern addressed in Saskatchewan is equally relevant across Canada, the Canadian Life and Health Insurance Association, which intervened in the litigation on behalf of the industry, plans to request other provincial and territorial governments to take comparable regulatory steps to avoid unnecessary, costly litigation in other jurisdictions.
Manulife Financial Corporation is a leading international financial services group that helps people make their decisions easier and lives better. We operate primarily as John Hancock in the United States and Manulife elsewhere. We provide financial advice, insurance, as well as wealth and asset management solutions for individuals, groups and institutions. At the end of 2017, we had about 35,000 employees, 73,000 agents, and thousands of distribution partners, serving more than 26 million customers. As of June 30, 2018, we had over $1.1 trillion (US$849 billion) in assets under management and administration, and in the previous 12 months we made $27.6 billion in payments to our customers. Our principal operations are in Asia, Canada and the United States where we have served customers for more than 100 years. With our global headquarters in Toronto, Canada, we trade as 'MFC' on the Toronto, New York, and the Philippine stock exchanges and under '945' in Hong Kong.
Sean B. Pasternak