Manulife gets enforcement notice
Globe and Mail Update,
Friday, Jun. 19, 2009 06:25PM EDT
Manulife Financial Corp. (MFC-T22.214.171.124%) says it has received an enforcement notice from regulators who believe the company failed to make proper disclosures concerning certain exposures.
The insurer also said that its chief financial officer is retiring.
In a news release issued late on Friday, Manulife said that staff of the Ontario Securities Commission sent it a notice this week relating to the information it disclosed about its variable annuity and segregated funds business before March of this year.
Manulife says it believes that its disclosure met all of the requirements, but the preliminary conclusion of OSC staff is that the company failed to meet its continuous disclosure obligations related to its stock market exposure.
The market exposure stems from the company's large variable annuity and segregated funds business. The products are like private pension plans for individual investors. Manulife takes a customer's money, invests it, and promises payments down the road. When markets drop, it must build up capital and reserves to protect against any shortfall in the amount it has promised to pay customers in the future.
The company will now have the opportunity to respond to the OSC's notice before the regulator's staff decides whether to start proceedings. Manulife said it intends to co-operate with the OSC.
In a separate statement that the company characterized as unrelated, Manulife said that chief financial officer Peter Rubenovitch is retiring after 14 years, and will be replaced by Michael Bell, who has been the chief financial officer of Cigna Corp. (CI-N25.241.586.68%) for the past six years.
Friday, June 19, 2009
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