Life insurers welcome new rules that limit how much they can accept as deposits

TORONTO _ Two of Canada’s largest life insurance companies welcomed a Saskatchewan government decision that clarifies the rules for a type of insurance policy that’s been the focus of civil suits against them.

Manulife Financial Corp. and IA Financial Group say they expect substantial aspects of the litigation against them will be resolved as a result of the revised provincial regulations.

Institutional investors argued in a Saskatchewan court last month that there shouldn’t be limits on how much they can deposit into side accounts associated with a type of universal insurance policy offered in the 1990s.

Manulife and IA argued in their defence that the side accounts associated with the insurance policies weren’t intended as investment vehicles and therefore there should have limits on how much money they can accept.

A report from short-seller Muddy Waters after the trial warned Manulife could face “billions of dollars of losses” if it lost the case. Manulife disagreed with the report, but its shares fell to a 2018 low within days of the Oct. 4 report.

Amendments to Saskatchewan insurance regulations, published Monday, say insurers aren’t allowed to accept deposits in excess of what’s required to pay premiums over the policy’s eligible period.

France’s AXA sells insurance assets in Ukraine to Canada’s Fairfax

REUTERS

AXA Insurance and AXA Insurance Life will continue to operate and fulfill all their obligations without any changes.

French-based AXA Group, represented in Ukraine by AXA Insurance and AXA Life Insurance, has sold its Ukrainian assets to Canada’s Fairfax Financial Holding Limited. Read also A third of businesses expect Ukraine investment climate to improve – EBA “AXA Group has entered into an agreement with Fairfax Financial Holding Limited (Canada) to sell all its insurance operations in Ukraine. Under the terms of the agreement, Fairfax would acquire a 100% of the non-life entity (AXA Insurance) and the life entity (AXA Life Insurance) in Ukraine,” the company’s press service said on October 23. As reported,

AXA Insurance and AXA Insurance Life will continue to operate and fulfill all their obligations without any changes. “It’s time to make a step forward, which will open up new opportunities for the company and each of its clients. With the new owner, we won’t only keep our leading positions, but also continue to develop the entire Ukrainian insurance market,” the press service added.

The new owner’s headquarters is based in Toronto, Canada, it said, adding that it has been engaged in insurance and investment management since 1985. “The company is listed on the Toronto Stock Exchange (FFH: CN). Its market capitalization is estimated at $15.1 billion. The holding operates in 40 countries across the world,” the report said. UNIAN memo. AXA Insurance, which is the leading insurance company in Ukraine, has been operating since 2007. AXA Insurance started working in the Ukrainian market in July 2013.

 

Michelin, Manulife Financial announce major expansions in Nova Scotia

HALIFAX _ Officials say expansions by two major corporations in Nova Scotia could bring hundreds of new jobs to the province.

In separate announcements Tuesday, the province unveiled rebates for Michelin North America (Canada) Inc. and Manulife Financial Corp.

Manulife says it plans to expand its existing operations in Halifax, adding as many as 600 new jobs over the next five years.

Nova Scotia Business Inc., the province’s business development agency, says Manulife could earn a payroll rebate of up to almost $10 million over five years, but less if it creates fewer than 600 new jobs.

Manulife has added 152 full-time equivalent jobs in Nova Scotia since its first payroll rebate agreement with Nova Scotia Business Inc. in 2014.

Michelin says it has two new projects at its Pictou County site worth $21 million that will add 150 jobs and make another 200 temporary jobs permanent.

Michelin says it will begin production on a new winter tire line, and launch “an innovative process for semi-finished materials.”

“This is amazing news for Michelin in Nova Scotia, as these two projects push Michelin’s employment in Nova Scotia to more than 3,600, the highest levels seen in our almost 50-year history,” Jeff MacLean, president of Michelin North America (Canada), said in a statement.

Nova Scotia Business Inc. says Michelin could earn a maximum rebate of $3.57 million, based on eligible capital spending of $14.3 million on the semi-finished materials process.

“This project reinforces the strength and technical capability of the Michelin Nova Scotia team,” Premier Stephen McNeil said in a statement.

U.S. short seller Muddy Waters takes aim at Manulife Financial Corp.

By Armina Ligaya

THE CANADIAN PRESS

TORONTO _ U.S.-based short-seller Muddy Waters has taken aim at Manulife Financial Corp., warning that an impending trial verdict could lead to “billions of dollars of losses” at the Canadian insurer.

Carson Block, the firm’s head of research, wrote in a report published Thursday that Manulife’s life insurance subsidiary has just concluded a trial that could “significantly damage its earnings, capital, creditworthiness, business, and solvency _ per its own expert’s sworn affidavit.”

“We believe a verdict is likely by the end of this year,” he wrote in the report announcing Muddy Waters’ short position in the firm.

“There are therefore material risks to the financial well-being of MFC. We do not believe investors are aware of these risks, nor do we believe they have been priced into MFC shares.”

Short selling is a trading technique that can produce a profit if a stock’s market value falls below a predetermined price.

Manulife, which has more than 13,000 staff in Canada and a global workforce of roughly 35,000, defended its actions. Manulife also operates as John Hancock in the United States.

“The Muddy Waters report is a short seller’s attempt to profit at the expense of our shareholders, and we disagree with its conclusions,” it said in a statement.

The company said consumers and issuers of universal life policies never intended to have the policies function as deposit or securities contracts.

“We expect we will prevail with respect to this matter and that it will not affect our business operations or our ability to meet obligations to our customers, vendors and other key stakeholders.”

Block whose 2011 report into timber company Sino-Forest triggered an investigation by regulators into what became one of Canada’s largest corporate fraud cases wrote that the trial involves one of Manulife’s insurance contracts purchased in 1997 by a hedge fund called Mosten Investment LP.

The report says that Mosten argues that it can deposit an unlimited amount of money with Manulife through the universal life insurance policy and receive an annualized guaranteed return of at least four per cent with one-month liquidity.

If Mosten prevails with its argument, the hedge fund could sell an unlimited amount of partnership interests backed by the Manulife insurance contract and “likely become the most lucrative money market fund in the developed world!” wrote Block.

“These terms alone could financially cripple Manulife,” he said.

Manulife, however, argues this is counter to the purpose of life insurance, which is to insure mortality risk, according to the report. The insurer also argues, according to Muddy Waters’ report, that insurance companies are not permitted to take deposits and taking unlimited premiums for deposit as investment would be illegal.

Block said Manulife’s argument  “strains credulity” as the product in question had an investment component.

“Insurance companies for some time have been blurring the line between insurance and investment, and universal life seems to me to be an example of such an attempt to blur the line,” he said in a phone interview from San Francisco.

Manulife, Canada’s largest life insurer by market value, said Thursday that Mosten’s position is “legally unfounded.”

Shares of Manulife closed down 65 cents, or 2.80 per cent at $22.54 on the Toronto Stock Exchange. The stock was down as much as four per cent earlier in the day to $22.23.

Manulife’s stock performance has already been weighed down recently, including by negative issues in the industry regarding long-term care insurance, said Gabriel Dechaine, an analyst with National Bank Financial.

“While we are happy to see the company take a confident position, we cannot overlook how this issue is adding to an already “noisy” year for MFC,“ he said in a note to clients on Thursday.

Andre Beaudry appointed Executive Director of CMC

Doug Potentier, President of Co-operatives and Mutuals Canada (CMC) is pleased to announce the appointment of André Beaudry as Executive Director of CMC, effective October 15, 2018.

Mr. Beaudry was most recently Chief Advancement Officer at Saint Paul University where he worked to establish Canada’s first School of Social Innovation, Canada’s first School of Transformative Leadership, and founded the Mauril Bélanger Social Innovation Workshop. Mr. Beaudry is a fully bilingual senior not-for-profit sector/fundraising professional driven by mission, teamwork, organizational performance and transparency. In collaboration with colleagues and community leaders, Mr. Beaudry has secured over $140M in private and public sector funds in support of endowment, major infrastructure, mental health, applied research, special projects, and national and international education funding priorities.

“I’m truly honoured to take on this leadership role. Canada’s over 8,000 co-operatives and mutuals work hard every day to deliver high quality products and services to a growing membership of 20,500,000 in Canada. CMC is the leading advocate, awareness builder, source of evidence-based research, and professional development for Canada’sgrowing cooperatives and mutuals industry.

It will be a distinct pleasure to collaborate with the leadership of CMC’s board of directors and dedicated team to advancing the mission of its members.”

Prior to his role with Saint Paul’s University, André served as Vice President of Canadian Partnerships with Colleges and Institutes Canada (CICan) where he led a global team in OttawaLondonNew DelhiManila and Guangzhou.

“On behalf of the CMC Board, we welcome André and look forward to working with him and the CMC team on achieving our strategic directions through government relations, co-op development, support for research and education, and facilitating communications and dialogue among co-operatives,” stated Doug PotentierAndré brings experience in building partnerships and engaging leaders in business, government and communities that will help CMC grow as a national voice for co-ops.”

Mr. Beaudry will be replacing Denyse Guy, CMC’s founding Executive Director. Ms. Guy has served as Executive Director of the Canadian Co-operative Association (CCA) since 2012 and transitioned to CMC in October 2013 when the conseil de la coopération et de la mutualité and CCA joined forces. After more than four years leading CMC, and more than 35 years in the co-operative and mutuals sector, Ms. Guy departs in 2018 to focus on co‑operative education, facilitation and support opportunities nationally and internationally.

About CMC: Co-operatives and Mutuals Canada is the national, bilingual association for co-operatives and mutuals in Canada. Through advocacy with the federal government, CMC provides a knowledgeable voice committed to improving the economic and regulatory environment for co-operatives and mutuals on behalf of our members. CMC’s members come from many sectors of the economy, including finance, insurance, agri-food and supply, wholesale and retail, housing, health, forestry, education, funeral services, public utilities and community development. CMC provides leadership to support, promote, and develop the co-operative economy in Canada. The co-operative and mutual movement in Canada counts more than 20.5 million memberships from more than 8,000 co-operative and mutual enterprises.

SOURCE Co-operatives and Mutuals Canada

Manulife announces appointment of Chief Human Resources Officer and retirement of Chief Investment Officer

Manulife today announced it has appointed Pamela Kimmet as Chief Human Resources Officer. Ms. Kimmet will oversee the Company’s Human Resources function and provide leadership to the people and culture elements of the Company’s transformation. The Company also announced that Warren Thomson has made the decision to retire as Manulife’s Chief Investment Officer and Chairman of Global Wealth and Asset Management.

Chief Human Resources Officer

Ms. Kimmet’s appointment is effective October 1, 2018, and she will report directly to Manulife President and Chief Executive Officer Roy Gori.

Ms. Kimmet is a world-class Human Resources leader who most recently served as the Chief Human Resources Officer of Cardinal Health, a healthcare services and products company with 50,000 employees in nearly 60 countries around the world. Ms. Kimmet has also served as a member of Manulife’s Board of Directors since March 2016. She resigned from that role effective September 4, 2018. She previously led the HR function at a number of global organizations, including Coca-Cola Enterprises, Bear, Stearns & Co. and Lucent Technologies, and held strategic HR roles at Citigroup and General Motors.

“Pam’s vast experience across a variety of industries and geographies makes her the ideal leader to take on this important role,” Mr. Gori said. “Building a high-performing team and culture is one of our five strategic priorities as we transform our Company into a digital, customer-centric market leader. Pam joins us at a critical time in our history, and her expertise in talent development and organizational change will be of great value as we work to achieve our bold people and culture ambitions.”

Ms. Kimmet is a thought leader within the HR profession, serving as Chair of the HR Policy Association, and past Chair of the Association’s Center for Executive Compensation. She also serves on the advisory boards for Cornell University’sCenter for Advanced Human Resources Studies, and the University of South Carolina’s Center for Executive Succession. Ms. Kimmet was named a Fellow by the National Academy of Human Resources in 2009. In addition, she serves on the Board of Directors of Perspecta, a leading information systems and mission services provider to the U.S. government.

Chief Investment Officer

Mr. Thomson has announced his intention to retire effective February 28, 2019, following an extremely successful career with Manulife and John Hancock during which he made significant contributions to the Company’s long-term success.

Paul Lorentz, who currently reports to Mr. Thomson with responsibility for Manulife’s Global Wealth and Asset Management business, has been promoted to the role of President and Chief Executive Officer, Global Wealth and Asset Management effective March 1, 2019, and will report directly to Mr. Gori. Mr. Lorentz, who was appointed to his current role in October 2017, joined Manulife in 1993 and has delivered outstanding results in a variety of Wealth and Asset Management roles.

Scott Hartz has been promoted to the role of Chief Investment Officer effective March 1, 2019, and will also report directly to Mr. Gori. Mr. Hartz currently serves as Head of General Account Investments for Manulife, overseeing all U.S., Canadian and Asian general account investments, and has performed with excellence in this role. Mr. Hartz is also the Chief Investment Officer for John Hancock Life Insurance Company, a wholly owned subsidiary of Manulife.

“Paul and Scott are proven leaders who have built and maintained strong momentum across their mandates and teams,” Mr. Gori said. “I’m confident they will continue to create significant value for our organization, our customers and our shareholders.”

Spanning more than two decades, Mr. Thomson’s tenure at Manulife has been marked by his focus on finding attractive growth opportunities with appropriate risk profiles. His innovative approach, coupled with a forward-looking view of clients’ needs, helped make Manulife an international leader. Following his appointment as Chief Investment Officer in 2009, during the global financial crisis, Mr. Thomson led programs to de-risk the Company’s equity and interest-rate risk exposures.

Mr. Thomson also oversaw the establishment and growth of Manulife Asset Management. Manulife Asset Management’s assets under management grew from $94 billion in 2006 to $516 billion as of June 30, 2018. Mr. Thomson led the expansion of Manulife Asset Management into private assets, which saw the Company extend its investment offerings and bring its General Fund expertise in alternative asset classes to external investors.

As a leader, Mr. Thomson has a deep belief in the importance of diversity. He is a passionate advocate of gender diversity and an executive sponsor of Women in Capital Markets, who recognized him in 2016 as a “Champion of Change” for his role in encouraging the advancement of women.

“Warren has made numerous contributions across our global franchise. He is a trusted and respected leader, and he will leave a strong legacy,” said Mr. Gori. “On behalf of the Board and Executive Leadership Team, we thank him and wish him all the best in retirement.”

About Manulife

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 AsiaCanada 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 TorontoNew York, and the Philippine stock exchanges and under ‘945’ in Hong Kong.

SOURCE Manulife Financial Corporation

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