TORONTO _ The chief executive of Manulife Financial Corp. says the insurer is “highly confident” it will prevail in its legal battle with hedge fund Mosten Investment LP over insurance contracts.
Roy Gori told a conference call discussing its latest quarterly results today that he’s not sure when a decision will be rendered in the case brought against Manulife’s life insurance subsidiary, but the company is “prepared to see this through.”
The trial involving one of Manulife’s insurance contracts purchased by Mosten wrapped up last year.
Mosten has argued that under the terms of the universal life insurance policy, it can deposit an unlimited amount of money and receive an annualized guaranteed return of at least four per cent with one-month liquidity.
Prominent short-seller Muddy Waters has said if the court sides with Mosten, the hedge fund could sell an unlimited amount of partnership interests backed by Manulife and “financially cripple” the insurer.
Manulife has argued that issuers of universal life policies never intended to have them function as deposit or securities contracts, and it disagrees with the short-seller’s conclusions.