Manulife's Regulatory Problems Continue

By Tara Perkins

Manulife Financial Corp. (MFC) said in the notes to its third-quarter earnings, which were released Thursday morning, that the regulatory probe into the adequacy of its prior disclosures is ongoing.

The insurer disclosed on June 19 that the Ontario Securities Commission had sent it an enforcement notice to say it had reached a “preliminary conclusion” that the company did not properly disclose the risks related to its variable annuity and segregated funds business before March 2009.

The OSC notice said that Manulife failed to tell its investors enough about the exposure it had to stock markets because of that business.

As is standard in these situations, the regulator gave the company the opportunity to respond to the notice before making a decision about whether to start formal proceedings. Manulife said today that it has responded to the notice, and is now cooperating with OSC staff and responding to further inquiries. “The process is ongoing,” it said.

Manulife also said on Thursday that it’s not aware of any other action by regulatory authorities with respect to this issue. However, there are a number of class action lawsuits in both Canada and the U.S., which Manulife intends to “vigorously defend itself against.”