DUFF & PHELPS: THE MANUFACTURERS LIFE INSURANCE COMPANY AND TWO SUBSIDIARIES CLAIMS PAYING ABILITY RATING REAFFIRMED AT 'AAA'
CHICAGO, Jan. 7 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has reaffirmed the "AAA" (Triple-A) claims paying ability ratings of The Manufacturers Life Insurance Company (Manulife Financial) and its two indirect, wholly owned subsidiaries. The Manufacturers Life Insurance Company of America and The Manufacturers Life Insurance Company (U.S.A.) (Manulife Financial (USA)). The reaffirmation of ratings considers the recent transfer of assets and liabilities of Manulife Financial's non- participating U.S. Branch business to Manulife Financial (USA). This "subsidiarization" transaction included the transfer of approximately $8.97 billion of assets and approximately $8.43 billion of liabilities through an assumption reinsurance agreement. The reaffirmation of Manulife Financial's "AAA" claims paying ability rating incorporates the positive effects expected from subsidiarization of its U.S. Branch business, which should strengthen the consolidated financial strength of Manulife Financial. Manulife Financial is a leading mutual life insurance organization domiciled in Toronto. Manulife Financial's consolidated assets at yearend 1992 were C$37.0 billion, and consolidated adjusted capital and surplus (including deferred gains) was approximately C$3.5 billion. The "AAA" claims paying ability rating of Manulife Financial reflects: (1) the company's superior statutory and "economic" capital position; (2) the diversity of its operations across both product lines and geographic markets; (3) the strong profitability of its insurance operations; and (4) its strong liquidity position in conjunction with very stable product liabilities. These strengths far outweigh the generally poor economic conditions in various real estate markets and the potential effect on Manulife Financial's mortgage and real estate portfolios. The reaffirmation of the "AAA" claims paying ability rating of Manulife Financial (USA) embodies Manulife Financial's provision of an appropriate mix of capital and obligation guarantee supports to ensure the continued reflection of the parent company rating. Nothing in the reinsurance agreement transferring U.S. Branch business affects Manulife Financial's continuing obligation to existing policyholders whose contracts were assumed by Manulife Financial (USA). For new policies issued after the date of transfer, Manulife Financial will guarantee payment of all claims, but Manulife Financial reserves the right to revoke future guarantees of new policies issued, but only after notice of revocation to Manulife Financial (USA). With respect to both existing as well as new policies issued after the date of transfer to Manulife Financial (USA), the guarantee shall cease to apply to policies that are assumed by another insurer, if a novation is given to Manulife Financial (USA). Manulife Financial (USA) is domiciled in Michigan and is licensed in 47 states and the District of Columbia. Manulife Financial (USA) had total assets of $268 million as of Dec. 31, 1992. Total capital and surplus was $14 million. The transfer of Manulife Financial's non-par U.S. Branch business has increased assets to approximately $9.2 billion, making Manulife Financial (USA) the strategic operating unit in the U.S. for Manulife Financial. Capital and surplus is increased to approximately $560 million through the reinsurance transaction. The majority of liabilities assumed are universal life, individual annuity and group pension contract obligations. In tandem with Manulife Financial's implied financial support, ongoing capital support from Manulife Financial is expected to maintain an appropriate level of operating leverage for Manulife Financial (USA). The Manufacturers Life Insurance Company of America primarily markets variable universal life and variable annuity products through ManEquity, Inc. an affiliated securities broker. The company is domiciled in Michigan and is licensed to sell variable products in 49 states and the District of Columbia. The Manufacturers Life Insurance Company of America has a formal service agreement and maintains reinsurance agreements with Manulife Financial. As of yearend 1992, the company's assets totaled $136 million. The Board of Directors of Manulife Financial has resolved to maintain adequate surplus and capital in The Manufacturers Life Insurance Company of America so long as it remains a wholly owned subsidiary. The claims paying ability rating of The Manufacturers Life Insurance Company of America is a direct reflection of its parent's financial strength. -0- 1/7/94 /CONTACT: Kevin A. Ceurvorst, CFA, of Duff & Phelps Credit Rating Co., 312-368-3144/
CO: Manufacturers Life Insurance Company ST: Michigan IN: INS SU: RTG
MP -- NY035 -- 0167 01/07/94 12:57 EST
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|Date:||Jan 7, 1994|
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