S&P Places Manulife Financial (MFC) Ratings on Watch for Downgrade

Standard & Poor's Ratings Services said that it placed its 'AA-' insurer financial strength rating on Japan-based Manulife Life Insurance Company (Manulife Japan)(NYSE: MFC) on CreditWatch with negative implications. This is because the policyholder guarantee provided by its parent company no longer meets the guarantee criteria in paragraph 104 of our group rating methodology. This misapplication of criteria was identified during a review of our application of the guarantee criteria, while we also corrected the associated criteria in the group rating methodology (GRM), originally published Nov. 19, 2013.

Our insurer financial strength rating on Manulife Japan was based on the explicit support provided in the form of a guarantee by its parent company, The Manufacturers Life Insurance Co. (MLI). We carried out a global review to reassess insurers' policyholder guarantees following the identification of a potential misapplication of the guarantee criteria in our GRM. Separately, we also corrected two elements of the guarantee criteria in our group methodology (see "Standard & Poor's Corrects Group Rating Methodology For Policyholder Guarantees," published Feb. 18, 2016, on RatingsDirect).

The CreditWatch placement reflects our ongoing review of Manulife Japan under our GRM or our review of any revised guarantee that may be provided by MLI. We expect to resolve the CreditWatch within 90 days, after completing our review.

We could either lower or affirm our insurer financial strength rating on Manulife Japan following our reassessment of the insurer's strategic importance to the group, and we will do so based on new information provided through discussions with the company.

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