Manulife Financial withdrew a high-leverage insurance product for wealthy Hong Kong clients following regulatory pressure. The product allowed customers to purchase policies with an $80 million nominal value. These arrangements utilized nearly four times leverage at fixed borrowing rates significantly below market levels.
Hong Kong and mainland Chinese authorities are tightening oversight of cross-border wealth products. The Hong Kong Insurance Authority warned that creative financial arrangements often produce returns below projections, leading to heavy losses. The regulator is prioritizing policyholder protection amid increased scrutiny of the sector.
Separately, Manulife’s U.S. subsidiary John Hancock launched an enhanced Protection Variable Universal Life (VUL) insurance solution. The product offers increased flexibility for customers. This launch aligns with the company’s strategy to expand its presence in the U.S. life insurance market.