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Manulife agrees to settle pending class-action lawsuits

Manulife Financial Corp. has agreed to settle with parties to pending class-action lawsuits in Ontario and Quebec against the company and certain of its former officers, subject to court approval.

The entire settlement amount of C$69 million will be fully funded by insurance. The agreement provides for the total settlement payment to be distributed to eligible class members, minus court-approved fees for class counsel and other expenses.

The lawsuits are based on allegations that the company failed to meet its disclosure obligations related to its exposure to market price risk in its segregated funds and variable annuity guaranteed products. The U.S. District Court for the Southern District of New York dismissed a proposed class action against Manulife involving similar allegations. The staff of the Ontario Securities Commission told the company in April 2011 that it would not seek any orders in connection with a June 2009 enforcement notice.

Manulife said the claims are not proven and that the settlement does not admit any liability. The company said it continues to "firmly believe" that its disclosure satisfied applicable disclosure requirements. The agreement contains no admission of wrongdoing by the company or any of its former officers.

Manulife agreed to the settlement to avoid the potential cost of two separate trials and said it expected a "significant portion" of its legal costs not to be recoverable even if it was successful.