Commitment To Customer Service and Financial Strength Ratings Drive Success
Boston– John Hancock led the life insurance industry in single premium pension closeout sales in 2006, according to a recent survey of 18 major life insurers by LIMRA International (LIMRA).
John Hancock’s pension closeout sales reached $415.2 million in 2006, capturing approximately 23 percent of the industry’s total sales for the year, according to LIMRA.
Ron McHugh, Senior Vice President, John Hancock Financial Services, said the company sees solid opportunity in the market and that John Hancock’s commitment to customer service and its outstanding financial strength ratings position John Hancock well for future growth in the business.
“With the passage of the Pension Protection Act last year and the ongoing shift toward defined contribution plans, we expect the single premium pension closeout market to grow significantly over the next few years,” Mr. McHugh said. “This market clearly plays to our strengths in asset-liability matching. We also have developed an excellent team to assess, price and service the business and our outstanding financial strength ratings are a significant point of differentiation for us.”
Companies offering defined benefit plans purchase single premium pension closeout contracts, also known as Single Premium Group Annuity contracts, to transfer certain benefit obligations of a terminating pension plan or, in some cases, a plan settlement for specific groups to an insurer. Such group annuity contracts relieve the plan sponsor of the benefit obligations, administration and other related tasks and fees associated with maintaining a defined benefit pension plan. Other instances when these contracts could be used are: plan termination due to a new acquisition or merger, plant shutdown, bankruptcy, court ordered liquidation or a change in retirement plans from a defined benefit plan to a 401(k).
A single premium group annuity contract is issued to the plan trustee or employer in exchange for a single sum; and certificates are issued to individual annuitants covered by the defined benefit plan, to evidence their entitlement under the group contract to current and future payments from the insurer.
About John Hancock and Manulife Financial
John Hancock is a wholly-owned subsidiary of Manulife Financial Corporation, a leading Canadian-based financial services group serving millions of customers in 19 countries and territories worldwide.
Operating as Manulife Financial in Canada and Asia, and primarily through John Hancock in the United States, the Company offers clients a diverse range of financial protection products and wealth management services through its extensive network of employees, agents and distribution partners. Funds under management by Manulife Financial and its subsidiaries were Cdn$414 (US$355 billion) as at December 31, 2006.
Manulife Financial Corporation trades as ‘MFC’ on the TSX, NYSE and PSE, and under ‘0945’ on the SEHK. Manulife Financial can be found on the Internet at www.manulife.com.
The John Hancock unit, through its insurance companies, comprises one of the largest life insurers in the United States. John Hancock offers a broad range of financial products and services, including life insurance, fixed and variable annuities, mutual funds, 401(k) plans, long-term care insurance, college savings and other forms of business insurance.
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Survey Source: LIMRA International, Stable Value and Funding Agreement Products, Fourth Quarter General Account YTD 2006 results. Sales based on annualized new premium.