Manulife Financial Corporation Shareholders Meeting - Final

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ARTHUR SAWCHUK, CHAIRMAN, MANULIFE FINANCIAL CORPORATION: The hour has arrived. Good morning, ladies and gentlemen, and welcome to the Ninth Annual Meeting of Manulife Financial Corporation, and the 121st Annual Meeting of the Manufacturers Life Insurance Company. My name is Arthur Sawchuk, and I am Chairman of both Manulife Financial Corporation and Manufacturers Life, and I will ask as Chairman of today's joint meeting.

Before I get started, just in the event of any problem with the fire alarm or anything like that, I remind you that there's an exit through there, and there are a couple of exit doors there. There's also that exit door at the back. Should anything occur, please make an orderly exit through all of them as quickly as possible.

Now this will be the 10th and the last annual meeting of Manulife that I will chair. It's been an enormous pleasure to have served the corporation, the shareholders and the policyholders. I've been blessed in having what I consider the best Board of Directors and management team to work with. It's been exciting to see the Company come such a long way in those ten years.

When I reflect on my contribution, I take the most pride in leading the Company to have among the very best of governance practices. Among those practices, is Board succession, which is always thoughtful, orderly, and done well in advance. For example, you will recall that we added two new Directors last year in anticipation of the retirement of two Directors this year. We did this so that the new Directors would get to know the Company and it's business before the retiring ones left the Board and the experience walked out the door.

I would now like to introduce the members of our Board of Directors who are present here today. I would ask them to please stand when I call their name; John Cassaday, Lino Celeste, Thomas d'Aquino, Richard DeWolfe, Robert Dineen Jr., Pierre Ducros, Thomas Kierans, Lorna Marsden, Hugh Sloan Jr., Gordon Thiessen. The two new Directors that we added last year who now have a year of experience; Scott Hand and Luther Helms.

Next is Allister Graham. Allister? This will be Allister's last annual meeting, having reached the mandatory retirement age, even though he doesn't look it. Allister is special in many ways. First, he helped bring us North American Life in 1996, where he was a Director, that's how he got on our Board. Secondly, he's been a great counselor to me personally, and to many others as well.

He has that special, nice way of getting things done. He will always be remembered by me as Gentlemen Al, and the Board would like to thank Allister for his numerous years as service as a member of the Board. Al, you will be missed on the Board, but never lost to us as a friend.

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On the platform with me, starting from my immediate left is Angela Shaffer, Vice President and Corporate Secretary; J-P Bisnaire, Senior Executive Vice President, Business Development and General Counsel; Dominic D'Alessandro, President and Chief Executive Office and Board member; Peter Rubenovitch, Senior Executive Vice President and Chief Financial Officer; and Gail Cook-Bennett, Vice Chair.

A year ago, anticipating my retirement as Chairman in 2008, that is this year, we started the process for finding orderly succession, successor. After a very thorough review of candidates, the Board chose Gail Cook-Bennett to be the Vice Chair of the Board. Assuming that we both get elected as Directors today, Gail will become the Chair of the Board in October, upon completion of her term as the Chair of the Canada Pension Plan Investment Board.

We also have with us a special guest today, as we always do, our Stars of Excellence. Every year at this time, we honor the Stars of Excellence as a distinguished group of employees and of field associates from around the world for their leadership, their commitment, and their contribution to the success of your company. Reflecting the global nature of our business, these employees and field associates come from 11 different countries and territories.

As I call out the region that you represent, I ask that you please stand so we may acknowledge you, and for some of you, your very first, of course, visit to Canada. Please stay standing until all the regions have been called. The regions represented by our Stars of Excellence are Belgium, there he is; China, Hong Kong, Indonesia, Japan, the Philippines, you are supposed to all stay standing; Singapore, Malaysia, Taiwan, United States, Canada. Now those who sat down earlier, stand up.

Let's give our Stars of Excellence a warm -- . I would like to say a warm Canadian welcome and a thank you. Thank you.

I now call this Annual Meeting of Shareholders of Manulife Financial Corporation and Annual Meeting of Policyholders and the Shareholders of Manufacturers Life Insurance Company to order. This meeting will be conducted in accordance with the rules of procedure set out in the agenda card, which has been provided to you. Angela Shaffer will act as Secretary of the meeting, [Karen Garrod] of CIBC Mellon Trust Company, and Lynore LeConche of BNY Mellon Shareowners Services will act as scrutineers for Manulife Financial Corporation.

Karen Garrod and [Joyce Whitelaw] of CIBC Mellon Trust Company will act as scrutineers for Manufacturers Life. I confirm that the notice of this meeting was given in accordance with the Insurance Companies Act, that the quorum requirements for the joint meeting have been complied with, and therefore the meeting is properly convened.

We will be conducting the voting for the election of Directors, the appointment of auditors, and the shareholders proposals by ballot in the spirit that every vote counts. In order to not to delay proceedings, certain individuals, who are either shareholders or policyholders have agreed to move and second the motions at this meeting.

Now ballots were handed out at the registration desk prior to the meeting. If you are a shareholder or a policyholder and have not already voted by proxy, or if you are a proxy holder who did not receive a ballot upon registration, please raise your hand and the scrutineers will provide you with the required ballots.

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Please mark an X in the appropriate box to vote for, to vote against, or to withhold a vote. The ballot requires that you print your name in the place indicated and sign the ballot. This is for verification and identification purposes. The scrutineers will collect the ballots twice, once following the election of Directors, and the appointment of auditors of both Manulife Financial and Manufacturers Life. At once following the vote on the shareholder proposals.

On behalf of the speakers that follow, I wish to caution you that their presentations and responses to questions may contain forward-looking statements within the meaning of the Safe Harbor provisions of applicable Canadian and U.S. Securities Laws. Certain material factors or assumptions are applied in making forward looking statements and actual results may differ materially from those expressed or implied in these statements.

For additional information about the material factors or assumptions applied in making these statements and about the material factors that may cause actual results to differ materially from expectations, please consult the "caution regarding forward-looking statements" in the slide presentation for this meeting available on our website, as well as the information in our annual information form and the management's discussion and analysis referred to in that caution.

The first item on our agenda is the election of Directors of Manulife Financial Corporation. The number of Directors to be elected today as determined by the Board is 15. Information regarding the nominees is set out in the proxy circular. I now declare the meeting open for nominations for the election of Directors. Edwina Stoate, a shareholder has agreed to move this motion.

EDWINA STOATE, INVESTOR RELATIONS, MANULIFE FINANCIAL CORPORATION: Mr. Chairman, I am pleased to nominate John Cassaday, Lino Celeste, Gail Cook-Bennett, Dominic D'Alessandro, Thomas d'Aquino, Richard DeWolfe, Robert Dineen, Pierre Ducros, Scott Hand, Luther Helms, Thomas Kierans, Lorna Marsden, Arthur Sawchuk, Hugh Sloan and Gordon Thiessen as Directors of Manulife Financial Corporation to hold office until the close of the next annual meeting of the shareholders of Manulife Financial Corporation or until their successors are elected or appointed.

ARTHUR SAWCHUK: Thank you, Miss Stoate. Are there any other nominees? As there are no further nominations, I declare the nominations closed. We will now proceed with the voting for the election of Directors of Manulife Financial. Please mark your ballot, which is the green ballot number one. Hopefully, it's done. Voting is now closed for the election of Directors of Manulife Financial Corporation.

The next item on our agenda is the election of Directors of Manufacturers Life. Manufacturers Life has both participating policyholders and one shareholder; Manulife Financial Corporation. The number of Directors to be elected today as determined by the Board is 15, six of them Policyholder Directors and nine Shareholder Directors. Information regarding nominees is set out in the report to policyholders.

I now declare the meeting open for nominations for the election of Policyholders Directors. [John Clark], a policyholder, has agreed to move this motion.

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JOHN CLARK, POLICYHOLDER: Mr. Chairman, I am pleased to nominate Thomas d'Aquino, Richard DeWolfe, Thomas Kierans, Arthur Sawchuk, Hugh Sloan, Gordon Thiessen as Policyholders Directors of the Manufacturers Life Insurance Company to hold office until the close of the next annual meeting of the policyholders and the shareholder of the Manufacturer Life Insurance Company or until their successors are elected or appointed.

ARTHUR SAWCHUK: Thank you, Mr. Clark. Are there any other nominees? As there are no further nominations, I declare the nominations closed. We'll now proceed with the voting for the Policyholder Directors of Manufacturers Life. Please mark your ballot, which now is the yellow ballot number one.

The voting is now closed for the election of Policyholder Directors of the Manufacturers Life Insurance Company. All of the common shares of Manufacturers Life are owned by Manulife Financial. The shareholder of Manufacturer Life has by written resolution in accordance with the Insurance Companies Act elected the shareholder's Directors, and therefore I declare that John Cassaday, Lino Celeste, Gail Cook-Bennett, Dominic D Alessandro, Robert Dineen, Pierre Ducros, Scott Hand and Luther Helms and Lorna Marsden have been elected to serve as the Shareholder Directors of the Manufacturers Life Insurance Company to hold office until the close of the next annual meeting of policyholders and the shareholder of the Manufacturers Life Insurance Company or until their successors are elected or appointed.

Next on the agenda is the appointment of auditors for the Manulife Financial and Manufacturers Life. Irene Bailey, a shareholder and policyholder, has agreed to bring this motion.

IRENE BAILEY, SHAREHOLDER: Mr. Chairman, I move for Ernst and Young LLP, Chartered Accountants, the appointed Auditors for Manulife Financial Corporation and the Manufacturers Life Insurance Company until the close of the next annual meeting.

ARTHUR SAWCHUK: Thank you, Miss Bailey. [Peter Marlatt], a shareholder and policyholder has agreed to second this motion.

PETER MARLATT, SHAREHOLDER: Mr. Chairman, I second that motion.

ARTHUR SAWCHUK: Thank you, Mr. Marlatt. We will now proceed with the voting for the appointment of the Auditors for Manulife Financial and Manufacturers Life. Please mark your ballots, this time green ballot number two is for the shareholders of Manulife Financial and yellow ballot number two is for policyholders of Manufacturers Life.

The voting is now closed for the appointment of Auditors of Manulife Financial and Manufacturers Life. The scrutineers will now collect the ballots for the election of the Directors and the appointment of Auditors. Please raise your hand if you have a ballot that you wish the scrutineers to collect, and I think most of that's done.

The next item on the agenda is the tabling of the 2007 Consolidated Financial statements of each of Manulife Financial and Manufacturers Life, and the Reports of the Auditor and the Actuary thereon.

Shareholders receive the 2007 Consolidated Financial Statements of Manulife Financial in accordance with the Insurance Companies Act and applicable securities legislation. Policyholders received the 2007 Consolidated Financial Statements of Manufacturers Life in accordance with the Insurance Companies Act.

The next item on the agenda is to consider the nine shareholder proposals submitted by the Mouvement d'education et de defense des actionnaires, otherwise abbreviated MEDAC. The proposals and the Board's response to these proposals are set out in schedule C of the proxy circular. You will be using the green ballot number three to vote on all of the Shareholder Proposals.

Mr. [Norman Carron] is the representative form MEDAC who will present the proposals. As Mr. Carron will present the proposals in French, we will have provided the English translation on the screen for your convenience. Mr. Carron, please present the motion for Shareholder proposal number one.

NORMAN CARRON, REPRESENTATIVE, MEDAC: Thank you, Mr. Chairman. I'm here. And I'm very glad to be here with you this morning to present our nine proposals. Why nine? Because it's the ninth anniversary of our little organization, but it won't be a tradition.

So the first proposal said that (spoken in French) I will give the explanation or the reason why we present this proposal. It takes it's inspiration from the French legislation adopted in July 1994 authorizing corporations to compensate shareholders for their loyalty currently in force with major French corporations like [Erika] or [Lafarge]. I'll take my breath.

This provision encourages small shareholder to keep their shares, give them a greater feeling of belonging, and give preference to long-term policies. But, as we know, the Insurance Corporation Act doesn't permit actually to proceed and implement this proposal. We suggest in the long run to the Board and the management of Manulife to support us eventually with the request at the political level to permit this sort of benefit.

ARTHUR SAWCHUK: Okay, thank you. We will now proceed with the vote on that shareholder proposal number one. Please mark your ballot with respect to that one. We'll wait a minute and then go to number two.

Proceed Mr. Carron.

NORMAN CARRON: (spoken in French). I think I will read it in English. It will be easier for me. It's proposed that shareholder voting right be granted after shares have been held for a minimum of period of one year. The logic -- it takes also this inspiration from a recombination put forward by the Institute of Governance of Private and Public Organization. This organization is partially financed by the Jarislowsky Foundation.

Stating the practice of granting all the privileges of corporate citizenship upon purchase of a share can give unique influence and power to transit shareholders determined to create short-term value for themselves by all possible means and some studies conclude that corporate managers could sacrifice long-term economic value to hit the target of the smooth short-term earnings. Again, as the law doesn't permit to implement this proposal, we suggest, like the first, to support ourselves in the next future.

ARTHUR SAWCHUK: Vote on number two.



UNIDENTIFIED SPEAKER: Shareholders entitled to speak before we vote?

ARTHUR SAWCHUK: I guess we have a simple proposal here to simply vote up and down on, the notice has been given, people have considered it, I think it would be unfair to have that influence in any of the votes because the other shareholders are not here to listen to it.

UNIDENTIFIED SPEAKER: That's fine. I'll speak during the question period then.

ARTHUR SAWCHUK: Thank you. Vote on Proposal number two. Mr. Carron, would you proceed to number three?

NORMAN CARRON: Okay. Proposal three. We propose that Manulife Financials by-law provide in the event of a merger or acquisition that an amount equal to double the compensatory bonuses and benefits paid to the Executive and Director be paid into the Employee Pension Plan. Why?

Recently, even if we are aware that it's not probably the case for the Company here, that any change of Manufacturer Life Control is a highly united even, we maintain this proposal because we need to protect shareholders that are avoiding possible conflict of interest among senior managers and executives where they can fill their pocket by dealing and selling company control. The recent case of BCE and Alcan seems so tragic. This is unfair that employees are not benefited in financial transaction of merger or acquisition even though they devote years and years and often decay while building the business and creating value for the shareholder.

ARTHUR SAWCHUK: Thank you. That is proposal number three. Would you please vote on that now? Proceed to number four, Monsieur.

NORMAN CARRON: Proposal four; It's a long-term proposal. We propose this year that there be as many women as men on Manufacturer Life Board of Director within three years of the adoption of this proposal. We are convinced that an increase in female presence on Board of Directors will bring added value to the way it's operated. This conviction is ground on survey results showing that more you have woman on Boards, more attractive are the rates of returns. I'm not saying it, I read it --

ARTHUR SAWCHUK: I think we know what you mean.

NORMAN CARRON: The Capital Assistance Institute in 1904. Also a study conduct by the Conference Board of Canada promotes clearly that the presence of woman change the way Boards operate, raising different kinds of issues during the meeting, asking novel questions, discussing broader aspect contributing to good government. For Manulife, the actual result, I think it's two on fifteen, quite far from how we suggest target for the next three years.

We hope that the presence of a woman in the role of Chair will contribute eventually to accelerate the process of change in the future. And as I said in other meetings, don't wait legislation, I think it's Norway, will establish for the public company a ratio of 40%, by law. So, the change will have to come from the inside and in the shareholder's meeting. Thank you.

ARTHUR SAWCHUK: Okay. If you'll vote on proposal number four.

Proceed, Mr. Carron on number five.

NORMAN CARRON: Number five. We have that the annual report and the management proxy circular disclose a new ration, the equity ratio between the total compensation of Manulife Financial higher state executive, which include annual salary bonuses, gratuities payment and all other form of compensation and the average employee compensation. The reason why; during the last years, and it's really a fact, data compiled for example, the Globe and Mail in 2006, the average compensation for the officer of Canada major corporation was 116 times the average compensation of Canada worker.

We know also that this executive compensation has no evident relationship between the corporations market performance according with the study conducted by the Teachers Pension Fund in May last year. It is imperative for [internet] cohesion and social stability in our country, in our institutions that this ratio be known and eventually reduced as much as possible.

We recognize that the Manulife's programs are based on the pay for performance philosophy and the long-term performance and we appreciate the presentation of the decreasing ratio compensation versus net income which is presented on page 32 in your circular. We do appreciate this new type of information. Thank you.

ARTHUR SAWCHUK: Now would you proceed to vote on number five. I think by now, they know how to vote, Mr. Carron, so why don't we go right to number six.

NORMAN CARRON: Well, in the same philosophy, we propose that the remuneration policy of the Company, five highest senior executives and the Board of Directors fees receive prior approval by the shareholders. This is the standard say on pay and it's a trend which suggests -- I will recall you the requirements set up by the [OECD] principal of governments four years ago, shareholders should be able to make their view known on the remuneration policy for Board members and key executives. The equity component of compensations came for Board members and employee should be subject to shareholder approval.

Last year in April in a historical vote at the house of representatives, a new law passed that imposed a consultative vote on remuneration policies. Let's not forget the result of votes obtained on say on pay resolution of this sort of some annual meetings like [Angersol Ran], Blockbuster, Motorola, [APO], City Group, over 50% did vote for this kind of policy. More recently here in Canada, two, a few months ago, a proposal of the consultative vote, I think it's a group in Vancouver, maybe [Caston] obtained more than 40% support at the annual meeting of the largest bank of Canada.

ARTHUR SAWCHUK: Okay, thank you. Proceed to vote on number six. And we move to number seven, Mr. Carron.

NORMAN CARRON: Seven. It's proposed that Manulife Financial govern the exercising of option allocated to the senior executives and Directors of our corporations by stipulating that such options may not be exercised by interested parties until the end of their term of office.

Since mid-1990's, North America corporations have moved towards the increasing use of stock option plans in the compensation of senior executive and director. This practice has resulted in excessive and unwarranted compensation levels that are not justified by the performance of a great majority of companies and the stock market returns offered to the shareholders.

This extensive use of stock options in the compensation plan is the primary source of fraud where management with the complicity of auditors, I don't have to cite any example here, but we know everybody knows them, across legal and ethical boundaries and information trafficking about the corporate actual financial status. We agree with the Canadian Council of Chief Executives who conduct a study in September 2002 that it is frustrating for investors when senior executives are rewarded handsomely for past performance that prove to be short-lived.

ARTHUR SAWCHUK: Thank you. Vote on proposal number seven. And could you proceed then, number eight.

NORMAN CARRON: This is a very actual proposal. Given the strong concerns expressed recently by numerous observers and regulators regarding the effects of hedge funds and subprime mortgage loans on the stability of the financial system, it is proposed that while the bank and other financial companies make public information concerning it's involvement, direct or indirect, in these type of activities.

Mr. Chairman, last year, our group sound the alarm by asking for a disclosure of involvement in hedge funds. This proposal received a strong support in annual meetings, exceeding 10% level. In accordance with the law and giving the most recent activity of this issue, we submit again this proposal.

Born of a concern of transparency, shareholders must be informed of such investment so that they can assess their investment in the corporation in the light of risks they are incurring and in light of highly speculative management philosophies espoused by their executives and member of the Board of Directors. We do appreciate that Manulife has appropriate controls in place to manage it's investment risks and we don't expect to experience any credit losses relating to subprime mortgage backed securities.

ARTHUR SAWCHUK: Thank you. Vote on number eight, and now we'll move to number nine.

NORMAN CARRON: And the last.

ARTHUR SAWCHUK: The last one.

NORMAN CARRON: Oh, I think I have a ten. It is proposed that Manulife Financial amend it's bylaw in order to implement a cumulative voting mechanisms for electing members of the Board of Directors. This is a whole proposal, and in some place we reach our objective. Under this [niche of] selection, shareholders are entitled to as many votes as the number of share they hold multiplied by the number of Directors to be elected.

These votes can then be exercised in favor of one single candidate or all candidates as the shareholder wishes. The cumulative vote is a provision of Canadian legislation to give preference to the wish of minority shareholders in the process of electing a corporation director. A cumulative vote is a mean to ensuring that minority shareholder play their role to the fullest.

This proposal doesn't bring judgment to bear on the openness of management or the Board of Directors on shareholders concerns, but to essentially affirm the principle that the members of the Board must represent both majority and minority shareholders. Thank you, Mr. Chairman.

ARTHUR SAWCHUK: Thank you, Mr. Carron.

NORMAN CARRON: And have a nice meeting.

ARTHUR SAWCHUK: And thank you for your nice thoughtful way of presenting your package. Would you proceed to vote on number nine? Hopefully that will be done quickly and I can declare the voting on the nine now closed and the scrutineers I would ask them to pick up, collect, the ballots for voting on the shareholder proposals.

Now, while we are waiting for the results of all the ballots, I think we will move on to the next item of business. At this point, I would like to introduce the President and the Chief Executive Officer, Dominic D'Alessandro. Dominic will deliver the President's address. I would ask you to, of course, recognize you hold your questions until the question and answer period at the end of his presentation, and we'll give you a chance to ask those at that time. Dominic?

DOMINIC D'ALESSANDRO, PRESIDENT & CEO, MANULIFE FINANCIAL CORPORATION: Well, good morning, ladies and gentlemen. I would like to add my welcome to those and Mr. Sawchuk's. It is a pleasure to see you here again today. I always look forward to this event and for the opportunity to greet so many friends and fellow shareholders.

As our chairman mentioned, it is at this time of year that we celebrate the achievements of a special group of Manulife people, our Stars of Excellence, who came from all over our various operations around the world. Last night we held in their honor a gala that was attended by our business leaders. It was a wonderful evening. I can't tell you how proud and enthusiastic everyone is and how good we feel about our achievements and about our prospects going forward.

We had a very strong year in 2007 as revenues reached record levels. Assets remained at an extraordinarily high quality and operating costs were kept under good control. In 2007, shareholders earnings amounted to $4.3 billion, a new record for us. Fully diluted earnings per share were $2.78, an increase of 11% over 2006.

Return on shareholders equity increased to a record 18.4% substantially exceeding our target of 16%. These results were fueled by record sales in virtually every line of business across the Company. New business embedded value a measure of future profitability of the business written during the year was also up very sharply to $2.2 billion, an increase of 18% over the prior year.

This strong performance was achieved in spite of the adverse affect of the weakening U.S. dollar, which reduced earnings by $227 million, and I want to emphasize without any relaxation of our very disciplined reserving practices.

The diversified nature of our company, combined with a prudent risk management framework enabled Manulife to successfully weather a number of significant challenges, which apart from currency included volatile equity markets, adverse interest rate movements and the much publicized subprime crisis, about which I will say more later in my address.

In 2007, dividends paid to common shareholders totaled $1.3 billion and on a per share basis increased 21% over the prior year. We also repurchased more than 56 million common shares last year at an aggregate cost of $2.2 billion. In total, $3.5 billion of capital was returned to common shareholders or more than 80% of our net income.

I'd like to say a few words about each of our operating divisions beginning with Canada. Our Canadian division enjoyed yet another extremely successful year as both our wealth management business and insurance business reported record sales. Net income from the Canadian division was $1.1 billion, an increase of 12% over 2006.

The focus on innovation and distribution excellence which are features of all of Manulife's businesses everywhere in the world was again very much in evidence in Canada. A particular success was the launch of [Income Plus] an investment product that provides predictable, sustainable income for life and which was expected to appeal to the very large baby boomer generation segment of the population.

Acceptance of this product has been exceptional. The sales of more than $3 billion last year, this guaranteed minimum withdrawal benefit product was the first of it's kind in the Canadian marketplace and has been recognized with a number of industry awards. Another highlight was the acquisition in late August of Berkshire TWC Financial Group which effectively doubles the size of our Canadian advisor base, and which we expect will allow us to grow our mutual fund and other savings businesses here.

Also encouraging is the performance of Manulife Bank which continued to attract a large number of new clients to it's innovative Manulife One Mortgage Account and it's competitive deposit offerings. The banks surpassed a milestone of $10 billion of assets during the year, and it expects to continue to grow at a good pace.

The group pensions businesses also performed well with new sales increasing by 120% over the prior year. The group benefits business also enjoyed a banner year, highlighted by the largest sale in Manulife's history and the largest in the industry in the last ten years. Group Benefits is now the leading provider in Canada and has a market share of more than 23%.

Finally, in Canada, our very important individual life insurance business achieved record results in 2007, a sales increase by 15%. I'm very pleased at how this business has focused so successfully on service and operational excellence to drive it's strong results. In the United States, for most of our business operates under the John Hancock name, our exceptional distribution capability and strong product focus continue to drive impressive results.

Our U.S. division contributed almost $1.9 billion to consolidated earnings in 2007. In 2006, we reported that our U.S. Life business emerged as the leading provider of individual life insurance in the U.S. marketplace. Through the launch of ten new products and ongoing service enhancements, this business has maintained it's number one market share position and once again produced record sales in 2007, up 15% over the prior year.

Similarly, our long-term care business also had record sales with success in the large group market propelling this unit to a 24% increase over 2006. U.S. wealth management also experienced a strong year despite challenging equity markets. Perhaps most notable was the performance of valuable annuities, which reported sales of $10.8 billion, an impressive 18% increase over the previous year. These robust results reflect the popularity of our recently enhanced guaranteed minimum withdrawal benefit product.

Our U.S. Group Pension business remains a strong performer with sales exceeding $5 billion for the first time. Amid 2007, U.S. Group pensions also surpassed $50 billion in funds under management, underscoring our continued leadership in this segment of the market.

U.S. fixed products continue to make an important contribution to our earnings, however, the continuing low interest rate environment makes it difficult to generate an acceptable level of profitability on new fixed-rate business. And accordingly, because of scheduled maturities, we expect that our funds under management in this segment which stood at $38 billion at the end of 2007 will continue to decline modestly in the periods ahead.

We are pleased with the position of our U.S. division and are particularly encouraged by the success it is having in expanding it's already formidable distribution capabilities. A number of new third-party distribution agreements were concluded during the year, including the very promising Edward Jones agreement which went live early in 2008. As well, John Hancock Financial Network already a strong distribution channel is growing it's agent base for the first time in several years.

Moving to Asia and Japan, our Asia and Japan division is well diversified by product offering, geography and increasingly by distribution channel. We have operations across ten countries and territories and in many markets we enjoy a leading position. In 2007, each of our operating units performed well, and altogether the Asia and Japan division produced record earnings last year of $858 million, up by 17% from the $734 million in the prior year.

Our distribution capability in the region was noticeably expanded during the year as our professionally trained agency force grew by 15% to 28,000, and a number of new distribution agreements with local financial institutions were established. As well, we continue to leverage our valuable annuity expertise in Hong Kong, Singapore and Taiwan, introducing the first guaranteed minimum withdrawal benefit products in each of these markets.

Because of time constraints, I can't go into a detailed review of each of our operations in the region. However, I would mention that our important operation in Hong Kong, where we do business with more than 1.4 million customers, continues to do very well and is rapidly growing an important savings business to compliment it's large life insurance block.

In Japan, we continue to enjoy success with our valuable annuity offerings and have added a number of new distribution partners for this attractive product. In China, we continue to move quickly to establish a broad footprint in that important market. During 2007, we received a number of new licenses and now have operations in 30 cities, up from 17 a year ago. It is gratifying that our company's leadership and professionalism in Asia is being acknowledged.

Manulife was named the life insurance company of the year by the Asia review awards and was ranked fourth by Fortune magazine in the their greater China survey of top companies for leaders. Looking briefly at reinsurance, our reinsurance division remains the leader in the life retrocession provider in North America and continues to provide property catastrophe and aviation coverage on a selective basis to other reinsurers.

As well, this division offers international employment benefit management services to multi-national corporations. The division had a good year in 2007 and was nicely profitable with earnings of $263 million. Particularly pleasing was that for the second consecutive year, there were no significant claims from the property and casualty business.

Investments. As I noted previously, I am happy to report that our company's long-standing philosophy of financial discipline and rigorous risk management ensure that we have avoided the problems arising from subprime loans, third party asset backed commercial paper, monoline insurance and other exposures that have afflicted so many other financial services companies.

Using a disciplined approach to building our asset base and it's blend of asset types, we have managed to keep our portfolio well diversified and of exceptionally high quality. Our investment division experienced another excellent year producing healthy returns across all assets, generated $10.3 billion of investment income and performing well against industry benchmarks.

On an exchange-neutral basis, assets managed for external clients increased by 11%, driven by growth in retail and institutional mandates. Alternate asset classes performed exceptionally well in 2007 with notable strength in real estate, agriculture and timber. Since the time of the John Hancock merger, our bond stock quality has steadily improved. Credit provisions were well below plan again this year and the Company's general account maintained a very strong credit quality with 96% of it's bond portfolio at investment grade or better.

Now looking at the first quarter of 2008, earlier this morning we announced that our earnings for the first quarter of 2008 were $869 million, which is down from the $986 million reported in the first quarter of last year. The decrease in earnings is largely attributable to the sharp decline in equity markets that occurred in the U.S., in Hong Kong and in Japan since the beginning of 2008. These markets have declined by 10% in the U.S. and 18% in both Japan and Hong Kong.

Our actuarial practices require us to assume that these declines are permanent and adjust our reserves for future benefits accordingly. In the quarter, an after-tax charge of $265 million was recorded. Now I want to clarify that this is a non-cash charge, which in the absence of further market declines will not recur in future quarters.

Should the markets recover, the reserve adjustment will be reversed. All other aspects of the business remain highly satisfactory. Sales continued their positive momentum from last year and we're up nicely in the quarter while our operating costs and investment returns generally were at expected levels.

I will be reviewing the details of our first quarter results with investments analysts later this afternoon and invite any of you who are interested to join the call. Looking forward, notwithstanding that we've gotten off to a somewhat soft first quarter, I remain optimistic of our prospects. While the coming quarters may well bring additional market volatility and uncertainty, I believe they also provide important opportunities which Manulife is well positioned to take advantage of.

And despite widespread concern about a continued downturn in the U.S. economy, our company's operations in Asia with it's robust markets offer countervailing opportunities. And again, I want to mention that our diverse asset portfolio and very, very stable funding base and strong liquidity position are all such that we can expect to do well no matter what and how turbulent the financial markets may get.

Going forward, we will continue to take full advantage of important demographic shifts, such as the aging baby boomer generation and the extended life spans. These trends require creative, sophisticated products that can respond to the needs of the population whose health and longevity concerns are intersecting with a desire for wealth accumulation.

Manulife has shown that it can provide product leadership in this new era. We intend to grow our businesses in both mature and emerging markets backed by the finest distribution network and suite of customer tailored offerings in the industry. This is a recipe for success that has served us very well.

It is also worth remembering that Manulife remains one of only two publicly traded life insurance companies in the world, whose insurance subsidiaries hold Standard [Mays] highest triple A rating. In 2007, we are also upgraded by Moody's investor services to a double A1 rating, which is further validation of the quality of our financial and risk management processes.

Undoubtedly, our robust financial position will stand us in good stead. I'm also very pleased that once again, Manulife rated first overall in the Globe and Mails annual survey of corporate governance. We have led this survey in four of the last six years. These ratings too recognize our stability and discipline, both integral to our work today and in the future.

I'd like now to comment on the extraordinary difficulties that currently exist in the financial markets around the world. I will admit that I am stunned at the extent of the problems and at the damage that has been done, not just to many of the largest and most sophisticated financial institutions in the world, but also to millions of investors and homeowners.

The losses of nearly $300 billion reported to date are simply staggering, and if the latest forecasts are to be believed there are significantly more losses yet to come. I've done a lot of reading about the subject to try to get an understanding of how this situation could have gotten as bad as it is. Every day there are new revelations about what went wrong. Not all of what happened is easy to understand.

Until five or six years ago, subprime lending was a small and relatively unimportant of the U.S. lending market. However, because of low interest rates and the steady price appreciation of residential real estate, more Americans than ever wanted to become homeowners. Mortgage lending exploded, facilitated by ridiculously loose lending standards, and the growth and demand for securitized assets.

Securitized subprime mortgages rose from roughly $60 billion per year in the late 90's to over $200 billion in 2003, and an even more phenomenal $450 billion in each of 2005 and 2006. In hindsight, it is obvious that there was a lethal self-reinforcing cycle of lending and price gains taking place. To meet the mortgage demands, investment banks and others developed an ever-more exotic array of financial instruments and funding vehicles.

Everyone got in on the act, rating agencies used would prove to be less than robust models as the basis for assigning investment grade risks through the subprime borrowings. Monoline insurers for a small fee provided credit guarantees, which made the loans even more marketable.

With the high ratings and the monoline guarantees in place, the subprime assets were purchased by investors from around the world, including as has been well publicized many small and far-flung European banks. As well, some of the banks distributing these products chose to create special investment vehicles to hold the subprime assets.

Under the rules, moving the assets into conduits allowed the banks to upfront a large portion of the future income, while concurrently reducing the amount of capital they needed to hold. The SIBs and Congress had very, very little capital, and made extensive use of money market and other short-term deposits to fund those assets.

At the end of the process, the world's financial system had, in addition to the credit risk inherit ant in the subprime loans been infected with unprecedented level of leverage and liquidity risk. Of course, everyone along the way collected fees; the mortgage brokers, the appraisers, the packagers, the bankers, the distributors, the rating agencies, the monolines and the man on the street was able to own a home.

It was a win, win, win, win. Until, that is, housing prices stopped rising and actually started to decline across the entire country, a development that none of the sophisticated financial models upon which everything rested had anticipated. As housing prices began to decline, the ultimate lenders to the subprime borrowers couldn't be repaid and the perfect storm was unleashed leading to the enormous losses referred to earlier.

Now, on a positive note, I'm pleased that although not completely immune, the situation in Canada is a far less troubled one. Largely because our mortgage lending practices are far more disciplined and because the securitization process was not as aggressively developed as in the United States. To their great credit, the authorities around the world are acting boldly and decisively to contain the damage.

Central banks are providing liquidity to the markets on a massive scale. The unprecedented intervention in the Bear Stearns affair was both timely and necessary. The banking system is rapidly deleveraging as institutions are successfully replenishing deleted capital levels and problem assets are being written off at a rapid pace. So, while much remains to be done and many sectors of the markets remain stressed, I am hopeful that the worst is behind us.

As a result of the global financial crisis, we can expect that a number of far-reaching and profound changes will be made to the regulations governing how our financial institutions operate. Already, there are many lessons that can be learned from the sad experience. Here are a few that I think are particularly important and which I hope will shape the actions of policy makers going forward.

Policy makers ought to rid themselves, once and for all, of the attitude that the market is always right. It is this attitude which events have shown to be naive and dangerous, which more than anything else, is at the heart of the current crisis.

It should be obvious, that sound regulation is necessary if markets are to operate properly that such regulations should be harmonized and consistent across geographies and markets goes without saying. The challenge, of course, will be to keep regulation intelligent. We don't need another Sarbanes 404 for example, but we do need rules of the road.

As a matter of some urgency, policy makers should carefully examine the operations of hedge funds and the derivatives markets in order to assess the extent to which they might pose systemic risk. Based on what has been reported about their size, complexity and use of leverage, it would appear that they do. And if so, than these activities ought to be subjected to the same regulatory oversight as would apply to more traditional financial pursuits.

Questions could also usefully be asked as to whether or not recent innovations in the financial markets are proceeding in a reckless and uncontrolled manner. Again, it is now obvious that there are many of the innovative instruments at the center of the current crisis that are fiendishly complex, not properly understood by anyone and certainly not well controlled by any of the risk management systems in effect as what we think of as the world's largest and most sophisticated financial institutions.

I, for one, do not believe that a slowdown in the pace of innovation to allow for a more comprehensive assessment of risk would be a bad thing. It is also my opinion that we desperately need to move to a principal based system of financial reporting. Rules-based systems will always be gamed by the clever.

However, I question whether the wholesale adoption of fair-value accounting as currently imposed by the standard setter is a step in the right direction. Time will show, I think, that this global financial crisis was greatly exacerbated by the accounting practices requiring that assets be written down to reflect current pricing levels regardless of the highly unsettled conditions that prevail.

Increasingly accounting practices are being mandated, which give rise to an exponential increase in the volatility of reported results, a volatility that most often has little to do with the operating fundamentals of the business. The many adverse consequences of adopting reporting standards that greatly exaggerate performance, either positively or negatively seem to be of no concern to the rule makers.

For those organizations who have the intention and demonstrative capacity to hold assets for the long-term or to maturity, fair value is a useful measure, useful as supplementary disclosure. It is much less meaningful when periodic changes in fair values are co-mingled with operating results. Whatever happened to the going concern principal? Now, I suggest would be a good time to pause and reexamine if the move to fair value accounting does in fact produce improved financial reporting model we all hope for.

Now these are some suggestions, I'm sure they will not find favor with everyone, but I felt it necessary to put them forward anyway. As I said, there will be profound and far-reaching changes that will be enacting as a result of the subprime crisis and I look forward to participating in the debate.

Ladies and gentlemen, before I conclude today I want to acknowledge the contribution of two individuals who've been instrumental in helping our company develop into the industry leader we are today. The first is Mr. Allister Graham, who has been a Director since 1996 when he joined the Board following our merger with North American Life.

Allister contributed greatly in helping us to affect a smooth integration at that time. And in particular, his council was useful to me when following the merger we had to make important decisions about a number of North American Life's activities, which were new to us.

I'm so glad I listened then to his many, many subsequent interventions over the years. On behalf of my management team, Allister, thank you very much for your support and steady confidence that you've always shown to us. We appreciate it.

The second departure that will take place later this year is that of our Chairman, Arthur Sawchuk. I can't tell you how grateful I am to have had Arthur to council me on so, so many issues over the past ten years. He's provided leadership to me and to my entire management team and I can say to the entire Board of Directors.

It is Arthur that is most responsible for the wide recognition that Manulife has received for the quality of it's governance practices that we are all so proud of, and it is Arthur who so skillfully, so skillfully managed my moods and helped me deal with all of the many, many stresses that are an inevitable part of running a large company.

Allister, would you please stand? Ladies and gentlemen, could you give Allister and Arthur a big round of applause?

As has been announced, Arthur will be succeeded as Chair by Dr. Gail Cook-Bennett later this year. Gail knows our company very, very well having joined as a Director now just out of college. She's been a Director for 30 years and we look forward to working with her. Ladies and gentlemen, there is one more final announcement I'd like to make today.

At our next annual meeting in 2009, I will be stepping down as President and CEO of our fine company, a position that I will have held for more than 15 exciting and eventful years. The Board and I have been actively working on the succession process for a few years now and it is anticipated that the CEO designate will be selected by year-end.

Now, needless to say, it's been the greatest and privilege and honor of my life to have been given the opportunity to lead this great company for so many years and to work with so many exceptional men and women in building what is surely, surely the finest life insurance company in the world.

I want to briefly acknowledge everyone's support today and I expect that there will be other opportunities to express my appreciation more fulsomely in the coming year. I want to conclude my address by thanking the thousands of employees, agents and business partners around the world for their commitment and confidence in our company. They are the reason why we've performed so well for so long and why we are optimistic for our future.

Thank you, ladies and gentlemen.

ARTHUR SAWCHUK: I now have the reports of the scrutineers on the election of Directors of Manulife Financial Corporation. All director nominees received at least 84% of the vote cast in favor of them. Therefore, all 15 director nominees were elected as Directors of Manulife Financial Corporation. On the election of policyholders Directors of Manufacturers Life, all policyholder director nominees received at least 95% of the votes cast, therefore, all six policyholder Directors were elected as policyholders Directors of Manufacturers Life.

On the appointment of auditors, Ernst and Young received 99% of the votes cast in favor. Therefore, I declare Ernst and Young LLP appointed as the auditors of Manulife Financial and Manufacturers Life.

All of the shareholders proposals received at least 11% for and Mr. Carron, if I might comment, much of the proposals have, in my opinion, have some good and solid intent. The differences may very well be in the way that we implement them. You know, that reminded me we used to have an elderly gentlemen, I think he was a retired employee, he used to stand over here and ask a question of me in my early years.

And the question at that time, for example, was how come there are no women sitting at this table? And I would just to like to comment that when I step down next year, there will be 40% women at this table. So, you think progress, but slightly different pace than perhaps you'd intended. At any rate, the scrutineers report in final form, will be recorded in the minutes of this meeting and will be posted on our website shortly after the meeting.

Now this concludes the official business of this meeting and I declare this meeting terminated. But we would now like to open the floor to your questions about the Company's business. Now when you make your comments or ask a question, I ask that you give your name and state whether you are a shareholder, a policyholder or a proxy holder.

Please direct your questions to me as the Chairman. In the interest of giving others the opportunity to ask questions, please keep your comments to not more than three minutes and ask only one question each time you are recognized. We have a microphone I think right on this aisle and one over there and I'll probably alternate between them to be sure we do that.

So, we're open for questions.


ARTHUR SAWCHUK: Can I take him because he was up first? Thank you.

BILL DAVIS, SHAREHOLDER: Mr. Chairman, my name's [Bill Davis], I'm a shareholder and a proxy holder. I want to say at the very beginning, I think you're ruling out a voter a question from a shareholder during the proposals may be in order, but it's certainly not common practice at a lot of other shareholder meetings I've attended. I was a little surprised at that, and I may be wrong, but I find it not common practice.

Anyway, the question that I had, I wanted to say in regard to Shareholder Proposals one and two, that I found the argumentation of the, however, of those proposals quite persuasive and I was personally inclined to vote for them.

And then I look at the response from the corporation and it says we can't do this because it's against the law. Now, hiding behind legality is okay I guess, but I would like to think that the Corporation gave a little bit of thought to; Does the law make sense?

Because the proposal had some value in it, and the gentlemen who presented it suggested that the Corporation might take a look at how we can work around the law or change the law or take some steps to implement something that makes good common sense. So my dilemma as a shareholder was, I couldn't vote against the proposal and yet I felt uneasy voting for something that would be illegal. So I abstained.

Now, my question is that there is no particular instruction in the proxy circular, how does one abstain? And I got into this at one of the bank meetings and talked with the corporate secretary afterward and I find that it can be done, but it's not clear. So there may be other shareholders who would have abstained who were faced with that same dilemma didn't know what to do. And maybe what I did wasn't right.

So I would like to thought given to that and I want to say if you hold American U.S. stocks, you will find on shareholder proposals, the option of abstention is right there, you just pick the box. So, I don't see why we can't have that made more simple for a shareholder facing that kind of a quandary and maybe the corporate secretary will want to comment to that. I think it's a legitimate question and maybe one that the corporations need to look at together.

ARTHUR SAWCHUK: Let me just make one quick comment before I turn it over to the secretary and legal counsel perhaps. We do have a struggle with the balloting question and there's -- we'll always weigh the issue of how to keep it simple rather than complicated. The minute we start to get it complicated we get complaints about complexity from shareholders, so life is never an easy solution. But, was somebody from secretary and legal add some comments?

UNIDENTIFIED SPEAKER: You raise good questions, in terms of the legality unfortunately the law is what the law is in terms of this area. Dividends are required to be paid to shareholders equally for example and unless you start to get into a dual-class structure, it's -- which would be inappropriate for this company, we just can't go along with the terms of either of the proposals.

On a second issue with respect to abstention, there's always the opportunity not to vote, and that in my view is deemed to be an abstention. The issue in the States is somewhat different because the law there and the way proxies are set up actually does have a section for abstention, but that's something that we can look at in the future as to whether or not we can provide an additional box.

BILL DAVIS: I'd appreciate that.

ARTHUR SAWCHUK: Yes, quite, quite. A lot of Mr. Carron's things, in a sense I had a feeling that they're almost an appeal to the regulatory bodies than they are to an individual corporation, while we may sort of sympathize with you, it's out of our hands. I think that's what we said. Thank you. Next question.

NICHOL MCNICHOL, SHAREHOLDER: Mr. Chairman, my name is [Nichol McNichol], I'm a shareholder. I would like to first to congratulate the management and the Board for steering the Company through very difficult waters in difficult times. But I'm interested in just what direction is being given to the business in India, because I didn't hear anything about India, and that's obviously a very important part of the world that we didn't seem to talk much about today.

ARTHUR SAWCHUK: Well, I'm going to let Dominic answer that one.

DOMINIC D'ALESSANDRO: Yes. No, thanks, it's a good question. We think about India all the time and it's very, very simple. Our issue is that our resources in terms of management are fully engaged in rapidly developing our already substantial operations in Asia as you may remember, China, Vietnam, Malaysia, Thailand, Japan.

These are new initiatives over the last handful of years and so we've got a lot of talent committed to developing those markets. The other reason for our hesitancy or to move quicker to go into India is the fact that under the regulation of the country of India you cannot own more than 26% of an investee life insurance financial institution and our experience we have a few joint ventures only too were we own 50%, but we find ourselves doing 100% of the work.

And so, we were very reluctant to go into a situation where we would own 26% and probably still have to do 100% of the work. So, we expect as India has been saying that it would that it would liberalize it's investment parameters so as to allow greater participation and greater ownership and when they do, we'll reexamine our posture.

ARTHUR SAWCHUK: Thank you. Yes?

RON CROW, POLICYHOLDER: Good afternoon, Mr. Chairman, Mr. D'Alessandro, Board of Directors, Shareholders and Policyholders of Manulife Financial. I bid you good day. My name is [Ron Crow], I am a policyholder of Manulife and I do have a comment to make for the Board and for the president. There has been much mention today of regulatory oversight, including Manulife's award for outstanding corporate governance.

As the CEO and Board of Directors of Manulife, the duty lies to them that the Company conducts itself in good faith and in accordance with good corporate governance and accordance with those obligations imposed upon it by both provincial and federal statute, including the Insurance Companies Act and the Office of the Superintendent of Financial Affairs.

Since it's demutualization by the federal government 1999, Manulife Financial has made use of two part settlement contracts at mandatory mediation which program is coincidentally enacted by the provincial legislatures also in 1999.

After allowing for the demutualization of Canadian Insurance companies, it was noted that prior to that time, that is prior to 1999, Manulife Financial sole responsibility was to it's policyholders, specifically to affect and insure the fair and timely settlement of bona fide claims.

For after all, it's from these policyholders whose rightful expectation to the fair and timely settlement of claims is the basis for their being policyholders of Manulife and from whom Manulife received an excess of $11,000 million in premiums paid in fiscal 2006. It is from these premiums paid in good faith by it's policyholders that Manulife Financial has been able to expand and consolidate it's global, corporate investment portfolio.

Every company listed on the [TSC], including Manulife has an obligation to full, true and timely disclosure of all relevant and material facts which are or could reasonably seem to be influential on the market value of it's securities. In particular, so that all investors are privy to the same facts, so that no officer or director can knowingly and improperly benefit from such knowledge, in order to maintain the integrity, truth and transparency; not only as to the securities of Manulife, but to the securities markets as a whole.

Disclosures required to vending material concern pursuant to national policy instrument and P51-201, in addition to the statutory requirements for disclosure under section 75 of the Ontario's Securities Act, the regulations there under, as well as under the Ontario's Securities Commission in accordance with policy 7-1. Such disclosure includes the litigation which may significantly impact Manulife's value share price.

Manulife Financial has a duty to disclose any relevant or material litigation irrespective if whether it is before the courts or is already been decided on the grounds that it poses a risk to Company moving forward in respect to it's potential quantum liability and loss of public good faith and confidence in the Company.

Presently, Manulife trades at a significant excess to it's peer group of priced above value, being approximately 2.5 times. It is conceivable should the allegations in respect of the effort mentioned action be proved in court that Manulife did be forced into dissolution, and it's policy and business lines forcibly liquidated at close to half of it's present book value, that would be US$16 to US$17 per share. Presumably, your management and it's Board has incorrectly judged the action to not be material, but both they and the Manulife's share price will be held to account.

There's presently a $5 billion civil suit against Manulife [et al] presently before the Canadian courts which involves substantive and particularized core allegations that have a non-zero probability of resulting in substantial cost to and penalties imposed on the Company.

ARTHUR SAWCHUK: Mr. Crow, could I ask are you getting close to asking your question?

RON CROW: Yes, sir. One-and-half paragraphs.


RON CROW: 1.5 paragraphs.

ARTHUR SAWCHUK: Is that really going to add anything in question?

RON CROW: Yes, sir it will. While it's Chief Executive Officer and Board of Directors as named defendants are aware of this matter, they have failed or refused to disclose this fact to other shareholders whose holdings in the Company may be materially affected by the action.

Manulife has a duty to disclose any relevant or material litigation irrespective of whether it's now before the courts or has already been decided. On the grounds that pose a risk to the Company moving forward in respect to it's potential quantum liability and loss of public good faith and confidence in the Company.

In closing, based on the significance of the quantum of the suit, and the demonstrative provability of it's core allegations by way of direct evidence, and the Company's admission of the truth of the court documents involved, namely a minutes of settlement and full and final release, why is Manulife refused or failed in it's duty to disclose this matter to it's shareholders at large or in good faith taken necessary steps to affect a reasonable resolution to this matter? And why does Manulife continue to make use of two-part settlement contracts at mediation?

ARTHUR SAWCHUK: I don't understand the question well enough to answer it. Would somebody in staff do that?

UNIDENTIFIED SPEAKER: Well, I guess in respect to the question of why don't we make disclosure, we disclose all -- I think you read correctly that the regulations require that we make disclosure of material litigation. Our judgment that the litigation in question here is not material, obviously, or we would have disclosed it. We come to that conclusion not capriciously but with the best legal advice that we can avail ourselves of and best securities practitioners and a concurrence of others who are familiar with matters like this.

With regard to the two-part form. I don't know what that means, maybe I should, but I just don't know.

RON CROW: It's an important form in that pursuant to mandatory mediation, under rule 24.1 of the Ontario Rules of Civil Procedure, any time there's a claim for long-term disability benefits, the insurance company, Manulife, attends to which [school] the mandatory mediation along with the claimant. Manulife, at mediation, is not required to provide to the claimant the contract in it's entirety. Manulife uses two-part settlement contracts.

In my case, the minutes of settlement, and as a standard practice of full and final relief. In my case, the material terms of the settlement agreement as expressed by Manulife in the minutes of settlement were fundamentally and materially altered unilaterally by Manulife subsequent to the mediation. It's my prejudice and it's my sole [in-exclusive] prejudice.

I have now gone through this, in all honesty, for three years. Everyone is aware of this case, the case records have been sealed by the court. The Ontario Superior Court has taken actions to kill the case and to kill my right to trial and that's at the behest of Manulife. That is improper, it is incorrect --

ARTHUR SAWCHUK: I'm very sympathetic and sorry for your problems. But I think that the audience ought to understand that we are -- this matter is being reviewed and being litigated in front of the courts, and I really don't know that I should add anything to the discussion today. I think you've made your point and we accept that you've got a difference of opinion and a point of view on this matter which is very important to you.

RON CROW: Thank you for the time and in closing I would just simply state the matter is now dead in Ontario Superior Court, it is proceeding in the Federal Court of Appeal, and the reason it's taken so long is because Manulife, through it's own endeavors or of a different sort, has had the full and uncompromising complicity of the Canadian courts in this matter, which will be addressed to the public at large and exposed to the widest possible scrutiny. Thank you.

ARTHUR SAWCHUK: Thank you, Mr. Crow, you've had a good chance to make your point. Next? I take it there are no more. Well, folks. Thank you for another wonderful year, and I can't say I'll see you next year.

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