Canada's Largest Insurance Co. Investigated

TORONTO (AP) — Manulife Financial Corp. said Friday it has received an enforcement notice from regulators over what Canada's largest insurance company told investors about the risks of its guaranteed fund business.

Manulife said it received the notice from the Ontario Securities Commission this week in connection with its disclosure of the risks in its variable annuity guarantee and segregated funds business.

"The OSC notice indicates that it is the preliminary conclusion of OSC staff that the company failed to meet its continuous disclosure obligations related to its exposure to market price risk in its segregated funds and variable annuity guaranteed products," the company said in a statement Friday night.

Manulife has an opportunity to respond to the notice before the regulator makes a decision whether to commence proceedings.

"The company believes that its disclosure satisfied applicable disclosure requirements," Manulife said.

The stock-market carnage has forced Manulife to increase its reserves to pay long-term segregated fund guarantees. Segregated funds are popular investment vehicles that are similar to mutual funds but contain insurance contracts that limit risk for investors and preserve capital.