Manulife Financial has removed leverage from a Hong Kong insurance product aimed at wealthy clients after the offering drew scrutiny from regulators and competitors. The product allowed clients to buy a policy with $80 million in nominal value using almost four times leverage, requiring a $14.4 million down payment while $56 million was borrowed at a fixed 3.39% interest rate for five years, far below the roughly 7% market lending rates on other policy loans available to retail customers. Manulife said it regularly reviews policy services and makes adjustments as part of routine operations, while the Hong Kong Insurance Authority noted it remains focused on policyholder protection amid creative financial arrangements in the industry. The move comes as Hong Kong and mainland Chinese authorities tighten oversight of cross-border wealth channels, with mainland visitors generating HK$62.8 billion in new premiums in 2024, nearly 29% of Hong Kong's insurance market. Earlier this year, Manulife's Singapore unit sold a $300 million life insurance policy, exceeding the Guinness World Records threshold for the most valuable single life insurance policy ever issued.
Manulife Financial CorpManulife removed leverage from a Hong Kong insurance product after regulatory scrutiny, potentially reducing product appeal and sales.