Fortress Manulife

Newly appointed CEO Donald Guloien continues to put his stamp on Manulife with the appointment of Michael Bell as Chief Financial Officer. Bell held a similar role for the last six years at Cigna Corp., a Fortune 200 provider of employer-sponsored health, accident and disability insurance. Bell replaces Peter Rubenovitch, one of Dominic D’Alessandro’s earliest hires in 1995.

When D’Alessandro arrived as CEO in 1994, he didn’t like a lot of what he saw in the executive ranks, and set out to replace most of the senior officers. Guloien doesn’t have that issue, but he will be presented with opportunities such as is the case with Rubenovitch who is retiring.

Just as well. Every new CEO needs his or her own people in place. It’s not that the predecessor had the wrong people, or that loyalties can’t be transferred, it’s normal human nature to want your own team. With David Paterson newly ensconced in public affairs, this is Guloien’s second appointment in a month.

Meanwhile, Guloien is also making capital strength a first priority. Even though the regulatory-mandated Minimum Continuing Capital and Surplus Requirements (MCCSR) are “near the highest levels in our history,” according to Guloien, he wants an even higher number. “We will embark on a plan to increase capital to fortress levels,” Guloien said in a statement. Moreover, to do so, he wants to avoid issuing more shares, and that’s good news for current shareholders who don’t want the value of their holdings diluted.

In other developments, the Ontario Securities Commission has told Manulife it has come to the preliminary conclusion that the company failed to disclose, on a timely basis, information about the sale of its guaranteed investment products. On the face of it, such inaction by Manulife seems unlikely, and indeed, the company says it was up-to-date with all filings. The OSC will be investigating further. Stay tuned.