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  "documentTitle": "Manulife Financial Corporation (MFC)",
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  "notes": "Contains detailed formulas for loss estimation and references to external expert testimony (Rehbeli) and regulatory standards (OSFI/LICAT).",
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      "text": "Per those estimates, if Mosten won its trial and was able to deposit $1 billion into the Carrier Fund, using Manulife's own numbers, that could mean a loss of $450 million.",
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      "text": "LICAT Ratio",
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      "text": "Previously, we mentioned that Mr. Rehbeli estimated that a $100 million deposit would reduce \"available capital\" by $45 million and increase \"required capital\" by $70 million. Canada's Insurance Companies Act requires federally regulated life insurance companies to maintain adequate capital or to maintain an adequate margin of assets over liabilities, and OSFI codifies these capital requirements in the LICAT guideline.",
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      "text": "4 \"Estimated First Year Loss (%)\" is based on the 10-year \"A\" bond yield (%) minus Guaranteed Rate (%) minus Credit Losses (%) minus Investment Expenses (%). 5 \"Adjusted Estimated First Year Loss (%)\" means Estimated First Year Loss (%) minus the Actuary Adjustment (%).",
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      "text": "Putting aside our estimates and focusing on those of Manulife's expert, the potential impact is staggering. Per those estimates, if Mosten won its trial and was able to deposit $1 billion into the Carrier Fund, using Manulife's own numbers, that could mean a loss of $450 million. That is approximately 35.7% of MFC's 2Q18 net income.",
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      "text": "7 \"After-Tax Loss per $100 million\" is calculated using the following formula: Pre-Tax Loss for each $100 million = After-Tax Loss per $100 million x (1- Tax Rate (%))",
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      "text": "Based on our assumptions, (a) for each $100 million deposited into the Carrier Fund by Mosten and assuming a 4.0% interest rate, we would estimate an after tax-loss of $20.44 million, and (b) for each $100 million deposited into the Carrier Fund by Mosten and assuming a 4.85% interest rate, we would estimate an after tax-loss of $45.26 million.",
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      "text": "6 When calculating the \"Pre-Tax Loss for each $100 million\" for Muddy Water's Assumptions, we used the following formula: Pre-Tax Loss for each $100 million = MW's Adjusted Estimated First Year Loss (%) / Manulife's Adjusted Estimated First Year Loss (%) x Manulife's Pre-Tax Loss for each $100 million",
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      "kind": "quote",
      "text": "\"The LICAT guideline establishes standards, using a risk-based approach, for measuring specific life insurer risks and for aggregating the results to calculate the amount of a life insurer's regulatory \"required capital\" to support these risks...\"",
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      "text": "The LICAT guideline establishes standards, using a risk-based approach, for measuring specific life insurer risks and for aggregating the results to calculate the amount of a life insurer's regulatory \"required capital\" to support these risks. The amount of capital targeted by the LICAT is meant to allow an insurer to survive a 1-in-200-year adverse event. LICAT also defines which components of the insurer's capital structure can be counted as \"available capital\" to satisfy the \"required capital\" benchmark. — Mr. Rehbeli",
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      "text": "31 Manulife reported net income of $1,262 million in the second quarter of 2018. See Manulife's 2Q2018 Shareholder Report. 32 See Rehbeli Affidavit, Exhibit B, Section 8.2.",
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      "text": "Explanation of the LICAT Ratio, \"Available Capital\" and \"Required Capital\"",
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