The Manufacturers Life Insurance Co. announced today it will distribute an estimated $200 million to participating Canadian policyholders. This is a 5% increase above the amount distributed last year.

Manulife says the investment environment continues to be a challenge with interest rates that remain low.

Consequently, to maintain the long-term viability of the participating account, the life insurer says it will reduce the Canadian policyholder dividend scale effective August 1, 2005.

“While it is necessary to reflect the declining returns in the dividend scales, I am pleased to advise policyholders that the dividend scale reduction is modest — in the range of 0 to 0.75% for most policies,” said Paul Rooney, Manulife’s executive vp, individual insurance, in a news release.

Participating policies underwritten by the former Zurich Life Insurance Company of Canada are not affected by this announcement, Manulife says.