A.M. Best Co. has affirmed the financial strength ratings of A++ (Superior) of Manufacturers Life Insurance Co. of and its strategic U.S. subsidiaries.

The ratings are being removed from under review and are being assigned stable outlooks. Additionally, A.M. Best has initially assigned an “aa-” rating to Manulife’s existing subordinated debt and an “a+” rating to the company’s existing capital securities.

These rating actions follow A.M. Best’s discussions with Manulife’s management regarding business plans and integration strategies for Canada Life Financial Corp.

On Dec. 9, 2002, Manulife offered to acquire all outstanding common shares of Canada Life in a transaction valued at more than $6.4 billion. Under the terms of the offer, Canada Life shareholders would receive $40 cash or 1.055 shares of Manulife Financial for each Canada Life share. If approved, the anticipated closing is second quarter 2003.

A.M. Best views this offer as a key component of Manulife’s growth strategy to become a leading global financial services company. While this transaction reflects possible integration challenges with international businesses in markets where Manulife does not operate, A.M. Best believes Manulife’s strong management team and prudent business strategy somewhat mitigate these challenges.

The financial strength and debt ratings reflect Manulife’s established presence in multiple markets, robust profitability from its geographically diversified businesses, conservative reserving practices and superior capitalization. The group maintains a strong franchise as a top provider of financial protection products and wealth management services in Canada, the United States and Asia.

A.M. Best believes the consistent flow of earnings from Manulife’s core businesses is sustainable and provides ample liquidity to strongly support its long-term debt service capabilities. Manulife’s operational and geographic diversification as well as its solid positions in numerous markets have somewhat insulated it from wide fluctuations in revenues and earnings. Manulife’s superior balance sheet strength and operating performance has enabled the company to secure funding at very favorable terms. Accordingly, A.M. Best views Manulife as very strong within its rating category.