Sun Life Financial Inc. has reached a significant settlement related to a long-standing class action lawsuit involving life insurance policies. This proposed settlement, valued at $213.5 million, aims to resolve claims tied to older policies originally issued by Metropolitan Life Insurance Company (MetLife) before Sun Life acquired the business in 2002.
Overview of the Settlement
The class action focuses on “legacy” life insurance policies issued by MetLife between 1987 and 1998. Specifically, this includes Universal Plus, Flexiplus, and Optimet products. These policies were marketed as effective investment options during the high-interest rate period of the 1980s. However, as interest rates declined, policy costs increased, and returns fell short of original expectations.
Background of the Dispute
The lawsuit, initiated in 2010, alleges that the insurer violated contract terms by raising costs related to insurance and administrative fees beyond what was stipulated in the original policy agreements. Additionally, the case initially encompassed claims of misrepresentation by sales agents. However, Canadian courts eventually determined these claims were too individualized to be part of the group lawsuit.
Eligibility for the Settlement
To be eligible for participation in this settlement, policyholders must have purchased a Universal Plus, Flexiplus, or Optimet policy from MetLife between 1987 and 1998. This class action includes residents from all provinces across Canada.
- Acquisition: Sun Life acquired the policies through its purchase of Clarica Life Insurance Co. in 2002.
- Involvement: Sun Life clarified that the settlement does not pertain to any products it developed or sold.
Next Steps for Policyholders
The proposed settlement is pending court approval, and no individual payout amounts have been finalized. Factors affecting the total disbursement are still being assessed. Sun Life anticipates recording an after-tax charge of approximately $145 million in its first-quarter earnings for 2026 related to this settlement.
For those who believe they may qualify, it is recommended to keep thorough records of the original contracts and policy names. Updates about the process will be available on relevant websites as new information emerges.
Contact and Updates
For ongoing updates about the settlement and eligibility criteria, affected individuals should regularly check reputable sources, including updates from El-Balad.
