Sun Life proposes $213.5M to settle Met Life class action

Sun Life Financial Inc. has reached a settlement in principle to settle a class action lawsuit about life insurance policies issued by the Metropolitan Life Insurance Company in the 1980s and 1990s, which Sun Life inherited through acquisitions, the insurer announced Thursday.

If the court approves the settlement, Sun Life would pay up to $213.5 million to eligible policyholders. Sun Life expects this to result in a charge of about $145 million in its 2026 first-quarter net income.

The case doesn’t involve policies issued by Sun Life. Sun Life took over administration of the policies when it acquired Clarica Life Insurance Co. in 2002; Clarica bought MetLife’s Canadian operations in 1998.

MetLife policyholders launched the class action in 2010 alleging breaches in connection in the sale and administration of 230,000 life insurance policies between 1985 and 1998. Plaintiffs originally sought $2.5 billion from Sun Life. The suit’s claims included misrepresentation, rescission, breach of the duties of good faith, fair dealing and fair contract in the sale and administration of those policies. None of those allegations have been proven in court.

MetLife provided Sun Life an indemnity on the policies in question, so Sun Life will seek recovery from MetLife if the settlement is approved by the court.

Jonathan Got

Jonathan Got is a reporter with Advisor.ca and its sister publication, Investment Executive. Reach him at jonathan@newcom.ca.