Sun Life Financial (SLF) is announcing that it has reached a settlement agreement in connection with the class action authorized in 2013 in Ontario by holders of four universal life insurance products issued by Metropolitan Life Insurance Company (MLIC) between 1985 and 1998. 

The settlement in principle must be approved by the Ontario Superior Court of Justice. SLF had inherited these contracts through past acquisitions made in Canada. In announcing the proposed settlement late in the day on April 30, Sun Life noted that the dispute does not involve any contract or product sold by SLF. 

The dispute concerned the interpretation of the wording of Metropolitan’s legacy contracts, and that company had already granted an indemnity to the acquirer, Mutual Life (later Clarica), in connection with these contracts. 

Following the merger with Clarica in 2002, these contracts are now the responsibility of SLF. The Clarica name was permanently discontinued in the first quarter of 2008. 

“Accordingly, if the settlement is approved by the court, Sun Life will seek full recourse from MetLife relating to these policies,” SLF stated in its news release. If the settlement and the notice to class members are approved, Sun Life would provide up to $213.5 million in settlement value to eligible policyholders. 

This “is expected to result in a charge to Q1 2026 reported net income of approximately $145 million,” SLF added. 

The note to the financial statements 

In its consolidated annual statements as at December 31, 2025, the company provided further details on the two class actions brought against SLF regarding sales practices related to individual policies issued by Metropolitan. “These policies were assumed by Clarica when Clarica acquired the bulk of MLIC’s Canadian operations in 1998.” 

Another class action had been filed in British Columbia. It was discontinued by agreement of the parties. 

In Ontario, the class action was filed in 2010. It was brought by the law firm Kim, Orr on behalf of plaintiff Joseph Kang. The motion for authorization was largely dismissed by the court on October 27, 2011. Four causes of action were rejected and, for two other grounds, the court found that the evidence was insufficient to grant authorization. 

On February 25, 2013, the Ontario Court of Appeal partially overturned the lower court’s decision and reinstated three of the four causes of action of the applicants. Since then, several procedural decisions have been issued. The action is now led by plaintiff Eldon Fehr, and the claims of other applicants have been consolidated into a single class action. 

Misrepresentations are alleged to have been made by agents regarding the permanent nature of the product, whereas coverage ended at the policyholder’s 90th birthday, as well as regarding the premium cap.