Sun Life/MetLife Life Insurance Class Action

Kim Orr is prosecuting a class action against Sun Life Assurance Company of Canada seeking $1 billion in damages for reckless or negligent misrepresentation, negligence, breach of contract, breach of the duty of utmost good faith, breach of fiduciary duty, deceit and civil fraud, and conspiracy to conceal.

The claims relate to the marketing, sale, and administration of four universal life insurance products acquired by Sun Life from the Metropolitan Life Insurance Company in 1998:

  1. Interest Plus

  2. Universal Plus

  3. Universal Flexiplus

  4. Universal Optimet

Please click here to see what Sun Life and MetLife agents have to say about these policies in documents filed with the court.

These policies were sold by the Metropolitan Life Insurance Company from 1985 to 1998.

In 1998, Sun Life purchased the life insurance business of MetLife. Sun Life is now suing MetLife for misrepresentations that were made at the time the policies were sold. Sun Life has consistently taken the position in the lawsuit against MetLife that the sales agents were trained to sell these policies on the basis of the misrepresentations, and that the policies are defective. However, at the same time, Sun Life has refused to inform the policyholders about the problems with their policies and has refused to compensate the policyholders.

Some Flexiplus policyhoders are now being offered the Flexiplus Options Program from Sun Life, including "Option A" and "Option B". The program may include a partial repayment of increases in the costs of insurance in 2001 and 2006. However, the program may also include the possibility of current or future increases in the cost of the insurance. We are asking that policyholders NOT sign the Flexiplus Options Program documents without first speaking to us, and that they NOT sign a release.

Sun Life has acknowledged that the policies were sold on the basis of a misrepresentation. By accepting the Flexiplus Options Program, Sun Life is asking the policyholders to "cure" the problem. The class action is asking that Sun Life be required to honour the original terms of the policies, so that policyholders get what they paid for.

The class action alleges that the policies were incorrectly sold to customers in the following ways:

  1. Interest Plus policyholders were sold life insurance on the basis that their policies were permanent, and provided lifetime coverage. In fact, Interest Plus insurance coverage terminates on the policy anniversary following the insured's 90th birthday;

  2. Universal Plus policyholders were sold life insurance on the basis that premiums owing would not exceed the stated "maximum premium". In fact, premiums in excess of this amount may be required in order to keep the Universal Plus policy in force;

  3. Universal Flexiplus policyholders were sold life insurance on the basis that the cost of insurance would be "level" in the first seven years of the policy, that there would be no cost of insurance in year eight of the policy and that there could be a new cost of insurance in year nine, which would remain "level" for year nine and following. In fact, the cost of insurance can be varied at any time other than at year eight of the policy; and

  4. Universal Optimet policyholders were sold life insurance on the basis that the cost of insurance would be "guaranteed" for the first eight years of the policy, and that there could be a new cost of insurance in year nine, which would be "guaranteed" for year nine and following. In fact, an increase in premiums may be required to keep the policy in force.

The proposed class action seeks damages on behalf of all persons in Canada and elsewhere who beneficially own, or owned, one of the four policy types, as well as any beneficiaries or trustees thereof.

Kim Orr will bring a motion for the certification of this action as a class proceeding. The date of the certification motion will be posted as soon as it is set by the Court.

For more information about this class action, please contact Victoria Paris at vp@kimorr.ca.

November 3, 2010 Sun Life Class Action update

We are advised that some Flexiplus policyholders have been asked by Sun Life to sign a release. The class action alleges that the Flexiplus policies were sold on the basis that the cost of insurance would be level and would not increase. Please DO NOT sign the release without first speaking to us.

Please join our Facebook community to share information about these policies.