Sun Life Financial to pay $213.5M settlement in class action lawsuit

Sun Life Financial (SLF) announced that it has reached a settlement in principle to resolve a class action relating to individual life insurance policies sold and issued by the MetLife (MET) in the 1980s and 1990s, which Sun Life inherited through historical Canadian acquisitions. This matter does not involve any policies or products sold by Sun Life. The proposed settlement will resolve this long-standing litigation. The settlement and notice to class members are subject to court approval. If approved, Sun Life would provide up to $213.5M settlement value to eligible policyholders, which is expected to result in a charge to Q1 reported net income of approximately $145M. These proceedings relate to the interpretation of policy language in these historic MetLife policies. MetLife provided an indemnity relating to these policies. Accordingly, if the settlement is approved by the court, Sun Life will seek full recourse from MetLife pursuant to the indemnity.