Sun Life Class Action Update

In September 2018, the Court of Appeal of Ontario reversed the motion judge’s decision, and ordered certification of the action. Click here for a copy of the reasons.

The certification order was entered on November 20, 2020. The Court appointed six representative plaintiffs, and Kim Spencer McPhee Barristers P.C. as Class Counsel to represent the national class, which is defined as:

  1. The “Universal Plus Class” is defined as persons who owned or own a Universal Plus policy sold by MetLife in Canada during the period 1987 through 1998, including any successor owners of the policy.
  2. The “Flexiplus Class” is defined as persons who owned or own a Flexiplus policy sold by MetLife in Canada during the period 1987 through 1998, including any successor owners of the policy whose monthly costs of insurance and or monthly administration fee was increased in one or more of 2001, 2006, or 2015 or the ninth year of the policy.
  3. The “Optimet Class” is defined as persons who owned or own an Optimet policy sold by MetLife in Canada during the period 1987 through 1998, including any successor owners of the policy where an increased cost of insurance rate was charged and paid commencing in year nine (9) of the policy.

The certified common issues are:

  1. Was it a term of the Flexiplus policy that the cost of insurance (“COI”) rate may be adjusted based on specified factors. If so, is Sun Life liable for breach of contract if increases were based in whole or in part on other factors?
  2. Was it a term of the Universal Flexiplus policies that Administrative Fees may be adjusted based on factors related to the cost of administering the policies? If so, is Sun Life liable for breach of contract if increases were based, in whole or in part, on other factors?
  3. Was it a term of the Optimet policy that the cost of insurance (“COI”) rate may be adjusted based on specified factors. If so, is Sun Life liable for breach of contract if increases were based, in whole or in part, on other factors?
  4. Was it a term of the Universal Plus, Flexiplus, and OptiMet policies that the “Maximum Premium” amount set out in the policies was the highest amount of premium that the policyholder would ever be required to pay for the policy in any year, in order to prevent lapse of the policy? If so, are the plaintiffs entitled to a declaration to that effect?
  5. If the answer to any of questions 1, 2, or 3 is that Sun Life breached the contract of insurance, did Sun Life administer the policies in a manner, including violating section 439 of the Insurance Act, S.O. 1990, c. I.8 (prohibiting unfair and deceptive practices) such that the breach of contract was concealed?

Additional court attendances were necessary to update the certification notices and litigation plan, which were finalized in early 2021.

The class action is currently in the summary judgment phase. Both parties have made a motion for summary judgment, asserting that the case should be decided based on existing material without the need for a trial.

As part of the summary judgment process, the plaintiffs are seeking to add a claim that Sun Life has been collecting excess amounts of “investment spread” deductions from Flexiplus policyholders’ accumulation funds since 2001. This would be in addition to the plaintiffs’ claims that the insurer has been collecting excessive cost of insurance (COI) charges and excessive administrative fees on Flexiplus, also starting in 2001. The plaintiffs’ claim that the insurer has been misapplying the Maximum Premium provision in the Flexiplus, Universal Plus, and Optimet policies is also part of the summary judgment motion.

Justice Jasmine T. Akbarali of the Superior Court has replaced Justice Perell on the case and has scheduled arguments on the plaintiffs’ motion to add the investment spread claim for early April 2023. Plaintiffs’ counsel estimate that arguments on the cross-motions for summary judgment will likely be heard late in 2023 or early the following year. Any significant developments in the case will be posted here, so please check back periodically.