Sun Life has proposed a $213.5 million settlement for a class action lawsuit involving life insurance policies issued by MetLife between 1985 and 1998. This legal action, initiated by MetLife policyholders in 2010, raises questions about the historical management of these policies.
The class action lawsuit alleges that policyholders were overcharged for insurance costs and fees. Specifically, it concerns approximately 230,000 life insurance policies that Sun Life inherited through its acquisition of Clarica Life Insurance Co. in 2002.
Originally, plaintiffs sought an astonishing $2.5 billion from Sun Life, but the proposed settlement indicates a shift towards resolution. The company expects this settlement to incur a charge of about $145 million in its first-quarter net income for 2026.
Eligible policyholders include those with Universal Plus, Flexiplus, or Optimet policies sold by MetLife during the relevant period—specifically between 1987 and 1998. But it’s essential to note that this case does not involve any policies issued directly by Sun Life.
The settlement is still pending court approval, and class members have been divided into three categories based on their specific policies. This classification could lead to individual claims for those misrepresented during the sales process.
While MetLife provided Sun Life with an indemnity concerning these policies, none of the allegations have been proven in court yet. The timeline for the court’s decision remains uncertain, but eligible policyholders can register online to claim part of the settlement.
