SETTLEMENT Q & A’S
Q. What is premium off-set?
A. Premium off-set is a payment option that allows you to pay for your policy using accumulated and future policy dividends instead of cash. Premium off-set is also known as premium abridgement/premium holiday/premium vacation and “vanishing premium”.
Q. What is the difference between “vanishing premium” and “premium off-set”?
A. The two are one and the same thing.
The actual option under the life insurance policy was called a “premium off-set” option.
“Vanishing premiums” is a term used to refer to the “premium off-set” option.
Both terms essentially refer to the fact that it was expected that at some point in time no further cash premium payments would be required by policyholders, ie. that the premiums “off-set” or “vanish”.
Q. Who qualifies for the Class Action Settlement Benefits?
Does my policy qualify?
How does this affect me?
A. The following persons qualify for benefits under the Canada Life Vanishing Premium Class Action Settlement:
i) Anyone who owns a participating whole life insurance policy issued in Canada by the Canada Life Assurance Company (“Canada Life”) between January 1, 1980 and December 31, 1997;
ii) The policy must have been in effect on February 1, 2001 (if the policy terminated between January 1, 1992 and February 1, 2001 because it lapsed or was surrendered, some benefits may be available as set-out below under the lapsed/surrendered policies heading).
A participating whole life policy is a whole life insurance policy where accumulated and future policy dividends are used to off-set or pay future premiums commencing on a specified date.
If you have received a mailing package from Canada Life, you qualify for the class action settlement benefits.
If you have not received a mailing package from Canada Life, call Canada Life for an explanation — toll free at 1-866-285-5502.
Q. I have a policy issued by New York Life. Do I receive benefits under the Agreement?
A. No. The settlement only relates to life insurance policies purchased from Canada Life.
Q. Why aren’t New York Life policies covered?
A. The settlement only relates to life insurance policies from Canada Life.
The New York Life policies were specifically excluded as part of the settlement.
Q. I have a policy issued by Crown Life. Do I receive benefits under the Agreement?
A. No. It only relates to life insurance policies purchased from Canada Life.
Q. Why aren’t Crown Life policies covered?
A. The settlement only relates to life insurance policies purchased from Canada Life. The Crown Life policies were specifically excluded to this part of the settlement.
Q. How many policyholders are included in the settlement?
A. Approximately 135,000 policyholders are covered.
Q. What are the benefits?
A. There are general and individual benefits:
i) Policyholders will get an increase in annual policy dividends of 0.25% higher than would otherwise have been paid by Canada Life for 3 years commencing on the policy anniversary date in 2002. For example, if a policy was issued on May 1, 1987, the increased annual policy dividend will apply commencing May 1, 2002, for 2002, 2003 and 2004.
ii) If your policy uses policy dividends to buy additional 1 year term insurance (known as “Enhanced Coverage Option”), Canada Life will reduce the cost of this term insurance by 10% of the rate otherwise payable according to the Canada Life rate scale in effect on January 1, 2001 for a 3 year period.
i) Policyholders who believe that a misrepresentation was made to them by a Canada Life sales representative prior to the sale of the policy or at any time up to 10 days following delivery of the policy that premiums would stop on a certain date, can apply to an independent party (Global Resolutions Inc.) to review the circumstances related to the purchase of the policy.
Global Resolutions Inc. is an independent mediation/adjudication service agreed to between Class Counsel and Canada Life with respect to processing of individual claims.
ii) Following a review of the written information provided by the policyholder, Global Resolutions Inc. will place the claim into one of 4 categories (categories A, B, C, or D). Each category will have a different level of benefits. The level of benefit depends on the strength of the proof of misrepresentation and the specific circumstances.
Q. How do I get the benefits?
You do not have to do anything to receive general benefits. General benefits automatically apply to all policyholders who qualify.
No action whatsoever is required by you to receive general benefits. You do not have to call, register or apply. The benefits will be granted to you automatically.
You must apply for individual benefits.
To do so, complete the Policyholder Option Form (see sample below) which you received as part of the mailing package. Complete Option 2 on the Policyholder Option Form. You must sign the form and send it to:
Canada Life Premium Offset Settlement Team
P.O. Box 4525
CANADA LIFE MUST RECEIVE THE COMPLETED POLICYHOLDER OPTION FORM BY SEPTEMBER 6, 2001.
We strongly recommend that you send the Policyholder Option Form to Canada Life by no later than August 20, 2001 to ensure that it will be received by Canada Life in time.
Once Canada Life receives your Policyholder Option Form with Option 2 checked-off, Canada Life will send you a Claims Package for you to complete and be returned.
Once you receive that Claims Package, we can assist you in understanding the Independent Review Process.
This process is structured so that you receive relief consistent with what would be granted in a civil court, ie. the greater proof available in support of your position, the greater relief available for you.
Under this process, you can achieve a full measure of relief, ie. being granted exactly what was promised at point of sale — for example, if you were promised a premium off-set date of 12 years and you have sufficient qualifying evidence/proof, you will be granted the premium off-set date of 12 years promised when you purchased your policy.
This remedy was fashioned so as to allow access to justice for a large group of people in a streamlined fashion which achieves judicial economy.
If you apply for relief under this process and are not happy with the outcome, you can appeal to the Court, however, you appeal will be successful only if the decision of the Independent Adjudicator was clearly unreasonable.
Q. When do I receive benefits?
The General benefits will automatically apply commencing on your policy anniversary date in the year 2002.
Following receipt of the sworn Policyholder Claim Form, the independent adjudicator, Global Resolutions Inc., shall make a determination of your additional benefits within a reasonable period of time.
Q. How do I know if I should participate in the Independent Review Process?
A. You may want to participate in the Independent Review Process if you feel that the Sales Representative who sold you your policy made a misrepresentation about premium off-set to you.
Under the Agreement, specific criteria have been set as to what constitutes a misrepresentation and what types of evidence must be presented in order for you to be successful in your claim.
Q. Do I need a lawyer to participate in the Independent Review Process?
A. No. You don’t need a lawyer to exercise any of the options under the settlement. If you do decide to hire a lawyer to represent you in the Independent Review Process or to initiate a claim after opting-out of the settlement, you are responsible for paying that lawyer.
Class Counsel are available to answer questions about the settlement and the Independent Review Process.
Q. What does it mean to opt-out of the Settlement Agreement?
A. If you opt-out of the Settlement Agreement, you will not be entitled to receive any of the general settlement benefits provided under the Settlement Agreement or make a claim under the Independent Review Process. You will, however, be entitled to exercise any other options available to you as a policyholder such as bringing your own legal action against Canada Life or a Sales Representative.
If you want to opt-out, you need to check Option 3 on the Policyholder Option Form and return it to Canada Life to be received no later than September 6, 2001.
Q. What if I have more than one policy?
Can I make a different decision for each one?
A. Yes. For example, if you have two policies, you may decide to accept the general settlement benefits for one policy and to elect to participate in the Independent Review Process for the other depending on the circumstances.
Q. What if I want to change my policy?
Will a change to my policy affect my eligibility under the settlement?
A. You should contact Canada Life for specific information. The number is 1-866-285-5502.
We recommend that you call Canada Life and make a specific inquiry regarding your proposed change to the policy.
Q. How do I contact the British Columbia lawyers?
A. The law firm is Poyner Baxter Poyner. The lawyers are James Poyner and Kenneth Baxter. You can contact them at (604) 988-6321 or at #408-145 Chadwick Court, North Vancouver, B.C., V7M 3KI. You can also visit their website at www.poynerbaxter.com.
Q. How do I contact the Quebec lawyers?
A. The law firm is Lauzon Belanger. The lawyers are Yves Lauzon and Gilles Gareau. You can contact them at (514) 844-4646 or at 511, Place D’Armes, bureau 200, Montreal, Quebec, H2Y 2W7. You can also visit their website at www.lauzonbelanger.qc.ca.
Q. How do I contact Canada Life’s lawyers?
A. The Ontario law firm for Canada Life is McCarthy Tetrault. The lawyer is Thomas Curry. He can be contacted at (416) 362-1812 or by mail at P.O. Box 48, Suite 4700, TD Bank Tower, TD Centre, Toronto, Ontario, M5K 1E6.
The British Columbia law firm for Canada Life is Branch McMaster. The lawyer is Ward Branch. He can be contacted at (604) 868-4003 or by mail at Suite 1210 – 777 Hornby Street, Vancouver, B.C., V6Z 1S4.
The Quebec law firm for Canada Life is McCarthy Tetrault. The lawyer is Louis Brousseau. He can be reached at (514) 397-4221 or by mail at Le Windsor 1170, rue Peel, Montreal, Quebec, H3B 4S8.