London Life Announces Class Action Settlement
LONDON, ON, June 29 / CNW / – London Life Insurance Company today announced an agreement to settle proposed premium offset class actions. “We are pleased to have reached this agreement to resolve the class actions, and enhance our relationships with our clients,” said London Life Senior Vice-President Al Edwards. “We believe the settlement is fair and reasonable.”
The settlement builds on London Life’s significant client satisfaction initiatives over the past number of years, including reduced term insurance rates, a client contact program, and the Client Satisfaction Process.
The settlement will provide benefits to more than 500,000 London Life clients across Canada. It applies to owners of eligible participating life insurance policies purchased from London Life across Canada from 1980 through 1995. The settlement includes global and enhanced benefits, and an individual claims review process. The Company estimates the value of the future settlement benefits to clients to be approximately $180 million. In addition, the value of settlement benefits already provided through prior initiatives is $60 million. The settlement is not expected to have a material adverse effect on the Company*s financial position. The Company continues to have excellent financial strength.
London Life will not recover the cost of the settlement benefits and expenses through future dividend scale changes. Future policyholder dividends will continue to reflect changes in such things as interest rates, claims and expenses.
London Life and the plaintiffs who are parties to the settlement believe the settlement will benefit all eligible clients, and they will strongly recommend its approval to the courts. The settlement requires approval by the courts in British Columbia, Ontario and Quebec, following which London Life will provide information to all eligible clients. In the meantime, general information about the settlement is available toll-free at 1-877-562-4334 and on London Life’s Web site at www.londonlife.com. Headquartered in London, Ontario where the company was founded 127 years ago, London Life is the leading provider of individual life insurance to Canadians.
About London Life’s class action settlement
London Life Insurance Company has announced an agreement to settle proposed premium offset class actions. The settlement will provide benefits to more than 500,000 eligible London Life participating policyowners across Canada. The settlement builds on London Life’s significant client satisfaction initiatives over the past number of years, including reduced term insurance rates, a client contact program and our Client Satisfaction Process. We*re pleased to provide benefits to eligible clients in order to enhance their satisfaction and resolve the class actions.
What are the next steps?
London Life and plaintiffs in these actions have agreed on a settlement, which requires court approval before it can be implemented. The courts in Quebec, Ontario and British Columbia will each hold hearings to determine whether to approve the settlement. A notice will be published in newspapers across Canada, providing further information about the court approval process, including dates and locations for these hearings. The notice will also be available at the same time on our Web site at www.londonlife.com.
Who is covered by the settlement?
The settlement covers owners of participating life insurance policies that were issued by London Life in Canada between Jan. 1, 1980, and Dec. 31, 1995. Class policies also include Econolife policies for which clients selected the Econolife dividend option on or before Dec. 31, 1995. The Equity series of participating life insurance policies, which was discontinued in 1982, is not included. The settlement includes eligible owners of class policies that are currently in force – or have lapsed or been surrendered on or after Jan .1, 1992. The settlement does not include policies for which the policyowner has released London Life from claims relating to matters at issue in the proposed class actions. The settlement relates to life insurance policies purchased from London Life. Therefore, former Prudential of America clients whose policies were acquired by London Life in 1996 are not part of the settlement.
What benefits does the settlement provide for?
Under the settlement, which requires court approval, London Life will provide the following benefits:
- Global benefits – All current eligible clients will automatically receive global benefits. These benefits provide a dividend enhancement of 50 basis points (0.5 per cent) to all in-force eligible policies for one year. Current Econolife policyowners also receive a reduction in the cost of the term insurance component of their Econolife coverage for five years. London Life began providing this reduction in March 1997.
- Enhanced benefits – In addition to global benefits, enhanced benefits will be provided to current eligible clients for whom premium offset was a significant factor in deciding to purchase their policies. There will be a streamlined process for determining eligibility for enhanced benefits. The enhanced benefits are:
- a dividend enhancement of 50 basis points for two more years – a further term purchase rate reduction, where applicable, and
- the premium offset date for the policy under London Life’s 2001 dividend scale will generally be no more than 50 per cent later than the offset date illustrated when the policy was issued.
- Individual claims review – Alternatively, eligible clients can choose to participate in an adjudication process for resolving any individual claims relating to premium offset, policy values and income benefits. The adjudication process will be conducted in writing and will include the right to appeal to an independent adjudicator. The benefits that each client may receive will depend on the particular attributes of the policy and evidence relating to the purchase or change of a policy. Eligible clients who choose the individual claims review process will be asked to complete a detailed questionnaire and provide any relevant documents. Options for eligible former clients – Eligible former clients may participate in the individual claims review process or purchase a new policy, subject to standard underwriting requirements, with a 50 per cent discount on the first year*s premium.
What is the effect on the Company*s financial position?
The Company estimates the value of the future settlement benefits to clients to be approximately $180 million. These future settlement benefits and $20 million of estimated expenses are fully provided for in existing reserves in the Company*s participating account. The settlement is therefore not expected to have an effect on the Company*s current net income, surplus, or Minimum Continuing Capital and Surplus Requirements (MCCSR) ratio.
If you would like more information regarding this claim or wish to be added to our database of claimants, you may e-mail us at email@example.com.
You can also access our class action hotline at 1-905-523-8048 OR 1-888-245-8829.
You can contact us directly by telephone at Scarfone Hawkins LLP at 1-905-523-1333.
You can contact us by fax at 1-905-523-5878.
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