The Ontario Superior Court of Justice has dismissed a proposed class-action lawsuit against Toronto-based Sun Life Assurance Co. of Canada involving alleged breaches of contract on certain universal life (UL) policies.
Justice Paul Perell concludes in a decision released this week in Fehr v Sun Life Assurance Co. of Canada that none of the plaintiffs’ claims in the case are certifiable. The decision comes approximately a year after Justice Perell dismissed a majority of the claims in the case and requested additional evidence to determine whether two of the claims were certifiable.
See: Major elements of proposed class-action lawsuit against Sun Life have been dismissed
The latest decision, which follows a hearing on Dec. 1, dismisses those remaining claims and eliminates the possibility of a class proceeding in the case.
The plaintiffs had initially been seeking a total of $2 billion in damages and $500 million in punitive damages in the case.
The case relates to life insurance policies the Canadian operations of New York-based Metropolitan Life Insurance Co. (MetLife) sold between 1985 and 1998. Sun Life acquired the policies through its 2002 acquisition of Clarica Life Insurance Co. (formerly known as Mutual Life Assurance Co. of Canada), which itself had acquired most of MetLife’s Canadian business in 1998.
The claims being considered for class certification in the latest hearing involved two UL policies: Universal Flexiplus and Universal Optimet. In total, there were more than 42,000 Flexiplus and Optimet policies in force as of November 2013.
Toronto-based law firm Kim Orr Barristers PC represented the plaintiffs, who had argued that they incurred increases in the cost of insurance (COI) on both types of policies, and in the case of Flexiplus policies, increases to administrative fees, which represented breaches of the terms of their insurance contracts.
The insurance contracts for both policies set out the parameters around when and to what extent the insurer can change the COI and administrative fees over the duration of the policy. The plaintiffs argued that the insurer made adjustments to these costs on the basis of factors different from the ones outlined as permissible in the contracts.
In question at the latest hearing was the method Sun Life used to calculate the adjustments it made to the COI and administrative fees and whether those adjustments were done in accordance with policyholders’ contracts.
After receiving evidence from Sun Life on the method it used to calculate the cost changes, Justice Perell found no proof the insurer had made price adjustments that breached the terms of the insurance contracts.
“There is no evidence — no basis in fact — proving the alleged breach of contract,” Justice Perell says in his decision. “The result is that the certification motion is dismissed in its entirety.”
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