Sun Life Financial Inc. is planning to shift most of Sun Life Assurance Co. of Canada’s asset management businesses, including its U.S. annuities business, to a newly incorporated subsidiary of Sun Life Financial, effective Jan. 4, 2005.

The reorganization remains subject to regulatory approvals.

Under the reorganization, Sun Life Assurance will transfer its shares of CI Fund Management Inc., McLean Budden Ltd., MFS Investments and its other U.S. subsidiaries. After the reorganization, the operations remaining in Sun Life Assurance will consist primarily of the life, health and annuities businesses of Sun Life Financial Canada, most of the life and health businesses of Sun Life Financial US and all of the operations of Sun Life Financial U.K. and Sun Life Financial Asia.

In a statement, Sun Life Financial said “the reorganization will allow Sun Life Financial to optimize its capital structure by positioning it to benefit from the new capital rules for life insurance holding companies recently proposed by the Office of the Superintendent of Financial Institutions, Canada.”

The company added that the reorganization is not expected to have any impact on the financial strength ratings of Sun Life Assurance “and it will have no impact on policyholders benefits and the quality of policyholder services will not be diminished.”

Standard & Poor’s Ratings Services revised its outlook on Sun Life Financial to positive, from stable following the announcement of the reorganization.

At the same time, S&P affirmed its ratings on all of Sun Life Financial subsidiaries, including its AA+ financial strength rating on Sun Life Assurance. The outlook on these subsidiaries is stable.

S&P says “Sun Life will benefit from an increased divergence in income streams to the holding company following the proposed corporate reorganization. It De-stacking the organization will lead to lighter regulation and lower capital requirements for the asset management businesses and other non-insurance businesses.”