-- Sun Life Financial (SLF.TO) Thursday after trade said it has reached a settlement in principle to resolve a class action relating to individual life insurance policies sold and issued by MetLife in the 1980s and 1990s, which Sun Life inherited through acquisitions.
This matter does not involve any policies or products sold by Sun Life, the company said.
If approved, Sun Life would provide up to $213.5 million settlement value to eligible policyholders, which is expected to result in a charge to first quarter 2026 reported net income of approximately $145 million.
The proceedings relate to the interpretation of policy language in the policies, which are subject to an indemnity from MetLife. Sun Life will seek full recourse from MetLife pursuant to the indemnity, if the settlement is approved, it confirmed.
Separately, AM Best affirmed the financial strength rating (FSR) of A+ (Superior) and the long-term issuer credit ratings (Long-Term ICR) of "aa" (Superior) of Sun Life Assurance Company of Canada and Sun Life and Health Insurance Company (U.S.), core insurance subsidiaries of Sun Life Financial. AM Best also affirmed the Long-Term ICR of "a" (Excellent) and the Long-Term Issue Credit Ratings (Long-Term IRs) of SLF. The outlook of these ratings is stable.
The ratings reflect Sun Life Group's balance sheet strength, which AM Best assesses as strongest, strong operating performance, favorable business profile and very strong enterprise risk management.
Sun Life Financial shares are unchanged at US$72.08 in U.S. after-hours trade. It closed up $1.30, to $97.87 on the Toronto Stock Exchange.