Proposed deal aims to resolve decades-old MetLife dispute as ratings reaffirm strength
Sun Life Financial Inc. has reached an agreement in principle to settle a longstanding class action lawsuit tied to life insurance policies originally issued by Metropolitan Life Insurance Company (MetLife), moving to resolve a complex dispute that has stretched over more than a decade.
The case involves individual policies sold in the 1980s and 1990s that later became part of Sun Life’s portfolio through prior Canadian acquisitions. The insurer has emphasized that it did not design or sell the products at the centre of the litigation.
If approved by the court, the proposed settlement would provide up to $213.5 million to eligible policyholders. Sun Life expects the agreement to result in an approximately $145 million charge to its net income for the first quarter of 2026.
At issue is the interpretation of provisions within the legacy policies. Sun Life said MetLife had agreed to indemnify it in relation to those contracts, and the company intends to pursue recovery under that arrangement if the deal is finalized.
The origins of the case date back to 2010, when a class action was filed on behalf of holders of more than 230,000 policies. As WP reported, plaintiffs argued they had been misled about how premiums and policy values would perform, particularly as falling interest rates drove higher costs and weaker-than-expected returns. The case has since navigated multiple legal hurdles, including appeals over certification and scope, highlighting its complexity and longevity.
As it moves to settle the matter, Sun Life’s financial footing has remained solid. AM Best reaffirmed the insurer’s credit ratings on Thursday, maintaining an A+ (Superior) financial strength rating and “aa” issuer credit ratings with a stable outlook. The agency pointed to Sun Life’s strongest balance sheet strength, consistent operating performance, favorable business profile and very strong enterprise risk management.
Sun Life, which operates globally across insurance, asset management and wealth services, reported $1.60 trillion in assets under management at the end of 2025.
