Ontario Court Approves a C$213.5 Million Sun Life Universal Life Settlement, Which Class Counsel Calls the Largest of Its Kind in Canada, With Cost-of-Insurance Freezes for Flexiplus Holders

An Ontario court has approved a settlement that class counsel describes as the largest reported in a Canadian life insurance policy dispute. According to Insurance Business Canada, which reported the approval on October 28, 2026, the Ontario Superior Court of Justice approved a C$213.5 million national class action settlement in the case of Fehr et al. v. Sun Life Assurance Company of Canada. The court found the deal fair, reasonable and in the best interests of the class. The case began in 2010 and the Ontario Court of Appeal certified the class in 2018, so the approval ends a dispute that has run for sixteen years. Sun Life disputes that it did anything wrong.

What the case is about

The lawsuit concerns the alleged improper administration of three universal life policies: Universal Plus, Flexiplus and OptiMet. Universal life is a type of permanent life insurance in which the policyholder pays premiums into an account, the insurer deducts charges, including a cost of insurance and administration fees, and interest is credited. The insurer can change some of those charges within limits set in the contract, which makes the contract wording central to disputes. According to the report, MetLife agents sold these policies in Canada between 1987 and 1998. Sun Life says it inherited them through earlier Canadian acquisitions and that it sold none of the products at issue.

For Universal Plus policies, the claims centre on the term Maximum Premium in earlier policy versions. According to the report, certain current and former holders of policies issued before 1992 may receive compensation if their cost of insurance charges exceeded the stated base coverage Maximum Premium. For Flexiplus, the claims relate to increases in cost of insurance and administration fees.

Who is in the class

The class consists of current and former Flexiplus and Universal Plus policyholders, about 70,000 people in total. The report notes that Daily Hive, citing the class action website, said OptiMet class members are no longer included, so people with OptiMet policies should check the settlement website or class counsel before assuming they are covered. The article does not describe a claims procedure, any deadlines or how eligibility will be confirmed, so those details must come from the official settlement notice.

What policyholders receive

Eligible current and former Flexiplus policyholders will receive direct payments covering part of past increases in cost of insurance and administration fees. For current Flexiplus holders, cost of insurance rates and administration fees will be permanently frozen. For current Universal Plus holders with policies issued before 1992, future cost of insurance charges will be capped at a set multiple of the Maximum Premium amount. The report does not give individual payment amounts or the multiple that applies, so it is not possible to say what any one policyholder might receive. Total settlement value includes both cash and the forward-looking limits on charges, and the article does not split the C$213.5 million between them.

Counsel and quotes

Class counsel is Kim Spencer McPhee Barristers P.C., whose managing principal Megan B. McPhee described it as the largest reported settlement in a Canadian life insurance policy dispute. She said the settlement will put money back in class members' pockets. Representative plaintiff Eldon Fehr said he was pleased to see the litigation finally come to a close. These statements come from the plaintiffs' side; the report does not include a comment from Sun Life beyond its position that it did nothing wrong and its intention to pursue recourse.

The financial side for Sun Life

On April 30, 2026, Sun Life announced a settlement in principle and said it expected a charge of about C$145 million to first-quarter net income. The difference between the C$145 million charge and the C$213.5 million headline figure is not explained in the article, and it should not be assumed that the two numbers are comparable, since the charge may be net of other items. Sun Life says it will seek full recourse from MetLife under an indemnity if the court approves the deal. How MetLife responds, and whether the indemnity will cover the full amount, is not stated in the report and may be a separate dispute.

Why legacy policies create liability

The case illustrates a recurring issue in the life insurance industry. Policies sold decades ago were written with charges the insurer could adjust, and disputes arise when policyholders question whether the adjustments were permitted. Insurers that acquire books of business also acquire the contractual obligations and the legal risk, even if they did not originally sell the product. For acquirers, indemnities from sellers are therefore a crucial part of deal protection, which is why the reference to MetLife matters.

What to do if you hold one of these policies

Policyholders who think they may be in the class should look for the official notice from the court or class counsel, check the policy name and issue date, and keep their policy documents and statements. They should be cautious of unsolicited offers to file claims for a fee, since a court-approved settlement process normally has its own free claims route, although this article does not specify the one that applies here.

This article summarises one trade-press report on a court approval and is general information, not legal advice. The settlement notice and court documents are the authoritative sources.