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Harrison Pensa LLP prosecuted two related class actions against London Life Insurance Company (“LLIC”) and the Great-West Life Assurance Company (“GWLAC”) on behalf of the certified class of participating life insurance policyholders of each of LLIC and GWLAC. Participating life insurance policies are unique insurance products which permit the policyholder to participate in the sharing of the profits earned by the life insurer through the payment of annual dividends, bonuses or credits in addition to the life insurance coverage provided. The action alleged that two internal financial transactions which used $220 million in cash from specific statutory accounts known as “participating accounts” within LLIC and GWLAC in order to help pay for the purchase of LLIC by GWLAC were unlawful. Participating accounts are required to be kept by law and the dividends, bonuses or credits which are owed to policyholders each year are paid from those accounts.
The matter was litigated over more than 14 years. The matter involved a 45 day common issues trial, multiple appeals to the Ontario Court of Appeal and leave applications to the Supreme Court of Canada. Ultimately, the transactions at issue were found to be in violation of specific laws that apply to life insurance companies, and resulted in a monetary award of $56.43 million dollars plus interest being returned to the participating accounts and the cancellation of substantial accounting charges against the participating accounts among other relief.
Due to the nature of the remedy granted by the Ontario Court of Appeal, policyholders were not required to make a claim or to otherwise take any steps in connection with the case. The Ontario Court of Appeal ordered that the monetary relief granted was to be managed in accordance with the dividend policies of LLIC and GWLAC in the ordinary course of business.
This matter is now fully resolved and our file is closed.