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Eligibility to Participate
Class policies are participating life insurance policies that
were issued by London Life in Canada between January 1, 1980 and December 31,
1995.
Class policies also include Econolife policies for which clients
selected the Econolife dividend option on or before December 31, 1995.
The Equity series of participating life insurance policies,
which was discontinued in 1982, is not included.
The settlement includes eligible owners of class policies
that are currently in-force or have lapsed or surrendered on or after January
1, 1992. The settlement does not include policies for which the policy owner
has released London Life from claims relating to matters at issue in the class
actions.
In general, the actions relate to premium offset, policy values
and income benefits for participating life insurance policies purchased from
London Life from 1980 through 1995.
The settlement relates to life insurance policies purchased
from London Life. Therefore, former Prudential of America clients whose policies
were acquired by London Life in 1996 are not part of the settlement.
Former Owners
A newspaper notice was published in newspapers all across
Canada on August 29, 2002 informing Former Owners about the settlement.
Former Owners are owners of policies that lapsed or were surrendered
between January 1, 1992 and April 15, 2002.
The newspaper notice relates only to Former Owners and not
to policyholders who have current in-force policies.
Policyholders who have current in-force policies will receive
a direct mailing package from London Life.
To view the newspaper notice to Former Owners, click here.
Former Owners have a choice of benefits under the settlement:
New Policy Benefit
Policyholders can choose to purchase a new participating life
insurance policy appropriate for the age of the person to be insured, subject
to the standard underwriting requirements of London Life.
If approved, the new policy will provide insurance on the
same person and in the same coverage amount as the lapsed or surrendered class
policy or London Life's current minimum coverage amount, if larger.
There will be a 50% reduction in the first annual premium
for the new policy.
Individual Claims Review Process (ICRP)
Policyholders may participate in an adjudication process to
resolve individual claims relating to premium offset, policy values or income
benefits.
The adjudication process is conducted entirely in writing
and includes a right to appeal to an independent adjudicator.
The claim review decision and the benefits received will depend
on the types of claims made, the particular features of the policies involved,
and the evidence available relating to the acquisition of the policies.
The stronger/better proof available, the better the relief
that will be received.
Current Owners
Global Benefits
Global Benefits are provided to policyholders automatically
for each current class policy, unless the policyholder opts out.
Policyholders do not have to do anything at all to receive
Global Benefits. Policyholders do not have to complete or return any form(s)
to receive Global Benefits.
Global Benefits include:
- An increase in the annual dividend on all current class policies (called
a dividend enhancement) for one year; and
- For Econolife policies, a reduction in the cost of the term insurance on
that policy (which benefit has already been provided).
Dividend Enhancement
As a current owner of a participating life insurance policy,
policyholders receive annual dividends on their policies, paid on the policy
anniversary date.
Dividends vary from year to year and are not guaranteed.
The Global Benefits provide an increase, for one year, in
the annual dividend otherwise payable on the basic insurance amount of the policy
by using an interest rate that is one-half of one percent (50 basis points) higher
than the interest rate that would otherwise apply.
London Life will have 180 days to begin providing this benefit
once the mailing of all notices has been completed.
The dividend enhancement will be provided on the first policy
anniversary date.
Reduction in Cost of Term Insurance
All class members who are current owners of an Econolife class
policy have already received a five year reduction in the cost of the term insurance
component of those policies.
This reduction started to apply in March, 1997.
A simple way to understand the Global Benefits is to consider
an analogy to a bank account.
The dividend enhancement described above is similar to a bank
agreeing to increase the interest it pays on your money for a period of one year.
Instead of paying interest at 2% for that year, the interest rate is bumped-up/increased
by ½ of 1% (50 basis points) so that the interest rate will be 2.5%.
The reduction in cost of term insurance is similar to a bank
agreeing to reducing service charges/fees on a bank account.
Global Benefits have real value for policyholders, however,
they do not result in policyholders receiving a payment, cheque or clearly-identifiable,
tangible benefit from London Life.
The reductions in cost of term insurance have already been
received by policyholders and the dividend enhancement will be received in due
course and will add value to policies.
Global and Enhanced Benefits
In addition to Global Benefits, policyholders may either automatically
qualify for Enhanced Benefits, or can apply for them.
Policyholders should check their Policy information statement
on Page 2 of the mailing package booklet to find out whether or not they automatically
qualify for Enhanced Benefits.
If policyholders automatically qualify, no forms need to be
completed or returned.
If policyholders do not automatically qualify for Enhanced
Benefits, information on how to apply for them, and who will be eligible, is
set-out below under the Tips for Completing the Policyholder Election Form.
Enhanced Benefits include:
- A dividend enhancement for two more years (two years beyond the one year
Global Benefit enhancement described above).
- A cap on reduced term purchase rates for Econolife policies.
- A cap on the premium offset date for the policy based on London Life's 2001
dividend scale.
Dividend Enhancement/Term Insurance Cost Reduction
The dividend enhancement and reduction in cost of term insurance
is as set-out above under the Global Benefits section.
Cap on Premium Offset Date
What is most important under the Enhanced Benefits relief
is that the premium offset date for the policy based on London Life's 2001 dividend
scale will be no more than 50% later than the premium offset date based on the
dividend scale in place when the policy was issued, i.e., one and one-half times
the premium offset date promised at point of sale of the policy.
For example, if the policy was originally illustrated to offset
after eight years, based on the dividend scale in effect at that time, the premium
offset date for the policy under the 2001 dividend scale would be capped so that
it is no more than 12 years (8 years x 50% = 4 years / 8 years + 4 years = 12
years).
This is a significant and valuable benefit in that the offset
date that is now faced by some policyholders prior to settlement benefits is
in many cases much more than one and one-half times what was illustrated at point
of sale.
The Enhanced Benefit brings the premium offset date back down
and more in-line with what was promised at point of sale.
Individual Claims Review Process (ICRP)
Class Members can choose to participate in an adjudication
process to resolve individual claims relating to premium offset, income benefits
or cash values.
There are three types of individual claims:
- Claims based on a representation of a guaranteed premium offset date -- called
premium offset claims.
- Claims based on a representation of a guaranteed annual income for some period
of time and, where applicable, a guaranteed premium offset date -- called Pay
Day claims.
- Claims based on a representation of a guaranteed cash value at a specified
point in time -- called cash value claims.
Policyholders can make only one type of claim for each policy.
Claims can be based on a representation at the time of purchase of the policy
or at the time of a change to the policy.
To make a claim, policyholders must choose the Individual Claims Review
Process (Option 3) on the Election Form and mail it to London Life post-marked
or delivered within 68 days of the date on the personalized covering letter.
London Life will send a claim adjudication package including the necessary
forms and that documentation will have to be reviewed, completed and returned
in order to participate in the ICRP.
Policyholders have 68 days from the date on the covering letter sending the
claim adjudication package within which to complete the necessary forms, etc.
and file the claim under the ICRP.
If a claim adjudication package is requested but not completed and returned
to London Life within the required time, the policyholder will not be entitled
to make a claim under the ICRP but will receive the Global Benefits and any Enhanced
Benefits they automatically qualify for, as shown on the Policy Information Statement.
Opting Out
Policyholders may choose to opt out and exclude themselves
from the settlement.
If policyholders opt out, they will not be entitled to receive
any settlement benefits.
Policyholders are not able to pursue a lawsuit or make any
other claim relating to the matters covered by the settlement unless they opt
out.
If policyholders wish to opt out, they must choose that option
on the Election Form and the form must be post-marked or delivered to London
Life within 68 days of the date on the personalized covering letter.
We do not recommend that any policyholder opt out of the settlement
unless they plan to specifically pursue a lawsuit or other claim relating to
the matters covered by the settlement. Such litigation against London Life is
risky and speculative and will involve significant cost and expense on the part
of the policyholder.
Most lawyers taking on a claim such as this will require a
significant up-front retainer fee and, other than in exceptional circumstances,
will not be prepared to take such cases on a contingency or speculative basis
nor will they be prepared to provide a definitive opinion on chances of success
at trial.
Because of the risks and costs of litigation on an individual
basis, we recommend that policyholders seriously consider receipt of benefits
under the Settlement Agreement rather than pursuit of expensive and risky individual
legal action against London Life.
CONTACT US
If you would like more information regarding this claim
or wish to be added to our database of claimants, you may e-mail us at manager@classactionlaw.ca.
You can also access our class action hotline at 1-905-523-8048.
You can contact us directly by telephone at Scarfone
Hawkins LLP
at 1-905-523-1333.
You can contact us by fax at 1-905-523-5878.
We are experiencing an extremely large volume of calls.
We will return your call as soon as possible. We would ask that you please be
patient. Thank you. |
