subsidiary of Winnipeg's Great West Life group of companies
2001 0630 - theglobeandmail.com - London Life settles "vanishing premium" suit, by Terry Weber - [link]
London Life Insurance Co. said Friday it will pay $180-million to settle a class action suit covering 500,000 clients who bought "premium offset" policies between 1980 and 1995.
The agreement, which still needs court approval in Ontario, British Columbia and Quebec, is the most recent in which a major North American insurer has settled with clients over the sale of contentious so-called "vanishing premium" policies.
The policies were designed so that the monthly premiums would disappear after a short period, provided interest rates remained level or fell. But rates jumped, leaving many customers facing premiums they didn't expect.
London Life, a subsidiary of Winnipeg's Great West Life group of companies, said the settlement includes enhanced benefits and a review process to deal with individual claims.
The $180-million price tag is on top of another $60-million provided to cover previous settlements, London, Ont.-based London Life said. The agreement isn't expected to have an impact on the insurer's financial results.