Great-West Lifeco has been dealt a
severe fine by an Ontario Superior Court of Justice judge who has
ruled against the Canadian insurer for improperly using money from
participating life insurance policyholders’ accounts.
In her ruling, Justice Leitch
ordered Great-West to repay C$84m and its wholly-owned subsidiary
London Life to repay C$372m to affected policyholders.
The ruling follows a class action
brought against Great-West in 2008 in which plaintiffs alleged that
it had breached certain requirements of the Insurance Companies Act
by using money from participating life insurance policy accounts of
London Life to help finance London Life’s acquisition in 1997.
Canadian insurer London Life is
based in London, Ontario.
Responding to the judgment,
Great-West said in a statement: “The management and boards of
directors believe they have at all times acted in the best
interests of their respective companies, taking into account the
interests of all stakeholders, including the policyholders.
“The acquisition of London Life was
carried out with careful supervision, rigorous analysis, and the
use of detailed third-party studies. In addition there were
statutory reviews by the financial services regulator.”
Great-West is to lodge an appeal
against the ruling. The insurer noted it believes “significant
aspects of the decision… are in error”.
