Questions and Answers

I’ve seen Great-West Life’s name in the news. What is happening?

What is the lawsuit about?

Who qualifies as a member of the class?

Will there be further appeals and how long will that take?

Does this lawsuit affect my policy with Great-West Life?

What do you mean by “any monies to be returned to the participating account will be dealt with in accordance with the company’s participating policyholder dividend policy in the ordinary course of business”?

Does this lawsuit impact the strength and stability of Great-West Life?

Does this lawsuit impact the strength and stability of the participating account?

What is participating life insurance and how does it work?

I have questions about my insurance; is there an independent organization I can talk to?

Who can provide more detail about the lawsuit?

I’ve seen Great-West Life’s name in the news. What is happening?

• The Court of Appeal for Ontario has released a decision in regard to the involvement of the participating accounts of Great-West Lifeco subsidiaries London Life Insurance Company and The Great-West Life Assurance Company in the financing of the acquisition of London Insurance Group in 1997.
• The Court of Appeal upheld that the participating policyholders were treated fairly and that there was no impact on their dividends. The Court of Appeal also confirmed that it was reasonable for the participating accounts to contribute to the acquisition in order to receive benefits.
• The Court of Appeal made adjustments to the original trial judgment. Any monies to be returned to the participating accounts will be dealt with in accordance with the company’s participating policyholder dividend policy in the ordinary course of business. No awards are to be paid out to individual class members.
• The decision will have no impact on participating policy contract terms or conditions.

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What is the lawsuit about?

• The financing transaction was premised on the participating account receiving, in proportion to its participation, a share of the savings from the integration of the two Companies following the acquisition. This has happened notwithstanding the legal challenge.
• The transaction was structured to be risk free for the participating account and provided an appropriate rate of return, reflecting the term and risk of this transaction.
• The acquisition and integration of the Companies has been a marked success and the Great-West Life participating account has received the anticipated savings and the planned rate of return. Furthermore, the participating account continues to benefit from additional expense savings.
• Our Company is committed to participating insurance and we intend to continue to focus on excellence in managing and growing our participating business. We believe our continuing focus on participating insurance will serve both existing and new policyholders well.

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Who qualifies as a member of the class?

• All persons who held a participating life insurance policy of The Great-West Life Assurance Company between November 1997 and October 1, 2010, the date of the trial judgment.

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Will there be further appeals and how long will that take?

• On January 3, 2012 the plaintiffs filed an application in the Supreme Court of Canada for leave to appeal the decision of the Court of Appeal. This process can take approximately 6 months before a decision is made on whether leave to appeal will be granted. If the Supreme Court of Canada grants leave to appeal, the appeal process can take over a year to complete.

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Does this lawsuit affect my policy with Great-West Life?

• The decision will have no impact on participating policy contract terms or conditions.
• Any monies to be returned to the participating account will be dealt with in accordance with the company’s participating policyholder dividend policy in the ordinary course of business. No awards are to be paid out to individual class members.
• If you are not a participating policyholder, the court action will not have any impact on your contract with us as it relates only to the participating life insurance business of the Company. 

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What do you mean by “any monies to be returned to the participating account will be dealt with in accordance with the company’s participating policyholder dividend policy in the ordinary course of business”?

• Any monies returned to the participating account will form part of the participating account. Participating policies are eligible for a dividend from a portion of the earnings of the participating account, as determined in accordance with the company’s participating policyholder dividend policy as approved by the Board of Directors.

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Does this lawsuit impact the strength and stability of Great-West Life?

• Our Company remains secure financially, as indicated by the strong ratings we have received from major ratings agencies.
• Our Company’s capital position remains strong. Our regulatory capital ratios in our countries of operation remain at or above the top end of our target ranges for our operating companies.
• We will continue to manage our affairs in a prudent and conservative manner. Financial solidity is our number one priority.

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Does this lawsuit impact the strength and stability of the participating account?

• No, this decision will not impact the strength and stability of the participating account. The Great-West Life participating account is strong and will continue to operate normally.
• At Great-West Life, we believe in participating life insurance and know the value it has delivered to participating policyholders over the years. Great-West Life is committed to excellence in participating life insurance.

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What is participating life insurance and how does it work?

• Participating life insurance is permanent life insurance that protects you and your family for your lifetime. It provides a death benefit and builds a tax-advantaged cash value that you can draw on during your lifetime.
• Participating life insurance is built on a foundation of basic guaranteed values, including a basic guaranteed death benefit and cash value. It also gives you the opportunity to earn policyholder dividends, which can be used in a variety of ways including purchasing additional insurance and cash value growth.
• Our Company is committed to participating life insurance and we intend to continue to focus on excellence in managing and growing our participating life insurance business. We believe our continuing focus on participating life insurance will serve both existing and new policyholders well.
• Participating life insurance is an important part of the value proposition we offer our customers. It provides choice and flexibility in choosing a life insurance solution to suit individual needs and circumstances.
• Our Company has paid participating policyholder dividends every year for well over 100 years. Even during challenging social, political and economic times we have continued to provide policyholders with solid, stable returns.
• In 2010 Great-West Life paid out in excess of $57 million in death benefits on participating policies and approximately $125 million in participating policyholder dividends.

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I have questions about my insurance; is there an independent organization I can talk to?

• We are a member of the OmbudService for Life & Health Insurance. This independent service helps consumers with questions and concerns about life and health insurance products and services.

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Who can provide more detail about the lawsuit?

• There are legal restrictions regarding discussion of these proceedings with participating policyholders of Great-West Life who are members of the class that is covered by the lawsuit. The court process and the legal rules restricting communication between parties to a legal action prohibit the Company and its representatives from discussing these legal actions with participating policyholders.
• Participating policyholders looking for more information about the lawsuits can go to www.parpolicyclassaction.com.
• The Company and its representatives may continue to deal with all clients and participating policyholders on regular sales, service and policy administration issues related to participating policies. If you have questions about your individual life insurance policy, please contact your financial security advisor or our Client Service Centre at 1-800-665-0551.