Sun Life 2015 Annual Report Download - page 161

24.E Guarantees of Sun Life Assurance Preferred Shares and Subordinated Debentures
SLF Inc. has provided a guarantee on the $150 of 6.30% subordinated debentures due 2028 issued by Sun Life Assurance. Claims
under this guarantee will rank equally with all other subordinated indebtedness of SLF Inc. SLF Inc. has also provided a subordinated
guarantee of the preferred shares issued by Sun Life Assurance from time to time, other than such preferred shares which are held by
SLF Inc. and its affiliates. Sun Life Assurance has no outstanding preferred shares subject to the guarantee. As a result of these
guarantees, Sun Life Assurance is entitled to rely on exemptive relief from most continuous disclosure and the certification
requirements of Canadian securities laws.
The following tables set forth certain consolidating summary financial information for SLF Inc. and Sun Life Assurance (Consolidated):
Results for the years ended
SLF Inc.
(unconsolidated)
Sun Life
Assurance
(consolidated)
Other
subsidiaries
of SLF Inc.
(combined)
Consolidation
adjustment
SLF Inc.
(consolidated)
December 31, 2015
Revenue $ 378 $ 15,367 $ 4,584 $ (1,055) $ 19,274
Shareholders’ net income (loss) $ 2,285 $ 1,787 $ 327 $ (2,114) $ 2,285
December 31, 2014
Revenue $ 121 $ 22,426 $ 5,287 $ (2,070) $ 25,764
Shareholders’ net income (loss) $ 1,922 $ 1,551 $ 564 $ (2,164) $ 1,873
Assets and liabilities as at
SLF Inc.
(unconsolidated)
Sun Life
Assurance
(consolidated)
Other
subsidiaries
of SLF Inc.
(combined)
Consolidation
adjustment
SLF Inc.
(consolidated)
December 31, 2015
Invested assets $ 20,695 $ 130,977 $ 5,794 $ (19,503) $ 137,963
Total other general fund assets $ 10,922 $ 21,279 $ 22,265 $ (37,016) $ 17,450
Investments for account of segregated
fund holders $ – $ 91,389 $ 51 $ – $ 91,440
Insurance contract liabilities $ – $ 110,568 $ 7,029 $ (7,370) $ 110,227
Investment contract liabilities $ – $ 2,913 $ – $ – $ 2,913
Total other general fund liabilities $ 10,367 $ 22,386 $ 20,380 $ (32,278) $ 20,855
December 31, 2014
Invested assets $ 19,211 $ 118,450 $ 5,412 $ (17,922) $ 125,151
Total other general fund assets $ 9,354 $ 17,074 $ 19,124 $ (31,284) $ 14,268
Investments for account of segregated
fund holders $ – $ 83,891 $ 47 $ – $ 83,938
Insurance contract liabilities $ – $ 101,440 $ 5,700 $ (5,912) $ 101,228
Investment contract liabilities $ – $ 2,819 $ – $ – $ 2,819
Total other general fund liabilities $ 9,834 $ 17,112 $ 17,925 $ (28,371) $ 16,500
24.F Legal and Regulatory Proceedings
We are regularly involved in legal actions, both as a defendant and as a plaintiff. Legal actions naming us as a defendant ordinarily
involve our activities as a provider of insurance protection and wealth management products, as an investor and investment advisor,
and as an employer. In addition, government and regulatory bodies in Canada, the U.S., the U.K., and Asia, including federal,
provincial, and state securities and insurance regulators and government authorities, from time to time, make inquiries and require the
production of information or conduct examinations or investigations concerning our compliance with insurance, securities, and other
laws.
Provisions for legal proceedings related to insurance contracts, such as for disability and life insurance claims and the cost of litigation,
are included in Insurance contract liabilities in our Consolidated Statements of Financial Position. Other provisions are established
outside of the Insurance contract liabilities if, in the opinion of management, it is both probable that a payment will be required and a
reliable estimate can be made of the amount of the obligation. Management reviews the status of all proceedings on an ongoing basis
and exercises judgment in resolving them in such manner as management believes to be in our best interest.
Two putative class action lawsuits have been filed against Sun Life Assurance in connection with sales practices relating to, and the
administration of, individual policies issued by the Metropolitan Life Insurance Company (“MLIC”). These policies were assumed by
Clarica when Clarica acquired the bulk of MLIC’s Canadian operations in 1998 and subsequently assumed by Sun Life Assurance as a
result of its amalgamation with Clarica. One of the lawsuits (Fehr et al v Sun Life Assurance Company of Canada) is a purported class
action issued in Ontario and the other (Alamwala v Sun Life Assurance Company of Canada) is in British Columbia. Neither action has
been certified at this time. In the Fehr action, on November 12, 2015, the court dismissed the plaintiff’s motion for certification for
certain claims and has not yet made a decision on the balance of the motion for the remaining claims. We expect the court will deliver
its final ruling on this part of the motion sometime in 2016. In addition, the plaintiffs have the right to appeal any decision against
Notes to Consolidated Financial Statements Sun Life Financial Inc. Annual Report 2015 159