TORONTO, Sept. 2 /CNW/ - Transamerica Life Canada ("Transamerica") and
Roy Elliott O'Connor LLP ("REO"), as counsel for the proposed representative
plaintiff Joseph Fantl, confirmed today that the parties have reached an
agreement in principle to settle the excess management fee claim in the
proposed national class action commenced against Transamerica in 2003. The
parties also announced today the next steps in the settlement process.
Under the agreement in principle, Transamerica will compensate
policyholders who invested in various Investment Manager Series ("IMS")
segregated funds for any excess management fees charged and for related
losses. Compensation will be paid pursuant to a restitution program to be
agreed by the parties and approved by the Ontario Superior Court of Justice.
While the precise number of affected policyholders is unknown, the proposed
settlement will affect over 100,000 policyholders from coast to coast.
The parties are currently negotiating the specific details of the
restitution program. There are still a number of steps to be completed before
the policyholders receive compensation. The amount that any individual may
receive and the total value of the settlement are unknown at this time. Before
compensation can be paid to any individual, the final settlement agreement
including the restitution program must be completed and approved by the Court.
The parties are working to have compensation paid to affected policyholders as
quickly as possible.
The Fantl action concerns various IMS funds which were offered for sale
by NN Life and subsequently Transamerica after its purchase of NN Life in
2000. The IMS funds were offered to policyholders under various individual
variable insurance contracts and universal life contracts. The statement of
claim alleges that NN Life and later Transamerica charged management fees for
the IMS funds in excess of what was permitted under various insurance policies
or represented in summary information folders.
In August 2007, Transamerica wrote to certain policyholders about a
potential management fee overcharge issue and committed to investigate the
overcharges, reset the amount of management fees and pay restitution. In
connection with this process, Transamerica will shortly advise its affected
policyholders about the resetting of the management fees back to contractually
permitted amounts. This reset is currently scheduled to occur around
November 14, 2008.
The Court approval of the settlement of the excess management fee claim
in the Fantl action will occur in two phases. First, the parties are scheduled
to appear before the Court in Toronto on November 24 and 25 for a settlement
pre-approval motion, including approving the notice program for the class.
Second, a fairness hearing will be held on April 22 through 25, 2009. If the
Court is satisfied with the fairness of the settlement, it should be approved
at that time. The foregoing dates are tentative and subject to change.
Pursuant to the agreement in principle, the policyholders will not have
to pay the legal fees and disbursements of class counsel because they will be
paid directly by Transamerica. In short, as a result of this agreement the
policyholders' compensation will not be affected by the class counsel's legal
fees. The amount of those fees and disbursements must be agreed upon by the
parties and approved by the Court or, if the parties are unable to agree, the
Court will be asked to fix the amount.
"We are pleased to reach an amicable framework for resolving the
management fee overcharge claim", said Paul Reaburn, President and CEO of
Transamerica Life Canada. "We look forward to completing our negotiations with
REO, obtaining court approval of our settlement and to seeing our
policyholders compensated fairly for any past overcharges which we regret
"I am pleased that Transamerica is endeavouring to resolve this claim
without the need for a trial, and I have instructed Roy Elliott O'Connor to
use their best efforts to pursue a final, fair and reasonable settlement as
quickly as possible", said Joseph Fantl, the representative plaintiff in the
For further information:
For further information: Media inquiries should be directed to: Inga
Eichenbaum, Transamerica Life Canada, Tel: (416) 883-5417; or David F.
O'Connor, Roy Elliott O'Connor LLP, Tel: (416) 362-1989, Email: firstname.lastname@example.org