La Capitale Proposes an Out-Of-Courtsettlement
JOINT NEWS RELEASE
FOR IMMEDIATE RELEASE
LA CAPITALE PROPOSES AN OUT-OF-COURTSETTLEMENT
Quebec City, March 22, 2005 - La Capitale Civil Service Insurer and Gérard Roberge, represented by the law firm Lauzon Bélanger, have signed an out-of-court settlement agreement with respect to a Motion to Institute a Class Action filed on behalf of all persons who purchased participating life insurance contracts from La Capitale in the Province of Quebec, featuring aself-financing premium option. Under this agreement, LaCapitale estimates the value of the settlement at about $20 million.
“Although a first Motion to Institutea Class Action was already rejected by the Superior Court, the Court of Appeal and the Supreme Court of Canada, La Capitale understands that some policyholders may have remained unsatisfied up to now, andto preserve our relationship with them, we have agreed to settle out of court with all policyholders”, said Monique Bégin, vice-president, communications and public relations, at La Capitale.
The settlement offered to policyholders compares favourably with similar settlements of class actions in Quebec and elsewhere in Canada.
“The proposal to policyholders affected is fair and equitable, since the solutions it contains are an appropriate response to the objectives of the class action,” said Yves Lauzon of Lauzon Bélanger, the firm representing the petitioner.
The proposed settlement
Policyholders will have a choice of three options:
The first option providesthem with a singledividend equivalent to 10% to 15% of the annual premium. This option will allow policyholders to maintain the value of their life insurance but will not guarantee the self-financing of their premium.
The second option will guarantee the Self-Financing Premium Date, but this date will be later than that originally projected. It will be determined according to the terms of the agreement and, as of this date, the policyholders will no longer be required to pay the premiumsthemselves. In exchange, policyholders will be required to renounce to the value oftheir additional paid-up accumulated insurance or theirdividends on deposit, which are in excess of amounts that may be owed to them by La Capitale.
Subject to certain conditions,the third option will guarantee theSelf-Financing Premium Date originally projected. In particular, to be entitled to this option, policyholders must fill in an unequivocal declaration under oath, accompanied either by adeclaration under oath by a representative of La Capitale who soldthe contract, or by a document from La Capitale, other thana dividends illustration,that guaranteed the Self-Financing Premium Date. A committee will decide whether the demand of a policyholder who selects this option is granted or not.
Next steps
This agreement must be approved by the Court. A hearing will take place on April 20, 2005. Once approval is received, policyholders will be mailed complete documentation describing the different benefits available to them and providing them with the information they need to take advantage of these benefits.
The settlement agreement may be consulted at the following Web sites:
La Capitale
Lauzon Bélanger
-30-
Information:
Monique Bégin
Vice-president, communications and public relations
La Capitale Financial Group
(418) 644-4276
Yves Lauzon, solicitor
Lauzon Bélanger, s.e.n.c.
(514) 844-4646