Does Money Matter to Insurance Companies?

Does Money Matter to Insurance Companies?

By David Share L.L.B.

President, David Share Associates, Lawyers

The next time you see one of those feel-good ads on TV, in a newspaper or on the radio for a insurance company, don't forget that it really is all about the money for insurance companies. Okay, lawyers work for money too, but we earn it based on the results we get for our clients in pursuing claims against large insurance companies.

A recent case, illustrates just how much money gets thrown around by insurance companies in their efforts to grab further market share. The Ontario Superior Court released its' decision in Sun Life v. Metropolitan Life, 2010 ONSC 558 (CanLII) on January 22, 2010. This case is a reminder of the type of stakes involved when one insurer acquires another. In July, 1998, The Mutual Life Assurance Company of Canada (which changed its' name to Clarica and was then purchased by Sun Life in December 2002), paid $2.2 billion dollars to Metropolitan Life for its' Canadian life insurance related businesses.

The case is about one insurer alleging that they are entitled to further reimbursement or indemnification from liabilities flowing from policies issued by Metropolitan Life prior to its' takeover by Sun Life. The concern that Sun Life has is that they do not wish to be stuck with the cost of fixing the cost structure of certain policies that Met Life had issued in the past, where their allegations of misrepresentations about the cost of these policies to the end individual policyholders.

The ins and outs of this particular case will not matter to you if your claim has been denied, be it for long term disability benefits, life insurance or critical illness, but it certainly does reinforce the notion that money really does matter to insurance companies. Does anything else matter to them? Absolutely, just nothing matters more than money.

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