LONDON LIFE POLICYHOLDERS NOT HURT, SAYS GREAT WEST LAWYER

Policyholders of Canada-based London Life Insurance Co were not harmed when purchasing companies Great-West Lifeco Inc and Power Financial Corp used policyholder funds to pay in part for the acquisition of London Life in 1997. Great-West and Power Financial lawyer Sheila Block said in her opening statement that it was a beneficial transaction that was "a stunning success because it has been brilliantly executed and managed". The two companies are being sued on behalf of 1.8m policyholders by D'Alton Rudd, a former London Life chief actuary, James Jeffery, a former corporate actuary, and a Great West policyholder. They accuse Great-West and Power Financial of illegally using CAD220m ($202m) to help pay for the $2.7bn acquisition by Great-West. Ms Block said that the evidence would show that the combined companies will gain CAD770m in savings over 50 years, with both policyholders and shareholders benefiting. It was only fair that policyholders should pay a share of the acquisition, Ms Block claimed. "There's no free ride", she told Ontario Superior Court Judge Joanne Morrisette.