Notice of Annual Meeting and Report to Voting Policyholders
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Sun Life Assurance Company of Canada INFORMATION FOR VOTING POLICYHOLDERS Notice of our 2019 annual meeting 2018 Report to Voting Policyholders Welcome As a voting policyholder of Sun Life Assurance, you have the right to vote at our annual meeting. This booklet includes the notice of our 2019 annual meeting as well as our 2018 Report to Voting Policyholders, which includes information about: • the business of the meeting (page 7) • how to vote (page 4) • policyholder dividends (page 20) • our financial performance in 2018 (page 24). Your vote is important. You can attend the meeting and vote in person or you can complete the policyholder proxy form in this package and have someone vote on your behalf. Please take some time to review this report and contact us if you have any questions. _______________ In this document: • we, us, our, the company and Sun Life Assurance mean Sun Life Assurance Company of Canada • you, your and policyholder mean voting policyholders of Sun Life Assurance • Sun Life Financial means our sole shareholder, Sun Life Financial Inc., which is a publicly traded company on the Toronto (TSX), New York (NYSE) and Philippine (PSE) stock exchanges under the ticker symbol SLF • all dollar amounts are in Canadian dollars unless stated otherwise. INFORMATION FOR VOTING POLICYHOLDERS 2019 Sun Life Assurance Company of Canada Dear voting policyholder: You are invited to attend the annual meeting of voting policyholders and the sole shareholder on Thursday, May 9, 2019 at 9:00 a.m. (Toronto time). The meeting will be held at Sun Life Financial’s head office at 1 York Street (at Harbour Street), 35th floor, Toronto, Ontario, Canada and will also be webcast at www.sunlife.com. This document includes the notice of our 2019 annual meeting and our 2018 Report to Voting Policyholders, which includes important information about the meeting, how to vote, policyholder dividends and our financial performance in 2018. We will be conducting the annual meeting of the common shareholders of Sun Life Financial Inc. at the same time. The formal business of each meeting will be conducted separately, however, management’s presentation will address policyholders and shareholders. A joint question and answer period will then follow. Your vote is important. If you cannot attend the meeting, please vote by submitting your proxy by mail, internet or telephone by 5:00 p.m. (Toronto time) on Thursday, May 2, 2019, as described on pages 4 to 6. We look forward to seeing you at the meeting. William D. Anderson Dean A. Connor Chairman of the Board President & Chief Executive Officer Si vous désirez recevoir l’avis de convocation à l’assemblée annuelle de 2019 et le rapport 2018 à l’intention des titulaires de contrat ayant droit de vote en français, veuillez communiquer avec le secrétaire en écrivant au 1 York Street, 31st Floor, Toronto (Ontario) Canada M5J 0B6, en composant le 1-877-786-5433, ou en envoyant un courriel à [email protected]. - 1 - INFORMATION FOR VOTING POLICYHOLDERS 2019 Notice of our 2019 Annual Meeting You are invited to our annual meeting of voting policyholders and the sole shareholder of Sun Life Assurance Company of Canada: When Thursday, May 9, 2019 at 9:00 a.m. (Toronto time) Where 1 York Street (at Harbour Street) 35th floor Toronto, Ontario, Canada What the meeting will cover 1. Receipt of the 2018 consolidated financial statements 2. Election of the directors 3. Appointment of the auditor 4. Consideration of any other business that may properly be brought before the meeting. As of March 15, 2019 (the record date), a total of 1,084,091 votes are eligible to be cast by voting policyholders and 427,179,546 votes are eligible to be cast by the sole shareholder at the meeting. The annual meeting of common shareholders of Sun Life Financial Inc. will also be held at the same time and place. If you cannot attend the meeting, please complete the enclosed proxy form to cast your vote and mail it in the envelope provided. The board of directors has approved the contents of this report and has authorized us to send it to you. Troy Krushel Vice-President, Associate General Counsel & Corporate Secretary Toronto, Ontario March 15, 2019 - 2 - INFORMATION FOR VOTING POLICYHOLDERS 2019 2018 Report to Voting Policyholders Contents Voting………………………………………………………………………………………….4 Who can vote………………………………………………………………………………… 4 How to vote…………………………………………………………………………………… 4 If you change your mind…………………………………………………………………….. 6 Processing the votes………………………………………………………………………… 6 Questions?.................................................................................................................... 6 Our 2019 annual meeting…………………………………………………………..……... 7 Business of the meeting…………………………………………………………………….. 7 The director nominees………………………………………………………………………. 8 The auditor………………………………………………………………………………….. 16 Policyholder proposals…………………………………………………………………….. 17 Director compensation…………………………………………………………………... 17 Directors’ compensation for 2018………………………………………………………… 18 Changes to directors’ compensation for 2019…………………………………………... 18 Share compensation plan…………………………………………………………………. 19 Compensation details ……………………………………………………………………... 19 Policyholder dividends and participating account management………………… 20 Our policyholder dividend and participating account management policies…………. 21 Safeguards for our policyholder dividend and participating account management processes…………………………………………………………………………………….21 2019 dividend scales………………………………………………………………………. 22 Information about the financial position of our participating accounts………………... 22 Annual financial information…………………………………………………………….24 Sources of earnings……………………………………………………………..……… 124 Our subsidiaries and associates……………………………………………………... 127 Appendix A – Policyholder dividend and participating account management policies…………………………………………………………………………..………… 130 - 3 - INFORMATION FOR VOTING POLICYHOLDERS 2019 Voting Who can vote Only voting policyholders and our sole shareholder can vote at our annual meeting. You are a voting policyholder if on March 15, 2019 (the record date) you owned one of the following: • a participating policy issued by Sun Life Assurance or The Mutual Life Assurance Company of Canada (Mutual Life). Mutual Life changed its name to Clarica Life Insurance Company on July 21, 1999. • a non-participating product with voting rights issued by Mutual Life before April 1, 1995. The table below shows the breakdown of voting policyholders as of March 15, 2019: Voting Policyholders Country # % Canada 928,439 85.6 United States 47,318 4.4 Other 108,334 10.0 Total 1,084,091 100.0 Voting policyholders are entitled to cast one vote on each item of business, regardless of the number of policies owned, except for the election of the shareholder’s directors. Sun Life Financial, our sole shareholder, is entitled to cast one vote on each item of business for each common share it holds, except for the election of the policyholders’ directors. See Electing the directors on page 6 for more information. How to vote You have two ways to vote: • by proxy • by attending the meeting and voting in person. Voting by proxy Voting by proxy is the easiest way to vote because you are giving someone else the authority to attend the meeting and vote for you (called your proxyholder). If you specify on your proxy form how you want to vote on a particular matter, then your proxyholder must vote according to your instructions. - 4 - INFORMATION FOR VOTING POLICYHOLDERS 2019 The enclosed proxy form names William D. Anderson, Chairman of the Board, or in his absence Scott F. Powers, Chair of the Governance, Nomination & Investment Committee (GNIC), or in his absence another director appointed by the board, as your proxyholder to vote at the meeting according to your instructions. If you appoint them as proxyholders but do not specify on the proxy form how you want to vote, your vote will be cast: • FOR electing each of the director nominees who are listed on the proxy form (called policyholders’ directors) • FOR appointing Deloitte LLP (Deloitte) as auditor. You can appoint another person to vote for you by printing his or her name in the space provided on the proxy form. This person does not need to be a voting policyholder, but your vote can only be counted if he or she attends the meeting and votes for you. Regardless of who you appoint as your proxyholder, if you do not specify how you want to vote, your proxyholder can vote as he or she sees fit. Your proxyholder can also vote as he or she decides on any other items of business that properly come before the meeting, and on any amendments to the items listed above. If you do not want to attend the meeting and vote in person, indicate your voting instructions on the enclosed proxy form, then sign, date and return it using one of the methods below: • Mail it in the envelope provided • Scan and email the signed page to [email protected]. Alternatively, you may submit your voting instructions by telephone or on the Internet. You will need the 13-digit control number in the top right-hand corner of the proxy form to complete your voting instructions using one of these methods. The control number is to verify your identity. Voting by phone Call 1-888-489-7352 from a touchtone telephone and follow (Canada & U.S. only) the instructions. Voting on the Go to www.astvotemyproxy.com and follow the instructions Internet on screen. Our agent, AST Trust Company (Canada) (“AST”), must receive your completed and signed proxy form by 5:00 p.m. (Toronto time) on Thursday, May 2, 2019 to have your vote recorded. If the meeting is adjourned, AST must receive your completed proxy form by 5:00 p.m. (Toronto time) on the date that is two business days before the meeting is reconvened. Voting in person Attending the meeting in person gives you an opportunity to hear directly from management and meet the individuals who have been nominated to serve on our board. - 5 - INFORMATION FOR VOTING POLICYHOLDERS 2019 If you want to attend the meeting and vote in person, do not complete or return the proxy form. When you arrive at the meeting, register with a representative of AST to receive a ballot.