Canada Life Policyholders Nearing Decision On Demutualization.

TORONTO--(BUSINESS WIRE)--July 20, 1999--

The Canada Life Assurance Company has today initiated an important step in its consideration of demutualization as the Superintendent of Financial Institutions gave approval to mail information packages to approximately 388,000 eligible policyholders in Canada, the United Kingdom, Ireland and the United States.

The package will be received by policyholders in early August and will contain a letter from David Nield, Chairman, President, and CEO, which includes information on the number of shares that each policyholder will be entitled to receive. Also included is a Guide with detailed information on demutualization; a voting form and reply envelope; and a form for policyholders to choose to keep or sell their shares for cash on conversion to a public company.

"We strongly urge all of our eligible policyholders to vote. This package of information is designed to ensure that they have all the information they require in order to make an informed decision about demutualization," said Nield. "At least two-thirds of those who vote must be in favour of the proposal for it to proceed. The Board of Directors of Canada Life have unanimously recommended this action, but ultimately, it's up to the policyholders."

Eligible policyholders can vote either by proxy or in person at a special meeting to be held at the Metro Toronto Convention Centre at 10:00 AM (Toronto time) on September 16, 1999.

Policyholders will receive confirmation of the estimated value and number of shares they may hold or sell if demutualization is approved. Prices are based on an opinion and valuation report in which Canada Life's financial advisors estimate that the range of market values for Canada Life on May 21, 1999 was approximately $2.5 billion (Canadian) to $3.7 billion (Canadian). Based on this estimate and on a total of approximately 156 million shares being issued on demutualization, the initial share value, as at May 21, 1999, would range from $16.03 (Canadian) to $23.72 (Canadian) per share. The median number of shares allocated to an eligible policyholder is 210 which, based on the above range, would result in a value between $3,366 and $4,981 (Canadian). The minimum number of shares allocated to an eligible policyholder is 100.

The allocation formula is made up of two parts, a fixed portion and a variable portion. With approval of demutualization, all eligible policyholders would receive 100 shares as the fixed portion of the allocation. These shares would represent approximately 25 percent of the total shares. The variable portion of the formula is broken down as follows: 25 percent of the total shares allocated on the basis of the basic annual premium paid on the policy; the remaining 50 percent is based on the total cash value of each policy multiplied by the length of time that the policy has been held with Canada Life, with certain adjustments.

The Policyholder Guide provides information on each aspect of demutualization. It is organized into two parts. Part One provides information about Canada Life and the proposal to demutualize. Part Two discusses Canada Life's business and provides financial information. It also includes expert opinions and the conversion proposal.

The Guide describes demutualization, including the advantages and disadvantages, a discussion of tax consequences, possible impact on government benefits, corporate changes that accompany the conversion, and an explanation of the means by which policyholders can vote.

Policyholders who are unable to attend the special meeting may cast their vote by filling out and returning the voting form that has been included with the Guide. These must be received no later than 5 p.m. (Toronto time), on September 13, 1999. The forms will be independently processed by Montreal Trust Company of Canada.

Part One of the Policyholder Guide is posted on the Company's internet site at www.canadalife.com.

Formed in 1847, in Hamilton, Ontario, Canada Life is the oldest Canadian life insurance company and is presently one of the largest Canadian life insurers, based on consolidated premium income and assets. Headquartered in Toronto, Canada, the company has assets under administration in excess of $50 billion and operates in Canada, the United Kingdom, Ireland and the United States.