Sun Life Financial announces sale of Clarica Life Insurance Company’s U.S. operations to Midland National Life Insurance Company

TORONTO, Oct. 22, 2002 – Sun Life Financial Services of Canada Inc. (NYSE, TSE: “SLC”) announced today that Clarica Life Insurance Company (Clarica) has signed a definitive agreement for the sale of Clarica U.S., Inc. (Clarica U.S.) to Midland National Life Insurance Company for US$286 million in cash, including repayment of approximately US$48 million of existing Clarica U.S. debt. The sale, which does not include Clarica’s U.S. reinsurance operations, is subject to certain conditions, including approval from regulators in the United States. The transaction is expected to close in the first quarter of 2003. Sun Life Financial completed its acquisition of Clarica on May 29, 2002.

“Although Clarica U.S. is a strong company, we concluded after a lengthy review process that there was not a clear strategic fit with Sun Life Financial’s existing U.S. operations,” said Donald A. Stewart, Chairman and Chief Executive Officer, Sun Life Financial. “The sale of Clarica U.S. is consistent with our focus on businesses where we can maintain or achieve competitive scale or scope.”

“We are very pleased with the announced sale of Clarica U.S. to Midland National,” said Bruce Crozier, President of Clarica U.S. “We look forward to working with our new owner to continue to build on our strong success in the U.S. market.”

As a result of this transaction, Sun Life Financial expects to take an approximate charge to earnings of US$30 million in the fourth quarter of 2002. Clarica U.S. reported earnings of CDN$23 million in 2001.

Ash Brokerage Operations, a brokerage general agency that Clarica U.S. purchased in October 2001, is not part of this transaction and will remain a stand-alone entity.

Clarica U.S. lines of business include individual life insurance and annuity solutions. The company serves its 225,000 U.S. customers from offices in Fargo, North Dakota. The company has about 200 employees.

Midland National Life is a provider of life insurance and annuity products and has key operations in Sioux Falls, South Dakota and Des Moines, Iowa. It is owned by Sammons Enterprises, Inc. of Dallas, one of the largest privately owned companies in America.

Sun Life Financial is a leading international financial services organization providing a diverse range of wealth accumulation and protection products and services to individuals and corporate customers. Tracing its roots back to 1865, Sun Life Financial and its partners today have operations in key markets worldwide, including Canada, the United States, the United Kingdom, Hong Kong, the Philippines, Japan, Indonesia, India, China and Bermuda. As of June 30, 2002, the Sun Life Financial group of companies had total assets under management of CDN $368.6 billion.

Sun Life Financial Services of Canada Inc. trades on the Toronto (TSX), New York (NYSE) and Philippine (PSE) stock exchanges under ticker symbol “SLC”.