CANFORGEN

3 OCTOBER 2005

SUBJ: SISIP FINANCIAL SERVICES (SISIP FS) NEW OPTIONAL TERM LIFE INSURANCE PLAN FOR RELEASED MEMBERS OF THE CANADIAN FORCES

1. SISIP FS IS INTRODUCING A NEW TERM LIFE INSURANCE PLAN, ENTITLED INSURANCE FOR RELEASED MEMBERS (IRM), TO REPLACE THE CURRENT COVERAGE AFTER RELEASE (CAR) PLAN EFF 1 OCT 2005

2. A RECENT REVIEW OF THE SISIP FS TERM LIFE INSURANCE PLANS DETERMINED THAT THE FUTURE OF THE CAR INSURANCE PLAN WAS NOT FINANCIALLY VIABLE IN ITS CURRENT STRUCTURE. THIS SITUATION IS THE RESULT OF THE PLAN'S PREMIUM DEFICIENCIES AND THE COST OF ITS BENEFITS SUCH AS THE PAID UP INSURANCE CERTIFICATE

3. CAR RATES HAVE NOT INCREASED IN OVER 15 YEARS AND THE CURRENT CAR PREMIUMS WOULD NEED TO INCREASE BY 77 PERCENT TO MAKE THE PLAN COST NEUTRAL. AN INCREASE THAT SIGNIFICANT WOULD NOT HAVE BEEN PRACTICAL TO IMPLEMENT DUE TO THE NEGATIVE IMPACT IT WOULD HAVE ON CURRENT AND FUTURE PLAN PARTICIPANTS. THE NON-PUBLIC PROPERTY BOARD OF DIRECTORS APPROVED THE INTRODUCTION OF THE IRM PLAN TO REPLACE THE CAR PLAN TO ENSURE THE FINANCIAL VIABILITY OF THE SISIP FS PLANS AS WELL AS THE FINANCIAL EQUITY BETWEEN THE DIFFERENT PLANS

4. THE IRM PREMIUMS ARE AMONG THE LOWEST IN THE INSURANCE INDUSTRY FOR COMPARABLE COVERAGE. THE IRM ALSO INCLUDES A NEW ACCIDENTAL DISMEMBERMENT (AD) BENEFIT FOR DEPENDENT CHILDREN (TO A MAXIMUM OF $10,000). A PAID UP INSURANCE CERTIFICATE BENEFIT WAS NOT INCLUDED TO MAINTAIN THE FINANCIAL VIABILITY OF THE NEW IRM PLAN

5. IN ADDITION TO THE NEW AD COVERAGE AND THE LOW PREMIUM RATES, THE NEW IRM ALSO HAS FEWER LIMITATIONS AND EXCLUSIONS FOUND IN OTHER OPTIONAL TERM LIFE INSURANCE PLANS AVAILABLE IN THE INSURANCE INDUSTRY INCLUDING:

•  NO EXCLUSIONS FOR DANGEROUS OCCUPATIONS, HOBBIES, VOLUNTEER ACTIVITIES OR SPORTS;

•  NO WAR OR TERRORISM EXCLUSION CLAUSE; AND

•  No MEDICAL TESTS TO DETERMINE PREMIUMS OR UPON RENEWAL OF THE POLICY

6. CF MEMBERS WHO HAVE APPLIED FOR CAR WITH AN EFF DATE OF RELEASE ON OR AFTER 1 OCT 2005 WILL AUTOMATICALLY BE ENROLLED IN THE NEW IRM

7. A LETTER WILL BE SENT IN OCT 2005 TO CAR PARTICIPANTS OUTLINING THE OPTIONS AVAIL TO THEM. THEY WILL HAVE UNTIL 1 DEC 05 TO INFORM THE INSURER, MANULIFE FINANCIAL, IN WRITING, OF THEIR DECISION

8. FOR MORE INFORMATION PLEASE CONTACT YOUR LOCAL SISIP FS INSURANCE REPRESENTATIVE OR CALL 1-800-267-6681 (613-233-2177 IN OTTAWA ).

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