Securities Law & Instruments

IN THE MATTER OF

ONTARIO SECURITIES COMMISSION

RULE 13-502 FEES

AND

IN THE MATTER OF

SUN LIFE CAPITAL TRUST II (the "Trust"),

SUN LIFE ASSURANCE COMPANY OF CANADA

("SLA") AND SUN LIFE FINANCIAL INC.

("SLF" and, together with the Trust and SLA,

the "Filers")

ORDER

WHEREAS the Director under the Ontario Securities Act has received an application on behalf of the Filers for an order, pursuant to section 6.1 of Ontario Securities Commission (the "Commission") Rule 13-502 Fees (the "Fees Rule"), that the requirements to pay a participation fee under section 2.2 of the Fees Rule shall not apply to the Trust, subject to certain terms and conditions.

AND WHEREAS the Filers have represented to the Commission that:

1. The Trust is a trust established under the laws of Ontario by Computershare Trust Company of Canada, as trustee (the "Trustee") pursuant to a declaration of trust dated as of November 6, 2009, as amended and restated on November 20, 2009, and as it may be further amended, restated and supplemented from time to time (the "Declaration of Trust").

2. The Trust's head office is located at 150 King Street West, Toronto, Ontario, M5H 1J9. The Trust has a financial year end of December 31.

3. The Trust completed an initial public offering (the "Offering") of 5.863% Sun Life ExchangEable Capital Securities -- Series 2009-1 due December 31, 2108 (the "SLEECS") in each province and territory of Canada (the "Reporting Jurisdictions") on November 20, 2009 and may, from time to time, issue further series of notes substantially similar to the SLEECS (collectively with the SLEECS, the "Notes"). As a result of the Offering, the capital of the Trust consists of: (i) the SLEECS; and (ii) voting trust units ("Voting Trust Units"). All of the outstanding Voting Trust Units are held by SLA.

4. As a result of having obtained a receipt for the prospectus for the Offering dated November 17, 2009 (the "Prospectus"), the Trust is a reporting issuer in the Reporting Jurisdictions. The Trust is not, to its knowledge, in default of its reporting issuer obligations under the securities legislation of any of the Reporting Jurisdictions.

5. The Trust is a single purpose vehicle established for the purpose of effecting offerings of securities, including the SLEECS and Voting Trust Units (collectively, the "Trust Securities") in order to provide SLA with a cost effective means of raising capital for Canadian insurance regulatory purposes by means of: (i) creating and selling the Trust Securities; and (ii) acquiring and holding assets, which will consist primarily of a senior unsecured debenture of SLA (the "SLA Debenture") and other eligible assets specified in the Prospectus (collectively, the "Trust Assets"). The Trust Assets will generate income for the payment of principal, interest, the redemption price, if any, and any other amounts, in respect of the Trust's debt securities, including the SLEECS. The Trust will not carry on any operating activity other than in connection with offerings of Trust Securities and in connection with the Trust Assets.

6. No Trust Securities are currently listed on a marketplace as defined in National Instrument 21-101 Marketplace Operation.

7. Pursuant to an administration agreement dated November 6, 2009, as amended and restated on November 20, 2009 and as it may be further amended and restated from time to time, entered into between the Trustee and SLA, the Trustee has delegated to SLA certain of its obligations in relation to the administration of the Trust. SLA, as administrative agent, will, at the request of the Trustee, administer the day-to-day operations of the Trust and perform such other matters as may be requested by the Trustee from time to time.

8. SLA is an insurance company under the Insurance Companies Act (Canada) (the "ICA") and is regulated by the Superintendent of Financial Institutions (Canada) (the "Superintendent"). The head office of SLA is located at 150 King Street West, Toronto, Ontario, M5H 1J9.

9. SLF holds all of the issued and outstanding shares of SLA.

10. The SLEECS, including accrued and unpaid interest thereon, will be exchanged automatically, without the consent of the holders thereof, for newly issued Class A shares Series V of SLA ("SLA Exchange Preferred Shares") if: (i) an application for a winding-up order in respect of SLA pursuant to the Winding-Up and Restructuring Act (Canada) is filed by the Attorney General of Canada or a winding-up order in respect of SLA pursuant to that Act is granted by a court; (ii) the Superintendent advises SLA in writing that the Superintendent has taken control of SLA or its assets pursuant to the ICA; (iii) the Superintendent advises SLA in writing that the Superintendent is of the opinion that SLA has a net Tier 1 capital ratio of less than 75% or an MCCSR ratio (as that term is defined in the Prospectus) of less than 120%; (iv) the board of directors of SLA advises the Superintendent in writing that SLA has a net Tier 1 capital ratio of less than 75% or an MCCSR ratio of less than 120%; or (v) the Superintendent directs SLA pursuant to the ICA to increase its capital or provide additional liquidity and SLA elects to cause the Automatic Exchange (as that term is defined in the Prospectus) as a consequence of the issuance of such direction or SLA does not comply with such direction to the satisfaction of the Superintendent within the time specified therein.

11. The SLA Exchange Preferred Shares will pay quarterly non-cumulative preferential cash dividends, as and when declared by the board of directors of SLA, subject to the provisions of the ICA, at the Perpetual Preferred Share Rate (as that term is defined in the Prospectus), subject to any applicable withholding tax.

12. If the SLEECS have not been exchanged for SLA Exchange Preferred Shares pursuant to the Automatic Exchange, SLA will not, without the prior approval of the Superintendent (if required) and the prior approval of the holders of the SLEECS, amend any terms attaching to the SLA Exchange Preferred Shares, provided that the prior approval of the holders of SLEECS will not be required in the case of amendments relating to the Class A shares of SLA as a class.

13. SLF has guaranteed certain obligations of SLA in order to rationalize the securities reporting obligations of SLF and SLA (the "SLF Guarantees"). The SLF Guarantees included: (i) a subordinated guarantee of SLA's Class A shares, Class B shares, Class C shares, Class D shares and Class E shares, other than preferred shares held by SLF and its affiliates (the "SLF Preferred Share Guarantee"); (ii) a full and unconditional subordinated guarantee of SLA's $150 million of outstanding 6.30% subordinated debentures due 2028; (iii) a full and unconditional subordinated guarantee of SLA's $300 million of outstanding 6.65% subordinated debentures due 2015; and (iv) a full and unconditional subordinated guarantee of SLA's $800 million of outstanding 6.15% subordinated debentures due 2022.

14. As a result of the SLF Guarantees, SLA received an exemption dated November 14, 2007 (the "2007 SLA Order") from the requirements to file certain continuous disclosure materials with the Canadian securities regulatory authorities. Under the 2007 SLA Order, SLA is not required to file interim financial statements, annual or interim management's discussion and analysis ("MD&A"), an annual information form, press releases and material change reports in the case of material changes that are also material changes in the affairs of SLF, material contracts, and Chief Executive Officer and Chief Financial Officer Certifications. However, SLA is required to file annual audited financial statements, and certain summary information regarding SLA is filed by SLF on a quarterly basis. SLA has filed a notice on SEDAR indicating that it is relying on the continuous disclosure filings of SLF and setting out where those documents can be found for viewing in electronic format. In addition, SLF is required to send to holders of the debentures and preferred shares of SLA the disclosure materials that SLF is required to send to holders of its similar debt and preferred shares, respectively.

15. Pursuant to a decision document dated as of the date hereof (the "Continuous Disclosure Exemption") granted to the Trust by the Commission, as principal regulator, the Commission determined that the requirements contained in the securities legislation of the Province of Ontario and in other applicable jurisdictions (collectively, the "Legislation") to:

(a) file interim financial statements and audited annual financial statements and deliver same to the security holders of the Trust pursuant to sections 4.1, 4.3 and 4.6 of National Instrument 51-102 Continuous Disclosure Obligations ("NI 51-102");

(b) file interim and annual MD&A and deliver same to the security holders of the Trust pursuant to sections 5.1 and 5.6 of NI 51-102;

(c) file an annual information form pursuant to section 6.1 of NI 51-102;

(d) comply with any other requirements of NI 51-102 ((a) through (d) are collectively referred to herein as the "Continuous Disclosure Obligations"); and

(e) file interim and annual certificates (collectively the "Officers' Certificates") pursuant to Parts 4, 5 and 6 of National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings ("NI 52-109") (the "Certification Obligations");

shall not apply to the Trust, for so long as:

(a) with respect to the Continuous Disclosure Obligations:

(i) each of SLF and SLA remains a reporting issuer under the Legislation and has filed all continuous disclosure documents that it is required to file by the Legislation subject to any applicable exemptions;

(ii) the Trust files a notice on SEDAR indicating that it is relying on the continuous disclosure filings of SLF and SLA referred to in paragraph (a) above and setting out where those documents can be found for viewing in electronic format;

(iii) at any time SLA is exempt from filing such documents, the Trust sends, or causes SLF or SLA to send, SLF's interim and annual financial statements and interim and annual MD&A required by NI 51-102 to holders of the Trust's debt securities, at the same time and in the same manner as if the holders of the Trust's debt securities were holders of preferred shares of SLF;

(iv) at any time SLA is not exempt from filing such documents, the Trust sends, or causes SLA to send, SLA's interim and annual financial statements and interim and annual MD&A required by NI 51-102 to holders of the Trust's debt securities, at the same time and in the same manner as if the holders of the Trust's debt securities were holders of preferred shares of SLA;

(v) all outstanding securities of the Trust are either Notes or Voting Trust Units;

(vi) the rights and obligations of the holders of additional series of Notes of the Trust are the same in all material respects as the rights and obligations of the holders of the SLEECS, with the exception of economic terms such as the interest payable by the Trust, maturity date and redemption dates and prices;

(vii) SLA remains the direct owner of all of the issued and outstanding voting securities of the Trust, including the Voting Trust Units;

(viii) SLF remains the beneficial owner of all of the issued and outstanding voting securities of SLA;

(ix) the Trust does not carry on any operating activity other than in connection with offerings of its securities and the Trust has minimal assets, operations, revenues or cash flows other than those related to the SLA Debenture or the issuance, administration and repayment of the Trust Securities;

(x) SLA, as holder of the Voting Trust Units, will not propose changes to the terms and conditions of any outstanding Notes that would result in Notes being exchangeable for securities other than SLA Exchange Preferred Shares;

(xi) the Trust issues a news release and files a material change report in accordance with Part 7 of NI 51-102, as amended, supplemented or replaced from time to time, in respect of any material change in the affairs of the Trust that is not also a material change in the affairs of SLF or SLA;

(xii) in any circumstances where the SLEECS (or any additional series of Notes) are voting, the Trust will comply with Part 9 of NI 51-102; and

(xiii) the Trust complies with Parts 4A, 4B, 11 and 12 of NI 51-102;

and

(b) with respect to the Certification Obligations:

(i) the Trust is not required to, and does not, file its own interim filings and annual filings (as those terms are defined in NI 52-109); and

(ii) the Trust is and continues to be exempted from the Continuous Disclosure Obligations and SLF, SLA and the Trust are in compliance with the conditions set out in paragraph (a) above.

16. The Continuous Disclosure Exemption will expire 30 days after the date that a material adverse change occurs in the representations of SLF, SLA or the Trust.

17. The SLEECS have been structured to achieve Tier 1 regulatory capital for purposes of the guidelines of the Superintendent.

18. The Superintendent maintains strict guidelines and standards with respect to the capital adequacy requirements of federally regulated financial institutions, including SLF and SLA, and, in particular, specifies minimum required amounts of capital to be maintained by such institutions. Tier 1 regulatory capital consists of common shareholders' equity, qualifying non-cumulative perpetual preferred shares, qualifying innovative instruments and qualifying non-controlling interests arising on a consolidation from Tier 1 capital instruments. Innovative instruments, such as the SLEECS, must satisfy the detailed requirements of the Capital Guidelines (as that term is defined in the Prospectus) to be included in Tier 1 capital. If SLF could issue the SLEECS directly, this capital would be included in the calculation of the participation fee payable by SLF in accordance with the Fees Rule.

19. No continuous disclosure documents concerning only the Trust will be filed with the Commission, other than those set out in paragraphs 15(a)(xi), (xii) and (xiii) above.

20. The Trust is a "Class 2 reporting issuer" under the Fees Rule and would be required (but for this order) to pay participation fees under such rule.

21. SLA and indirectly, SLF, control the Trust through SLA's ownership of the Voting Trust Units issued by the Trust. SLF has paid, and will continue to pay, participation fees applicable to it under section 2.2 of the Fees Rule.

22. The Fees Rule includes an exemption for "subsidiary entities" in section 2.6(2) of the Fees Rule. SLF and the Trust will meet all of the substantive requirements to rely on the exemption in section 2.6(2) of the Fees Rule, but for the requirement that applicable accounting standards require the consolidation of the parent and the subsidiary entity. The applicable accounting standards are those pursuant to which the entity's financial statements are prepared under Ontario securities law (being Canadian generally accepted accounting principles, or "Canadian GAAP").

23. In accordance with amendments to Canadian GAAP that SLF and SLA adopted effective January 1, 2005, the assets and liabilities of the Trust will not be consolidated in the financial statements of SLF and SLA. As a result, the Trust may not, from a technical accounting perspective, be entitled to rely on the exemption in section 2.6(2) of the Fees Rule.

THE ORDER of the Director under the Fees Rule is that the requirements to pay a participation fee under Section 2.2 of the Fees Rule shall not apply to the Trust, for so long as:

(i) SLF, SLA and the Trust continue to satisfy all of the conditions contained in the Continuous Disclosure Exemption; and

(ii) the capitalization of the Trust represented by the SLEECS and any additional securities of the Trust that may be issued, from time to time, by the Trust is included in the participation fee calculation applicable to SLF and SLF has paid the participation fee calculated on this basis.

DATED this 8th day of February, 2010.

"Michael Brown"
Assistant Manager, Corporate Finance
Ontario Securities Commission