We have commenced a proposed class action against RBC Life Insurance Company and the Royal Bank of Canada.

RBC Life Insurance Company sells life insurance through its insurance arm, RBC Insurance. Those who buy the insurance become policyholders. The policyholders’ premiums are then invested by RBC Insurance. In return, the policyholders obtain life insurance and at the same time, the invested premiums pay interest to the policyholders. RBC Insurance charges a management fee to manage the invested premiums.

RBC Insurance discloses that its management fee is 1.65% and that is the management fee that the policyholders agreed to. Unbeknownst to the policyholders, RBC is charging not only the 1.65%, but an additional hidden fee of 1.84%. So, the policyholders are being charged twice.

When one policyholder investigated this practice, and discovered the true state of affairs, he realized that he and all the other policyholders were being charged the extra 1.84% of the amount that was reinvested in another RBC fund each and every year.

The fund in question is worth $1.6 billion.

Policyholders do not need to take any steps at present as the action is not yet certified. Policyholders will automatically be included in the class action if it is certified.