Re Agreement

Sun Life Fin.Services of Canada Inc
17 December 2001


          Clarica and Sun Life Financial agree to combine operations 
                      forming a Canadian-based powerhouse


(TORONTO and WATERLOO, ON December 17, 2001) - Sun Life Financial Services of 
Canada Inc. (NYSE, TSE: 'SLC') and Clarica Life Insurance Company (TSE: 'CLI') 
announced today a definitive agreement to combine operations based on their 
shared vision of a world-class international financial services institution 
headquartered in Canada. Clarica Life Insurance Company will become a wholly-
owned subsidiary of Sun Life Financial Services of Canada Inc., maintaining the 
Clarica name. The combined Canadian operation will be based in Waterloo. The 
board of directors of Clarica will recommend the acceptance of the proposed 
transaction to Clarica's shareholders and voting policyholders.

Under the terms of the agreement, Clarica's common shareholders will exchange 
each Clarica share for 1.5135 common shares of Sun Life Financial Services of 
Canada Inc. The transaction, which is subject to approval by the Minister of 
Finance, regulators in Canada and the U.S., and Clarica's shareholders and 
voting policyholders, is expected to close in the second quarter of next year. 
Based on the 10-day volume-weighted average closing price of Sun Life Financial 
shares, the agreement values each Clarica share at $54.65.

The combined operation will hold leading positions within the Canadian insurance
industry:

- £1 based on total revenues of $21.7 billion, assets under administration of   
  $344 billion and total assets of $140.2 billion

- £1 in group life and health

- £1 in group retirement services

- £1 in retail insurance premiums in force

- £1 in market capitalization for Canadian insurance companies

- £1 customer base with approximately 7 million Canadian customers

- One of the top five publicly-traded North American life insurance companies,  
  measured by market capitalization

Donald A. Stewart, Chairman and Chief Executive Officer of Sun Life Financial 
said, 'I am delighted to announce this agreement with Clarica. The cultural and 
business affinities between these two leading Canadian financial services 
companies create an excellent strategic fit. It rewards shareholders, benefits 
consumers and contributes to the strength of Canada's economy.'

'The combination is expected to create lower cost structures, increased revenue 
and expanded distribution capabilities, which will deliver greater economic 
value to customers and shareholders,' added Mr. Stewart. 'The transaction also 
represents a material step towards Sun Life Financial's goal of achieving 
leading positions in key North American markets, creating an even greater base 
for international expansion. The uniting of two companies with proven records
of leadership, integrity, performance and customer focus will strengthen our 
position in an industry marked by increased consolidation and competition at 
home and abroad.'

Bob Astley, Clarica's President and Chief Executive Officer, said the combined 
Canadian operation will be more than the sum of its parts: 'I view this as a 
tremendous opportunity for Clarica and all our stakeholders. This transaction 
positions us very well to continue growing and delivering on our brand promise 
to customers who are seeking clarity and trusted advice in making complex 
financial decisions. We are excited to build on our strengths in this country as
well as participate in the growth of a dynamic international organization.

'Canadians will benefit from enhanced value, choice, innovation and access to 
greater expertise by combining the capabilities of two leading financial 
services providers,' added Mr. Astley. 'A transition team, led by me and made up
of people from both companies, will drive the integration process, identifying 
the best possible approach for moving forward. Both companies have talented, 
capable people who will combine their skills and expertise to ensure the 
integration is as seamless as possible for customers, with minimal disruptions.'

Sun Life Financial's corporate headquarters will remain in Toronto. The combined
Canadian operation will be based in Waterloo, while maintaining a significant 
presence in Toronto, Montreal and Ottawa. Sun Life Financial's U.S. operations 
will remain headquartered in Wellesley Hills, MA, and the two companies will 
determine how Clarica's U.S. operations will be integrated as part of the 
transition planning process. Donald Stewart will remain Chairman and CEO, and 
Bob Astley will become President, Canadian Operations. Mr. Astley will also 
continue as President and CEO of Clarica.

Excluding a one-time charge to be taken at closing, the acquisition is expected 
to be immediately accretive to earnings per share (EPS).

Combined Company Benefits:

The combined operation will have a leading presence across Canada providing 
approximately 7 million Canadians with greater choice and selection. These 
benefits include:

- For shareholders - An international financial services platform with momentum 
  for sustainable growth; significant revenue synergies derived from new        
  capabilities; and cost synergies that will help to rationalize the overall    
  expense structure.

- For retail customers - The complementary capabilities of two leading financial
  services providers, which are able to combine the best people, processes and  
  products; additional value, increased innovation, and access to greater       
  expertise and Canada's largest personal sales force.

- For group customers - An organization that can provide the highest levels of  
  customer service and customer care, as well as the scale and ability to invest
  more heavily in technology, particularly e-business solutions for customers.

- For sales force members - To be an integral part of a dynamic and growing     
  organization that strongly believes in the face-to-face distribution system.

- For staff members - An opportunity to be part of and contribute to a world-
  class financial services company, creating a unique opportunity to realize    
  their full potential with a market leader offering expanded career            
  possibilities.

- For communities - A combined vision that is dedicated to corporate social
  responsibility and a commitment to maintain a significant, presence in        
  Waterloo, Ottawa, Toronto, Montreal and Western Canada.

The exact impact on jobs will not be known until the integration planning 
process is complete, but it is anticipated that approximately 1,500 positions 
will be eliminated out of a combined total of 8,600. There will be no staff 
reductions related to this transaction prior to June 30, 2002. Displaced 
employees will receive transition support. A transition fund of up to $25 
million will be established to support individuals in repositioning themselves 
for either internal or external roles. Employees of both organizations will have
full access to all vacant positions in the new organization and the two 
companies will be guided by principles of fairness, dignity and respect in 
approaching job reductions.

Clarica's shareholders and voting policyholders will receive information 
outlining the details of the transaction and will be asked to vote on the 
proposal at a date still to be determined. The Canadian regulatory approval 
process will start at the beginning of next year following the expiration of the
transition period established by the Canadian government.

Merrill Lynch & Co. acted as financial advisor to Sun Life Financial for this 
transaction. Goldman, Sachs & Co. and TD Securities Inc. acted as financial 
advisors on behalf of Clarica Life Insurance Company.

Clarica
Clarica has provided insurance and investment solutions to Canadians for 130 
years. As well as individual and group insurance, Clarica also provides a full 
range of savings and retirement products. In Canada, Clarica serves more than 
3.3 million customers through 8,000 staff, agents, financial planners and group 
representatives who operate out of 90 offices throughout the country. In the 
U.S., Clarica operates from three mid-western locations to serve 225,000 
policyholders.

Sun Life Financial
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 1871,
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, and Bermuda. As of September 30, 2001 
the Sun Life Financial group of companies has total assets under management of 
$299 billion.

Clarica trades on the Toronto Stock Exchange (TSE) under the Ticker symbol 
'CLI'. Sun Life Financial Services of Canada Inc. trades on the TSE, New York 
(NYSE) and Philippine (PSE) stock exchanges under ticker symbol 'SLC', and on 
the London Stock Exchange under Ticker symbol 'SFC'.

This press release does not constitute an offer to sell or the solicitation of 
an offer to buy shares of Clarica Life Insurance Company or Sun Life Financial 
Services of Canada Inc.

This press release contains forward-looking statements with respect to the 
company, including its business operations and strategy and financial 
performance and condition. Although management believes that the expectations 
reflected in such forward looking statements are reasonable, such statements 
involve risks and uncertainties. Actual results may differ materially from those
expressed or implied by such forward-looking statements. Factors that could 
cause actual results to differ materially from expectations include, among other
things, general economic and market factors, including interest rates, business 
competition, changes in government regulations or in tax laws and other factors 
discussed in materials filed 'with applicable securities regulatory authorities 
from time to time.


Media Contacts:
John Vincic                                  Nick Thomas
Sun Life Financial                           Clarica
416-979-6070                                 519-888-3160


Francine Cleroux 
Sun Life Financial 
514-866-2561


Investor Relations Contacts:
Thomas R. Rice                               Vivian Zochowski
Sun Life Financial                           Clarica
416-204-8163                                 519-888-2733


Website: www.sunlife.com                     www.clarica.com 

There will be regular updates on both websites as the transaction progresses.