18:58:07 EDT Fri 23 Aug 2019
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Founders Advantage Capital Corp
Symbol C : FCF
Shares Issued 38,007,442
Close 2019-02-08 C$ 1.21
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Founders investee DLC receives statement of claim

2019-02-11 06:21 ET - News Release

Mr. Gary Mauris reports


Founders Advantage Capital Corp.'s investee, Dominion Lending Centres Inc. (DLC), has received a statement of claim filed in the Ontario Superior Court of Justice by two individual plaintiffs. The plaintiffs are seeking certification of the claim under the Class Proceedings Act (Ontario) and are seeking an order for damages of $800-million.

The claim relates to a product called mortgage protection plan (MPP), mortgage creditor insurance underwritten by the Manufacturers Life Insurance Company (Manulife), formerly administered by Benesure Canada Inc., and offered through Credit Security Insurance Agency Inc. (CSIA). The claim alleges that Benesure is an unlicensed insurer and that DLC is liable for distributing the MPP product through the DLC network. Benesure, Manulife and other parties were subject to a B.C. class action lawsuit in 2013 relating to the MPP product which failed to be certified in 2016.

DLC is contractually indemnified from Benesure, Manulife and CSIA for any costs, expenses, damages or liability arising from the offering of MPP through the DLC network of brokers.

Lastly, the company notes that the Superintendent of Financial Institutions in British Columbia did investigate the practices and procedures of Benesure and Manulife with respect to the sale of MPP in British Columbia through mortgage brokers in 2013/2014. The settlement agreement and consent order from such investigation includes the following, "the superintendent, after investigation, is not aware of any harm to policyholders, and the companies advise and confirm that the insurance coverages issued by the companies under the MPP program continue to be valid and in effect."

Gary Mauris, president of DLC, commented: "We consider this claim to be frivolous and entirely without merit and we intend on launching a vigorous defence. Unfortunately, when you are the largest player in your sector, you become a target for these types of nuisance claims. We are comfortable with both our legal position relating to the claim and our contractual indemnity from Benesure, Manulife and CSIA."

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