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EXHIBIT 3

(SUNLIFE LOGO)





Sun Life Financial Inc.



Renewal Annual Information FormFor the Year Ended December 31, 2003









February 17, 2004





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Presentation of Information

Sun Life Financial Inc. (SLF Inc.) became the
publicly traded holding company of Sun Life Assurance Company of
Canada (Sun Life Assurance) on the conversion of Sun Life Assurance
from a mutual insurance company to an insurance company with share
capital on March 22, 2000. In this Annual Information Form (AIF), the
terms Sun Life Financial and the Company refer, at all times
after the demutualization, to SLF Inc. and its consolidated
subsidiaries and joint ventures and, at all times prior to the
demutualization, to Sun Life Assurance and its consolidated
subsidiaries and joint ventures.

Unless otherwise indicated, all information in this AIF is presented
as at and for the year ended December 31, 2003 and amounts are
expressed in Canadian dollars. Financial information is presented in
accordance with Canadian generally accepted accounting principles
(GAAP) including the accounting requirements of the Office of the
Superintendent of Financial Institutions.

Documents Incorporated by Reference

The following documents are incorporated by reference into
this AIF: (i) SLF Inc.s Managements Discussion and Analysis for the
year ended December 31, 2003 (Managements Discussion and Analysis),
and (ii) SLF Inc.s Consolidated Financial Statements and
accompanying notes for the year ended December 31, 2003 (the
Consolidated Financial Statements). These documents have been filed
with applicable securities regulators in Canada and may be
accessed at www.sedar.com and have also been filed with the
Securities and Exchange Commission in the United States.



Forward-looking Statements Some of the statements contained or incorporated by reference in this
AIF, including those relating to Sun Life Financials strategies and
other statements that are predictive in nature, that depend upon or
refer to future events or conditions, or that include words such as
expects, anticipates, intends, plans, believes, estimates
or similar expressions, are forward-looking statements within the
meaning of securities laws. Forward looking statements include,
without limitation, the information concerning possible or assumed
future results of operations of Sun Life Financial as set forth under
General Development of the Business and Business of Sun Life
Financial. These statements are not historical facts but instead
represent only Sun Life Financials expectations, estimates and
projections regarding future events. The forward-looking statements contained or incorporated by reference
in this AIF are not guarantees of future performance and involve
certain risks and uncertainties that are difficult to predict. The
future results and stockholder value of Sun Life Financial may differ
materially from those expressed in the forward looking statements
contained or incorporated by reference in this AIF due to, among
other factors, the matters set forth under Risk Factors on pages 21
to 26 of this AIF and the factors detailed in Sun Life Financials
other filings with Canadian and U.S. securities regulators, including
the factors detailed in Sun Life Financials annual and interim
managements discussion and analysis, and the annual and interim
financial statements and the notes thereto. Sun Life Financial does
not undertake any obligation to update or release any revisions to
these forward-looking statements to reflect events or circumstances
after the date of this AIF or to reflect the occurrence of
unanticipated events, except as required by law.


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Table of Contents

Page ReferenceIncorporated by Reference fromAnnual
    
    Managements
    
    ConsolidatedInformation
    
    Discussion and
    
    Financial StatementsForm
    
    Analysis
    
    and NotesCORPORATE STRUCTURE
    
    
    1GENERAL DEVELOPMENT OF THE BUSINESS
    
    
    2
    
    
    
    4-5
    
    
    
    12-15BUSINESS OF SUN LIFE FINANCIAL
    
    
    4Consolidated
Results of Operation
    
    
    
    
    
    
    10-13Sun Life Financial Canada
    
    
    
    
    
    
    14-20Sun Life Financial United States
    
    
    
    
    
    
    21-27MFS Investment Management
    
    
    
    
    
    
    28-30Sun Life Financial Asia
    
    
    
    
    
    
    31-33Sun Life Financial United Kingdom
    
    
    
    
    
    
    34Corporate
Capital
    
    
    
    
    
    
    35Risk Management
    
    
    
    
    
    
    36-39Investments
    
    
    
    
    
    
    45-48SELECTED CONSOLIDATED FINANCIAL INFORMATION
    
    
    7Financial Highlights
    
    
    
    
    
    
    1Consolidated
Results of Operations  Earnings and Earnings Per Share
    
    
    
    
    
    
    10Consolidated Statements of Operations
    
    
    
    
    
    
    
    
    
    
    2Consolidated Balance Sheets
    
    
    
    
    
    
    
    
    
    
    3Consolidated Statements of Equity
    
    
    
    
    
    
    
    
    
    
    4Consolidated Statements of Cash Flows
    
    
    
    
    
    
    
    
    
    
    5Consolidated Statements of Changes in Segregated
Funds Net Assets
    
    
    
    
    
    
    
    
    
    
    6Consolidated Statements of Segregated Fund Net Assets
    
    
    
    
    
    
    
    
    
    
    6Notes to Consolidated Financial Statements
    
    
    
    
    
    
    
    
    
    
    7-49Financial Results Under U.S. GAAP
    
    
    
    
    
    
    
    
    
    
    38-48Segmented Information
    
    
    
    
    
    
    
    
    
    
    15-16Quarterly Information
    
    
    
    
    
    
    1Shareholder Dividends
    
    
    
    
    
    5 and 51
    
    
    4Capital Structure
    
    
    
    
    
    
    50-51
    
    
    
    29-31MANAGEMENTS DISCUSSION AND ANALYSIS
    
    
    7
    
    
    
    1-54MARKET FOR SECURITIES
    
    
    7ASSET-BACKED SECURITIES
    
    
    7
    
    
    
    52
    
    
    
    21-22TRANSFER AGENTS
    
    
    7DIRECTORS AND EXECUTIVE OFFICERS
    
    
    8REGULATORY MATTERS
    
    
    12RISK FACTORS
    
    
    21ADDITIONAL INFORMATION
    
    
    26


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CORPORATE STRUCTURE

Incorporation

Sun Life Financial Inc. (SLF Inc.), formerly known as Sun Life Financial
Services of Canada Inc. prior to a name change pursuant to Letters Patent of
Amendment on July 2, 2003, was incorporated under the Insurance Companies Act
(Canada) (the Insurance Act) on August 5, 1999. On the completion of the
demutualization of Sun Life Assurance Company of Canada (Sun Life Assurance) on
March 22, 2000, SLF Inc. became the holding company which holds directly all
the outstanding shares of Sun Life Assurance. In this Annual Information Form
(AIF), the terms Sun Life Financial and the Company refer, at all times
after the demutualization, to SLF Inc. and its consolidated subsidiaries and
joint ventures and, at all times prior to the demutualization, to Sun Life
Assurance and its consolidated subsidiaries and joint ventures.

Sun Life Assurance was incorporated by a Special Act of Parliament of
Canada in 1865. Sun Life Assurance was converted into a mutual company through
a process that was completed in 1962 under the provisions of the Canadian and
British Insurance Companies Act, R.S.C 1952, c. 31. The Special Act of Sun
Life Assurance, as amended, was replaced in 1992 by amending letters patent
issued under the Insurance Act. Sun Life Assurance was converted on its
demutualization from a mutual insurance company to a stock insurance company
pursuant to letters patent of conversion issued under the Insurance Act on
March 22, 2000. On May 29, 2002, SLF Inc. acquired Clarica Life Insurance
Company (Clarica). On December 31, 2002, Clarica was amalgamated with Sun Life
Assurance and the amalgamated company operates under the legal name of Sun Life
Assurance Company of Canada.

Sun Life Financial traces its roots in Canada back to 1865, in the United
States to 1895, in Asia to 1892, and in the United Kingdom to 1893. SLF Inc.s
corporate office is located at Sun Life Tower, 150 King Street West, Toronto,
Ontario, Canada M5H 1J9. Sun Life Financials principal office in Canada is
located at 227 King Street South, Waterloo, Ontario, Canada, N2C 4C5, its
principal office in the United States is located at One Sun Life Executive
Park, Wellesley Hills, Massachusetts, U.S.A. 02481, its regional headquarters
for Asia are located at Two Pacific Place, 88 Queensway, Hong Kong, and its
principal office in the United Kingdom is located at Basing View, Basingstoke,
United Kingdom RG21 4DZ.

Principal Subsidiaries and Significant Equity Investments

Sun Life Financial offers wealth management and protection products and
services (as described under Business of Sun Life Financial) through direct
and indirect subsidiaries and joint ventures in Canada, the United States, the
United Kingdom, Hong Kong, the Philippines, India, China and Bermuda. The
corporate structure of SLF Inc., including its principal direct and indirect
subsidiaries (with the jurisdiction of incorporation of each indicated in
italics), and significant equity investments is shown below. Unless otherwise
indicated, all principal subsidiaries are 100 per cent owned.

(FLOW CHART)

Sun Life Financial Inc.
    
    
    12003 Annual Information Form


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GENERAL DEVELOPMENT OF THE BUSINESS

Overview

Sun Life Financial experienced significant growth during the period
between 1998 and 2003. Assets under management and revenue experienced
compound annual growth rates of 7 per cent and 10 per cent, respectively during
the period. Sun Life Financials growth strategy is to balance the higher
long-term growth prospects of wealth management with the stability of
protection earnings.

The recent growth of Sun Life Financial reflects several trends that have
generally impacted the financial services industry. The first trend is the
maturing of the protection market in North America. In Canada and the United
States, Sun Life Financial has been shifting the focus of its protection
business towards universal life and other non-participating products as a
result of increasing demands for these products. In Asia, Sun Life Financial
has been focusing on emerging markets offering significant long-term growth
opportunities.

The second trend has been the growing need for wealth accumulation
products, including annuities, group pensions and mutual funds, driven by the
increasing concern of individuals outliving their assets. Sun Life Financial
has benefited from this trend towards wealth management by being a strong,
well-established provider of these products in Canada and the United States.
Sun Life Financial is also expanding its wealth management operations in the
Philippines and India.

The Company believes that transparency of financial and other key
information is critically important to establish and maintain the confidence of
its stakeholders in the Companys operating integrity and financial strength.
In 2003 the Company established a Disclosure Committee which will play a key
role in ensuring the quality of stakeholder information. The Disclosure
Committee is supported in its role by disclosure review and attestation
processes in each of its business segments.

The recent mergers and acquisitions in Canada will drastically change the
competitive landscape as the top four players will control more than two thirds
of virtually all life insurance markets in Canada. Among other effects, these
combinations are causing certain major group insurance clients to hold off
purchase decisions. Being the first among the major competitors to complete
integration efforts allows Sun Life Financial to increase its focus on the
development of new products and services, so that it is in a strong position to
compete for new business.

In June 2003, U.S. Treasury bond yields dropped to the lowest levels in 40
years. The low interest rate environment adversely affected the Companys
fixed annuity business in the U.S., as the net spread between interest earned
on investments and interest credited on the annuities was reduced (spread
compression). Management has taken measures to mitigate the issue by lowering
crediting rates and reducing commissions at the expense of short-term market
share.

During 2003, the Company integrated the annuity distribution platforms of
MFS Investment Management (MFS) and the U.S. operations of Sun Life Financial
(SLF U.S.) through the formation of MFS/Sun Life Financial Distributors, Inc.
(MFSLF). The creation of this integrated distribution company will enable both
entities to focus their marketing efforts and achieve economies of scale. For
longer term revenue and earnings growth the Company is making strategic
investments in India and China, as well as expanding operations in existing
markets in Asia.

On February 5, 2004, MFS, its Chief Executive Officer, John Ballen, and
its President, Kevin Parke, reached settlements with federal and state
regulators related to administrative proceedings against them alleging false
and misleading information in certain MFS fund prospectuses regarding market
timing and related issues. Under the terms of the settlements, MFS and the
executives neither admitted nor denied wrongdoing.

As part of the settlement with the United States Securities and Exchange
Commission (SEC), MFS agreed to pay US$225 million to compensate certain fund
shareholders, of which US$50 million is a penalty, and agreed with the New
Hampshire Bureau of Securities Regulation to pay an administrative fine in the
amount of US$1 million. The Company recorded a $211 million after-tax charge to
income in the fourth quarter of 2003 in connection with the SEC and New
Hampshire settlements. MFS further agreed with the Attorney General of the
State of New York (NYAG) to reduce fees on the funds it advises by
approximately US$25 million annually over the next five years. Messrs. Ballen
and Parke agreed with the SEC to suspensions for nine and six months,

Sun Life Financial Inc.
    
    
    22003 Annual Information Form


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respectively, other restrictions on their employment for a three year
period, and to pay approximately US$315,000 each, including US$250,000 in
penalty.

Robert Pozen, a former Vice Chairman of Fidelity Investments and John Olin
Visiting Professor at Harvard Law School, has been appointed Chairman of MFS.
Robert J. Manning, has been named Chief Executive Officer, President and Chief
Investment Officer of MFS. Mr. Manning, who joined MFS in 1984, is a member of
the Management Committee and the Board of Directors of MFS and served as Chief
Fixed Income Officer since 2001.

In addition to steps MFS had previously adopted to reinforce its frequent
trading policies and procedures, MFS agreed to undertake a number of other
governance reforms, including retaining an independent compliance consultant,
creating an internal compliance controls committee, establishing a code of
ethics oversight committee, and hiring a corporate ombudsman.

In November 2003, the SEC and Morgan Stanley DW, Inc. (Morgan Stanley)
settled an enforcement action against Morgan Stanley relating to the receipt of
fees from certain mutual fund companies in return for preferred marketing of
their funds. MFS was one of the 14 fund companies reported to be on Morgan
Stanleys preferred list. As a result, MFS has been under investigation by the
SEC relating to its directed brokerage and revenue-sharing arrangements with
various distributors of its products, including Morgan Stanley. MFS is
cooperating with the SECs investigation, which is ongoing.

In addition, certain of the Companys subsidiaries have received requests
for information from the SEC and other regulators in connection with enquiries
into directed brokerage and revenue-sharing arrangements and are responding to
these requests.

As part of an industry-wide investigation of variable insurance product
sponsors, certain subsidiaries of the Company received requests from the SEC
for information regarding practices with respect to sub-account market timing
practices with respect to receiving and processing exchange orders from
contract owners, and oversight of such activities in separate accounts. The
Company has responded to the SECs request.

See also
the Risk Factors  Investigations into U.S.
Investment Industry on page 22 of this AIF.

Acquisitions, Disposals and Business Combinations

Sun Life Financial maintains an ongoing program of assessing its
businesses and corporate strategies in order to optimise the use of capital and
enhance shareholders value.

Details of Sun Life Financials 2003 business development activities are
discussed on pages 4 to 5 of SLF Inc.s 2003 Managements Discussion and
Analysis and financial details of acquisitions and disposals are discussed on
pages 12 to 15 of SLF Inc.s 2003 Consolidated Financial Statements, which are
incorporated by reference into this AIF

Following is a brief summary of the Companys acquisitions, disposals and
business combination activities over the past three years:

C.I. Fund Management Inc.

On July 25, 2002, Sun Life Financial acquired 71 million common shares of
CI Fund Management Inc. (CI), a major Canadian mutual fund manager, in exchange
for the all the shares of the Companys Canadian mutual fund subsidiaries,
Spectrum Investment Management Limited and Clarica Diversico Ltd. Including
this transaction, the Companys economic interest in CI was 31.7% on July 25,
2002.

On March 20, 2003, Sun Life Financial further increased its ownership
interest in CI by issuing approximately 2 million common shares of SLF Inc. in
exchange for approximately 5 million common shares of CI. As a result of this transaction, Sun Life Financial now owns
approximately 34 per cent of the outstanding common shares of CI.

Sun Life Financial Inc.
    
    
    32003 Annual Information Form


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In the fourth quarter of 2003, CI Fund Management Inc. (CI) acquired
Synergy Asset Management Inc. and the Canadian operations of Assante
Corporation. Sun Life Financial supported the transaction and maintained its
34 per cent ownership interest in CI by acquiring additional CI common shares
for $266 million.

Clarica Life Insurance Company (Clarica)

On May 29, 2002, SLF Inc. acquired Clarica, which was a leading provider
of insurance and investment products in the Canadian market. Clarica was
amalgamated with Sun Life Assurance on December 31, 2002. The amalgamated
company operates under the legal name of Sun Life Assurance Company of Canada.

On January 7, 2003, the Company sold Clarica U.S. Inc., a subsidiary
acquired as part of the Clarica acquisition, to Midland National Life Insurance
Company after concluding that it was not a strategic fit for the Companys U.S.
operations.

Keyport Life Insurance Company (Keyport)

On October 31, 2001, the Company completed the acquisition of Keyport and
Independent Financial Marketing Group, Inc. (IFMG). Keyport was a U.S.-based
provider of fixed and variable annuities. IFMG is a distributor of annuities
and mutual funds through financial institutions across the United States. The
aggregate purchase price for Keyport and IFMG was US$1.7 billion. Keyport was
amalgamated with Sun Life Assurance Company of Canada (U.S.) on December 31,
2003.

Sun Life Financial United Kingdom Operations

In March 2001, the Company exited the direct sales force distribution
business and stopped selling individual life insurance and pension products to
new customers in the U.K. This strategic move allowed Sun Life Financial to
focus on realizing the underlying value of its U.K. in-force individual life
and pension policies

In December 2001, the Company sold its asset management unit, SLC Asset
Management Limited (SLCAM) and in November 2001, the Company sold its banking
subsidiary, Sun Bank plc, a United Kingdom bank. The net proceeds from the
sales of SLCAM and Sun Bank plc were $242 million and $144 million,
respectively.

In March 2002, the Company signed agreements with the Marlborough Sterling
group, a U.K.-based software and service provider specializing in financial
services sectors, to outsource the administration of its closed book of U.K.
individual life and pension business.

On February 28, 2003, the Company sold its U.K. group insurance business
to Unum Limited, a U.K. subsidiary of UnumProvident Corporation, as part of its
efforts to realize the underlying value of its U.K. operations. Under the sale
agreements, Unum Limited acquired the renewal rights to the group life
business. For the group income protection business, the business was fully
reinsured with Unum Limited effective February 28, 2003 and formally
transferred under a Court Scheme effective July 1, 2003.

BUSINESS OF SUN LIFE FINANCIAL

Overview

Sun Life Financial is a leading international financial services
organization, providing a wide range of savings, retirement, pension, mutual
funds, investment management, and life and health insurance products and
services to individual and corporate customers. At December 31, 2003, without
reflecting industry mergers and acquisitions closing after December 31, 2003,
Sun Life Financial was the largest Canadian life insurance organization based
on total assets under management of $359 billion. Sun Life Financial recorded
total revenue of $22.1 billion and shareholders net income of $1.3 billion for
the year ended December 31, 2003. At December 31, 2003, Sun Life Financial had
approximately 13,570 employees worldwide and an extensive global
distribution network consisting of career sales forces in certain countries,
independent insurance agents, investment dealers and financial planners.

Sun Life Financial Inc.
    
    
    42003 Annual Information Form


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Sun Life Financials operations in Canada, the United States, the United
Kingdom and Asia, as well as its risk management policies and investment
activities, are described in detail in SLF Inc.s Managements Discussion and
Analysis, which is incorporated by reference into this AIF.

Sun Life Financials portfolio of products and services by each business
segment is summarized in the following table:

Products and Services by Business Segment

SLF
    
    SLF
    
    
    
    
    
    SLF
    
    SLFCanada
    
    U.S.
    
    MFS
    
    U.K.
    
    AsiaWealth ManagementIndividual annuity and savings products
    
    
    l
    
    
    
    l
    
    
    
    l
    
    
    
    l
    
    
    
    lGroup pensions and retirement products
    
    
    l
    
    
    
    
    
    
    
    l
    
    
    
    
    
    
    
    lMutual funds
    
    
    l
    
    
    
    
    
    
    
    l
    
    
    
    
    
    
    
    lAsset management services
    
    
    l
    
    
    
    l
    
    
    
    lProtectionIndividual life
    
    
    l
    
    
    
    l
    
    
    
    
    
    
    
    l
    
    
    
    lIndividual Health
    
    
    lGroup life and health
    
    
    l
    
    
    
    l
    
    
    
    
    
    
    
    l
    
    
    
    lReinsurance  life retrocession
    
    
    l


Wealth Management

Sun Life Financials wealth management operations are conducted primarily
in Canada, the United States, and the United Kingdom. It is expanding this
business in Asia. Sun Life Financial focuses on meeting the savings and
retirement needs of its customers and helping them plan and achieve lifetime
financial security. It offers a broad range of wealth management products with
fixed income or equity-linked investment features. Fixed income products,
including primarily fixed annuities, pensions and group retirement products and
services, are less sensitive to market volatility and generate relatively
predictable profits. Equity-linked products, including mutual funds, variable
annuities and asset management services, are directly driven by market
performance and the demand for these products could be adversely affected by
market fluctuations. Sun Life Financials wealth management operations are
well diversified.

Protection

Sun Life Financial offers protection products and services primarily in
Canada, the United States and Asia. In addition, the Company has a run-off
block of individual insurance business in its U.K. operations. Sun Life
Financials protection operations comprise (i) retail insurance, offering a
wide range of individual life and health insurance products; (ii) group
benefits, offering customized group products to meet the protection needs of
employers; and (iii) reinsurance, primarily life retrocession. Sun Life
Financials individual life insurance products are positioned to provide
value-added protection for individual customers. Its group insurance products
are custom-designed to fulfill the protection needs of group plan members.

The Wealth Management and Protection Industries

The global financial services industry is undergoing a period of
significant evolution, particularly in North America. The wealth management
and protection industries are transforming rapidly in response to demographic
shifts, changing customer expectations, changing government regulations,
advances in technology

Sun Life Financial Inc.
    
    
    52003 Annual Information Form


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and increased competition and consolidation in the
financial services sector. Throughout 2003, equity markets continued to
experience volatility and interest rates remained at historically low levels.

Demographic shifts, particularly in North America, highlighted by
increasing life expectancies and a growing retirement population, have resulted
in an increased emphasis on retirement planning and saving, with a focus on
inter-generational wealth transfer vehicles. Concerns about the ability of
governments to finance traditional sources of retirement income have led
consumers to focus on self-directed investments intended to supplement these
sources of retirement income. Customers in the insurance and wealth management
industries have also grown increasingly sophisticated which, together with a
growing desire for self-directed investments, has resulted in a more
knowledgeable customer base that is more demanding.

Changes in the regulation of the financial services industry in North
America have reduced the traditional barriers between the banking, insurance
and investment industries, heightening competition in these markets. Several of
the major Canadian banks have significant operations in securities, wealth
management and insurance operations. The Canadian financial services
legislation provides a regulatory framework for further convergence of the
banking, insurance and investment industries. On June 23, 2003, the government
of Canada released a policy paper titled Response of the Government to Large
Bank Mergers in Canada: Safeguarding the Public Interest for Canadians and
Canadian Businesses. This document was prepared in response to reports issued
by the House of Commons Standing Committee on Finance and the Senate Standing
Committee on Banking, Trade and Commerce on the public interest considerations
in reviewing bank mergers. The government announced that it would not accept or
consider any merger proposals among large financial institutions until after
September 30, 2004. Sun Life Financials position on further consolidation in
the Canadian financial services industry is outlined in a submission to the
Government of Canada dated December 31, 2003 titled Consolidation of the
Canadian Financial Services Sector in the Public Interest,and is accessible on
Sun Life Financials Web site, www.sunlife.com. In the United States, recent
consolidation has created larger financial institutions involved in the
banking, insurance and investment management businesses, and the enactment of
the Gramm-Leach-Bliley Act of 1999, which implements fundamental changes in the
regulation of the U.S. financial services industry, may encourage further
consolidation.

Financial services companies, particularly in North America, are
increasing their development of multiple distribution channels, including
independent third party brokers and financial planners, and making increasing
use of electronic communication channels, such as the Internet, to reach
customers.

Competition

The wealth management and protection markets in which Sun Life Financial
engages are highly competitive. Sun Life Financials competitors include other
insurance companies, mutual fund companies, banks, financial planners and other
providers. Frequently, competition is on the basis of pricing and ability to
provide value-added services to distributors and customers. Among other things,
the competition in the wealth management and protection industries throughout
the world has resulted in a trend towards the global consolidation of the
financial services industry. Within the Canadian market, the pace of
consolidation accelerated further following acquisition announcements by two
key players. Management believes that Sun Life Financial will increasingly
face more competition from large, well capitalized financial services companies
in each jurisdiction in which it operates.

Sun Life Financial intends to sustain its competitive advantage and leadership
in the marketplace through its financial strength and high credit ratings, its
recognized brand, its product innovation and underwriting expertise, and its
quality customer services. The acquisition of Clarica has created a stronger
organization in Canada with enhanced products, expanded distribution power,
greater management depth and lower cost structures, and has further
strengthened Sun Life Financials ability to compete successfully at home and
in the international marketplace.

SELECTED CONSOLIDATED FINANCIAL INFORMATION

Selected consolidated financial information for three most recent
completed financial years can be found in SLF Inc.s 2003 Managements
Discussion and Analysis on page 1 under the heading Financial Highlights

Sun Life Financial Inc.
    
    
    62003 Annual Information Form


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and on page 10 under the heading Consolidated Results of
Operations  Earnings and
Earnings Per Share, which are incorporated by reference into this AIF.

MANAGEMENTS DISCUSSION AND ANALYSIS

SLF Inc.s 2003 Managements
Discussion and Analysis is incorporated by reference into this AIF and should be read in conjunction with SLF Inc.s 2003 Consolidated
Financial Statements.

ASSET-BACKED SECURITIES

Sun Life Financial issues asset-backed securities from time to time as
part of its normal course of business. The details of Sun Life Financials
asset securitization program are presented on page 52 in SLF Inc.s 2003
Managements Discussion and Analysis and on pages 21 to 22 in SLF Inc.s 2003
Consolidated Financial Statements, which are incorporated by reference into
this AIF.

MARKET FOR SECURITIES

The common shares of SLF Inc. are listed on the Toronto (TSX), New York (NYSE)
and Philippine (PSE) Stock Exchanges under the ticker symbol of SLF.

TRANSFER AGENTS

The transfer agents for SLF Inc. are as follows:

Shareholders
Country of Residence
    
    Transfer Agent and
LocationCanada and the United States
    
    CIBC Mellon Trust CompanyPO Box 7010, Adelaide Street Postal Station, Toronto, Ontario, Canada, M5C 2W9United Kingdom
    
    Capita IRG PlcBourne House, 34 Beckenham Road, Beckenham, Kent, United Kingdom, BR3 4TUPhilippines
    
    The Hong Kong and Shanghai Banking Corporation Limited30/F The Discovery Suites, #25 ADB Avenue, Ortigas Centre, Pasig, Metro Manila, PhilippinesHong Kong
    
    Computershare Hong Kong Investor Services LimitedRooms 1901-1905, 19th Floor, Hopewell Centre, 183 Queens Road East, Wanchai, Hong Kong


Sun Life Financial Inc.
    
    
    72003 Annual Information Form


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DIRECTORS AND EXECUTIVE OFFICERS

Board of Directors

In 2003, the Board of Directors had five standing committees:



| | 1. |  | Audit Committee               
| | -- |  | ------------------------------
| | 2. |  | Conduct Review Committee      
| | 3. |  | Risk Review Committee         
| | 4. |  | Management Resources Committee
| | 5. |  | Governance Committee          

On February 12, 2004, the Board combined the responsibilities of the Audit
Committee and the Conduct Review Committee into one committee called the Audit
and Conduct Review Committee.

The following table sets out the directors of SLF Inc. and, for each
director, his or her municipality of residence, principal occupation, years as
a director, the year in which the term of office expires, and membership on
board committees.

Name andMunicipality of
    
    Position with
    
    Principal
    
    Term
    
    Board CommitteeResidence
    
    SLF Inc.
    
    Occupation
    
    as Director
    
    MembershipRobert M. Astley    
Waterloo, Ontario
    
    Director
    
    President, Sun Life
Financial Canada
    
    Director since1: 2002
*1989
Term expires2: 2004
    
    (none)James C. Baillie    
Toronto, Ontario
    
    Director
    
    Counsel, Torys LLP
    
    Director since: 2000
Term expires: 2005
    
    Audit
Conduct Review
Risk ReviewWilliam R. Fatt    
Toronto, Ontario
    
    Director
    
    C.E.O., Fairmont
Hotels & Resorts
Inc.
    
    Director since: 2001
Term expires: 2004
    
    Management Resources
Risk ReviewDavid A. Ganong    
St. Stephen,    
New Brunswick
    
    Director
    
    President, Ganong
Bros. Limited
    
    Director since: 2002
*1991
Term expires: 2005
    
    Governance
Management ResourcesGermaine Gibara    
Montreal, Quebec
    
    Director
    
    President, Avvio
Management Inc.
    
    Director since: 2002
*1997
Term expires: 2004
    
    Governance
Risk ReviewStanley H. Hartt    
Toronto, Ontario
    
    Director
    
    Chairman, Citigroup
Global Markets
Canada Inc.
    
    Director since: 1993
Term expires: 2004
    
    Audit
Conduct Review
Risk ReviewKrystyna T. Hoeg    
Toronto, Ontario
    
    Director
    
    President & C.E.O.,
Corby Distilleries
Limited
    
    Director since: 2002
*1999
Term expires: 2005
    
    Audit
Conduct ReviewIdalene F. Kesner    
Bloomington, Indiana
    
    Director
    
    Chairperson, MBA
Program, Frank P.
Popoff Chair of Strategic
Management, Kelley
School of Business,
Indiana University
    
    Director since: 2002
*1997
Term expires: 2005
    
    Audit
Conduct Review




---

|1 |  | Director since means the date on which the director first joined the Board
of SLF Inc. Where a director served as a director of Sun Life Assurance before
the formation of SLF Inc. in 1999, the date on which that director first joined
the board of Sun Life Assurance is indicated. Where a director served as a
director of Clarica Life Insurance Company prior to the combination transaction
with SLF Inc. on May 29, 2002, the date on which that director first joined the
board of Clarica is indicated by *.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2 |  | Term expires means the directors term expires at the close of the annual
meeting in the year shown. At the annual meeting on June 4, 2003 the
shareholders approved an Amendment to By-Law No. 1 to change the directors
term of office from three years to one year. Upon the expiry of the directors
current term of office, he or she will be elected annually.                                                                                                                                                   

Sun Life Financial Inc.
    
    
    82003 Annual Information Form


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##### 



John D. McNeil    
Toronto, Ontario
    
    Director
    
    Chairman, Fairmont
Hotels & Resorts
Inc.
    
    Director since: 1987
Term expires: 2004
    
    Risk ReviewBertin F. Nadeau    
Montreal, Quebec
    
    Director
    
    Chairman and
C.E.O.,GescoLynx Inc.
    
    Director since: 1990
Term expires: 2005
    
    Governance
Management ResourcesRonald W. Osborne    
Toronto, Ontario
    
    Director
    
    Corporate Director
    
    Director since: 1989
Term expires: 2004
    
    Audit
Conduct Review
Management ResourcesMadeleine M. Paquin    
Montreal, Quebec
    
    Director
    
    President and
C.E.O.,
Logistec
Corporation
    
    Director since: 2001
Term expires: 2004
    
    GovernanceC. James Prieur    
Toronto, Ontario
    
    Director
    
    President & C.O.O., SLF
Inc. and Sun Life
Assurance
    
    Director since: 2002
Term expires: 2004
    
    (none)Sir Bob Reid    
London, England
    
    Director
    
    Deputy Governor,
Bank of Scotland
    
    Director since: 1997
Term expires: 2004
    
    Audit
Conduct Review
Risk ReviewDonald A. Stewart    
Toronto, Ontario
    
    Director
    
    C.E.O., SLF Inc. and
Sun Life Assurance
    
    Director since: 1996
Term expires: 2004
    
    (none)William W. Stinson    
Toronto, Ontario
    
    Director
    
    Chairman SLF Inc. and
Sun Life Assurance
    
    Director since: 1985
Term expires: 2004
    
    GovernanceW. Vickery Stoughton    
Los Angeles,
California
    
    Director
    
    Chairman & C.E.O.,
Careside, Inc.
    
    Director since: 1988
Term expires: 2004
    
    Management Resources


Each director of SLF Inc. has been engaged for more than five years in his
or her present principal occupation or in other capacities with the company or
organization (or predecessor thereof) in which he or she currently holds his or
her principal occupation, except Mr. Astley who, prior to January 2003, was
President and Chief Executive Officer of Clarica, Mr. Baillie who, prior to
January 2000, was a partner at Torys and Mr. Osborne who, prior to December
2003, was President and Chief Executive Officer of Ontario Power Generation
Inc., or its predecessor, Ontario Hydro.

Messrs. Ganong, Osborne and Stoughton are or have been directors or
officers of publicly traded companies which, in the ten years preceding the
date of this AIF became bankrupt, made proposals under legislation relating to
bankruptcies or insolvencies or were subject to or instituted any proceedings,
arrangements or compromises with creditors.

Audit Committee Financial Expert

SLF Inc.s board of directors has determined that it has at least one
audit committee financial expert serving on its audit committee. Mr. Ronald W.
Osborne has been determined to be an audit committee financial expert and is
independent, as that term is defined by the New York Stock Exchanges listing
standards. The United States Securities Exchange Commission has indicated that
the designation of Mr. Osborne as an audit committee financial expert
does not make Mr. Osborne an expert for any purpose, or impose any
duties, obligations or liability on Mr. Osborne that are greater than
those imposed on members of the audit committee and board of directors who do
not carry this designation or affect the duties, obligations or liabilities of
any other member of the audit committee or board of directors.

Sun Life Financial Inc.
    
    
    92003 Annual Information Form


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---



##### 



Executive Officers

The executive officers of SLF Inc. as at the date of this AIF, were as
follows:

Name and Municipality of Residence
    
    PositionDonald A. Stewart    
Toronto, Ontario
    
    Chief Executive OfficerC. James Prieur    
Toronto, Ontario
    
    President and Chief Operating OfficerRobert M. Astley    
Waterloo, Ontario
    
    President, Sun Life Financial CanadaThomas A. Bogart    
Toronto, Ontario
    
    Executive Vice-President and Chief Legal OfficerDavid W. Davies    
Epsom, Surrey, United Kingdom
    
    Managing Director & Chief Executive Officer, Sun Life    
Assurance Company of Canada (U.K.) LimitedPaul W. Derksen    
Mississauga, Ontario
    
    Executive Vice-President and Chief Financial OfficerDouglas C. Henck    
Hong Kong, China
    
    President, Sun Life Financial AsiaPeter G. Pereira    
Mississauga, Ontario
    
    Executive Vice-President and Chief Information OfficerRobert C. Salipante    
Wellesley, Massachusetts, USA
    
    President, Sun Life Financial United States


Each executive officer of SLF Inc. has been engaged for more than five
years in his present principal occupation or in other capacities with the
company or organization (or predecessor thereof) in which he currently holds
his principal occupation, with the following exceptions. Prior to January
2003, Mr. Astley was President and Chief Executive Officer of Clarica. Prior to
September 2002, Mr. Davies was Trustee and Advisor for Alba Life, Police Mutual
Friendly Society and LAHC, prior to March 2002, he was Chief Executive for
Royal National Pension Fund for Nurses, and prior to February 1999, he was a
Consultant for the Britannia Life subsidiary of Britannia Building Society.
Prior to February 2000, Mr. Derksen was Executive Vice-President and Chief
Financial Officer of CT Financial Services Inc. Prior to April 2000, Mr. Henck
was Senior Vice-President, AIG Life Division of American International Group,
Inc. Prior to January 2004, Mr. Pereira was Chief Information Officer and
Vice-President, Information Technology, of Telus Corporation, and prior to
January 2002, he was Chief Information Officer and Vice-President, Information
Technology and Global Outsourcing, of GE Capital Information Technology
Solutions, and prior to January 2001, he was Vice-President, North American
SAP, of GE Capital Information Technology Solutions. Prior to February 2003,
Mr. Salipante was a private consultant, and prior to April 2002, he was
President and General Manager of ING U.S. Financial Services.

As at December 31, 2003, Sun Life Financials directors and executive
officers, as a group, owned, directly or indirectly, or had voting control or
direction over, 438,196 common shares of SLF Inc., or less than 1 per cent of
the total common shares outstanding.

CODE OF ETHICS

All employees, officers and directors of Sun Life Financial, including the
Chief Executive Officer, Chief Financial Officer and Controller, are subject to
and are required to annually confirm adherence to the Sun Life Financial Code
of Business Conduct. The Code of Business Conduct is available at
www.sunlife.com.

Sun Life Financial Inc.
    
    
    102003 Annual Information Form


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---



##### 



PRINCIPAL ACCOUNTANT FEES AND SERVICES

For the years ended December 31, 2003 and 2002, the fees paid by Sun Life
Financial for audit work performed by Deloitte & Touche LLP were as follows:

Year Ended December 31($millions)
    
    2003*
    
    2002*Audit Services
    
    
    9.2
    
    
    
    8.7Audit-Related Services
    
    
    2.1
    
    
    
    1.2Tax Services
    
    
    1.5
    
    
    
    2.3Other Services
    
    
    0.3
    
    
    
    10.2




---

|* |  | In order to reflect new SEC reporting guidance, 2003 fees include, and
2002 fees have been restated
to include; administrative and out-of-pocket expenses and fees relating to
segregated funds (known as
separate accounts in the U.S.)
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Audit Fees

Audit fees were paid for professional services rendered by the auditors for the
audit of Sun Life Financials annual financial statements and segregated funds
as well as services provided in connection with statutory and regulatory
filings.

Audit-Related Fees

Audit-related fees were paid for assurance and related services that are
reasonably related to the performance of the audit or review of the annual
financial statements and are not reported under the audit fees category above.
These services consisted of employee benefit plan audits, special audits in
connection with acquisitions, internal control reviews and consultations
concerning financial accounting and reporting standards.

Tax Fees

Tax fees were paid for tax compliance, tax advice and tax planning professional
services. These services consisted of tax compliance, including the review of
original and amended tax returns, assistance with questions regarding tax
audits and refund claims, tax advice in connection with acquisitions and tax
planning and advisory services relating to domestic and international taxation.

Other Fees

Other fees were paid for products and services other than the audit fees,
audit-related fees and tax fees described above.

Audit Committee Approval

Sun Life Financial established a policy requiring pre-approval of services
provided by Sun Life Financials external auditors in July 2002 and amended and
restated the policy in October 2002. Set out below is the amended and restated
policy. All fees paid to Sun Life Financials external auditors since July
2002 have been approved by Sun Life Financials Audit Committee in accordance
with the policy in effect at the time. None of the services described in the table above
were approved by the Audit Committee pursuant to
paragraph (c)(7)(i)(C) of SEC Rule 2-01 of Regulation S-X.

The Company no longer has any engagements with its auditors for services
identified in item 3 of the following policy.

Sun Life Financial Inc.
    
    
    112003 Annual Information Form


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---



##### 



Policy Restricting the Use of the
Companys External Auditors



|1. |  | This policy governs all proposals by the
Company or any of its
subsidiaries to engage, as a service provider, the external auditor or any
of its affiliates, related businesses or associated persons as defined in
the Sarbanes-Oxley Act of 2002 (S-O Act) (collectively referred to as the
External Auditor).
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|2. |  | The External Auditor will normally be engaged to provide audit and
audit-related services, including advisory services related to the
External Auditors audit and audit-related work such as advice pertaining
to internal
audit, tax, actuarial valuation, risk management, and regulatory and
compliance matters, subject to the prohibitions contained in the S-O Act and
in any other applicable laws, regulations or rules. The S-O Act prohibitions
are set out in Appendix 1.
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|3. |  | Any engagement of the External Auditor for services that would be legally
prohibited by the S-O Act and that was in place at the date this policy
was initially established may continue in place until such prohibition
becomes operative or it is otherwise prohibited by applicable law,
regulation or rule. The Controller will maintain a list of such
engagements. The Company will not enter into any other such
engagements prior to the S-O Act prohibitions becoming operative.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|4. |  | Each engagement of the External Auditor to provide services will require
the approval in advance of the Audit Committee of Sun Life Financial
Inc. and
the audit committee of any affected subsidiary that is itself directly
subject to the S-O Act. The Audit Committee may establish procedures
regarding the approval process, which will be co-coordinated by the
Controller.
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|5. |  | The Company and its subsidiaries will not employ or appoint as
chief executive officer, chief financial officer, controller, chief
accounting officer, appointed actuary, or equivalent position within
the Company or subsidiaries, any person who was employed by the
External Auditor and who provided any services to the Company or subsidiary at any time during the previous two years.
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|6. |  | The Controller is responsible for the application and interpretation of
this policy, and should be consulted in any case where there is
uncertainty regarding whether a proposed service is, or is not, an audit
or audit-related service. The Controller will revise Appendix 1 as
required, from time to time, to reflect changes in applicable laws,
regulations or rules.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|7. |  | This policy, as amended and restated, is effective from October 30, 2002.
|-- |  | -------------------------------------------------------------------------

Appendix 1

Sarbanes-Oxley Act of 2002  Prohibition on services

The External Auditor will be prohibited from providing the following
services after the applicable provisions of the S-O Act become operative:



| | a) |  | bookkeeping or other services related to the accounting records or
financial statements;
| | -- |  | ----------------------------------------------------------------------------------------

| | b) |  | financial information systems design and implementation;
| | -- |  | --------------------------------------------------------

| | c) |  | appraisal or valuation services, fairness opinions, or
contribution-in-kind reports;
| | -- |  | ------------------------------------------------------------------------------------

| | d) |  | actuarial services;
| | -- |  | -------------------

| | e) |  | internal audit outsourcing services;
| | -- |  | ------------------------------------

| | f) |  | management functions or human resources;
| | -- |  | ----------------------------------------

| | g) |  | broker or dealer, investment adviser, or investment banking
services;
| | -- |  | ---------------------------------------------------------------------

| | h) |  | legal services and expert services unrelated to the audit; and
| | -- |  | --------------------------------------------------------------

| | i) |  | any other service that the Public Company Accounting Oversight
Board, to be established under the S-O Act, determines to be
impermissible.
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------

REGULATORY MATTERS

Sun Life Financial is subject to regulation and supervision by
governmental authorities in the jurisdictions in which it does business.

Sun Life Financial Inc.
    
    
    122003 Annual Information Form


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---



##### 



Canada

General

SLF Inc. and Sun Life Assurance are governed by the Insurance Act. The
Insurance Act is administered, and the activities of Sun Life Financial are
supervised, by the Office of the Superintendent of Financial Institutions
(OSFI). SLF Inc. and Sun Life Assurance have all the powers and restrictions
applicable to life insurance companies governed by the Insurance Act. The
Insurance Act permits insurance companies to offer, directly or through
subsidiaries or through networking arrangements, a broad range of financial
services, including banking services, investment counseling and portfolio
management, mutual funds, trust services, real property brokerage and appraisal
and merchant banking services.

The Insurance Act requires the filing of annual and other reports on the
financial condition of insurance companies, provides for periodic examinations
of insurance companies affairs, imposes restrictions on transactions with
related parties, and sets forth requirements governing certain aspects of
insurance companies businesses.

OSFI supervises SLF Inc. on a consolidated basis (including from a capital
adequacy perspective) to ensure that it has an overview of activities of SLF
Inc. and its consolidated subsidiaries. This consolidated regulation includes
the ability to review both insurance and non-insurance activities, whether
inside or outside of Canada, conducted by subsidiaries of SLF Inc. and adequate
supervisory power to bring about corrective action.

Investment Powers

Under the Insurance Act, a life insurance company must maintain a prudent
portfolio of investments, subject to certain overall limitations on the amount
it may invest in certain classes of investments, such as commercial loans, real
estate and stocks. Additional restrictions (and, in some cases, the need for
regulatory approvals) limit the type of investments which Sun Life Financial
can make in excess of 10 per cent of the voting rights or 25 per cent of the
equity of any entity.

Minimum Continuing Capital and Surplus Requirements

The Insurance Act requires Canadian life insurance companies to maintain
adequate capital and adequate and appropriate forms of liquidity in relation to
their operations. OSFI has established Minimum Continuing Capital and Surplus
Requirements (MCCSR). Under MCCSR, a life insurance company is required to
maintain an amount of capital which is calculated by reference to, and which
varies with, the risk characteristics of each category of on- and off- balance
sheet assets and liabilities held by it. The MCCSR calculation involves
applying quantitative factors to specific assets and liabilities, as well as to
certain off-balance sheet items, based on the following risk components: (i)
asset default risk, (ii) mortality/morbidity and lapse risk, (iii) interest
margin pricing risk, (iv) changes in interest rate environment risk, (v)
segregated fund risk, and (vi) off-balance sheet exposure. The total capital
required is the sum of the capital required calculated for each of the six risk
components. OSFI uses this total, in conjunction with the amount calculated as
available capital, together with other considerations, in assessing the capital
adequacy of a life insurance company. OSFI generally expects life insurance
companies to maintain a minimum MCCSR of 150 per cent or greater, based on the
risk profile of the relevant insurance company. The MCCSR ratios for each of
SLF Inc. and Sun Life Assurance as of December 31, 2003 exceeded the levels
that would require any regulatory or corrective action.

The principal elements of available capital include common shares,
contributed surplus, retained earnings, reported surplus, unamortized deferred
realized and unrealized gains and certain losses on investments not taken into
account in the valuation of liabilities, a certain portion of actuarial
liabilities related to future policyholder termination dividends, preferred
shares, qualifying innovative capital instruments and subordinated debt. Funds
raised by a life insurance company through borrowing or issuing securities are
treated as different categories of available capital for MCCSR purposes
depending on the characteristics of the instrument issued.

The amount of available capital is then reduced by Sun Life Financials
goodwill and controlling interests in non-life financial corporations,
non-controlling substantial investments in corporations, a portion of negative
policy reserves and cash value deficiencies and reserves on reinsurance ceded
to unregistered reinsurers. OSFI may require that a higher amount of capital
be available for an insurance company, taking into account such factors as the
companys operating experience and diversification of asset or insurance
portfolios. OSFI may

Sun Life Financial Inc.
    
    
    132003 Annual Information Form


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---



##### 



intervene and assume control of an insurance company if
it deems the amount of available capital insufficient. MCCSR may be adjusted
by OSFI in the future as experience develops, the risk profile of Canadian life
insurers changes, and to reflect other risks.

In September 2003, OSFI indicated that it is developing new capital
guidelines for non-operating insurance holding companies. SLF Inc. will be
subject to these new guidelines and it is anticipated that Sun Life Assurance
will continue to be subject to the MCCSR tests. The guidelines are anticipated
to be issued in the first quarter of 2004 and are expected to recommend that
the MCCSR test no longer be applied at the consolidated insurance holding company level to assess solvency. In lieu of this
measure, OSFI is expected to introduce leverage and servicing ratios to measure
capital adequacy.

Restrictions on Dividends and Capital Transactions

The Insurance Act prohibits the declaration or payment of any dividend on
shares of an insurance company if there are reasonable grounds for believing an
insurance company is, or the payment of the dividend would cause the company to
be, in contravention of MCCSR, and requires an insurance company to notify the
Superintendent of Financial Institutions (the Superintendent) of the
declaration of a dividend at least 10 days prior to the date fixed for its
payment. The Insurance Act also prohibits the purchase for cancellation of any
shares issued by an insurance company or the redemption of any redeemable
shares or other similar capital transactions, if there are reasonable grounds
for believing that the company is, or the payment would cause the company to
be, in contravention of MCCSR. Further, any purchase for cancellation of any
shares issued by an insurance company or the redemption of any redeemable
shares or similar capital transactions is prohibited without the prior approval
of the Superintendent.

Restrictions on Ownership

The Insurance Act contains restrictions on the purchase or other
acquisition, issue, transfer and voting of the shares of an insurance company.
Pursuant to these restrictions, no person is permitted to acquire any shares of
SLF Inc. if the acquisition would cause the person to have a significant
interest in any class of shares of SLF Inc., without the prior approval of the
Minister of Finance of Canada. In addition SLF Inc. is not permitted to record
any transfer or issue of shares of SLF Inc. if the transfer or issue would
cause the person to have a significant interest in SLF Inc., unless prior
approval is obtained from the Minister of Finance of Canada. No person who has
a significant interest in SLF Inc. may exercise any voting rights attached to
the shares held by that person, unless that prior approval of the Minister of
Finance of Canada is obtained. A person has a significant interest in a class
of shares where the aggregate of any shares of that class beneficially owned by
that person, any entity controlled by that person and any person acting jointly
or in concert with that person exceeds 10 per cent of all of the outstanding
shares of that class of shares.

Under the Insurance Act, the Minister of Finance of Canada may approve
only the acquisition of a significant interest of up to 30 per cent of any
class of non-voting shares and up to 20 per cent of a class of voting shares
and provided that the person acquiring those shares does not have direct or
indirect influence over SLF Inc. that, if exercised, would result in that
person having control in fact of SLF Inc. In addition, the Insurance Act
prohibits life insurance companies, including SLF Inc., from recording a
transfer or issuing shares of any class to Her Majesty in right of Canada or of
a province, an agent of Her Majesty, a foreign government or an agent of a
foreign government.

SLF Inc. is required to continue to control, but not wholly own, Sun Life
Assurance. Any shares of Sun Life Assurance that are not owned by SLF Inc. are
required to meet the widely held criteria. The 20 per cent limit on voting
share ownership and 30 per cent limit on non-voting share ownership apply to
the direct and indirect cumulative ownership of Sun Life Assurance, with the
effect that no single investor will be able to use the holding company
structure to exceed the ownership restrictions.

On June 23, 2003, the government of Canada released a policy paper titled
Response of the Government to Large Bank Mergers in Canada: Safeguarding the
Public Interest for Canadians and Canadian Businesses. This document was
prepared in response to reports issued by the House of Commons Standing
Committee on Finance and the Senate Standing Committee on Banking, Trade and
Commerce on the public interest considerations in reviewing bank mergers. The
government announced that it would not accept or consider any merger proposals
among large financial institutions until after September 30, 2004.

Sun Life Financial Inc.
    
    
    142003 Annual Information Form


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##### 



Appointed Actuary

In accordance with the Insurance Act, the Board of Directors of each of
SLF Inc. and Sun Life Assurance has appointed a Fellow of the Canadian
Institute of Actuaries as the Appointed Actuary. The Appointed Actuary is
required to value the consolidated policy liabilities of each of SLF Inc. and
Sun Life Assurance as at the end of each period in accordance with accepted
actuarial practices, including selection of appropriate assumptions and
methods, and provide an opinion as to whether the amount of policy liabilities
makes appropriate provisions for all obligations to policyholders and whether the valuation
of liabilities is fairly presented in the consolidated financial statements.
At least once in each financial year, the Appointed Actuary must meet with the
Board of Directors or the Audit Committee to report, in accordance with
accepted actuarial practice, on the financial position and the expected future
financial condition of SLF Inc. and Sun Life Assurance. The Appointed Actuary
is required to report to the Chief Executive Officer and the Chief Financial
Officer of each of SLF Inc. and Sun Life Assurance if the Appointed Actuary
identifies any matters which, in the Appointed Actuarys opinion, have material
adverse effects on the financial condition of Sun Life Financial.

Provincial/Territorial Insurance Regulation

Sun Life Financial is subject to provincial regulation and supervision in
each of the provinces and territories in Canada in which it carries on
business. Provincial insurance regulation is concerned primarily with the form
of insurance contracts and the sale and marketing of insurance and annuity
products, including the licensing and supervision of insurance producers.
Individual variable insurance and annuity products and the underlying
segregated funds to which they relate are subject to guidelines adopted by the
Canadian Council of Insurance Regulators and incorporated by reference into
provincial insurance regulations. These guidelines govern a number of matters
relating to the sale of these products and the administration of the underlying
segregated funds. The Company is licensed to transact business in all provinces
and territories in Canada.

Privacy of Customer Information

Canadian federal, and some provincial, laws and regulations require
financial institutions to protect the security and confidentiality of customer
information and to notify customers about their policies and practices relating
to their collection and disclosure of customer information and their policies
relating to protecting the security and confidentiality of that information.
These laws also regulate disclosure of customer information.

Securities Laws

CI and certain subsidiaries of Sun Life Assurance, including McLean Budden
Limited, Clarica Investco Inc. and IQON Financial Inc., certain of their
employees or sales representatives and certain of the products offered by these
subsidiaries, are registered with provincial and territorial securities
commissions and are subject to regulation and supervision under securities laws
in each of the provinces and territories of Canada. These registrations may be
terminated or suspended for failure to adhere to certain regulatory
requirements.

United States

General Regulation at the State Level

In the United States, each state, the District of Columbia, and U.S.
territories and possessions have insurance laws that apply to companies
licensed to carry on an insurance business in the jurisdiction. However, the
state of domicile of the insurer is the primary regulator of the company. The
extent of regulation by the domiciliary jurisdiction varies, but most
jurisdictions have laws and regulations governing the financial aspects of
insurers, including standards of solvency, reserves, reinsurance, capital
adequacy and the business conduct of insurers. In addition, the laws of the
various states establish state insurance departments with broad administrative
powers to approve policy forms and, for certain lines of insurance, rates,
grant and revoke licenses to transact business, regulate trade practices,
license agents, require statutory financial statements and prescribe the type
and amount of investments permitted. The primary purpose of such regulation by
the state insurance departments is for the benefit of policyholders, rather
than shareholders. Insurance companies are required to file detailed annual and
quarterly financial statements with state insurance regulators in each of the
states in which they are licensed, and their business and accounts are subject
to examination by such agencies at any time. Regulators have

Sun Life Financial Inc.
    
    
    152003 Annual Information Form


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##### 



discretionary
authority, in connection with the continued licensing of life insurance
companies, to limit or prohibit the ability to issue new policies if, in their
judgement, the regulators determine that an insurer is not maintaining minimum
statutory surplus or capital or if the further transaction of business would be
detrimental to policyholders. In addition, as part of their routine oversight
process, state insurance departments conduct detailed examinations periodically
(generally every three to five years) of the books, records, accounts and
market conduct of insurance companies domiciled in their states. Market conduct
reviews examine, among other things, content of disclosures, illustrations, and sales practices. Examinations are
generally conducted in cooperation with the departments of two or three other
states under guidelines published by the National Association of Insurance
Commissioners (NAIC).

SLF Inc. is not regulated as an insurance company in the United States but
is, as the direct or indirect owner of the capital stock of Sun Life Assurance
and other U.S. insurance subsidiaries, subject to the insurance holding company
acts of the states in which Sun Life Assurance and its other U.S. insurance
subsidiaries are domiciled (or deemed to be commercially domiciled). Most
states have enacted legislation that generally requires each insurer that is
domiciled therein and that is a member of a holding company system to register
with the insurance regulatory authority of that state and, annually, to furnish
those authorities certain reports including information concerning capital
structure, ownership, financial condition, certain intercompany transactions
and general business operations. Sun Life Financial has insurance subsidiaries
domiciled in Delaware, Rhode Island and New York. In addition, Michigan is Sun
Life Assurances state of entry and, as such, it is treated as Sun Life
Assurances state of domicile in the United States for purposes of the
insurance holding company laws. Under most states holding company laws, all
transactions within the holding company system to which the domestic insurer is
a party must be fair and equitable and such insurers policyholder surplus
following any such transaction must be both reasonable in relation to its
outstanding liabilities and adequate for its needs. In addition, most states,
including Michigan, also require prior notice or regulatory approval of the
change of control of the domestic insurer or an entity that controls the
domestic insurer and of material intercorporate transfers of assets or other
material affiliate transactions to which the domestic insurer is a party. The
laws of the states in which Sun Life Financials U.S. insurance subsidiaries
are domiciled contain similar provisions with respect to such subsidiaries and
their affiliates. Generally, under such laws, a state insurance authority must
approve in advance the direct or indirect acquisition of 10 per cent or more of
the voting securities of an insurance company domiciled in its state.

Sun Life Assurance is licensed to transact business through its U.S.
branch in every state in the United States (except New York, where it is an
accredited reinsurer), the District of Columbia, Puerto Rico and the U.S.
Virgin Islands. SLF Inc.s insurance subsidiaries are, collectively, licensed
to transact business in all states, the District of Columbia, Puerto Rico and
the U.S. Virgin Islands.

In recent years, a number of life and annuity insurers have been the
subject of regulatory proceedings and litigation relating to alleged improper
life insurance pricing and sales practices. Some of these insurers have
incurred or paid substantial amounts in connection with the resolution of these
matters. In addition, state insurance regulatory authorities regularly make
inquiries, hold investigations and administer market conduct examinations with
respect to insurers compliance with applicable insurance laws and regulations.
In addition, state regulatory authorities, industry groups and rating agencies
have developed several initiatives regarding market conduct.

Restrictions on Dividends and Capital Transactions

As a holding company, SLF Inc. depends primarily on the receipt of funds
from its operating subsidiaries to pay shareholder dividends and operating
expenses. The source of these funds is primarily dividends SLF Inc. receives
from its operating companies in Canada, the U.K. and Asia. The inability of its
subsidiaries to pay dividends to SLF Inc. in the future may materially impair
the ability of SLF Inc. to pay dividends to shareholders or to meet its cash
obligations. To the extent dividends are paid by U.S. insurance companies, the
insurance holding company system laws and regulations of various states
regulate the amount of dividends that a domestic insurance company may pay to
its parent without prior regulatory approval. In addition, covenants in surplus
notes affect the Delaware domestic insurance companys ability to pay dividends
by requiring it to maintain certain levels of surplus.

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NAIC IRIS Ratios

The NAIC has developed a set of financial relationships or tests known
as the NAIC Insurance Regulatory Information System (IRIS) to assist state
regulators in monitoring the financial condition of insurance companies and
identifying companies that may require special attention or action by insurance
regulatory authorities. A second set of confidential ratios, called Financial
Analysis Solvency Tracking System, (FAST), are also used for monitoring.
Insurance companies generally submit data quarterly to the NAIC,
which in turn analyzes the data using prescribed financial data ratios, each with
defined usual ranges. If an insurance companys results vary significantly
from expected ranges, regulators may make further inquiries. Regulators have
the authority to impose remedies ranging from increased monitoring to certain
business limitations to various degrees of supervision.For the twelve months
ended December 31, 2002, Sun Life Assurance and its U.S. insurance subsidiaries
were within the usual ranges for most of the IRIS ratios. Management believes
that the ratios which are outside the usual range do not indicate any adverse
solvency issues.

Statutory Investment and Other Valuation Reserves

Under NAIC rules, life insurance companies must maintain an asset
valuation reserve (AVR), supplemented by an interest maintenance reserve (IMR).
These reserves are recorded for purposes of statutory accounting practices;
they are not recorded under the provisions of Canadian GAAP and therefore have
no impact on SLF Inc.s reported results of operations or financial position.
These reserves affect the determination of statutory surplus, and changes in
such reserves may impact the ability of a U.S. insurance subsidiary to pay
dividends or other distributions to its parent and also may impact the amounts
required to be maintained in trust by the U.S. branch of Sun Life Assurance.
The impact of the AVR, which is a provision for potential asset credit
defaults, will depend upon future composition of the investment portfolios of
the U.S. branch of Sun Life Assurance and its U.S. life insurance
subsidiaries.

Michigan insurance law and the laws of several other states require life
insurance companies to analyze the adequacy of their reserves annually. Sun
Life Assurances appointed actuary for the U.S. branch of Sun Life Assurance
must submit an opinion that such reserves, when considered in light of the
assets held with respect to those reserves, make adequate provision for Sun
Life Assurances contractual obligations and related expenses. Similarly, the
appointed actuary for each of the U.S. life insurance subsidiaries submits an
annual opinion.

The NAIC has adopted a model regulation called Valuation of Life
Insurance Policies Model Regulation that establishes new minimum statutory
reserve requirements for individual life insurance policies written in the
future. These reserve standards have been enacted by most of the states,
generally with a January 1, 2000 effective date. As a result, insurers selling
some individual life insurance products such as term life insurance with
guaranteed premium periods may need to adjust reserves and/or shorten guarantee
periods. While the model regulation has been enacted by certain states in
which Sun Life Financial has domestic companies, the enactment of the
regulation has not had a material impact on Sun Life Financial. The NAIC is
currently considering revisions to this regulation; however, the revisions are
not expected to have a material impact on Sun Life Financial.

Risk-Based Capital Requirements

In order to enhance the regulation of insurers solvency, the NAIC adopted
a model law to implement risk-based capital requirements for life, health and
property and casualty insurance companies. All states have adopted the NAICs
model law or a substantially similar law. The risk-based capital (RBC)
calculation, which regulators use to assess the sufficiency of an insurers
capital, measures the risk characteristics of a companys assets, liabilities
and certain off-balance sheet items. RBC is calculated by applying factors to
various asset, premium and liability items. Within a given risk category, these
factors are higher for those items with greater underlying risk and lower for
items with lower underlying risk. Insurers that have less statutory capital
than the RBC calculation requires are considered to have inadequate capital and
are subject to varying degrees of regulatory action depending upon the level of
capital inadequacy. The RBC ratios for each of the U.S. branch of Sun Life
Assurance and its U.S. insurance subsidiaries as of December 31, 2002 exceeded
the levels that would require any regulatory or corrective action.

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Minimum Statutory Surplus and Capital

Sun Life Assurances U.S. branch is required to maintain a certain amount
of assets in trust with a financial institution acceptable to the Michigan
Insurance Commissioner in an amount at all times at least equal to the sum of
the U.S. branchs reserves and other liabilities, the minimum required capital
and surplus and any additional amounts considered necessary by the Michigan
Insurance Commissioner to cover Sun Life Assurances liabilities plus a portion
of its surplus in the United States. These assets are generally only available
to meet the policyholder obligations of Sun Life Assurance to its U.S.
policyholders, claimants and other U.S. branch creditors. Any amendment to the
trust agreement must be approved by the Michigan Insurance Commissioner. As
at December 31, 2002, Sun Life Assurance had assets in trust in excess of
Michigans requirements for branches of alien insurers including the RBC
requirements referred to above.

The U.S. branch of Sun Life Assurance and its U.S. life insurance
subsidiaries are required to have minimum statutory surplus and capital of
various amounts, depending on the state in which they are licensed and the
types of business they transact.

Regulation of Investments

The U.S. branch of Sun Life Assurance and its U.S. insurance subsidiaries
are subject to state laws and regulations that require diversification of their
investment portfolios and limit the amount of investments in certain investment
categories such as below investment grade fixed income securities, equity real
estate and equity investments. Failure to comply with these laws and
regulations would cause investments exceeding regulatory limitations to be
treated as non-admitted assets for purposes of measuring surplus, and, in some
instances, would require divestiture of such non-qualifying investments.

Assessments Against Insurers

Insurance guaranty association laws exist in all states, the District of
Columbia and Puerto Rico. Insurers doing business in any of these jurisdictions
can be assessed for policyholder losses incurred by impaired or insolvent
insurance companies. Assessments are generally based upon the proportionate
share of premiums written by member insurers in the lines of business in which
the impaired or insolvent insurer is engaged. A large part of the assessments
paid by Sun Life Financial pursuant to these laws may be used as credits for a
portion of Sun Life Financials U.S. premium taxes. Based on the best
information currently available, Sun Life Financial believes the total
assessments are adequately accrued.

General Regulation of Insurance at Federal Level

Although the U.S. federal government does not directly regulate the
insurance business, federal legislation and administrative policies in several
areas, including pension regulation, age and sex discrimination, investment
company regulation, financial services regulation and federal taxation, do
affect the insurance business. For example, the U.S. Congress has from time to
time considered legislation related to the deferral of taxation on the
accretion of value within certain annuities and life insurance products,
limitations on antitrust immunity, the alteration of the federal income tax
structure and the availability of 401(k) or individual retirement accounts. In
addition, legislation has been introduced from time to time in recent years
which, if ever enacted, could result in the U.S. federal government assuming a
more direct role in the regulation of the insurance industry.

In June 2001, the Economic Growth and Tax Relief Reconciliation Act of
2001 (the 2001 Act) was enacted. The 2001 Act contains provisions that will,
over time, significantly lower individual tax rates. This will have the effect
of reducing the benefits of tax deferral on the build-up of value of annuities
and life insurance products. The 2001 Act also includes provisions that will
eliminate, over time, the estate, gift and generation-skipping taxes and
partially eliminates the step-up in basis rule applicable to property held in a
decedents estate. Some of these changes might hinder sales and result in the
increased surrender of insurance and annuity products.

In May 2003, the Jobs and Growth Tax Relief Reconciliation Act of 2003
(the 2003 Act) was enacted. The 2003 Act included a provision which reduces the
tax rate on capital gains and qualifying dividends to a maximum rate of 15 per
cent. The reduced rate is, however, only available (either directly or through
an investment in a mutual fund or other pass through entity) to individuals.
Corporate taxation of dividends and capital gains, including those derived from
corporate shares held through insurance, annuity and tax-qualified

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retirement
plans, remains unchanged. It is not clear at this time what impact this
provision has had or might have on the sale and surrender of certain products.
On February 2, 2004, President Bush introduced his budget for fiscal year 2005.
Included in the budget are provisions creating new tax-favoured savings
initiatives  Lifetime Savings Accounts (LSA), Retirement Savings Accounts
(RSA) ,and Employer Retirement Savings Accounts (ERSA)  which, if passed as
proposed, could adversely affect the sale of annuity and other tax-favoured
products currently offered by the Company.

In 2003, the Senate Finance Committee passed a bill entitled National
Employee Savings and Trust Equity Guarantee Act, (NESTEG) leaving open for
further discussion a provision changing the current tax treatment of employers who buy Corporate Owned Life Insurance (COLI). On
February 2, 2004, Senate Finance agreed upon amendments to the COLI provision.
As amended, payments made to an employer under a COLI policy would be taxable
unless certain qualifications, such as employment or level of compensation, are
met. The provision also requires that employees covered under COLI policies be
informed and give consent to the coverage before the employer purchases the
COLI policy. NESTEG goes next to the Senate floor and if passed, must be
reconciled with the House version of the bill. It is possible Congress may
pass a more restrictive law than the Senate Finance Committees COLI provision.

Title III of the USA PATRIOT Act of 2001 (the PATRIOT Act) amends the
Money Laundering Control Act of 1986 and the Bank Secrecy Act of 1970 to expand
anti-money laundering (AML) and financial transparency laws to apply to
financial services companies, including some categories of insurance companies.
The PATRIOT Act, among other things, seeks to promote cooperation among
financial institutions, regulators and law enforcement entities in identifying
parties that may be involved in terrorism, money laundering or other illegal
activities. To the extent required by applicable laws and regulations, the
subsidiaries of SLF Inc. that are deemed financial institutions under the
PATRIOT Act have adopted AML programs that include policies, procedures and
controls to detect and prevent money laundering, designating a compliance
officer to oversee the program, providing for on-going employee training, and
ensuring periodic independent testing of the program. These AML programs, to
the extent required, also establish and enforce customer identification
programs and provide for the monitoring and the reporting to the Department of
the Treasury of certain suspicious transactions.

Privacy of Customer Information

U.S. federal and state laws require financial institutions to protect the
security and confidentiality of customer information and to notify customers
about their policies and practices relating to their collection, use and
disclosure and protection of customer information and their policies relating
to protecting the security and confidentiality of that information. U.S.
federal and state laws also regulate disclosure of customer information. The
U.S. Congress and state legislatures are expected to consider additional laws
and regulations to further protect customer information.

Securities Laws

Certain
subsidiaries of SLF Inc. and certain policies and
contracts offered by these subsidiaries, are subject to various levels of
regulation under U.S. federal securities laws administered by the Securities
and Exchange Commission (the SEC) and under certain state securities laws.

All
aspects of SLF Inc.s subsidiaries investment advisory
activities are subject to various federal and state laws and regulations in
jurisdictions in which they conduct business. These laws and regulations are
primarily intended to benefit investment advisory clients and investment
company shareholders. MFS and certain of SLF Inc.s other U.S.
subsidiaries are investment advisors registered under the Investment Advisers
Act of 1940, as amended (the Investment Advisers Act) and, as such, are
regulated by and subject to examination by the SEC. The Investment Advisers Act
imposes numerous obligations on registered investment advisors, including
fiduciary duties, record keeping and reporting requirements, operational
requirements, and disclosure obligations. The SEC is authorized to institute
proceedings and impose sanctions for violations of the Investment Advisers Act,
ranging from censure to limitations on the investment advisors activities to
termination of an investment advisors registration. Certain investment
companies managed by such subsidiaries, including the MFS mutual funds, are
registered with the SEC under, and subject to, the Investment Company Act of
1940, as amended, and the shares of certain of these entities are qualified for
sale in certain states in the United States and the District of Columbia.

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Certain
annuity contracts and insurance policies issued by SLF Inc.s U.S. subsidiaries are registered under the Securities Act of 1933,
as amended. Sun Life Assurance Company of Canada (U.S.) and Sun Life Insurance
and Annuity Company of New York file periodic reports with the SEC under the
Securities Exchange Act of 1934, as amended (the Exchange Act). Certain other
U.S. subsidiaries of Sun Life Financial. are registered as broker-dealers under
the Exchange Act, are subject to the SECs net capital rules, and are members
of, and subject to regulation by, the National Association of Securities
Dealers, Inc.

United Kingdom

Insurance Regulation

SLF Inc.s U.K. life insurance subsidiary, Sun Life Assurance
Company of Canada (U.K.) Limited (Sun Life (UK)) carries on certain regulated
activities as principal and by way of business in the United Kingdom in
relation to long-term contracts of insurance and, therefore, is required to be
authorized under the Financial Services and Markets Act 2000(the FSM Act) by
the Financial Services Authority (the FSA). All insurance companies authorized
under the FSM Act are required to conduct their business in accordance with the
prudential and conduct of business rules and guidance set out in the FSA
Handbook of Rules and Guidance(the FSA Handbook), including the Principles for
Businessescontained in the High Level Standardsof the FSA Handbook. These
include a requirement for firms including insurance companies, authorized under
the FSM Act, to conduct their business with due regard to the interests of
their customers and to treat them fairly. Insurance companies that are
authorized under the FSM Act are also required under the Interim Prudential
Sourcebook for Insurers(IPRU(INS)) (which is part of the FSA Handbook) to file
their accounts and balance sheets and other information in prescribed form with
the FSA on an annual basis.

Long-Term Assets and Liabilities

In accordance with the FSA rules set out in IPRU(INS), Sun Life (UK) is
required to maintain a separate account and records in respect of its long-term
insurance business and to apply the assets and liabilities attributable to its
long-term insurance business to a long-term insurance fund, separate from the
assets and liabilities attributable to its non-life insurance business, if any,
or to shareholders. Within its long-term insurance fund, Sun Life (UK)
maintains separate sub-funds in respect of assets and liabilities attributable
to its participating insurance business and to its non-participating insurance
business, respectively. The FSA rules set out in IPRU(INS) impose restrictions
on Sun Life (UK) from applying assets attributable to its long-term insurance
business for purposes other than its long-term business.

Margin of Solvency

The FSA requires that insurance companies authorized under the FSM Act
maintain a required margin of solvency, the calculation of which for any
particular insurance company depends upon the type and amount of insurance
business a company writes. Failure to maintain the margin required is one of
the grounds on which the FSA may exercise its wide powers of intervention
provided for in the FSM Act. In addition, the IPRU(INS) also sets out
requirements which implement the European directive on the supplementary
supervision of insurance undertakings in insurance groups (98/78/EC) (the
Insurance Groups Directive). These include the following: (i) a group-wide
solvency calculation which is designed to eliminate double-gearing, or the
use of the same capital to cover different risks within an insurance group;
(ii) a solvency margin calculation at the level of a parent company of a
regulated insurer which is itself either an insurance holding company, a
reinsurer or a non-European Economic Area direct insurer and which has a
subsidiary direct insurer whose head office is in a member state of the
European Economic Area (which is intended to allow supervisory authorities to
assess the potential effect of the parent companys capital structure on the
solvency of the insurance company); and (iii) the monitoring of intra-group
transactions. Currently, Sun Life (UK) meets its solvency margin requirements
in the United Kingdom.

Restrictions on the Distribution of Dividends

Insurance companies in the United Kingdom are subject to the provisions of
the Companies Act 1985governing the payment of dividends, which prevents any
distribution by a company except out of profits available for this purpose. In
addition, under the FSA Handbook, a life insurance company cannot declare a
dividend at any

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time when the assets of the long-term insurance business fund
do not exceed the liabilities of the long-term business. The FSA also requires
that once a previously established surplus in respect of which long-term
policyholders were eligible to participate has been allocated to such
policyholders, an authorized insurance company may not transfer assets
representing a current established surplus unless the relevant minimum of
such surplus (calculated by reference to the percentage of the previously
established surplus which was allocated to such policyholders) has been
allocated to those policyholders or certain regulatory notification
requirements have been satisfied. On this basis, Sun Life (UK) is currently
prohibited from transferring any assets maintained in the account for participating policies to its shareholders and can only pay
dividends out of non-participating surplus once this has been transferred from
the long-term fund to the shareholders fund after the annual valuation.

Financial Services Compensation Scheme

The Financial Services Compensation Scheme (administered by the Financial
Services Compensation Scheme Limited) established under the FSM Act, provides
for the protection of certain individual policyholders in the United Kingdom
who may be affected by the inability of insurance companies who carry on
insurance business in the United Kingdom to meet their liabilities.

The Financial Services Compensation Scheme is funded by statutory levies
on authorized insurance companies. Separate levies are imposed on long-term
and general insurance business.

Intervention

The FSA has extensive powers to intervene in the affairs of an authorized
insurance company. These include the power to fine the insurance company and
to vary or cancel its permission to carry on regulated activities in the United
Kingdom, to require information or documents and to investigate the business of
the insurance company and to require the company to take appropriate actions in
order to satisfy required threshold conditions for authorization.

Reform Proposals

The regulation of the insurance industry in the United Kingdom is in the
process of undergoing significant changes. In particular, the FSA is currently
engaged in a number of regulatory work streams to achieve a new risk based
cross sectoral prudential regulatory framework which includes enhanced
individual capital adequacy standards for long-term insurance companies, and,
in particular, a realistic approach to assessing the capital adequacy of an
insurance companys participating business. In addition to these reforms, the
FSA is in the process of reviewing the governance of participating business,
and is concerned with promoting the sound management of authorized firms. In
line with these reforms, Sun Life (U.K.) will publish a Principles and
Practices of Financial Management for both of its participating funds from
April 1, 2004. Consideration is also being given to the appropriate ongoing
governance model.

Other Jurisdictions

In each of the countries in which subsidiaries or joint ventures of Sun
Life Financial operate, local regulatory authorities supervise and monitor
their business and financial condition. In a number of countries, certain
insurance subsidiaries or joint ventures are required to meet specific minimum
working and regulatory capital requirements.

RISK FACTORS

The following risk factors should be considered in conjunction with the
other information included in this AIF and in the documents incorporated by
reference in and forming part of this AIF. In particular, please see the
discussion of Sun Life Financials risk management framework described on pages
36 to 39 of SLF Inc.s 2003 Managements Discussion and Analysis.

The following risks affect one or more of Sun Life Financials reportable
business segments.

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Investigations into U.S. Investment Industry

Sun Life Financials and, in particular, MFS reputation could suffer
materially as a result of the issues related to the investigations into the
U.S. investment industrys practices. Sun Life Financials and MFS business is
based on public trust and confidence and any damage to that trust and
confidence could cause customers not to buy, or to redeem, Sun Life Financials
or MFS products.

As part of the terms of settlement with the NYAG, MFS has agreed to reduce
fees on the funds it advises by approximately US$25 million annually over the
next five years. This fee reduction will reduce the fee income generated by MFS from its current assets under management and thereby have
an adverse effect on Sun Life Financials results of operations. In addition,
the elimination of directed brokerage and soft dollar arrangements may have an
adverse effect Sun Life Financials ability to attract and retain assets from
investors which may in turn reduce Sun Life Financials earnings.

MFS and other subsidiaries of Sun Life Financial continue to be under
regulatory investigation in connection with market timing related issues and
directed brokerage and revenue-sharing arrangements with distributors, and Sun
Life Financial is also cooperating with the SEC in its requests for information
related to variable annuity practices. The outcome of these investigations is
not yet determinable and may result in sanctions, compensation payments or
other financial penalties.

Investors in MFS funds, including those invested through one of Sun Life
Financials insurance products, may chose to redeem their investments from
funds or products managed by MFS.

Since December 2003, Sun Life Financial and MFS, along with certain MFS
funds and trustees who serve on the Board of Trustees of these MFS funds, have
been named as defendants in purported class action lawsuits filed in the United
States seeking damages of unspecified amounts. The lawsuits were purportedly
filed on behalf of people who purchased, owned and/or redeemed shares of MFS
funds during specified periods. The suits allege that certain defendants
permitted market timing and late trading in the MFS funds which allegedly
caused financial injury to the funds shareholders. All of these lawsuits seek
an unspecified amount of damages. The defendants are reviewing the allegations
and will respond appropriately. Additional lawsuits based upon similar
allegations may be filed in the future. Although it is expected that the
payments required under the terms of the settlement with the Regulators will
largely mitigate any damages payable under the class action lawsuits initiated
in respect of these matters, Sun Life Financial cannot predict the outcome of
these actions with certainty and is accordingly unable to determine the total
potential impact that they may have on Sun Life Financials results of
operations, financial position and cash flows.

Product Guarantees

Certain of Sun Life Financials variable annuity products sold in the
United States and Canada contain guarantees upon death, maturity or
annuitization, where the guarantee may vary with, or may be triggered by, the
market performance of the underlying funds Although Sun Life Financial has
entered into various reinsurance arrangements with respect to these products
(whereby Sun Life Financial has ceded certain risk to other insurance
companies), has economic hedging programs in place, and has diversified its
exposure to market changes in either direction, if a significant market shift
is experienced within Sun Life Financials book of business, these guarantees
could have an adverse effect on Sun Life Financials financial position and
results of operations.

Sun Life Financial has also assumed some risk, through reinsurance
transactions, with respect to certain variable annuity policies issued in the
United States by other insurance companies that contain guarantees upon death
or annuitization, where the guarantee may vary with, or be triggered by, the
market performance of the underlying funds. While Sun Life Financial has
established a hedging program for these reinsured policies and during 2003
strengthened reserves related to these guarantees to the maximum level
permitted by actuarial standards and practices in Canada, these guarantees
could have an adverse effect on Sun Life Financial, if a significant market
shift is experienced in these reinsurance policies.

Interest Rate Risk

Movements in interest rates create several interest rate risks for Sun
Life Financials protection business and the fixed annuity portion of the
wealth management business.

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Many of Sun Life Financials annuity products contain explicit or implicit
guarantees and, if long-term interest rates fall below these guaranteed rates,
Sun Life Financial may be required to increase reserves against losses, thereby
adversely affecting its results of operations. Interest rate changes can also
cause compression of net spread between interest earned on investments and
interest credited, thereby adversely affecting Sun Life Financials results of
operations. Rapid declines in interest rates may result in, among other things,
increased asset calls, mortgage prepayments or policy withdrawals and
reinvestment at significantly lower yields, which could adversely affect
earnings. Interest rate changes can also produce an unanticipated increase in
transfers to separate account (variable) options or surrenders, which may force
Sun Life Financial to sell investment assets at a loss in order to fund such transfers or surrenders and accelerate recognition of
expenses related to the acquisition of fixed annuity products.

Similar risks exist in certain protection products. Interest-sensitive
universal life products typically contain an explicit interest rate guarantee.
In addition, some universal life products contain secondary guarantees under
which cost of insurance charges are guaranteed at certain levels, or coverage
is maintained in force so long as a specified minimum premium is paid, even if
the account value is depleted. The value of such guarantees increases as
interest rates decline.

Credit Risk

The capital and earnings of Sun Life Financial are affected by, among
other things, the investment results, carrying value and levels of allowances
for losses on, and write-downs of, Sun Life Financials investment portfolio.
The market value of Sun Life Financials investments varies depending upon
prevailing economic and market conditions, including interest rates and the
strength of the stock markets. A pronounced and sustained decline in the
Canadian or United States stock markets would reduce the market value of Sun
Life Financials general fund equity portfolio.

Sun Life Financial is also subject to credit risk relating to the
uncertainty associated with the continued ability of debtors to make timely
payments pursuant to the contractual terms underlying such loans. Although Sun
Life Financials bonds are mostly investment-grade and Sun Life Financial
believes that it maintains prudent issuer diversification, a major economic
downturn could result in issuer defaults.

Asia

The future success of Sun Life Financials businesses in Asia depend in
large part on Sun Lifes ability to compete in the disparate markets of Asia
which requires appropriate resources, skills, incentives and organization to
execute the business strategy. The risk includes resource availability, depth,
and retention, key person concentration, project implementation and succession
planning. In addition, the joint venture operations in India and China have
the risks inherent in joint venture relationships.

Regulatory and Related Matters

Both the wealth management business and the protection business are
subject to extensive levels of regulation. Changes in laws or regulations, or
in government policies, could materially and adversely affect the business and
operations of Sun Life Financial.

In particular, insurance regulators in Canada and the United States have
given greater emphasis in recent years to the investigation of allegations of
improper life insurance pricing and sales practices by life and annuity
insurers, including churning, inappropriate sales and other misleading
practices by insurance agents. In the United States, state insurance regulatory
authorities regularly make inquiries, hold investigations and administer market
conduct examinations with respect to insurers compliance with applicable
insurance laws and regulations.

Sun Life Financial is required to maintain adequate regulatory capital in
relation to its operations. Currently, Sun Life Financials capital ratios are
in excess of those required by OSFI. These ratios can be adversely affected by
changes in business conditions, such as declines in the stock market or
interest rate spreads.

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Effect of Changes in Market Conditions

Sun Life Financial derives a substantial portion of its revenue from fees
generated by its wealth management business including, in particular, MFS. Sun
Life Financial intends to continue expanding its wealth management business in
the future. The fees earned from the wealth management business are generally
assessed as a percentage of assets under management and therefore vary directly
with the value of such assets. Accordingly, fluctuations in the market value of
such assets may result in fluctuations in Sun Life Financials wealth
management revenue.

Sun Life Financial is exposed to certain equity-market related risks
associated with its equity-indexed annuity products. These annuities typically
provide for the crediting of interest at rates related to the
performance of various equity indices. If there is a substantial decline in the
applicable index, the attractiveness of equity-indexed annuity and variable
annuity products to customers will be diminished, and holders of equity-indexed
annuities may seek to surrender their policies prior to the end of the product
term. Equity-indexed annuity policies typically provide for early surrender
charges and restrictions. An increase in surrenders in such annuities, however,
could have an adverse effect on Sun Life Financial. In addition to the risk of
surrenders, Sun Life Financial bears the risk that the spread between the
investment income earned on its investments and the interest credited declines
below profitable levels.

Dependence on Third Party Relationships

Sun Life Financial distributes its wealth management and protection
products through a variety of distribution channels, including broker-dealers,
banks, wholesalers, its own internal sales force and other third party
marketing organizations. An interruption in Sun Life Financials continuing
relationship with certain of these third parties or the impairment of their
reputation or creditworthiness could materially and adversely affect Sun Life
Financials ability to market its products. There can be no assurance that Sun
Life Financial would be able to find alternate sources of distribution in a
timely manner. The financial strength ratings of Sun Life Financials insurance
company subsidiaries are a key competitive factor in marketing products and in
attracting and retaining agents. Should the financial strength rating of one or
more of those insurance subsidiaries decline, Sun Life Financials competitive
position would be negatively impacted.

Reinsurance Operations

Certain of the arrangements in Sun Life Financials run-off reinsurance
operations, including the Unicover-related treaties, are subject to litigation
or arbitration. In particular, Sun Life Financial has been engaged in
arbitration proceedings in the United States and in England with certain of the
companies that have contracts to provide reinsurance to Sun Life Financial. In
late 2003, Sun Life Financial initiated arbitration proceedings against its
largest retrocessionaire. Those companies are disputing their obligation to
provide retrocession cover to Sun Life Financial under their respective
contracts of reinsurance. Other reinsurers of Sun Life Financial may institute
similar proceedings. The liabilities of Sun Life Financial under these
arrangements are subject to measurement uncertainty, and therefore uncertainty
about the ultimate level of liability, but they are not expected to have a
material adverse effect on Sun Life Financials consolidated financial
position. The matters related to these reinsurance arrangements are also
discussed in Note 21 of SLF Inc.s 2003 Consolidated Financial Statements.

Currency Exchange Rate Fluctuations

As an international provider of financial services, Sun Life Financial
operates in a number of countries, with revenues and expenses denominated in
several local currencies. In each territory in which it operates, it is Sun
Life Financials policy to invest in sufficient assets to match its aggregate
liabilities and minimum surplus requirements in that territory. This approach
provides an operational hedge against disruptions in local operations caused by
currency fluctuations. However, changes in exchange rates can affect Sun Life
Financials net income and surplus when results in local currency are
translated into Canadian dollars. Strengthening of the Canadian dollar against
the U.S. dollar and the pound sterling could adversely affect Sun Life
Financials reported net income.

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Competition

The wealth management and protection businesses in which Sun Life
Financial engages are highly competitive. Sun Life Financials products compete
not only with those offered by other insurance companies, but with those
offered by mutual fund companies, banks, financial planners and other
providers. Frequently, competition is on the basis of pricing and service
provided to distribution channels. Sun Life Financial has many large and
well-capitalized competitors with access to significant resources. Among other
things, the competition in these industries throughout the world has resulted
in a trend towards the global consolidation of the financial services industry
including, in particular, the insurance, banking and investment management
sectors. To the extent that consolidation continues, Sun Life Financial will
increasingly face more competition from large, well capitalized financial
services companies in each jurisdiction in which it operates. There can be no
assurance that this increasing level of competition will not adversely affect
Sun Life Financials businesses in certain countries. Sun Life Financial
reports its results based on Canadian generally accepted accounting principles
(Canadian GAAP). Some of the Companys competitors report on different accounting
bases, such as U.S. GAAP. Because of differences in the incidence of earnings
between different accounting bases, the Company may be at a disadvantage
compared to some of its competitors in certain of its businesses

In the United States, national banks, with their pre-existing customer
bases for financial services products, may, in the future, provide increased
competition to insurers, including Sun Life Financial, as a result of, among
other things, the Gramm-Leach-Bliley Act of 1999, which removed restrictions on
bank affiliations with insurers. With the passage of this legislation, among
other things, bank holding companies may acquire insurers, and insurance
holding companies may acquire banks. In Canada, the federal government is
currently reviewing its policies concerning bank and insurance affiliations and
the distribution of insurance products through bank branches and may elect to
remove the current restrictions on such affiliations or distribution. The
ability of banks to affiliate with insurance companies or, in Canada, to
distribute insurance products through their branches, may materially adversely
affect all of Sun Life Financials products by substantially increasing the
number and financial strength of potential competitors.

Risks Relating to Canadian Operations

The following risk relates to and may only impact the earnings produced by
Sun Life Financials Canadian operations. Sun Life Financial has substantially
completed the integration of Clarica with its existing Canadian operations.
While management attention has been diverted to integration, product
development has lagged and, in some instances, service levels have been
impacted. To maintain and grow its position in the market, Sun Life Financials
Canadian operations will refocus their attention on operational, business
growth and strategic issues. There is a risk that these efforts may not be
successful which could adversely impact the Companys existing business and
competitive position in the market place.

Risks Relating to U.S. Operations

The following risks relate to and may impact the earnings produced by Sun
Life Financials U.S. operations. Sun Life Financials U.S. annuities business
has been undergoing a number of challenges related to the current low interest
environment. In particular, the U.S. annuities business was adversely affected
as the net spread between the interest earned on investments and interest
credited on fixed annuities contracts was reduced. Sun Life Financials U.S.
annuities business is subject to OSFIs requirements related to capital. Since
many of Sun Life Financials U.S. competitors operate under different
regulatory regimes and are subject to lower capital requirements, Sun Life
Financials U.S. operations are at a competitive disadvantage. Sun Life
Financial reports its results based on Canadian generally accepted accounting
principles (Canadian GAAP).The Companys primary competitors report on a U.S.
GAAP basis. Because of differences in the incidence of earnings between
Canadian GAAP and U.S. GAAP, the Company may be at a disadvantage compared to
its primary competitors in certain of its businesses.

Risks Relating to U.K. Operations

The following risks relate to and may only impact the earnings produced by
Sun Life Financials United Kingdom operations. In recent years, Sun Life
Financials United Kingdom wealth management business has experienced
significant losses arising out of certain sales practices and guaranteed
annuity products. In 2001, Sun Life Financial stopped selling new individual
insurance in the United Kingdom, but it continues to manage its

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existing block of business. Sun Life Financials United Kingdom operations continue to be
subject to regulatory overview in the United Kingdom, including reviews of past
business sold, and the Company has regularly engaged in discussions with United
Kingdom regulators with respect to these and other matters. Sun Life
Financials United Kingdom operations may be subject to censure if it fails to
satisfy the FSA as to the scope and conduct of these reviews.

Sun Life Financials past business sold includes a variety of endowment
products in the United Kingdom. Endowment policies are sometimes sold to
provide customers with a method of repaying mortgage debt at the end of a
mortgage term. There can be no assurance that United Kingdom regulators will
not, in the future, require providers of endowment products to bear some or all
of the additional costs required to ensure that such policies meet their target
mortgage debts.

Sun Life Financial in the United Kingdom has outsourced the administration
of both its individual business and its group business as part of the
repositioning of the business as a run-off business. There are risks inherent
in outsourcing arrangements. The outsourcing contracts are monitored and
controlled by a dedicated team in the United Kingdom operation, whose role
includes the application of appropriate mitigation actions for these risks.

ADDITIONAL INFORMATION

Additional information including directors and officers remuneration and
indebtedness, principal holders of SLF Inc.s securities, securities authorized
for issuance under equity compensation plans and interests of informed persons
in material transactions, if applicable, is contained in SLF Inc.s information
circular for its most recent annual meeting of security holders that involved
the election of directors.

Additional financial information is provided in SLF Inc.s Managements
Discussion and Analysis and Consolidated Financial Statements for its most
recently completed financial year.

When SLF Inc. is in the course of a distribution pursuant to a short form
prospectus or a preliminary short form prospectus has been filed in respect of
a distribution of its securities, SLF Inc. will provide to any person one copy
of each of the following documents (the Disclosure Documents) upon request:
(i) this AIF and any document or the pertinent pages of any document
incorporated by reference herein, (ii) the comparative consolidated financial
statements of SLF Inc. for the most recently completed financial year with the
accompanying auditors report, (iii) any interim consolidated financial
statements of SLF Inc. subsequent to the financial statements for its most
recently completed financial year, (iv) SLF Inc.s most recent proxy circular
and (v) any other documents incorporated by reference into a preliminary short
form prospectus or a short form prospectus. When SLF Inc. has not filed a
preliminary short form prospectus or is not in the course of a distribution, it
shall provide copies of any of the foregoing Disclosure Documents subject to
its right to require persons who are not security holders to pay a reasonable
charge. Requests for such copies may be sent to the Corporate Secretary of SLF
Inc. at 150 King Street West, 6th Floor, Toronto, Ontario, Canada M5H 1J9. The
foregoing Disclosure Documents and other additional information related to Sun
Life Financial is accessible at SLF Inc.s Web site, www.sunlife.com.

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