exv99w1

Exhibit 99.1

Sun Life Financial reports
record quarterly earnings of $541 million
Return on Equity increases to 14.4%

Toronto – October 26, 2006 – Sun Life Financial Inc. (TSX/NYSE: SLF) today announced record earnings of $541 million or $0.94 per share for the quarter ended September 30, 2006. Earnings per share (EPS) were up 14.6% (19.5% in constant currency) over operating EPS¹ in the third quarter of 2005. Return on equity (ROE) grew to 14.4% for the quarter, up from operating ROE ¹ of 13.1% in the third quarter of 2005.

“Each of our geographic markets produced impressive earnings growth this quarter, once again demonstrating the strength of our diversified earnings platform,” said Donald A. Stewart, Chief Executive Officer. “We also added to the strength of our management team this past quarter with the addition of three high caliber senior executives: Dean Connor, Rick McKenney and Stephan Rajotte,” he said.

Paul W. Derksen, Executive Vice-President and Chief Financial Officer, noted, “Strong earnings and continued effective capital management contributed to the 14.6% increase in earnings per share and the 130 basis points improvement in return on equity over operating results in the third quarter of last year.”

Financial Highlights

•		ROE increased 270 basis points to 14.4% from 11.7% in the third quarter of 2005. Operating ROE of 14.4% (14.7% in constant currency) increased 130 basis points (160 basis points in constant currency) from 13.1% in the third quarter of 2005.

•		EPS for the quarter increased 27% compared to the third quarter of 2005. Operating EPS of $0.94 per share ($0.98 per share in constant currency) increased 14.6% (19.5% in constant currency) over operating EPS in the third quarter of 2005. The strengthening of the Canadian dollar reduced earnings by $20 million or 4 cents per common share in the third quarter of 2006.

•		Sun Life Financial declared $172 million in common shareholder dividends during the quarter, up 18% per share over the third quarter of 2005, and representing a payout ratio of 32%.

•		Sun Life Financial repurchased approximately 1.9 million common shares for $85 million this quarter, for a total share buyback of $484 million in the first nine months of this year.

•		Sun Life Financial completed a domestic public offering in October of $300 million of Non-Cumulative Preferred Shares, Series 4 at $25 per share yielding 4.45% annually.


¹		Operating EPS and ROE in the third quarter of 2005 excluded a $51 million after-tax charge to earnings related to the sale of Administradora de Fondos de Pensiones Cuprum S.A. Including this charge, EPS and ROE this quarter increased by 27% and 270 basis points, respectively, over the third quarter of 2005.

Third Quarter 2006/ sunlife.com 1

Business Highlights

During the third quarter of 2006, the Company performed strongly in each of its markets and continued to execute on its growth and distribution expansion strategies.

•		Birla Sun Life Insurance Company exceeded its year-end target of 20,000 advisors as the direct sales force in India grew to 21,500 advisors in 116 branches serving 95 cities.

•		The growth in the Birla Sun Life direct sales force contributed to a 61%² growth in agency sales in India during the first nine months of this year.

•		In China, sales grew by 149% over the third quarter of 2005. Sun Life Everbright Life Insurance Company opened three new sales offices in Zhejiang province during the third quarter of 2006.

•		Assets under management (AUM) at Sun Life Financial were over C$400 billion at September 30, 2006, driven in part by the US$7 billion increase during the quarter at MFS, where AUM reached a record US$175 billion.

•		MFS’s pre-tax operating profit margin ratio increased to 30% in the third quarter of 2006 from 22% in the third quarter of 2005.

•		Sun Life Financial announced on October 23, 2006 that it had completed its assessment of strategic alternatives for MFS and that it will continue to own and invest in MFS under the current ownership structure.

•		Sun Life Financial Canada’s Individual Life market share³ reached 13.6% for the quarter ended June 30, 2006 on the strength of continued growth in the wholesale channel. Wholesale life and health sales in the third quarter of 2006 increased 33% compared to the third quarter of 2005. Sun Life Financial Canada also announced in October that it is now offering the highest amount of individual life coverage in Canada – up to $100 million.

•		Group Benefits net sales in Canada increased by 33% over the third quarter of 2005 with the continued expansion in the medium-sized case market.

•		Sun Life Financial Canada’s Group Retirement Services continued to lead the market with asset retention levels of four times those of its closest competitor ³for the twelve months ended June 30, 2006.

•		Sun Life Financial U.S. gross domestic variable annuity sales of US$404 million in the third quarter of 2006 increased 16% compared to the third quarter of 2005.

•		Individual Life insurance sales from Sun Life Financial U.S. continued to be strong, increasing more than 300% over the third quarter of 2005 with robust growth in both individual and corporate segments and in both domestic and offshore markets.

•		Sun Life Financial U.S. Group Life & Health business in-force increased by 18% in the third quarter of 2006 compared to the same period a year ago on strong business growth, including increased sales through Medical Group Insurance Services, Inc.


²		All figures shown in the Business Highlights are in local currency.

³		Source: LIMRA; market share information is one quarter in arrears.

Third Quarter 2006 / sunlife.com 2

•		Sun Life Financial has been named one of Canada’s Top 100 Employers for 2007 by Mediacorp Canada Inc. for the fourth year in the past five. This coveted recognition places Sun Life Financial, the only life insurer on the list, among the leading organizations in the country in attracting and retaining the best employees. Top 100 recognition is a tribute to our employees, who make this a great place to work through teamwork and collaboration, their generous donation of time and money to community causes, and through pride in the Company and in their work.

•		Sun Life Financial appointed Dean Connor as Executive Vice-President, Richard P. McKenney as Executive Vice-President and Stephan Rajotte as President, Sun Life Financial Asia in August. Mr. McKenney will assume the role of Chief Financial Officer upon Paul W. Derksen’s retirement in 2007.

Use of Non-GAAP Financial Measures

Management evaluates the Company’s performance on the basis of financial measures prepared in accordance with Canadian generally accepted accounting principles (GAAP), including earnings, EPS and ROE. Management also measures the Company’s performance based on certain non-GAAP measures, including operating earnings, operating EPS, operating ROE, ROE for business groups, pre-tax operating profit margin ratios and financial performance measures prepared on a constant currency basis. Information concerning these non-GAAP financial measures and reconciliations to GAAP measures are included in the Company’s annual and interim Management’s Discussion and Analysis and its Supplementary Financial Information packages that are available in the Investor Relations – Financial Publications section of Sun Life Financial’s website, www.sunlife.com.

The financial results presented in this document are unaudited.

Analysts’ Conference Call

The Company’s third quarter 2006 financial results will be reviewed at a conference call today at 4:00 p.m. ET. To listen to the call via live audio webcast and to view the presentation slides, please visit our website and double click the Q3 Results link from the homepage 10 minutes prior to the start of the presentation. A link to our webcast page, where you can access the webcast, will be provided along with links to related information. The webcast and presentation will be archived on our website following the event.

Sun Life Financial

Sun Life Financial is a leading international financial services organization providing a diverse range of wealth accumulation and protection products and services to individuals and corporate customers. Chartered in 1865, Sun Life Financial and its partners today have operations in key markets worldwide, including Canada, the United States, the United Kingdom, Ireland, Hong Kong, the Philippines, Japan, Indonesia, India, China and Bermuda. As of September 30, 2006, the Sun Life Financial group of companies had total assets under management in excess of $400 billion.

Sun Life Financial Inc. trades on the Toronto (TSX), New York (NYSE) and Philippine (PSE) stock exchanges under ticker symbol SLF.

Note to Editors: All figures shown in Canadian dollars unless otherwise noted.


Media Relations Contact:		Investor Relations Contact:
Susan Jantzi		Kevin Strain
Manager, Media Relations		Vice-President, Investor Relations
Tel: 519-888-3160		Tel: 416-204-8163
susan.jantzi@sunlife.com		investor.relations@sunlife.com

Third Quarter 2006 / sunlife.com 3

Management’s Discussion & Analysis

Management’s Discussion & Analysis

for the period ended September 30, 2006
Dated October 26, 2006

Earnings and Profitability

FINANCIAL SUMMARY
Unaudited



	Quarterly Results										Year to Date
	Q3/06		Q2/06		Q1/06		Q4/05		Q3/05		2006		2005
Revenues ($mm)		6,604		6,231		5,315		5,338		5,504		18,150		16,580

Common Shareholders’ Net Income ($mm)		541		512		491		478		430		1,544		1,365
Operating Earnings¹($mm)		541		512		493		490		481		1,546		1,416

Earnings per Common Share (EPS) ($)		0.94		0.88		0.84		0.82		0.74		2.67		2.32
Operating EPS¹($)		0.94		0.88		0.85		0.84		0.82		2.67		2.40
Fully Diluted Operating EPS¹($)		0.93		0.88		0.84		0.83		0.82		2.65		2.40

Return on Common Equity (ROE) (%)		14.4		13.6		13.1		13.0		11.7		13.7		12.6
Operating ROE¹(%)		14.4		13.6		13.2		13.3		13.1		13.7		13.0

Average Common Shares Outstanding (mm)		574.2		578.8		581.8		582.8		584.2		578.2		587.8
Closing Common Shares Outstanding (mm)		573.0		575.3		580.9		582.0		582.9		573.0		582.9

S&P500 Index (daily average)		1,287		1,282		1,283		1,232		1,223		1,284		1,199
S&P500 Index (close)		1,336		1,270		1,295		1,248		1,229		1,336		1,229

Sun Life Financial Inc.⁵ reported record common shareholders’ net income of $541 million for the quarter ended September 30, 2006, up $111 million from $430 million in the third quarter of 2005. The increase in common shareholders’ net income was primarily due to stronger Group Benefits results in Sun Life Financial Canada, increased earnings from improved equity markets, the contribution from the CMG Asia⁶ acquisition and the absence of a charge of $51 million relating to the sale of Administradora de Fondos de Pensiones Cuprum S.A. (Cuprum) taken in the third quarter of 2005. The strengthening of the Canadian dollar reduced earnings in the third quarter of 2006 by $20 million or $0.04 per common share. ROE for the third quarter of 2006 was 14.4% (14.7% in constant currency) compared with 11.7% for the third quarter of 2005. The 270 basis point improvement was the result of improved earnings, the absence of the Cuprum charge and the repurchase of common shares. EPS were $0.94, 27% higher than the $0.74 reported in the prior year.

Operating ROE of 14.4% for the quarter was up from operating ROE of 13.1% in the third quarter of 2005. Operating EPS of $0.94 ($0.98 in constant currency) for the quarter were up 14.6% (19.5% in constant currency) over operating EPS of $0.82 in the third quarter of 2005.


¹		Operating earnings, operating EPS and operating ROE exclude the charge of $51 million related to the sale of Administradora de Fondos de Pensiones Cuprum S.A. (Cuprum) taken in the third quarter of 2005 and the after-tax charges of $12 million and $2 million for the integration of CMG Asia taken in the fourth quarter of 2005 and the first quarter of 2006 respectively. See “Use of Non-GAAP Financial Measures”.

⁵		Or together with its subsidiaries and joint ventures “the Company” or “Sun Life Financial”.

⁶		CMG Asia Limited and CommServe Financial Limited, which were acquired in October 2005, are collectively referred to as CMG Asia.

Third Quarter 2006 / sunlife.com 4

Management’s Discussion & Analysis

The Company reported a $130 million increase in operating earnings for the first nine months of 2006 compared to the same period in 2005 due to stronger Group Benefits results in Sun Life Financial Canada, increased earnings from improved equity markets, improved earnings in Corporate and $35 million in Sun Life Financial Asia from the CMG Asia acquisition. As a result of the increase in operating earnings and repurchase of common shares, operating EPS grew from $2.40 per share for the nine months of 2005 to $2.67 per share in the nine months of 2006, an 11.3% (16.3% in constant currency) increase. Operating ROE increased 70 basis points (130 basis points in constant currency) from 13.0% for the first nine months of 2005 to 13.7% for the first nine months of 2006.

Common shareholders’ net income of $1,544 million for the first nine months of 2006 was $179 million higher than in the first nine months of 2005 and EPS of $2.67 for the first nine months of 2006 was 15.1% higher than EPS of $2.32 in the first nine months of 2005.

Performance by Business Group

The Company manages its operations and reports its results in five business segments: Sun Life Financial Canada (SLF Canada), Sun Life Financial U.S. (SLF U.S.), MFS Investment Management (MFS), Sun Life Financial Asia (SLF Asia), and Corporate. Additional details concerning the segments and the purpose and use of the segmented information are outlined in Note 4 to Sun Life Financial Inc.’s third quarter 2006 Interim Consolidated Financial Statements, which are prepared in accordance with Canadian generally accepted accounting principles (GAAP). Where appropriate, information on a business segment has been presented both in Canadian dollars and the segment’s local currency to facilitate the analysis of underlying business trends. ROE for the business segments is a “Non-GAAP” financial measure as outlined under “Use of Non-GAAP Financial Measures”.

SLF Canada


	Quarterly Results										Year to Date
	Q3/06		Q2/06		Q1/06		Q4/05		Q3/05		2006		2005
Revenues ($mm)		2,335		2,223		2,255		2,288		2,120		6,813		6,370

Common Shareholders’ Net Income ($mm)
Individual Insurance & Investments		123		156		150		131		128		429		441
Group Benefits		85		65		37		85		69		187		161
Group Wealth¹		32		43		47		38		31		122		107

Total		240		264		234		254		228		738		709

ROE (%)		13.3		15.0		13.7		15.1		13.5		14.0		14.3


¹		Group Wealth comprises Group Retirement Services and Institutional Investments.

SLF Canada’s earnings increased by $12 million, or 5.3%, compared to the third quarter of 2005. SLF Canada benefited from business growth in each of its business units and strong investment results in Group Benefits, partially offset by less favourable investment experience in Individual Insurance & Investments and Group Wealth.

•

Individual Insurance & Investments earnings for the third quarter of 2006 decreased by 4% over the third quarter of 2005 as business growth was more than offset by less favourable investment experience in Individual Wealth and new business strain.

Third Quarter 2006 / sunlife.com 5

Management’s Discussion & Analysis

•		Group Benefits earnings for the third quarter of 2006 increased by 23% over the third quarter of 2005 due to the reserve impact of cash-flow methodology refinements of $18 million and strong investment results, partially offset by unfavourable morbidity experience of $15 million.

•		Group Wealth earnings for the third quarter of 2006 increased slightly over the third quarter of 2005 due to higher income on increased assets under management offset by less favourable investment experience.

Nine-month earnings increased by $29 million, or 4.1%, over the same period in 2005 due to higher Group Wealth earnings from better mortality experience and asset growth, higher Group Benefits earnings from strong investment results and higher CI Financial (CI) earnings, partially offset by $19 million from a return to more normal annuity mortality experience in Individual Insurance & Investments following unusually favourable experience in the same period in 2005.

SLF U.S.


	Quarterly Results											Year to Date
	Q3/06		Q2/06			Q1/06		Q4/05		Q3/05		2006		2005
Revenues (US$mm)		2,804		2,608			1,734		1,699		2,020		7,146		5,840
Revenues (C$mm)		3,143		2,929			2,001		1,994		2,443		8,073		7,167

Common Shareholders’ Net Income (US$mm)
Annuities		88		64			85		84		78		237		184
Individual Life		22		(4	)		23		34		21		41		66
Group Life & Health		11		20			—		10		10		31		31

Total (US$mm)		121		80			108		128		109		309		281

Total (C$mm)		136		90			125		149		133		351		346

ROE (%)		13.9		9.4			12.9		15.6		13.6		12.1		12.0

Earnings for SLF U.S. increased C$3 million, or 2.3%, compared to the third quarter of 2005. The appreciation of the Canadian dollar against the U.S. dollar reduced earnings in SLF U.S. by C$10 million compared to the third quarter of 2005.

In U.S. dollars, earnings were US$121 million, US$12 million, or 11%, higher than in the third quarter of 2005. Earnings increased this quarter as a result of the positive effect of equity market movements and improved spread income in Annuities, the favourable impact of the lower cost funding solution for universal life product reserves in Individual Life, and increased proportion of earnings from lower tax jurisdictions. These increases were partially offset by new business strain and the reserve impact of increased reinsurance rates on new business in Individual Life. Equity markets increases over the course of the past few years have steadily reduced the exposure to guaranteed variable annuity benefits and, accordingly, future equity market improvements are expected to have a less pronounced impact on Annuities earnings.

•

Annuities earnings increased US$10 million compared to the third quarter of 2005 due to the positive impact of equity market movements of US$9 million and improved spread income of US$6 million, partially offset by losses at Retirement Services, Inc. (RSI). SLF U.S. issued US$900 million of funding agreement backed medium-term notes (MTNs) in the third quarter of 2006 compared to US$300 million of MTNs issued in the third quarter of 2005.

Third Quarter 2006 / sunlife.com 6

Management’s Discussion & Analysis

•		Individual Life earnings increased slightly compared to the third quarter of 2005 due to the favourable impact of the lower cost funding solution for universal life product reserves and increased proportion of earnings from lower tax jurisdictions, partially offset by new business strain and the reserve impact of increased reinsurance rates on new business.

•		Group Life & Health earnings were up slightly compared to the third quarter of 2005 as improved claims experience was offset by increased infrastructure investment.

Nine-month earnings increased by US$28 million, or 10%, over the same period in 2005 due to increased Annuities earnings of US$53 million partially offset by lower Individual Life earnings of US$25 million. Nine-month Annuities earnings increased compared to the same period in 2005 due to improved fixed spread income of US$34 million and the positive impact of equity market movements of US$32 million. Nine-month Individual Life earnings decreased over the same period in 2005 primarily due to new business strain resulting from increased sales and mix of business and the reserve impact of increased reinsurance rates on new business.

SLF U.S. continued to strengthen its product portfolio in the third quarter of 2006. Annuities introduced an enhanced bonus variable annuity and launched a new fixed index annuity with a unique lifetime income feature. RSI, the SLF U.S. retirement services division, entered into an agreement with Princeton Retirement Group to consolidate investment trading services and to expand its investment options. Individual Life launched its next generation of no-lapse guarantee universal life products.

MFS


	Quarterly Results															Year to Date
	Q3/06			Q2/06			Q1/06			Q4/05			Q3/05			2006			2005
Revenues (US$mm)		352			362			360			354			342			1,074			1,006
Revenues (C$mm)		395			407			416			416			412			1,218			1,232

Common Shareholders’ Net Income (US$mm)		52			47			45			38			38			144			109
Common Shareholders’ Net Income (C$mm)		58			53			52			45			46			163			134

Pre-tax Operating Profit Margin Ratio		30	%		27	%		26	%		23	%		22	%		28	%		22	%
Average Net Assets (US$B)		170			168			167			158			155			169			149
Assets Under Management (US$B)		175			168			170			162			157			175			157
Net Sales/(Redemptions) (US$B)		(0.1	)		(0.4	)		(0.3	)		1.9			1.4			(0.8	)		5.6
Market Movement (US$B)		6.9			(1.0	)		7.5			2.9			6.3			13.4			5.7

S&P500 Index (daily average)		1,287			1,282			1,283			1,232			1,223			1,284			1,199

Earnings for MFS increased C$12 million, or 26.1%, compared to the third quarter of 2005. The appreciation of the Canadian dollar against the U.S. dollar reduced earnings for MFS by C$4 million compared to the third quarter of 2005.

In U.S. dollars, third quarter earnings were US$52 million, US$14 million, or 37%, higher than in the third quarter of 2005 due to asset growth and cost containment. Average net assets of US$170 billion increased 10% compared to the third quarter of 2005. Total revenues of US$352 million grew by 3% compared to the third quarter of 2005. Advisory revenues for the third quarter increased 10% to US$212 million consistent with asset growth. Other sales and servicing revenues declined for the period due to changes in the retail product mix and the transfer of RSI to SLF U.S.

Management’s Discussion & Analysis

Nine-month earnings of US$144 million increased by US$35 million, or 32%, over the same period in 2005 driven by growth in advisory revenue of US$70 million, slower growth in operating expenses and the transfer of RSI.

Total assets under management at September 30, 2006 were US$175 billion, an increase of US$13 billion for the nine-month period, driven by market appreciation of US$13.4 billion and net managed fund sales of US$3.5 billion partially offset by net retail mutual fund redemptions of US$4.3 billion during the period.

SLF Asia


	Quarterly Results										Year to Date
	Q3/06		Q2/06		Q1/06		Q4/05		Q3/05		2006		2005
Revenues ($mm)		240		259		226		257		152		725		502

Common Shareholders’ Net Income ($mm)		13		31		24		7		10		68		35

ROE (%)		5.2		12.6		10.2		4.3		9.8		9.3		10.8

SLF Asia’s third quarter 2006 revenues increased 58% for the quarter and 44% for the nine-month period over the same periods last year primarily due to the acquisition of CMG Asia and business growth.

Third quarter 2006 earnings of $13 million increased by $3 million, or 30%, over the same period in 2005 primarily due to the CMG Asia acquisition, partially offset by reserve strengthening in Indonesia.

Nine-month earnings of $68 million, after net integration costs of $2 million, increased by $33 million, or 94%, over the same period last year mostly due to the CMG Asia acquisition.

SLF Asia sales momentum continued in the third quarter of 2006, with sales up 53% in Canadian currency over the same period last year. In local currency, Hong Kong sales were up 111% due to the CMG Asia acquisition. In India, Birla Sun Life Insurance Company achieved its year-end target of 20,000 advisors early as the direct sales force in India grew to 21,500 advisors in 116 branches serving 95 cities, contributing to a 61% growth in agency sales during the first nine months of this year. In China, sales grew by 149% over the third quarter of 2005. Sun Life Everbright Life Insurance Company opened three new sales offices in Zhejiang province during the third quarter of 2006. Philippines had a strong third quarter of sales, with individual life and pre-need sales up 76% over last year, while sales in Indonesia were up a strong 65%.

Corporate

Corporate includes the results of SLF U.K., the active Reinsurance business unit and run-off reinsurance as well as investment income, expenses, capital and other items not allocated to Sun Life Financial’s other business groups. Run-off reinsurance is included in Other operations.


	Quarterly Results												Year to Date
	Q3/06		Q2/06		Q1/06		Q4/05			Q3/05			2006		2005
Common Shareholders’ Net Income/(Loss) ($mm)
SLF U.K.		57		48		38		58			48			143		134
Reinsurance		25		24		9		(18	)		(6	)		58		23
Other		12		2		9		(17	)		(29	)		23		(16	)

Total		94		74		56		23			13			224		141

Third Quarter 2006 / sunlife.com 8

Management’s Discussion & Analysis

Third quarter earnings increased by $81 million compared to the third quarter of 2005 due to the absence of a charge of $51 million relating to the sale of Cuprum taken in the third quarter of 2005, increased earnings in SLF U.K. from the reimbursement of certain mortgage endowment costs, net of other provisions, and improved results in Reinsurance from better mortality and the absence of reserve strengthening which occurred in the third quarter of 2005.

Nine-month earnings increased by $83 million compared to the first nine months of 2005 mostly for the same reasons outlined above.

Additional Financial Disclosure

Revenue

Under Canadian GAAP, premium revenue includes annuity premiums, which are excluded as revenue under U.S. GAAP and also for similar products sold by other financial institutions.

Revenues of $6.6 billion in the third quarter of 2006 increased by $1.1 billion over the same period in 2005. The increase was largely due to higher premiums of $871 million, predominantly from annuities and life insurance. Excluding the unfavourable impact of $299 million due to the strengthening of the Canadian dollar against foreign currencies, revenues grew by $1.4 billion.

Premium revenue rose to $4.2 billion, improving by $871 million over the third quarter last year, or by $1.1 billion excluding the unfavourable impact of $195 million due to the strengthening of the Canadian dollar. Life insurance premiums grew by $209 million with increases mainly from SLF U.S. and SLF Asia of $134 million and $60 million, respectively. Hong Kong’s acquisition of CMG Asia accounted for $53 million, or 88%, of SLF Asia’s total life insurance premiums increase. SLF U.S.’s Individual Life boosted premiums by $126 million from the third quarter of 2005 mainly on higher core universal life (UL) premiums.

Annuity premiums of $1.8 billion in the third quarter were up $614 million as compared to the third quarter of 2005 including the negative effect of $114 million from currency rate changes. SLF U.S. issued US$900 million of MTNs this quarter versus last year’s third quarter US$300 million MTN issue. The additional premiums from the MTN issue were partly offset by the $139 million decrease in U.S. annuities premiums, primarily attributable to lower fixed indexed sales.

Third quarter 2006 net investment income of $1.7 billion increased by $235 million from the third quarter of 2005 in spite of the stronger Canadian dollar producing an unfavourable currency effect of $61 million. The gains were mainly from the fluctuations in the equity markets and the absence of the $51 million charge for Cuprum.

Fee income of $724 million in the third quarter of 2006 was up $38 million from the same period in 2005 before the unfavourable currency translation impact of $44 million.

Total revenue of $18.2 billion for the nine months ended September 30, 2006 increased by $1.6 billion compared to the same period in 2005 due to higher premiums of $1.2 billion with the remainder from both higher net investment income and fee income. Total revenues would have been up to $2.4 billion without the negative currency effect of $929 million.

Life insurance premiums contributed $366 million of the overall year-to-date premiums increase as SLF U.S.’s Individual Life Insurance premiums rose by $240 million mainly on higher core UL sales. Health premiums improved by $299 million from last year with $240 million from SLF Canada’s Group Benefits due to new business growth and the termination of a reinsurance agreement. Annuities premiums gained $517 million over last year, including the benefit of an increase of $461 million from SLF U.S. The additional US$900 million from the 2006 MTN issuance was partly reduced by lower U.S. annuities premiums, including the fixed indexed annuities.

Management’s Discussion & Analysis

Cash Flows


	Quarterly Results						Year to Date
($mm)	Q3/06			Q3/05			2006			2005
Cash and cash equivalents, beginning of period		3,581			4,340			2,740			3,748
Cash flows provided by (used in):
Operating activities		1,947			17			3,485			1,845
Financing activities		54			72			312			(205	)
Investing activities		(1,488	)		(697	)		(2,343	)		(1,689	)
Changes due to fluctuations in exchange rates		9			(163	)		(91	)		(130	)

Increase (Decrease) in cash and cash equivalents		522			(771	)		1,363			(179	)

Cash and cash equivalents, end of period		4,103			3,569			4,103			3,569
Short-term securities, end of period		694			2,702			694			2,702

Total cash, cash equivalents and short-term securities		4,797			6,271			4,797			6,271

Net cash, cash equivalents and short-term securities at the end of the third quarter of 2006 decreased by $1.5 billion from the third quarter of 2005 mainly as a result of a net increase in long-term invested assets and the cash used in the acquisition of CMG Asia in the fourth quarter of 2005. Cash flows generated by operating activities increased by $1.9 billion compared to the same period a year ago primarily due to the inflow from the additional sale amount of US$600 million related to the MTN program and the impact from the timing of investment transactions. Cash used in investing activities increased by $791 million over the third quarter in 2005, reflecting a higher level of net purchases of investment assets during this quarter. There was only a slight decrease of $18 million in cash flows produced from financing activities this quarter over the same quarter last year. A $300 million issue of Senior Unsecured 5% Fixed/Floating debentures was completed in July 2006 as compared to the issue of $325 million of preferred shares in July 2005.

The Company had net cash inflows of $1.4 billion in the first nine months of 2006 as compared to a $179 million cash outflow in the comparable period of 2005. Operating activities generated $1.6 billion more in cash flows on a year-to-date basis mainly due to the inflow from the additional sale of US$900 million in MTNs this year and the impact from the timing of investment transactions. Cash used in investing activities increased by $654 million from the nine months of 2005 as a higher level of net purchases in investment assets were made during this year. Financing activities produced a positive cash impact of $517 million over the same period a year ago. The issuances of $1.0 billion fixed/floating debentures and $250 million preferred shares during 2006 were partially offset by the $725 million in preferred shares issued in 2005 for the comparable period.

Risk Management

Sun Life Financial has developed a framework to assist in categorizing, monitoring and managing the risks to which it is exposed. The major categories of risk are credit risk, market risk, insurance risk and operational risk. Operational risk is a broad category that includes legal and regulatory risks, people risks and systems and processing risks.

Through its ongoing risk management procedures, Sun Life Financial reviews the various risk factors identified in the framework and reports to senior management on a monthly basis and to the Risk Review Committee of the Board quarterly. Sun Life Financial’s risk management procedures and risk factors are described in Sun Life Financial Inc.’s Management’s Discussion and Analysis (MD&A) and Annual Information Form (AIF) for the year ended December 31, 2005. Interest rate and equity market sensitivities are disclosed in the annual MD&A, but change as market levels change, new business is added, or as management actions are taken.

Management’s Discussion & Analysis

Outlook

During the past quarter, major North American stock market indices were up and interest rates trended downward. Shorter-term interest rates decreased marginally lower than longer term bond yields, contributing to an inverted yield curve. The Canadian dollar remained strong in comparison to the U.S. dollar through to the end of the quarter.

The Company generally benefits from steady or slowly increasing interest rates from recent levels, particularly in the U.S. fixed annuity and universal life businesses; however, this benefit is partially offset by a flat or inverted yield curve. Declining stock market indices may adversely affect earnings from market-based products and flows in the Company’s asset management businesses. The Company’s earnings will benefit from a reduction in the value of the Canadian dollar versus foreign currencies, most notably the U.S. dollar.

Regulatory and Legal Matters

Sun Life Financial Inc. and certain of its U.S. subsidiaries are cooperating with insurance and securities regulators and other government and self-regulatory agencies in the United States in their investigations and examinations with respect to various issues. Certain of these investigations and examinations may lead to settled administrative actions or enforcement proceedings. While it is not possible to predict the resolution of these matters, management expects that their ultimate resolution will not be material to the Company’s consolidated financial condition or results of operations.

As previously disclosed, Sun Life Financial Inc. and MFS have been named as defendants in multiple lawsuits in U.S. courts relating to the matters that led to the settlements between MFS and U.S. regulators in 2004 and it is not possible to predict the outcome of these actions at this time. Sun Life Financial Inc. and its subsidiaries are also involved in regulatory proceedings and are engaged in various legal actions in the ordinary course of business, which are not expected to have a material adverse effect, individually or in the aggregate, on the Company’s consolidated financial position or results of operations.

Additional information concerning these and related matters is provided in Sun Life Financial Inc.’s annual consolidated financial statements, annual MD&A and AIF for the year ended December 31, 2005. Copies of these documents are available on the Company’s website at www.sunlife.com and at www.sedar.com and www.sec.com.

Use of Non-GAAP Financial Measures

Management evaluates the Company’s performance on the basis of financial measures prepared in accordance with GAAP, including earnings, EPS and ROE. Management also measures the Company’s performance based on certain non-GAAP measures, including operating earnings, and other financial measures based on operating earnings, including operating EPS and operating ROE, that exclude certain significant items that are not operational or ongoing in nature. Management also uses financial performance measures that are prepared on a constant currency basis, which excludes the impact of currency fluctuations. Management measures the performance of its business segments using ROE that is based on an allocation of common equity or risk capital to the business segments, using assumptions, judgments and methodologies that are regularly reviewed and revised by management. Management also monitors MFS’s pre-tax operating profit margin ratio, which excludes certain fee income, as a means of measuring the underlying profitability of that business. Management believes that these non-GAAP financial measures provide information useful to investors in understanding the Company’s performance and facilitate the comparison of the quarterly and full-year results of the Company’s ongoing operations. These non-GAAP financial measures do not have any standardized meaning and may not be comparable with similar measures used by other companies. They should not be viewed as an alternative to measures of financial performance determined in accordance with GAAP. Additional information concerning these non-GAAP financial measures and reconciliations to GAAP measures are included in Sun Life Financial Inc.’s annual MD&A and the Supplementary Financial

Management’s Discussion & Analysis

Information packages that are available in the Investor Relations – Financial Publications section of Sun Life Financial’s website, www.sunlife.com. Operating earnings, operating EPS and operating ROE exclude the charge of $51 million related to the sale of Cuprum taken in the third quarter of 2005 and the after-tax charges of $12 million and $2 million for the integration of CMG Asia taken in the fourth quarter of 2005 and the first quarter of 2006 respectively.

Forward-Looking Statements

Some of the statements contained in this document, including those relating to the Company’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 the Company. These statements are not historical facts but instead represent only the Company’s expectations, estimates and projections regarding future events.

Forward-looking statements 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 Inc. may differ materially from those expressed in these forward-looking statements due to, among other factors, the matters set out under “Risk Factors” in Sun Life Financial Inc.’s AIF and the factors detailed in its other filings with Canadian and U.S. securities regulators, including its annual MD&A, and annual and interim financial statements which are available for review at www.sedar.com.

Factors that could cause actual results to differ materially from expectations include, but are not limited to: external factors, including changes in equity market performance, interest rates, currency exchange rates and government regulations; the amount and composition of assets under management; the management of product pricing; mortality and morbidity rates; expense management; the maintenance of spreads between credited rates and investment returns; surrender and lapse rates; the management of market and credit risks; the management of risks inherent in products with guaranteed benefit options; and the results of regulatory investigations into the practices of the mutual fund, insurance, annuity and financial product distribution industries, including private legal proceedings and class actions that have been commenced or threatened in connection with these practices. The Company 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 report or to reflect the occurrence of unanticipated events, except as required by law.

	(i)		an increase of $10.9 billion from market performance;
	(ii)		continued business growth of $2.6 billion mostly in SLF U.S. investment and Individual Life products; and
	(iii)		an increase of $0.4 billion from a marginal weakening of the Canadian dollar against foreign currencies at the end of the third quarter of 2006.

	(i)		positive market movements of $24.8 billion;
	(ii)		net sales of mutual, managed and segregated funds of $2.6 billion;
	(iii)		an increase of $4.4 billion from the CMG Asia acquisition; partially offset by
	(iv)		a decrease of $9.5 billion from the strengthening of the Canadian dollar against foreign currencies.