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Canadian insurer Manulife Financial Corp. has reached a deal with the Toronto Transit Commission to settle a long-running case involving a multimillion-dollar benefits scam that involved more than 200 TTC employees.

Manulife announced on Wednesday that it has “resolved” a lawsuit the TTC filed against the insurer in 2016. The terms were not disclosed.

The TTC began investigating in 2014 after a tip that Healthy Fit, a provider of health care products and services based in Toronto, was issuing fraudulent receipts to TTC employees.

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“Manulife and the TTC remain united in a commitment to fraud prevention, and collaborated on the investigation that brought Healthy Fit to justice,” Manulife said in a statement. “We’re pleased to have worked together, with law enforcement, to stop a fraudulent provider.”

In 2015, the Toronto police criminally charged clinic proprietor Adam Smith with fraud. They alleged he provided TTC employees with invoices for falsified or inflated claims for customized medical devices such as orthotics and compression stockings. The employees then claimed these amounts on their Manulife Financial benefits program.

Police also alleged that Healthy Fit and the employees who made improper claims shared the money paid out.

Healthy Fit closed in 2015, and the TTC dismissed employees connected to the fraud. Since then, the TTC says it has saved almost $7-million a year in benefit costs related to claims for orthotics, orthopedic shoes, compression stockings and leg and arm braces.

In 2016, the TTC filed a lawsuit against Manulife alleging the insurer did not have appropriate fraud-management controls or systems to detect and analyze unusual trends or patterns that might indicate fraud or abuse.

The TTC alleged Manulife “breached its duties of care.” The transit commission was seeking $5-million in reimbursement for its increased benefit costs, and damages.

Mr. Smith pleaded guilty to two counts of fraud over $5,000 in September, 2017, and was sentenced to two years in a federal penitentiary.

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The TTC said on Wednesday its internal investigation continues, and employees could still face discipline, including dismissal.

To date, 254 TTC employees accused of participating in the fraud have been dismissed, resigned or retired, and 14 have been disciplined. Nine former employees were convicted criminally for their part in the fraud.

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