[Federal Register: April 15, 2003 (Volume 68, Number 72)]
[Notices]
[Page 18308-18313]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15ap03-128]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. IC-26003; File No. 812-12906]
John Hancock Life Insurance Company, et al.
April 10, 2003.
AGENCY: The Securities and Exchange Commission (``Commission'').
ACTION: Notice of application for an order of approval pursuant to
section 26(c) of the Investment Company Act of 1940 (the ``Act'').
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Applicants: John Hancock Life Insurance Company (``John Hancock''),
John Hancock Variable Life Insurance Company (``JHVLICO''), John
Hancock Variable Life Account S (``Account S''), John Hancock Variable
Life Account UV (``Account UV''), John Hancock Variable Life Account U
(``Account U''), John Hancock Variable Annuity Account JF (``Account
JF''), John Hancock Variable Annuity Account I (``Account I''), and
John Hancock Variable Annuity Account H (``Account H'') (collectively,
``Applicants'').
Filing Date: The application was filed on December 2, 2002 and amended
and restated on April 10, 2003.
Summary of Application: Applicants request an order permitting (1)
Account S, Account UV, Account U, Account JF, and Account H (together
with Account I, the ``Separate Accounts'') to substitute shares of the
International Equity Index Fund (the ``Hancock International Fund'')
for their shares of the Templeton Foreign Securities Fund (the
``Templeton Foreign Fund''); (2) Account JF and Account H to substitute
shares of the International Opportunities Fund (the ``Hancock
International Opportunities Fund'') for their shares of the Templeton
Developing Markets Securities Fund (the ``Templeton Developing Fund'');
[[Page 18309]]
and (3) all of the Separate Accounts to substitute shares of the AIM
V.I. Premier Equity Fund (together with the Hancock International Fund
and the Hancock International Opportunities Fund, the ``Replacing
Funds'') for their shares of the AIM V.I. Growth Fund (together with
the Templeton Foreign Fund and the Templeton Developing Fund, the
``Replaced Funds'').
Hearing or Notification of Hearing: An order granting the application
will be issued unless the Commission orders a hearing. Interested
persons may request a hearing by writing to the Secretary of the
Commission and serving Applicants with a copy of the request,
personally or by mail. Hearing requests must be received by the
Commission by 5:30 p.m. on April 30, 2003 and should be accompanied by
proof of service on Applicants in the form of an affidavit or, for
lawyers, a certificate of service. Hearing requests should state the
nature of the writer's interest, the reason for the request, and the
issues contested. Persons who wish to be notified of a hearing may
request notification by writing to the Secretary of the Commission.
ADDRESSES: Secretary, Securities and Exchange Commission, 450 Fifth
Street, NW., Washington, DC 20549-0609; Applicants, c/o Arnold R.
Bergman, Esq., John Hancock Life Insurance Company, John Hancock Place,
PO Box 111, Boston MA 02117. Copy to Foley & Lardner, 3000 K Street,
NW., Washington, DC, 20007, for the attention of Thomas C. Lauerman,
Esq.
FOR FURTHER INFORMATION CONTACT: Harry Eisenstein, Senior Counsel, at
(202) 942-0552 or Zandra Bailes, Branch Chief, Office of Insurance
Products, Division of Investment Management at (202) 942-0670.
SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application is available for a fee from the
Commission's Public Reference Branch, 450 Fifth Street, NW.,
Washington, DC 20549 (Phone: (202) 942-8090).
Applicants' Representations
1. John Hancock is a stock life insurance company organized under
the laws of Massachusetts. John Hancock is a publicly-held financial
services company whose primary business is life insurance and
annuities.
2. JHVLICO is a wholly-owned subsidiary of John Hancock organized
under the laws of Massachusetts. JHVLICO is a stock life insurance
company whose primary business is life insurance and annuities.
3. Account S is a separate investment account established by
JHVLICO under Massachusetts law to fund variable life insurance
policies issued by JHVLICO. Account S is registered under the Act as a
unit investment trust (File No. 811-7782).
4. The variable life insurance policies Funded by Account S that
are affected by this application are as follows: Medallion Executive
Variable Life (``MEVL''), MEVL II, and MEVL III, interests under all of
which are also registered under the Securities Act of 1933 (the ``1933
Act'') (File No. 333-425); Majestic Variable Universal Life (``MVUL''),
and MVUL 98, interests under both of which are also registered under
the 1933 Act (File No. 333-15075); Variable Master Plan Plus
(``VCOLI''), interests under which are also registered under the 1933
Act (File No. 33-79108); Majestic VCOLI (``MVCOLI''), interests under
which are also registered under the 1933 Act (File No. 333-60274); and
Variable Estate Protection (``VEP''), Majestic Variable Estate
Protection (``MVEP''), MVEP98, and VEP Plus, interests under all of
which also are registered under the 1933 Act (File No. 33-64366); and
VEP Edge, interests under which are also registered under the 1933 Act
(File No. 33-55172).
5. Account UV is a separate investment account established by John
Hancock under Massachusetts law to fund variable life insurance
policies issued by John Hancock. Account UV is registered under the Act
as a unit investment trust (File No. 811-7766).
6. The variable life insurance policies funded by Account UV that
are affected by this application are as follows: VEP (NY), interests
under which are also registered under the 1933 Act (File No. 33-64364);
VEP Plus--NY, interests under which are also registered under the 1933
Act (File No. 333-73082); VEP Edge--NY, interests under which are also
registered under the 1933 Act (File No. 333-73072); MVUL98-NY,
interests under which are also registered under the 1933 Act (File No.
333-42378); MVEP98-NY, interests under which are also registered under
the 1933 Act (File No. 333-73444); MEVL III-NY, interests under which
are also registered under the 1933 Act (File No. 333-63654); MVL Plus--
NY, interests under which are also registered under the 1933 Act (File
No. 70734); MVL Edge--NY, interests under which are also registered
under the 1933 Act (File No. 333-70746); and VCOLI-NY, interests under
which are also registered under the 1933 Act (File No. 333-67744).
7. Account U is a separate investment account established by
JHVLICO under Massachusetts law to fund variable life insurance
policies issued by JHVLICO. Account U is registered under the Act as a
unit investment trust (File No. 811-3068).
8. The Account U variable life insurance policies affected by this
application are as follows: MVL Plus, and MVL Edge, interests under
both of which are also registered under the 1933 Act (File Nos. 33-
76660 and 333-52128, respectively); and eVariable Life, interests under
which are also registered under the 1933 Act (File No. 333-50312).
9. Account JF is a separate investment account established by
JHVLICO under Massachusetts law to fund variable annuity contracts
issued by JHVLICO. Account JF is registered under the Act as a unit
investment trust (File No. 811-07451).
10. The Account JF variable annuity contracts affected by this
application are as follows: Revolution Access, Revolution Extra,
Revolution Standard, and Revolution Value, interests under all of which
are also registered under the 1933 Act (File Nos. 333-84769, 333-84767,
333-84763, and 333-81127, respectively).
11. Account I is a separate investment account established by
JHVLICO under Massachusetts law to fund variable annuity contracts
issued by JHVLICO. Account I is registered under the Act as a unit
investment trust (File No. 811-8696).
12. The only Account I variable life insurance policy affected by
this application is eVariable Annuity, interests under which are also
registered under the 1933 Act (File No. 333-16949).
13. Account H is a separate investment account established by John
Hancock under Massachusetts law to fund variable annuity contracts
issued by John Hancock. Account H is registered under the Act as a unit
investment trust (File No. 811-07711).
14. The Account H contracts affected by this application are as
follows: Revolution Access, Revolution Extra, Revolution Standard, and
Revolution Value, interests under all of which are also registered
under the 1933 Act (File Nos. 333-84771, 333-84783, 333-84765 and 333-
81103, respectively).
15. Purchase payments under the variable life insurance policies
and variable annuity contracts identified above (collectively, the
``Contracts'') are allocated to one or more subaccounts
(``Subaccounts'') of the Separate Accounts.
16. Income, gains and losses, whether or not realized, from assets
allocated to a Separate Account are, as provided in the Contracts,
credited to or charged
[[Page 18310]]
against that Separate Account without regard to other income, gains or
losses of John Hancock or JHVLICO. The assets maintained in the
Separate Accounts will not be charged with any liabilities arising out
of any other business conducted by John Hancock or JHVLICO.
Nevertheless, all of the obligations of each of those companies arising
under the Contracts, including its commitment to make cash value
payments, annuity payments or death benefit payments, are general
corporate obligations of that company. Accordingly, all of the assets
of John Hancock or JHVLICO, as the case may be, are available to meet
its obligations under its Contracts.
17. Each Separate Account meets the definition of ``separate
account'' contained in section 37 of the Act.
18. Each of the Contracts permits its owner to allocate the
Contract's accumulated value among numerous available Subaccounts, each
of which invests in a different investment portfolio (``Fund'') of an
underlying mutual fund. Each of the Contracts has at least 32 different
Subaccounts that, together with their corresponding Funds (including
the applicable Replaced Funds), are currently available for this
purpose.
19. Each Contract permits its owner to transfer the Contract's
accumulated value from one Subaccount to another Subaccount of the
issuing Separate Account at any time, subject to certain potential
restrictions and charges described below. No sales charge applies to
such a transfer of accumulated value among Subaccounts.
20. The only other charges on such transfers are, under certain
Contracts, flat dollar amounts that may be assessed to help defray the
administrative costs of effecting the transfers. In some cases, the
Contracts permit up to a specified number of free transfers in a
Contract year, before any such transfer charge may be imposed. Also,
under certain Contracts, no transfer is permitted if it would result in
the Contract being invested in more than 18 investment options over the
life of the Contract (``Lifetime Cap'') or, after the annuity payment
commencement date, in more than four investment options at any one
time.
21. John Hancock or JHVLICO, as applicable, has reserved the right
to make certain changes, including to substitute, for the shares held
in any Subaccount, the shares of another Fund or the shares of another
underlying mutual fund, as stated in each prospectus for the Contracts
contained in its applicable registration statement under the 1933 Act.
The Funds
22. The Templeton Foreign Fund and the Templeton Developing Fund
are separate Portfolios of the Franklin Templeton Variable Insurance
Products Trust (the ``Templeton Trust''). The Templeton Trust is
registered as a management investment company under the Act (File No.
811-5583), and the shares in each of its portfolios (including the
Templeton Foreign Fund and the Templeton Developing Fund) are also
registered under the 1933 Act (File No. 33-23493).
23. Both the Templeton Foreign Fund and the Templeton Developing
Fund issue more than one ``class'' of shares, which differ only as to
charges they impose for sales and administrative services. In each
case, the Contracts use only the ``Class 2'' shares, which impose an
asset-based sales charge pursuant to rule 12b-1 under the Act (``Rule
12b-1 fee'') equal to .25% per annum of the Fund's average daily net
assets. Apart from the investment management fees and other Fund
operating expenses, which also affect the net asset values of their
shares, these Funds impose no other charges or deductions on their
shares.
24. The AIM V.I. Growth Fund and the AIM V.I. Premier Equity Fund
are separate portfolios of the AIM Variable Insurance Funds (``AIM V.I.
Funds''). The AIM Variable Insurance Funds is registered as a
management investment company under the Act (File Nos. 811-07452), and
the shares in each of its Portfolios (including the AIM V.I. Growth
Fund and AIM V.I. Premier Equity Fund) are also registered under the
1933 Act (File No. 33-57340).
25. Each of the AIM V.I. Growth Fund and the AIM Premier Equity
Fund issues more than one ``class'' of shares, which differ only as to
charges that they impose for sales and administrative services. In each
case, the Contracts use only the ``Series I'' shares of the AIM V.I.
Growth Fund and the AIM V.I. Premier Equity Fund, which do not impose
any Rule 12b-1 fees or any other fees or charges, other than investment
management fees and other operating expenses that affect the net asset
value of their shares.
26. The Hancock International Fund and the Hancock International
Opportunities Fund are portfolios of the John Hancock Variable Series
Trust I (the ``Hancock Trust''). The Hancock Trust is registered as a
management investment company under the Act (File No. 811-04990), and
the shares in each of its portfolios (including the Hancock
International Fund and the Hancock International Opportunities Fund)
are also registered under the 1933 Act (File No. 33-2081).
27. Both the Hancock International Fund and the Hancock
International Opportunities Fund offer only one class of shares, and
that class does not impose any Rule 12b-1 fee or any other fees or
charges, other than investment management fees and other operating
expenses that affect the net asset value of their shares.
The Funds' Investment Program
28. The Templeton Foreign Fund is managed by Templeton Investment
Counsel, LLC, which has no affiliation with John Hancock.
29. The investment objective of the Templeton Foreign Fund is long-
term capital growth. The Fund is an international fund that seeks to
achieve its objective by investing primarily in equity securities of
large to medium size companies outside the U.S. The Fund's current
policy is, under normal circumstances, to invest at least 80% of its
assets in non-U.S. companies. The Fund's investment philosophy is
``bottom-up,'' long-term, and value oriented.
30. The Hancock International Fund is managed by John Hancock and
sub-advised by Independence Investment LLC, which is indirectly wholly-
owned by John Hancock. The investment objective of the Hancock
International Fund is to track the performance of a broad-based equity
index of foreign companies in developed and emerging markets. This
Portfolio follows a ``passive'' investment strategy of owning a
representative number of stocks in the index it seeks to track. The
Fund is normally fully invested at all times.
31. The index used by the Hancock International Fund is a composite
that is weighted 90% to the Morgan Stanley Capital International
(``MSCI'') Europe, Australia and Far East (``EAFE'') Gross Domestic
Product (``GDP'') Index. The MSCI EAFE GDP Index is an index of non-
U.S. equities in developed countries, within which each country's
representation is weighted in proportion to its gross-domestic product,
while companies within each country are weighted by market
capitalization. The remaining 10% of the composite consists of the MSCI
Emerging Markets Free (``EMF'') Index. The MSCI EMF Index is a market
capitalization-weighted index of emerging market stocks.
32. The Templeton Developing Fund is managed by Templeton Asset
Management Ltd., which has no affiliation with John Hancock. The
investment objective of the Templeton Developing Fund is long-term
capital
[[Page 18311]]
appreciation. The Fund seeks to attain this objective by investing
primarily in stocks of ``emerging markets'' companies, and, under
normal circumstances, it invests at least 80% of its assets in such
companies. The Fund's investment philosophy is ``bottom-up,'' value
oriented, and long-term.
33. The Hancock International Opportunities Fund is managed by John
Hancock and is sub-advised by T. Rowe Price International, Inc. The
investment objective of this Fund is long-term capital appreciation.
The Fund seeks to achieve this objective by investing primarily in the
stocks of large established and medium sized companies located outside
the U.S., primarily in developed countries and, to a lesser extent, in
emerging markets. The Fund's investment philosophy entails fundamental
research on individual companies, combined with stock selection of
companies with certain growth characteristics. In addition, the Hancock
International Opportunities Fund broadly diversifies, whereas the
Templeton Developing Fund may, at times, have significant investments
in one or more countries and or sectors.
34. The AIM V.I. Growth Fund is managed by AIM Advisors, Inc.,
which has no affiliation with John Hancock. The investment objective of
the AIM V.I. Growth Fund is capital growth. The Fund seeks to meet its
objective by investing principally in seasoned and better capitalized
companies considered to have strong earnings momentum. The portfolio
managers focus on companies that have experienced above-average growth
in earnings and have excellent prospects for future growth.
35. The AIM V.I. Premier Equity Fund also is managed by AIM
Advisors, Inc. The investment objective of the AIM V.I. Premier Equity
Fund is long-term capital growth. Income is a secondary investment
objective. The Fund seeks to meet its objective by investing, normally,
at least 80% of its net assets in equity securities, including
convertible securities. The portfolio managers focus on undervalued
equity securities.
Fund Financial Information
36. The net assets of each Fund as of December 31, 2003 were as
follows:
------------------------------------------------------------------------
Fund Net assets
------------------------------------------------------------------------
Templeton Foreign...................................... $697,780,000
Hancock International.................................. 98,917,000
Templeton Developing................................... 306,406,000
Hancock International Opportunities.................... 87,288,000
AIM V.I. Growth........................................ 363,992,000
AIM V.I. Premier Equity................................ 1,530,359,000
------------------------------------------------------------------------
37. Of the net assets shown above for each Replaced Fund, the
following amounts were attributable to Contracts, and thus would have
been transferred pursuant to the Substitutions described herein:
Templeton Foreign $7,830,000; Templeton Developing, $3,823,000; and AIM
V.I., Growth $27,559,000.
38. The total fees and expenses of the Funds for the twelve months
ended December 31, 2003, expressed as an annual percentage of average
daily net assets, were as follows:
------------------------------------------------------------------------
Total
expenses
(including
Fund advisory
fees and
12b-1 fees)
(Percent)
------------------------------------------------------------------------
Templeton Foreign......................................... 1.13
Hancock International..................................... *.28
Templeton Developing...................................... 1.83
Hancock International Opportunities....................... *1.24
AIM V.I. Growth........................................... .91
AIM Premier Equity........................................ .85
------------------------------------------------------------------------
* Includes expense reimbursement. This percentage would otherwise have
been .46% for the Hancock International Fund and 1.25% for the Hancock
International Opportunities Fund. No expenses or fees for the other
funds were waived or reimbursed.
The expense reimbursement arrangements referred to above are provided
for in each affected Fund's Investment Management Agreement.
39. The Fund's investment advisory and Rule 12b-1 fee rates (as an
annual percentage of average daily net assets) are as follows:
------------------------------------------------------------------------
Rule 12b-1 fee
Fund Advisory fees rate rate
------------------------------------------------------------------------
Templeton Foreign............. .75% of first $200 .25%.
million, .675% of
next $1.1 billion,
and .60% of
additional amounts.
Hancock International......... .18% of the first None.
$100 million, 15% of
the next $100
million, and .11% of
additional amounts.
Templeton Developing.......... 1.25%................ .25%.
Hancock International 1.30% of first $20 None.
Opportunities. million, 1.15% of
next $30 million,
and 1.05% of
additional amounts.
AIM V.I. Growth and AIM V.I. .65% of the first None.
Premier Equity. $250 million and
.60% of additional
amounts.
------------------------------------------------------------------------
40. Neither the Templeton Foreign Fund nor the Hancock
International Fund has achieved performance that is clearly superior or
inferior to that of the other.
41. The overall performance record of the Hancock International
Opportunities Fund has been superior to that of the Templeton
Developing Fund.
42. The overall performance record of the AIM V.I. Premier Equity
Fund has been superior to that of the AIM V.I. Growth Fund.
Terms of Substitutions
43. Each Substitution will take place at the applicable Funds'
relative per share net asset values determined on the date of the
Substitution in accordance with section 22 of the Act and rule 22c-1
thereunder. Each Substitution will be effected by having each
Subaccount that invests in a Replaced Fund redeem its shares of the
Replaced Fund at the net asset value calculated on the date of the
Substitution and purchase shares of the appropriate Replacing Fund at
the net asset value calculated on the same date.
44. John Hancock and JHVLICO will pay all expenses and transaction
costs of the Substitutions, including all legal, accounting, and
brokerage expenses relating to the Substitutions, the below-described
disclosure documents, and this application. No costs will be borne
directly or indirectly by Contract owners.
45. Affected Contract owners will not incur any fees or charges as
a result of the Substitutions, and the Substitutions will result in no
change in their accumulated values under their Contracts. Nor will the
rights or the obligations of John Hancock or JHVLICO under the
Contracts, or the insurance benefits to Contract owners, be altered in
any way. The Substitutions will not cause the fees and charges under
the Contracts currently being paid by Contract owners to be greater
after the Substitutions than before the Substitutions.
[[Page 18312]]
46. The Substitutions requested in this application will be
described in supplements to the applicable prospectuses for the
Contracts filed with the Commission or in other supplemental disclosure
documents, (collectively, ``Supplements'') and mailed to all affected
Contract owners. Each Supplement will give the relevant Contract owners
notice of each Substitution that would affect their respective
Contracts and will describe the reasons for engaging in that
Substitution. The Supplements will also inform existing Contract owners
with values allocated to a Subaccount investing in a Replaced Fund that
no additional amounts may be allocated to the Subaccounts that invest
in that Fund on or after the date of Substitution.
47. In addition, the affected Contract owners will have (and the
Supplements will inform them that they have) an opportunity to
reallocate their accumulated value:
[sbull] Prior to a Substitution, from the Subaccount investing in
the Replaced Fund in that Substitution, or
[sbull] For 30 days after a Substitution, from a Subaccount
investing in the Replacing Fund in that Substitution
to one or more Subaccounts investing in other Funds available under the
applicable Contract without the reallocation resulting in any transfer
charge or limitation, counting toward the Lifetime Cap, or diminishing
the number of free transfers that otherwise may be made in a given
Contract year.
48. Each affected Contract owner will also be provided with a
prospectus for each relevant Replacing Fund, which will accompany or
precede the Supplement discussed above.
49. Within five days after a Substitution, John Hancock and JHVLICO
each will send to its affected Contract owners written confirmation
that the Substitutions have occurred. The confirmations will also
identify the shares of the Replaced Portfolios that have been
eliminated and the shares of the Replacing Portfolios that have been
substituted. That confirmation will reiterate the free transfer rights
disclosed in the Supplements that such owners will have previously
received.
50. The Substitutions will in no way alter the tax treatment of
owners in connection with their Contracts, and no tax liability will
arise for Contract owners as a result of the Substitutions.
Applicants' Legal Analysis
1. According to Applicants, the legislative history makes it clear
that the purpose of section 26(c) is to protect the expectation of
investors in a unit investment trust that the unit investment trust
will accumulate shares of a particular issuer. Applicants state that
section 26(c) does this by preventing unscrutinized substitutions,
which might, in effect, force shareholders dissatisfied with the
replacing security to redeem their shares, thereby possibly incurring
either a loss of any sales load deducted from their original
investment, an additional sales load upon reinvestment of the
redemption proceeds, or both.
2. Applicants submit that all of the Substitutions will benefit
Contract owners by moving them to Funds with lower overall expenses and
equal or better performance record and prospects.
3. Applicants also contend that the investment characteristics of
each Replacing Fund are very similar to those of the corresponding
Replaced Fund. In this connection, Applicants point out that the
Hancock International Opportunities Fund is somewhat more conservative
than the Templeton Developing Fund, and that the AIM V.I. Premier
Equity Fund is somewhat more conservative than the AIM V.I. Growth
Fund. However, Applicants assert that the Hancock International Fund
should not be considered to be either more or less conservative than
the Templeton Foreign Fund.
4. Applicants assert that the Substitutions will be effected in a
manner that has no adverse economic consequences for Contract owners.
In this regard, Applicants will afford affected Contract owners
protection against increased expenses and changes, under terms
described in Applicants' Condition 1, below.
5. Applicants note that Contract owners who do not wish to
participate in a Replacing Fund will have an opportunity to reallocate
their accumulated value among other available Subaccounts without the
imposition of any charge or limitation.
6. The Substitution from AIM V.I. Growth Fund is to the much larger
AIM V.I. Premier Equity Fund, which, according to Applicants, has
potential advantages to Contract owners in terms of economies of scale
and diversification of portfolio investments. Applicants acknowledge
that The Templeton Developing Fund is larger than the Hancock
International Opportunities Fund and that the Templeton Foreign Fund is
larger than the Hancock International Fund, which would replace it.
Nevertheless, Applicants point out that, even without any reimbursement
arrangement, the expense ratio of each Replaced Fund is higher than
that of the corresponding Replacing Fund.
7. To summarize, Applicants submit (a) that the Substitutions will
benefit the affected Contract owners and will not entail any of the
abuses against which section 26(c) is addressed, and (b) that the
approvals Applicants request under section 26(c) are consistent with
the protection of investors and the purposes fairly intended by the
policy and provisions of the Act.
Applicants' Conditions
As conditions to the approvals that Applicants seek,
1. For each fiscal period (not to exceed a fiscal quarter) during
the 24 months following the date of Substitution into the Hancock
International Fund and the Hancock International Opportunities Fund,
each of John Hancock and JHVLICO will adjust the Contract values
invested in either of such Funds as a result of the Substitutions, to
the extent necessary to effectively reimburse the affected owners for
their proportionate share of any amount by which the annual rate of the
Replacing Fund's total operating expenses (after any expense waivers or
reimbursements) for that fiscal period, as a percentage of the Fund's
average daily net assets, plus the annual rate of any asset-based
charges (excluding any such charges that are for premium taxes)
deducted under the terms of the owner's Contract for that fiscal
period, exceed the sum of:
[sbull] The annualized rate of the corresponding Replaced Fund's
total operating expenses, as a percentage of such replaced Fund's
average daily net assets, for the twelve months ended December 31,
2002; plus
[sbull] The annual rate of any asset-based charges (excluding any
such charges that are for premium taxes) deducted under that Contract
for such twelve months.
2. For a period of three years following the date of the
Substitution of the AIM V.I. Premier Equity Fund for the AIM V.I.
Growth Fund, neither John Hancock nor JHVLICO will receive any direct
or indirect benefits from AIM V.I. Premier Equity Fund, any investment
adviser or underwriter to that Fund, or any ``affiliated person'' (as
that term is in section 2(a)(3) of the Act) of any of them, that exceed
the rate of any benefits that such insurance company directly or
indirectly has been receiving from AIM V.I. Growth Fund, any investment
adviser or underwriter to that Fund, or any affiliated person of any of
them. For this purpose, ``benefits'' shall be construed to include any
investment advisory fees, payments pursuant to rule 12b-1 plans,
shareholder or other service fees,
[[Page 18313]]
administrative fees, revenue sharing payments, or other similar
payments in connection with assets subject to the Substitution (whether
such benefits are with respect to the AIM V.I. Premier Equity Fund or
part of an overall relationship with AIM V.I. Funds, any investment
adviser or underwriter to any of such Fund, or any affiliated person of
any of them). In this connection, Applicants also represent that
neither such Substitution nor the selection of AIM V.I. Premier Equity
Fund as a Replacing Fund have been motivated by the receipt or promised
receipt by John Hancock, JHVLICO or any of their affiliated persons of
any benefit or other thing of value from AIM V.I. Premier Equity Fund,
any investment adviser or underwriter to such Fund, or any affiliated
person of any of them.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-9261 Filed 4-14-03; 8:45 am]
BILLING CODE 8010-01-P