[Federal Register Volume 70, Number 70 (Wednesday, April 13, 2005)]
[Notices]
[Pages 19523-19530]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-1745]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. IC-26830; File No. 812-13130]


John Hancock Life Insurance Company (U.S.A.), et al., Notice of 
Application

April 7, 2005.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of application for an order pursuant to Section 26(c) of 
the Investment Company Act of 1940 (the ``Act''), approving the 
substitution of securities.

-----------------------------------------------------------------------

Applicants:  John Hancock Life Insurance Company (U.S.A.) (``JHLICO 
USA'') (formerly The Manufacturers Life Insurance Company (U.S.A.)), 
John Hancock Life Insurance Company (U.S.A.) Separate Account A 
(``JHLICO USA Account A'') (formerly The Manufacturers Life Insurance 
Company (U.S.A.) Separate Account A), John Hancock Life Insurance 
Company (U.S.A.) Separate Account H (``JHLICO USA Account H'') 
(formerly The Manufacturers Life Insurance Company (U.S.A.) Separate 
Account H) (JHLICO USA Accounts A and H are collectively referred to 
herein as the ``JHLICO USA Accounts''), John Hancock Life Insurance 
Company of New York (``JHLICO New York'') (formerly The Manufacturers 
Life Insurance Company of New York) and John Hancock Life Insurance 
Company of New York Separate Account A (``JHLICO NY Account A'' and 
collectively with the JHLICO USA Accounts, the ``Separate Accounts'') 
(formerly The Manufacturers Life Insurance Company of New York Separate 
Account A) (JHLICO USA, the JHLICO USA Accounts, JHLICO New York and 
JHLICO NY Account A are collectively referred to herein as 
``Applicants'').

Summary of Application:  Applicants seek an order approving each of the 
following substitutions of shares of series of John Hancock Trust 
(``JHT'') (formerly Manufacturers Investment Trust) (the 
``Substitutions''): (1) Shares of JHT 500 Index Trust for shares of 
each of the following series of JHT: (a) Select Growth Trust and (b) 
Core Value Trust; (2) shares of JHT Mid Cap Index Trust for shares of 
each of the following series of JHT: (a) Small-Mid Cap Trust and (b) 
Small-Mid Cap Growth Trust; (3) shares of JHT International Equity 
Index Trust A for shares of each of the following series of JHT: (a) 
International Equity Select Trust and (b) Global Equity Select Trust; 
(4) shares of JHT Investment Quality Bond Trust for shares of the 
following series of JHT: High Grade Bond Trust; and (5) shares of JHT 
U.S. Global Leaders Growth Trust for shares of the following series of 
JHT: Great Companies--America Trust.

Filing Date:  The Application was filed on October 19, 2004 and amended 
and restated on April 1, 2005 and April 5, 2005. Applicants have agreed 
to file an amendment during the notice period, the substance of which 
is reflected in this notice.

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 28, 2005, 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 
natures of the requester'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 John W. Blouch, 
Esq., Dykema Gossett, PLLC, 1300 I Street NW., Suite 300 West, 
Washington, DC 20005.

FOR FURTHER INFORMATION CONTACT: Jeffrey Foor, Staff Attorney, or 
Zandra Bailes, Branch Chief, Office of Insurance Products, Division of 
Investment Management, at (202) 551-6795.

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 20549-0102 (202-942-8090).

[[Page 19524]]

Applicants' Representations

    1. JHLICO USA is a stock life insurance company incorporated in 
Maine in 1955 and re-domesticated under the laws of Michigan in 1992. 
It is authorized to transact a life insurance and annuity business in 
the District of Columbia and all states except New York. JHLICO USA is 
a wholly-owned subsidiary of The Manufacturers Life Insurance Company 
(``Manulife''), a stock life insurance company organized under the laws 
of Canada. Manulife Financial Corporation, a publicly-traded company 
based in Toronto, Canada, is the holding company of Manulife and its 
subsidiaries, collectively known as ``Manulife Financial.'' For 
purposes of the Act, JHLICO USA is the depositor and sponsor of the 
JHLICO USA Accounts as those terms have been interpreted by the 
Commission with respect to variable life insurance and variable annuity 
separate accounts.
    2. JHLICO New York is a stock life insurance company organized 
under the laws of New York in 1992. It is authorized to transact a life 
insurance and annuity business in New York. JHLICO New York is a 
wholly-owned subsidiary of Manulife. For purposes of the Act, JHLICO 
New York is the depositor and sponsor of JHLICO NY Account A as those 
terms have been interpreted by the Commission with respect to variable 
life insurance and variable annuity separate accounts.
    3. JHLICO USA Account A was established in 1986 to fund variable 
life insurance contracts and is registered under the Act as a unit 
investment trust (File No. 811-4834).
    4. JHLICO USA Account H was established in 1984 to fund variable 
annuity contracts and is registered under the Act as a unit investment 
trust (File No. 811-4113).
    5. JHLICO NY Account A was established in 1992 to fund variable 
annuity contracts and is registered under the Act as a unit investment 
trust (File No. 811-6584).
    6. JHT is organized as a Massachusetts business trust and is 
registered under the Act as an open-end management investment company 
(File No. 811-4146). JHT is a series investment company, as defined by 
Rule 18f-2 under the Act, and currently offers 79 separate series or 
portfolios, each of which has its own investment objectives and 
policies. The application relates to 13 of these portfolios (the ``JHT 
Portfolios''). Shares of JHT are registered on Form N-1A under the 
Securities Act of 1933 Act (``1933 Act'') (File No. 2-94157).
    7. Shares of JHT are not offered directly to the public. Rather, 
they are offered to separate accounts of JHLICO USA and JHLICO New York 
as the underlying investment medium for variable contracts issued by 
such companies, including the Contracts, and to qualified pension and 
retirement plans within the meaning of Treasury Regulation 1.817-
5(f)(3)(iii) (``Qualified Plans'') and may in the future be offered to 
certain other eligible persons described in Treasury Application 1.817-
5(f)(3) (``Other Eligible Persons''). JHT does not impose sales charges 
on purchases of its shares. All dividends and other distributions with 
respect to a portfolio's shares are reinvested in full and fractional 
shares of that portfolio.
    8. John Hancock Investment Management Services, LLC (``JHIMS'') 
(formerly, Manufacturers Securities Services, LLC), a wholly-owned 
subsidiary of JHLICO USA, serves as the investment adviser to JHT with 
respect to each of the JHT Portfolios. JHIMS is a Delaware limited 
liability company which is registered as an investment adviser under 
the Investment Advisers Act of 1940, as amended (the ``Advisers Act'').
    9. Pursuant to investment subadvisory agreements, JHIMS has 
retained a subadviser to provide day-to-day investment management 
services for each of the JHT Portfolios. The subadvisers to each of the 
JHT Portfolios are identified below. Each is registered as an 
investment adviser under the Advisers Act unless exempt from such 
registration. One of the subadvisers, MFC Global Investment Management 
(U.S.A.) Limited, a Canadian corporation (``MFC Global (U.S.A.)''), is 
a wholly-owned subsidiary of Manulife and an affiliate of JHIMS.
    10. John Hancock Variable Series Trust I (``JH VST'') is organized 
as a Massachusetts business trust and is registered under the Act as an 
open-end management investment company (File No. 811-04490). JH VST is 
a series investment company, as defined by Rule 18f-2 under the Act, 
and currently offers 30 separate series or portfolios, each of which 
has its own investment objectives and policies. Shares of JH VST are 
registered on Form N-1A under the 1933 Act (File No. 33-2081).
    11. Shares of JH VST are not offered directly to the public. 
Rather, they are offered only to insurance companies as the underlying 
investment medium for variable contracts issued by such companies and 
to Qualified Plans and to certain Other Eligible Persons.
    12. John Hancock Life Insurance Company (``JHLICO'') serves as the 
investment adviser to JH VST with respect to its portfolios and is 
registered as an investment adviser under the Advisers Act. JHLICO is a 
wholly-owned subsidiary of John Hancock Financial Services, Inc. 
(``John Hancock''). John Hancock became a wholly-owned subsidiary of 
Manulife Financial Corporation, effective April 28, 2004. In its 
capacity as investment adviser to JH VST, JHLICO recommends subadvisers 
for the JH VST portfolios and oversees and evaluates the performance of 
subadvisers.
    13. There are seven kinds of variable insurance contracts affected 
by the application (the ``Contracts''). One of the Contracts is a 
flexible premium variable life insurance policy (the ``VL Contract''); 
six of the Contracts are variable annuity contracts (the ``VA 
Contracts''). Purchase payments for the VL Contracts are allocated to 
JHLICO USA Account A. Purchase payments for the VA Contracts are 
allocated to JHLICO USA Account H or JHLICO NY Account A.
    14. Contract owners may allocate purchase payments to one or more 
subaccounts (``Subaccounts'') of a Separate Account. Each Subaccount 
invests in shares of a portfolio of JHT, JH VST or PIMCO Variable 
Insurance Trust (``PIMCO VIT'') (the ``Underlying Portfolios''). The 
only Subaccounts affected by the application are those which invest in 
the portfolios of JHT identified below as Replaced Portfolios or 
Substituted Portfolios.
    15. The following table identifies (i) each Contract affected by 
the application, (ii) the file number under the 1933 Act for each 
Contract, and (iii) the total number of investment options available 
under each Contract and the number of those investment options provided 
by JHT, JH VST and PIMCO VIT.

[[Page 19525]]



                                               Investment Options
----------------------------------------------------------------------------------------------------------------
                    Contract                       File No.      Total         JHT         JH VST     PIMCO VIT
----------------------------------------------------------------------------------------------------------------
                                                   VL Contract
----------------------------------------------------------------------------------------------------------------
EPVUL..........................................    333-85284           19           18            1            0
------------------------------------------------
                                                  VA Contracts
----------------------------------------------------------------------------------------------------------------
Vantage........................................    333-71072           73           71            1            1
Ven 20-21......................................    333-70728           73           71            1            1
Venture III....................................    333-70850           73           71            1            1
Vision 25......................................    333-71074           73           71            1            1
NY Ven 24......................................     33-79112           73           71            1            1
Ven 9..........................................     33-46217           73           71            1            1
----------------------------------------------------------------------------------------------------------------

    16. After the Substitutions, the total number of Investment Options 
available to the VL Contract and to each of the VA Contracts will be 
73.
    17. The application covers eight Replaced Portfolios. Of these, 
seven were created expressly for and were sold only to Subaccounts used 
to fund the VL Contract. The VL Contract was created at the request of, 
and has been sold as a proprietary product exclusively by, an entity 
that is not affiliated with Applicants. Applicants understand that this 
unaffiliated entity has ceased to actively market the VL Contract. At 
December 30, 2004, there were 85 VL Contracts and 25 VA Contracts.
    18. JHT stopped selling shares of the Great Companies--America 
Trust on May 1, 2004 and shares of Select Growth Trust, Core Value 
Trust, Small-Mid Cap Trust, Small-Mid Cap Growth Trust and Global 
Equity Select Trust on November 29, 2004.
    19. Applicants seek an order permitting substitutions of 
Substituted Portfolios for Replaced Portfolios as indicated in the 
following table. Great Companies--America Trust has only Series II 
shares outstanding, and Series II shares of U.S. Global Leaders Growth 
Trust will be substituted for those shares. Each of the other Replaced 
Portfolios has only Series I shares outstanding, and Series I shares of 
the corresponding Substituted Portfolio will be substituted for those 
shares.

------------------------------------------------------------------------
                                                         Substituted
        Substitution           Replaced portfolio         portfolio
------------------------------------------------------------------------
One.........................  Select Growth Trust.  500 Index Trust.
Two.........................  Core Value Trust....  500 Index Trust.
Three.......................  Small-Mid Cap Trust.  Mid Cap Index Trust.
Four........................  Small-Mid Cap Growth  Mid Cap Index Trust.
                               Trust.
Five........................  High Grade Bond       Investment Quality
                               Trust.                Bond Trust.
Six.........................  Global Equity Select  International Equity
                               Trust.                Index Trust A.
Seven.......................  International Equity  International Equity
                               Select Trust.         Index Trust A.
Eight.......................  Great Companies--     U.S. Global Leaders
                               America Trust.        Growth Trust.
------------------------------------------------------------------------

    All of the Replaced and Substituted Portfolios are existing 
portfolios of JHT, except for the International Equity Index Trust A, 
which will be a newly created portfolio of JHT. It will have the same 
investment objective, policies and risks and the same subadviser as the 
International Equity Index Fund of JH VST (``JH VST International 
Equity Index Fund'') and, subject to the approval of the shareholders 
of that JH VST International Equity Index Fund, will succeed to all the 
assets and liabilities of that portfolio at the same time that the 
Substitution is effective.
    20. The following table identifies the subadviser for each of the 
JHT Portfolios:

------------------------------------------------------------------------
                Portfolio                            Subadviser
------------------------------------------------------------------------
Select Growth Trust......................  Roxbury Capital Management,
                                            LLC.
Core Value Trust.........................  Rorer Asset Management, LLC.
Small-Mid Cap Trust......................  Kayne Anderson Rudnick
                                            Investment Management, LLC.
Small-Mid Cap Growth Trust...............  Navellier Management, Inc.
High Grade Bond Trust....................  Allegiance Capital, Inc.
Global Equity Select Trust...............  Lazard Asset Management LLC.
International Equity Select Trust........  Lazard Asset Management LLC.
Great Companies--America Trust...........  Great Companies, L.L.C.
500 Index Trust..........................  MFC Global (U.S.A.).
Mid Cap Index Trust......................  MFC Global (U.S.A.).
Investment Quality Bond Trust............  Wellington Management
                                            Company, LLP.
International Equity Index Trust A.......  MFC Global SSgA Funds
                                            Management, Inc.
U.S. Global Leaders Growth Trust.........  Sustainable Growth Advisers,
                                            L.P.
------------------------------------------------------------------------

    21. Select Growth Trust's investment objective is to seek long-term 
growth of capital. It invests primarily in large cap equity securities. 
The subadviser defines large cap equity securities as securities of 
companies with at least $2 billion in market cap. The portfolio may 
also invest up to 20% of its assets in mid cap securities and in 
securities of

[[Page 19526]]

any market cap where the subadviser believes there are prospects for 
significant appreciation in the price of the security. Core Value 
Trust's investment objective is to seek long-term capital appreciation. 
Under normal market conditions, the portfolio invests primarily in 
equity and equity-related securities of companies with market 
capitalization greater than $5 billion at the time of purchase. 500 
Index Trust's investment objective is to seek to approximate the 
aggregate total return of a broad U.S. domestic equity market index. It 
invests, under normal market conditions, at least 80% of its net assets 
(plus any borrowing for investment purposes) in (a) the common stocks 
that are included in the S&P 500 Index and (b) securities (which may or 
may not be included in the S&P 500 Index) that its subadviser believes 
as a group will behave in a manner similar to the index.
    22. Small-Mid Cap Trust's investment objective is to achieve long-
term capital appreciation, with dividend income as a secondary 
consideration. Under normal market conditions, the portfolio invests at 
least 80% of its assets (plus any borrowing for investment purposes) in 
small and mid cap companies that the subadviser believes are of high 
quality (small and mid cap companies are those whose market cap does 
not exceed the market cap of the largest company included in the 
Russell 2500 Index at the time of purchase by the portfolio). Small-Mid 
Cap Growth Trust's investment objective is to seek long-term growth of 
capital. The portfolio invests primarily in equity securities of fast 
growing companies that offer innovative products, services, or 
technologies to a rapidly expanding marketplace. Under normal market 
conditions, the portfolio will invest at least 80% of its assets (plus 
any borrowings for investment purposes) in securities of small to mid 
cap companies, currently defined as companies with $2 billion to $10 
billion in market capitalization at the time of purchase. Mid Cap Index 
Trust's investment objective is to seek to approximate the aggregate 
total return of a mid cap U.S. domestic equity market index. Under 
normal market conditions, the portfolio invests 80% of its net assets 
(plus any borrowings for investment purposes) in (a) the common stocks 
that are included in the S&P 400 Index and (b) securities (which may or 
may not be included in the S&P 400 Index) that the subadviser believes 
as a group will behave in a manner similar to the index.
    23. High Grade Bond Trust's investment objective is to maximize 
total return, consistent with the preservation of capital and prudent 
investment management. Under normal market conditions, the portfolio 
invests at least 80% of its net assets (plus any borrowings for 
investment purposes) in investment grade, fixed income securities of 
varying maturities. Investment Quality Bond Trust's investment 
objective is to provide a high level of current income consistent with 
the maintenance of principal and liquidity. Under normal market 
conditions, the portfolio invests at least 80% of its net assets (plus 
any borrowings for investment purposes) in investment grade bonds. The 
portfolio tends to focus on corporate bonds and U.S. government bonds 
with intermediate to longer term maturities.
    24. Global Equity Select Trust's investment objective is to seek 
long-term capital appreciation. Under normal market conditions, the 
portfolio generally invests at least 80% of its total assets (plus any 
borrowings for investment purposes) in equity securities, including 
American and Global Depository Receipts and common stocks of relatively 
large U.S. and non-U.S. companies with market capitalizations in the 
range of the Morgan Stanley Capital International World I Index that 
its subadviser believes are undervalued based on their earnings, cash 
flow or asset values. International Equity Select Trust's investment 
objective is to seek long-term capital appreciation. Under normal 
market conditions, it invests at least 80% of its net assets (plus any 
borrowings for investment purposes) in equity securities. The portfolio 
will invest primarily in American Depository Receipts and common 
stocks, of relatively large non-U.S. companies with market 
capitalization in the range of the Morgan Stanley Capital International 
Europe, Australia and Far East Index. International Equity Index Trust 
A's investment objective is to seek to track the performance of a 
broad-based equity index of foreign companies primarily in developed 
countries and, to a lesser extent, in emerging market countries. The 
portfolio seeks to invest more than 80% of its assets in securities 
included in the Morgan Stanley Capital International All Country World 
Excluding U.S. Index, an international stock market index that, as of 
December 31, 2004, included approximately 1,892 securities listed on 
the stock exchanges of 49 developed and emerging market countries (but 
not the United States).
    25. Great Companies--America Trust's investment objective is to 
seek long-term growth of capital. It is non-diversified. The portfolio 
invests principally in large cap stocks, generally those with a market 
cap in excess of $15 billion. U.S. Global Leaders Growth Trust's 
investment objective is to seek long-term growth of capital. It is non-
diversified. Under normal market conditions, the portfolio invests at 
least 80% of its assets primarily in stocks of U.S. Companies with 
multinational operations that exhibit sustainable growth 
characteristics. The subadviser to U.S. Global Leaders Growth Trust 
seeks to identify companies with superior long-term earnings prospects. 
The portfolio invests in large capitalization companies (companies in 
the capitalization range of the S&P 500 Index).
    26. The following table contains information about the net assets 
of the portfolios as of December 31, 2004:

----------------------------------------------------------------------------------------------------------------
                                                          Net assets
        Replaced  portfolio          Total net assets   attributable to       Substituted       Total net assets
                                            ($)         contracts  ($)         portfolio
----------------------------------------------------------------------------------------------------------------
Select Growth Trust................         3,550,498           639,800  500 Index Trust......    $1,263,351,026
Core Value Trust...................         3,590,295           697,594  500 Index Trust......     1,263,351,026
Small-Mid Cap Trust................         2,503,291           376,745  Mid Cap Index Trust..       247,296,621
Small-Mid Cap Growth Trust.........         2,991,474           243,506  Mid Cap Index Trust..       247,296,621
High Grade Bond Trust..............         5,884,918           733,261  Investment Quality          472,243,219
                                                                          Bond Trust.
Global Equity Select Trust.........         3,550,498           103,319  International Equity                  *
                                                                          Index Trust A.
International Equity Select Trust..         2,871,718           492,787  International Equity                  *
                                                                          Index Trust A.
Great Companies--America Trust.....         2,587,538           306,364  U.S. Global Leaders        397,513,438
                                                                          Growth Trust.
----------------------------------------------------------------------------------------------------------------
* The International Equity Index Trust A will be a newly created protfolio of JHT, and will, subject to the
  approval of sharehlders of JH VST International Equity Index Fund, succeed to all the assets and liabilities
  of that portfolio attributable to its Series I and II shares (``JH VST Combination''). As of December 31,
  2004, total net assets of the JH VST International Equity Fund were $103,030,000.


[[Page 19527]]

    The shareholders of each of the Replaced Portfolios are their 
Subaccounts and JHLICO USA.
    27. The shareholders of the Strategic Growth Trust, another 
portfolio of JHT, with net assets of $387,915,360 at December 31, 2004, 
have approved its combination with U.S. Global Leaders Growth Trust as 
of the effective time of the Substitution.
    28. The following tables set forth the expense ratios for the 
shares of each of the Replaced and Substituted Portfolios affected by 
the Substitutions (as a percentage of average net assets) for the year 
ended December 31, 2004.

----------------------------------------------------------------------------------------------------------------
                                                        Select Growth      Core Value Trust     500 Index Trust
                                                       Trust  (Series I   (Series I Shares)    (Series I Shares)
                                                      Shares) (percent)       (percent)            (percent)
----------------------------------------------------------------------------------------------------------------
Management Fees.....................................              0.80                 0.80                0.38
Distribution (12b-1) Fees...........................              0.15                 0.15                0.15
Other Expenses......................................              0.88                 0.61                0.03
                                                     --------------------
    Total Annual Expenses...........................              1.83                 1.56                0.56
Fee Waiver/Expense Reimbursement....................             (0.59)               (0.39)              (0.00)
                                                     --------------------
    Net Annual Expenses.............................              1.24                 1.17                0.56
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
                                                        Small-Mid Cap       Small-Mid Cap
                                                       Trust  (Series I      Growth Trust        Mid Cap Index
                                                           Shares)        (Series I Shares)    Trust  (Series I
                                                          (percent)           (percent)       Shares)  (percent)
----------------------------------------------------------------------------------------------------------------
Management Fees.....................................              0.95                 0.80                0.38
Distribution (12b-1) Fees...........................              0.15                 0.15                0.15
Other Expenses......................................              0.13                 1.02                0.04
                                                     --------------------
    Total Annual Expenses...........................              1.23                 1.97                0.57
Fee Waiver/Expense Reimbursement....................             (0.00)               (0.56)              (0.00)
                                                     --------------------
    Net Annual Expenses.............................              1.23                 1.41                0.57
----------------------------------------------------------------------------------------------------------------


------------------------------------------------------------------------
                                                      Investment Quality
                                    High Grade Bond       Bond Trust
                                   Trust  (Series I    (Series I Shares)
                                  Shares)  (percent)       (percent)
------------------------------------------------------------------------
Management Fees.................               0.56                0.50
Distribution (12b-1) Fees.......               0.15                0.15
Other Expenses..................               0.17                0.09
                                 ---------------------
    Total Annual Expenses.......               0.88                0.74
Fee Waiver/Expense Reimbursement              (0.07)              (0.00)
                                 ---------------------
    Net Annual Expenses.........               0.81                0.74
------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
                                                                            International Equity Index Trust A
                                                         Global Equity         (Series I Shares)  (percent)
                                                         Select Trust    ---------------------------------------
                                                       (Series I Shares)        JH VST         JHT International
                                                           (percent)         International    Equity Index Trust
                                                                           Equity Index Fund     A (estimated)
----------------------------------------------------------------------------------------------------------------
Management Fees.....................................               0.90                0.15                0.55
Distribution (12b-1) Fees...........................               0.15                0.40                0.05
Other Expenses......................................               0.75                0.17                0.06
                                                     ---------------------
    Total Annual Expenses...........................               1.80                0.72                0.66
Fee Waiver/Expense Reimbursement....................              (0.45)              (0.00)              (0.00)
                                                     ---------------------
    Net Annual Expense..............................               1.35                0.72                0.66
----------------------------------------------------------------------------------------------------------------


----------------------------------------------------------------------------------------------------------------
                                                                            International Equity Index Trust A
                                                                               (Series I Shares)  (percent)
                                                  International Equity   ---------------------------------------
                                                 Select Trust  (Series I        JH VST         JHT International
                                                   Shares)  (percent)        International    Equity Index Trust
                                                                           Equity Index Fund     A (estimated)
----------------------------------------------------------------------------------------------------------------
Management Fees...............................                     0.90                0.15                0.55

[[Page 19528]]

 
Distribution (12b-1)..........................                     0.15                0.40                0.05
Fees:
    Other Expenses............................                     0.26                0.17                0.06
                                               ---------------------------
    Total Annual Expenses.....................                     1.31                0.72                0.66
    Fee Waiver/Expense Reimbursement..........                    (0.11)              (0.00)              (0.00)
                                               ---------------------------
    Net Annual Expenses.......................                     1.20                0.72                0.66
----------------------------------------------------------------------------------------------------------------


------------------------------------------------------------------------
                                 Great Companies--   U.S. Global Leaders
                                   America Trust         Growth Trust
                                 (Series II Shares)   (Series II Shares)
                                     (percent)            (percent)
------------------------------------------------------------------------
Management Fees...............                0.75                 0.61
Distribution (12b-1)..........                0.35                 0.35
Fees:
    Other Expenses............                1.02                 0.73
                               ----------------------
    Total Annual Expenses.....                2.12                 1.69
    Fee Waiver/Expense                       (0.19)               (0.23)
     Reimbursement............
                               ----------------------
    Net Annual Expenses.......                1.93                 1.46
------------------------------------------------------------------------

    29. The following table contains performance information for the 
indicated periods ended December 31, 2004 for the shares of each of the 
Replaced and Substituted Portfolios affected by the Substitutions, 
except that in the case of the International Equity Index Trust A, the 
performance shown is for the NAV shares of JH VST International Equity 
Index Fund. Series I shares of JH VST International Equity Index Fund 
were not offered prior to May 3, 2004. The performance of the Series I 
shares of JH VST International Equity Index Fund will be lower than the 
performance of the NAV shares because of its 12b-1 Fee. JH VST 
International Equity Index Fund will be the accounting survivor of the 
JH VST Combination.

----------------------------------------------------------------------------------------------------------------
                                                                                          Life of
                   Portfolio                       One year    Five year     Ten year    portfolic    Date first
                                                  (percent)    (percent)    (percent)    (percent)    available
----------------------------------------------------------------------------------------------------------------
Select Growth Trust (Series I Shares)..........         2.62          N/A          N/A        -4.54     07/16/01
Core Value Trust (Series I Shares).............         3.27          N/A          N/A        -1.05     07/16/01
500 Index Trust (Series I Shares)..............        10.26          N/A          N/A        -3.02     05/01/00
Small-Mid Cap Trust (Series I Shares)..........         7.15          N/A          N/A         1.13     07/16/00
Small-Mid Cap Growth Trust (Series I Shares)...        13.70          N/A          N/A        -2.50     07/16/01
Mid Cap Index Trust (Series I Shares)..........        15.83          N/A          N/A         7.35     05/01/00
High Grade Bond Trust (Series I Shares)........         2.77          N/A          N/A         5.20     07/16/01
Investment Quality Bond Trust (Series I Shares)         4.81         7.74         7.63          N/A     06/18/85
Global Equity Select Trust (Series I Shares)...        11.86          N/A          N/A         4.09     07/16/01
International Equity Select Trust..............        18.94          N/A          N/A         7.71     07/16/01
JH VST International Equity Index Fund NAV             20.24        -0.95         5.38          N/A     05/02/88
 Shares........................................
Series I Shares................................          N/A          N/A          N/A        18.45   05/03/2004
Great Companies--America Trust (Series II               1.81          N/A          N/A         9.82   08/04/2003
 Shares).......................................
U.S. Global Leaders Growth Trust (Series II              N/A          N/A          N/A         5.68   05/03/2004
 Shares).......................................
----------------------------------------------------------------------------------------------------------------

    30. Applicants represent that each of the Substitutions will better 
serve the interests of the Contract owners because it will provide 
those owners with an investment option that: (i) Permits them to pursue 
an investment option that is comparable to their current investment 
option in terms of pursuing long-term investment goals without becoming 
subject to greater overall risks; (ii) is much larger; (iii) has a 
lower advisory fee and overall expense ratio; and (iv) has better 
overall or short-term historical performance.
    31. Applicants anticipate that each of the Substitutions will be 
effected by having each Subaccount that invests in a Replaced Portfolio 
redeem its shares of that Portfolio for cash at the net asset value 
calculated on the Substitution Date and purchase shares of the 
Substituted Portfolio for cash at net asset value at the same time. 
Because each of the Substitutions will take place at the relative net 
asset values determined on the Substitution Date in accordance with 
Section 22(c) of the Act and Rule 22c-1 thereunder, it will have no 
financial impact on any Contract owner. In connection with the 
completion of each of the Substitutions, JHLICO USA will withdraw its 
seed money from each of the Replaced Portfolios in which it has seed 
money, and JHT will terminate those Portfolios.

[[Page 19529]]

    32. Applicants filed with the Commission on October 22, 2004, and 
provided to Contract owners, a prospectus supplement that described the 
Substitutions and explained that Applicants had filed with the 
Commission an application for an order approving the Substitutions, 
that, if the order is issued, will take place as of the close of 
regularly scheduled trading on the New York Stock Exchange on April 29, 
2005 (the ``Substitution Date'') and that the Contract owners affected 
by the Substitutions will be sent written confirmations (described 
below) informing them of the Substitutions.
    33. The disclosure advised Contract owners affected by the 
Substitutions that they may transfer Contract values, prior to the 
Substitutions, from Subaccounts investing in the Replaced Portfolios to 
Subaccounts investing in other investment options available under the 
applicable Contract, and for 30 days following the Substitution Date, 
from Subaccounts investing in the Substituted Portfolios to Subaccounts 
investing in other investment options available under the applicable 
Contract. The disclosure further advised Contract owners that such 
transfers may be made without the imposition of any transfer charges, 
will not be counted for purposes of determining the numbers of 
permitted transfers or permitted free transfers under a Contract or the 
Disruptive Short-Term Trading Policy and will not be subject to any 
maximum amount limitations otherwise applicable under a Contract or the 
Disruptive Short-Term Trading Policy. A second prospectus supplement 
filed with the Commission in March 2005 provided Contract owners with 
substantially the same updated information.
    34. Applicants represent that all expenses in connection with the 
Substitutions, including any brokerage commissions and legal, 
accounting and other fees and expenses, will be paid by JHLICO USA and 
JHLICO New York and will not be borne, directly or indirectly, by the 
Replaced Portfolios, the Substituted Portfolios or Contract owners. 
Affected Contract owners will not incur any fees or charges as a result 
of the Substitutions. 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 they were before the 
Substitutions.
    35. Applicants further represent the Substitutions will not have 
any impact on the insurance benefits that JHLICO USA and JHLICO New 
York are obligated to provide under the Contracts or on the rights of 
Contract owners and the other obligations of JHLICO USA and JHLICO New 
York under the Contracts. The Substitutions will not have a tax impact 
on Contract owners.
    36. Applicants also represent that the Substitutions involving the 
International Equity Index Trust A will not be effected if the JH VST 
Combination is not approved by shareholders of JH VST International 
Equity Index Fund.

Applicants' Legal Analysis

    1. Applicants request an order pursuant to Section 26(c) of the Act 
approving each of the Substitutions. Section 26(c) of the Act makes it 
unlawful for any depositor or trustee of a registered unit investment 
trust holding the security of a single issuer to substitute another 
security for such security unless the Commission approves the 
substitution. The Commission will approve such a substitution if the 
evidence establishes that it is consistent with the protection of 
investors and the purposes fairly intended by the policy and provisions 
of the Act.
    2. Applicants assert that the purposes, terms and conditions of the 
Substitutions are consistent with the principles and purposes of 
Section 26(c) and do not entail any of the abuses that Section 26(c) is 
designed to prevent. Substitution is an appropriate solution to the 
lack of Contract owner interest in and higher relative expenses of the 
Replaced Portfolios. Applicants do not expect that any Substitution 
will have a significant impact on the expense ratio of the Substituted 
Portfolio and believe that each Substituted Portfolio will serve 
Contract owner interests better than the Replaced Portfolio because it 
provides a comparable investment option while being larger and having a 
lower expense ratio. Each of the Contracts reserves to JHLICO USA or 
JHLICO New York, as the case may be, the right to effect such 
substitutions, and each of JHLICO USA and JHLICO New York has made 
disclosure of this reserved right in the prospectuses for the 
Contracts.
    3. Applicants submit that the Substitutions will not result in the 
type of costly forced redemptions that Section 26(c) was intended to 
guard against and, for the following reasons, are consistent with the 
protection of investors and the purposes fairly intended by the Act:
    (a) The Substitutions will make available under the Contracts 
continuity of investment objectives and expectations.
    (b) Contract owners who have allocated Contract values to one or 
more of the Replaced Portfolios will be provided with advance notice of 
the Substitutions and will have the opportunity, from the date of such 
advance notice until 30 days after the Substitution Date, to transfer 
Contract values to which a Substitution applies from a Subaccount 
investing in a Replaced Portfolio or a Substituted Portfolio to other 
available investment options under a Contract. Such transfers may be 
made without the imposition of any transfer charges, will not be 
counted for purposes of determining the numbers of permitted transfers 
or permitted free transfers under a Contract or applicable short-term 
trading policy and will not be subject to any maximum amount 
limitations otherwise applicable under a Contract or applicable short-
term trading policy.
    (c) The Substitutions will be effected at the respective net asset 
values of the shares of the Replaced Portfolios and their corresponding 
Substituted Portfolios in conformity with Section 22(c) of the Act and 
Rule 22c-1 thereunder, without the imposition of any transfer or 
similar charge by Applicants and with no change in the amount of any 
Contract owner's Contract value.
    (d) The expenses of the Substitutions will be paid by JHLICO USA 
and JHLICO New York and will not be borne, directly or indirectly, by 
the Replaced Portfolios, the Substituted Portfolios or Contract owners.
    (e) The Substitutions will not have any impact on the insurance 
benefits that JHLICO USA and JHLICO New York are obligated to provide 
under the Contracts or on the rights of Contract owners and the other 
obligations of JHLICO USA and JHLICO New York under the Contracts.
    (f) The Substitutions will not cause the fees and charges under the 
Contracts currently being paid by Contract owners to be greater after 
than before the Substitutions and will not have any tax impact on 
Contract owners.
    (g) Within five days after a Substitution, JHLICO USA and JHLICO 
New York will send to Contract owners written confirmation that the 
Substitution has occurred.
    (h) For each fiscal period (not to exceed a fiscal quarter) during 
the 24 months following the date of each Substitution, JHLICO USA or 
JHLICO NY, as appropriate, will adjust the Contract values invested in 
the Substituted Portfolio as a result of the Substitution, to the 
extent necessary to effectively reimburse the affected Contract owners 
for their proportionate share of any amount by which the annual rate of 
the Substituted Portfolio's total operating expenses (after any

[[Page 19530]]

expense waivers or reimbursements) for that fiscal period, as a 
percentage of the Portfolio'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 the annual rate of the 
corresponding Replaced Portfolio's total operating expenses, as a 
percentage of such replaced Portfolio's average daily net assets, for 
the twelve months ended December 31, 2004, plus 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.

Conclusion

    For the reasons and upon the facts set forth in the application, 
Applicants submit that the requested order meets the standards set 
forth in Section 26(c) and respectfully request that the Commission 
issue an order pursuant to Section 26(c) of the Act approving the 
Substitutions.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-1745 Filed 4-12-05; 8:45 am]
BILLING CODE 8010-01-P