[Federal Register Volume 70, Number 71 (Thursday, April 14, 2005)]
[Notices]
[Pages 19793-19812]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-7496]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. IC-26831; File No. 812-13129]


John Hancock Life Insurance Company, et al.

April 11, 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 certain 
substitutions of securities.

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

DATES: Filing Date: The application was filed on October 15, 2004 and 
amended on February 9, 2005 and on April 11, 2005.

Applicants: John Hancock Life Insurance Company (``John Hancock''), 
John Hancock Variable Life Insurance Company (``JHVLICO''), and the 
following separate accounts of John Hancock and JHVLICO (``Separate 
Accounts''): 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'').
Summary of Application: Applicants request an order to permit certain 
unit investment trusts to substitute shares of the following series of 
John Hancock Trust (``JHT'') (formerly, Manufacturers Investment 
Trust): (a) Shares of JHT 500 Index Trust B for shares of each of the 
following series of unaffiliated registered investment companies: AIM 
V.I. Premier Equity Fund (Series I and Series II Shares) of AIM 
Variable Insurance Funds, AllianceBernstein Growth and Income Portfolio 
(Class B Shares) of AllianceBernstein Variable Products Series Fund, 
Inc., AllianceBernstein Premier Growth Portfolio (Class B Shares) of 
AllianceBernstein Variable Products Series Fund, Inc., Fidelity VIP 
Growth Portfolio (Service Class and Service Class 2 Shares) of Variable 
Insurance Products Fund, MFS Investors Growth Stock Series (Initial 
Class) of MFS Variable Insurance Trust, and Growth and Income Portfolio 
(Class VC Shares) of Lord Abbett Series Fund, Inc.; (b) shares of JHT 
Total Stock Market Index Trust for shares of each of the following 
series of unaffiliated registered investment companies: Fidelity VIP 
Contrafund Portfolio (Service Class Shares) of Variable Insurance 
Products Fund II, MFS Research Series (Initial Class and Service Class) 
of MFS Variable Insurance Trust, Putnam VT Investors Fund (Class 1B 
Shares) of Putnam Variable Trust, Oppenheimer Capital Appreciation 
Fund/VA (Service Class Shares) of Oppenheimer Variable Account Funds, 
Mutual Shares Securities Fund (Class 2 Shares) of Franklin Templeton 
Variable Insurance Products Trust, Global Technology Portfolio (Service 
Shares) of Janus Aspen Series; (c) shares of JHT Mid Cap Index Trust 
for shares of each of the following series of unaffiliated registered 
investment companies: Mid Cap Value Portfolio (Class VC Shares) of Lord 
Abbett Series Fund, Inc., Putnam VT Vista Fund (Class IB Shares) of 
Putnam Variable Trust, MFS Mid Cap Growth Series (Service Class Shares) 
of MFS Variable Insurance Trust, Mid Cap Stock Portfolio (Service Class 
Shares) of Dreyfus Investment Portfolios, and AIM V.I. Capital 
Development Fund (Series I and Series II shares) of AIM Variable 
Insurance Funds; (d) shares of JHT Small Cap Index Trust for shares of 
each of the following series of unaffiliated registered investment 
companies: Delaware VIP Small Cap Value Series (Service Class Shares) 
of Delaware VIP Trust, Emerging Leaders Portfolio (Service Class 
Shares) of Dreyfus Investment Portfolios, Franklin Small Cap Fund 
(Class 2 Shares) of Franklin Templeton Variable Insurance Products 
Trust, Delaware VIP Trend Series (Service Class Shares) of Delaware VIP 
Trust, MFS New Discovery Series (Initial Class and Service Class 
Shares) of MFS Variable Insurance Trust; (e) shares of JHT 
International Equity Index Trust B for shares of each of the following 
series of unaffiliated registered investment companies: Fidelity VIP 
Overseas Portfolio (Service Class and Service Class 2 Shares) of 
Variable Insurance Products Fund, Worldwide Growth Portfolio (Service 
Shares) of Janus Aspen Series, and Putnam VT International Equity Fund 
(Class 1B Shares) of Putnam Variable Trust; (f) shares of JHT U.S. 
Government Securities Trust for shares of the following series of an 
unaffiliated registered investment company: Putnam VT American 
Government Income Fund (Class 1B Shares) of Putnam Variable Trust; and 
(g) shares of JHT Bond Index Trust B for shares of the following series 
of an unaffiliated registered investment company: Franklin U.S. 
Government Fund (Class 2 Shares) of Franklin Templeton Variable 
Insurance Products Trust.

Hearing of Notification: 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 should be received by the Commission by 5:30 p.m. on 
April 29, 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 nature of the writer's 
interest, the reason for the request and the issues contested. Persons 
may request notification of a hearing by writing to the Secretary of 
the Commission.

ADDRESSES: Secretary, Securities and Exchange Commission, 450 Fifth 
Street, NW., Washington, DC 20549. Applicants: Raymond A. O'Hara III, 
Blazzard, Grodd & Hasenauer, P.C., 943 Post Road East, Westport, CT 
06880 and Arnold R. Bergman, John Hancock Life Insurance Company, 601 
Congress Street, 11th Floor, Boston, MA 02210-2801.

FOR FURTHER INFORMATION CONTACT: Harry Eisenstein, Senior Counsel, at 
(202) 551-6764 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 may be obtained for a fee from 
the Public Reference Branch of the Commission, 450 Fifth Street, NW., 
Washington, DC 20549, (202) 942-8090.

Applicants' Representations

    1. John Hancock is a Massachusetts stock life insurance company. On 
February 1, 2000, John Hancock Mutual Life Insurance Company converted 
to a stock company from a mutual company and changed its name to its 
present name. As part of the demutualization process, John Hancock 
became a subsidiary of John Hancock Financial Services, Inc., a newly-
formed publicly-traded corporation. In April 2004, John Hancock 
Financial Services, Inc. was merged with a subsidiary of Manulife 
Financial Corporation, a publicly-traded corporation organized under 
the laws of Canada. The merger was effected pursuant to an Agreement 
and Plan of Merger dated as of September 28, 2003.

[[Page 19794]]

As a consequence of the merger, John Hancock's ultimate parent is now 
Manulife Financial Corporation. John Hancock provides a broad range of 
insurance and investment products, and investment management and 
advisory services.
    2. JHVLICO is a wholly-owned subsidiary of John Hancock and is 
organized under the laws of Massachusetts. JHVLICO is a stock life 
insurance company, which was organized in 1979. Its primary business is 
life insurance and annuities. John Hancock and JHVLICO are referred to 
collectively herein as the ``Insurance Companies.''
    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). The variable life insurance 
policies funded by Account S that are affected by the 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); VEP Edge, interests under which are also 
registered under the 1933 Act (File No. 33-55172); and Performance 
Executive Variable Life (``PEVL''), interests under which are also 
registered under the 1933 Act (File No. 333-111385).
    4. 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). The variable life 
insurance policies funded by Account UV that are affected by the 
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 and MVL Edge II-NY, interests under both of which 
are also registered under the 1933 Act (File No. 333-70746); VCOLI-NY, 
interests under which are also registered under the 1933 Act (File No. 
333-67744); MVCOLI-NY, interests under which are registered on Form N-6 
under the 1933 Act (File No. 333-91448); and PEVL-NY, interests under 
which are registered on Form N-6 under the 1933 Act (File No. 333-
111383).
    5. 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). The Account U variable life 
insurance policies affected by the application are as follows: MVL 
Plus, interests under which are also registered under the 1933 Act 
(File Nos. 33-76660), MVL Edge and MVL-Edge II, interests under both of 
which are also registered under the 1933 Act (File No. 333-52128); and 
eVariable Life, interests under which are also registered under the 
1933 Act (File No. 333-50312).
    6. 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). The Account JF variable annuity 
contracts affected by the 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).
    7. 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). The only Account I variable life 
insurance policy affected by the application is eVariable Annuity, 
interests under which are also registered under the 1933 Act (File No. 
333-16949).
    8. 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). The Account H contracts affected 
by the application are as follows: Revolution Access, Revolution Extra 
and Revolution Extra II, Revolution Standard, and Revolution Value, 
Revolution Value II and Wealth Builder, interests under all of which 
are also registered under the 1933 Act (File Nos. 333-84771, 333-84783, 
333-84765 and 333-81103, respectively).
    9. JHT was originally organized on August 3, 1984 as a Maryland 
corporation. Effective December 31, 1988, JHT was reorganized as a 
Massachusetts business trust. JHT is registered under the Act as an 
open-end management investment company of the series type, and its 
securities are registered under the 1933 Act. JHT currently offers 79 
series. The substitutions will involve seven series of JHT, three of 
which--the JHT 500 Index Trust B, the JHT International Equity Index 
Trust B and the JHT Bond Index Trust B--are newly-organized funds that 
will first issue shares on April 29, 2005, pursuant to a reorganization 
that will combine shares of certain series of John Hancock Variable 
Series Trust I into certain existing and certain newly-organized series 
of JHT.
    10. Each of the variable life and variable annuity policies 
identified above (``Contracts'') issued by the Separate Accounts 
permits its owners 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 (and corresponding 
funds) that are currently available for this purpose.
    11. 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 
any such transfer of accumulated value among subaccounts.
    12. 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 these 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

[[Page 19795]]

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 or, after the annuity payment commencement date, 
in more than four investment options at any one time.
    13. To the extent that the Contracts contain restrictions or 
limitations on an owner's right to transfer, such restrictions and 
limitations will be suspended in connection with the transfers as 
described in further detail below.
    14. John Hancock or JHVLICO, as applicable, reserves the right to 
make certain changes, including the right 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 the applicable Form N-6 or Form N-4 registration 
statement.

The Proposed Substitutions

    15. Each Insurance Company, on its behalf and on behalf of the 
Separate Accounts, proposes to make certain substitutions of shares of 
twenty-seven funds (the ``Existing Funds'') held in subaccounts of its 
respective Separate Accounts for certain series (the ``Replacement 
Funds'') of JHT. The proposed substitutions are as follows:
    (1) Shares of JHT 500 Index Trust B for shares of each of the 
following series of unaffiliated registered investment companies:
    (a) AIM V.I. Premier Equity Fund (Series I and Series II Shares) of 
AIM Variable Insurance Funds.
    (b) AllianceBernstein Growth and Income Portfolio (Class B Shares) 
of AllianceBernstein Variable Products Series Fund, Inc.
    (c) AllianceBernstein Premier Growth Portfolio (Class B Shares) of 
AllianceBernstein Variable Products Series Fund, Inc.
    (d) Fidelity VIP Growth Portfolio (Service Class and Service Class 
2 Shares) of Variable Insurance Products Fund.
    (e) MFS Investors Growth Stock Series (Initial Class) of MFS 
Variable Insurance Trust.
    (f) Growth and Income Portfolio (Class VC Shares) of Lord Abbett 
Series Fund, Inc.
    (2) Shares of JHT Total Stock Market Index Trust for shares of each 
of the following series of unaffiliated registered investment 
companies:
    (a) Fidelity VIP Contrafund Portfolio (Service Class Shares) of 
Variable Insurance Products Fund II.
    (b) MFS Research Series (Initial Class and Service Class) of MFS 
Variable Insurance Trust.
    (c) Putnam VT Investors Fund (Class 1B Shares) of Putnam Variable 
Trust.
    (d) Oppenheimer Capital Appreciation Fund/VA (Service Class Shares) 
of Oppenheimer Variable Account Funds.
    (e) Mutual Shares Securities Fund (Class 2 Shares) of Franklin 
Templeton Variable Insurance Products Trust.
    (f) Global Technology Portfolio (Service Shares) of Janus Aspen 
Series.
    (3) Shares of JHT Mid Cap Index Trust for shares of each of the 
following series of unaffiliated registered investment companies:
    (a) Mid Cap Value Portfolio (Class VC Shares) of Lord Abbett Series 
Fund, Inc.
    (b) Putnam VT Vista Fund (Class 1B Shares) of Putnam Variable 
Trust.
    (c) MFS Mid Cap Growth Series (Service Class Shares) of MFS 
Variable Insurance Trust.
    (d) Mid Cap Stock Portfolio (Service Class Shares) of Dreyfus 
Investment Portfolios.
    (e) AIM V.I. Capital Development Fund (Series I and Series II 
Shares) of AIM Variable Insurance Funds.
    (4) Shares of JHT Small Cap Index Trust for shares of each of the 
following series of unaffiliated registered investment companies:
    (a) Delaware VIP Small Cap Value Series (Service Class Shares) of 
Delaware VIP Trust.
    (b) Emerging Leaders Portfolio (Service Class Shares) of Dreyfus 
Investment Portfolios.
    (c) Franklin Small Cap Fund (Class 2 Shares) of Franklin Templeton 
Variable Insurance Products Trust.
    (d) Delaware VIP Trend Series (Service Class Shares) of Delaware 
VIP Trust.
    (e) MFS New Discovery Series (Initial Class and Service Class 
Shares) of MFS Variable Insurance Trust.
    (5) Shares of JHT International Equity Index Trust B for shares of 
each of the following series of unaffiliated registered investment 
companies:
    (a) Fidelity VIP Overseas Portfolio (Service Class and Service 
Class 2 Shares) of Variable Insurance Products Fund.
    (b) Worldwide Growth Portfolio (Service Shares) of Janus Aspen 
Series.
    (c) Putnam VT International Equity Fund (Class 1B Shares) of Putnam 
Variable Trust.
    (6) Shares of JHT U.S. Government Securities Trust for shares of 
the following series of an unaffiliated registered investment company: 
Putnam VT American Government Income Fund (Class 1B Shares) of Putnam 
Variable Trust.
    (7) Shares of JHT Bond Index Trust B for shares of the following 
series of an unaffiliated registered investment company: Franklin U.S. 
Government Fund (Class 2 Shares) of Franklin Templeton Variable 
Insurance Products Trust.

The Funds' Investment Strategies

    16. Set forth below is a description of the investment objectives 
and principal investment policies of each Existing Fund and its 
corresponding Replacement Fund.

------------------------------------------------------------------------
             Existing fund                       Replacement fund
------------------------------------------------------------------------
AIM V.I. Premier Equity Fund--seeks to   JHT 500 Index Trust B--seeks to
 achieve long-term growth of capital.     approximate the aggregate
 Income is a secondary objective. The     total return of a broad U.S.
 Fund normally invests at least 80% of    domestic equity market index.
 its net assets in equity securities.     The Trust invests, under
 The Fund may also invest in preferred    normal market conditions, at
 stocks and debt instruments that have    least 80% of its net assets
 prospects for growth of capital and      (plus any borrowings for
 may invest up to 25% of its total        investment purposes) in (a)
 assets in foreign securities. The        the common stocks that are
 portfolio managers focus on              included in the Standard &
 undervalued equity securities.           Poor's 500 (S&P 500) Index and
                                          (b) securities (which may or
                                          may not be included in the S&P
                                          500 Index) that the
                                          subadviser, believes as a
                                          group will behave in a manner
                                          similar to the index.
AllianceBernstein Growth and Income      JHT 500 Index Trust B.
 Portfolio--seeks reasonable current
 income and reasonable opportunity for
 appreciation through investments
 primarily in dividend-paying common
 stocks of good quality companies. The
 Portfolio also may invest in fixed-
 income and convertible securities and
 in securities of foreign issuers.

[[Page 19796]]

 
AllianceBernstein Premier Growth         JHT 500 Index Trust B.
 Portfolio--seeks growth of capital by
 pursuing aggressive investment
 policies. The Portfolio invests
 primarily in the securities of a small
 number of U.S. companies. The
 Portfolio may invest up to 20% of its
 total assets in foreign securities and
 up to 20% of its net assets in
 convertible securities.
Fidelity VIP Growth Portfolio--seeks to  JHT 500 Index Trust B.
 achieve capital appreciation. The
 Portfolio normally invests its assets
 primarily in common stocks. The
 Portfolio also may invest in
 securities of foreign issuers in
 addition to securities of domestic
 issuers.
MFS Investors Growth Stock Series--      JHT 500 Index Trust B.
 seeks to provide long-term growth of
 capital and future income rather than
 current income. The Series invests,
 under normal market conditions, at
 least 80% of its net assets in common
 stocks and related securities, such as
 preferred stocks, convertible
 securities and depository receipts.
 The Series also may invest in foreign
 securities.
Lord Abbett Growth and Income            JHT 500 Index Trust B.
 Portfolio--seeks long-term growth of
 capital and income without excessive
 fluctuations in market value. The
 Portfolio primarily invests in equity
 securities of large, seasoned U.S. and
 multinational companies. Under normal
 circumstances, the Portfolio will
 invest at least 80% of its net assets
 in equity securities of large
 companies with market capitalizations
 of at least $5 billion at the time of
 purchase.
Fidelity VIP Contrafund Portfolio--      JHT Total Stock Market Index
 seeks long-term capital appreciation.    Trust--seeks to approximate
 The Portfolio normally invests           the aggregate total return of
 primarily in common stocks, investing    a broad U.S. domestic equity
 in securities of companies whose value   market index. The Trust
 it believes is not fully recognized by   invests, under normal market
 the public. The Portfolio invests in     conditions, at least 80% of
 both domestic and foreign issuers and    its net assets (plus any
 invests in either ``growth'' stocks or   borrowings for investment
 ``value'' stocks or both.                purposes) in (a) the common
                                          stocks that are included in
                                          the Dow Jones Wilshire 5000
                                          Index and (b) securities
                                          (which may or may not be
                                          included in the Dow Jones
                                          Wilshire 5000 Index) that MFC
                                          Global (U.S.A.), the
                                          subadviser, believes as a
                                          group will behave in a manner
                                          similar to the index.
MFS Research Series--seeks to provide    JHT Total Stock Market Index
 long-term growth of capital and future   Trust.
 income. The Series invests at least
 80% of its net assets in common stocks
 and related securities. The Series may
 invest in companies of any size and in
 foreign securities, including emerging
 market securities.
Putnam VT Investors Fund--seeks long-    JHT Total Stock Market Index
 term growth of capital and any           Trust.
 increased income that results from
 this growth. The Fund invests mainly
 in common stocks of U.S. companies
 which the adviser believes have
 favorable investment potential. The
 Fund invests mainly in large companies.
Oppenheimer Capital Appreciation Fund/   JHT Total Stock Market Index
 VA--seeks capital appreciation by        Trust.
 investing in securities of well-known,
 established companies. The Fund
 invests mainly in common stocks of
 ``growth companies. The Fund currently
 focuses mainly on mid-cap and large-
 cap domestic companies, but buys
 foreign stocks as well.
Mutual Shares Securities Fund--seeks     JHT Total Stock Market Index
 capital appreciation. Income is a        Trust.
 secondary goal. Under normal market
 conditions, the Fund invests mainly in
 equity securities believed to be
 undervalued. The Fund invests
 substantially in medium and large
 capitalization companies with market
 capitalization values greater than
 $1.5 billion. The Fund expects to
 invest significantly in foreign
 investments. The Fund also invests in
 risk arbitrage securities and
 distressed companies.
Global Technology Portfolio--seeks long- JHT Total Stock Market Index
 term growth of capital. The Portfolio    Trust.
 invests, under normal circumstances,
 at least 80% of its net assets in
 securities of companies that the
 portfolio manager believes will
 benefit significantly from advances or
 improvements in technology. The
 Portfolio invests primarily in equity
 securities of U.S. and foreign
 companies. The Portfolio may invest
 without limit in foreign equity and
 debt securities. The Portfolio will
 limit its investment in high-yield/
 high-risk bonds to less than 35% of
 its net assets.
Lord Abbett Mid-Cap Value Portfolio--    JHT Mid Cap Index Trust--seeks
 seeks capital appreciation through       to approximate the aggregate
 investments, primarily in equity         total return of a mid cap U.S.
 securities, which are believed to be     domestic equity index. The
 undervalued in the marketplace. The      Trust invests, under normal
 Portfolio normally invests at least      market conditions, at least
 80% of its net assets, plus the amount   80% of its net assets (plus
 of borrowings for any investment         any borrowings for investment
 purposes, in equity securities of mid-   purposes) in (a) the common
 sized companies meaning those with a     stocks that are included in
 market capitalization of roughly $500    the Standard & Poor's 400 (S&P
 million to $10 billion, at time of       400) Index and (b) securities
 purchase. The Portfolio may invest in    (which may or may not be
 various equity securities.               included in the S&P 400 Index)
                                          that MFC Global (U.S.A.), the
                                          subadviser, believes as a
                                          group will behave in a manner
                                          similar to the index. There
                                          are no limitations on the
                                          amount of fixed income
                                          securities in which the Trust
                                          may invest.

[[Page 19797]]

 
Putnam VT Vista Fund-- seeks capital     JHT Mid Cap Index Trust.
 appreciation. The Fund invests mainly
 in common stocks of U.S. companies
 with a focus on growth stocks. The
 Fund invests mainly in midsized
 companies.
MFS Mid Cap Growth Series--seeks long-   JHT Mid Cap Index Trust.
 term growth of capital. The Series
 invests, under normal market
 conditions, at least 80% of its net
 assets in common stocks and related
 securities of companies with medium
 market capitalization (at least $250
 million. The Series may invest in
 foreign securities.
Mid Cap Stock Portfolio--seeks           JHT Mid Cap Index Trust.
 investment results that are greater
 than the total return performance of
 publicly traded common stocks of
 medium-size domestic companies in the
 aggregate, as represented by the S&P
 400. The Portfolio normally invests at
 least 80% of its assets in stocks of
 midsize companies.
AIM V.I. Capital Development Fund--      JHT Mid Cap Index Trust.
 seeks long-term growth of capital. The
 Fund invests primarily in securities,
 including common stocks, convertible
 securities and bonds, of small- and
 medium-sized companies. The Fund may
 also invest up to 25% of its total
 assets in foreign securities. There
 are no limitations on the amount of
 fixed income securities in which the
 Trust may invest.
Delaware VIP Small Cap Value Series--    JHT Small Cap Index Trust--
 seeks capital appreciation. The series   seeks to approximate the
 will invest, under normal                aggregate total return of a
 circumstances, at least 80% of its net   small cap U.S. domestic equity
 assets in investments of small           market index. The Trust
 capitalization companies (which it       invests, under normal market
 currently defines as those having a      conditions, at least 80% of
 market capitalization of generally       its net assets (plus any
 less than $2 billion at the time of      borrowings for investment
 purchase).                               purposes) in (a) the common
                                          stocks that are included in
                                          the Russell 2000 Index and (b)
                                          securities (which may or may
                                          not be included in the Russell
                                          2000 Index) that MFC Global
                                          (U.S.A.), the subadviser,
                                          believes as a group will
                                          behave in a manner similar to
                                          the index.
Emerging Leaders Portfolio--seeks        JHT Small Cap Index Trust.
 capital growth. The Portfolio normally
 invests at least 80% of its assets in
 stocks of companies the adviser
 believes to be ``emerging leaders.''
 The Portfolio primarily invests in
 companies with market capitalizations
 of less than $2 billion at the time of
 purchase. The Portfolio may invest up
 to 25% of its assets in foreign
 securities.
Franklin Small Cap Fund--seeks long-     JHT Small Cap Index Trust.
 term capital growth. Under normal
 market conditions, the Fund invests at
 least 80% of its net assets in
 investments of small capitalization
 (small-cap) companies, i.e., those
 with market capitalizations not
 exceeding (a) $1.5 billion or (b) the
 highest market capitalization value in
 the Russell 2000 Index, whichever is
 greater at time of purchase. The Fund
 may invest up to 20% of its net assets
 in investments of larger companies.
Delaware VIP Trend Series--seeks long-   JHT Small Cap Index Trust.
 term capital appreciation. The Series
 invests primarily in stocks of small,
 growth-oriented or emerging companies.
MFS New Discovery Series--seeks capital  JHT Small Cap Index Trust.
 appreciation. The Series invests,
 under normal market conditions, at
 least 65% of its net assets in equity
 securities of emerging growth
 companies. The Series generally
 focuses on smaller capitalization
 emerging growth companies that are
 early in their life cycle. The Series'
 adviser defines small cap companies as
 those with market capitalization
 within the range of market
 capitalizations in the Russell 2000
 Stock Index at the time of investment.
 The Series may also invest in foreign
 securities.
Fidelity VIP Overseas Portfolio--seeks   JHT International Equity Index
 long-term growth of capital. The         Trust B--seeks to track the
 Portfolio's adviser normally invests     performance of a broad-based
 at least 80% of the Portfolio's assets   equity index of foreign
 in non-U.S. securities. The Portfolio    companies primarily in
 normally invests primarily in common     developed countries and, to a
 stocks.                                  lesser extent, in emerging
                                          market countries. The Trust
                                          invests, under normal market
                                          conditions, at least 80% of
                                          its assets in securities
                                          listed in the Morgan Stanley
                                          Capital International All
                                          Country World Excluding U.S.
                                          Index.
Worldwide Growth Portfolio--seeks long-  JHT International Equity Index
 term growth of capital in a manner       Trust B
 consistent with the preservation of
 capital. The Portfolio invests
 primarily in common stocks of
 companies of any size located
 throughout the world. The Portfolio
 normally invests in issuers from at
 least five different countries,
 including the U.S. The Portfolio may
 invest without limit in foreign equity
 and debt securities, but will limit
 its investment in high-yield/high-risk
 bonds to less than 35% of its net
 assets.
Putnam VT International Equity Fund--    JHT International Equity Index
 seeks capital appreciation, by           Trust B.
 investing mainly in common stocks of
 companies outside the U.S. Under
 normal circumstances, at least 80% of
 the Fund's assets will be invested in
 equity investments. The Fund invests
 mainly in midsized and large
 companies. The Fund may invest in
 companies located in developing
 (emerging) markets.

[[Page 19798]]

 
Franklin U.S. Government Fund--seeks     JHT Bond Index Trust B--seeks
 income. Under normal market              to track the performance of
 conditions, the Fund invests at least    the Lehman Brothers Aggregate
 80% of its net assets in U.S.            Bond Index (``Lehman Index''),
 government securities. The Fund          which broadly represents the
 currently invests primarily in fixed     U.S. investment grade bond
 and variable rate mortgage-backed        market. The Trust is an
 securities, a substantial portion of     intermediate term bond fund of
 which is in securities issued by the     high and medium credit quality
 Government National Mortgage             which normally will invest
 Association. The Fund also may invest    more than 80% of its assets in
 in U.S. government securities backed     securities listed in the
 by other types of assets as well as in   Lehman Index. The Lehman Index
 U.S. Treasury bonds, notes and bills,    consists of dollar
 and securities issued by U.S.            denominated, fixed rate,
 government agencies or authorities.      investment grade debt
                                          securities with maturities
                                          generally greater than one
                                          year and outstanding par
                                          values of at least $200
                                          million. The Lehman Index
                                          includes U.S. Treasury and
                                          agency securities; asset-
                                          backed and mortgage-backed
                                          securities; corporate bonds,
                                          both U.S. and foreign (if
                                          dollar denominated); and
                                          foreign government and agency
                                          securities (if dollar
                                          denominated).
Putnam VT American Government Income     JHT U.S. Government Securities
 Fund--seeks high current income with     Trust--seeks to obtain a high
 preservation of capital as its           level of current income
 secondary objective. Under normal        consistent with preservation
 circumstances, the Fund invests at       of capital and maintenance of
 least 80% of its net assets in U.S.      liquidity. The Trust invests a
 government securities. The Fund          substantial portion of its
 invests mainly in intermediate-to long-  assets in debt obligations and
 term bonds that are obligations of the   mortgage-backed securities
 U.S. government, its agencies and        issued or guaranteed by the
 instrumentalities and are backed by      U.S. government, its agencies
 the full faith and credit of the U.S.,   or instrumentalities and
 or by only the credit of a federal       derivative securities such as
 agency or government sponsored entity.   collateralized mortgage
 The Fund may also make other types of    obligations backed by such
 investments, such as investments in      securities and futures
 derivatives.                             contracts. The Trust may also
                                          invest a portion of its assets
                                          in investment grade corporate
                                          bonds.
------------------------------------------------------------------------

    17. John Hancock Investment Management Services, LLC (``JHIMS'') is 
the Adviser to all of the Replacement Funds. MFC Global Investment 
Management (U.S.A.) Limited is the subadviser to the JHT 500 Index 
Trust B, JHT Total Stock Market Index Trust, JHT Mid Cap Index Trust 
and JHT Small Cap Index Trust. SSgA Funds Management, Inc. is the 
subadviser to the JHT International Equity Index Trust B. Declaration 
Management and Research LLC is the subadviser to the JHT Bond Index 
Trust B. Salomon Brothers Asset Management Inc., is the subadviser to 
the JHT U.S. Government Securities Trust. Currently, all of the 
Replacement Funds in JHT have Rule 12b-1 Plans through their Series I, 
II and III share classes. However, to accommodate the substitutions 
described herein, JHT is adding another class to each of the 
Replacement Funds which will have no Rule 12b-1 Plan (``NAV Class''). 
The NAV Class will be the only class used to accommodate the 
substitutions.

Funds' Financial Data

    18. Comparative size and expense data for the JHT 500 Index B Fund 
substitutions are as follows:

(a) AIM V.I. Premier Equity Fund--JHT 500 Index Trust B

    The aggregate amount of assets in the Separate Accounts allocated 
to the AIM V.I. Premier Equity Fund as of December 31, 2004 was 
approximately $89,043,959. It is estimated that the newly-created JHT 
500 Index Trust B series will have at least $1,137,000,000 in assets as 
of April 29, 2005.
    The management fees and total operating expenses of the two Funds 
are shown below. As discussed above, depicted below is an NAV Class for 
the Replacement Fund which will be created for the substitution. 
Expenses shown for the JHT 500 Index Trust B are based on estimates for 
the current fiscal year.

 
                                                  [In percent]
----------------------------------------------------------------------------------------------------------------
                                                            Existing Fund  AIM V.I. Premier     Replacement Fund
                                                                      Equity Fund                JHT 500 Index
                   Fees and expenses                    --------------------------------------    Trust B  NAV
                                                              Series I          Series II            Class
----------------------------------------------------------------------------------------------------------------
Management Fee.........................................               0.61               0.61               0.47
12b-1 Fee..............................................  .................               0.25
Other Expenses.........................................               0.30               0.30               0.03
                                                        --------------------
    Total Expenses.....................................               0.91               1.16               0.50
Waivers................................................              -0.01               -.01             *-0.25
                                                        --------------------
    Net Expenses.......................................               0.90               1.15              0.25
----------------------------------------------------------------------------------------------------------------
*Pursuant to an agreement between JHT and JHIMS, JHIMS has agreed to waive fees or reimburse expenses so that
  Total Expenses do not exceed the rate shown in the table above. This expense cap will remain in effect until
  May 1, 2006 and will terminate after that date only if JHT, without the prior written consent of JHIMS, sells
  shares of the fund to (or has shares of the fund held by) any person other than the insurance company separate
  accounts of John Hancock or any of its affiliates that are specified in the agreement.


[[Page 19799]]

(b) AllianceBernstein Growth and Income Portfolio--JHT 500 Index Trust 
B

    The aggregate amount of assets in the Separate Accounts allocated 
to the AllianceBernstein Growth and Income Portfolio as of December 31, 
2004 was approximately $2,306,677. It is estimated that the newly-
created JHT 500 Index Trust B series will have at least $1,137,000,000 
in assets as of April 29, 2005.
    The management fees and total operating expenses of the two Funds 
are shown below. As discussed above, depicted below is an NAV Class for 
the Replacement Fund which will be created for the substitution. 
Expenses shown for the JHT 500 Index Trust B are based on estimates for 
the current fiscal year.

 
                              [In percent]
------------------------------------------------------------------------
                                   Existing Fund
                                 AllianceBernstein     Replacement Fund
       Fees and expenses         Growth and Income   JHT 500 Index Trust
                                 Portfolio  Class B      B  NAV Class
------------------------------------------------------------------------
Management Fee................                 0.55                 0.47
12b-1 Fee.....................                 0.25  ...................
Other Expenses................                 0.05                 0.03
                               ----------------------
    Total Expenses............                 0.85                 0.50
Waivers.......................  ...................               *-0.25
                               ----------------------
    Net Expenses..............                 0.85                0.25
------------------------------------------------------------------------
*Pursuant to an agreement between the Trust and JHIMS, JHIMS has agreed
  to waive fees or reimburse expenses so that the Total Expenses do not
  exceed the rate shown in the table above. This expense cap will remain
  in effect until May 1, 2006 and will terminate after that date only if
  the Trust, without the prior written consent of JHIMS, sells shares of
  the fund to (or has shares of the fund held by) any person other than
  the insurance company separate accounts of John Hancock or any of its
  affiliates that are specified in the agreement.

(c) AllianceBernstein Premier Growth Portfolio--JHT 500 Index Trust B

    The aggregate amount of assets in the Separate Accounts allocated 
to the AllianceBernstein Premier Growth Portfolio as of December 31, 
2004 was approximately $371,125. It is estimated that the newly-created 
JHT 500 Index Trust B series will have at least $1,137,000,000 in 
assets as of April 29, 2005.
    The management fees and total operating expenses of the two Funds 
are shown below. As discussed above, depicted below is an NAV Class for 
the Replacement Fund which will be created for the substitution. 
Expenses shown for the JHT 500 Index Trust B are based on estimates for 
the current fiscal year.

 
                              [In percent]
------------------------------------------------------------------------
                                   Existing Fund       Replacement Fund
                                 AllianceBernstein   JHT 500 Index Trust
                                   Premier Growth             B
       Fees and expenses             Portfolio      --------------------
                               ---------------------
                                      Class B             NAV Class
------------------------------------------------------------------------
Management Fee................                 0.75                 0.47
12b-1 Fee.....................                 0.25  ...................
Other Expenses................                 0.06                 0.03
                               ----------------------
    Total Expenses............                 1.06                 0.50
Waivers.......................  ...................               *-0.25
-------------------------------
    Net Expenses..............                 1.06                0.25
------------------------------------------------------------------------
*Pursuant to an agreement between the Trust and JHIMS, JHIMS has agreed
  to waive fees or reimburse expenses so that the Total Expenses do not
  exceed the rate shown in the table above. This expense cap will remain
  in effect until May 1, 2006 and will terminate after that date only if
  the Trust, without the prior written consent of JHIMS, sells shares of
  the fund to (or has shares of the fund held by) any person other than
  the insurance company separate accounts of John Hancock or any of its
  affiliates that are specified in the agreement.

(d) Fidelity VIP Growth Portfolio--JHT 500 Index Trust B

    The aggregate amount of assets in the Separate Accounts allocated 
to the Fidelity VIP Growth Portfolio as of December 31, 2004 was 
approximately $85,567,487. It is estimated that the newly-created JHT 
500 Index Trust B series will have at least $1,137,000,000 in assets as 
of April 29, 2005.
    The management fees and total operating expenses of the two Funds 
are shown below. As discussed above, depicted below is an NAV Class for 
the Replacement Fund which will be created for the substitution. 
Expenses shown for the JHT 500 Index Trust B are based on estimates for 
the current fiscal year.

[[Page 19800]]



 
                                                  [In percent]
----------------------------------------------------------------------------------------------------------------
                                                      Existing Fund  Fidelity VIP Growth       Replacement Fund
                                                                   Portfolio                 JHT 500 Index Trust
                Fees and expenses                 ------------------------------------------          B
                                                                                            --------------------
                                                      Service Class       Service Class 2         NAV Class
----------------------------------------------------------------------------------------------------------------
Management Fee...................................                 0.58                 0.58                 0.47
12b-1 Fee........................................                 0.10                 0.25
Other Expenses...................................                 0.10                 0.10                 0.03
                                                  ----------------------
    Total Expenses...............................                 0.78                 0.93                 0.50
Waivers..........................................                    0                    0               *-0.25
                                                  ----------------------
    Net Expenses.................................                 0.78                 0.93                0.25
----------------------------------------------------------------------------------------------------------------
*Pursuant to an agreement between the Trust and JHIMS, JHIMS has agreed to waive fees or reimburse expenses so
  that the Total Expenses do not exceed the rate shown in the table above. This expense cap will remain in
  effect until May 1, 2006 and will terminate after that date only if the Trust, without the prior written
  consent of JHIMS, sells shares of the fund to (or has shares of the fund held by) any person other than the
  insurance company separate accounts of John Hancock or any of its affiliates that are specified in the
  agreement.

(e) MFS Investors Growth Stock Series--JHT 500 Index Trust B

    The aggregate amount of assets in the Separate Accounts allocated 
to the MFS Investors Growth Stock Series as of December 31, 2004 was 
approximately $30,894,103. It is estimated that the newly-created JHT 
500 Index Trust B series will have at least $1,137,000,000 in assets as 
of April 29, 2005.
    The management fees and total operating expenses of the two Funds 
are shown below. As discussed above, depicted below is an NAV Class for 
the Replacement Fund which will be created for the substitution. 
Expenses shown for the JHT 500 Index Trust B are based on estimates for 
the current fiscal year.

 
                              [In percent]
------------------------------------------------------------------------
                                 Existing Fund  MFS    Replacement Fund
                                  Investors Growth   JHT 500 Index Trust
       Fees and expenses            Stock Series              B
                               -----------------------------------------
                                   Initial Class          NAV Class
------------------------------------------------------------------------
Management Fee................                 0.75                 0.47
12b-1 Fee.....................                    0
Other Expenses................                 0.11                 0.03
                               ----------------------
    Total Expenses............                 0.86                 0.50
Waivers.......................                    0              -**0.25
                               ----------------------
    Net Expenses..............                 0.86                0.25
------------------------------------------------------------------------
**Pursuant to an agreement between the Trust and JHIMS, JHIMS has agreed
  to waive fees or reimburse expenses so that the Total Expenses do not
  exceed the rate shown in the table above. This expense cap will remain
  in effect until May 1, 2006 and will terminate after that date only if
  the Trust, without the prior written consent of JHIMS, sells shares of
  the fund to (or has shares of the fund held by) any person other than
  the insurance company separate accounts of John Hancock or any of its
  affiliates that are specified in the agreement.

(f) Lord Abbett Growth and Income Portfolio--JHT 500 Index Trust B

    The aggregate amount of assets in the Separate Accounts allocated 
to the Lord Abbett Growth and Income Portfolio as of December 31, 2004 
was approximately $1,462,569. It is estimated that the newly-created 
JHT 500 Index Trust B series will have at least $1,137,000,000 in 
assets as of April 29, 2005.
    The management fees and total operating expenses of the two Funds 
are shown below. As discussed above, depicted below is an NAV Class for 
the Replacement Fund which will be created for the substitution. 
Expenses shown for the JHT 500 Index Trust B are based on estimates for 
the current fiscal year.

 
                              [In percent]
------------------------------------------------------------------------
                                Existing Fund  Lord    Replacement Fund
                                 Abbett Growth and   JHT 500 Index Trust
       Fees and expenses          Income Portfolio            B
                               -----------------------------------------
                                      Class VC            NAV Class
------------------------------------------------------------------------
Management Fee................                 0.50                 0.47
12b-1 Fee.....................  ...................  ...................

[[Page 19801]]

 
Other Expenses................                 0.39                 0.03
                               ----------------------
    Total Expenses............                 0.89                 0.50
Waivers.......................  ...................               *-0.25
                               ----------------------
    Net Expenses..............                 0.89                0.25
------------------------------------------------------------------------
* Pursuant to an agreement between the Trust and JHIMS, JHIMS has agreed
  to waive fees or reimburse expenses so that the Total Expenses do not
  exceed the rate shown in the table above. This expense cap will remain
  in effect until May 1, 2006 and will terminate after that date only if
  the Trust, without the prior written consent of JHIMS, sells shares of
  the fund to (or has shares of the fund held by) any person other than
  the insurance company separate accounts of John Hancock or any of its
  affiliates that are specified in the agreement.

    19. Comparative size and expense data for the JHT Total Stock 
Market Index Trust substitutions are as follows:

(a) Fidelity VIP Contrafund Portfolio--JHT Total Stock Market Index 
Trust

    The aggregate amount of assets in the Separate Accounts allocated 
to the Fidelity VIP Contrafund Portfolio as of December 31, 2004 was 
approximately $167,672,399. As of December 31, 2004, the JHT Total 
Stock Market Index Trust's assets were approximately $212,471,510.
    The management fees and total operating expenses of the two Funds 
are shown below. As discussed above, depicted below is an NAV Class for 
the Replacement Fund which will be created for the substitution. The 
Management Fee shown below reflects the increase anticipated to take 
effect on May 1, 2005. Other Expenses are shown as if the NAV Class had 
been in place for the Replacement Fund at December 31, 2004.

 
                              [In percent]
------------------------------------------------------------------------
                                   Existing Fund       Replacement Fund
                                    Fidelity VIP       JHT Total Stock
                                     Contrafund       Market Index Trust
       Fees and expenses             Portfolio      --------------------
                               ---------------------
                                   Service Class          NAV Class
------------------------------------------------------------------------
Management Fee................                 0.57                 0.49
12b-1 Fee.....................                 0.10  ...................
Other Expenses................                 0.11                 0.03
                               ----------------------
    Total Expenses............                 0.78                 0.52
                               ----------------------
    Net Expenses..............                 0.78                 0.52
------------------------------------------------------------------------

(b) MFS Research Series--JHT Total Stock Market Index Trust

    The aggregate amount of assets in the Separate Accounts allocated 
to the MFS Research Series as of December 31, 2004 was approximately 
$18,991,017. As of December 31, 2004, the JHT Total Stock Market Index 
Trust's assets were approximately $212,471,510.
    The management fees and total operating expenses of the two Funds 
are shown below. As discussed above, depicted below is an NAV Class for 
the Replacement Fund which will be created for the substitution. The 
Management Fee shown below reflects the increase anticipated to take 
effect on May 1, 2005. Other Expenses are shown as if the NAV Class had 
been in place for the Replacement Fund at December 31, 2004.

 
                                                  [In percent]
----------------------------------------------------------------------------------------------------------------
                                                      Existing fund  MFS Research Series       Replacement fund
                                                  ------------------------------------------   JHT Total Stock
                Fees and expenses                                                             Market Index Trust
                                                      Initial Class        Service Class    --------------------
                                                                                                  NAV Class
----------------------------------------------------------------------------------------------------------------
Management Fee...................................                 0.75                 0.75                 0.49
12b-1 Fee........................................                    0                 0.25  ...................
Other Expenses...................................                 0.13                 0.13                 0.03
                                                  ----------------------
    Total Expenses...............................                 0.88                 1.13                 0.52
                                                  ----------------------

[[Page 19802]]

 
    Net Expenses.................................                 0.88               * 1.13                 0.52
----------------------------------------------------------------------------------------------------------------

(c) Putnam VT Investors Fund--JHT Total Stock Market Index Trust

    The aggregate amount of assets in the Separate Accounts allocated 
to the Putnam VT Investors Fund as of December 31, 2004 was 
approximately $166,524. As of December 31, 2004, the JHT Total Stock 
Market Index Trust's assets were approximately $212,471,510.
    The management fees and total operating expenses of the two Funds 
are shown below. As discussed above, depicted below is an NAV Class for 
the Replacement Fund which will be created for the substitution. The 
Management Fee shown below reflects the increase anticipated to take 
effect on May 1, 2005. Other Expenses are shown as if the NAV Class had 
been in place for the Replacement Fund at December 31, 2004.

 
                              [In percent]
------------------------------------------------------------------------
                                   Existing Fund       Replacement Fund
                                Putnam VT Investors    JHT Total Stock
       Fees and expenses                Fund          Market Index Trust
                               -----------------------------------------
                                      Class 1B            NAV Class
------------------------------------------------------------------------
Management Fee................                 0.65                 0.49
12b-1 Fee.....................                 0.25  ...................
Other Expenses................                 0.11                 0.03
                               ----------------------
    Total Expenses............                 1.01                 0.52
                               ----------------------
    Net Expenses..............                 1.01                 0.52
------------------------------------------------------------------------

(d) Oppenheimer Capital Appreciation Fund/VA--JHT Total Stock Market 
Index Trust

    The aggregate amount of assets in the Separate Accounts allocated 
to the Oppenheimer Capital Appreciation Fund/VA as of December 31, 2004 
was approximately $1,762,206. As of December 31, 2004, the JHT Total 
Stock Market Index Trust's assets were approximately $212,471,510.
    The management fees and total operating expenses of the two Funds 
are shown below. As discussed above, depicted below is an NAV Class for 
the Replacement Fund which will be created for the substitution. The 
Management Fee shown below reflects the increase anticipated to take 
effect on May 1, 2005. Other Expenses are shown as if the NAV Class had 
been in place for the Replacement Fund at December 31, 2004.

 
                              [in percent]
------------------------------------------------------------------------
                                   Existing fund       Replacement fund
                                Oppenheimer capital    JHT total stock
                                 appreciation fund/   market index trust
       Fees and expenses                 VA         --------------------
                               ---------------------
                                   Service class          NAV class
------------------------------------------------------------------------
Management Fee................                 0.65                 0.49
12b-1 Fee.....................                 0.25  ...................
Other Expenses................                 0.01                 0.03
                               ----------------------
    Total Expenses............                 0.91                 0.52
                               ----------------------
    Net Expenses..............                 0.91                 0.52
------------------------------------------------------------------------

(e) Mutual Shares Securities Fund--JHT Total Stock Market Index Trust

    The aggregate amount of assets in the Separate Accounts allocated 
to the Mutual Shares Securities Fund as of December 31, 2004 was 
approximately $859,664. As of December 31, 2004, the JHT Total Stock 
Market Index Trust's assets were approximately $212,471,510.
    The management fees and total operating expenses of the two Funds 
are shown below. As discussed above, depicted below is an NAV Class for 
the Replacement Fund which will be created for the substitution. The

[[Page 19803]]

Management Fee shown below reflects the increase anticipated to take 
effect on May 1, 2005. Other Expenses are shown as if the NAV Class had 
been in place for the Replacement Fund at December 31, 2004.

 
                              [In percent]
------------------------------------------------------------------------
                                   Existing Fund       Replacement Fund
                                   Mutual Shares       JHT Total Stock
       Fees and expenses          Securities Fund     Market Index Trust
                               -----------------------------------------
                                      Class 2             NAV Class
------------------------------------------------------------------------
Management Fee................                 0.60                 0.49
12b-1 Fee.....................                 0.25  ...................
Other Expenses................                 0.15                 0.03
                               ----------------------
    Total Expenses............                 1.00                 0.52
                               ----------------------
    Net Expenses..............                 1.00                 0.52
------------------------------------------------------------------------

    20. Comparative size and expense data for the JHT Total Stock 
Market Index Trust substitutions are as follows:

(a) Global Technology Portfolio--JHT Total Stock Market Index Trust

    The aggregate amount of assets in the Separate Accounts allocated 
to the Global Technology Portfolio as of December 31, 2004 was 
approximately $5,307,134. As of December 31, 2004, the JHT Total Stock 
Market Index Trust's assets were approximately $212,471,510.
    The management fees and total operating expenses of the two Funds 
are shown below. As discussed above, depicted below is an NAV Class for 
the Replacement Fund which will be created for the substitution. The 
Management Fee shown below reflects the increase anticipated to take 
effect on May 1, 2005. Other Expenses are shown as if the NAV Class had 
been in place for the Replacement Fund at December 31, 2004.

 
                              [In percent]
------------------------------------------------------------------------
                                   Existing Fund       Replacement Fund
                                 Global Technology     JHT Total Stock
       Fees and expenses             Portfolio        Market Index Trust
                               -----------------------------------------
                                   Service Shares         NAV Class
------------------------------------------------------------------------
Management Fee................                 0.64                 0.49
12b-1 Fee.....................                 0.25  ...................
Other Expenses................                 0.20                 0.03
                               ----------------------
    Total Expenses............                 1.09                 0.52
                               ----------------------
    Net Expenses..............                 1.09                 0.52
------------------------------------------------------------------------

(b) Lord Abbett Mid Cap Value Portfolio--JHT Mid Cap Index Trust

    The aggregate amount of assets in the Separate Accounts allocated 
to the Lord Abbett Mid Cap Value Portfolio as of December 31, 2004 was 
approximately $1,314,074. As of December 31, 2004, the JHT Mid Cap 
Index Trust's assets were approximately $247,296,621.
    The management fees and total operating expenses of the two Funds 
are shown below. As discussed above, depicted below is an NAV Class for 
the Replacement Fund which will be created for the substitution. The 
Management Fee shown below reflects the increase anticipated to take 
effect on May 1, 2005. Other Expenses are shown as if the NAV Class had 
been in place for the Replacement Fund at December 31, 2004.

 
                              [In percent]
------------------------------------------------------------------------
                                Existing Fund  Lord    Replacement Fund
                                   Abbett Mid Cap     JHT Mid Cap Index
       Fees and expenses          Value Portfolio           Trust
                               -----------------------------------------
                                      Class VC            NAV Class
------------------------------------------------------------------------
Management Fee................                 0.75                 0.49
12b-1 Fee.....................  ...................  ...................
Other Expenses................                 0.42                 0.03
                               ----------------------
    Total Expenses............                 1.17                 0.52
                               ----------------------

[[Page 19804]]

 
    Net Expenses..............                 1.17                 0.52
------------------------------------------------------------------------

(c) Putnam VT Vista Fund--JHT Mid Cap Index Trust

    The aggregate amount of assets in the Separate Accounts allocated 
to the Putnam VT Vista Fund as of December 31, 2004 was approximately 
$119,673. As of December 31, 2004, the JHT Mid Cap Index Trust's assets 
were approximately $247,296,621.
    The management fees and total operating expenses of the two Funds 
are shown below. As discussed above, depicted below is an NAV Class for 
the Replacement Fund which will be created for the substitution. The 
Management Fee shown below reflects the increase anticipated to take 
effect on May 1, 2005. Other Expenses are shown as if the NAV Class had 
been in place for the Replacement Fund at December 31, 2004.

 
                              [In percent]
------------------------------------------------------------------------
                                   Existing Fund       Replacement Fund
                                  Putnam VT Vista     JHT Mid Cap Index
       Fees and expenses                Fund                Trust
                               -----------------------------------------
                                      Class 1B            NAV Class
------------------------------------------------------------------------
Management Fee................                 0.65                 0.49
12b-1 Fee.....................                 0.25  ...................
Other Expenses................                 0.14                 0.03
                               ----------------------
    Total Expenses............                 1.04                 0.52
                               ----------------------
    Net Expenses..............                 1.04                 0.52
------------------------------------------------------------------------

(d) MFS Mid Cap Growth Series--JHT Mid Cap Index Trust

    The aggregate amount of assets in the Separate Accounts allocated 
to the MFS Mid Cap Growth Series as of December 31, 2004 was 
approximately $434,324. As of December 31, 2004, the JHT Mid Cap Index 
Trust's assets were approximately $247,296,621.
    The management fees and total operating expenses of the two Funds 
are shown below. As discussed above, depicted below is an NAV Class for 
the Replacement Fund which will be created for the substitution. The 
Management Fee shown below reflects the increase anticipated to take 
effect on May 1, 2005. Other Expenses are shown as if the NAV Class had 
been in place for the Replacement Fund at December 31, 2004.

 
                              [In percent]
------------------------------------------------------------------------
                                 Existing Fund MFS     Replacement Fund
                                   Mid Cap Growth     JHT Mid Cap Index
       Fees and expenses               Series               Trust
                               -----------------------------------------
                                   Service Class          NAV Class
------------------------------------------------------------------------
Management Fee................                 0.75                 0.49
12b-1 Fee.....................                 0.25  ...................
Other Expenses................                 0.12                 0.03
                               ----------------------
    Total Expenses............                 1.12                 0.52
                               ----------------------
    Net Expenses..............                 1.12                 0.52
------------------------------------------------------------------------

(e) Mid Cap Stock Portfolio--JHT Mid Cap Index Trust

    The aggregate amount of assets in the Separate Accounts allocated 
to the Mid Cap Stock Portfolio as of December 31, 2004 was 
approximately $734,207. As of December 31, 2004, the JHT Mid Cap Index 
Trust's assets were approximately $247,296,621.
    The management fees and total operating expenses of the two Funds 
are shown below. As discussed above, depicted below is an NAV Class for 
the Replacement Fund which will be created for the substitution. The 
Management Fee shown below reflects the increase anticipated to take 
effect on May 1, 2005. Other Expenses are shown as if the NAV Class had 
been in place for the Replacement Fund at December 31, 2004.

[[Page 19805]]



 
                              [In percent]
------------------------------------------------------------------------
                                 Existing Fund  Mid    Replacement Fund
                                Cap Stock Portfolio   JHT Mid Cap Index
       Fees and expenses       ---------------------        Trust
                                                    --------------------
                                   Service Class          NAV Class
------------------------------------------------------------------------
Management Fee................                 0.75                 0.49
12b-1 Fee.....................                 0.25  ...................
Other Expenses................                 0.03                 0.03
                               ----------------------
    Total Expenses............                 1.03                 0.52
Waivers.......................                *0.03  ...................
                               ----------------------
    Net Expenses..............                 1.00                0.52
------------------------------------------------------------------------
* The manager has agreed, from January 1, 2004 to December 31, 2005, to
  waive receipt of its fees and/or assume the expenses of the portfolio
  so that the expenses (excluding taxes, brokerage fees, interest on
  borrowings and extraordinary expenses) do not exceed 1.00% of the
  value of the average daily net assets.

(f) AIM V.I. Capital Development Fund--JHT Mid Cap Index Trust

    The aggregate amount of assets in the Separate Accounts allocated 
to the AIM V.I. Capital Development Fund as of December 31, 2004 was 
approximately $7,229,586. As of December 31, 2004, the JHT Mid Cap 
Index Trust's assets were approximately $247,296,621.
    The management fees and total operating expenses of the two Funds 
are shown below. As discussed above, depicted below is an NAV Class for 
the Replacement Fund which will be created for the substitution. The 
Management Fee shown below reflects the increase anticipated to take 
effect on May 1, 2005. Other Expenses are shown as if the NAV Class had 
been in place for the Replacement Fund at December 31, 2004.

 
                                                  [In percent]
----------------------------------------------------------------------------------------------------------------
                                                       Existing Fund AIM V.I. Capital       Replacement Fund JHT
                                                              Development Fund               Mid Cap Index Trust
                Fees and expenses                ---------------------------------------------------------------
                                                        Series I            Series II             NAV Class
----------------------------------------------------------------------------------------------------------------
Management Fee..................................                 .075                 0.75
12b-1 Fee.......................................  ...................                 0.25
Other Expenses..................................                 0.35                 0.35                  0.03
                                                 ----------------------
    Total Expenses..............................                 1.10                 1.35                  0.52
Waivers.........................................                -0.01                -0.01  ....................
                                                 ----------------------
    Net Expenses................................                 1.09                 1.34                  0.52
----------------------------------------------------------------------------------------------------------------

    21. Comparative size and expense data for the JHT Small Cap Index 
Trust substitutions are as follows:

(a) Delaware VIP Small Cap Value Series--JHT Small Cap Index Trust

    The aggregate amount of assets in the Separate Accounts allocated 
to the Delaware VIP Small Cap Value Series as of December 31, 2004 was 
approximately $1,318,590. As of December 31, 2004, the JHT Small Cap 
Index Trust's assets were approximately $234,277,032.
    The management fees and total operating expenses of the two Funds 
are shown below. As discussed above, depicted below is an NAV Class for 
the Replacement Fund which will be created for the substitution. The 
Management Fee shown below reflects the increase anticipated to take 
effect on May 1, 2005. Other Expenses are shown as if the NAV Class had 
been in place for the Replacement Fund at December 31, 2004.

 
                              [In percent]
------------------------------------------------------------------------
                                   Existing Fund       Replacement Fund
                                 Delaware VIP Small  JHT Small Cap Index
       Fees and expenses          Cap Value Series          Trust
                               -----------------------------------------
                                   Service Class          NAV Class
------------------------------------------------------------------------
Management Fee................                 0.75                 0.48
12b-1 Fee.....................                 0.30
Other Expenses................                 0.08                 0.03
                               ----------------------
    Total Expenses............                 1.13                 0.51

[[Page 19806]]

 
Waivers.......................                *0.05  ...................
                               ----------------------
    Net Expenses..............                 1.08                0.51
------------------------------------------------------------------------
 *The adviser has contractually agreed to waive that portion, if any, of
  its management fee and reimburse the Series to the extent necessary to
  ensure that annual operating expenses, exclusive of taxes, interest,
  brokerage commissions, distribution fees, certain insurance costs and
  extraordinary expenses, do not exceed 0.95% of average daily net
  assets of the Series through April 30, 2005. No reimbursement was due
  for the year ended December 31, 2004.

(b) Emerging Leaders Portfolio--JHT Small Cap Index Trust

    The aggregate amount of assets in the Separate Accounts allocated 
to the Emerging Leaders Portfolio as of December 31, 2004 was 
approximately $602,768. As of December 31, 2004, the JHT Small Cap 
Index Trust's assets were approximately $234,277,032.
    The management fees and total operating expenses of the two Funds 
are shown below. As discussed above, depicted below is an NAV Class for 
the Replacement Fund which will be created for the substitution. The 
Management Fee shown below reflects the increase anticipated to take 
effect on May 1, 2005. Other Expenses are shown as if the NAV Class had 
been in place for the Replacement Fund at December 31, 2004.

 
                              [In percent]
------------------------------------------------------------------------
                                   Existing Fund       Replacement Fund
                                  Emerging Leaders   JHT Small Cap Index
       Fees and expenses             Portfolio              Trust
                               -----------------------------------------
                                   Service Class          NAV Class
------------------------------------------------------------------------
Management Fee................                 0.90                 0.48
12b-1 Fee.....................                 0.25
Other Expenses................                 0.23                 0.03
                               ----------------------
    Total Expenses............                 1.38                 0.51
Waivers*......................                       ...................
                               ----------------------
    Net Expenses..............                 1.38                0.51
------------------------------------------------------------------------
* The adviser has agreed, until December 31, 2005, to waive receipt of
  its fees and/or assume the expenses of the portfolio so that the
  expenses (excluding taxes, brokerage commissions, extraordinary
  expenses, interest expenses and commitment fees on borrowings) do not
  exceed 1.50%.

(c) Franklin Small Cap Fund -- JHT Small Cap Index Trust

    The aggregate amount of assets in the Separate Accounts allocated 
to the Franklin Small Cap Fund as of December 31, 2004 was 
approximately $647,520. As of December 31, 2004, the JHT Small Cap 
Index Trust's assets were approximately $234,277,032.
    The management fees and total operating expenses of the two Funds 
are shown below. As discussed above, depicted below is an NAV Class for 
the Replacement Fund which will be created for the substitution. The 
Management Fee shown below reflects the increase anticipated to take 
effect on May 1, 2005. Other Expenses are shown as if the NAV Class had 
been in place for the Replacement Fund at December 31, 2004.

 
                              [In percent]
------------------------------------------------------------------------
                                   Existing fund       Replacement Fund
                                 Franklin Small Cap  JHT Small Cap Index
       Fees and expenses                Fund                Trust
                               -----------------------------------------
                                      Class 2             NAV Class
------------------------------------------------------------------------
Management Fee................                 0.48                 0.48
12b-1 Fee.....................                 0.25
Other Expenses................                 0.29                 0.03
                               ----------------------
    Total Expenses............                 1.02                 0.51
Waivers.......................              *(0.03)  ...................
                               ----------------------

[[Page 19807]]

 
    Net Expenses..............                 0.99                0.51
------------------------------------------------------------------------
* The manager has agreed in advance to reduce its fee from assets
  invested by the Fund in a Franklin Templeton money fund. This
  reduction is required by the Board and an order of the Commission.

(d) Delaware VIP Trend Series--JHT Small Cap Index Trust

    The aggregate amount of assets in the Separate Accounts allocated 
to the Delaware VIP Trend Series as of December 31, 2004 was 
approximately $91,176. As of December 31, 2004, the JHT Small Cap Index 
Trust's assets were approximately $234,277,032.
    The management fees and total operating expenses of the two Funds 
are shown below. As discussed above, depicted below is an NAV Class for 
the Replacement Fund which will be created for the substitution. The 
Management Fee shown below reflects the increase anticipated to take 
effect on May 1, 2005. Other Expenses are shown as if the NAV Class had 
been in place for the Replacement Fund at December 31, 2004.

 
                              [In percent]
------------------------------------------------------------------------
                                   Existing Fund       Replacement Fund
                                 Delaware VIP Trend  JHT Small Cap Index
       Fees and expenses               Series               Trust
                               -----------------------------------------
                                   Service Class          NAV Class
------------------------------------------------------------------------
Management Fee................                 0.75                 0.48
12b-1 Fee.....................                 0.30
Other Expenses................                 0.09                 0.03
                               ----------------------
    Total Expenses............                 1.14                 0.51
Waivers**.....................                 0.05  ...................
                               ----------------------
    Net Expenses..............                 1.09                0.51
------------------------------------------------------------------------
** The adviser has contractually agreed to waive that portion, if any,
  of its management fee and reimburse the Series to the extent necessary
  to ensure that annual operating expenses, exclusive of taxes,
  interest, brokerage commissions, distribution fees, certain insurance
  costs and extraordinary expenses do not exceed 0.95% of average daily
  net assets of the Series through April 30, 2005. No reimbursement was
  due for the year ended December 31, 2004.

(e) MFS New Discovery Series--JHT Small Cap Index Trust

    The aggregate amount of assets in the Separate Accounts allocated 
to the MFS New Discovery Series as of December 31, 2004 was 
approximately $31,823,713. As of December 31, 2004, the JHT Small Cap 
Index Trust's assets were approximately $234,277,032.
    The management fees and total operating expenses of the two Funds 
are shown below. As discussed above, depicted below is an NAV Class for 
the Replacement Fund which will be created for the substitution. The 
Management Fee shown below reflects the increase anticipated to take 
effect on May 1, 2005. Other Expenses are shown as if the NAV Class had 
been in place for the Replacement Fund at December 31, 2004.

 
                                                  [In percent]
----------------------------------------------------------------------------------------------------------------
                                                    Existing Fund  MFS New Discovery Series    Replacement Fund
                                                  ------------------------------------------ JHT Small Cap Index
                Fees and expenses                                                                   Trust
                                                      Initial Class        Service Class    --------------------
                                                                                                  NAV Class
----------------------------------------------------------------------------------------------------------------
Management Fee...................................                 0.90                 0.90                 0.48
12b-1 Fee........................................                    0                 0.25
Other Expenses...................................                 0.11                 0.11                 0.03
                                                  ----------------------
    Total Expenses...............................                 1.01                 1.26                 0.51
Waivers..........................................                    0                    0
                                                  ----------------------
    Net Expenses.................................                 1.01                 1.26                 0.51
----------------------------------------------------------------------------------------------------------------


[[Page 19808]]

    22. Comparative size and expense data for the JHT International 
Equity Index Trust B substitutions are as follows:

(a) Fidelity VIP Overseas Portfolio--JHT International Equity Index 
Trust B

    The aggregate amount of assets in the Separate Accounts allocated 
to the Fidelity VIP Overseas Portfolio as of December 31, 2004 was 
approximately $34,468,284. The JHT International Equity Index Trust B 
series is a newly-created series which will begin selling its shares on 
or about May 1, 2005. Projected asset information with respect to the 
newly-created JHT International Equity Index Trust B series is not yet 
available.
    The management fees and total operating expenses of the two Funds 
are shown below. As discussed above, depicted below is an NAV Class for 
the Replacement Fund which will be created for the substitution. 
Expenses shown for the JHT International Equity Index Trust B are based 
on estimates for the current fiscal year.

 
                                                  [In percent]
----------------------------------------------------------------------------------------------------------------
                                                      Existing Fund  Fidelity VIP Overseas     Replacement Fund
                                                                   Portfolio                  JHT International
                                                  ------------------------------------------  Equity Index Trust
                Fees and expenses                                                                     B
                                                      Service Class        Service Class    --------------------
                                                                                                  NAV Class
----------------------------------------------------------------------------------------------------------------
Management Fee...................................                 0.72                 0.72                 0.55
12b-1 Fee........................................                 0.10                 0.25
Other Expenses...................................                 0.19                 0.19                 0.04
                                                  ----------------------
    Total Expenses...............................                 1.01                 1.16                 0.59
Waivers..........................................                    0  ...................               *-0.25
                                                  ----------------------
    Net Expenses*................................                 1.01                 1.16                0.34
----------------------------------------------------------------------------------------------------------------
* Pursuant to an agreement between the Trust and JHIMS, JHIMS has agreed to waive fees or reimburse expenses so
  that the Total Expenses do not exceed the rate shown in the table above. This expense cap will remain in
  effect until May 1, 2006 and will terminate after that date only if the Trust, without the prior written
  consent of JHIMS, sells shares of the fund to (or has shares of the fund held by) any person other than the
  insurance company separate accounts of John Hancock or any of its affiliates that are specified in the
  agreement.

(b) Worldwide Growth Portfolio--JHT International Equity Index Trust B

    The aggregate amount of assets in the Separate Accounts allocated 
to the Worldwide Growth Portfolio as of December 31, 2004 was 
approximately $15,068,888. The JHT International Equity Index Trust B 
series is a newly-created series which will begin selling its shares on 
or about May 1, 2005. Projected asset information with respect to the 
newly-created JHT International Equity Index Trust B series is not yet 
available.
    The management fees and total operating expenses of the two Funds 
are shown below. As discussed above, depicted below is an NAV Class for 
the Replacement Fund which will be created for the substitution. 
Expenses shown for the JHT International Equity Index Trust B are based 
on estimates for the current fiscal year. x

 
                              [In percent]
------------------------------------------------------------------------
                                   Existing Fund       Replacement Fund
                                  Worldwide Growth    JHT International
                                     Portfolio        Equity Index Trust
       Fees and expenses       ---------------------          B
                                                    --------------------
                                   Service Shares         NAV Class
------------------------------------------------------------------------
Management Fee................                 0.60                 0.55
12b-1 Fee.....................                 0.25  ...................
Other Expenses................                 0.06                 0.04
                               ----------------------
    Total Expenses............                 0.91                 0.59
Waivers.......................  ...................               *-0.25
                               ----------------------
    Net Expenses..............                 0.91                0.34
------------------------------------------------------------------------
* Pursuant to an agreement between the Trust and JHIMS, JHIMS has agreed
  to waive fees or reimburse expenses so that the Total Expenses do not
  exceed the rate shown in the table above. This expense cap will remain
  in effect until May 1, 2006 and will terminate after that date only if
  the Trust, without the prior written consent of JHIMS, sells shares of
  the fund to (or has shares of the fund held by) any person other than
  the insurance company separate accounts of John Hancock or any of its
  affiliates that are specified in the agreement.

(c) Putnam VT International Equity Fund--JHT International Equity Index 
Trust B

    The aggregate amount of assets in the Separate Accounts allocated 
to the Putnam VT International Equity Fund as of December 31, 2004 was 
approximately $817,663. Projected asset information with respect to the 
newly-created JHT International Equity Index Trust B series is not yet 
available.
    The management fees and total operating expenses of the two Funds 
are shown below. As discussed above, depicted below is an NAV Class for 
the Replacement Fund which will be created for the substitution. 
Expenses shown for the JHT International Equity Index Trust B are based 
on estimates for the current fiscal year.

[[Page 19809]]



 
                              [In percent]
------------------------------------------------------------------------
                                   Existing Fund       Replacement Fund
                                     Putnam VT        JHT International
                                   International      Equity Index Trust
       Fees and expenses            Equity Fund               B
                               -----------------------------------------
                                      Class 1B            NAV Class
------------------------------------------------------------------------
Management Fee................                 0.76                 0.55
12b-1 Fee.....................                 0.25  ...................
Other Expenses................                 0.18                 0.04
                               ----------------------
    Total Expenses............                 1.19                 0.59
Waivers.......................  ...................             \*\-0.25
                               ----------------------
    Net Expenses..............                 1.19                0.34
------------------------------------------------------------------------
\*\Pursuant to an agreement between the Trust and JHIMS, JHIMS has
  agreed to waive fees or reimburse expenses so that the Total Expenses
  do not exceed the rate shown in the table above. This expense cap will
  remain in effect until May 1, 2006 and will terminate after that date
  only if the Trust, without the prior written consent of JHIMS, sells
  shares of the fund to (or has shares of the fund held by) any person
  other than the insurance company separate accounts of John Hancock or
  any of its affiliates that are specified in the agreement.

    23. Comparative size and expense data for the JHT Bond Index Trust 
B substitution are as follows:

Franklin U.S. Government Fund--JHT Bond Index Trust B

    The aggregate amount of assets in the Separate Accounts allocated 
to the Franklin U.S. Government Fund as of December 31, 2004 was 
approximately $2,990,795. It is estimated that the newly-created JHT 
Bond Index Trust B series will have approximately $205,000,000 in 
assets as of April 29, 2005.
    The management fees and total operating expenses of the two Funds 
are shown below. As discussed above, depicted below is an NAV Class for 
the Replacement Fund which will be created for the substitution. 
Expenses shown for the JHT Bond Index Trust B are based on estimates 
for the current fiscal year.

 
                              [in percent]
------------------------------------------------------------------------
                                   Existing fund       Replacement fund
                                   Franklin U.S.        JHT Bond Index
       Fees and expenses          Government Fund          Trust B
                               -----------------------------------------
                                      Class 2             NAV Class
------------------------------------------------------------------------
Management Fee................              \*\0.49                 0.47
12b-1 Fee.....................                 0.25  ...................
Other Expenses................                 0.05                 0.03
                               ----------------------
    Total Expenses............                 0.79                 0.50
Waivers.......................  ...................            \**\-0.25
                               ----------------------
    Net Expenses..............                 0.79                0.25
------------------------------------------------------------------------
\*\The fund administration fee is paid indirectly through the management
  fee.
\**\Pursuant to an agreement between the Trust and JHIMS, JHIMS has
  agreed to waive fees or reimburse expenses so that the Total Expenses
  do not exceed the rate shown in the table above. This expense cap will
  remain in effect until May 1, 2006 and will terminate after that date
  only if the Trust, without the prior written consent of JHIMS, sells
  shares of the fund to (or has shares of the fund held by) any person
  other than the insurance company separate accounts of John Hancock or
  any of its affiliates that are specified in the agreement.

    24. Comparative size and expense data for the JHT Bond Index Trust 
B substitution are as follows:

Putnam VT American Government Income Fund--JHT U.S. Government 
Securities Trust

    The aggregate amount of assets in the Separate Accounts allocated 
to the Putnam VT American Government Income Fund as of December 31, 
2004 was approximately $258,450. As of December 31, 2004, the JHT U.S. 
Government Securities Trust's assets were approximately $736,062,950.
    The management fees and total operating expenses of the two Funds 
are shown below. As discussed above, depicted below is an NAV Class for 
the Replacement Fund which will be created for the substitution. The 
Management Fee shown below reflects the increase anticipated to take 
effect on May 1, 2005. Other Expenses are shown as if the NAV Class had 
been in place for the Replacement Fund at December 31, 2004.

[[Page 19810]]



 
                              [In percent]
------------------------------------------------------------------------
                                   Existing Fund       Replacement Fund
                                 Putnam VT American  JHT U.S. Government
                                 Government Income     Securities Trust
       Fees and expenses                Fund        --------------------
                               ---------------------
                                      Class 1B            NAV Class
------------------------------------------------------------------------
Management Fee................                 0.65                 0.62
12b-1 Fee.....................                 0.25  ...................
Other Expenses................                 0.01                 0.07
                               ----------------------
    Total Expenses............                 0.91                 0.69
                               ----------------------
    Net Expenses..............                 0.91                 0.69
------------------------------------------------------------------------

Summary of Benefits

    25. Applicants note that contract owners with subaccount balances 
invested in shares of the Replacement Funds will, in every case, have 
lower total expense ratios than they currently have in the Existing 
Funds. In each case, the total expenses of the Replacement Funds (even 
without applicable fee waivers) are lower than those of the Existing 
Funds with their fee waivers. Further, in each case, the management 
fees of the Replacement Funds are lower than those of the Existing 
Funds even with the Replacement Funds' fee increase described below. 
For Contract owners with account balances in funds involved in the 
substitutions, the substitutions are therefore expected to result in 
decreased expense ratios. Moreover, there will be no increase in 
Contract fees and expenses, including mortality and expense risk fees 
and administration and distribution fees charged to the Separate 
Accounts as a result of the substitutions.
    26. With respect to the JHT 500 Index Trust B, the JHT Total Stock 
Market Index Trust, the JHT Mid Cap Index Trust, the JHT Small Cap 
Index Trust, the JHT International Equity Index Trust B, and the JHT 
U.S. Government Securities Trust, Applicants believe that the each of 
these Replacement Funds is no more risky than any of the Existing Funds 
being substituted into it. Applicants note that each of these 
Replacement Funds are invested substantially in securities similar to 
each of the Existing Funds being substituted into it, and so believe 
that it has risk characteristics very similar to each of those Existing 
Funds. Applicants also note that each of these Replacement Funds, other 
than the JHT U.S. Government Securities Trust, is an index fund and is 
not actively managed.
    27. Applicants believe that investment in the JHT Bond Index Trust 
B Replacement Fund involves certain additional risks not involved in 
the Franklin U.S. Government Existing Fund relating to investment in 
corporate bonds. However, Applicants believe that the additional risks 
are not materially significant and that the Replacement Fund is a 
suitable replacement investment for the Franklin U.S. Government 
Existing Fund. Both the JHT Bond Index Trust B Replacement Fund and the 
Franklin U.S. Government Existing Fund are invested substantially in 
bonds and therefore share the common risks of investing in bonds. 
Additionally, the JHT Bond Index Trust B Replacement Fund is an index 
fund and is not actively managed.
    28. Applicants expect that the substitutions will provide 
significant benefits to Contract owners, including improved selection 
of portfolio managers and simplification of fund offerings through the 
elimination of overlapping offerings. Applicants state that the 
Insurance Companies considered the performance history of the Existing 
Funds and the Replacement Funds and determined that no Contract owners 
would be materially adversely affected as a result of the 
substitutions. Applicants believe that the substitutions, each of which 
replaces outside funds with funds for which JHIMS acts as investment 
adviser, will permit JHIMS, under a multi-manager order granted by the 
Commission \1\ to hire, monitor and replace sub-advisers as necessary 
to seek optimal performance and to ensure a consistent investment 
style. The Applicants further believe that the subadvisers to the 
Replacement Funds overall are better positioned to provide consistent 
above-average performance for their Funds than are the advisers or sub-
advisers of the Existing Funds. Applicants state that Contract owners 
will continue to be able to select among a large number of funds, with 
a full range of investment objectives, investment strategies, and 
managers. Applicants believe there will also be a significant savings 
to Contract owners because certain costs, such as the costs of printing 
and mailing lengthy periodic reports and prospectuses for the Existing 
Funds will be substantially reduced. Applicants state this would be the 
case because the Replacement Funds are each a series of one Fund (JHT), 
so an individual fund prospectus and reports or prospectuses and 
reports with just a limited number of funds will be able to be sent to 
Contract owners.
---------------------------------------------------------------------------

    \1\John Hancock Investment Management Services LLC, et al., 
Investment Company Act Release No. 24261 (December 29, 1999) 
(notice), Investment Company Act Release No. 24261 (January 27, 
2000) (order).
---------------------------------------------------------------------------

    29. Applicants state that, in addition, as a result of the 
substitutions, neither JHIMS nor any of its affiliates will receive 
increased amounts of compensation from the charges to the Separate 
Accounts related to the Contracts or from Rule 12b-1 fees or revenue 
sharing currently received from the investment advisers or distributors 
of the Existing Funds. In fact, owners will benefit from a reduction in 
fund expenses since many of the Existing Funds have 12b-1 fees in 
place, while the NAV Class of the Replacement Funds will have no 12b-1 
fees.
    30. The proposed substitutions will take place at relative net 
asset value with no change in the amount of any Contract owner's 
Contract value, cash value, or death benefit or in the dollar value of 
his or her investment in the Separate Accounts. Applicants expect that 
the substitutions will be effected by redeeming shares of an Existing 
Fund for cash and using the cash to purchase shares of the Replacement 
Fund.
    31. Contract owners will not incur any fees or charges as a result 
of the proposed substitutions, nor will their rights or an Insurance 
Company's obligations under the Contracts be altered in any way. All 
expenses incurred in connection with the proposed substitutions, 
including brokerage, legal, accounting, and other

[[Page 19811]]

fees and expenses, will be paid by the Insurance Companies. In 
addition, the proposed substitutions will not impose any tax liability 
on Contract owners. The proposed substitutions will not cause the 
Contract fees and charges currently being paid by existing Contract 
owners to be greater after the proposed substitutions than before the 
proposed substitutions. No fees will be charged on the transfers made 
at the time of the proposed substitutions because the proposed 
substitutions will not be treated as a transfer for the purpose of 
assessing transfer charges or for determining the number of remaining 
permissible transfers in a Contract year.
    32. By a supplement to the prospectuses for the Contracts and the 
Separate Accounts, each Insurance Company has notified all owners of 
the Contracts of its intention to take the necessary actions, including 
seeking the requested order, to substitute shares of the funds as 
described in this notice. The supplement advised Contract owners that 
from the date of the supplement until the date of the proposed 
substitution, owners are permitted to make transfers of Contract value 
(or annuity unit exchange) out of the Existing Fund subaccount to 
another subaccount without the transfer (or exchange) being treated as 
one of a limited number of permitted transfers (or exchanges) or a 
limited number of transfers (or exchanges) permitted without a transfer 
charge. The supplement also informed Contract owners that the Insurance 
Company will not exercise any rights reserved under any Contract to 
impose additional restrictions on transfers until at least 30 days 
after the proposed substitutions. The supplement also advised Contract 
owners that for at least 30 days following the proposed substitutions, 
the Insurance Companies will permit Contract owners affected by the 
substitutions to make transfers of Contract value (or annuity unit 
exchange) out of the Replacement Fund subaccount to another subaccount 
without the transfer (or exchange) being treated as one of a limited 
number of permitted transfers (or exchanges) or a limited number of 
transfers (or exchanges) permitted without a transfer charge.
    33. In addition to the prospectus supplements distributed to owners 
of Contracts, within five business days after the proposed 
substitutions, each Insurance Company will send Contract owners a 
written notice informing them that the substitutions were carried out 
and that they may transfer all Contract value or cash value under a 
Contract invested in any one of the subaccounts on the date of the 
notice to another subaccount available under their Contract at no cost 
and without regard to the usual limit on the frequency of transfers 
from the variable account options to the fixed account options. The 
notice will also reiterate that (other than with respect to ``market 
timing'' activity as described above, the Insurance Company will not 
exercise any rights reserved by it under the Contracts to impose 
additional restrictions on transfers or to impose any charges on 
transfers until at least 30 days after the proposed substitutions. The 
Insurance Companies will also send each Contract owner current 
prospectuses for the Replacement Funds involved.

Applicants' Legal Analysis

    1. Applicants note that Section 26(c) of the Act provides that 
``[i]t shall be 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] 
shall have approved such substitution.'' Section 26(b) of the Act was 
enacted as part of the Investment Company Act Amendments of 1970. 
Applicants contend that the section's legislative history makes clear 
Congress' intent to provide Commission scrutiny of proposed 
substitutions which could otherwise, in effect, force shareholders 
dissatisfied with the substituted security to redeem their shares, 
thereby possibly incurring either a loss of the sales load deducted 
from initial purchase payments, an additional sales load upon 
reinvestment of the proceeds of redemption, or both.
    2. Applicants note that the Contracts expressly reserve to the 
applicable Insurance Company the right, subject to compliance with 
applicable law, to substitute shares of another investment company for 
shares of an investment company held by a subaccount of the Separate 
Accounts. Applicants assert that the prospectuses for the Contracts and 
the Separate Accounts contain appropriate disclosure of this right.
    3. In each case, Applicants believe that it is in the best 
interests of the Contract owners to substitute the Replacement Fund for 
the Existing Fund. In this regard, Applicants contend that the proposed 
Replacement Fund for each Existing Fund has an investment objective 
that is at least substantially similar to that of the Existing Fund. 
Applicants also assert that the principal investment policies of the 
Replacement Funds are similar to those of the corresponding Existing 
Funds. In addition, with respect to each proposed substitution, 
Applicants note that Contract owners with balances invested in the 
Replacement Fund will have a lower expense ratio in all cases.
    4. Applicants anticipate that Contract owners will be better off 
with the array of subaccounts offered after the proposed substitutions 
than they have been with the array of subaccounts offered prior to the 
substitutions. The proposed substitutions retain for Contract owners 
the investment flexibility which is a central feature of the Contracts. 
If the proposed substitutions are carried out, all Contract owners will 
be permitted to allocate purchase payments and transfer Contract values 
and cash values between and among approximately the same number of 
subaccounts as they could before the proposed substitutions. Moreover, 
the elimination of the costs of printing and mailing prospectuses and 
periodic reports of the Existing Funds will benefit Contract owners.
    5. Applicants note that Contract owners who do not wish to 
participate in a Replacement Fund will have an opportunity to 
reallocate their accumulated value among other available subaccounts 
without the imposition of any charge or limitation (other than with 
respect to ``market timing'' activity).
    6. Applicants assert that, for the reasons summarized above, the 
proposed substitutions and related transactions meet the standards of 
Section 26(c) of the Act and that the requested order should be 
granted.

Applicants' Condition

    For purposes of the approval sought pursuant to Section 26(c) of 
the Act, the substitutions described in the application will not be 
completed unless the following condition is met:
    For those who were Contract owners on the date of the proposed 
substitutions, John Hancock and JHVLICO will reimburse, on the last 
business day of each fiscal period (not to exceed a fiscal quarter) 
during the twenty-four months following the date of the proposed 
substitutions, the subaccount investing in the Replacement Fund such 
that the sum of the Replacement Fund's operating expenses (taking into 
account fee waivers and expense reimbursements) and subaccount expenses 
(asset-based fees and charges deducted on a daily basis from subaccount 
assets and reflected in the calculation of subaccount unit values) for 
such period will not exceed, on an annualized basis, the sum of the 
Replacement Fund's operating expenses (taking into account

[[Page 19812]]

fee waivers and expense reimbursements) and subaccount expenses for the 
fiscal year preceding the date of the proposed substitution. In 
addition, for twenty-four months following the proposed substitutions, 
John Hancock and JHVLICO will not increase asset-based fees or charges 
for Contracts outstanding on the date of the proposed substitutions.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 05-7496 Filed 4-11-05; 12:35 pm]
BILLING CODE 8010-01-P