[Federal Register Volume 62, Number 62 (Tuesday, April 1, 1997)]
[Notices]
[Pages 15550-15552]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-8232]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. IC-22583; File No. 812-10510]
John Hancock Mutual Life Insurance Company, et al.
March 25, 1997.
AGENCY: The Securities and Exchange Commission (``Commission'').
ACTION: Notice of application for an order under the Investment Company
Act of 1940 (``1940 Act'').
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APPLICANTS: John Hancock Mutual Life insurance Company (``John
Hancock''), John Hancock Mutual Variable Life Insurance Account UV
(``Account UV''), John Hancock Variable Life Insurance Company
(``JHVLICO''), John Hancock Variable Life Account V (``Account V''),
John Hancock Variable Life Account U (``Account U''), John Hancock
Variable Life Account S (``Account S,'' together with Account UV,
Account V and Account U, the ``Existing Accounts''), John Hancock
Variable Series Trust I (``Trust''), any other separate accounts
established by John Hancock or JHVLICO in the future to support
variable life insurance contracts (``Other accounts,'' together with
the existing Accounts, the ``Accounts'') and John Hancock Distributors,
Inc. (``Distributors'').
RELEVANT 1940 ACT SECTIONS: Order requested pursuant to Section 6(c) of
the 1940 Act to amend certain orders previously issued by the
Commission granting exemptive relief from all sections of the 1940 Act
specified in Rule 6e-2(b) under the 1940 Act (other than Sections 7 and
8(a)); Sections 2(a)(32), 2(a)(35), 9(a), 13(a), 15(a), 15(b), 22(c),
and 22(d) of the 1940 Act; all rules specified in Rule 6e-2(b); and
Rules 6e-2(a)(2), 6e-2(b)(1), 6e-2(b)(12), 6e-2(b)(13)(iv), 6e-
2(b)(15), 6e-2(c)(1), 6e-2(c)(4) and 22c-1 under the 1940 Act.
SUMMARY OF THE APPLICATION: Applicants seek an order amending orders
issued by the Commission in connection with File Nos. 812-5959, 812-
8428, 812-6424, 812-6835, 812-8426, 812-8858 and 812-8446 (the
``Existing Orders''): (i) to add Distributors as a party; (ii) to
specify that Distributors, or any other company that may be appointed
as such in the future (``Future Underwriter''), is or will be the
principal underwriter with respect to the variable annuity contracts
(``VA Contracts''), the variable life insurance policies (``VLI
Policies'') and the Trust's shares (``Trust Shares'') referred to in
the applications granted by the Existing Orders; and (iii) to provide
Distributors or any Future Underwriter certain exemptive relief that
was previously granted by the Existing Orders to John Hancock in its
capacity as principal underwriter of the VLI Policies and Trust Shares.
FILING DATE: The application was filed on January 24, 1997.
HEARING OR NOTIFICATION OF HEARING: An order granting the Application
will be issued unless the Commission orders a hearing. Interested
persons may request a hearing by writing to the Commission's Secretary
and serving Applicants with a copy of the request, personally or by
mail. Hearing requests must be received by the Commission by 5:30 p.m.
on April 21, 1997, 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 Commission's
Secretary.
ADDRESSES: Secretary, Securities and Exchange Commission, 450 Fifth
Street, N.W., Washington, D.C. 20549. Applicants: c/o Sandra M. DaDalt,
Associate Counsel, John Hancock Mutual Life Insurance Company, John
Hancock Place, P.O. Box 111, Boston, Massachusetts 02117.
FOR FURTHER INFORMATION CONTACT: Ethan D. Corey, Senior Counsel, or
Kevin M. Kirchoff, Branch Chief, Office of Insurance Products (Division
of Investment Management) at 202-942-0670.
SUPPLEMENTARY INFORMATION: Following is a summary of the Application;
the complete Application is available for a fee from the Commission's
Public Reference Branch.
[[Page 15551]]
Applicant's Representations
1. John Hancock is a mutual life insurance company chartered under
the laws of the Commonwealth of Massachusetts. John Hancock is the
depositor of Account UV and is the current principal underwriter for
the VA Contracts, VLI Policies and Trust Shares. John Hancock is
registered as a broker-dealer under the Securities Exchange Act of 1934
(``1934 Act''), and is a member of the National Association of
Securities Dealers, Inc. (``NASD'').
2. JHVLICO is a stock life insurance company, incorporated under
the laws of the Commonwealth of Massachusetts. JHVLICO is the depositor
of Account V, Account U, and Account S, and a wholly-owned subsidiary
of John Hancock.
3. Account UV, Account V, Account U, and Account S serve as
investment vehicles for certain VLI Policies. Each of the Existing
Accounts is (and any Other Account will be) registered with the
Commission under the 1940 Act as a unit investment trust.
4. The Trust, a Massachusetts business trust, serves as a funding
medium for Account UV, Account V, Account U, and Account S. The trust
is registered as a management investment company under the 1940 Act,
and that Trust Shares are registered under the Securities Act of 1933.
5. Distributors, incorporated under the laws of the State of
Delaware, is registered as a broker-dealer under the 1934 Act, and is a
member of the NASD. Distributors is an indirect wholly-owned subsidiary
of John Hancock. Distributors is or will be the principal underwriter
of VLI Policies and Trust Shares.
6. Broker-dealers other than Distributors may also serve as
principal underwriters of VLI Policies or Trust Shares. Any such Future
Underwriter will be registered under the 1934 Act as a broker-dealer
and will be a member of the NASD.
7. John Hancock and JHVLICO have issued (and continue to issue)
single premium and scheduled premium VLI Policies in reliance on Rule
6e-2, flexible premium VLI Policies in reliance on Rule 6e-3(T), and,
in reliance on Rule 6e-2, certain ``hybrid'' VLI Policies that
incorporate features of both scheduled and flexible premium variable
life insurance.
8. John Hancock has determined that it no longer remains useful or
advisable to serve as the principal underwriter for VLI Policies or
Trust Shares. Accordingly, Applicants propose to substitute
Distributors for John Hancock as principal underwriter for the VLI
Policies and Trust Shares. As a consequence, the Application seeks to
have extended to Distributors and any Future Underwriters certain of
the exemptive relief that the Exiting Orders previously granted to John
Hancock in its capacity as principal underwriter.
9. In File No. 812-5959, John Hancock, JHVLICO, and Account U
obtained exemptions from Sections 2(a)(32), 2(a)(35), 22(c) and 22(d)
and Rules 6e-2(b)(1), 6e-2(b)(12), 6e-2(b)(13)(iv), 6e-2(c)(4), and
22c-1 with respect to certain single-premium VLI Policies. the relief
permits those parties to deduct a contingent deferred sales charge and
to deduct both a ``front-end' sales charge and contingent deferred
sales charge in connection with such VLI Policies. Release Nos. IC-
14565 (Feb. 11, 1985) (Order) and IC-14320 (Jan. 7, 1985 (Notice).
10. In File No. 812-8428, John Hancock and Account UV obtained
exemptive relief substantially identical to that described in paragraph
9, above. This Existing Order also granted John Hancock and Account UV
relief from Rules 6e-2(b)(1) and 6e-2(c)(4) to use the 1980
Commissioners' Standard Ordinary Mortality tables (``1980 CSO Tables'')
in connection with Rule 6e-2's definition of ``sales load,'' as applied
to such single premium VLI Policies. Release Nos. IC-19748 (Sept. 29,
1993) (Order) and IC-19680 (Sept. 2, 1993) (Notice).
11. In File No. 812-6424, John Hancock, JHVLICO, Affiliates,
Account U, Account V, Account S, Account UV, Other Accounts, Affiliate
Accounts and the Trust obtained exemptions from Sections 9(a), 13(a),
15(a) and 15(b) and Rule 6e-2(b)(15) to permit ``mixed'' funding (i.e.,
the sale of Trust Shares both to variable annuity separate accounts and
to variable life insurance separate accounts that may rely on Rule 6e-
2) in connection with the conditional exemptions contained in Rule 6e-
2(b)(15) regarding these sections of the 1940 Act. Release Nos. IC-
15407 (Nov. 12, 1986) (Order) and IC-15359 (Oct. 15, 1986) (Notice).
12. In File No. 812-6835, JHVLICO, Account V, and John Hancock
obtained exemptions from all sections of the 1940 Act specified in Rule
6e-2(b) (other than Sections 7 and 8(a)), Sections 2(a)(32), 2(a)(35),
and 22(c), all rules specified in Rule 6e-2(b) and Rules 6e-2(b)(1),
6e-2(b)(12), 6e-2(b)(13)(iv), 6e-2(c)(1), 6e-2(c)(4), and 22c-1, with
respect to certain hybrid VLI Policies. The relief permits those
parties generally to rely on the exemptions provided by Rules 6c-3 and
6e-2 under the 1940 Act (notwithstanding any questions about whether
the hybrid VLI Policies meet Rule 6e-2's definition of variable life
insurance contracts); to deduct part of the policies's sales charge as
a contingent deferred sales charge; to deduct any uncollected issue
charge upon surrender or lapse of a policy; and to use the 1980 CSO
Tables in connection with the definition of ``sales load'' for such VLI
Policies. Release Nos. IC-16197 (Dec. 29, 1987) (Order) and IC-16152
(Nov. 30, 1987) (Notice).
13. In file No. 812-8426, John Hancock and Account UV obtained
exemptive relief substantially identical to that described in paragraph
12, above. Release Nos. IC-19746 (Sept. 29, 1993)(Order) and IC-19682
(Sept. 2, 1993)(Notice).
14. In File No. 812-8858, John Hancock, Account UV, JHVLICO, and
account V obtained exemptive relief substantially identical to that
described in paragraphs 12 and 13, above, except that the relief
obtained in those earlier proceedings for deduction of any uncollected
``issue charge'' upon surrender or lapse of the policies was here
obtained instead for deduction of a ``contingent deferred
administrative charge.'' Release Nos. IC-20332 (June 1, 1994)(Order)
and IC-20266 (May 2, 1994)(Notice).
15. In File No. 812-8446, John Hancock, Account UV, JHVLICO,
Account U, Account V, and the Other Accounts obtained exemptions from
Rules 6e-2(a)(2) and 6e-2(b)(15) to permit each of such Accounts to
serve simultaneously as funding media for both Rule 6e-2 and Rule 6e-
3(T) VLI Policies. Release Nos. IC-19898 (Nov. 24, 1993)(Order) and IC-
19817 (Oct. 27, 1993)(Notice).
Applicant's Legal Analysis
1. The Application requests an order of the Commission, pursuant to
Section 6(c) of the 1940 Act, and amending the Existing Orders: (i) to
add Distributors as a party; (ii) to specify that Distributors or a
Future Underwriter is or will be the principal underwriter with respect
to the VA Contracts, VLI Policies and the Trust Shares; and (iii) to
provide to Distributors or any Future Underwriter certain exemptive
relief that was previously granted to John Hancock in its capacity as
principal underwriter of the VLI Policies and Trust Shares.
2. All of the relief requested in the Application for Distributors
and Future Underwriters has previously been granted by the Commission
for John Hancock in one or more of the Existing Orders. Applicants
assert that all of such relief continues to be as appropriate as it was
when the Existing Orders were granted and that the legal
[[Page 15552]]
and factual basis and justification for the initial granting of such
relief likewise continues.
3. Applicants represent that all of the facts asserted and
representations made in the applications (and any amendments thereto)
for the Existing Orders remain true and accurate in all respects
material to any relief that is requested herein. Applicants further
represent that they will continue to comply with any terms, conditions,
and undertakings that were set forth in those applications (and any
amendments thereto) in connection with the exemptions that they now
request be extended to Distributors or any Future Underwriter.
Conclusion
Applicants submit that, for the reasons and upon the facts
summarized above, the exemptive relief requested pursuant to Section
6(c) of the 1940 Act is appropriate in the public interest and
consistent with the protection of investors and the purposes fairly
intended by the policy and provisions of the 1940 Act.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-8232 Filed 3-31-97; 8:45 am]
BILLING CODE 8010-01-M
