dojW000759.xml

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2001-11-26

Dept. of Justice Victim Comp. Fund
Notice of Inquiry Response

VIA E-MAIL & TELEFAX & HARDCOPY

November 26, 2001

Kenneth L. Zwick, Director
Office of Management Programs
Civil Division
United States Department of Justice
Main Building Room 3140
950 Pennsylvania Avenue NW
Washington, District of Columbia 20530

Re: September 11th Victim Compensation Fund
RIN: 1105-AA79

Structured Settlement Annuities

Dear Sir:

The following discussion is submitted as "Comments" pursuant to the Department's Notice of
Inquiry and Advance Notice of Rulemaking published on November 5, 2001 regarding the
September 11th Victim Compensation Fund (the "Fund"). These Comments are provided on
behalf of John Hancock Life Insurance Company, of which I am a Vice President with
responsibilities for certain annuity product lines. These include the Company's annuity products customarily used to fund structured settlements.

We believe that it is highly desirable to permit the Fund to offer benefits in the form of periodic payments, and to have the government provide for those payments through the purchase of annuities from life insurance companies. Although our Comments may be considered as responding to "Topic #6" as they certainly relate to the "Nature and Amount of Compensation", providing for appropriately funded structured settlements should also be considered a general comment on the administration of the Fund.

Many of the claimants seeking compensation from the Fund will be the dependents of those
individuals who died on September 11th. These people will need the benefits from their claims for many years to come. Parents of young children, the children themselves, the elderly who lost working adult children -- all of these people will be relying on the payments from the Fund to replace the financial support of those loved ones who died.

Unfortunately, the experience is that individuals who receive cash settlements have had the
misfortune of watching the money dissipate due to poor judgment, bad advice, expensive
hobbies, needy family and friends or just plain bad luck. Historically, a vast majority of all large settlements for personal physical injury damages are gone after five short years. In many cases, with their means of support gone, these individuals must then rely on public assistance.

Structured settlements, backed with annuities issued by financially sound life insurance
companies are designed to assure that the money is there when it is needed. Periodic payments cannot be easily assigned or advanced by financially unsophisticated beneficiaries. Payment schedules can be set to provide larger sums when timely (e.g. for college tuition) and the cost to the purchaser comes at a discounted value when the settlement is funded. Moreover, we believe that the purchaser, in the instant case the United States government, will have the lowest cost, and the payments will be most secure when the structured settlements are funded through competitive bidding among life insurance companies meeting the highest financial standards.

In the present situation, there will be thousands of children as beneficiaries of the Fund and the deferral of a portion of their benefits will be desirable. There is ample precedent for the use of structured settlement annuities in programs not dissimilar from the September 11th Victim Compensation Fund. Such annuities are routinely utilized by the Department's administration of the National Vaccine Injury Compensation Program. It is not yet known whether the procedures established by the Department will require the application of any part of the various state Payment to Minors Acts. However, it should be noted that many of these statutes specifically authorize the use of structured settlement annuities from approved insurance companies [see New York Civil Practice Law and Rules Article 12, Section 1206(c)].

The John Hancocok Life Insurance Company, has been issuing annuities for over 60 years and is a provider of structured settlement annuities. The Company is pleased to offer the expertise and experience of its staff in aiding the Department in establishing the procedures for the Fund, either directly or by participation with other members of the insurance industry.

We thank you for your attention to our discussion above. All acknowledgments and inquiries
regarding our comments should be directed to at .

Comments by
John Hancock Life Insurance Company

2001-11-26