<PAGE> 1
As filed with the Securities and Exchange Commission.
'33 Act File No. 333-52579
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 3 [X]
and
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 [ ]
NATIONWIDE VARIABLE ACCOUNT-9
(Exact Name of Registrant)
NATIONWIDE LIFE INSURANCE COMPANY
(Name of Depositor)
ONE NATIONWIDE PLAZA, COLUMBUS, OHIO 43215
(Address of Depositor's Principal Executive Offices) (Zip Code)
Depositor's Telephone Number, including Area Code: (614) 249-7111
DENNIS W. CLICK, SECRETARY, ONE NATIONWIDE PLAZA, COLUMBUS, OHIO 43215
(Name and Address of Agent for Service)
This Post-Effective Amendment amends the Registration Statement in respect of
the Prospectus, Statement of Additional Information, and the Financial
Statements.
[ ] immediately upon filing to paragraph (b) of Rule 485
[ x ] on September 24, 1999 pursuant to paragraph (b) of Rule 485
[ ] 60 days after filing pursuant to paragraph (a) of Rule 485
[ ] on (date) pursuant to paragraph (a) of Rule 485
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
================================================================================
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<TABLE>
<CAPTION>
NATIONWIDE VARIABLE ACCOUNT-9
REFERENCE TO ITEMS REQUIRED BY FORM N-4
N-4 ITEM PAGE
Part A INFORMATION REQUIRED IN A PROSPECTUS
<S> <C> <C>
Item 1. Cover Page...............................................................................6
Item 2. Definitions..............................................................................8
Item 3. Synopsis or Highlights..................................................................17
Item 4. Condensed Financial Information.........................................................18
Item 5. General Description of Registrant, Depositor, and Portfolio Companies...................18
Item 6. Deductions and Expenses.................................................................20
Item 7. General Description of Variable Annuity Contracts.......................................22
Item 8. Annuity Period..........................................................................29
Item 9. Death Benefit and Distributions.........................................................34
Item 10. Purchases and Contract Value...........................................................22
Item 11. Redemptions............................................................................25
Item 12. Taxes..................................................................................38
Item 13. Legal Proceedings......................................................................45
Item 14. Table of Contents of the Statement of Additional Information...........................51
Part B INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
Item 15. Cover Page.............................................................................76
Item 16. Table of Contents......................................................................76
Item 17. General Information and History........................................................76
Item 18. Services...............................................................................76
Item 19. Purchase of Securities Being Offered...................................................77
Item 20. Underwriters...........................................................................77
Item 21. Calculation of Performance Information.................................................77
Item 22. Annuity Payments.......................................................................78
Item 23. Financial Statements...................................................................79
Part C OTHER INFORMATION
Item 24. Financial Statements and Exhibits.....................................................142
Item 25. Directors and Officers of the Depositor...............................................144
Item 26. Persons Controlled by or Under Common Control with the Depositor or Registrant........146
Item 27. Number of Contract Owners.............................................................158
Item 28. Indemnification.......................................................................158
Item 29. Principal Underwriter.................................................................158
Item 30. Location of Accounts and Records......................................................160
Item 31. Management Services...................................................................160
Item 32. Undertakings..........................................................................161
</TABLE>
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SUPPLEMENT DATED SEPTEMBER 24, 1999 TO
PROSPECTUS DATED MAY 1, 1999 FOR
MODIFIED SINGLE PREMIUM DEFERRED VARIABLE ANNUITY CONTRACTS
ISSUED BY
NATIONWIDE LIFE INSURANCE COMPANY
THROUGH ITS
NATIONWIDE VARIABLE ACCOUNT - 9
THIS SUPPLEMENT UPDATES CERTAIN INFORMATION CONTAINED IN YOUR PROSPECTUS. PLEASE
READ IT AND KEEP IT WITH YOUR PROSPECTUS FOR FUTURE REFERENCE.
1. EFFECTIVE JULY 6, 1999, ALL REFERENCES TO WARBURG PINCUS ASSET MANAGEMENT,
INC. IN YOUR PROSPECTUS CHANGED TO:
Credit Suisse Asset Management, LLC
2. EFFECTIVE SEPTEMBER 27, 1999, ALL REFERENCES TO NATIONWIDE SEPARATE ACCOUNT
TRUST - NATIONWIDE SELECT ADVISERS MID CAP FUND IN YOUR PROSPECTUS ARE
CHANGED TO:
Nationwide Separate Account Trust - Nationwide Mid Cap Index Fund
AND THE SUBADVISER FOR THIS UNDERLYING MUTUAL FUND IS CHANGED TO:
The Dreyfus Corporation
3. THE FOLLOWING UNDERLYING MUTUAL FUNDS WILL NOT BE AVAILABLE FOR NEW ANNUITY
APPLICATIONS RECEIVED ON OR AFTER SEPTEMBER 27, 1999, OR APPLICATIONS
RECEIVED BY NATIONWIDE'S HOME OFFICE PRIOR TO SEPTEMBER 27, 1999 THAT WERE
NOT IN GOOD ORDER:
Warburg Pincus Trust - International Equity Portfolio
Warburg Pincus Trust - Post-Venture Capital Portfolio
CURRENT CONTRACTS ARE NOT AFFECTED BY THIS CHANGE.
4. EFFECTIVE SEPTEMBER 27, 1999 PAGE 1 OF YOUR PROSPECTUS IS AMENDED TO
INCLUDE THE FOLLOWING UNDERLYING MUTUAL FUND AS AN INVESTMENT OPTION FOR
ALL CONTRACTS:
Dreyfus Investment Portfolios - European Equity Portfolio
5. EFFECTIVE SEPTEMBER 27, 1999 THE "UNDERLYING MUTUAL FUND ANNUAL EXPENSES"
TABLE LOCATED ON PAGES 7 THROUGH 8 OF YOUR PROSPECTUS, IS AMENDED AS
FOLLOWS:
<TABLE>
<CAPTION>
UNDERLYING MUTUAL FUND ANNUAL EXPENSES
(AS A PERCENTAGE OF UNDERLYING MUTUAL FUND AVERAGE NET ASSETS, AFTER EXPENSE REIMBURSEMENT)
Total Underlying
Management Other 12b-1 Mutual Fund
Fees Expenses Fees Expenses
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Dreyfus Investment Portfolios - European Equity 1.00% 0.50% 0.00% 1.50%
Portfolio
----------------------------------------------------------------------------------------------------------------------
NSAT Nationwide Mid Cap Index Fund 0.15% 0.50% 0.00% 0.65%
----------------------------------------------------------------------------------------------------------------------
</TABLE>
The expenses shown above are deducted by the underlying mutual fund before it
provides Nationwide with the daily net asset value. Nationwide then deducts
applicable variable account charges from the net asset value to calculate the
unit value of the corresponding sub-account. The management fees and other
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<PAGE> 4
expenses are more fully described in the prospectus for each underlying mutual
fund. Information relating to the underlying mutual funds was provided by the
underlying mutual funds and not independently verified by Nationwide.
Some underlying mutual funds are subject to fee waivers and expense
reimbursements. The following chart shows what the expenses would have been for
such funds without fee waivers and expense reimbursements.
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
Total Underlying
Management Other 12b-1 Mutual Fund
Fees Expenses Fees Expenses
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Dreyfus Investment Portfolios - European Equity 1.00% 2.67% 0.00% 3.67%
Portfolio
----------------------------------------------------------------------------------------------------------------------
NSAT Nationwide Mid Cap Index Fund 0.50% 0.50% 0.00% 1.00%
----------------------------------------------------------------------------------------------------------------------
</TABLE>
6. EFFECTIVE SEPTEMBER 27, 1999 THE "EXAMPLE" CHART LOCATED ON PAGES 9 THROUGH
11 OF YOUR PROSPECTUS IS AMENDED AS FOLLOWS:
The following chart shows the amount of expenses (in dollars) that would be
incurred under this contract assuming a $1,000 investment, 5% annual return, and
no change in expenses. These dollar figures are illustrative only and should not
be considered a representation of past or future expenses. Actual expenses may
be greater or less than those shown below.
The chart reflects expenses of both the variable account and the underlying
mutual funds. The chart reflects variable account charges of 1.80%, which is the
maximum variable account charges that could be assessed to a contract.
For those contracts that do not elect the maximum number of rider options, the
expenses would be reduced. Deductions for premium taxes are not reflected but
may apply.
The summary of contract expenses and example are to help contract owners
understand the expenses associated with the contract.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
If you surrender your contract If you do not surrender your If you annuitize your contract
at the end of the applicable contract at the end of the at the end of the applicable
time period applicable time period time period
- -------------------------------------------------------------------------------------------------------------------------------
1 Yr. 3 Yrs. 5 Yrs. 10 Yrs. 1 Yr. 3 Yrs 5 Yrs. 10 Yrs. 1 Yr. 3 Yrs. 5 Yrs. 10 Yrs.
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Dreyfus Investment 35 106 179 371 35 106 179 371 * 106 179 371
Portfolios - European Equity
Portfolio
- -------------------------------------------------------------------------------------------------------------------------------
NSAT Nationwide Mid Cap 26 79 135 287 26 79 135 287 * 79 135 287
Index Fund
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
7. EFFECTIVE SEPTEMBER 1, 1999 "APPENDIX A: OBJECTIVES FOR UNDERLYING MUTUAL
FUNDS" LOCATED ON PAGES 46 THROUGH 55 OF YOUR PROSPECTUS IS AMENDED AS
FOLLOWS:
NATIONWIDE SEPARATE ACCOUNT TRUST
Nationwide Separate Account Trust ("NSAT") is a diversified open-end
management investment company created under the laws of Massachusetts. NSAT
offers shares in the mutual funds listed below, each with its own
investment objectives. Shares of NSAT will be sold primarily to separate
accounts to fund the benefits under variable life insurance policies and
variable annuity contracts issued by life insurance companies. Effective
September 1, 1999, the investment advisory services previously performed by
Nationwide Advisory Services ("NAS") were transferred to Villanova Mutual
Fund Capital Trust ("VMF"), an affiliate of NAS and an indirect subsidiary
of Nationwide Financial Services, Inc. The portfolio managers and
subadvisers for each of the Funds continue to manage the Funds after the
transfer to VMF.
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<PAGE> 5
8. EFFECTIVE SEPTEMBER 27, 1999 "APPENDIX A: OBJECTIVES FOR UNDERLYING MUTUAL
FUNDS" LOCATED ON PAGES 46 THROUGH 55 OF YOUR PROSPECTUS IS AMENDED AS
FOLLOWS:
DREYFUS INVESTMENT PORTFOLIOS
Dreyfus Investment Portfolios (the "Fund") is an open-end, management
investment company known as a mutual fund. Shares are offered only to
variable annuity and variable life insurance separate accounts established
by insurance companies to fund variable annuity contracts and variable life
insurance policies and to qualified pension and retirement plans.
Individuals may not purchase shares directly from the Fund. The Dreyfus
Corporation serves as the Fund's investment adviser.
EUROPEAN EQUITY PORTFOLIO
Investment Objective: The Portfolio seeks long-term capital growth. To
pursue this goal, the Portfolio generally invests at least 80% of its
total assets in stocks included within the universe of the 300 largest
European companies. The Portfolio may invest up to 10% of its total
assets in the stocks of non-European companies. The Portfolio's stock
investments may include common stocks, preferred stocks and convertible
securities.
NATIONWIDE SEPARATE ACCOUNT TRUST
SUBADVISED NATIONWIDE FUNDS
NATIONWIDE MID CAP INDEX FUND (FORMERLY NATIONWIDE SELECT ADVISERS MID
CAP FUND)
Investment Objective: Capital appreciation. The Fund seeks to
match the performance of the Standard & Poor's MidCap 400 Index. To
pursue this goal, the Fund generally is fully invested in all 400
stocks included in this index in proportion to their weighting in the
index, and in futures whose performance is tied to the index. The Fund
is neither sponsored by nor affiliated with Standard & Poor's
Corporation.
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<PAGE> 6
NATIONWIDE LIFE INSURANCE COMPANY
Modified Single Premium Deferred Variable Annuity Contracts
Issued by Nationwide Life Insurance Company through its Nationwide
Variable Account-9
The date of this prospectus is May 1, 1999.
- --------------------------------------------------------------------------------
This prospectus contains basic information you should know about the contracts
before investing.
Please read it and keep it for future reference.
The following underlying mutual funds are available under the contracts:
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC., A MEMBER OF THE AMERICAN
CENTURY(SM) FAMILY OF INVESTMENTS
- American Century VP Income & Growth
- American Century VP International
- American Century VP Value
DREYFUS
- The Dreyfus Socially Responsible Growth Fund, Inc.
- Dreyfus Stock Index Fund, Inc.
- Dreyfus Variable Investment Fund - Capital Appreciation Portfolio
FEDERATED INSURANCE SERIES
- Federated Quality Bond Fund II
FIDELITY VARIABLE INSURANCE PRODUCTS FUND
- VIP Equity-Income Portfolio: Service Class
- VIP Growth Portfolio: Service Class
- VIP High Income Portfolio: Service Class*
- VIP Overseas Portfolio: Service Class
FIDELITY VARIABLE INSURANCE PRODUCTS FUND II
- VIP II Contrafund Portfolio: Service Class
FIDELITY VARIABLE INSURANCE PRODUCT FUND III
- VIP III Growth Opportunities Portfolio: Service Class
MORGAN STANLEY
- Morgan Stanley Dean Witter Universal Funds, Inc. -
Emerging Markets Debt Portfolio
- Van Kampen Life Investment Trust - Morgan Stanley Real Estate
Securities Portfolio
NATIONWIDE SEPARATE ACCOUNT TRUST
- Capital Appreciation Fund
- Government Bond Fund
- Money Market Fund
- Total Return Fund
- Nationwide Balanced Fund (subadviser: Salomon Brothers Asset
Management, Inc.)
- Nationwide Equity Income Fund (subadviser: Federated Investment
Counseling)
- Nationwide Global Equity Fund (subadviser: J.P. Morgan Investment
Management, Inc.)
- Nationwide High Income Bond Fund (subadviser: Federated Investment
- Counseling)
- Nationwide Multi Sector Bond Fund (subadviser: Salomon Brothers Asset
Management, Inc. with Salomon Brothers Asset Management Limited)
- Nationwide Select Advisers Mid Cap Fund (subadvisers: First Pacific
Advisors, Inc., Pilgrim Baxter & Associates, Ltd., and Rice, Hall, James
& Associates)
- Nationwide Select Advisers Small Cap Growth Fund (subadvisers: Franklin
Advisers, Inc., Miller Anderson & Sherrerd, LLP, and Neuberger
Berman, LLC.)
- Nationwide Small Cap Value Fund (subadviser: The Dreyfus Corporation)
- Nationwide Small Company Fund (subadvisers: The Dreyfus Corporation,
Neuberger Berman, LLC, Lazard Asset Management, Strong Capital
Management, Inc. and Warburg Pincus Asset Management, Inc.)
- Nationwide Strategic Growth Fund (subadviser: Strong Capital
Management Inc.)
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- Nationwide Strategic Value Fund (subadviser: Strong Capital Management
Inc./Schafer Capital Management Inc.)
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST
- AMT Guardian Portfolio
- AMT Mid-Cap Growth Portfolio
- AMT Partners Portfolio
OPPENHEIMER VARIABLE ACCOUNT FUNDS
- Oppenheimer Aggressive Growth Fund/VA (formerly "Oppenheimer Capital
Appreciation Fund")
- Oppenheimer Capital Appreciation Fund/VA (formerly "Oppenheimer
Growth Fund")
- Oppenheimer Main Street Growth & Income Fund/VA (formerly "Oppenheimer
Growth & Income Fund")
VAN ECK WORLDWIDE INSURANCE TRUST
- Worldwide Emerging Markets Fund
- Worldwide Hard Assets Fund
WARBURG PINCUS TRUST
- Growth & Income Portfolio
- International Equity Portfolio
- Post-Venture Capital Portfolio
*These underlying mutual funds may invest in lower quality debt securities
commonly referred to as junk bonds.
Purchase payments not invested in the underlying mutual fund options of the
Nationwide Variable Account-9 ("variable account") may be allocated to the
Guaranteed Term Options (Guaranteed Term Options may not be available in every
jurisdiction - refer to your contract for specific benefit information).
The Statement of Additional Information (dated May 1, 1999) which contains
additional information about the contracts and the variable account, has been
filed with the Securities and Exchange Commission ("SEC") and is incorporated
herein by reference. The table of contents for the Statement of Additional
Information is on page 46.
For general information or to obtain FREE copies of the:
- Statement of Additional Information;
- prospectus for any underlying mutual fund;
- prospectus for the Guaranteed Term Options; or
- required Nationwide forms,
call: 1-800-848-6331
TDD 1-800-238-3035
or write:
NATIONWIDE LIFE INSURANCE COMPANY
P.O. BOX 16609
COLUMBUS, OHIO 43216-6609
The Statement of Additional Information and other material incorporated by
reference can be found on the SEC website at:
www.sec.gov
Information about this and other Best of America products can be found at:
www.bestofamerica.com
THIS ANNUITY IS NOT:
- A BANK DEPOSIT - FEDERALLY INSURED
- ENDORSED BY A BANK OR - AVAILABLE IN EVERY
GOVERNMENT AGENCY STATE
Investors assume certain risks when investing in the contracts, including the
possibility of losing money.
These contracts are offered to customers of various financial institutions and
brokerage firms. No financial institution or brokerage firm is responsible for
the guarantees under the contracts. Guarantees under the contracts are the sole
responsibility of Nationwide.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC, NOR HAS THE
SEC PASSED UPON THE ACCURACY OR ADEQUACY OF THE PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
2
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GLOSSARY OF SPECIAL TERMS
ACCUMULATION UNIT- An accounting unit of measure used to calculate the contract
value allocated to the variable account before the annuitization date.
ANNUITIZATION DATE- The date on which annuity payments begin.
ANNUITY COMMENCEMENT DATE- The date on which annuity payments are scheduled to
begin. This date may be changed by the contract owner with Nationwide's consent.
ANNUITY UNIT- An accounting unit used to calculate the variable payment annuity
payments.
CONTRACT VALUE- The total of all accumulation units in a contract, and any
amount held under Guaranteed Term Options.
CONTRACT YEAR- Each year the contract is in force beginning with the date the
contract is issued.
ERISA- The Employee Retirement Income Security Act of 1974, as amended.
GENERAL ACCOUNT- All assets of Nationwide other than those of the variable
account or in other separate accounts that have been or may be established by
Nationwide.
INDIVIDUAL RETIREMENT ACCOUNT- An account that qualifies for favorable tax
treatment under Section 408(a) of the Internal Revenue Code, but does not
include Roth IRAs.
INDIVIDUAL RETIREMENT ANNUITY- An annuity contract that qualifies for favorable
tax treatment under Section 408(b) of the Internal Revenue Code, but does not
include Roth IRAs.
INVESTMENT-ONLY CONTRACT- A contract purchased by a Qualified Pension,
Profit-Sharing, or Stock Bonus Plan as defined by Section 401(a) of the Internal
Revenue Code.
NATIONWIDE- Nationwide Life Insurance Company.
NON-QUALIFIED CONTRACT- A contract which does not qualify for favorable tax
treatment as a Qualified Plan, Individual Retirement Annuity, Roth IRA, SEP IRA,
or Tax Sheltered Annuity.
QUALIFIED PLANS- Retirement plans which receive favorable tax treatment under
Section 401 of the Internal Revenue Code.
ROTH IRA- An annuity contract which qualifies for favorable tax treatment under
Section 408A of the Internal Revenue Code.
SEP IRA- An annuity contract which qualifies for favorable tax treatment under
Section 408(k) of the Internal Revenue Code.
SUB-ACCOUNTS- Divisions of the variable account to which underlying mutual fund
shares are allocated and for which accumulation units and annuity units are
separately maintained.
TAX SHELTERED ANNUITY- An annuity that qualifies for favorable tax treatment
under Section 403(b) of the Internal Revenue Code.
VALUATION PERIOD- Each day the New York Stock Exchange is open for business.
VARIABLE ACCOUNT- Nationwide Variable Account-9, a separate account of
Nationwide that contains variable account allocations. The variable account is
divided into sub-accounts, each of which invests in shares of a separate
underlying mutual fund.
3
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<PAGE> 9
TABLE OF CONTENTS
GLOSSARY OF SPECIAL TERMS.........................3
SUMMARY OF STANDARD CONTRACT
EXPENSES.....................................6
ADDITIONAL CONTRACT OPTIONS.......................6
UNDERLYING MUTUAL FUND ANNUAL EXPENSES............7
EXAMPLE...........................................9
SYNOPSIS OF THE CONTRACTS........................11
FINANCIAL STATEMENTS.............................12
CONDENSED FINANCIAL INFORMATION..................12
NATIONWIDE LIFE INSURANCE COMPANY................12
NATIONWIDE ADVISORY SERVICES, INC................12
INVESTING IN THE CONTRACT........................12
The Variable Account and Underlying Mutual
Funds
Guaranteed Term Options
STANDARD CHARGES AND DEDUCTIONS..................14
Mortality and Expense Risk Charge
Premium Taxes
OPTIONAL CONTRACT BENEFITS, CHARGES AND
DEDUCTIONS ....................................15
Death Benefit Options
Guaranteed Minimum Income Benefit Option
CONTRACT OWNERSHIP...............................15
Joint Ownership
Contingent Ownership
Annuitant
Beneficiary and Contingent Beneficiary
OPERATION OF THE CONTRACT........................17
Minimum Initial and Subsequent Purchase
Payments
Pricing
Allocation of Purchase Payments
Determining the Contract Value
Transfers
RIGHT TO REVOKE..................................19
SURRENDER (REDEMPTION)...........................19
Partial Surrenders (Partial Redemptions)
Full Surrenders (Full Redemptions)
Surrenders Under a Texas Optional Retirement
Program or a Louisiana Optional Retirement
Plan
Surrenders Under a Tax Sheltered Annuity
LOAN PRIVILEGE...................................21
Minimum & Maximum Loan Amounts
Loan Processing Fee
How Loan Requests are Processed
Loan Interest
Loan Repayment
Distributions & Annuity Payments
Transferring the Contract
Grace Period & Loan Default
ASSIGNMENT.......................................22
CONTRACT OWNER SERVICES..........................23
Asset Rebalancing
Dollar Cost Averaging
Systematic Withdrawals
ANNUITY COMMENCEMENT DATE........................24
ANNUITIZING THE CONTRACT.........................24
Annuitization Date
Annuitization
Fixed Payment Annuity
Variable Payment Annuity
Frequency and Amount of Annuity Payments
Guaranteed Minimum Income Benefit
Option ("GMIB")
Annuity Payment Options
DEATH BENEFITS...................................28
Death of Contract Owner - Non-Qualified
Contracts
Death of Annuitant - Non-Qualified Contracts
Death of Contract Owner/Annuitant
Death Benefit Payment
REQUIRED DISTRIBUTIONS...........................30
Required Distributions for Non-Qualified
Contracts
4
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Required Distributions for Tax Sheltered
Annuities
Required Distributions for IRAs and
SEP IRAs
Required Distributions for Roth IRAs
FEDERAL TAX CONSIDERATIONS.......................32
Federal Income Taxes
IRAs, SEP IRAs, and Tax Sheltered Annuities
Roth IRAs
Withholding
Non-Resident Aliens
Federal Estate, Gift, and Generation Skipping
Transfer Taxes
Puerto Rico
Charge for Tax
Diversification
Tax Changes
STATEMENTS AND REPORTS...........................38
YEAR 2000 COMPLIANCE ISSUES......................38
LEGAL PROCEEDINGS................................39
ADVERTISING AND SUB-ACCOUNT PERFORMANCE SUMMARY..41
TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL
INFORMATION ...................................45
APPENDIX A: OBJECTIVES FOR UNDERLYING MUTUAL
FUNDS .........................................46
APPENDIX B: CONDENSED FINANCIAL INFORMATION......56
5
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<PAGE> 11
SUMMARY OF STANDARD CONTRACT EXPENSES
The expenses listed below are charged to all contracts unless a contract owner
has replaced a standard benefit with an available option for an additional
charge.
VARIABLE ACCOUNT CHARGES1
(as a percentage of average account value)
Mortality and Expense Risk Charge.............1.20%
Total Variable Account Charges...........1.20%(2)
(1)These charges apply only to sub-account allocations. They do not apply to
allocations made to the Guaranteed Term Options. They are charged on a daily
basis at the annual rate noted above.
(2)Charges shown include the Standard Contractual Death Benefit that is standard
to every contract (see "Death Benefit Payment").
Nationwide may assess a loan processing fee at the time each new loan is
processed. Loans are only available for contracts issued as Tax Sheltered
Annuities. Loans are not available in all states. In addition, some states may
not allow Nationwide to assess a loan processing fee (see "Loan Privilege").
ADDITIONAL CONTRACT OPTIONS
For an additional charge, the following options are available to contract owners
(upon approval by state insurance authorities). These options must be elected at
the time of application and will replace the corresponding standard contract
benefits.
If the contract owner chooses one or more of the following optional benefits, a
corresponding charge will be deducted. Charges for the optional benefits are IN
ADDITION TO the standard variable account charges. They are charged on a daily
basis at the annual rate noted below. Optional benefit charges will only apply
to allocations made to the variable account and are charged as a percentage of
the average variable account value.
DEATH BENEFIT OPTIONS
An applicant may choose one of two optional death benefits instead of the
Standard Contractual Death Benefit that is standard to every contract. The
optional death benefits are:
Optional One-Year Step Up
Death Benefit................................0.10%
Total Variable Account Charges
(including One-Year Step Up
Death Benefit).............................1.30%
Optional 5% Enhanced Death
Benefit......................................0.15%
Total Variable Account Charges
(including 5% Enhanced Death
Benefit)...................................1.35%
GUARANTEED MINIMUM INCOME BENEFIT OPTION
For an additional 0.45% of the daily net assets of the variable account, an
applicant may elect the Guaranteed Minimum Income Benefit option (see
"Guaranteed Minimum Income Benefit Option").
Guaranteed Minimum Income Benefit Option.....0.45%
Total Variable Account Charges
(including the Guaranteed Minimum
Income Benefit option).....................1.65%
6
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<PAGE> 12
<TABLE>
<CAPTION>
UNDERLYING MUTUAL FUND ANNUAL EXPENSES
(AS A PERCENTAGE OF UNDERLYING MUTUAL FUND NET ASSETS, AFTER EXPENSE REIMBURSEMENT)
-------------------------------------------------------------------------------------------------------------------
Management Other 12b-1 Total Mutual
Fees Expenses Fees Fund Expenses
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
American Century Variable Portfolios, Inc. - American 0.70% 0.00% 0.00% 0.70%
Century VP Income & Growth
-------------------------------------------------------------------------------------------------------------------
American Century Variable Portfolios, Inc. - American 1.47% 0.00% 0.00% 1.47%
Century VP International
-------------------------------------------------------------------------------------------------------------------
American Century Variable Portfolios, Inc. - American 1.00% 0.00% 0.00% 1.00%
Century VP Value
-------------------------------------------------------------------------------------------------------------------
The Dreyfus Socially Responsible Growth Fund, Inc. 0.75% 0.05% 0.00% 0.80%
-------------------------------------------------------------------------------------------------------------------
Dreyfus Stock Index Fund, Inc. 0.25% 0.01% 0.00% 0.26%
-------------------------------------------------------------------------------------------------------------------
Dreyfus Variable Investment Fund - Capital 0.75% 0.05% 0.00% 0.80%
Appreciation Portfolio
-------------------------------------------------------------------------------------------------------------------
Federated Insurance Series - Federated Quality Bond 0.23% 0.47% 0.00% 0.70%
Fund II
-------------------------------------------------------------------------------------------------------------------
Fidelity VIP Equity-Income Portfolio: Service Class, 0.49% 0.08% 0.10% 0.67%
-------------------------------------------------------------------------------------------------------------------
Fidelity VIP Growth Portfolio: Service Class 0.59% 0.06% 0.10% 0.75%
-------------------------------------------------------------------------------------------------------------------
Fidelity VIP High Income Portfolio: Service Class 0.58% 0.14% 0.10% 0.82%
-------------------------------------------------------------------------------------------------------------------
Fidelity VIP Overseas Portfolio: Service Class 0.74% 0.13% 0.10% 0.97%
-------------------------------------------------------------------------------------------------------------------
Fidelity VIP II Contrafund Portfolio: Service Class 0.59% 0.06% 0.10% 0.75%
-------------------------------------------------------------------------------------------------------------------
Fidelity VIP III Growth Opportunities Portfolio: 0.59% 0.10% 0.10% 0.79%
Service Class
-------------------------------------------------------------------------------------------------------------------
Morgan Stanley Dean Witter Universal Funds, Inc. - 0.27% 1.25% 0.00% 1.52%
Emerging Markets Debt Portfolio
-------------------------------------------------------------------------------------------------------------------
NSAT Capital Appreciation Fund 0.60% 0.07% 0.00% 0.67%
-------------------------------------------------------------------------------------------------------------------
NSAT Government Bond Fund 0.50% 0.07% 0.00% 0.57%
-------------------------------------------------------------------------------------------------------------------
NSAT Money Market Fund 0.40% 0.06% 0.00% 0.46%
-------------------------------------------------------------------------------------------------------------------
NSAT Total Return Fund 0.59% 0.06% 0.00% 0.65%
-------------------------------------------------------------------------------------------------------------------
NSAT Nationwide Balanced Fund 0.75% 0.15% 0.00% 0.90%
-------------------------------------------------------------------------------------------------------------------
NSAT Nationwide Equity Income Fund 0.80% 0.15% 0.00% 0.95%
-------------------------------------------------------------------------------------------------------------------
NSAT Nationwide Global Equity Fund 1.00% 0.20% 0.00% 1.20%
-------------------------------------------------------------------------------------------------------------------
NSAT Nationwide High Income Bond Fund 0.80% 0.15% 0.00% 0.95%
-------------------------------------------------------------------------------------------------------------------
NSAT Nationwide Multi-Sector Bond Fund 0.75% 0.15% 0.00% 0.90%
-------------------------------------------------------------------------------------------------------------------
NSAT Nationwide Select Advisers Mid Cap Fund 1.05% 0.15% 0.00% 1.20%
-------------------------------------------------------------------------------------------------------------------
NSAT Nationwide Select Advisers Small Cap Growth Fund 1.10% 0.20% 0.00% 1.30%
-------------------------------------------------------------------------------------------------------------------
NSAT Nationwide Small Cap Value Fund 0.90% 0.15% 0.00% 1.05%
-------------------------------------------------------------------------------------------------------------------
NSAT Nationwide Small Company Fund 1.00% 0.07% 0.00% 1.07%
-------------------------------------------------------------------------------------------------------------------
NSAT Nationwide Strategic Growth Fund 0.90% 0.10% 0.00% 1.00%
-------------------------------------------------------------------------------------------------------------------
NSAT Nationwide Strategic Value Fund 0.90% 0.10% 0.00% 1.00%
-------------------------------------------------------------------------------------------------------------------
Neuberger Berman AMT Guardian Portfolio 0.85% 0.15% 0.00% 1.00%
-------------------------------------------------------------------------------------------------------------------
Neuberger Berman AMT Mid-Cap Growth Portfolio 0.85% 0.15% 0.00% 1.00%
-------------------------------------------------------------------------------------------------------------------
Neuberger Berman AMT Partners Portfolio 0.78% 0.06% 0.00% 0.84%
-------------------------------------------------------------------------------------------------------------------
Oppenheimer Variable Account Funds - Oppenheimer 0.69% 0.02% 0.00% 0.71%
Aggressive Growth Fund/VA
-------------------------------------------------------------------------------------------------------------------
Oppenheimer Variable Account Funds - Oppenheimer 0.72% 0.03% 0.00% 0.75%
Capital Appreciation Fund/VA
-------------------------------------------------------------------------------------------------------------------
Oppenheimer Variable Account Funds - Oppenheimer Main 0.74% 0.05% 0.00% 0.79%
Street Growth & Income Fund/VA
-------------------------------------------------------------------------------------------------------------------
</TABLE>
7
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<PAGE> 13
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
Management Other 12b-1 Total Mutual
Fees Expenses Fees Fund Expenses
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Van Eck Worldwide Insurance Trust - Worldwide 1.00% 0.50% 0.00% 1.50%
Emerging Markets Fund
-------------------------------------------------------------------------------------------------------------------
Van Eck Worldwide Insurance Trust - Worldwide Hard 1.00% 0.16% 0.00% 1.16%
Assets Fund
-------------------------------------------------------------------------------------------------------------------
Van Kampen Life Investment Trust - Morgan Stanley 1.20% 0.00% 0.00% 1.20%
Real Estate Securities Portfolio
-------------------------------------------------------------------------------------------------------------------
Warburg Pincus Trust - Growth & Income Portfolio 0.51% 0.49% 0.00% 1.00%
-------------------------------------------------------------------------------------------------------------------
Warburg Pincus Trust - International Equity Portfolio 1.00% 0.33% 0.00% 1.33%
-------------------------------------------------------------------------------------------------------------------
Warburg Pincus Trust - Post-Venture Capital Portfolio 1.08% 0.32% 0.00% 1.40%
-------------------------------------------------------------------------------------------------------------------
</TABLE>
The expenses shown above are deducted by the underlying mutual fund before it
provides Nationwide with the daily net asset value. Nationwide then deducts
applicable variable account charges from the net asset value to calculate the
unit value of the corresponding sub-account. The management fees and other
expenses are more fully described in the prospectus for each underlying mutual
fund. Information relating to the underlying mutual funds was provided by the
underlying mutual funds and not independently verified by Nationwide.
Some underlying mutual funds are subject to fee waivers and expense
reimbursements. The following chart shows what the expenses would have been for
such funds without fee waivers and expense reimbursements.
<TABLE>
<CAPTION>
- -------------------------------------------------- ------------- ------------- -------------- ----------------------
Management Other Total Underlying
Fees Expenses 12b-1 Fees Mutual Fund Expenses
- -------------------------------------------------- ------------- ------------- -------------- ----------------------
<S> <C> <C> <C> <C>
Fidelity VIP Equity-Income Portfolio: Service 0.49% 0.09% 0.10% 0.68%
Class
- -------------------------------------------------- ------------- ------------- -------------- ----------------------
Fidelity VIP Growth Portfolio: Service Class 0.59% 0.11% 0.10% 0.80%
- -------------------------------------------------- ------------- ------------- -------------- ----------------------
Fidelity VIP Overseas Portfolio: Service Class 0.74% 0.17% 0.10% 1.01%
- -------------------------------------------------- ------------- ------------- -------------- ----------------------
Fidelity VIP II Contrafund Portfolio: Service 0.59% 0.11% 0.10% 0.80%
Class
- -------------------------------------------------- ------------- ------------- -------------- ----------------------
Fidelity VIP III Growth Opportunities Portfolio: 0.59% 0.11% 0.10% 0.80%
Service Class
- -------------------------------------------------- ------------- ------------- -------------- ----------------------
Morgan Stanley Dean Witter Universal Funds, Inc. 0.80% 1.25% 0.00% 2.05%
- - Emerging Markets Debt Portfolio
- -------------------------------------------------- ------------- ------------- -------------- ----------------------
NSAT Nationwide Balanced Fund 0.75% 0.21% 0.00% 0.96%
- -------------------------------------------------- ------------- ------------- -------------- ----------------------
NSAT Nationwide Equity Income Fund 0.80% 0.35% 0.00% 1.15%
- -------------------------------------------------- ------------- ------------- -------------- ----------------------
NSAT Nationwide Global Equity Fund 1.00% 0.46% 0.00% 1.46%
- -------------------------------------------------- ------------- ------------- -------------- ----------------------
NSAT Nationwide High Income Bond Fund 0.80% 0.32% 0.00% 1.12%
- -------------------------------------------------- ------------- ------------- -------------- ----------------------
NSAT Nationwide Multi-Sector Bond Fund 0.75% 0.21% 0.00% 0.96%
- -------------------------------------------------- ------------- ------------- -------------- ----------------------
NSAT Nationwide Select Advisers Mid Cap Fund 1.05% 0.49% 0.00% 1.54%
- -------------------------------------------------- ------------- ------------- -------------- ----------------------
NSAT Nationwide Select Advisers Small Cap Growth 1.10% 0.58% 0.00% 1.68%
Fund
- -------------------------------------------------- ------------- ------------- -------------- ----------------------
NSAT Nationwide Small Cap Value Fund 0.90% 0.43% 0.00% 1.33%
- -------------------------------------------------- ------------- ------------- -------------- ----------------------
NSAT Nationwide Strategic Growth Fund 0.90% 0.65% 0.00% 1.55%
- -------------------------------------------------- ------------- ------------- -------------- ----------------------
NSAT Nationwide Strategic Value Fund 0.90% 0.33% 0.00% 1.23%
- -------------------------------------------------- ------------- ------------- -------------- ----------------------
Van Eck Worldwide Insurance Trust - Worldwide 1.00% 0.61% 0.00% 1.61%
Emerging Markets Fund
- -------------------------------------------------- ------------- ------------- -------------- ----------------------
Van Eck Worldwide Insurance Trust - Worldwide 1.00% 0.20% 0.00% 1.20%
Hard Assets Fund
- -------------------------------------------------- ------------- ------------- -------------- ----------------------
</TABLE>
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<PAGE> 14
EXAMPLE
The following chart shows the amount of expenses (in dollars) that would be
incurred under this contract assuming a $1,000 investment, 5% annual return, and
no change in expenses. These dollar figures are illustrative only and should not
be considered a representation of past or future expenses. Actual expenses may
be greater or less than those shown below.
The chart reflects expenses of both the variable account and the underlying
mutual funds. The chart reflects variable account charges of 1.80%, which is the
maximum variable account charges that could be assessed to a contract.
For those contracts that do not elect the maximum number of rider options, the
expenses would be reduced. Deductions for premium taxes are not reflected but
may apply.
The summary of contract expenses and example are to help contract owners
understand the expenses associated with the contract.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
If you surrender your contract If you do not surrender your If you annuitize your contract
at the end of the applicable contract at the end of the at the end of the applicable
time period applicable time period time period
- ------------------------------------------------------------------------------------------------------------------------------
1 Yr. 3 Yrs. 5 Yrs. 10 Yrs. 1 Yr. 3 Yrs 5 Yrs. 10 Yrs. 1 Yr. 3 Yrs. 5 Yrs. 10 Yrs.
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
American Century Variable 26 81 138 292 26 81 138 292 * 81 138 292
Portfolios, Inc. - American
Century VP Income & Growth
- ------------------------------------------------------------------------------------------------------------------------------
American Century Variable 34 105 177 369 34 105 177 369 * 105 177 369
Portfolios, Inc. - American
Century VP International
- ------------------------------------------------------------------------------------------------------------------------------
American Century Variable 29 90 153 323 29 90 153 323 * 90 153 323
Portfolios, Inc. - American
Century VP Value
- ------------------------------------------------------------------------------------------------------------------------------
The Dreyfus Socially 27 84 143 303 27 84 143 303 * 84 143 303
Responsible Growth Fund, Inc.
- ------------------------------------------------------------------------------------------------------------------------------
Dreyfus Stock Index Fund, 22 67 114 246 22 67 114 246 * 67 114 246
Inc.
- ------------------------------------------------------------------------------------------------------------------------------
Dreyfus Variable Investment 27 84 143 303 27 84 143 303 * 84 143 303
Fund - Capital Appreciation
Portfolio
- ------------------------------------------------------------------------------------------------------------------------------
Federated Insurance Series - 26 81 138 292 26 81 138 292 * 81 138 292
Federated Quality Bond
Fund II
- ------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Equity-Income 26 80 136 289 26 80 136 289 * 80 136 289
Portfolio: Service Class
- ------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Growth 27 82 140 298 27 82 140 298 * 82 140 298
Portfolio: Service Class
- ------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP High Income 28 84 144 305 28 84 144 305 * 84 144 305
Portfolio: Service Class
- ------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Overseas 29 89 152 320 29 89 152 320 * 89 152 320
Portfolio: Service Class
- ------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP II Contrafund 27 82 140 298 27 82 140 298 * 82 140 298
Portfolio: Service Class
- ------------------------------------------------------------------------------------------------------------------------------
Fidelity VIP III Growth 27 83 142 302 27 83 142 302 * 83 142 302
Opportunities Portfolio:
Service Class
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
9
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<PAGE> 15
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
If you surrender your contract If you do not surrender your If you annuitize your contract
at the end of the applicable contract at the end of the at the end of the applicable
time period applicable time period time period
- --------------------------------------------------------------------------------------------------------------------------
1 Yr. 3 Yrs. 5 Yrs. 10 Yrs. 1 Yr. 3 Yrs 5 Yrs. 10 Yrs. 1 Yr. 3 Yrs. 5 Yrs. 10 Yrs.
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Morgan Stanley Dean Witter 35 106 180 373 35 106 180 373 * 106 180 373
Universal Funds, Inc. -
Emerging Markets Debt
Portfolio
- --------------------------------------------------------------------------------------------------------------------------
NSAT Capital Appreciation 26 80 136 289 26 80 136 289 * 80 136 289
Fund
- --------------------------------------------------------------------------------------------------------------------------
NSAT Government Bond Fund 25 77 131 279 25 77 131 279 * 77 131 279
- --------------------------------------------------------------------------------------------------------------------------
NSAT Money Market Fund 24 73 125 267 24 73 125 267 * 73 125 267
- --------------------------------------------------------------------------------------------------------------------------
NSAT Total Return Fund 26 79 135 287 26 79 135 287 * 79 135 287
- --------------------------------------------------------------------------------------------------------------------------
NSAT Nationwide Balanced Fund 28 87 148 313 28 87 148 313 * 87 148 313
- --------------------------------------------------------------------------------------------------------------------------
NSAT Nationwide Equity 29 88 151 318 29 88 151 318 * 88 151 318
Income Fund
- --------------------------------------------------------------------------------------------------------------------------
NSAT Nationwide Global 32 96 163 343 32 96 163 343 * 96 163 343
Equity Fund
- --------------------------------------------------------------------------------------------------------------------------
NSAT Nationwide High Income 29 88 151 318 29 88 151 318 * 88 151 318
Bond Fund
- --------------------------------------------------------------------------------------------------------------------------
NSAT Nationwide Multi Sector 28 87 148 313 28 87 148 313 * 87 148 313
Bond Fund
- --------------------------------------------------------------------------------------------------------------------------
NSAT Nationwide Select 32 96 163 343 32 96 163 343 * 96 163 343
Advisers Mid-Cap Fund
- --------------------------------------------------------------------------------------------------------------------------
NSAT Nationwide Select 33 99 169 352 33 99 169 352 99 169 352
Advisers Small Cap Growth
Fund
- --------------------------------------------------------------------------------------------------------------------------
NSAT Nationwide Small Cap 30 92 156 328 30 92 156 328 * 92 156 328
Value Fund
- --------------------------------------------------------------------------------------------------------------------------
NSAT Nationwide Small 30 92 157 330 30 92 157 330 * 92 157 330
Company Fund
- --------------------------------------------------------------------------------------------------------------------------
NSAT Nationwide Strategic 29 90 153 323 29 90 153 323 * 90 153 323
Growth Fund
- --------------------------------------------------------------------------------------------------------------------------
NSAT Nationwide Strategic 29 90 153 323 29 90 153 323 * 90 153 323
Value Fund
- --------------------------------------------------------------------------------------------------------------------------
Neuberger Berman AMT- 29 90 153 323 29 90 153 323 * 90 153 323
Guardian Portfolio
- --------------------------------------------------------------------------------------------------------------------------
Neuberger Berman AMT- 29 90 153 323 29 90 153 323 * 90 153 323
Mid-Cap Growth Portfolio
- --------------------------------------------------------------------------------------------------------------------------
Neuberger Berman AMT- 28 85 145 307 28 85 145 307 * 85 145 307
Partners Portfolio
- --------------------------------------------------------------------------------------------------------------------------
Oppenheimer Variable Account 26 81 138 293 26 81 138 293 * 81 138 293
Funds - Oppenheimer
Aggressive Growth Fund/VA
- --------------------------------------------------------------------------------------------------------------------------
Oppenheimer Variable Account 27 82 140 298 27 82 140 298 * 82 140 298
Funds - Oppenheimer Capital
Appreciation Fund/VA
- --------------------------------------------------------------------------------------------------------------------------
Oppenheimer Variable Account 27 83 142 302 27 83 142 302 * 83 142 302
Funds - Oppenheimer Main
Street Growth & Income
Fund/VA
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
10
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<PAGE> 16
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
If you surrender your contract If you do not surrender your If you annuitize your contract
at the end of the applicable contract at the end of the at the end of the applicable
time period applicable time period time period
- ----------------------------------------------------------------------------------------------------------------------------
1 Yr. 3 Yrs. 5 Yrs. 10 Yrs. 1 Yr. 3 Yrs 5 Yrs. 10 Yrs. 1 Yr. 3 Yrs. 5 Yrs. 10 Yrs.
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Van Eck Worldwide Insurance 35 106 179 371 35 106 179 371 * 106 179 371
Trust - Worldwide Emerging
Markets Fund
- ----------------------------------------------------------------------------------------------------------------------------
Van Eck Worldwide Insurance 31 95 161 339 31 95 161 339 * 95 161 339
Trust - Worldwide Hard
Assets Fund
- ----------------------------------------------------------------------------------------------------------------------------
Van Kampen Life Investment 32 96 163 343 32 96 163 343 * 96 163 343
Trust - Morgan Stanley Real
Estate Securities Portfolio
- ----------------------------------------------------------------------------------------------------------------------------
Warburg Pincus Trust - 29 90 153 323 29 90 153 323 * 90 153 323
Growth & Income Portfolio
- ----------------------------------------------------------------------------------------------------------------------------
Warburg Pincus Trust - 33 100 170 355 33 100 170 355 * 100 170 355
International Equity
Portfolio
- ----------------------------------------------------------------------------------------------------------------------------
Warburg Pincus Trust - 34 102 174 362 34 102 174 362 * 102 174 362
Post-Venture Capital
Portfolio
- ----------------------------------------------------------------------------------------------------------------------------
<FN>
*The contracts sold under this prospectus do not permit annuitization during the
first two contract years.
</TABLE>
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<PAGE> 17
SYNOPSIS OF THE CONTRACTS
The contracts described in this prospectus are modified single purchase payment
contracts. The contracts may be issued as either individual or group contracts.
In those states where contracts are issued as group contracts, references
throughout this prospectus to "contract(s)" will also mean "certificate(s)" and
"contract owner" will mean "participant".
The contracts can be categorized as:
- Non-Qualified;
- Investment-only Contracts;
- Individual Retirement Annuities;
- Roth IRAs;
- SEP IRAs; and
- Tax Sheltered Annuities with contributions rolled over or transferred
from other Tax Sheltered Annuity plans.
MINIMUM INITIAL AND SUBSEQUENT PURCHASE PAYMENTS
- ------------------- ----------------- -----------------
MINIMUM INITIAL MINIMUM
CONTRACT PURCHASE PAYMENT SUBSEQUENT
TYPE PAYMENTS
- ------------------- ----------------- -----------------
Non-Qualified $ 15,000 $ 1,000
- ------------------- ----------------- -----------------
Investment-only $100,000 $15,000
Contracts
- ------------------- ----------------- -----------------
IRA $ 15,000 $1,000
- ------------------- ----------------- -----------------
Roth IRA $ 15,000 $1,000
- ------------------- ----------------- -----------------
SEP IRA $ 15,000 $1,000
- ------------------- ----------------- -----------------
Tax Sheltered $ 15,000 $1,000
Annuity
- ------------------- ----------------- -----------------
Guaranteed Term Options
Guaranteed Term Options are separate investment options under the contract. The
minimum amount that may be allocated to a Guaranteed Term Option is $1,000.
CHARGES AND EXPENSES
Nationwide deducts a Mortality and Expense Risk Charge equal to an annual rate
of 1.20% of the daily net assets of the variable account. Nationwide assesses
this charge in return for bearing certain mortality and expense risks, and for
administrative expenses.
Nationwide does not deduct a sales charge from purchase payments upon deposit
into or withdrawal from the contract.
Two optional death benefits are available under the contract. If the contract
owner elects one of these options, Nationwide will deduct either 0.10% for the
One-Year Step Up Death Benefit, or 0.15% for the 5% Enhanced Death Benefit.
A Guaranteed Minimum Income Benefit option is available under the contract. If
the contract owner elects the Guaranteed Minimum Income Benefit option,
Nationwide will deduct an additional charge of 0.45% of the daily net assets of
the variable account (see "Guaranteed Minimum Income Benefit").
ANNUITY PAYMENTS
Annuity payments begin on the annuitization date. The payments will be based on
the annuity payment option chosen at the time of application (see "Annuity
Payment Options").
TAXATION
How the contracts are taxed depends on the type of contract issued. Nationwide
will charge against the contract any premium taxes levied by any governmental
authority (see "Federal Tax Considerations" and "Premium Taxes").
TEN DAY FREE LOOK
Contract owners may return the contract for any reason within ten days of
receipt and Nationwide will refund the contract value or the amount required by
law (see "Right to Revoke").
FINANCIAL STATEMENTS
Financial statements for the variable account and Nationwide are located in the
Statement of Additional Information. A current Statement of Additional
Information may be obtained, without charge, by contacting Nationwide's home
office at the telephone number listed on page 2 of this prospectus.
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<PAGE> 18
CONDENSED FINANCIAL INFORMATION
The value of an accumulation unit is determined on the basis of changes in the
per share value of the underlying mutual funds and the assessment of a variable
account charge which may vary from contract to contract (for more information on
the calculation of accumulation unit values, see "Determining Variable Account
Value - Valuing an Accumulation Unit"). Please refer to Appendix B for
information regarding each class of accumulation units.
NATIONWIDE LIFE INSURANCE COMPANY
Nationwide is a stock life insurance company organized under Ohio law in March,
1929 with its home office at One Nationwide Plaza, Columbus, Ohio 43215.
Nationwide is a provider of life insurance, annuities and retirement products.
It is admitted to do business in all states, the District of Columbia and Puerto
Rico.
NATIONWIDE ADVISORY SERVICES, INC.
The contracts are distributed by the general distributor, Nationwide Advisory
Services, Inc. ("NAS"), Three Nationwide Plaza, Columbus, Ohio 43215. NAS is a
wholly owned subsidiary of Nationwide Life Insurance Company.
INVESTING IN THE CONTRACT
THE VARIABLE ACCOUNT AND UNDERLYING MUTUAL FUNDS
Nationwide Variable Account-9 is a separate account that invests in the
underlying mutual funds listed in Appendix A. Nationwide established the
separate account on May 22, 1997, pursuant to Ohio law. Although the separate
account is registered with the SEC as a unit investment trust pursuant to the
Investment Company Act of 1940 ("1940 Act"), the SEC does not supervise the
management of Nationwide or the variable account.
Income, gains, and losses credited to, or charged against, the variable account
reflect the variable account's own investment experience and not the investment
experience of Nationwide's other assets. The variable account's assets are held
separately from Nationwide's assets and are not chargeable with liabilities
incurred in any other business of Nationwide. Nationwide is obligated to pay all
amounts promised to contract owners under the contracts.
The variable account is divided into sub-accounts. Nationwide uses the assets of
each sub-account to buy shares of the underlying mutual funds based on contract
owner instructions. There are two sub-accounts for each underlying mutual fund.
One sub-account contains shares attributable to accumulation units under
Non-Qualified Contracts. The other contains shares attributable to accumulation
units under 401(a) Investment-only Contracts, Individual Retirement Annuities,
Roth IRAs, SEP IRAs, Tax Sheltered Annuities and Charitable Remainder Trusts.
Each underlying mutual fund's prospectus contains more detailed information
about that fund. Prospectuses for the underlying mutual funds should be read in
conjunction with this prospectus.
Underlying mutual funds in the variable account are NOT publicly traded mutual
funds. They are only available as investment options in variable life insurance
policies or variable annuity contracts issued by life insurance companies, or in
some cases, through participation in certain qualified pension or retirement
plans.
The investment advisers of the underlying mutual funds may manage publicly
traded mutual funds with similar names and investment objectives. However, the
underlying mutual funds are NOT directly related to any publicly traded mutual
fund. Contract owners should not compare the performance of a publicly traded
fund with the performance of the underlying mutual funds participating in the
variable account. The performance of the underlying mutual funds could differ
substantially from that of any publicly traded funds.
13
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<PAGE> 19
Voting Rights
Contract owners who have allocated assets to the underlying mutual funds are
entitled to certain voting rights. Nationwide will vote contract owner shares at
special shareholder meetings based on contract owner instructions. However, if
the law changes and Nationwide is allowed to vote in its own right, it may elect
to do so.
Contract owners with voting interests in an underlying mutual fund will be
notified of issues requiring the shareholders' vote as soon as possible before
the shareholder meeting. Notification will contain proxy materials and a form
with which to give Nationwide voting instructions. Nationwide will vote shares
for which no instructions are received in the same proportion as those that are
received.
The number of shares which a contract owner may vote is determined by dividing
the cash value of the amount they have allocated to an underlying mutual fund by
the net asset value of that underlying mutual fund. Nationwide will designate a
date for this determination not more than 90 days before the shareholder
meeting.
Material Conflicts
The underlying mutual funds may be offered through separate accounts of other
insurance companies, as well as through other separate accounts of Nationwide.
Nationwide does not anticipate any disadvantages to this. However, it is
possible that a conflict may arise between the interests of the variable account
and one or more of the other separate accounts in which these underlying mutual
funds participate.
Material conflicts may occur due to a change in law affecting the operations of
variable life insurance policies and variable annuity contracts, or differences
in the voting instructions of the contract owners and those of other companies.
If a material conflict occurs, Nationwide will take whatever steps are necessary
to protect contract owners and variable annuity payees, including withdrawal of
the variable account from participation in the underlying mutual fund(s)
involved in the conflict.
Substitution of Securities
Nationwide may substitute, eliminate or combine shares of another underlying
mutual fund for shares already purchased or to be purchased in the future if
either of the following occurs:
1) shares of a current underlying mutual fund are no longer available for
investment; or
2) further investment in an underlying mutual fund is inappropriate.
No substitution, elimination, or combination of shares may take place without
the prior approval of the SEC and state insurance departments.
GUARANTEED TERM OPTIONS
Guaranteed Term Options are separate investment options under the contract. A
Guaranteed Term Option prospectus must be read along with this prospectus. The
minimum amount that may be allocated to a Guaranteed Term Option is $1,000.
Allocations to the Guaranteed Term Options are not subject to variable account
charges.
Guaranteed Term Options provide a guaranteed rate of interest over four
different maturity durations: three (3), five (5), seven (7) or ten (10) years.
Note: The guaranteed term may last for up to 3 months beyond the 3, 5, 7, or 10
year period since every guaranteed term will end on the final day of a calendar
quarter.
For the duration selected, Nationwide will declare a guaranteed interest rate.
That rate will be credited to amounts allocated to the Guaranteed Term Option
UNLESS a distribution is taken before the maturity date. If a distribution
occurs before the maturity date, the amount distributed will be subject to a
market value adjustment. A market value adjustment can increase or decrease the
amount distributed depending on current interest rate fluctuations. No market
value adjustment will be applied if Guaranteed Term Option allocations are held
to maturity.
14
19 of 164
<PAGE> 20
Because a market value adjustment can affect the value of a distribution, its
effects should be carefully considered before surrendering or transferring from
Guaranteed Term Options. When actual interest rates are higher than the
guaranteed rate, a market value adjustment would reduce the value of the amount
distributed. When actual interest rates are lower than the guaranteed rate, the
value of the amount distributed would increase.
Guaranteed Term Options are available only during the accumulation phase of a
contract. They are not available after the annuitization date. In addition,
Guaranteed Term Options are not available for use with asset rebalancing, Dollar
Cost Averaging, or systematic withdrawals.
Guaranteed Term Options may not be available in every state.
STANDARD CHARGES AND DEDUCTIONS
The maximum commissions payable on the sale of a contract described in this
prospectus is 1.5% of purchase payments.
MORTALITY AND EXPENSE RISK CHARGE
Nationwide deducts a Mortality and Expense Risk Charge from the variable
account. This amount is computed on a daily basis, and is equal to an annual
rate of 1.20% of the daily net assets of the variable account.
The mortality risk charges (0.80%) compensate Nationwide for guaranteeing the
annuity rate of the contracts. This guarantee ensures that the annuity rates
will not change regardless of the death rates of annuity payees or the general
population.
The expense risk charges (0.40%) compensate Nationwide for guaranteeing that
administration charges will not increase regardless of actual expenses.
If the Mortality and Expense Risk Charge is insufficient to cover actual
expenses, the loss is borne by Nationwide.
PREMIUM TAXES
Nationwide will charge against the contract value any premium taxes levied by a
state or other government entity. Premium tax rates currently range from 0% to
3.5%. This range is subject to change. The method used to assess premium tax
will be determined by Nationwide at its sole discretion in compliance with state
law.
If applicable, Nationwide will deduct premium taxes from the contract either at:
(1) the time the contract is surrendered;
(2) annuitization; or
(3) such earlier date as Nationwide becomes subject to premium taxes.
Premium taxes may be deducted from death benefit proceeds.
OPTIONAL CONTRACT BENEFITS, CHARGES AND DEDUCTIONS
DEATH BENEFIT OPTIONS
If the contract owner chooses an optional death benefit, Nationwide will deduct
a charge equal to an annual rate of either 0.10% or 0.15% of the daily net
assets of the variable account, depending upon which option was chosen.
Nationwide may lower either of these charges at any time without notifying
contract owners. Further information about these benefits can be found in the
"Death Benefit Payment" provision.
One-Year Step Up Death Benefit
If the annuitant dies before the annuitization date, the death benefit will be
the greatest of:
1) the contract value;
2) the total of all purchase payments, less an adjustment for amounts
surrendered; or
3) the highest contract value on any contract anniversary before the
annuitant's 86th birthday, less an adjustment for amounts subsequently
surrendered, plus purchase payments received after that contract
anniversary.
15
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<PAGE> 21
The adjustment for amounts surrendered will reduce items (2) and (3) above in
the same proportion that the contract value was reduced on the date(s) of the
partial surrender(s).
5% Enhanced Death Benefit
If the annuitant dies before the annuitization date, the death benefit will be
the greater of:
(1) the contract value; or
(2) the total of all purchase payments, less any amounts surrendered,
accumulated at 5% simple interest from the date of each purchase
payment or surrender to the most recent contract anniversary prior to
the annuitant's 86th birthday, less an adjustment for amounts
subsequently surrendered, plus purchase payments received since that
contract anniversary.
GUARANTEED MINIMUM INCOME BENEFIT OPTION
For an additional charge of 0.45% of the daily net assets of the variable
account, the contract owner can purchase a Guaranteed Minimum Income Benefit
option at the time of application. The Guaranteed Minimum Income Benefit option
provides for a minimum guaranteed value that may replace the contract value as
the amount to be annuitized under certain circumstances. A Guaranteed Minimum
Income Benefit may afford protection against unfavorable investment performance.
CONTRACT OWNERSHIP
The contract owner has all rights under the contract. Purchasers who name
someone other than themselves as the contract owner will have no rights under
the contract.
Contract owners of Non-Qualified Contracts may name a new contract owner at any
time before the annuitization date. Any change of contract owner automatically
revokes any prior contract owner designation. Changes in contract ownership may
result in federal income taxation and may be subject to state and federal gift
taxes.
A change in contract ownership must be submitted in writing and recorded at
Nationwide's home office. Once recorded, the change will be effective as of the
date signed. However, the change will not affect any payments made or actions
taken by Nationwide before it was recorded.
The contract owner may also request a change in the annuitant, contingent
annuitant, contingent owner, beneficiary, or contingent beneficiary before the
annuitization date. These changes must be:
- on a Nationwide form;
- signed by the contract owner; and
- received at Nationwide's home office before the annuitization date.
Nationwide must review and approve any change requests. If the contract owner is
not a natural person (e.g. a trust or corporation) and there is a change of the
annuitant, distributions will be made as if the contract owner died at the time
of the change.
On the annuitization date, the annuitant will become the contract owner, unless
the contract owner is a Charitable Remainder Trust.
JOINT OWNERSHIP
Joint owners each own an undivided interest in the contract.
Contract owners can name a joint owner at any time before annuitization subject
to the following conditions:
- Joint owners can only be named for Non-Qualified Contracts;
- Joint owners must be spouses at the time joint ownership is requested,
unless state law requires Nationwide to allow non-spousal joint owners;
- The exercise of any ownership right in the contract will generally require
a written request signed by both joint owners;
- Nationwide will not be liable for any loss, liability, cost, or expense
for acting in accordance with the instructions of either joint owner; and
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<PAGE> 22
- An election in writing signed by both contract owners must be made to
authorize Nationwide to allow the exercise of ownership rights
independently by either joint owner.
CONTINGENT OWNERSHIP
The contingent owner is entitled to certain benefits under the contract, if a
contract owner who is NOT the annuitant dies before the annuitization date, and
there is no surviving joint owner.
The contract owner may name or change a contingent owner at any time before the
annuitization date. To change the contingent owner, a written request must be
submitted to Nationwide. Once Nationwide has recorded the change, it will be
effective as of the date it was signed, whether or not the contract owner was
living at the time it was recorded. The change will not affect any action taken
by Nationwide before the change was recorded.
ANNUITANT
The annuitant is the person who will receive annuity payments and upon whose
continuation of life any annuity payment involving life contingencies depends.
This person must be age 85 or younger at the time of contract issuance (age 83
or younger if electing a Guaranteed Minimum Income Benefit option), unless
Nationwide approves a request for an annuitant of greater age. The annuitant may
be changed before the annuitization date with Nationwide's consent.
BENEFICIARY AND CONTINGENT BENEFICIARY
The beneficiary(ies) is the person(s) who is entitled to the death benefit if
the annuitant dies before the annuitization date and there is no joint owner.
The contract owner can name more than one beneficiary. Multiple beneficiaries
will share the death benefit equally, unless otherwise specified.
The contract owner may change the beneficiary or contingent beneficiary during
the annuitant's lifetime by submitting a written request to Nationwide. Once
recorded, the change will be effective as of the date it was signed, whether or
not the annuitant was living at the time it was recorded. The change will not
affect any action taken by Nationwide before the change was recorded.
OPERATION OF THE CONTRACT
MINIMUM INITIAL AND SUBSEQUENT PURCHASE PAYMENTS
- ------------------- ----------------- -----------------
MINIMUM INITIAL MINIMUM
CONTRACT PURCHASE PAYMENT SUBSEQUENT
TYPE PAYMENTS
- ------------------- ----------------- -----------------
Non-Qualified $15,000 $1,000
- ------------------- ----------------- -----------------
Investment-only $100,000 $15,000
Contracts
- ------------------- ----------------- -----------------
IRA $15,000 $1,000
- ------------------- ----------------- -----------------
Roth IRA $15,000 $1,000
- ------------------- ----------------- -----------------
SEP IRA $15,000 $1,000
- ------------------- ----------------- -----------------
Tax Sheltered $15,000 $1,000
Annuity
- ------------------- ----------------- -----------------
Guaranteed Term Options
Guaranteed Term Options are separate investment options under the contract. The
minimum amount that may be allocated to a Guaranteed Term Option is $1,000.
PRICING
Initial purchase payments allocated to sub-accounts will be priced at the
accumulation unit value determined no later than 2 business days after receipt
of an order to purchase if the application and all necessary information are
complete. If the application is not complete, Nationwide may retain a purchase
payment for up to 5 business days while attempting to complete it. If the
application is not completed within 5 business days, the prospective purchaser
will be informed of the reason for the delay. The purchase payment will be
returned unless the prospective purchaser specifically allows Nationwide to hold
the purchase payment until the application is completed.
Subsequent purchase payments will be priced based on the next available
accumulation unit value after the payment is received. The cumulative total of
all purchase payments under contracts on the life of any one annuitant cannot
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exceed $1,000,000 without Nationwide's prior consent.
Purchase payments will not be priced when the New York Stock Exchange is closed
or on the following nationally recognized holidays:
- - New Year's Day - Independence Day
- - Martin Luther King, Jr. Day - Labor Day
- - Presidents' Day - Thanksgiving
- - Good Friday - Christmas
- - Memorial Day
Nationwide also will not price purchase payments if:
(1) trading on the New York Stock Exchange is restricted;
(2) an emergency exists making disposal or valuation of securities held in
the variable account impracticable; or
(3) the SEC, by order, permits a suspension or postponement for the
protection of security holders.
Rules and regulations of the SEC will govern as to when the conditions described
in (2) and (3) exist. If Nationwide is closed on days when the New York Stock
Exchange is open, contract value may be affected since the contract owner would
not have access to their account.
ALLOCATION OF PURCHASE PAYMENTS
Nationwide allocates purchase payments to sub-accounts and/or Guaranteed Term
Options as instructed by the contract owner. Shares of the underlying mutual
funds allocated to the sub-accounts are purchased at net asset value, then
converted into accumulation units. Contract owners can change allocations or
make exchanges among the sub-accounts or Guaranteed Term Options. However, no
change may be made that would result in an amount less than 1% of the purchase
payment being allocated. Certain transactions may be subject to conditions
imposed by the underlying mutual funds, as well as those set forth in the
contract.
DETERMINING THE CONTRACT VALUE
The contract value is the sum of:
1) the value of amounts allocated to the sub-accounts of the variable
account; and
2) amounts allocated to a Guaranteed Term Option.
If part or all of the contract value is surrendered, or charges are assessed
against the contract value, Nationwide will deduct a proportionate amount from
each of the sub-accounts and amounts from the Guaranteed Term Options based on
current cash values.
Determining Variable Account Value - Valuing an Accumulation Unit
Purchase payments or transfers allocated to the underlying mutual funds are
accounted for in accumulation units. Accumulation unit values (for each
sub-account) are determined by calculating the net investment factor for the
underlying mutual fund for the current valuation period and multiplying that
result with the accumulation unit values determined on the previous valuation
period.
Nationwide uses the net investment factor as a way to calculate the investment
performance of a sub-account from valuation period to valuation period. For each
sub-account, the net investment factor shows the investment performance of the
underlying mutual fund in which a particular sub-account invests, including the
charges assessed against that sub-account for a valuation period.
The net investment factor is determined by dividing (a) by (b), and then
subtracting (c) from the result, where:
(a) is:
(1) the net asset value of the underlying mutual fund as of the end of
the current valuation period; and
(2) the per share amount of any dividend or income distributions made by
the underlying mutual fund (if the ex-dividend date occurs during
the current valuation period); and
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(b) is the net asset value of the underlying mutual fund determined as of
the end of the preceding valuation period; and
(c) is a factor representing the daily variable account charges, which may
include charges for contract options chosen by the contract owner. The
factor is equal to an annual rate ranging from 1.20% to 1.80% of the
daily net assets of the variable account, depending on which contract
features the contract owner chose.
Based on the net investment factor, the value of an accumulation unit may
increase or decrease. Changes in the net investment factor may not be directly
proportional to changes in the net asset value of the underlying mutual fund
shares because of the deduction of variable account charges.
Though the number of accumulation units will not change as a result of
investment experience, the value of an accumulation unit may increase or
decrease from valuation period to valuation period.
Determining the Guaranteed Term Option Value
Nationwide determines the value of a Guaranteed Term Option by:
1) adding all amounts allocated to any Guaranteed Term Option, minus
amounts previously transferred or withdrawn (which may be subject to a
market value adjustment); and
2) adding any interest earned on the amounts allocated to any Guaranteed
Term Option; and
3) subtracting charges deducted in accordance with the contract.
TRANSFERS
Contract owners can transfer allocations without penalty or adjustment subject
to the following conditions:
- Transfers among the sub-accounts are limited to 12 times per year.
- Transfers from a Guaranteed Term Option prior to maturity are subject to
a market value adjustment.
- After annuitization, transfers may only be made on the anniversary of
the annuitization date.
Amounts transferred to the variable account will receive the accumulation unit
value next determined after the transfers request is received.
Transfer Requests
Nationwide will accept transfer requests in writing or, in those states that
allow them, over the telephone. Nationwide will use reasonable procedures to
confirm that telephone instructions are genuine and will not be liable for
following telephone instructions that it reasonably determined to be genuine.
Nationwide may withdraw the telephone exchange privilege upon 30 days written
notice to contract owners.
Market Timing Firms
Some contract owners may use market timing firms or other third parties to make
transfers on their behalf. Generally, in order to take advantage of perceived
market trends, market-timing firms will submit transfer or exchange requests on
behalf of multiple contract owners at the same time. Sometimes this can result
in unusually large transfers of funds. These large transfers might interfere
with the ability of Nationwide or the underlying mutual fund to process
transactions. This can potentially disadvantage contract owners not using
market-timing firms. To avoid this, Nationwide may modify transfer and exchange
rights of contract owners who use market timing firms (or other third parties)
to transfer or exchange funds on their behalf.
The exchange and transfer rights of individual contract owners will not be
modified in any way when instructions are submitted directly by the contract
owner, or by the contract owner's representative (as authorized by the execution
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of a valid Nationwide Limited Power of Attorney Form).
To protect contract owners, Nationwide may refuse exchange and transfer
requests:
- - submitted by any agent acting under a power of attorney on behalf of more
than one contract owner; or
- - submitted on behalf of individual contract owners who have executed
pre-authorized exchange forms which are submitted by market timing firms (or
other third parties) on behalf of more than one contract owner at the same
time.
Nationwide will not restrict exchange rights unless Nationwide believes it to be
necessary for the protection of all contract owners.
RIGHT TO REVOKE
Contract owners have a ten day "free look" to examine the contract. The contract
may be returned to Nationwide's home office for any reason within ten days of
receipt and Nationwide will refund the contract value or another amount required
by law. The refunded contract value will reflect the deduction of any contract
charges, unless otherwise required by law. All IRA and Roth IRA refunds will be
a return of purchase payments. State and/or federal law may provide additional
free look privileges.
Liability of the variable account under this provision is limited to the
contract value in each sub-account on the date of revocation. Any additional
amounts refunded to the contract owner will be paid by Nationwide.
SURRENDER (REDEMPTION)
Contract owners may surrender some or all of their contract value before the
earlier of the annuitization date or the annuitant's death. Surrender requests
must be in writing and Nationwide may require additional information. When
taking a full surrender, the contract must accompany the written request.
Nationwide may require a signature guarantee.
Nationwide will pay any amounts surrendered from the sub-accounts within 7 days.
However, Nationwide may suspend or postpone payment when it is unable to price a
purchase payment or transfer.
PARTIAL SURRENDERS (PARTIAL REDEMPTIONS)
Nationwide will surrender accumulation units from the sub-accounts and an amount
from the Guaranteed Term Options. The amount withdrawn from each investment
option will be in proportion to the value in each option at the time of the
surrender request.
FULL SURRENDERS (FULL REDEMPTIONS)
The contract value upon full surrender may be more or less than the total of all
purchase payments made to the contract. The contract value will reflect variable
account charges, underlying mutual fund charges and the investment performance
of the underlying mutual funds.
SURRENDERS UNDER A TEXAS OPTIONAL RETIREMENT PROGRAM OR A LOUISIANA OPTIONAL
RETIREMENT PLAN
Redemption restrictions apply to contracts issued under the Texas Optional
Retirement Program or the Louisiana Optional Retirement Plan.
The Texas Attorney General has ruled that participants in contracts issued under
the Texas Optional Retirement Program may only take withdrawals if:
- the participant dies;
- the participants retires;
- the participant terminates employment due to total disability; or
- the participant that works in a Texas public institution of higher
education terminates employment.
A participant under a contract issued under the Louisiana Optional Retirement
Plan may only take distributions from the contract upon retirement or
termination of employment. All retirement benefits under this type of plan must
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be paid as lifetime income; lump sum cash payments are not permitted, except for
death benefits.
Due to the restrictions described above, a participant under either of these
plans will not be able to withdraw cash values from the contract unless one of
the applicable conditions is met. However, contract value may be transferred to
other carriers, subject to any CDSC.
Nationwide issues this contract to participants in the Texas Optional Retirement
Program in reliance upon and in compliance with Rule 6c-7 of the Investment
Company Act of 1940. Nationwide issues this contract to participants in the
Louisiana Optional Retirement Plan in reliance upon and in compliance with an
exemptive order that Nationwide received from the SEC on August 22, 1990.
SURRENDERS UNDER A TAX SHELTERED ANNUITY
Contract owners of a Tax Sheltered Annuity may surrender part or all of their
contract value before the earlier of the annuitization date or the annuitant's
death, except as provided below:
A. Contract value attributable to contributions made under a qualified cash or
deferred arrangement (within the meaning of Internal Revenue Code Section
402(g)(3)(A)), a salary reduction agreement (within the meaning of Internal
Revenue Code Section 402(g)(3)(C)), or transfers from a Custodial Account
(described in Section 403(b)(7) of the Internal Revenue Code), may be
surrendered only:
1. when the contract owner reaches age 59 1/2, separates from service,
dies, or becomes disabled (within the meaning of Internal Revenue Code
Section 72(m)(7)); or
2. in the case of hardship (as defined for purposes of Internal Revenue
Code Section 401(k)), provided that any such hardship surrender may NOT
include any income earned on salary reduction contributions.
B. The surrender limitations described in Section A also apply to:
1. salary reduction contributions to Tax Sheltered Annuities made for plan
years beginning after December 31, 1988;
2. earnings credited to such contracts after the last plan year beginning
before January 1, 1989, on amounts attributable to salary reduction
contributions; and
3. all amounts transferred from 403(b)(7) Custodial Accounts (except that
earnings and employer contributions as of December 31, 1988 in such
Custodial Accounts may be withdrawn in the case of hardship).
C. Any distribution other than the above, including a ten day free look
cancellation of the contract (when available) may result in taxes, penalties
and/or retroactive disqualification of a Qualified Contract or Tax Sheltered
Annuity.
In order to prevent disqualification of a Tax Sheltered Annuity after a ten day
free look cancellation, Nationwide will transfer the proceeds to another Tax
Sheltered Annuity upon proper direction by the contract owner.
These provisions explain Nationwide's understanding of current withdrawal
restrictions. These restrictions may change.
Distributions pursuant to Qualified Domestic Relations Orders will not violate
the restrictions stated above.
LOAN PRIVILEGE
The loan privilege is ONLY available to owners of Tax Sheltered Annuities. These
contract owners can take loans from the contract value beginning 30 days after
the contract is issued up to the annuitization date. Loans are subject to the
terms of the contract, the plan and the Internal Revenue Code. Nationwide may
modify the terms of a loan to comply with changes in applicable law.
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MINIMUM & MAXIMUM LOAN AMOUNTS
Contract owners may borrow a minimum of $1000, unless Nationwide is required by
law to allow a lesser minimum amount. Each loan must individually satisfy the
contract minimum amount.
Nationwide will calculate the maximum nontaxable loan amount based upon
information provided by the participant or the employer. Loans may be taxable if
a participant has additional loans from other plans. The total of all
outstanding loans must not exceed the following limits:
- --------------- ------------ --------------------------
CONTRACT MAXIMUM OUTSTANDING LOAN
VALUES BALANCE ALLOWED
- --------------- ------------ --------------------------
NON-ERISA up to up to 80% of contract
PLANS $20,000 value (not more than
$10,000)
- --------------- ------------ --------------------------
$20,000 up to 50% of contract
and over value (not more than
$50,000*)
- --------------- ------------ --------------------------
- --------------- ------------ --------------------------
ERISA PLANS All up to 50% of contract
value (not more than
$50,000*)
- --------------- ------------ --------------------------
*The $50,000 limits will be reduced by the highest outstanding balance owed
during the previous 12 months.
For salary reduction Tax Sheltered Annuities, loans may be secured only by the
contract value.
LOAN PROCESSING FEE
Nationwide may charge a loan processing fee at the time each new loan is
processed. If assessed, this fee compensates Nationwide for expenses related to
administering and processing loans.
The fee is taken from the sub-accounts and Guaranteed Term Options in proportion
to the contract value at the time the loan is processed.
HOW LOAN REQUESTS ARE PROCESSED
All loans are made from the collateral fixed account. Nationwide transfers
accumulation units in proportion to the assets in each sub-account to the
collateral fixed account until the requested amount is reached. Any remaining
required collateral will be transferred from the Guaranteed Term Options.
Transfers from the Guaranteed Term Options may be subject to a market value
adjustment.
LOAN INTEREST
The outstanding loan balance in the collateral fixed account is credited with
interest until the loan is repaid in full. The interest rate will be 2.25% less
than the loan interest rate fixed by Nationwide. It is guaranteed never to fall
below 3.0%.
Specific loan terms are disclosed at the time of loan application or issuance.
LOAN REPAYMENT
Loans must be repaid in five years. However, if the loan is used to purchase the
contract owner's principal residence, the contract owner has 15 years to repay
the loan.
Contract owners must identify loan repayments as loan repayments or they will be
treated as purchase payments and will not reduce the outstanding loan. Payments
must be substantially level and made at least quarterly.
Loan repayments will consist of principal and interest in amounts set forth in
the loan agreement. Repayments are allocated to the sub-accounts in accordance
with the contract, unless Nationwide and the contract owner have agreed to amend
the contract at a later date on a case by case basis.
Loan repayments to the Guaranteed Term Options must be at least $1,000. If the
proportional share of the repayment to the Guaranteed Term Option is less than
$1,000, that portion of the repayment will be allocated to the NSAT Money Market
Fund unless the contract owner directs otherwise.
DISTRIBUTIONS & ANNUITY PAYMENTS
Distributions made from the contract while a loan is outstanding will be reduced
by the amount of the outstanding loan plus accrued interest if:
- the contract is surrendered;
- the contract owner/annuitant dies;
- the contract owner who is not the annuitant dies prior to annuitization;
or
- annuity payments begin.
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TRANSFERRING THE CONTRACT
Nationwide reserves the right to restrict any transfer of the contract while the
loan is outstanding.
GRACE PERIOD & LOAN DEFAULT
If a loan payment is not made when due, interest will continue to accrue. A
grace period may be available (please refer to the terms of the loan agreement).
If a loan payment is not made by the end of the applicable grace period, the
entire loan will be treated as a deemed distribution and will be taxable to the
borrower. This deemed distribution may also be subject to an early withdrawal
tax penalty by the Internal Revenue Service.
After default, interest will continue to accrue on the loan. Defaulted amounts,
plus interest, are deducted from the contract value when the participant is
eligible for a distribution of at least that amount. Additional loans are not
available while a previous loan is in default.
ASSIGNMENT
Contract rights are personal to the contract owner and may not be assigned
without Nationwide's written consent.
A Non-Qualified Contract owner may assign some or all rights under the contract.
An assignment must occur before annuitization while the annuitant is alive. Once
proper notice of assignment is recorded by Nationwide's home office, the
assignment will become effective as of the date the written request was signed.
Investment-only Contracts, IRAs, SEP IRAs, Roth IRAs, and Tax Sheltered
Annuities may not be assigned, pledged or otherwise transferred except where
allowed by law.
Nationwide is not responsible for the validity or tax consequences of any
assignment. Nationwide is not liable for any payment or settlement made before
the assignment is recorded. Assignments will not be recorded until Nationwide
receives sufficient direction from the contract owner and the assignee regarding
the proper allocation of contract rights.
Amounts pledged or assigned will be treated as distributions and will be
included in gross income to the extent that the cash value exceeds the
investment in the contract for the taxable year in which it was pledged or
assigned. Amounts assigned may be subject to a tax penalty equal to 10% of the
amount included in gross income.
Assignment of the entire contract value may cause the portion of the contract
value exceeding the total investment in the contract and previously taxed
amounts to be included in gross income for federal income tax purposes each year
that the assignment is in effect.
CONTRACT OWNER SERVICES
ASSET REBALANCING
Asset rebalancing is the automatic reallocation of contract values to the
sub-accounts on a predetermined percentage basis. Asset rebalancing is not
available for assets held in the Guaranteed Term Options. Requests for asset
rebalancing must be on a Nationwide form.
Asset rebalancing occurs every three months or on another frequency if permitted
by Nationwide. If the last day of the three-month period falls on a Saturday,
Sunday, recognized holiday, or any other day when the New York Stock Exchange is
closed, asset rebalancing will occur on the next business day.
Asset rebalancing may be subject to employer limitations or restrictions for
contracts issued to a Tax Sheltered Annuity plan. Contract owners should consult
a financial adviser to discuss the use of asset rebalancing.
Nationwide reserves the right to stop establishing new asset rebalancing
programs. Nationwide also reserves the right to assess a processing fee for this
service.
DOLLAR COST AVERAGING
Dollar Cost Averaging is a long-term transfer program that allows you to make
regular, level
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investments over time. It involves the automatic transfer of a specified amount
from certain sub-accounts into other sub-accounts. Contract owners may
participate in this program if their contract value is $15,000 or more.
Nationwide does not guarantee that this program will result in profit or protect
contract owners from loss.
Contract owners direct Nationwide to automatically transfer specified amounts
from the following underlying mutual funds: Federated Insurance Series -
Federated Quality Bond Fund II, Fidelity VIP High Income Portfolio, NSAT
Government Bond Fund, NSAT Nationwide High Income Bond Fund, and NSAT Money
Market Fund to any other underlying mutual fund. Dollar Cost Averaging transfers
may not be directed to Guaranteed Term Options. The minimum monthly transfer is
$100.
Transfers occur monthly or on another frequency if permitted by Nationwide.
Nationwide will process transfers until either the value in the originating
investment option is exhausted, or the contract owner instructs Nationwide in
writing to stop the transfers.
Nationwide reserves the right to stop establishing new Dollar Cost Averaging
programs. Nationwide also reserves the right to assess a processing fee for this
service.
SYSTEMATIC WITHDRAWALS
Systematic withdrawals allow contract owners to receive a specified amount (of
at least $100) on a monthly, quarterly, semi-annual, or annual basis. Requests
for systematic withdrawals and requests to discontinue systematic withdrawals
must be in writing.
The withdrawals will be taken from the sub-accounts proportionately unless
Nationwide is instructed otherwise. Systematic withdrawals are not available
from the Guaranteed Term Options.
Nationwide will withhold federal income taxes from systematic withdrawals unless
otherwise instructed by the contract owner. The Internal Revenue Service may
impose a 10% penalty tax if the contract owner is under age 59 1/2 unless the
contract owner has made an irrevocable election of distributions of
substantially equal payments.
Nationwide reserves the right to stop establishing new systematic withdrawal
programs. Nationwide also reserves the right to assess a processing fee for this
service. Systematic withdrawals are not available before the end of the ten-day
free look period (see "Right to Revoke").
ANNUITY COMMENCEMENT DATE
The annuity commencement date is the date on which annuity payments are
scheduled to begin. The contract owner may change the annuity commencement date
before annuitization. This change must be in writing and approved by Nationwide.
ANNUITIZING THE CONTRACT
ANNUITIZATION DATE
The annuitization date is the date that annuity payments begin. It will be the
first day of a calendar month unless otherwise agreed, and must be at least 2
years after the contract is issued. If the contract is issued to fund a Tax
Sheltered Annuity plan, annuitization may occur during the first 2 years subject
to Nationwide's approval.
ANNUITIZATION
Annuitization is the period during which annuity payments are received. It is
irrevocable once payments have begun. Upon arrival of the annuitization date,
the annuitant must choose:
(1) an annuity payment option; and
(2) either a fixed payment annuity, variable payment annuity, or an
available combination.
Nationwide guarantees that each payment under a fixed payment annuity will be
the same throughout annuitization. Under a variable payment annuity, the amount
of each payment
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will vary with the performance of the underlying mutual funds chosen by the
contract owner.
FIXED PAYMENT ANNUITY
A fixed payment annuity is an annuity where the amount of the annuity payments
remains level.
The first payment under a fixed payment annuity is determined on the
annuitization date on an "age last birthday" basis by:
1) deducting applicable premium taxes from the total contract value; then
2) applying the contract value amount specified by the contract owner to the
fixed payment annuity table for the annuity payment option elected.
Subsequent payments will remain level unless the annuity payment option elected
provides otherwise. Nationwide does not credit discretionary interest during
annuitization.
VARIABLE PAYMENT ANNUITY
A variable payment annuity is an annuity where the amount of the annuity
payments will vary depending on the performance of the underlying mutual funds
selected.
-----------------------------------------------------------------
A VARIABLE PAYMENT ANNUITY MAY NOT BE ELECTED WHEN EXERCISING THE
GUARANTEED MINIMUM INCOME BENEFIT OPTION.
-----------------------------------------------------------------
The first payment under a variable payment annuity is determined on the
annuitization date on an "age last birthday" basis by:
1) deducting applicable premium taxes from the total contract value; then
2) applying the contract value amount specified by the contract owner to
the variable payment annuity table for the annuity payment option
elected.
The dollar amount of the first payment is converted into a set number of annuity
units that will represent each monthly payment. This is done by dividing the
dollar amount of the first payment by the value of an annuity unit as of the
annuitization date. This number of annuity units remains fixed during
annuitization.
The second and subsequent payments are determined by multiplying the fixed
number of annuity units by the annuity unit value for the valuation period in
which the payment is due. The amount of the second and subsequent payments will
vary with the performance of the selected underlying mutual funds. Nationwide
guarantees that variations in mortality experience from assumptions used to
calculate the first payment will not affect the dollar amount of the second and
subsequent payments.
Assumed Investment Rate
An assumed investment rate is the percentage rate of return assumed to determine
the amount of the first payment under a variable payment annuity. Nationwide
uses the assumed investment rate of 3.5% to calculate the first annuity payment
and to calculate the investment performance of an underlying mutual fund in
order to determine subsequent payments under a variable payment annuity. An
assumed investment rate is the percentage rate of return required to maintain
level variable annuity payments. Subsequent variable annuity payments may be
more or less than the first payment based on whether actual investment
performance of the underlying mutual funds is higher or lower than the assumed
investment rate of 3.5%.
Value of an Annuity Unit
Annuity unit values for sub-accounts are determined by multiplying the net
investment factor for the valuation period for which the annuity unit is being
calculated by the immediately preceding valuation period's annuity unit value,
and multiplying the result by an interest factor to neutralize the assumed
investment rate of 3.5% per annum built into the variable payment annuity
purchase rate basis in the contracts.
Exchanges among Underlying Mutual Funds
Exchanges among underlying mutual funds during annuitization must be in writing.
Exchanges will occur on each anniversary of the annuitization date.
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FREQUENCY AND AMOUNT OF ANNUITY PAYMENTS
Payments are made based on the annuity payment option selected, unless:
- the amount to be distributed is less than $5,000, in which case
Nationwide may make one lump sum payment of the contract value; or
- an annuity payment would be less than $50, in which case Nationwide can
change the frequency of payments to intervals that will result in
payments of at least $50. Payments will be made at least annually.
GUARANTEED MINIMUM INCOME BENEFIT OPTION ("GMIB")
What is a GMIB?
A GMIB is a benefit which ensures the availability of a minimum amount when the
contract owner wishes to annuitize the contract. This minimum amount, referred
to as the Guaranteed Annuitization Value, may be used at specified times to
provide a guaranteed level of determinable lifetime annuity payments. The GMIB
may provide protection in the event of lower contract values that may result
from the investment performance of the contract.
How is the Guaranteed Annuitization Value Determined?
The Guaranteed Annuitization Value is equal to (a) - (b), but will never be
greater than 200% of all purchase payments, where:
(a) is the sum of all purchase payments, plus interest accumulated at a
compounded annual rate of 5% starting at the date of issue and ending on
the contract anniversary occurring immediately prior to the annuitant's
86th birthday;
(b) is the reductions to (a) due to surrenders made from the contract. All such
reductions will be proportionately the same as reductions to the contract
value caused by surrenders. For example, a surrender which reduces the
contract value by 25% will also reduce the Guaranteed Annuitization Value
by 25%.
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GMIB Illustrations
The following charts illustrate the amount of income that will be provided to an
annuitant if the contract owner annuitizes the contract at the 7th, 10th or 15th
contract anniversary date, using the GMIB.
The illustrations assume the following:
- An initial purchase payment of $100,000 is made to the contract and
allocated to the variable account;
- The contract is issued to a MALE at age 55, 65 or 70; and
- A Life Annuity with 120 Months Guaranteed Fixed Payment Annuity Option
is elected.
<TABLE>
<CAPTION>
7 Years in Accumulation
$140,710.04 for GMIB at Annuitization
- ----------------------------- ----------------------------- ---------------------------- ----------------------------
Male Age at Issue Male Age at Annuitization GMIB Purchase Rate* Monthly GMIB
- ----------------------------- ----------------------------- ---------------------------- ----------------------------
<S> <C> <C> <C> <C>
55 62 $4.72 $664.15
- ----------------------------- ----------------------------- ---------------------------- ----------------------------
65 72 $5.96 $838.63
- ----------------------------- ----------------------------- ---------------------------- ----------------------------
70 77 $5.79 $955.42
- ----------------------------- ----------------------------- ---------------------------- ----------------------------
<CAPTION>
10 Years in Accumulation
$162,889.46 for GMIB at Annuitization
- ----------------------------- ----------------------------- ---------------------------- ----------------------------
Male Age at Issue Male Age at Annuitization GMIB Purchase Rate* Monthly GMIB
- ----------------------------- ----------------------------- ---------------------------- ----------------------------
<S> <C> <C> <C> <C>
55 65 $5.03 $819.33
- ----------------------------- ----------------------------- ---------------------------- ----------------------------
65 75 $6.44 $1,049.01
- ----------------------------- ----------------------------- ---------------------------- ----------------------------
70 80 $7.32 $1,192.35
- ----------------------------- ----------------------------- ---------------------------- ----------------------------
<CAPTION>
15 Years in Accumulation
$200,000.00 for GMIB at Annuitization
- ----------------------------- ----------------------------- ---------------------------- ----------------------------
Male Age at Issue Male Age at Annuitization GMIB Purchase Rate* Monthly GMIB
- ----------------------------- ----------------------------- ---------------------------- ----------------------------
<S> <C> <C> <C> <C>
55 70 $5.66 $1,132.00
- ----------------------------- ----------------------------- ---------------------------- ----------------------------
65 80 $7.32 $1,464.00
- ----------------------------- ----------------------------- ---------------------------- ----------------------------
70 85 $8.18 $1,636.00
- ----------------------------- ----------------------------- ---------------------------- ----------------------------
*Guaranteed Monthly Benefit per $1,000 applied
</TABLE>
The illustrations should be used as a tool to assist an investor in determining
whether purchasing and exercising a GMIB option is right for them. The
guaranteed purchase rates assumed in the illustrations may not apply in some
states, or for contracts issued under an employer sponsored plan. Different
guaranteed purchase rates will also apply for females, for males who annuitize
at ages other than the ages shown above or for annuitizations under other
annuity payment options. Where different guaranteed purchase rates apply, GMIB
amounts shown above will be different. In all cases, the guaranteed purchase
rates used to calculate the GMIB will be the same as the purchase rates
guaranteed in the contract for fixed annuitizations without the GMIB.
The purchase rates available in connection with annuitization options under a
GMIB are minimum guaranteed purchase rates. Alternative purchase rates, which
may be more favorable, may apply to annuitizations which occur without a GMIB
option.
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When May the Guaranteed Annuitization Value be Used?
The contract owner may use the Guaranteed Annuitization Value by annuitizing the
contract during the thirty day period following any contract anniversary:
(1) after the contract has been in effect for seven years; and
(2) the annuitant has attained age 60.
What Annuity Payment Options May Be Used With the Guaranteed Annuitization
Value?
The contract owner may elect any life contingent FIXED ANNUITY PAYMENT OPTION
calculated using the guaranteed annuity purchase rates set forth in the
contract. Such Fixed Annuity Payment Options include:
- Life Annuity;
- Joint and Last Survivor Annuity; and
- Life Annuity with 120 or 240 Monthly Payments Guaranteed.
Other GMIB Terms and Conditions
**PLEASE READ CAREFULLY**
- The GMIB must be elected at the time of application;
- The annuitant must be age 83 or younger at the time the contract is
issued; and
- The GMIB is irrevocable and will remain for as long as the contract
remains in force.
- -------------------------------------------------------------------------------
IMPORTANT CONSIDERATIONS TO KEEP IN MIND REGARDING
THE GMIB OPTION
While a GMIB does provide a Guaranteed Annuitization Value, A GMIB MAY NOT BE
APPROPRIATE FOR ALL INVESTORS and should be understood completely and analyzed
thoroughly before being elected.
- A GMIB DOES NOT in any way guarantee the performance of any underlying
mutual fund, or any other investment option available under the
contract.
- Once elected, the GMIB is irrevocable, meaning that even if the
investment performance of underlying mutual funds or other available
investment options surpasses the minimum guarantees associated with the
GMIB, the GMIB charges will still be assessed.
- The GMIB in no way restricts or limits the rights of contract owners to
annuitize the contract at other times permitted under the contract, nor
will it in any way restrict the right to annuitize the contract using
contract values that may be higher than the Guaranteed Annuitization
Value.
- Please take advantage of the guidance of a qualified financial adviser
in evaluating the GMIB options, and all other aspects of the contract.
- GMIB may not be approved in all state jurisdictions.
- -------------------------------------------------------------------------------
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ANNUITY PAYMENT OPTIONS
Contract owners must elect an annuity payment option before the annuitization
date. The annuity payment options are:
(1) LIFE ANNUITY - An annuity payable periodically, but at least annually, for
the lifetime of the annuitant. Payments will end upon the annuitant's
death. For example, if the annuitant dies before the second annuity payment
date, the annuitant will receive only one annuity payment. The annuitant
will only receive two annuity payments if he or she dies before the third
annuity payment date, and so on.
(2) JOINT AND LAST SURVIVOR ANNUITY - An annuity payable periodically, but at
least annually, during the joint lifetimes of the annuitant and a
designated second individual. If one of these parties dies, payments will
continue for the lifetime of the survivor. As is the case under option 1,
there is no guaranteed number of payments. Payments end upon the death of
the last surviving party, regardless of the number of payments received.
(3) LIFE ANNUITY WITH 120 OR 240 MONTHLY PAYMENTS GUARANTEED - An annuity
payable monthly during the lifetime of the annuitant. If the annuitant dies
before all of the guaranteed payments have been made, payments will
continue to the end of the guaranteed period and will be paid to a designee
chosen by the annuitant at the time the annuity payment option was elected.
The designee may elect to receive the present value of the remaining
guaranteed payments in a lump sum. The present value will be computed as of
the date Nationwide receives the notice of the annuitant's death.
Not all of the annuity payment options may be available in all states. Contract
owners may request other options before the annuitization date. These options
are subject to Nationwide's approval.
No distribution for Non-Qualified Contracts will be made until an annuity
payment option has been elected. IRAs and Tax Sheltered Annuities are subject to
the "minimum distribution" requirements set forth in the plan, contract, and the
Internal Revenue Code.
DEATH BENEFITS
DEATH OF CONTRACT OWNER - NON-QUALIFIED CONTRACTS
If the contract owner who is not the annuitant dies before the annuitization
date, the joint owner becomes the contract owner. If no joint owner is named,
the contingent owner becomes the contract owner. If no contingent owner is
named, the last surviving contract owner's estate becomes the contract owner.
If the contract owner and annuitant are the same, and the contract
owner/annuitant dies before the annuitization date, the contingent owner will
not have any rights in the contract unless the contingent owner is also the
beneficiary.
Distributions under Non-Qualified Contracts will be made pursuant to the
"Required Distributions for Non-Qualified Contracts" provision.
DEATH OF ANNUITANT - NON-QUALIFIED CONTRACTS
If the annuitant who is not the contract owner dies before the annuitization
date, a death benefit is payable to the beneficiary unless a contingent
annuitant is named. If a contingent annuitant is named, the contingent annuitant
becomes the annuitant and no death benefit is payable.
The beneficiary may elect to receive the death benefit:
(1) in a lump sum;
(2) as an annuity; or
(3) in any other manner permitted by law and approved by Nationwide.
The beneficiary must notify Nationwide of this election within 60 days of the
annuitant's death.
If no beneficiary(ies) survive the annuitant, the contingent beneficiary(ies)
receives the death benefit. Contingent beneficiaries will share the death
benefit equally, unless otherwise specified.
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If no beneficiary(ies) or contingent beneficiary(ies) survive the annuitant, the
contract owner or the last surviving contract owner's estate will receive the
death benefit.
If the contract owner is a Charitable Remainder Trust and the annuitant dies
before the annuitization date, the death benefit will accrue to the Charitable
Remainder Trust. Any designation in conflict with the Charitable Remainder
Trust's right to the death benefit will be void.
If the annuitant dies after the annuitization date, any benefit that may be
payable will be paid according to the selected annuity payment option.
DEATH OF CONTRACT OWNER/ANNUITANT
If a contract owner who is also the annuitant dies before the annuitization
date, a death benefit is payable according to the "Death of the Annuitant -
Non-Qualified Contracts" provision.
A joint owner will receive a death benefit if a contract owner/annuitant dies
before the annuitization date.
If the contract owner/annuitant dies after the annuitization date, any benefit
that may be payable will be paid according to the selected annuity payment
option.
DEATH BENEFIT PAYMENT
Contract owners may select one of three death benefits available under the
contract at the time of application (not all death benefit options may be
available in all states). If no selection is made at the time of application,
the death benefit will be the Standard Contractual Death Benefit.
The death benefit value is determined as of the date Nationwide receives:
1) proper proof of the annuitant's death;
2) an election specifying the distribution method; and
3) any state required form(s).
Standard Contractual Death Benefit
If the annuitant dies before the annuitization date, the death benefit will be
the greater of:
1) the contract value; and
2) the total of all purchase payments made to the contract, less an
adjustment for amounts surrendered.
The adjustment for amounts surrendered will reduce item (2) above in the same
proportion that the contract value was reduced on the date(s) of the partial
surrender(s).
One-Year Step Up Death Benefit
If the annuitant dies before the annuitization date, the death benefit will be
the greatest of:
1) the contract value;
2) the total of all purchase payments, less an adjustment for amounts
surrendered; or
3) the highest contract value on any contract anniversary before the
annuitant's 86th birthday, less an adjustment for amounts subsequently
surrendered, plus purchase payments received after that contract
anniversary.
The adjustment for amounts surrendered will reduce items (2) and (3) above in
the same proportion that the contract value was reduced on the date(s) of the
partial surrender(s).
5% Enhanced Death Benefit
If the annuitant dies before the annuitization date, the death benefit will be
the greater of:
1) the contract value; or
2) the total of all purchase payments, less any amounts surrendered,
accumulated at 5% simple interest from the date of each purchase payment
or surrender to the most recent contract anniversary prior to the
annuitant's 86th birthday, less an adjustment for amounts subsequently
surrendered, plus purchase payments received since that contract
anniversary.
The total accumulated amount will not exceed 200% of the net of purchase
payments and amounts surrendered. The adjustment for amounts subsequently
surrendered after the most recent contract anniversary will reduce the 5%
interest anniversary value in the same proportion
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that the contract value was reduced on the date(s) of the partial surrender(s).
REQUIRED DISTRIBUTIONS
REQUIRED DISTRIBUTIONS FOR NON-QUALIFIED CONTRACTS
Internal Revenue Code Section 72(s) requires Nationwide to make certain
distributions when a contract owner dies. The following distributions will be
made according to those requirements:
1) If any contract owner dies on or after the annuitization date and before
the entire interest in the contract has been distributed, then the
remaining interest must be distributed at least as rapidly as the
distribution method in effect on the contract owner's death.
2) If any contract owner dies before the annuitization date, then the
entire interest in the contract (consisting of either the death benefit
or the contract value reduced by charges set forth elsewhere in the
contract) will be distributed within 5 years of the contract owner's
death, provided however:
a) any interest payable to or for the benefit of a natural person
(referred to herein as a "designated beneficiary"), may be
distributed over the life of the designated beneficiary or over a
period not longer than the life expectancy of the designated
beneficiary. Payments must begin within one year of the contract
owner's death unless otherwise permitted by federal income tax
regulations; and
b) if the designated beneficiary is the surviving spouse of the
deceased contract owner, the spouse can choose to become the
contract owner instead of receiving a death benefit. Any
distributions required under these distribution rules will be made
upon that spouse's death.
In the event that the contract owner is not a natural person (e.g., a trust or
corporation), then, for purposes of these distribution provisions:
a) the death of the annuitant will be treated as the death of a contract
owner;
b) any change of annuitant will be treated as the death of a contract
owner; and
c) in either case, the appropriate distribution will be made upon the death
or change, as the case may be.
These distribution provisions do not apply to any contract exempt from Section
72(s) of the Internal Revenue Code by reason of Section 72(s)(5) or any other
law or rule.
The designated beneficiary must elect a method of distribution and notify
Nationwide of this election within 60 days of the contract owner's death.
REQUIRED DISTRIBUTIONS FOR TAX SHELTERED ANNUITIES
Distributions from Tax Sheltered Annuities will be made according to the Minimum
Distribution and Incidental Benefit ("MDIB") provisions of Section 401(a)(9) of
the Internal Revenue Code. Distributions will be made to the annuitant according
to the selected annuity payment option over a period not longer than:
a) the life of the annuitant or the joint lives of the annuitant and the
annuitant's designated beneficiary; or
b) a period not longer than the life expectancy of the annuitant or the
joint life expectancies of the annuitant and the annuitant's designated
beneficiary.
Required distributions do not have to be withdrawn from this contract if they
are being withdrawn from another Tax Sheltered Annuity of the annuitant.
If the annuitant's entire interest in a Tax Sheltered Annuity will be
distributed in equal or substantially equal payments over a period described in
a) or b), the payments will begin on the required beginning date. The required
beginning date is the later of:
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a) April 1 of the calendar year following the calendar year in which the
annuitant reaches age 70 1/2; or
b) the annuitant's retirement date.
Provision b) does not apply to any employee who is a 5% owner (as defined in
Section 416 of the Internal Revenue Code) with respect to the plan year ending
in the calendar year when the employee attains the age of 70 1/2.
Distribution commencing on the required distribution date must satisfy minimum
distribution and incidental benefit provisions set forth in the Internal Revenue
Code. Those provisions require that distributions cannot be less than the amount
determined by dividing the annuitant's interest in the Tax Sheltered Annuity
determined by the end of the previous calendar year by (a) the annuitant's life
expectancy; or, if applicable, (b) the joint and survivor life expectancy of the
annuitant and the annuitant's beneficiary. The life expectancies and joint life
expectancies are determined by reference to Treasury Regulation 1.72-9.
If the annuitant dies before distributions begin, the interest in the Tax
Sheltered Annuity must be distributed by December 31 of the calendar year in
which the fifth anniversary of the annuitant's death occurs unless:
a) the annuitant names his or her surviving spouse as the beneficiary and
the spouse chooses to receive distribution of the contract in
substantially equal payments over his or her life (or a period not longer
than his or her life expectancy) and beginning no later than December 31
of the year in which the annuitant would have attained age 70 1/2; or
b) the annuitant names a beneficiary other than his or her surviving spouse
and the beneficiary elects to receive distribution of the contract in
substantially equal payments over his or her life (or a period not longer
than his or her life expectancy) beginning no later than December 31 of
the year following the year in which the annuitant dies.
If the annuitant dies after distributions have begun, distributions must
continue at least as rapidly as under the schedule used before the annuitant's
death.
If distribution requirements are not met, a penalty tax of 50% is levied on the
difference between the amount that should have been distributed for that year
and the amount that actually was distributed for that year.
REQUIRED DISTRIBUTIONS FOR IRAS AND SEP IRAS
Distributions from an IRA or SEP IRA must begin no later than April 1 of the
calendar year following the calendar year in which the contract owner reaches
age 70 1/2. Distributions may be paid in a lump sum or in substantially equal
payments over:
a) the contract owner's life or the lives of the contract owner and his or
her spouse or designated beneficiary; or
b) a period not longer than the life expectancy of the contract owner or
the joint life expectancy of the contract owner and the contract owner's
designated beneficiary.
If the contract owner dies before distributions begin, the interest in the IRA
or SEP IRA must be distributed by December 31 of the calendar year in which the
fifth anniversary of the contract owner's death occurs, unless:
a) the contract owner names his or her surviving spouse as the beneficiary
and such spouse chooses to:
1) treat the contract as an IRA or SEP IRA established for his or her
benefit; or
2) receive distribution of the contract in substantially equal payments
over his or her life (or a period not longer than his or her life
expectancy) and beginning no later than December 31 of the year in
which the contract owner would have reached age 70 1/2; or
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b) the contract owner names a beneficiary other than his or her surviving
spouse and such beneficiary elects to receive a distribution of the
contract in substantially equal payments over his or her life (or a
period not longer than his or her life expectancy) beginning no later
than December 31 of the year following the year of the contract owner's
death.
Required distributions do not have to be withdrawn from this contract if they
are being withdrawn from another IRA or SEP IRA of the contract owner.
If the contract owner dies after distributions have begun, distributions must
continue at least as rapidly as under the schedule being used before the
contract owner's death. However, a surviving spouse who is the beneficiary under
the annuity payment option may treat the contract as his or her own, in the same
manner as is described in section (a)(i) of this provision.
If distribution requirements are not met, a penalty tax of 50% is levied on the
difference between the amount that should have been distributed for that year
and the amount that actually was distributed for that year.
A portion of each distribution will be included in the recipient's gross income
and taxed at ordinary income tax rates. The portion of a distribution which is
taxable is based on the ratio between the amount by which non-deductible
purchase payments exceed prior non-taxable distributions and total account
balances at the time of the distribution. The owner of an IRA or SEP IRA must
annually report the amount of non-deductible purchase payments, the amount of
any distribution, the amount by which non-deductible purchase payments for all
years exceed non-taxable distributions for all years, and the total balance of
all IRAs.
If the contract owner dies before the entire interest in the contract has been
distributed, the balance will also be included in his or her gross estate.
REQUIRED DISTRIBUTIONS FOR ROTH IRAS
The rules for Roth IRAs do not require distributions to begin during the
contract owner's lifetime.
When the contract owner dies, the interest in the Roth IRA must be distributed
by December 31 of the calendar year in which the fifth anniversary of his or her
death occurs, unless:
a) the contract owner names his or her surviving spouse as the beneficiary
and the spouse chooses to:
1) treat the contract as a Roth IRA established for his or her benefit;
or
2) receive distribution of the contract in substantially equal payments
over his or her life (or a period not longer than his or her life
expectancy) and beginning no later than December 31 of the year
following the year in which the contract owner would have reached
age 70 1/2; or
b) the contract owner names a beneficiary other than his or her surviving
spouse and the beneficiary chooses to receive distribution of the
contract in substantially equal payments over his or her life (or a
period not longer than his or her life expectancy) beginning no later
than December 31 of the year following the year in which the contract
owner dies.
Distributions from Roth IRAs may be either taxable or nontaxable, depending upon
whether they are "qualified distributions" or "non-qualified distributions" (see
"Federal Tax Considerations").
FEDERAL TAX CONSIDERATIONS
FEDERAL INCOME TAXES
Contract owners should consult a financial consultant, legal counsel or tax
advisor to discuss in detail the taxation and the use of the contracts.
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Nationwide does not guarantee the tax status of the contracts or any
transactions involving the contracts.
Section 72 of the Internal Revenue Code governs federal income taxation of
annuities in general. That section sets forth different rules for: (1)
Individual Retirement Annuities; (2) Roth IRAs; (3) SEP IRAs; (4) Tax Sheltered
Annuities; and (5) Non-Qualified Contracts. Each type of annuity is discussed
below.
IRAs, SEP IRAs, and Individual Retirement Accounts
Distributions from IRAs, SEP IRAs and contracts owned by Individual Retirement
Accounts are generally taxed when received. The excludable portion of each
payment is based on the ratio between the amount by which non-deductible
purchase payments to all the contracts exceeds prior non-taxable distributions
from the contracts, and the total account balances in the contracts at the time
of the distribution. The owner of the IRA, SEP IRA or the annuitant under
contracts held by Individual Retirement Accounts, must annually report to the
Internal Revenue Service:
- the amount of nondeductible purchase payments;
- the amount of any distributions;
- the amount by which nondeductible purchase payments for all years exceed
non-taxable distributions for all years; and
- the total balance in all IRAs and Individual Retirement Accounts.
Roth IRAs
Distributions of earnings from Roth IRAs are taxable or nontaxable, depending
upon whether they are "qualified distributions" or "non-qualified
distributions." A "qualified distribution" is one that satisfies the five-year
rule and meets one of the following requirements:
(i) it is made on or after the date on which the contract owner attains
age 59 1/2;
(ii) it is made to a beneficiary (or the contract owner's estate) on or
after the death of the contract owner;
(iii)it is attributable to the contract owner's disability; or
(iv) it is a qualified first-time homebuyer distribution (as defined in
Section 72(t)(2)(F) of the Internal Revenue Code).
If the Roth IRA does not have any qualified rollover contributions from a
retirement plan other than a Roth IRA (or income allocable thereto), the five
year rule is satisfied if the distribution is not made within the five year
period beginning with the first contribution to the Roth IRA. If the Roth IRA
contains qualified rollover contributions from a retirement plan other than a
Roth IRA (or income allocable thereto), the five year rule is satisfied if the
distribution is not made within the five taxable year period commencing with the
taxable year in which the qualified rollover contribution was made.
A non-qualified distribution is any distribution that is not a qualified
distribution.
A qualified distribution is not included in gross income for federal income tax
purposes. A non-qualified distribution is not includible in gross income to the
extent that the distribution, when added to all previous distributions, does not
exceed that total amount of contributions made to the Roth IRA. Any
non-qualified distribution in excess of the aggregate amount of contributions
will be included in the contract owner's gross income in the year that is
distributed to the contract owner.
Taxable distributions will not receive the same favorable tax treatment of a
lump sum distribution from a Qualified Plan. If the contract owner dies before
the contract is completely distributed, the balance will also be included in the
contract owner's gross estate for tax purposes.
A change of the annuitant or contingent annuitant may be treated by the Internal
Revenue Service as a taxable transaction.
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Tax Sheltered Annuities
Distributions from Tax Sheltered Annuities are generally taxed when received. A
portion of each distribution is excludable from income based on a formula
required by the Internal Revenue Code. The formula excludes from income the
amount invested in the contract divided by the number of anticipated payments
(as determined pursuant to Section 72(d) of the Internal Revenue Code) until the
full investment in the contract is recovered. Thereafter, all distributions are
fully taxable.
Non-Qualified Contracts - Natural Persons as Contract Owners
The rules applicable to Non-Qualified Contracts provide that a portion of each
annuity payment is excludable from taxable income based on the ratio between the
contract owner's investment in the contract and the expected return on the
contract until the investment has been recovered. Thereafter, the entire amount
is includible in income. The maximum amount excludable from income is the
investment in the contract. If the annuitant dies before the entire investment
in the contract has been excluded from income and no additional payments are due
after his or her death, then he or she may be entitled to a deduction for the
balance of the investment on his or her final income tax return.
Distributions before the annuitization date are taxable to the contract owner to
the extent that the cash value of the contract exceeds the contract owner's
investment at the time of the distribution. Distributions, for this purpose,
include partial surrenders, dividends, loans or any portion of the contract that
is assigned or pledged; or for contracts issued after April 22, 1987, any
portion of the contract transferred by gift. For these purposes, a transfer by
gift may occur upon annuitization if the contract owner and the annuitant are
not the same individual.
In determining the taxable amount of a distribution, all annuity contracts
issued after October 21, 1988 by the same company to the same contract owner
during any 12-month period will be treated as one annuity contract. Additional
limitations on the use of multiple contracts may be imposed by Treasury
Regulations.
Distributions before the annuitization date allocable to a portion of the
contract invested prior to August 14, 1982, are treated first as a recovery of
the investment in the contract as of that date. A distribution in excess of the
amount of the investment in the contract as of August 14, 1982, will be treated
as taxable income.
The Tax Reform Act of 1986 has changed the tax treatment of certain
Non-Qualified Contracts held by entities other than individuals. Such entities
are taxed currently on earnings from contributions made to the contract after
February 28, 1986. There are exceptions for immediate annuities and certain
contracts owned for the benefit of an individual. An immediate annuity, for
purposes of this discussion, is a single premium contract on which payments
begin within one year of purchase. If this contract is issued as the result of
an exchange described in Section 1035 of the Internal Revenue Code, for purposes
of determining whether the contract is an immediate annuity, it will generally
be considered to have been purchased on the purchase date of the contract given
up in the exchange.
Internal Revenue Code Section 72 also assesses a penalty tax if a distribution
is made before the contract owner reaches age 59 1/2. The amount of the penalty
is 10% of the portion of any distribution that is includible in gross income.
The penalty tax does not apply if the distribution:
1) is the result of a contract owner's death;
2) is the result of a contract owner's disability;
3) is one of a series of substantially equal periodic payments made over
the life or life expectancy of the contract owner (or the joint lives
or joint life expectancies of the contract owner and the beneficiary
selected by the contract owner to receive
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payment under the annuity payment option selected by the contract
owner),
4) is for the purchase of an immediate annuity; or
5) is allocable to an investment in the contract before August 14, 1982.
A contract owner that wants to begin taking distributions to which the 10% tax
penalty does not apply should forward a written request to Nationwide. Upon
receipt of this written request, Nationwide will inform the contract owner of
Nationwide's policies and procedures, as well as contract limitations. An
election to begin taking these withdrawals will be irrevocable and may not be
amended or changed.
In order to qualify as an annuity contract under Section 72 of the Internal
Revenue Code, the contract must provide for distribution of the entire contract
upon a contract owner's death.
The Internal Revenue Code requires that any election to receive an annuity
instead of a lump sum payment be made within 60 days after the lump sum becomes
payable (generally, within 60 days of the death of a contract owner or the
annuitant). As long as the election is made within the 60 day period, each
distribution will be taxable when it is paid. Upon the end of this 60 day
period, if no election has been made, the entire amount of the lump sum will be
subject to immediate tax, even if the payee decides at a later date to take the
distribution as an annuity.
Non-Qualified Contracts - Non-Natural Persons as Contract Owners
The previous discussion related to the taxation of Non-Qualified Contracts owned
(or, pursuant to Section 72(u) of the Internal Revenue Code, deemed to be owned)
by individuals. Different rules apply if the contract owner is not a natural
person.
Generally, contracts owned by corporations, partnerships, trusts, and similar
entities ("non-natural persons") are not treated as annuity contracts under the
Internal Revenue Code. Specifically, they are not treated as annuity contracts
for purposes of Section 72. Therefore, income earned under a Non-Qualified
Contract that is owned by a non-natural person is taxed as ordinary income
during the taxable year that it is earned. Taxation is not deferred, even if the
income is not distributed out of the contract to the contract owner.
This non-natural person rule does not apply to all entity-owned contracts. A
contract that is owned by a non-natural person as an agent for an individual is
treated as owned by the individual. This would put the contract back under
Section 72, allowing tax deferral. However, this exception does not apply when
the non-natural person is an employer that holds the contract under a
non-qualified deferred compensation arrangement for one or more employees.
The non-natural person rule also does not apply to contracts that are:
a) acquired by the estate of a decedent by reason of the death of the
decedent;
b) issued in connection with certain qualified retirement plans and
individual retirement plans;
c) used in connection with certain structured settlements;
d) purchased by an employer upon the termination of certain qualified
retirement plans; or
e) an immediate annuity.
IRAS, SEP IRAS, AND TAX SHELTERED ANNUITIES
Contract owners looking for information on eligibility, limitations on
permissible amounts of purchase payments, and the tax consequences of
distributions from IRAs, SEP IRAs, and Tax Sheltered Annuities should contact a
qualified adviser. The terms of each plan may limit the rights available under
the contracts.
Section 403(b)(1)(E) of the Internal Revenue Code requires a contract issued as
a Tax Sheltered Annuity to limit purchase payments for any year to an amount
that does not exceed
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the limit set forth in Section 402(g) of the Internal Revenue Code. This limit
is increased from time to time to reflect increases in the cost of living. This
limit may be reduced by deposits, contributions or payments made to another Tax
Sheltered Annuity or other plan, contract or arrangement by or on behalf of the
contract owner.
The Internal Revenue Code allows most distributions from Qualified Plans to be
rolled into IRAs or SEP IRAs. Most distributions from Tax Sheltered Annuities
may be rolled into another Tax Sheltered Annuity, IRA or SEP IRA. Distributions
that may NOT be rolled over are those that are:
a) one of a series of substantially equal annual (or more frequent)
payments made:
1) over the life (or life expectancy) of the contract owner;
2) over the joint lives (or joint life expectancies) of the contract
owner and the contract owner's designated beneficiary; and/or
3) for a specified period of ten years or more; or
b) a required minimum distribution.
Any distribution that is eligible for rollover will be subject to federal tax
withholding of 20% if the distribution is not rolled into an appropriate plan as
described above.
Individual Retirement Accounts and Individual Retirement Annuities may not
provide life insurance benefits. If the death benefit exceeds the greater of the
contract's cash value or the sum of all purchase payments (less any surrenders),
the contract could be considered life insurance. Consequently, the Internal
Revenue Service could determine that the Individual Retirement Account or
Individual Retirement Annuity does not qualify for the desired tax treatment.
ROTH IRAS
The contract may be purchased as a Roth IRA. For detailed information on
purchasing and holding this contract as a Roth IRA, the contract owner should
contact a financial adviser.
The Internal Revenue Code allows distributions from Individual Retirement
Accounts and Individual Retirement Annuities to be rolled into Roth IRAs. The
rollovers are subject to federal income tax as distributions from the Individual
Retirement Account or Individual Retirement Annuity.
For rollovers from Individual Retirement Accounts or Individual Retirement
Annuities, all of the income from the rollover will be required to be included
in income in the year of the rollover distribution from the Individual
Retirement Account or Individual Retirement Annuity.
A distribution from a Roth IRA that contains the proceeds of a rollover from an
Individual Retirement Account or Individual Retirement Annuity within the
preceding five years could be subject to a 10% penalty, even if the distribution
is not taxable. In addition, if the rollover from the Individual Retirement
Account or Individual Retirement Annuity was made in 1998, and the income from
that rollover was included in income ratably over a four year period, a
distribution from the Roth IRA within four years of the rollover may result in
the loss of the four year spread, subject to the amount deferred under the four
year election to be taxed immediately.
WITHHOLDING
Pre-death distributions from the contracts are subject to federal income tax.
Nationwide will withhold the tax from the distributions unless the contract
owner requests otherwise. Contract owners may not waive withholding if the
distribution is subject to mandatory back-up withholding (if no mandatory
taxpayer identification number is given or if the Internal Revenue Service
notifies Nationwide that mandatory back-up withholding is required), or if it is
an eligible rollover distribution.
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<PAGE> 43
Mandatory back-up withholding rates are 31% of income that is distributed.
NON-RESIDENT ALIENS
Generally, a pre-death distribution from a contract to a non-resident alien is
subject to federal income tax at a rate of 30% of the amount of income that is
distributed. Nationwide is required to withhold this amount and send it to the
Internal Revenue Service. Some distributions to non-resident aliens may be
subject to a lower (or no) tax if a treaty applies. In order to obtain the
benefits of such a treaty, the non-resident alien must:
1) provide Nationwide with proof of residency and citizenship (in
accordance with Internal Revenue Service requirements); and
2) provide Nationwide with an individual taxpayer identification number.
If the non-resident alien does not meet the above conditions, Nationwide will
withhold 30% of income from the distribution.
Another way to avoid the 30% withholding is for the non-resident alien to
provide Nationwide with sufficient evidence that:
1) the distribution is connected to the non-resident alien's conduct of
business in the United States; and
2) the distribution is includible in the non-resident alien's gross income
for United States federal income tax purposes.
Note that these distributions may be subject to back-up withholding, currently
31%, if a correct taxpayer identification number is not provided.
FEDERAL ESTATE, GIFT, AND GENERATION SKIPPING TRANSFER TAXES
The following transfers may be considered a gift for federal gift tax purposes:
- a transfer of the contract from one contract owner to another; or
- a distribution to someone other than a contract owner.
Upon the contract owner's death, the value of the contract may be subject to
estate taxes, even if all or a portion of the value is also subject to federal
income taxes.
Section 2612 of the Internal Revenue Code may require Nationwide to determine
whether a death benefit or other distribution is a "direct skip" and the amount
of the resulting generation skipping transfer tax, if any. A direct skip is when
property is transferred to, or a death benefit or other distribution is made to:
a) an individual who is two or more generations younger than the contract
owner; or
b) certain trusts, as described in Section 2613 of the Internal Revenue
Code (generally, trusts that have no beneficiaries who are not 2 or more
generations younger than the contract owner).
If the contract owner is not an individual, then for this purpose ONLY,
"contract owner" refers to any person:
- who would be required to include the contract, death benefit,
distribution or other payment in his or her federal gross estate at his
or her death; or
- who is required to report the transfer of the contract, death benefit,
distribution or other payment for federal gift tax purposes.
If a transfer is a direct skip, Nationwide will deduct the amount of the
transfer tax from the death benefit, distribution or other payment, and remit it
directly to the Internal Revenue Service.
PUERTO RICO
Under the Puerto Rico tax code, distributions from a Non-Qualified Contract
before annuitization are treated as nontaxable return of principal until the
principal is fully recovered. Thereafter all distributions are fully taxable.
Distributions after annuitization are treated as part taxable income and part
nontaxable return of principal. The amount excluded from gross income after
annuitization is equal to the
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<PAGE> 44
amount of the distribution in excess of 3% of the total purchase payments paid,
until an amount equal to the total purchase payments paid has been excluded.
Thereafter, the entire distribution is included in gross income. Puerto Rico
does not impose an early withdrawal penalty tax. Generally, Puerto Rico does not
require income tax to be withheld from distributions of income. A personal
adviser should be consulted in these situations.
CHARGE FOR TAX
Nationwide is not required to maintain a capital gain reserve liability on
Non-Qualified Contracts. If tax laws change requiring a reserve, Nationwide may
implement and adjust a tax charge.
DIVERSIFICATION
Internal Revenue Code Section 817(h) contains rules on diversification
requirements for variable annuity contracts. A variable annuity contract that
does not meet these diversification requirements will not be treated as an
annuity, unless:
- the failure to diversify was accidental;
- the failure is corrected; and
- a fine is paid to the Internal Revenue Service.
The amount of the fine will be the amount of tax that would have been paid by
the contract owner if the income, for the period the contract was not
diversified, had been received by the contract owner.
If the violation is not corrected, the contract owner will be considered the
owner of the underlying securities and will be taxed on the earnings of his or
her contract. Nationwide believes that the investments underlying this contract
meet these diversification requirements.
TAX CHANGES
The foregoing tax information is based on Nationwide's understanding of federal
tax laws. It is NOT intended as tax advice. All information is subject to change
without notice. For more details, contact your personal tax and/or financial
advisor.
STATEMENTS AND REPORTS
Nationwide will mail contract owners statements and reports. Therefore, contract
owners should promptly notify Nationwide of any address change.
These mailings will contain:
- statements showing the contract's quarterly activity;
- confirmation statements showing transactions that affect the contract's
value. Confirmation statements will not be sent for recurring
transactions (i.e., Dollar Cost Averaging or salary reduction programs).
Instead, confirmation of recurring transactions will appear in the
contract's quarterly statements;
- annual and semi-annual reports containing all applicable information and
financial statements or their equivalent, which must be sent to the
underlying mutual fund beneficial shareholders as required by the rules
under the Investment Company Act of 1940 for the variable account.
Contract owners should review statements and confirmations carefully. All errors
or corrections must be reported to Nationwide immediately to assure proper
crediting to the contract. Unless Nationwide is notified within 30 days of
receipt of the statement, Nationwide will assume statements and confirmation
statements are correct.
YEAR 2000 COMPLIANCE ISSUES
Nationwide has developed and implemented a plan to address issues related to the
Year 2000. The problem relates to many existing computer systems using only two
digits to identify a year in a date field. These systems were designed and
developed without considering the impact of the upcoming change in the century.
If not corrected, many computer systems could fail or create erroneous results
when processing
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information dated after December 31, 1999. Like many organizations, Nationwide
is required to renovate or replace computer systems so that the systems will
function properly after December 31, 1999.
Nationwide has completed an inventory and assessment of all computer systems and
has implemented a plan to renovate or replace all applications that were
identified as not Year 2000 compliant. Nationwide has renovated all applications
that required renovation. Testing of the renovated programs included running
each application in a Year 2000 environment and was completed as planned during
1998. For applications being replaced, Nationwide had all replacement systems in
place and functioning as planned by year-end 1998. Conversions of existing
traditional life policies will continue through second quarter, 1999. In
addition, the shareholder services system that supports our mutual fund products
will be fully deployed in the first quarter of 1999.
Nationwide has completed an inventory and assessment of all vendor products and
has tested and certified that each vendor product is Year 2000 compliant. Any
vendor products that could not be certified as Year 2000 compliant were replaced
or eliminated in 1998.
Nationwide has also addressed issues associated with the exchange of electronic
data with external organizations. Nationwide has completed an inventory and
assessment of all business partners including electronic interfaces. Processes
have been put into place and programs initiated to process data irrespective of
the format by converting non-compliant data into a Year 2000 compliant format.
Systems supporting Nationwide's infrastructure such as telecommunications, voice
and networks will be compliant by March 1999. Nationwide's assessment of Year
2000 issues has also included non-information technology systems with embedded
computer chips. Nationwide's building systems such as fire, security, elevators
and escalators supporting facilities in Columbus, Ohio have been tested and are
Year 2000 compliant.
In addition to resolving internal Year 2000 readiness issues, Nationwide is
surveying significant external organizations (business partners) to assess if
they will be Year 2000 compliant and be in a position to do business in the Year
2000 and beyond. Specifically, Nationwide has contacted mutual fund
organizations that provide funds for our variable annuity and life products. The
same action will continue during the first quarter of 1999 with wholesale
producers. Nationwide continues its efforts to identify external risk factors
and is planning to develop contingency plans as part of its ongoing risk
management strategy.
Operating expenses in 1998 and 1997 included approximately $44.7 million and
$45.4 million, respectively, for technology projects, including costs related to
Year 2000. Nationwide anticipates spending approximately $5 million on Year 2000
activities in 1999. These expenses do not have an effect on the assets of the
variable account and are not charged through to the contract owner.
Management does not anticipate that the completion of Year 2000 renovation and
replacement activities will result in a reduction in operating expenses. Rather,
personnel and resources currently allocated to Year 2000 issues will be assigned
to other technology-related projects.
LEGAL PROCEEDINGS
Nationwide Life Insurance Company ("Nationwide") is a party to litigation and
arbitration proceedings in the ordinary course of its business, none of which is
expected to have a material adverse effect on Nationwide.
In recent years, life insurance companies have been named as defendants in
lawsuits, including class action lawsuits, relating to life insurance and
annuity pricing and sales practices. A number of these lawsuits have resulted in
substantial jury awards or settlements.
In February 1997, Nationwide was named as a defendant in a lawsuit filed in New
York state court related to the sale of whole life policies on
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a "vanishing premium" basis (John H. Snyder v. Nationwide Life Insurance Co.).
In April 1998, Nationwide was named as a defendant in a lawsuit filed in Ohio
state court similar to the Snyder case (David and Joan Mishler v. Nationwide
Life Insurance Co.). In August 1998, Nationwide Mutual Insurance Company and
Nationwide and the plaintiffs executed a stipulation of settlement and submitted
it to the New York state court for approval. On August 20, 1998, the court in
the Snyder case signed an order preliminarily approving a class for settlement
purposes (which would include the Mishler case) and scheduled a fairness hearing
for December 17, 1998. At that hearing, the court reviewed the fairness and
reasonableness of the proposed settlement and issued a final order and judgment.
The approved settlement provides for dismissal of both the Snyder and Mishler
cases, bars class members from pursuing litigation against Nationwide Mutual
Insurance Company and its affiliates, including Nationwide and its subsidiaries,
relating to the allegations in the Snyder case, and provides class members with
a potential value of approximately $100 million in policy adjustments,
discounted premiums and discounted products.
In November 1997, two plaintiffs, one who was the owner of a variable life
insurance policy and the other who was the owner of a variable annuity contract,
commenced a lawsuit in a federal court in Texas against Nationwide and the
American Century group of defendants (Robert Young and David D. Distad v.
Nationwide Life Insurance Company et al.). In this lawsuit, plaintiffs seek to
represent a class of variable life insurance policy owners and variable annuity
contract owners whom they claim were allegedly misled when purchasing these
variable contracts into believing that the performance of their underlying
mutual fund option managed by American Century, whose shares may only be
purchased by insurance companies, would track the performance of a mutual fund,
also managed by American Century, whose shares are publicly traded. The amended
complaint seeks unspecified compensatory and punitive damages. On April 27,
1998, the district court denied, in part, and granted, in part, Nationwide and
American Century's motions to dismiss the complaint. The remaining claims
against Nationwide allege securities fraud, common law fraud, civil conspiracy
and breach of contract. On December 2, 1998, the district court issued an order
denying plaintiffs' motion for class certification. On December 10, 1998, the
district court stayed the lawsuit pending plaintiffs' petition to the federal
appeals court for interlocutory review of the order denying class certification.
On December 14, 1998, plaintiffs filed their petition for interlocutory review,
on which the federal appeals court has not yet ruled. Nationwide intends to
defend the case vigorously.
On October 29, 1998, Nationwide and certain of its subsidiaries were named in a
lawsuit filed in Ohio state court related to the sale of deferred annuity
products for use as investments in tax-deferred contributory retirement plans
(Mercedes Castillo v. Nationwide Financial Services, Inc., Nationwide Life
Insurance Company and Nationwide Life and Annuity Insurance Company). The
plaintiff in such lawsuit seeks to represent a national class of Nationwide's
customers and seeks unspecified compensatory and punitive damages. Nationwide
currently is evaluating this lawsuit, which has not been certified as a class.
Nationwide intends to defend this lawsuit vigorously.
There can be no assurance that any litigation relating to pricing or sales
practices will not have a material adverse effect on Nationwide in the future.
The general distributor, Nationwide Advisory Services, Inc., is not a party to
any litigation of any material nature.
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<PAGE> 47
ADVERTISING AND SUB-ACCOUNT PERFORMANCE SUMMARY
ADVERTISING
A "yield" and "effective yield" may be advertised for the NSAT Money Market
Fund. "Yield" is a measure of the net dividend and interest income earned over a
specific seven-day period (which period will be stated in the advertisement)
expressed as a percentage of the offering price of the NSAT Money Market Fund's
units. Yield is an annualized figure, which means that it is assumed that the
NSAT Money Market Fund generates the same level of net income over a 52-week
period. The "effective yield" is calculated similarly but includes the effect of
assumed compounding, calculated under rules prescribed by the SEC. The effective
yield will be slightly higher than yield due to this compounding effect.
Nationwide may advertise the performance of a sub-account in relation to the
performance of other variable annuity sub-accounts, underlying mutual fund
options with similar or different objectives, or the investment industry as a
whole. Other investments to which the sub-accounts may be compared include, but
are not limited to:
- precious metals;
- real estate;
- stocks and bonds;
- closed-end funds;
- bank money market deposit accounts and passbook savings;
- CDs; and
- the Consumer Price Index.
Market Indexes
The sub-accounts will be compared to certain market indexes, such as:
- S&P 500;
- Shearson/Lehman Intermediate Government/Corporate Bond Index;
- Shearson/Lehman Long-Term Government/Corporate Bond Index;
- Donoghue Money Fund Average;
- U.S. Treasury Note Index;
- Bank Rate Monitor National Index of 2 1/2 Year CD Rates; and
- Dow Jones Industrial Average.
Tracking & Rating Services; Publications
Nationwide's rankings and ratings are sometimes published by other services,
such as:
- Lipper Analytical Services, Inc.;
- CDA/Wiesenberger;
- Morningstar;
- Donoghue's;
- magazines such as:
- Money;
- Forbes;
- Kiplinger's Personal Finance Magazine;
- Financial World;
- Consumer Reports;
- Business Week;
- Time;
- Newsweek;
- National Underwriter; and
- News and World Report;
- LIMRA;
- Value;
- Best's Agent Guide;
- Western Annuity Guide;
- Comparative Annuity Reports;
- Wall Street Journal;
- Barron's;
- Investor's Daily;
- Standard & Poor's Outlook; and
- Variable Annuity Research & Data Service (The VARDS Report).
These rating services and publications rank the underlying mutual funds'
performance against other funds. These rankings may or may not include the
effects of sales charges or other fees.
Financial Rating Services
Nationwide is also ranked and rated by independent financial rating services,
among which are Moody's, Standard & Poor's and A.M. Best Company. Nationwide may
advertise these ratings. These ratings reflect Nationwide's financial strength
or claims-paying ability. The ratings are not intended to reflect the investment
experience or financial strength of the variable account.
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<PAGE> 48
Some Nationwide advertisements and endorsements may include lists of
organizations, individuals or other parties that recommend Nationwide or the
contract. Furthermore, Nationwide may occasionally advertise comparisons of
currently taxable and tax deferred investment programs, based on selected tax
brackets, or discussions of alternative investment vehicles and general economic
conditions.
Historical Performance of the Sub-Accounts
Nationwide will advertise historical performance of the sub-accounts. Nationwide
may advertise for the sub-account's standardized average annual total return
("standardized return") calculated in a manner prescribed by the SEC, and
non-standardized total return ("non-standardized return").
Standardized return shows the percentage rate of return of a hypothetical
initial investment of $1,000 for the most recent one, five and ten year periods
(or for a period covering the time the underlying mutual fund has been available
in the variable account if it has not been available for one of the prescribed
periods). This calculation reflects the charges that could be assessed to a
contract if the maximum rider options are chosen as of December 31, 1998
(1.35%). Standardized return does not reflect the deduction of state premium
taxes, which may be imposed by certain states.
Non-standardized return is calculated similarly to standardized return except
non-standardized return assumes an initial investment of $25,000, with base
contract variable account charges of 1.35%. An assumed initial investment of
$25,000 is used because that amount more accurately reflects the average
contract size.
Both methods of calculation reflect total return for the most recent one, five
and ten year periods (or for a period covering the time the underlying mutual
fund has been in existence). For those underlying mutual funds which have not
been available for one of the prescribed periods, the nonstandardized total
return illustrations will show the investment performance the underlying mutual
funds would have achieved had they been available in the variable account for
one of the periods.
The standardized average annual total return and nonstandardized total return
quotations are calculated using data for the period ended December 31, 1998.
However, Nationwide generally provides performance information more frequently.
Information relating to performance of the sub-accounts is based on historical
earnings and does not represent or guarantee future results.
<TABLE>
<CAPTION>
SUB-ACCOUNT PERFORMANCE SUMMARY
STANDARDIZED AVERAGE ANNUAL TOTAL RETURN
------------------------------------------------------------------------------------------------------------------
10 Years
or Date Fund
Available in Date Fund
the Variable Available in
1 Year 5 Years Account the Variable
Sub-Account Option to 12/31/98 to 12/31/98 to 12/31/98 Account
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
American Century Variable Portfolios, Inc. - 25.16% N/A 25.60% 11/03/97
American Century VP Income & Growth
------------------------------------------------------------------------------------------------------------------
American Century Variable Portfolios, Inc. - 17.15% N/A 15.45% 11/03/97
American Century VP International
------------------------------------------------------------------------------------------------------------------
American Century Variable Portfolios, Inc. - 3.40% N/A 5.51% 11/03/97
American Century VP Value
------------------------------------------------------------------------------------------------------------------
The Dreyfus Socially Responsible Growth Fund, Inc. 27.64% N/A 25.21% 11/03/97
------------------------------------------------------------------------------------------------------------------
Dreyfus Stock Index Fund, Inc. 26.49% N/A 26.05% 11/03/97
------------------------------------------------------------------------------------------------------------------
Dreyfus Variable Investment Fund - Capital 28.47% N/A 26.75% 11/03/97
Appreciation Portfolio
------------------------------------------------------------------------------------------------------------------
</TABLE>
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<PAGE> 49
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
10 Years
or Date Fund
Available in Date Fund
the Variable Available in
1 Year 5 Years Account the Variable
Sub-Account Option to 12/31/98 to 12/31/98 to 12/31/98 Account
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Fidelity VIP Equity-Income Portfolio: Service Class 10.04% N/A 11.72% 11/03/97
------------------------------------------------------------------------------------------------------------------
Fidelity VIP Growth Portfolio: Service Class 37.51% N/A 31.94% 11/03/97
------------------------------------------------------------------------------------------------------------------
Fidelity VIP High Income Portfolio: Service Class -5.72% N/A -3.97% 11/03/97
------------------------------------------------------------------------------------------------------------------
Fidelity VIP Overseas Portfolio: Service Class 11.12% N/A 8.55% 11/03/97
------------------------------------------------------------------------------------------------------------------
Fidelity VIP II Contrafund Portfolio: Service Class 28.19% N/A 23.37% 11/03/97
------------------------------------------------------------------------------------------------------------------
Fidelity VIP III Growth Opportunities Portfolio: 22.83% N/A 23.48% 11/03/97
Service Class
------------------------------------------------------------------------------------------------------------------
Morgan Stanley Dean Witter Universal Funds, Inc. - -29.34% N/A -23.24% 11/03/97
Emerging Markets Debt Portfolio
------------------------------------------------------------------------------------------------------------------
NSAT Capital Appreciation Fund 28.22% N/A 27.99% 11/03/97
------------------------------------------------------------------------------------------------------------------
NSAT Government Bond Fund 7.44% N/A 7.65% 11/03/97
------------------------------------------------------------------------------------------------------------------
NSAT Money Market Fund 3.85% N/A 3.86% 10/31/97
------------------------------------------------------------------------------------------------------------------
NSAT Total Return Fund 16.49% N/A 16.41% 11/03/97
------------------------------------------------------------------------------------------------------------------
NSAT Nationwide Balanced Fund 6.61% N/A 6.82% 11/03/97
------------------------------------------------------------------------------------------------------------------
NSAT Nationwide Equity Income Fund 13.59% N/A 13.12% 11/03/97
------------------------------------------------------------------------------------------------------------------
NSAT Nationwide Global Equity Fund 17.53% N/A 15.92% 11/03/97
------------------------------------------------------------------------------------------------------------------
NSAT Nationwide High Income Bond Fund 4.37% N/A 5.61% 11/03/97
------------------------------------------------------------------------------------------------------------------
NSAT Nationwide Multi-Sector Bond Fund 1.22% N/A 1.77% 11/03/97
------------------------------------------------------------------------------------------------------------------
NSAT Nationwide Select Advisers Mid Cap Fund 9.32% N/A 7.46% 11/03/97
------------------------------------------------------------------------------------------------------------------
NSAT Nationwide Small Cap Value Fund -4.37% N/A -5.30% 11/03/97
------------------------------------------------------------------------------------------------------------------
NSAT Nationwide Small Company Fund -0.35% N/A -3.70% 11/03/97
------------------------------------------------------------------------------------------------------------------
NSAT Nationwide Strategic Growth Fund 13.05% N/A 13.07% 11/03/97
------------------------------------------------------------------------------------------------------------------
NSAT Nationwide Strategic Value Fund -0.96% N/A 0.37% 11/03/97
------------------------------------------------------------------------------------------------------------------
Neuberger Berman AMT Guardian Portfolio 29.89% N/A 30.70% 11/03/97
------------------------------------------------------------------------------------------------------------------
Neuberger Berman AMT Mid-Cap Growth Portfolio 37.41% N/A 50.62% 11/03/97
------------------------------------------------------------------------------------------------------------------
Neuberger Berman AMT Partners Portfolio 2.81% N/A 3.53% 11/03/97
------------------------------------------------------------------------------------------------------------------
Oppenheimer Variable Account Funds - Oppenheimer 10.85% N/A 4.83% 11/03/97
Aggressive Growth Fund/VA
------------------------------------------------------------------------------------------------------------------
Oppenheimer Variable Account Funds - Oppenheimer 22.33% N/A 17.17% 11/03/97
Capital Appreciation Fund/VA
------------------------------------------------------------------------------------------------------------------
Oppenheimer Variable Account Funds - Oppenheimer 3.29% N/A 5.08% 11/03/97
Main Street Growth & Income Fund/VA
------------------------------------------------------------------------------------------------------------------
Van Eck Worldwide Insurance Trust - Worldwide -35.02% N/A -38.23% 11/03/97
Emerging Markets Fund
------------------------------------------------------------------------------------------------------------------
Van Eck Worldwide Insurance Trust - Worldwide Hard -31.90% N/A -34.64% 11/03/97
Assets Fund
------------------------------------------------------------------------------------------------------------------
Van Kampen Life Investment Trust - Morgan Stanley -12.82% N/A -8.63% 11/03/97
Real Estate Securities Portfolio
------------------------------------------------------------------------------------------------------------------
Warburg Pincus Trust - Growth & Income Portfolio 10.62% N/A 12.55% 11/03/97
------------------------------------------------------------------------------------------------------------------
Warburg Pincus Trust - International Equity Portfolio 3.92% N/A -1.56% 11/03/97
------------------------------------------------------------------------------------------------------------------
Warburg Pincus Trust - Post-Venture Capital Portfolio 5.08% N/A 2.99% 11/03/97
------------------------------------------------------------------------------------------------------------------
</TABLE>
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<PAGE> 50
NON-STANDARDIZED AVERAGE ANNUAL TOTAL RETURN
$25,000 INITIAL INVESTMENT, VARIABLE ACCOUNT CHARGES OF 1.35%
PLEASE NOTE: THE PERFORMANCE NUMBERS BELOW REFLECT THE DEDUCTION OF THE AMOUNT
ASSESSED FOR THE BASE CONTRACT OF 1.35% (A CONTRACT WITH NO RIDER OPTIONS). FOR
CONTRACT OWNERS WHICH HAVE CHOSEN ONE OR MORE RIDER OPTIONS, THE FUND
PERFORMANCE AS SHOWN BELOW WOULD BE REDUCED IN ACCORDANCE TO THE COSTS OF THE
RIDER OPTIONS SELECTED.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
10 Years
to 12/31/98
1 Year 5 Years or Life of Date Fund
Sub-Account Option to 12/31/98 to 12/31/98 Fund Effective
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
American Century Variable Portfolios, Inc. - 25.16% N/A 28.95% 10/30/97
American Century VP Income & Growth
------------------------------------------------------------------------------------------------------------------
American Century Variable Portfolios, Inc. - 17.15% N/A 10.78% 05/02/94
American Century VP International
------------------------------------------------------------------------------------------------------------------
American Century Variable Portfolios, Inc. - 3.40% N/A 14.39% 05/01/96
American Century VP Value
------------------------------------------------------------------------------------------------------------------
The Dreyfus Socially Responsible Growth Fund, Inc. 27.64% 20.78% 21.32% 10/06/93
------------------------------------------------------------------------------------------------------------------
Dreyfus Stock Index Fund, Inc. 26.49% 21.91% 15.56% 09/29/89
------------------------------------------------------------------------------------------------------------------
Dreyfus Variable Investment Fund - Capital 28.47% 21.92% 20.00% 04/05/93
Appreciation Portfolio
------------------------------------------------------------------------------------------------------------------
Fidelity VIP Equity-Income Portfolio: Service Class 10.04% 17.15% 14.05% 10/09/86
------------------------------------------------------------------------------------------------------------------
Fidelity VIP Growth Portfolio: Service Class 37.51% 20.07% 17.78% 10/09/86
------------------------------------------------------------------------------------------------------------------
Fidelity VIP High Income Portfolio: Service Class -5.72% 7.29% 9.63% 09/19/85
------------------------------------------------------------------------------------------------------------------
Fidelity VIP Overseas Portfolio: Service Class 11.12% 8.20% 8.58% 01/28/87
------------------------------------------------------------------------------------------------------------------
Fidelity VIP II Contrafund Portfolio: Service Class 28.19% N/A 26.89% 01/03/95
------------------------------------------------------------------------------------------------------------------
Fidelity VIP III Growth Opportunities Portfolio: 22.83% N/A 24.55% 01/03/95
Service Class
------------------------------------------------------------------------------------------------------------------
Morgan Stanley Dean Witter Universal Funds, Inc. - -29.34% N/A -20.16% 01/16/97
Emerging Markets Debt Portfolio
------------------------------------------------------------------------------------------------------------------
NSAT Capital Appreciation Fund 28.22% 21.44% 17.74% 04/15/92
------------------------------------------------------------------------------------------------------------------
NSAT Government Bond Fund 7.44% 5.82% 7.87% 11/08/82
------------------------------------------------------------------------------------------------------------------
NSAT Money Market Fund 3.85% 3.62% 3.99% 11/30/81
------------------------------------------------------------------------------------------------------------------
NSAT Total Return Fund 16.49% 17.82% 13.88% 11/08/82
------------------------------------------------------------------------------------------------------------------
NSAT Nationwide Balanced Fund 6.61% N/A 6.76% 10/31/97
------------------------------------------------------------------------------------------------------------------
NSAT Nationwide Equity Income Fund 13.59% N/A 13.01% 10/31/97
------------------------------------------------------------------------------------------------------------------
NSAT Nationwide Global Equity Fund 17.53% N/A 15.79% 10/31/97
------------------------------------------------------------------------------------------------------------------
NSAT Nationwide High Income Bond Fund 4.37% N/A 5.55% 10/31/97
------------------------------------------------------------------------------------------------------------------
NSAT Nationwide Multi-Sector Bond Fund 1.22% N/A 1.75% 10/31/97
------------------------------------------------------------------------------------------------------------------
NSAT Nationwide Select Advisers Mid Cap Fund 9.32% N/A 7.40% 10/31/97
------------------------------------------------------------------------------------------------------------------
NSAT Nationwide Small Cap Value Fund -4.37% N/A -5.28% 10/31/97
------------------------------------------------------------------------------------------------------------------
NSAT Nationwide Small Company Fund -0.35% N/A 15.76% 10/23/95
------------------------------------------------------------------------------------------------------------------
NSAT Nationwide Strategic Growth Fund 13.05% N/A 12.96% 10/31/97
------------------------------------------------------------------------------------------------------------------
NSAT Nationwide Strategic Value Fund -0.96% N/A 0.36% 10/31/97
------------------------------------------------------------------------------------------------------------------
Neuberger Berman AMT Guardian Portfolio 29.89% N/A 30.70% 11/03/97
------------------------------------------------------------------------------------------------------------------
Neuberger Berman AMT Mid-Cap Growth Portfolio 37.41% N/A 50.62% 11/03/97
------------------------------------------------------------------------------------------------------------------
Neuberger Berman AMT Partners Portfolio 2.81% N/A 18.11% 03/22/94
------------------------------------------------------------------------------------------------------------------
</TABLE>
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<PAGE> 51
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
10 Years
to 12/31/98
1 Year 5 Years or Life of Date Fund
Sub-Account Option to 12/31/98 to 12/31/98 Fund Effective
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Oppenheimer Variable Account Funds - Oppenheimer 10.85% 11.55% 14.57% 08/15/86
Aggressive Growth Fund/VA
------------------------------------------------------------------------------------------------------------------
Oppenheimer Variable Account Funds - Oppenheimer 22.33% 20.47% 15.29% 04/03/85
Capital Appreciation Fund/VA
------------------------------------------------------------------------------------------------------------------
Oppenheimer Variable Account Funds - Oppenheimer 3.29% N/A 25.30% 07/05/95
Main Street Growth & Income Fund/VA
------------------------------------------------------------------------------------------------------------------
Van Eck Worldwide Insurance Trust - Worldwide -35.02% N/A -11.04% 12/21/95
Emerging Markets Fund
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Van Eck Worldwide Insurance Trust - Worldwide Hard -31.90% -4.58% 0.72% 09/01/89
Assets Fund
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Van Kampen Life Investment Trust - Morgan Stanley -12.82% N/A 13.54% 07/03/95
Real Estate Securities Portfolio
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Warburg Pincus Trust - Growth & Income Portfolio 10.62% N/A 12.45% 10/31/87
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Warburg Pincus Trust - International Equity Portfolio 3.92% N/A 4.29% 06/30/95
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Warburg Pincus Trust - Post-Venture Capital Portfolio 5.08% N/A 6.11% 09/30/96
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</TABLE>
TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION
Page
General Information and History...............................................1
Services......................................................................1
Purchase of Securities Being Offered..........................................2
Underwriters..................................................................2
Calculations of Performance...................................................2
Annuity Payments..............................................................3
Financial Statements..........................................................4
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APPENDIX A: OBJECTIVES FOR UNDERLYING MUTUAL FUNDS
The underlying mutual funds listed below are designed primarily as investments
for variable annuity contracts and variable life insurance policies issued by
insurance companies.
There is no guarantee that the investment objectives will be met.
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC., A MEMBER OF THE AMERICAN CENTURYSM
FAMILY OF INVESTMENTS
American Century Variable Portfolios, Inc. was organized as a Maryland
corporation in 1987. It is a diversified, open-end investment management company
that offers its shares only as investment vehicles for variable annuity and
variable life insurance products of insurance companies. American Century
Variable Portfolios, Inc. is managed by American Century Investment Management,
Inc.
AMERICAN CENTURY VP INCOME & GROWTH
Investment Objective: Dividend growth, current income and capital
appreciation. The Fund seeks to achieve its investment objective by
investing in common stocks. The investment manager constructs the portfolio
to match the risk characteristics of the S&P 500 Stock Index and then
optimizes each portfolio to achieve the desired balance of risk and return
potential. This includes targeting a dividend yield that exceeds that of
the S&P 500. Such a management technique known as "portfolio optimization"
may cause the Fund to be more heavily invested in some industries than in
others. However, the Fund may not invest more than 25% of its total assets
in companies whose principal business activities are in the same industry.
AMERICAN CENTURY VP INTERNATIONAL
Investment Objective: To seek capital growth. The Fund will seek to achieve
its investment objective by investing primarily in securities of foreign
companies that meet certain fundamental and technical standards of
selection and, in the opinion of the investment manager, have potential for
appreciation. Under normal conditions, the Fund will invest at least 65% of
its assets in common stocks or other equity securities of issuers from at
least three countries outside the United States. While securities of United
States issuers may be included in the portfolio from time to time, it is
the primary intent of the manager to diversify investments across a broad
range of foreign issuers. Although the primary investment of the Fund will
be common stocks (defined to include depository receipts for common stock
and other equity equivalents), the Fund may also invest in other types of
securities consistent with the Fund's objective. When the manager believes
that the total capital growth potential of other securities equals or
exceeds the potential return of common stocks, the Fund may invest up to
35% of its assets in such other securities.
AMERICAN CENTURY VP VALUE
Investment Objective: The investment objective of the Fund is long-term
capital growth; income is a secondary objective. The equity securities in
which the Fund will invest will be primarily securities of well-established
companies with intermediate-to-large market capitalizations that are
believed by management to be undervalued at the time of purchase. Under
normal market conditions, the Fund expects to invest at least 80% of the
value of its total asset in equity securities, including common and
preferred stock, convertible preferred stock and convertible debt
obligations.
DREYFUS STOCK INDEX FUND, INC.
The Dreyfus Stock Index Fund, Inc. is an open-end, non-diversified, management
investment company incorporated under Maryland law on January 24, 1989 and
commenced operations on September 29, 1989. The Fund offers its shares only as
investment vehicles for variable annuity and variable life insurance products of
insurance companies. The Dreyfus Corporation ("Dreyfus") serves as the Fund's
manager,
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while Mellon Equity Associates, an affiliate of Dreyfus, serves as the Fund's
index manager. Dreyfus is a wholly owned subsidiary of Mellon Bank, N.A., which
is a wholly owned subsidiary of Mellon Bank Corporation.
Investment Objective: To provide investment results that correspond to the
price and yield performance of publicly traded common stocks in the
aggregate, as represented by the Standard & Poor's 500 Composite Stock
Price Index. The Fund is neither sponsored by nor affiliated with Standard
& Poor's Corporation.
DREYFUS VARIABLE INVESTMENT FUND
Dreyfus Variable Investment Fund is an open-end, management investment company.
It was organized as an unincorporated business trust under the laws of the
Commonwealth of Massachusetts on October 29, 1986 and commenced operations on
August 31, 1990. The Fund offers its shares only as investment vehicles for
variable annuity and variable life insurance products of insurance companies.
Dreyfus serves as the Fund's manager. Fayez Sarofim & Company serves as the
sub-adviser and provides day-to-day management of the Portfolio.
CAPITAL APPRECIATION PORTFOLIO
Investment Objective: The Portfolio's primary investment objective is to
provide long-term capital growth consistent with the preservation of
capital; current income is a secondary investment objective. This Portfolio
invests primarily in the common stocks of domestic and foreign issuers.
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
The Dreyfus Socially Responsible Growth Fund, Inc. is an open-end, diversified,
management investment company incorporated under Maryland law on July 20, 1992
and commenced operations on October 7, 1993. The Fund offers its share only as
investment vehicles for variable annuity and variable life insurance products of
insurance companies. Dreyfus serves as the Fund's investment adviser. NCM
Capital Management Group, Inc. serves as the Fund's sub-investment adviser and
provides day-to-day management of the Fund's portfolio.
Investment Objective: Capital growth through equity investment in companies
that, in the opinion of the Fund's advisers, not only meet traditional
investment standards, but which also show evidence that they conduct their
business in a manner that contributes to the enhancement of the quality of
life in America. Current income is secondary to the primary goal.
FEDERATED INSURANCE SERIES
Federated Insurance Series (the "Trust"), an Open-End Management Investment
Company, was established as a Massachusetts business trust, under a Declaration
of Trust dated September 15, 1993. The Trust offers its shares only as
investment vehicles for variable annuity and variable life insurance products of
insurance companies. Federated Advisers serves as the investment adviser.
FEDERATED QUALITY BOND FUND II
Investment Objective: Current income by investing in investment grade fixed
income securities.
FIDELITY VARIABLE INSURANCE PRODUCTS FUND
The Fidelity Variable Insurance Products Fund (VIP) is an open-end, diversified,
management investment company organized as a Massachusetts business trust on
November 13, 1981. Shares of VIP are purchased by insurance companies to fund
benefits under variable life insurance policies and variable annuity contracts.
Fidelity Management & Research Company ("FMR") is the manager for VIP and its
portfolios.
VIP EQUITY-INCOME PORTFOLIO: SERVICE CLASS
Investment Objective: Reasonable income by investing primarily in
income-producing equity securities. In choosing these securities FMR also
will consider the potential for capital appreciation. The Portfolio's goal
is to achieve a yield which exceeds the composite yield on the
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securities comprising the Standard & Poor's 500 Composite Stock Price
Index.
VIP GROWTH PORTFOLIO: SERVICE CLASS
Investment Objective: Capital appreciation. This Portfolio will invest in
the securities of both well-known and established companies, and smaller,
less well-known companies which may have a narrow product line or whose
securities are thinly traded. These latter securities will often involve
greater risk than may be found in the ordinary investment security. FMR's
analysis and expertise plays an integral role in the selection of
securities and, therefore, the performance of the Portfolio. Many
securities which FMR believes would have the greatest potential may be
regarded as speculative, and investment in the Portfolio may involve
greater risk than is inherent in other underlying mutual funds. It is also
important to point out that this Portfolio makes sense for you if you can
afford to ride out changes in the stock market because it invests primarily
in common stocks. FMR can also make temporary investments in securities
such as investment-grade bonds, high-quality preferred stocks and
short-term notes, for defensive purposes when it believes market conditions
warrant.
VIP HIGH INCOME PORTFOLIO: SERVICE CLASS
Investment Objective: High level of current income by investing primarily
in high-risk, lower-rated, high-yielding, fixed-income securities, while
also considering growth of capital. FMR will seek high current income
normally by investing the Portfolio's assets as follows:
- at least 65% in income-producing debt securities and preferred stocks,
including convertible securities; and
- up to 20% in common stocks and other equity securities when consistent
with the Portfolio's primary objective or acquired as part of a unit
combining fixed-income and equity securities.
Higher yields are usually available on securities that are lower-rated or
that are unrated. Lower-rated securities are usually defined as Ba or lower
by Moody's Investor Service, Inc. ("Moody's"); BB or lower by Standard &
Poor's and may be deemed to be of a speculative nature. The Portfolio may
also purchase lower-quality bonds such as those rated Ca3 by Moody's or C-
by Standard & Poor's which provide poor protection for payment of principal
and interest (commonly referred to as "junk bonds"). For a further
discussion of lower-rated securities, please see the "Risks of Lower-Rated
Debt Securities" section of the Portfolio's prospectus.
VIP OVERSEAS PORTFOLIO: SERVICE CLASS
Investment Objective: Long-term capital growth primarily through
investments in foreign securities. This Portfolio provides a means for
investors to diversify their own portfolios by participating in companies
and economies outside the United States.
FIDELITY VARIABLE INSURANCE PRODUCTS FUND II
The Fidelity Variable Insurance Products Fund II (VIP II) is an open-end,
diversified, management investment company organized as a Massachusetts business
trust on March 21, 1988. VIP II's shares are purchased by insurance companies to
fund benefits under variable life insurance policies and variable annuity
contracts. FMR is the manager of VIP II and its portfolios.
VIP II CONTRAFUND PORTFOLIO: SERVICE CLASS
Investment Objective: To seek capital appreciation by investing primarily
in companies that FMR believes to be undervalued due to an overly
pessimistic appraisal by the public. This strategy can lead to investments
in domestic or foreign companies, small and large, many of which may not be
well known. The Portfolio primarily invests in common stock and securities
convertible into common stock, but it has the flexibility to invest in any
type
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of security that may produce capital appreciation.
FIDELITY VARIABLE INSURANCE PRODUCTS FUND III
The Fidelity Variable Insurance Products Fund III (VIP III) is an open-end,
diversified, management investment company organized as a Massachusetts business
trust on July 14, 1994. VIP III's shares are purchased by insurance companies to
fund benefits under variable life insurance policies and variable annuity
contracts. FMR is the manager of VIP III and its portfolios.
VIP III GROWTH OPPORTUNITIES PORTFOLIO: SERVICE CLASS
Investment Objective: Capital growth by investing primarily in common
stocks and securities convertible into common stocks. The Portfolio, under
normal conditions, will invest at least 65% of its total assets in
securities of companies that FMR believes have long-term growth potential.
Although the Portfolio invests primarily in common stock and securities
convertible into common stock, it has the ability to purchase other
securities, such as preferred stock and bonds, that may produce capital
growth. The Portfolio may invest in foreign securities without limitation.
MORGAN STANLEY DEAN WITTER UNIVERSAL FUNDS, INC.
Morgan Stanley Dean Witter Universal Funds, Inc. is a mutual fund designed to
provide investment vehicles for variable annuity contracts and variable life
insurance policies and for certain tax-qualified investors. Its Emerging Markets
Debt Portfolio is managed by Morgan Stanley Dean Witter Investment Management,
Inc.
EMERGING MARKETS DEBT PORTFOLIO
Investment Objective: High total return by investing primarily in dollar
and non-dollar denominated fixed income securities of government and
government-related issuers located in emerging market countries, which
securities provide a high level of current income, while at the same time
holding the potential for capital appreciation if the perceived
creditworthiness of the issuer improves due to improving economic,
financial, political, social or other conditions in the country in which
the issuer is located.
NATIONWIDE SEPARATE ACCOUNT TRUST
Nationwide Separate Account Trust ("NSAT") is a diversified open-end management
investment company created under the laws of Massachusetts. NSAT offers shares
in the mutual funds listed below, each with its own investment objectives.
Shares of NSAT will be sold primarily to separate accounts to fund the benefits
under variable life insurance policies and variable annuity contracts issued by
life insurance companies. The assets of NSAT are managed by Nationwide Advisory
Services, Inc. ("NAS"), a wholly-owned subsidiary of Nationwide Life Insurance
Company.
CAPITAL APPRECIATION FUND
Investment Objective: Long-term capital appreciation.
GOVERNMENT BOND FUND
Investment Objective: As high a level of income as is consistent with the
preservation of capital by investing in a diversified portfolio of
securities issued or backed by the U.S. Government, its agencies or
instrumentalities.
MONEY MARKET FUND
Investment Objective: As high a level of current income as is consistent
with the preservation of capital and maintenance of liquidity.
TOTAL RETURN FUND
Investment Objective: To obtain a reasonable, long-term total return on
invested capital.
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SUBADVISED NATIONWIDE FUNDS
NATIONWIDE BALANCED FUND
Subadviser: Salomon Brothers Asset Management, Inc.
Investment Objective: Primarily seeks above-average income compared to a
portfolio entirely invested in equity securities. The Fund's secondary
objective is to take advantage of opportunities for growth of capital and
income. The Fund seeks its objective primarily through investments in a
broad variety of securities, including equity securities, fixed-income
securities and short-term obligations. Under normal market conditions, it
is anticipated that the Fund will invest at least 40% of the Fund's total
assets in equity securities and at least 25% in fixed-income senior
securities. The Fund's subadviser, Salomon Brothers Asset Management,
Inc., will have discretion to invest in the full range of maturities of
fixed-income securities. Generally, most of the Fund's long-term debt
investments will consist of "investment grade" securities, but the Fund
may invest up to 20% of its net assets in non-convertible fixed-income
securities rated below investment grade or determined by the subadviser
to be of comparable quality. These securities are commonly known as junk
bonds. In addition, the Fund may invest an unlimited amount in
convertible securities rated below investment grade.
NATIONWIDE EQUITY INCOME FUND
Subadviser: Federated Investment Counseling
Investment Objective: Seeks above average income and capital appreciation
by investing at least 65% of its assets in income-producing equity
securities. Such equity securities include common stocks, preferred
stocks, and securities (including debt securities) that are convertible
into common stocks. The portion of the Fund's total assets invested in
each type of equity security will vary according to the Fund's
subadviser's assessment of market, economic conditions and outlook.
NATIONWIDE GLOBAL EQUITY FUND
Subadviser: J. P. Morgan Investment Management Inc.
Investment Objective: To provide high total return from a globally
diversified portfolio of equity securities. Total return will consist of
income plus realized and unrealized capital gains and losses. The Fund
seeks its investment objective through country allocation, stock
selection and management of currency exposure. Under normal market
conditions, J.P. Morgan Investment Management Inc. intends to keep the
Fund essentially fully invested with at least 65% of the value of its
total assets in equity securities consisting of common stocks and other
securities with equity characteristics such as preferred stocks,
warrants, rights, convertible securities, trust certificates, limited
partnership interests and equity participations. The Fund's primary
equity instruments are the common stock of companies based in the
developed countries around the world. The assets of the Fund will
ordinarily be invested in the securities of at least five different
countries.
NATIONWIDE HIGH INCOME BOND FUND
Subadviser: Federated Investment Counseling
Investment Objective: Seeks to provide high current income by investing
primarily in a professionally managed, diversified portfolio of fixed
income securities. To meet its objective, the Fund intends to invest at
least 65% of its assets in lower-rated fixed income securities such as
preferred stocks, bonds, debentures, notes, equipment lease certificates
and equipment trust certificates which are rated BBB or lower by Standard
& Poor's or Fitch Investors Service or Baa or lower by Moody's (or if not
rated, are determined by the Fund's subadviser to be of a comparable
quality).
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Such investments are commonly referred to as "junk bonds." For a further
discussion of lower-rated securities, please see the "High Yield
Securities" section of the Fund's prospectus.
NATIONWIDE MULTI SECTOR BOND FUND
Subadviser: Salomon Brothers Asset Management, Inc. with Salomon Brothers
Asset Management Limited
Investment Objective: Primarily seeks a high level of current income.
Capital appreciation is a secondary objective. The Fund seeks to achieve
its objectives by investing in a globally diverse portfolio of
fixed-income investments and by giving the subadviser, Salomon Brothers
Asset Management, Inc. broad discretion to deploy the Fund's assets among
certain segments of the fixed-income market that the subadviser believes
will best contribute to the achievement of the Fund's investment
objectives. The Fund reserves the right to invest predominantly in
securities rated in medium or lower categories, or as determined by the
subadviser to be of comparable quality, commonly referred to as "junk
bonds." Although the subadviser has the ability to invest up to 100% of
the Fund's assets in lower-rated securities, the subadviser does not
anticipate investing in excess of 75% of the Fund's assets in such
securities. The Subadviser has entered into a subadvisory agreement with
its London based affiliate, Salomon Brothers Asset Management Limited,
pursuant to which the subadviser has delegated to Salomon Brothers Asset
Management Limited responsibility for management of the Fund's
investments in non-dollar denominated debt securities and currency
transactions.
NATIONWIDE SELECT ADVISERS MID CAP FUND
Subadvisers: First Pacific Advisors, Inc., Pilgrim Baxter & Associates,
Ltd., and Rice, Hall, James & Associates
Investment Objective: Capital appreciation by investing primarily in
equity securities of medium-sized companies (market capitalization
between $500 million and $7 billion). Under normal market conditions, the
Fund will invest in equity securities consisting of common stock,
preferred stock and securities convertible into common stocks, including
convertible preferred stock and convertible bonds. NAS has chosen the
Fund's subadvisers because they utilize a number of different investment
styles. In utilizing these different styles, NAS hopes to increase
prospects for investment return and to reduce market risk and volatility.
NATIONWIDE SELECT ADVISERS SMALL CAP GROWTH FUND
Subadvisers: Franklin Advisers, Inc., Miller Anderson & Sherrerd, LLP,
Neuberger Berman, LLC.
Investment Objective: Seeks capital growth by investing in a broadly
diversified portfolio of equity securities issued by U.S. and foreign
companies with market capitalizations in the range of companies
represented by the Russell 2000, known has small cap companies. Under
normal market conditions, the Fund will invest at least 65% of its total
assets in the equity securities of small cap companies. The balance of
the Fund's assets may be invested in equity securities of larger cap
companies. The Fund may also invest in foreign securities.
NATIONWIDE SMALL CAP VALUE FUND
Subadviser: The Dreyfus Corporation
Investment Objective: The Fund intends to pursue its investment objective
by investing, under normal market conditions, at least 75% of the Fund's
total assets in equity securities of
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companies whose equity market capitalizations at the time of investments
are similar to the market capitalizations of companies in the Russell
2000 Small Stock Index.
NATIONWIDE SMALL COMPANY FUND
Subadvisers: The Dreyfus Corporation, Neuberger Berman, LLC, Lazard Asset
Management, Strong Capital
Management, Inc. and Warburg Pincus Asset Management, Inc. Investment
Objective: Under normal market conditions, the Fund will invest at least
65% of its total assets in equity securities of companies whose equity
market capitalizations at the time of investment are similar to the
market capitalizations of companies in the Russell 2000 Small Stock
Index.
NATIONWIDE STRATEGIC GROWTH FUND
Subadviser: Strong Capital Management Inc.
Investment Objective: Capital growth by investing primarily in equity
securities that the Fund's subadviser believes have above-average growth
prospects. The Fund will generally invest in companies whose earnings are
believed to be in a relatively strong growth trend, and to a lesser
extent, in companies in which significant further growth is not
anticipated but whose market value is thought to be undervalued. Under
normal market conditions, the Fund will invest at least 65% of its total
assets in equity securities, including common stocks, preferred stocks,
and securities convertible into common or preferred stocks, such as
warrants and convertible bonds. The Fund may invest up to 35% of its
total assets in debt obligations, including intermediate- to long-term
corporate or U.S. Government debt securities.
NATIONWIDE STRATEGIC VALUE FUND
Subadviser: Strong Capital Management Inc./Schafer Capital Management
Inc.
Investment Objective: Primarily long-term capital appreciation; current
income is a secondary objective. The Fund seeks to meet its objectives by
investing in securities which are believed to offer the possibility of
increase in value, primarily common stocks of established companies
having a strong financial position and a low stock market valuation at
the time of purchase in relation to investment value. Other than
considered appropriate for cash reserves, the Fund will generally
maintain a fully invested position in common stocks of publicly held
companies, primarily in stocks of companies listed on a national
securities exchange or other equity securities (common stock or
securities convertible into common stock). Investments may also be made
in debt securities which are convertible into common stocks and in
warrants or other rights to purchase common stock, which in such case are
considered equity securities by the Fund. Strong Capital Management, Inc.
has subcontracted with Schafer Capital Management, Inc. to subadvise the
Fund.
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST
Neuberger Berman Advisers Management Trust ("NB AMT") is an open-end,
diversified management investment company consisting of several series. Shares
of the series of NB AMT are offered in connection with certain variable annuity
contracts and variable life insurance policies issued through life insurance
company separate accounts and are also offered directly to qualified pension and
retirement plans outside of the separate account context.
The Guardian, Partners and Mid-Cap Growth Portfolios of NB AMT invest all of
their investable assets in a corresponding series of Advisers Managers Trust
managed by Neuberger Berman Management Incorporated
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("NB Management"). Each series then invests in securities in accordance with an
investment objective, policies and limitations identical to those of the
Portfolio. This "master/feeder fund" structure is different from that of many
other investment companies which directly acquire and manage their own
portfolios of securities. (For more information regarding "master/feeder fund"
structure, see "Special Information Regarding Organization, Capitalization, and
Other Matters" in the underlying mutual fund prospectus.) The investment advisor
is NB Management.
AMT GUARDIAN PORTFOLIO
Investment Objective: Capital appreciation and secondarily, current income.
The Portfolio and its corresponding series seek to achieve these objectives
by investing in common stocks of long-established, high-quality companies.
NB Management uses a value-oriented investment approach in selecting
securities, looking for low price-to-earnings ratios, strong balance
sheets, solid management, and consistent earnings.
AMT MID-CAP GROWTH PORTFOLIO
Investment Objective: Capital appreciation by investing in equity
securities of medium-sized companies that NB Management believes have the
potential for long-term, above-average capital appreciation. Medium-sized
companies have market capitalizations from $300 million to $10 billion at
the time of investment. The Portfolio and its corresponding series may
invest up to 10% of its net assets, measured at the time of investment, in
corporate debt securities that are below investment grade or, if unrated,
deemed by NB Management to be of comparable quality. Securities that are
below investment grade, as well as unrated securities, are often considered
to be speculative and usually entail greater risk. As a part of the
Portfolio's investment strategy, the Portfolio may invest up to 20% of its
net assets in securities of issuers organized and doing business
principally outside the United States. This limitation does not apply with
respect to foreign securities that are denominated in U.S. dollars.
AMT PARTNERS PORTFOLIO
Investment Objective: Capital growth by investing primarily in the common
stock of established companies. Its investment program seeks securities
believed to be undervalued based on fundamentals such as low
price-to-earnings ratios, consistent cash flows, and the company's track
record through all parts of the market cycle.
OPPENHEIMER VARIABLE ACCOUNT FUNDS
The Oppenheimer Variable Account Funds are an open-end, diversified management
investment company organized as a Massachusetts business trust in 1984. Shares
of the Funds are sold to provide benefits under variable life insurance policies
and variable annuity contracts. OppenheimerFunds, Inc. is the investment
adviser.
OPPENHEIMER AGGRESSIVE GROWTH FUND/VA (FORMERLY "OPPENHEIMER CAPITAL
APPRECIATION FUND")
Investment Objective: Capital appreciation by investing in "growth type"
companies. Such companies are believed to have relatively favorable
long-term prospects for increasing demand for their goods or services, or
to be developing new products, services or markets and normally retain a
relatively larger portion of their earnings for research, development and
investment in capital assets. The Fund may also invest in cyclical
industries in "special situations" that OppenheimerFunds, Inc. believes
present opportunities for capital growth.
OPPENHEIMER CAPITAL APPRECIATION FUND/VA (FORMERLY "OPPENHEIMER GROWTH
FUND")
Investment Objective: Capital appreciation by investing in securities of
well-known established companies. Such securities generally have a history
of earnings and dividends and are issued by seasoned companies (companies
which have an operating history of at least five years including
predecessors). Current income is
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a secondary consideration in the selection of the Fund's portfolio
securities.
OPPENHEIMER MAIN STREET GROWTH & INCOME FUND/VA (FORMERLY "OPPENHEIMER
GROWTH & INCOME FUND")
Investment Objective: High total return, which stocks, preferred stocks,
convertible securities and warrants. Debt investments will include bonds,
participation includes growth in the value of its shares as well as current
income from quality and debt securities. In seeking its investment
objectives, the Fund may invest in equity and debt securities. Equity
investments will include common interests, asset-backed securities,
private-label mortgage-backed securities and CMOs, zero coupon securities
and U.S. debt obligations, and cash and cash equivalents. From time to
time, the Fund may focus on small to medium capitalization issuers, the
securities of which may be subject to greater price volatility than those
of larger capitalized issuers.
VAN ECK WORLDWIDE INSURANCE TRUST
Van Eck Worldwide Insurance Trust is an open-end management investment company
organized as a business trust under the laws of the Commonwealth of
Massachusetts on January 7, 1987. Shares of Van Eck Trust are offered only to
separate accounts of insurance companies to fund the benefits of variable life
insurance policies and variable annuity contracts. The investment advisor and
manager is Van Eck Associates Corporation.
WORLDWIDE EMERGING MARKETS FUND
Investment Objective: Seeks long-term capital appreciation by investing
primarily in equity securities in emerging markets around the world. The
Fund emphasizes investment in countries that, compared to the world's major
economies, exhibit relatively low gross national product per capita, as
well as the potential for rapid economic growth.
WORLDWIDE HARD ASSETS FUND
Investment Objective: Long-term capital appreciation by investing primarily
in "Hard Asset Securities." For the Fund's purpose, "Hard Assets" are real
estate, energy, timber, and industrial and precious metals.
Income is a secondary consideration.
VAN KAMPEN LIFE INVESTMENT TRUST
Van Kampen Life Investment Trust is an open-end diversified management
investment company organized as a Delaware business trust. Shares are offered in
separate portfolios which are sold only to insurance companies to provide
funding for variable life insurance policies and variable annuity contracts. Van
Kampen Asset Management Inc. serves as the Fund's investment adviser.
MORGAN STANLEY REAL ESTATE SECURITIES PORTFOLIO
Investment Objective: Long-term capital growth by investing principally in
a diversified portfolio of securities of companies operating in the real
estate industry ("Real Estate Securities"). Current income is a secondary
consideration. Real Estate Securities include equity securities, including
common stocks and convertible securities, as well as non-convertible
preferred stocks and debt securities of real estate industry companies. A
"real estate industry company" is a company that derives at least 50% of
its assets (marked to market), gross income or net profits from the
ownership, construction, management or sale of residential, commercial or
industrial real estate. Under normal market conditions, at least 65% of the
Fund's total assets will be invested in Real Estate Securities, primarily
equity securities of real estate investment trusts. The Portfolio may
invest up to 25% of its total assets in securities issued by foreign
issuers, some or all of which may also be Real Estate Securities.
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WARBURG PINCUS TRUST
The Warburg Pincus Trust is an open-end management investment company organized
in March 1995 as a business trust under the laws of The Commonwealth of
Massachusetts. The Trust offers its shares to insurance companies for allocation
to separate accounts for the purpose of funding variable annuity and variable
life contracts. Portfolios are managed by Warburg Pincus Asset Management, Inc.
("Warburg").
GROWTH & INCOME PORTFOLIO
Investment Objective: Long-term growth of capital and income by investing
primarily in dividend-paying equity securities. Under normal market
conditions, the Portfolio will invest substantially all of its asset in
equity securities that Warburg considers to be relatively undervalued based
upon research and analysis, taking into account factors such as price/book
ratio, price/cash flow ratio, earnings growth, debt/capital ratio and
multiples of earnings of comparable securities. Although the Portfolio may
hold securities of any size, it currently expects to focus on companies
with market capitalizations of $1 billion or greater at the time of initial
purchase.
INTERNATIONAL EQUITY PORTFOLIO
Investment Objective: Long-term capital appreciation by investing primarily
in a broadly diversified portfolio of equity securities of companies,
wherever organized, that in the judgment of Warburg have their principal
business activities and interests outside the United States. The Portfolio
will ordinarily invest substantially all of its assets, but no less than
65% of its total assets, in common stocks, warrants and securities
convertible into or exchangeable for common stocks. The Portfolio intends
to invest principally in the securities of financially strong companies
with opportunities for growth within growing international economies and
markets through increased earning power and improved utilization or
recognition of assets.
POST-VENTURE CAPITAL PORTFOLIO
Investment Objective: Long-term growth of capital by investing primarily in
equity securities of issuers in their post-venture capital stage of
development and pursues an aggressive investment strategy. Under normal
market conditions, the Portfolio will invest at least 65% of its total
assets in equity securities of "post-venture capital companies." A
post-venture capital company is one that has received venture capital
financing either: (a) during the early stages of the company's existence or
the early stages of the development of a new product or service; or (b) as
part of a restructuring or recapitalization of the company. The Portfolio
may invest up to 10% of its assets in venture capital and other investment
funds.
56
61 of 164
<PAGE> 62
APPENDIX B: CONDENSED FINANCIAL INFORMATION
Accumulation unit values for accumulation units outstanding throughout the
period.
<TABLE>
<CAPTION>
NO OPTIONAL DEATH BENEFITS
(VARIABLE ACCOUNT CHARGES OF 1.20% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT)
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT PERCENT CHANGE IN NUMBER OF YEAR
VALUE AT VALUE AT END OF ACCUMULATION UNIT ACCUMULATION
BEGINNING OF PERIOD VALUE UNITS AT END OF
PERIOD PERIOD
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
<S> <C> <C> <C> <C> <C>
American Century 10.000000 12.431326 24.31% 1,366 1998
Variable Portfolios, ------------------- ------------------- ------------------- ------------------- ------------
Inc. - American
Century VP Income & ------------------- ------------------- ------------------- ------------------- ------------
Growth - Q
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
American Century 10.000000 12.431326 24.31% 1,176 1998
Variable Portfolios, ------------------- ------------------- ------------------- ------------------- ------------
Inc. - American
Century VP Income & ------------------- ------------------- ------------------- ------------------- ------------
Growth - NQ
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
American Century 10.000000 10.904652 9.05% 0 1998
Variable Portfolios, ------------------- ------------------- ------------------- ------------------- ------------
Inc. - American
Century VP ------------------- ------------------- ------------------- ------------------- ------------
International - Q
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
American Century 10.000000 10.904652 9.05% 223 1998
Variable Portfolios, ------------------- ------------------- ------------------- ------------------- ------------
Inc. - American
Century VP ------------------- ------------------- ------------------- ------------------- ------------
International - NQ
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
American Century 10.000000 11.497731 14.98% 3 1998
Variable Portfolios, ------------------- ------------------- ------------------- ------------------- ------------
Inc. - American
Century VP Value - Q ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
American Century 10.000000 11.497731 14.98% 1,306 1998
Variable Portfolios, ------------------- ------------------- ------------------- ------------------- ------------
Inc. - American
Century VP Value - NQ ------------------- ------------------- ------------------- ------------------- ------------
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
The Dreyfus Socially 10.000000 12.758878 27.59% 925 1998
Responsible Growth ------------------- ------------------- ------------------- ------------------- ------------
Fund, Inc. - Q
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
The Dreyfus Socially 10.000000 12.758878 27.59% 2,098 1998
Responsible Growth ------------------- ------------------- ------------------- ------------------- ------------
Fund, Inc. - NQ
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
</TABLE>
57
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<PAGE> 63
<TABLE>
<CAPTION>
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT PERCENT CHANGE IN NUMBER OF YEAR
VALUE AT VALUE AT END OF ACCUMULATION UNIT ACCUMULATION
BEGINNING OF PERIOD VALUE UNITS AT END OF
PERIOD PERIOD
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
<S> <C> <C> <C> <C> <C>
Dreyfus Stock Index 10.000000 12.367188 23.67% 3,618 1998
Fund, Inc. - Q ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Dreyfus Stock Index 10.000000 12.367188 23.67% 26,086 1998
Fund, Inc. - NQ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Dreyfus Variable 10.000000 12.207586 22.08% 390 1998
Investment Fund - ------------------- ------------------- ------------------- ------------------- ------------
Capital Appreciation
Portfolio - Q ------------------- ------------------- ------------------- ------------------- ------------
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Dreyfus Variable 10.000000 12.207586 22.08% 2,910 1998
Investment Fund - ------------------- ------------------- ------------------- ------------------- ------------
Capital Appreciation
Portfolio - NQ ------------------- ------------------- ------------------- ------------------- ------------
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Fidelity VIP 10.000000 11.850451 18.50% 3,974 1998
Equity-Income ------------------- ------------------- ------------------- ------------------- ------------
Portfolio: Service
Class - Q ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Fidelity VIP 10.000000 11.850451 18.50% 776 1998
Equity-Income ------------------- ------------------- ------------------- ------------------- ------------
Portfolio: Service
Class - NQ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Fidelity VIP Growth 10.000000 13.015101 30.15% 10,429 1998
Portfolio: Service ------------------- ------------------- ------------------- ------------------- ------------
Class - Q
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Fidelity VIP Growth 1998
Portfolio: Service ------------------- ------------------- ------------------- ------------------- ------------
Class - NQ 10.000000 13.015101 30.15% 0 1997
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Fidelity VIP High 10.000000 10.384114 3.84% 991 1998
Income Portfolio: ------------------- ------------------- ------------------- ------------------- ------------
Service Class - Q
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Fidelity VIP High 10.000000 10.384114 3.84% 1,251 1998
Income Portfolio: ------------------- ------------------- ------------------- ------------------- ------------
Service Class - NQ
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
</TABLE>
58
63 of 164
<PAGE> 64
<TABLE>
<CAPTION>
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT PERCENT CHANGE IN NUMBER OF YEAR
VALUE AT VALUE AT END OF ACCUMULATION UNIT ACCUMULATION
BEGINNING OF PERIOD VALUE UNITS AT END OF
PERIOD PERIOD
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
<S> <C> <C> <C> <C> <C>
Fidelity VIP Overseas 10.000000 11.296846 12.97% 3,385 1998
Portfolio: Service ------------------- ------------------- ------------------- ------------------- ------------
Class - Q
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Fidelity VIP Overseas 10.000000 11.296846 12.97% 811 1998
Portfolio: Service ------------------- ------------------- ------------------- ------------------- ------------
Class - NQ
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Fidelity VIP II 10.000000 12.602507 26.03% 1,641 1998
Contrafund Portfolio: ------------------- ------------------- ------------------- ------------------- ------------
Service Class - Q
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Fidelity VIP II 10.000000 12.602507 26.03% 10,719 1998
Contrafund Portfolio: ------------------- ------------------- ------------------- ------------------- ------------
Service Class - NQ
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Fidelity VIP III 10.000000 12.421717 24.22% 1 1998
Growth Opportunities ------------------- ------------------- ------------------- ------------------- ------------
Portfolio: Service
Class - Q ------------------- ------------------- ------------------- ------------------- ------------
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Fidelity VIP III 10.000000 12.421717 24.22% 2,338 1998
Growth Opportunities ------------------- ------------------- ------------------- ------------------- ------------
Portfolio: Service
Class - NQ ------------------- ------------------- ------------------- ------------------- ------------
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Morgan Stanley Dean 10.000000 11.400149 14.00% 0 1998
Witter Universal ------------------- ------------------- ------------------- ------------------- ------------
Funds, Inc. - Emerging
Markets Debt Portfolio ------------------- ------------------- ------------------- ------------------- ------------
- - Q
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Morgan Stanley Dean 10.000000 11.400149 14.00% 593 1998
Witter Universal ------------------- ------------------- ------------------- ------------------- ------------
Funds, Inc. - Emerging
Markets Debt Portfolio ------------------- ------------------- ------------------- ------------------- ------------
- - NQ
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
NSAT Capital 10.000000 12.392954 23.93% 35 1998
Appreciation Fund - Q ------------------- ------------------- ------------------- ------------------- ------------
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
</TABLE>
59
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<PAGE> 65
<TABLE>
<CAPTION>
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT PERCENT CHANGE IN NUMBER OF YEAR
VALUE AT VALUE AT END OF ACCUMULATION UNIT ACCUMULATION
BEGINNING OF PERIOD VALUE UNITS AT END OF
PERIOD PERIOD
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
<S> <C> <C> <C> <C> <C>
NSAT Capital 10.000000 12.392954 23.93% 2,724 1998
Appreciation Fund - NQ ------------------- ------------------- ------------------- ------------------- ------------
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
NSAT Government Bond 10.000000 10.174058 1.74% 10 1998
Fund - Q ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
NSAT Government Bond 10.000000 10.174058 1.74% 1,172 1998
Fund - NQ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
NSAT Money Market Fund 10.000000 10.126097 1.26% 0 1998
- - Q* ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
NSAT Money Market Fund 10.000000 10.126097 1.26% 48,756 1998
- - NQ* ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
NSAT Total Return Fund 10.000000 11.968910 19.69% 335 1998
- - Q ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
NSAT Total Return Fund 10.000000 11.968910 19.69% 2,349 1998
- - NQ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
NSAT Nationwide 10.000000 10.772545 7.73% 2 1998
Balanced Fund - Q ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
NSAT Nationwide 10.000000 10.772545 7.73% 842 1998
Balanced Fund - NQ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
NSAT Nationwide Equity 10.000000 11.927845 19.28% 0 1998
Income Fund - Q ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
NSAT Nationwide Equity 10.000000 11.927845 19.28% 1,552 1998
Income Fund - NQ ------------------- ------------------- ------------------- ------------------- ------------
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
NSAT Nationwide High 10.000000 10.558563 5.59% 19 1998
Income Bond Fund - Q ------------------- ------------------- ------------------- ------------------- ------------
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
</TABLE>
60
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<PAGE> 66
<TABLE>
<CAPTION>
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT PERCENT CHANGE IN NUMBER OF YEAR
VALUE AT VALUE AT END OF ACCUMULATION UNIT ACCUMULATION
BEGINNING OF PERIOD VALUE UNITS AT END OF
PERIOD PERIOD
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
<S> <C> <C> <C> <C> <C>
NSAT Nationwide High 10.000000 10.558563 5.59% 1,154 1998
Income Bond Fund - NQ ------------------- ------------------- ------------------- ------------------- ------------
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
NSAT Nationwide 10.000000 10.475252 4.75% 0 1998
Multi-Sector Bond Fund ------------------- ------------------- ------------------- ------------------- ------------
- - Q
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
NSAT Nationwide 10.000000 10.475252 4.75% 1,706 1998
Multi-Sector Bond Fund ------------------- ------------------- ------------------- ------------------- ------------
- - NQ
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
NSAT Nationwide Small 10.000000 12.586199 25.86% 1,749 1998
Cap Value Fund - Q ------------------- ------------------- ------------------- ------------------- ------------
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
NSAT Nationwide Small 10.000000 12.586199 25.86% 1,878 1998
Cap Value Fund - NQ ------------------- ------------------- ------------------- ------------------- ------------
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
NSAT Nationwide Small 10.000000 12.016781 20.17% 3 1998
Company Fund - Q ------------------- ------------------- ------------------- ------------------- ------------
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
NSAT Nationwide Small 10.000000 12.016781 20.17% 0 1998
Company Fund - NQ ------------------- ------------------- ------------------- ------------------- ------------
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
NSAT Nationwide 10.000000 12.477330 24.77% 853 1998
Strategic Value Fund - ------------------- ------------------- ------------------- ------------------- ------------
Q
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
NSAT Nationwide 10.000000 12.477330 24.77% 0 1998
Strategic Value Fund - ------------------- ------------------- ------------------- ------------------- ------------
NQ
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Neuberger Berman AMT 10.000000 12.307946 23.08% 29 1998
Guardian Portfolio - Q ------------------- ------------------- ------------------- ------------------- ------------
------------------- ------------------- ------------------- ------------------- ------------
- ----------------------- ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
</TABLE>
61
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<PAGE> 67
<TABLE>
<CAPTION>
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT PERCENT CHANGE IN NUMBER OF YEAR
VALUE AT VALUE AT END OF ACCUMULATION UNIT ACCUMULATION
BEGINNING OF PERIOD VALUE UNITS AT END OF
PERIOD PERIOD
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
<S> <C> <C> <C> <C> <C>
Neuberger Berman AMT 10.000000 12.307946 23.08% 0 1998
Guardian Portfolio - NQ ------------------- ------------------- ------------------- ------------------- ------------
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Neuberger Berman AMT 10.000000 13.702754 37.03% 0 1998
Mid-Cap Growth ------------------- ------------------- ------------------- ------------------- ------------
Portfolio - Q
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Neuberger Berman AMT 10.000000 13.702754 37.03% 1,744 1998
Mid-Cap Growth ------------------- ------------------- ------------------- ------------------- ------------
Portfolio - NQ
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Neuberger Berman AMT 10.000000 11.821068 18.21% 874 1998
Partners Portfolio - Q ------------------- ------------------- ------------------- ------------------- ------------
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Neuberger Berman AMT 10.000000 11.821068 18.21% 1,913 1998
Partners Portfolio - NQ ------------------- ------------------- ------------------- ------------------- ------------
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Oppenheimer Variable 10.000000 12.961315 29.61% 47 1998
Account Funds - ------------------- ------------------- ------------------- ------------------- ------------
Oppenheimer Aggressive
Growth Fund/VA - Q ------------------- ------------------- ------------------- ------------------- ------------
------------------- ------------------- ------------------- ------------------- ------------
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Oppenheimer Variable 10.000000 12.961315 29.61% 1,383 1998
Account Funds - ------------------- ------------------- ------------------- ------------------- ------------
Oppenheimer Aggressive
Growth Fund/VA - NQ ------------------- ------------------- ------------------- ------------------- ------------
------------------- ------------------- ------------------- ------------------- ------------
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Oppenheimer Variable 10.000000 12.752843 27.53% 1 1998
Account Funds - ------------------- ------------------- ------------------- ------------------- ------------
Oppenheimer Capital
Appreciation Fund/VA - ------------------- ------------------- ------------------- ------------------- ------------
Q
------------------- ------------------- ------------------- ------------------- ------------
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Oppenheimer Variable 10.000000 12.752843 27.53% 2,543 1998
Account Funds - ------------------- ------------------- ------------------- ------------------- ------------
Oppenheimer Capital
Appreciation Fund/VA - ------------------- ------------------- ------------------- ------------------- ------------
NQ
------------------- ------------------- ------------------- ------------------- ------------
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
</TABLE>
62
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<PAGE> 68
<TABLE>
<CAPTION>
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT PERCENT CHANGE IN NUMBER OF YEAR
VALUE AT VALUE AT END OF ACCUMULATION UNIT ACCUMULATION
BEGINNING OF PERIOD VALUE UNITS AT END OF
PERIOD PERIOD
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
<S> <C> <C> <C> <C> <C>
Oppenheimer Variable 10.000000 12.149185 21.49% 806 1998
Account Funds - ------------------- ------------------- ------------------- ------------------- ------------
Oppenheimer Main
Street Growth & Income ------------------- ------------------- ------------------- ------------------- ------------
Fund/VA - Q
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Oppenheimer Variable 10.000000 12.149185 21.49% 1,940 1998
Account Funds - ------------------- ------------------- ------------------- ------------------- ------------
Oppenheimer Main
Street Growth & Income ------------------- ------------------- ------------------- ------------------- ------------
Fund/VA - NQ
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Van Eck Worldwide 10.000000 12.101814 21.02% 0 1998
Insurance Trust - ------------------- ------------------- ------------------- ------------------- ------------
Worldwide Emerging
Markets Fund - Q ------------------- ------------------- ------------------- ------------------- ------------
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Van Eck Worldwide 10.000000 12.101814 21.02% 1,018 1998
Insurance Trust - ------------------- ------------------- ------------------- ------------------- ------------
Worldwide Emerging
Markets Fund - NQ ------------------- ------------------- ------------------- ------------------- ------------
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Van Kampen Life 10.000000 10.740684 7.41% 3 1998
Investment Trust - ------------------- ------------------- ------------------- ------------------- ------------
Morgan Stanley Real
Estate Securities ------------------- ------------------- ------------------- ------------------- ------------
Portfolio - Q
------------------- ------------------- ------------------- ------------------- ------------
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Van Kampen Life 10.000000 10.740684 7.41% 2,201 1998
Investment Trust - ------------------- ------------------- ------------------- ------------------- ------------
Morgan Stanley Real
Estate Securities ------------------- ------------------- ------------------- ------------------- ------------
Portfolio - NQ
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Warburg Pincus Trust - 10.000000 11.688738 16.89% 25 1998
Growth & Income ------------------- ------------------- ------------------- ------------------- ------------
Portfolio - Q
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Warburg Pincus Trust - 10.000000 11.688738 16.89% 0 1998
Growth & Income ------------------- ------------------- ------------------- ------------------- ------------
Portfolio - NQ
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
</TABLE>
63
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<PAGE> 69
<TABLE>
<CAPTION>
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT PERCENT CHANGE IN NUMBER OF YEAR
VALUE AT VALUE AT END OF ACCUMULATION UNIT ACCUMULATION
BEGINNING OF PERIOD VALUE UNITS AT END OF
PERIOD PERIOD
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
<S> <C> <C> <C> <C> <C>
Warburg Pincus Trust - 10.000000 12.739606 27.40% 3 1998
Post-Venture Capital ------------------- ------------------- ------------------- ------------------- ------------
Portfolio - Q
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Warburg Pincus Trust - 10.000000 12.739606 27.40% 0 1998
Post-Venture Capital ------------------- ------------------- ------------------- ------------------- ------------
Portfolio - NQ
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
</TABLE>
*The 7 day yield for the NSAT Money Market Fund as of December 31, 1998 was
3.47%.
The Federated Insurance Series - Federated Quality Bond Fund II and NSAT
Nationwide Select Advisers Small Cap Growth Fund were added to the variable
account May 1, 1999. Therefore, no Condensed Financial Information is available.
64
69 of 164
<PAGE> 70
<TABLE>
<CAPTION>
OPTIONAL ONE-YEAR STEP UP DEATH BENEFIT
(VARIABLE ACCOUNT CHARGES OF 1.30% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT)
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT PERCENT CHANGE IN NUMBER OF YEAR
VALUE AT VALUE AT END OF ACCUMULATION UNIT ACCUMULATION
BEGINNING OF PERIOD VALUE UNITS AT END OF
PERIOD PERIOD
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
<S> <C> <C> <C> <C> <C>
The Dreyfus Socially 10.000000 12.754610 27.55% 571 1998
Responsible Growth ------------------- ------------------- ------------------- ------------------- ------------
Fund, Inc. - Q
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
The Dreyfus Socially 10.000000 12.754610 27.55% 0 1998
Responsible Growth ------------------- ------------------- ------------------- ------------------- ------------
Fund, Inc. - NQ
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Dreyfus Stock Index 10.000000 12.363055 23.63% 1,040 1998
Fund, Inc. - Q ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Dreyfus Stock Index 10.000000 12.363055 23.63% 0 1998
Fund, Inc. - NQ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Dreyfus Variable 10.000000 12.203505 22.04% 343 1998
Investment Fund - ------------------- ------------------- ------------------- ------------------- ------------
Capital Appreciation
Portfolio - Q ------------------- ------------------- ------------------- ------------------- ------------
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Dreyfus Variable 10.000000 12.203505 22.04% 0 1998
Investment Fund - ------------------- ------------------- ------------------- ------------------- ------------
Capital Appreciation
Portfolio - NQ ------------------- ------------------- ------------------- ------------------- ------------
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Fidelity VIP 10.000000 11.846486 18.47% 2,008 1998
Equity-Income ------------------- ------------------- ------------------- ------------------- ------------
Portfolio: Service
Class - Q ------------------- ------------------- ------------------- ------------------- ------------
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Fidelity VIP 10.000000 11.846886 18.47% 0 1998
Equity-Income ------------------- ------------------- ------------------- ------------------- ------------
Portfolio: Service
Class - NQ ------------------- ------------------- ------------------- ------------------- ------------
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Fidelity VIP Growth 10.000000 13.010755 30.11% 123 1998
Portfolio: Service ------------------- ------------------- ------------------- ------------------- ------------
Class - Q
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Fidelity VIP Growth 10.000000 13.010755 30.11% 0 1998
Portfolio: Service ------------------- ------------------- ------------------- ------------------- ------------
Class - NQ
------------------- ------------------- ------------------- ------------------- ------------
------------------- ------------------- ------------------- ------------------- ------------
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
</TABLE>
65
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<PAGE> 71
<TABLE>
<CAPTION>
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT PERCENT CHANGE IN NUMBER OF YEAR
VALUE AT VALUE AT END OF ACCUMULATION UNIT ACCUMULATION
BEGINNING OF PERIOD VALUE UNITS AT END OF
PERIOD PERIOD
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
<S> <C> <C> <C> <C> <C>
Fidelity VIP II 10.000000 12.598299 25.93% 169 1998
Contrafund Portfolio: ------------------- ------------------- ------------------- ------------------- ------------
Service Class - Q
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Fidelity VIP II 10.000000 12.592899 25.93% 0 1998
Contrafund Portfolio: ------------------- ------------------- ------------------- ------------------- ------------
Service Class - NQ
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
NSAT Government Bond 10.000000 10.170644 1.71% 144 1998
Fund - Q ------------------- ------------------- ------------------- ------------------- ------------
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
NSAT Government Bond 10.000000 10.170644 1.71% 0 1998
Fund - NQ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
NSAT Total Return Fund 10.000000 11.964909 19.65% 1,548 1998
- - Q ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
NSAT Total Return Fund 10.000000 11.964909 19.65% 0 1998
- - NQ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
NSAT Nationwide 10.000000 10.768931 7.69% 1,074 1998
Balanced Fund - Q ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
NSAT Nationwide 10.000000 10.768931 7.69% 0 1998
Balanced Fund - NQ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
NSAT Nationwide 10.000000 10.471735 4.72% 115 1998
Multi-Sector Bond Fund ------------------- ------------------- ------------------- ------------------- ------------
- - Q
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
NSAT Nationwide 10.000000 10.471735 4.72% 0 1998
Multi-Sector Bond Fund ------------------- ------------------- ------------------- ------------------- ------------
- - NQ
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
NSAT Nationwide Small 10.000000 12.012761 20.13% 4 1998
Company Fund - Q ------------------- ------------------- ------------------- ------------------- ------------
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
NSAT Nationwide Small 10.000000 12.012761 20.13% 0 1998
Company Fund - NQ ------------------- ------------------- ------------------- ------------------- ------------
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
</TABLE>
66
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<PAGE> 72
<TABLE>
<CAPTION>
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT PERCENT CHANGE IN NUMBER OF YEAR
VALUE AT VALUE AT END OF ACCUMULATION UNIT ACCUMULATION
BEGINNING OF PERIOD VALUE UNITS AT END OF
PERIOD PERIOD
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
<S> <C> <C> <C> <C> <C>
NSAT Nationwide 10.000000 12.459415 24.59% 134 1998
Strategic Growth Fund ------------------- ------------------- ------------------- ------------------- ------------
- - Q
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
NSAT Nationwide 10.000000 12.459415 24.59% 0 1998
Strategic Growth Fund ------------------- ------------------- ------------------- ------------------- ------------
- - NQ
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
NSAT Nationwide 10.000000 12.473162 24.73% 3 1998
Strategic Value Fund - ------------------- ------------------- ------------------- ------------------- ------------
Q
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
NSAT Nationwide 10.000000 12.473162 24.73% 0 1998
Strategic Value Fund - ------------------- ------------------- ------------------- ------------------- ------------
NQ
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Neuberger Berman AMT 10.000000 11.817120 18.17% 3 1998
Partners Portfolio - Q ------------------- ------------------- ------------------- ------------------- ------------
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Neuberger Berman AMT 10.000000 11.817120 18.17% 0 1998
Partners Portfolio - NQ ------------------- ------------------- ------------------- ------------------- ------------
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Oppenheimer Variable 10.000000 12.956986 29.57% 415 1998
Account Funds - ------------------- ------------------- ------------------- ------------------- ------------
Oppenheimer Aggressive
Growth Fund/VA - Q ------------------- ------------------- ------------------- ------------------- ------------
------------------- ------------------- ------------------- ------------------- ------------
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Oppenheimer Variable 10.000000 12.956986 29.57% 0 1998
Account Funds - ------------------- ------------------- ------------------- ------------------- ------------
Oppenheimer Aggressive
Growth Fund/VA - NQ ------------------- ------------------- ------------------- ------------------- ------------
------------------- ------------------- ------------------- ------------------- ------------
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Oppenheimer Variable 10.000000 12.748581 27.49% 102 1998
Account Funds - ------------------- ------------------- ------------------- ------------------- ------------
Oppenheimer Capital
Appreciation Fund/VA - ------------------- ------------------- ------------------- ------------------- ------------
Q
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
</TABLE>
67
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<PAGE> 73
<TABLE>
<CAPTION>
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT PERCENT CHANGE IN NUMBER OF YEAR
VALUE AT VALUE AT END OF ACCUMULATION UNIT ACCUMULATION
BEGINNING OF PERIOD VALUE UNITS AT END OF
PERIOD PERIOD
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
<S> <C> <C> <C> <C> <C>
Oppenheimer Variable 10.000000 12.748581 27.49% 0 1998
Account Funds - ------------------- ------------------- ------------------- ------------------- ------------
Oppenheimer Capital
Appreciation Fund/VA - ------------------- ------------------- ------------------- ------------------- ------------
NQ
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Oppenheimer Variable 10.000000 12.145122 21.45% 367 1998
Account Funds - ------------------- ------------------- ------------------- ------------------- ------------
Oppenheimer Main
Street Growth & Income ------------------- ------------------- ------------------- ------------------- ------------
Fund/VA - Q
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Oppenheimer Variable 10.000000 12.145122 21.45% 0 1998
Account Funds - ------------------- ------------------- ------------------- ------------------- ------------
Oppenheimer Main
Street Growth & Income ------------------- ------------------- ------------------- ------------------- ------------
Fund/VA - NQ
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
</TABLE>
The Federated Insurance Series - Federated Quality Bond Fund II and NSAT
Nationwide Select Advisers Small Cap Growth Fund were added to the variable
account May 1, 1999. Therefore, no Condensed Financial Information is available.
68
73 of 164
<PAGE> 74
<TABLE>
<CAPTION>
OPTIONAL 5% ENHANCED DEATH BENEFIT
(VARIABLE ACCOUNT CHARGES OF 1.35% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT)
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT PERCENT CHANGE IN NUMBER OF YEAR
VALUE AT VALUE AT END OF ACCUMULATION UNIT ACCUMULATION
BEGINNING OF PERIOD VALUE UNITS AT END OF
PERIOD PERIOD
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
<S> <C> <C> <C> <C> <C>
American Century 10.000000 12.054452 20.54% 272 1998
Variable Portfolios, ------------------- ------------------- ------------------- ------------------- ------------
Inc. - American
Century VP ------------------- ------------------- ------------------- ------------------- ------------
International - Q
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
American Century 10.000000 12.054452 20.54% 0 1998
Variable Portfolios, ------------------- ------------------- ------------------- ------------------- ------------
Inc. - American
Century VP ------------------- ------------------- ------------------- ------------------- ------------
International - NQ
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Dreyfus Stock Index 10.000000 12.456413 24.56% 311 1998
Fund, Inc. - Q ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Dreyfus Stock Index 10.000000 12.456413 24.56% 0 1998
Fund, Inc. - NQ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Dreyfus Variable 10.000000 12.382184 23.82% 259 1998
Investment Fund - ------------------- ------------------- ------------------- ------------------- ------------
Capital Appreciation
Portfolio - Q ------------------- ------------------- ------------------- ------------------- ------------
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Dreyfus Variable 10.000000 12.382184 23.82% 0 1998
Investment Fund - ------------------- ------------------- ------------------- ------------------- ------------
Capital Appreciation
Portfolio - NQ ------------------- ------------------- ------------------- ------------------- ------------
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Fidelity VIP High 10.000000 10.523939 5.24% 295 1998
Income Portfolio: ------------------- ------------------- ------------------- ------------------- ------------
Service Class - Q
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
Fidelity VIP High 10.000000 10.523939 5.24% 0 1998
Income Portfolio: ------------------- ------------------- ------------------- ------------------- ------------
Service Class - NQ
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
NSAT Capital 10.000000 12.431774 24.32% 51 1998
Appreciation Fund - Q ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
NSAT Capital 10.000000 12.431774 24.32% 0 1998
Appreciation Fund - NQ ------------------- ------------------- ------------------- ------------------- ------------
------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
</TABLE>
69
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<PAGE> 75
<TABLE>
<CAPTION>
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
UNDERLYING MUTUAL FUND ACCUMULATION UNIT ACCUMULATION UNIT PERCENT CHANGE IN NUMBER OF YEAR
VALUE AT VALUE AT END OF ACCUMULATION UNIT ACCUMULATION
BEGINNING OF PERIOD VALUE UNITS AT END OF
PERIOD PERIOD
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
<S> <C> <C> <C> <C> <C>
NSAT Money Market Fund 10.000000 10.089342 0.89% 4,169 1998
- - Q* ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
NSAT Money Market Fund 10.000000 10.089342 0.89% 0 1998
- - NQ* ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
NSAT Total Return Fund 10.000000 11.985762 19.86% 265 1998
- - Q ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
NSAT Total Return Fund 10.000000 11.985762 19.86% 0 1998
- - NQ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
- ------------------------ ------------------- ------------------- ------------------- ------------------- ------------
</TABLE>
*The 7 day yield for the NSAT Money Market Fund as of December 31, 1998 was
3.47%.
The Federated Insurance Series - Federated Quality Bond Fund II and NSAT
Nationwide Select Advisers Small Cap Growth Fund were added to the variable
account May 1, 1999. Therefore, no Condensed Financial Information is available.
70
75 of 164
<PAGE> 76
STATEMENT OF ADDITIONAL INFORMATION
MAY 1, 1999
DEFERRED VARIABLE ANNUITY CONTRACTS
ISSUED BY NATIONWIDE LIFE INSURANCE COMPANY
THROUGH ITS NATIONWIDE VARIABLE ACCOUNT- 9
This Statement of Additional Information is not a prospectus. It contains
additional information than set forth in the prospectus and should be read in
conjunction with the prospectus dated May 1, 1999. The prospectus may be
obtained from Nationwide Life Insurance Company by writing P.O. Box 16609,
Columbus, Ohio 43216-6609, or calling 1-800-848-6331, TDD 1-800-238-3035.
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
<S> <C>
General Information and History..........................................1
Services.................................................................1
Purchase of Securities Being Offered.....................................2
Underwriters.............................................................2
Calculations of Performance..............................................2
Annuity Payments.........................................................3
Financial Statements.....................................................4
</TABLE>
GENERAL INFORMATION AND HISTORY
Nationwide Variable Account-9 is a separate investment account of Nationwide
Life Insurance Company ("Nationwide"). Nationwide is a member of the Nationwide
Insurance Enterprise. All of Nationwide's common stock is owned by Nationwide
Financial Services, Inc. ("NFS"), a holding company. NFS has two classes of
common stock outstanding with different voting rights enabling Nationwide
Corporation (the holder of all of the outstanding Class B Common Stock) to
control NFS. Nationwide Corporation is a holding company, as well. All of the
common stock is held by Nationwide Mutual Insurance Company (95.24%) and
Nationwide Mutual Fire Insurance Company (4.76%), the ultimate controlling
persons of Nationwide Insurance Enterprise. The Nationwide Insurance Enterprise
is one of America's largest insurance and financial services family of
companies, with combined assets of over $98.28 billion as of December 31, 1998.
SERVICES
Nationwide, which has responsibility for administration of the contracts and the
variable account, maintains records of the name, address, taxpayer
identification number, and other pertinent information for each contract owner
and the number and type of contract issued to each contract owner and records
with respect to the contract value of each contract.
The Custodian of the assets of the variable account is Nationwide. Nationwide
will maintain a record of all purchases and redemption of shares of the
underlying mutual funds. Nationwide, or affiliates of Nationwide may have
entered into agreements with either the investment adviser or distributor for
the underlying mutual funds. The agreements relate to administrative services
furnished by Nationwide or an affiliate of Nationwide and provide for an annual
fee based on the average aggregate net assets of the variable account (and other
separate accounts of Nationwide or life insurance company subsidiaries of
Nationwide) invested in particular underlying mutual funds. These fees in no way
affect the net asset value of the underlying mutual funds or fees paid by the
contract owner.
1
76 of 164
<PAGE> 77
The audited financial statements have been included herein in reliance upon the
reports of KPMG LLP, independent certified public accountants, Two Nationwide
Plaza, Columbus Ohio 43215, and upon the authority of said firm as experts in
accounting and auditing.
PURCHASE OF SECURITIES BEING OFFERED
The contracts will be sold by licensed insurance agents in the states where the
contracts may be lawfully sold. Such agents will be registered representatives
of broker-dealers registered under the Securities Exchange Act of 1934 who are
members of the National Association of Securities Dealers, Inc. ("NASD").
UNDERWRITERS
The contracts, which are offered continuously, are distributed by Nationwide
Advisory Services, Inc. ("NAS"), Three Nationwide Plaza, Columbus, Ohio 43215,
an affiliate of Nationwide. No underwriting commissions have been paid by
Nationwide to NAS.
CALCULATIONS OF PERFORMANCE
Any current yield quotations of the NSAT Money Market Fund, subject to Rule 482
of the Securities Act of 1933, will consist of a seven calendar day historical
yield, carried at least to the nearest hundredth of a percent. The yield will be
calculated by determining the net change, exclusive of capital changes, in the
value of a hypothetical pre-existing account having a balance of one
accumulation unit at the beginning of the base period, subtracting a
hypothetical charge reflecting deductions from contract owner accounts and
dividing the net change in account value by the value of the account at the
beginning of the period to obtain a base period return and multiplying the base
period return by (365/7) or (366/7) in a leap year. The NSAT Money Market Fund's
effective yield is computed similarly, but includes the effect of assumed
compounding on an annualized basis of the current unit value yield quotations of
the NSAT Money Market Fund.
The NSAT Money Market Fund's yield and effective yield will fluctuate daily.
Actual yields will depend on factors such as the type of instruments in the
fund's portfolio, portfolio quality and average maturity, changes in interest
rates, and the fund's expenses. Although the NSAT Money Market Fund determines
its yield on the basis of a seven day period, it may use a different time period
on occasion. The yield quotes may reflect the expense limitation described
"Investment Manager and Other Services" in the NSAT Money Market Fund's
Statement of Additional Information. There is no assurance that the yields
quoted on any given occasion will remain in effect for any period of time and
there is no guarantee that the net asset values will remain constant. It should
be noted that a contract owner's investment in the NSAT Money Market Fund is not
guaranteed or insured. Yields of other money market funds may not be comparable
if a different base period or another method of calculation is used.
All performance advertising will include quotations of standardized average
annual total return, calculated in accordance with a standard method prescribed
by rules of the SEC. Standardized average annual total return is found by taking
a hypothetical $1,000 investment in each of the sub-accounts' units on the first
day of the period at the offering price, which is the accumulation unit value
per unit ("initial investment") and computing the ending redeemable value
("redeemable value") of that investment at the end of the period. The redeemable
value is then divided by the initial investment and this quotient is taken to
the Nth root (N represents the number of years in the period) and 1 is
subtracted from the result which is then expressed as a percentage, carried to
at least the nearest hundredth of a percent. Standardized average annual total
return reflects the deduction of variable account charges of 1.80% which
includes the 5% Enhanced Death Benefit and the Guaranteed Minimum Income Benefit
option. No deduction is made for premium taxes which may be assessed by certain
states. Nonstandardized total return may also be advertised, and is calculated
in a manner similar to standardized average annual total
2
77 of 164
<PAGE> 78
return except the nonstandardized total return is based on a hypothetical
initial investment of $25,000. An assumed initial investment of $25,000 will be
used because that figure more closely approximates the size of a typical
contract than does the $1,000 figure used in calculating the standardized
average annual total return quotations.
The standardized average annual total return and nonstandardized average annual
total return quotations will be current to the last day of the calendar quarter
preceding the date on which an advertisement is submitted for publication. The
standardized average annual return will be based on rolling calendar quarters
and will cover periods of one, five, and ten years, or a period covering the
time the underlying mutual fund has been available in the variable account if
the underlying mutual fund has not been available for one of the prescribed
periods. Nonstandardized average annual total return will be based on rolling
calendar quarters and will cover periods of one, five and ten years, or a period
covering the time the underlying mutual fund has been in existence.
Quotations of average annual total return and total return are based upon
historical earnings and will fluctuate. Any quotation of performance is not a
guarantee of future performance. Factors affecting a sub-account's performance
include general market conditions, operating expenses and investment management.
A contract owner's account when redeemed may be more or less than the original
cost.
ANNUITY PAYMENTS
See "Frequency and Amount of Annuity Payments" located in the prospectus.
3
78 of 164
<PAGE> 79
<PAGE> 1
Independent Auditors' Report
The Board of Directors of Nationwide Life Insurance Company and Contract Owners
of Nationwide Variable Account-9:
We have audited the accompanying statement of assets, liabilities and
contract owners' equity of Nationwide Variable Account-9 as of December 31,
1998, and the related statements of operations and changes in contract owners'
equity for the year then ended and the period November 3, 1997 (commencement of
operations) through December 31, 1997. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of December 31, 1998, by correspondence with
the transfer agents of the underlying mutual funds. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Nationwide Variable
Account-9 as of December 31, 1998, and the results of its operations and its
changes in contract owners' equity for the year then ended and the period
November 3, 1997 (commencement of operations) through December 31, 1997, in
conformity with generally accepted accounting principles.
KPMG LLP
Columbus, Ohio
February 5, 1999
<PAGE> 2
NATIONWIDE VARIABLE ACCOUNT-9
STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY
DECEMBER 31, 1998
<TABLE>
<S> <C>
ASSETS:
Investments at market value:
American Century VP - American Century VP Income & Growth (ACVPIncGr)
6,808,423 shares (cost $41,583,538) ........................................ $ 46,161,106
American Century VP - American Century VP International (ACVPInt)
6,855,908 shares (cost $51,855,024) ........................................ 52,242,021
American Century VP - American Century VP Value (ACVPValue)
3,217,095 shares (cost $21,777,436) ........................................ 21,651,051
The Dreyfus Socially Responsible Growth Fund, Inc. (DrySRGro)
1,248,565 shares (cost $35,462,984) ........................................ 38,805,415
Dreyfus Stock Index Fund (DryStkIx)
9,577,288 shares (cost $279,024,199) ....................................... 311,453,398
Dreyfus VIF - Capital Appreciation Portfolio (DryCapAp)
1,589,914 shares (cost $52,116,562) ........................................ 57,411,798
Fidelity VIP - Equity-Income Portfolio - Service Class (FidVIPEIS)
7,742,140 shares (cost $188,934,420) ....................................... 196,572,937
Fidelity VIP - Growth Portfolio - Service Class (FidVIPGrS)
2,439,295 shares (cost $92,723,883) ........................................ 109,329,206
Fidelity VIP - High Income Portfolio - Service Class (FidVIPHIS)
8,982,394 shares (cost $109,103,276) ....................................... 103,387,351
Fidelity VIP - Overseas Portfolio - Service Class (FidVIPOvS)
1,311,658 shares (cost $25,776,988) ........................................ 26,272,515
Fidelity VIP-II - Contrafund Portfolio - Service Class (FidVIPConS)
5,268,891 shares (cost $110,700,033) ....................................... 128,666,318
Fidelity VIP-III - Growth Opportunities Portfolio - Service Class (FidVIPGrOpS)
4,400,750 shares (cost $88,712,986) ........................................ 100,601,146
Morgan Stanley - Emerging Markets Debt Portfolio (MSEmMkt)
533,017 shares (cost $4,220,740) ........................................... 3,251,406
Nationwide SAT - Balanced Fund (NSATBal)
3,702,529 shares (cost $38,838,888) ........................................ 39,172,762
Nationwide SAT - Capital Appreciation Fund (NSATCapAp)
7,353,398 shares (cost $180,569,944) ....................................... 195,526,840
Nationwide SAT - Equity Income Fund (NSATEqInc)
1,115,255 shares (cost $11,913,630) ........................................ 12,791,978
Nationwide SAT - Global Equity Fund (NSATGlobEq)
1,278,862 shares (cost $14,086,471) ........................................ 15,026,629
Nationwide SAT - Government Bond Fund (NSATGvtBd)
11,611,591 shares (cost $135,670,425) ...................................... 135,739,496
Nationwide SAT - High Income Bond Fund (NSATHIncBd)
2,988,003 shares (cost $30,639,154) ........................................ 29,999,551
Nationwide SAT - Money Market Fund (NSATMyMkt)
190,044,189 shares (cost $190,044,189) ..................................... 190,044,189
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
Nationwide SAT - Multi Sector Bond Fund (NSATMSecBd)
3,559,456 shares (cost $35,711,253) .................................. 34,953,863
Nationwide SAT - Select Advisers Mid Cap Fund (NSATMidCap)
663,376 shares (cost $6,840,714) ..................................... 7,244,064
Nationwide SAT - Small Cap Value Fund (NSATSmCapV)
3,132,624 shares (cost $29,764,563) .................................. 29,728,605
Nationwide SAT - Small Company Fund (NSATSmCo)
2,686,535 shares (cost $42,607,479) .................................. 43,011,428
Nationwide SAT - Strategic Growth Fund (NSATStrGro)
746,793 shares (cost $7,919,572) ..................................... 8,737,474
Nationwide SAT - Strategic Value Fund (NSATStrVal)
1,344,546 shares (cost $13,728,595) .................................. 13,606,806
Nationwide SAT - Total Return Fund (NSATTotRe)
15,536,927 shares (cost $281,022,843) ................................ 285,879,460
Neuberger & Berman AMT - Guardian Portfolio (NBAMTGuard)
2,338,020 shares (cost $31,751,426) .................................. 32,358,203
Neuberger & Berman AMT - Mid-Cap Growth Portfolio (NBAMTMCGr)
1,748,395 shares (cost $23,894,825) .................................. 28,358,964
Neuberger & Berman AMT - Partners Portfolio (NBAMTPart)
5,754,650 shares (cost $111,859,485) ................................. 108,935,530
Oppenheimer VAF - Aggressive Growth Fund (OppAggGro)
610,901 shares (cost $25,670,049) .................................... 27,386,693
Oppenheimer VAF - Growth Fund (OppGro)
1,127,365 shares (cost $37,003,995) .................................. 41,340,470
Oppenheimer VAF - Growth & Income Fund (OppGrInc)
2,521,659 shares (cost $51,774,563) .................................. 51,643,569
Van Eck WIT - Worldwide Emerging Markets Fund (VEWrldEMkt)
664,975 shares (cost $5,629,404) ..................................... 4,734,621
Van Eck WIT - Worldwide Hard Assets Fund (VEWrldHAs)
222,585 shares (cost $2,130,378) ..................................... 2,047,778
Van Kampen American Capital LIT -
Morgan Stanley Real Estate Securities Portfolio (VKMSRESec)
1,308,962 shares (cost $19,243,692) .................................. 18,011,317
Warburg Pincus Trust - Growth & Income Portfolio (WPGrInc)
1,140,740 shares (cost $12,673,239) .................................. 13,095,697
Warburg Pincus Trust - International Equity Portfolio (WPIntEq)
1,439,870 shares (cost $16,523,314) .................................. 15,824,169
Warburg Pincus Trust - Post Venture Capital Portfolio (WPPVenCap)
552,506 shares (cost $6,237,564) ..................................... 6,508,526
--------------
Total investments ................................................. 2,587,514,350
Accounts receivable ........................................................ 1,282,585
--------------
Total assets ...................................................... 2,588,796,935
ACCOUNTS PAYABLE .............................................................. --
--------------
CONTRACT OWNERS' EQUITY (NOTE 4) .............................................. $2,588,796,935
==============
</TABLE>
See accompanying notes to financial statements.
<PAGE> 4
NATIONWIDE VARIABLE ACCOUNT - 9
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
Year Ended December 31, 1998 and For the Period November 3, 1997
(commencement of operations) Through December 31, 1997
<TABLE>
<CAPTION>
TOTAL ACVPIncGr
---------------------------------- ----------------------------------
1998 1997 1998 1997
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 20,037,926 184,101 220,567 --
Mortality and expense risk charges (note 2):
Asset fee @ 0.95% rate ..................... (6,687,096) (26,321) (104,919) (119)
Asset fee @ 1.00% rate ..................... (4,480,001) (13,431) (64,746) (83)
Asset fee @ 1.05% rate ..................... (1,009,646) (4,753) (13,006) (29)
Asset fee @ 1.10% rate ..................... (909) -- (46) --
Asset fee @ 1.15% rate ..................... (244) -- (14) --
Asset fee @ 1.20% rate ..................... (1,510) -- (19) --
Asset fee @ 1.25% rate ..................... (131) -- -- --
Asset fee @ 1.30% rate ..................... (50) -- -- --
Asset fee @ 1.35% rate ..................... (37) -- -- --
--------------- --------------- --------------- ---------------
Net investment activity ...................... 7,858,302 139,596 37,817 (231)
--------------- --------------- --------------- ---------------
Proceeds from mutual fund shares sold ......... 147,138,081 1,928,035 299,469 3,255
Cost of mutual fund shares sold ............... (151,277,931) (1,932,025) (260,801) (3,092)
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments .......... (4,139,850) (3,990) 38,668 163
Change in unrealized gain (loss) on investments 121,513,304 259,323 4,570,573 6,996
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... 117,373,454 255,333 4,609,241 7,159
--------------- --------------- --------------- ---------------
Reinvested capital gains ...................... 27,066,537 478,503 9,256 --
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 152,298,293 873,432 4,656,314 6,928
--------------- --------------- --------------- ---------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 2,421,579,829 81,649,336 34,231,141 389,541
Transfers between funds ....................... -- -- 7,880,597 61,740
Redemptions ................................... (66,628,531) (339,129) (1,021,174) (635)
Contingent deferred sales charges (note 2) .... (676,512) (409) (7,094) --
Adjustments to maintain reserves .............. 38,184 2,442 (27,089) 5
--------------- --------------- --------------- ---------------
Net equity transactions .................... 2,354,312,970 81,312,240 41,056,381 450,651
--------------- --------------- --------------- ---------------
NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 2,506,611,263 82,185,672 45,712,695 457,579
Contract owners' equity beginning of period .... 82,185,672 -- 457,579 --
--------------- --------------- --------------- ---------------
Contract owners' equity end of period .......... $ 2,588,796,935 82,185,672 46,170,274 457,579
=============== =============== =============== ===============
</TABLE>
<TABLE>
<CAPTION>
ACVPInt ACVPValue
---------------------------------- ----------------------------------
1998 1997 1998 1997
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... 26,394 -- 28,096 --
Mortality and expense risk charges (note 2):
Asset fee @ 0.95% rate ..................... (135,323) (169) (68,970) (235)
Asset fee @ 1.00% rate ..................... (74,971) (58) (44,443) (348)
Asset fee @ 1.05% rate ..................... (14,635) (20) (8,106) (55)
Asset fee @ 1.10% rate ..................... (9) -- (4) --
Asset fee @ 1.15% rate ..................... (9) -- -- --
Asset fee @ 1.20% rate ..................... (2) -- (24) --
Asset fee @ 1.25% rate ..................... -- -- (2) --
Asset fee @ 1.30% rate ..................... -- -- -- --
Asset fee @ 1.35% rate ..................... (4) -- -- --
--------------- --------------- --------------- ---------------
Net investment activity ...................... (198,559) (247) (93,453) (638)
--------------- --------------- --------------- ---------------
Proceeds from mutual fund shares sold ......... 2,580,905 -- 1,595,103 --
Cost of mutual fund shares sold ............... (2,610,970) -- (1,678,560) --
--------------- --------------- --------------- ---------------
Realized gain (loss) on investments .......... (30,065) -- (83,457) --
Change in unrealized gain (loss) on investments 379,163 7,835 (147,770) 21,385
--------------- --------------- --------------- ---------------
Net gain (loss) on investments ............... 349,098 7,835 (231,227) 21,385
--------------- --------------- --------------- ---------------
Reinvested capital gains ...................... 270,951 -- 335,441 --
--------------- --------------- --------------- ---------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 421,490 7,588 10,761 20,747
--------------- --------------- --------------- ---------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 39,680,086 451,373 19,091,612 929,382
Transfers between funds ....................... 12,597,519 90,951 1,715,026 410,117
Redemptions ................................... (1,031,134) (18) (518,275) (856)
Contingent deferred sales charges (note 2) .... (7,206) -- (7,315) --
Adjustments to maintain reserves .............. 31,510 4 (218) 8
--------------- --------------- --------------- ---------------
Net equity transactions .................... 51,270,775 542,310 20,280,830 1,338,651
--------------- --------------- --------------- ---------------
NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 51,692,265 549,898 20,291,591 1,359,398
Contract owners' equity beginning of period .... 549,898 -- 1,359,398 --
--------------- --------------- --------------- ---------------
Contract owners' equity end of period .......... 52,242,163 549,898 21,650,989 1,359,398
=============== =============== =============== ===============
</TABLE>
<PAGE> 5
NATIONWIDE VARIABLE ACCOUNT - 9
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
Year Ended December 31, 1998 and For the Period November 3, 1997
(commencement of operations) Through December 31, 1997
<TABLE>
<CAPTION>
DrySRGro DryStkix
---------------------------- ----------------------------
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 60,373 2,537 2,203,648 19,230
Mortality and expense risk charges (note 2):
Asset fee @ 0.95% rate ..................... (87,632) (245) (736,785) (1,875)
Asset fee @ 1.00% rate ..................... (63,281) (157) (495,327) (946)
Asset fee @ 1.05% rate ..................... (13,367) (30) (102,440) (152)
Asset fee @ 1.10% rate ..................... (51) -- (137) --
Asset fee @ 1.15% rate ..................... (15) -- (51) --
Asset fee @ 1.20% rate ..................... (13) -- (305) --
Asset fee @ 1.25% rate ..................... (15) -- (30) --
Asset fee @ 1.30% rate ..................... (6) -- (2) --
Asset fee @ 1.35% rate ..................... -- -- (5) --
------------ ------------ ------------ ------------
Net investment activity ...................... (104,007) 2,105 868,566 16,257
------------ ------------ ------------ ------------
Proceeds from mutual fund shares sold ......... 777,497 -- 3,532,880 53,202
Cost of mutual fund shares sold ............... (725,553) -- (3,554,666) (55,328)
------------ ------------ ------------ ------------
Realized gain (loss) on investments .......... 51,944 -- (21,786) (2,126)
Change in unrealized gain (loss) on investments 3,346,139 (3,707) 32,439,748 (10,549)
------------ ------------ ------------ ------------
Net gain (loss) on investments ............... 3,398,083 (3,707) 32,417,962 (12,675)
------------ ------------ ------------ ------------
Reinvested capital gains ...................... 1,392,227 20,741 435,046 83,330
------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 4,686,303 19,139 33,721,574 86,912
------------ ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 29,765,433 806,446 242,868,858 5,885,293
Transfers between funds ....................... 4,305,104 32,713 34,854,129 151,175
Redemptions ................................... (803,449) (1,570) (6,057,535) (3,783)
Contingent deferred sales charges (note 2) .... (4,582) -- (83,383) --
Adjustments to maintain reserves .............. 66 (4) 30,385 1,038
------------ ------------ ------------ ------------
Net equity transactions .................... 33,262,572 837,585 271,612,454 6,033,723
------------ ------------ ------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 37,948,875 856,724 305,334,028 6,120,635
Contract owners' equity beginning of period .... 856,724 -- 6,120,635 --
------------ ------------ ------------ ------------
Contract owners' equity end of period .......... $ 38,805,599 856,724 311,454,663 6,120,635
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
DryCapAp FidVIPEIS
--------------------------- -----------------------------
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... 296,317 4,948 217,564 --
Mortality and expense risk charges (note 2):
Asset fee @ 0.95% rate ..................... (111,207) (267) (505,712) (1,422)
Asset fee @ 1.00% rate ..................... (62,252) (133) (395,500) (815)
Asset fee @ 1.05% rate ..................... (17,737) (30) (90,638) (339)
Asset fee @ 1.10% rate ..................... (62) -- (58) --
Asset fee @ 1.15% rate ..................... (27) -- (7) --
Asset fee @ 1.20% rate ..................... (19) -- (41) --
Asset fee @ 1.25% rate ..................... -- -- (22) --
Asset fee @ 1.30% rate ..................... (4) -- (14) --
Asset fee @ 1.35% rate ..................... (4) -- -- --
------------ ------------ ------------ ------------
Net investment activity ...................... 105,005 4,518 (774,428) (2,576)
------------ ------------ ------------ ------------
Proceeds from mutual fund shares sold ......... 692,754 -- 628,613 72,868
Cost of mutual fund shares sold ............... (632,372) -- (599,673) (74,460)
------------ ------------ ------------ ------------
Realized gain (loss) on investments .......... 60,382 -- 28,940 (1,592)
Change in unrealized gain (loss) on investments 5,296,793 (1,557) 7,558,663 79,853
------------ ------------ ------------ ------------
Net gain (loss) on investments ............... 5,357,175 (1,557) 7,587,603 78,261
------------ ------------ ------------ ------------
Reinvested capital gains ...................... 1,464 414 774,271 --
------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 5,463,644 3,375 7,587,446 75,685
------------ ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 37,281,447 894,637 175,676,909 4,978,409
Transfers between funds ....................... 14,756,161 34,011 13,491,409 268,956
Redemptions ................................... (999,653) -- (5,441,684) (7,395)
Contingent deferred sales charges (note 2) .... (11,014) -- (54,879) --
Adjustments to maintain reserves .............. (10,617) (1) (2,947) 1,150
------------ ------------ ------------ ------------
Net equity transactions .................... 51,016,324 928,647 183,668,808 5,241,120
------------ ------------ ------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 56,479,968 932,022 191,256,254 5,316,805
Contract owners' equity beginning of period .... 932,022 -- 5,316,805 --
------------ ------------ ------------ ------------
Contract owners' equity end of period .......... 57,411,990 932,022 196,573,059 5,316,805
============ ============ ============ ============
</TABLE>
(Continued)
<PAGE> 6
NATIONWIDE VARIABLE ACCOUNT - 9
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
Year Ended December 31, 1998 and For the Period November 3, 1997
(commencement of operations) Through December 31, 1997
<TABLE>
<CAPTION>
FidVIPGrS FidVIPHIS
------------------------------ ------------------------------
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 27,645 -- 609,157 --
Mortality and expense risk charges (note 2):
Asset fee @ 0.95% rate ..................... (212,170) (572) (294,475) (1,047)
Asset fee @ 1.00% rate ..................... (166,839) (312) (193,581) (382)
Asset fee @ 1.05% rate ..................... (35,112) (72) (58,296) (139)
Asset fee @ 1.10% rate ..................... (51) -- (22) --
Asset fee @ 1.15% rate ..................... (10) -- (5) --
Asset fee @ 1.20% rate ..................... (99) -- (16) --
Asset fee @ 1.25% rate ..................... (6) -- -- --
Asset fee @ 1.30% rate ..................... (1) -- -- --
Asset fee @ 1.35% rate ..................... -- -- (4) --
------------- ------------- ------------- -------------
Net investment activity ...................... (386,643) (956) 62,758 (1,568)
------------- ------------- ------------- -------------
Proceeds from mutual fund shares sold ......... 1,691,790 24,231 5,911,230 --
Cost of mutual fund shares sold ............... (1,783,855) (24,000) (7,053,926) --
------------- ------------- ------------- -------------
Realized gain (loss) on investments .......... (92,065) 231 (1,142,696) --
Change in unrealized gain (loss) on investments 16,582,085 23,237 (5,732,014) 16,089
------------- ------------- ------------- -------------
Net gain (loss) on investments ............... 16,490,020 23,468 (6,874,710) 16,089
------------- ------------- ------------- -------------
Reinvested capital gains ...................... 723,135 -- 387,069 --
------------- ------------- ------------- -------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 16,826,512 22,512 (6,424,883) 14,521
------------- ------------- ------------- -------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 71,107,684 1,981,907 106,687,268 2,761,595
Transfers between funds ....................... 21,283,689 1,697 3,713,555 132,705
Redemptions ................................... (1,868,105) (577) (3,477,421) (954)
Contingent deferred sales charges (note 2) .... (25,533) -- (19,045) --
Adjustments to maintain reserves .............. 198 (111) (220) (1)
------------- ------------- ------------- -------------
Net equity transactions .................... 90,497,933 1,982,916 106,904,137 2,893,345
------------- ------------- ------------- -------------
NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 107,324,445 2,005,428 100,479,254 2,907,866
Contract owners' equity beginning of period .... 2,005,428 -- 2,907,866 --
------------- ------------- ------------- -------------
Contract owners' equity end of period .......... $ 109,329,873 2,005,428 103,387,120 2,907,866
============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
FidVIPOvS FidVIPConS
------------------------------ ------------------------------
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... 39,473 -- 56,795 --
Mortality and expense risk charges (note 2):
Asset fee @ 0.95% rate ..................... (70,614) (303) (299,506) (1,607)
Asset fee @ 1.00% rate ..................... (42,096) (95) (193,026) (564)
Asset fee @ 1.05% rate ..................... (13,142) (40) (37,910) (160)
Asset fee @ 1.10% rate ..................... -- -- (67) --
Asset fee @ 1.15% rate ..................... (2) -- (15) --
Asset fee @ 1.20% rate ..................... (32) -- (115) --
Asset fee @ 1.25% rate ..................... -- -- -- --
Asset fee @ 1.30% rate ..................... -- -- (2) --
Asset fee @ 1.35% rate ..................... -- -- -- --
------------- ------------- ------------- -------------
Net investment activity ...................... (86,413) (438) (473,846) (2,331)
------------- ------------- ------------- -------------
Proceeds from mutual fund shares sold ......... 4,459,537 5,931 389,637 --
Cost of mutual fund shares sold ............... (4,576,878) (5,843) (408,471) --
------------- ------------- ------------- -------------
Realized gain (loss) on investments .......... (117,341) 88 (18,834) --
Change in unrealized gain (loss) on investments 489,713 5,814 17,909,633 56,652
------------- ------------- ------------- -------------
Net gain (loss) on investments ............... 372,372 5,902 17,890,799 56,652
------------- ------------- ------------- -------------
Reinvested capital gains ...................... 116,340 -- 417,852 --
------------- ------------- ------------- -------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 402,299 5,464 17,834,805 54,321
------------- ------------- ------------- -------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 21,535,431 757,896 95,817,883 3,573,555
Transfers between funds ....................... 3,800,935 157,648 13,757,369 83,693
Redemptions ................................... (383,762) -- (2,362,374) (70)
Contingent deferred sales charges (note 2) .... (3,534) -- (32,976) --
Adjustments to maintain reserves .............. 163 (2) (59,196) 7
------------- ------------- ------------- -------------
Net equity transactions .................... 24,949,233 915,542 107,120,706 3,657,185
------------- ------------- ------------- -------------
NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 25,351,532 921,006 124,955,511 3,711,506
Contract owners' equity beginning of period .... 921,006 -- 3,711,506 --
------------- ------------- ------------- -------------
Contract owners' equity end of period .......... 26,272,538 921,006 128,667,017 3,711,506
============= ============= ============= =============
</TABLE>
<PAGE> 7
NATIONWIDE VARIABLE ACCOUNT - 9
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
Year Ended December 31, 1998 and For the Period November 3, 1997
(commencement of operations) Through December 31, 1997
<TABLE>
<CAPTION>
FidVIPGrOpS MSEmMkt
------------------------------ ------------------------------
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 67,013 -- 387,439 3,740
Mortality and expense risk charges (note 2):
Asset fee @ 0.95% rate ..................... (225,407) (596) (13,756) (54)
Asset fee @ 1.00% rate ..................... (198,453) (418) (5,701) (40)
Asset fee @ 1.05% rate ..................... (34,785) (123) (1,939) (16)
Asset fee @ 1.10% rate ..................... (23) -- -- --
Asset fee @ 1.15% rate ..................... -- -- -- --
Asset fee @ 1.20% rate ..................... (7) -- (8) --
Asset fee @ 1.25% rate ..................... -- -- (1) --
Asset fee @ 1.30% rate ..................... -- -- -- --
Asset fee @ 1.35% rate ..................... -- -- -- --
------------- ------------- ------------- -------------
Net investment activity ...................... (391,662) (1,137) 366,034 3,630
------------- ------------- ------------- -------------
Proceeds from mutual fund shares sold ......... 312,351 3 1,077,168 810
Cost of mutual fund shares sold ............... (318,329) (3) (1,547,782) (823)
------------- ------------- ------------- -------------
Realized gain (loss) on investments .......... (5,978) -- (470,614) (13)
Change in unrealized gain (loss) on investments 11,843,161 44,999 (967,487) (1,847)
------------- ------------- ------------- -------------
Net gain (loss) on investments ............... 11,837,183 44,999 (1,438,101) (1,860)
------------- ------------- ------------- -------------
Reinvested capital gains ...................... 232,948 -- -- 1,623
------------- ------------- ------------- -------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 11,678,469 43,862 (1,072,067) 3,393
------------- ------------- ------------- -------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 79,527,836 2,201,875 3,872,593 185,958
Transfers between funds ....................... 8,581,600 332,841 313,112 6,858
Redemptions ................................... (1,722,323) (304) (58,191) --
Contingent deferred sales charges (note 2) .... (20,999) -- (253) --
Adjustments to maintain reserves .............. (21,308) (4) (62) (1)
------------- ------------- ------------- -------------
Net equity transactions .................... 86,344,806 2,534,408 4,127,199 192,815
------------- ------------- ------------- -------------
NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 98,023,275 2,578,270 3,055,132 196,208
Contract owners' equity beginning of period .... 2,578,270 -- 196,208 --
------------- ------------- ------------- -------------
Contract owners' equity end of period .......... $ 100,601,545 2,578,270 3,251,340 196,208
============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
NSATBal NSATCapAp
------------------------------ ------------------------------
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... 683,468 3,951 750,851 5,462
Mortality and expense risk charges (note 2):
Asset fee @ 0.95% rate ..................... (90,403) (195) (465,341) (739)
Asset fee @ 1.00% rate ..................... (70,281) (154) (270,821) (447)
Asset fee @ 1.05% rate ..................... (15,676) (110) (52,969) (244)
Asset fee @ 1.10% rate ..................... (11) -- (81) --
Asset fee @ 1.15% rate ..................... (7) -- (20) --
Asset fee @ 1.20% rate ..................... (9) -- (17) --
Asset fee @ 1.25% rate ..................... -- -- -- --
Asset fee @ 1.30% rate ..................... (1) -- -- --
Asset fee @ 1.35% rate ..................... -- -- -- --
------------- ------------- ------------- -------------
Net investment activity ...................... 507,080 3,492 (38,398) 4,032
------------- ------------- ------------- -------------
Proceeds from mutual fund shares sold ......... 181,876 -- 2,717,344 --
Cost of mutual fund shares sold ............... (178,647) -- (2,728,836) --
------------- ------------- ------------- -------------
Realized gain (loss) on investments .......... 3,229 -- (11,492) --
Change in unrealized gain (loss) on investments 328,826 5,048 14,966,388 (9,492)
------------- ------------- ------------- -------------
Net gain (loss) on investments ............... 332,055 5,048 14,954,896 (9,492)
------------- ------------- ------------- -------------
Reinvested capital gains ...................... 115,971 -- 5,341,096 52,894
------------- ------------- ------------- -------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 955,106 8,540 20,257,594 47,434
------------- ------------- ------------- -------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 33,253,731 818,465 150,374,491 2,528,751
Transfers between funds ....................... 4,913,679 65,644 25,963,419 88,972
Redemptions ................................... (833,930) (90) (3,752,392) (3,756)
Contingent deferred sales charges (note 2) .... (8,225) -- (30,248) --
Adjustments to maintain reserves .............. 177 (26) 53,212 4
------------- ------------- ------------- -------------
Net equity transactions .................... 37,325,432 883,993 172,608,482 2,613,971
------------- ------------- ------------- -------------
NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 38,280,538 892,533 192,866,076 2,661,405
Contract owners' equity beginning of period .... 892,533 -- 2,661,405 --
------------- ------------- ------------- -------------
Contract owners' equity end of period .......... 39,173,071 892,533 195,527,481 2,661,405
============= ============= ============= =============
</TABLE>
(Continued)
<PAGE> 8
NATIONWIDE VARIABLE ACCOUNT - 9
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
Year Ended December 31, 1998 and For the Period November 3, 1997
(commencement of operations) Through December 31, 1997
<TABLE>
<CAPTION>
NSATEqinc NSATGlobEq
---------------------------- ----------------------------
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 75,504 989 141,975 871
Mortality and expense risk charges (note 2):
Asset fee @ 0.95% rate ..................... (34,439) (265) (39,570) (165)
Asset fee @ 1.00% rate ..................... (27,139) (116) (28,746) (116)
Asset fee @ 1.05% rate ..................... (5,129) (30) (8,199) (45)
Asset fee @ 1.10% rate ..................... -- -- (5) --
Asset fee @ 1.15% rate ..................... (1) -- -- --
Asset fee @ 1.20% rate ..................... (18) -- -- --
Asset fee @ 1.25% rate ..................... -- -- (2) --
Asset fee @ 1.30% rate ..................... -- -- -- --
Asset fee @ 1.35% rate ..................... -- -- -- --
------------ ------------ ------------ ------------
Net investment activity ...................... 8,778 578 65,453 545
------------ ------------ ------------ ------------
Proceeds from mutual fund shares sold ......... 376,534 2 685,356 --
Cost of mutual fund shares sold ............... (366,898) (3) (668,251) --
------------ ------------ ------------ ------------
Realized gain (loss) on investments .......... 9,636 (1) 17,105 --
Change in unrealized gain (loss) on investments 869,248 9,100 936,891 3,267
------------ ------------ ------------ ------------
Net gain (loss) on investments ............... 878,884 9,099 953,996 3,267
------------ ------------ ------------ ------------
Reinvested capital gains ...................... 137,183 -- 98,132 --
------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 1,024,845 9,677 1,117,581 3,812
------------ ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 10,836,292 524,315 12,466,313 505,387
Transfers between funds ....................... 736,897 58,870 1,290,714 4,389
Redemptions ................................... (392,814) (135) (359,325) --
Contingent deferred sales charges (note 2) .... (5,629) -- (2,129) --
Adjustments to maintain reserves .............. (359) 14 35 (105)
------------ ------------ ------------ ------------
Net equity transactions .................... 11,174,387 583,064 13,395,608 509,671
------------ ------------ ------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 12,199,232 592,741 14,513,189 513,483
Contract owners' equity beginning of period .... 592,741 -- 513,483 --
------------ ------------ ------------ ------------
Contract owners' equity end of period .......... $ 12,791,973 592,741 15,026,672 513,483
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
NSATGvtBd NSATHIncBd
---------------------------- ----------------------------
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... 4,068,221 46,514 1,175,418 9,587
Mortality and expense risk charges (note 2):
Asset fee @ 0.95% rate ..................... (325,601) (1,060) (70,627) (359)
Asset fee @ 1.00% rate ..................... (228,102) (369) (51,930) (153)
Asset fee @ 1.05% rate ..................... (64,068) (301) (17,784) (125)
Asset fee @ 1.10% rate ..................... (51) -- -- --
Asset fee @ 1.15% rate ..................... (13) -- -- --
Asset fee @ 1.20% rate ..................... (11) -- (14) --
Asset fee @ 1.25% rate ..................... (14) -- (1) --
Asset fee @ 1.30% rate ..................... (1) -- -- --
Asset fee @ 1.35% rate ..................... -- -- -- --
------------ ------------ ------------ ------------
Net investment activity ...................... 3,450,360 44,784 1,035,062 8,950
------------ ------------ ------------ ------------
Proceeds from mutual fund shares sold ......... 6,875,359 24,775 1,434,798 663
Cost of mutual fund shares sold ............... (6,712,656) (24,775) (1,454,954) (653)
------------ ------------ ------------ ------------
Realized gain (loss) on investments .......... 162,703 -- (20,156) 10
Change in unrealized gain (loss) on investments 96,330 (27,259) (637,940) (1,663)
------------ ------------ ------------ ------------
Net gain (loss) on investments ............... 259,033 (27,259) (658,096) (1,653)
------------ ------------ ------------ ------------
Reinvested capital gains ...................... 644,842 -- -- --
------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 4,354,235 17,525 376,966 7,297
------------ ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 135,535,861 3,147,571 26,481,762 762,946
Transfers between funds ....................... (2,966,402) 4,912 2,932,999 144,381
Redemptions ................................... (4,331,237) -- (701,614) (643)
Contingent deferred sales charges (note 2) .... (23,933) -- (4,542) --
Adjustments to maintain reserves .............. 1,128 1 (12) --
------------ ------------ ------------ ------------
Net equity transactions .................... 128,215,417 3,152,484 28,708,593 906,684
------------ ------------ ------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 132,569,652 3,170,009 29,085,559 913,981
Contract owners' equity beginning of period .... 3,170,009 -- 913,981 --
------------ ------------ ------------ ------------
Contract owners' equity end of period .......... 135,739,661 3,170,009 29,999,540 913,981
============ ============ ============ ============
</TABLE>
<PAGE> 9
NATIONWIDE VARIABLE ACCOUNT - 9
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
Year Ended December 31, 1998 and For the Period November 3, 1997
(commencement of operations) Through December 31, 1997
<TABLE>
<CAPTION>
NSATMyMkt NSATSecBd
------------------------------ ------------------------------
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 5,541,671 35,527 1,155,410 5,220
Mortality and expense risk charges (note 2):
Asset fee @ 0.95% rate ..................... (597,802) (4,055) (95,878) (353)
Asset fee @ 1.00% rate ..................... (367,633) (1,841) (61,058) (186)
Asset fee @ 1.05% rate ..................... (112,880) (1,142) (20,762) (71)
Asset fee @ 1.10% rate ..................... (56) -- (2) --
Asset fee @ 1.15% rate ..................... (1) -- -- --
Asset fee @ 1.20% rate ..................... (530) -- (20) --
Asset fee @ 1.25% rate ..................... -- -- (1) --
Asset fee @ 1.30% rate ..................... -- -- (1) --
Asset fee @ 1.35% rate ..................... (16) -- -- --
------------- ------------- ------------- -------------
Net investment activity ...................... 4,462,753 28,489 977,688 4,610
------------- ------------- ------------- -------------
Proceeds from mutual fund shares sold ......... 74,592,150 772,983 474,327 3
Cost of mutual fund shares sold ............... (74,592,150) (772,983) (482,830) (3)
------------- ------------- ------------- -------------
Realized gain (loss) on investments .......... -- -- (8,503) --
Change in unrealized gain (loss) on investments -- -- (757,239) (151)
------------- ------------- ------------- -------------
Net gain (loss) on investments ............... -- -- (765,742) (151)
------------- ------------- ------------- -------------
Reinvested capital gains ...................... -- -- 31,361 --
------------- ------------- ------------- -------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 4,462,753 28,489 243,307 4,459
------------- ------------- ------------- -------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 406,622,866 16,698,066 29,533,663 862,594
Transfers between funds ....................... (219,515,750) (3,252,991) 4,903,909 174,229
Redemptions ................................... (13,347,779) (289,851) (761,323) --
Contingent deferred sales charges (note 2) .... (133,217) (409) (7,092) --
Adjustments to maintain reserves .............. 36,549 2,636 78 14
------------- ------------- ------------- -------------
Net equity transactions .................... 173,662,669 13,157,451 33,669,235 1,036,837
------------- ------------- ------------- -------------
NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 178,125,422 13,185,940 33,912,542 1,041,296
Contract owners' equity beginning of period .... 13,185,940 -- 1,041,296 --
------------- ------------- ------------- -------------
Contract owners' equity end of period .......... $ 191,311,362 13,185,940 34,953,838 1,041,296
============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
NSATMidCap NSATSmCapV
------------------------------ ------------------------------
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... 40,624 535 -- 590
Mortality and expense risk charges (note 2):
Asset fee @ 0.95% rate ..................... (20,251) (37) (83,736) (376)
Asset fee @ 1.00% rate ..................... (14,445) (62) (45,868) (190)
Asset fee @ 1.05% rate ..................... (4,536) (22) (9,629) (37)
Asset fee @ 1.10% rate ..................... (9) -- (7) --
Asset fee @ 1.15% rate ..................... -- -- (4) --
Asset fee @ 1.20% rate ..................... -- -- (35) --
Asset fee @ 1.25% rate ..................... -- -- (2) --
Asset fee @ 1.30% rate ..................... -- -- -- --
Asset fee @ 1.35% rate ..................... -- -- -- --
------------- ------------- ------------- -------------
Net investment activity ...................... 1,383 414 (139,281) (13)
------------- ------------- ------------- -------------
Proceeds from mutual fund shares sold ......... 1,063,903 -- 2,135,282 --
Cost of mutual fund shares sold ............... (1,093,420) -- (2,330,458) --
------------- ------------- ------------- -------------
Realized gain (loss) on investments .......... (29,517) -- (195,176) --
Change in unrealized gain (loss) on investments 397,911 5,439 (40,635) 4,678
------------- ------------- ------------- -------------
Net gain (loss) on investments ............... 368,394 5,439 (235,811) 4,678
------------- ------------- ------------- -------------
Reinvested capital gains ...................... -- -- -- 4,611
------------- ------------- ------------- -------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 369,777 5,853 (375,092) 9,276
------------- ------------- ------------- -------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 6,187,234 205,427 24,448,985 1,082,589
Transfers between funds ....................... 558,871 20,348 5,269,520 65,401
Redemptions ................................... (98,756) (2,559) (761,878) --
Contingent deferred sales charges (note 2) .... (2,133) -- (10,195) --
Adjustments to maintain reserves .............. 6 (7) 49 (112)
------------- ------------- ------------- -------------
Net equity transactions .................... 6,645,222 223,209 28,946,481 1,147,878
------------- ------------- ------------- -------------
NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 7,014,999 229,062 28,571,389 1,157,154
Contract owners' equity beginning of period .... 229,062 -- 1,157,154 --
------------- ------------- ------------- -------------
Contract owners' equity end of period .......... 7,244,061 229,062 29,728,543 1,157,154
============= ============= ============= =============
</TABLE>
(Continued)
<PAGE> 10
NATIONWIDE VARIABLE ACCOUNT - 9
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
Year Ended December 31, 1998 and For the Period November 3, 1997
(commencement of operations) Through December 31, 1997
<TABLE>
<CAPTION>
NSATSmCo NSATStrGro
---------------------------- ----------------------------
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ -- -- -- 301
Mortality and expense risk charges (note 2):
Asset fee @ 0.95% rate ..................... (117,084) (473) (27,226) (83)
Asset fee @ 1.00% rate ..................... (81,828) (380) (13,699) (44)
Asset fee @ 1.05% rate ..................... (15,866) (83) (3,029) (23)
Asset fee @ 1.10% rate ..................... (7) -- (12) --
Asset fee @ 1.15% rate ..................... -- -- -- --
Asset fee @ 1.20% rate ..................... -- -- -- --
Asset fee @ 1.25% rate ..................... -- -- -- --
Asset fee @ 1.30% rate ..................... -- -- (1) --
Asset fee @ 1.35% rate ..................... -- -- -- --
------------ ------------ ------------ ------------
Net investment activity ...................... (214,785) (936) (43,967) 151
------------ ------------ ------------ ------------
Proceeds from mutual fund shares sold ......... 1,735,242 -- 487,613 1
Cost of mutual fund shares sold ............... (1,907,541) -- (466,818) (1)
------------ ------------ ------------ ------------
Realized gain (loss) on investments .......... (172,299) -- 20,795 --
Change in unrealized gain (loss) on investments 424,838 (20,889) 809,463 8,439
------------ ------------ ------------ ------------
Net gain (loss) on investments ............... 252,539 (20,889) 830,258 8,439
------------ ------------ ------------ ------------
Reinvested capital gains ...................... -- 39,296 -- --
------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 37,754 17,471 786,291 8,590
------------ ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 35,742,935 1,396,707 7,304,155 310,341
Transfers between funds ....................... 6,599,455 144,223 441,689 7,111
Redemptions ................................... (919,776) (19) (118,200) --
Contingent deferred sales charges (note 2) .... (7,264) -- (2,477) --
Adjustments to maintain reserves .............. 6 (67) (24) --
------------ ------------ ------------ ------------
Net equity transactions .................... 41,415,356 1,540,844 7,625,143 317,452
------------ ------------ ------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 41,453,110 1,558,315 8,411,434 326,042
Contract owners' equity beginning of period .... 1,558,315 -- 326,042 --
------------ ------------ ------------ ------------
Contract owners' equity end of period .......... $ 43,011,425 1,558,315 8,737,476 326,042
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
NSATStrVal NSATTotRe
---------------------------- ----------------------------
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... 63,791 542 1,708,752 15,396
Mortality and expense risk charges (note 2):
Asset fee @ 0.95% rate ..................... (41,771) (125) (790,615) (2,108)
Asset fee @ 1.00% rate ..................... (23,731) (66) (504,264) (945)
Asset fee @ 1.05% rate ..................... (7,171) (31) (88,737) (369)
Asset fee @ 1.10% rate ..................... (1) -- (65) --
Asset fee @ 1.15% rate ..................... -- -- (29) --
Asset fee @ 1.20% rate ..................... (9) -- (28) --
Asset fee @ 1.25% rate ..................... -- -- (9) --
Asset fee @ 1.30% rate ..................... -- -- (8) --
Asset fee @ 1.35% rate ..................... -- -- (4) --
------------ ------------ ------------ ------------
Net investment activity ...................... (8,892) 320 324,993 11,974
------------ ------------ ------------ ------------
Proceeds from mutual fund shares sold ......... 1,450,301 -- 467,344 --
Cost of mutual fund shares sold ............... (1,513,062) -- (439,529) --
------------ ------------ ------------ ------------
Realized gain (loss) on investments .......... (62,761) -- 27,815 --
Change in unrealized gain (loss) on investments (125,831) 4,042 4,936,630 (80,013)
------------ ------------ ------------ ------------
Net gain (loss) on investments ............... (188,592) 4,042 4,964,445 (80,013)
------------ ------------ ------------ ------------
Reinvested capital gains ...................... -- -- 11,040,291 175,028
------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... (197,484) 4,362 16,329,729 106,989
------------ ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 12,996,713 364,129 262,212,521 5,708,934
Transfers between funds ....................... 616,493 114,972 8,063,395 247,938
Redemptions ................................... (291,210) -- (6,698,439) (5,049)
Contingent deferred sales charges (note 2) .... (1,123) -- (83,262) --
Adjustments to maintain reserves .............. (115) -- (796) (666)
------------ ------------ ------------ ------------
Net equity transactions .................... 13,320,758 479,101 263,493,419 5,951,157
------------ ------------ ------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 13,123,274 483,463 279,823,148 6,058,146
Contract owners' equity beginning of period .... 483,463 -- 6,058,146 --
------------ ------------ ------------ ------------
Contract owners' equity end of period .......... 13,606,737 483,463 285,881,294 6,058,146
============ ============ ============ ============
</TABLE>
<PAGE> 11
NATIONWIDE VARIABLE ACCOUNT - 9
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
Year Ended December 31, 1998 and For the Period November 3, 1997
(commencement of operations) Through December 31, 1997
<TABLE>
<CAPTION>
NBAMTGuard NBAMTMCGr
---------------------------- ----------------------------
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 1,976 -- 2,804 --
Mortality and expense risk charges (note 2):
Asset fee @ 0.95% rate ..................... (72,339) (110) (60,842) (183)
Asset fee @ 1.00% rate ..................... (65,593) (158) (55,230) (427)
Asset fee @ 1.05% rate ..................... (12,071) (54) (11,986) (92)
Asset fee @ 1.10% rate ..................... (10) -- (1) --
Asset fee @ 1.15% rate ..................... -- -- -- --
Asset fee @ 1.20% rate ..................... -- -- (4) --
Asset fee @ 1.25% rate ..................... -- -- -- --
Asset fee @ 1.30% rate ..................... -- -- -- --
Asset fee @ 1.35% rate ..................... -- -- -- --
------------ ------------ ------------ ------------
Net investment activity ...................... (148,037) (322) (125,259) (702)
------------ ------------ ------------ ------------
Proceeds from mutual fund shares sold ......... 3,798,426 34 2,635,124 2
Cost of mutual fund shares sold ............... (3,492,087) (32) (2,223,804) (2)
------------ ------------ ------------ ------------
Realized gain (loss) on investments .......... 306,339 2 411,320 --
Change in unrealized gain (loss) on investments 594,984 11,793 4,390,487 73,651
------------ ------------ ------------ ------------
Net gain (loss) on investments ............... 901,323 11,795 4,801,807 73,651
------------ ------------ ------------ ------------
Reinvested capital gains ...................... -- -- 19,626 --
------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 753,286 11,473 4,696,174 72,949
------------ ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 24,467,744 399,649 18,933,486 1,023,027
Transfers between funds ....................... 7,388,132 51,821 3,753,367 488,359
Redemptions ................................... (704,350) -- (610,060) (3,016)
Contingent deferred sales charges (note 2) .... (8,663) -- (5,247) --
Adjustments to maintain reserves .............. (16) (876) 10,095 3
------------ ------------ ------------ ------------
Net equity transactions .................... 31,142,847 450,594 22,081,641 1,508,373
------------ ------------ ------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 31,896,133 462,067 26,777,815 1,581,322
Contract owners' equity beginning of period .... 462,067 -- 1,581,322 --
------------ ------------ ------------ ------------
Contract owners' equity end of period .......... $ 32,358,200 462,067 28,359,137 1,581,322
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
NBAMTPart OppAggGro
---------------------------- ----------------------------
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... 110,164 -- 9,456 --
Mortality and expense risk charges (note 2):
Asset fee @ 0.95% rate ..................... (403,079) (5,247) (66,368) (275)
Asset fee @ 1.00% rate ..................... (264,681) (1,929) (43,278) (120)
Asset fee @ 1.05% rate ..................... (43,176) (298) (9,592) (83)
Asset fee @ 1.10% rate ..................... (16) -- (7) --
Asset fee @ 1.15% rate ..................... (3) -- (2) --
Asset fee @ 1.20% rate ..................... (17) -- (26) --
Asset fee @ 1.25% rate ..................... (3) -- (5) --
Asset fee @ 1.30% rate ..................... -- -- (4) --
Asset fee @ 1.35% rate ..................... -- -- -- --
------------ ------------ ------------ ------------
Net investment activity ...................... (600,811) (7,474) (109,826) (478)
------------ ------------ ------------ ------------
Proceeds from mutual fund shares sold ......... 11,129,126 8,557 1,420,396 1,564
Cost of mutual fund shares sold ............... (12,460,209) (8,600) (1,460,125) (1,616)
------------ ------------ ------------ ------------
Realized gain (loss) on investments .......... (1,331,083) (43) (39,729) (52)
Change in unrealized gain (loss) on investments (3,000,603) 76,648 1,711,620 5,023
------------ ------------ ------------ ------------
Net gain (loss) on investments ............... (4,331,686) 76,605 1,671,891 4,971
------------ ------------ ------------ ------------
Reinvested capital gains ...................... 3,470,168 -- 97,107 --
------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... (1,462,329) 69,131 1,659,172 4,493
------------ ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 107,647,557 12,820,732 21,395,189 690,779
Transfers between funds ....................... (8,050,973) 483,875 4,014,156 25,316
Redemptions ................................... (2,536,518) (12,173) (398,429) (192)
Contingent deferred sales charges (note 2) .... (22,496) -- (3,886) --
Adjustments to maintain reserves .............. (1,292) 21 66 45
------------ ------------ ------------ ------------
Net equity transactions .................... 97,036,278 13,292,455 25,007,096 715,948
------------ ------------ ------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 95,573,949 13,361,586 26,666,268 720,441
Contract owners' equity beginning of period .... 13,361,586 -- 720,441 --
------------ ------------ ------------ ------------
Contract owners' equity end of period .......... 108,935,535 13,361,586 27,386,709 720,441
============ ============ ============ ============
</TABLE>
(Continued)
<PAGE> 12
NATIONWIDE VARIABLE ACCOUNT - 9
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
Year Ended December 31, 1998 and For the Period November 3, 1997
(commencement of operations) Through December 31, 1997
<TABLE>
<CAPTION>
OppGro OppGrInc
---------------------------- ----------------------------
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 37,971 -- 15,499 1,975
Mortality and expense risk charges (note 2):
Asset fee @ 0.95% rate ..................... (97,646) (182) (118,139) (341)
Asset fee @ 1.00% rate ..................... (61,251) (193) (87,278) (204)
Asset fee @ 1.05% rate ..................... (15,113) (94) (21,510) (129)
Asset fee @ 1.10% rate ..................... (5) -- (18) --
Asset fee @ 1.15% rate ..................... (2) -- (5) --
Asset fee @ 1.20% rate ..................... (6) -- (26) --
Asset fee @ 1.25% rate ..................... (6) -- -- --
Asset fee @ 1.30% rate ..................... (1) -- (4) --
Asset fee @ 1.35% rate ..................... -- -- -- --
------------ ------------ ------------ ------------
Net investment activity ...................... (136,059) (469) (211,481) 1,301
------------ ------------ ------------ ------------
Proceeds from mutual fund shares sold ......... 597,638 -- 1,051,542 8
Cost of mutual fund shares sold ............... (673,390) -- (1,137,377) (8)
------------ ------------ ------------ ------------
Realized gain (loss) on investments .......... (75,752) -- (85,835) --
Change in unrealized gain (loss) on investments 4,326,733 9,743 (156,268) 25,274
------------ ------------ ------------ ------------
Net gain (loss) on investments ............... 4,250,981 9,743 (242,103) 25,274
------------ ------------ ------------ ------------
Reinvested capital gains ...................... 458,139 -- 341,298 --
------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... 4,573,061 9,274 (112,286) 26,575
------------ ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 34,076,956 933,456 47,098,256 953,722
Transfers between funds ....................... 2,552,479 7,668 4,855,602 104,635
Redemptions ................................... (796,810) (27) (1,267,689) (199)
Contingent deferred sales charges (note 2) .... (15,293) -- (14,711) --
Adjustments to maintain reserves .............. (7) (138) 6 (358)
------------ ------------ ------------ ------------
Net equity transactions .................... 35,817,325 940,959 50,671,464 1,057,800
------------ ------------ ------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 40,390,386 950,233 50,559,178 1,084,375
Contract owners' equity beginning of period .... 950,233 -- 1,084,375 --
------------ ------------ ------------ ------------
Contract owners' equity end of period .......... $ 41,340,619 950,233 51,643,553 1,084,375
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
VEWrldEMkt VEWrldHAs
---------------------------- ----------------------------
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... 10,120 -- 2,513 --
Mortality and expense risk charges (note 2):
Asset fee @ 0.95% rate ..................... (15,766) (204) (8,058) (79)
Asset fee @ 1.00% rate ..................... (11,953) (380) (3,644) (15)
Asset fee @ 1.05% rate ..................... (2,830) (6) (1,503) (17)
Asset fee @ 1.10% rate ..................... -- -- (5) --
Asset fee @ 1.15% rate ..................... -- -- -- --
Asset fee @ 1.20% rate ..................... (14) -- -- --
Asset fee @ 1.25% rate ..................... -- -- -- --
Asset fee @ 1.30% rate ..................... -- -- -- --
Asset fee @ 1.35% rate ..................... -- -- -- --
------------ ------------ ------------ ------------
Net investment activity ...................... (20,443) (590) (10,697) (111)
------------ ------------ ------------ ------------
Proceeds from mutual fund shares sold ......... 1,437,687 505,309 1,320,656 --
Cost of mutual fund shares sold ............... (1,801,946) (492,562) (1,839,705) --
------------ ------------ ------------ ------------
Realized gain (loss) on investments .......... (364,259) 12,747 (519,049) --
Change in unrealized gain (loss) on investments (898,926) 4,143 (85,920) 3,319
------------ ------------ ------------ ------------
Net gain (loss) on investments ............... (1,263,185) 16,890 (604,969) 3,319
------------ ------------ ------------ ------------
Reinvested capital gains ...................... 8,995 -- 61,720 --
------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... (1,274,633) 16,300 (553,946) 3,208
------------ ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 5,631,777 1,193,031 2,371,551 178,412
Transfers between funds ....................... (119,473) (549,841) 111,448 38,553
Redemptions ................................... (159,609) (1,956) (100,995) --
Contingent deferred sales charges (note 2) .... (976) -- (454) --
Adjustments to maintain reserves .............. 120 2 (228) 6
------------ ------------ ------------ ------------
Net equity transactions .................... 5,351,839 641,236 2,381,322 216,971
------------ ------------ ------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 4,077,206 657,536 1,827,376 220,179
Contract owners' equity beginning of period .... 657,536 -- 220,179 --
------------ ------------ ------------ ------------
Contract owners' equity end of period .......... 4,734,742 657,536 2,047,555 220,179
============ ============ ============ ============
</TABLE>
<PAGE> 13
NATIONWIDE VARIABLE ACCOUNT - 9
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
Year Ended December 31, 1998 and For the Period November 3, 1997
(commencement of operations) Through December 31, 1997
<TABLE>
<CAPTION>
VKMSRESec WPGrinc
---------------------------- ----------------------------
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 10,631 19,701 108,063 1,508
Mortality and expense risk charges (note 2):
Asset fee @ 0.95% rate ..................... (67,026) (302) (39,367) (61)
Asset fee @ 1.00% rate ..................... (39,789) (166) (19,708) (130)
Asset fee @ 1.05% rate ..................... (7,635) (77) (6,454) (28)
Asset fee @ 1.10% rate ..................... (8) -- (2) --
Asset fee @ 1.15% rate ..................... (2) -- -- --
Asset fee @ 1.20% rate ..................... (26) -- -- --
Asset fee @ 1.25% rate ..................... -- -- (6) --
Asset fee @ 1.30% rate ..................... -- -- -- --
Asset fee @ 1.35% rate ..................... -- -- -- --
------------ ------------ ------------ ------------
Net investment activity ...................... (103,855) 19,156 42,526 1,289
------------ ------------ ------------ ------------
Proceeds from mutual fund shares sold ......... 1,342,798 -- 492,211 --
Cost of mutual fund shares sold ............... (1,619,581) -- (462,324) --
------------ ------------ ------------ ------------
Realized gain (loss) on investments .......... (276,783) -- 29,887 --
Change in unrealized gain (loss) on investments (1,172,272) (60,104) 416,403 6,055
------------ ------------ ------------ ------------
Net gain (loss) on investments ............... (1,449,055) (60,104) 446,290 6,055
------------ ------------ ------------ ------------
Reinvested capital gains ...................... 104,608 66,235 -- --
------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... (1,448,302) 25,287 488,816 7,344
------------ ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 17,955,980 917,137 11,279,862 402,032
Transfers between funds ....................... 861,422 117,890 1,072,048 25,646
Redemptions ................................... (416,792) -- (178,134) --
Contingent deferred sales charges (note 2) .... (1,112) -- (1,134) --
Adjustments to maintain reserves .............. (276) (46) (786) (2)
------------ ------------ ------------ ------------
Net equity transactions .................... 18,399,222 1,034,981 12,171,856 427,676
------------ ------------ ------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 16,950,920 1,060,268 12,660,672 435,020
Contract owners' equity beginning of period .... 1,060,268 -- 435,020 --
------------ ------------ ------------ ------------
Contract owners' equity end of period .......... $ 18,011,188 1,060,268 13,095,692 435,020
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
WPIntEq WPPVenCap
---------------------------- ----------------------------
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... 82,563 4,961 -- 16
Mortality and expense risk charges (note 2):
Asset fee @ 0.95% rate ..................... (53,651) (325) (17,995) (108)
Asset fee @ 1.00% rate ..................... (28,614) (112) (9,221) (177)
Asset fee @ 1.05% rate ..................... (7,209) (32) (3,019) (5)
Asset fee @ 1.10% rate ..................... -- -- -- --
Asset fee @ 1.15% rate ..................... -- -- -- --
Asset fee @ 1.20% rate ..................... -- -- -- --
Asset fee @ 1.25% rate ..................... -- -- (6) --
Asset fee @ 1.30% rate ..................... -- -- -- --
Asset fee @ 1.35% rate ..................... -- -- -- --
------------ ------------ ------------ ------------
Net investment activity ...................... (6,911) 4,492 (30,241) (274)
------------ ------------ ------------ ------------
Proceeds from mutual fund shares sold ......... 2,101,509 5,961 1,184,605 447,873
Cost of mutual fund shares sold ............... (2,099,792) (6,534) (1,319,705) (460,704)
------------ ------------ ------------ ------------
Realized gain (loss) on investments .......... 1,717 (573) (135,100) (12,831)
Change in unrealized gain (loss) on investments (655,153) (43,991) 268,939 2,023
------------ ------------ ------------ ------------
Net gain (loss) on investments ............... (653,436) (44,564) 133,839 (10,808)
------------ ------------ ------------ ------------
Reinvested capital gains ...................... -- 34,331 -- --
------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations ......... (660,347) (5,741) 103,598 (11,082)
------------ ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .............................. 14,240,840 838,600 5,338,928 584,670
Transfers between funds ....................... 1,644,029 (19,613) 1,058,670 (427,813)
Redemptions ................................... (211,060) -- (134,332) (3,302)
Contingent deferred sales charges (note 2) .... (2,448) -- (810) --
Adjustments to maintain reserves .............. (112) 11 15 --
------------ ------------ ------------ ------------
Net equity transactions .................... 15,671,249 818,998 6,262,471 153,555
------------ ------------ ------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY .......... 15,010,902 813,257 6,366,069 142,473
Contract owners' equity beginning of period .... 813,257 -- 142,473 --
------------ ------------ ------------ ------------
Contract owners' equity end of period .......... 15,824,159 813,257 6,508,542 142,473
============ ============ ============ ============
</TABLE>
See accompanying notes to financial statements.
<PAGE> 14
NATIONWIDE VARIABLE ACCOUNT-9
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Organization and Nature of Operations
The Nationwide Variable Account-9 (the Account) was established
pursuant to a resolution of the Board of Directors of Nationwide Life
Insurance Company (the Company) on May 22, 1997. The Account has been
registered as a unit investment trust under the Investment Company Act
of 1940.
The Company offers tax qualified and non-tax qualified Modified Single
Premium Deferred Variable Annuity Contracts through the Account. The
primary distribution for the contracts is through the brokerage
community; however, other distributors are utilized.
(b) The Contracts
Only contracts without a front-end sales charge, but with a contingent
deferred sales charge and certain other fees are offered for purchase.
See note 2 for a discussion of contract expenses.
With certain exceptions, contract owners in either the accumulation or
the payout phase may invest in the following:
Portfolios of the American Century Variable Portfolios, Inc.
(American Century VP);
American Century VP - American Century VP Income & Growth
(ACVPIncGr)
American Century VP - American Century VP International
(ACVPInt)
American Century VP - American Century VP Value (ACVPValue)
The Dreyfus Socially Responsible Growth Fund, Inc. (DrySRGro)
Dreyfus Stock Index Fund (DryStkIx)
Portfolio of the Dreyfus Variable Investment Fund (Dreyfus VIF);
Dreyfus VIF - Capital Appreciation Portfolio (DryCapAp)
Portfolios of the Fidelity Variable Insurance Products Fund
(Fidelity VIPS);
Fidelity VIP - Equity-Income Portfolio - Service Class
(FidVIPEIS)
Fidelity VIP - Growth Portfolio - Service Class (FidVIPGrS)
Fidelity VIP - High Income Portfolio - Service Class
(FidVIPHIS)
Fidelity VIP - Overseas Portfolio - Service Class (FidVIPOvS)
Portfolio of the Fidelity Variable Insurance Products Fund II
(Fidelity VIP-II);
Fidelity VIP-II - Contrafund Portfolio - Service Class
(FidVIPConS)
Portfolio of the Fidelity Variable Insurance Products Fund III
(Fidelity VIP-III);
Fidelity VIP-III - Growth Opportunities Portfolio - Service
Class (FidVIPGrOpS)
Portfolio of the Morgan Stanley Universal Funds, Inc. (Morgan
Stanley);
Morgan Stanley - Emerging Markets Debt Portfolio (MSEmMkt)
Funds of the Nationwide Separate Account Trust (Nationwide SAT)
(managed for a fee by an affiliated investment advisor);
Nationwide SAT - Balanced Fund (NSATBal)
Nationwide SAT - Capital Appreciation Fund (NSATCapAp)
Nationwide SAT - Equity Income Fund (NSATEqInc)
Nationwide SAT - Global Equity Fund (NSATGlobEq)
Nationwide SAT - Government Bond Fund (NSATGvtBd)
Nationwide SAT - High Income Bond Fund (NSATHIncBd)
Nationwide SAT - Money Market Fund (NSATMyMkt)
Nationwide SAT - Multi Sector Bond Fund (NSATMSecBd)
Nationwide SAT - Select Advisers Mid Cap Fund (NSATMidCap)
<PAGE> 15
Nationwide SAT - Small Cap Value Fund (NSATSmCapV)
Nationwide SAT - Small Company Fund (NSATSmCo)
Nationwide SAT - Strategic Growth Fund (NSATStrGro)
Nationwide SAT - Strategic Value Fund (NSATStrVal)
Nationwide SAT - Total Return Fund (NSATTotRe)
Portfolios of the Neuberger & Berman Advisers Management Trust
(Neuberger &Berman AMT);
Neuberger & Berman AMT - Guardian Portfolio (NBAMTGuard)
Neuberger & Berman AMT - Mid-Cap Growth Portfolio (NBAMTMCGr)
Neuberger & Berman AMT - Partners Portfolio (NBAMTPart)
Funds of the Oppenheimer Variable Account Funds (Oppenheimer VAF);
Oppenheimer VAF - Aggressive Growth Fund (OppAggGro)
(formerly Oppenheimer VAF - Capital Appreciation Fund)
Oppenheimer VAF - Growth Fund (OppGro)
Oppenheimer VAF - Growth & Income Fund (OppGrInc)
Funds of the Van Eck Worldwide Insurance Trust (Van Eck WIT);
Van Eck WIT - Worldwide Emerging Markets Fund (VEWrldEMkt)
Van Eck WIT - Worldwide Hard Assets Fund (VEWrldHAs)
Portfolio of the Van Kampen American Capital Life Investment Trust
(Van Kampen American Capital LIT);
Van Kampen American Capital LIT - Morgan Stanley Real Estate
Securities Portfolio (VKMSRESec)
Portfolios of the Warburg Pincus Trust;
Warburg Pincus Trust - Growth & Income Portfolio (WPGrInc)
Warburg Pincus Trust - International Equity Portfolio (WPIntEq)
Warburg Pincus Trust - Post Venture Capital Portfolio
(WPPVenCap)
At December 31, 1998, contract owners have invested in all of the above
funds. The contract owners' equity is affected by the investment
results of each fund, equity transactions by contract owners and
certain contract expenses (see note 2).
The accompanying financial statements include only contract owners'
purchase payments pertaining to the variable portions of their
contracts and exclude any purchase payments for fixed dollar benefits,
the latter being included in the accounts of the Company.
A contract owner may choose from among a number of different underlying
mutual fund options. The underlying mutual fund options are not
available to the general public directly. The underlying mutual funds
are available as investment options in variable life insurance policies
or variable annuity contracts issued by life insurance companies or, in
some cases, through participation in certain qualified pension or
retirement plans.
Some of the underlying mutual funds have been established by investment
advisers which manage publicly traded mutual funds having similar names
and investment objectives. While some of the underlying mutual funds
may be similar to, and may in fact be modeled after, publicly traded
mutual funds, the underlying mutual funds are not otherwise directly
related to any publicly traded mutual fund. Consequently, the
investment performance of publicly traded mutual funds and any
corresponding underlying mutual funds may differ substantially.
(c) Security Valuation, Transactions and Related Investment Income
The market value of the underlying mutual funds is based on the closing
net asset value per share at December 31, 1998. The cost of investments
sold is determined on the specific identification basis. Investment
transactions are accounted for on the trade date (date the order to buy
or sell is executed) and dividend income is recorded on the ex-dividend
date.
(d) Federal Income Taxes
Operations of the Account form a part of, and are taxed with,
operations of the Company which is taxed as a life insurance company
under the Internal Revenue Code.
The Company does not provide for income taxes within the Account. Taxes
are the responsibility of the contract owner upon termination or
withdrawal.
<PAGE> 16
(e) Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally
accepted accounting principles may require management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities, if
any, at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
(2) EXPENSES
(a) Sales Charges
The Company does not deduct a sales charge from purchase payments
received from the contract owners. However, if any part of the contract
value of such contracts is surrendered the Company will, with certain
exceptions, deduct from a contract owner's contract value a contingent
deferred sales charge not to exceed 7% of the lesser of purchase
payments or the amount surrendered, such charge declining 1% per year,
to 0% after the purchase payment has been held in the contract for 84
months. On NEA Valuebuilder Select Roth IRA and BOA V Roth IRA
contracts, for an additional charge of 0.15% of the daily net assets,
such charge will decline to 0%, after the purchases payment has been
held in the contract for 60 months.
For all contracts, except BOA Exclusive II, which have elected a death
benefit option at the time of application, the following long term care
facility provisions also apply. Beginning at the third contract
anniversary, surrender charges on withdrawals will not apply if a
contract owner is diagnosed with a terminal illness or has been
confined to a long term care facility or hospital for a continuous 90
day period which has commenced any time after the date of issue.
No sales charges are deducted on BOA Exclusive II contracts and no
sales charges are deducted on redemptions used to purchase units in the
fixed investment options of the Company.
(b) Mortality and Expense Risk Charges
The Company deducts a mortality and expense risk charge assessed
through the daily unit value calculation. Refer to the following table
to determine the mortality and risk expense associated with each of the
products offered in the Account:
<TABLE>
<CAPTION>
ASSET FEE RATE
-----------------------------------------------------------------------
0.95% 1.00% 1.05% 1.10% 1.15% 1.20% 1.25% 1.30% 1.35%
----- ----- ----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BOA Future/NEA Valuebuilder Future ....... X
Optional long term care facility
with a stepped up death benefit ................ X
Optional long term care facility
with a 5% enhanced death benefit ........................ X
BOA V/NEA Valuebuilder Select ..................................... X
Optional long term care facility
with a stepped up death benefit ......................................... X
Optional long term care facility
with a 5% enhanced death benefit ................................................ X
BOA Choice/BOA Vision II .......................................................... X
Optional long term care facility
with a 5% enhanced death benefit ......................................................... X
BOA Exclusive II .................................................................. X
Optional long term care facility
with a stepped up death benefit .................................................................. X
Optional long term care facility
with a 5% enhanced death benefit ........................................................................ X
</TABLE>
<PAGE> 17
(3) RELATED PARTY TRANSACTIONS
The Company performs various services on behalf of the Mutual Fund
Companies in which the Account invests and may receive fees for the
services performed. These services include, among other things, shareholder
communications, preparation, postage, fund transfer agency and various
other record keeping and customer service functions. These fees are paid to
an affiliate of the Company.
<PAGE> 18
(4) COMPONENTS OF CONTRACT OWNERS' EQUITY
The following is a summary of contract owners' equity at December 31, 1998.
<TABLE>
<CAPTION>
ANNUAL
Contract owners' equity represented by: UNITS UNIT VALUE RETURN(b)
--------- ----------- ---------
<S> <C> <C> <C> <C>
Contracts in accumulation phase:
Asset fee @ 0.95% rate:
American Century VP -
American Century VP Income & Growth:
Tax qualified ........................................ 954,865 $13.081019 $12,490,607 26%
Non-tax qualified .................................... 1,156,159 13.081019 15,123,738 26%
American Century VP -
American Century VP International:
Tax qualified ........................................ 1,231,761 11.866841 14,617,112 18%
Non-tax qualified .................................... 1,439,143 11.866841 17,078,081 18%
American Century VP -
American Century VP Value:
Tax qualified ........................................ 628,798 10.689857 6,721,761 4%
Non-tax qualified .................................... 591,188 10.689857 6,319,715 4%
The Dreyfus Socially Responsible
Growth Fund, Inc.:
Tax qualified ........................................ 897,734 13.034607 11,701,610 28%
Non-tax qualified .................................... 729,174 13.034607 9,504,497 28%
Dreyfus Stock Index Fund:
Tax qualified ........................................ 6,530,360 13.135997 85,782,789 27%
Non-tax qualified .................................... 6,930,101 13.135997 91,033,786 27%
Dreyfus VIF -
Capital Appreciation Portfolio:
Tax qualified ........................................ 994,159 13.220513 13,143,292 29%
Non-tax qualified .................................... 1,635,130 13.220513 21,617,257 29%
Fidelity VIP - Equity-Income Portfolio -
Service Class:
Tax qualified ........................................ 4,652,014 11.422130 53,135,909 10%
Non-tax qualified .................................... 4,431,491 11.422130 50,617,066 10%
Fidelity VIP - Growth Portfolio -
Service Class:
Tax qualified ........................................ 2,225,770 13.848033 30,822,536 38%
Non-tax qualified .................................... 1,962,518 13.848033 27,177,014 38%
Fidelity VIP - High Income Portfolio -
Service Class:
Tax qualified ........................................ 3,021,525 9.586675 28,966,378 (5)%
Non-tax qualified .................................... 3,109,107 9.586675 29,805,998 (5)%
Fidelity VIP - Overseas Portfolio -
Service Class:
Tax qualified ........................................ 630,058 11.047878 6,960,804 12%
Non-tax qualified .................................... 759,889 11.047878 8,395,161 12%
Fidelity VIP-II - Contrafund Portfolio -
Service Class:
Tax qualified ........................................ 2,868,661 12.812355 36,754,303 29%
Non-tax qualified .................................... 2,993,987 12.812355 38,360,024 29%
</TABLE>
<PAGE> 19
<TABLE>
<S> <C> <C> <C> <C>
Fidelity VIP-III - Growth Opportunities
Portfolio - Service Class:
Tax qualified ....................... 2,015,088 12.826216 25,845,954 23%
Non-tax qualified ................... 2,029,092 12.826216 26,025,572 23%
Morgan Stanley -
Emerging Markets Debt Portfolio:
Tax qualified ....................... 148,936 7.395794 1,101,500 (29)%
Non-tax qualified ................... 152,995 7.395794 1,131,520 (29)%
Nationwide SAT - Balanced Fund:
Tax qualified ....................... 1,042,085 10.844036 11,300,407 7%
Non-tax qualified ................... 927,751 10.844036 10,060,565 7%
Nationwide SAT -
Capital Appreciation Fund:
Tax qualified ....................... 4,235,753 13.369463 56,629,743 29%
Non-tax qualified ................... 4,697,136 13.369463 62,798,186 29%
Nationwide SAT - Equity Income Fund:
Tax qualified ....................... 237,366 11.588459 2,750,706 14%
Non-tax qualified ................... 340,149 11.588459 3,941,803 14%
Nationwide SAT - Global Equity Fund:
Tax qualified ....................... 296,907 11.921445 3,539,560 18%
Non-tax qualified ................... 382,578 11.921445 4,560,883 18%
Nationwide SAT - Government Bond Fund:
Tax qualified ....................... 3,607,650 10.941842 39,474,336 8%
Non-tax qualified ................... 3,232,045 10.941842 35,364,526 8%
Nationwide SAT - High Income Bond Fund:
Tax qualified ....................... 656,370 10.701912 7,024,414 5%
Non-tax qualified ................... 709,535 10.701912 7,593,381 5%
Nationwide SAT - Money Market Fund:
Tax qualified ....................... 4,931,150 10.504509 51,799,310 4%
Non-tax qualified ................... 5,513,782 10.504509 57,919,573 4%
Nationwide SAT - Multi Sector Bond Fund:
Tax qualified ....................... 915,760 10.252876 9,389,174 2%
Non-tax qualified ................... 934,096 10.252876 9,577,170 2%
Nationwide SAT -
Select Advisers Mid Cap Fund:
Tax qualified ....................... 171,632 10.919701 1,874,170 10%
Non-tax qualified ................... 185,246 10.919701 2,022,831 10%
Nationwide SAT - Small Cap Value Fund:
Tax qualified ....................... 930,565 9.432351 8,777,416 (4)%
Non-tax qualified ................... 1,021,664 9.432351 9,636,693 (4)%
Nationwide SAT - Small Company Fund:
Tax qualified ....................... 1,269,546 9.617964 12,210,448 0%
Non-tax qualified ................... 1,253,383 9.617964 12,054,993 0%
Nationwide SAT - Strategic Growth Fund:
Tax qualified ....................... 265,377 11.582258 3,073,665 14%
Non-tax qualified ................... 223,704 11.582258 2,590,997 14%
Nationwide SAT - Strategic Value Fund:
Tax qualified ....................... 345,847 10.090240 3,489,679 (1)%
Non-tax qualified ................... 505,486 10.090240 5,100,475 (1)%
</TABLE>
(Continued)
<PAGE> 20
<TABLE>
<S> <C> <C> <C> <C>
Nationwide SAT - Total Return Fund:
Tax qualified .................. 8,225,066 11.979444 98,531,718 17%
Non-tax qualified .............. 5,639,031 11.979444 67,552,456 17%
Neuberger & Berman AMT -
Guardian Portfolio:
Tax qualified .................. 578,032 13.699229 7,918,593 30%
Non-tax qualified .............. 609,746 13.699229 8,353,050 30%
Neuberger & Berman AMT -
Mid-Cap Growth Portfolio:
Tax qualified .................. 436,579 16.144809 7,048,485 38%
Non-tax qualified .............. 449,661 16.144809 7,259,691 38%
Neuberger & Berman AMT -
Partners Portfolio:
Tax qualified .................. 3,020,772 10.458607 31,593,067 3%
Non-tax qualified .............. 2,842,880 10.458607 29,732,565 3%
Oppenheimer VAF -
Aggressive Growth Fund:
Tax qualified .................. 787,398 10.609896 8,354,211 11%
Non-tax qualified .............. 753,325 10.609896 7,992,700 11%
Oppenheimer VAF - Growth Fund:
Tax qualified .................. 916,203 12.070167 11,058,723 23%
Non-tax qualified .............. 1,094,091 12.070167 13,205,861 23%
Oppenheimer VAF -
Growth & Income Fund:
Tax qualified .................. 1,242,544 10.639805 13,220,426 4%
Non-tax qualified .............. 1,352,028 10.639805 14,385,314 4%
Van Eck WIT -
Worldwide Emerging Markets Fund:
Tax qualified .................. 217,873 5.751082 1,253,005 (35)%
Non-tax qualified .............. 279,325 5.751082 1,606,421 (35)%
Van Eck WIT -
Worldwide Hard Assets Fund:
Tax qualified .................. 82,690 6.139717 507,693 (32)%
Non-tax qualified .............. 115,681 6.139717 710,249 (32)%
Van Kampen American Capital LIT -
Morgan Stanley Real Estate
Securities Portfolio:
Tax qualified .................. 646,017 9.050353 5,846,682 (12)%
Non-tax qualified .............. 606,338 9.050353 5,487,573 (12)%
Warburg Pincus Trust -
Growth & Income Portfolio:
Tax qualified .................. 373,962 11.521372 4,308,555 11%
Non-tax qualified .............. 328,455 11.521372 3,784,252 11%
Warburg Pincus Trust -
International Equity Portfolio:
Tax qualified .................. 479,917 9.865775 4,734,753 4%
Non-tax qualified .............. 496,472 9.865775 4,898,081 4%
Warburg Pincus Trust -
Post Venture Capital Portfolio:
Tax qualified .................. 192,595 10.394476 2,001,924 5%
Non-tax qualified .............. 209,056 10.394476 2,173,028 5%
</TABLE>
<PAGE> 21
Asset fee @ 1.00% rate:
<TABLE>
<S> <C> <C> <C> <C>
American Century VP -
American Century VP Income & Growth:
Tax qualified ....................... 583,554 13.073386 7,629,027 26%
Non-tax qualified ................... 612,111 13.073386 8,002,363 26%
American Century VP -
American Century VP International:
Tax qualified ....................... 667,671 11.859906 7,918,515 18%
Non-tax qualified ................... 795,739 11.859906 9,437,390 18%
American Century VP -
American Century VP Value:
Tax qualified ....................... 355,592 10.683601 3,799,003 4%
Non-tax qualified ................... 298,758 10.683601 3,191,811 4%
The Dreyfus Socially Responsible
Growth Fund, Inc.:
Tax qualified ....................... 570,245 13.026995 7,428,579 28%
Non-tax qualified ................... 538,134 13.026995 7,010,269 28%
Dreyfus Stock Index Fund:
Tax qualified ....................... 4,403,681 13.128325 57,812,955 27%
Non-tax qualified ................... 4,086,832 13.128325 53,653,259 27%
Dreyfus VIF -
Capital Appreciation Portfolio:
Tax qualified ....................... 620,733 13.212796 8,201,618 29%
Non-tax qualified ................... 689,993 13.212796 9,116,737 29%
Fidelity VIP - Equity-Income Portfolio -
Service Class:
Tax qualified ....................... 3,163,281 11.415454 36,110,289 10%
Non-tax qualified ................... 3,558,258 11.415454 40,619,131 10%
Fidelity VIP - Growth Portfolio -
Service Class:
Tax qualified ....................... 1,633,140 13.839948 22,602,573 38%
Non-tax qualified ................... 1,450,527 13.839948 20,075,218 38%
Fidelity VIP - High Income Portfolio -
Service Class:
Tax qualified ....................... 1,716,342 9.581067 16,444,388 (5)%
Non-tax qualified ................... 1,953,504 9.581067 18,716,653 (5)%
Fidelity VIP - Overseas Portfolio -
Service Class:
Tax qualified ....................... 390,759 11.041416 4,314,533 12%
Non-tax qualified ................... 364,389 11.041416 4,023,371 12%
Fidelity VIP-II - Contrafund Portfolio -
Service Class:
Tax qualified ....................... 1,744,153 12.804877 22,333,665 29%
Non-tax qualified ................... 1,750,402 12.804877 22,413,682 29%
Fidelity VIP-III - Growth Opportunities
Portfolio - Service Class:
Tax qualified ....................... 1,566,691 12.818700 20,082,942 23%
Non-tax qualified ................... 1,701,741 12.818700 21,814,107 23%
</TABLE>
(Continued)
<PAGE> 22
<TABLE>
<S> <C> <C> <C> <C>
Morgan Stanley -
Emerging Markets Debt Portfolio:
Tax qualified ....................... 50,958 7.391460 376,654 (29)%
Non-tax qualified ................... 56,822 7.391460 419,998 (29)%
Nationwide SAT - Balanced Fund:
Tax qualified ....................... 724,101 10.837697 7,847,587 7%
Non-tax qualified ................... 641,839 10.837697 6,956,057 7%
Nationwide SAT -
Capital Appreciation Fund:
Tax qualified ....................... 2,719,427 13.361662 36,336,064 29%
Non-tax qualified ................... 2,067,286 13.361662 27,622,377 29%
Nationwide SAT - Equity Income Fund:
Tax qualified ....................... 182,603 11.581699 2,114,853 14%
Non-tax qualified ................... 263,284 11.581699 3,049,276 14%
Nationwide SAT - Global Equity Fund:
Tax qualified ....................... 209,682 11.914478 2,498,252 18%
Non-tax qualified ................... 265,967 11.914478 3,168,858 18%
Nationwide SAT - Government Bond Fund:
Tax qualified ....................... 2,389,465 10.935440 26,129,851 8%
Non-tax qualified ................... 2,162,208 10.935440 23,644,696 8%
Nationwide SAT - High Income Bond Fund:
Tax qualified ....................... 563,880 10.695657 6,031,067 5%
Non-tax qualified ................... 507,316 10.695657 5,426,078 5%
Nationwide SAT - Money Market Fund:
Tax qualified ....................... 3,146,947 10.498325 33,037,672 4%
Non-tax qualified ................... 2,859,923 10.498325 30,024,401 4%
Nationwide SAT - Multi Sector Bond Fund:
Tax qualified ....................... 628,805 10.246882 6,443,291 2%
Non-tax qualified ................... 548,001 10.246882 5,615,302 2%
Nationwide SAT -
Select Advisers Mid Cap Fund:
Tax qualified ....................... 124,451 10.913315 1,358,173 10%
Non-tax qualified ................... 125,175 10.913315 1,366,074 10%
Nationwide SAT - Small Cap Value Fund:
Tax qualified ....................... 502,680 9.426837 4,738,682 (4)%
Non-tax qualified ................... 467,220 9.426837 4,404,407 (4)%
Nationwide SAT - Small Company Fund:
Tax qualified ....................... 832,015 9.612340 7,997,611 0%
Non-tax qualified ................... 830,194 9.612340 7,980,107 0%
Nationwide SAT - Strategic Growth Fund:
Tax qualified ....................... 105,819 11.575478 1,224,906 13%
Non-tax qualified ................... 115,940 11.575478 1,342,061 13%
Nationwide SAT - Strategic Value Fund:
Tax qualified ....................... 134,335 10.084334 1,354,679 (1)%
Non-tax qualified ................... 239,315 10.084334 2,413,332 (1)%
Nationwide SAT - Total Return Fund:
Tax qualified ....................... 4,784,644 11.972436 57,283,844 17%
Non-tax qualified ................... 3,784,283 11.972436 45,307,086 17%
</TABLE>
<PAGE> 23
<TABLE>
<S> <C> <C> <C> <C>
Neuberger & Berman AMT -
Guardian Portfolio:
Tax qualified ................ 519,550 13.691238 7,113,283 30%
Non-tax qualified ............ 425,826 13.691238 5,830,085 30%
Neuberger & Berman AMT -
Mid-Cap Growth Portfolio:
Tax qualified ................ 347,143 16.135377 5,601,283 38%
Non-tax qualified ............ 372,662 16.135377 6,013,042 38%
Neuberger & Berman AMT -
Partners Portfolio:
Tax qualified ................ 1,949,091 10.452498 20,372,870 3%
Non-tax qualified ............ 1,997,553 10.452498 20,879,419 3%
Oppenheimer VAF -
Aggressive Growth Fund:
Tax qualified ................ 395,607 10.603692 4,194,895 11%
Non-tax qualified ............ 446,338 10.603692 4,732,831 11%
Oppenheimer VAF - Growth Fund:
Tax qualified ................ 587,304 12.063121 7,084,719 23%
Non-tax qualified ............ 591,561 12.063121 7,136,072 23%
Oppenheimer VAF -
Growth & Income Fund:
Tax qualified ................ 825,742 10.633592 8,780,604 4%
Non-tax qualified ............ 1,013,404 10.633592 10,776,125 4%
Van Eck WIT -
Worldwide Emerging Markets Fund:
Tax qualified ................ 141,469 5.747723 813,125 (35)%
Non-tax qualified ............ 104,323 5.747723 599,620 (35)%
Van Eck WIT -
Worldwide Hard Assets Fund:
Tax qualified ................ 69,784 6.136113 428,203 (32)%
Non-tax qualified ............ 36,296 6.136113 222,716 (32)%
Van Kampen American Capital LIT -
Morgan Stanley Real Estate
Securities Portfolio:
Tax qualified ................ 372,172 9.045055 3,366,316 (13)%
Non-tax qualified ............ 250,104 9.045055 2,262,204 (13)%
Warburg Pincus Trust -
Growth & Income Portfolio:
Tax qualified ................ 150,366 11.514627 1,731,408 11%
Non-tax qualified ............ 193,659 11.514627 2,229,911 11%
Warburg Pincus Trust -
International Equity Portfolio:
Tax qualified ................ 216,678 9.860001 2,136,445 4%
Non-tax qualified ............ 284,936 9.860001 2,809,469 4%
Warburg Pincus Trust -
Post Venture Capital Portfolio:
Tax qualified ................ 92,766 10.388404 963,691 5%
Non-tax qualified ............ 59,430 10.388404 617,383 5%
</TABLE>
(Continued)
<PAGE> 24
Asset fee @ 1.05% rate:
<TABLE>
<S> <C> <C> <C> <C>
American Century VP -
American Century VP Income & Growth:
Tax qualified ....................... 81,928 13.065728 1,070,449 26%
Non-tax qualified ................... 128,629 13.065728 1,680,632 26%
American Century VP -
American Century VP International:
Tax qualified ....................... 99,298 11.852979 1,176,977 18%
Non-tax qualified ................... 165,809 11.852979 1,965,331 18%
American Century VP -
American Century VP Value:
Tax qualified ....................... 77,126 10.677353 823,502 4%
Non-tax qualified ................... 72,329 10.677353 772,282 4%
The Dreyfus Socially Responsible
Growth Fund, Inc.:
Tax qualified ....................... 89,640 13.019372 1,167,057 28%
Non-tax qualified ................... 135,100 13.019372 1,758,917 28%
Dreyfus Stock Index Fund:
Tax qualified ....................... 783,466 13.120640 10,279,575 27%
Non-tax qualified ................... 913,818 13.120640 11,989,877 27%
Dreyfus VIF -
Capital Appreciation Portfolio:
Tax qualified ....................... 131,684 13.205079 1,738,898 29%
Non-tax qualified ................... 246,123 13.205079 3,250,074 29%
Fidelity VIP - Equity-Income Portfolio -
Service Class:
Tax qualified ....................... 524,588 11.408770 5,984,904 10%
Non-tax qualified ................... 864,765 11.408770 9,865,905 10%
Fidelity VIP - Growth Portfolio -
Service Class:
Tax qualified ....................... 253,263 13.831860 3,503,098 38%
Non-tax qualified ................... 343,224 13.831860 4,747,426 38%
Fidelity VIP - High Income Portfolio -
Service Class:
Tax qualified ....................... 376,294 9.575458 3,603,187 (5)%
Non-tax qualified ................... 598,620 9.575458 5,732,061 (5)%
Fidelity VIP - Overseas Portfolio -
Service Class:
Tax qualified ....................... 91,010 11.034969 1,004,293 11%
Non-tax qualified ................... 137,943 11.034969 1,522,197 11%
Fidelity VIP-II - Contrafund Portfolio -
Service Class:
Tax qualified ....................... 214,618 12.797393 2,746,551 29%
Non-tax qualified ................... 446,178 12.797393 5,709,915 29%
Fidelity VIP-III - Growth Opportunities
Portfolio - Service Class:
Tax qualified ....................... 231,845 12.811215 2,970,216 23%
Non-tax qualified ................... 295,189 12.811215 3,781,730 23%
</TABLE>
<PAGE> 25
<TABLE>
<S> <C> <C> <C> <C>
Morgan Stanley -
Emerging Markets Debt Portfolio:
Tax qualified ....................... 9,703 7.387124 71,677 (29)%
Non-tax qualified ................... 19,124 7.387124 141,271 (29)%
Nationwide SAT - Balanced Fund:
Tax qualified ....................... 123,286 10.831355 1,335,354 7%
Non-tax qualified ................... 149,449 10.831355 1,618,735 7%
Nationwide SAT -
Capital Appreciation Fund:
Tax qualified ....................... 391,203 13.353842 5,224,063 29%
Non-tax qualified ................... 499,622 13.353842 6,671,873 29%
Nationwide SAT - Equity Income Fund:
Tax qualified ....................... 32,573 11.574924 377,030 14%
Non-tax qualified ................... 46,558 11.574924 538,905 14%
Nationwide SAT - Global Equity Fund:
Tax qualified ....................... 52,138 11.907510 620,834 18%
Non-tax qualified ................... 52,521 11.907510 625,394 18%
Nationwide SAT - Government Bond Fund:
Tax qualified ....................... 425,444 10.929045 4,649,697 8%
Non-tax qualified ................... 578,467 10.929045 6,322,092 8%
Nationwide SAT - High Income Bond Fund:
Tax qualified ....................... 168,923 10.689393 1,805,684 5%
Non-tax qualified ................... 196,834 10.689393 2,104,036 5%
Nationwide SAT - Money Market Fund:
Tax qualified ....................... 773,874 10.492136 8,119,591 4%
Non-tax qualified ................... 932,153 10.492136 9,780,276 4%
Nationwide SAT - Multi Sector Bond Fund:
Tax qualified ....................... 180,699 10.240891 1,850,519 2%
Non-tax qualified ................... 200,225 10.240891 2,050,482 2%
Nationwide SAT -
Select Advisers Mid Cap Fund:
Tax qualified ....................... 20,280 10.906928 221,192 10%
Non-tax qualified ................... 35,289 10.906928 384,895 10%
Nationwide SAT - Small Cap Value Fund:
Tax qualified ....................... 73,139 9.421309 689,065 (4)%
Non-tax qualified ................... 149,068 9.421309 1,404,416 (4)%
Nationwide SAT - Small Company Fund:
Tax qualified ....................... 103,212 9.606706 991,527 0%
Non-tax qualified ................... 182,983 9.606706 1,757,864 0%
Nationwide SAT - Strategic Growth Fund:
Tax qualified ....................... 28,004 11.568711 323,970 13%
Non-tax qualified ................... 14,539 11.568711 168,197 13%
Nationwide SAT - Strategic Value Fund:
Tax qualified ....................... 36,418 10.078441 367,037 (1)%
Non-tax qualified ................... 85,804 10.078441 864,771 (1)%
Nationwide SAT - Total Return Fund:
Tax qualified ....................... 705,982 11.965436 8,447,382 17%
Non-tax qualified ................... 695,165 11.965436 8,317,952 17%
</TABLE>
(Continued)
<PAGE> 26
<TABLE>
<S> <C> <C> <C> <C>
Neuberger & Berman AMT -
Guardian Portfolio:
Tax qualified ................ 66,839 13.683246 914,574 30%
Non-tax qualified ............ 161,709 13.683246 2,212,704 30%
Neuberger & Berman AMT -
Mid-Cap Growth Portfolio:
Tax qualified ................ 41,741 16.125954 673,113 38%
Non-tax qualified ............ 107,495 16.125954 1,733,459 38%
Neuberger & Berman AMT -
Partners Portfolio:
Tax qualified ................ 269,744 10.446379 2,817,848 3%
Non-tax qualified ............ 330,876 10.446379 3,456,456 3%
Oppenheimer VAF -
Aggressive Growth Fund:
Tax qualified ................ 75,188 10.597477 796,803 11%
Non-tax qualified ............ 118,302 10.597477 1,253,703 11%
Oppenheimer VAF - Growth Fund:
Tax qualified ................ 110,392 12.056049 1,330,891 23%
Non-tax qualified ............ 122,036 12.056049 1,471,272 23%
Oppenheimer VAF -
Growth & Income Fund:
Tax qualified ................ 155,966 10.627355 1,657,506 4%
Non-tax qualified ............ 254,947 10.627355 2,709,412 4%
Van Eck WIT -
Worldwide Emerging Markets Fund:
Tax qualified ................ 31,317 5.744349 179,896 (35)%
Non-tax qualified ............ 46,981 5.744349 269,875 (35)%
Van Eck WIT -
Worldwide Hard Assets Fund:
Tax qualified ................ 10,468 6.132522 64,195 (32)%
Non-tax qualified ............ 17,880 6.132522 109,649 (32)%
Van Kampen American Capital LIT -
Morgan Stanley Real Estate
Securities Portfolio:
Tax qualified ................ 40,468 9.039759 365,821 (13)%
Non-tax qualified ............ 71,613 9.039759 647,364 (13)%
Warburg Pincus Trust -
Growth & Income Portfolio:
Tax qualified ................ 18,436 11.507907 212,160 11%
Non-tax qualified ............ 71,280 11.507907 820,284 11%
Warburg Pincus Trust -
International Equity Portfolio:
Tax qualified ................ 43,919 9.854235 432,788 4%
Non-tax qualified ............ 82,462 9.854235 812,600 4%
Warburg Pincus Trust -
Post Venture Capital Portfolio:
Tax qualified ................ 32,373 10.382320 336,107 5%
Non-tax qualified ............ 39,431 10.382320 409,385 5%
</TABLE>
<PAGE> 27
Asset fee @ 1.10% rate:
<TABLE>
<S> <C> <C> <C> <C>
American Century VP -
American Century VP Income & Growth:
Tax qualified ....................... 7,515 12.515499 94,054 25%(a)
Non-tax qualified ................... 411 12.515499 5,144 25%(a)
American Century VP -
American Century VP International:
Non-tax qualified ................... 1,791 12.062037 21,603 21%(a)
American Century VP -
American Century VP Value:
Tax qualified ....................... 360 11.279817 4,061 13%(a)
The Dreyfus Socially Responsible
Growth Fund, Inc.:
Tax qualified ....................... 10,035 12.784895 128,296 28%(a)
Non-tax qualified ................... 706 12.784895 9,026 28%(a)
Dreyfus Stock Index Fund:
Tax qualified ....................... 29,563 12.464249 368,481 25%(a)
Non-tax qualified ................... 1,760 12.464249 21,937 25%(a)
Dreyfus VIF -
Capital Appreciation Portfolio:
Tax qualified ....................... 19,433 12.389971 240,774 24%(a)
Non-tax qualified ................... 366 12.389971 4,535 24%(a)
Fidelity VIP - Equity-Income Portfolio -
Service Class:
Tax qualified ....................... 8,946 11.809798 105,650 18%(a)
Non-tax qualified ................... 384 11.809798 4,535 18%(a)
Fidelity VIP - Growth Portfolio -
Service Class:
Tax qualified ....................... 17,524 12.914475 226,313 29%(a)
Non-tax qualified ................... 382 12.914475 4,933 29%(a)
Fidelity VIP - High Income Portfolio -
Service Class:
Tax qualified ....................... 7,652 10.530579 80,580 5%(a)
Non-tax qualified ................... 71 10.530579 748 5%(a)
Fidelity VIP - Overseas Portfolio -
Service Class:
Tax qualified ....................... 171 12.187321 2,084 22%(a)
Fidelity VIP-II - Contrafund Portfolio -
Service Class:
Tax qualified ....................... 12,351 12.797152 158,058 28%(a)
Non-tax qualified ................... 54 12.797152 691 28%(a)
Fidelity VIP-III - Growth Opportunities
Portfolio - Service Class:
Tax qualified ....................... 3,636 12.309512 44,757 23%(a)
Non-tax qualified ................... 534 12.309512 6,573 23%(a)
Morgan Stanley -
Emerging Markets Debt Portfolio:
Tax qualified ....................... 18 11.395495 205 14%(a)
Nationwide SAT - Balanced Fund:
Tax qualified ....................... 2,359 10.677473 25,188 7%(a)
</TABLE>
(Continued)
<PAGE> 28
<TABLE>
<S> <C> <C> <C> <C>
Nationwide SAT -
Capital Appreciation Fund:
Tax qualified ....................... 12,023 12.439602 149,561 24%(a)
Non-tax qualified ................... 1,118 12.439602 13,907 24%(a)
Nationwide SAT - Equity Income Fund:
Tax qualified ....................... 17 11.846282 201 18%(a)
Nationwide SAT - Global Equity Fund:
Tax qualified ....................... 586 12.212250 7,156 22%(a)
Non-tax qualified ................... 86 12.212250 1,050 22%(a)
Nationwide SAT - Government Bond Fund:
Tax qualified ....................... 9,774 9.853072 96,304 (1)%(a)
Non-tax qualified ................... 345 9.853072 3,399 (1)%(a)
Nationwide SAT - High Income Bond Fund:
Tax qualified ....................... 85 10.339812 879 3%(a)
Nationwide SAT - Money Market Fund:
Tax qualified ....................... 9,288 10.095781 93,770 1%(a)
Nationwide SAT - Multi Sector Bond Fund:
Tax qualified ....................... 338 10.245831 3,463 2%(a)
Nationwide SAT -
Select Advisers Mid Cap Fund:
Tax qualified ....................... 1,248 12.253848 15,293 23%(a)
Non-tax qualified ................... 36 12.253848 441 23%(a)
Nationwide SAT - Small Cap Value Fund:
Tax qualified ....................... 1,427 12.964349 18,500 30%(a)
Nationwide SAT - Small Company Fund:
Tax qualified ....................... 1,394 12.123056 16,900 21%(a)
Non-tax qualified ................... 89 12.123056 1,079 21%(a)
Nationwide SAT - Strategic Growth Fund:
Tax qualified ....................... 896 12.668723 11,351 27%(a)
Nationwide SAT - Strategic Value Fund:
Tax qualified ....................... 184 13.028676 2,397 30%(a)
Nationwide SAT - Total Return Fund:
Tax qualified ....................... 24,285 11.993303 291,257 20%(a)
Non-tax qualified ................... 1,477 11.993303 17,714 20%(a)
Neuberger & Berman AMT -
Guardian Portfolio:
Tax qualified ....................... 1,095 12.887023 14,111 29%(a)
Neuberger & Berman AMT -
Mid-Cap Growth Portfolio:
Tax qualified ....................... 318 14.077949 4,477 41%(a)
Neuberger & Berman AMT -
Partners Portfolio:
Tax qualified ....................... 2,949 11.858021 34,969 19%(a)
Oppenheimer VAF -
Aggressive Growth Fund:
Tax qualified ....................... 1,583 13.191805 20,883 32%(a)
Oppenheimer VAF - Growth Fund:
Tax qualified ....................... 591 13.244991 7,828 32%(a)
Non-tax qualified ................... 199 13.244991 2,636 32%(a)
</TABLE>
<PAGE> 29
<TABLE>
<S> <C> <C> <C> <C>
Oppenheimer VAF -
Growth & Income Fund:
Tax qualified ....................... 4,829 12.340636 59,593 23%(a)
Non-tax qualified ................... 274 12.340636 3,381 23%(a)
Van Eck WIT -
Worldwide Emerging Markets Fund:
Tax qualified ....................... 18 12.634284 227 26%(a)
Van Eck WIT -
Worldwide Hard Assets Fund:
Tax qualified ....................... 489 9.918535 4,850 (1)%(a)
Van Kampen American Capital LIT -
Morgan Stanley Real Estate
Securities Portfolio:
Tax qualified ....................... 883 10.411332 9,193 4%(a)
Warburg Pincus Trust -
Growth & Income Portfolio:
Tax qualified ....................... 252 11.896081 2,998 19%(a)
Warburg Pincus Trust -
International Equity Portfolio:
Tax qualified ....................... 2 11.551939 23 16%(a)
Warburg Pincus Trust -
Post Venture Capital Portfolio:
Tax qualified ....................... 61 12.839012 783 28%(a)
Asset fee @ 1.15% rate:
American Century VP -
American Century VP Income & Growth:
Tax qualified ....................... 1,887 12.513926 23,614 25%(a)
Non-tax qualified ................... 1,522 12.513926 19,046 25%(a)
American Century VP -
American Century VP International:
Tax qualified ....................... 1,080 12.060517 13,025 21%(a)
Non-tax qualified ................... 698 12.060517 8,418 21%(a)
American Century VP -
American Century VP Value:
Tax qualified ....................... 9 11.278389 102 13%(a)
The Dreyfus Socially Responsible
Growth Fund, Inc.:
Tax qualified ....................... 2,027 12.783289 25,912 28%(a)
Non-tax qualified ................... 662 12.783289 8,463 28%(a)
Dreyfus Stock Index Fund:
Tax qualified ....................... 6,396 12.462691 79,711 25%(a)
Non-tax qualified ................... 964 12.462691 12,014 25%(a)
Dreyfus VIF -
Capital Appreciation Portfolio:
Tax qualified ....................... 2,784 12.388419 34,489 24%(a)
Non-tax qualified ................... 1,343 12.388419 16,638 24%(a)
Fidelity VIP - Equity-Income Portfolio -
Service Class:
Tax qualified ....................... 1,580 11.808307 18,657 18%(a)
Non-tax qualified ................... 324 11.808307 3,826 18%(a)
</TABLE>
(Continued)
<PAGE> 30
<TABLE>
<S> <C> <C> <C> <C>
Fidelity VIP - Growth Portfolio -
Service Class:
Tax qualified ....................... 667 12.912859 8,613 29%(a)
Non-tax qualified ................... 670 12.912859 8,652 29%(a)
Fidelity VIP - High Income Portfolio -
Service Class:
Tax qualified ....................... 852 10.529250 8,971 5%(a)
Non-tax qualified ................... 168 10.529250 1,769 5%(a)
Fidelity VIP - Overseas Portfolio -
Service Class:
Tax qualified ....................... 221 12.185792 2,693 22%(a)
Fidelity VIP-II - Contrafund Portfolio -
Service Class:
Tax qualified ....................... 1,632 12.795546 20,882 28%(a)
Non-tax qualified ................... 887 12.795546 11,350 28%(a)
Fidelity VIP-III - Growth Opportunities
Portfolio - Service Class:
Tax qualified ....................... 52 12.307964 640 23%(a)
Nationwide SAT - Balanced Fund:
Tax qualified ....................... 798 10.676123 8,520 7%(a)
Nationwide SAT -
Capital Appreciation Fund:
Tax qualified ....................... 2,994 12.438039 37,239 24%(a)
Non-tax qualified ................... 573 12.438039 7,127 24%(a)
Nationwide SAT - Equity Income Fund:
Tax qualified ....................... 58 11.844786 687 18%(a)
Nationwide SAT - Global Equity Fund:
Tax qualified ....................... 97 12.210713 1,184 22%(a)
Nationwide SAT - Government Bond Fund:
Tax qualified ....................... 2,196 9.851828 21,635 (1)%(a)
Non-tax qualified ................... 346 9.851828 3,409 (1)%(a)
Nationwide SAT - High Income Bond Fund:
Tax qualified ....................... 2 10.338506 21 3%(a)
Nationwide SAT - Money Market Fund:
Tax qualified ....................... 99 10.094495 999 1%(a)
Nationwide SAT - Multi Sector Bond Fund:
Tax qualified ....................... 367 10.244538 3,760 2%(a)
Nationwide SAT -
Select Advisers Mid Cap Fund:
Tax qualified ....................... 81 12.252304 992 23%(a)
Nationwide SAT - Small Cap Value Fund:
Tax qualified ....................... 757 12.962717 9,813 30%(a)
Nationwide SAT - Small Company Fund:
Tax qualified ....................... 67 12.121529 812 21%(a)
Nationwide SAT - Strategic Growth Fund:
Tax qualified ....................... 52 12.667131 659 27%(a)
Nationwide SAT - Strategic Value Fund:
Tax qualified ....................... 283 13.027042 3,687 30%(a)
</TABLE>
<PAGE> 31
<TABLE>
<S> <C> <C> <C> <C>
Nationwide SAT - Total Return Fund:
Tax qualified ................... 4,692 11.991803 56,266 20%(a)
Non-tax qualified ............... 645 11.991803 7,735 20%(a)
Neuberger & Berman AMT -
Guardian Portfolio:
Tax qualified ................... 110 12.885403 1,417 29%(a)
Non-tax qualified ............... 2 12.885403 26 29%(a)
Neuberger & Berman AMT -
Mid-Cap Growth Portfolio:
Tax qualified ................... 120 14.076184 1,689 41%(a)
Neuberger & Berman AMT -
Partners Portfolio:
Tax qualified ................... 392 11.856528 4,648 19%(a)
Non-tax qualified ............... 110 11.856528 1,304 19%(a)
Oppenheimer VAF -
Aggressive Growth Fund:
Tax qualified ................... 461 13.190143 6,081 32%(a)
Oppenheimer VAF - Growth Fund:
Tax qualified ................... 206 13.243332 2,728 32%(a)
Oppenheimer VAF -
Growth & Income Fund:
Tax qualified ................... 1,075 12.339083 13,265 23%(a)
Van Eck WIT -
Worldwide Emerging Markets Fund:
Tax qualified ................... 20 12.632701 253 26%(a)
Van Kampen American Capital LIT -
Morgan Stanley Real Estate
Securities Portfolio:
Tax qualified ................... 227 10.410018 2,363 4%(a)
Asset fee @ 1.20% rate:
American Century VP -
American Century VP Income & Growth:
Tax qualified ................... 1,366 12.431326 16,981 24%(a)
Non-tax qualified ............... 1,176 12.431326 14,619 24%(a)
American Century VP -
American Century VP International:
Non-tax qualified ............... 223 10.904652 2,432 9%(a)
American Century VP -
American Century VP Value:
Tax qualified ................... 3 11.497731 34 15%(a)
Non-tax qualified ............... 1,306 11.497731 15,016 15%(a)
The Dreyfus Socially Responsible
Growth Fund, Inc.:
Tax qualified ................... 925 12.758878 11,802 28%(a)
Non-tax qualified ............... 2,098 12.758878 26,768 28%(a)
Dreyfus Stock Index Fund:
Tax qualified ................... 3,618 12.367188 44,744 24%(a)
Non-tax qualified ............... 26,086 12.367188 322,610 24%(a)
</TABLE>
(Continued)
<PAGE> 32
<TABLE>
<S> <C> <C> <C> <C>
Dreyfus VIF --
Capital Appreciation Portfolio:
Tax qualified ....................... 390 12.207586 4,761 22%(a)
Non-tax qualified ................... 2,910 12.207586 35,524 22%(a)
Fidelity VIP - Equity-Income Portfolio -
Service Class:
Tax qualified ....................... 3,974 11.850451 47,094 19%(a)
Non-tax qualified ................... 776 11.850451 9,196 19%(a)
Fidelity VIP - Growth Portfolio -
Service Class:
Tax qualified ....................... 10,429 13.015101 135,734 30%(a)
Fidelity VIP - High Income Portfolio -
Service Class:
Tax qualified ....................... 991 10.384114 10,291 4%(a)
Non-tax qualified ................... 1,251 10.384114 12,991 4%(a)
Fidelity VIP - Overseas Portfolio -
Service Class:
Tax qualified ....................... 3,385 11.296846 38,240 13%(a)
Non-tax qualified ................... 811 11.296846 9,162 13%(a)
Fidelity VIP-II - Contrafund Portfolio -
Service Class:
Tax qualified ....................... 1,641 12.602507 20,681 26%(a)
Non-tax qualified ................... 10,719 12.602507 135,086 26%(a)
Fidelity VIP-III - Growth Opportunities
Portfolio - Service Class:
Tax qualified ....................... 1 12.421717 12 24%(a)
Non-tax qualified ................... 2,338 12.421717 29,042 24%(a)
Morgan Stanley -
Emerging Markets Debt Portfolio:
Non-tax qualified ................... 593 11.400149 6,760 14%(a)
Nationwide SAT - Balanced Fund:
Tax qualified ....................... 2 10.772545 22 8%(a)
Non-tax qualified ................... 842 10.772545 9,070 8%(a)
Nationwide SAT -
Capital Appreciation Fund:
Tax qualified ....................... 35 12.392954 434 24%(a)
Non-tax qualified ................... 2,724 12.392954 33,758 24%(a)
Nationwide SAT - Equity Income Fund:
Non-tax qualified ................... 1,552 11.927845 18,512 19%(a)
Nationwide SAT - Government Bond Fund:
Tax qualified ....................... 10 10.174058 102 2%(a)
Non-tax qualified ................... 1,172 10.174058 11,924 2%(a)
Nationwide SAT - High Income Bond Fund:
Tax qualified ....................... 19 10.558563 201 6%(a)
Non-tax qualified ................... 1,154 10.558563 12,185 6%(a)
Nationwide SAT - Money Market Fund:
Non-tax qualified ................... 48,756 10.126097 493,708 1%(a)
Nationwide SAT - Multi Sector Bond Fund:
Non-tax qualified ................... 1,706 10.475252 17,871 5%(a)
</TABLE>
<PAGE> 33
<TABLE>
<S> <C> <C> <C> <C>
Nationwide SAT - Small Cap Value Fund:
Tax qualified ..................... 1,749 12.586199 22,013 26%(a)
Non-tax qualified ................. 1,878 12.586199 23,637 26%(a)
Nationwide SAT - Small Company Fund:
Tax qualified ..................... 3 12.016781 36 20%(a)
Nationwide SAT - Strategic Value Fund:
Tax qualified ..................... 853 12.477330 10,643 25%(a)
Nationwide SAT - Total Return Fund:
Tax qualified ..................... 335 11.968910 4,010 20%(a)
Non-tax qualified ................. 2,349 11.968910 28,115 20%(a)
Neuberger & Berman AMT -
Guardian Portfolio:
Tax qualified ..................... 29 12.307946 357 23%(a)
Neuberger & Berman AMT -
Mid-Cap Growth Portfolio:
Non-tax qualified ................. 1,744 13.702754 23,898 37%(a)
Neuberger & Berman AMT -
Partners Portfolio:
Tax qualified ..................... 874 11.821068 10,332 18%(a)
Non-tax qualified ................. 1,913 11.821068 22,614 18%(a)
Oppenheimer VAF -
Aggressive Growth Fund:
Tax qualified ..................... 47 12.961315 609 30%(a)
Non-tax qualified ................. 1,383 12.961315 17,925 30%(a)
Oppenheimer VAF - Growth Fund:
Tax qualified ..................... 1 12.752843 13 28%(a)
Non-tax qualified ................. 2,543 12.752843 32,430 28%(a)
Oppenheimer VAF -
Growth & Income Fund:
Tax qualified ..................... 806 12.149185 9,792 21%(a)
Non-tax qualified ................. 1,940 12.149185 23,569 21%(a)
Van Eck WIT -
Worldwide Emerging Markets Fund:
Non-tax qualified ................. 1,018 12.101814 12,320 21%(a)
Van Kampen American Capital LIT -
Morgan Stanley Real Estate
Securities Portfolio:
Tax qualified ..................... 3 10.740684 32 7%(a)
Non-tax qualified ................. 2,201 10.740684 23,640 7%(a)
Warburg Pincus Trust -
Growth & Income Portfolio:
Tax qualified ..................... 25 11.688738 292 17%(a)
Warburg Pincus Trust -
Post Venture Capital Portfolio:
Tax qualified ..................... 3 12.739606 38 27%(a)
</TABLE>
(Continued)
<PAGE> 34
<TABLE>
<S> <C> <C> <C> <C>
Asset fee @ 1.25% rate:
American Century VP --
American Century VP Value:
Non-tax qualified ................... 322 11.495807 3,702 15%(a)
The Dreyfus Socially Responsible
Growth Fund, Inc.:
Tax qualified ....................... 1,342 12.756741 17,120 28%(a)
Dreyfus Stock Index Fund:
Tax qualified ....................... 1,241 12.365124 15,345 24%(a)
Non-tax qualified ................... 1,686 12.365124 20,848 24%(a)
Fidelity VIP - Equity-Income Portfolio -
Service Class:
Tax qualified ....................... 739 11.848469 8,756 18%(a)
Non-tax qualified ................... 1,549 11.848469 18,353 18%(a)
Fidelity VIP - Growth Portfolio -
Service Class:
Tax qualified ....................... 41 13.012933 534 30%(a)
Non-tax qualified ................... 1,201 13.012933 15,629 30%(a)
Morgan Stanley -
Emerging Markets Debt Portfolio:
Tax qualified ....................... 154 11.398245 1,755 14%(a)
Nationwide SAT -
Capital Appreciation Fund:
Tax qualified ....................... 203 12.390885 2,515 24%(a)
Nationwide SAT - Global Equity Fund:
Tax qualified ....................... 155 11.745400 1,821 17%(a)
Non-tax qualified ................... 143 11.745400 1,680 17%(a)
Nationwide SAT - Government Bond Fund:
Tax qualified ....................... 997 10.172348 10,142 2%(a)
Non-tax qualified ................... 598 10.172348 6,083 2%(a)
Nationwide SAT - High Income Bond Fund:
Non-tax qualified ................... 151 10.556787 1,594 6%(a)
Nationwide SAT - Multi Sector Bond Fund:
Non-tax qualified ................... 153 10.473496 1,602 5%(a)
Nationwide SAT - Small Cap Value Fund:
Non-tax qualified ................... 310 12.584102 3,901 26%(a)
Nationwide SAT - Total Return Fund:
Tax qualified ....................... 1,038 11.966903 12,422 20%(a)
Non-tax qualified ................... 137 11.966903 1,639 20%(a)
Neuberger & Berman AMT -
Partners Portfolio:
Tax qualified ....................... 7 11.819096 83 18%(a)
Non-tax qualified ................... 789 11.819096 9,325 18%(a)
Oppenheimer VAF -
Aggressive Growth Fund:
Tax qualified ....................... 147 12.959156 1,905 30%(a)
Non-tax qualified ................... 678 12.959156 8,786 30%(a)
Oppenheimer VAF - Growth Fund:
Tax qualified ....................... 482 12.750719 6,146 28%(a)
</TABLE>
<PAGE> 35
<TABLE>
<S> <C> <C> <C> <C>
Oppenheimer VAF -
Growth & Income Fund:
Tax qualified ....................... 9 12.147153 109 21%(a)
Warburg Pincus Trust -
Growth & Income Portfolio:
Tax qualified ....................... 499 11.686779 5,832 17%(a)
Warburg Pincus Trust -
Post Venture Capital Portfolio:
Tax qualified ....................... 487 12.737475 6,203 27%(a)
Asset fee @ 1.30% rate:
The Dreyfus Socially Responsible
Growth Fund, Inc.:
Tax qualified ....................... 571 12.754610 7,283 28%(a)
Dreyfus Stock Index Fund:
Tax qualified ....................... 1,040 12.363055 12,858 24%(a)
Dreyfus VIF -
Capital Appreciation Portfolio:
Tax qualified ....................... 343 12.203505 4,186 22%(a)
Fidelity VIP - Equity-Income Portfolio -
Service Class:
Tax qualified ....................... 2,008 11.846486 23,788 18%(a)
Fidelity VIP - Growth Portfolio -
Service Class:
Tax qualified ....................... 123 13.010755 1,600 30%(a)
Fidelity VIP-II - Contrafund Portfolio -
Service Class:
Tax qualified ....................... 169 12.598299 2,129 26%(a)
Nationwide SAT - Balanced Fund:
Tax qualified ....................... 1,074 10.768931 11,566 8%(a)
Nationwide SAT - Government Bond Fund:
Tax qualified ....................... 144 10.170644 1,465 2%(a)
Nationwide SAT - Multi Sector Bond Fund:
Tax qualified ....................... 115 10.471735 1,204 5%(a)
Nationwide SAT - Small Company Fund:
Tax qualified ....................... 4 12.012761 48 20%(a)
Nationwide SAT - Strategic Growth Fund:
Tax qualified ....................... 134 12.459415 1,670 25%(a)
Nationwide SAT - Strategic Value Fund:
Tax qualified ....................... 3 12.473162 37 25%(a)
Nationwide SAT - Total Return Fund:
Tax qualified ....................... 1,548 11.964909 18,522 20%(a)
Neuberger & Berman AMT -
Partners Portfolio:
Tax qualified ....................... 3 11.817120 35 18%(a)
Oppenheimer VAF -
Aggressive Growth Fund:
Tax qualified ....................... 415 12.956986 5,377 30%(a)
</TABLE>
(Continued)
<PAGE> 36
<TABLE>
<S> <C> <C> <C> <C>
Oppenheimer VAF - Growth Fund:
Tax qualified ..................... 102 12.748581 1,300 27%(a)
Oppenheimer VAF -
Growth & Income Fund:
Tax qualified ..................... 367 12.145122 4,457 21%(a)
Asset fee @ 1.35% rate:
American Century VP -
American Century VP International:
Tax qualified ..................... 272 12.054452 3,279 21%(a)
Dreyfus Stock Index Fund:
Tax qualified ..................... 311 12.456413 3,874 25%(a)
Dreyfus VIF -
Capital Appreciation Portfolio:
Tax qualified ..................... 259 12.382184 3,207 24%(a)
Fidelity VIP - High Income Portfolio -
Service Class:
Tax qualified ..................... 295 10.523939 3,105 5%(a)
Nationwide SAT -
Capital Appreciation Fund:
Tax qualified ..................... 51 12.431774 634 24%(a)
Nationwide SAT - Money Market Fund:
Tax qualified ..................... 4,169 10.089342 42,062 1%(a)
Nationwide SAT - Total Return Fund:
Tax qualified ..................... 265 11.985762 3,176 20%(a)
===== =========
$2,588,796,935
==============
</TABLE>
(a) This investment option was not being utilized for the entire period.
Accordingly, the annual return was computed for such period as the
investment option was utilized.
(b) The annual return does not include contract charges satisfied by
surrendering units.
<PAGE> 80
<PAGE> 1
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Nationwide Life Insurance Company:
We have audited the accompanying consolidated balance sheets of Nationwide Life
Insurance Company and subsidiaries (collectively the Company), a wholly owned
subsidiary of Nationwide Financial Services, Inc., as of December 31, 1998 and
1997, and the related consolidated statements of income, shareholder's equity
and cash flows for each of the years in the three-year period ended December 31,
1998. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Nationwide Life
Insurance Company and subsidiaries as of December 31, 1998 and 1997, and the
results of their operations and their cash flows for each of the years in the
three-year period ended December 31, 1998, in conformity with generally accepted
accounting principles.
KPMG LLP
Columbus, Ohio
January 29, 1999
<PAGE> 2
<TABLE>
<CAPTION>
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Consolidated Balance Sheets
(in millions of dollars, except per share amounts)
December 31,
-----------------------
Assets 1998 1997
------ --------- ---------
<S> <C> <C>
Investments:
Securities available-for-sale, at fair value:
Fixed maturity securities $14,245.1 $13,204.1
Equity securities 127.2 80.4
Mortgage loans on real estate, net 5,328.4 5,181.6
Real estate, net 243.6 311.4
Policy loans 464.3 415.3
Other long-term investments 44.0 25.2
Short-term investments 289.1 358.4
--------- ---------
20,741.7 19,576.4
--------- ---------
Cash 3.4 175.6
Accrued investment income 218.7 210.5
Deferred policy acquisition costs 2,022.2 1,665.4
Other assets 420.3 438.4
Assets held in separate accounts 50,935.8 37,724.4
--------- ---------
$74,342.1 $59,790.7
========= =========
Liabilities and Shareholder's Equity
------------------------------------
Future policy benefits and claims $19,767.1 $18,702.8
Other liabilities 866.1 885.6
Liabilities related to separate accounts 50,935.8 37,724.4
--------- ---------
71,569.0 57,312.8
--------- ---------
Commitments and contingencies (notes 7 and 12)
Shareholder's equity:
Common stock, $1 par value. Authorized 5.0 million shares;
3.8 million shares issued and outstanding 3.8 3.8
Additional paid-in capital 914.7 914.7
Retained earnings 1,579.0 1,312.3
Accumulated other comprehensive income 275.6 247.1
--------- ---------
2,773.1 2,477.9
--------- ---------
$74,342.1 $59,790.7
========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 3
<TABLE>
<CAPTION>
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Consolidated Statements of Income
(in millions of dollars)
Years ended December 31,
-----------------------------------
1998 1997 1996
-------- -------- ---------
<S> <C> <C> <C>
Revenues:
Policy charges $ 698.9 $ 545.2 $ 400.9
Life insurance premiums 200.0 205.4 198.6
Net investment income 1,481.6 1,409.2 1,357.8
Realized gains (losses) on investments 28.4 11.1 (0.3)
Other 66.8 46.5 35.9
-------- -------- --------
2,475.7 2,217.4 1,992.9
-------- -------- --------
Benefits and expenses:
Interest credited to policyholder account balances 1,069.0 1,016.6 982.3
Other benefits and claims 175.8 178.2 178.3
Policyholder dividends on participating policies 39.6 40.6 41.0
Amortization of deferred policy acquisition costs 214.5 167.2 133.4
Other operating expenses 419.7 384.9 342.4
-------- -------- --------
1,918.6 1,787.5 1,677.4
-------- -------- --------
Income from continuing operations before federal income tax expense 557.1 429.9 315.5
Federal income tax expense 190.4 150.2 110.9
-------- -------- --------
Income from continuing operations 366.7 279.7 204.6
Income from discontinued operations (less federal income tax expense
of $4.5 in 1996) -- -- 11.3
-------- -------- --------
Net income $ 366.7 $ 279.7 $ 215.9
======== ======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 4
<TABLE>
<CAPTION>
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Consolidated Statements of Shareholder's Equity
Years ended December 31, 1998, 1997 and 1996
(in millions of dollars)
Accumulated
Additional other Total
Common paid-in Retained comprehensive shareholder's
stock capital earnings income equity
----- ------- -------- ------ ------
<S> <C> <C> <C> <C> <C>
December 31, 1995 $ 3.8 $ 657.2 $1,583.2 $ 384.3 $2,628.5
Comprehensive income:
Net income -- -- 215.9 -- 215.9
Net unrealized losses on securities
available-for-sale arising during
the year -- -- -- (170.9) (170.9)
--------
Total comprehensive income 45.0
--------
Dividends to shareholder -- (129.3) (366.5) (39.8) (535.6)
------ ------- -------- ------- --------
December 31, 1996 3.8 527.9 1,432.6 173.6 2,137.9
Comprehensive income:
Net income -- -- 279.7 -- 279.7
Net unrealized gains on securities
available-for-sale arising during
the year -- -- -- 73.5 73.5
--------
Total comprehensive income 353.2
--------
Capital contribution -- 836.8 -- -- 836.8
Dividend to shareholder -- (450.0) (400.0) -- (850.0)
------ ------- -------- ------- --------
December 31, 1997 3.8 914.7 1,312.3 247.1 2,477.9
Comprehensive income:
Net income -- -- 366.7 -- 366.7
Net unrealized gains on securities
available-for-sale arising during
the year -- -- -- 28.5 28.5
--------
Total comprehensive income 395.2
--------
Dividend to shareholder -- -- (100.0) -- (100.0)
------ ------- -------- ------- --------
December 31, 1998 $ 3.8 $ 914.7 $1,579.0 $ 275.6 $2,773.1
====== ======= ======== ======= ========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 5
<TABLE>
<CAPTION>
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Consolidated Statements of Cash Flows
(in millions of dollars)
Years ended December 31,
---------------------------------------
1998 1997 1996
--------- --------- ---------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 366.7 $ 279.7 $ 215.9
Adjustments to reconcile net income to net cash provided by operating
activities:
Interest credited to policyholder account balances 1,069.0 1,016.6 982.3
Capitalization of deferred policy acquisition costs (584.2) (487.9) (422.6)
Amortization of deferred policy acquisition costs 214.5 167.2 133.4
Amortization and depreciation (8.5) (2.0) 7.0
Realized gains on invested assets, net (28.4) (11.1) (0.3)
(Increase) decrease in accrued investment income (8.2) (0.3) 2.8
(Increase) decrease in other assets 16.4 (12.7) (38.9)
Decrease in policy liabilities (8.3) (23.1) (151.0)
(Decrease) increase in other liabilities (34.8) 230.6 191.4
Other, net (11.3) (10.9) (61.7)
--------- --------- ---------
Net cash provided by operating activities 982.9 1,146.1 858.3
--------- --------- ---------
Cash flows from investing activities:
Proceeds from maturity of securities available-for-sale 1,557.0 993.4 1,162.8
Proceeds from sale of securities available-for-sale 610.5 574.5 299.6
Proceeds from repayments of mortgage loans on real estate 678.2 437.3 309.0
Proceeds from sale of real estate 103.8 34.8 18.5
Proceeds from repayments of policy loans and sale of other invested assets 23.6 22.7 22.8
Cost of securities available-for-sale acquired (3,182.8) (2,828.1) (1,573.6)
Cost of mortgage loans on real estate acquired (829.1) (752.2) (972.8)
Cost of real estate acquired (0.8) (24.9) (7.9)
Policy loans issued and other invested assets acquired (88.4) (62.5) (57.7)
Short-term investments, net 69.3 (354.8) 28.0
--------- --------- ---------
Net cash used in investing activities (1,058.7) (1,959.8) (771.3)
--------- --------- ---------
Cash flows from financing activities:
Proceeds from capital contributions -- 836.8 --
Cash dividends paid (100.0) -- (50.0)
Increase in investment product and universal life insurance
product account balances 2,682.1 2,488.5 1,781.8
Decrease in investment product and universal life insurance
product account balances (2,678.5) (2,379.8) (1,784.5)
--------- --------- ---------
Net cash (used in) provided by financing activities (96.4) 945.5 (52.7)
--------- --------- ---------
Net (decrease) increase in cash (172.2) 131.8 34.3
Cash, beginning of year 175.6 43.8 9.5
--------- --------- ---------
Cash, end of year $ 3.4 $ 175.6 $ 43.8
========= ========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 6
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Notes to Consolidated Financial Statements
December 31, 1998, 1997 and 1996
(1) Organization and Description of Business
----------------------------------------
Prior to January 27, 1997, Nationwide Life Insurance Company (NLIC) was
wholly owned by Nationwide Corporation (Nationwide Corp.). On that
date, Nationwide Corp. contributed the outstanding shares of NLIC's
common stock to Nationwide Financial Services, Inc. (NFS), a holding
company formed by Nationwide Corp. in November 1996 for NLIC and the
other companies within the Nationwide Insurance Enterprise that offer
or distribute long-term savings and retirement products. On March 11,
1997, NFS completed an initial public offering of its Class A common
stock.
During 1996 and 1997, Nationwide Corp. and NFS completed certain
transactions in anticipation of the initial public offering that
focused the business of NFS on long-term savings and retirement
products. On September 24, 1996, NLIC declared a dividend payable to
Nationwide Corp. on January 1, 1997 consisting of the outstanding
shares of common stock of certain subsidiaries that do not offer or
distribute long-term savings or retirement products. In addition,
during 1996, NLIC entered into two reinsurance agreements whereby all
of NLIC's accident and health and group life insurance business was
ceded to two affiliates effective January 1, 1996. These subsidiaries,
through December 31, 1996, and all accident and health and group life
insurance business have been accounted for as discontinued operations
for all periods presented. See notes 10 and 14. Additionally, NLIC paid
$900.0 million of dividends, $50.0 million to Nationwide Corp. on
December 31, 1996 and $850.0 million to NFS, which then made an
equivalent dividend to Nationwide Corp., on February 24, 1997.
NFS contributed $836.8 million to the capital of NLIC during March
1997.
Wholly owned subsidiaries of NLIC include Nationwide Life and Annuity
Insurance Company (NLAIC), Nationwide Advisory Services, Inc.,
Nationwide Investment Services Corporation and NWE, Inc. NLIC and its
subsidiaries are collectively referred to as "the Company."
The Company is a leading provider of long-term savings and retirement
products, including variable annuities, fixed annuities and life
insurance.
(2) Summary of Significant Accounting Policies
------------------------------------------
The significant accounting policies followed by the Company that
materially affect financial reporting are summarized below. The
accompanying consolidated financial statements have been prepared in
accordance with generally accepted accounting principles, which differ
from statutory accounting practices prescribed or permitted by
regulatory authorities. Annual Statements for NLIC and NLAIC, filed
with the Department of Insurance of the State of Ohio (the Department),
are prepared on the basis of accounting practices prescribed or
permitted by the Department. Prescribed statutory accounting practices
include a variety of publications of the National Association of
Insurance Commissioners (NAIC), as well as state laws, regulations and
general administrative rules. Permitted statutory accounting practices
encompass all accounting practices not so prescribed. The Company has
no material permitted statutory accounting practices.
<PAGE> 7
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Notes to Consolidated Financial Statements, Continued
In preparing the consolidated financial statements, management is
required to make estimates and assumptions that affect the reported
amounts of assets and liabilities and the disclosures of contingent
assets and liabilities as of the date of the consolidated financial
statements and the reported amounts of revenues and expenses for the
reporting period. Actual results could differ significantly from those
estimates.
The most significant estimates include those used in determining
deferred policy acquisition costs, valuation allowances for mortgage
loans on real estate and real estate investments and the liability for
future policy benefits and claims. Although some variability is
inherent in these estimates, management believes the amounts provided
are adequate.
(a) Consolidation Policy
--------------------
The consolidated financial statements include the accounts of NLIC
and its wholly owned subsidiaries. Operations that are classified
and reported as discontinued operations are not consolidated but
rather are reported as "Income from discontinued operations" in
the accompanying consolidated statements of income. All
significant intercompany balances and transactions have been
eliminated.
(b) Valuation of Investments and Related Gains and Losses
-----------------------------------------------------
The Company is required to classify its fixed maturity securities
and equity securities as either held-to-maturity,
available-for-sale or trading. Fixed maturity securities are
classified as held-to-maturity when the Company has the positive
intent and ability to hold the securities to maturity and are
stated at amortized cost. Fixed maturity securities not classified
as held-to-maturity and all equity securities are classified as
available-for-sale and are stated at fair value, with the
unrealized gains and losses, net of adjustments to deferred policy
acquisition costs and deferred federal income tax, reported as a
separate component of shareholder's equity. The adjustment to
deferred policy acquisition costs represents the change in
amortization of deferred policy acquisition costs that would have
been required as a charge or credit to operations had such
unrealized amounts been realized. The Company has no fixed
maturity securities classified as held-to-maturity or trading as
of December 31, 1998 or 1997.
Mortgage loans on real estate are carried at the unpaid principal
balance less valuation allowances. The Company provides valuation
allowances for impairments of mortgage loans on real estate based
on a review by portfolio managers. The measurement of impaired
loans is based on the present value of expected future cash flows
discounted at the loan's effective interest rate or, as a
practical expedient, at the fair value of the collateral, if the
loan is collateral dependent. Loans in foreclosure and loans
considered to be impaired are placed on non-accrual status.
Interest received on non-accrual status mortgage loans on real
estate is included in interest income in the period received.
Real estate is carried at cost less accumulated depreciation and
valuation allowances. Other long-term investments are carried on
the equity basis, adjusted for valuation allowances. Impairment
losses are recorded on long-lived assets used in operations when
indicators of impairment are present and the undiscounted cash
flows estimated to be generated by those assets are less than the
assets' carrying amount.
Realized gains and losses on the sale of investments are
determined on the basis of specific security identification.
Estimates for valuation allowances and other than temporary
declines are included in realized gains and losses on investments.
<PAGE> 8
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Notes to Consolidated Financial Statements, Continued
(c) Revenues and Benefits
---------------------
Investment Products and Universal Life Insurance Products:
Investment products consist primarily of individual and group
variable and fixed deferred annuities. Universal life insurance
products include universal life insurance, variable universal life
insurance, corporate owned life insurance and other
interest-sensitive life insurance policies. Revenues for
investment products and universal life insurance products consist
of net investment income, asset fees, cost of insurance, policy
administration and surrender charges that have been earned and
assessed against policy account balances during the period. Policy
benefits and claims that are charged to expense include interest
credited to policy account balances and benefits and claims
incurred in the period in excess of related policy account
balances.
Traditional Life Insurance Products: Traditional life insurance
products include those products with fixed and guaranteed premiums
and benefits and consist primarily of whole life insurance,
limited-payment life insurance, term life insurance and certain
annuities with life contingencies. Premiums for traditional life
insurance products are recognized as revenue when due. Benefits
and expenses are associated with earned premiums so as to result
in recognition of profits over the life of the contract. This
association is accomplished by the provision for future policy
benefits and the deferral and amortization of policy acquisition
costs.
(d) Deferred Policy Acquisition Costs
---------------------------------
The costs of acquiring new business, principally commissions,
certain expenses of the policy issue and underwriting department
and certain variable sales expenses have been deferred. For
investment products and universal life insurance products,
deferred policy acquisition costs are being amortized with
interest over the lives of the policies in relation to the present
value of estimated future gross profits from projected interest
margins, asset fees, cost of insurance, policy administration and
surrender charges. For years in which gross profits are negative,
deferred policy acquisition costs are amortized based on the
present value of gross revenues. For traditional life insurance
products, these deferred policy acquisition costs are
predominantly being amortized with interest over the premium
paying period of the related policies in proportion to the ratio
of actual annual premium revenue to the anticipated total premium
revenue. Such anticipated premium revenue was estimated using the
same assumptions as were used for computing liabilities for future
policy benefits. Deferred policy acquisition costs are adjusted to
reflect the impact of unrealized gains and losses on fixed
maturity securities available-for-sale as described in note 2(b).
(e) Separate Accounts
-----------------
Separate account assets and liabilities represent contractholders'
funds which have been segregated into accounts with specific
investment objectives. For all but $743.9 million of separate
account assets, the investment income and gains or losses of these
accounts accrue directly to the contractholders. The activity of
the separate accounts is not reflected in the consolidated
statements of income and cash flows except for the fees the
Company receives.
(f) Future Policy Benefits
----------------------
Future policy benefits for investment products in the accumulation
phase, universal life insurance and variable universal life
insurance policies have been calculated based on participants'
contributions plus interest credited less applicable contract
charges. The average interest rate credited on investment product
policy reserves was 6.0%, 6.1% and 6.3% for the years ended
December 31, 1998, 1997 and 1996, respectively.
Future policy benefits for traditional life insurance policies
have been calculated by the net level premium method using
interest rates varying from 6.0% to 10.5% and estimates of
mortality, morbidity, investment yields and withdrawals which were
used or which were being experienced at the time the policies were
issued, rather than the assumptions prescribed by state regulatory
authorities.
<PAGE> 9
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Notes to Consolidated Financial Statements, Continued
(g) Participating Business
----------------------
Participating business represents approximately 40% in 1998 (50%
in 1997 and 52% in 1996) of the Company's life insurance in force,
74% in 1998 (77% in 1997 and 78% in 1996) of the number of life
insurance policies in force, and 14% in 1998 (27% in 1997 and 40%
in 1996) of life insurance statutory premiums. The provision for
policyholder dividends is based on current dividend scales and is
included in "Future policy benefits and claims" in the
accompanying consolidated balance sheets.
(h) Federal Income Tax
------------------
The Company files a consolidated federal income tax return with
Nationwide Mutual Insurance Company (NMIC), the majority
shareholder of Nationwide Corp. The members of the consolidated
tax return group have a tax sharing arrangement which provides, in
effect, for each member to bear essentially the same federal
income tax liability as if separate tax returns were filed.
The Company utilizes the asset and liability method of accounting
for income tax. Under this method, deferred tax assets and
liabilities are recognized for the future tax consequences
attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their
respective tax bases and operating loss and tax credit
carryforwards. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be
recovered or settled. Under this method, the effect on deferred
tax assets and liabilities of a change in tax rates is recognized
in income in the period that includes the enactment date.
Valuation allowances are established when necessary to reduce the
deferred tax assets to the amounts expected to be realized.
(i) Reinsurance Ceded
-----------------
Reinsurance premiums ceded and reinsurance recoveries on benefits
and claims incurred are deducted from the respective income and
expense accounts. Assets and liabilities related to reinsurance
ceded are reported on a gross basis. All of the Company's accident
and health and group life insurance business is ceded to
affiliates and is accounted for as discontinued operations. See
notes 10 and 14.
<PAGE> 10
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Notes to Consolidated Financial Statements, Continued
(j) Recently Issued Accounting Pronouncements
-----------------------------------------
On January 1, 1998 the Company adopted SFAS No. 131 - Disclosures
about Segments of an Enterprise and Related Information (SFAS
131). SFAS 131 supersedes SFAS No. 14 - Financial Reporting for
Segments of a Business Enterprise. SFAS 131 establishes standards
for public business enterprises to report information about
operating segments in annual financial statements and selected
information about operating segments in interim financial reports.
SFAS 131 also establishes standards for related disclosures about
products and services, geographic areas, and major customers. The
adoption of SFAS 131 did not affect results of operations or
financial position, nor did it affect the manner in which the
Company defines its operating segments. The segment information
required for annual financial statements is included in note 13.
On January 1, 1998, the Company adopted SFAS No. 132 - Employers'
Disclosures about Pensions and Other Postretirement Benefits (SFAS
132). SFAS 132 revises employers' disclosures about pension and
other postretirement benefit plans. The Statement does not change
the measurement or recognition of benefit plans in the financial
statements. The revised disclosures required by SFAS 132 are
included in note 8.
In June 1998, the FASB issued SFAS No. 133 - Accounting for
Derivative Instruments and Hedging Activities (SFAS 133). SFAS 133
establishes accounting and reporting standards for derivative
instruments and for hedging activities. Contracts that contain
embedded derivatives, such as certain insurance contracts, are
also addressed by the Statement. SFAS 133 requires that an entity
recognize all derivatives as either assets or liabilities in the
statement of financial position and measure those instruments at
fair value. The Statement is effective for fiscal years beginning
after June 15, 1999. It may be implemented earlier provided
adoption occurs as of the beginning of any fiscal quarter after
issuance. The Company plans to adopt this Statement in first
quarter 2000 and is currently evaluating the impact on results of
operations and financial condition.
In March 1998, The American Institute of Certified Public
Accountant's Accounting Standards Executive Committee issued
Statement of Position 98-1 - Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use (SOP 98-1). SOP
98-1 provides guidance intended to standardize accounting
practices for costs incurred to develop or obtain computer
software for internal use. Specifically, SOP 98-1 provides
guidance for determining whether computer software is for internal
use and when costs incurred for internal use software are to be
capitalized. SOP 98-1 is effective for financial statements for
fiscal years beginning after December 15, 1998. The Company does
not expect the adoption of SOP 98-1, which occurred on January 1,
1999, to have a material impact on the Company's financial
statements.
(k) Reclassification
----------------
Certain items in the 1997 and 1996 consolidated financial
statements have been reclassified to conform to the 1998
presentation.
<PAGE> 11
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Notes to Consolidated Financial Statements, Continued
(3) Investments
-----------
The amortized cost, gross unrealized gains and losses and estimated
fair value of securities available-for-sale as of December 31, 1998 and
1997 were:
<TABLE>
<CAPTION>
Gross Gross
Amortized unrealized unrealized Estimated
(in millions of dollars) cost gains losses fair value
------------------------ ---- ----- ------ ----------
<S> <C> <C> <C> <C>
December 31, 1998:
Fixed maturity securities:
U.S. Treasury securities and obligations of U.S.
government corporations and agencies $ 255.9 $ 13.0 $ -- $ 268.9
Obligations of states and political subdivisions 1.6 -- -- 1.6
Debt securities issued by foreign governments 106.5 4.5 -- 111.0
Corporate securities 9,899.6 423.2 (18.7) 10,304.1
Mortgage-backed securities 3,457.7 104.2 (2.4) 3,559.5
--------- ------ ------ ---------
Total fixed maturity securities 13,721.3 544.9 (21.1) 14,245.1
Equity securities 110.4 18.3 (1.5) 127.2
--------- ------ ------ ---------
$13,831.7 $563.2 $(22.6) $14,372.3
========= ====== ====== =========
December 31, 1997:
Fixed maturity securities:
U.S. Treasury securities and obligations of U.S.
government corporations and agencies $ 305.1 $ 8.6 $ -- $ 313.7
Obligations of states and political subdivisions 1.6 -- -- 1.6
Debt securities issued by foreign governments 93.3 2.7 (0.2) 95.8
Corporate securities 8,698.7 355.5 (11.5) 9,042.7
Mortgage-backed securities 3,634.2 118.6 (2.5) 3,750.3
--------- ------ ------ ---------
Total fixed maturity securities 12,732.9 485.4 (14.2) 13,204.1
Equity securities 67.8 12.9 (0.3) 80.4
--------- ------ ------ ---------
$12,800.7 $498.3 $(14.5) $13,284.5
========= ====== ====== =========
</TABLE>
As of December 31, 1998 the Company had entered into S&P 500 futures
contracts with a notional amount of $20.0 million to reduce the risk of
changes in the fair market value of certain investments classified as
equity securities. These contracts had an unrealized loss of $1.3
million as of December 31, 1998 which is included in the recorded
amount of the equity securities and in accumulated other comprehensive
income, net of tax, similar to other unrealized gains and losses on
securities available-for-sale.
<PAGE> 12
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Notes to Consolidated Financial Statements, Continued
The amortized cost and estimated fair value of fixed maturity
securities available-for-sale as of December 31, 1998, by expected
maturity, are shown below. Expected maturities will differ from
contractual maturities because borrowers may have the right to call or
prepay obligations with or without call or prepayment penalties.
<TABLE>
<CAPTION>
Amortized Estimated
(in millions of dollars) cost fair value
---- ----------
<S> <C> <C>
Fixed maturity securities available for sale:
Due in one year or less $ 2,019.9 $ 2,048.0
Due after one year through five years 8,169.1 8,470.6
Due after five years through ten years 2,795.0 2,927.7
Due after ten years 737.3 798.8
--------- ---------
$13,721.3 $14,245.1
========= =========
</TABLE>
The components of unrealized gains on securities available-for-sale,
net, were as follows as of December 31:
<TABLE>
<CAPTION>
(in millions of dollars) 1998 1997
---- ----
<S> <C> <C>
Gross unrealized gains $ 540.6 $ 483.8
Adjustment to deferred policy acquisition costs (116.6) (103.7)
Deferred federal income tax (148.4) (133.0)
------- -------
$ 275.6 $ 247.1
======= =======
</TABLE>
An analysis of the change in gross unrealized gains (losses) on
securities available-for-sale and fixed maturity securities
held-to-maturity follows for the years ended December 31:
<TABLE>
<CAPTION>
(in millions of dollars) 1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Securities available-for-sale:
Fixed maturity securities $52.6 $137.5 $(289.2)
Equity securities 4.2 (2.7) 8.9
----- ------ -------
$56.8 $134.8 $(280.3)
===== ====== =======
</TABLE>
Proceeds from the sale of securities available-for-sale during 1998,
1997 and 1996 were $610.5 million, $574.5 million and $299.6 million,
respectively. During 1998, gross gains of $9.0 million ($9.9 million
and $6.6 million in 1997 and 1996, respectively) and gross losses of
$7.6 million ($18.0 million and $6.9 million in 1997 and 1996,
respectively) were realized on those sales. In addition, gross gains of
$15.1 million and gross losses of $0.7 million were realized in 1997
when the Company paid a dividend to NFS, which then made an equivalent
dividend to Nationwide Corp., consisting of securities having an
aggregate fair value of $850.0 million.
The recorded investment of mortgage loans on real estate considered to
be impaired as of December 31, 1998 was $3.7 million. No valuation
allowance has been recorded for these loans as of December 31, 1998.
The recorded investment of mortgage loans on real estate considered to
be impaired as of December 31, 1997 was $19.9 million which includes
$3.9 million of impaired mortgage loans on real estate for which the
related valuation allowance was $0.1 million and $16.0 million of
impaired mortgage loans on real estate for which there was no valuation
allowance. During 1998, the average recorded investment in impaired
mortgage loans on real estate was approximately $9.1 million ($31.8
million in 1997) and interest income recognized on those loans was $0.3
million ($1.0 million in 1997), which is equal to interest income
recognized using a cash-basis method of income recognition.
<PAGE> 13
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Notes to Consolidated Financial Statements, Continued
Activity in the valuation allowance account for mortgage loans on real
estate is summarized for the years ended December 31:
<TABLE>
<CAPTION>
(in millions of dollars) 1998 1997
---- ----
<S> <C> <C>
Allowance, beginning of year $42.5 $51.0
Reductions credited to operations (0.1) (1.2)
Direct write-downs charged against the allowance -- (7.3)
----- -----
Allowance, end of year $42.4 $42.5
===== =====
</TABLE>
Real estate is presented at cost less accumulated depreciation of $21.5
million as of December 31, 1998 ($45.1 million as of December 31, 1997)
and valuation allowances of $5.4 million as of December 31, 1998 ($11.1
million as of December 31, 1997).
Investments that were non-income producing for the twelve month period
preceding December 31, 1998 amounted to $42.4 million ($19.4 million
for 1997) and consisted of $32.7 million ($3.0 million in 1997) in
securities available-for-sale and $9.7 million ($16.4 million in 1997)
in real estate.
An analysis of investment income by investment type follows for the
years ended December 31:
<TABLE>
<CAPTION>
(in millions of dollars) 1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Gross investment income:
Securities available-for-sale:
Fixed maturity securities $ 982.5 $ 911.6 $ 917.1
Equity securities 0.8 0.8 1.3
Mortgage loans on real estate 458.9 457.7 432.8
Real estate 40.4 42.9 44.3
Short-term investments 17.8 22.7 4.2
Other 30.7 21.0 4.0
-------- -------- --------
Total investment income 1,531.1 1,456.7 1,403.7
Less investment expenses 49.5 47.5 45.9
-------- -------- --------
Net investment income $1,481.6 $1,409.2 $1,357.8
======== ======== ========
</TABLE>
An analysis of realized gains (losses) on investments, net of valuation
allowances, by investment type follows for the years ended December 31:
<TABLE>
<CAPTION>
(in millions of dollars) 1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Securities available-for-sale:
Fixed maturity securities $(0.7) $ 3.6 $(3.5)
Equity securities 2.1 2.7 3.2
Mortgage loans on real estate 3.9 1.6 (4.1)
Real estate and other 23.1 3.2 4.1
----- ----- -----
$28.4 $11.1 $(0.3)
===== ===== =====
</TABLE>
Fixed maturity securities with an amortized cost of $6.5 million and
$6.2 million as of December 31, 1998 and 1997, respectively, were on
deposit with various regulatory agencies as required by law.
<PAGE> 14
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Notes to Consolidated Financial Statements, Continued
(4) Federal Income Tax
------------------
The Company's current federal income tax liability was $72.8 million
and $60.1 million as of December 31, 1998 and 1997, respectively.
The tax effects of temporary differences that give rise to significant
components of the net deferred tax liability as of December 31, 1998
and 1997 are as follows:
<TABLE>
<CAPTION>
(in millions of dollars) 1998 1997
---- ----
<S> <C> <C>
Deferred tax assets:
Future policy benefits $207.7 $200.1
Liabilities in Separate Accounts 319.9 242.0
Mortgage loans on real estate and real estate 17.5 19.0
Other assets and other liabilities 58.9 59.2
------ ------
Total gross deferred tax assets 604.0 520.3
Less valuation allowance (7.0) (7.0)
------ ------
Net deferred tax assets 597.0 513.3
------ ------
Deferred tax liabilities:
Deferred policy acquisition costs 568.7 480.5
Fixed maturity securities 212.2 193.3
Deferred tax on realized investment gains 34.8 40.1
Equity securities and other long-term investments 9.6 7.5
Other 21.6 22.2
------ ------
Total gross deferred tax liabilities 846.9 743.6
------ ------
Net deferred tax liability $249.9 $230.3
====== ======
</TABLE>
In assessing the realizability of deferred tax assets, management
considers whether it is more likely than not that some portion of the
total gross deferred tax assets will not be realized. Nearly all future
deductible amounts can be offset by future taxable amounts or recovery
of federal income tax paid within the statutory carryback period. There
has been no change in the valuation allowance for the years ended
December 31, 1998, 1997 and 1996.
Federal income tax expense attributable to income from continuing
operations for the years ended December 31 was as follows:
<TABLE>
<CAPTION>
(in millions of dollars) 1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Currently payable $186.1 $121.7 $116.5
Deferred tax expense (benefit) 4.3 28.5 (5.6)
------ ------ ------
$190.4 $150.2 $110.9
====== ====== ======
</TABLE>
<PAGE> 15
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Notes to Consolidated Financial Statements, Continued
Total federal income tax expense for the years ended December 31, 1998,
1997 and 1996 differs from the amount computed by applying the U.S.
federal income tax rate to income before tax as follows:
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ---------------- -----------------
(in millions of dollars) Amount % Amount % Amount %
------ - ------ - ------ -
<S> <C> <C> <C> <C> <C> <C>
Computed (expected) tax expense $195.0 35.0 $150.5 35.0 $110.4 35.0
Tax exempt interest and dividends
received deduction (4.9) (0.9) - 0.0 (0.2) (0.1)
Other, net 0.3 0.1 (0.3) (0.1) 0.7 0.3
------ ---- ------ ---- ------ ----
Total (effective rate of each year) $190.4 34.2 $150.2 34.9 $110.9 35.2
====== ==== ====== ==== ====== ====
</TABLE>
Total federal income tax paid was $173.4 million, $91.8 million and
$115.8 million during the years ended December 31, 1998, 1997 and 1996,
respectively.
(5) Comprehensive Income
--------------------
Pursuant to SFAS No. 130 - Reporting Comprehensive Income, which the
Company adopted January 1, 1998, the Consolidated Statements of
Shareholder's Equity include a new measure called "Comprehensive
Income". Comprehensive Income includes net income as well as certain
items that are reported directly within separate components of
shareholders' equity that bypass net income. Currently, the Company's
only component of Other Comprehensive Income is unrealized gains
(losses) on securities available-for-sale. The related before and after
federal tax amounts are as follows:
<TABLE>
<CAPTION>
(in millions of dollars) 1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Unrealized gains (losses) on securities
available-for-sale arising during the period:
Gross $ 58.2 $141.1 $(272.4)
Adjustment to deferred policy acquisition costs (12.9) (21.8) 57.0
Related federal income tax (expense) benefit (15.9) (41.7) 44.0
------ ------ ------
Net 29.4 77.6 (171.4)
------ ------ ------
Reclassification adjustment for net (gains) losses
on securities available-for-sale realized
during the period:
Gross (1.4) (6.3) 0.7
Related federal income tax expense (benefit) 0.5 2.2 (0.2)
------ ------ -------
Net (0.9) (4.1) 0.5
------ ------ -------
Total Other Comprehensive Income $ 28.5 $ 73.5 $(170.9)
====== ====== =======
</TABLE>
(6) Fair Value of Financial Instruments
-----------------------------------
The following disclosures summarize the carrying amount and estimated
fair value of the Company's financial instruments. Certain assets and
liabilities are specifically excluded from the disclosure requirements
of financial instruments. Accordingly, the aggregate fair value amounts
presented do not represent the underlying value of the Company.
<PAGE> 16
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Notes to Consolidated Financial Statements, Continued
The fair value of a financial instrument is defined as the amount at
which the financial instrument could be exchanged in a current
transaction between willing parties. In cases where quoted market
prices are not available, fair value is to be based on estimates using
present value or other valuation techniques. Many of the Company's
assets and liabilities subject to the disclosure requirements are not
actively traded, requiring fair values to be estimated by management
using present value or other valuation techniques. These techniques are
significantly affected by the assumptions used, including the discount
rate and estimates of future cash flows. Although fair value estimates
are calculated using assumptions that management believes are
appropriate, changes in assumptions could cause these estimates to vary
materially. In that regard, the derived fair value estimates cannot be
substantiated by comparison to independent markets and, in many cases,
could not be realized in the immediate settlement of the instruments.
Although insurance contracts, other than policies such as annuities
that are classified as investment contracts, are specifically exempted
from the disclosure requirements, estimated fair value of policy
reserves on life insurance contracts is provided to make the fair value
disclosures more meaningful.
The tax ramifications of the related unrealized gains and losses can
have a significant effect on fair value estimates and have not been
considered in the estimates.
The following methods and assumptions were used by the Company in
estimating its fair value disclosures:
Fixed maturity and equity securities: The fair value for fixed
maturity securities is based on quoted market prices, where
available. For fixed maturity securities not actively traded, fair
value is estimated using values obtained from independent pricing
services or, in the case of private placements, is estimated by
discounting expected future cash flows using a current market rate
applicable to the yield, credit quality and maturity of the
investments. The fair value for equity securities is based on
quoted market prices. The carrying amount and fair value for
equity securities exclude the fair value of futures contracts
designated as hedges of equity securities.
Mortgage loans on real estate, net: The fair value for mortgage
loans on real estate is estimated using discounted cash flow
analyses, using interest rates currently being offered for similar
loans to borrowers with similar credit ratings. Loans with similar
characteristics are aggregated for purposes of the calculations.
Fair value for mortgage loans in default is the estimated fair
value of the underlying collateral.
Policy loans, short-term investments and cash: The carrying amount
reported in the consolidated balance sheets for these instruments
approximates their fair value.
Separate account assets and liabilities: The fair value of assets
held in separate accounts is based on quoted market prices. The
fair value of liabilities related to separate accounts is the
amount payable on demand, which is net of certain surrender
charges.
Investment contracts: The fair value for the Company's liabilities
under investment type contracts is disclosed using two methods.
For investment contracts without defined maturities, fair value is
the amount payable on demand. For investment contracts with known
or determined maturities, fair value is estimated using discounted
cash flow analysis. Interest rates used are similar to currently
offered contracts with maturities consistent with those remaining
for the contracts being valued.
<PAGE> 17
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Notes to Consolidated Financial Statements, Continued
Policy reserves on life insurance contracts: Included are
disclosures for individual life insurance, universal life
insurance and supplementary contracts with life contingencies for
which the estimated fair value is the amount payable on demand.
Also included are disclosures for the Company's limited payment
policies, which the Company has used discounted cash flow analyses
similar to those used for investment contracts with known
maturities to estimate fair value.
Commitments to extend credit: Commitments to extend credit have
nominal fair value because of the short-term nature of such
commitments. See note 7.
Futures contracts: The fair value for futures contracts is based
on quoted market prices.
Carrying amount and estimated fair value of financial instruments
subject to disclosure requirements and policy reserves on life
insurance contracts were as follows as of December 31:
<TABLE>
<CAPTION>
1998 1997
------------------------- --------------------------
Carrying Estimated Carrying Estimated
(in millions of dollars) amount fair value amount fair value
--------- ---------- --------- ----------
<S> <C> <C> <C> <C>
Assets:
Investments:
Securities available-for-sale:
Fixed maturity securities $14,245.1 $14,245.1 $13,204.1 $13,204.1
Equity securities 128.5 128.5 80.4 80.4
Mortgage loans on real estate, net 5,328.4 5,527.6 5,181.6 5,509.7
Policy loans 464.3 464.3 415.3 415.3
Short-term investments 289.1 289.1 358.4 358.4
Cash 3.4 3.4 175.6 175.6
Assets held in separate accounts 50,935.8 50,935.8 37,724.4 37,724.4
Liabilities:
Investment contracts 15,468.7 15,158.6 14,708.2 14,322.1
Policy reserves on life insurance contracts 3,914.0 3,768.9 3,345.4 3,182.4
Liabilities related to separate accounts 50,935.8 49,926.5 37,724.4 36,747.0
Futures contracts 1.3 1.3 -- --
</TABLE>
(7) Risk Disclosures
----------------
The following is a description of the most significant risks facing
life insurers and how the Company mitigates those risks:
Credit Risk: The risk that issuers of securities owned by the Company
or mortgagors on mortgage loans on real estate owned by the Company
will default or that other parties, including reinsurers, which owe the
Company money, will not pay. The Company minimizes this risk by
adhering to a conservative investment strategy, by maintaining
reinsurance and credit and collection policies and by providing for any
amounts deemed uncollectible.
Interest Rate Risk: The risk that interest rates will change and cause
a decrease in the value of an insurer's investments. This change in
rates may cause certain interest-sensitive products to become
uncompetitive or may cause disintermediation. The Company mitigates
this risk by charging fees for non-conformance with certain policy
provisions, by offering products that transfer this risk to the
purchaser, and/or by attempting to match the maturity schedule of its
assets with the expected payouts of its liabilities. To the extent that
liabilities come due more quickly than assets mature, an insurer would
have to borrow funds or sell assets prior to maturity and potentially
recognize a gain or loss.
<PAGE> 18
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Notes to Consolidated Financial Statements, Continued
Legal/Regulatory Risk: The risk that changes in the legal or regulatory
environment in which an insurer operates will result in increased
competition, reduced demand for a company's products, or create
additional expenses not anticipated by the insurer in pricing its
products. The Company mitigates this risk by offering a wide range of
products and by operating throughout the United States, thus reducing
its exposure to any single product or jurisdiction, and also by
employing underwriting practices which identify and minimize the
adverse impact of this risk.
Financial Instruments with Off-Balance-Sheet Risk: The Company is a
party to financial instruments with off-balance-sheet risk in the
normal course of business through management of its investment
portfolio. These financial instruments include commitments to extend
credit in the form of loans. These instruments involve, to varying
degrees, elements of credit risk in excess of amounts recognized on the
consolidated balance sheets.
Commitments to fund fixed rate mortgage loans on real estate are
agreements to lend to a borrower, and are subject to conditions
established in the contract. Commitments generally have fixed
expiration dates or other termination clauses and may require payment
of a deposit. Commitments extended by the Company are based on
management's case-by-case credit evaluation of the borrower and the
borrower's loan collateral. The underlying mortgage property represents
the collateral if the commitment is funded. The Company's policy for
new mortgage loans on real estate is to lend no more than 75% of
collateral value. Should the commitment be funded, the Company's
exposure to credit loss in the event of nonperformance by the borrower
is represented by the contractual amounts of these commitments less the
net realizable value of the collateral. The contractual amounts also
represent the cash requirements for all unfunded commitments.
Commitments on mortgage loans on real estate of $156.0 million
extending into 1999 were outstanding as of December 31, 1998. The
Company also had $40.0 million of commitments to purchase fixed
maturity securities outstanding as of December 31, 1998.
Significant Concentrations of Credit Risk: The Company grants mainly
commercial mortgage loans on real estate to customers throughout the
United States. The Company has a diversified portfolio with no more
than 22% (20% in 1997) in any geographic area and no more than 2% (2%
in 1997) with any one borrower as of December 31, 1998. As of December
31, 1998, 42% (46% in 1997) of the remaining principal balance of the
Company's commercial mortgage loan portfolio financed retail
properties.
Reinsurance: The Company has entered into a reinsurance contract to
cede a portion of its general account individual annuity business to
The Franklin Life Insurance Company (Franklin). Total recoveries due
from Franklin were $187.9 million and $220.2 million as of December 31,
1998 and 1997, respectively. The contract is immaterial to the
Company's results of operations. The ceding of risk does not discharge
the original insurer from its primary obligation to the policyholder.
Under the terms of the contract, Franklin has established a trust as
collateral for the recoveries. The trust assets are invested in
investment grade securities, the market value of which must at all
times be greater than or equal to 102% of the reinsured reserves.
(8) Pension Plan and Postretirement Benefits Other Than Pensions
------------------------------------------------------------
The Company is a participant, together with other affiliated companies,
in a pension plan covering all employees who have completed at least
one year of service. The Company funds pension costs accrued for direct
employees plus an allocation of pension costs accrued for employees of
affiliates whose work efforts benefit the Company. Assets of the
Retirement Plan are invested in group annuity contracts of NLIC and
Employers Life Insurance Company of Wausau (ELICW).
Pension costs charged to operations by the Company during the years
ended December 31, 1998, 1997 and 1996 were $2.0 million, $7.5 million
and $7.4 million, respectively. The Company has recorded a prepaid
pension asset of $5.0 million as of December 31, 1998 and no prepaid or
accrued pension asset or expense as of December 31, 1997.
<PAGE> 19
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Notes to Consolidated Financial Statements, Continued
In addition to the defined benefit pension plan, the Company, together
with other affiliated companies, participates in life and health care
defined benefit plans for qualifying retirees. Postretirement life and
health care benefits are contributory and generally available to full
time employees who have attained age 55 and have accumulated 15 years
of service with the Company after reaching age 40. Postretirement
health care benefit contributions are adjusted annually and contain
cost-sharing features such as deductibles and coinsurance. In addition,
there are caps on the Company's portion of the per-participant cost of
the postretirement health care benefits. These caps can increase
annually, but not more than three percent. The Company's policy is to
fund the cost of health care benefits in amounts determined at the
discretion of management. Plan assets are invested primarily in group
annuity contracts of NLIC.
The Company elected to immediately recognize its estimated accumulated
postretirement benefit obligation (APBO), however, certain affiliated
companies elected to amortize their initial transition obligation over
periods ranging from 10 to 20 years.
The Company's accrued postretirement benefit expense as of December 31,
1998 and 1997 was $40.1 million and $36.5 million, respectively, and
the net periodic postretirement benefit cost (NPPBC) for 1998, 1997 and
1996 was $4.1 million, $3.0 million and $3.3 million, respectively.
Information regarding the funded status of the pension plan as a whole
and the postretirement life and health care benefit plan as a whole as
of December 31, 1998 and 1997 follows:
<TABLE>
<CAPTION>
Pension Benefits Postretirement Benefits
--------------------- -----------------------
(in millions of dollars) 1998 1997 1998 1997
--------------------------------------------------------- -------- -------- -------- -------
<S> <C> <C> <C> <C>
Change in benefit obligation:
Benefit obligation at beginning of year $2,033.8 $1,847.8 $237.9 $ 200.7
Service cost 87.6 77.3 9.8 7.0
Interest cost 123.4 118.6 15.4 14.0
Actuarial loss 123.2 60.0 15.6 24.4
Plan curtailment in 1998/merger in 1997 (107.2) 1.5 - -
Benefits paid (75.8) (71.4) (8.6) (8.2)
-------- -------- ------- -------
Benefit obligation at end of year 2,185.0 2,033.8 270.1 237.9
-------- -------- ------- -------
Change in plan assets:
Fair value of plan assets at beginning of year 2,212.9 1,947.9 69.2 63.0
Actual return on plan assets 300.7 328.1 5.0 3.6
Employer contribution 104.1 7.2 12.1 10.6
Plan merger - 1.1 - -
Benefits paid (75.8) (71.4) (8.4) (8.0)
-------- -------- ------- -------
Fair value of plan assets at end of year 2,541.9 2,212.9 77.9 69.2
-------- -------- ------- -------
Funded status 356.9 179.1 (192.2) (168.7)
Unrecognized prior service cost 31.5 34.7 - -
Unrecognized net (gains) losses (345.7) (330.7) 16.0 1.6
Unrecognized net (asset) obligation at transition (11.0) 33.3 1.3 1.5
-------- -------- ------- -------
Prepaid (accrued) benefit cost $ 31.7 $ (83.6) $(174.9) $(165.6)
======== ======== ======= =======
</TABLE>
<PAGE> 20
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Notes to Consolidated Financial Statements, Continued
Basis for measurements, funded status of the pension plan and
postretirement life and health care benefit plan:
<TABLE>
<CAPTION>
Pension Benefits Postretirement Benefits
-------------------- -----------------------
1998 1997 1998 1997
-------- ------ -------- --------
<S> <C> <C> <C> <C>
Weighted average discount rate 5.50% 6.00% 6.65% 6.70%
Rate of increase in future compensation levels 3.75% 4.25% -- --
Assumed health care cost trend rate:
Initial rate -- -- 15.00% 12.13%
Ultimate rate -- -- 8.00% 6.12%
Uniform declining period -- -- 15 Years 12 Years
</TABLE>
The net periodic pension cost for the pension plan as a whole for the
years ended December 31, 1998, 1997 and 1996 follows:
<TABLE>
<CAPTION>
(in millions of dollars) 1998 1997 1996
-------------------------------------------------------------------------------- ---- ----
<S> <C> <C>
Service cost (benefits earned during the period) $ 87.6 $ 77.3 $ 75.5
Interest cost on projected benefit obligation 123.4 118.6 105.5
Expected return on plan assets (159.0) (139.0) (116.1)
Recognized gains (3.8) - -
Amortization of prior service cost 3.2 3.2 3.2
Amortization of unrecognized transition obligation 4.2 4.2 4.1
------- ------- -------
$ 55.6 $ 64.3 $ 72.2
======= ======= =======
</TABLE>
Effective December 31, 1998, Wausau Service Corporation (WSC) ended its
affiliation with the Nationwide Insurance Enterprise and employees of
WSC ended participation in the plan. A curtailment gain of $67.1
million resulted (consisting of a $107.2 million reduction in the
projected benefit obligation, net of the write-off of the $40.1 million
remaining unamortized transition obligation related to WSC). The
Company anticipates that the plan will settle the obligation related to
WSC employees with a transfer of assets during 1999.
Basis for measurements, net periodic pension cost for the pension plan:
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Weighted average discount rate 6.00% 6.50% 6.00%
Rate of increase in future compensation levels 4.25% 4.75% 4.25%
Expected long-term rate of return on plan assets 7.25% 7.25% 6.75%
</TABLE>
<PAGE> 21
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Notes to Consolidated Financial Statements, Continued
The amount of NPPBC for the postretirement benefit plan as a whole for
the years ended December 31, 1998, 1997 and 1996 was as follows:
<TABLE>
<CAPTION>
(in millions of dollars) 1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Service cost (benefits attributed to employee service during the year) $ 9.8 $ 7.0 $ 6.5
Interest cost on accumulated postretirement benefit obligation 15.4 14.0 13.7
Actual return on plan assets (5.0) (3.6) (4.3)
Amortization of unrecognized transition obligation of affiliates 0.2 0.2 0.2
Net amortization and deferral 1.2 (0.5) 1.8
----- ----- -----
$21.6 $17.1 $17.9
===== ===== =====
</TABLE>
Actuarial assumptions used for the measurement of the accumulated
postretirement benefit obligation (APBO) and the NPPBC for the
postretirement benefit plan for 1998, 1997 and 1996 were as follows:
<TABLE>
<CAPTION>
1998 1997 1996
----- ----- ----
<S> <C> <C> <C>
NPPBC:
Discount rate 6.70% 7.25% 6.65%
Long term rate of return on plan
assets, net of tax 5.83% 5.89% 4.80%
Assumed health care cost trend rate:
Initial rate 12.00% 11.00% 11.00%
Ultimate rate 6.00% 6.00% 6.00%
Uniform declining period 12 Years 12 Years 12 Years
</TABLE>
For the postretirement benefit plan as a whole, a one percentage point
increase or decrease in the assumed health care cost trend rate would
have no impact on the APBO as of December 31, 1998 and have no impact
on the NPPBC for the year ended December 31, 1998.
(9) Shareholder's Equity, Regulatory Risk-Based Capital, Retained Earnings
----------------------------------------------------------------------
and Dividend Restrictions
-------------------------
Ohio, NLIC's and NLAIC's state of domicile, imposes minimum risk-based
capital requirements that were developed by the NAIC. The formulas for
determining the amount of risk-based capital specify various weighting
factors that are applied to financial balances or various levels of
activity based on the perceived degree of risk. Regulatory compliance
is determined by a ratio of the company's regulatory total adjusted
capital, as defined by the NAIC, to its authorized control level
risk-based capital, as defined by the NAIC. Companies below specific
trigger points or ratios are classified within certain levels, each of
which requires specified corrective action. NLIC and NLAIC each exceed
the minimum risk-based capital requirements.
The statutory capital and surplus of NLIC as of December 31, 1998, 1997
and 1996 was $1.32 billion, $1.13 billion and $1.00 billion,
respectively. The statutory net income of NLIC for the years ended
December 31, 1998, 1997 and 1996 was $171.0 million, $111.7 million and
$73.2 million, respectively.
The Company is limited in the amount of shareholder dividends it may
pay without prior approval by the Department. As of December 31, 1998,
the maximum amount available for dividend payment from the Company to
its shareholder without prior approval of the Department was $71.0
million.
<PAGE> 22
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Notes to Consolidated Financial Statements, Continued
In addition, the payment of dividends by NLIC may also be subject to
restrictions set forth in the insurance laws of New York that limit the
amount of statutory profits on NLIC's participating policies (measured
before dividends to policyholders) that can inure to the benefit of the
Company and its shareholder.
The Company currently does not expect such regulatory requirements to
impair its ability to pay operating expenses and shareholder dividends
in the future.
(10) Transactions With Affiliates
----------------------------
As part of the restructuring described in note 1, NLIC paid a dividend
valued at $485.7 million to Nationwide Corp. on January 1, 1997
consisting of the outstanding shares of common stock of ELICW, National
Casualty Company (NCC) and West Coast Life Insurance Company (WCLIC).
Also, on February 24, 1997, NLIC paid a dividend to NFS, and NFS paid
an equivalent dividend to Nationwide Corp., consisting of securities
having an aggregate fair value of $850.0 million. The Company
recognized a gain of $14.4 million on the transfer of securities.
The Company leases office space from NMIC and certain of its
subsidiaries. For the years ended December 31, 1998, 1997 and 1996, the
Company made lease payments to NMIC and its subsidiaries of $8.0
million, $8.4 million and $9.1 million, respectively.
Pursuant to a cost sharing agreement among NMIC and certain of its
direct and indirect subsidiaries, including the Company, NMIC provides
certain operational and administrative services, such as sales support,
advertising, personnel and general management services, to those
subsidiaries. Expenses covered by this agreement are subject to
allocation among NMIC, the Company and other affiliates. Amounts
allocated to the Company were $95.0 million, $85.8 million and $101.6
million in 1998, 1997 and 1996, respectively. The allocations are based
on techniques and procedures in accordance with insurance regulatory
guidelines. Measures used to allocate expenses among companies include
individual employee estimates of time spent, special cost studies,
salary expense, commissions expense and other methods agreed to by the
participating companies that are within industry guidelines and
practices. The Company believes these allocation methods are
reasonable. In addition, the Company does not believe that expenses
recognized under the inter-company agreements are materially different
than expenses that would have been recognized had the Company operated
on a stand alone basis. Amounts payable to NMIC from the Company under
the cost sharing agreement were $31.9 million and $20.5 million as of
December 31, 1998 and 1997, respectively.
The Company also participates in intercompany repurchase agreements
with affiliates whereby the seller will transfer securities to the
buyer at a stated value. Upon demand or a stated period, the securities
will be repurchased by the seller at the original sales price plus a
price differential. Transactions under the agreements during 1998 and
1997 were not material. The Company believes that the terms of the
repurchase agreements are materially consistent with what the Company
could have obtained with unaffiliated parties.
<PAGE> 23
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Notes to Consolidated Financial Statements, Continued
Intercompany reinsurance agreements exist between NLIC and,
respectively, NMIC and ELICW whereby all of NLIC's accident and health
and group life insurance business is ceded on a modified coinsurance
basis. NLIC entered into the reinsurance agreements during 1996 because
the accident and health and group life insurance business was unrelated
to the Company's long-term savings and retirement products.
Accordingly, the accident and health and group life insurance business
has been accounted for as discontinued operations for all periods
presented. Under modified coinsurance agreements, invested assets are
retained by the ceding company and investment earnings are paid to the
reinsurer. Under the terms of the Company's agreements, the investment
risk associated with changes in interest rates is borne by ELICW or
NMIC, as the case may be. Risk of asset default is retained by the
Company, although a fee is paid by ELICW or NMIC, as the case may be,
to the Company for the Company's retention of such risk. The agreements
will remain in force until all policy obligations are settled. However,
with respect to the agreement between NLIC and NMIC, either party may
terminate the contract on January 1 of any year with prior notice. The
ceding of risk does not discharge the original insurer from its primary
obligation to the policyholder. The Company believes that the terms of
the modified coinsurance agreements are consistent in all material
respects with what the Company could have obtained with unaffiliated
parties. Amounts ceded to NMIC and ELICW for the years ended December
31, 1998, 1997 and 1996 were:
<TABLE>
<CAPTION>
1998 1997 1996
------------------------------------------------------------------------------------
(in millions of dollars) NMIC ELICW NMIC ELICW NMIC ELICW
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Premiums $90.1 $106.3 $ 91.4 $199.8 $ 97.3 $224.2
Net investment income and other
revenue $11.1 $ 9.4 $ 10.7 $ 13.4 $ 10.9 $ 14.8
Benefits, claims and expenses $98.8 $160.5 $100.7 $225.9 $100.5 $246.6
</TABLE>
The Company and various affiliates entered into agreements with
Nationwide Cash Management Company (NCMC), an affiliate, under which
NCMC acts as a common agent in handling the purchase and sale of
short-term securities for the respective accounts of the participants.
Amounts on deposit with NCMC were $248.4 million and $211.0 million as
of December 31, 1998 and 1997, respectively, and are included in
short-term investments on the accompanying consolidated balance sheets.
Certain annuity products are sold through three affiliated companies,
which are also subsidiaries of NFS. Total commissions and fees paid to
these affiliates for the three years ended December 31, 1998 were $60.0
million, $66.1 million and $76.9 million, respectively.
(11) Bank Lines of Credit
--------------------
In August 1996, NLIC, along with NMIC, entered into a $600.0 million
revolving credit facility which provides for a $600.0 million loan over
a five year term on a fully revolving basis with a group of national
financial institutions. The credit facility provides for several and
not joint liability with respect to any amount drawn by either NLIC or
NMIC. NLIC and NMIC pay facility and usage fees to the financial
institutions to maintain the revolving credit facility. All previously
existing line of credit agreements were canceled. In September 1997,
the credit agreement was amended to include NFS as a party to and
borrower under the agreement. As of December 31, 1998 the Company had
no amounts outstanding under the agreement.
<PAGE> 24
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Notes to Consolidated Financial Statements, Continued
(12) Contingencies
-------------
On October 29, 1998, the Company and certain of its affiliates were
named in a lawsuit filed in the Common Pleas Court of Franklin County,
Ohio related to the sale of deferred annuity products for use as
investments in tax-deferred contributory retirement plans (Mercedes
Castillo v. Nationwide Financial Services, Inc., Nationwide Life
Insurance Company and Nationwide Life and Annuity Insurance Company).
The plaintiff in such lawsuit seeks to represent a national class of
the Company's customers and seeks unspecified compensatory and punitive
damages. The Company is currently evaluating this lawsuit, which is in
an early stage and has not been certified as a class. The Company
intends to defend this lawsuit vigorously.
(13) Segment Information
-------------------
The Company uses differences in products as the basis for defining its
reportable segments. The Company reports three product segments:
Variable Annuities, Fixed Annuities and Life Insurance.
The Variable Annuities segment consists of annuity contracts that
provide the customer with the opportunity to invest in mutual funds
managed by independent investment managers and the Company, with
investment returns accumulating on a tax-deferred basis. The Company's
variable annuity products consist almost entirely of flexible premium
deferred variable annuity contracts.
The Fixed Annuities segment consists of annuity contracts that generate
a return for the customer at a specified interest rate, fixed for a
prescribed period, with returns accumulating on a tax-deferred basis.
Such contracts consist of single premium deferred annuities, flexible
premium deferred annuities and single premium immediate annuities. The
Fixed Annuities segment includes the fixed option under variable
annuity contracts.
The Life Insurance segment consists of insurance products, including
variable universal life insurance and corporate-owned life insurance
products, that provide a death benefit and may also allow the customer
to build cash value on a tax-deferred basis.
In addition to the product segments, the Company reports corporate
revenue and expenses, investments and related investment income
supporting capital not specifically allocated to its product segments,
revenues and expenses of its investment advisor subsidiary (other than
the portion allocated to the Variable Annuities and Life Insurance
segments), revenues and expenses related to group annuity contracts
sold to Nationwide Insurance Enterprise employee and agent benefit
plans and all realized gains and losses on investments in a Corporate
and Other segment.
<PAGE> 25
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Notes to Consolidated Financial Statements, Continued
The following table summarizes the financial results of the Company's business
segments for the years ended December 31, 1998, 1997 and 1996.
<TABLE>
<CAPTION>
Variable Fixed Life Corporate
(in millions of dollars) Annuities Annuities Insurance and Other Total
- ------------------------------------ --------- --------- --------- --------- -----
<S> <C> <C> <C> <C> <C>
1998:
Net investment income (1) $ (31.3) $ 1,116.6 $ 231.6 $ 164.7 $ 1,481.6
Other operating revenue 560.8 35.7 319.6 49.6 965.7
--------- --------- -------- -------- ---------
Total operating revenue (2) 529.5 1,152.3 551.2 214.3 2,447.3
--------- --------- -------- -------- ---------
Interest credited to policyholder
account balances -- 828.6 115.4 125.0 1,069.0
Amortization of deferred policy
acquisition costs 123.9 44.2 46.4 -- 214.5
Other benefits and expenses 187.2 104.2 294.6 49.1 635.1
--------- --------- -------- -------- ---------
Total expenses 311.1 977.0 456.4 174.1 1,918.6
--------- --------- -------- -------- ---------
Operating income (loss) before
federal income tax 218.4 175.3 94.8 40.2 528.7
Realized gains on investments -- -- -- 28.4 28.4
--------- --------- -------- -------- ---------
Consolidated income before
federal tax expense $ 218.4 $ 175.3 $ 94.8 $ 68.6 $ 557.1
========= ========= ======== ======== =========
Assets as of year end $47,668.7 $15,215.7 $5,187.6 $6,270.1 $74,342.1
========= ========= ======== ======== =========
1997:
Net investment income (1) $ (26.9) $ 1,098.2 $ 189.1 $ 148.8 $ 1,409.2
Other operating revenue 430.9 43.2 284.0 39.0 797.1
--------- --------- -------- -------- ---------
Total operating revenue (2) 404.0 1,141.4 473.1 187.8 2,206.3
--------- --------- -------- -------- ---------
Interest credited to policyholder
account balances -- 823.4 78.5 114.7 1,016.6
Amortization of deferred policy
acquisition costs 87.8 39.8 39.6 -- 167.2
Other benefits and expenses 165.3 108.7 284.1 45.6 603.7
--------- --------- -------- -------- ---------
Total expenses 253.1 971.9 402.2 160.3 1,787.5
--------- --------- -------- -------- ---------
Operating income before federal
income tax 150.9 169.5 70.9 27.5 418.8
Realized gains on investments -- -- -- 11.1 11.1
--------- --------- -------- -------- ---------
Consolidated income before
federal tax expense $ 150.9 $ 169.5 $ 70.9 $ 38.6 $ 429.9
========= ========= ======== ======== =========
Assets as of year end $35,278.7 $14,436.3 $3,901.4 $6,174.3 $59,790.7
========= ========= ======== ======== =========
</TABLE>
<PAGE> 26
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Notes to Consolidated Financial Statements, Continued
<TABLE>
<CAPTION>
Variable Fixed Life Corporate
(in millions of dollars) Annuities Annuities Insurance and Other Total
------------------------------------ ---------- ---------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
1996:
Net investment income (1) $ (21.5) $ 1,050.6 $ 174.0 $ 154.7 $ 1,357.8
Other operating revenue 306.1 42.0 261.6 25.7 635.4
---------- ---------- --------- --------- ---------
Total operating revenue (2) 284.6 1,092.6 435.6 180.4 1,993.2
---------- ---------- --------- --------- ---------
Interest credited to policyholder
account balances -- 805.0 70.2 107.1 982.3
Amortization of deferred policy
acquisition costs 57.4 38.6 37.4 -- 133.4
Benefits and expenses 136.9 113.6 260.8 50.4 561.7
---------- ---------- --------- --------- ---------
Total expenses 194.3 957.2 368.4 157.5 1,677.4
---------- ---------- --------- --------- ---------
Operating income before federal
income tax 90.3 135.4 67.2 22.9 315.8
Realized losses on investments -- -- -- (0.3) (0.3)
---------- ---------- --------- --------- ---------
Consolidated income from
continuing operations before
federal tax expense $ 90.3 $ 135.4 $ 67.2 $ 22.6 $ 315.5
========== ========== ======== ======== =========
Assets as of year end $ 25,069.7 $ 13,994.7 $3,353.3 $5,348.5 $47,766.2
========== ========== ======== ======== =========
</TABLE>
-----------
(1) The Company's method of allocating net investment income results
in a charge (negative net investment income) to the Variable
Annuities segment which is recognized in the Corporate and Other
segment. The charge relates to non-invested assets which support
this segment on a statutory basis.
(2) Excludes realized gains and losses on investments.
The Company has no significant revenue from customers located outside
of the United States nor does the Company have any significant
long-lived assets located outside the United States.
(14) Discontinued Operations
-----------------------
As discussed in note 1, NFS is a holding company for NLIC and certain
other companies within the Nationwide Insurance Enterprise that offer
or distribute long-term savings and retirement products. Prior to the
contribution by Nationwide Corp. of the outstanding common stock of
NLIC to NFS, NLIC effected certain transactions with respect to certain
subsidiaries and lines of business that were unrelated to long-term
savings and retirement products.
On September 24, 1996, NLIC's Board of Directors declared a dividend
payable to Nationwide Corp. on January 1, 1997 consisting of the
outstanding shares of common stock of three subsidiaries: ELICW, NCC
and WCLIC. ELICW writes group accident and health and group life
insurance business and maintains it offices in Wausau, Wisconsin. NCC
is a property and casualty company with offices in Scottsdale, Arizona
that serves as a fronting company for a property and casualty
subsidiary of NMIC. WCLIC writes high dollar term life insurance
policies and is located in San Francisco, California. ELICW, NCC and
WCLIC have been accounted for as discontinued operations in the
accompanying consolidated financial statements through December 31,
1996. The Company did not recognize any gain or loss on the disposal of
these subsidiaries.
<PAGE> 27
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Notes to Consolidated Financial Statements, Continued
Also, during 1996, NLIC entered into two reinsurance agreements whereby
all of NLIC's accident and health and group life insurance business was
ceded to ELICW and NMIC, effective January 1, 1996. See note 10 for a
complete discussion of the reinsurance agreements. The Company has
discontinued its accident and health and group life insurance business
and in connection therewith has entered into reinsurance agreements to
cede all existing and any future writings to other affiliated
companies. NLIC's accident and health and group life insurance business
is accounted for as discontinued operations for all periods presented.
The Company did not recognize any gain or loss on the disposal of the
accident and health and group life insurance business. The assets,
liabilities, results of operations and activities of discontinued
operations are distinguished physically, operationally and for
financial reporting purposes from the remaining assets, liabilities,
results of operations and activities of the Company.
A summary of the results of operations of discontinued operations for
the years ended December 31, 1998, 1997 and 1996 is as follows:
<TABLE>
<CAPTION>
(in millions of dollars) 1998 1997 1996
---- ---- ----
<S> <C> <C>
Revenues $ -- $ -- $ 668.9
Net income $ -- $ -- $ 11.3
</TABLE>
A summary of the assets and liabilities of discontinued operations as
of December 31, 1998, 1997 and 1996 is as follows:
<TABLE>
<CAPTION>
(in millions of dollars) 1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Assets, consisting primarily of investments $221.5 $247.3 $3,288.5
Liabilities, consisting primarily of policy benefits and claims $221.5 $247.3 $2,802.8
</TABLE>
<PAGE> 81
PART C. OTHER INFORMATION
Item 24. FINANCIAL STATEMENTS AND EXHIBITS
<TABLE>
<CAPTION>
(a) Financial Statements: PAGE
<S> <C>
(1) Financial statements included in Prospectus (Part A):
(2) Financial statements included N/A in Part B as required:
Nationwide Variable Account-9:
Independent Auditors' Report. 79
Statement of Assets, Liabilities and Contract
Owners' Equity as of December 31, 1998. 80
Statement of Operations and Changes in Contract Owners'
Equity for the year ended 1998 and the period November 3,
1997 (commencement of
operations) through December 31, 1997. 81
Notes to Financial Statements. 82
Nationwide Life Insurance Company and subsidiaries:
Independent Auditors' Report. 115
Consolidated Balance Sheets as of December
31, 1998 and 1997. 116
Consolidated Statements of Income for the
years ended December 31, 1998, 1997 and 117
1996.
Consolidated Statements of Shareholder's
Equity for the years ended December 31,
1998, 1997 and 1996. 118
Consolidated Statements of Cash Flows for
the years ended December 31, 1998, 1997
and 1996. 119
Notes to Consolidated Financial Statements. 120
</TABLE>
142 of 164
<PAGE> 82
<TABLE>
<CAPTION>
Item 24. (b) Exhibits
<S> <C>
(1) Resolution of the Depositor's Board of Filed previously with this Registration
Directors authorizing the Statement and incorporated by reference
establishment of the Registrant (333-52579).
(2) Not Applicable
(3) Underwriting or Distribution of Filed previously with this Registration
contracts between the Registrant and Statement and incorporated by reference
Principal Underwriter (333-52579).
(4) The form of the variable annuity Filed previously with this Registration
contract Statement and incorporated by reference
(333-52579).
(5) Variable Annuity Application Filed previously with this Registration
Statement and incorporated by reference
(333-52579).
(6) Articles of Incorporation of Depositor Filed previously with this Registration
Statement and incorporated by reference
(333-52579).
(7) Not Applicable
(8) Not Applicable
(9) Opinion of Counsel Filed previously with this Registration
Statement and incorporated by reference
(333-52579).
(10) Not Applicable
(11) Not Applicable
(12) Not Applicable
(13) Performance Advertising Calculation Filed previously with this Registration
Schedule Statement and incorporated by reference
(333-52579).
</TABLE>
143 of 164
<PAGE> 83
Item 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL POSITIONS AND OFFICES
BUSINESS ADDRESS WITH DEPOSITOR
- -------------------------------------------------------------------------------------------------------------------
<S> <C>
Lewis J. Alphin Director
519 Bethel Church Road
Mount Olive, NC 28365
- -------------------------------------------------------------------------------------------------------------------
A. I. Bell Director
4121 North River Road West
Zanesville, OH 43701
- -------------------------------------------------------------------------------------------------------------------
Kenneth D. Davis Director
7229 Woodmansee Road
Leesburg, OH 45135
- -------------------------------------------------------------------------------------------------------------------
Keith W. Eckel Director
1647 Falls Road
Clarks Summit, PA 18411
- -------------------------------------------------------------------------------------------------------------------
Willard J. Engel Director
300 East Marshall Street
Marshall, MN 56258
- -------------------------------------------------------------------------------------------------------------------
Fred C. Finney Director
1558 West Moreland Road
Wooster, OH 44691
- -------------------------------------------------------------------------------------------------------------------
Joseph J. Gasper President and Chief Operating Officer
One Nationwide Plaza and Director
Columbus, OH 43215
- -------------------------------------------------------------------------------------------------------------------
Dimon R. McFerson Chairman and Chief Executive Officer
One Nationwide Plaza and Director
Columbus, OH 43215
- -------------------------------------------------------------------------------------------------------------------
David O. Miller Chairman of the Board and Director
115 Sprague Drive
Hebron, OH 43025
- -------------------------------------------------------------------------------------------------------------------
Yvonne L. Montgomery Director
2859 Paces Ferry Road
Atlanta, GA 30339
- -------------------------------------------------------------------------------------------------------------------
Ralph M. Paige, Executive Director Director
Federation of Southern
Cooperatives/Land Assistance Fund
2769 Church Street
East Point, GA 30344
- -------------------------------------------------------------------------------------------------------------------
James F. Patterson Director
8765 Mulberry Road
Chesterland, OH 44026
- -------------------------------------------------------------------------------------------------------------------
Arden L. Shisler Director
1356 North Wenger Road
Dalton, OH 44618
- -------------------------------------------------------------------------------------------------------------------
Robert L. Stewart Director
88740 Fairview Road
Jewett, OH 43986
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
144 of 164
<PAGE> 84
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL POSITIONS AND OFFICES
BUSINESS ADDRESS WITH DEPOSITOR
- -------------------------------------------------------------------------------------------------------------------
<S> <C>
Nancy C. Thomas Director
1733A Westwood Avenue
Alliance, OH 44601
- -------------------------------------------------------------------------------------------------------------------
Richard D. Headley Executive Vice President - Chief
One Nationwide Plaza Information Technology Officer
Columbus, OH 43215
- -------------------------------------------------------------------------------------------------------------------
Robert A. Oakley Executive Vice President-
One Nationwide Plaza Chief Financial Officer
Columbus, OH 43215
- -------------------------------------------------------------------------------------------------------------------
Robert J. Woodward Jr. Executive Vice President
One Nationwide Plaza Chief Investment Officer
Columbus, OH 43215
- -------------------------------------------------------------------------------------------------------------------
James E. Brock Senior Vice President - Corporate
One Nationwide Plaza Development
Columbus, OH 43215
- -------------------------------------------------------------------------------------------------------------------
Charles A. Bryan Senior Vice President - Chief Actuary
One Nationwide Plaza Property and Casualty
Columbus, OH 43215
- -------------------------------------------------------------------------------------------------------------------
John R. Cook, Jr. Senior Vice President -
One Nationwide Plaza Chief Communications Officer
Columbus, OH 43215
- -------------------------------------------------------------------------------------------------------------------
Thomas L. Crumrine Senior Vice President
One Nationwide Plaza
Columbus, OH 43215
- -------------------------------------------------------------------------------------------------------------------
David A. Diamond Senior Vice President - Corporate
One Nationwide Plaza Controller
Columbus, OH 43215
- -------------------------------------------------------------------------------------------------------------------
Phillip C. Gath Senior Vice President -
One Nationwide Plaza Chief Actuary
Columbus, OH 43215
- -------------------------------------------------------------------------------------------------------------------
Patricia R. Hatler Senior Vice President and
One Nationwide Plaza General Counsel
Columbus, OH 43215
- -------------------------------------------------------------------------------------------------------------------
David K. Hollingsworth Senior Vice President - Marketing
One Nationwide Plaza
Columbus, OH 43215
- -------------------------------------------------------------------------------------------------------------------
David R. Jahn Senior Vice President -
One Nationwide Plaza Commercial Insurance
Columbus, OH 43215
- -------------------------------------------------------------------------------------------------------------------
Donna A. James Senior Vice President -
One Nationwide Plaza Chief Human Resources Officer
Columbus, OH 43215
- -------------------------------------------------------------------------------------------------------------------
Richard A. Karas Senior Vice President - Sales -
One Nationwide Plaza Financial Services
Columbus, OH 43215
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
145 of 164
<PAGE> 85
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
NAME AND PRINCIPAL POSITIONS AND OFFICES
BUSINESS ADDRESS WITH DEPOSITOR
- -------------------------------------------------------------------------------------------------------------------
<S> <C>
Edwin P. McCausland, Jr. Senior Vice President -
One Nationwide Plaza Fixed Income Securities
Columbus, OH 43215
- -------------------------------------------------------------------------------------------------------------------
Douglas C. Robinette Senior Vice President- Finance
One Nationwide Plaza
Columbus, OH 43215
- -------------------------------------------------------------------------------------------------------------------
James A. Taylor Senior Vice President -
One Nationwide Plaza Property and Casualty Insurance
Columbus, OH 43215
- -------------------------------------------------------------------------------------------------------------------
Mark R. Thresher Senior Vice President - Finance
One Nationwide Plaza
Columbus, OH 43215
- -------------------------------------------------------------------------------------------------------------------
Richard M. Waggoner Senior Vice President -
One Nationwide Plaza Shared Services
Columbus, OH 43215
- -------------------------------------------------------------------------------------------------------------------
Susan A. Wolken Senior Vice President -
One Nationwide Plaza Product Management and Marketing
Columbus, OH 43215
- -------------------------------------------------------------------------------------------------------------------
Bruce C. Barnes Vice President - Technology
One Nationwide Plaza Strategy and Planning
Columbus, OH 43215
- -------------------------------------------------------------------------------------------------------------------
Dennis W. Click Vice President - Secretary
One Nationwide Plaza
Columbus, OH 43215
- -------------------------------------------------------------------------------------------------------------------
Matthew S. Easley Vice President -
One Nationwide Plaza Investment Life Actuarial
Columbus, OH 43215
- -------------------------------------------------------------------------------------------------------------------
R. Dennis Noice Vice President - Systems
One Nationwide Plaza
Columbus, OH 43215
- -------------------------------------------------------------------------------------------------------------------
Joseph P. Rath Senior Vice President - Product
One Nationwide Plaza and Market Compliance
Columbus, OH 43215
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
Item 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR
OR REGISTRANT.
* Subsidiaries for which separate financial statements are
filed
** Subsidiaries included in the respective consolidated
financial statements
*** Subsidiaries included in the respective group financial
statements filed for unconsolidated subsidiaries
**** other subsidiaries
146 of 164
<PAGE> 86
<TABLE>
<CAPTION>
-------------------------------------- ------------------------- ------------------ ---------------------------------------
COMPANY STATE/COUNTRY OF NO. VOTING PRINCIPAL BUSINESS
ORGANIZATION SECURITIES
(SEE ATTACHED
CHART UNLESS
OTHERWISE
INDICATED)
-------------------------------------- ------------------------- ------------------ ---------------------------------------
<S> <C> <C> <C>
The 401K Companies, Inc. Texas Holding Company
-------------------------------------- ------------------------- ------------------ ---------------------------------------
The 401(K) Company Texas Third-party administrator for 401(k)
plans
-------------------------------------- ------------------------- ------------------ ---------------------------------------
401K Investment Advisors, Inc. Texas Investment Advisor registered with the
SEC
-------------------------------------- ------------------------- ------------------ ---------------------------------------
401K Investments Services, Inc. Texas NASD registered Broker-Dealer
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Affiliate Agency, Inc. Delaware Life Insurance Agency
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Affiliate Agency of Ohio, Inc. Ohio Life Insurance Agency
-------------------------------------- ------------------------- ------------------ ---------------------------------------
AID Finance Services, Inc. Iowa Holding Company
-------------------------------------- ------------------------- ------------------ ---------------------------------------
ALLIED General Agency Company Iowa Managing General Agent and Surplus
Lines Broker (P&C)
-------------------------------------- ------------------------- ------------------ ---------------------------------------
ALLIED Group, Inc. Iowa Holding Company
-------------------------------------- ------------------------- ------------------ ---------------------------------------
ALLIED Group Insurance Marketing Iowa Direct Marketer (P&C)
Company
-------------------------------------- ------------------------- ------------------ ---------------------------------------
ALLIED Group Merchant Banking Iowa
Corporation
-------------------------------------- ------------------------- ------------------ ---------------------------------------
ALLIED Group Mortgage Company Iowa Mortgage Lender
-------------------------------------- ------------------------- ------------------ ---------------------------------------
ALLIED Life Brokerage Agency, Inc. Iowa Insurance Broker
-------------------------------------- ------------------------- ------------------ ---------------------------------------
ALLIED Life Financial Corporation Iowa Holding Company
-------------------------------------- ------------------------- ------------------ ---------------------------------------
ALLIED Life Insurance Company Iowa Insurance Company
-------------------------------------- ------------------------- ------------------ ---------------------------------------
ALLIED Property and Casualty Iowa Underwrites General P&C Insurance
Insurance Company
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Allnations, Inc. Ohio Promotes international cooperative
insurance organizations
-------------------------------------- ------------------------- ------------------ ---------------------------------------
AMCO Insurance Company Iowa Underwrites General P&C Insurance
-------------------------------------- ------------------------- ------------------ ---------------------------------------
American Marine Underwriters, Inc. Florida Underwriting Manager
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Auto Direkt Insurance Company Germany Insurance Company
-------------------------------------- ------------------------- ------------------ ---------------------------------------
CalFarm Insurance Company California Stock Corporation
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Caliber Funding Corporation Delaware Stock Corporation
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Colonial County Mutual Insurance Texas Insurance Company
Company
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Colonial Insurance Company of Wisconsin Insurance Company
Wisconsin
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Columbus Insurance Brokerage and Germany Insurance Broker
Service GmbH
-------------------------------------- ------------------------- ------------------ ---------------------------------------
</TABLE>
147 of 164
<PAGE> 87
<TABLE>
<CAPTION>
-------------------------------------- ------------------------- ------------------ ---------------------------------------
COMPANY STATE/COUNTRY OF NO. VOTING PRINCIPAL BUSINESS
ORGANIZATION SECURITIES
(SEE ATTACHED
CHART UNLESS
OTHERWISE
INDICATED)
-------------------------------------- ------------------------- ------------------ ---------------------------------------
<S> <C> <C> <C>
Cooperative Service Company Nebraska Insurance Agency
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Depositors Insurance Company Iowa Underwrites P&C insurance
-------------------------------------- ------------------------- ------------------ ---------------------------------------
*Employers Life Insurance Company Wisconsin Life Insurance Company
of Wausau
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Excaliber Funding Corporation Delaware Limited purpose corporation
-------------------------------------- ------------------------- ------------------ ---------------------------------------
F&B, Inc. Iowa Insurance Agency
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Farmland Mutual Insurance Company Iowa Mutual Insurance Company
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Financial Horizons Distributors Alabama Insurance Agency
Agency of Alabama, Inc.
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Financial Horizons Distributors Ohio Insurance Agency
Agency of Ohio, Inc.
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Financial Horizons Distributors Oklahoma Insurance Agency
Agency of Oklahoma, Inc.
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Financial Horizons Distributors Texas Insurance Agency
Agency of Texas, Inc.
-------------------------------------- ------------------------- ------------------ ---------------------------------------
*Financial Horizons Investment Trust Massachusetts Investment Company
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Financial Horizons Securities Oklahoma Broker-Dealer
Corporation
-------------------------------------- ------------------------- ------------------ ---------------------------------------
GatesMcDonald Health Plus, Inc. Ohio Managed Care Organization
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Gates, McDonald & Company Ohio Cost Control
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Gates, McDonald & Company of Nevada Nevada Self-insurance administration, claims
examinations and data processing
services
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Gates, McDonald & Company of New New York Workers' compensation claims
York, Inc. administration
-------------------------------------- ------------------------- ------------------ ---------------------------------------
MedPro Solutions, Inc. Massachusetts Third-party administration services
for workers' compensation, automobile
injury and disability claims
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Insurance Intermediaries, Inc. Ohio Insurance Broker and Insurance Agency
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Irvin L. Schwartz and Associates, Ohio Insurance Agency
Inc.
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Landmark Financial Services of New New York Life Insurance Agency
York, Inc.
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Leben Direkt Insurance Company Germany Life Insurance Company
-------------------------------------- ------------------------- ------------------ ---------------------------------------
</TABLE>
148 of 164
<PAGE> 88
<TABLE>
<CAPTION>
-------------------------------------- ------------------------- ------------------ ---------------------------------------
COMPANY STATE/COUNTRY OF NO. VOTING PRINCIPAL BUSINESS
ORGANIZATION SECURITIES
(SEE ATTACHED
CHART UNLESS
OTHERWISE
INDICATED)
-------------------------------------- ------------------------- ------------------ ---------------------------------------
<S> <C> <C> <C>
Lone Star General Agency, Inc. Texas Insurance Agency
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Midwest Printing Services, Inc. Iowa General Printing Services
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Morley & Associates Oregon Insurance Broker
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Morley Capital Management, Inc. Oregon Investment Adviser and stable value
money management
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Morley Financial Services, Inc. Oregon Holding Company
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Morley Research Associates, Ltd. Delaware Credit research consulting
-------------------------------------- ------------------------- ------------------ ---------------------------------------
**MRM Investments, Inc. Ohio Owns and operates a recreational ski
facility
-------------------------------------- ------------------------- ------------------ ---------------------------------------
**National Casualty Company Wisconsin Insurance Company
-------------------------------------- ------------------------- ------------------ ---------------------------------------
National Casualty Company of America, Great Britain Insurance Company
Ltd.
-------------------------------------- ------------------------- ------------------ ---------------------------------------
National Deferred Compensation, Inc. Ohio Administers deferred compensation
plans for public employees
-------------------------------------- ------------------------- ------------------ ---------------------------------------
**National Premium and Benefit Delaware Insurance Administrative Services
Administration Company
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Nationwide Advisory Services, Inc. Ohio Investment Management and
Administrative Services
-------------------------------------- ------------------------- ------------------ ---------------------------------------
**Nationwide Agency, Inc. Ohio Insurance Agency
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Nationwide Agribusiness Insurance Iowa Insurance Company
Company
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Nationwide Asset Allocation Trust Massachusetts Investment Company
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Nationwide Cash Management Company Ohio Investment Securities Agent
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Nationwide Community Urban Ohio Special purpose real estate corporation
Redevelopment Corporation
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Nationwide Corporation Ohio Holding Company
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Nationwide Financial Institution Delaware Insurance Agency
Distributors Agency, Inc.
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Nationwide Financial Services Bermuda Life Insurance Company
(Bermuda) Ltd.
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Nationwide Financial Services Delaware Statutory Business Trust
Capital Trust
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Nationwide Financial Services Delaware Statutory Business Trust
Capital Trust II
-------------------------------------- ------------------------- ------------------ ---------------------------------------
</TABLE>
149 of 164
<PAGE> 89
<TABLE>
<CAPTION>
-------------------------------------- ------------------------- ------------------ ---------------------------------------
COMPANY STATE/COUNTRY OF NO. VOTING PRINCIPAL BUSINESS
ORGANIZATION SECURITIES
(SEE ATTACHED
CHART UNLESS
OTHERWISE
INDICATED)
-------------------------------------- ------------------------- ------------------ ---------------------------------------
<S> <C> <C> <C>
Nationwide Financial Services, Inc. Delaware Holding Company
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Nationwide General Insurance Company Ohio Insurance Company
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Nationwide Global Holdings, Inc. Ohio Holding Company for International
Operations
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Nationwide Health Plans, Inc. Ohio Health Maintenance Organization
-------------------------------------- ------------------------- ------------------ ---------------------------------------
*Nationwide Indemnity Company Ohio Reinsurance Company
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Nationwide Insurance Company of California Underwriter
America
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Nationwide Insurance Company of Ohio Insurance Company
Florida
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Nationwide Insurance Enterprise Ohio Membership Non-Profit Corporation
Foundation
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Nationwide Services Company, LCC Ohio Shared services functions
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Nationwide Insurance Golf Charities, Ohio Membership Non-Profit Corporation
Inc.
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Nationwide International Underwriters California Underwriting Manager
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Nationwide Investing Foundation Michigan Provide investors with continuous
source of investment
-------------------------------------- ------------------------- ------------------ ---------------------------------------
*Nationwide Investing Foundation II Massachusetts Common Law Trust
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Nationwide Investment Services Oklahoma Registered Broker-Dealer in deferred
Corporation compensation market
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Nationwide Investors Services, Inc. Ohio Stock Transfer Agent
-------------------------------------- ------------------------- ------------------ ---------------------------------------
**Nationwide Life and Annuity Ohio Life Insurance Company
Insurance Company
-------------------------------------- ------------------------- ------------------ ---------------------------------------
**Nationwide Life Insurance Company Ohio Life Insurance Company
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Nationwide Lloyds Texas Property Insurance
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Nationwide Management Systems, Inc. Ohio Preferred provider organization,
products and related services
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Nationwide Mutual Fire Insurance Ohio Mutual Insurance Company
Company
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Nationwide Mutual Funds Ohio Investment Company
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Nationwide Mutual Insurance Company Ohio Mutual Insurance Company
-------------------------------------- ------------------------- ------------------ ---------------------------------------
</TABLE>
150 of 164
<PAGE> 90
<TABLE>
<CAPTION>
-------------------------------------- ------------------------- ------------------ ---------------------------------------
COMPANY STATE/COUNTRY OF NO. VOTING PRINCIPAL BUSINESS
ORGANIZATION SECURITIES
(SEE ATTACHED
CHART UNLESS
OTHERWISE
INDICATED)
-------------------------------------- ------------------------- ------------------ ---------------------------------------
<S> <C> <C> <C>
Nationwide Properties, Ltd. Ohio Develop, own and operate real estate
and real estate investments
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Nationwide Property and Casualty Ohio Insurance Company
Insurance Company
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Nationwide Realty Investors, Inc. Ohio Develop, own and operate real estate
and real estate investments
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Nationwide Retirement Solutions, Inc. Delaware Market and administer deferred
compensation plans for public employees
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Nationwide Retirement Solutions, Alabama Market and administer deferred
Inc. of Alabama compensation plans for public employees
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Nationwide Retirement Solutions, Arizona Market and administer deferred
Inc. of Arizona compensation plans for public employees
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Nationwide Retirement Solutions, Arkansas Market and administer deferred
Inc. of Arkansas compensation plans for public employees
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Nationwide Retirement Solutions, Montana Market and administer deferred
Inc. of Montana compensation plans for public employees
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Nationwide Retirement Solutions, Nevada Market and administer deferred
Inc. of Nevada compensation plans for public employees
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Nationwide Retirement Solutions, New Mexico Market and administer deferred
Inc. of New Mexico compensation plans for public employees
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Nationwide Retirement Solutions, Ohio Market variable annuity contracts to
Inc. of Ohio members of the National Education
Association in the state of Ohio
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Nationwide Retirement Solutions, Oklahoma Market variable annuity contracts to
Inc. of Oklahoma members of the National Education
Association in the state of Oklahoma
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Nationwide Retirement Solutions, South Dakota Market and administer deferred
Inc. of South Dakota compensation plans for public employees
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Nationwide Retirement Solutions, Texas Market and administer deferred
Inc. of Texas compensation plans for public employees
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Nationwide Retirement Solutions, Wyoming Market variable annuity contracts to
Inc. of Wyoming members of the National Education
Association in the state of Wyoming
-------------------------------------- ------------------------- ------------------ ---------------------------------------
</TABLE>
151 of 164
<PAGE> 91
<TABLE>
<CAPTION>
-------------------------------------- ------------------------- ------------------ ---------------------------------------
COMPANY STATE/COUNTRY OF NO. VOTING PRINCIPAL BUSINESS
ORGANIZATION SECURITIES
(SEE ATTACHED
CHART UNLESS
OTHERWISE
INDICATED)
-------------------------------------- ------------------------- ------------------ ---------------------------------------
<S> <C> <C> <C>
Nationwide Retirement Solutions Massachusetts Market and administer deferred
Insurance Agency Inc. compensation plans for public employees
-------------------------------------- ------------------------- ------------------ ---------------------------------------
*Nationwide Separate Account Trust Massachusetts Investment Company
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Nationwide Trust Company, FSB United States of America Federal Savings Bank
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Neckura Holding Company Germany Administrative services for Neckura
Insurance Group
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Neckura Insurance Company Germany Insurance Company
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Neckura Life Insurance Company Germany Life Insurance Company
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Nevada Independent Workers' compensation administrative
Companies-Construction services
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Nevada Independent Companies-Health Nevada Workers' compensation administrative
and Nonprofit services
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Nevada Independent Companies- Nevada Workers' compensation administrative
Hospitality and Entertainment services
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Nevada Independent Companies- Nevada Workers' compensation administrative
Manufacturing services
-------------------------------------- ------------------------- ------------------ ---------------------------------------
NFS Distributors, Inc. Delaware Holding Company
-------------------------------------- ------------------------- ------------------ ---------------------------------------
NWE, Inc. Ohio Special Investments
-------------------------------------- ------------------------- ------------------ ---------------------------------------
PanEuroLife Luxembourg Life Insurance
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Pension Associates, Inc. Wisconsin Pension plan administration
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Portland Investment Services, Inc. Oregon NASD Registered Broker-Dealer
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Premier Agency, Inc. Iowa Insurance Agency
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Riverview Agency, Inc. Texas Stock Corporation
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Scottsdale Indemnity Company Ohio Insurance Company
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Scottsdale Insurance Company Ohio Insurance Company
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Scottsdale Surplus Lines Insurance Arizona Excess and Surplus Lines Insurance
Company Company
-------------------------------------- ------------------------- ------------------ ---------------------------------------
SVM Sales GmbH, Neckura Insurance Germany Sales support for Neckura Insurance
Group Group
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Union Bond and Trust Company Oregon Oregon state bank with trust powers
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Villanova Capital, Inc. Delaware Holding Company
-------------------------------------- ------------------------- ------------------ ---------------------------------------
</TABLE>
152 of 164
<PAGE> 92
<TABLE>
<CAPTION>
-------------------------------------- ------------------------- ------------------ ---------------------------------------
COMPANY STATE/COUNTRY OF NO. VOTING PRINCIPAL BUSINESS
ORGANIZATION SECURITIES
(SEE ATTACHED
CHART UNLESS
OTHERWISE
INDICATED)
-------------------------------------- ------------------------- ------------------ ---------------------------------------
<S> <C> <C> <C>
Villanova Mutual Fund Capital Trust Delaware Business Trust
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Villanova SA Capital Trust Delaware Business Trust
-------------------------------------- ------------------------- ------------------ ---------------------------------------
**Wausau Preferred Health Insurance Wisconsin Insurance and Reinsurance Company
Company
-------------------------------------- ------------------------- ------------------ ---------------------------------------
Western Heritage Insurance Company Arizona Excess and Surplus Lines Insurance
Company
-------------------------------------- ------------------------- ------------------ ---------------------------------------
</TABLE>
153 of 164
<PAGE> 93
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------
COMPANY STATE/COUNTRY OF NO. VOTING SECURITIES PRINCIPAL BUSINESS
ORGANIZATION (SEE ATTACHED CHART)
UNLESS OTHERWISE INDICATED
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
* MFS Variable Account Ohio Nationwide Life Separate Issuer of Annuity Contracts
Account
-------------------------------------------------------------------------------------------------------------------------------
* NACo Variable Account Ohio Nationwide Life Separate Issuer of Annuity Contracts
Account
-------------------------------------------------------------------------------------------------------------------------------
* Nationwide DC Variable Account Ohio Nationwide Life Separate Issuer of Annuity Contracts
Account
-------------------------------------------------------------------------------------------------------------------------------
Nationwide DCVA-II Ohio Nationwide Life Separate Issuer of Annuity Contracts
Account
-------------------------------------------------------------------------------------------------------------------------------
* Separate Account No. 1 Ohio Nationwide Life Separate Issuer of Annuity Contracts
Account
-------------------------------------------------------------------------------------------------------------------------------
* Nationwide Multi-Flex Variable Account Ohio Nationwide Life Separate Issuer of Annuity Contracts
Account
-------------------------------------------------------------------------------------------------------------------------------
* Nationwide VA Separate Account-A Ohio Nationwide Life and Annuity Issuer of Annuity Contracts
Separate Account
-------------------------------------------------------------------------------------------------------------------------------
* Nationwide VA Separate Account-B Ohio Nationwide Life and Annuity Issuer of Annuity Contracts
Separate Account
-------------------------------------------------------------------------------------------------------------------------------
* Nationwide VA Separate Account-C Ohio Nationwide Life and Annuity Issuer of Annuity Contracts
Separate Account
-------------------------------------------------------------------------------------------------------------------------------
Nationwide VA Separate Account-Q Ohio Nationwide Life and Annuity Issuer of Annuity Contracts
Separate Account
-------------------------------------------------------------------------------------------------------------------------------
* Nationwide Variable Account Ohio Nationwide Life Separate Issuer of Annuity Contracts
Account
-------------------------------------------------------------------------------------------------------------------------------
* Nationwide Variable Account-II Ohio Nationwide Life Separate Issuer of Annuity Contracts
Account
-------------------------------------------------------------------------------------------------------------------------------
* Nationwide Variable Account-3 Ohio Nationwide Life Separate Issuer of Annuity Contracts
Account
-------------------------------------------------------------------------------------------------------------------------------
* Nationwide Variable Account-4 Ohio Nationwide Life Separate Issuer of Annuity Contracts
Account
-------------------------------------------------------------------------------------------------------------------------------
* Nationwide Variable Account-5 Ohio Nationwide Life Separate Issuer of Annuity Contracts
Account
-------------------------------------------------------------------------------------------------------------------------------
* Nationwide Variable Account-6 Ohio Nationwide Life Separate Issuer of Annuity Contracts
Account
-------------------------------------------------------------------------------------------------------------------------------
* Nationwide Fidelity Advisor Variable Ohio Nationwide Life Separate Issuer of Annuity Contracts
Account Account
-------------------------------------------------------------------------------------------------------------------------------
Nationwide Variable Account-8 Ohio Nationwide Life Separate Issuer of Annuity Contracts
Account
-------------------------------------------------------------------------------------------------------------------------------
* Nationwide Variable Account-9 Ohio Nationwide Life Separate Issuer of Annuity Contracts
Account
-------------------------------------------------------------------------------------------------------------------------------
Nationwide Variable Account-10 Ohio Nationwide Life Separate Issuer of Annuity Contracts
Account
-------------------------------------------------------------------------------------------------------------------------------
* Nationwide VL Separate Account-A Ohio Nationwide Life and Annuity Issuer of Life Insurance
Separate Account Policies
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>
154 of 164
<PAGE> 94
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------
COMPANY STATE/COUNTRY OF NO. VOTING SECURITIES PRINCIPAL BUSINESS
ORGANIZATION (SEE ATTACHED CHART)
UNLESS OTHERWISE INDICATED
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Nationwide VL Separate Account-B Ohio Nationwide Life and Annuity Issuer of Life Insurance
Separate Account Policies
-------------------------------------------------------------------------------------------------------------------------------
* Nationwide VL Separate Account-C Ohio Nationwide Life and Annuity Issuer of Life Insurance
Separate Account Policies
-------------------------------------------------------------------------------------------------------------------------------
Nationwide VL Separate Account -D Ohio Nationwide Life and Annuity Issuer of Life Insurance
Separate Account Policies
-------------------------------------------------------------------------------------------------------------------------------
* Nationwide VLI Separate Account Ohio Nationwide Life Separate Issuer of Life Insurance
Account Policies
-------------------------------------------------------------------------------------------------------------------------------
* Nationwide VLI Separate Account-2 Ohio Nationwide Life Separate Issuer of Life Insurance
Account Policies
-------------------------------------------------------------------------------------------------------------------------------
* Nationwide VLI Separate Account-3 Ohio Nationwide Life Separate Issuer of Life Insurance
Account Policies
-------------------------------------------------------------------------------------------------------------------------------
* Nationwide VLI Separate Account-4 Ohio Nationwide Life Separate Issuer of Life Insurance
Account Policies
-------------------------------------------------------------------------------------------------------------------------------
Nationwide VLI Separate Account-5 Ohio Nationwide Life Separate Issuer of Life Insurance
Account Policies
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>
155 of 164
<PAGE> 95
<TABLE>
<CAPTION>
(left side)
<S> <C> <C> <C>
- ------------------------
| NATIONWIDE INSURANCE |
| GOLF CHARITIES, INC. |
| |
| MEMBERSHIP |
| NONPROFIT |
| CORPORATION |
- ------------------------
-------------------------------------------------------------------------------------------------------------------------
| | |
- --------------------------- --------------------------- ----------------------------
| ALLIED LIFE | | ALLIED | | AID FINANCE |
| FINANCIAL | | GROUP, INC. | | SERVICES, INC. |
| CORPORATION | | (AGI) | | (AID FINANCE) |
| (ALFC) | | | | |
|Common Stock: 850 | |Common Stock: 850 Shares | |Common Stock: 10,000 |
|------------ Shares | |------------ | |------------ Shares |
| |---| | |---| | |
| Cost | | | Cost | | | Cost |
| ---- | | | ---- | | | ---- |
|Casualty- | | |Casualty- | | |Casualty- |
|100% $47,286,429 | | |100% $1,049,237,226| | |100% $19,545,634 |
- --------------------------- | --------------------------- | ----------------------------
| | |
- --------------------------- | --------------------------- | ----------------------------
| ALLIED GROUP | | | AMCO | | | ALLIED |
| MERCHANT BANKING | | | INSURANCE COMPANY | | | GROUP INSURANCE |
| CORPORATION | | | (AMCO) | | | MARKETING COMPANY |
|Common Stock: 10,000 | | |Common Stock: 155,991 | | |Common Stock: 20,000 |
|------------ Shares | | |------------ Shares | | |------------ Shares |
| |---| |----| |---| | |
| Cost | | | | Cost | | | Cost |
| ---- | | | | ---- | | | ---- |
| | | | | | | |Aid Finance- |
|AFLC-100% $100,000 | | | |AGI-100% $95,925,450| | |100% $16,059,469 |
- --------------------------- | | --------------------------- | ----------------------------
| | |
- --------------------------- | | --------------------------- | ----------------------------
| ALLIED LIFE | | | | WESTERN | | | DEPOSITORS |
| BROKERAGE | | | | HERITAGE INSURANCE | | | INSURANCE COMPANY |
| AGENCY, INC. | | | | COMPANY | | | (DEPOSITORS) |
|Common Stock: 500,000 | | | |Common Stock: 4,776,076 | | |Common Stock: 199,991 |
|------------ Shares | | | |------------ Shares | | |------------ Shares |
| |---| |----| | |---| |
| Cost | | | | Cost | | | Cost |
| ---- | | | | ---- | | | ---- |
|AFLC-100% $442,695 | | | |AMCO-100% $11,686,037| | |AGI-100% $15,251,842 |
- --------------------------- | | --------------------------- | ----------------------------
| | |
- --------------------------- | | --------------------------- | ----------------------------
| ALLIED LIFE | | | | ALLIED | | | ALLIED PROPERTY |
| INSURANCE | | | | GENERAL AGENCY | | | AND CASUALTY |
| COMPANY | | | | COMPANY | | | INSURANCE COMPANY |
|Common Stock: 250,000 | | | |Common Stock: 5,000 | | |Common Stock: 156,822 |
|------------ Shares | | | |------------ Shares | | |------------ Shares |
| |---| |----| | |---| |
| Cost | | Cost | | | Cost |
| ---- | | ---- | | | ---- |
|AFLC-100% $41,732,343| |AMCO-100% $135,342 | | |AGI-100% $33,018,634 |
- --------------------------- --------------------------- | ----------------------------
|
--------------------------- | ----------------------------
| PREMIER | | | ALLIED |
| AGENCY, | | | GROUP MORTGAGE |
| INC. | | | COMPANY |
|Common Stock: 100,000 | | |Common Stock: 9,500 |
|------------ Shares | | |------------ Shares |
| |---|---| |
| Cost | | | Cost |
| ---- | | | ---- |
|AGI-100% $100,000 | | |AGI-100% $213,976 |
--------------------------- | ----------------------------
|
| ----------------------------
| | MIDWEST |
| | PRINTING SERVICES |
| | LTD. |
| |Common Stock: 10,000 |
| |------------ Shares |
|---| |
| Cost |
| ---- |
|AFLC-100% $610,000 |
----------------------------
</TABLE>
<PAGE> 96
<TABLE>
<CAPTION>
NATIONWIDE INSURANCE ENTERPRISE(R) (middle)
<S> <C> <C>
------------------------------------------ ------------------------------------------
| | | |
| NATIONWIDE MUTUAL | | NATIONWIDE MUTUAL |
| INSURANCE COMPANY |============================| FIRE INSURANCE COMPANY |
| (CASUALTY) | | (FIRE) |
| | | |
------------------------------------------ ------------------------------------------
| || | |
| || |--------------------------------------------------------------------| |--------------------------
- --| || |
|| |--------------------------------------------------------------|----------------
|| | |
|| -------------------------------- | -------------------------------- --------------------------------
|| | | | | NATIONWIDE GENERAL | | NECKURA HOLDING |
|| | | | | INSURANCE COMPANY | | COMPANY (NECKURA) |
|| | NATIONWIDE LLOYDS | | | | | |
|| | | | |Common Stock: 20,000 | |Common Stock: 10,000 |
||==| | |---|------------ Shares | |--|------------ Shares |
|| | A TEXAS LLOYDS | | | | | | |
|| | | | | Cost | | | Cost |
|| | | | | ---- | | | ---- |
|| | | | |Casualty-100% $5,944,422 | | |Casualty-100% $87,943,140 |
|| -------------------------------- | -------------------------------- | --------------------------------
|| | |
|| -------------------------------- | -------------------------------- | --------------------------------
|| | FARMLAND MUTUAL | | | NATIONWIDE PROPERTY | | | NECKURA |
|| | INSURANCE COMPANY | | | AND CASUALTY | | | INSURANCE COMPANY |
|| |Guaranty Fund | | | INSURANCE COMPANY | | | |
|| |------------ | | |Common Stock: 60,000 | |--|Common Stock: 6,000 |
||==|Certificate |---| |---|------------ Shares | | |------------ Shares |
|----------- Cost | | | | Cost | | | Cost |
| ---- | | | | ---- | | |Neckura- ---- |
|Casualty $500,000 | | | |Casualty-100% $6,000,000 | | |100% DM 6,000,000 |
-------------------------------- | | -------------------------------- | --------------------------------
| | |
-------------------------------- | | -------------------------------- | --------------------------------
| F & B, INC. | | | | COLONIAL INSURANCE | | | NECKURA LIFE |
| | | | | COMPANY OF WISCONSIN | | | INSURANCE COMPANY |
|Common Stock: 1 Share | | | | (COLONIAL) | | | |
|------------ |---- |---|Common Stock: 1,750 | |--|Common Stock: 4,000 |
| Cost | | | |------------ Shares | | |------------ Shares |
| ---- | | | | Cost | | | Cost |
|Farmland | | | | ---- | | | ---- |
|Mutual-100% $10 | | | |Casualty-100% $41,750,000 | | |Neckura-100% DM 15,825,681 |
-------------------------------- | | -------------------------------- | --------------------------------
| | |
-------------------------------- | | -------------------------------- | --------------------------------
| COOPERATIVE SERVICE | | | | SCOTTSDALE | | | NECKURA GENERAL |
| COMPANY | | | | INSURANCE COMPANY | | | INSURANCE COMPANY |
|Common Stock: 600 Shares | | | | (SIC) | | | |
|------------ | | | |Common Stock: 30,136 | | |Common Stock: 1,500 |
| Cost |---- |---|------------ Shares | ---- |--|------------ Shares |
| ---- | | | Cost | | | | Cost |
|Farmland $3,506,173 | | | ---- | | | | ---- |
|Mutual-100% | | |Casualty-100% $150,000,000 | | | |Neckura-100% DM 1,656,925 |
-------------------------------- | -------------------------------- | | --------------------------------
| | |
-------------------------------- | -------------------------------- | | --------------------------------
| NATIONWIDE AGRIBUSINESS | | | SCOTTSDALE | | | | COLUMBUS INSURANCE |
| INSURANCE COMPANY | | | SURPLUS LINES | | | | BROKERAGE AND SERVICE |
|Common Stock: 1,000,000 | | | INSURANCE COMPANY | | | | GmbH |
|------------ Shares | | | Common Stock: 10,000 | | | |Common Stock: 1 Share |
| |--------| | ------------ Shares | ---| |--|------------ |
| Cost | | | | | | | |
|Casualty-99.9% ---- | | | Cost | | | | Cost |
|Other Capital: $26,714,335 | | | ---- | | | | ---- |
|------------- | | | SIC-100% $6,000,000 | | | |Neckura-100% DM 51,639 |
|Casualty-Ptd. $ 713,576 | | | | | | | |
-------------------------------- | -------------------------------- | | --------------------------------
| | |
-------------------------------- | -------------------------------- | | --------------------------------
| NATIONAL CASUALTY | | | NATIONAL PREMIUM & | | | | LEBEN DIREKT |
| COMPANY | | | BENEFIT ADMINISTRATION | | | | INSURANCE COMPANY |
| (NC) | | | COMPANY | | | | |
|Common Stock: 100 Shares | | |Common Stock: 10,000 | | | |Common Stock: 4,000 Shares |
|------------ |--------| |------------ Shares |----| |--|------------ |
| Cost | | Cost | | | Cost |
| ---- | | ---- | | | ---- |
|Casualty-100% $67,442,439 | |Scottsdale-100% $10,000 | | |Neckura-100% DM 4,000,000 |
-------------------------------- -------------------------------- | --------------------------------
| |
-------------------------------- -------------------------------- | --------------------------------
| NCC OF AMERICA, LTD. | | SVM SALES | | | AUTO DIREKT |
| (INACTIVE) | | GmbH | | | INSURANCE COMPANY |
| | | | | | |
| | |Common Stock: 50 Shares | | |Common Stock: 1500 Shares |
| | |------------ |------------|------------ |
| | | Cost | | Cost |
|NC-100% | | ---- | | ---- |
| | |Neckura-100% DM 50,000 | |Neckura-100% DM 1,643,149 |
| | | | | |
| | | | | |
-------------------------------- -------------------------------- --------------------------------
</TABLE>
<PAGE> 97
<TABLE>
<CAPTION>
(right side)
<S> <C> <C> <C>
------------------------
| NATIONWIDE INSURANCE |
| ENTERPRISE FOUNDATION|
| |
| MEMBERSHIP |
| NONPROFIT |
| CORPORATION |
------------------------
- -----------------------------------------------------------------------|
|
- --------------- --------------------------------------------------
| |
- -----------------------------------------------------------------------------------------|----------------------- |
| | | | |
| -------------------------------- | -------------------------------- | ----------------------------------
| | SCOTTSDALE | | | NATIONWIDE | | | NATIONWIDE |
| | INDEMNITY COMPANY | | | COMMUNITY URBAN | | | CORPORATION |
| | | | | REDEVELOPMENT | | | |
| | | | | CORPORATION | | |Common Stock: Control: |
| |Common Stock: 50,000 | | |Common Stock: 10 Shares | | |------------ ------- |
|-----|------------ Shares | |----|------------ | | |$13,642,432 100% |
| | Cost | | | Cost | | | Shares Cost |
| | ---- | | | ---- | | | ------ ---- |
| |Casualty-100% $8,800,000 | | |Casualty-100% $1,000 | | |Casualty 12,992,922 $751,352,485|
| | | | | | | |Fire 649,510 24,007,936|
| | | | | | | | (See Page 2) |
| -------------------------------- | -------------------------------- | ----------------------------------
| | |
| -------------------------------- | -------------------------------- | ----------------------------------
| | NATIONWIDE | | | INSURANCE | | | ALLNATIONS, INC. |
| | INDEMNITY COMPANY | | | INTERMEDIARIES, INC. | | |Common Stock: 10,330 Shares |
| | | | | | | |------------- Cost |
|-----|Common Stock: 28,000 | |----|Common Stock: 1,615 | |--------| ---- |
| |------------ Shares | | |------------ Shares | | |Casualty-18.6% $88,320 |
| | Cost | | | Cost | | |Fire-18.6% $88,463 |
| | ---- | | | ---- | | |Preferred Stock 1466 Shares |
| |Casualty-100% $294,529,000 | | |Casualty-100% $1,615,000 | | |--------------- Cost |
| | | | | | | | ---- |
| | | | | | | |Casualty-6.8% $100,000 |
| | | | | | | |Fire-6.8% $100,000 |
| -------------------------------- | -------------------------------- | ----------------------------------
| | |
| -------------------------------- | -------------------------------- | ----------------------------------
| | LONE STAR | | | NATIONWIDE CASH | | | PENSION ASSOCIATES |
| | GENERAL AGENCY, INC. | | | MANAGEMENT COMPANY | | | OF WAUSAU, INC. |
| | | | |Common Stock: 100 Shares | | |Common Stock: 1,000 Shares |
------|Common Stock: 1,000 | |----|------------ | |--------|------------- |
| |------------ Shares | | | Cost | | | Cost |
| | Cost | | | ---- | | | ---- |
| | ---- | | |Casualty-90% $9,000 | | | |
| |Casualty-100% $5,000,000 | | |NW Adv. Serv. 1,000 | | |Casualty-100% $2,839,392 |
| -------------------------------- | -------------------------------- | ----------------------------------
| || | |
| -------------------------------- | -------------------------------- | ----------------------------------
| | COLONIAL COUNTY MUTUAL | | | NATIONWIDE INSURANCE | | | AMERCIAN MARINE |
| | INSURANCE COMPANY | | | COMPANY OF FLORIDA | | | UNDERWRITERS, INC. |
| | | | |Common Stock: 10,000 | | |Common Stock: 20 Shares |
| |Surplus Debentures | | |------------- Shares | | |------------- |
| |------------------ | |----| | |--------| Cost |
| | Cost | | | Cost | | ---- |
| | ---- | | | ---- | | |
| |Colonial $500,000 | | |Casualty-100% $300,000,000 | |Casualty-100% $5,020 |
| |Lone Star 150,000 | | | | | |
| -------------------------------- | -------------------------------- ----------------------------------
| |
| -------------------------------- | --------------------------------
| | TIG COUNTRYWIDE | | | WAUSAU INTERNATIONAL |
| | INSURANCE COMPANY | | | UNDERWRITERS |
| |Common Stock 12,000 | | | |
| |------------ Shares | | |Common Stock: 1,000 Shares |
|-----| | -----|------------ |
| | Cost | | | Cost |
| | ---- | | | ---- |
| |Casualty-100% $215,273,000 | | |Casualty-100% $10,000 |
| | | | | |
| -------------------------------- | | |
| | --------------------------------
| |
| -------------------------------- | --------------------------------
| | NATIONWIDE INSURANCE | | | NATIONWIDE |
| | ENTERPRISE SERVICES, LTD. | | | ARENA LLC |
| | | | | |
| |Single Member Limited | | | |
|.....|Liability Company | |....| |
| | | |
| | | |
|Casualty-100% | |Casualty-90% |
| | | |
-------------------------------- --------------------------------
Subsidiary Companies -- Solid Line
Contractual Association -- Double Line
Limited Liability Company -- Dotted Line
December 31, 1998
</TABLE>
Page 1
<PAGE> 98
<TABLE>
<CAPTION>
(Left Side)
<S> <C> <C> <C> <C> <C> <C>
|----------------------------------|-----------------------------------|-------------------------------
| | |
----------------------------- ----------------------------- -----------------------------
| NATIONWIDE LIFE INSURANCE | | NATIONWIDE | | NATIONWIDE FINANCIAL |
| COMPANY (NW LIFE) | | FINANCIAL SERVICES | | INSTITUTION DISTRIBUTORS |
| | | CAPITAL TRUST | | AGENCY, INC. (NFIDAI) |
| Common Stock: 3,814,779 | | Preferred Stock: | | Common Stock: 1,000 |
| ------------ Shares | | --------------- | | ------------ Shares |
| | | | | |
| NFS--100% | | NFS--100% | | NFS--100% |
----------------|------------ ----------------------------- ---------------||------------
| ||
- ----------------------------- | ----------------------------- ----------------------------- || ----------------------------
| NATIONWIDE LIFE AND | | | NATIONWIDE | | FINANCIAL HORIZONS | || | |
| ANNUITY INSURANCE COMPANY | | | ADVISORY SERVICES, INC. | | DISTRIBUTORS AGENCY | || | |
| | | | (NW ADV. SERV.) | | OF ALABAMA, INC. | || | |
| Common Stock: 66,000 | | | Common Stock: 7,676 | | Common Stock: 10,000 | || | FINANCIAL HORIZONS |
| ------------ Shares |--|--| ------------ Shares |==|| | ------------ Shares |--||==| DISTRIBUTORS AGENCY |
| | | | | || | | || | OF OHIO, INC. |
| Cost | | | Cost | || | Cost | || | |
| ---- | | | ---- | || | ---- | || | |
| NW Life -100% $58,070,003 | | | NW Life -100% $5,996,261 | || | NFIDAI -100% $100 | || | |
- ----------------------------- | ----------------------------- || ----------------------------- || ----------------------------
| || ||
- ----------------------------- | ----------------------------- || ----------------------------- || ----------------------------
| NWE, INC. | | | NATIONWIDE | || | LANDMARK FINANCIAL | || | |
| | | | INVESTORS SERVICES, INC. | || | SERVICES OF | || | |
| | | | | || | NEW YORK, INC. | || | |
| Common Stock: 100 | | | Common Stock: 5 Shares | || | Common Stock: 10,000 | || | FINANCIAL HORIZONS |
| ------------ Shares |--| | ------------ |--|| | ------------ Shares |--||==| DISTRIBUTORS AGENCY |
| | | | | || | | || | OF OKLAHOMA, INC. |
| Cost | | | Cost | || | Cost | || | |
| ---- | | | ---- | || | ---- | || | |
| NW Life -100% $35,971,375 | | | NW Adv. Serv. -100% $5,000| || | NFIDAI -100% $10,100 | || | |
- ----------------------------- | ----------------------------- || ----------------------------- || ----------------------------
| || ||
- ----------------------------- | ----------------------------- || ----------------------------- || ----------------------------
| NATIONWIDE INVESTMENT | | | FINANCIAL HORIZONS | || | FINANCIAL HORIZONS | || | |
| SERVICES CORPORATION | | | INVESTMENT TRUST | || | SECURITIES CORP. | || | |
| | | | | || | | || | |
| Common Stock: 5,000 | | | | || | Common Stock: 10,000 | || | FINANCIAL HORIZONS |
| ------------ Shares |--| | |==|| | ------------ Shares |--||==| DISTRIBUTORS AGENCY |
| | | | | || | | || | OF TEXAS, INC. |
| Cost | | | | || | Cost | || | |
| ---- | | | | || | ---- | || | |
| NW Life -100% $529,728 | | | COMMON LAW TRUST | || | NFIDAI -100% $153,000 | || | |
- ----------------------------- | ----------------------------- || ----------------------------- || ----------------------------
| || ||
- ----------------------------- | ----------------------------- || ----------------------------- || ----------------------------
| NATIONWIDE REALTY | | | NATIONWIDE | || | AFFILIATE AGENCY, INC. | || | |
| INVESTORS, LTD. | | | INVESTING | || | | || | |
| | | | FOUNDATION | || | | || | |
| Units: | | | | || | Common Stock: 100 | || | AFFILIATE |
| ------ |..| | |==|| | ------------ Shares |--||==| AGENCY OF |
| | | | | || | | | OHIO, INC. |
| | | | | || | Cost | | |
| NW Life -90% | | | | || | ---- | | |
| NW Mutual-10% | | | COMMON LAW TRUST | || | NFIDAI -100% $100 | | |
- ----------------------------- | ----------------------------- || ----------------------------- ----------------------------
| ||
- ----------------------------- | ----------------------------- || -----------------------------
| NATIONWIDE | | | NATIONWIDE | || | NATIONWIDE |
| PROPERTIES, LTD. | | | INVESTING | || | INVESTING |
| | | | FOUNDATION II | || | FOUNDATION III |
| Units: |..| | | || | |
| ------ | | |==||==| |
| | | | || | |
| | | | || | | ----------------------
| NW Life -97.6% | | | || | | | MORLEY RESEARCH |
| NW Mutual -2.4% | | COMMON LAW TRUST | || | OHIO BUSINESS TRUST | | ASSOCIATES, LTD. |
- ----------------------------- ----------------------------- || ----------------------------- | |
|| |Common Stock: 1,000 |
----------------------------- || ----------------------------- |------------- Shares|------
| NATIONWIDE | || | NATIONWIDE | | Cost |
| SEPARATE ACCOUNT | || | ASSET ALLOCATION TRUST | | ---- |
| TRUST | || | | |Morley-100% $1,000|
| | || | | ----------------------
| |==||==| |
| | | |
| | | |
| | | MASSACHUSETTS |
| COMMON LAW TRUST | | BUSINESS TRUST |
----------------------------- -----------------------------
</TABLE>
<PAGE> 99
<TABLE>
<CAPTION>
(Center)
NATIONWIDE INSURANCE ENTERPRISE (R)
<S> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------- --------------------------------------------------
| NATIONWIDE MUTUAL | | NATIONWIDE MUTUAL |
| INSURANCE COMPANY |================================| FIRE INSURANCE COMPANY |
| (CASUALTY) | | | (FIRE) |
- -------------------------------------------------- | --------------------------------------------------
|
-----------------------------------------
| NATIONWIDE CORPORATION (NW CORP) |
| Common Stock: Control: |
| ------------ ------- |
| 13,642,432 100% |
| Shares Cost |
| ------ ---- |
|Casualty 12,992,922 $751,352,485 |
|Fire 649,510 24,007,936 |
-------------------|---------------------
|--------------------------------------------------------------
---------------|-------------
| NATIONWIDE FINANCIAL |
| SERVICES, INC. (NFS) |
| |
|Common Stock: Control: |
|------------ ------- |
| |
| |
|Class A Public--100% |
|Class B NW Corp--100% |
---------------|-------------
|
- -----------------|-------------------------------|-------------------|--------------------------------|-----------------------------
| | | |
-------------|--------------- --------------|-------------- | ---------------|-------------
| MORLEY FINANCIAL | | THE 401(k) COMPANIES, INC.| | | NATIONWIDE RETIREMENT |
| SERVICES, INC. (MORLEY) | | (401(k)) | | | SOLUTIONS, INC. |
|Common Stock: 82,343 | |Common Stock: Control: | | |Common Stock: 236,494 |
|---|------------- Shares | |------------- ------- |--| | |------------- Shares |
| | | |Class A Other-100% | | | | |
| |NFS-100% | |Class B NFS -100% | | | |NRS-100% |
| ----------------------------- ----------------------------- | | ---------------|-------------
| | | |
| ----------------------------- ----------------------------- | | ----------------------------- | ---------------------------
| | MORLEY & | | 401(k) INVESTMENT | | | | NATIONWIDE RETIREMENT | | | NATIONWIDE RETIREMENT |
| | ASSOCIATES, INC. | | SERVICES, INC. | | | | SOLUTIONS, INC. OF | | | SOLUTIONS, INC. OF NEW |
| | | | | | | | ALABAMA | | | MEXICO |
| |Common Stock: 3,500 | | Common Stock: 1,000,000 | | | | Common Stock: 10,000 | | | Common Stock: 1,000 |
|---|------------- Shares | | ------------- Shares |--| | | ------------- Shares |--|--| ------------- Shares |
| | Cost | | Cost | | | | Cost | | | Cost |
| | ---- | | ---- | | | | ---- | | | ---- |
| |Morley-100% $1,000 | |401(k)-100% $7,800 | | | |NRS-100% $1,000 | | |NRS-100% $1,000 |
| ----------------------------- ----------------------------- | | ----------------------------- | ---------------------------
| | | |
| ----------------------------- ----------------------------- | | ----------------------------- | ---------------------------
| | MORLEY CAPITAL | | 401(k) INVESTMENT | | | | NATIONWIDE RETIREMENT | | | NATIONWIDE RETIREMENT |
| | MANAGEMENT | | ADVISORS, INC. | | | | SOLUTIONS, INC. OF | | | SOLUTIONS, INC. OF |
| | | | | | | | ARIZONA | | | SO. DAKOTA |
| |Common Stock: 500 | |Common Stock: 1,000 | | | |Common Stock: 1,000 | | |Common Stock: 1,000 |
|---|------------- Shares | |------------- Shares |--| | |------------- Shares |--|--|------------- Shares |
| | Cost | | Cost | | | | Cost | | | Cost |
| | ---- | | ---- | | | | ---- | | | ---- |
| |Morley-100% $5,000 | |401(k)-100% $1,000 | | | |NRS-100% $1,000 | | |NRS-100% $1,000 |
| ----------------------------- ----------------------------- | | ----------------------------- | ---------------------------
| | | |
| ----------------------------- ----------------------------- | | ----------------------------- | ---------------------------
| | UNION BOND | | 401(k) ICOMPANY | | | | NATIONWIDE RETIREMENT | | | NATIONWIDE RETIREMENT |
| | & TRUST COMPANY | | | | | | SOLUTIONS, INC. OF | | | SOLUTIONS, INC. OF |
| | | | | | | | ARKANSAS | | | WYOMING |
| |Common Stock: 2,000 | |Common Stock: 855,000 | | | |Common Stock: 50,000 | | |Common Stock: 500 |
|---|------------- Shares | |------------- Shares |--| | |------------- Shares |--|--|------------- Shares |
| | Cost | | Cost | | | Cost | | | Cost |
| | ---- | | ---- | | | ---- | | | ---- |
| |Morley-100% $50,000 | |401(k)-100% $1,000 | | |NRS-100% $500 | | |NRS-100% $500 |
| ----------------------------- ----------------------------- | ----------------------------- | ---------------------------
| | |
| ----------------------------- ----------------------------- | ----------------------------- | ---------------------------
| | PORTLAND INVESTMENT | | NATIONWIDE TRUST | | | NATIONWIDE RETIREMENT | | | NATIONWIDE RETIREMENT |
| | SERVICES, INC. | | COMPANY, FSB | | | SOLUTIONS, INS. AGENCY, | | | SOLUTIONS, INC. OF |
| | | | | | | INC. | | | OHIO |
| |Common Stock: 1,000 | |Common Stock: 2,800,000 | | |Common Stock: 1,000 | | | |
|---|------------- Shares | |------------- Shares |-----| |------------- Shares |--|==| |
| | Cost | | Cost | | | Cost | | | |
| | ---- | | ---- | | | ---- | | | |
| |Morley-100% $25,000 | |NFS-100% $3,500,000 | | |NRS -100% $1,000 | | | |
| ----------------------------- ----------------------------- | ----------------------------- | ---------------------------
| | |
| ----------------------------- ----------------------------- | ---------------------------- | ---------------------------
| | EXCALIBER FUNDING | | NATIONWIDE FINANCIAL | | | NATIONWIDE RETIREMENT | | | NATIONWIDE RETIREMENT |
| | CORPORATION | | SERVICES CAPITAL TRUST II | | | SOLUTIONS, INC. OF | | | SOLUTIONS, INC. OF |
| | | | | | | MONTANA | | | OKLAHOMA |
| |Common Stock: 1,000 | | | | |Common Stock: 500 | | | |
|---|------------- Shares | | |-----| |------------- Shares |--|==| |
| | Cost | | | | | Cost | | | |
| | ---- | | | | | ---- | | | |
| |Morley-100% $1,000 | |NFS-100% | | |NRS-100% $500 | | | |
| ----------------------------- ----------------------------- | ----------------------------- | ---------------------------
| | |
| ----------------------------- ----------------------------- | ----------------------------- | ---------------------------
| | CALIBER FUNDING | | NFS DISTRIBUTORS INC. | | | NATIONWIDE RETIREMENT | | | NATIONWIDE RETIREMENT |
| | CORPORATION | | | | | SOLUTIONS, INC. OF | | | SOLUTIONS, INC. OF |
| | | | | | | NEVADA | | | TEXAS |
| | | | | | | Common Stock: 1,000 | | | |
|---| | | |-----| | ------------- Shares |--|==| |
| | | | | Cost | | |
| | | | | ---- | | |
|Morley-100% | |NFS-100% | | NRS-100% $1,000 | | |
----------------------------- ----------------------------- ----------------------------- ---------------------------
</TABLE>
<PAGE> 100
<TABLE>
<CAPTION>
(Right)
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------|--------------------|---------------------------------------|
| | |
| ---------------|---------------- --------------|----------------
| | EMPLOYERS LIFE INSURANCE CO. | | GATES MCDONALD |
| | OF WAUSAU (ELIOW) | | & COMPANY (GATES) |
| | | | |
| |Common Stock: 250,000 | |Common Stock: 254 |
| |--|------------- Shares | |--|------------- Shares |
| | | | | | |
| | | Cost | | | Cost |
| | | ---- | | | ---- |
| | |NW CORP. -100% $126,509,480 | | |NW CORP. -100% $25,683,532 |
| | -------------------------------- | -------------------------------
- ------------ | | |
| -------------------------------- | | -------------------------------- | --------------------------------
| | NATIONWIDE TRUST | | | | WAUSAU PREFERRED | | | HEALTHCARE |
| | COMPANY | | | | HEALTH INSURANCE CO. | | | FIRST, INC. |
| | | | | | | | | |
| |Common Stock: 2,800,000 | | | |Common Stock: 200 | | | |
|--|------------- Shares | | |--|------------- Shares | |--| |
| | | | | | | | |
| | Cost | | | Cost | | | Cost |
| | ---- | | | ---- | | | ---- |
| |NFS-100% $3,500,000 | | |ELIOW -100% $57,413,193 | | |Gates-100% $6,700,000 |
| -------------------------------- | -------------------------------- | --------------------------------
| | |
| -------------------------------- | -------------------------------- | -------------------------------
| | NATIONWIDE FINANCIAL | | | NATIONWIDE GLOBAL | | | GATES MCDONALD & COMPANY |
| | SERVICES (BERMUDA) INC. | | | HOLDINGS, INC. (NGH) | | | OF NEW YORK, INC. |
| | | | | | | | |
| |Common Stock: 250,000 | | |Common Stock: 1 | | |Common Stock: 3 |
|--|------------- Shares | |-----|------------- Share | |--|------------- Shares |
| | | | | | | | |
| | Cost | | | Cost | | | Cost |
| | ---- | | | ---- | | | ---- |
| |NFS-100% $3,500,000 | | |NW CORP.-100% $7,000,000 | | |Gates-100% $106,947 |
| -------------------------------- | -------------------------------- | -------------------------------
| | | |
| -------------------------------- | -------------------------------- | -------------------------------
| | NATIONWIDE DEFERRED | | | NATIONWIDE GLOBAL HOLDINGS | | | GATES MCDONALD & COMPANY |
| | COMPENSATION, INC. | | | -HONG KONG, LIMITED | | | OF NEVADA |
| | | | | | | | |
| | | | |Common Stock: 2 | | |Common Stock: 40 |
|--| | | |------------- Shares | |--|------------- Shares |
| | | | | | | | |
| | | | | | | | Cost |
| | | | | | | | ---- |
| |NFS-100% | | |NGH-100% | | |Gates-100% $93,750 |
| -------------------------------- | -------------------------------- | -------------------------------
| | |
| -------------------------------- | -------------------------------- | -------------------------------
| | IRVIN L. SCHWARTZ | | | NATIONWIDE | | | GATES McDONALD |
| | AND ASSOCIATES, INC. | | | HEALTH PLANS, INC. (NHP) | | | HEALTH PLUS, INC. |
| | | | | | | | |
| |Common Stock: Control | | |Common Stock: 100 | | |Common Stock: 200 |
|--|------------- ------- | |-----|------------- Shares |--| |--|------------- Shares |
| | | | | | | |
| | | | Cost | | | Cost |
|Class A Other-100% | | | ---- | | | ---- |
|Class B NFS -100% | | |NW CORP.-100% $14,603,732 | | |Gates-100% $2,000,000 |
-------------------------------- | -------------------------------- | -------------------------------
| |
-------------------------------- | -------------------------------- |
| MRM INVESTMENTS, INC. | | | NATIONWIDE MANAGEMENT | |
| | | | SYSTEMS, INC. | |
| | | | | |
|Common Stock: 1 | | |Common Stock: 100 | |
|------------- Share |--| |------------- Shares |--|
| | | | |
| Cost | | Cost | |
| ---- | | ---- | |
|NW CORP.-100% $7,000,000 | |NHP Inc.-100% $25,149 | |
-------------------------------- -------------------------------- |
|
-------------------------------- |
| NATIONWIDE | |
| AGENCY, INC. | |
| | |
|Common Stock: 100 | |
|------------ Shares |--|
| |
| Cost |
| ---- |
|NHP Inc.-99% $116,077 |
--------------------------------
Subsidiary Companies -- Solid Line
Contractual Association -- Double Line
Limited Liability Company -- Dotted Line
December 31, 1998
Page 2
</TABLE>
<PAGE> 101
Item 27. NUMBER OF CONTRACT OWNERS
The number of contract owners of Qualified and Non-Qualified
contracts as of January 31, 1999 was 2 and 7, respectively.
Item 28. INDEMNIFICATION
Provision is made in the Company's Amended and Restated Code of
Regulations and expressly authorized by the General Corporation
Law of the State of Ohio, for indemnification by the Company of
any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or
investigative by reason of the fact that such person is or was a
director, officer or employee of the Company, against expenses,
including attorneys fees, judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding, to the extent and
under the circumstances permitted by the General Corporation Law
of the State of Ohio.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 ("Act") may be permitted to directors,
officers or persons controlling the Company pursuant to the
foregoing provisions, the Company has been informed that in the
opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final
adjudication of such issue.
Item 29. PRINCIPAL UNDERWRITER
(a) Nationwide Advisory Services, Inc. ("NAS") acts as principal
underwriter and general distributor for the Nationwide
Variable Account, Nationwide Multi-Flex Variable Account,
Nationwide Variable Account-II, Nationwide Variable
Account-5, Nationwide Variable Account-6, Nationwide
Variable Account-8, Nationwide Variable Account-9,
Nationwide Variable Account-10, Nationwide VA Separate
Account-A, Nationwide VA Separate Account-B, Nationwide VA
Separate Account-C, Nationwide VL Separate Account-A,
Nationwide VL Separate Account-B, Nationwide VL Separate
Account-C, Nationwide VL Separate Account-D, Nationwide VLI
Separate Account-2, Nationwide VLI Separate Account-3,
Nationwide VLI Separate Account-4, and the Nationwide VLI
Separate Account-5, all of which are separate investment
accounts of Nationwide or its affiliates.
NAS also acts as principal underwriter for Nationwide Mutual
Funds, Nationwide Separate Account Trust, and Nationwide
Asset Allocation Trust, which are open-end management
investment companies.
158 of 164
<PAGE> 102
<TABLE>
<CAPTION>
(b) NATIONWIDE ADVISORY SERVICES, INC.
DIRECTORS AND OFFICERS
------------------------------------------------------------------------------------------------------------------
POSITIONS AND OFFICES
NAME AND BUSINESS ADDRESS WITH UNDERWRITER
------------------------------------------------------------------------------------------------------------------
<S> <C>
Joseph J. Gasper President and Director
One Nationwide Plaza
Columbus, OH 43215
------------------------------------------------------------------------------------------------------------------
Dimon R. McFerson Chairman of the Board of Directors and Chairman and Chief Executive
One Nationwide Plaza Officer and Director
Columbus, OH 43215
------------------------------------------------------------------------------------------------------------------
Robert A. Oakley Executive Vice President - Chief Financial Officer and Director
One Nationwide Plaza
Columbus, OH 43215
------------------------------------------------------------------------------------------------------------------
Susan A. Wolken Director
One Nationwide Plaza
Columbus, OH 43215
------------------------------------------------------------------------------------------------------------------
Paul J. Hondros Director
One Nationwide Plaza
Columbus, OH 43215
------------------------------------------------------------------------------------------------------------------
Robert J. Woodward, Jr. Executive Vice President - Chief Investment Officer and Director
One Nationwide Plaza
Columbus, OH 43215
------------------------------------------------------------------------------------------------------------------
Edwin P. McCausland, Jr. Senior Vice President-Fixed Income Securities
One Nationwide Plaza
Columbus, OH 43215
------------------------------------------------------------------------------------------------------------------
Charles S. Bath Vice President - Investments
One Nationwide Plaza
Columbus, OH 43215
------------------------------------------------------------------------------------------------------------------
Alan A. Todryk Vice President - Taxation
One Nationwide Plaza
Columbus, OH 43215
------------------------------------------------------------------------------------------------------------------
Dennis W. Click Vice President and Secretary
One Nationwide Plaza
Columbus, OH 43215
------------------------------------------------------------------------------------------------------------------
William G. Goslee Vice President
One Nationwide Plaza
Columbus, OH 43215
------------------------------------------------------------------------------------------------------------------
James F. Laird, Jr. Vice President and General Manager
One Nationwide Plaza
Columbus, OH 43215
------------------------------------------------------------------------------------------------------------------
Joseph P. Rath Vice President - Compliance
One Nationwide Plaza
Columbus, OH 43215
------------------------------------------------------------------------------------------------------------------
Christopher A. Cray Treasurer
One Nationwide Plaza
Columbus, OH 43215
------------------------------------------------------------------------------------------------------------------
</TABLE>
159 of 164
<PAGE> 103
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
POSITIONS AND OFFICES
NAME AND BUSINESS ADDRESS WITH UNDERWRITER
------------------------------------------------------------------------------------------------------------------
<S> <C>
Elizabeth A. Davin Assistant Secretary
One Nationwide Plaza
Columbus, OH 43215
------------------------------------------------------------------------------------------------------------------
David E. Simaitis Assistant Secretary
One Nationwide Plaza
Columbus, OH 43215
------------------------------------------------------------------------------------------------------------------
Patricia J. Smith Assistant Secretary
One Nationwide Plaza
Columbus, OH 43215
------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
(c)
- ------------------------------ ------------------------ ----------------------- ------------------ -------------------
NAME OF PRINCIPAL UNDERWRITER NET UNDERWRITING COMPENSATION ON BROKERAGE COMPENSATION
DISCOUNTS AND REDEMPTION OR COMMISSIONS
COMMISSIONS ANNUITIZATION
- ------------------------------ ------------------------ ----------------------- ------------------ -------------------
<S> <C> <C> <C> <C>
Nationwide Advisory N/A N/A N/A N/A
Services, Inc.
- ------------------------------ ------------------------ ----------------------- ------------------ -------------------
</TABLE>
Item 30. LOCATION OF ACCOUNTS AND RECORDS
John Davis
Nationwide Life Insurance Company
One Nationwide Plaza
Columbus, OH 43215
Item 31. MANAGEMENT SERVICES
Not Applicable
160 of 164
<PAGE> 104
Item 32. UNDERTAKINGS
The Registrant hereby undertakes to:
(a) file a post-effective amendment to this registration
statement as frequently as is necessary to ensure that the
audited financial statements in the registration statement
are never more than 16 months old for so long as payments
under the variable annuity contracts may be accepted;
(b) include either (1) as part of any application to purchase a
contract offered by the prospectus, a space that an
applicant can check to request a Statement of Additional
Information, or (2) a post card or similar written
communication affixed to or included in the prospectus that
the applicant can remove to send for a Statement of
Additional Information; and
(c) deliver any Statement of Additional Information and any
financial statements required to be made available under
this form promptly upon written or oral request.
The Registrant represents that any of the Contracts which are
issued pursuant to Section 403(b) of the Code is issued by the
Company through the Registrant in reliance upon, and in compliance
with, a no-action letter issued by the Staff of the Securities and
Exchange Commission to the American Council of Life Insurance
(publicly available November 28, 1988) permitting withdrawal
restrictions to the extent necessary to comply with Section
403(b)(11) of the Code.
The Company represents that the fees and charges deducted under
the Contract in the aggregate are reasonable in relation to the
services rendered, the expenses expected to be incurred and risks
assumed by the Company.
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<PAGE> 105
Offered by
Nationwide Life Insurance Company
NATIONWIDE LIFE INSURANCE COMPANY
Nationwide Variable Account-9
Deferred Variable Annuity Contracts
PROSPECTUS
May 1, 1999
162 of 164
<PAGE> 106
INDEPENDENT AUDITORS' CONSENT
The Board of Directors of Nationwide Life Insurance Company and Contract Owners
of the Nationwide Variable Account-9:
We consent to the use of our reports included herein and to the reference to our
firm under the heading "Services" in the Statement of Additional Information.
KPMG LLP
Columbus, Ohio
April 29, 1999
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<PAGE> 107
SIGNATURES
As required by the Securities Act of 1933, and the Investment Company Act of
1940, the Registrant, NATIONWIDE VARIABLE ACCOUNT-9, certifies that it meets the
requirements of Securities Act Rule 485(b) for effectiveness of this
Post-Effective Amendment and has caused this Post-Effective Amendment to be
signed on its behalf in the City of Columbus, and State of Ohio, on this 24th
day of September, 1999.
NATIONWIDE VARIABLE ACCOUNT-9
-----------------------------------------------------------
(Registrant)
NATIONWIDE LIFE INSURANCE COMPANY
-----------------------------------------------------------
(Depositor)
By/s/JOSEPH P. RATH
-----------------------------------------------------------
Joseph P. Rath
Vice President - Office of Product and Market Compliance
As required by the Securities Act of 1933, this Post-Effective Amendment to the
Registration Statement has been signed by the following persons in the
capacities indicated on the 24th day of September, 1999.
<TABLE>
<CAPTION>
SIGNATURE TITLE
<S> <C> <C>
LEWIS J. ALPHIN Director
- ---------------------------------------
Lewis J. Alphin
A. I. BELL Director
- ---------------------------------------
A. I. Bell
KENNETH D. DAVIS Director
- ---------------------------------------
Kenneth D. Davis
KEITH W. ECKEL Director
- ---------------------------------------
Keith W. Eckel
WILLARD J. ENGEL Director
- ---------------------------------------
Willard J. Engel
FRED C. FINNEY Director
- ---------------------------------------
Fred C. Finney
JOSEPH J. GASPER President and Chief Operating
- --------------------------------------- Officer and Director
Joseph J. Gasper
DIMON R. MCFERSON Chairman and Chief Executive
- --------------------------------------- Officer and Director
Dimon R. McFerson
DAVID O. MILLER Chairman of the Board and
- --------------------------------------- Director
David O. Miller
YVONNE L. MONTGOMERY Director
- ---------------------------------------
Yvonne L. Montgomery
ROBERT A. OAKLEY Executive Vice President and Chief
- --------------------------------------- Financial Officer
Robert A. Oakley
RALPH M. PAIGE Director
- ---------------------------------------
Ralph M. Paige
JAMES F. PATTERSON Director
- ---------------------------------------
James F. Patterson
ARDEN L. SHISLER Director By /s/ JOSEPH P. RATH
- --------------------------------------- --------------------------------------
Arden L. Shisler Joseph P. Rath
ROBERT L. STEWART Director Attorney-in-Fact
- ---------------------------------------
Robert L. Stewart
NANCY C. THOMAS Director
- ---------------------------------------
Nancy C. Thomas
</TABLE>
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