<PAGE> 1
Nationwide(R) VL
Separate Account-C
June 30, 1999
[Logo] THE BEST OF AMERICA(R)
America's FUTURE Life Series(SM)
'99
SEMI-ANNUAL REPORT
- --------------------------------------------------------------------------------
[LOGO]
Nationwide Life and Annuity Insurance Company
Home Office: Columbus, Ohio
<PAGE> 2
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NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY
ONE NATIONWIDE PLAZA, COLUMBUS, OHIO 43215-2220
PRESIDENT'S MESSAGE
On behalf of Nationwide Life and Annuity Insurance Company, we are
pleased to present the 1999 semi-annual report of the Nationwide VL
Separate Account-C.
Equity investments performed well during the first half of 1999 with
the major market indices showing double-digit gains. Fixed income
investments did not fare as well during this period in the face of
the Federal Reserve's inflation cautiousness. The Fed is mindful of
the resilient U.S. economy and the increasingly tight labor pool
that portends future wage inflation. Accordingly, we have seen a
ratcheting-up of short-term interest rates to dampen the momentum of
the current expansion. How aggressively the Fed may react to the
perceived inflation threat only adds uncertainty to the already
jittery equity markets. Over the long term, however, a slower but
sustainable rate of growth, with low inflation, provides a favorable
environment for further advances in financial assets.
At mid-year, we are pleased to report that all the mission-critical
systems used to service our variable annuity and variable life
business have been internally inventoried, assessed and tested as
being Year 2000 compliant. We are currently contacting our critical
business partners to determine if they will be Year 2000 compliant.
Contingency plans are being developed and are to be completed by the
end of the third quarter. All these steps are being taken to assure
that Nationwide Financial will be able to continue to serve your
financial needs into the Year 2000 and beyond.
Thank you for selecting Nationwide Financial to help you achieve
your financial planning and retirement savings goals. You have our
commitment to provide the consistent, high quality service you
expect and deserve.
Joseph J. Gasper, President
August 19, 1999
<PAGE> 3
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NATIONWIDE VL SEPARATE ACCOUNT-C
STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY
JUNE 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments at market value:
American Century VP - American Century VP Income & Growth (ACVPIncGr)
515,801 shares (cost $3,661,743) .......................................... $ 3,837,559
American Century VP - American Century VP International (ACVPInt)
220,037 shares (cost $1,721,564) .......................................... 1,799,904
American Century VP - American Century VP Value (ACVPValue)
27,659 shares (cost $173,664) ............................................. 187,802
The Dreyfus Socially Responsible Growth Fund, Inc. (DrySRGro)
6,407 shares (cost $208,941) .............................................. 224,560
Dreyfus Stock Index Fund (DryStkIx)
668,253 shares (cost $21,861,315) ......................................... 24,130,598
Dreyfus VIF - Capital Appreciation Portfolio (DryCapAp)
28,504 shares (cost $1,071,379) ........................................... 1,106,543
Fidelity VIP - Equity-Income Portfolio - Service Class (FidVIPEIS)
10,466 shares (cost $278,348) ............................................. 284,782
Fidelity VIP - Growth Portfolio - Service Class (FidVIPGrS)
146,626 shares (cost $6,331,048) .......................................... 6,693,479
Fidelity VIP - High Income Portfolio - Service Class (FidVIPHIS)
210,603 shares (cost $2,341,890) .......................................... 2,371,386
Fidelity VIP - Overseas Portfolio - Service Class (FidVIPOvS)
41,128 shares (cost $800,965) ............................................. 854,225
Fidelity VIP-II - Contrafund Portfolio - Service Class (FidVIPCon)
106,443 shares (cost $2,590,725) .......................................... 2,773,915
Fidelity VIP-III - Growth Opportunities Portfolio - Service Class (FidVIPGrOp)
63,817 shares (cost $1,426,217) ........................................... 1,507,362
Morgan Stanley - Emerging Markets Debt Portfolio (VKMSEmMkt)
26,839 shares (cost $181,278) ............................................. 184,919
Nationwide SAT - Balanced Fund (NSATBal)
79,080 shares (cost $860,819) ............................................. 871,457
Nationwide SAT - Capital Appreciation Fund (NSATCapAp)
52,089 shares (cost $1,409,497) ........................................... 1,545,996
Nationwide SAT - Equity Income Fund (NSATEqInc)
18,824 shares (cost $229,067) ............................................. 236,800
Nationwide SAT - Global Equity Fund (NSATGlobEq)
29,397 shares (cost $367,866) ............................................. 372,750
Nationwide SAT - Government Bond Fund (NSATGvtBd)
481,406 shares (cost $5,512,629) .......................................... 5,358,048
Nationwide SAT - High Income Bond Fund (NSATHIncBd)
34,465 shares (cost $351,481) ............................................. 341,552
Nationwide SAT - Money Market Fund (NSATMyMkt)
6,737,556 shares (cost $6,737,556) ........................................ 6,737,556
(Continued)
</TABLE>
3
<PAGE> 4
<TABLE>
<S> <C>
Nationwide SAT - Multi Sector Bond Fund (NSATMSecBd)
42,011 shares (cost $409,067) ........................................... 395,745
Nationwide SAT - Select Advisers Mid Cap Fund (NSATMidCap)
58 shares (cost $663) ................................................... 702
Nationwide SAT - Small Cap Growth Fund (NSATSmCapGr)
100,000 shares (cost $1,000,000) ........................................ 1,127,000
Nationwide SAT - Small Cap Value Fund (NSATSmCapV)
130,141 shares (cost $1,142,799) ........................................ 1,443,268
Nationwide SAT - Small Company Fund (NSATSmCo)
72,577 shares (cost $1,135,913) ......................................... 1,250,503
Nationwide SAT - Strategic Growth Fund (NSATStrGro)
3,244 shares (cost $42,235) ............................................. 47,623
Nationwide SAT - Strategic Value Fund (NSATStrVal)
23,988 shares (cost $253,480) ........................................... 258,346
Nationwide SAT - Total Return Fund (NSATTotRe)
1,584 shares (cost $30,915) ............................................. 32,131
Neuberger & Berman AMT - Guardian Portfolio (NBAMTGuard)
90,780 shares (cost $1,266,261) ......................................... 1,467,913
Neuberger & Berman AMT - Mid-Cap Growth Portfolio (NBAMTMCGr)
96,507 shares (cost $1,437,408) ......................................... 1,602,008
Neuberger & Berman AMT - Partners Portfolio (NBAMTPart)
53,553 shares (cost $1,028,643) ......................................... 1,109,626
Oppenheimer VAF - Aggressive Growth Fund (OppAggGr)
20,402 shares (cost $905,593) ........................................... 1,106,782
Oppenheimer VAF - Growth Fund (OppGro)
21,703 shares (cost $840,304) 884,402 Oppenheimer VAF - Growth & Income
Fund (OppGrInc)
41,234 shares (cost $849,335) ........................................... 956,633
Van Eck WIT - Worldwide Emerging Markets Fund (VEWrldEMkt)
25,425 shares (cost $179,105) ........................................... 264,163
Van Eck WIT - Worldwide Hard Assets Fund (VEWrldHAs)
16,465 shares (cost $172,660) ........................................... 176,341
Van Kampen LIT - Morgan Stanley Real Estate Securities Portfolio (VKMSRESec)
20,778 shares (cost $285,768) ........................................... 288,604
Warburg Pincus Trust - Growth & Income Portfolio (WPGrInc)
14,807 shares (cost $192,811) ........................................... 195,899
Warburg Pincus Trust - International Equity Portfolio (WPIntEq)
31,106 shares (cost $337,477) ........................................... 365,497
Warburg Pincus Trust - Post Venture Capital Portfolio (WPPVenCap)
19,529 shares (cost $225,616) ........................................... 259,351
-----------
Total investments .................................................... 74,653,730
Accounts receivable ........................................................... --
-----------
Total assets ......................................................... 74,653,730
ACCOUNTS RECEIVABLE .............................................................. 13,087
-----------
CONTRACT OWNERS' EQUITY (NOTE 7) ................................................. $74,640,643
===========
</TABLE>
See accompanying notes to financial statements.
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4
<PAGE> 5
NATIONWIDE VL SEPARATE ACCOUNT-C
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
Total ACVPincGr ACVPint ACVPValue DrySRGro
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 574,989 165 - 1,471 -
Mortality and expense charges (note 3)......... (93,438) (2,894) (1,770) (294) (183)
------------- ------------- ------------- ------------- -------------
Net investment activity...................... 481,551 (2,729) (1,770) 1,177 (183)
------------- ------------- ------------- ------------- -------------
Proceeds from mutual fund shares sold.......... 35,955,196 866,199 476,367 32,451 9,570
Cost of mutual fund shares sold................ (34,334,981) (776,553) (429,836) (30,139) (8,453)
------------- ------------- ------------- ------------- -------------
Realized gain (loss) on investments.......... 1,620,215 89,646 46,531 2,312 1,117
Change in unrealized gain (loss) on investments 2,427,206 121,392 47,565 8,933 14,782
------------- ------------- ------------- ------------- -------------
Net gain (loss) on investments............... 4,047,421 211,038 94,096 11,245 15,899
------------- ------------- ------------- ------------- -------------
Reinvested capital gains....................... 450,919 - - 13,940 -
------------- ------------- ------------- ------------- -------------
Net increase (decrease) in contract owners'
equity resulting from operations......... 4,979,891 208,309 92,326 26,362 15,716
------------- ------------- ------------- ------------- -------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners.............................. 43,819,797 2,957,314 1,286,823 38,964 185,242
Transfers between funds........................ - 230,864 137,674 29,313 17,491
Surrenders..................................... - - - - -
Policy loans (net of repayments) (note 5) ..... - - - - -
Redemptions to pay cost of insurance
charges and administration charges
(notes 2b and 2c)............................ (1,058,304) (22,420) (29,776) (2,963) (2,136)
------------- ------------- ------------- ------------- -------------
Net equity transactions.................... 42,761,493 3,165,758 1,394,721 65,314 200,597
------------- ------------- ------------- ------------- -------------
NET CHANGE IN CONTRACT OWNERS' EQUITY............ 47,741,384 3,374,067 1,487,047 91,676 216,313
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ..... 26,899,259 459,304 306,135 96,106 8,270
------------- ------------- ------------- ------------- -------------
CONTRACT OWNERS' EQUITY END OF PERIOD............ $ 74,640,643 3,833,371 1,793,182 187,782 224,583
============= ============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
DryStkix DryCapAp FidVIPEIS
-------------- -------------- -------------
<S> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .......................... 103,831 45 148
Mortality and expense charges (note 3)......... (27,737) (1,486) (180)
-------------- -------------- -------------
Net investment activity...................... 76,094 (1,441) (32)
-------------- -------------- -------------
Proceeds from mutual fund shares sold.......... 709,436 419,714 72,901
Cost of mutual fund shares sold................ (547,076) (373,844) (73,300)
-------------- -------------- -------------
Realized gain (loss) on investments.......... 162,360 45,870 (399)
Change in unrealized gain (loss) on investments 1,367,902 11,054 5,582
-------------- -------------- -------------
Net gain (loss) on investments............... 1,530,262 56,924 5,183
-------------- -------------- -------------
Reinvested capital gains....................... 62,396 - 327
-------------- -------------- -------------
Net increase (decrease) in contract owners'
equity resulting from operations......... 1,668,752 55,483 5,478
-------------- -------------- -------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners.............................. 6,946,038 530,036 8,520
Transfers between funds........................ 9,716,946 245,690 263,312
Surrenders..................................... - - -
Policy loans (net of repayments) (note 5) ..... - - -
Redemptions to pay cost of insurance
charges and administration charges
(notes 2b and 2c)............................ (261,291) (27,292) (1,648)
-------------- -------------- -------------
Net equity transactions.................... 16,401,693 748,434 270,184
-------------- -------------- -------------
NET CHANGE IN CONTRACT OWNERS' EQUITY............ 18,070,445 803,917 275,662
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ..... 6,042,687 300,742 9,154
-------------- -------------- -------------
CONTRACT OWNERS' EQUITY END OF PERIOD............ 24,113,132 1,104,659 284,816
============== ============== =============
(Continued)
</TABLE>
5
<PAGE> 6
NATIONWIDE VL SEPARATE ACCOUNT-C
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
FidVIPGrS FidVIPHIS FidVIPOvS FidVIPCon FidVIPGrOp
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ......................... $ 2,889 96,332 10,719 6,774 3,879
Mortality and expense charges (note 3)........ (6,047) (3,765) (1,521) (3,431) (1,998)
------------- ------------- ------------- ------------- -------------
Net investment activity..................... (3,158) 92,567 9,198 3,343 1,881
------------- ------------- ------------- ------------- -------------
Proceeds from mutual fund shares sold......... 380,415 2,626,664 400,402 862,713 880,110
Cost of mutual fund shares sold............... (321,246) (2,554,125) (359,909) (685,582) (827,047)
------------- ------------- ------------- ------------- -------------
Realized gain (loss) on investments......... 59,169 72,539 40,493 177,131 53,063
Change in unrealized gain (loss) on investments 183,872 (27,293) 4,463 (21,924) 39,363
------------- ------------- ------------- ------------- -------------
Net gain (loss) on investments.............. 243,041 45,246 44,956 155,207 92,426
------------- ------------- ------------- ------------- -------------
Reinvested capital gains...................... 181,621 3,601 17,288 49,679 7,581
------------- ------------- ------------- ------------- -------------
Net increase (decrease) in contract owners'
equity resulting from operations........ 421,504 141,414 71,442 208,229 101,888
------------- ------------- ------------- ------------- -------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners............................. 3,380,024 2,059,901 201,213 694,756 843,725
Transfers between funds....................... 1,362,296 (730,917) (71,366) 649,502 190,195
Surrenders.................................... - - - - -
Policy loans (net of repayments) (note 5) - - - - -
Redemptions to pay cost of insurance
charges and administration charges
(notes 2b and 2c)........................... (47,634) (106,899) (15,621) (48,109) (43,600)
------------- ------------- ------------- ------------- -------------
Net equity transactions................... 4,694,686 1,222,085 114,226 1,296,149 990,320
------------- ------------- ------------- ------------- -------------
NET CHANGE IN CONTRACT OWNERS' EQUITY........... 5,116,190 1,363,499 185,668 1,504,378 1,092,208
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD .... 1,576,877 957,639 668,428 1,270,102 393,106
------------- ------------- ------------- ------------- -------------
CONTRACT OWNERS' EQUITY END OF PERIOD........... $ 6,693,067 2,321,138 854,096 2,774,480 1,485,314
============= ============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
VKMSEmMkt NSATBal NSATCapAp
-------------- -------------- -------------
<S> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ......................... - 9,254 3,127
Mortality and expense charges (note 3)........ (230) (790) (1,751)
-------------- -------------- -------------
Net investment activity..................... (230) 8,464 1,376
-------------- -------------- -------------
Proceeds from mutual fund shares sold......... 180,915 224,189 311,026
Cost of mutual fund shares sold............... (171,817) (215,596) (270,998)
-------------- -------------- -------------
Realized gain (loss) on investments......... 9,098 8,593 40,028
Change in unrealized gain (loss) on investments 9,575 9,771 104,031
-------------- -------------- -------------
Net gain (loss) on investments.............. 18,673 18,364 144,059
-------------- -------------- -------------
Reinvested capital gains...................... - 5 -
-------------- -------------- -------------
Net increase (decrease) in contract owners'
equity resulting from operations........ 18,443 26,833 145,435
-------------- -------------- -------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners............................. 42,135 367,059 771,832
Transfers between funds....................... 35,983 407,651 188,299
Surrenders.................................... - - -
Policy loans (net of repayments) (note 5) - - -
Redemptions to pay cost of insurance
charges and administration charges
(notes 2b and 2c)........................... (2,383) (11,925) (29,635)
-------------- -------------- -------------
Net equity transactions................... 75,735 762,785 930,496
-------------- -------------- -------------
NET CHANGE IN CONTRACT OWNERS' EQUITY........... 94,178 789,618 1,075,931
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD .... 90,735 80,927 471,725
-------------- -------------- -------------
CONTRACT OWNERS' EQUITY END OF PERIOD........... 184,913 870,545 1,547,656
============== ============== =============
</TABLE>
6
<PAGE> 7
NATIONWIDE VL SEPARATE ACCOUNT-C
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
NSATEqinc NSATGlobEq NSATGvtBd NSATHincBd NSATMyMkt
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................ $ 238 757 120,416 10,915 169,172
Mortality and expense charges (note 3)....... (166) (109) (5,236) (493) (15,357)
------------- ------------- ------------- ------------- -------------
Net investment activity.................... 72 648 115,180 10,422 153,815
------------- ------------- ------------- ------------- -------------
Proceeds from mutual fund shares sold........ 11,096 34,192 1,313,299 451,949 19,350,999
Cost of mutual fund shares sold.............. (11,232) (32,405) (1,344,373) (447,400) (19,350,999)
------------- ------------- ------------- ------------- -------------
Realized gain (loss) on investments........ (136) 1,787 (31,074) 4,549 -
Change in unrealized gain (loss) on investments 7,733 4,519 (145,837) (12,864) -
------------- ------------- ------------- ------------- -------------
Net gain (loss) on investments............. 7,597 6,306 (176,911) (8,315) -
------------- ------------- ------------- ------------- -------------
Reinvested capital gains..................... 44 32 - 112 -
------------- ------------- ------------- ------------- -------------
Net increase (decrease) in contract owners'
equity resulting from operations....... 7,713 6,986 (61,731) 2,219 153,815
------------- ------------- ------------- ------------- -------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners............................ 29,586 11,597 2,063,830 52,337 16,476,559
Transfers between funds...................... 201,347 355,473 2,894,605 150,870 (16,830,516)
Surrenders................................... - - - - -
Policy loans (net of repayments) (note 5) ... - - - - -
Redemptions to pay cost of insurance
charges and administration charges
(notes 2b and 2c).......................... (1,974) (3,726) (57,420) (5,650) (118,848)
------------- ------------- ------------- ------------- -------------
Net equity transactions.................. 228,959 363,344 4,901,015 197,557 (472,805)
------------- ------------- ------------- ------------- -------------
NET CHANGE IN CONTRACT OWNERS' EQUITY.......... 236,672 370,330 4,839,284 199,776 (318,990)
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ... - 2,480 504,828 145,175 7,180,241
------------- ------------- ------------- ------------- -------------
CONTRACT OWNERS' EQUITY END OF PERIOD.......... $ 236,672 372,810 5,344,112 344,951 6,861,251
============= ============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
NSATMSecBd NSATMidCap NSATSmCapGr
-------------- -------------- -------------
<S> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends ........................ 10,156 1 -
Mortality and expense charges (note 3)....... (695) (9) -
-------------- -------------- -------------
Net investment activity.................... 9,461 (8) -
-------------- -------------- -------------
Proceeds from mutual fund shares sold........ 320,311 2,945 -
Cost of mutual fund shares sold.............. (320,864) (2,600) -
-------------- -------------- -------------
Realized gain (loss) on investments........ (553) 345 -
Change in unrealized gain (loss) on investments (13,968) (351) 127,000
-------------- -------------- -------------
Net gain (loss) on investments............. (14,521) (6) 127,000
-------------- -------------- -------------
Reinvested capital gains..................... - - -
-------------- -------------- -------------
Net increase (decrease) in contract owners'
equity resulting from operations....... (5,060) (14) 127,000
-------------- -------------- -------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners............................ 227,416 1,113 999,286
Transfers between funds...................... (141,913) (2,907) -
Surrenders................................... - - -
Policy loans (net of repayments) (note 5) ... - - -
Redemptions to pay cost of insurance
charges and administration charges
(notes 2b and 2c).......................... (10,538) (9) -
-------------- -------------- -------------
Net equity transactions.................. 74,965 (1,803) 999,286
-------------- -------------- -------------
NET CHANGE IN CONTRACT OWNERS' EQUITY.......... 69,905 (1,817) 1,126,286
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD ... 325,786 2,544 -
-------------- -------------- -------------
CONTRACT OWNERS' EQUITY END OF PERIOD.......... 395,691 727 1,126,286
============== ============== =============
(Continued)
</TABLE>
7
<PAGE> 8
NATIONWIDE VL SEPARATE ACCOUNT-C
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
NSATSmCapV NSATSmCo NSATStrGro NSATStrVal NSATTotRe
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .................. $ - - - 1,083 75
Mortality and expense charges (note 3). (1,939) (1,655) (49) (481) (139)
------------- ------------- ------------- ------------- -------------
Net investment activity.............. (1,939) (1,655) (49) 602 (64)
------------- ------------- ------------- ------------- -------------
Proceeds from mutual fund shares sold.. 23,053 652,792 10,464 337,174 162,224
Cost of mutual fund shares sold........ (20,377) (604,897) (9,961) (295,065) (149,286)
------------- ------------- ------------- ------------- -------------
Realized gain (loss) on investments.. 2,676 47,895 503 42,109 12,938
Change in unrealized gain (loss) on investments 252,331 69,355 5,388 (36,733) (4,684)
------------- ------------- ------------- ------------- -------------
Net gain (loss) on investments....... 255,007 117,250 5,891 5,376 8,254
------------- ------------- ------------- ------------- -------------
Reinvested capital gains............... 60,891 - - 3,883 6
------------- ------------- ------------- ------------- -------------
Net increase (decrease) in contract owners'
equity resulting from operations. 313,959 115,595 5,842 9,861 8,196
------------- ------------- ------------- ------------- -------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners...................... 26,813 756,241 15,613 59,802 43,900
Transfers between funds................ 525,388 (50,555) 26,879 (88,739) (121,292)
Surrenders............................. - - - - -
Policy loans (net of repayments) (note 5) - - - - -
Redemptions to pay cost of insurance
charges and administration charges
(notes 2b and 2c).................... (10,943) (42,971) (770) (6,250) (2,026)
------------- ------------- ------------- ------------- -------------
Net equity transactions............ 541,258 662,715 41,722 (35,187) (79,418)
------------- ------------- ------------- ------------- -------------
NET CHANGE IN CONTRACT OWNERS' EQUITY.... 855,217 778,310 47,564 (25,326) (71,222)
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD 587,880 457,896 - 283,667 103,390
------------- ------------- ------------- ------------- -------------
CONTRACT OWNERS' EQUITY END OF PERIOD.... $ 1,443,097 1,236,206 47,564 258,341 32,168
============= ============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
NBAMTGuard NBAMTMCGr NBAMTPart
-------------- -------------- -------------
<S> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .................. 6,081 - 4,324
Mortality and expense charges (note 3). (2,924) (2,756) (1,176)
-------------- -------------- -------------
Net investment activity.............. 3,157 (2,756) 3,148
-------------- -------------- -------------
Proceeds from mutual fund shares sold.. 951,436 755,623 80,205
Cost of mutual fund shares sold........ (732,696) (613,410) (68,280)
-------------- -------------- -------------
Realized gain (loss) on investments.. 218,740 142,213 11,925
Change in unrealized gain (loss) on investments 38,434 (67,406) 60,860
-------------- -------------- -------------
Net gain (loss) on investments....... 257,174 74,807 72,785
-------------- -------------- -------------
Reinvested capital gains............... - 33,171 7,690
-------------- -------------- -------------
Net increase (decrease) in contract owners'
equity resulting from operations. 260,331 105,222 83,623
-------------- -------------- -------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners...................... 473,592 277,411 428,649
Transfers between funds................ (437,334) 160,904 370,920
Surrenders............................. - - -
Policy loans (net of repayments) (note 5) - - -
Redemptions to pay cost of insurance
charges and administration charges
(notes 2b and 2c).................... (27,412) (22,731) (16,099)
-------------- -------------- -------------
Net equity transactions............ 8,846 415,584 783,470
-------------- -------------- -------------
NET CHANGE IN CONTRACT OWNERS' EQUITY.... 269,177 520,806 867,093
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD 1,198,660 1,081,173 242,510
-------------- -------------- -------------
CONTRACT OWNERS' EQUITY END OF PERIOD.... 1,467,837 1,601,979 1,109,603
============== ============== =============
</TABLE>
8
<PAGE> 9
NATIONWIDE VL SEPARATE ACCOUNT-C
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
OppAggGr OppGro OppGrinc VEWrldEMkt VEWrldHAs
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .................. $ - 122 4,341 - 1,327
Mortality and expense charges (note 3). (1,523) (445) (1,473) (402) (216)
------------- ------------- ------------- ------------- -------------
Net investment activity.............. (1,523) (323) 2,868 (402) 1,111
------------- ------------- ------------- ------------- -------------
Proceeds from mutual fund shares sold.. 247,577 375,974 254,479 66,249 332,265
Cost of mutual fund shares sold........ (173,671) (345,292) (208,779) (45,924) (309,311)
------------- ------------- ------------- ------------- -------------
Realized gain (loss) on investments.. 73,906 30,682 45,700 20,325 22,954
Change in unrealized gain (loss) on investments 103,252 23,591 81,678 69,765 5,720
------------- ------------- ------------- ------------- -------------
Net gain (loss) on investments....... 177,158 54,273 127,378 90,090 28,674
------------- ------------- ------------- ------------- -------------
Reinvested capital gains............... - 1,339 7,313 - -
------------- ------------- ------------- ------------- -------------
Net increase (decrease) in contract owners'
equity resulting from operations. 175,635 55,289 137,559 89,688 29,785
------------- ------------- ------------- ------------- -------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners...................... 240,951 412,028 124,684 76,780 26,089
Transfers between funds................ 188,281 298,494 429,376 (30,073) 40,017
Surrenders............................. - - - - -
Policy loans (net of repayments) (note 5) - - - - -
Redemptions to pay cost of insurance
charges and administration charges
(notes 2b and 2c).................... (13,650) (5,817) (11,994) (5,415) (2,224)
------------- ------------- ------------- ------------- -------------
Net equity transactions............ 415,582 704,705 542,066 41,292 63,882
------------- ------------- ------------- ------------- -------------
NET CHANGE IN CONTRACT OWNERS' EQUITY.... 591,217 759,994 679,625 130,980 93,667
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD 515,466 125,183 276,899 133,153 82,749
------------- ------------- ------------- ------------- -------------
CONTRACT OWNERS' EQUITY END OF PERIOD.... $ 1,106,683 885,177 956,524 264,133 176,416
============= ============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
VKMSRESec WPGrinc WPintEq
------------ ------------ ------------
<S> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested dividends .................. 7,347 - -
Mortality and expense charges (note 3). (313) (766) (562)
-------------- -------------- -------------
Net investment activity.............. 7,034 (766) (562)
-------------- -------------- -------------
Proceeds from mutual fund shares sold.. 491,084 900,326 158,440
Cost of mutual fund shares sold........ (463,524) (811,642) (145,585)
-------------- -------------- -------------
Realized gain (loss) on investments.. 27,560 88,684 12,855
Change in unrealized gain (loss) on investments 2,328 (31,843) 12,371
-------------- -------------- -------------
Net gain (loss) on investments....... 29,888 56,841 25,226
-------------- -------------- -------------
Reinvested capital gains............... - - -
-------------- -------------- -------------
Net increase (decrease) in contract owners'
equity resulting from operations. 36,922 56,075 24,664
-------------- -------------- -------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners...................... 235,712 227,908 119,716
Transfers between funds................ 5,451 (535,326) 2,873
Surrenders............................. - - -
Policy loans (net of repayments) (note 5) - - -
Redemptions to pay cost of insurance
charges and administration charges
(notes 2b and 2c).................... (11,659) (12,735) (7,053)
-------------- -------------- -------------
Net equity transactions............ 229,504 (320,153) 115,536
-------------- -------------- -------------
NET CHANGE IN CONTRACT OWNERS' EQUITY.... 266,426 (264,078) 140,200
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD 14,393 458,232 225,231
-------------- -------------- -------------
CONTRACT OWNERS' EQUITY END OF PERIOD.... 280,819 194,154 365,431
============== ============== ============= (Continued)
</TABLE>
9
<PAGE> 10
NATIONWIDE VL SEPARATE ACCOUNT-C
STATEMENTS OF OPERATIONS AND CHANGES
IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
WPPVenCap
<S> <C>
INVESTMENT ACTIVITY: -------------
Reinvested dividends .................. -
Mortality and expense charges (note 3). (477)
-------------
Net investment activity.............. (477)
-------------
Proceeds from mutual fund shares sold.. 217,968
Cost of mutual fund shares sold........ (181,887)
-------------
Realized gain (loss) on investments.. 36,081
Change in unrealized gain (loss) on investments (2,501)
-------------
Net gain (loss) on investments....... 33,580
-------------
Reinvested capital gains............... -
-------------
Net increase (decrease) in contract owners'
equity resulting from operations. 33,103
-------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners...................... 98,602
Transfers between funds................ (85,156)
Surrenders............................. -
Policy loans (net of repayments) (note 5) -
Redemptions to pay cost of insurance
charges and administration charges
(notes 2b and 2c).................... (7,058)
-------------
Net equity transactions............ 6,388
-------------
NET CHANGE IN CONTRACT OWNERS' EQUITY.... 39,491
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD 219,786
-------------
CONTRACT OWNERS' EQUITY END OF PERIOD.... 259,277
=============
</TABLE>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
10
<PAGE> 11
NATIONWIDE VL SEPARATE ACCOUNT-C
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999
(UNAUDITED)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Organization and Nature of Operations
The Nationwide VL Separate Account-C (the Account) was established
pursuant to a resolution of the Board of Directors of Nationwide Life
and Annuity Insurance Company (the Company) on December 3, 1997. The
Account has been registered as a unit investment trust under the
Investment Company Act of 1940.
The Company offers Corporate Flexible Premium Variable Life Insurance
Policies through the Account.
(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 policy charges, and note 3 for asset
charges.
Contract owners 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)
Federated Insurance Series - Quality Bond Fund II (FedQualBd)
Portfolios of the Fidelity Variable Insurance Products Fund
(Fidelity VIP); 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
(FidVIPCon)
Portfolio of the Fidelity Variable Insurance Products Fund III
(Fidelity VIP-III);
Fidelity VIP-III - Growth Opportunities Portfolio - Service
Class (FidVIPGrOp)
Portfolio of the Morgan Stanley Universal Funds, Inc. (Morgan
Stanley);
Morgan Stanley - Emerging Markets Debt Portfolio (VKMSEmMkt)
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)
11
<PAGE> 12
Nationwide SAT - Select Advisers Mid Cap Fund (NSATMidCap)
Nationwide SAT - Small Cap Growth Fund (NSATSmCapGr)
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 (OppAggGr)
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 Life Investment Trust (Van Kampen
LIT);
Van Kampen 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 June 30, 1999, contract owners have invested in all of the above
funds except for Federated Insurance Series Quality Bond Fund II. 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 June 30, 1999. 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.
12
<PAGE> 13
(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) POLICY CHARGES
(a) Deductions from Premium
On corporate flexible premium contracts, the Company deducts a charge
for state premium taxes of 3.5% on all premiums received to cover the
payment of premium taxes. Additionally, the Company deducts a front-end
sales load not to exceed 5.5% from each premium payment received. The
Company may at its sole discretion reduce this sales loading.
(b) Cost of Insurance
A cost of insurance charge is assessed monthly against each contract.
The amount of the charge is based upon age, sex, rate class and net
amount at risk (death benefit less total contract value).
(c) Administrative Charges
For corporate flexible premium contracts, the Company deducts a monthly
administrative expense charge to recover policy maintenance,
accounting, record keeping and other administrative expenses. On a
current basis this charge is $5.00 per month in all policy years. On a
guaranteed basis this charge is $10.00 per month in all policy years.
The above charges are assessed against each contract by liquidating
units.
(3) ASSET CHARGES
For corporate flexible premium contracts, the Company deducts a charge from
the contract to cover mortality and expense risk charges related to
operations. This charge is guaranteed not to exceed an annual rate of .75%.
On a current basis this rate will be .40% during the first through fourth
policy years, .25% during the fifth through twentieth policy years, and
.10% thereafter. For jumbo tier corporate flexible premium contracts the
current rate is .10% for all policy years.
(4) DEATH BENEFITS
Death benefits result in a redemption of the contract value from the
Account and payment of the death benefit proceeds, less any outstanding
policy loans and policy charges, to the legal beneficiary. The excess of
the death benefit proceeds over the contract value on the date of death is
paid by the Company's general account. There were no death benefits paid in
the current year.
(5) POLICY LOANS (NET OF REPAYMENTS)
Contract provisions allow contract owners to borrow 90% of a policy's cash
surrender value. Interest is charged on the outstanding loan and is due and
payable in advance on the policy anniversary.
At the time the loan is granted, the amount of the loan is transferred from
the Account to the Company's general account as collateral for the
outstanding loan. Collateral amounts in the general account are credited
with the stated rate of interest in effect at the time the loan is made,
subject to a guaranteed minimum rate. Interest credited is paid by the
Company's general account to the Account. Loan repayments result in a
transfer of collateral including interest back to the Account. There were
no policy loans in the current year.
(6) 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.
13
<PAGE> 14
(7) COMPONENTS OF CONTRACT OWNERS' EQUITY
The following is a summary of contract owners' equity at June 30, 1999.
<TABLE>
<CAPTION>
PERIOD
Contract owners' equity represented by: UNITS UNIT VALUE RETURN(b)
--------- ----------- -------
<S> <C> <C> <C> <C>
The BEST of AMERICA(R) America's FUTURE Life SeriesSM:
American Century VP - American
Century VP Income & Growth 196,203 $ 11.930918 $ 2,340,882 10%
American Century VP - American
Century VP International 156,839 10.465323 1,641,371 7%
American Century VP - American
Century VP Value 17,739 10.585835 187,782 13%
The Dreyfus Socially Responsible
Growth Fund, Inc. 17,904 12.543738 224,583 13%
Dreyfus Stock Index Fund 1,715,617 12.344504 21,178,441 12%
Dreyfus VIF -
Capital Appreciation Portfolio 93,377 11.830098 1,104,659 7%
Fidelity VIP - Equity-Income Portfolio -
Service Class 25,566 11.140410 284,816 12%
Fidelity VIP - Growth Portfolio -
Service Class 361,035 13.751919 4,964,924 14%
Fidelity VIP - High Income Portfolio -
Service Class 239,446 9.693786 2,321,138 8%
Fidelity VIP - Overseas Portfolio -
Service Class 83,286 10.254973 854,096 8%
Fidelity VIP-II - Contrafund Portfolio -
Service Class 220,534 12.580736 2,774,480 11%
Fidelity VIP-III - Growth Opportunities
Portfolio - Service Class 124,317 11.947796 1,485,314 6%
Morgan Stanley -
Emerging Markets Debt Portfolio 24,247 7.626214 184,913 13%
Nationwide SAT - Balanced Fund 82,244 10.584906 870,545 6%
Nationwide SAT -
Capital Appreciation Fund 123,800 12.501259 1,547,656 12%
Nationwide SAT - Equity Income Fund 20,366 11.620929 236,672 10%
Nationwide SAT - Global Equity Fund 33,140 11.249540 372,810 8%
Nationwide SAT - Government Bond Fund 451,382 10.411381 4,699,510 (2)%
Nationwide SAT - High Income Bond Fund 33,475 10.304749 344,951 3%
Nationwide SAT - Money Market Fund 651,223 10.535947 6,861,251 2%
Nationwide SAT - Multi Sector Bond Fund 36,005 9.862919 355,114 (1)%
Nationwide SAT -
Select Advisers Mid Cap Fund 67 10.856013 727 11%
Nationwide SAT - Small Cap Growth Fund 100,000 11.262862 1,126,286 13%(a)
Nationwide SAT - Small Cap Value Fund 136,263 10.590528 1,443,097 23%
Nationwide SAT - Small Company Fund 127,081 9.727700 1,236,206 7%
Nationwide SAT - Strategic Growth Fund 3,610 13.175713 47,564 25%
Nationwide SAT - Strategic Value Fund 26,211 9.856191 258,341 8%
</TABLE>
14
<PAGE> 15
<TABLE>
<S> <C> <C> <C> <C>
Nationwide SAT - Total Return Fund 2,869 11.212270 32,168 11%
Neuberger & Berman AMT -
Guardian Portfolio 127,307 10.928637 1,391,292 17%
Neuberger & Berman AMT -
Mid-Cap Growth Portfolio 135,164 11.852112 1,601,979 5%
Neuberger & Berman AMT -
Partners Portfolio 105,121 10.555488 1,109,603 13%
Oppenheimer VAF -
Aggressive Growth Fund 91,474 11.698025 1,070,065 21%
Oppenheimer VAF - Growth Fund 22,876 12.321204 281,860 16%
Oppenheimer VAF -
Growth & Income Fund 93,526 10.227355 956,524 14%
Van Eck WIT -
Worldwide Emerging Markets Fund 28,682 9.209003 264,133 46%
Van Eck WIT -
Worldwide Hard Assets Fund 21,849 8.074329 176,416 18%
Van Kampen LIT - Morgan Stanley
Real Estate Securities Portfolio 29,045 9.668428 280,819 8%
Warburg Pincus Trust -
Growth & Income Portfolio 16,980 11.434266 194,154 15%
Warburg Pincus Trust -
International Equity Portfolio 38,500 9.491713 365,431 7%
Warburg Pincus Trust -
Post Venture Capital Portfolio 25,421 10.199319 259,277 13%
The BEST of AMERICA(R)
America's FUTURE Life SeriesSM Jumbo Tier:
American Century VP - American
Century VP Income & Growth 139,253 10.717821 1,492,489 7%(a)
American Century VP - American
Century VP International 14,498 10.471172 151,811 5%(a)
Dreyfus Stock Index Fund 276,031 10.631744 2,934,691 6%(a)
Fidelity VIP - Growth Portfolio -
Service Class 165,208 10.460406 1,728,143 5%(a)
Nationwide SAT - Government Bond Fund 65,024 9.913287 644,602 (1)%(a)
Nationwide SAT - Multi Sector Bond Fund 4,095 9.908985 40,577 (1)%(a)
Neuberger & Berman AMT -
Guardian Portfolio 6,842 11.187560 76,545 12%(a)
Oppenheimer VAF -
Aggressive Growth Fund 3,344 10.950258 36,618 10%(a)
Oppenheimer VAF - Growth Fund 55,741 10.823581 603,317 8%(a)
======== ========= ============
$ 74,640,643
============
</TABLE>
(a) This investment option was not being utilized for the entire period.
Accordingly, the period return was computed for such period as the
investment option was utilized.
(b) The period return does not include contract charges satisfied by
surrending units.
- --------------------------------------------------------------------------------
15
<PAGE> 16
NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY Bulk Rate
HOME OFFICE: ONE NATIONWIDE PLAZA o COLUMBUS, OHIO 43215-2220 U.S. Postage
PAID
Columbus, Ohio
Permit No. 521
Nationwide(R) is a registered federal service mark of Nationwide Mutual
Insurance Company
