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Nationwide(R) VL
Separate Account-D
June 30, 1999
The Best
of America
America's FUTURE Life Series(SM)
'99
Semi-Annual Report
[Nationwide Logo]
Nationwide Life and Annuity Insurance Company
Home Office: Columbus, Ohio
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[Nationwide Logo]
NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY
ONE NATIONWIDE PLAZA, COLUMBUS, OHIO 43215-2220
[Photo]
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-D.
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.
/s/ Joseph J. Gasper, President
Joseph J.Gasper, President
August 19, 1999
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NATIONWIDE VL SEPARATE ACCOUNT-D
STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY
June 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
Assets:
Investments at market value:
<S> <C>
Dreyfus Variable Investment Fund - Quality Bond Portfolio
724 shares (cost $8,011) . . . . . . . . . . . . . . . . . . . . . . . . $ 8,025
Fidelity VIP - Overseas Portfolio: Service Class
697 shares (cost $14,179) . . . . . . . . . . . . . . . . . . . . . . . 14,468
INVESCO VIF - Dynamics Portfolio
2,692 shares (cost $37,691) . . . . . . . . . . . . . . . . . . . . . . 39,360
INVESCO VIF - Blue Chip Growth Portfolio
2,711 shares (cost $40,363) . . . . . . . . . . . . . . . . . . . . . . 42,394
INVESCO VIF - High Yield Portfolio
1,179 shares (cost $14,138) . . . . . . . . . . . . . . . . . . . . . . 14,168
INVESCO VIF - Industrial Income Portfolio
4,223 shares (cost $87,000) . . . . . . . . . . . . . . . . . . . . . . 89,405
Nationwide SAT - Money Market Fund
4,030 shares (cost $4,030) . . . . . . . . . . . . . . . . . . . . . . . 4,030
---------
Total investments . . . . . . . . . . . . . . . . . . . . . . . . . . 211,850
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 211,850
---------
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
---------
Contract owners' equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 211,793
=========
</TABLE>
See accompanying notes to financial statements.
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NATIONWIDE VLI SEPARATE ACCOUNT-D
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIOD ENDED JUNE 30,1999
(UNAUDITED)
<TABLE>
<CAPTION>
INVESCO VIF
Dreyfus VIF Fidelity VIP INVESCO VIF Blue Chip
Quality Bond Overseas Dynamics Growth
Total Portfolio Portfolio Portfolio Portfolio
<S> <C> <C> <C> <C> <C>
Investment activity:
Reinvested dividends ............................ $ 30 16 -- -- --
Mortality and expense charges (note 3) .......... (88) (4) (7) (18) (18)
--------- -------- -------- ------- -------
Net investment income ........................ (58) 13 (7) (18) (18)
--------- -------- -------- ------- -------
Proceeds from mutual fund shares sold ........... 5,247 201 361 968 986
Cost of mutual fund shares sold ................. (5,404) (203) (365) (1,006) (1,034)
--------- -------- -------- ------- -------
Realized gain (loss) on investments .......... (157) (2) (4) (38) (48)
Change in unrealized gain (loss) on investments . 6,439 15 289 1,669 2,031
--------- -------- -------- ------- -------
Net gain (loss) on investments ............... 6,282 13 285 1,631 1,983
--------- -------- -------- ------- -------
Reinvested capital gains ........................ -- -- -- -- --
--------- -------- -------- ------- -------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 6,224 26 278 1,614 1,965
--------- -------- -------- ------- -------
Equity transactions:
Purchase payments received from
contract owners .............................. 226,651 4,349 7,832 21,585 22,215
Transfers between funds ......................... -- 4,245 7,429 19,104 21,226
Redemptions to pay cost of insurance
charges and administration charges
(notes 2b and 2c) ............................ (21,082) (602) (1,082) (2,959) (3,030)
--------- -------- -------- ------- -------
Net equity transactions .................... 205,569 7,993 14,180 37,730 40,411
--------- -------- -------- ------- -------
Net change in contract owners' equity ............. 211,793 8,019 14,458 39,344 42,376
Contract owners' equity beginning of period ....... -- -- -- -- --
--------- ------- ------- ------ ------
Contract owners' equity end of period ............. $ 211,793 8,019 14,458 39,344 42,376
========= ======== ======== ======= ======
</TABLE>
See accompanying notes to financial statements.
NATIONWIDE VLI SEPARATE ACCOUNT-D
STATEMENTS OF OPERATIONS AND
CHANGES IN CONTRACT
OWNERS' EQUITY
SIX MONTH PERIOD ENDED
JUNE 30,1999
(UNAUDITED)
<TABLE>
<CAPTION>
INVESCO VIF
INVESCO VIF Industrial Nationwide SAT
High Yield Income Money Market
Portfolio Portfolio Fund
<S> <C> <C> <C>
Investment activity:
Reinvested dividends ............................ -- -- 14
Mortality and expense charges (note 3) .......... -- (40) (2)
-------- ------- --------
Net investment income ........................ -- (40) 12
-------- ------- --------
Proceeds from mutual fund shares sold ........... 357 2,271 103
Cost of mutual fund shares sold ................. (361) (2,332) (103)
-------- ------- --------
Realized gain (loss) on investments .......... (4) (61) --
Change in unrealized gain (loss) on investments . 30 2,405 --
-------- ------- --------
Net gain (loss) on investments ............... 26 2,344 --
-------- ------- --------
Reinvested capital gains ........................ -- -- --
-------- ------- --------
Net increase (decrease) in contract owners'
equity resulting from operations ........ 26 2,304 12
-------- ------- --------
Equity transactions:
Purchase payments received from
contract owners .............................. 7,786 49,307 113,577
Transfers between funds ......................... 7,429 44,575 (104,009)
Redemptions to pay cost of insurance
charges and administration charges
(notes 2b and 2c) ............................ (1,080) (6,780) (5,550)
-------- ------- --------
Net equity transactions .................... 14,135 87,102 4,018
-------- ------- --------
Net change in contract owners' equity ............. 14,161 89,406 4,029
Contract owners' equity beginning of period ....... -- -- --
------ ------ --------
Contract owners' equity end of period ............. 14,161 89,406 4,029
====== ======= ========
</TABLE>
See accompanying notes to financial statements.
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NATIONWIDE VL SEPARATE ACCOUNT-D
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-D (the Account) was established
pursuant to a resolution of the Board of Directors of Nationwide Life
and Annuity Insurance Company (the Company) on May 22, 1998. The Account
has been registered as a unit investment trust under the Investment
Company Act of 1940.
The Company offers 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:
Dreyfus Variable Investment Fund - Quality Bond Portfolio
Fidelity VIP - Overseas Portfolio:Service Class
Goldman Sachs VIT - Global Income Fund
Portfolio of the INVESCO Variable Investment Fund (INVESCO VIF);
INVESCO VIF - Dynamics Portfolio
INVESCO VIF - Blue Chip Growth Portfolio
INVESCO VIF - Health Sciences Portfolio
INVESCO VIF - High Yield Portfolio
INVESCO VIF - Industrial Income Portfolio
INVESCO VIF - Realty Portfolio
INVESCO VIF - Small Company Growth Portfolio
INVESCO VIF - Technology Portfolio
INVESCO VIF - Total Return Portfolio
INVESCO VIF - Utilities Portfolio
Funds of the Nationwide Separate Account Trust (Nationwide SAT)
(managed for a fee by an affiliated investment advisor);
Nationwide SAT Capital Appreciation Fund
Nationwide SAT Government Bond Fund
Nationwide SAT Money Market Fund
Nationwide SAT Total Return Fund
Nationwide SAT Nationwide Balanced Fund
Nationwide SAT Nationwide Equity Income Fund
Nationwide SAT Nationwide Global Equity Fund
Nationwide SAT Nationwide High Income Bond Fund
Nationwide SAT Nationwide Multi-Sector Bond Fund
Nationwide SAT Nationwide Select Advisers Mid Cap Fund
Nationwide SAT Nationwide Select Advisers Small Cap Growth Fund
Nationwide SAT Nationwide Small Cap Value Fund
Nationwide SAT Nationwide Small Company Fund
Nationwide SAT Nationwide Strategic Growth Fund
Nationwide SAT Nationwide Strategic Value Fund
Salomon Brothers Investors Fund
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At June 30, 1999, 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.
(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.
(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 life insurance contracts, the Company
deducts a charge for state premium taxes not to exceed 3.5% of all
premiums received to cover the payment of these premium taxes.
Additionally, the Company deducts a front-end sales load of up to 5.5%
from each premium payment received.
(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 charge of $5 on a current basis and $10 on a guaranteed
basis in all policy years.
(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, and to recover policy maintenance charges.This charge is
guaranteed not to exceed an annual effective rate of .75%.On a current
basis, the annual rate will be .60% during the first through fourth policy
years, .40% during the fifth through twentieth policy years, and .25%
thereafter.
(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.
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(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.
(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.
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(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(*)
----- ---------- ---------
<S> <C> <C> <C> <C>
Dreyfus Variable Investment Fund -
Quality Bond Portfolio .......................... 814 $ 9.850744 8,019 (1)%
Fidelity VIP -
Overseas Service Class Shares ................... 1,394 10.371806 14,458 4%
INVESCO VIF - Dynamics Portfolio ................... 3,325 11.832674 39,344 18%
INVESCO VIF - Blue Chip Growth Portfolio ........... 3,970 10.674111 42,376 7%
INVESCO VIF - High Yield Portfolio ................. 1,341 10.559719 14,161 6%
INVESCO VIF - Industrial Income Portfolio .......... 7,933 11.270116 89,406 13%
Nationwide SAT - Money Market Fund ................. 395 10.199244 4,029 2%
===== =========== ======
$(211,793)
</TABLE>
(*)The period return does not include contract charges satisfied by surrendering
units.
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NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY
HOME OFFICE: ONE NATIONWIDE PLAZA o COLUMBUS, OHIO 43215-2220
Bulk Rate
U.S.Postage
PAID
Columbus, Ohio
Permit No.521
Nationwide((R)) is a registered federal service mark of Nationwide Mutual
Insurance Company
