<PAGE> 1
As filed with the Securities and Exchange Commission.
`33 Act File No. ________
`40 Act File No. ________
================================================================================
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES [X]
ACT OF 1933
and
REGISTRATION STATEMENT UNDER THE [X]
INVESTMENT COMPANY ACT OF 1940
NATIONWIDE VA SEPARATE ACCOUNT-D
(EXACT NAME OF REGISTRANT)
NATIONWIDE LIFE AND ANNUITY 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
PATRICIA R. HATLER, SECRETARY, ONE NATIONWIDE PLAZA, COLUMBUS, OHIO 43215
(Name and Address of Agent for Service)
Approximate date of proposed public offering: (Upon the effective date of this
Registration Statement. December 1, 2000 requested.)
The Registrant hereby agrees to amend this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall therefore become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such a date as the Commission, acting pursuant to Section 8(a), may
determine.
================================================================================
<PAGE> 2
NATIONWIDE VA SEPARATE ACCOUNT-D
REFERENCE TO ITEMS REQUIRED BY FORM N-4
Caption in Prospectus and Statement of Additional Information and Other
Information
<TABLE>
<CAPTION>
N-4 ITEM CAPTION
PART A INFORMATION REQUIRED IN A PROSPECTUS
<S> <C> <C>
Item 1. Cover Page.................................................................................Cover Page
Item 2. Definitions.................................................................Glossary of Special Terms
Item 3. Synopsis or Highlights......................................................Synopsis of the Contracts
Item 4. Condensed Financial Information...................................................................N/A
Item 5. General Description of Registrant, Depositor, and Portfolio
Companies ..............Nationwide Life and Annuity Insurance Company; Investing in the Contract
Item 6. Deductions and Expenses.................................................Standard Charges & Deductions
Item 7. General Description of Variable
Annuity Contracts.......................................Contract Ownership; Operation of the Contract
Item 8. Annuity Period...............................................................Annuitizing the Contract
Item 9. Death Benefit..........................................................................Death Benefits
Item 10. Purchases and Contract Value................................................Operation of the Contract
Item 11. Redemptions...................................................................Surrender (Redemption)
Item 12. Taxes ....................................................................Federal Tax Considerations
Item 13. Legal Proceedings...................................................................Legal Proceedings
Item 14. Table of Contents of the Statement of Additional
Information.........................Table of Contents of the Statement of Additional Information
PART B INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
Item 15. Cover Page.................................................................................Cover Page
Item 16. Table of Contents...................................................................Table of Contents
Item 17. General Information and History.......................................General Information and History
Item 18. Services.....................................................................................Services
Item 19. Purchase of Securities Being Offered.............................Purchase of Securities Being Offered
Item 20. Underwriters.............................................................................Underwriters
Item 21. Calculation of Performance Information.........................Calculation of Performance Information
Item 22. Annuity Payments.....................................................................Annuity Payments
Item 23. Financial Statements.............................................................Financial Statements
PART C OTHER INFORMATION
Item 24. Financial Statements and Exhibits.............................................................Item 24
Item 25. Directors and Officers of the Depositor.......................................................Item 25
Item 26. Persons Controlled by or Under Common Control with
the Depositor or Registrant..............................................................Item 26
Item 27. Number of Contract Owners.....................................................................Item 27
Item 28. Indemnification...............................................................................Item 28
Item 29. Principal Underwriter.........................................................................Item 29
Item 30. Location of Accounts and Records..............................................................Item 30
Item 31. Management Services...........................................................................Item 31
Item 32. Undertakings..................................................................................Item 32
</TABLE>
<PAGE> 3
NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY
Deferred Variable Annuity Contracts
Issued by Nationwide Life and Annuity Insurance Company
through its Nationwide VA Separate Account-D
The date of this prospectus is December 1, 2000.
--------------------------------------------------------------------------------
Variable annuities are complex investment products with unique benefits and
advantages that may be particularly useful to many investors in meeting
long-term savings and retirement needs. There are, however, costs and charges
associated with some of these unique benefits - costs and charges that do not
exist or are not present with other investment products. With help from
financial consultants or advisers, investors are encouraged to compare and
contrast the costs and benefits of the variable annuity described in this
prospectus with those of other investment products, including other variable
annuity or variable life insurance products offered by Nationwide Life and
Annuity Insurance Company and its affiliates. This process will aid in
determining whether the purchase of the contract described in this prospectus is
consistent with an individual's goals, risk tolerance, time horizon, marital
status, tax situation, and other personal characteristics and needs.
THIS PROSPECTUS CONTAINS BASIC INFORMATION YOU SHOULD KNOW ABOUT THE CONTRACTS
BEFORE INVESTING. PLEASE READ THIS PROSPECTUS CAREFULLY AND KEEP IT FOR FUTURE
REFERENCE.
--------------------------------------------------------------------------------
The following underlying mutual funds are available under the contracts:
TARGET/UNITED FUNDS, INC.
- Asset Strategy Portfolio
- Balanced Portfolio
- Bond Portfolio
- Growth Portfolio
- High Income Portfolio
- Income Portfolio
- International Portfolio
- Limited-Term Bond Portfolio
- Money Market Portfolio
- Science and Technology Portfolio
- Small Cap Portfolio
Purchase payments not invested in the underlying mutual fund options of the
Nationwide VA Separate Account-D ("variable account") may be allocated to the
fixed account.
The Statement of Additional Information (dated December 1, 2000) 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 48.
For general information or to obtain FREE copies of the:
- Statement of Additional Information;
- prospectus, annual report or semi-annual report for any underlying
mutual fund; or
- required Nationwide forms,
call: 1-866-221-1100
TDD 1-800-238-3035
or write:
NATIONWIDE LIFE AND ANNUITY
INSURANCE COMPANY
P.O. BOX 182449
COLUMBUS, OHIO 43218-2449
The Statement of Additional Information and other material incorporated by
reference can be found on the SEC website at:
www.sec.gov
THIS ANNUITY IS NOT:
- A BANK DEPOSIT - FEDERALLY INSURED
- ENDORSED BY A BANK - AVAILABLE IN
OR GOVERNMENT AGENCY EVERY STATE
1
<PAGE> 4
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
<PAGE> 5
GLOSSARY OF SPECIAL TERMS
ACCUMULATION UNIT- An accounting unit of measure used to calculate the variable
account value 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 of measure used to calculate the variable
annuity payments.
CONTRACT VALUE- The total value of all accumulation units in a contract plus any
amount held in the fixed account.
CONTRACT YEAR- Each year the contract is in force beginning with the date the
contract is issued.
FIXED ACCOUNT- An investment option that is funded by the general account of
Nationwide.
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 and Annuity Insurance Company.
NON-QUALIFIED CONTRACT- A contract which does not qualify for favorable tax
treatment as a Qualified Plan, Individual Retirement Account, Individual
Retirement Annuity, Roth IRA, SEP IRA, Simple IRA, or Tax Sheltered Annuity.
QUALIFIED PLANS- Retirement plans which receive favorable tax treatment under
Section 401 or 403(a) 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.
SIMPLE IRA- An annuity contract which qualifies for favorable tax treatment
under Section 408(p) of the Internal Revenue Code.
SUB-ACCOUNTS- Divisions of the variable account for which accumulation units and
annuity units are separately maintained - each sub-account corresponds to a
single underlying mutual fund.
TAX SHELTERED ANNUITY- An annuity that qualifies for favorable tax treatment
under Section 403(b) of the Internal Revenue Code. The Tax Sheltered Annuities
described in this prospectus are not subject to the Employee Retirement Income
Security Act of 1974.
VALUATION PERIOD- Each day the New York Stock Exchange is open for business.
VARIABLE ACCOUNT- Nationwide VA Separate Account-D, 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
<PAGE> 6
TABLE OF CONTENTS
GLOSSARY OF SPECIAL TERMS..........................
SUMMARY OF STANDARD CONTRACT
EXPENSES.........................................
ADDITIONAL CONTRACT OPTIONS........................
UNDERLYING MUTUAL FUND ANNUAL
EXPENSES.........................................
EXAMPLE............................................
SYNOPSIS OF THE CONTRACTS..........................
FINANCIAL STATEMENTS...............................
NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY......
GENERAL DISTRIBUTOR................................
TYPES OF CONTRACTS.................................
Non-Qualified Contracts
Individual Retirement Annuities (IRAs)
Simplified Employee Pension IRAs (SEP IRAs)
Simple IRAs
Roth IRAs
Tax Sheltered Annuities
Qualified Plans
INVESTING IN THE CONTRACT..........................
The Variable Account and Underlying Mutual Funds
The Fixed Account
STANDARD CHARGES AND DEDUCTIONS....................
Mortality and Expense Risk Charge
Administration Charge
Contract Maintenance Charge
Contingent Deferred Sales Charge
Premium Taxes
OPTIONAL CONTRACT BENEFITS, CHARGES AND DEDUCTIONS.
Reduced Purchase Payment Option
Extra Credit Option
Death Benefit Options
Guaranteed Minimum Income Benefit Options
Nursing Home and Long Term Care Option
CONTRACT OWNERSHIP.................................
Joint Ownership
Contingent Ownership
Annuitant
Beneficiary and Contingent Beneficiary
OPERATION OF THE CONTRACT..........................
Minimum Initial and Subsequent
Purchase Payments
Pricing
Allocation of Purchase Payments
Determining the Contract Value
Transfers Prior to Annuitization
Transfers After Annuitization
Transfer Requests
RIGHT TO REVOKE....................................
SURRENDER (REDEMPTION).............................
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.....................................
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.........................................
CONTRACT OWNER SERVICES............................
Asset Rebalancing
Dollar Cost Averaging
Systematic Withdrawals
ANNUITY COMMENCEMENT DATE..........................
ANNUITIZING THE CONTRACT...........................
Annuitization Date
Annuitization
Fixed Payment Annuity
Variable Payment Annuity
4
<PAGE> 7
Frequency and Amount of Annuity
Payments
Guaranteed Minimum Income Benefit
Options ("GMIB")
Annuity Payment Options
DEATH BENEFITS.....................................
Death of Contract Owner -
Non-Qualified Contracts
Death of Annuitant - Non-Qualified Contracts
Death of Contract Owner/Annuitant
Death Benefit Payment
REQUIRED DISTRIBUTIONS.............................
Required Distributions for
Non-Qualified Contracts
Required Distributions for Tax Sheltered
Annuities
Required Distributions for Individual
Retirement Annuities, SEP IRAs and
Simple IRAs
Required Distributions for Roth IRAs
FEDERAL TAX CONSIDERATIONS.........................
Federal Income Taxes
Withholding
Non-Resident Aliens
Federal Estate, Gift, and Generation
Skipping Transfer Taxes
Charge for Tax
Diversification
Tax Changes
STATEMENTS AND REPORTS.............................
LEGAL PROCEEDINGS..................................
ADVERTISING........................................
TABLE OF CONTENTS OF STATEMENT OF
ADDITIONAL INFORMATION........................
APPENDIX A: OBJECTIVES FOR UNDERLYING
MUTUAL FUNDS..................................
5
<PAGE> 8
SUMMARY OF STANDARD CONTRACT EXPENSES
The expenses listed below are charged to all contracts unless:
- the contract owner meets an available exception under the contract; or
- a contract owner has replaced a standard benefit with an available option
for an additional charge.
CONTRACT OWNER TRANSACTION EXPENSES
Maximum Contingent Deferred Sales
Charge ("CDSC") (as a percentage of
purchase payments surrendered)....................9%(1)
Range of CDSC over time:
-------------------------------- ------------------------
Number of Completed Years from CDSC
Date of Purchase Payment Percentage
-------------------------------- ------------------------
0 9%
-------------------------------- ------------------------
1 8%
-------------------------------- ------------------------
2 8%
-------------------------------- ------------------------
3 8%
-------------------------------- ------------------------
4 6%
-------------------------------- ------------------------
5 5%
-------------------------------- ------------------------
6 4%
-------------------------------- ------------------------
7 2%
-------------------------------- ------------------------
8 0%
-------------------------------- ------------------------
(1) Each contract year, the contract owner may withdraw without a CDSC the
greater of:
1) the lesser of:
a) 10% of purchase payments that are subject to CDSC, less purchase
payments withdrawn that were subject to CDSC; or
b) 10% of the contract value; or
2) any amount withdrawn to meet minimum distribution requirements under the
Internal Revenue Code.
This free withdrawal privilege is non-cumulative. Free amounts not taken
during any given contract year cannot be taken as free amounts in a subsequent
contract year (see "Contingent Deferred Sales Charge").
Withdrawals may be restricted for contracts issued as Tax Sheltered Annuities
due to Internal Revenue Code restrictions.
CONTRACT MAINTENANCE CHARGE.....................$50(2)
VARIABLE ACCOUNT CHARGES(3)
(as a percentage of the daily net assets of the variable account)
Mortality and Expense Risk Charge..............0.90%
Administration Charge..........................0.10%(4)
Total Variable Account Charges............1.00%(5)
(2) Each year, on the contract anniversary, Nationwide will deduct the Contract
Maintenance Charge. Nationwide will waive the Contract Maintenance Charge on
any contract anniversary that the contract value is $100,000 or more.
(3) These charges apply only to sub-account allocations. They do not apply to
allocations made to the fixed account. They are charged on a daily basis at
the annual rate noted above.
(4) Nationwide will assess the Administration Charge during the first 8 contract
years ONLY.
(5) Charges shown include the standard death benefit (see "Death Benefit
Payment"). Additionally, after the 8th contract year, Total Variable
Account Charges (not including charges from optional benefits) will be
reduced to 0.90% of the daily net assets of the variable account.
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 permit Nationwide to assess a loan processing fee (see "Loan Privilege").
6
<PAGE> 9
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. Except as otherwise noted,
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.
REDUCED PURCHASE PAYMENT OPTION
For an additional charge at an annualized rate of 0.05% of the daily net assets
of the variable account, Nationwide will lower an applicant's minimum initial
purchase payment to $5,000 (see "Reduced Purchase Payment Option").
Reduced Purchase Payment Option...............0.05%
Total Variable Account Charges
(including Reduced Purchase
Payment Option only) ..................1.05%
EXTRA CREDIT OPTION
For an additional charge at an annualized rate of 0.40% of the daily net assets
of the variable account, Nationwide will credit 3% of the purchase payment(s)
made to the contract during the first 12 months the contract is in force.
Nationwide will discontinue deducting this charge 8 years from the date the
contract was issued (see "Extra Credit Option").
Extra Credit Option..........................0.40%
Total Variable Account Charges
(including Extra Credit Option only).......1.40%
The charge for the Extra Credit Option will be assessed against the fixed
account allocations during the first eight contract years in the form of
crediting rates that may be up to 0.40% less than the crediting rates available
when the Extra Credit Option is not elected (see "Fixed Account").
DEATH BENEFIT OPTIONS
For an additional charge at an annualized rate of 0.15% and/or 0.05% of the
daily net assets of the variable account, an applicant may choose one of the
following death benefits as a replacement for the standard death benefit (see
"Death Benefit Options").
Maximum Anniversary Death Benefit.............0.15%
Total Variable Account Charges
(including Maximum Anniversary
Death Benefit only)......................1.15%
Five Year Reset Death Benefit.................0.05%
Total Variable Account Charges
(including Five Year Reset Death
Benefit only)............................1.05%
GUARANTEED MINIMUM INCOME BENEFIT OPTIONS
For an additional charge at an annualized rate of either 0.45% or 0.30% of the
daily net assets of the variable account, an applicant may elect one of two
Guaranteed Minimum Income Benefit options (see "Guaranteed Minimum Income
Benefit Options").
5% Interest Guaranteed Minimum Income
Benefit Option .................................0.45%
Total Variable Account Charges
(including the 5% Interest Guaranteed
Minimum Income Benefit
Option only)...............................1.45%
Maximum Anniversary Guaranteed
Minimum Income Benefit Option ..................0.30%
Total Variable Account Charges
(including the Maximum Anniversary
Guaranteed Minimum Income
Benefit Option only).......................1.30%
NURSING HOME AND LONG TERM CARE OPTION
For an additional charge at an annualized rate of 0.05% of the daily net assets
of the variable account, an applicant may elect to purchase the Nursing Home and
Long Term Care Option (see "Nursing Home and Long Term Care Option").
Nursing Home and Long Term Care
Option..........................................0.05%
Total Variable Account Charges
(including Nursing Home and Long
Term Care Option only).....................1.05%
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<PAGE> 10
The expenses shown below 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 in calculating 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.
<TABLE>
<CAPTION>
UNDERLYING MUTUAL FUND ANNUAL EXPENSES
(as a percentage of underlying mutual fund net assets)
---------------------------------------------------------------------------------------------------------------------------
Management Other 12b-1 Total Underlying Mutual
Fees Expenses Fees Fund Expenses
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Target/United Funds, Inc. - Asset Strategy Portfolio 0.74% 0.14% 0.24% 1.12%
---------------------------------------------------------------------------------------------------------------------------
Target/United Funds, Inc. - Balanced Portfolio 0.65% 0.06% 0.24% 0.95%
---------------------------------------------------------------------------------------------------------------------------
Target/United Funds, Inc. - Bond Portfolio 0.52% 0.06% 0.24% 0.82%
---------------------------------------------------------------------------------------------------------------------------
Target/United Funds, Inc. - Growth Portfolio 0.69% 0.02% 0.24% 0.95%
---------------------------------------------------------------------------------------------------------------------------
Target/United Funds, Inc. - High Income Portfolio 0.63% 0.05% 0.24% 0.92%
---------------------------------------------------------------------------------------------------------------------------
Target/United Funds, Inc. - Income Portfolio 0.69% 0.02% 0.24% 0.95%
---------------------------------------------------------------------------------------------------------------------------
Target/United Funds, Inc. - International Portfolio 0.82% 0.15% 0.24% 1.21%
---------------------------------------------------------------------------------------------------------------------------
Target/United Funds, Inc. - Limited-Term Bond Portfolio 0.52% 0.15% 0.24% 0.91%
---------------------------------------------------------------------------------------------------------------------------
Target/United Funds, Inc. - Money Market Portfolio 0.44% 0.08% 0.24% 0.76%
---------------------------------------------------------------------------------------------------------------------------
Target/United Funds, Inc. - Science and Technology 0.80% 0.06% 0.24% 1.10%
Portfolio
---------------------------------------------------------------------------------------------------------------------------
Target/United Funds, Inc. - Small Cap Portfolio 0.84% 0.04% 0.24% 1.12%
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
None of the underlying mutual funds are subject to fee waivers or expense
reimbursements.
8
<PAGE> 11
EXAMPLE
The following chart shows the 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 example reflects expenses of both the variable account and the underlying
mutual funds. The example reflects the 8 year CDSC schedule and assumed variable
account charges of 2.15%, which is the maximum charge for the maximum number of
rider options. For those contracts that do not elect the maximum number of rider
options, the expenses are reduced. The Contract Maintenance Charge is reflected
as a percentage of the average account value. Since average contract value is
greater than $1,000, the expense effect of the Contract Maintenance Charge is
reduced accordingly. Deductions for premium taxes are not reflected but may
apply.
<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>
Target/United Funds, Inc. - 109 185 262 391 37 113 190 391 * 113 190 391
Asset Strategy Portfolio
--------------------------------------------------------------------------------------------------------------------------
Target/United Funds, Inc. - 107 179 253 375 35 107 181 375 * 107 181 375
Balanced Portfolio
--------------------------------------------------------------------------------------------------------------------------
Target/United Funds, Inc. - 106 175 247 363 34 103 175 363 * 103 175 363
Bond Portfolio
--------------------------------------------------------------------------------------------------------------------------
Target/United Funds, Inc. - 107 179 253 375 35 107 181 375 * 107 181 375
Growth Portfolio
--------------------------------------------------------------------------------------------------------------------------
Target/United Funds, Inc. - 107 178 252 373 35 106 180 373 * 106 180 373
High Income Portfolio
--------------------------------------------------------------------------------------------------------------------------
Target/United Funds, Inc. - 107 179 253 375 35 107 181 375 * 107 181 375
Income Portfolio
--------------------------------------------------------------------------------------------------------------------------
Target/United Funds, Inc. - 110 187 266 400 38 115 194 400 * 115 194 400
International Portfolio
--------------------------------------------------------------------------------------------------------------------------
Target/United Funds, Inc. - 107 178 251 375 35 106 179 372 * 106 179 372
Limited-Term Bond Portfolio
--------------------------------------------------------------------------------------------------------------------------
Target/United Funds, Inc. - 105 173 244 357 33 101 172 357 * 101 172 357
Money Market Portfolio
--------------------------------------------------------------------------------------------------------------------------
Target/United Funds, Inc. - 109 184 261 390 37 112 189 390 * 112 189 390
Science and Technology
Portfolio
--------------------------------------------------------------------------------------------------------------------------
Target/United Funds, Inc. - 109 185 262 391 37 113 190 391 * 113 190 391
Small Cap Portfolio
--------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Annuitization is not permitted during the first two contract years.
9
<PAGE> 12
SYNOPSIS OF THE CONTRACTS
The contracts described in this prospectus are flexible 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
agreement(s)."
The contracts can be categorized as:
- Investment-only;
- Non-Qualified;
- Individual Retirement Annuities;
- Roth IRAs;
- SEP IRAs;
- Simple IRAs;
- Tax Sheltered Annuities (Non-ERISA); and
- Charitable Remainder Trusts.
For more detailed information with regard to the differences in contract types,
please see "Types of Contracts" later in this prospectus.
MINIMUM INITIAL AND SUBSEQUENT PURCHASE PAYMENTS
-------------------- ----------------- ------------------
MINIMUM INITIAL MINIMUM
CONTRACT PURCHASE SUBSEQUENT
TYPE PAYMENT PAYMENTS
-------------------- ----------------- ------------------
Investment-only $25,000 $1,000*
-------------------- ----------------- ------------------
Non-Qualified $25,000 $1,000*
-------------------- ----------------- ------------------
IRA $25,000 $1,000*
-------------------- ----------------- ------------------
Roth IRA $25,000 $1,000*
-------------------- ----------------- ------------------
SEP IRA $25,000 $1,000*
-------------------- ----------------- ------------------
Simple IRA $25,000 $1,000*
-------------------- ----------------- ------------------
Tax Sheltered $25,000 $1,000*
Annuity
-------------------- ----------------- ------------------
Charitable $25,000 $1,000*
Remainder Trust
-------------------- ----------------- ------------------
*For subsequent purchase payments sent via automatic deposit, the minimum
subsequent purchase payment is $100.
If the contract owner elects the Reduced Purchase Payment Option, the minimum
initial purchase payment will be reduced accordingly.
CHARGES AND EXPENSES
Nationwide deducts a Mortality and Expense Risk Charge equal to an annual rate
of 0.90% of the daily net assets of the variable account. Nationwide assesses
this charge in return for bearing certain mortality and expense risks, and for
certain administrative expenses.
For the first 8 years after a contract is issued, Nationwide deducts an
Administration Charge equal to an annual rate of 0.10% of the daily net assets
of the variable account. Nationwide assesses this charge in return for incurring
certain administrative expenses. Nationwide will discontinue deducting this
charge after the 8th contract year.
A $50 Contract Maintenance Charge is assessed to each contract on the contract
anniversary date (and on the surrender date upon full surrender of the
contract). This charge will be waived for each year that the contract value is
$100,000 or more on the contract anniversary.
Nationwide does not deduct a sales charge from purchase payments upon deposit
into the contract. However, Nationwide may deduct a CDSC if any amount is
withdrawn from the contract. This CDSC reimburses Nationwide for sales expenses.
The amount of the CDSC will not exceed 9% of purchase payments surrendered.
If the contract owner elects the Reduced Purchase Payment Option, Nationwide
will reduce the required minimum initial purchase payment to $5,000. In return
for the reduction, Nationwide will deduct an additional charge equal to an
annual rate of 0.05% of the daily net assets of the variable account.
An Extra Credit Option is available under the contract. This option is only
available at the time of application. If the contract owner elects the Extra
Credit Option, Nationwide will apply a credit of 3% of the purchase payment(s)
made during the first 12 months the contract is in force. In exchange, for the
first 8 years after a contract is issued, Nationwide will deduct an additional
charge equal to an annual rate of 0.40% of the daily net assets of the variable
account. Nationwide will discontinue deducting this charge after the 8th
contract year. Once the Extra Credit Option is elected, it may not be revoked.
10
<PAGE> 13
Two optional death benefits are available to contract owners at the time of
contract issuance. Nationwide will deduct an additional charge equal to an
annual rate of 0.15% of the daily net assets of the variable account if the
contract owner elects the Maximum Anniversary Death Benefit, and/or an
additional 0.05% if the contract owner elects the Five Year Reset Death Benefit
(see "Death Benefit Payment").
Two Guaranteed Minimum Income Benefit options are available under the contract.
If the contract owner elects one of the Guaranteed Minimum Income Benefit
options, Nationwide will deduct an additional charge equal to an annual rate of
0.45% or 0.30% of the daily net assets of the variable account, depending on
which option is chosen (see "Guaranteed Minimum Income Benefits").
An optional Nursing Home and Long Term Care option is available under the
contract. Nationwide will deduct an additional charge equal to an annual rate of
0.05% of the daily net assets of the variable account if the contract owner
elects the Nursing Home and Long Term Care option (see "Nursing Home and Long
Term Care Option").
Upon annuitization of the contract, any amounts assessed for any rider options
elected will be waived and only those charges applicable to the base contract
will be assessed.
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 a contract is taxed depends on the type of contract issued and the purpose
for which the contract is purchased. 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 other amounts required
by law (see "Right to Revoke").
FINANCIAL STATEMENTS
Financial statements for 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 1 of this prospectus.
NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY
Nationwide is a stock life insurance company organized under Ohio law in
February, 1981, with its home office at One Nationwide Plaza, Columbus, Ohio
43215. Nationwide is a provider of life insurance, annuities and retirement
products.
GENERAL DISTRIBUTOR
The contracts are distributed by the general distributor, Waddell & Reed, Inc.,
6300 Lamar Avenue, Overland Park, Kansas 66202.
TYPES OF CONTRACTS
The contracts described in this prospectus are classified according to the tax
treatment they are subject to under the Internal Revenue Code. The following is
a general description of the various types of contracts. Eligibility
requirements, tax benefits (if any), limitations, and other features of the
contracts will differ depending on the type of contract.
NON-QUALIFIED CONTRACTS
A Non-Qualified Contract is a contract that does not qualify for certain tax
benefits under the Internal Revenue Code, and which is not an IRA, a Roth IRA, a
SEP IRA, a Simple IRA, Investment-only Contract, or a Tax Sheltered Annuity.
Upon the death of the owner of a Non-Qualified Contract, mandatory distribution
requirements
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<PAGE> 14
are imposed to ensure distribution of the entire balance in the contract within
a required period of time.
Non-Qualified Contracts that are owned by natural persons allow for the deferral
of taxation on the income earned in the contract until it is distributed or
deemed to be distributed.
INDIVIDUAL RETIREMENT ANNUITIES (IRAS)
Individual Retirement Annuities are contracts that are issued by insurance
companies and satisfy the following requirements:
- the contract is not transferable by the owner;
- the premiums are not fixed;
- the annual premium cannot exceed $2,000 (although rollovers of greater
amounts from Qualified Plans, Tax Sheltered Annuities and other IRAs can be
received);
- certain minimum distribution requirements must be satisfied after the owner
attains the age of 70 1/2;
- the entire interest of the owner in the contract is nonforfeitable; and
- after the death of the owner, additional distribution requirements may be
imposed to ensure distribution of the entire balance in the contract within
the statutory period of time.
Depending on the circumstance of the owner, all or a portion of the
contributions made to the account may be deducted for federal income tax
purposes.
Failure to make the mandatory distributions can result in an additional penalty
tax of 50% of the excess of the amount required to be distributed over the
amount that was actually distributed.
IRAs may receive rollover contributions from other Individual Retirement
Accounts and Individual Retirement Annuities, from Tax Sheltered Annuities, and
from qualified retirement plans, including 401(k) plans.
For further details regarding IRAs, please refer to the disclosure statement
provided when the IRA was established.
SIMPLIFIED EMPLOYEE PENSION IRAS (SEP IRAS)
A SEP IRA is a written plan established by an employer for the benefit of
employees which permits the employer to make contributions to an IRA established
for the benefit of each employee.
An employee may make deductible contributions to a SEP IRA in the same way, and
with the same restrictions and limitations, as for an IRA. In addition, the
employer may make contributions to the SEP IRA, subject to dollar and percentage
limitations imposed by both the Internal Revenue Code and the written plan.
A SEP IRA plan established by an employer must satisfy certain requirements:
- minimum participation rules;
- top-heavy contribution rules;
- nondiscriminatory allocation rules; and
- requirements regarding a written allocation formula.
In addition, the plan cannot restrict withdrawals of non-elective contributions,
and must restrict withdrawals of elective contributions before March 15th of the
following year.
SIMPLE IRAS
A Simple IRA is an individual retirement annuity which is funded exclusively by
a qualified salary reduction arrangement and satisfies the following:
- vesting requirements,
- participation requirements; and
- administrative requirements.
The funds contributed to a Simple IRA cannot be commingled with funds in IRAs or
SEP IRAs.
A Simple IRA cannot receive rollover distributions except from another Simple
IRA.
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<PAGE> 15
ROTH IRAS
Roth IRA contracts are contracts that are issued by insurance companies and
satisfy the following requirements:
- the contract is not transferable by the owner;
- the premiums are not fixed;
- the annual premium cannot exceed $2,000 (although rollovers of greater
amounts from other Roth IRAs and IRAs can be received);
- the entire interest of the owner in the contract is nonforfeitable; and
- after the death of the owner, certain distribution requirements may be
imposed to ensure distribution of the entire balance in the contract within
the statutory period of time.
A Roth IRA can receive a rollover from an IRA; however, the amount rolled over
from the IRA to the Roth IRA is required to be included in the owner's federal
gross income at the time of the rollover, and will be subject to federal income
tax.
There are income limitations on eligibility to participate in a Roth IRA and
additional income limitations for eligibility to roll over amounts from an IRA
to a Roth IRA. For further details regarding Roth IRAs, please refer to the
disclosure statement provided when the Roth IRA was established.
TAX SHELTERED ANNUITIES
Certain tax-exempt organizations (described in section 501(c)(3) of the Internal
Revenue Code) and public school systems may establish a plan under which annuity
contracts can be purchased for their employees. These annuity contracts are
often referred to as Tax Sheltered Annuities.
Purchase payments made to Tax Sheltered Annuities are excludible from the income
of the employee, up to statutory maximum amounts. These amounts should be set
forth in the plan adopted by the employer.
The owner's interest in the contract is nonforfeitable (except for failure to
pay premiums) and cannot be transferred. Certain minimum distribution
requirements must be satisfied after the owner attains the age of 70 1/2, and
after the death of the owner. Additional distribution requirements may be
imposed to ensure distribution of the entire balance in the contract within the
required period of time.
QUALIFIED PLANS
Contracts that are owned by Qualified Plans are not intended to confer tax
benefits on the beneficiaries of the plan; they are used as investment vehicles
for the plan. The income tax consequences to the beneficiary of a Qualified Plan
are controlled by the operation of the plan, not by operation of the assets in
which the plan invests.
Beneficiaries of Qualified Plans should contact their employer and/or trustee of
the plan to obtain and review the plan, trust, summary plan description and
other documents for the tax and other consequences of being a participant in a
qualified plan.
INVESTING IN THE CONTRACT
THE VARIABLE ACCOUNT AND UNDERLYING MUTUAL FUNDS
Nationwide VA Separate Account-D is a variable account that invests in the
underlying mutual funds listed in Appendix A. Nationwide established the
variable account on July 26, 2000, pursuant to Ohio law. Although the variable
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.
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<PAGE> 16
The variable account is divided into sub-accounts, each corresponding to a
single underlying mutual fund. 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
Investment-only Contracts, Individual Retirement Annuities, Simple IRAs, SEP
IRAs, Roth IRAs, and Tax Sheltered Annuities.
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 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.
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
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<PAGE> 17
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.
THE FIXED ACCOUNT
The fixed account is an investment option that is funded by assets of
Nationwide's general account. The general account contains all of Nationwide's
assets other than those in other Nationwide separate accounts. It is used to
support Nationwide's annuity and insurance obligations and may contain
compensation for mortality and expense risks. The general account is not subject
to the same laws as the variable account and the SEC has not reviewed material
in this prospectus relating to the fixed account. However, information relating
to the fixed account is subject to federal securities laws relating to accuracy
and completeness of prospectus disclosure.
Purchase payments will be allocated to the fixed account by election of the
contract owner.
The investment income earned by the fixed account will be allocated to the
contracts at varying guaranteed interest rate(s) depending on the following
categories of fixed account allocations:
- New Money Rate - The rate credited on the fixed account allocation when the
contract is purchased or when subsequent purchase payments are made.
Subsequent purchase payments may receive different New Money Rates than the
rate when the contract was issued, since the New Money Rate is subject to
change based on market conditions.
- Variable Account to Fixed Rate - Allocations transferred from any of the
underlying investment options in the variable account to the fixed account
may receive a different rate. The rate may be lower than the New Money
Rate. There may be limits on the amount and frequency of movements from the
variable account to the fixed account.
- Renewal Rate - The rate available for maturing fixed account allocations
which are entering a new guarantee period. The contract owner will be
notified of this rate in a letter issued with the quarterly statements when
any of the money in the contract owner's fixed account matures. At that
time, the contract owner will have an opportunity to leave the money in the
fixed account and receive the Renewal Rate or the contract owner can move
the money to any of the other underlying mutual fund options.
- Dollar Cost Averaging Rate - From time to time, Nationwide may offer a more
favorable rate for an initial purchase payment into a new contract when
used in conjunction with a Dollar Cost Averaging program.
For contract owners that elect the Extra Credit Option, payments or transfers
made to the fixed account will, for the first 8 contract years, be credited a
guaranteed interest rate of 0.40% less than the crediting rate that applies to
the fixed account if the Extra Credit Option is not elected. Nationwide
guarantees, however, that the rate will not be less than 3.0% for any given
year.
All of these rates are subject to change on a daily basis; however, once applied
to the fixed account, the interest rates are guaranteed until the end of the
calendar quarter during which the12 month anniversary of the fixed account
allocation occurs.
Credited interest rates are annualized rates - the effective yield of interest
over a one year period. Interest is credited to each contract on a daily basis.
As a result, the credited interest rate is compounded daily to achieve the
stated effective yield.
The guaranteed rate for any purchase payment will be effective for not less than
twelve months. Nationwide guarantees that the rate will not be less than 3.0%
per year.
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Any interest in excess of 3.0% will be credited to fixed account allocations at
Nationwide's sole discretion. The contract owner assumes the risk that interest
credited to fixed account allocations may not exceed the minimum guarantee of
3.0% for any given year.
Nationwide guarantees that the fixed account contract value will not be less
than the amount of the purchase payments allocated to the fixed account, plus
interest credited as described above, less any surrenders and any applicable
charges including CDSC.
STANDARD CHARGES AND DEDUCTIONS
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 0.90% of the daily net assets of the variable account.
The mortality risk charge compensates Nationwide for guaranteeing the annuity
purchase rates of the contracts. This guarantee ensures that the annuity
purchase rates will not change regardless of the death rates of annuity payees
or the general population. The mortality risk charge also compensates Nationwide
for risks assumed in connection with the standard death benefit, but only
partially compensates Nationwide in connection with the two optional death
benefits, for which there are separate charges.
The expense risk charge compensates Nationwide for guaranteeing that 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.
ADMINISTRATION CHARGE
For the first 8 contract years only, Nationwide deducts an Administration Charge
from the variable account. This amount is computed on a daily basis and is equal
to an annual rate of 0.10% of the daily net assets of the variable account.
The Administration Charge compensates Nationwide for bearing certain
administrative expenses associated with maintaining the contracts.
The Administration Charge results in contract owners having two different
variable account charge structures: one for the first 8 years of the contract,
and a second for the remainder of the contract.
For the first 8 contract years, if no additional contract options are elected,
the total variable account charges under the contract will be an annualized rate
of 1.00% of the daily net assets of the variable account.
After the 8th contract year, Nationwide will discontinue deducting the
Administration Charge. At that point in time and thereafter, if no additional
optional benefits were elected, the total variable account charges under the
contract will be an annualized rate of 0.90% of the daily net assets of the
variable account.
Nationwide intends to administer the removal of the Administration Charge by
decreasing the number of units and increasing the unit value of the sub-accounts
in which the contract owner was invested at the end of the 8th contract year.
The elimination of the charge and the adjustment in the number of units and unit
values will not affect contract owners' contract values.
CONTRACT MAINTENANCE CHARGE
Nationwide deducts an annual Contract Maintenance Charge of $50 on each contract
anniversary and upon full surrender of the contract. This charge reimburses
Nationwide for administrative expenses involved in issuing and maintaining the
contract.
The deduction of the Contract Maintenance Charge will be taken proportionately
from each sub-account and the fixed account based on the value in each option as
compared to the total contract value.
If, on any contract anniversary (or on the date of a full surrender), the
contract value is $100,000
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or more, Nationwide will waive the Contract Maintenance Charge for that year.
Nationwide will not increase the Contract Maintenance Charge. Nationwide will
not reduce or eliminate the Contract Maintenance Charge where it would be
discriminatory or unlawful.
CONTINGENT DEFERRED SALES CHARGE
No sales charge deduction is made from the purchase payments when amounts are
deposited into the contracts. However, if any part of the contract is
surrendered, Nationwide will deduct a CDSC. The CDSC will not exceed 9% of
purchase payments surrendered.
The CDSC is calculated by multiplying the applicable CDSC percentage (noted
below) by the amount of purchase payments surrendered. For purposes of
calculating the CDSC, surrenders are considered to come first from the oldest
purchase payment made to the contract, then the next oldest purchase payment,
and so forth. Earnings are not subject to the CDSC. However, earnings may not be
distributed prior to the distribution of all purchase payments. (For tax
purposes, a surrender is usually treated as a withdrawal of earnings first.)
The CDSC applies as follows:
----------------------------- ---------------------------
NUMBER OF COMPLETED YEARS CDSC
FROM DATE OF PURCHASE PERCENTAGE
PAYMENT
----------------------------- ---------------------------
0 9%
----------------------------- ---------------------------
1 8%
----------------------------- ---------------------------
2 8%
----------------------------- ---------------------------
3 8%
----------------------------- ---------------------------
4 6%
----------------------------- ---------------------------
5 5%
----------------------------- ---------------------------
6 4%
----------------------------- ---------------------------
7 2%
----------------------------- ---------------------------
8 0%
----------------------------- ---------------------------
The CDSC is used to cover sales expenses, including commissions (maximum of
5.55% of purchase payments), production of sales material, and other promotional
expenses. If expenses are greater than the CDSC, the shortfall will be made up
from Nationwide's general assets, which may indirectly include portions of the
variable account charges, since Nationwide may generate a profit from these
charges.
All or a portion of any withdrawal may be subject to federal income taxes.
Contract owners taking withdrawals before age 59 1/2 may be subject to a 10%
penalty tax.
Waiver of Contingent Deferred Sales Charge
Each contract year, the contract owner may withdraw without a CDSC the greater
of:
1) the lesser of:
a) 10% of purchase payments that are subject to CDSC, less purchase
payments withdrawn that were subject to CDSC; or
b) 10% of the contract value; or
2) any amount withdrawn to meet minimum distribution requirements under the
Internal Revenue Code.
This CDSC-free privilege is non-cumulative. Free amounts not taken during any
given contract year cannot be taken as free amounts in a subsequent contract
year.
In addition, no CDSC will be deducted:
1) upon the annuitization of contracts which have been in force for at least
two years;
2) upon payment of a death benefit; or
3) from any values which have been held under a contract for at least 8 years.
No CDSC applies to transfers among sub-accounts or between or among the fixed
account and/or the variable account. Nationwide may waive the CDSC if a contract
described in this prospectus is exchanged for another Nationwide contract (or a
contract of any of its affiliated insurance companies). A CDSC may apply to the
contract received in the exchange.
A contract held by a Charitable Remainder Trust may withdraw CDSC-free the
greater of (a) or (b), where:
a) is the amount which would otherwise be available for withdrawal
without a CDSC; and
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b) is the difference between the total purchase payments made to the
contract as of the date of the withdrawal (reduced by previous
withdrawals) and the contract value at the close of the day prior to
the date of the withdrawal.
The CDSC will not be eliminated if to do so would be unfairly discriminatory or
prohibited by state law.
Terminal Illness and Disability
No CDSC will be charged if:
1) The contract owner has been diagnosed by a physician (after contract
issuance) to have a terminal illness; and
2) Nationwide receives and records a letter from that physician
indicating such diagnosis.
In addition, no CDSC will be charged if after contract issuance and before the
contract owner attains age 65, the contract owner becomes disabled.
Written notice and proof of terminal illness or disability must be received in a
form satisfactory to Nationwide and recorded at Nationwide's home office prior
to waiver of the CDSC.
For those contracts that have a non-natural person as the contract owner acting
as an agent for a natural person, the annuitant may exercise the rights of the
contract owner for the purposes described in this provision. If the non-natural
contract owner does NOT own the contract as an agent for a natural person (e.g.,
the contract owner is a corporation or a trust for the benefit of an entity),
the annuitant may NOT exercise the rights described in this provision.
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
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
Upon annuitization of the contract, any amounts assessed for any optional
benefits elected will be waived and only those charges applicable to the base
contract will be assessed.
REDUCED PURCHASE PAYMENT OPTION
If the contract owner chooses the Reduced Purchase Payment Option, Nationwide
will deduct an additional charge equal to an annualized rate of 0.05% of the
daily net assets of the variable account. In return, the required minimum
initial purchase payment for that contract will be $5,000.
Nationwide will discontinue deducting this charge upon contract value reaching
$50,000.
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EXTRA CREDIT OPTION
-------------------------------------------------------------------------------
THE EXTRA CREDIT OPTION MAY NOT BE AVAILABLE IN ALL
STATES. APPLICANTS SHOULD BE AWARE OF THE FOLLOWING
PRIOR TO ELECTING THE EXTRA CREDIT OPTION:
1. ELECTING THE EXTRA CREDIT OPTION WILL BE BENEFICIAL FOR CONTRACT OWNERS
ONLY IF THE INVESTMENT PERFORMANCE OF THE UNDERLYING MUTUAL FUNDS AND RATE
OF RETURN IN THE FIXED ACCOUNT IS GREAT ENOUGH TO COMPENSATE FOR THE
REDUCTION IN CONTRACT VALUE DUE TO THE 0.40% CHARGE;
2. NATIONWIDE MAY MAKE A PROFIT FROM THE CHARGE ASSESSED BY THE EXTRA CREDIT
OPTION;
3. BECAUSE THE 0.40% CHARGE ASSOCIATED WITH THE EXTRA CREDIT OPTION WILL BE
ASSESSED AGAINST THE ENTIRE VARIABLE ACCOUNT VALUE FOR THE FIRST EIGHT (8)
CONTRACT YEARS, CONTRACT OWNERS WHO ANTICIPATE MAKING ADDITIONAL PURCHASE
PAYMENTS AFTER THE FIRST CONTRACT YEAR SHOULD CAREFULLY EXAMINE THE EXTRA
CREDIT OPTION AND CONSULT THEIR FINANCIAL ADVISER REGARDING ITS
DESIRABILITY;
4. ONCE THE EXTRA CREDIT OPTION IS ELECTED, IT MAY NOT BE REVOKED; AND
5. NATIONWIDE MAY RECAPTURE ALL OR PART OF THE AMOUNT CREDITED IN THE EVENT OF
EARLY SURRENDERS, INCLUDING REVOCATION OF THE CONTRACT DURING THE
CONTRACTUAL FREE LOOK PERIOD.
-------------------------------------------------------------------------------
For an additional charge at an annualized rate of 0.40% of the daily net assets
of the variable account, the contract owner can purchase an Extra Credit Option
at the time of application. Nationwide may reduce this charge.
In exchange, Nationwide will apply a credit of 3% of the purchase payment(s)
made during the first 12 months the contract is in force. This credit is funded
from Nationwide's general account. The amount credited will be allocated among
the sub-accounts and the fixed account in the same proportion that the purchase
payment is allocated to the contract.
The option of electing the Extra Credit Option allows prospective contract
owners to choose between two different variable account charge structures for
the first 8 years of the contract.
If the Extra Credit Option is elected and no additional optional benefits are
elected, the total variable account charges under the contract will be an
annualized rate of 1.40% of the daily net assets of the variable account for the
first 8 years of the contract. After the 8th contract year, assuming no other
optional benefits are elected, total variable account charges will be reduced to
0.90% (due to the elimination of the Administration Charge and the Extra Credit
Charge).
If the Extra Credit Option is not elected, total variable account charges will
be an annualized rate of 1.00% (assuming no other optional benefits are elected)
of the daily net assets of the variable account for the first 8 years of the
contract, and 0.90% thereafter (due to the elimination of the Administration
Charge).
Under these circumstances, the decision to elect or decline the Extra Credit
Option will depend primarily on whether the prospective contract owner believes
it is more advantageous to have:
a) a 1.40% variable account charge for the first 8 years of the contract, plus
the Extra Credit; or
b) a 1.00% variable account charge for the first 8 years of the contract,
without the Extra Credit.
The following table demonstrates hypothetical rates of return for contracts with
the Extra Credit Option and no other optional benefits (total variable account
charges of 1.40%) and contracts with no optional benefits (total variable
account charges of 1.00%). The figures are based upon:
a) a $100,000 initial purchase payment with no additional purchase payments;
b) the deduction of variable account charges of an annualized rate of 1.00%
(base contract) and 1.40% (contract with only the Extra Credit Option) of
the daily net assets of the variable account; and
c) an assumed annual rate of return before charges of 9.47% for all years for
a period of 10 years.
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9.47% RATE OF RETURN
------------------------------------------------------------
Contract Year Base Contract Contract With Extra
(1.00% variable Credit Option (1.40%
account charges) variable account
charges)
------------------------------------------------------------
0 100,000 103,000
------------------------------------------------------------
1 108,376 111,215
------------------------------------------------------------
2 117,453 120,086
------------------------------------------------------------
3 127,290 129,663
------------------------------------------------------------
4 137,951 140,005
------------------------------------------------------------
5 149,505 151,172
------------------------------------------------------------
6 162,027 163,229
------------------------------------------------------------
7 175,598 176,248
------------------------------------------------------------
8 190,305 190,305
------------------------------------------------------------
9 206,453 206,453
------------------------------------------------------------
10 223,970 223,970
------------------------------------------------------------
Generally, the higher the rate of return, the more advantageous the Extra Credit
Option becomes, and vice versa. The table above assumes no additional purchase
payments are made to the contract after the first contract anniversary. If
subsequent purchase payments are made to the contract after the first contract
anniversary (assuming a rate of return of 9.47%) the number of contract years
needed to "break-even" increases in direct correlation with the amount of
subsequent purchase payments made to the contract after the first contract
anniversary.
Amounts credited to the contract in connection with the Extra Credit Option may
be recaptured if:
a) the contract owner elects to surrender the contract pursuant to the
contractual free look provisions; or
b) the contract owner makes withdrawals that are subject to a CDSC before the
end of the 8th contract year.
If the contract is surrendered pursuant to the contractual free look, Nationwide
may recapture the full credited amount if the contract value, at the time of the
request to surrender, is equal to or greater than the purchase payments made to
the contract. In such a situation, the contract owner is entitled to keep any
earnings. If, however, the contract value is less than the purchase payments
made to the contract, Nationwide will bear the loss.
After the free look period and before the 8th contract anniversary, any amounts
withdrawn from the contract that are subject to a CDSC subjects a part of the
amount credited to recapture. For example, if a contract owner withdraws 13% of
purchase payments made within the first contract year, 3% of the amount credited
will be recaptured by Nationwide, since the contract owner may withdraw only 10%
of purchase payments without a CDSC. This means that the percentage of the
amount credited to be recaptured will be the determined by the percentage of
total purchase payments reflected in the amount surrendered that is subject to
CDSC. The amount recaptured will be taken from the sub-accounts and the fixed
account in the same proportion as allocated by the contract owner at the time of
the withdrawal.
NO AMOUNT CREDITED WILL BE SUBJECT TO RECAPTURE IF THE WITHDRAWAL IS NOT SUBJECT
TO A CDSC OR IF A DISTRIBUTION IS TAKEN AS A RESULT OF DEATH, ANNUITIZATION, OR
TO MEET MINIMUM DISTRIBUTION REQUIREMENTS UNDER THE INTERNAL REVENUE CODE. IN
ADDITION, NO RECAPTURE WILL TAKE PLACE AFTER THE 8TH CONTRACT YEAR.
After the end of the first 8 contract years, the 0.40% charge for the Extra
Credit Option will no longer be assessed and the amount credited will be fully
vested. Nationwide intends to administer the removal of the 0.40% charge by
decreasing the number of units and increasing the unit value of the sub-accounts
in which the contract owner was invested at the end of the 8th contract year.
The elimination of the 0.40% charge and the adjustment in the number of units
and unit values will not affect contract owners' contract values.
DEATH BENEFIT OPTIONS
If the contract owner chooses an optional death benefit, Nationwide will deduct
a charge equal to an annualized rate of either 0.15% (for the Maximum
Anniversary Death Benefit) or 0.05% (for the Five Year Reset Death Benefit) of
the
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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. All of the following death benefit options
may not be available in every state.
Maximum Anniversary 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 85th 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).
Five Year Reset 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 contract value as of the most recent five year contract anniversary
before the annuitant's 85th birthday, less an adjustment for amounts
surrendered, plus purchase payments received after that five year 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).
GUARANTEED MINIMUM INCOME BENEFIT OPTIONS
The contract owner can purchase one of two Guaranteed Minimum Income Benefit
options at the time of application. If elected, Nationwide will deduct an
additional charge equal to an annual rate of either 0.45% or 0.30% of the daily
net assets of the variable account, depending on which option was chosen.
Guaranteed Minimum Income Benefit options provide 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.
NURSING HOME AND LONG TERM CARE OPTION
For an additional charge at an annualized rate of 0.05% of the daily net assets
of the variable account, the contract owner may elect the Nursing Home and Long
Term Care Option. If this option is elected, Nationwide will waive any
applicable CDSC upon notification that the contract owner has been confined to a
nursing home or long term care facility for a continuous 90-day period that
began on or after the third contract anniversary. Nationwide must receive the
notification during the period of confinement or within 90 days after release.
Written notice and proof of confinement must be received in a form satisfactory
to Nationwide and recorded at Nationwide's home office prior to waiver of the
CDSC.
For those contracts that have a non-natural person as the contract owner acting
as an agent for a natural person, the annuitant may exercise the rights of the
contract owner for the purposes described in this provision. If the non-natural
contract owner does NOT own the contract as an agent for a natural person (e.g.,
the contract owner is a corporation or a trust for the benefit of an entity),
the annuitant may NOT exercise the rights described in this provision.
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<PAGE> 24
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 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;
- 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; and
- Nationwide will not be liable for any loss, liability, cost, or expense for
acting in accordance with the instructions of 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 90 or younger at the time of contract issuance (age 82
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
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before the annuitization date with Nationwide's consent.
BENEFICIARY AND CONTINGENT BENEFICIARY
The beneficiary is the person 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
-------------------- ----------------- ------------------
Investment-only $25,000 $1,000*
-------------------- ----------------- ------------------
Non-Qualified $25,000 $1,000*
-------------------- ----------------- ------------------
IRA $25,000 $1,000*
-------------------- ----------------- ------------------
Roth IRA $25,000 $1,000*
-------------------- ----------------- ------------------
SEP IRA $25,000 $1,000*
-------------------- ----------------- ------------------
Simple IRA $25,000 $1,000*
-------------------- ----------------- ------------------
Tax Sheltered $25,000 $1,000*
Annuity
-------------------- ----------------- ------------------
Charitable $25,000 $1,000*
Remainder Trust
-------------------- ----------------- ------------------
*For subsequent purchase payments sent via automatic deposit, the minimum
subsequent purchase payment is $100.
Subsequent purchase payments may not be permitted in some states under certain
circumstances.
If the contract owner elects the Reduced Purchase Payment Option, the minimum
initial purchase payment will be reduced accordingly.
If the contract owner elects the Extra Credit Option, amounts credited to the
contract may not be used to meet the minimum initial and subsequent purchase
payment requirements.
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 issued by Nationwide on the life of any
one annuitant cannot 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.
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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 will
not have access to their account.
ALLOCATION OF PURCHASE PAYMENTS
Nationwide allocates purchase payments to sub-accounts and/or the fixed account
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 and the fixed account. However, no change may
be made that would result in an amount less than 1% of the purchase payments
being allocated to any sub-account. 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 the fixed account.
If part or all of the contract value is surrendered, or charges are assessed
against the whole contract value, Nationwide will deduct a proportionate amount
from each sub-account and the fixed account based on current cash values.
Determining Variable Account Value - Valuing an Accumulation Unit
Purchase payments or transfers allocated to sub-accounts 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
funds 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 for any particular sub-account 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).
b) is the net asset value of the underlying mutual fund determined as of the
end of the preceding valuation period.
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 0.90% to 2.15% of the daily
net assets of the variable account, depending on which contract features
the contract owner chooses.
Based on the change in 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.
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Determining Fixed Account Value
Nationwide determines the value of the fixed account by:
1) adding all amounts allocated to the fixed account, minus amounts previously
transferred or withdrawn; and
2) adding any interest earned on the amounts allocated.
TRANSFERS PRIOR TO ANNUITIZATION
Transfers from the Fixed Account to the Variable Account
Fixed account allocations may be transferred to the variable account only upon
reaching the end of an interest rate guarantee period. Normally, Nationwide will
permit 100% of such fixed account allocations to be transferred to the variable
account; however Nationwide may, under certain economic conditions and at its
discretion, limit the maximum transferable amount. Under no circumstances will
the maximum transferable amount be less than 10% of the fixed account allocation
reaching the end of an interest rate guarantee period. Transfers of the fixed
account allocations must be made within 45 days after reaching the end of an
interest rate guarantee period.
Contract owners who use Dollar Cost Averaging may transfer from the fixed
account to the variable account under the terms of that program (see "Dollar
Cost Averaging").
Transfers to the Fixed Account
Variable account allocations may be transferred to the fixed account at any
time. Normally, Nationwide will not restrict transfers from the variable account
to the fixed account; however, Nationwide may establish a maximum transfer limit
from the variable account to the fixed account. Except as noted below, under no
circumstances will the transfer limit be less than 10% of the current value of
the variable account, less any transfers made in the 12 months preceding the
date the transfer is requested, but not including transfers made prior to the
imposition of the transfer limit. However, where permitted by state law,
Nationwide reserves the right to refuse transfers or purchase payments to the
fixed account when the fixed account value is greater than or equal to 30% of
the contract value at the time the purchase payment is made or the transfer is
requested.
Transfers Among the Sub-Accounts
Allocations may be transferred among the sub-accounts once per valuation period.
TRANSFERS AFTER ANNUITIZATION
After annuitization, transfers may only be made on the anniversary of the
annuitization date.
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.
Amounts transferred to the variable account will receive the accumulation unit
value next determined after the transfer request is received.
Interest Rate Guarantee Period
The interest rate guarantee period is the period of time that the fixed account
interest rate is guaranteed to remain the same.
Within 45 days of the end of an interest rate guarantee period, transfers may be
made from the fixed account to the variable account. Nationwide will determine
the amount that may be transferred and will declare this amount at the end of
the guarantee period. This amount will not be less than 10% of the amount in the
fixed account that is maturing.
For new purchase payments allocated to the fixed account, or transfers to the
fixed account from the variable account, this period begins on the date of
deposit or transfer and ends on the one year anniversary of the deposit or
transfer. The guaranteed interest rate period may last for up to 3 months beyond
the 1 year anniversary
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because guaranteed terms end on the last day of a calendar quarter.
During an interest rate guarantee period, transfers cannot be made from the
fixed account, and amounts transferred to the fixed account must remain on
deposit.
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
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 Individual Retirement Annuity,
SEP IRA, Simple IRA and Roth IRA refunds will be a return of purchase payments.
State and/or federal law may provide additional free look privileges.
Contract owners who have elected the Extra Credit Option and subsequently
terminate the contract under the free look provision will forfeit any amounts
credited to the contract pursuant to the Extra Credit Option. For those
jurisdictions that allow a return of contract value, the contract owner will
retain any earnings attributable to the amount credited; all losses attributable
to the amount credited will be incurred by Nationwide.
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.
If the Extra Credit Option has been elected, and the amount withdrawn is subject
to a CDSC, then for the first 8 contract years only, a portion of the amount
credited under the Extra Credit may be recaptured. No recapture will take place
after the 8th contract year. The amount credited will not, however, be subject
to recapture if the
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withdrawal is not subject to CDSC (see "Extra Credit Option").
Nationwide is required by state law to reserve the right to postpone payment of
assets in the fixed account for a period of up to six months from the date of
the surrender request.
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 fixed account. The amount withdrawn from each investment option will be
in proportion to the value in each option at the time of the surrender request.
A CDSC may apply. The contract owner may take the CDSC from either:
a) the amount requested; or
b) the contract value remaining after the contract owner has received the
amount requested.
If the contract owner does not make a specific election, any applicable CDSC
will be taken from the amount requested.
The CDSC deducted is a percentage of the amount requested by the contract owner.
Amounts deducted for CDSC are not subject to subsequent CDSC.
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. A CDSC may apply.
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 participant 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
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.
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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 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.
MINIMUM & MAXIMUM LOAN AMOUNTS
Contract owners may borrow a minimum of $1,000, 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
--------------- --------------------------
up to $20,000 up to 80% of contract
value (not more than
$10,000)
--------------- --------------------------
$20,000 and up to 50% of contract
over value (not more than
$50,000*)
--------------- --------------------------
*The $50,000 limit will be reduced by the highest outstanding balance owed
during the previous 12 months.
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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. Loans are not available in all states. In
addition, some states may not allow Nationwide to assess a loan processing fee.
The fee is taken from the sub-accounts and the fixed account 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. If there are not
enough accumulation units available in the contract to reach the requested loan
amount, Nationwide next transfers contract value from the fixed account. No CDSC
will be deducted on transfers related to loan processing.
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, unless otherwise required by
state regulations. The interest rate 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.
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.
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.
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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, Individual Retirement Annuities, Roth IRAs, SEP IRAs,
Simple 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 fixed account. 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 investments over time. It involves the automatic transfer of a
specified amount from the fixed account and/or certain sub-accounts into other
sub-accounts. 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 fixed account and the Money Market Portfolio to any other underlying
mutual fund.
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
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requests to discontinue Systematic Withdrawals must be in writing.
The withdrawals will be taken from the sub-accounts and the fixed account
proportionately unless Nationwide is instructed otherwise.
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.
A CDSC may apply to amounts taken through Systematic Withdrawals.
If the contract owner takes Systematic Withdrawals, the maximum amount that can
be withdrawn annually without a CDSC is the greatest of:
1) the lesser of:
a) 10% of purchase payments that are subject to CDSC, less purchase
payments withdrawn that were subject to CDSC; or
b) 10% of the contract value; or
2) any amount withdrawn to meet minimum distribution requirements under the
Internal Revenue Code.
The CDSC-free withdrawal privilege for Systematic Withdrawals is non-cumulative.
Free amounts not taken during any contract year cannot be taken as free amounts
in a subsequent contract year.
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, 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 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 adjusted "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.
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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.
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A VARIABLE PAYMENT ANNUITY MAY NOT BE ELECTED WHEN EXERCISING A GUARANTEED
MINIMUM INCOME BENEFIT OPTION.
--------------------------------------------------------------------------------
The first payment under a variable payment annuity is determined on the
annuitization date on an adjusted "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.
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.
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GUARANTEED MINIMUM INCOME BENEFIT OPTIONS ("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?
There are two options available at the time of application. The Guaranteed
Annuitization Value is determined differently based on which option the contract
owner elects.
Calculation Under the 5% Interest GMIB Option
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 reduction 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%.
Special Restrictions for the 5% Interest GMIB Option
After the first contract year, if the value of the contract owner's fixed
account allocation becomes greater than 30% of the contract value in any
contract year due to:
1) the application of additional purchase payments;
2) surrenders; or
3) transfers from the variable account,
then 0% interest will accrue in that contract year for purposes of calculating
the Guaranteed Annuitization Value.
If the contract owner's fixed account allocation becomes greater than 30% of the
contract value solely as a result of fluctuations in the value of the variable
account, then interest will continue to accrue for the purposes of the
Guaranteed Annuitization Value at 5% annually, subject to the other terms and
conditions outlined herein.
Calculation Under the Maximum Anniversary GMIB Option
The Guaranteed Annuitization Value will be equal to the highest contract value
on any contract anniversary occurring prior to the annuitant's 86th birthday,
less an adjustment for amounts surrendered, plus purchase payments received
after that contract anniversary. If the contract owner elects to annuitize the
contract using this GMIB option prior to the first contract anniversary, the
Guaranteed Annuitization Value will be equal to the amount of purchase payments
paid, less an adjustment for amounts surrendered.
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 a GMIB.
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The illustrations assume the following:
- An initial purchase payment of $100,000 is made to the contract and
allocated to the variable account;
- There are no surrenders from the contract or transfers to the fixed account
(raising the fixed account value to greater than 30% of the contract
value);
- The contract is issued to a MALE at age 55, 65 or 70;
- A Life Annuity with 120 Months Guaranteed Fixed Payment Annuity Option is
elected.
7 Years in Accumulation
$140,710.04 for GMIB at Annuitization
-------------- -------------- ---------------- -------------
Male Age at Male Age at GMIB Purchase Monthly GMIB
Issue Annuitization Rate*
-------------- -------------- ---------------- -------------
55 62 $4.72 $664.15
-------------- -------------- ---------------- -------------
65 72 $5.96 $838.63
-------------- -------------- ---------------- -------------
70 77 $5.79 $955.42
-------------- -------------- ---------------- -------------
10 Years in Accumulation
$162,889.46 for GMIB at Annuitization
-------------- -------------- ---------------- -------------
Male Age at Male Age at GMIB Purchase Monthly GMIB
Issue Annuitization Rate*
-------------- -------------- ---------------- -------------
55 65 $5.03 $819.33
-------------- -------------- ---------------- -------------
65 75 $6.44 $1,049.01
-------------- -------------- ---------------- -------------
70 80 $7.32 $1,192.35
-------------- -------------- ---------------- -------------
15 Years in Accumulation
$200,000.00 for GMIB at Annuitization
-------------- -------------- ---------------- -------------
Male Age at Male Age at GMIB Purchase Monthly GMIB
Issue Annuitization Rate*
-------------- -------------- ---------------- -------------
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.
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.
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 82 or younger at the time the contract is issued.
The GMIB is irrevocable and will remain for as long as the contract remains in
force.
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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. Individual Retirement Annuities 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
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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 a 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 survives the annuitant, the contingent beneficiary receives
the death benefit. Contingent beneficiaries will share the death benefit
equally, unless otherwise specified.
If no beneficiaries or contingent beneficiaries 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 two death benefit options available under the
contract at the time of application (not all death benefit options may be
available in all states). If no death benefit option is elected at the time of
application, the death benefit will be the standard 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).
If a contract owner who is also the annuitant dies, and the beneficiary is the
contract owner/ annuitant's spouse who is:
a) eligible to continue the contract; and
b) entitled to a death benefit,
then the spousal-beneficiary shall have the option of continuing the contract
with the contract value adjusted to include the difference between the death
benefit (if greater than the contract value) and the contract value at the time
of the contract owner/annuitant's death.
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Standard Death Benefit
If the annuitant dies before reaching age 85 and 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 contract value as of the most recent 8 year or 16 year contract
anniversary before the annuitant's 75th birthday, less an adjustment for
amounts subsequently surrendered, plus purchase payments received after
that 8 year or 16 year 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).
If the annuitant dies on or after reaching age 85 and before the annuitization
date, the death benefit will equal the contract value.
Maximum Anniversary 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 85th 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).
Five Year Reset 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 contract value as of the most recent five year contract anniversary
before the annuitant's 85th birthday, less an adjustment for amounts
surrendered, plus purchase payments received after that five year 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).
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
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permitted by federal income tax regulations;
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:
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
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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 INDIVIDUAL RETIREMENT ANNUITIES, SEP IRAS AND SIMPLE
IRAS
Distributions from an Individual Retirement Annuity, SEP IRA or Simple 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. Distribution 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
Individual Retirement Annuity, SEP IRA or Simple 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 Individual Retirement Annuity, SEP IRA or
Simple 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
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 Individual Retirement Annuity, SEP IRA or
Simple 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)(1) 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
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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 Individual Retirement
Annuity, SEP IRA or Simple 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 Individual Retirement Annuities, SEP IRA
or Simple IRA.
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
The tax consequences of purchasing a contract described in this prospectus will
depend on:
- the type of contract purchased;
- the purposes for which the contract is purchased; and
- the personal circumstances of individual investors having interests in the
contracts.
See "Synopsis of the Contracts" for a brief description of the various types of
contracts and the different purposes for which the contracts may be purchased.
Existing tax rules are subject to change, and may affect individuals differently
depending on their situation. Nationwide does not guarantee the tax status of
any contracts or any transactions involving the contracts.
If the contract is purchased as an investment of certain retirement plans (such
as qualified retirement plans, Individual Retirement Accounts, and custodial
accounts as described in Sections 401, 408(a), and 403(b)(7) of the Internal
Revenue Code), tax advantages enjoyed by the contract owner and/or annuitant may
relate to participation in the plan rather than ownership of the annuity
contract. Such plans are permitted to purchase investments other than annuities
and retain tax-deferred status.
The following is a brief summary of some of the federal income tax
considerations related to the
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contracts. In addition to the federal income tax, distributions from annuity
contracts may be subject to state and local income taxes. The tax rules across
all states and localities are not uniform and therefore will not be discussed in
this prospectus. Tax rules that may apply to contracts issued in U.S.
territories such as Puerto Rico and Guam are also not discussed. Nothing in this
prospectus should be considered to be tax advice. Contract owners and
prospective contract owners are encouraged to consult a financial consultant,
tax advisor or legal counsel to discuss the taxation and use of the contracts.
The Internal Revenue Code sets forth different income tax rules for the
following types of annuity contracts:
- Individual Retirement Annuities;
- SEP IRAs;
- Simple IRAs;
- Roth IRAs;
- Tax Sheltered Annuities; and
- Non-Qualified Contracts.
Individual Retirement Annuities, SEP IRAs and Simple IRAs
Distributions from Individual Retirement Annuities, SEP IRAs and Simple IRAs are
generally taxed when received. If any of the amount contributed to the IRA was
nondeductible for federal income tax purposes, then a portion of each
distribution is excludable from income.
If distributions of income from an IRA are made prior to the date that the owner
attains the age of 59 1/2 years, the income is subject to both the regular
income tax and an additional penalty tax of 10%. (For Simple IRAs, the 10%
penalty is increased to 25% if the distribution is made during the 2 year period
beginning on the date that the individual first participated in the Simple IRA.)
The penalty tax can be avoided if the distribution is:
- made to a beneficiary on or after the death of the owner;
- attributable to the owner becoming disabled (as defined in the Internal
Revenue Code);
- part of a series of substantially equal periodic payments made not less
frequently than annually made for the life (or life expectancy) of the
owner, or the joint lives (or joint life expectancies) of the owner and his
or her designated beneficiary;
- used for qualified higher education expenses; or
- used for expenses attributable to the purchase of a home for a qualified
first-time buyer.
Roth IRAs
Distributions of earnings from Roth IRAs are taxable or non-taxable depending
upon whether they are "qualified distributions" or "nonqualified distributions."
A "qualified distribution" is one that satisfies the five-year rule and meets
one of the following requirements:
- it is made on or after the date on which the contract owner attains age 59
1/2;
- it is made to a beneficiary (or the contract owner's estate) on or after
the death of the contract owner;
- it is attributable to the contract owner's disability; or
- it is used for expenses attributable to the purchase of a home for a
qualified first-time buyer.
The five year rule generally is satisfied if the distribution is not made within
the five taxable year period beginning with the first taxable year in which a
contribution is made to any Roth IRA established for the owner.
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
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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.
Special rules apply for Roth IRAs that have proceeds received from an IRA prior
to January 1, 1999 if the owner elected the special 4-year income averaging
provisions that were in effect for 1998.
If non-qualified distributions of income from a Roth IRA are made prior to the
date that the owner attains the age of 59 1/2 years, the income is subject to
both the regular income tax and an additional penalty tax of 10%. The penalty
tax can be avoided if the distribution is:
- made to a beneficiary on or after the death of the owner;
- attributable to the owner becoming disabled as defined in the Internal
Revenue Code;
- part of a series of substantially equal periodic payments made not less
frequently than annually made for the life (or life expectancy) of the
owner, or the joint lives (or joint life expectancies) of the owner and his
or her designated beneficiary;
- for qualified higher education expenses; or
- used for expenses attributable to the purchase of a home for a qualified
first-time buyer.
If the contract owner dies before the contract is completely distributed, the
balance may be included in the contract owner's gross estate for tax purposes.
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
established pursuant to the Internal Revenue Code. The formula excludes from
income the amount invested in the contract divided by the number of anticipated
payments until the full investment in the contract is recovered. Thereafter all
distributions are fully taxable.
If a distribution of income is made from a Tax Sheltered Annuity prior to the
date that the owner attains the age of 59 1/2 years, the income is subject to
both the regular income tax and an additional penalty tax of 10%. The penalty
tax can be avoided if the distribution is:
- made to a beneficiary on or after the death of the owner;
- attributable to the owner becoming disabled as defined in the Internal
Revenue Code;
- part of a series of substantially equal periodic payments made not less
frequently than annually made for the life (or life expectancy) of the
owner, or the joint lives (or joint life expectancies) of the owner and his
or her designated beneficiary;
- for qualified higher education expenses;
- used for expenses attributable to the purchase of a home for a qualified
first-time buyer; or
- made to the owner after separation from service with his or her employer
after age 55.
Non-Qualified Contracts - Natural Persons as Contract Owners
Generally, the income earned inside a Non-Qualified Contract that is owned by a
natural person is not taxable until it is distributed from the contract.
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, any portion of the contract that is assigned or
pledged; or any portion of the contract that is 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.
With respect to annuity distributions on or after the annuitization date, a
portion of each annuity payment is excludable from taxable income. The amount
excludable is based on the ratio
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between the contract owner's investment in the contract and the expected return
on the contract. Once the entire investment in the contract is recovered, all
distributions are fully includable 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 as a result
of the annuitant's death no more payments are due under the contract, then the
unrecovered investment in the contract may be deducted on his or her final tax
return.
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 the same calendar year will be treated as one annuity contract.
A special rule applies to distributions from contracts that have investments
that were made prior to August 14, 1982. For those contracts, distributions that
are made prior to the annuitization date 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 Internal Revenue Code imposes 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 is:
- the result of a contract owner's death;
- the result of a contract owner's disability, as defined in the Internal
Revenue Code;
- 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 payment under the annuity payment option
selected by the contract owner; or
- is allocable to an investment in the contract before August 14, 1982.
Non-Qualified Contracts - Non-Natural Persons as Contract Owners
The previous discussion related to the taxation of Non-Qualified Contracts owned
by individuals. Different rules (the so-called "non-natural persons" rules)
apply if the contract owner is not a natural person.
Generally, contracts owned by corporations, partnerships, trusts, and similar
entities are not treated as annuity contracts under the Internal Revenue Code.
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. The income is taxable as ordinary income, not capital gain.
The non-natural persons rules do not apply to all entity-owned contracts. A
contract that is owned by a non-natural person as an agent of an individual is
treated as owned by the individual. This would cause the contract to be treated
as an annuity under the Internal Revenue Code, 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 persons rules also do not apply to contracts that are:
- acquired by the estate of a decedent by reason of the death of the
decedent;
- issued in connection with certain qualified retirement plans and individual
retirement plans;
- purchased by an employer upon the termination of certain qualified
retirement plans.
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. If the distribution is from a Tax Sheltered Annuity,
it
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will be subject to mandatory 20% withholding that cannot be waived, unless:
- the distribution is made directly to another Tax Sheltered Annuity or IRA;
or
- the distribution satisfies the minimum distribution requirements imposed by
the Internal Revenue Code.
In addition, contract owners may not waive withholding if the distribution is
subject to mandatory back-up withholding (if no taxpayer identification number
is given or if the Internal Revenue Service notifies Nationwide that mandatory
back-up withholding is required). 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 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
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death benefit, distribution or other payment, and remit it directly to the
Internal Revenue Service.
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;
- semi-annual reports as of June 30 containing financial statements for the
variable account; and
- annual reports as of December 31 containing financial statements 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.
LEGAL PROCEEDINGS
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 November 1997, two plaintiffs, one who was the owner of a variable life
insurance contract and the other who was the owner of a variable annuity
contract, commenced a lawsuit in a federal court in Texas against Nationwide
Life
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Insurance Company and the American Century group of defendants (Robert Young and
David D. Distad v. Nationwide Life Insurance Company et al.). In this lawsuit,
plaintiffs sought to represent a class of variable life insurance contract
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, motions to dismiss the complaint filed by Nationwide and
American Century. 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 and the appeals court declined
to review the order denying class certification upon interlocutory appeal. On
June 11, 1999, the district court denied the plaintiffs' motion to amend their
complaint and reconsider class certification. In January 2000, the parties to
this litigation settled this lawsuit now limited to the claims of the two named
plaintiffs. On February 9, 2000, the court dismissed this lawsuit with
prejudice.
On October 29, 1998, Nationwide was 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). On May 3, 1999, the complaint was amended to,
among other things, add Marcus Shore as a second plaintiff. The amended
complaint is brought as a class action on behalf of all persons who purchased
individual deferred annuity contracts or participated in group annuity contracts
sold by Nationwide and the other named Nationwide affiliates which were used to
fund certain tax-deferred retirement plans. The amended complaint seeks
unspecified compensatory and punitive damages. No class has been certified. On
June 11, 1999, Nationwide and the other named defendants filed a motion to
dismiss the amended complaint. On March 8, 2000, the court denied the motion to
dismiss the amended complaint filed by Nationwide and other named defendants.
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, Waddell & Reed, Inc. is not engaged in any litigation
of any material nature.
ADVERTISING
A "yield" and "effective yield" may be advertised for the 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 Money Market Fund's
units. Yield is an annualized figure, which means that it is assumed that the
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-
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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.
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 average annual 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
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<PAGE> 50
the variable account if it has not been available for one of the prescribed
periods). This calculation reflects the 8 year CDSC schedule and the variable
account charges that would be assessed to a contract if the maximum number of
rider options were chosen (2.15%). 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 variable
account charges of 0.90%. No CDSC is reflected. 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 non-standardized 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. If the underlying mutual fund has been available in the
variable account for less than one year (or if the underlying mutual fund has
been effective for less than one year) standardized and non-standardized
performance is not annualized.
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.
TARGET/UNITED FUNDS, INC.
The Fund is an open-end, diversified management company organized as a Maryland
corporation on December 2, 1986. The Fund sells its shares only to the separate
accounts of participating insurance companies to fund certain variable life
insurance policies and variable annuity contracts. Waddell & Reed Investment
Management Company is the Fund's investment advisor.
ASSET STRATEGY PORTFOLIO
Investment Objective: The Asset Strategy Portfolio seeks high total return
over the long-term. It seeks to achieve its goal by allocating its assets
among stocks, bonds and short-term instruments, both in the United States
and abroad.
BALANCED PORTFOLIO
Investment Objective: The Balanced Portfolio seeks as a primary goal,
current income, with a secondary goal of long-term appreciation of capital.
It invests primarily in a mix of stocks, fixed-income securities and cash,
depending on market conditions.
BOND PORTFOLIO
Investment Objective: The Bond Portfolio seeks a reasonable return with
more emphasis on preservation of capital. It seeks to achieve its goal by
investing primarily in domestic debt securities, usually of investment
grade.
GROWTH PORTFOLIO
Investment Objective: The Growth Portfolio seeks capital growth, with a
secondary goal of current income. It seeks to achieve its goal by investing
primarily in common stocks, or securities convertible into common stocks,
of U.S. and foreign companies.
HIGH INCOME PORTFOLIO
Investment Objective: The High Income Portfolio seeks as a primary goal,
high current income with a secondary goal of capital growth. It seeks to
achieve its goals by investing primarily in high-yield, high-risk,
fixed-income securities of U.S. and foreign issuers, the risks of which are
consistent with the Portfolio's goals.
INCOME PORTFOLIO
Investment Objective: The Income Portfolio seeks maintenance of current
income, subject to market conditions, with a secondary goal of capital
growth. It seeks to achieve its goals by investing primarily in common
stocks of large U.S. and foreign companies that have a record of paying
regular dividends on common stock or have the potential for capital
appreciation, or are expected to resist market decline.
INTERNATIONAL PORTFOLIO
Investment Objective: The International Portfolio seeks as a primary goal,
long-term appreciation of capital, with a secondary goal of current income.
It seeks to achieve its goals by investing primarily in common stocks, or
securities convertible into or exchangeable for common stocks of foreign
companies that may have the potential for long-term growth.
LIMITED-TERM BOND PORTFOLIO
Investment Objective: The Limited-Term Bond Portfolio seeks a high level of
current income consistent with preservation of capital. It seeks to achieve
its goal by investing primarily in investment-grade debt securities of U.S.
issuers, including U.S. Government securities.
MONEY MARKET PORTFOLIO
Investment Objective: The Money Market Portfolio seeks current income
consistent with stability of principal. It seeks to achieve it goal by
investing in U.S. dollar-
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denominated high quality money market obligations and instruments.
SCIENCE AND TECHNOLOGY PORTFOLIO
Investment Objective: The Science and Technology Portfolio seeks long-term
capital growth. It seeks to achieve its goals by concentrating its
investments primarily in the common stock of science and technology
securities of U.S. and foreign companies.
SMALL CAP PORTFOLIO
Investment Objective: The Small Cap Portfolio seeks capital growth. It
seeks to achieve its goal by investing primarily in common stocks, or
securities convertible into the common stocks, of companies that are
relatively new or unseasoned, companies in their early stages of
development, or smaller companies positioned in new or in emerging
industries where the opportunity for rapid growth is above average.
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STATEMENT OF ADDITIONAL INFORMATION
DECEMBER 1, 2000
DEFERRED VARIABLE ANNUITY CONTRACTS
ISSUED BY NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY
THROUGH ITS NATIONWIDE VA SEPARATE ACCOUNT-D
This Statement of Additional Information is not a prospectus. It contains
information in addition to and more detailed than set forth in the prospectus
and should be read in conjunction with the prospectus dated December 1, 2000.
The prospectus may be obtained from Nationwide Life and Annuity Insurance
Company by writing P.O. Box 182449, Columbus, Ohio 43218-2449, or calling
1-866-221-1100, TDD 1-800-238-3035.
TABLE OF CONTENTS
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
GENERAL INFORMATION AND HISTORY
The Nationwide VA Separate Account-D is a separate investment account of
Nationwide Life and Annuity Insurance Company ("Nationwide") (formerly,
Financial Horizons Life Insurance Company). All of Nationwide's common stock is
owned by Nationwide Life Insurance Company, which 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 its
common stock is held by Nationwide Mutual Insurance Company (95.24%) and
Nationwide Mutual Fire Insurance Company (4.76%), the ultimate controlling
persons of the Nationwide group of companies. The Nationwide group of companies
is one of America's largest insurance and financial services family of
companies, with combined assets of over $120 billion as of December 31, 1999.
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.
The custodian of the assets of the variable account is Nationwide. Nationwide
will maintain a record of all purchases and redemptions 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
1
<PAGE> 54
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.
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 Waddell &
Reed, Inc., 6300 Lamar Avenue, Overland Park, Kansas 66202. No underwriting
commissions have been paid by Nationwide to Waddell & Reed, Inc.
CALCULATIONS OF PERFORMANCE
Any current yield quotations of the 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 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 Money Market Fund.
The 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 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 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 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 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 a the 8 year CDSC schedule and the deduction of
all charges that could be made to a contract if all available options were
chosen (2.15%), except for premium taxes, which may be imposed by certain
states. Non-standardized total return may also be advertised, and is calculated
in a manner similar to standardized average annual total return except the
non-standardized total return is based on a hypothetical initial investment of
$25,000 and the
2
<PAGE> 55
deduction of charges for the base contract (0.90%). 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 non-standardized 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. Non-standardized average annual total return will 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. If the
underlying mutual fund has been available in the variable account for less than
one year (or if the underlying mutual fund has been effective for less than one
year), standardized and non-standardized performance is not annualized.
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
<PAGE> 56
[Financial Statements to be added via Pre-Effective Amendment]
4
<PAGE> 57
PART C. OTHER INFORMATION
Item 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements:
(1) Financial statements included in Prospectus.
(Part A):
Condensed Financial Information.
in Part B:
Those financial statements required by Item 23 to
be included in Part B have been incorporated
therein by reference to the Prospectus (Part A).
Nationwide Life and Annuity Insurance Company:
To be added via Pre-Effective Amendment
<PAGE> 58
Item 24. (b) Exhibits
(1) Resolution of the Depositor's Board of Directors
authorizing the establishment of the Registrant -
Attached hereto.
(2) Not Applicable
(3) Underwriting or Distribution of contracts between the
Registrant and Principal Underwriter - To be filed by
Pre-Effective Amendment to the Registration Statement.
(4) The form of the variable annuity contract - Attached
hereto.
(5) Variable annuity application - Attached hereto.
(6) Articles of Incorporation of Depositor - Attached
hereto.
(7) Not Applicable
(8) Not Applicable
(9) Opinion of Counsel - To be filed by Pre-Effective
Amendment to the Registration Statement.
(10) Not Applicable
(11) Not Applicable
(12) Not Applicable
(13) Performance Advertising Calculation Schedule - Attached
hereto.
<PAGE> 59
Item 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITIONS AND OFFICES
BUSINESS ADDRESS WITH DEPOSITOR
<S> <C> <C>
Lewis J. Alphin Director
519 Bethel Church Road
Mount Olive, NC 28365-6107
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
301 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
Xerox Corporation
Suite 200
1401 H Street NW
Washington, DC 20005-2110
Ralph M. Paige 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
</TABLE>
<PAGE> 60
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITIONS AND OFFICES
BUSINESS ADDRESS WITH DEPOSITOR
<S> <C> <C> <C> <C> <C> <C>
Arden L. Shisler Director
1356 North Wenger Road
Dalton, OH 44618
Robert L. Stewart Director
88740 Fairview Road
Jewett, OH 43986
Nancy C. Thomas Director
1767D 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
Charles A. Bryan Senior Vice President -
One Nationwide Plaza Chief Actuary - 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 -
One Nationwide Plaza Corporate Controller
Columbus, OH 43215
Philip C. Gath Senior Vice President -
One Nationwide Plaza Chief Actuary - Nationwide Financial
Columbus, OH 43215
Patricia R. Hatler Senior Vice President,
One Nationwide Plaza General Counsel and Secretary
Columbus, OH 43215
</TABLE>
<PAGE> 61
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITIONS AND OFFICES
BUSINESS ADDRESS WITH DEPOSITOR
<S> <C> <C> <C> <C> <C>
David K. Hollingsworth Senior Vice President -
One Nationwide Plaza Business Development and
Columbus, OH 43215 Sponsor Relations
David R. Jahn Senior Vice President -
One Nationwide Plaza Commercial Insurance
Columbus, OH 43215
Donna A James Senior Vice President - Chief Human
One Nationwide Plaza Resources Officer
Columbus, OH 43215
Richard A. Karas Senior Vice President - Sales -
One Nationwide Plaza Financial Services
Columbus, OH 43215
Gregory S. Lashutka Senior Vice President -
One Nationwide Plaza Corporate Relations
Columbus, OH 43215
Edwin P. McCausland, Jr. Senior Vice President -
One Nationwide Plaza Fixed Income Securities
Columbus, OH 43215
Mark D. Phelan Senior Vice President -
One Nationwide Plaza Technology Services
Columbus, OH 43215
Douglas C. Robinette Senior Vice President -
One Nationwide Plaza Claims and Finance Services
Columbus, OH 43215
Mark R. Thresher Senior Vice President -
One Nationwide Plaza Finance - Nationwide Financial
Columbus, OH 43215
Richard M. Waggoner Senior Vice President -
One Nationwide Plaza Operations
Columbus, OH 43215
Susan A. Wolken Senior Vice President - Product
One Nationwide Plaza Management and Nationwide
Columbus, OH 43215 Financial Marketing
</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
<PAGE> 62
<TABLE>
<CAPTION>
---------------------------------------- ------------------------- ------------------ ----------------------------------------
COMPANY STATE/COUNTRY OF NO. VOTING PRINCIPAL BUSINESS
ORGANIZATION SECURITIES
(SEE ATTACHED
CHART UNLESS
OTHERWISE
INDICATED)
---------------------------------------- ------------------------- ------------------ ----------------------------------------
<S> <C> <C>
The 401(k) Companies, Inc. Texas Holding Company
---------------------------------------- ------------------------- ------------------ ----------------------------------------
The 401(k) Company Texas Third-party administrator for 401(k)
plans
---------------------------------------- ------------------------- ------------------ ----------------------------------------
401(k) Investment Advisors, Inc. Texas Investment advisor registered with the
SEC
---------------------------------------- ------------------------- ------------------ ----------------------------------------
401(k) Investments Services, Inc. Texas NASD registered broker-dealer
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Affiliate Agency, Inc. Delaware Insurance agency marketing life
insurance & annuity products through
financial institutions
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Affiliate Agency of Ohio, Inc. Ohio Insurance agency marketing life
insurance & annuity products through
financial institutions
---------------------------------------- ------------------------- ------------------ ----------------------------------------
AID Finance Services, Inc. Iowa Holding Company
---------------------------------------- ------------------------- ------------------ ----------------------------------------
ALLIED General Agency Company Iowa Managing general agent and surplus
lines broker for property & casualty
insurance products
---------------------------------------- ------------------------- ------------------ ----------------------------------------
ALLIED Group, Inc. Iowa Property & casualty holding company
---------------------------------------- ------------------------- ------------------ ----------------------------------------
ALLIED Group Insurance Marketing Iowa Direct marketer for property and
Company casualty insurance products
---------------------------------------- ------------------------- ------------------ ----------------------------------------
ALLIED Group Merchant Banking Iowa Broker-Dealer
Corporation
---------------------------------------- ------------------------- ------------------ ----------------------------------------
ALLIED Property and Casualty Insurance Iowa Underwrites general property &
Company casualty insurance
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Allnations, Inc. Ohio Promotes international cooperative
insurance organizations
---------------------------------------- ------------------------- ------------------ ----------------------------------------
AMCO Insurance Company Iowa Underwrites general property &
casualty insurance
---------------------------------------- ------------------------- ------------------ ----------------------------------------
American Marine Underwriters, Inc. Florida Underwriting manager for ocean cargo
and bulk insurance
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Auto Direkt Insurance Company Germany Insurance Company
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Cal-Ag Insurance services, Inc. California Captive insurance brokerage firm
---------------------------------------- ------------------------- ------------------ ----------------------------------------
CalFarm Insurance Agency California Former marketing company for
traditional agent producers of CalFarm
Insurance Company
---------------------------------------- ------------------------- ------------------ ----------------------------------------
CalFarm Insurance Company California Multi-line insurance company
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Caliber Funding Delaware A limited purpose corporation
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Colonial County Mutual Insurance Texas Insurance Company
Company
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Columbus Insurance Brokerage and Germany General service insurance broker
Service GmbH
---------------------------------------- ------------------------- ------------------ ----------------------------------------
</TABLE>
<PAGE> 63
<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 that sells and
services commercial insurance
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Depositors Insurance Company Iowa Underwrites property & casualty
insurance
---------------------------------------- ------------------------- ------------------ ----------------------------------------
eNationwide, LLC Ohio A limited liability company to provide
administrative services to
Nationwide's direct operations
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Excaliber Funding Corporation Delaware Limited purpose corporation
---------------------------------------- ------------------------- ------------------ ----------------------------------------
F&B, Inc. Iowa Insurance Agency
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Farmland Mutual Insurance Company Iowa Mutual Insurance Company
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Financial Horizons Distributors Agency Alabama Insurance agency marketing life
of Alabama, Inc. insurance and annuity products through
financial institutions
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Financial Horizons Distributors Agency Ohio Insurance marketing life insurance and
of Ohio, Inc. annuity products through financial
institutions
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Financial Horizons Distributors Agency Oklahoma Insurance marketing life insurance and
of Oklahoma, Inc. annuity products through financial
institutions
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Financial Horizons Distributors Agency Texas Insurance marketing life insurance and
of Texas, Inc. annuity products through financial
institutions
---------------------------------------- ------------------------- ------------------ ----------------------------------------
*Financial Horizons Investment Trust Massachusetts Diversified, open-end investment
company
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Financial Horizons Securities Oklahoma Limited broker-dealer doing business
Corporation solely in the financial institution
market
---------------------------------------- ------------------------- ------------------ ----------------------------------------
GatesMcDonald Health Plus Inc. Ohio Managed Care Organization
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Gates, McDonald & Company Ohio Services employers for managing
workers' and unemployment compensation
matters
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Gates, McDonald & Company of Nevada Nevada Self-insurance administration, claims
examinations and data processing
services
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Gates, McDonald & Company of New York, New York Workers' compensation/self-insured
Inc. claims administration services to
employers with exposure in New York
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Insurance Intermediaries, Inc. Ohio Insurance agency providing commercial
property & casualty brokerage services
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Irvin L. Schwartz and Associates, Inc. Ohio Insurance Agency
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Landmark Financial Services of New New York Insurance agency marketing life
York, Inc. insurance and annuity products through
financial institutions
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Leben Direkt Insurance Company Germany Life insurance through direct mail
---------------------------------------- ------------------------- ------------------ ----------------------------------------
</TABLE>
<PAGE> 64
<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 General agent to market non-standard
automobile and motorcycle insurance
for Colonial Mutual Insurance Company
---------------------------------------- ------------------------- ------------------ ----------------------------------------
MedProSolutions, Inc. Massachusetts Provides third-party administration
services for workers compensation,
automobile injury and disability claims
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Midwest Printing Services, Ltd. Iowa General printing services
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Morley & Associates, Inc. Oregon Insurance brokerage
---------------------------------------- ------------------------- ------------------ ----------------------------------------
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, England Insurance Company
Ltd.
---------------------------------------- ------------------------- ------------------ ----------------------------------------
National Deferred Compensation, Inc. Ohio Administers deferred compensation
plans for public employees
---------------------------------------- ------------------------- ------------------ ----------------------------------------
**National Premium and Benefit Delaware Provides third-party administration
Administration Company services
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Nationwide Advisory Services, Inc. Ohio Registered broker-dealer providing
investment management and
administrative services
---------------------------------------- ------------------------- ------------------ ----------------------------------------
**Nationwide Agency, Inc. Ohio Insurance Agency
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Nationwide Agribusiness Insurance Iowa Provides property & casualty insurance
Company primarily to agricultural business
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Nationwide Arena, LLC Ohio A limited liability company related to
arena development
---------------------------------------- ------------------------- ------------------ ----------------------------------------
*Nationwide Asset Allocation Trust Ohio Diversified open-end investment company
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Nationwide Assurance Company Wisconsin Underwrites non-standard automobile
and motorcycle insurance
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Nationwide Cash Management Company Ohio Investment Securities Agent
---------------------------------------- ------------------------- ------------------ ----------------------------------------
</TABLE>
<PAGE> 65
<TABLE>
<CAPTION>
---------------------------------------- ------------------------- ------------------ ----------------------------------------
COMPANY STATE/COUNTRY OF NO. VOTING PRINCIPAL BUSINESS
ORGANIZATION SECURITIES
(SEE ATTACHED
CHART UNLESS
OTHERWISE
INDICATED)
---------------------------------------- ------------------------- ------------------ ----------------------------------------
<S> <C> <C> <C>
Nationwide Corporation Ohio Holding company for entities
affiliated with Nationwide Mutual
Insurance Company
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Nationwide Exclusive Distribution Ohio A limited liability company providing
Company, LLC agency support services to Nationwide
exclusive agents
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Nationwide Financial Assignment Company Ohio An assignment company to administer
structured settlement business
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Nationwide Financial Institution Delaware Insurance Agency
Distributors Agency, Inc.
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Nationwide Financial Institution New Mexico Insurance Agency
Distributors Agency, Inc. of New Mexico
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Nationwide Financial Institution Massachusetts Insurance Agency
Distributors Agency, Inc. of
Massachusetts
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Nationwide Financial Services Bermuda Long-term insurer which issued
(Bermuda) Ltd. variable annuity and variable life
products to persons outside the U.S. &
Bermuda
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Nationwide Financial Services Capital Delaware Trust which issues and sells
Trust securities & uses proceeds to acquire
debentures
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Nationwide Financial Services Capital Delaware Trust which issues and sells
Trust II securities & uses proceeds to acquire
debentures
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Nationwide Financial Services, Inc. Delaware Holding Company for entities
associated with Nationwide Mutual
Insurance Company
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Nationwide Foundation Ohio Not-for profit corporation
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Nationwide General Insurance Company Ohio Primarily provides automobile and fire
insurance to select customers
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Nationwide Global Finance, LLC Ohio Act as a support company for
Nationwide Global Holdings, Inc. & its
international capitalization efforts
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Nationwide Global Funds Cayman Islands Exempted company with limited
liability for purpose of issuing
investment shares to segregated asset
accounts of Nationwide Financial
Services (Bermuda) Ltd. and to
non-U.S. resident investors
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Nationwide Global Holdings, Inc. Ohio Holding Company for Nationwide
Insurance Enterprise international
operations
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Nationwide Global Holdings, Inc.-NGH Grand Duchy of Analyze European market of life
Luxembourg Branch Luxembourg insurance
---------------------------------------- ------------------------- ------------------ ----------------------------------------
</TABLE>
<PAGE> 66
<TABLE>
<CAPTION>
---------------------------------------- ------------------------- ------------------ ----------------------------------------
COMPANY STATE/COUNTRY OF NO. VOTING PRINCIPAL BUSINESS
ORGANIZATION SECURITIES
(SEE ATTACHED
CHART UNLESS
OTHERWISE
INDICATED)
---------------------------------------- ------------------------- ------------------ ----------------------------------------
<S> <C> <C> <C>
Nationwide Global Holdings-Hong Kong, Hong Kong Primarily a holding company for
Limited Nationwide Global Holdings, Inc. Asian
operations
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Nationwide Global Holdings-NGH Brasil Brazil Holding company
Participacoes LTDA
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Nationwide Health Plans, Inc. Ohio Health insuring organization
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Nationwide Home Mortgage Company Iowa Mortgage lendor
---------------------------------------- ------------------------- ------------------ ----------------------------------------
*Nationwide Indemnity Company Ohio Reinsurance company assuming business
from Nationwide Mutual Insurance
Company and other insurers within the
Nationwide Insurance Enterprise
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Nationwide Insurance Company of America Wisconsin Independent agency personal lines
underwriter of property & casualty
insurance
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Nationwide Insurance Company of Florida Ohio Transacts general insurance business
except life insurance
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Nationwide Insurance Golf Charities, Ohio Not-for-profit corporation
Inc.
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Nationwide International Underwriters California Special risks, excess & surplus lines
underwriting manager
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Nationwide Investing Foundation Michigan Provide investors with continuous
source of investment under management
of trustees
---------------------------------------- ------------------------- ------------------ ----------------------------------------
*Nationwide Investing Foundation II Massachusetts Diversified, open-end investment
company
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Nationwide Investment Services Oklahoma Registered broker-dealer
Corporation
---------------------------------------- ------------------------- ------------------ ----------------------------------------
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 Commercial property insurance in Texas
---------------------------------------- ------------------------- ------------------ ----------------------------------------
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 Diversified, open-end investment
company
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Nationwide Mutual Insurance Company Ohio Mutual Insurance Company
---------------------------------------- ------------------------- ------------------ ----------------------------------------
</TABLE>
<PAGE> 67
<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, Inc. Alabama Market and administer deferred
of Alabama compensation plans for public employees
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Nationwide Retirement Solutions, Inc. Arizona Market and administer deferred
of Arizona compensation plans for public employees
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Nationwide Retirement Solutions, Inc. Arkansas Market and administer deferred
of Arkansas compensation plans for public employees
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Nationwide Retirement Solutions, Inc. Montana Market and administer deferred
of Montana compensation plans for public employees
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Nationwide Retirement Solutions, Inc. Nevada Market and administer deferred
of Nevada compensation plans for public employees
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Nationwide Retirement Solutions, Inc. New Mexico Market and administer deferred
of New Mexico compensation plans for public employees
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Nationwide Retirement Solutions, Inc. Ohio Market variable annuity contracts to
of Ohio members of the National Education
Association in the state of Ohio
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Nationwide Retirement Solutions, Inc. Oklahoma Market variable annuity contracts to
of Oklahoma members of the National Education
Association in the state of Oklahoma
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Nationwide Retirement Solutions, Inc. South Dakota Market and administer deferred
of South Dakota compensation plans for public employees
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Nationwide Retirement Solutions, Inc. Texas Market and administer deferred
of Texas compensation plans for public employees
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Nationwide Retirement Solutions, Inc. Wyoming Market variable annuity contracts to
of Wyoming members of the National Education
Association in the state of Wyoming
---------------------------------------- ------------------------- ------------------ ----------------------------------------
</TABLE>
<PAGE> 68
<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 Seguradora S.A. Brazil Engage in elementary, health & life
insurance; private open pension and
wealth concession plans
---------------------------------------- ------------------------- ------------------ ----------------------------------------
*Nationwide Separate Account Trust Massachusetts Diversified, open-end investment
company
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Nationwide Services Company, LLC. Ohio Single member limited liability
company performing shared services
functions for the Nationwide Insurance
Enterprise
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Nationwide Trust Company, FSB United States Federal savings bank chartered by the
Office of Thrift Supervision in U.S.
Department of Treasury to exercise
custody & fiduciary powers
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Neckura Holding Company Germany Administrative services for Neckura
Insurance Group
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Neckura Insurance Company Germany Insurance Company
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Neckura Life Insurance Company Germany Life and health insurance company
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Nevada Independent Nevada Workers' compensation administrative
Companies-Construction services to Nevada employers in the
construction industry
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Nevada Independent Companies-Health Nevada Workers' compensation administrative
and Nonprofit services to Nevada employers in health
& nonprofit industries
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Nevada Independent Companies- Nevada Workers' compensation administrative
Hospitality and Entertainment services to Nevada employers in the
hospitality & entertainment industries
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Nevada Independent Companies- Nevada Workers' compensation administrative
Manufacturing, Transportation and services to Nevada employers in the
Distribution manufacturing, transportation and
distribution industries
---------------------------------------- ------------------------- ------------------ ----------------------------------------
NFS Distributors, Inc. Delaware Holding company for Nationwide
Financial Services, Inc. distribution
companies
---------------------------------------- ------------------------- ------------------ ----------------------------------------
NGH Luxembourg, S.A Luxembourg Acts primarily as holding company for
Nationwide Global Holdings, Inc.
European operations
---------------------------------------- ------------------------- ------------------ ----------------------------------------
NGH Netherlands, B.V. The Netherlands Holding company for other overseas
companies
---------------------------------------- ------------------------- ------------------ ----------------------------------------
</TABLE>
<PAGE> 69
<TABLE>
<CAPTION>
---------------------------------------- ------------------------- ------------------ ----------------------------------------
COMPANY STATE/COUNTRY OF NO. VOTING PRINCIPAL BUSINESS
ORGANIZATION SECURITIES
(SEE ATTACHED
CHART UNLESS
OTHERWISE
INDICATED)
---------------------------------------- ------------------------- ------------------ ----------------------------------------
<S> <C> <C> <C>
NGH UK, Ltd. United Kingdom Assist Nationwide Global Holdings,
Inc. with European operations and
marketing
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Northpointe Capital LLC Delaware Limited liability company for
investments
---------------------------------------- ------------------------- ------------------ ----------------------------------------
PanEuroLife Luxembourg Life Insurance company providing
individual life insurance primarily in
the UK, Belgium and France
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Pension Associates, Inc. Wisconsin Pension plan administration and record
keeping services
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Portland Investment Services, Inc. Oregon NASD registered broker-dealer
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Premier Agency, Inc. Iowa Insurance Agency
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Riverview Agency, Inc. Texas Has a pending application to become a
licensed insurance agency with the
Texas Department of Insurance
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Scottsdale Indemnity Company Ohio Insurance Company
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Scottsdale Insurance Company Ohio Insurance Company
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Scottsdale Surplus Lines Insurance Arizona Provides excess and surplus lines
Company insurance coverage on a non-admitted
basis
---------------------------------------- ------------------------- ------------------ ----------------------------------------
SVM Sales GmbH, Neckura Insurance Group Germany Recruits and supervises external sales
partners who obtain new business for
the Neckura Group as well as to offer
financial services
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Union Bond & Trust Company Oregon Oregon state bank with trust powers
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Villanova Capital, Inc. Delaware Holding Company
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Villanova Mutual Fund Capital Trust Delaware Trust designed to act as a registered
investment advisor
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Villanova SA Capital Trust Delaware Trust designed to act as a registered
investment advisor
---------------------------------------- ------------------------- ------------------ ----------------------------------------
Western Heritage Insurance Company Arizona Underwrites excess and surplus lines
of property and casualty insurance
---------------------------------------- ------------------------- ------------------ ----------------------------------------
</TABLE>
<PAGE> 70
<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-D 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 Variable Account-11 Ohio Nationwide Life Separate Issuer of Annuity Contracts
Account
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 71
<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-A Ohio Nationwide Life and Annuity Issuer of Life Insurance
Separate Account Policies
--------------------------------------------------------------------------------------------------------------------------------
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>
<PAGE> 72
<TABLE>
<CAPTION>
(left side)
<S> <C> <C> <C>
------------------------
| NATIONWIDE INSURANCE |
| GOLF CHARITIES, INC. |
| |
| MEMBERSHIP |
| NONPROFIT |
| CORPORATION |
------------------------
-------------------------------------------------------------------------------------------------------------------------
| |
--------------------------- --------------------------- ----------------------------
| CARIBBEAN ALLIANCE | | ALLIED | | |
| INSURANCE COMPANY | | GROUP, INC. | | |
| | | (AGI) | | NATIONWIDE LLOYDS |
| | | | | |
|Common Stock: 1,900,000 | |-------|Common Stock: 850 Shares |---| | |
|------------ Shares | | |------------ | | | A TEXAS LLOYDS |================================
| | | | | | | |
| Cost | | | Cost | | | |
| ---- | | | ---- | | | |
|Casualty- | | |Casualty- | | | |
|100% $19,000,000 | | |100% $1,243,344,521| | | |
--------------------------- | --------------------------- | ----------------------------
| |
--------------------------- | --------------------------- | ----------------------------
| NATIONWIDE INSURANCE | | | AMCO | | | DEPOSITORS |
| COMPANY OF AMERICA | | | INSURANCE COMPANY | | | INSURANCE COMPANY |
| | | | (AMCO) | | | (DEPOSITORS) |
|Common Stock: 12,000 | | |Common Stock: 500,000 | | |Common Stock: 300,000 |
|------------ Shares | | |------------ Shares | | |------------ Shares |
| |---| | |---|---| |
| Cost | | | Cost | | | Cost |
| ---- | | | ---- | | | ---- |
| | | | | | | |
|AGI-100% $215,273,000 | | |AGI-100% $147,425,540| | |AGI 100% $22,251,842 |
--------------------------- | --------------------------- | ----------------------------
| | |
--------------------------- | --------------------------- | ----------------------------
| AID FINANCE | | | ALLIED | | | ALLIED PROPERTY |
| SERVICES, INC. | | | GENERAL AGENCY | | | AND CASUALTY |
| (AID FINANCE) | | | COMPANY | | | INSURANCE COMPANY |
|Common Stock: 10,000 | | |Common Stock: 5,000 | | |Common Stock: 300,000 |
|------------ Shares | | |------------ Shares | | |------------ Shares |
| |---| | | |---| |
| Cost | | Cost | | | Cost |
| ---- | | ---- | | | ---- |
|AGI-100% $19,545,634| |AMCO-100% $135,342 | | |AGI-100% $47,018,643 |
--------------------------- --------------------------- | ----------------------------
| |
--------------------------- --------------------------- | ----------------------------
| ALLIED | | ALLIED | | | NATIONWIDE |
| GROUP INSURANCE | | DOCUMENT SOLUTIONS, | | | HOME MORTGAGE |
| MARKETING COMPANY | | INC. | | | COMPANY (NHMC) |
| | |Common Stock: 10,000 | | | |
|Common Stock: 20,000 | |------------ Shares | | |Common Stock: 54,348 |
|------------ Shares | | |---|---|------------ Shares |
| | | | | | |
| | | | | | |
| | | | | | |
| Cost | | Cost | | | |
| ---- | | ---- | | | |
| Aid | |AGI-100% $610,000 | | |AGI-80% |
| Finance-100% $16,059,469| --------------------------- | ----------------------------
-------------------------- | |
--------------------------- | ----------------------------
| PREMIER | | | AGMC |
| AGENCY, | | | REINSURANCE, LTD. |
| INC. | | | |
|Common Stock: 100,000 | | |Common Stock: 11,000 |
|------------ Shares | | |------------ Shares |
| |---| | |
| Cost | | Cost |
| ---- | | ---- |
|AGI-100% $100,000 | |NHMC-100% $11,000 |
--------------------------- ----------------------------
----------------------------
| WESTERN |
| HERITAGE INSURANCE |
| COMPANY |
| |
|Common Stock: 4,776,076 |--------------------------------
|------------- Shares |
| |
| Cost |
| ---- |
|SIC-100% $57,000,000 |
----------------------------
</TABLE>
<PAGE> 73
<TABLE>
<CAPTION>
NATIONWIDE(R) (middle)
<S> <C> <C>
------------------------------------------ ------------------------------------------
| | | |
| NATIONWIDE MUTUAL | | NATIONWIDE MUTUAL |
| INSURANCE COMPANY |==============================================| FIRE INSURANCE COMPANY |
| (CASUALTY) | | (FIRE) |
| | | |
------------------------------------------ ------------------------------------------
| || | |
--| || |--------------------------------------------------------------------| |-----------------------
|| |
|| |--------------------------------------------------------------|-------------------
|| | |
|| -------------------------------- | -------------------------------- -----------------------------------
|| | FARMLAND MUTUAL | | | NATIONWIDE GENERAL | | NECKURA HOLDING |
|| | INSURANCE COMPANY | | | INSURANCE COMPANY | | COMPANY (NECKURA) |
|| |Guaranty Fund | | | | | |
=====||==|------------ |---| | |Common Stock: 20,000 | |Common Stock: 10,000 |
|Certificate | | |---|------------ Shares | |--|------------ Shares |
|----------- | | | | | | | |
| Cost | | | | Cost | | | Cost |
| ---- | | | | ---- | | | ---- |
|Casualty $500,000 | | | |Casualty-100% $5,944,422 | | |Casualty-100% $142,943,140 |
-------------------------------- | | -------------------------------- | --------------------------------
| | |
-------------------------------- | | -------------------------------- | --------------------------------
| F & B, INC. | | | | NATIONWIDE PROPERTY | | | NECKURA |
| | | | | AND CASUALTY | | | INSURANCE COMPANY |
|Common Stock: 1 Share | | | | INSURANCE COMPANY | | | |
|------------ | | | |Common Stock: 60,000 | |--|Common Stock: 6,000 |
| |---| |---|------------ Shares | | |------------ Shares |
| Cost | | | | | | | |
| ---- | | | | Cost | | | Cost |
|Farmland | | | | ---- | | | ---- |
|Mutual-100% $10 | | | |Casualty-100% $6,000,000 | | |Neckura-100% DM 6,000,000 |
-------------------------------- | | -------------------------------- | --------------------------------
| | |
-------------------------------- | | -------------------------------- | --------------------------------
| COOPERATIVE SERVICE | | | | NATIONWIDE ASSURANCE | | | NECKURA LIFE |
| COMPANY | | | | COMPANY | | | INSURANCE COMPANY |
|Common Stock: 600 Shares | | | | | | | |
|------------ |---- |---|Common Stock: 1,750 | |--|Common Stock: 4,000 |
| | | |------------ Shares | | |------------ Shares |
| Cost | | | | |
| ---- | | | Cost | | | Cost |
|Farmland | | | ---- | | | ---- |
|Mutual-100% $3,506,173 | | |Casualty-100% $41,750,000 | | |Neckura-100% DM 15,825,681|
-------------------------------- | -------------------------------- | --------------------------------
| |
-------------------------------- | -------------------------------- | --------------------------------
| SCOTTSDALE | | | NATIONWIDE AGRIBUSINESS | | | COLUMBUS INSURANCE |
| INSURANCE COMPANY | | | INSURANCE COMPANY | | | BROKERAGE AND SERVICE |
| (SIC) | | | | | | GmbH |
|Common Stock: 30,136 | | |Common Stock: 1,000,000 | | |Common Stock: 1 Share |
|---|------------ Shares |--------|---|------------ Shares | |--|------------ |
| | | | | | | | |
| | | | | Cost | | | Cost |
| | Cost | | | ---- | | | ---- |
| | ---- | | |Casualty-99.9% $26,714,335 | | |Neckura-100% DM 51,639 |
| |Casualty-100% $150,000,500 | | |Other Capital | | | |
| | | | |------------- | | | |
| | | | |Casualty-Ptd. $713,576 | | | |
| -------------------------------- | ------------------------------- | --------------------------------
| | |
| -------------------------------- | -------------------------------- | --------------------------------
| | SCOTTSDALE | | | NATIONAL CASUALTY | | | LEBEN DIREKT |
| | SURPLUS LINES | | | COMPANY | | | INSURANCE COMPANY |
| | INSURANCE COMPANY | | | (NC) | | | |
| |Common Stock: 10,000 | | | Common Stock: 100 Shares | | |Common Stock: 4,000 Shares |
|---|------------ Shares | |---| ------------- | |--|------------ |
| | | | | | | | |
| | Cost | | | Cost | | | Cost |
| | ---- | | | ---- | | | ---- |
| |SIC-100% $6,000,000 | | |Casualty-100% $67,442,439 | | |Neckura-100% DM 4,000,000 |
| | | | | | | | |
| -------------------------------- | -------------------------------- | --------------------------------
| | | |
| -------------------------------- | -------------------------------- | --------------------------------
| | NATIONAL PREMIUM & | | | NCC OF AMERICAN, LTD. | | | AUTO DIREKT |
| | BENEFIT ADMINISTRATION | | | (INACTIVE) | | | INSURANCE COMPANY |
| | COMPANY | | | | | | |
| |Common Stock: 10,000 | | | | | |Common Stock: 1500 Shares |
---|---|------------ Shares | | | | |--|------------ |
| | | | | | | |
| Cost | | | | | | Cost |
| ---- | | | | | | ---- |
|SIC-100% $10,000 | | |NC-100% | | |Neckura-100% DM 1,643,149 |
-------------------------------- | -------------------------------- | --------------------------------
| |
-------------------------------- | -------------------------------- | --------------------------------
| RP&C | | | SUN DIRECT | | | SVM SALES |
| INTERNATIONAL | | | VERSICHERUNGS - | | | GmbH |
| | | | AKTIENGESCLISCHAFT | | | |
|Common Stock: 1,000 | | |Common Stock: 1 Share | | |Common Stock: 50 Shares |
|------------ Shares |--------- |------------ |------------|------------ |
| | | | | |
| Cost | | Cost | | Cost |
| ---- | | ---- | | ---- |
|Casualty-20.3% $2,400,740 | |Neckura-100% $9,600,000 | |Neckura-100% DM 50,000 |
| | | EURO | | |
-------------------------------- -------------------------------- --------------------------------
</TABLE>
<PAGE> 74
<TABLE>
<CAPTION>
(right side)
<S> <C> <C> <C>
------------------------
| NATIONWIDE |
| FOUNDATION |
| |
| MEMBERSHIP |
| NONPROFIT |
| CORPORATION |
------------------------
---------------------------------------------------------------------------------------------------------------------|
|
--------------------------------------------------------------------------------------------------------------- |
| | | | |
| | | | |
| -------------------------------- | -------------------------------- | -------------------------------------
| | SCOTTSDALE | | | NATIONWIDE CASH | | | NATIONWIDE |
| | INDEMNITY COMPANY | | | MANAGEMENT COMPANY | | | CORPORATION |
| | | | | | | | |
| | | | | | | |Common Stock: Control: |
| |Common Stock: 50,000 | | |Common Stock: 100 Shares | | |------------ ------- |
|-----|------------ Shares | |----|------------ | | |$13,642,432 100% |
| | | | | Cost | | | Shares Cost |
| | Cost | | | ---- | | | ------ ---- |
| | ---- | | |Casualty-100% $11,226 | | |Casualty 12,992,922 $1,182,959,447 |
| |Casualty-100% $8,800,000 | | | | | |Fire 649,510 111,835,185 |
| | | | | | | | (See Page 2) |
| -------------------------------- | -------------------------------- | -------------------------------------
| | |
| -------------------------------- | -------------------------------- | -------------------------------------
| | NATIONWIDE | | | NATIONWIDE | | | ALLNATIONS, INC. |
| | INDEMNITY COMPANY | | | ARENA LLC | | |Common Stock: 12,167 Shares |
| | | | | | | |------------- Cost |
|-----|Common Stock: 28,000 | |....| | |-----| ---- |
| |------------ Shares | | | | | |Casualty-16% $91,600 |
| | | | | | | |Fire-16% $91,742 |
| | Cost | | | | | |Preferred Stock 1,466 Shares |
| | ---- | | |Casualty-90% | | |--------------- Cost |
| |Casualty-100% $594,529,000 | | | | | | ---- |
| | | | | | | |Casualty-6.8% $100,000 |
| | | | | | | |Fire-6.8% $100,000 |
| -------------------------------- | -------------------------------- | -------------------------------------
| | |
| -------------------------------- | -------------------------------- | -------------------------------------
| | LONE STAR | | | NATIONWIDE | | | NATIONWIDE INTERNATIONAL |
| | GENERAL AGENCY, INC. | | | EXCLUSIVE DISTRIBUTION | | | UNDERWRITERS |
| | | | | COMPANY, LLC (NEDCO) | | | |
------|Common Stock: 1,000 | |....| | |-----|Common Stock: 1,000 |
| |------------ Shares | | | Single Member Limited | | |------------- Shares |
| | | | | Liability Company | | | |
| | Cost | | | | | | Cost |
| | ---- | | |Casualty-100% | | | ---- |
| |Casualty-100% $5,000,000 | | | | | |Casualty-100% $10,000 |
| -------------------------------- | -------------------------------- | -------------------------------------
| || | | |
| -------------------------------- | -------------------------------- | -------------------------------------
| | COLONIAL COUNTY | | | INSURANCE | | | CALFARM INSURANCE |
| | MUTUAL INSURANCE | | | INTERMEDIARIES, INC. | | | COMPANY |
| | COMPANY | | | | | | |
| | | | |Common Stock: 1,615 Shares | | |Common Stock: 52,000 |
| | | | |------------- | |-----|-------------- Shares |
| | | | | Cost | | |
| |Surplus Debentures: | | | ---- | | Cost |
| |------------------- | | |NEDCO-100% $1,615,000 | | ---- |
| | Cost | | -------------------------------- |Casualty-100% $106,164,995 |
| | ---- | | | |
| |Colonial $500,000 | | -------------------------------- -------------------------------------
| |Lone Star 150,000 | | | eNATIONWIDE, LLC | |
| -------------------------------- | | (eNat) | -------------------------------------
| | | | | CALFARM INSURANCE |
| -------------------------------- | | | | AGENCY |
| | NATIONWIDE SERVICES | |....| Single Member Limited | | |
| | COMPANY, LLC | | Liability Company | | |
| | | | | | |
| |Single Member Limited | |----| | |Common Stock: 1,000 shares |
|.....|Liability Company | | | | |------------- |
| | | | | | | |
| | | | |Casualty-100% | | |
| |Casualty-100% | | | | | |
| | | | -------------------------------- |CalFarm Insurance |
| -------------------------------- | |Company - 100% |
| | -------------------------------- -------------------------------------
| | | DISCOVER INSURANCE | |
| -------------------------------- | | COMPANY, LLC | -------------------------------------
| | AMERICAN MARINE | | | | | CAL-AG INSURANCE |
| | UNDERWRITERS, INC. | | | | | SERVICES |
| | | | | Single Member Limited | | |
| |Common Stock: 20 Shares | |....| Liability Company | |Common Stock: 100 Shares |
|-----|------------ | | | | |------------ |
| | Cost | | | | | |
| | ---- | | |eNat-100% | |CalFarm Insurance |
| |Casualty-100% $5,020 | | | | |Agency-100% |
| | | | -------------------------------- -------------------------------------
| -------------------------------- |
| | --------------------------------
| --------------------------------- | | DISCOVER COMPANY |
| | NATIONWIDE INSURANCE | | | OF TEXAS, LLC |
| | COMPANY OF FLORIDA | | | |
| | | | | Single Member Limited |
| | Liability Company | |....| Liability Company |
| |Common Stock: 10,000 Shares | | |
|-----|------------- | | |
| Cost | |eNat-100% |
| ---- | | |
|Casualty-100% $300,000,000 | --------------------------------
| |
---------------------------------
Subsidiary Companies -- Solid Line
Contractual Association -- Double Line
Limited Liability Company -- Dotted Line
June 30, 2000
</TABLE>
Page 1
<PAGE> 75
<TABLE>
<CAPTION>
(Left Side)
<S> <C> <C> <C> <C> <C> <C>
|----------------------------------|-----------------------------------|-----------------------------
| | |
----------------------------- ----------------------------- -----------------------------
| NATIONWIDE LIFE INSURANCE | | NATIONWIDE | | NATIONWIDE TRUST |
| COMPANY (NW LIFE) | | FINANCIAL SERVICES | | COMPANY, FSB |
| | | CAPITAL TRUST | | Common Stock: 2,800,000 |
| Common Stock: 3,814,779 | | Preferred Stock: | | ------------ Shares |
| ------------ Shares | | --------------- | | Cost |
| | | | | ---- |
| NFS--100% | | NFS--100% | | NFS--100% $3,000,000 |
----------------|------------ ----------------------------- -----------------------------
|
| |--------------------------
----------------------------- | ----------------------------- -----------------------------
| NATIONWIDE LIFE AND | | | NATIONWIDE | | NATIONWIDE FINANCIAL |
| ANNUITY INSURANCE COMPANY | | | ADVISORY SERVICES, INC | | INSTITUTION DISTRIBUTORS |
| | | | (NW ADV. SERV.) | | AGENCY, INC. (NFIDAI) |
| Common Stock: 66,000 | | | Common Stock: 7,676 | | |
| ------------ Shares |--|--| ------------ Shares |==== | |
| | | | | || | |
| Cost | | | Cost | || | Common Stock: 1,000 Shares|
| ---- | | | ---- | || | ------------ |
| NW Life-100% $58,070,003 | | | NW Life-100% $5,996,261 | || | NFSDI-100% |
----------------------------- | ----------------------------- || --------------|--||----------
| || | ||
----------------------------- | ----------------------------- || ----------------------------- | || -----------------------
| NATIONWIDE INVESTMENT | | | NATIONWIDE MUTUAL | || | FINANCIAL HORIZONS | | || | |
| SERVICES CORPORATION | | | FUNDS | || | DISTRIBUTORS AGENCY | | || | |
| | | | | || | OF ALABAMA, INC. | | || | |
| Common Stock: 5,000 | | | OHIO BUSINESS TRUST | || | | | || | FLORIDA |
| ------------ Shares | | | | || | Common Stock: 10,000 | | || | RECORDS |===
| |--| | |==|| | ------------ Shares |-- || | ADMINISTRATOR, |
| | | | | || | | | || | INC |
| Cost | | | | || | Cost | | || | |
| ---- | | | | || | ---- | | || | |
| NW Life-100% $529,728 | | | | || | NFIDAI-100% $100 | | || | |
----------------------------- | ----------------------------- || ----------------------------- | || -----------------------
| || | ||
----------------------------- | ----------------------------- || ----------------------------- | || -----------------------
| NATIONWIDE FINANCIAL | | | NATIONWIDE | || | LANDMARK FINANCIAL | | || | |
| ASSIGNMENT | | | SEPARATE ACCOUNT | || | SERVICES OF | | || | |
| COMPANY | | | TRUST | || | NEW YORK, INC. | | || | |
| | | | | || | | | || | |
| | | | | || | Common Stock: 10,000 | | || | FINANCIAL HORIZONS |
| |--| | MASSACHUSETTS |==|| | ------------ Shares |-- ||==| DISTRIBUTORS AGENCY |
| | | | BUSINESS TRUST | || | | | || | OF OHIO, INC |
| | | | | || | Cost | | || | |
| | | | | || | ---- | | || | |
| NW Life-100% | | | | || | NFIDAI-100% $10,100 | | || | |
----------------------------- | ----------------------------- || ----------------------------- | || -----------------------
| || | ||
----------------------------- | ----------------------------- || ----------------------------- | || -----------------------
| NATIONWIDE REALTY | | | NATIONWIDE | || | FINANCIAL HORIZONS | | || | |
| INVESTORS, LTD. | | | ASSET ALLOCATION TRUST | || | SECURITIES CORP. | | || | |
| | | | | || | | | || | |
| Units: | | | | || | Common Stock: 10,000 | | || | FINANCIAL HORIZONS |
| ------ |..| | OHIO BUSINESS TRUST |==|| | ------------ Shares |-- ||==| DISTRIBUTORS AGENCY |
| | | | | | | | || | OF OKLAHOMA, INC |
| | | | | | Cost | | || | |
| NW Life-70% | | | | | ---- | | || | |
| NW Mutual-30% | | | | | NFIDAI-100% $153,000 | | || | |
----------------------------- | ----------------------------- ----------------------------- | || -----------------------
| | ||
----------------------------- | ----------------------------- | || -----------------------
| NATIONWIDE | | | AFFILIATE AGENCY, INC. | | || | |
| PROPERTIES, LTD. | | | | | || | |
| | | | | | || | |
| Units: |..| | Common Stock: 100 | | || | FINANCIAL HORIZONS |
| ------ | | ------------ Shares |-- ||==| DISTRIBUTORS AGENCY |
| | | | | || | OF TEXAS, INC |
| | | Cost | | || | |
| NW Life-97.6% | | ---- | | || | |
| NW Mutual-2.4% | | NFIDAI-100% $100 | | || | |
----------------------------- ----------------------------- | || -----------------------
| ||
----------------------------- | || -----------------------
| NATIONWIDE FINANCIAL | | || | |
| INSTITUTION DISTRIBUTORS | | || | |
| INSURANCE AGENCY, | | || | |
| INC. OF MASS. | | || | AFFILIATE |
| |-- ====| AGENCY OF |
|Common Stock: 100 Shares | | | OHIO, INC |
|------------ | | | |
| | | | |
|NFIDAI-100% | | | |
----------------------------- | -----------------------
----------------------------- |
| NATIONWIDE FINANCIAL | |
| INSTITUTION DISTRIBUTORS | |
| INSURANCE AGENCY, INC. | |
| OF NEW MEXICO |--
| |
|Common Stock: 100 Shares |
|------------ |
| |
|NFIDAI-100% |
-----------------------------
</TABLE>
<PAGE> 76
<TABLE>
<CAPTION>
(Center)
NATIONWIDE(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 $1,182,959,447 |
|FIRE 649,510 111,385,185 |
-------------------|---------------------
|--------------------------------------------------------------
---------------|-------------
| NATIONWIDE FINANCIAL |
| SERVICES, INC. (NFS) |
| |
|Common Stock: Control: |
|------------ ------- |
| |
| |
|Class A Public-100% |
|CLASS B NW CORP-100% |
---------------|-------------
|
-----------|-------------------------|-------------------------|--------------------------|-------------------------|
| | | | |
-----------|------------ ------------|------------ ------------|------------ -------------|------------ ------------|-------------
|NFS DISTRIBUTORS, INC.| | NATIONWIDE FINANCIAL | | NATIONWIDE FINANCIAL | |PENSION ASSOCIATES, INC.| |VILLANOVA CAPITAL, INC. |
| (NFSDI) | | SERVICES CAPITAL | |SERVICES (BERMUDA) INC.| |Common Stock: 1,000 | |Common Stock: 958,750 |
| | | TRUST II | |Common Stock: 250,000 | |------------ Shares | |------------- Shares |
| | | | |------------- Shares | | | |NFS-96% |
| | | | | Cost | | Cost | |Preferred Stock: 500,000|
|NFS-100% | | | | ---- | | ---- | |--------------- Shares |
| | | NFS-100% | |NFS-100% $3,500,000 | | NFS-100% $2,839,392| |NFS-100% |
-----------|------------ ------------------------- ------------------------- -------------------------- ------------|-------------
|
-----------|---------|----------------|--------------------------| |-------------------------|---------------
-----------|-------- | ---------------|------------ -------------|------------ -----------|------------- -----------|-------------
|NATIONAL DEFERRED | | |THE 401(k) COMPANIES, INC.| | NATIONWIDE RETIREMENT | | VILLANOVA S.A. CAPITAL| | MORLEY FINANCIAL |
|COMPENSATION, INC.| | | (401(k)) | | SOLUTIONS, INC. (NRS)| | TRUST (VSA) | |SERVICES, INC. (MORLEY)|
| | | | | |Common Stock: 236,494 | | | |Common Stock: 82,343 |
| | | |Common Stock: Control | |------------- Shares | | | |------------ Shares |
| | | |------------- ------- | | | | | | |
|NFSDI-100% | | |Class A Other-100% | | | | | |VILLANOVA CAPITAL, INC.|
| | | |Class B NFS-100% | |NFSDI-100% | |DELAWARE BUSINESS TRUST| |-100% |
---||--------------- | ---------------------------- -------------|------------ -----------------|------- -----------|-------------
|| | | | | |
|| | | | | |------------|
|| | | | | |
|| --------------|------------|---------------------------- | -------------------------- | ---------------------------- |
|| | IRVIN L. SCHWARTZ ||| NATIONWIDE RETIREMENT | | |NATIONWIDE RETIREMENT | | | NATIONWIDE | |
|| | AND ASSOCIATES, INC. |||SOLUTIONS, INC. OF ALABAMA| | | SOLUTIONS, INC. OF | | | INVESTORS SERVICES, INC. | |
|| | ||| | | | NEW MEXICO | | | | |
|| |Common Stock: Control: |||Common Stock: 10,000 | | | Common Stock: 1,000 | | |Common Stock: 5 | |
===== |------------- -------- |||------------- Shares |--|--| ------------- Shares | |--|------------- Shares | |
|Class A Other-100%||| Cost | | | Cost | | | Cost | |
|Class B NFSDI-100%||| ---- | | | ---- | | | ---- | |
| |||NRS-100% $1,000 | | |NRS-100% $1,000 | | |VSA-100% $5,000 | |
---------------------------|---------------------------- | -------------------------- | ---------------------------- |
| | | |
---------------------------|---------------------------- | -------------------------- | ---------------------------- |
| 401(k) INVESTMENT ||| NATIONWIDE RETIREMENT | | | NATIONWIDE RETIREMENT | | | NATIONWIDE GLOBAL FUNDS | |
| SERVICES, INC. |||SOLUTIONS, INC. OF ARIZONA| | | SOLUTIONS, INC. OF | | | | |
| ||| | | | SO. DAKOTA | | | | |
|Common Stock: 1,000,000 |||Common Stock: 1,000 | | |Common Stock: 1,000 | | | | |
|------------ Shares |-|------------- Shares |--|--|------------- Shares | |==| LUXEMBOURG SICAV | |--
| ||| Cost | | | Cost | | | | |
| Cost ||| ---- | | | ---- | | | | |
| ---- |||NRS-100% $1,000 | | |NRS-100% $1,000 | | | | |
|401(k)-100% $7,800 ||---------------------------- | -------------------------- | ---------------------------- |
---------------------------| | | |
|---------------------------- | -------------------------- | ---------------------------- |
---------------------------|| NATIONWIDE RETIREMENT | | | NATIONWIDE RETIREMENT | | | ALLIED GROUP MERCHANT | |
| 401(k) INVESTMENT ||| SOLUTIONS, INC. OF | | | SOLUTIONS, INC. | | | BANKING CORPORATION | |
| ADVISORS, INC. ||| ARKANSAS | | | OF WYOMING | | | | |
| |||Common Stock: 50,000 |-----|Common Stock: 500 Shares| |--|Common Stock: 10,000 | |--
|Common Stock: 1,000 |||------------- Shares | | |------------- | |------------- Shares | |
|------------ Shares |-| Cost | | | Cost | | Cost | |
| ||| ---- | | | ---- | | ---- | |
| Cost |||NRS-100% $500 | | |NRS-100% $500 | |VSA-100% $146,653 | |
| ---- ||---------------------------- | -------------------------- ---------------------------- |
|401(k)-100% $1,000 || | |
---------------------------|---------------------------- | -------------------------- ---------------------------- |
|| NATIONWIDE RETIREMENT | | | NATIONWIDE RETIREMENT | | UNION BOND | |
---------------------------|| SOLUTIONS, INS. | | | SOLUTIONS, INC. | | & TRUST COMPANY | |
| 401(k) COMPANY ||| AGENCY, INC. | | | OF OHIO | | | |
| |||Common Stock: 1,000 | | | | |Common Stock: 2,000 | |
|Common Stock: 855,000 |||------------- Shares |--|==| | |------------- Shares |--|--
|------------ Shares ||| | | | | | | |
| ||| Cost | | | | | Cost | |
| Cost ||| ---- | | | | | ---- | |
| ---- |-|NRS-100% $1,000 | | | | |Morley-100% $50,000 | |
|401(k)-100% $1,000 ||---------------------------- | -------------------------- ---------------------------- |
---------------------------| | |
|---------------------------- | -------------------------- ---------------------------- |
---------------------------|| NATIONWIDE RETIREMENT | | | NATIONWIDE RETIREMENT | | PORTLAND INVESTMENT | |
| |||SOLUTIONS, INC. OF MONTANA| | | SOLUTIONS, INC. OF | | SERVICES, INC. | |
| ||| | | | OKLAHOMA | | | |
| RIVERVIEW AGENCY, INC. |||Common Stock: 500 | | | | |Common Stock: 1,000 | |
| |||------------- Shares |--|==| | |------------- Shares |--|--
| ||| Cost | | | | | Cost | |
| |=| ---- | | | | | ---- | |
| | |NRS-100% $500 | | | | |Morley-100% $25,000 | |
--------------------------- ---------------------------- | -------------------------- ---------------------------- |
| |
---------------------------- | -------------------------- ---------------------------- |
| NATIONWIDE RETIREMENT | | | NATIONWIDE RETIREMENT| | MORLEY & | |
| SOLUTIONS, INC. OF NEVADA| | | SOLUTIONS, INC. | | ASSOCIATES, INC. | |
| | | | OF TEXAS | | | |
|Common Stock: 1,000 |-- ==| | |Common Stock: 3,500 |--|
|------------- Shares | | | |------------- Shares |
| Cost | | | | Cost |
| ---- | | | | ---- |
|NRS-100% $1,000 | | | |Morley-100% $1,000 |
---------------------------- -------------------------- ----------------------------
</TABLE>
<PAGE> 77
<TABLE>
<CAPTION>
(Right)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
---------------|-------------- ------------------------------- | ----------------------------
| NATIONWIDE GLOBAL | | GATES MCDONALD | | | NATIONWIDE |
| HOLDINGS, INC. (NGH) | | & COMPANY (GATES) | | |HEALTH PLANS, INC. (NHP) |
| | | | | | |
|Common Stock: 1 Share | --|Common Stock: 254 Shares | | |---|Common Stock: 100 Shares |
|------------ | | |------------ | | | |------------ |
| Cost | | | Cost | | | | Cost |
| ---- | | | ---- | | | | ---- |
|NW Corp.-100% $257,000,000 | | |NW Corp.-100% $25,683,532 | | | | |
| | | |------------------------------ | | |NW Corp.-100% $14,603,732|
------------------------------ | | | ----------------------------
| |------------------------------ | | ----------------------------
| | MEDPROSOLUTIONS, INC. | | | | NATIONWIDE MANAGEMENT |
------------------------------ --| | | | | SYSTEMS, INC. |
| VILLANOVA MUTUAL FUND | | | Cost | | | | |
| CAPITAL TRUST (VMF) | | | ---- | | |---|Common Stock: 100 Shares |
----|----| | | |Gates-100% $6,700,000 | | | |------------- |
| | | | | | | | | Cost |
| | | | | | | | | ---- |
| | | | ------------------------------- | | |NHP Inc.-100% $25,149 |
| | | | | | ----------------------------
| | | | |------------------------------ | | ----------------------------
| | DELAWARE BUSINESS TRUST | | | GATES MCDONALD & | | | | NATIONWIDE |
| ------------------------------ | | COMPANY OF NEW YORK, INC. | | | | AGENCY, INC. |
| --| | | | | |
| ------------------------------ | |Common Stock: 3 Shares | | |---|Common Stock: 100 Shares |
| | NORTHPOINTE | | |------------ | | |------------ |
| | CAPITAL LLC | | | Cost | | | Cost |
| | | | | ---- | | | ---- |
|----| | | |Gates-100% $106,947 | | |NHP Inc.-99% $116,077 |
| | | ------------------------------- | ----------------------------
| | | |
| | | ------------------------------- | ----------------------------
|VILLANOVA CAPITAL, INC.-100%| | | GATES MCDONALD & | | | MRM INVESTMENTS, INC. |
------------------------------ | | COMPANY OF NEVADA | | | |
--| | -------|Common Stock: 1 Shares |
------------------------------ | |Common Stock: 40 Shares | |------------ |
| EXCALIBER FUNDING | | |------------ | | Cost |
| CORPORATION | | | Cost | | ---- |
---------|Common Stock: 1,000 Shares | | | ---- | |NW Corp.-100% $7,000,000 |
|------------- | | |Gates-100% $93,750 | ----------------------------
| Cost | | -------------------------------
| ---- | |
|Morley-100% $1,000 | | -------------------------------
------------------------------ | | GATES MCDONALD |
| | HEALTH PLUS, INC. |
------------------------------ --| |
| CALIBER FUNDING | | |Common Stock: 200 Shares |
| CORPORATION | | |------------ |
| | | | Cost |
---------| | | | ---- |
| | | |Gates-100% $2,000,000 |
| Morley-100% | | -------------------------------
| | |
------------------------------ | -------------------------------
| |NEVADA INDEPENDENT COMPANIES-|
| |MANUFACTURING TRANSPORTATION |
| | AND DISTRIBUTION |
--| |
| |Common Stock: 1,000 Shares |
| |------------ |
| |Gates-100% |
| -------------------------------
|
------------------------------ | -------------------------------
| MORLEY RESEARCH | | | NEVADA INDEPENDENT |
| ASSOCIATES, LTD. | | | COMPANIES-HEALTH AND |
---------| | --| NONPROFIT |
|Common Stock: 1,000 Shares | | |Common Stock: 1,000 Shares |
|------------- | | |------------ |
| Cost | | | |
| ---- | | |Gates-100% |
|Morley-100% $1,000 | | -------------------------------
------------------------------ |
| -------------------------------
------------------------------ | | NEVADA INDEPENDENT |
| MORLEY CAPITAL | | | COMPANIES-CONSTRUCTION |
| MANAGEMENT | --| |
| | | |Common Stock: 1,000 Shares |
---------|Common Stock: 500 Shares | | |------------ |
|------------- | | | |
| Cost | | |Gates-100% |
| ---- | | -------------------------------
|Morley-100% $5,000 | |
------------------------------ | -------------------------------
| | NEVADA INDEPENDENT |
| | COMPANIES-HOSPITALITY AND | Subsidiary Companies - Solid Line
--| ENTERTAINMENT | Contractual Association - Double Line
| | Limited Liability Company - Dotted Line
|Common Stock: 1,000 Shares |
|------------ |
| |
|Gates-100% | June 30, 2000
-------------------------------
Page 2
</TABLE>
<PAGE> 78
Item 27. NUMBER OF CONTRACT OWNERS
N/A.
Item 28. INDEMNIFICATION
Provision is made in Nationwide's Amended and Restated Code of
Regulations and expressly authorized by the General Corporation
Law of the State of Ohio, for indemnification by Nationwide 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 Nationwide, 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 Nationwide pursuant to the
foregoing provisions, Nationwide 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) Waddell & Reed, Inc. acts as principal underwriter and
general distributor for the:
Waddell & Reed Advisors Funds
Waddell & Reed Advisors Funds, Inc.
Waddell & Reed Advisors Accumulative Fund
Waddell & Reed Advisors Bond Fund
Waddell & Reed Advisors Income Fund
Waddell & Reed Advisors Science and Technology Fund
Waddell & Reed Advisors Asset Strategy Fund, Inc.
Waddell & Reed Advisors Cash Management, Inc.
Waddell & Reed Advisors Continental Income Fund, Inc.
Waddell & Reed Advisors Global Bond Fund (formerly,
Waddell & Reed Advisors High Income Fund II, Inc.)
Waddell & Reed Advisors Government Securities Fund, Inc.
Waddell & Reed Advisors High Income Fund, Inc.
Waddell & Reed Advisors International Growth Fund, Inc.
Waddell & Reed Advisors Municipal Bond Fund, Inc.
Waddell & Reed Advisors Municipal High Income Fund, Inc.
Waddell & Reed Advisors New Concepts Fund, Inc.
Waddell & Reed Advisors Retirement Shares, Inc.
Waddell & Reed Advisors Small Cap Fund, Inc.
Waddell & Reed Advisors Tax-Managed Equity Fund, Inc.
<PAGE> 79
Waddell & Reed Advisors Vanguard Fund, Inc.
W&R Funds, Inc.
Asset Strategy Fund
High Income Fund
International Growth Fund
Large Cap Growth Fund
Limited-Term Bond Fund
Mid Cap Growth Fund Money Market Fund
Municipal Bond Fund
Science and Technology Fund
Small Cap Growth Fund Tax-Managed Equity Fund
Total Return Fund
Target/United Funds, Inc. (to be renamed W&R/Target Funds,
Inc.)
Asset Strategy Portfolio
Balanced Portfolio
Bond Portfolio
Growth Portfolio
High Income Portfolio
Income Portfolio
International Growth Portfolio
Large Cap Growth Portfolio
Mid Cap Growth Portfolio
Science and Technology Portfolio
Small Cap Growth Portfolio
Tax-Managed Equity Portfolio
Total Return Portfolio.
(b) WADDELL & REED, INC.
DIRECTORS AND OFFICERS
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
POSITIONS AND OFFICES
NAME AND BUSINESS ADDRESS WITH UNDERWRITER
------------------------------------------------------------------------------------------------------------------
<S> <C>
Keith A. Tucker Director, Chairman of the Board
6300 Lamar Ave.
Overland Park, KS 66202
------------------------------------------------------------------------------------------------------------------
Robert L. Hechler Director, President, Chief Executive
6300 Lamar Ave. Officer and Treasurer
Overland Park, KS 66202
------------------------------------------------------------------------------------------------------------------
Henry J. Herrmann Director
6300 Lamar Ave.
Overland Park, KS 66202
------------------------------------------------------------------------------------------------------------------
Robert J. Williams Executive Vice President
6300 Lamar Ave. and National Sales Manager
Overland Park, KS 66202
------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 80
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
POSITIONS AND OFFICES
NAME AND BUSINESS ADDRESS WITH UNDERWRITER
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Thomas W. Butch Executive Vice President
6300 Lamar Ave. and Chief Marketing Officer
Overland Park, KS 66202
------------------------------------------------------------------------------------------------------------------
Daniel C. Schulte Senior Vice President, Secretary
6300 Lamar Ave. and Chief Legal Officer
Overland Park, KS 66202
------------------------------------------------------------------------------------------------------------------
(c)
------------------------------ ------------------------ ----------------------- ------------------ -------------------
NAME OF PRINCIPAL UNDERWRITER NET UNDERWRITING COMPENSATION ON BROKERAGE COMPENSATION
DISCOUNTS AND REDEMPTION OR COMMISSIONS
COMMISSIONS ANNUITIZATION
------------------------------ ------------------------ ----------------------- ------------------ -------------------
Waddell & Reed, Inc. N/A N/A N/A N/A
------------------------------ ------------------------ ----------------------- ------------------ -------------------
</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
<PAGE> 81
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 Internal Revenue Code,
are issued by Nationwide 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 Internal Revenue Code.
Nationwide 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 Nationwide.
<PAGE> 82
SIGNATURES
As required by the Securities Act of 1933, and the Investment Company Act of
1940, the Registrant, NATIONWIDE VA SEPARATE ACCOUNT-D, certifies that it meets
the requirements of the Securities Act for effectiveness of the Registration
Statement and has caused this Registration Statement to be signed on its behalf
in the City of Columbus, and State of Ohio, on this 18th day of September, 2000.
NATIONWIDE VA SEPARATE ACCOUNT-D
-------------------------------------------------------
(Registrant)
NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY
--------------------------------------------------------------
(Depositor)
By/s/STEVEN SAVINI, ESQ.
------------------------------------------------------
Steven Savini, Esq.
As required by the Securities Act of 1933, this Registration Statement has been
signed by the following persons in the capacities indicated on the 18th day of
September, 2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
<S> <C> <C>
LEWIS J. ALPHIN Director
----------------------------------------
Lewis J. Alphin
A. I. BELL Director
----------------------------------------
A. I. Bell
NANCY C. BREIT Director
----------------------------------------
Nancy C. Breit
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
W.G. JURGENSEN Chief Executive Officer Elect
---------------------------------------- and Director
W.G. Jurgensen
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/ STEVEN SAVINI
---------------------------------------- --------------------------------------
Arden L. Shisler Steven Savini
Attorney-in-Fact
ROBERT L. STEWART Director
----------------------------------------
Robert L. Stewart
</TABLE>
