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SUPPLEMENT DATED JULY 1, 1999 TO
PROSPECTUS DATED MAY 1, 1999 FOR
GROUP FLEXIBLE FUND RETIREMENT CONTRACTS
ISSUED BY
NATIONWIDE LIFE INSURANCE COMPANY
THROUGH ITS
NACo VARIABLE ACCOUNT
THIS SUPPLEMENT UPDATES CERTAIN INFORMATION CONTAINED IN YOUR PROSPECTUS. PLEASE
READ IT AND KEEP IT FOR FUTURE REFERENCE.
1. EFFECTIVE JULY 2, 1999, THE LISTING OF AVAILABLE UNDERLYING MUTUAL FUND
OPTIONS AT PAGE 1 OF THE PROSPECTUS IS AMENDED TO ADD THE FOLLOWING:
o The Brown Capital Management Small Company Fund
o Nationwide Separate Account Trust - Nationwide(R) Income Fund
(subadvisers: NCM Capital Management Group, Inc. and Smith Graham &
Co. Asset Managers, L.P.)
2. THE UNDERLYING MUTUAL FUND ANNUAL EXPENSES TABLE AT PAGES 6 AND 7 OF THE
PROSPECTUS IS AMENDED TO ADD THE FOLLOWING INFORMATION:
<TABLE>
<CAPTION>
UNDERLYING MUTUAL FUND ANNUAL EXPENSES
(as a percentage of underlying mutual fund net assets, after expense reimbursement)
- ----------------------------------------------------------------------------------------------------------
Management Other 12b-1 Fees Total Mutual
Fees Expenses Fund Expenses
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
The Brown Capital Management Small 0.65% 0.85% 0.00% 1.50%
Company Fund
- ----------------------------------------------------------------------------------------------------------
NSAT - Nationwide Income Fund 0.04% 0.71% 0.00% 0.75%
- ----------------------------------------------------------------------------------------------------------
NSAT - Nationwide Small Company Fund 1.00% 0.25% 0.00% 1.25%
- ----------------------------------------------------------------------------------------------------------
Nationwide(R)Growth Fund - Class D 0.58% 0.27% 0.00% 0.85%
- ----------------------------------------------------------------------------------------------------------
Nationwide(R)Fund - Class D 0.56% 0.21% 0.00% 0.77%
- ----------------------------------------------------------------------------------------------------------
Nationwide(R)Money Market Fund 0.40% 0.29% 0.00% 0.69%
- ----------------------------------------------------------------------------------------------------------
</TABLE>
The expenses shown above are deducted by the underlying mutual fund before it
provides Nationwide with the daily net asset value. Nationwide then deducts
applicable variable account charges from the net asset value to calculate the
unit value of the corresponding sub-account. The management fees and other
expenses are more fully described in the prospectus for each underlying mutual
fund. Information relating to the underlying mutual funds was provided by the
underlying mutual funds and not independently verified by Nationwide.
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Some underlying mutual funds are subject to fee waivers and expense
reimbursements. The following chart shows what the expenses would have been for
such funds without fee waivers and expense reimbursements.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
Management Other 12b-1 Fees Total Mutual
Fees Expenses Fund Expenses
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
The Brown Capital Management Small 1.00% 0.85% 0.00% 1.85%
Company Fund
- ---------------------------------------------------------------------------------------------------------
NSAT - Nationwide Income Fund 0.45% 0.71% 0.00% 1.16%
- ----------------------------------------------------------------------------------------------------------
</TABLE>
3. THE "EXAMPLE" LOCATED AT PAGES 8 THROUGH 10 OF THE PROSPECTUS IS AMENDED TO
ADD THE FOLLOWING INFORMATION:
EXAMPLE
The following chart shows the amount of expenses (in dollars) that would be
incurred under the contracts 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 lesser than those shown below.
The example reflects expenses of both the variable account and the underlying
mutual funds. Deductions for premium taxes are not reflected but may apply. The
example reflects CDSC at 5% of total purchase payments and the maximum Variable
Account Annual Expense Fee (0.95% of average account value). The example
reflects the Participant Account Maintenance Charge, expressed as a percentage
of average account value. Since the average contract value is greater than
$1,000, the expense effect of the Participant Account Maintenance Charge is
reduced accordingly.
For those contracts that have a different CDSC schedule or a lower Variable
Account Annual Expense Fee, the actual expenses are reduced.
The summary of contract expenses and example are to help contract owners
understand expenses associated with the contracts.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
If you surrender your If you do not surrender your If you annuitize your
contract at the end of the contract at the end of the contract at the end of the
applicable time period applicable time period applicable time period
- --------------------------------------------------------------------------------------------------------------------------
1 3 5 10 1 3 5 10 1 3 5 10
Yr. Yrs. Yrs. Yrs. Yr. Yrs. Yrs. Yrs. Yr. Yrs. Yrs. Yrs.
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
The Brown Capital Management 76 129 185 337 26 79 135 287 * 79 135 287
Small Company Fund
- --------------------------------------------------------------------------------------------------------------------------
NSAT - Nationwide Income Fund 68 105 145 257 18 55 95 207 * 55 95 207
- --------------------------------------------------------------------------------------------------------------------------
NSAT - Nationwide Small 73 121 172 311 23 71 122 261 * 71 122 261
Company Fund
- --------------------------------------------------------------------------------------------------------------------------
Nationwide(R)Growth Fund - 69 108 151 268 19 58 101 218 * 58 101 218
Class D
- --------------------------------------------------------------------------------------------------------------------------
Nationwide(R)Fund - Class D 68 106 146 259 18 56 96 209 * 56 96 209
- --------------------------------------------------------------------------------------------------------------------------
Nationwide(R)Money Market Fund 67 103 142 250 17 53 92 200 * 53 92 200
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
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5. "APPENDIX A: OBJECTIVES FOR UNDERLYING MUTUAL FUNDS" AT PAGES 32 THROUGH 40
OF THE PROSPECTUS IS AMENDED TO ADD THE FOLLOWING INFORMATION:
THE BROWN CAPITAL MANAGEMENT SMALL COMPANY FUND
The investment objective of the Fund is to seek capital appreciation principally
through investment in the equity securities of those companies with operating
revenues of $250 million or less at the time of the initial investment. Current
income is of secondary importance.
NATIONWIDE SEPARATE ACCOUNT TRUST - NATIONWIDE INCOME FUND
The Fund seeks to provide as high a level of income as is consistent with
reasonable concern for safety of principal. Under normal conditions, the Fund
invests primarily in investment grade corporate bonds and U.S. Government
Securities. The Fund is subadvised by NCM Capital Management Group, Inc. and
Smith Graham & Co. Asset Managers, L.P.
6. "APPENDIX B: CONDENSED FINANCIAL INFORMATION" AT PAGES 41 THROUGH 75 OF THE
PROSPECTUS IS HEREBY AMENDED TO INCLUDE THE FOLLOWING INFORMATION AFTER THE
TABLES:
The Brown Capital Management Small Company Fund and the NSAT - Nationwide Income
Fund were added to the variable account on July 2, 1999, and therefore, no
condensed financial information is available.
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