<PAGE> 1
As filed with the Securities and Exchange Commission.
'33 Act Registration No.2-51911
'40 Act Registration No.811-2804
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933
Post-Effective Amendment No. 35 /x/
and
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
Amendment No. 36
NATIONWIDE DC VARIABLE ACCOUNT
------------------------------
(Exact Name of Registrant)
NATIONWIDE LIFE INSURANCE COMPANY
---------------------------------
(Name of Depositor)
ONE NATIONWIDE PLAZA, COLUMBUS, OHIO 43215
------------------------------------------
(Address of Depositor's Principal Executive Offices) (Zip Code)
Depositor's Telephone Number, including Area Code: (614) 249-7111
--------------
GORDON E. MCCUTCHAN, SECRETARY, ONE NATIONWIDE PLAZA, COLUMBUS, OHIO 43215
--------------------------------------------------------------------------
(Name and Address of Agent for Service)
This Post-Effective Amendment amends the Registration Statement in
respect of the Prospectus, Statement of Additional Information, and the
Financial Statements.
It is proposed that this filing will become effective (check appropriate
space)
immediately upon filing pursuant to paragraph (b) of Rule 485
------------
X on May 1, 1995, pursuant of paragraph (b) of Rule 485
------------
60 days after filing pursuant to paragraph (a)(i) of Rule 485
------------
on (date), pursuant to paragraph (a)(i) of Rule 485
-------------
75 days after filing pursuant to paragraph (a)(ii) of Rule
------------- 485
on (date), pursuant to paragraph (a)(ii) of Rule 485
-------------
Registrant has registered an indefinite number of securities by a prior
registration statement in accordance with Rule 24f-2 under the Investment
Company Act of 1940. Pursuant to Paragraph (a)(3) thereof, a
non-refundable fee in the amount of $500 has been paid to the Commission.
Registrant filed its Rule 24f-2 Notice for the fiscal year ended December
31, 1994, on February 23, 1995.
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
1 of 125
<PAGE> 2
NATIONWIDE DC VARIABLE ACCOUNT
REFERENCE TO ITEMS REQUIRED BY FORM N-4
<TABLE>
<CAPTION>
N-4 ITEM PAGE
<S> <C> <C>
Part A INFORMATION REQUIRED IN A PROSPECTUS
Item 1. Cover page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Item 2. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Item 3. Synopsis or Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Item 4. Condensed Financial Information . . . . . . . . . . . . . . . . . . . . . 16
Item 5. General Description of Registrant, Depositor, and Portfolio Companies . . 24
Item 6. Deductions and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . 25
Item 7. General Description of Variable Annuity Contracts . . . . . . . . . . . . 27
Item 8. Annuity Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Item 9. Death Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Item 10. Purchases and Contract Value . . . . . . . . . . . . . . . . . . . . . . . 29
Item 11. Redemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Item 12. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Item 13. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Item 14. Table of Contents of the Statement of Additional Information . . . . . . . 39
Part B INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION
Item 15. Cover Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Item 16. Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Item 17. General Information and History . . . . . . . . . . . . . . . . . . . . . 47
Item 18. Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Item 19. Purchase of Securities Being Offered . . . . . . . . . . . . . . . . . . . 48
Item 20. Underwriters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Item 21. Calculation of Performance . . . . . . . . . . . . . . . . . . . . . . . . 48
Item 22. Annuity Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Item 23. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Part C OTHER INFORMATION
Item 24. Financial Statements and Exhibits . . . . . . . . . . . . . . . . . . . . 92
Item 25. Directors and Officers of the Depositor . . . . . . . . . . . . . . . . . 94
Item 26. Persons Controlled by or Under Common Control with the Depositor or
Registrant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
Item 27. Number of Contract Owners . . . . . . . . . . . . . . . . . . . . . . . . 106
Item 28. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
Item 29. Principal Underwriters . . . . . . . . . . . . . . . . . . . . . . . . . . 106
Item 30. Location of Accounts and Records . . . . . . . . . . . . . . . . . . . . . 109
Item 31. Management Services . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
Item 32. Undertakings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
</TABLE>
2 OF 125
<PAGE> 3
NATIONWIDE LIFE INSURANCE COMPANY
Home Office
P. O. Box 16766
One Nationwide Plaza
Columbus, Ohio 43216
1-800-545-4730 (TTY: 1-800-848-0833)
GROUP FLEXIBLE FUND RETIREMENT CONTRACTS
ISSUED BY THE NATIONWIDE DC VARIABLE ACCOUNT OF
NATIONWIDE LIFE INSURANCE COMPANY
The Group Flexible Fund Retirement Contracts (the "Contract" or
"Contracts") described in this Prospectus are designed for use in
connection with supplemental deferred compensation plans for employees of
tax exempt entities. Such Plans will generally qualify for favorable tax
treatment under Sections 401, 403(b) or 457 of the Internal Revenue Code
("Code"), but may also include other nonqualified deferred compensation
plans. Contracts will be issued only to fund deferred compensation plans to
employers who are exempt from taxation. The employees are generally not
subject to tax until distributions are received from the Plan. Purchase
Payments made at any time by or on behalf of any Participant must be at
least $20 per month. The assets of Code Section 457 Plans are part of the
general assets of the Owner, subject to the claims of the Owner's
creditors. The Participants in such Plans have a contractual claim against
the Owner for the benefits promised by such Plans.
Purchase Payments are allocated to the Nationwide DC Variable Account
(the "DCVA"). The DCVA is a unit investment trust with 44 Series of unit
values, each reflecting investment results of a different management
investment company. Amounts equivalent to the obligations of Nationwide
Life Insurance Company ("the Company") under each Series will be invested
in the specified management investment company. (See Appendix of
Participating Funds).
This Prospectus provides you with the basic information you should
know about the Group Flexible Fund Retirement Contracts issued by the
Nationwide DC Variable Account before investing. You should read it and
keep it for future reference. A Statement of Additional Information dated
May 1, 1995 containing further information about the Contracts and the DCVA
has been filed with the Securities and Exchange Commission. You can obtain
a copy without charge from the Company by calling the number listed above,
or writing P. O. Box 16766, One Nationwide Plaza, Columbus, Ohio 43216.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE STATEMENT OF ADDITIONAL INFORMATION, DATED MAY 1, 1995, IS INCORPORATED
HEREIN BY REFERENCE. THE TABLE OF CONTENTS FOR THE STATEMENT OF ADDITIONAL
INFORMATION APPEARS ON PAGE 37 OF THIS PROSPECTUS.
THE DATE OF THIS PROSPECTUS IS MAY 1, 1995.
1
3 of 125
<PAGE> 4
GLOSSARY OF TERMS
ACCUMULATION UNIT--This is a statistical index measuring the net investment
results of each Series of the DCVA. It is the unit of measurement used to
determine the value of a Contract and each Participant Account.
ACTUARIAL RISK FEE--The Actuarial Risk Fee is the charge made for mortality and
expense risk and administration of the DCVA. It is computed on a daily basis
and is equal to an annual rate of .95% of the daily net asset value of the
DCVA.
ADMINISTRATIVE CHARGE--The maximum Administrative Charge is $15 per Participant
per year to reimburse the Company for certain administrative expenses relating
to the maintenance of individual Participant records and the mailing of
periodic statements to Participants.
BENEFICIARY--The Beneficiary is the person named in the application to receive
certain benefits under the Contract upon the death of the designated annuitant.
The Beneficiary can be changed by the Owner as set forth in the Contract.
CODE--The Internal Revenue Code of 1986, as amended.
COMPANY-- Nationwide Life Insurance Company.
CONTINGENT BENEFICIARY--The Contingent Beneficiary is the person named in the
application to be the Beneficiary if the named Beneficiary is not living at the
time of the death of the designated annuitant.
CONTRACT--This is the group flexible fund retirement contract issued by the
Company to the Owner under which the Company invests Purchase Payments made by
the Owner and assists the Owner in making retirement income payments at
specified dates.
CONTRACT DATE--The Contract Date is the date shown in the Contract.
CONTRACT YEAR--Each period starting with either (1) the Contract Date or (2) a
Contract Anniversary. It ends immediately prior to the next Contract
Anniversary.
CONTRACT ANNIVERSARY--An anniversary of the Contract Date.
FUND--This is the registered management investment company, specified in the
Contract application, in which the assets of a Series of the DCVA will be
invested.
GENERAL ACCOUNT--This is an account comprised of all assets of the Company
other than those in any segregated asset account.
GROUP FIXED CONTRACT--The Company's Group Fixed Fund Retirement Contract or
Group Fixed Tax Deferred Annuity Contract.
NATIONWIDE DC VARIABLE ACCOUNT (DCVA)--This is a segregated investment account
established by the Company in which amounts equivalent to the Company's
obligations under the Contract are held for all Participants, and for those
Participants during retirement who have annuitized.
OPTIONAL RETIREMENT INCOME FORMS--This is the method for making annuity
payments. Several forms are available under the Contract.
2
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<PAGE> 5
OWNER--This is the employer or other entity to which the Contract is issued.
PARTICIPANT--This is an eligible employee, member, or other person who is
entitled to benefits under the Plan. Such persons are determined and
reported to the Company by the Owner.
PARTICIPANT ACCOUNT--This is an account established by the Company for each
Participant in which all financial transactions occurring with respect to a
Participant, under this Contract, other than the purchase and payment of an
annuity made from the Company's General Account, are recorded.
PARTICIPANT ACCOUNT YEAR--For each Participant, this is each one year
period starting with either the Participant Effective Date or a Participant
Anniversary.
PARTICIPANT ANNIVERSARY--This is an anniversary of the Participant
Effective Date.
PARTICIPANT EFFECTIVE DATE--For each Participant, this is the first date
Accumulation Units are credited to the Participant's Account on behalf of
such Participant under the Contract.
PLAN--This is a retirement plan which receives favorable tax treatment
under the provisions of the Code. The Plan document is referred to in the
Contract as the Plan. The assets of any Plan established pursuant to Code
Section 457 are part of the general assets of the Owner, and are subject to
the claims of the Owner's creditors. The Participants in such Plans have a
contractual claim against the Owner for the benefits promised by the Plan.
PURCHASE PAYMENTS--These are amounts paid to the Company, pursuant to the
Contract, in order to provide retirement income benefits.
RETIRED PARTICIPANT--This is a Participant for whom payments under an
Optional Retirement Income Form are being made.
SERIES--These are sub-accounts of the DCVA, to which specific Fund shares
are allocated and for which Accumulation Units are separately maintained.
VALUATION DATE--This is each day the New York Stock Exchange and the
Company's Home Office is open for business or any other day during which
there is a sufficient degree of trading of the DCVA's Fund shares that the
current net asset value of its Accumulation Units might be materially
affected.
VALUATION PERIOD--This is the period of time commencing at the close of
business of the New York Stock Exchange and ending at the close of business
for the next succeeding Valuation Date.
3
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<PAGE> 6
SUMMARY OF CONTRACT EXPENSES
<TABLE>
<S> <C>
PARTICIPANT TRANSACTION EXPENSES
Maximum Deferred Sales Load(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 %
-------
(as a percentage of purchase payments)
ANNUAL CONTRACT FEE(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $15
--------
SEPARATE ACCOUNT ANNUAL EXPENSES
(as a percentage of average account value)
Mortality and Expense Risk Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.50 %
--------
Administration Charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.45 %
--------
Total Separate Account Annual Expenses . . . . . . . . . . . . . . . . . . . . . . . 0.95 %
--------
</TABLE>
FUND ANNUAL EXPENSES(3)
(as a percentage of Fund average net assets)
<TABLE>
<CAPTION>
---------------------------------------------------------
Management Fees Other Expenses Total Fund
Annual Expenses
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AIM Constellation Fund - Institutional
Class .62 .07 .69
- ------------------------------------------------------------------------------------------------
AIM Weingarten Fund - Institutional
Class .61 .04 .65
- ------------------------------------------------------------------------------------------------
The Bond Fund of America(SM), Inc.(4) .37 .32 .69
- ------------------------------------------------------------------------------------------------
Delaware Group Decatur Fund, Inc.- .49 .21 .70
Decatur Income Fund
- ------------------------------------------------------------------------------------------------
Dreyfus Cash Management .20 .00 .20
- ------------------------------------------------------------------------------------------------
The Dreyfus Third Century Fund, Inc. .75 .42 1.17
- ------------------------------------------------------------------------------------------------
The Evergreen Total Return Fund 1.00 .18 1.18
- ------------------------------------------------------------------------------------------------
Federated GNMA Trust-Institutional .40 .20 .60
Shares
- ------------------------------------------------------------------------------------------------
Federated Intermediate Government Trust - .40 .14 .54
Institutional Shares
- ------------------------------------------------------------------------------------------------
Fidelity Asset Manager(TM) .72 .32 1.04
- ------------------------------------------------------------------------------------------------
Fidelity Capital & Income Fund .71 .26 .97
- ------------------------------------------------------------------------------------------------
Fidelity Contrafund .70 .30 1.00
- ------------------------------------------------------------------------------------------------
Fidelity Equity-Income Fund .44 .25 .69
- ------------------------------------------------------------------------------------------------
Fidelity Growth & Income Portfolio .52 .30 .82
- ------------------------------------------------------------------------------------------------
Fidelity Magellan(R) Fund .76 .23 .99
- ------------------------------------------------------------------------------------------------
</TABLE>
(1) Imposed only when it is applicable. (See "Contingent Deferred Sales
Charge".)
(2) The Annual Contract Fee, if applicable, will also be assessed on the date
that amounts held with respect to a Participant are fully withdrawn from
the Contract. (See "Administrative Charge".)
(3) The Fund expenses shown above are assessed at the underlying Fund level and
are not direct charges against DCVA assets or reductions from Contract
values. These Fund expenses are taken into consideration in computing each
Fund's net asset value, which is the share price used to calculate the
DCVA's unit value. There are no front-end load fees (sales charges) at the
underlying Fund level.
(4) A 12b-1 fee is included in the calculation of "Other Expenses".
(Continued on next page)
4
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<PAGE> 7
FUND ANNUAL EXPENSES(1)--CONTINUED
<TABLE>
<CAPTION> ----------------------------------------------------
Management Fees Other Total Fund
Expenses Annual Expenses
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Fidelity OTC Portfolio .50 .38 .88
- ------------------------------------------------------------------------------------------------------
Fidelity Puritan Fund .53 .26 .79
- ------------------------------------------------------------------------------------------------------
The Growth Fund of America(R) , Inc.(2) .39 .39 .78
- ------------------------------------------------------------------------------------------------------
The Income Fund of America(R) , Inc.(2) .32 .31 .63
- ------------------------------------------------------------------------------------------------------
INVESCO Industrial Income Fund, Inc.(2) .49 .43 .92
- ------------------------------------------------------------------------------------------------------
Janus Fund .66 .25 .91
- ------------------------------------------------------------------------------------------------------
Janus Twenty Fund .67 .35 1.02
- ------------------------------------------------------------------------------------------------------
MAS Funds Fixed Income Portfolio .38 .12 .50
- ------------------------------------------------------------------------------------------------------
Massachusetts Investors Growth Stock Fund - .31 .41 .82
Class A(2)
- ------------------------------------------------------------------------------------------------------
MFS(R) Growth Opportunities Fund - Class A(2) .43 .42 .85
- ------------------------------------------------------------------------------------------------------
MFS(R) High Income Fund - Class A(2) .45 .54 .99
- ------------------------------------------------------------------------------------------------------
Nationwide(R) Bond Fund .50 .21 .71
- ------------------------------------------------------------------------------------------------------
Nationwide(R) Fund .50 .13 .63
- ------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Fund expenses shown above are assessed at the underlying Fund
level and are not direct charges against DCVA assets or reductions
from Contract values. These Fund expenses are taken into
consideration in computing each Fund's net asset value, which is
the share price used to calculate the DCVA's unit value. There
are no front-end load fees (sales charges) at the underlying Fund
level.
(2) A 12b-1 fee is included in the calculation of "Other Expenses".
(Continued on next page)
5
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<PAGE> 8
FUND ANNUAL EXPENSES(1)--CONTINUED
<TABLE>
<CAPTION> -----------------------------------------------------------
Management Fees Other Expenses Total Fund
Annual Expenses
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Nationwide(R) Growth Fund .50 .18 .68
- --------------------------------------------------------------------------------------------------
Nationwide(R) Money Market Fund .45 .20 .65
- --------------------------------------------------------------------------------------------------
Neuberger & Berman Guardian Fund .62 .19 .81
- --------------------------------------------------------------------------------------------------
Neuberger & Berman Manhattan Fund, Inc. .69 .26 .95
- --------------------------------------------------------------------------------------------------
New York Venture Fund, Inc.(3) .63 .24 .87
- --------------------------------------------------------------------------------------------------
Putnam Investors Fund - Class A(3) .61 .38 .99
- --------------------------------------------------------------------------------------------------
Putnam Voyager Fund - Class A(3) .55 .55 1.10
- --------------------------------------------------------------------------------------------------
SEI Index Funds - S&P 500 Index .17 .08 .25
Portfolio(2,3)
- --------------------------------------------------------------------------------------------------
Seligman Growth Fund, Inc. -
Class A(3) .49 .41 .90
- --------------------------------------------------------------------------------------------------
Strong Common Stock Fund, Inc. 1.00 .34 1.34
- --------------------------------------------------------------------------------------------------
T. Rowe Price International Stock
Fund(R) .69 .27 .96
- --------------------------------------------------------------------------------------------------
Templeton Foreign Fund(3) .63 .51 1.14
- --------------------------------------------------------------------------------------------------
Templeton Smaller Companies Growth
Fund, Inc.(3) .75 .61 1.36
- --------------------------------------------------------------------------------------------------
Twentieth Century Growth Investors 1.00 .00 1.00
- --------------------------------------------------------------------------------------------------
Twentieth Century Select Investors 1.00 .00 1.00
- --------------------------------------------------------------------------------------------------
Twentieth Century Ultra Investors 1.00 .00 1.00
- --------------------------------------------------------------------------------------------------
</TABLE>
(1) The Fund expenses shown above are assessed at the underlying Fund level and
are not direct charges against DCVA assets or reductions from Contract
values. These Fund expenses are taken into consideration in computing each
Fund's net asset value, which is the share price used to calculate the
DCVA's unit value. There are no front-end load fees (sales charges) at the
underlying Fund level.
(2) The Manager and Administrator have voluntarily waived their fees to
limit new operating expenses to no more than .25% of average net assets of
the Portfolio. Waivers by both the Manager and Administrator are voluntary
and may be terminated at any time.
(3) A 12b-1 fee is included in the calculation of "Other Expenses".
6
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<PAGE> 9
EXAMPLE
The following chart depicts the dollar amount of expenses that would be
incurred under this Contract assuming a $1000 initial purchase payment and
5% annual return on assets.
<TABLE>
<CAPTION> ------------------------------------------
If you surrender your contract
at the end of the applicable time period
------------------------------------------
1 Yr. 3 Yrs. 5 Yrs. 10 Yrs.
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
AIM Constellation Fund - Institutional Class 58 97 138 253
- ------------------------------------------------------------------------------------------------------
AIM Weingarten Fund - Institutional Class 58 96 136 249
- ------------------------------------------------------------------------------------------------------
The Bond Fund of America(SM), Inc. 67 104 143 252
- ------------------------------------------------------------------------------------------------------
Delaware Group Decatur Fund, Inc.--Decatur Income
Fund 68 104 144 253
- ------------------------------------------------------------------------------------------------------
Dreyfus Cash Management 53 81 112 198
- ------------------------------------------------------------------------------------------------------
The Dreyfus Third Century Fund, Inc. 72 119 169 305
- ------------------------------------------------------------------------------------------------------
The Evergreen Total Return Fund 73 120 169 306
- ------------------------------------------------------------------------------------------------------
Federated GNMA Trust-Institutional Shares 66 101 138 242
- ------------------------------------------------------------------------------------------------------
Federated Intermediate Government Trust--Institutional
Shares 57 92 130 237
- ------------------------------------------------------------------------------------------------------
Fidelity Asset Manager(TM) 71 115 162 291
- ------------------------------------------------------------------------------------------------------
Fidelity Capital & Income Fund 70 113 158 283
- ------------------------------------------------------------------------------------------------------
Fidelity Contrafund 62 107 155 287
- ------------------------------------------------------------------------------------------------------
Fidelity Equity-Income Fund 67 104 143 252
- ------------------------------------------------------------------------------------------------------
Fidelity Growth & Income Portfolio 60 101 145 268
- ------------------------------------------------------------------------------------------------------
Fidelity Magellan(R) Fund 71 114 159 285
- ------------------------------------------------------------------------------------------------------
Fidelity OTC Portfolio 60 103 149 274
- ------------------------------------------------------------------------------------------------------
Fidelity Puritan Fund 60 100 144 264
- ------------------------------------------------------------------------------------------------------
The Growth Fund of America(R), Inc. 68 107 148 262
- ------------------------------------------------------------------------------------------------------
The Income Fund of America(R), Inc. 67 102 140 245
- ------------------------------------------------------------------------------------------------------
INVESCO Industrial Income Fund, Inc. 61 105 151 279
- ------------------------------------------------------------------------------------------------------
Janus Fund 61 104 150 277
- ------------------------------------------------------------------------------------------------------
Janus Twenty Fund 62 108 156 289
- ------------------------------------------------------------------------------------------------------
MAS Funds Fixed Income Portfolio 56 91 128 231
- ------------------------------------------------------------------------------------------------------
Massachusetts Investors Growth Stock Fund - Class A 68 105 145 256
- ------------------------------------------------------------------------------------------------------
MFS(R) Growth Opportunities Fund - Class A 69 109 152 270
- ------------------------------------------------------------------------------------------------------
</TABLE>
(Continued on next page)
7
9 of 125
<PAGE> 10
EXAMPLE- CONTINUED
The following chart depicts the dollar amount of expenses that would be
incurred under this Contract assuming a $1000 initial purchase payment and 5%
annual return on assets.
<TABLE>
<CAPTION>
-------------------------------------------
If you surrender your contract
at the end of the applicable time period
-------------------------------------------
1 Yr. 3 Yrs. 5 Yrs. 10 Yrs.
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MFS(R) High Income Fund - Class A 71 114 159 285
- -----------------------------------------------------------------------------------------------------
Nationwide(R) Bond Fund 68 105 144 254
- -----------------------------------------------------------------------------------------------------
Nationwide(R) Fund 67 102 140 245
- -----------------------------------------------------------------------------------------------------
Nationwide(R) Growth Fund 67 104 142 251
- -----------------------------------------------------------------------------------------------------
Nationwide(R) Money Market Fund 67 103 141 248
- -----------------------------------------------------------------------------------------------------
Neuberger & Berman Guardian Fund 60 101 145 267
- -----------------------------------------------------------------------------------------------------
Neuberger & Berman Manhattan Fund, Inc. 70 112 157 281
- -----------------------------------------------------------------------------------------------------
New York Venture Fund, Inc. 69 110 153 272
- -----------------------------------------------------------------------------------------------------
Putnam Investors Fund - Class A 71 114 159 285
- -----------------------------------------------------------------------------------------------------
Putnam Voyager Fund - Class A 72 117 165 297
- -----------------------------------------------------------------------------------------------------
SEI Index Funds--S&P 500 Index Portfolio 63 90 119 202
- -----------------------------------------------------------------------------------------------------
Seligman Growth Fund, Inc. - Class A 70 111 154 275
- -----------------------------------------------------------------------------------------------------
Strong Common Stock Fund, Inc. 74 125 178 323
- -----------------------------------------------------------------------------------------------------
T. Rowe Price International Stock Fund(R) 70 113 158 282
- -----------------------------------------------------------------------------------------------------
Templeton Foreign Fund 63 111 162 302
- -----------------------------------------------------------------------------------------------------
Templeton Smaller Companies Growth Fund 66 118 174 325
- -----------------------------------------------------------------------------------------------------
Twentieth Century Growth Investors 71 114 160 286
- -----------------------------------------------------------------------------------------------------
Twentieth Century Select Investors 71 114 160 286
- -----------------------------------------------------------------------------------------------------
Twentieth Century Ultra Investors 71 114 160 286
- -----------------------------------------------------------------------------------------------------
</TABLE>
(Continued on next page)
8
10 of 125
<PAGE> 11
EXAMPLE-CONTINUED
The following chart depicts the dollar amount of expenses that would be
incurred under this Contract assuming a $1000 initial purchase payment and
5% annual return on assets.
<TABLE>
<CAPTION>
------------------------------------------
If you do not surrender your contract
at the end of the applicable time period
------------------------------------------
1 Yr. 3 Yrs. 5 Yrs. 10 Yrs.
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
AIM Constellation Fund - Institutional Class 18 57 98 213
- ----------------------------------------------------------------------------------------------------
AIM Weingarten Fund - Institutional Class 18 56 96 209
- ----------------------------------------------------------------------------------------------------
The Bond Fund of America(SM), Inc. 17 54 93 202
- ----------------------------------------------------------------------------------------------------
Delaware Group Decatur Fund, Inc.--Decatur Income
Fund 18 54 94 203
- ----------------------------------------------------------------------------------------------------
Dreyfus Cash Management 13 41 72 158
- ----------------------------------------------------------------------------------------------------
The Dreyfus Third Century Fund, Inc. 22 69 119 255
- ----------------------------------------------------------------------------------------------------
The Evergreen Total Return Fund 23 70 119 256
- ----------------------------------------------------------------------------------------------------
Federated GNMA Trust-Institutional Shares 16 51 88 192
- ----------------------------------------------------------------------------------------------------
Federated Intermediate Government Trust--
Institutional Shares 17 52 90 197
- ----------------------------------------------------------------------------------------------------
Fidelity Asset Manager(TM) 21 65 112 241
- ----------------------------------------------------------------------------------------------------
Fidelity Capital & Income Fund 20 63 108 233
- ----------------------------------------------------------------------------------------------------
Fidelity Contrafund 22 67 115 247
- ----------------------------------------------------------------------------------------------------
Fidelity Equity-Income Fund 17 54 93 202
- ----------------------------------------------------------------------------------------------------
Fidelity Growth & Income Portfolio 20 61 105 228
- ----------------------------------------------------------------------------------------------------
Fidelity Magellan(R) Fund 21 64 109 235
- ----------------------------------------------------------------------------------------------------
Fidelity OTC Portfolio 20 63 109 234
- ----------------------------------------------------------------------------------------------------
Fidelity Puritan Fund 20 60 104 224
- ----------------------------------------------------------------------------------------------------
The Growth Fund of America(R), Inc. 18 57 98 212
- ----------------------------------------------------------------------------------------------------
The Income Fund of America(R), Inc. 17 52 90 195
- ----------------------------------------------------------------------------------------------------
INVESCO Industrial Income Fund, Inc. 21 65 111 239
- ----------------------------------------------------------------------------------------------------
Janus Fund 21 64 110 237
- ----------------------------------------------------------------------------------------------------
Janus Twenty Fund 22 68 116 249
- ----------------------------------------------------------------------------------------------------
MAS Funds Fixed Income Portfolio 16 51 88 191
- ----------------------------------------------------------------------------------------------------
Massachusetts Investors Growth Stock Fund - Class A 18 55 95 206
- ----------------------------------------------------------------------------------------------------
MFS(R) Growth Opportunities Fund - Class A 19 59 102 220
- ----------------------------------------------------------------------------------------------------
</TABLE>
(Continued on next page)
9
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<PAGE> 12
EXAMPLE-CONTINUED
The following chart depicts the dollar amount of expenses that would be
incurred under this Contract assuming a $1000 initial purchase payment and 5%
annual return on assets.
<TABLE>
<CAPTION>
-----------------------------------------
If you do not surrender your contract
at the end of the applicable time period
-----------------------------------------
1 Yr. 3 Yrs. 5 Yrs. 10 Yrs.
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MFS(R) High Income Fund - Class A 21 64 109 235
- ---------------------------------------------------------------------------------------------------
Nationwide(R) Bond Fund 18 55 94 204
- ---------------------------------------------------------------------------------------------------
Nationwide(R) Fund 17 52 90 195
- ---------------------------------------------------------------------------------------------------
Nationwide(R) Growth Fund 17 54 92 201
- ---------------------------------------------------------------------------------------------------
Nationwide(R) Money Market Fund 17 53 91 198
- ---------------------------------------------------------------------------------------------------
Neuberger & Berman Guardian Fund 20 61 105 227
- ---------------------------------------------------------------------------------------------------
Neuberger & Berman Manhattan Fund, Inc. 20 62 107 231
- ---------------------------------------------------------------------------------------------------
New York Venture Fund, Inc. 19 60 103 222
- ---------------------------------------------------------------------------------------------------
Putnam Investors Fund - Class A 21 64 109 235
- ---------------------------------------------------------------------------------------------------
Putnam Voyager Fund - Class A 22 67 115 247
- ---------------------------------------------------------------------------------------------------
SEI Index Funds--S&P 500 Index Portfolio 13 40 69 152
- ---------------------------------------------------------------------------------------------------
Seligman Growth Fund, Inc. - Class A 20 61 104 225
- ---------------------------------------------------------------------------------------------------
Strong Common Stock Fund, Inc. 24 75 128 273
- ---------------------------------------------------------------------------------------------------
T. Rowe Price International Stock Fund(R) 20 63 108 232
- ---------------------------------------------------------------------------------------------------
Templeton Foreign Fund 23 71 122 262
- ---------------------------------------------------------------------------------------------------
Templeton Smaller Companies Growth Fund 26 78 134 285
- ---------------------------------------------------------------------------------------------------
Twentieth Century Growth Investors 21 64 110 236
- ---------------------------------------------------------------------------------------------------
Twentieth Century Select Investors 21 64 110 236
- ---------------------------------------------------------------------------------------------------
Twentieth Century Ultra Investors 21 64 110 236
- ---------------------------------------------------------------------------------------------------
</TABLE>
(Continued on next page)
10
12 of 125
<PAGE> 13
EXAMPLE-CONTINUED
The following chart depicts the dollar amount of expenses that would be
incurred under this Contract assuming a $1000 initial purchase payment and
5% annual return on assets.
<TABLE>
<CAPTION>
------------------------------------------
If you annuitize your contract
at the end of the applicable time period
------------------------------------------
1 Yr. 3 Yrs. 5 Yrs. 10 Yrs.
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
AIM Constellation Fund - Institutional Class 18 57 98 213
- ----------------------------------------------------------------------------------------------------
AIM Weingarten Fund - Institutional Class 18 56 96 209
- ----------------------------------------------------------------------------------------------------
The Bond Fund of America(SM), Inc. 17 54 93 202
- ----------------------------------------------------------------------------------------------------
Delaware Group Decatur Fund, Inc.--Decatur Income
Fund 18 54 94 203
- ----------------------------------------------------------------------------------------------------
Dreyfus Cash Management 13 41 72 158
- ----------------------------------------------------------------------------------------------------
The Dreyfus Third Century Fund, Inc. 22 69 119 255
- ----------------------------------------------------------------------------------------------------
The Evergreen Total Return Fund 23 70 119 256
- ----------------------------------------------------------------------------------------------------
Federated GNMA Trust-Institutional Shares 16 51 88 192
- ----------------------------------------------------------------------------------------------------
Federated Intermediate Government Trust--
Institutional Shares 17 52 90 197
- ----------------------------------------------------------------------------------------------------
Fidelity Asset Manager(TM) 21 65 112 241
- ----------------------------------------------------------------------------------------------------
Fidelity Capital & Income Fund 20 63 108 233
- ----------------------------------------------------------------------------------------------------
Fidelity Contrafund 22 67 115 247
- ----------------------------------------------------------------------------------------------------
Fidelity Equity-Income Fund 17 54 93 202
- ----------------------------------------------------------------------------------------------------
Fidelity Growth & Income Portfolio 20 61 105 228
- ----------------------------------------------------------------------------------------------------
Fidelity Magellan(R) Fund 21 64 109 235
- ----------------------------------------------------------------------------------------------------
Fidelity OTC Portfolio 20 63 109 234
- ----------------------------------------------------------------------------------------------------
Fidelity Puritan Fund 20 60 104 224
- ----------------------------------------------------------------------------------------------------
The Growth Fund of America(R), Inc. 18 57 98 212
- ----------------------------------------------------------------------------------------------------
The Income Fund of America(R), Inc. 17 52 90 195
- ----------------------------------------------------------------------------------------------------
INVESCO Industrial Income Fund, Inc. 21 65 111 239
- ----------------------------------------------------------------------------------------------------
Janus Fund 21 64 110 237
- ----------------------------------------------------------------------------------------------------
Janus Twenty Fund 22 68 116 249
- ----------------------------------------------------------------------------------------------------
MAS Funds Fixed Income Portfolio 16 51 88 191
- ----------------------------------------------------------------------------------------------------
Massachusetts Investors Growth Stock Fund - Class A 18 55 95 206
- ----------------------------------------------------------------------------------------------------
MFS(R) Growth Opportunities Fund - Class A 19 59 102 220
- ----------------------------------------------------------------------------------------------------
</TABLE>
(Continued on next page)
11
13 of 125
<PAGE> 14
EXAMPLE-CONTINUED
The following chart depicts the dollar amount of expenses that would be
incurred under this Contract assuming a $1000 initial purchase payment and 5%
annual return on assets.
<TABLE>
<CAPTION>
-----------------------------------------
If you annuitize your contract
at the end of the applicable time period
-----------------------------------------
1 Yr. 3 Yrs. 5 Yrs. 10 Yrs.
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MFS(R) High Income Fund - Class A 21 64 109 235
- ---------------------------------------------------------------------------------------------------
Nationwide(R) Bond Fund 18 55 94 204
- ---------------------------------------------------------------------------------------------------
Nationwide(R) Fund 17 52 90 195
- ---------------------------------------------------------------------------------------------------
Nationwide(R) Growth Fund 17 54 92 201
- ---------------------------------------------------------------------------------------------------
Nationwide(R) Money Market Fund 17 53 91 198
- ---------------------------------------------------------------------------------------------------
Neuberger & Berman Guardian Fund 20 61 105 227
- ---------------------------------------------------------------------------------------------------
Neuberger & Berman Manhattan Fund, Inc. 20 62 107 231
- ---------------------------------------------------------------------------------------------------
New York Venture Fund, Inc. 19 60 103 222
- ---------------------------------------------------------------------------------------------------
Putnam Investors Fund - Class A 21 64 109 235
- ---------------------------------------------------------------------------------------------------
Putnam Voyager Fund - Class A 22 67 115 247
- ---------------------------------------------------------------------------------------------------
SEI Index Funds--S&P 500 Index Portfolio 13 40 69 152
- ---------------------------------------------------------------------------------------------------
Seligman Growth Fund, Inc. - Class A 20 61 104 225
- ---------------------------------------------------------------------------------------------------
Strong Common Stock Fund, Inc. 24 75 128 273
- ---------------------------------------------------------------------------------------------------
T. Rowe Price International Stock Fund(R) 20 63 108 232
- ---------------------------------------------------------------------------------------------------
Templeton Foreign Fund 23 71 122 262
- ---------------------------------------------------------------------------------------------------
Templeton Smaller Companies Growth Fund 26 78 134 285
- ---------------------------------------------------------------------------------------------------
Twentieth Century Growth Investors 21 64 110 236
- ---------------------------------------------------------------------------------------------------
Twentieth Century Select Investors 21 64 110 236
- ---------------------------------------------------------------------------------------------------
Twentieth Century Ultra Investors 21 64 110 236
- ---------------------------------------------------------------------------------------------------
</TABLE>
This example should not be considered a representation of past or future
expenses. Actual expenses may be greater or lesser than those shown.
The purpose of the preceding table is to assist the Participant in understanding
the various costs and expenses that a Participant will bear directly or
indirectly when investing in the Contract. The table reflects expenses of the
DCVA as well as the underlying mutual fund investment options. For a more
detailed explanation of these expenses, see "DCVA Charges and Other Deductions".
For more and complete information regarding expenses paid out of the assets of a
particular mutual fund, see the Fund's prospectus. In addition to the expenses
shown above, deductions for premium taxes may also be applicable, depending upon
the jurisdiction in which the Contract is sold (See "Premium Taxes").
12
14 of 125
<PAGE> 15
SYNOPSIS
The Contracts described in this Prospectus are designed for use in
connection with supplemental deferred compensation plans for employees of
tax exempt entities. Such Plans generally will qualify for favorable tax
treatment under Section 401, 403(b) or 457 of the Code, but may also
include other nonqualified deferred compensation plans. Contracts will be
issued only to employers who are exempt from taxation to fund deferred
compensation plans. The employees are generally not subject to federal
income tax on amounts deferred under such plans until distributions are
received from the Plan. Purchase Payments made at any time by or on behalf
of any Participant must be at least $20 per month.
Purchase Payments under the Contracts are placed in the DCVA. The DCVA
is a unit investment trust with 44 Series of unit values, each reflecting
investment results of a different management investment company. Amounts
equivalent to the obligations of the Company under each Series will be
invested in the specified management investment company. (See Appendix of
Participating Funds.)
The Company does not deduct a sales charge from Purchase Payments made
for these Contracts. However, if any part of such Contracts is withdrawn,
the Company will, with certain exceptions, deduct from the Contract Value a
Contingent Deferred Sales Charge equal to not more than 5% of the lesser of
the total of all Purchase Payments made prior to the date of the request
for surrender, or the amount surrendered. This charge, when applicable, is
imposed to permit the Company to recover sales expenses which have been
advanced by the Company. (See "Contingent Deferred Sales Charge".)
An Administrative Charge may be deducted each year from a Participant
Account. (See "Administrative Charge".) Any applicable premium taxes can be
deducted and will be charged against the Contracts. If any such premium
taxes are payable at the time Purchase Payments are made, the premium tax
deduction will be made from the Contract prior to allocation to any mutual
fund option (See "Premium Taxes".)
A daily deduction is made from the DCVA in an amount equivalent to
0.95% per annum for the Company's contractual promises to accept the
mortality and expense risks and for administration of the DCVA. (See
"Mortality and Expense Risks and Administration".) In addition, the
investment companies whose shares are purchased by the DCVA make certain
deductions from their assets.
The Contracts provide that the mortality basis, minimum death benefits
and the deductions made from Purchase Payments, Participants' Accounts, the
DCVA Contingent Deferred Sales Charges, Administrative Charges,
and Actuarial Risk Fees may be changed by the Company after the first
Contract Year. (See "Modification of the Contract".)
13
15 of 125
<PAGE> 16
CONDENSED FINANCIAL INFORMATION
Accumulation Unit Values (For an accumulation unit outstanding throughout the
period)
NATIONWIDE DC VARIABLE ACCOUNT
<TABLE>
<CAPTION>
ACCUMULATION ACCUMULATION NUMBER OF
UNIT VALUE UNIT VALUE ACCUMULATION UNITS
AT BEGINNING AT END OUTSTANDING AT THE
FUND OF PERIOD OF PERIOD END OF THE PERIOD YEAR
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
AIM 1.305850 1.316836 1,607,538 1994
--------------------------------------------------------------------
Constellation Fund - 1.120568 1.305850 1,341,351 1993
--------------------------------------------------------------------
Institutional Class 1.000000 1.120568 0 1992
============================================================================================
AIM 1.044414 1.035886 870,956 1994
--------------------------------------------------------------------
Weingarten Fund - 1.034606 1.044414 936,998 1993
--------------------------------------------------------------------
Institutional Class 1.000000 1.034606 0 1992
============================================================================================
The Bond Fund 1.850918 1.741422 7,880,903 1994
--------------------------------------------------------------------
of America(SM), Inc. 1.637181 1.850918 8,560,956 1993
--------------------------------------------------------------------
1.484255 1.637181 6,077,266 1992
--------------------------------------------------------------------
1.238222 1.484255 5,128,071 1991
--------------------------------------------------------------------
1.208717 1.238222 5,102,901 1990
--------------------------------------------------------------------
1.109668 1.208717 3,105,875 1989
--------------------------------------------------------------------
1.011923 1.109668 1,113,940 1988
--------------------------------------------------------------------
1.000000 1.011923 173,764 1987
============================================================================================
Delaware Group 1.473401 1.449372 104,006 1994
--------------------------------------------------------------------
Decatur Fund, 1.289480 1.473401 281,500 1993
--------------------------------------------------------------------
Inc.-Decatur Income 1.196471 1.289480 162,528 1992
--------------------------------------------------------------------
Fund 0.991871 1.196471 106,856 1991
--------------------------------------------------------------------
1.142606 0.991871 16,158 1990
--------------------------------------------------------------------
1.000000 1.142606 0 1989
============================================================================================
Dreyfus 1.025704 1.057458 2,324,960 1994
--------------------------------------------------------------------
Cash 1.003770 1.025704 25,763 1993
--------------------------------------------------------------------
Management* 1.000000 1.003770 0 1992
============================================================================================
The Dreyfus 1.814915 1.663803 6,965,653 1994
--------------------------------------------------------------------
Third Century 1.740666 1.814915 8,765,880 1993
--------------------------------------------------------------------
Fund, Inc. 1.723855 1.740666 9,137,872 1992
--------------------------------------------------------------------
1.259983 1.723855 5,165,976 1991
--------------------------------------------------------------------
1.228377 1.259983 4,118,236 1990
--------------------------------------------------------------------
1.057519 1.228377 1,659,197 1989
--------------------------------------------------------------------
0.866121 1.057519 618,691 1988
--------------------------------------------------------------------
1.000000 0.866121 63,671 1987
- --------------------------------------------------------------------------------------------
</TABLE>
* The 7-day yield on the Dreyfus Cash Management fund as of December 31, 1994
was 4.27%.
14
16 of 125
<PAGE> 17
CONDENSED FINANCIAL INFORMATION, Continued
<TABLE>
<CAPTION>
ACCUMULATION ACCUMULATION NUMBER OF
UNIT VALUE UNIT VALUE ACCUMULATION UNITS
AT BEGINNING AT END OUTSTANDING AT THE
FUND OF PERIOD OF PERIOD END OF THE PERIOD YEAR
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
The Evergreen 1.531292 1.419467 4,439,096 1994
-------------------------------------------------------------------
Total Return 1.368966 1.531292 7,948,202 1993
-------------------------------------------------------------------
Fund 1.256090 1.368966 6,846,744 1992
-------------------------------------------------------------------
1.031024 1.256090 7,328,719 1991
-------------------------------------------------------------------
1.110904 1.031024 13,632,891 1990
-------------------------------------------------------------------
0.959913 1.110904 10,256,138 1989
-------------------------------------------------------------------
0.837244 0.959913 5,595,414 1988
-------------------------------------------------------------------
1.000000 0.837244 2,115,006 1987
==============================================================================================
Federated 1.119643 1.081229 422,171 1994
-------------------------------------------------------------------
GNMA Trust -- 1.061001 1.119643 497,960 1993
-------------------------------------------------------------------
Institutional Shares 1.000000 1.061001 305,851 1992
==============================================================================================
Federated 1.020623 0.991595 1,280,899 1994
-------------------------------------------------------------------
Intermediate 1.000000 1.020623 696,793 1993
Government Trust --
Institutional Shares
==============================================================================================
Fidelity Asset 1.036089 0.958564 3,916,306 1994
-------------------------------------------------------------------
Manager(TM) 1.000000 1.036089 79,714 1993
==============================================================================================
Fidelity Capital 3.397953 3.210584 561,985 1994
-------------------------------------------------------------------
& Income Fund 2.746533 3.397953 925,953 1993
-------------------------------------------------------------------
2.165417 2.746533 1,032,492 1992
-------------------------------------------------------------------
1.684020 2.165417 1,471,867 1991
-------------------------------------------------------------------
1.768220 1.684020 4,160,164 1990
-------------------------------------------------------------------
1.843890 1.768220 4,943,976 1989
-------------------------------------------------------------------
1.653959 1.843890 4,248,205 1988
-------------------------------------------------------------------
1.649063 1.653959 3,210,794 1987
-------------------------------------------------------------------
1.411482 1.649063 1,810,114 1986
-------------------------------------------------------------------
1.135137 1.411482 654,426 1985
==============================================================================================
Fidelity 1.289799 1.263308 40,927,857 1994
-------------------------------------------------------------------
Contrafund 1.072342 1.289799 14,514,807 1993
-------------------------------------------------------------------
1.000000 1.072342 186,872 1992
- ----------------------------------------------------------------------------------------------
</TABLE>
15
17 of 125
<PAGE> 18
CONDENSED FINANCIAL INFORMATION, Continued
<TABLE>
<CAPTION>
ACCUMULATION ACCUMULATION NUMBER OF
UNIT VALUE UNIT VALUE ACCUMULATION UNITS
AT BEGINNING AT END OUTSTANDING AT THE
FUND OF PERIOD OF PERIOD END OF THE PERIOD YEAR
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Fidelity 3.448520 3.424310 34,056,352 1994
--------------------------------------------------------------------
Equity-Income 2.869860 3.448520 41,743,016 1993
--------------------------------------------------------------------
Fund 2.526472 2.869860 36,410,831 1992
--------------------------------------------------------------------
1.971024 2.526472 40,239,204 1991
--------------------------------------------------------------------
2.314450 1.971024 65,533,870 1990
--------------------------------------------------------------------
1.968876 2.314450 62,489,636 1989
--------------------------------------------------------------------
1.622650 1.968876 66,300,418 1988
--------------------------------------------------------------------
1.665429 1.622650 55,094,558 1987
--------------------------------------------------------------------
1.436150 1.665429 33,659,577 1986
--------------------------------------------------------------------
1.159331 1.436150 13,999,157 1985
============================================================================================
Fidelity 1.239420 1.255568 2,808,994 1994
--------------------------------------------------------------------
Growth & 1.046808 1.239420 1,219,293 1993
--------------------------------------------------------------------
Income Portfolio 1.000000 1.046808 85,896 1992
============================================================================================
Fidelity 1.311856 1.275955 68,044,510 1994
--------------------------------------------------------------------
Magellan(R) 1.062405 1.311856 43,203,753 1993
--------------------------------------------------------------------
Fund 1.000000 1.062405 10,591,374 1992
============================================================================================
The Growth 1.857739 1.840658 5,646,915 1994
--------------------------------------------------------------------
Fund of 1.638011 1.857739 5,353,392 1993
--------------------------------------------------------------------
America(R), Inc. 1.539692 1.638011 3,840,212 1992
--------------------------------------------------------------------
1.144684 1.539692 1,551,711 1991
--------------------------------------------------------------------
1.205372 1.144684 105,320 1990
--------------------------------------------------------------------
1.000000 1.205372 0 1989
============================================================================================
The Income 1.533299 1.480756 7,829,528 1994
--------------------------------------------------------------------
Fund of 1.357846 1.533299 7,258,704 1993
--------------------------------------------------------------------
America(R), Inc. 1.223786 1.357846 3,016,773 1992
--------------------------------------------------------------------
0.998504 1.223786 631,336 1991
--------------------------------------------------------------------
1.000000 0.998504 0 1990
============================================================================================
INVESCO 1.208959 1.151056 8,239,738 1994
--------------------------------------------------------------------
Industrial 1.045472 1.208959 3,039,640 1993
--------------------------------------------------------------------
Income Fund, 1.000000 1.045472 17,289 1992
Inc.
============================================================================================
Janus Fund 1.077425 1.055481 7,345,306 1994
--------------------------------------------------------------------
1.000000 1.077425 2,969,768 1993
- --------------------------------------------------------------------------------------------
</TABLE>
16
18 of 125
<PAGE> 19
CONDENSED FINANCIAL INFORMATION, Continued
<TABLE>
<CAPTION>
ACCUMULATION ACCUMULATION NUMBER OF
UNIT VALUE UNIT VALUE ACCUMULATION UNITS
AT BEGINNING AT END OUTSTANDING AT THE
FUND OF PERIOD OF PERIOD END OF THE PERIOD YEAR
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Janus Twenty 1.058801 0.978264 11,285 1994
-------------------------------------------------------------------
Fund 1.000000 1.058801 0 1993
===========================================================================================
MAS Funds Fixed 1.000000 0.980782 31,751 1994
Income Portfolio
===========================================================================================
Massachusetts 7.613442 7.034148 604,020 1994
-------------------------------------------------------------------
Investors Growth 6.714892 7.613442 891,831 1993
-------------------------------------------------------------------
Stock Fund - 6.368639 6.714892 914,534 1992
-------------------------------------------------------------------
Class A 4.352449 6.368639 1,056,566 1991
-------------------------------------------------------------------
4.612779 4.352449 1,577,501 1990
-------------------------------------------------------------------
3.430876 4.612779 1,393,742 1989
-------------------------------------------------------------------
3.326929 3.430876 2,091,280 1988
-------------------------------------------------------------------
3.173352 3.326929 2,154,700 1987
-------------------------------------------------------------------
2.847946 3.173352 2,334,606 1986
-------------------------------------------------------------------
2.288558 2.847946 2,392,942 1985
===========================================================================================
MFS(R) Growth 4.834037 4.589533 4,635,532 1994
-------------------------------------------------------------------
Opportunities 4.200054 4.834037 9,303,110 1993
-------------------------------------------------------------------
Fund - Class A 3.936838 4.200054 10,600,796 1992
-------------------------------------------------------------------
3.246855 3.936838 13,413,614 1991
-------------------------------------------------------------------
3.427388 3.246855 23,047,089 1990
-------------------------------------------------------------------
2.692907 3.427388 24,300,466 1989
-------------------------------------------------------------------
2.493461 2.692907 28,164,998 1988
-------------------------------------------------------------------
2.421913 2.493461 29,369,357 1987
-------------------------------------------------------------------
2.312498 2.421913 38,069,020 1986
-------------------------------------------------------------------
1.849746 2.312498 37,012,777 1985
===========================================================================================
MFS(R) High 4.422563 4.265493 877,250 1994
-------------------------------------------------------------------
Income 3.739642 4.422523 1,068,154 1993
-------------------------------------------------------------------
Fund - 3.225557 3.739642 1,036,507 1992
-------------------------------------------------------------------
Class A 2.186959 3.225557 1,186,991 1991
-------------------------------------------------------------------
2.651605 2.186959 2,159,639 1990
-------------------------------------------------------------------
2.731036 2.651605 2,739,257 1989
-------------------------------------------------------------------
2.453867 2.731036 2,747,679 1988
-------------------------------------------------------------------
2.470209 2.453867 2,713,471 1987
-------------------------------------------------------------------
2.248114 2.470209 3,349,170 1986
-------------------------------------------------------------------
1.838059 2.248114 2,827,530 1985
- -------------------------------------------------------------------------------------------
</TABLE>
17
19 of 125
<PAGE> 20
CONDENSED FINANCIAL INFORMATION, Continued
<TABLE>
<CAPTION>
ACCUMULATION ACCUMULATION NUMBER OF
UNIT VALUE UNIT VALUE ACCUMULATION UNITS
AT BEGINNING AT END OUTSTANDING AT THE
FUND OF PERIOD OF PERIOD END OF THE PERIOD YEAR
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Nationwide(R) 1.778765 1.619166 51,492 1994
-------------------------------------------------------------------
Bond Fund 1.621957 1.778765 148,222 1993
-------------------------------------------------------------------
1.516560 1.621957 197,350 1992
-------------------------------------------------------------------
1.309926 1.516560 363,511 1991
-------------------------------------------------------------------
1.222004 1.309926 420,858 1990
-------------------------------------------------------------------
1.114209 1.222004 314,062 1989
-------------------------------------------------------------------
1.039905 1.114209 188,045 1988
-------------------------------------------------------------------
1.074676 1.039905 28,819 1987
===========================================================================================
Nationwide(R) 9.502760 9.468045 3,036,527 1994
-------------------------------------------------------------------
Fund 8.985447 9.502760 3,690,273 1993
-------------------------------------------------------------------
8.810680 8.985447 4,218,392 1992
-------------------------------------------------------------------
6.830443 8.810680 3,906,633 1991
-------------------------------------------------------------------
6.875188 6.830443 3,792,110 1990
-------------------------------------------------------------------
5.187286 6.875188 2,756,965 1989
-------------------------------------------------------------------
4.485232 5.187286 3,174,211 1988
-------------------------------------------------------------------
4.438511 4.485232 2,879,455 1987
-------------------------------------------------------------------
3.809764 4.438511 3,446,791 1986
-------------------------------------------------------------------
2.818948 3.809764 2,977,448 1985
===========================================================================================
Nationwide(R) 2.081399 2.092009 3,759,425 1994
-------------------------------------------------------------------
Growth Fund 1.887524 2.081399 5,928,120 1993
-------------------------------------------------------------------
1.792687 1.887524 5,747,753 1992
-------------------------------------------------------------------
1.330199 1.792687 5,108,711 1991
-------------------------------------------------------------------
1.452973 1.330199 7,279,598 1990
-------------------------------------------------------------------
1.276112 1.452973 4,762,338 1989
-------------------------------------------------------------------
1.051373 1.276112 1,947,635 1988
-------------------------------------------------------------------
1.236522 1.051373 352,893 1987
===========================================================================================
Nationwide(R) 2.583387 2.654661 18,028,497 1994
-------------------------------------------------------------------
Money Market 2.542721 2.583387 20,122,594 1993
-------------------------------------------------------------------
Fund* 2.487178 2.542721 22,067,362 1992
-------------------------------------------------------------------
2.377082 2.487178 33,612,374 1991
-------------------------------------------------------------------
2.224557 2.377082 48,721,235 1990
-------------------------------------------------------------------
2.062504 2.224557 43,599,432 1989
-------------------------------------------------------------------
1.944054 2.062504 39,596,561 1988
-------------------------------------------------------------------
1.848104 1.944054 35,995,910 1987
-------------------------------------------------------------------
1.754559 1.848104 41,090,565 1986
-------------------------------------------------------------------
1.640849 1.754559 50,916,086 1985
- -------------------------------------------------------------------------------------------
</TABLE>
* The 7-day yield on the Nationwide Money Market Fund as of December 31, 1994,
was 4.40%.
18
20 of 125
<PAGE> 21
CONDENSED FINANCIAL INFORMATION, Continued
<TABLE>
<CAPTION>
ACCUMULATION ACCUMULATION NUMBER OF
UNIT VALUE UNIT VALUE ACCUMULATION
AT BEGINNING AT END UNITS
FUND OF PERIOD OF PERIOD OUTSTANDING AT YEAR
THE
END OF THE PERIOD
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Neuberger & 1.823796 1.741549 406,054 1994
------------------------------------------------------------------
Berman Manhattan 1.673695 1.823796 317,549 1993
------------------------------------------------------------------
Fund, Inc. 1.434738 1.673695 56,526 1992
------------------------------------------------------------------
1.106565 1.434738 7,124 1991
------------------------------------------------------------------
1.214940 1.106565 0 1990
------------------------------------------------------------------
1.000000 1.214940 0 1989
==========================================================================================
New York 0.994508 0.966146 720,917 1994
------------------------------------------------------------------
Venture 1.000000 0.994508 5,626 1993
Fund, Inc.
==========================================================================================
Putnam 8.652501 8.297318 3,674,131 1994
------------------------------------------------------------------
Investors 7.410567 8.652501 4,311,483 1993
------------------------------------------------------------------
Fund - 6.934213 7.410567 4,294,647 1992
------------------------------------------------------------------
Class A 5.445269 6.934213 4,745,398 1991
------------------------------------------------------------------
5.654203 5.445269 6,112,297 1990
------------------------------------------------------------------
4.262206 5.654203 5,893,052 1989
------------------------------------------------------------------
4.003173 4.262206 9,986,301 1988
------------------------------------------------------------------
3.885972 4.003173 10,268,895 1987
------------------------------------------------------------------
3.389459 3.885972 14,447,283 1986
------------------------------------------------------------------
2.648354 3.389459 14,193,225 1985
==========================================================================================
Putnam Voyager 1.992379 1.982311 14,803,070 1994
------------------------------------------------------------------
Fund - Class A 1.698751 1.992379 11,820,145 1993
------------------------------------------------------------------
1.563079 1.698751 7,640,204 1992
------------------------------------------------------------------
1.049811 1.563079 4,622,048 1991
------------------------------------------------------------------
1.000000 1.049811 290,518 1990
==========================================================================================
SEI Index 1.792223 1.792835 722,997 1994
------------------------------------------------------------------
Funds - S&P 500 1.647325 1.792223 509,498 1993
------------------------------------------------------------------
Index Portfolio 1.548965 1.647325 257,368 1992
------------------------------------------------------------------
1.203412 1.548965 121,485 1991
------------------------------------------------------------------
1.254560 1.203412 509 1990
------------------------------------------------------------------
1.000000 1.254560 0 1989
- ------------------------------------------------------------------------------------------
</TABLE>
19
21 of 125
<PAGE> 22
CONDENSED FINANCIAL INFORMATION, Continued
<TABLE>
<CAPTION>
ACCUMULATION ACCUMULATION NUMBER OF
UNIT VALUE UNIT VALUE ACCUMULATION UNITS
AT BEGINNING AT END OUTSTANDING AT THE
FUND OF PERIOD OF PERIOD END OF THE PERIOD YEAR
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Seligman 7.370495 7.020585 299,685 1994
-------------------------------------------------------------------
Growth 6.989639 7.370495 513,220 1993
-------------------------------------------------------------------
Fund, Inc. - 6.340967 6.989639 555,163 1992
-------------------------------------------------------------------
Class A 4.611005 6.340967 685,494 1991
-------------------------------------------------------------------
4.910683 4.611005 977,515 1990
-------------------------------------------------------------------
3.714452 4.910683 916,525 1989
-------------------------------------------------------------------
3.491789 3.714452 1,189,216 1988
-------------------------------------------------------------------
3.351057 3.491789 1,200,692 1987
-------------------------------------------------------------------
2.905343 3.351057 1,618,100 1986
-------------------------------------------------------------------
2.248515 2.905343 1,471,285 1985
===========================================================================================
Strong 1.017301 1.002820 742,264 1994
-------------------------------------------------------------------
Common Stock 1.000000 1.017301 16,364 1993
Fund, Inc.
===========================================================================================
T. Rowe Price 1.454045 1.429428 18,673,315 1994
-------------------------------------------------------------------
International 1.047655 1.454045 11,658,962 1993
-------------------------------------------------------------------
Stock Fund(R) 1.095728 1.047655 4,370,293 1992
-------------------------------------------------------------------
0.954695 1.095728 2,239,924 1991
-------------------------------------------------------------------
1.000000 0.954695 441,232 1990
===========================================================================================
Templeton 1.387073 1.378759 25,358,639 1994
-------------------------------------------------------------------
Foreign 1.023491 1.387073 6,636,629 1993
-------------------------------------------------------------------
Fund 1.000000 1.023491 0 1992
===========================================================================================
Templeton 1.353616 1.279328 225,110 1994
-------------------------------------------------------------------
Smaller Companies 1.036433 1.353616 117,690 1993
-------------------------------------------------------------------
Growth Fund, Inc. 1.000000 1.036433 0 1992
===========================================================================================
Twentieth 3.443124 3.359891 41,134,943 1994
-------------------------------------------------------------------
Century Growth 3.350122 3.443124 51,977,134 1993
-------------------------------------------------------------------
Investors 3.533694 3.350122 58,356,370 1992
-------------------------------------------------------------------
2.110582 3.533694 53,923,483 1991
-------------------------------------------------------------------
2.216085 2.110582 67,311,152 1990
-------------------------------------------------------------------
1.562983 2.216085 49,896,477 1989
-------------------------------------------------------------------
1.536055 1.562983 51,598,758 1988
-------------------------------------------------------------------
1.374167 1.536055 38,777,840 1987
-------------------------------------------------------------------
1.164500 1.374167 23,661,751 1986
-------------------------------------------------------------------
0.877637 1.164500 20,125,699 1985
- -------------------------------------------------------------------------------------------
</TABLE>
20
22 of 125
<PAGE> 23
CONDENSED FINANCIAL INFORMATION, Continued
<TABLE>
<CAPTION>
ACCUMULATION ACCUMULATION NUMBER OF
UNIT VALUE UNIT VALUE ACCUMULATION UNITS
AT BEGINNING AT END OUTSTANDING AT THE
FUND OF PERIOD OF PERIOD END OF THE PERIOD YEAR
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Twentieth 1.202996 1.095899 194,231 1994
-------------------------------------------------------------------
Century Select 1.059075 1.202996 386,750 1993
-------------------------------------------------------------------
Investors 1.118927 1.059075 383,487 1992
-------------------------------------------------------------------
1.000000 1.118927 2,950 1991
============================================================================================
Twentieth 1.409710 1.345904 88,713,416 1994
-------------------------------------------------------------------
Century Ultra 1.168340 1.409710 68,551,255 1993
-------------------------------------------------------------------
Investors 1.164722 1.168340 33,483,411 1992
-------------------------------------------------------------------
1.000000 1.164722 11,412 1991
- --------------------------------------------------------------------------------------------
</TABLE>
Fidelity OTC Portfolio, Fidelity Puritan Fund, and Neuberger & Berman
Guardian Fund first became available through the DCVA in 1995; therefore,
no 1994 unit value information is available for these funds.
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<PAGE> 24
NATIONWIDE LIFE INSURANCE COMPANY
The Company is a stock life insurance company organized under the laws of
the State of Ohio in March, 1929. The Company is a member of the "Nationwide
Insurance Enterprise", with its home office at One Nationwide Plaza, Columbus,
Ohio 43215. The Company offers a complete line of life insurance, including
annuities and accident and health insurance. It is admitted to do business in
all states, the District of Columbia, the Virgin Islands, and Puerto Rico.
THE DCVA
The DCVA was established by the Company on July 10, 1974, pursuant to the
provisions of Ohio law. The DCVA was also registered with the Securities and
Exchange Commission as a unit investment trust pursuant to the provisions of
the Investment Company Act of 1940. Such registration does not involve
supervision of the management of the DCVA or the Company by the Securities and
Exchange Commission.
On November 2, 1977, the Company established the Nationwide DC Variable
Account II (the "DCVA-II") as a unit investment trust, for the sole purpose of
maintaining the qualification of the DCVA as a regulated investment company,
under Section 851 of the Code. The Company later determined that the continued
maintenance of the DCVA-II was no longer necessary or desirable to achieve the
tax result of DCVA's prior private letter ruling.
Effective February 29, 1988, the Company caused the DCVA and the DCVA-II to
be combined into a single segregated asset account of the Company, thereafter
known as the DCVA. Both prior to and after this transaction, the annuity unit
values for a series of DCVA-II were exactly equivalent to an accumulation unit
value for the corresponding series in DCVA.
The net Purchase Payments applied to the DCVA are invested in shares of the
Funds available under the terms of the Contract. The DCVA is divided into 44
Series of Accumulation Units, each of which represents a separate Fund. (See
"Appendix Participating Funds" for a description of the investment objective of
each Fund.)
Each Series in the DCVA is administered and accounted for as a part of the
separate account, but the income, capital gains or losses of each DCVA Series
are credited to or charged against the assets held for that Series in
accordance with the terms of each Contract, without regard to other income,
capital gains or losses of any other DCVA Series, or arising out of any other
business the Company may conduct. The assets within each DCVA Series are not
chargeable with liabilities arising out of the business conducted by any other
DCVA Series, nor will the DCVA as a whole be chargeable with liabilities
arising out of any other business the Company may conduct.
VOTING RIGHTS
The DCVA will be owner of record of all Fund shares purchased by the
respective account until such Fund shares are sold, but all securities will be
held for the benefit of the Owners of the Contracts. In accordance with its
view of present applicable law, the Company will vote the shares of the Funds
held in the DCVA at regular and special meetings of the shareholders of the
Funds in accordance with instructions received from the Owners. The Company
will mail to each Owner at its last known address all periodic reports and
proxy material of the applicable Fund, and a form with which to give voting
instructions. Any Fund shares as to which no timely instructions are received
will be voted by the Company in the same proportion as the instructions received
from all persons furnishing timely instructions. An Owner's voting rights may
decrease with the cancellation of Accumulation Units to make annuity payments.
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<PAGE> 25
PERIODIC REPORTS
The Company will, semi-annually, provide to each person covered by a
Contract, a Statement of Assets, Liabilities and Contract Owners' Equity
and a Statement of Operations and Changes in Contract Owners' Equity of the
DCVA. Each Participant and Retired Participant will also be informed,
periodically, of the number of Units credited to his account as well as the
total account value.
The current Prospectus of the DCVA will be made available to
Participants through the Owner. In addition, the Owner may, under the terms
of the Plan, have an obligation to furnish additional information to
Participants, such as: a notice of any changes in the Plan, or tax status of
the Plan and the financial condition of the Owner as it relates to
obligations under the Plan.
DCVA CHARGES AND OTHER DEDUCTIONS
CONTINGENT DEFERRED SALES CHARGE
No deduction for a sales charge is made from the Purchase Payments for
these Contracts. However, the Contingent Deferred Sales Charge, referred to
below, when it is applicable, will be used to cover expenses relating to the
sale of the Contracts, including commissions paid to sales personnel, the
costs of preparation of sales literature, and other promotional activity.
Gross commissions paid on the sale of these Contracts vary depending upon
the contract of the general agent performing the marketing and enrollment
function in connection with a particular Contract.
If part or all of the Contract Value representing Participant Accounts
that have been established under the Contract and held in the DCVA for less
than 16 years is surrendered, a Contingent Deferred Sales Charge will, when
it is applicable, be made by the Company. This charge will not exceed 5% of
the lesser of (1) the total of all Purchase Payments received on behalf of
the surrendering Participant or the withdrawing Owner prior to the date of
the request for surrender or (2) the amount surrendered. The cumulative sum
of all such charges, per Participant, will never exceed 5% (or such lesser
percentage,if applicable) of the total Purchase Payments made on behalf of
such Participant during the period of up to 16 years prior to the date on
which the surrender is requested.
When a Contingent Deferred Sales Charge of less than 5% is negotiated
and assessed, the reduced charge will reflect actual variations in
expenses, usually resulting from reduced agent's commissions.
No Contingent Deferred Sales Charge will be imposed on Contract Value
that is paid under:
- any life income payment option;
- Designated Period payment options of 5 or more years for a
Participant who has a minimum of 5 Participant Account Years prior
to the time the benefit payments are to commence;
- a one-sum or periodic payment payable because of a Participant's
death.
ADMINISTRATIVE CHARGE
FOR CONTRACTS WITH AN EFFECTIVE DATE ON OR AFTER MAY 1, 1991, THE
COMPANY WILL NOT ASSESS THE FLAT DOLLAR ADMINISTRATIVE CHARGE. In
addition, for those Contracts with an effective date prior to May 1, 1991,
the Company will eliminate the Administrative Charge at such time as the
Company and the Owner renegotiate the Company's continued participation as
an annuity provider under the Owner's Plan, and the Company issues a new
Contract.
For Contracts with an effective date that is prior to May 1, 1991,
the Company will make a maximum charge of $15 per Participant per year to
reimburse the Company for certain administrative expenses relating to the
maintenance of individual Participant records and the mailing
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of periodic statements to Participants. The Administrative Charges, which are
guaranteed never to increase, are designed only to help the Company offset such
administrative expenses, and such charges will not exceed the Company's actual
administration expenses under the Contracts.
The Administrative Charge is made by canceling a number of Accumulation
Units on each Participant Anniversary equal in value to the applicable
Administrative Charge. If a Participant Account includes more than one Series,
the deduction will be allocated among Series on the basis of relative values at
the time the deduction is made. For those Contracts where the Owner has so
elected, there will be no charge for the transfers among Series.
The Company will assess an Administrative Charge on the date (other than a
Participant Anniversary) that amounts held in respect of a Participant are fully
withdrawn from the DCVA. In such case, the amount of the Administrative Charge
will be one-twelfth of the applicable Administrative Charge, multiplied by the
number of whole or partial calendar months which have elapsed between the
Participant Anniversary (or the Participant Effective Date during the first
Participant Account Year) and the date of full withdrawal.
For those Plans which provide this Contract and certain other investment
options (such as the Company's Group Fixed Fund Retirement Contract), the
Administrative Charge under this Contract may be reduced so that the total of
the Administrative Charge and any similar administrative charges imposed under
other investment options available under the Plan shall not exceed the
Administrative Charge assessed under this Contract. In this event, such charge
will be allocated among Series of the DCVA and amounts held in such other
investment options available under the Plan on the basis of the relative values
of the Participant's Accounts at the time the deduction is made. When an
Administrative Charge of less than $15 is otherwise negotiated and assessed, the
reduced charge will reflect actual variations in administrative expenses
incurred by the Company, usually resulting from an Owner or Plan administrator
assuming certain administrative functions otherwise required to be performed by
the Company.
MORTALITY AND EXPENSE RISKS AND ADMINISTRATION
The Contracts contain purchase rates applicable at and after retirement.
These purchase rates may be used to determine the retirement income payments to
be made by the Owner to Participants in accordance with the terms of the Plan.
However, the Owners have contracted with the Company to provide retirement
income payments.
Under the terms of the Contracts, the Company assumes the risk that: (i)
the actuarial estimate of mortality rates among Retired Participants may prove
erroneous and amounts set aside for retirement income benefits on the basis of
such estimate may prove inadequate, and (ii) deductions for sales and
Administrative Charges may be insufficient to cover the actual cost of these
items.
For the Company's contractual promise to accept these risks and for
Administrative Charges of the DCVA, the Contracts provide for the daily
deduction of an Actuarial Risk Fee. (See "Glossary of Terms".) The deduction is
based on the daily value of the applicable DCVA Series, and is equivalent to
0.95% on an annual basis (0.35% for the mortality risk, 0.15% for the expense
risk, and 0.45% for administration of the DCVA.) If this Actuarial Risk Fee is
insufficient to cover the actual cost of the mortality risk, the expense risk,
the administration of the DCVA, or the Administrative Charges, the loss will be
borne by the Company. Conversely, if the Actuarial Risk Fee proves more than
sufficient, the excess will be a profit to the Company.
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<PAGE> 27
PREMIUM TAXES
The Company will charge against the Contract Value the amount of any
premium taxes levied by a state or any other governmental entity upon
annuity considerations received by the Company. To the best of the
Company's present knowledge, premium taxes currently imposed by certain
states range from 0% to 3.5%. The Company is currently not deducting such
taxes from an Owner's Contract value at the time of annuitization, but
reserves the right to deduct such taxes when incurred. Retirement Income
Payments may be reduced or Accumulation Units canceled to provide for
premium taxes assessed.
EXPERIENCE CREDITS
The Contracts described herein are participating where permitted by law
in the state of issue. A participating contract provides the right to
participate in the distribution of surplus of the Company. In the event that
Administrative Charges and Actuarial Risk Fees collected under this
Contract accrue to the Company in excess of an amount deemed necessary at
the sole discretion of the Company's board of directors, such excess may be
allocated to the Contract by purchasing additional Accumulation Units and
crediting such additional units of the Participant Accounts. There have not
been any Experience Credits to date. The Company cannot offer any assurance
that there will be Experience Credits in the future.
EXPENSES OF DCVA
The DCVA's total expenses for the fiscal year ended December 31, 1994,
were 0.95% of the average net assets. Deductions from and expenses paid out
of the assets of the Funds are described in each of the Fund's prospectus.
DESCRIPTION OF THE CONTRACTS
A. GENERAL
PURPOSE OF THE CONTRACTS
The Contracts described in this Prospectus are Group Flexible Fund
Retirement Contracts designed to fund certain deferred compensation plans
generally established under either Section 401, 403(b) or 457 of the Code
(although they may include certain other nonqualified deferred compensation
plans) for employees of states and their political subdivisions and any
other organizations exempt from taxation. A single group Contract is issued
to the Owner, covering all present and future participating employees. The
Company will issue a certificate to the Owner for delivery to each Retired
Participant or other person for whom an Optional Retirement Income Form is
purchased, setting forth in substance the benefits to which such person is
entitled. In addition, if any applicable law requires, the Company will
issue a descriptive certificate to the Owner for delivery to any such
person required by law to receive such certificate, setting forth in
substance the benefits to which such person is entitled. For purposes of
determining benefits payable under the Plan, an individual accumulation
account is established for each Participant. The frequency of Purchase
Payments is normally monthly but can be adjusted to fit the payroll
practices of the Owner. Purchase Payments made at any time by or on behalf
of any Participant must be at least $20 per month.
The basic objectives of the Contracts are to provide each Participant
with an initial retirement income payment, which will tend to reflect the
changes which have occurred in the cost of living during preretirement
years (without the necessity of increased Purchase Payments
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to keep pace with any increase in the cost of living which might occur
during those years), and to provide subsequent retirement income payments
which will tend to vary with the cost of living changes during his retired
lifetime. The Company seeks to accomplish these objectives by applying
purchase rates contained in the Contract to the amounts accumulated through
investment in mutual funds. Notwithstanding the foregoing, there is no
assurance that these objectives will be attained. Historically, the value
of a diversified portfolio of common stocks held for an extended period of
time has tended to rise during periods of inflation. There has, however,
been no exact correlation, and for some periods, the prices of securities
have declined while the cost of living was rising.
MODIFICATION OF THE CONTRACT
Contract provisions with respect to the mortality basis, minimum
death benefits, and the deductions made from Purchase Payments, Participant
Accounts, the DCVA for Contingent Deferred Sales Charges, Administrative
Charges, and Actuarial Risk Fees may not be changed prior to the first
Contract Anniversary. These same provisions may not be changed except as
they apply to Participants entering the Contract after the effective date
of such change.
Other than as set forth above, the Company may modify the Contract
at any time without consent of the Owner or Participants. No such
modification shall be retroactive or affect Retired Participants in any
manner without their written consent, unless such modification is
considered necessary by the Company to obtain for Participants the benefit
of federal or state statutes or regulations or to maintain qualification of
the Plan.
EXCHANGE PRIVILEGE
The Company will permit the Owner, or the Participant if the Plan
so provides, to exchange amounts among the Series as frequently as
permitted by the Plan, subject to the limits and rules set by each Fund.
For those Contracts where the Owner has elected an exchange privilege,
there will be no Administrative Charge for exchanges among the Series.
The Company will also permit the Participant to utilize the
Telephone Exchange Privilege, for exchanging amounts among Series, if forms
are executed by the Owner and Participant agreeing with certain
restrictions applicable to such privilege. Telephone exchange requests must
be received by the Company prior to the close of the New York Stock
Exchange in order to receive that day's closing Series price. A telephone
exchange request may not be revoked once instructions have been recorded
and accepted. If the Participant is unable to execute an exchange request
by telephone (for example, during times of unusual market activity), they
might consider placing the exchange order by mail. The Company will employ
reasonable procedures to confirm that instructions communicated by
telephone are genuine. Such procedures may include any or all of the
following, or such other procedures as the Company may, from time to time,
deem reasonable: requesting identifying information, such as name,
contract number, Social Security number, and/or personal identification
number; tape recording all telephone transactions; and providing written
confirmation thereof to the Participant or Owner and any agent of record,
at the last address of record. Failure to follow reasonable procedures may
result in the Company's liability for any losses due to unauthorized or
fraudulent telephone transfers. However, any losses incurred pursuant to
actions taken by the Company in reliance on telephone instructions
reasonably believed to be genuine shall be borne by the Participant. The
Company may determine to withdraw the Telephone Exchange Privilege, upon 30
days' written notice to Owners and Participants.
On the date the Company receives an exchange request in good
order, which includes all of the information necessary for processing the
request, the Company will transfer the amount to be converted. Such
transfers will be based on the Accumulation Unit Values of the affected
Series if
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received at the Company's office prior to the close of the New York Stock
Exchange on a day on which the New York Stock Exchange is open for
business. If the exchange request is received after the close of the New
York Stock Exchange on any day, or on a day the New York Stock Exchange
is closed for business, the transfer will be based on the next business
day on which the New York Stock Exchange is open.
For those Plans which provide this Contract and the Company's Group
Fixed Fund Retirement Contract, the Owner, or the Participant if the Plan
so provides, may exchange Accumulation Units between any Series of the
DCVA and the Group Fixed Fund Retirement Contract. Exchanges from the
deposit fund to any Series of the DCVA will be subject to the limitations
of the Group Fixed Fund Retirement Contract. Exchanges will be effected
when received in good order by the Company at its home office.
ASSIGNMENTS
The Contract belongs to the Owner. All contractual rights and
privileges may be exercised by the Owner, subject to any rights
specifically reserved in the Plan for Participants as a group or as
individuals. The Contract may not be assigned.
SUSPENSION AND TERMINATION
The Contract may be suspended at the option of the Company on written
notice to the Owner if (a) the Owner has failed to remit to the Company
any Purchase Payment specified in the Plan, or (b) if the Company does not
accept an amendment to the Plan, filed with the Company by the Owner,
which in the Company's opinion would adversely affect its administrative
procedures or financial experience, or both, with respect to the Contract.
The Owner may suspend the Contract upon 90 days' written notice to the
Company. Suspension of the Contract will become effective as of the
ninety-first (91st) day following receipt of written notice by the Company.
Suspension of the Contract shall mean only that no further Purchase
Payments will be accepted by the Company except by mutual consent, and all
other terms of the Contract shall continue to apply. After suspension of
the Contract has become effective, the Owner may, upon 30 days' written
notice, terminate the Contract. Upon termination of the Contract,the
Company will pay to the Owner the value of the Contract, subject to
applicable charges, in accordance with the terms of the Contract. (See
"Redemption of Participant Accounts (Termination)").
B. PARTICIPANT ACCOUNT VALUES
APPLICATION OF PURCHASE PAYMENTS
The Company shall receive Purchase Payments from the Owner in
accordance with the requirements of the Plan. Net Purchase Payments
received on behalf of Participants will be applied by the Company to
purchase Accumulation Units of Series in the DCVA in accordance with the
instructions of the Owner. Purchase Payments made at any time by or on
behalf of each Participant must be at least $20 per month. Payments must
be no less than monthly, unless agreed to by the Company.
An initial Purchase Payment will be priced not later than 2 business
days after receipt of an order to purchase, if the application of the
Participant and all information necessary for processing the purchase
order are complete upon receipt by the Company. The Company may retain the
Purchase Payment for up to 5 business days while attempting to complete
an incomplete application. If the application cannot be made complete
within 5 business days, the Owner will be informed of the reasons for the
delay and the Purchase Payment will be returned immediately unless the
Owner consents to the Company retaining the Purchase Payment until
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the application of the Participant is made complete. Upon completion of
such incomplete application, the Purchase Payment will be priced within 2
business days.
Purchase Payments will not be priced on days when the New York
Stock Exchange is not open for business.
ADDITIONAL PURCHASE PAYMENT PRIOR TO COMMENCEMENT OF ANNUITY PAYMENTS
The Owner shall have the right to make one additional Purchase
Payment in respect to a Participant for the purpose of increasing
retirement income payments. Notice of such payment shall be given to the
Company at the time the notice to distribute is given, and such additional
Purchase Payment must be made no later than the last business day prior to
the date upon which retirement income payments are to commence. All such
additional Purchase Payments shall be subject to any applicable premium
taxes. The annuity rates provided under this Contract at the time of issue
shall be applicable to the entire value, including any such additional
Purchase Payment, of such account which does not exceed five times the
Purchase Payments allocated to such account prior to the date notice to
distribute is given. Any excess amount may be applied at annuity rates then
offered by the Company for contracts of the same type as this Contract.
CREDITING ACCUMULATION UNITS
When a Purchase Payment is received by the Company, the net
Purchase Payment for each Series is applied separately to provide
Accumulation Units which are credited to a Participant Account in
accordance with the instructions of the Owner. The number of Accumulation
Units credited to each Participant Account for each Series is determined by
dividing the net Purchase Payment allocated to that Series for that
Participant by the value of the Accumulation Unit for that Series next
computed following receipt of the Purchase Payment by the Company. The net
Purchase Payment for each Participant is the total Purchase Payment for
that Participant less any taxes then payable.
DCVA ACCUMULATION UNIT VALUE
The value of an Accumulation Unit for each Series was established
at $1.00 as of the date Fund shares were available for purchase for that
Series. The value of Accumulation Units for any Series for any subsequent
business day is determined by multiplying the value for the preceding
business day by the Net Investment Factor for that Series for the period
since that day. A business day is any day on which the New York Stock
Exchange is open for trading or any other day during which there is a
sufficient degree of trading of the Fund shares that the current net asset
value of their Accumulation Units might be materially affected.
ALLOCATION OF PURCHASE PAYMENTS
The Owner or Participant must specify the proportion of the
Purchase Payments to be applied to provide benefits under any Series of the
DCVA. The Company will permit the Owner, or the Participant if the Plan so
permits, to change the allocation percentages among Series for subsequent
Purchase Payments, provided that no change may be made which would result
in an amount less than 1% of the payment being allocated to any Series for
any Participant. The Company will permit such allocation changes as
frequently as permitted by the Plan. A change in allocation percentages
will not affect Accumulation Units of any Series resulting from Purchase
Payments made before the change.
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<PAGE> 31
VALUATION OF AN ACCOUNT
The sum of the value of all Accumulation Units credited to the
Participant Account in respect of the Participant is the Participant
Account Value. Purchase Payments are allocated among the Series of the
DCVA in accordance with the instructions of the Owner.
The value of a Participant's Account on any day can be determined by
multiplying the total number of Accumulation Units credited to the account
for each Series by the current Accumulation Unit Value for that Series in
respect of the Participant. Each Participant (or the Owner) will be
advised periodically of the number of Accumulation Units credited to his
account for each Series, the current Accumulation Unit Values, and the
total value of his account. Such reports to Participants are for
informational purposes only and should not be interpreted to mean that a
Participant has any rights with respect to his account beyond that
provided by the Owner in accordance with the terms of the Plan.
The Participant and Owner should review the information in these
reports carefully. All errors or corrections must be reported to the
Company immediately to assure proper crediting to the Contract and
appropriate Series. The Company will assume all transactions are accurate
unless the Participant or the Owner notifies the Company otherwise within
30 days after receipt of the report.
C. REDEMPTION OF PARTICIPANT ACCOUNTS (TERMINATION)
The Owner's right to redeem (terminate) Participant Accounts, either
fully or partially, will be governed by the terms of the Plan which the
Contract is issued to fund. It should be recognized that the value of the
investment on redemption can be more or less than its cost. All such
payments will be made by the Company to the Owner, after the assessment
of any applicable Contingent Deferred Sales Charge. It is the Owner's
obligation to distribute such payments to a Participant. The Company may
undertake the obligation on behalf of the Owner to distribute such
payments, less the Contingent Deferred Sales Charge, if any, directly to a
Participant by agreement with the Owner. To the extent permitted by the
Plan, a Participant Account may be redeemed fully or partially at any time
prior to the date Retirement Income Payments commence for the Participant
under either Option B1 or B2, subject to the Contingent Deferred Sales
Charge. No partial redemption will directly affect future requirements to
make Purchase Payments for that Participant nor his retirement date. If
the Contract is terminated by the Owner, all Participant Accounts in the
DCVA will be redeemed to the extent permitted by the Plan.
A request for a partial redemption of a Participant Account
containing more than one Series of Accumulation Units must specify the
allocation of the partial redemption among the Series of Accumulation
Units. However, if no such direction is contained in the request for a
redemption, the Company may pro-rate the redemption among the applicable
Series of Accumulation Units. Upon receipt at the Company's home office
of a written request for a full or partial redemption of a Participant
Account, the Company will determine the value of the number of
Accumulation Units redeemed, less any applicable Contingent Deferred
Sales Charge, at the Accumulation Unit Value next computed following
receipt of such written request by the Company. Payment of any such
amount will be made to the Owner with reasonable promptness, and in any
event, within 7 days of the date the request is received by the Company.
Payment of redemption values may be suspended when redemption of the Fund
shares is suspended (i) during any period in which the New York Stock
Exchange is closed, or (ii) in the event that the Securities and Exchange
Commission may by order direct for the protection of Owners or
Participants. Instead of a lump sum distribution of a full or partial
redemption, the Owner, or Participant if permitted by the Plan, may elect
to have that amount paid out in installments under Option A1 or A2, subject
to the minimums applicable to these options.
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D. DISTRIBUTION OF PARTICIPANT ACCOUNTS (RETIREMENT PERIOD)
RETIREMENT INCOME PAYMENTS
The period during which a Participant Account is paid out in
periodic installments is known as the distribution period. Because
periodic distributions will normally be made after the Participant retires,
the distribution period is also called the retirement period. All such
periodic distributions will be made by the Company to the Owner. It is the
Owner's obligation to pay such amounts to a Participant. The Company may
undertake the obligation on behalf of the Owner to pay such amounts
directly to a Participant by agreement with the Owner. Retirement Income
Payments under Options B1 and B2 are determined on the basis of (i) the
mortality tables specified in the Contract, (ii) the adjusted age of the
Retired Participants, (iii) the type of Retirement Income Payment option(s)
selected, and (iv) in the case of variable payments, the investment
performance of the specific DCVA Series elected. While the Company may be
obligated to make variable Retirement Income Payments under the Contract,
the amount of each such payment is not guaranteed. The dollar amount of
variable payments will reflect investment gains and losses, and investment
income of the DCVA Series on which they are based, but they will not be
affected by adverse mortality experience or by an increase in the Company's
expenses above the amount provided for in the Contracts.
ELECTION OF INCOME FORM AND DATE
The Contracts provide for Retirement Income Payments to begin on
the date and under the retirement options elected in accordance with the
Plan. At least one month prior to a Participant's retirement date, the
Contract Owner may by written election to the Company at its home office,
elect any one of the retirement income options described below. The Plan
may restrict changes in election of retirement income options. Retirement
date means the date retirement income commences for a Participant and is
specified in the Plan.
ALLOCATION OF RETIREMENT INCOME
At retirement, Accumulation Units in a Participant's Account may
be used to purchase a Fixed Dollar Annuity for the Participant. For
Participants electing Options A1 or A2 as described below, Accumulation
Units in a Participant's Account of any Series in the DCVA will be used to
provide variable Retirement Income Payments as described further in this
Prospectus.
FIXED DOLLAR ANNUITY
A Fixed Dollar Annuity is an annuity with payments which are
guaranteed as to dollar amount during the retirement period. The first
fixed dollar payment will be determined by applying the General Account
Contract value to the applicable Annuity Table in accordance with the
Optional Retirement Income Form elected. This will be done at the
retirement date. Fixed Dollar Annuity payments after the first will not be
less than the First Fixed Dollar Annuity payment. The availability of Fixed
Dollar Annuity Contracts under a particular Plan is subject to the election
of the Owner.
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MINIMUM PAYMENT
If the present value of the Participant's accrued benefit at the time
of retirement is less than $3,500, the Company shall have the right to
make a lump sum distribution to such Retired Participant.
DEATH BENEFIT BEFORE RETIREMENT
In the event a Participant dies before his retirement income
commences, a death benefit equal to the value of such Participant Account,
on the date due proof of death is received in
writing by the Company will be paid as provided by the Plan. If the
Plan so provides, a Beneficiary may elect either to receive such
value in a lump sum or to apply it under any of the Optional
Retirement Income Forms contained in this Contract, subject to the
minimums applicable to such optional forms. Monthly payments due
under such options may be fixed, variable, or a combination of
fixed and variable.
OPTIONAL RETIREMENT INCOME FORMS
The availability of the following Optional Retirement Income Forms is
subject to the election of the Owner.
OPTION A1--Payments for a Designated Period. Payments are made monthly
for any specified number of years not exceeding 30. The amount of each
variable payment will be determined by multiplying (a) by (b) where (a) is
the Accumulation Unit Value for the date the payment is made and (b) is
the number of Accumulation Units applied under this option divided by the
number of payments selected. Exchanges between the investment options are
permitted subject to limitations outlined in the Company's Group Fixed
Fund Retirement Contract. A period certain payment period of less than 5
years for a Participant who has less than a minimum of 5 Participant
Account Years would result in imposition of the applicable Contingent
Deferred Sales Charge.
OPTION A2--Payments of a Designated Amount. Payments are made monthly
in equal installments (not less than $25 per month) until the amount
applied, adjusted each business day for investment results, is exhausted.
The final installment will be the sum remaining with the Company.
Payments under this option which result in a payment period of less than
5 years for a Participant who has less than 5 Participant Account Years
would result in imposition of the applicable Contingent Deferred
Sales Charge.
OPTION B1--Life Income with Payment Certain. Payments are made
monthly during the lifetime of an individual with payments made for a
period certain of 60, 120, 180, 240, 300, or 360 months as elected. If
the individual dies before the end of the period certain, level payments
will continue to the Designated Beneficiary for the remainder of the
period certain.
OPTION B2--Joint and Survivor Life Income. Payments are made monthly
during the joint lifetime of an individual and another named individual.
Payments will continue to be made as long as either is living. This
option will permit the choice of 100%, 75% 66-2/3% or 50% of the original
payment amount to be paid to the Beneficiary. Payments will stop with
the last payment due prior to the death of the Beneficiary. If the
Beneficiary predeceases the designated annuitant, the payments continue
at 100% to the designated annuitant.
OTHER FORMS AND BENEFIT PAYMENTS-- With the consent of the Company,
the amount due on distribution may be applied on any other mutually
agreeable basis.
Exchanges processed while Participants are receiving payments under
Option A1 may change the number of Accumulation Units remaining. In this
event, the payment amount must be recalculated.
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DEATH OF RETIRED PARTICIPANT
If any Retired Participant dies while receiving payments, any
death benefit payable will be determined in accordance with the retirement
income form elected. Calculation of the present value of any remaining
payments certain for purposes of making a lump sum payment will be based on
the same assumed investment rate used by the Company in determining the
payments certain prior to the death of the Retired Participant.
WITHDRAWAL
If permitted by the Plan, any amount remaining under Option A1 or
A2 may be withdrawn, or if that amount is at least $5,000, it may be
applied under either Option B1 or B2, subject to the minimum payment
requirements described previously. Unless prohibited by the Plan, a
Beneficiary receiving payments certain under Option B1 after the death of a
Retired Participant may elect at any time to receive the present value at
the current dollar amount of the remaining number of payments certain in a
single payment, calculated on the basis of the assumed investment rate used
in computing the amount of the previous payments.
FREQUENCY OF PAYMENT
At the election of the Retired Participant, and with the consent
of the Owner, payments made under any option may be made annually,
semi-annually, or quarterly instead of monthly. Any change in frequency of
payments must be on the anniversary of the commencement of Retirement
Income Payments.
DETERMINATION OF PAYMENTS UNDER OPTIONS A1 AND A2
Monthly payments under Options A1 and A2 will be determined in the
manner set forth in the description of the options. As each payment is made
under either of these options, a number of Accumulation Units equal in
value to the payment will be canceled.
DETERMINATION OF PAYMENTS UNDER OPTIONS B1 AND B2
Variable monthly payments under Options B1 and B2 will be
determined annually and will remain level throughout the year. Each year,
as of the anniversary of the commencement of Retirement Income Payments, a
new variable monthly payment will be determined and that new payment will
remain level for that year. An adjusted age is used to determine the amount
of monthly payment for each year. Such adjusted age may not be the same as
the actual age of the Retired Participant.
DETERMINATION OF AMOUNT OF VARIABLE MONTHLY PAYMENTS FOR FIRST YEAR
In determining the amount of Retirement Income Payments under
Options B1 and B2, the value held on behalf of a Participant is determined
by multiplying the number of Accumulation Units in each Series for that
account by the Accumulation Unit value for that Series on the last business
day of the second calendar week immediately preceding the date on which the
first payment is due.
The first year variable monthly payment for each Series is
determined by dividing the value of the Accumulation Units of that Series
in the Participant Account by the amount required to provide $1 per month
(the purchase rate).
Once the first year's variable monthly payment amount has been
determined for a Participant, the Company will deduct the annual premium
from the Participant Account. This deduction is made by canceling a number
of Accumulation Units in the Participant Account equal in value to the
annual premium. The allocation of the annual premium between Series will be
in such relationship as the monthly payments from each Series have to each
other.
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The annual premium is calculated so that if there are no partial
redemption's (and therefore no Fund dividends have been taken in cash) the
payee will receive level annual payments if the net investment factor, on
an annual basis, is equal to the Assumed Investment Rate plus an amount
equal to the annual Administrative Charge. Payments for subsequent years
will be smaller than, equal to, or greater than the payments received
during the initial year, depending on whether the actual net investment
result on an annual basis of a DCVA Series is smaller than, equal to, or
greater than the Assumed Investment Rate.
DETERMINATION OF AMOUNT OF VARIABLE MONTHLY PAYMENTS FOR THE SECOND AND
SUBSEQUENT YEARS
As of the first anniversary of the commencement of Retirement Income
Payments,the second year variable monthly payments will be determined
in exactly the same manner as for the first year, using the purchase rates
in the Contract for the Retired Participant's age as then determined under
the terms of the Contract. As in the first year, an annual premium will be
deducted and transferred to the General Account from which Account the
Company will make the Retirement Income Payments. Subsequent annual
determinations will be made in the same manner.
Upon the death of any Retired Participant, the Participant Account
will be reduced by the number of Accumulation Units not required to
provide further payments during the remainder of a period certain, if any,
or to a contingent Retired Participant. Any Accumulation Units so canceled
will either remain in the DCVA or be transferred to the Company's General
Account, depending on the Company's obligation.
ALTERNATE ASSUMED INVESTMENT RATE
The Contracts include purchase rates based on a 3 1/2% rate. If not
prohibited by the laws and regulations of the states in which this Contract
is issued, an Owner may elect on the Contract Date to have all variable
benefits payable for all Participants determined on an Assumed Investment
Rate of 5%. The Assumed Investment Rate basis in the Contract is used
merely to determine each year's monthly payment from investment experience
of any of the DCVA Series. The choice of the Assumed Investment Rate
affects the pattern of retirement income payments. A higher Assumed
Investment Rate will produce a higher initial payment, but a more slowly
rising series of subsequent payments (or a more rapidly falling series of
subsequent payments) than a lower Assumed Investment Rate. Although a
higher initial payment would be received under a higher Assumed Investment
Rate, there is a point in time after which payments under a lower Assumed
Investment Rate would be greater, assuming payment continues after that
point in time.
The objective of a variable retirement contract is to provide level
payments during periods when the economy is relatively stable and to
reflect as increased payments only the excess of investment results
flowing from inflation or an increase in productivity. The achievement of
this objective will depend in part upon the validity of the assumption that
the net investment result, on an annual basis, of a DCVA Series equals the
Assumed Investment Rate during periods of stable prices.
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GENERAL INFORMATION
SUBSTITUTION OF SECURITIES
If the shares of any Fund should no longer be available for
investment by the DCVA or, if in the judgment of the Company's management,
further investment in such Fund shares should become inappropriate in view
of the purposes of the Contract, the Company may substitute shares of
another Fund for Fund shares already purchased or to be purchased in the
future by Purchase Payments under the Contract. No substitution of
securities in any DCVA Series may take place without prior approval of the
Securities and Exchange Commission, and under such requirements as it may
impose.
PERFORMANCE ADVERTISING
The Company may from time to time advertise several types of
historical performance for the Series of the DCVA. A "yield" and "effective
yield" may be advertised for the Nationwide Money Market Fund Series, the
Dreyfus Cash Management Fund Series and the Nationwide Separate Account
Trust Money Market Fund Series. "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 Series units. Yield is an annualized figure, which
means that it is assumed that the Series generates the same level of net
income each week over a 52-week period. The "effective yield" is calculated
similarly but includes the effect of assumed compounding calculated under
rules prescribed by the Securities and Exchange Commission. The effective
yield will be slightly higher than yield due to this compounding effect.
The Company may also advertise for the Series standardized
"average annual total return", calculated in a manner prescribed by the
Securities and Exchange Commission, and non-standardized "total return".
"Average annual total return" will show the percentage rate of return of a
hypothetical initial investment of $1,000 for rolling calendar quarters and
will cover, at least, the most recent one, five and ten year periods, or
for a period from inception to date if the Fund held in the Series has not
been in existence for one of the prescribed periods. This calculation
reflects the deduction of all applicable charges made to the Contracts
except for premium taxes, which may be imposed by certain states.
Non-standardized "total return" will be calculated in a similar manner as
will average annual total return except total return will not reflect the
deduction of any applicable Administrative Charge or Contingent Deferred
Sales Charge, which, if reflected, would decrease the level of performance
shown.
The Company may also from time to time advertise the performance
of the sub-accounts of the DCVA relative to the performance of other
variable annuity sub-accounts or mutual funds with similar or different
objectives, or the investment industry as a whole.
The sub-accounts of the DCVA may also be compared to certain
market indexes, which may include, but are not limited to: 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; and Dow Jones Industrial Average.
Normally these rankings and ratings are published by independent
tracking services and publications of general interest including, but not
limited to: 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, U.S. News and World Report, National Underwriter;
rating services such as LIMRA, Value, Best's Agent Guide, Western Annuity
Guide, Comparative Annuity Reports; and other
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publications such as the Wall Street Journal, Barron's, Columbus Dispatch,
Investor's Daily, and Standard & Poor's Outlook. In addition, Variable
Annuity Research & Data Service (The VARDS Report) is an independent
rating service that ranks over 500 variable annuity funds based upon
total return performance. These rating services and publications rank
the performance of the Funds against all funds over specified periods and
against funds in specified categories. The rankings may or may not
include the effects of sales or other charges.
The Company is also ranked and rated by independent financial rating
services, among which are Moody's, Standard & Poor's and A.M. Best Company.
The purpose of these ratings is to reflect the financial strength or
claims-paying ability of the Company. The ratings are not intended to
reflect the investment experience or financial strength of the DCVA.
The Company may advertise these ratings from time to time. In addition,
the Company may include in certain advertisements, endorsements in the form
of a list of organizations, individuals or other parties which recommend
the Company or the Contract. Furthermore, the Company may occasionally
include in advertisements comparisons of currently taxable and tax
deferred investment programs, based on selected tax brackets, or
discussions of alternative investment vehicles and general economic
conditions.
ALL PERFORMANCE INFORMATION AND COMPARATIVE MATERIAL ADVERTISED BY
THE COMPANY IS HISTORICAL IN NATURE AND IS NOT INTENDED TO REPRESENT OR
GUARANTEE FUTURE RESULTS. THE OWNER'S OR PARTICIPANT'S ACCOUNT VALUE AT
REDEMPTION MAY BE MORE OR LESS THAN ORIGINAL COST.
The Statement of Additional Information contains more detailed
information about the performance calculations, including actual examples
for each type of performance advertised.
CONTRACT OWNER INQUIRIES
Owner and Participant inquiries may be directed to Nationwide Life
Insurance Company by writing P. O. Box 16766, One Nationwide Plaza,
Columbus, Ohio 43216, or calling 1-800-545-4730 (TTY: 1-800-848-0833).
DCVA NET INVESTMENT FACTOR
The Net Investment Factor for any Valuation Period is determined by
dividing (a) by (b) and subtracting (c) from the result where:
(a) is the net of:
(1) the net asset value per share of the Fund held in the Series
determined at the end of the current valuation Period, plus
(2) the per share amount of any dividend or capital gain
distributions made by the Fund held in the Series if the
"ex-dividend" date occurs during the current Valuation
Period, plus or minus
(3) a per share charge or credit for any taxes reserved for,
which is determined by the Company to have resulted from
the investment operations of the Series.
(b) is the net of:
(1) the net asset value per share of the Fund held in the Series
determined as of the end of the immediately preceding
Valuation Period, plus or minus
(2) the per share charge or credit for any taxes reserved for
in the immediately preceding Valuation Period.
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(c) is a factor representing the daily Actuarial Risk Fee deducted from
the DCVA. Such factor is equal to an annual rate of 0.95% of the
daily net asset value of the DCVA.
For Funds that credit dividends on a daily basis and pay such
dividends once each month or quarter, (such as money market funds and
certain bond funds) the Net Investment Factor allows for the monthly or
quarterly reinvestment of these daily dividends.
The Net Investment Factor may be greater or less than one;
therefore, the value of an Accumulation Unit may increase or decrease. It
should be noted that changes in the Net Investment Factor may not be
directly proportional to changes in the net asset value of underlying Fund
shares, because of the deduction for the Actuarial Risk Fee and the effect
of the various purchase and sale transactions on any particular day.
VALUATION OF ASSETS
Fund shares in the DCVA will be purchased and valued at their net
asset value (daily bid price exclusive of any sales charges). A Fund's net
asset value per share is determined by dividing the value of the total
assets of the Fund, less liabilities, by the number of shares outstanding,
with no charge for sales expense.
FEDERAL TAX STATUS
The following description of the federal tax status of these
Contracts is not exhaustive, and special rules are provided with respect to
situations not discussed herein. For complete information, consult a
qualified tax advisor. The Company does not make any guarantee regarding
the tax status of any Contract or any transaction involving the Contracts.
For federal income tax purposes, the operations of the DCVA form a
part of the Company's operations. Under existing federal income tax law, no
taxes are payable by the Company on the investment income of the DCVA to
the extent it is credited to the Owners under the Contracts. The Company is
taxed as a life insurance company under Part One, Subchapter L, of the
Code.
Income and capital gains of the DCVA would normally be taxable to
Owners whether or not taken by the Owners in cash. However, the Contracts
are issued only to organizations exempt from federal income tax.
The amounts received by the Participant under the Plan normally
represent the accumulation of Purchase Payments which were not previously
included in the Participant's gross income, and therefore any such amounts
should be included in gross income of a Participant or Beneficiary when
such amounts are received.
It is the responsibility of each Owner to determine that its Plan
is established and administered in accordance with the applicable
provisions of the Code.
CONTRACTS ISSUED UNDER THE NEW YORK MODEL PLAN
The following contract amendments are required by the Rules and
Regulations of the New York State Deferred Compensation Board in order to
market the Contracts to governmental employers for use in funding public
employee deferred compensation plans in the State of New York.
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Throughout the prospectus, references to "annuity" payments are
modified to "benefit" payments.
The "Suspension and Termination"provisions are amended to permit a
Participant to "freeze" his/her account and maintain the account on
deposit with the Company notwithstanding the Owner's termination of its
contractual relationship with the Company. These accounts shall remain
the exclusive property of the Owner, subject to the claims of its general
creditors.
All references throughout the prospectus to Optional Retirement
Income Forms A1, A2, B1 and B2 shall mean Option 1, Option 2, Option 3 and
Option 4, respectively. All references to "Contingent Deferred Sales
Charge" are deleted.
LEGAL PROCEEDINGS
There are no material legal proceedings, other than ordinary routine
litigation incidental to the business to which the Company, or the DCVA,
are parties or to which any of their property is the subject.
The General Distributor, Nationwide Financial Services, Inc., is not
engaged in any litigation of any material nature.
TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION
<TABLE>
<CAPTION>
PAGE
<S> <C>
General Information and History . . . . . . . . . . . . 1
Services . . . . . . . . . . . . . . . . . . . . . . . 1
Purchase of Securities Being Offered . . . . . . . . . 2
Underwriters . . . . . . . . . . . . . . . . . . . . . 2
Calculation of Performance . . . . . . . . . . . . . . 2
Annuity Payments . . . . . . . . . . . . . . . . . . . 7
Financial Statements . . . . . . . . . . . . . . . . . 8
</TABLE>
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APPENDIX
PARTICIPATING FUNDS
(THE COMPANY MAY LIMIT THE NUMBER OF FUNDS SELECTED BY THE OWNER, AND
ALL FUNDS MAY NOT BE AVAILABLE UNDER YOUR PLAN.)
A SUMMARY OF INVESTMENT OBJECTIVES IS CONTAINED IN THE DESCRIPTIONS OF EACH
MUTUAL FUND BELOW. MORE DETAILED INFORMATION MAY BE FOUND IN THE CURRENT
PROSPECTUS FOR EACH MUTUAL FUND. SUCH A PROSPECTUS FOR THE MUTUAL FUND OR
FUNDS BEING CONSIDERED SHOULD ACCOMPANY THE PROSPECTUS AND SHOULD BE READ IN
CONJUNCTION HEREWITH. A COPY OF EACH PROSPECTUS MAY BE OBTAINED WITHOUT CHARGE
FROM NATIONWIDE LIFE INSURANCE COMPANY.
THE FOLLOWING FUNDS ARE AVAILABLE ONLY FOR DEFERRED COMPENSATION CONTRACTS.
AIM WEINGARTEN FUND - INSTITUTIONAL CLASS
The investment objective of the Fund is to provide growth of capital
through investments primarily in common stocks of leading U.S. companies
considered by management to have strong earnings momentum.
AIM CONSTELLATION FUND - INSTITUTIONAL CLASS
The investment objective of the Fund is to provide capital appreciation
primarily through investments in common stocks with emphasis on medium-sized
and smaller emerging growth companies.
DREYFUS CASH MANAGEMENT
The investment objective of the Fund is to provide investor with as high a
level of current income as is consistent with the preservation of capital and
the maintenance of liquidity.
THE DREYFUS THIRD CENTURY FUND, INC.
The Fund's primary goal is to provide capital growth through equity
investment in companies that, in the opinion of the Fund's management, not only
meet traditional investment standards, but which also show evidence that they
conduct their business in a manner that contributes to the enhancement of the
quality of life in America. Current income is secondary to the primary goal.
THE EVERGREEN TOTAL RETURN FUND
The investment objective of the Fund is current income and capital
appreciation. The Fund invests primarily in common and preferred stocks,
securities convertible into or exchangeable for common stocks, and fixed income
securities. The Fund's objective is to maximize the "total return" on its
portfolio of investments.
FEDERATED GNMA TRUST-INSTITUTIONAL SHARES
The investment objective of the Fund is current income. The Fund pursues
this investment objective by investing primarily in instruments issued or
guaranteed by the Government National Mortgage Association ("GNMA").
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FEDERATED INTERMEDIATE GOVERNMENT TRUST-INSTITUTIONAL SHARES
The investment objective of the Fund is current income. The Fund pursues
this investment objective by investing in U.S. government securities with
remaining maturities of five years or less.
FIDELITY ASSET MANAGER(TM)
The investment objective of the Fund is a high total return with reduced
risk over the long term by allocating its assets among domestic and foreign
stocks, bonds, and short-term instruments.
FIDELITY CONTRAFUND
The investment objective of the Fund is capital appreciation by investing
in securities that its manager believes are undervalued due to an overly
pessimistic appraisal by the public. Although the Fund will usually be
invested primarily in common stocks and securities convertible into common
stock, the percentage of its assets invested in other securities may vary.
FIDELITY EQUITY-INCOME FUND
The investment objective of the Fund is to obtain reasonable income from
a portfolio consisting primarily of income-producing equity securities. The
Fund seeks a yield which exceeds the composite yield on the securities
comprising the Standard & Poor's Composite Index of 500 Stocks. In pursuing
this objective, the Fund will also consider the potential for capital
appreciation.
FIDELITY GROWTH & INCOME PORTFOLIO
The investment objective of the Fund is long term capital growth, current
income, and growth of income consistent with reasonable investment risk.
FIDELITY MAGELLAN(R) FUND
The investment objective of the Fund is capital appreciation by investing
primarily in common stock and securities convertible into common stock. The
Fund may also invest in foreign securities, which involves additional risks.
The Fund may also invest in stock index futures and options both of which can
be volatile investments.
FIDELITY OTC PORTFOLIO*
The investment objective of the Fund is to seek capital appreciation by
investing primarily in securities traded on the over-the counter (OTC)
securities market. Securities traded on the OTC include, among others,
industrial corporations, financial services institutions, public utilities,
and transportation companies, common and preferred stocks, securities
convertible into common stock, warrants and similar rights, and debt
securities, and obligations of the federal government. The fund does not
place any weight on dividend and interest income unless it believes this
income will have a favorable influence on the market value of a security.
FIDELITY PURITAN FUND*
The investment objective of the Fund seeks to obtain as much income
as possible, consistent with the preservation and conservation of capital,
by investing in a broadly diversified portfolio of securities, including
common stocks, preferred stocks, and bonds. While emphasis on income is an
important objective, this does not preclude growth in capital since some
securities offering a better than average yield may also possess some
growth possibilities.
* May not yet be available for New York Participants pending approval by the
New York Insurance Department.
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INVESCO INDUSTRIAL INCOME FUND, INC. (FORMERLY "FINANCIAL INDUSTRIAL INCOME
FUND, INC.")
The investment objective of the Fund is to seek the best possible current
income while following sound investment practices by investing in securities
which will provide a relatively high yield and stable return and which, over a
period of years, may also provide capital appreciation. Capital growth
potential is a secondary factor in the selection of portfolio securities of the
Fund. The Fund invests in common stocks, as well as convertible bond and
preferred stocks.
JANUS FUND
The Janus Fund is a diversified fund that seeks long-term growth of capital
by investing primarily in common stocks of a large number of issuers of any
size. Janus Capital's fundamental analysis and selection process focuses on
stocks with earnings growth potential that may not be recognized by the market.
Such securities are selected solely for their capital growth potential;
investment income is not a consideration.
JANUS TWENTY FUND
The investment objective of the Fund is growth of capital in a manner
consistent with the preservation of capital. Under normal conditions, the Fund
will concentrate its investments in a core position of 20-30 common stocks.
However, the percentage of the Fund's assets invested in common stocks will
vary, depending upon its investment adviser's opinion of prevailing market,
financial and economic conditions. Consequently, the Fund may at times hold
substantial positions in cash, or interest-bearing securities.
MAS FUNDS FIXED INCOME PORTFOLIO
The investment objective of the Fund is to achieve above-average total
return over a market cycle of three to five years, consistent with reasonable
risk, by investing in a diversified portfolio of U.S. Government securities,
corporate bonds (including bonds rated below investment grade commonly referred
to as "junk bonds"), foreign fixed-income securities and mortgage-backed
securities of domestic issuers and other fixed-income securities. The
portfolio's average weighted maturity will ordinarily be greater than five
years.
MFS(R) GROWTH OPPORTUNITIES FUND - CLASS A (FORMERLY "MFS(R) CAPITAL
DEVELOPMENT FUND")
The investment objective of the Fund is growth of capital. Dividend
income, if any, is incidental to the objective of capital growth. To achieve
this objective, a flexible approach toward types of companies as well as types
of securities is maintained by the Fund, depending upon the economic
environment and the relative attractiveness of the various securities markets.
MFS(R) HIGH INCOME FUND - CLASS A
The investment objective of the Fund is high current income by investing
primarily in a professionally managed diversified portfolio of fixed income
securities, some of which may involve equity features. Securities offering the
high current income sought by this Fund are ordinarily in the lower rating
categories of recognized rating agencies or are unrated and generally involve
greater volatility of price and risk of principal and income than securities in
the high rating categories. Capital growth, if any, is a consideration
incidental to the investment objective of high current income.
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MASSACHUSETTS INVESTORS GROWTH STOCK FUND - CLASS A
The investment objective of the Fund is long-term growth of capital and
future income rather that current income.
NATIONWIDE(R) BOND FUND
The investment objective of the Fund is to generate a high level of income,
consistent with capital preservation, through investments in high-quality bonds
and other fixed income securities. Through investment in long-term income
obligations, including corporate debt securities, United States and Canadian
Government obligations and commercial paper, this Fund seeks to serve those who
are less willing to accept the risk associated with stocks.
NATIONWIDE(R) FUND
The investment objective of the Fund is to obtain a total return from a
flexible combination of current income and capital appreciation. Primary
emphasis is given to common stocks, but investments may also include
convertible issues, bonds and money market instruments.
NATIONWIDE(R) GROWTH FUND
The investment objective of the Fund is to achieve long-term capital
appreciation without emphasis on current return. Major emphasis in the
selection of securities is placed on companies which have capable management,
and are in fields where social and economic trends, technological
developments, and new processes or products indicate a potential for greater
than average growth.
NATIONWIDE(R) MONEY MARKET FUND
The investment objective of the Fund is to provide as high a level of
current income as is consistent with the preservation of capital and
maintenance of liquidity, through investment in a diversified portfolio of high
quality money market instruments maturing in 397 days or less. These
instruments include, but are not limited to, U.S. Government and Agency
obligations, obligations of large commercial and foreign banks, certificates of
deposit of large savings associations, taxable or partly taxable obligations
of state, county and local governments, highly rated commercial paper, highly
rated corporate obligations, and repurchase agreements in any of the above.
NEUBERGER & BERMAN GUARDIAN FUND*
The Fund seeks capital appreciation through investments generally in
dividend-paying issues of established companies that its investment officers
believe are well managed. The emphasis of the Fund's investments is on common
stock. The Fund diversifies its holdings among different industries and
different companies in light of conditions prevailing at any given time.
Current income is a secondary objective.
* May not yet be available for New York Participants pending approval by
the New York Insurance Department.
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NEUBERGER & BERMAN MANHATTAN FUND, INC.
The Fund seeks capital appreciation without regard to income. It invests,
through its corresponding Portfolio, in securities believed to have the maximum
potential for long-term capital appreciation. It does not seek to invest in
securities that pay dividends or interest, and any such income is incidental.
The Portfolio expects to be almost fully invested in common stocks, often of
companies that may be temporarily out of favor in the market. Its aggressive
growth investment program involves greater risks and share price volatility
than programs that invest in more conservative securities.
NEW YORK VENTURE FUND, INC.
The investment objective of the Fund is growth of capital. It invests
primarily in common stocks, and securities convertible into common stocks. The
Fund invests in securities subject to the risk of price fluctuations reflecting
both market evaluations of the business involved and general changes in the
equity markets. It invests in securities of foreign issuers, which involve
special risk factors, and may hedge currency fluctuation risks related thereto.
PUTNAM INVESTORS FUND - CLASS A
The investment objective of the Fund is long-term growth of capital and any
increased income resulting from such growth. The Fund is designed for
investors seeking long-term growth of capital from a portfolio consisting
primarily of common stocks. The Fund's management emphasizes investment in
quality growth stocks.
PUTNAM VOYAGER FUND - CLASS A
The investment objective of the Fund is capital appreciation. The Fund
invests primarily in common stocks believed by the Fund's Investment Manager,
Putnam Management, to have potential for capital appreciation significantly
greater than the market average. The Fund is designed for investors willing to
assume above-average risk in return for above-average capital growth potential.
SEI INDEX FUNDS-S&P 500 INDEX PORTFOLIO
The S&P 500 Index Portfolio seeks to provide investment results that
correspond to the aggregate price and dividend performance of the securities in
the Standard & Poor's 500 Composite Stock Price Index which is comprised of 500
selected common stocks, most of which are listed on the New York Stock
Exchange. The investment objective is a fundamental policy of the portfolio.
There can be no assurance that the Portfolio will achieve its investment
objective.
SELIGMAN GROWTH FUND, INC. - CLASS A
The investment objective of the Fund is longer-term growth in capital value
and an increase in future income. Fund assets have been invested primarily in
common stocks with the inherent investment risks tempered by portfolio
diversification.
STRONG COMMON STOCK FUND, INC.
The Strong Common Stock Fund seeks capital growth. It seeks to attain this
objective by investing in a diversified portfolio of equity securities which,
in the opinion of the Fund's investment advisor, possess the potential for
price appreciation.
42
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<PAGE> 45
TEMPLETON FOREIGN FUND
The investment objective of the Fund is long-term capital
growth through a flexible policy of investing in stocks and debt obligations
of companies and governments outside the United States. Any income
realized will be incidental.
TEMPLETON SMALLER COMPANIES GROWTH FUND, INC.
The investment objective of the Fund is long-term capital growth,
primarily through investment in common stocks and all types of common stock
equivalents, including rights, warrants and preferred stock, of companies
of various nations throughout the world.
T. ROWE PRICE INTERNATIONAL STOCK FUND(R)
The Fund's objective is long-term growth of capital through
investments primarily in common stocks of established, non-U.S. companies.
TWENTIETH CENTURY GROWTH INVESTORS
The investment objective of the Fund is capital growth through
investment in securities which the management considers to have better-
than-average prospects for appreciation. It is management's intention that
the portfolio will generally consist of common stocks of large, established
companies.
TWENTIETH CENTURY SELECT INVESTORS
The investment objective of the Fund is capital growth by
investing primarily in common stocks that are considered by management to
have better-than-average prospects for appreciation. Common stocks chosen
must have a record of paying or having committed themselves to the payment
of regular cash dividends, but growth is the primary consideration, and the
dividends may not be significant.
TWENTIETH CENTURY ULTRA INVESTORS
The investment objective of the Fund is capital growth by
investing primarily in common stocks that are considered by management to
have better-than-average prospects for appreciation. It is management's
intention that the portfolio will generally consist of common stocks of
medium-sized and smaller companies.
THE FOLLOWING FUND IS NOT AVAILABLE FOR NEW CONTRACTS ISSUED ON OR AFTER
JANUARY 1, 1987:
FIDELITY CAPITAL & INCOME FUND (FORMERLY "FIDELITY HIGH INCOME FUND")
The investment objective of the Fund is to seek to provide a
combination of income and capital growth by investing primarily in debt
instruments and common and preferred stocks, with a focus on lower-quality
debt securities and securities of companies with uncertain financial
positions.
Effective on and after May 1, 1991, the Company shall no longer
permit Owners or Participants to make additional Purchase Payments or to
exchange Contract values into the Fidelity Capital & Income Fund Series.
However, Contract values held in the Fidelity Capital & Income Fund Series
as of May 1, 1991 may continue to be invested in that Series. Unless the
Company is notified otherwise, any Purchase Payments or exchanges which the
Owner or Participants directs the Company to invest in the Fidelity Capital
& Income Fund Series on and after May 1, 1991 shall instead be
automatically invested in the Nationwide Money Market Fund Series.
43
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<PAGE> 46
The Company has determined that further investment in the Fidelity Capital
& Income Fund Series is not in the best interests of the Owners and
Participants in view of the Fund's adoption, effective for shares purchased on
and after February 1, 1991, of a redemption fee equal to 1.5% of the net asset
value of any Fund shares redeemed which are held less than twelve months. Any
redemption fees which the Fund may assess against Fund shares held by the
Company in the DCVA which were purchased from February 1, 1991 to May 1, 1991
shall be paid by the Company from surplus and shall not be paid, directly or
indirectly, by Contract Owners, Participants or the DCVA.
THE FOLLOWING FUND IS NOT AVAILABLE FOR NEW CONTRACTS ISSUED ON OR AFTER AUGUST
1, 1993:
DELAWARE GROUP DECATUR FUND, INC.-DECATUR INCOME FUND
The investment Objective of the Fund is to achieve the highest possible
current income by investing primarily in common stocks that provide the
potential for income and capital appreciation without undue risk to principal.
THE FOLLOWING FUNDS MAY NOT BE AVAILABLE TO ALL CONTRACT OWNERS ON OR AFTER
JANUARY 1, 1994:
THE BOND FUND OF AMERICA(SM), INC.
The Fund's investment objective is to provide as high a level of current
income as is consistent with the preservation of capital. The Fund invests
substantially all of its assets in marketable corporate debt securities, U.S.
Government securities, mortgage-related securities, other asset-backed
securities and cash or money market instruments. Normally, at least 65% of the
Fund's assets will be invested in bonds.
THE GROWTH FUND OF AMERICA(R), INC.
The investment objective of the Fund is growth of capital. The realization
of current income will not be a consideration. The Fund seeks to achieve its
objective by investing in a diversified portfolio consisting primarily of
common stocks. However, assets may also be held in securities convertible into
common stocks, cash or cash equivalents, straight debt securities (including
U.S. Government securities), or nonconvertible preferred stocks. The Fund will
maintain at least 65% of the value of its total assets in growth-type
securities under normal market conditions.
THE INCOME FUND OF AMERICA(R), INC.
The investment objective is to emphasize current income while secondarily
striving to attain capital growth. The Fund believes that a portfolio with
relatively high current income can also generate growth of capital.
44
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<PAGE> 47
STATEMENT OF ADDITIONAL INFORMATION
MAY 1, 1995
GROUP FLEXIBLE FUND RETIREMENT CONTRACTS ISSUED
BY THE NATIONWIDE DC VARIABLE ACCOUNT OF
NATIONWIDE LIFE INSURANCE COMPANY
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 May
1, 1995. The Prospectus may be obtained from Nationwide Life Insurance
Company, P.O. Box 16766, One Nationwide Plaza, Columbus, Ohio 43216, or by
calling 1-800-545-4730 (TTY: 1-800-848-0833).
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
General Information and History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Purchase of Securities Being Offered . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Underwriters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Calculation of Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Annuity Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
</TABLE>
GENERAL INFORMATION AND HISTORY
The Nationwide DC Variable Account ("DCVA") is a separate investment
account of Nationwide Life Insurance Company ("Company"). The Company is a
member of the "Nationwide Insurance Enterprise" and all of the Company's
common stock is owned by Nationwide Corporation. Nationwide Corporation is
a holding company. All of its common stock is held by Nationwide Mutual
Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company
(4.8%).
SERVICES
The Company, which has responsibility for administration of the
Contracts and DCVA, maintains records of the name, address, taxpayer
identification number, and other pertinent information for each Owner and
the number and type of Contract issued to each such Owner and records with
respect to the Contract Value of each Contract.
All assets of the DCVA are held in custody for safekeeping by the
Company. The assets of each Series will be kept physically segregated and
held separate and apart from assets of other Series and from assets of any
other firm, person, or corporation. The Company will maintain a record of
all purchases and redemption for shares of the Fund held in each Series.
The financial statements and schedule included herein have been
included herein in reliance upon the reports of KPMG Peat Marwick LLP,
independent certified public accountants, Two Nationwide Plaza, Columbus,
Ohio 43215, and upon the authority of said firm as experts in accounting
and auditing.
1
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<PAGE> 48
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.
For those Plans which provide this Contract and the Company's Group Fixed
Fund Retirement Contract, the Owner, or the Participant if the Plan so provides,
may exchange Accumulation Units between any Series of the DCVA and the deposit
fund of the Group Fixed Fund Retirement Contract. Exchanges from the deposit
fund to any series of the DCVA will be subject to the limitations of the Group
Fixed Fund Retirement Contract. Exchanges will be effected when received in
good order by the Company at its home office.
UNDERWRITERS
The Contracts, which are offered continuously, are distributed by
Nationwide Financial Services, Inc. ("NFS"), One Nationwide Plaza, Columbus,
Ohio 43215, a wholly owned subsidiary of the Company. During the fiscal years
ended December 31, 1994, 1993, and 1992, no underwriting commissions were paid
by the Company to NFS.
CALCULATION OF PERFORMANCE
Any current yield quotations of the Nationwide Money Market Fund Series
and the Dreyfus Cash Management Fund Series, subject to Rule 482 of the
Securities Act of 1933, shall consist of a seven calendar day historical yield,
carried at least to the nearest hundredth of a percent. The yield shall 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 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. As of December 31, 1994, the
Nationwide Money Market Fund Series and the Dreyfus Cash Management Fund
Series seven-day current yield was 4.40% and 4.27% respectively. The
Nationwide Money Market Fund Series and the Dreyfus Cash Management Fund Series
effective yield is computed similarly but includes the effect of assumed
compounding on an annualized basis of the current yield quotations of the Fund,
and for the period ending December 31, 1994 was 4.50%
and 4.37%, respectively.
The Nationwide Money Market Fund Series and the Dreyfus Cash Management
Fund Series yield and effective yield will fluctuate daily. Actual yields will
depend on factors such as the type of instruments in the Funds' portfolio,
portfolio quality and average maturity, changes in interest rates, and the
Funds' expenses. Although each Series determines its yield on the basis of a
seven calendar day period, it may use a different time period on occasion. The
yield quotes may reflect the expense limitation described under "Investment
Manager and Other Services" in the Funds' Statement of Additional Information.
There is no assurance that the yields quoted on any give 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 an Owner's investment in
the Nationwide Money Market Fund Series and the Dreyfus Cash Management Fund
Series 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 shall include quotations of average annual
total return, calculated in accordance with a standard method prescribed by
rules of the Securities and Exchange Commission, to facilitate comparison with
total return quoted by other variable annuity separate accounts. Standardized
average annual total return advertised for a specific period is found by first
taking a hypothetical $1,000 investment in each of the Series' 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. Average annual total return
reflects the deduction of a maximum $15 Administrative Charge and a 0.95%
Actuarial Risk Charge. The redeemable value also reflects the effect of any
applicable Contingent Deferred Sales Charge that may be imposed at the end of
the period. (See "Contingent Deferred Sales Charge") No deduction is made for
premium taxes which may be assessed by
2
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<PAGE> 49
certain states. Non-standardized total return is calculated in a manner similar
to average annual total return except the total return does not reflect the
deduction of any applicable Contingent Deferred Sales Charge or Administrative
Charge, which, if reflected, would decrease the level of the performance
advertised.
The average annual total return and 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
total return figures will be based on rolling calendar quarters and will cover
periods of, at least, one, five, and ten years, or a period covering the time
a Fund held in the Series has been in existence, if the Fund has not been in
existence for one of the prescribed periods. The non-standardized total return
will cover the cumulative current calendar year and the most recently completed
calendar year, and periods of three, five and ten years on a rolling calendar
quarter basis. For those Funds which have not been held as Series within the
DCVA for one of the quoted periods, the standardized average annual total return
and non-standardized total return quotations will show the investment
performance such Funds would have achieved (reduced by the applicable charges)
had they been held as Series within the DCVA for the period quoted.
Quotations of average annual total return and total return are based upon
historical earnings and will fluctuate. Any quotation of performance,
therefore, should not be considered a guarantee of future performance. Factors
affecting a Series' performance include general market conditions, operating
expenses and investment management. A Contract Owner's and Participant's
account when redeemed may be more or less than original cost.
Below are quotations of average annual total return and total return,
calculated as described above, for each of the Series available within the
DCVA.
3
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<PAGE> 50
DCVA
SERIES PERFORMANCE SUMMARY
STANDARDIZED AVERAGE ANNUAL TOTAL RETURN
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
1 YEAR 5 YEARS 10 YEARS
SERIES OPTIONS TO 12/31/94 TO 12/31/94 TO 12/31/94
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AIM Constellation Fund - Institutional Class -4.63% 14.96% 17.94%
- ------------------------------------------------------------------------------------------------------------
AIM Weingarten Fund - Institutional Class -6.22% 6.45% 14.06%
- ------------------------------------------------------------------------------------------------------------
The Bond Fund of America, Inc.(SM) -11.12% 5.66% 8.38%
- ------------------------------------------------------------------------------------------------------------
Delaware Group Decatur Fund, Inc.-Decatur Income Fund -7.01% 2.69% 9.89%
- ------------------------------------------------------------------------------------------------------------
Dreyfus Cash Management -2.40% 2.00% 3.51%(1)
- ------------------------------------------------------------------------------------------------------------
The Dreyfus Third Century Fund, Inc. -13.43% 4.35% 8.91%
- ------------------------------------------------------------------------------------------------------------
The Evergreen Total Return Fund -12.45% 2.94% 7.85%
- ------------------------------------------------------------------------------------------------------------
Federated GNMA Trust--Institutional Shares -8.73% 4.12% 6.90%
- ------------------------------------------------------------------------------------------------------------
Federated Intermediate Government Trust-Institutional Shares -8.17% 3.81% 5.87%
- ------------------------------------------------------------------------------------------------------------
Fidelity Asset Manager(TM) -12.62% 8.24% 9.15%(2)
- ------------------------------------------------------------------------------------------------------------
Fidelity Capital & Income Fund -10.73% 10.91% 9.79%
- ------------------------------------------------------------------------------------------------------------
Fidelity Contrafund -7.41% 14.86% 16.51%
- ------------------------------------------------------------------------------------------------------------
Fidelity Equity-Income Fund -6.11% 6.11% 10.33%
- ------------------------------------------------------------------------------------------------------------
Fidelity Growth & Income Portfolio -4.19% 9.63% 14.89%(3)
- ------------------------------------------------------------------------------------------------------------
Fidelity Magellan(R) Fund -8.07% 9.14% 15.31%
- ------------------------------------------------------------------------------------------------------------
Fidelity OTC Portfolio -8.91% 8.70% 16.21%
- ------------------------------------------------------------------------------------------------------------
Fidelity Puritan Fund -4.63% 7.85% 11.61%
- ------------------------------------------------------------------------------------------------------------
The Growth Fund of America(R), Inc. -6.32% 6.93% 12.55%
- ------------------------------------------------------------------------------------------------------------
The Income Fund of America(R), Inc. -8.73% 4.86% 9.69%
- ------------------------------------------------------------------------------------------------------------
INVESCO Industrial Income Fund, Inc. -10.04% 7.99% 12.09%
- ------------------------------------------------------------------------------------------------------------
Janus Fund -7.40% 7.82% 13.05%
- ------------------------------------------------------------------------------------------------------------
Janus Twenty Fund -12.74% 8.11% 11.40%(4)
- ------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Represents total return for the eight years, two months from inception
(October, 1986).
(2) Represents total return for the six years from inception (December,
1988).
(3) Represents total return for the nine years from inception (December,
1985).
(4) Represents total return for the nine years, eight months from inception
(April, 1985).
(CONTINUED ON NEXT PAGE)
4
50 of 125
<PAGE> 51
DCVA
SERIES PERFORMANCE SUMMARY - CONTINUED
STANDARDIZED AVERAGE ANNUAL TOTAL RETURN
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
1 YEAR 5 YEARS 10 YEARS
SERIES OPTIONS TO 12/31/94 TO 12/31/94 TO 12/31/94
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MAS Funds Fixed Income Portfolio -11.52% 5.86% 8.53%
- ------------------------------------------------------------------------------------------------------------
Massachusetts Investors Growth Stock Fund - Class A -12.74% 6.95% 10.82%
- ------------------------------------------------------------------------------------------------------------
MFS(R) Growth Opportunities Fund - Class A -10.30% 3.97% 8.33%
- ------------------------------------------------------------------------------------------------------------
MFS(R) High Income Fund - Class A -8.85% 8.05% 7.48%
- ------------------------------------------------------------------------------------------------------------
Nationwide(R) Bond Fund -14.05% 3.83% 6.11%
- ------------------------------------------------------------------------------------------------------------
Nationwide(R) Fund -5.79% 4.64% 11.93%
- ------------------------------------------------------------------------------------------------------------
Nationwide(R) Growth Fund -4.95% 5.58% 11.10%
- ------------------------------------------------------------------------------------------------------------
Nationwide(R) Money Market Fund -2.74% 1.45% 3.40%
- ------------------------------------------------------------------------------------------------------------
Neuberger & Berman Guardian Fund -5.76% 8.98% 12.31%
- ------------------------------------------------------------------------------------------------------------
Neuberger & Berman Manhattan Fund, Inc. -9.77% 5.50% 12.47%
- ------------------------------------------------------------------------------------------------------------
New York Venture Fund, Inc. -8.18% 9.08% 14.88%
- ------------------------------------------------------------------------------------------------------------
Putnam Investors Fund - Class A -9.38% 6.04% 11.06%
- ------------------------------------------------------------------------------------------------------------
Putnam Voyager Fund - Class A -5.93% 10.97% 16.07%
- ------------------------------------------------------------------------------------------------------------
SEI Index Funds-S&P 500 Index Portfolio -5.41% 5.44% 11.04%(5)
- ------------------------------------------------------------------------------------------------------------
Seligman Growth Fund, Inc. - Class A -10.00% 5.48% 11.04%
- ------------------------------------------------------------------------------------------------------------
Strong Common Stock Fund, Inc. -6.81% 16.37% 16.36%(6)
- ------------------------------------------------------------------------------------------------------------
T. Rowe Price International Stock Fund(R) -7.07% 4.04% 16.11%
- ------------------------------------------------------------------------------------------------------------
Templeton Foreign Fund -6.02% 5.82% 14.89%
- ------------------------------------------------------------------------------------------------------------
Templeton Smaller Companies Growth Fund, Inc. -10.71% 6.55% 10.07%
- ------------------------------------------------------------------------------------------------------------
Twentieth Century Growth Investors -7.76% 6.86% 13.47%
- ------------------------------------------------------------------------------------------------------------
Twentieth Century Ultra Investors -9.79% 16.82% 16.67%
- ------------------------------------------------------------------------------------------------------------
Twentieth Century Select Investors -13.99% 3.08% 11.48%
- ------------------------------------------------------------------------------------------------------------
</TABLE>
(5) Represents total return for the nine years, two months from inception
(October, 1985).
(6) Represents total return for the five years from inception (December,
1989).
5
51 of 125
<PAGE> 52
DCVA
SERIES PERFORMANCE SUMMARY
NON-STANDARDIZED TOTAL RETURN
(The total return figures shown below do not reflect the deduction of the
Administrative Charges
or any applicable Contingent Deferred Sales Charges)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
YEAR ENDED 3 YEARS 5 YEARS 10 YEARS
SERIES OPTIONS 12/31/94 TO TO TO
12/31/94 12/31/94 12/31/94
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
AIM Constellation Fund - Institutional Class 0.84% 10.24% 16.54% 18.79%
- ----------------------------------------------------------------------------------------------------------
AIM Weingarten Fund - Institutional Class -0.82% -0.73% 8.27% 14.91%
- ----------------------------------------------------------------------------------------------------------
The Bond Fund of America(SM), Inc. -5.92% 5.47% 7.58% 9.54%
- ----------------------------------------------------------------------------------------------------------
Delaware Group Decatur Fund, Inc.-Decatur
Income Fund -1.63% 6.60% 4.87% 10.95%
- ----------------------------------------------------------------------------------------------------------
Dreyfus Cash Management 3.10% 2.70% 4.12% 5.16%(1)
- ----------------------------------------------------------------------------------------------------------
The Dreyfus Third Century Fund, Inc. -8.33% -1.17% 6.26% 10.01%
- ----------------------------------------------------------------------------------------------------------
The Evergreen Total Return Fund -7.30% 4.16% 5.02% 9.00%
- ----------------------------------------------------------------------------------------------------------
Federated GNMA Trust--Institutional Shares -3.43% 2.45% 6.08% 8.15%
- ----------------------------------------------------------------------------------------------------------
Federated Intermediate Government Trust-
Institutional Shares -2.84% 2.85% 5.79% 7.19%
- ----------------------------------------------------------------------------------------------------------
Fidelity Asset Manager(TM) -7.48% 8.06% 10.05% 10.72%(2)
- ----------------------------------------------------------------------------------------------------------
Fidelity Capital & Income Fund -5.51% 14.03% 12.67% 10.96%
- ----------------------------------------------------------------------------------------------------------
Fidelity Contrafund -2.05% 10.57% 16.41% 17.45%
- ----------------------------------------------------------------------------------------------------------
Fidelity Equity-Income Fund -0.70% 10.67% 8.15% 11.44%
- ----------------------------------------------------------------------------------------------------------
Fidelity Growth & Income Portfolio 1.30% 9.84% 11.45% 15.87%(3)
- ----------------------------------------------------------------------------------------------------------
Fidelity Magellan(R) Fund -2.74% 8.38% 10.96% 16.17%
- ----------------------------------------------------------------------------------------------------------
Fidelity OTC Portfolio -3.62% 5.64% 10.49% 16.98%
- ----------------------------------------------------------------------------------------------------------
Fidelity Puritan Fund 0.84% 11.54% 9.77% 12.65%
- ----------------------------------------------------------------------------------------------------------
The Growth Fund of America(R), Inc. -0.92% 6.13% 8.84% 13.53%
- ----------------------------------------------------------------------------------------------------------
The Income Fund of America(R), Inc. -3.43% 6.56% 6.87% 10.78%
- ----------------------------------------------------------------------------------------------------------
INVESCO Industrial Income Fund, Inc. -4.79% 3.27% 9.79% 13.10%
- ----------------------------------------------------------------------------------------------------------
Janus Fund -2.04% 4.43% 9.64% 14.05%
- ----------------------------------------------------------------------------------------------------------
Janus Twenty Fund -7.61% -1.47% 9.83% 12.49%(4)
- ----------------------------------------------------------------------------------------------------------
</TABLE>
(1) Represents total return for the eight years, two months from inception
(October, 1986).
(2) Represents total return for the six years from inception (December, 1988).
(3) Represents total return for the nine years from inception (December, 1985).
(4) Represents total return for the nine years, eight months from inception
(April, 1985).
(Continued on next page)
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<PAGE> 53
DCVA
SERIES PERFORMANCE SUMMARY - CONTINUED
NON-STANDARDIZED TOTAL RETURN
(The total return figures shown below do not reflect the deduction of the
Administrative Charges
or any applicable Contingent Deferred Sales Charges)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
YEAR ENDED 3 YEARS 5 YEARS 10 YEARS
SERIES OPTIONS 12/31/94 TO TO TO
12/31/94 12/31/94 12/31/94
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MAS Funds Fixed Income Portfolio -6.33% 4.35% 7.75% 9.86%
- ------------------------------------------------------------------------------------------------------------
Massachusetts Investors Growth Stock Fund - Class A -7.61% 3.37% 8.81% 11.88%
- ------------------------------------------------------------------------------------------------------------
MFS(R) Growth Opportunities Fund - Class A -5.06% 5.25% 6.01% 9.51%
- ------------------------------------------------------------------------------------------------------------
MFS(R) High Income Fund - Class A -3.55% 9.76% 9.97% 8.78%
- ------------------------------------------------------------------------------------------------------------
Nationwide(R) Bond Fund -8.97% 2.21% 5.79% 7.40%
- ------------------------------------------------------------------------------------------------------------
Nationwide(R) Fund -0.37% 2.43% 6.61% 12.88%
- ------------------------------------------------------------------------------------------------------------
Nationwide(R) Growth Fund 0.51% 5.28% 7.56% 12.11%
- ------------------------------------------------------------------------------------------------------------
Nationwide(R) Money Market Fund 2.76% 2.20% 3.60% 4.93%
- ------------------------------------------------------------------------------------------------------------
Neuberger & Berman Guardian Fund -0.34% 9.96% 10.80% 13.35%
- ------------------------------------------------------------------------------------------------------------
Neuberger & Berman Manhattan Fund, Inc. -4.51% 6.67% 7.47% 13.41%
- ------------------------------------------------------------------------------------------------------------
New York Venture Fund, Inc. -2.85% 7.76% 10.88% 15.76%
- ------------------------------------------------------------------------------------------------------------
Putnam Investors Fund - Class A -4.10% 6.16% 7.97% 12.10%
- ------------------------------------------------------------------------------------------------------------
Putnam Voyager Fund - Class A -0.51% 8.24% 12.70% 16.92%
- ------------------------------------------------------------------------------------------------------------
SEI Index Funds-S&P 500 Index Portfolio 0.03% 4.99% 7.40% 12.14%(5)
- ------------------------------------------------------------------------------------------------------------
Seligman Growth Fund, Inc. - Class A -4.75% 3.45% 7.41% 12.06%
- ------------------------------------------------------------------------------------------------------------
Strong Common Stock Fund, Inc. -1.42% 13.52% 17.90% 17.89%(6)
- ------------------------------------------------------------------------------------------------------------
T. Rowe Price International Stock Fund(R) -1.69% 9.27% 6.20% 16.83%
- ------------------------------------------------------------------------------------------------------------
Templeton Foreign Fund -0.60% 10.09% 7.86% 15.73%
- ------------------------------------------------------------------------------------------------------------
Templeton Smaller Companies Growth Fund, Inc. -5.49% 9.30% 8.56% 11.22%
- ------------------------------------------------------------------------------------------------------------
Twentieth Century Growth Investors -2.42% -1.67% 8.68% 14.37%
- ------------------------------------------------------------------------------------------------------------
Twentieth Century Ultra Investors -4.53% 4.94% 18.24% 17.60%
- ------------------------------------------------------------------------------------------------------------
Twentieth Century Select Investors -8.90% -0.69% 5.10% 12.42%
- ------------------------------------------------------------------------------------------------------------
</TABLE>
(5) Represents total return for the nine years, two months from inception
(October, 1985).
(6) Represents total return for the five years from inception (December, 1989).
ANNUITY PAYMENTS
See "Distribution of Participant Accounts (Retirement Period)" in the
Prospectus.
7
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<PAGE> 54
Independent Auditors' Report
The Board of Directors and Contract Owners of
Nationwide DC Variable Account
Nationwide Life Insurance Company:
We have audited the accompanying statement of assets, liabilities and
contract owners' equity of Nationwide DC Variable Account as of December 31,
1994, and the related statements of operations and changes in contract owners'
equity for each of the years in the three year period then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as of December 31, 1994,
by correspondence with the custodian and the transfer agents of the underlying
mutual funds. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Nationwide DC Variable
Account as of December 31, 1994, and the results of its operations and its
changes in contract owners' equity for each of the years in the three year
period then ended in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information included
in Schedule I is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
KPMG Peat Marwick LLP
Columbus, Ohio
February 3, 1995
8
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<PAGE> 55
NATIONWIDE DC VARIABLE ACCOUNT
STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY
DECEMBER 31, 1994
<TABLE>
<S> <C>
ASSETS:
Investments at market value:
AIM Constellation Fund -- Institutional Class (AIMCon)
121,765 shares (cost $2,083,764) . . . . . . . . . . . . . . . . . . . . . . . . $ 2,116,271
AIM Weingarten Fund -- Institutional Class (AIMWein)
59,081 shares (cost $981,371) . . . . . . . . . . . . . . . . . . . . . . . . . 901,583
The Bond Fund of America(SM) (BdFdAm)
1,081,463 shares (cost $15,121,865) . . . . . . . . . . . . . . . . . . . . . . 13,723,767
Delaware Group Decatur Fund, Inc.--Decatur Income Fund (DeDecInc)
9,558 shares (cost $164,938) . . . . . . . . . . . . . . . . . . . . . . . . . . 146,144
Dreyfus Cash Management (DryCsMgt)
2,492,688 shares (cost $2,492,688) . . . . . . . . . . . . . . . . . . . . . . . 2,492,688
The Dreyfus Third Century Fund, Inc. (Dry3dCen)
1,774,755 shares (cost $13,836,426) . . . . . . . . . . . . . . . . . . . . . . 11,589,152
The Evergreen Total Return Fund (EvTotRet)
369,987 shares (cost $7,285,574) . . . . . . . . . . . . . . . . . . . . . . . . 6,300,877
Federated GNMA Trust -- Institutional Shares (FedGNMA)
43,553 shares (cost $490,807) . . . . . . . . . . . . . . . . . . . . . . . . . 456,441
Federated Intermediate Goverment Trust -- Institutional Shares (FedIGvt)
126,895 shares (cost $1,303,804) . . . . . . . . . . . . . . . . . . . . . . . . 1,270,215
Fidelity Asset Manager(TM) (FidAsMgr)
271,435 shares (cost $3,963,878) . . . . . . . . . . . . . . . . . . . . . . . . 3,753,939
Fidelity Capital & Income Fund (FidCapIn)
209,091 shares (cost $1,586,079) . . . . . . . . . . . . . . . . . . . . . . . . 1,804,458
Fidelity Contrafund (FidContr)
1,707,492 shares (cost $52,868,454) . . . . . . . . . . . . . . . . . . . . . . 51,702,868
Fidelity Equity-Income Fund (FidEqInc)
3,798,583 shares (cost $106,812,105) . . . . . . . . . . . . . . . . . . . . . . 116,616,498
Fidelity Growth & Income Portfolio (FidGrInc)
167,223 shares (cost $3,682,393) . . . . . . . . . . . . . . . . . . . . . . . . 3,526,729
Fidelity Magellan(R) Fund (FidMgln)
1,299,682 shares (cost $90,389,879) . . . . . . . . . . . . . . . . . . . . . . 86,818,760
The Growth Fund of America,(R) Inc. (GroFdAm)
407,122 shares (cost $10,239,274) . . . . . . . . . . . . . . . . . . . . . . . 10,393,832
The Income Fund of America,(R) Inc. (IncFdAm)
882,299 shares (cost $12,488,792) . . . . . . . . . . . . . . . . . . . . . . . 11,593,413
INVESCO Industrial Income Fund, Inc. (InvIndln)
901,537 shares (cost $10,523,674) . . . . . . . . . . . . . . . . . . . . . . . 9,484,169
Janus Fund (JanFund)
412,813 shares (cost $8,064,859) . . . . . . . . . . . . . . . . . . . . . . . . 7,752,625
Janus Twenty Fund (Jan20Fd)
486 shares (cost $12,201) . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,041
MAS Funds Fixed Income Portfolio (MASFIP)
2,941 shares (cost $31,626) . . . . . . . . . . . . . . . . . . . . . . . . . . 31,141
</TABLE>
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<PAGE> 56
<TABLE>
<S> <C>
Massachusetts Investors Growth Stock Fund -- Class A (MFSGrStk)
444,917 shares (cost $4,929,888) . . . . . . . . . . . . . . . . . . . . . . . . 4,248,954
MFS(R) Growth Opportunities Fund -- Class A (MFSGrOpp)
2,091,890 shares (cost $22,560,587) . . . . . . . . . . . . . . . . . . . . . . 21,274,526
MFS(R) High Income Fund -- Class A (MFSHiInc)
776,285 shares (cost $3,945,857) . . . . . . . . . . . . . . . . . . . . . . . . 3,741,696
Nationwide(R) Bond Fund (NWBdFd)
9,886 shares (cost $86,726) . . . . . . . . . . . . . . . . . . . . . . . . . . 83,335
Nationwide(R) Fund (NWFund)
1,977,299 shares (cost $30,962,972) . . . . . . . . . . . . . . . . . . . . . . 28,749,934
Nationwide(R) Growth Fund (NWGroFd)
734,319 shares (cost $7,604,856) . . . . . . . . . . . . . . . . . . . . . . . . 7,864,555
Nationwide(R) Money Market Fund (NWMyMkt)
47,699,643 shares (cost $47,699,643) . . . . . . . . . . . . . . . . . . . . . . 47,699,643
Neuberger & Berman Manhattan Fund (NBManhFd)
70,715 shares (cost $810,141) . . . . . . . . . . . . . . . . . . . . . . . . . 707,146
New York Venture Fund, Inc. (NYVenFd)
62,409 shares (cost $740,304) . . . . . . . . . . . . . . . . . . . . . . . . . 696,479
Putnam Investors Fund --Class A (PutInvFd)
4,269,637 shares (cost $34,481,978) . . . . . . . . . . . . . . . . . . . . . . 30,485,205
Putnam Voyager Fund --Class A (PutVoyFd)
2,547,188 shares (cost $28,011,382) . . . . . . . . . . . . . . . . . . . . . . 29,343,604
SEI Index Funds -- S&P 500 Index Portfolio (SEI500Ix)
85,896 shares (cost $1,344,681) . . . . . . . . . . . . . . . . . . . . . . . . 1,296,176
Seligman Growth Fund, Inc. -- Class A (SelGroFd)
463,427 shares (cost $2,525,524) . . . . . . . . . . . . . . . . . . . . . . . . 2,103,961
Strong Common Stock Fund, Inc. (StComStk)
44,465 shares (cost $788,122) . . . . . . . . . . . . . . . . . . . . . . . . . 744,338
T. Rowe Price International Stock Fund (TRIntStk)
2,357,901 shares (cost $28,810,591) . . . . . . . . . . . . . . . . . . . . . . 26,691,438
Templeton Foreign Fund (TemForFd)
3,963,929 shares (cost $37,410,317) . . . . . . . . . . . . . . . . . . . . . . 34,961,850
Templeton Smaller Companies Growth Fund, Inc. (TemSmGro)
38,760 shares (cost $315,233) . . . . . . . . . . . . . . . . . . . . . . . . . 287,983
Twentieth Century Growth Investors (TCGroInv)
7,374,885 shares (cost $159,369,310) . . . . . . . . . . . . . . . . . . . . . . 138,205,338
Twentieth Century Select Investors (TCSelInv)
6,431 shares (cost $244,337) . . . . . . . . . . . . . . . . . . . . . . . . . . 212,852
Twentieth Century Ultra Investors (TCUltra)
5,984,575 shares (cost $119,375,064) . . . . . . . . . . . . . . . . . . . . . . 119,392,279
Dreyfus Stock Index Fund (DryStkIx)
59 shares (cost $769) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 763
Fidelity VIP Asset Manager Portfolio (FidVIPAM)
141 shares (cost $1,997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,948
Fidelity VIP Equity Income Portfolio (FidVIPEI)
362 shares (cost $5,604) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,554
Fidelity VIP Growth Portfolio (FidVIPGr)
330 shares (cost $7,016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,161
Fidelity VIP High Income Portfolio (FidVIPHI)
137 shares (cost $1,470) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,473
</TABLE>
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<PAGE> 57
<TABLE>
<S> <C>
Fidelity VIP Overseas Portfolio (FidVIPOv)
665 shares (cost $10,563) . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,415
Nationwide SAT - Government Bond Fund (NWGvtBd)
128 shares (cost $1,333) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,306
Nationwide SAT - Money Market Fund (SATMyMkt)
2,940 shares (cost $2,940) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,940
Nationwide SAT - Total Return Fund (NWTotRet)
627 shares (cost $6,249) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,081
Neuberger & Berman Advisers Management Trust -
Growth Portfolio (NBGro)
1,080 shares (cost $23,150) . . . . . . . . . . . . . . . . . . . . . . . . . . 21,941
Neuberger & Berman Advisers Management Trust -
Limited Maturity Bond Portfolio (NBLtdMat)
42 shares (cost $593) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 594
Neuberger & Berman Advisers Management Trust -
Partners Portfolio (NBPart)
320 shares (cost $3,142) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,129
TCI Portfolios, Inc. - TCI Growth (TCIGro)
5,623 shares (cost $48,399) . . . . . . . . . . . . . . . . . . . . . . . . . . 51,792
-----------
Total investments . . . . . . . . . . . . . . . . . . . . . . . . . . 841,393,000
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192,352
-----------
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 841,585,352
ACCOUNTS PAYABLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,374
-----------
CONTRACT OWNERS' EQUITY (NOTE 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 841,548,978
===========
</TABLE>
See accompanying notes to financial statements.
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<PAGE> 58
NATIONWIDE DC VARIABLE ACCOUNT
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested capital gains and dividends . . . . . . . . . . . . . . . $ 61,302,838 54,320,159 22,095,269
------------ ------------ ------------
Gain (loss) on investments:
Proceeds from redemptions of mutual fund shares . . . . . . . . . 264,448,390 133,104,700 151,080,585
Cost of mutual fund shares sold . . . . . . . . . . . . . . . . . (230,194,049) (113,800,616) (135,321,342)
------------ ------------ ------------
Realized gain on investments . . . . . . . . . . . . . . . . . . 34,254,341 19,304,084 15,759,243
Change in unrealized gain (loss) on investments . . . . . . . . . (110,099,526) 9,356,816 (11,637,120)
------------ ------------ ------------
Net gain (loss) on investments . . . . . . . . . . . . . . . (75,845,185) 28,660,900 4,122,123
------------ ------------ ------------
Net investment activity . . . . . . . . . . . . . . . . (14,542,347) 82,981,059 26,217,392
------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from contract owners . . . . . . . . . . . 283,645,521 241,760,552 169,526,269
Redemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . (244,646,099) (106,489,443) (139,041,330)
Adjustments to maintain reserves . . . . . . . . . . . . . . . . . . (174,764) 36,571 (219,007)
------------ ------------ ------------
Net equity transactions . . . . . . . . . . . . . . . . 38,824,658 135,307,680 30,265,932
------------ ------------ ------------
EXPENSES (NOTE 2):
Contract charges . . . . . . . . . . . . . . . . . . . . . . . . . . (7,875,081) (6,752,316) (5,531,491)
Contingent deferred sales charges . . . . . . . . . . . . . . . . . . (4,451) (4,840) (8,423)
----------- ------------ ------------
Total expenses . . . . . . . . . . . . . . . . . . . . . (7,879,532) (6,757,156) (5,539,914)
----------- ------------ ------------
NET CHANGE IN CONTRACT OWNERS' EQUITY . . . . . . . . . . . . . . . . . . 16,402,779 211,531,583 50,943,410
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD . . . . . . . . . . . . . . . 825,146,199 613,614,616 562,671,206
----------- ----------- -----------
CONTRACT OWNERS' EQUITY END OF PERIOD . . . . . . . . . . . . . . . . . . $ 841,548,978 825,146,199 613,614,616
=========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
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<PAGE> 59
NATIONWIDE DC VARIABLE ACCOUNT
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994, 1993 AND 1992
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Organization
Nationwide DC Variable Account (the Account) was established by
resolution of the Board of Directors of Nationwide Life Insurance Company (the
Company) on July 10, 1974. The Account has been registered as a unit investment
trust under the Investment Company Act of 1940.
(b) The Contracts
Participants in group flexible fund contracts may be invested in any
of the following funds:
AIM Constellation Fund -- Institutional Class (AIMCon)
AIM Weingarten Fund -- Institutional Class (AIMWein)
The Bond Fund of America(SM) (BdFdAm) (only available for certain
contracts issued beginning January 1, 1994)
Delaware Group Decatur Fund, Inc. -- Decatur Income Fund (DeDecInc)
(not available for contracts issued on or after August 1, 1993)
Dreyfus Cash Management (DryCsMgt)
The Dreyfus Third Century Fund, Inc. (Dry3dCen)
The Evergreen Total Return Fund (EvTotRet)
Federated GNMA Trust -- Institutional Shares (FedGNMA)
Federated Intermediate Government Trust -- Institutional Shares
(FedIGvt)
Fidelity Asset Manager(TM) (FidAsMgr)
Fidelity Capital & Income Fund (FidCapIn) (not available for
contracts issued on or after January 1, 1987)
Fidelity Contrafund (FidContr)
Fidelity Equity-Income Fund (FidEqInc)
Fidelity Growth & Income Portfolio (FidGrInc)
Fidelity Magellan(R) Fund (FidMgln)
The Growth Fund of America,(R) Inc. (GroFdAm) (only available for
certain contracts issued beginning January 1, 1994)
The Income Fund of America,(R) Inc. (IncFdAm) (only available for
certain contracts issued beginning January 1, 1994)
INVESCO Industrial Income Fund, Inc. (InvIndIn) (formerly
Financial Industrial Income Fund, Inc. (FII))
Janus Fund (JanFund)
Janus Twenty Fund (Jan20Fd)
MAS Funds Fixed Income Portfolio (MASFIP)
Massachusetts Investors Growth Stock Fund -- Class A (MFSGrStk)
MFS(R) Growth Opportunities Fund -- Class A (MFSGrOpp)(formerly
MFS(R) Capital Development Fund (MCD))
MFS(R) High Income Fund -- Class A (MFSHiInc)
Nationwide(R) Bond Fund (NWBdFd) (managed for a fee by an
affiliated investment advisor)
Nationwide(R) Fund (NWFund) (managed for a fee by an affiliated
investment advisor)
Nationwide(R) Growth Fund (NWGroFd) (managed for a fee by an
affiliated investment advisor)
Nationwide(R) Money Market Fund (NWMyMkt) (managed for a fee by an
affiliated investment advisor)
Neuberger & Berman Manhattan Fund (NBManhFd)
New York Venture Fund, Inc. (NYVenFd)
Putnam Investors Fund -- Class A (PutInvFd)
Putnam Voyager Fund -- Class A (PutVoyFd)
SEI Index Funds -- S&P 500 Index Portfolio (SEI500Ix)
Seligman Growth Fund, Inc. -- Class A (SelGroFd)
Strong Common Stock Fund, Inc. (StComStk)
T. Rowe Price International Stock Fund (TRIntStk)
Templeton Foreign Fund (TemForFd)
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<PAGE> 60
(2) Expenses
Net purchase payments received for contracts issued before July 1, 1980,
represent contributions by the contract owners less a sales charge by the
Company of not more than 5%, to cover sales expenses. The Company does not
deduct a sales charge from purchase payments for contracts issued after July 1,
1980. However, if any part of the contract value representing participant
accounts that have been established under the contracts and held in the Account
for less than sixteen (16) years is surrendered, the Company will, with certain
exceptions, assess a contingent deferred sales charge. This charge will be
equal to not more than 5% of the lesser of all purchase payments received on
behalf of the surrendering participant or contract owner prior to the date of
the request for surrender, or the amount surrendered. Sales charges or
contingent deferred sales charges of less than 5% reflect actual variations in
expense (usually reduced agents' commissions). No sales charges are deducted on
redemptions used to purchase units in the fixed investment options of the
Company. Sales charges may be reduced or eliminated upon negotiated conversion
of the contracts to other investment programs offered by the Company or its
affiliates.
The following administrative charges are deducted by the Company on
contracts issued before July 1, 1980: (a) an annual contract maintenance charge
of $8 assessed by surrendering units; (b) a charge for mortality and expense
risk assessed through the daily unit value calculation equal to an annual rate
of 0.95%; and (c) a charge on complete redemption, equal to the lesser of $8 or
2% of the value of the account, except when such redemption occurs within 31
days of the anniversary date of the contract.
For contracts issued beginning July 1, 1980 through April 30, 1991,
administrative charges include: (a) an annual contract maintenance charge of
$12 or $15, based upon administrative services provided, assessed by
surrendering units; and (b) a charge for mortality and expense risk assessed
through the daily unit value calculation equal to an annual rate of 0.95%.
For contracts issued beginning May 1, 1991, administrative charges include
a mortality risk charge, an expense risk charge and an administration charge
assessed through the daily unit value calculation equal to an annual rate of
0.35%, 0.15% and 0.45%, respectively.
Contract owners may negotiate an exchange privilege with the Company. The
exchange privilege provides for transfers of units among the various investment
options for each participant's account. The number of transfers allowed, and
any administrative charges associated therewith, are subject to negotiation
between the contract owner and the Company.
(3) Schedule I
Schedule I presents the components of the change in the unit values, which
are the basis for contract owners' equity. This schedule is presented in the
following format:
* Beginning unit value - Jan. 1
* Reinvested capital gains and dividends
(This amount reflects the increase in the unit value due to
capital gains and dividend distributions from the underlying
mutual funds.)
* Unrealized gain (loss)
(This amount reflects the increase (decrease) in the unit value
resulting from the market appreciation (depreciation) of the
fund.)
* Contract charges
(This amount reflects the decrease in the unit value due to the
mortality risk charge, expense risk charge and administration
charge discussed in note 2.)
* Ending unit value - Dec. 31
* Percentage increase (decrease) in unit value.
60 of 125
<PAGE> 61
(4) Components of Contract Owners' Equity
The following is a summary of contract owners' equity at December 31, 1994.
<TABLE>
<CAPTION>
Units Unit Value
----- ----------
<S> <C> <C> <C>
AIM Constellation Fund -- Institutional Class . . . . . . . . . . . . . . . . . . . 1,607,538 $ 1.316836 $ 2,116,864
AIM Weingarten Fund -- Institutional Class . . . . . . . . . . . . . . . . . . . . 870,956 1.035886 902,211
The Bond Fund of America(SM) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,880,903 1.741422 13,723,978
Delaware Group Decatur Fund, Inc. -- Decatur Income Fund . . . . . . . . . . . . . 104,006 1.449372 150,743
Dreyfus Cash Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,324,960 1.057458 2,458,548
The Dreyfus Third Century Fund, Inc. . . . . . . . . . . . . . . . . . . . . . . . 6,965,653 1.663803 11,589,474
The Evergreen Total Return Fund . . . . . . . . . . . . . . . . . . . . . . . . . . 4,439,096 1.419467 6,301,150
Federated GNMA Trust -- Institutional Shares . . . . . . . . . . . . . . . . . . . 422,171 1.081229 456,464
Federated Intermediate Government Trust -- Institutional Shares . . . . . . . . . . 1,280,899 .991595 1,270,133
Fidelity Asset Manager(TM) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,916,306 .958564 3,754,030
Fidelity Capital & Income Fund . . . . . . . . . . . . . . . . . . . . . . . . . . 561,985 3.210584 1,804,300
Fidelity Contrafund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,927,857 1.263308 51,704,489
Fidelity Equity-Income Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,056,352 3.424310 116,619,507
Fidelity Growth & Income Portfolio . . . . . . . . . . . . . . . . . . . . . . . . 2,808,994 1.255568 3,526,883
Fidelity Magellan(R) Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68,044,510 1.275955 86,821,733
The Growth Fund of America,(R) Inc. . . . . . . . . . . . . . . . . . . . . . . . . 5,646,915 1.840658 10,394,039
The Income Fund of America,(R) Inc. . . . . . . . . . . . . . . . . . . . . . . . . 7,829,528 1.480756 11,593,621
INVESCO Industrial Income Fund, Inc. . . . . . . . . . . . . . . . . . . . . . . . 8,239,738 1.151056 9,484,400
Janus Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,345,306 1.055481 7,752,831
Janus Twenty Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,285 .978264 11,040
MAS Funds Fixed Income Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . 31,751 .980782 31,141
Massachusetts Investors Growth Stock Fund -- Class A . . . . . . . . . . . . . . . 604,020 7.034148 4,248,766
MFS(R) Growth Opportunities Fund -- Class A . . . . . . . . . . . . . . . . . . . . 4,635,532 4.589533 21,274,927
MFS(R) High Income Fund -- Class A . . . . . . . . . . . . . . . . . . . . . . . . 877,250 4.265493 3,741,904
Nationwide(R) Bond Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51,492 1.619166 83,374
Nationwide(R) Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,036,527 9.468045 28,749,974
Nationwide(R) Growth Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,759,425 2.092009 7,864,751
Nationwide(R) Money Market Fund . . . . . . . . . . . . . . . . . . . . . . . . . . 18,028,497 2.654661 47,859,548
Neuberger & Berman Manhattan Fund . . . . . . . . . . . . . . . . . . . . . . . . . 406,054 1.741549 707,163
New York Venture Fund, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 720,917 .966146 696,511
Putnam Investors Fund -- Class A . . . . . . . . . . . . . . . . . . . . . . . . . 3,674,131 8.297318 30,485,433
Putnam Voyager Fund -- Class A . . . . . . . . . . . . . . . . . . . . . . . . . . 14,803,070 1.982311 29,344,288
SEI Index Funds -- S&P 500 Index Portfolio . . . . . . . . . . . . . . . . . . . . 722,997 1.792835 1,296,214
Seligman Growth Fund, Inc -- Class A. . . . . . . . . . . . . . . . . . . . . . . . 299,685 7.020585 2,103,964
Strong Common Stock Fund, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . 742,264 1.002820 744,357
T. Rowe Price International Stock Fund . . . . . . . . . . . . . . . . . . . . . . 18,673,315 1.429428 26,692,159
Templeton Foreign Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,358,639 1.378759 34,963,452
Templeton Smaller Companies Growth Fund, Inc. . . . . . . . . . . . . . . . . . . . 225,110 1.279328 287,990
Twentieth Century Growth Investors . . . . . . . . . . . . . . . . . . . . . . . . 41,134,943 3.359891 138,208,925
Twentieth Century Select Investors . . . . . . . . . . . . . . . . . . . . . . . . 194,231 1.095899 212,858
Twentieth Century Ultra Investors . . . . . . . . . . . . . . . . . . . . . . . . . 88,713,416 1.345904 119,399,741
Dreyfus Stock Index Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 782 .975745 763
Fidelity VIP Asset Manager Portfolio . . . . . . . . . . . . . . . . . . . . . . . 2,037 .955979 1,947
Fidelity VIP Equity Income Portfolio . . . . . . . . . . . . . . . . . . . . . . . 5,699 .974175 5,552
Fidelity VIP Growth Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,026 1.018963 7,159
Fidelity VIP High Income Portfolio . . . . . . . . . . . . . . . . . . . . . . . . 1,484 .992271 1,473
Fidelity VIP Overseas Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . 10,984 .947883 10,412
Nationwide SAT -- Government Bond Fund . . . . . . . . . . . . . . . . . . . . . . 971 1.338281 1,299
Nationwide SAT -- Money Market Fund . . . . . . . . . . . . . . . . . . . . . . . . 2,543 1.155984 2,940
Nationwide SAT -- Total Return Fund . . . . . . . . . . . . . . . . . . . . . . . . 3,996 1.525590 6,096
Neuberger & Berman Advisers Management Trust -- Growth Portfolio . . . . . . . . . 17,238 1.272940 21,943
Neuberger & Berman Advisers Management Trust -- Limited Maturity Bond Portfolio . . 597 .995462 594
Neuberger & Berman Advisers Management Trust -- Partners Portfolio . . . . . . . . 3,237 .966223 3,128
TCI Portfolios, Inc. -- TCI Growth . . . . . . . . . . . . . . . . . . . . . . . . 38,898 1.331537 51,794
========== ======== -----------
$841,548,978
===========
</TABLE>
61 of 125
<PAGE> 62
Templeton Smaller Companies Growth Fund, Inc. (TemSmGro)
Twentieth Century Growth Investors (TCGroInv)
Twentieth Century Select Investors (TCSelInv)
Twentieth Century Ultra Investors (TCUltra)
The following funds are available for investment only by Plans established
under Internal Revenue Code (IRC) Section 403(b).
Dreyfus Socially Responsible Growth Fund (DrySRGro)
Dreyfus Stock Index Fund (DryStIx)
Fidelity VIP Asset Manager Portfolio (FidVIPAM)
Fidelity VIP Equity Income Portfolio (FidVIPEI)
Fidelity VIP Growth Portfolio (FidVIPGr)
Fidelity VIP High Income Portfolio (FidVIPHI)
Fidelity VIP Overseas Portfolio (FidVIPOv)
Funds of the Nationwide Separate Account Trust (Nationwide SAT)
(managed for a fee by an affiliated investment advisor):
Nationwide SAT -- Government Bond Fund (NWGvtBd)
Nationwide SAT -- Money Market Fund (SATMyMkt)
Nationwide SAT -- Total Return Fund (NWTotRet)
Neuberger & Berman Advisers Management Trust -- Growth Portfolio
(NBGro)
Neuberger & Berman Advisors Management Trust -- Limited
Maturity Bond Portfolio (NBLtdMat)
Neuberger & Berman Advisers Management Trust -- PartnersPortfolio
(NBPart)
TCI Portfolios, Inc. -- TCI Balanced (TCIBal)
TCI Portfolios, Inc. -- TCI Growth (TCIGro)
All funds have been utilized as of December 31, 1994, except Dreyfus
Socially Responsible Fund, Inc. (DrySRGro) and TCI Portfolios, Inc. -- TCI
Balanced (TCIBal).
The contract owners' equity is affected by the investment results of each
fund and certain expenses (see note 2). The accompanying financial statements
include only contract owners' purchase payments pertaining to the variable
portions of their contracts and exclude any purchase payments for fixed dollar
benefits, the latter being included in the accounts of the Company.
(c) Security Valuation, Transactions and Related Investment Income
The market value of investments is based on the closing bid prices at
December 31, 1994. The cost of investments sold is determined on the specific
identification basis. Investment transactions are accounted for on the trade
date (date the order to buy or sell is executed) and dividend income is
recorded on the ex-dividend date.
(d) Federal Income Taxes
Operations of the Account form a part of, and are taxed with,
operations of the Company, which is taxed as a life insurance company under the
IRC. The assets in this account are held pursuant to contracts with entities
which are exempt from Federal income tax. Because of this exemption, no taxes
need be provided for investment income or realized and unrealized capital
gains. Annuity payouts and withdrawal payments are taxable as wages when
received by the participants.
62 of 125
<PAGE> 63
SCHEDULE I
NATIONWIDE DC VARIABLE ACCOUNT
SCHEDULES OF CHANGES IN UNIT VALUE
YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
<TABLE>
<CAPTION>
AIMCon AIMWein BdFdAm DeDecInc DryCsMgt Dry3dCen EvTotRet
------ ------- ------ -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
1994
Beginning unit value - Jan. 1 $1.305850 1.044414 1.850918 1.473401 1.025704 1.814915 1.531292
- -----------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .038234 .114765 .138760 .102070 .041657 .233019 .106153
- -----------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) (.014948) (.113428) (.231366) (.112176) .000000 (.367765) (.204194)
- -----------------------------------------------------------------------------------------------------------------------------
Contract charges (.012300) (.009865) (.016890) (.013923) (.009903) (.016366) (.013784)
- -----------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $1.316836 1.035886 1.741422 1.449372 1.057458 1.663803 1.419467
- -----------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* (a) 1% (1)% (6)% (2)% 3% (8)% (7)%
=============================================================================================================================
1993
Beginning unit value - Jan. 1 $1.120568 1.034606 1.637181 1.289480 1.003770 1.740666 1.368966
- -----------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .000000 .029163 .178726 .198323 .031647 .132238 .165734
- -----------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) .196509 (.009792) .052059 (.001107) .000000 (.041442) .010622
- -----------------------------------------------------------------------------------------------------------------------------
Contract charges (.011227) (.009563) (.017048) (.013295) (.009713) (.016547) (.014030)
- -----------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $1.305850 1.044414 1.850918 1.473401 1.025704 1.814915 1.531292
- -----------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* (a) 17% 1% 13% 14% 2% 4% 12%
=============================================================================================================================
1992
Beginning unit value - Jan. 1 ** ** $1.484255 1.196471 ** 1.723855 1.256090
- -----------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .135065 .118269 .020288 .102975
- -----------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) .032781 (.013661) .011980 .022142
- -----------------------------------------------------------------------------------------------------------------------------
Contract charges (.014920) (.011599) (.015457) (.012241)
- -----------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $1.637181 1.289480 1.740666 1.368966
- -----------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* (a) 10% 8% 1% 9%
=============================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
FedGNMA FedIGvt FidAsMgr FidCapIn
------- ------- -------- --------
<S> <C> <C> <C> <C>
1994
Beginning unit value - Jan. 1 1.119643 1.020623 1.036089 3.397953
- ----------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .080720 .050088 .038621 .285090
- ----------------------------------------------------------------------------------------------
Unrealized gain (loss) (.108769) (.069585) (.106677) (.440620)
- ----------------------------------------------------------------------------------------------
Contract charges (.010365) (.009531) (.009469) (.031839)
- ----------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 1.081229 .991595 .958564 3.210584
- ----------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* (a) (3)% (3)% (7)% (6)%
==============================================================================================
1993
Beginning unit value - Jan. 1 1.061001 1.000000 1.000000 2.746533
- ----------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .079608 .027755 .040710 .275431
- ----------------------------------------------------------------------------------------------
Unrealized gain (loss) (.010414) (.000640) (.003048) .406133
- ----------------------------------------------------------------------------------------------
Contract charges (.010552) (.006492) (.001573) (.030144)
- ----------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 1.119643 1.020623 1.036089 3.397953
- ----------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* (a) 6% 2%(b) 4%(b) 24%
==============================================================================================
1992
Beginning unit value - Jan. 1 1.000000 ** ** 2.165417
- ----------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .054829 .203832
- ----------------------------------------------------------------------------------------------
Unrealized gain (loss) .012628 .401942
- ----------------------------------------------------------------------------------------------
Contract charges (.006456) (.024658)
- ----------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 1.061001 2.746533
- ----------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* (a) 6%(b) 27%
==============================================================================================
</TABLE>
* An annualized rate of return cannot be determined as:
(a) Contract charges do not include the annual contract maintenance
charge discussed in note 2; and
(b) This investment option was not utilized for the entire year
indicated.
** This investment option was not utilized or was not available.
63 of 125
<PAGE> 64
SCHEDULE I, CONTINUED
NATIONWIDE DC VARIABLE ACCOUNT
SCHEDULES OF CHANGES IN UNIT VALUE
YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
<TABLE>
<CAPTION>
FidContr FidEqInc FidGrInc FidMgln GroFdAm IncFdAm InvIndIn
-------- -------- -------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
1994
Beginning unit value - Jan. 1 $1.289799 3.448520 1.239420 1.311856 1.857739 1.533299 1.208959
- -----------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .009193 .333965 .092801 .051123 .083262 .097082 .097608
- -----------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) (.023586) (.325363) (.064842) (.074747) (.082914) (.135450) (.144261)
- -----------------------------------------------------------------------------------------------------------------------------
Contract charges (.012098) (.032812) (.011811) (.012277) (.017429) (.014175) (.011250)
- -----------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $1.263308 3.424310 1.255568 1.275955 1.840658 1.480756 1.151056
- -----------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* (a) (2)% (1)% 1% (3)% (1)% (3)% (5)%
=============================================================================================================================
1993
Beginning unit value - Jan. 1 $1.072342 2.869860 1.046808 1.062405 1.638011 1.357846 1.045472
- -----------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .094904 .126727 .069383 .124579 .072693 .120765 .094056
- -----------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) .134019 .482324 .134221 .136398 .163417 .068633 .080250
- -----------------------------------------------------------------------------------------------------------------------------
Contract charges (.011466) (.030391) (.010992) (.011526) (.016382) (.013945) (.010819)
- -----------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $1.289799 3.448520 1.239420 1.311856 1.857739 1.533299 1.208959
- -----------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* (a) 20% 20% 18% 23% 13% 13% 16%
=============================================================================================================================
1992
Beginning unit value - Jan. 1 $1.000000 2.526472 1.000000 1.000000 1.539692 1.223786 1.000000
- -----------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .054462 .104723 .018784 .151730 .018632 .101384 .011071
- -----------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) .019469 .264010 .029592 (.079779) .094195 .044936 .035970
- -----------------------------------------------------------------------------------------------------------------------------
Contract charges (.001589) (.025345) (.001568) (.009546) (.014508) (.012260) (.001569)
- -----------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $1.072342 2.869860 1.046808 1.062405 1.638011 1.357846 1.045472
- -----------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* (a) 7%(b) 14% 5%(b) 6%(b) 6% 11% 5%(b)
=============================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
JanFund Jan20Fd MASFIP MFSGrStk MFSGrOpp
------- ------- ------ -------- --------
<S> <C> <C> <C> <C> <C>
1994
Beginning unit value - Jan. 1 1.077425 1.058801 1.000000 7.613442 4.834037
- --------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .021792 .002891 .029902 .717173 .376509
- --------------------------------------------------------------------------------------------------------
Unrealized gain (loss) (.033660) (.073797) (.046046) (1.229319) (.576664)
- --------------------------------------------------------------------------------------------------------
Contract charges (.010076) (.009631) (.003074) (.067148) (.044349)
- --------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 1.055481 .978264 .980782 7.034148 4.589533
- --------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* (a) (2)% (8)% (2)%(b) (8)% (5)%
========================================================================================================
1993
Beginning unit value - Jan. 1 1.000000 ** ** 6.714892 4.200054
- --------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .069141 1.133243 .528137
- --------------------------------------------------------------------------------------------------------
Unrealized gain (loss) .014854 (.168690) .148725
- --------------------------------------------------------------------------------------------------------
Contract charges (.006570) (.066003) (.042879)
- --------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 1.077425 7.613442 4.834037
- --------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* (a) 8%(b) 13% 15%
========================================================================================================
1992
Beginning unit value - Jan. 1 ** ** ** 6.368639 3.936838
- --------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .390016 .146228
- --------------------------------------------------------------------------------------------------------
Unrealized gain (loss) .014635 .154228
- --------------------------------------------------------------------------------------------------------
Contract charges (.058398) (.037240)
- --------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 6.714892 4.200054
- --------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* (a) 5% 7%
========================================================================================================
</TABLE>
* An annualized rate of return cannot be determined as:
(a) Contract charges do not include the annual contract maintenance
charge discussed in note 2; and
(b) This investment option was not utilized for the entire year
indicated.
** This investment option was not utilized or was not available.
64 of 125
<PAGE> 65
SCHEDULE I, CONTINUED
NATIONWIDE DC VARIABLE ACCOUNT
SCHEDULES OF CHANGES IN UNIT VALUE
YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
<TABLE>
<CAPTION>
MFSHiInc NWBdFd NWFund NWGroFd NWMyMkt NBManhFd NYVenFd
-------- ------ ------ ------- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
1994
Beginning unit value - Jan. 1 $4.422523 1.778765 9.502760 2.081399 2.583387 1.823796 .994508
- -----------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .374437 .121459 .927943 .079372 .096188 .115456 .046949
- -----------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) (.490350) (.265190) (.873192) (.049054) .000000 (.180865) (.065935)
- -----------------------------------------------------------------------------------------------------------------------------
Contract charges (.041117) (.015868) (.089466) (.019708) (.024914) (.016838) (.009376)
- -----------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $4.265493 1.619166 9.468045 2.092009 2.654661 1.741549 .966146
- -----------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* (a) (4)% (9)% 0% 1% 3% (5)% (3)%
=============================================================================================================================
1993
Beginning unit value - Jan. 1 $3.739642 1.621957 8.985447 1.887524 2.542721 1.673695 1.000000
- -----------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .354624 .128391 .679906 .073989 .065160 .287611 .057859
- -----------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) .367761 .045063 (.077647) .138601 .000000 (.121214) (.061826)
- -----------------------------------------------------------------------------------------------------------------------------
Contract charges (.039504) (.016646) (.084946) (.018715) (.024494) (.016296) (.001525)
- -----------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $4.422523 1.778765 9.502760 2.081399 2.583387 1.823796 .994508
- -----------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* (a) 18% 10% 6% 10% 2% 9% (1)%(b)
=============================================================================================================================
1992
Beginning unit value - Jan. 1 $3.225557 1.516560 8.810680 1.792687 2.487178 1.434738 **
- -----------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .382586 .131292 .414440 .073764 .079597 .211048
- -----------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) .165276 (.011086) (.157770) .038259 .000000 .041652
- -----------------------------------------------------------------------------------------------------------------------------
Contract charges (.033777) (.014809) (.081903) (.017186) (.024054) (.013743)
- -----------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $3.739642 1.621957 8.985447 1.887524 2.542721 1.673695
- -----------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* (a) 16% 7% 2% 5% 2% 17%
=============================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
PutInvFd PutVoyFd SEI500Ix SelGroFd
-------- -------- -------- --------
<S> <C> <C> <C> <C>
1994
Beginning unit value - Jan. 1 8.652501 1.992379 1.792223 7.370495
- --------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .771381 .083642 .101704 .708203
- --------------------------------------------------------------------------------------------
Unrealized gain (loss) (1.046752) (.075428) (.084212) (.990524)
- --------------------------------------------------------------------------------------------
Contract charges (.079812) (.018282) (.016880) (.067589)
- --------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 8.297318 1.982311 1.792835 7.020585
- --------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* (a) (4)% (1)% 0% (5)%
============================================================================================
1993
Beginning unit value - Jan. 1 7.410567 1.698751 1.647325 6.989639
- --------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends 1.260334 .072965 .100192 1.309602
- --------------------------------------------------------------------------------------------
Unrealized gain (loss) .057997 .237532 .061055 (.863222)
- --------------------------------------------------------------------------------------------
Contract charges (.076397) (.016869) (.016349) (.065524)
- --------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 8.652501 1.992379 1.792223 7.370495
- --------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* (a) 17% 17% 9% 5%
============================================================================================
1992
Beginning unit value - Jan. 1 6.934213 1.563079 1.548965 6.340967
- --------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .991810 .080133 .049562 .613652
- --------------------------------------------------------------------------------------------
Unrealized gain (loss) (.450123) .070006 .063592 .094783
- --------------------------------------------------------------------------------------------
Contract charges (.065333) (.014467) (.014794) (.059763)
- --------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 7.410567 1.698751 1.647325 6.989639
- --------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* (a) 7% 9% 6% 10%
============================================================================================
</TABLE>
* An annualized rate of return cannot be determined as:
(a) Contract charges do not include the annual contract maintenance
charge discussed in note 2; and
(b) This investment option was not utilized for the entire year
indicated.
** This investment option was not utilized or was not available.
65 of 125
<PAGE> 66
SCHEDULE I, CONTINUED
NATIONWIDE DC VARIABLE ACCOUNT
SCHEDULES OF CHANGES IN UNIT VALUE
YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
<TABLE>
<CAPTION>
StComStk TRIntStk TemForFd TemSmGro TCGroInv TCSelInv TCUltra
-------- -------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
1994
Beginning unit value - Jan. 1 $1.017301 1.454045 1.387073 1.353616 3.443124 1.202996 1.409710
- -----------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .063114 .087659 .098557 .032943 .498592 .095333 .042137
- -----------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) (.067992) (.098366) (.093448) (.094423) (.549338) (.191608) (.093077)
- -----------------------------------------------------------------------------------------------------------------------------
Contract charges (.009603) (.013910) (.013423) (.012808) (.032487) (.010822) (.012866)
- -----------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $1.002820 1.429428 1.378759 1.279328 3.359891 1.095899 1.345904
- -----------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* (a) (1)% (2)% (1)% (5)% (2)% (9)% (5)%
=============================================================================================================================
1993
Beginning unit value - Jan. 1 $1.000000 1.047655 1.023491 1.036433 3.350122 1.059075 1.168340
- -----------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .042093 .033862 .037835 .016770 .384659 .132743 .000000
- -----------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) (.023251) .384061 .336947 .311711 (.260224) .022087 .253599
- -----------------------------------------------------------------------------------------------------------------------------
Contract charges (.001541) (.011533) (.011200) (.011298) (.031433) (.010909) (.012229)
- -----------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $1.017301 1.454045 1.387073 1.353616 3.443124 1.202996 1.409710
- -----------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* (a) 2%(b) 39% 36% 31% 3% 14% 21%
=============================================================================================================================
1992
Beginning unit value - Jan. 1 ** $1.095728 ** ** 3.533694 1.118927 1.164722
- -----------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .036414 .049615 .047697 .000000
- -----------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) (.074201) (.202281) (.097692) .013657
- -----------------------------------------------------------------------------------------------------------------------------
Contract charges (.010286) (.030906) (.009857) (.010039)
- -----------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $1.047655 3.350122 1.059075 1.168340
- -----------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* (a) (4)% (5)% (5)% 0%
=============================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
DryStIx FidVIPAM FidVIPEI
------- -------- --------
<S> <C> <C> <C>
1994
Beginning unit value - Jan. 1 1.000000 1.000000 1.000000
- ------------------------------------------------------------------------------
Reinvested capital gains
and dividends .016017 .000695 .011343
- ------------------------------------------------------------------------------
Unrealized gain (loss) (.037213) (.041640) (.034096)
- ------------------------------------------------------------------------------
Contract charges (.003059) (.003076) (.003072)
- ------------------------------------------------------------------------------
Ending unit value - Dec. 31 .975745 .955979 .974175
- ------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* (a) (2)%(b) (4)%(b) (3)%(b)
==============================================================================
1993
Beginning unit value - Jan. 1 ** ** **
- ------------------------------------------------------------------------------
Reinvested capital gains
and dividends
- ------------------------------------------------------------------------------
Unrealized gain (loss)
- ------------------------------------------------------------------------------
Contract charges
- ------------------------------------------------------------------------------
Ending unit value - Dec. 31
- ------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* (a)
==============================================================================
1992
Beginning unit value - Jan. 1 ** ** **
- ------------------------------------------------------------------------------
Reinvested capital gains
and dividends
- ------------------------------------------------------------------------------
Unrealized gain (loss)
- ------------------------------------------------------------------------------
Contract charges
- ------------------------------------------------------------------------------
Ending unit value - Dec. 31
- ------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* (a)
==============================================================================
</TABLE>
* An annualized rate of return cannot be determined as:
(a) Contract charges do not include the annual contract maintenance
charge discussed in note 2; and
(b) This investment option was not utilized for the entire year
indicated.
** This investment option was not utilized or was not available.
66 of 125
<PAGE> 67
SCHEDULE I, CONTINUED
NATIONWIDE DC VARIABLE ACCOUNT
SCHEDULES OF CHANGES IN UNIT VALUE
YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
<TABLE>
<CAPTION>
FidVIPGr FidVIPHI FidVIPOv NWGvtBd SATMyMkt NWTotRet NBGro
-------- -------- -------- ------- -------- -------- -----
<S> <C> <C> <C> <C> <C> <C>
1994
Beginning unit value - Jan. 1 $1.000000 1.000000 1.000000 1.396125 1.123427 1.523742 1.352530
- -----------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .000000 .000000 .000000 .087782 .043407 .077107 .163043
- -----------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) .022089 (.004613) (.049090) (.132815) .000000 (.060675) (.230291)
- -----------------------------------------------------------------------------------------------------------------------------
Contract charges (.003126) (.003116) (.003027) (.012811) (.010850) (.014584) (.012342)
- -----------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $1.018963 .992271 .947883 1.338281 1.155984 1.525590 1.272940
- -----------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* (a) 2%(b) (1)%(b) (5)%(b) (4)% 3%(b) 0% (6)%
=============================================================================================================================
1993
Beginning unit value - Jan. 1 ** ** ** $1.286974 ** 1.386859 1.278609
- -----------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .082394 .056736 .029640
- -----------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) .039739 .094024 .056552
- -----------------------------------------------------------------------------------------------------------------------------
Contract charges (.012982) (.013877) (.012271)
- -----------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 $1.396125 1.523742 1.352530
- -----------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* (a) 8% 10% 6%
=============================================================================================================================
1992
Beginning unit value - Jan. 1 ** ** ** 1.204500 ** 1.294230 1.178398
- -----------------------------------------------------------------------------------------------------------------------------
Reinvested capital gains
and dividends .128811 .048818 .012605
- -----------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) (.034595) .056385 .098791
- -----------------------------------------------------------------------------------------------------------------------------
Contract charges (.011742) (.012574) (.011185)
- -----------------------------------------------------------------------------------------------------------------------------
Ending unit value - Dec. 31 1.286974 1.386859 1.278609
- -----------------------------------------------------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* (a) 7% 7% 9%
=============================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
NBLtdMat NBPart TCIGro
-------- ------ ------
<S> <C> <C> <C>
1994
Beginning unit value - Jan. 1 1.000000 1.000000 1.360119
- -------------------------------------------------------------------------------
Reinvested capital gains
and dividends .000000 .000000 .000146
- -------------------------------------------------------------------------------
Unrealized gain (loss) (.001418) (.030724) (.016072)
- -------------------------------------------------------------------------------
Contract charges (.003120) (.003053) (.012656)
- -------------------------------------------------------------------------------
Ending unit value - Dec. 31 .995462 .966223 1.331537
- -------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* (a) 0%(b) (3)%(b) (2)%
===============================================================================
1993
Beginning unit value - Jan. 1 ** ** 1.244720
- -------------------------------------------------------------------------------
Reinvested capital gains
and dividends .003393
- -------------------------------------------------------------------------------
Unrealized gain (loss) .124357
- -------------------------------------------------------------------------------
Contract charges (.012351)
- -------------------------------------------------------------------------------
Ending unit value - Dec. 31 1.360119
- -------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* (a) 9%
===============================================================================
1992
Beginning unit value - Jan. 1 ** ** 1.273681
- -------------------------------------------------------------------------------
Reinvested capital gains
and dividends .008089
- -------------------------------------------------------------------------------
Unrealized gain (loss) (.025654)
- -------------------------------------------------------------------------------
Contract charges (.011396)
- -------------------------------------------------------------------------------
Ending unit value - Dec. 31 1.244720
- -------------------------------------------------------------------------------
Percentage increase (decrease)
in unit value* (a) (2)%
===============================================================================
</TABLE>
* An annualized rate of return cannot be determined as:
(a) Contract charges do not include the annual contract maintenance
charge discussed in note 2; and
(b) This investment option was not utilized for the entire year
indicated.
** This investment option was not utilized or was not available.
See accompanying independent auditors' report.
67 of 125
<PAGE> 68
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Nationwide Life Insurance Company:
We have audited the accompanying consolidated balance sheets of Nationwide Life
Insurance Company (a wholly owned subsidiary of Nationwide Corporation) and
subsidiaries as of December 31, 1994 and 1993, and the related consolidated
statements of income, shareholder's equity and cash flows for each of the years
in the three-year period ended December 31, 1994. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
Participating insurance and the related surplus are discussed in note 13. The
Company and its counsel are of the opinion that the ultimate ownership of the
participating surplus in excess of the contemplated equitable policyholder
dividends belongs to the shareholder. The accompanying consolidated financial
statements are presented on such basis.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Nationwide Life
Insurance Company and subsidiaries as of December 31, 1994 and 1993, and the
results of their operations and their cash flows for each of the years in the
three-year period ended December 31, 1994, in conformity with generally
accepted accounting principles.
As discussed in note 2 to the consolidated financial statements, in 1994 the
Company adopted the provisions of the Financial Accounting Standards Board's
Statement of Financial Accounting Standards (SFAS) No. 115, Accounting for
Certain Investments in Debt and Equity Securities.
In 1993, the Company adopted the provisions of SFAS No. 109, Accounting for
Income Taxes and SFAS No. 106, Employers' Accounting for Postretirement
Benefits Other Than Pensions.
KPMG Peat Marwick LLP
Columbus, Ohio
February 27, 1995
68 of 125
<PAGE> 69
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Corporation)
Consolidated Balance Sheets
December 31, 1994 and 1993
(000's omitted)
<TABLE>
<CAPTION>
Assets 1994 1993
------ ------------ ----------
<S> <C> <C>
Investments (notes 5, 8 and 9):
Securities available-for-sale, at fair value:
Fixed maturities (cost $8,318,865 in 1994) $ 8,045,906 -
Equity securities (cost $18,373 in 1994; $8,263 in 1993) 24,713 16,593
Fixed maturities held-to-maturity, at amortized cost (fair value $3,602,310
in 1994; $10,886,820 in 1993) 3,688,787 10,120,978
Mortgage loans on real estate 4,222,284 3,871,560
Real estate 252,681 253,831
Policy loans 340,491 315,898
Other long-term investments 63,914 118,490
Short-term investments (note 14) 131,643 41,797
------------ ----------
16,770,419 14,739,147
------------ ----------
Cash 7,436 21,835
Accrued investment income 220,540 190,886
Deferred policy acquisition costs 1,064,159 811,944
Deferred Federal income tax 36,515 -
Other assets 790,603 636,161
Assets held in Separate Accounts (note 8) 12,222,461 9,006,388
------------ ----------
$31,112,133 25,406,361
============ ==========
</TABLE>
<TABLE>
<CAPTION>
Liabilities and Shareholder's Equity
------------------------------------
<S> <C> <C>
Future policy benefits and claims (notes 6 and 8) 16,321,461 14,092,255
Policyholders' dividend accumulations 338,058 322,686
Other policyholder funds 72,770 71,959
Accrued Federal income tax (note 7):
Current 13,126 12,294
Deferred - 31,659
----------- ----------
13,126 43,953
----------- ----------
Other liabilities 235,778 217,952
Liabilities related to Separate Accounts (note 8) 12,222,461 9,006,388
----------- ----------
29,203,654 23,755,193
----------- ----------
Shareholder's equity (notes 3, 4, 7 and 13):
Capital shares, $1 par value. Authorized 5,000 shares, issued and
outstanding 3,815 shares 3,815 3,815
Paid-in additional capital 622,753 422,753
Unrealized gains (losses) on securities available-for-sale, net of adjustment to
deferred policy acquisition costs of $82,525 ($0 in 1993) and net of deferred (119,668) 6,747
Federal income tax benefit of $64,425 ($1,583 expense in 1993)
Retained earnings 1,401,579 1,217,853
----------- ----------
1,908,479 1,651,168
----------- ----------
Commitments and contingencies (notes 9 and 16)
$31,112,133 25,406,361
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
69 of 125
<PAGE> 70
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Corporation)
Consolidated Statements of Income
Years ended December 31, 1994, 1993 and 1992
(000's omitted)
<TABLE>
<CAPTION>
1994 1993 1992
----------- ---------- ----------
<S> <C> <C> <C>
Revenues (note 17):
Traditional life insurance premiums $ 209,538 215,715 226,888
Accident and health insurance premiums 324,524 312,655 430,009
Universal life and investment product policy charges 239,021 188,057 148,464
Net investment income (note 5) 1,289,501 1,204,426 1,120,157
Net ceded commissions from disposition of credit life and
credit accident and health business (note 12) - - 27,115
Realized gains (losses) on investments (notes 5 and 14) (16,384) 113,673 (19,315)
----------- ---------- ----------
2,046,200 2,034,526 1,933,318
----------- ---------- ----------
Benefits and expenses:
Benefits and claims 1,279,763 1,236,906 1,319,735
Provision for policyholders' dividends on participating
policies (note 13) 46,061 53,189 61,834
Amortization of deferred policy acquisition costs 94,744 102,134 99,197
Other operating costs and expenses 352,402 329,396 321,993
----------- ---------- ----------
1,772,970 1,721,625 1,802,759
----------- ---------- ----------
Income before Federal income tax and cumulative
effect of changes in accounting principles 273,230 312,901 130,559
----------- ---------- ----------
Federal income tax (note 7):
Current expense 79,847 75,124 47,402
Deferred expense (benefit) 9,657 31,634 (13,660)
----------- ---------- ----------
89,504 106,758 33,742
----------- ---------- ----------
Income before cumulative effect of changes in
accounting principles 183,726 206,143 96,817
Cumulative effect of changes in accounting principles,
net of tax (note 3) - 5,365 -
----------- ---------- ----------
Net income $ 183,726 211,508 96,817
=========== ========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
70 of 125
<PAGE> 71
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Corporation)
Consolidated Statements of Shareholder's Equity
Years ended December 31, 1994, 1993 and 1992
(000's omitted)
<TABLE>
<CAPTION>
Unrealized
gains (losses)
Paid-in on securities Total
Capital additional available-for- Retained shareholder's
shares capital sale, net earnings equity
--------- ---------- -------------- -------- -------------
<S> <C> <C> <C> <C> <C>
1992:
Balance, beginning of year $ 3,815 311,753 96,048 933,179 1,344,795
Dividends paid to shareholder - - - (5,846) (5,846)
Net income - - - 96,817 96,817
Unrealized losses on equity
securities, net of deferred
Federal income tax - - (5,524) - (5,524)
--------- ---------- -------------- --------- -------------
Balance, end of year $ 3,815 311,753 90,524 1,024,150 1,430,242
========= ========== ============== ========= =============
1993:
Balance, beginning of year 3,815 311,753 90,524 1,024,150 1,430,242
Capital contributions - 111,000 - - 111,000
Dividends paid to shareholder - - - (17,805) (17,805)
Net income - - - 211,508 211,508
Unrealized losses on equity
securities, net of deferred
Federal income tax - - (83,777) - (83,777)
--------- ---------- -------------- --------- -------------
Balance, end of year $ 3,815 422,753 6,747 1,217,853 1,651,168
========= ========== ============== ========= =============
1994:
Balance, beginning of year 3,815 422,753 6,747 1,217,853 1,651,168
Capital contribution - 200,000 - - 200,000
Net income - - - 183,726 183,726
Adjustment for change in
accounting for certain
investments in debt and equity
securities, net of
adjustment to deferred policy - - 216,915 - 216,915
acquisition costs and deferred
Federal income tax (note 3)
Unrealized losses on securities
available-for-sale, net of
adjustment to deferred policy
acquisition costs and deferred
Federal income tax - - (343,330) - (343,330)
--------- ---------- ------------- --------- -------------
Balance, end of year $ 3,815 622,753 (119,668) 1,401,579 1,908,479
========= ========== ============= ========= =============
</TABLE>
See accompanying notes to consolidated financial statements.
71 of 125
<PAGE> 72
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Corporation)
Consolidated Statements of Cash Flows
Years ended December 31, 1994, 1993 and 1992
(000's omitted)
<TABLE>
<CAPTION>
1994 1993 1992
------------ ---------- ----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 183,726 211,508 96,817
Adjustments to reconcile net income to net cash provided by
operating activities:
Capitalization of deferred policy acquisition costs (264,434) (191,994) (177,928)
Amortization of deferred policy acquisition costs 94,744 102,134 99,197
Amortization and depreciation 6,207 11,156 5,607
Realized losses (gains) on invested assets, net 15,949 (113,648) 19,092
Deferred Federal income tax benefit (2,166) (6,006) (13,105)
Increase in accrued investment income (29,654) (4,218) (11,518)
(Increase) decrease in other assets (112,566) (549,277) 6,132
Increase in policyholder account balances 1,038,641 509,370 19,087
Increase in policyholders' dividend accumulations 15,372 17,316 18,708
Increase (decrease) in accrued Federal income tax payable 832 16,838 (15,723)
Increase in other liabilities 17,826 26,958 73,512
Other, net (19,303) (11,745) (10,586)
------------ ---------- ----------
Net cash provided by operating activities 945,174 18,392 109,292
------------ ---------- ----------
Cash flows from investing activities:
Proceeds from maturity of securities available-for-sale 579,067 - -
Proceeds from sale of securities available-for-sale 247,876 247,502 27,844
Proceeds from maturity of fixed maturities held-to-maturity 516,003 1,192,093 1,030,397
Proceeds from sale of fixed maturities - 33,959 123,422
Proceeds from repayments of mortgage loans on real estate 220,744 146,047 259,659
Proceeds from sale of real estate 46,713 23,587 22,682
Proceeds from repayments of policy loans and
sale of other invested assets 134,998 59,643 99,189
Cost of securities available-for-sale acquired (2,569,672) (12,550) (12,718)
Cost of fixed maturities held-to-maturity acquired (675,835) (2,016,831) (2,687,975)
Cost of mortgage loans on real estate acquired (627,025) (475,336) (654,403)
Cost of real estate acquired (15,962) (8,827) (137,843)
Policy loans issued and other invested assets acquired (118,012) (76,491) (97,491)
------------ ---------- ----------
Net cash used in investing activities (2,261,105) (887,204) (2,027,620)
------------ ---------- ----------
Cash flows from financing activities:
Proceeds from capital contributions 200,000 111,000 -
Dividends paid to shareholder - (17,805) (5,846)
Increase in universal life and investment product account balances 3,640,958 2,249,740 2,468,236
Decrease in universal life and investment product account balances (2,449,580) (1,458,504) (575,180)
------------ ---------- ----------
Net cash provided by financing activities 1,391,378 884,431 1,887,210
------------ ---------- ----------
Net increase (decrease) in cash and cash equivalents 75,447 15,619 (31,118)
Cash and cash equivalents, beginning of year 63,632 48,013 79,131
------------ ---------- ----------
Cash and cash equivalents, end of year $ 139,079 63,632 48,013
============ ========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
72 of 125
<PAGE> 73
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Corporation)
Notes to Consolidated Financial Statements
December 31, 1994, 1993 and 1992
(000's omitted)
(1) Organization and Description of Business
Nationwide Life Insurance Company (NLIC) is a wholly owned
subsidiary of Nationwide Corporation (Corp.). Wholly-owned
subsidiaries of NLIC include Financial Horizons Life Insurance
Company (FHLIC), West Coast Life Insurance Company (WCLIC), National
Casualty Company and subsidiaries (NCC), Nationwide Financial
Services, Inc. (NFS), and effective December 31, 1994, Employers Life
Insurance Company of Wausau and subsidiary (ELICW). NLIC and its
subsidiaries are collectively referred to as "the Company."
NLIC, FHLIC, WCLIC and ELICW are life and accident and health
insurers and NCC is a property and casualty insurer. The Company is
licensed in all 50 states, the District of Columbia, the Virgin
Islands and Puerto Rico. The Company offers a full range of life,
health and annuity products through exclusive agents and other
distribution channels and is subject to competition from other
insurers throughout the United States. The Company is subject to
regulation by the Insurance Departments of states in which it is
licensed, and undergoes periodic examinations by those departments.
The following is a description of the most significant risks facing
life and health insurers and how the Company mitigates those risks:
Legal/Regulatory Risk is the risk that changes in the legal or
regulatory environment in which an insurer operates will create
additional expenses not anticipated by the insurer in pricing
its products. That is, regulatory initiatives designed to
reduce insurer profits, new legal theories or insurance company
insolvencies through guaranty fund assessments may create costs
for the insurer beyond those recorded in the consolidated
financial statements. The Company mitigates this risk by
offering a wide range of products and by operating throughout
the United States, thus reducing its exposure to any single
product or jurisdiction, and also by employing underwriting
practices which identify and minimize the adverse impact of this
risk.
Credit Risk is the risk that issuers of securities owned by the
Company or mortgagors on mortgage loans on real estate owned by
the Company will default or that other parties, including
reinsurers, which owe the Company money, will not pay. The
Company minimizes this risk by adhering to a conservative
investment strategy, by maintaining sound reinsurance and credit
and collection policies and by providing for any amounts deemed
uncollectible.
Interest Rate Risk is the risk that interest rates will change
and cause a decrease in the value of an insurer's investments.
This change in rates may cause certain interest-sensitive
products to become uncompetitive or may cause
disintermediation. The Company mitigates this risk by charging
fees for non-conformance with certain policy provisions, by
offering products that transfer this risk to the purchaser,
and/or by attempting to match the maturity schedule of its
assets with the expected payouts of its liabilities. To the
extent that liabilities come due more quickly than assets
mature, an insurer would have to borrow funds or sell assets prior
to maturity and potentially recognize a gain or loss.
(2) Summary of Significant Accounting Policies
The significant accounting policies followed by the Company that
materially affect financial reporting are summarized below. The
accompanying consolidated financial statements have been prepared in
accordance with generally accepted accounting principles (GAAP)
which differ from statutory accounting practices prescribed or
permitted by regulatory authorities. See note 4.
In preparing the consolidated financial statements, management is
required to make estimates and assumptions that affect the reported
amounts of assets and liabilities as of the date of the consolidated
financial statements and revenues and expenses for the period.
Actual results could differ significantly from those estimates.
The estimates susceptible to significant change are those used in
determining the liability for future policy benefits and claims and
those used in determining valuation allowances for mortgage loans on
real estate and real estate. Although some variability is inherent
in these estimates, management believes the amounts provided are
adequate.
73 of 125
<PAGE> 74
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Corporation)
Notes to Consolidated Financial Statements, Continued
(a) Consolidation Policy
The December 31, 1994, 1993 and 1992 consolidated financial statements
include the accounts of NLIC and its wholly owned subsidiaries FHLIC,
WCLIC, NCC and NFS. The December 31, 1994 consolidated balance sheet also
includes the accounts of ELICW, which was acquired by NLIC effective
December 31, 1994. See Note 14. All significant intercompany balances and
transactions have been eliminated.
(b) Valuation of Investments and Related Gains and Losses
Prior to January 1, 1994, the Company classified fixed maturities in
accordance with the then existing accounting standards, and accordingly,
fixed maturity securities were carried at amortized cost, adjusted for
amortization of premium or discount, since the Company had both the ability
and intent to hold those securities until maturity. Equity securities were
carried at fair value with the unrealized gains and losses, net of deferred
Federal income tax, reported as a separate component of shareholder's
equity.
In May 1993, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 115 - Accounting for
Certain Investments in Debt and Equity Securities (SFAS 115). SFAS 115
requires fixed maturities and equity securities to be classified as either
held-to-maturity, available-for-sale, or trading. The Company has no
trading securities. The Company adopted SFAS 115 as of January 1, 1994,
with no effect on consolidated net income. See note 3 regarding the effect
on consolidated shareholder's equity.
Fixed maturity securities are classified as held-to-maturity when the
Company has the positive intent and ability to hold the securities to
maturity and are stated at amortized cost. Fixed maturity securities not
classified as held-to- maturity and all equity securities are classified as
available-for-sale and are stated at fair value, with the unrealized gains
and losses, net of adjustments to deferred policy acquisition costs and
deferred Federal income tax, reported as a separate component of
shareholder's equity. The adjustment to deferred policy acquisition costs
represents the change in amortization of deferred policy acquisition costs
that would have been required as a charge or credit to operations had such
unrealized amounts been realized.
Mortgage loans on real estate are carried at the unpaid principal balance
less valuation allowances. The Company provides valuation allowances for
impairments of mortgage loans on real estate based on a review by portfolio
managers. Loans in foreclosure and loans considered in-substance
foreclosed as of the balance sheet date are placed on non- accrual status
and written down to the fair value of the existing property to derive a new
cost basis. Real estate is carried at cost less accumulated depreciation
and valuation allowances. Other long-term investments are carried on the
equity basis, adjusted for valuation allowances.
Realized gains and losses on the sale of investments are determined on the
basis of specific security identification. Estimates for valuation
allowances and other than temporary declines are included in realized gains
and losses on investments.
In May, 1993, the FASB issued Statement of Financial Accounting Standards
No. 114 - Accounting by Creditors for Impairment of a Loan (SFAS 114).
SFAS 114, which was amended by Statement of Financial Accounting Standards
No. 118 - Accounting by Creditors for Impairment of a Loan - Income
Recognition and Disclosure in October, 1994, requires the measurement of
impaired loans be based on the present value of expected future cash flows
discounted at the loan's effective interest rate or, as a practical
expedient, at the loan's observable market price or the fair value of the
collateral if the loan is collateral dependent. The impact on the
consolidated financial statements of adopting SFAS 114 as amended is not
expected to be material. Previously issued consolidated financial
statements shall not be restated. The Company will adopt SFAS 114 as
amended in 1995.
74 of 125
<PAGE> 75
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Corporation)
Notes to Consolidated Financial Statements, Continued
(c) Revenues and Benefits
Traditional Life Insurance Products: Traditional life insurance products
include those products with fixed and guaranteed premiums and benefits and
consist primarily of whole life, limited-payment life, term life and
certain annuities with life contingencies. Premiums for traditional life
insurance products are recognized as revenue when due and collected.
Benefits and expenses are associated with earned premiums so as to result
in recognition of profits over the life of the contract. This association
is accomplished by the provision for future policy benefits and the
deferral and amortization of policy acquisition costs.
Universal Life and Investment Products: Universal life products include
universal life, variable universal life and other interest-sensitive life
insurance policies. Investment products consist primarily of individual
and group deferred annuities, annuities without life contingencies and
guaranteed investment contracts. Revenues for universal life and
investment products consist of cost of insurance, policy administration and
surrender charges that have been earned and assessed against policy account
balances during the period. Policy benefits and claims that are charged to
expense include benefits and claims incurred in the period in excess of
related policy account balances and interest credited to policy account
balances.
Accident and Health Insurance: Accident and health insurance premiums are
recognized as revenue over the terms of the policies. Policy claims are
charged to expense in the period that the claims are incurred.
(d) Deferred Policy Acquisition Costs
The costs of acquiring new business, principally commissions, certain
expenses of the policy issue and underwriting department and certain
variable agency expenses have been deferred. For traditional life and
individual health insurance products, these deferred acquisition costs are
predominantly being amortized with interest over the premium paying period
of the related policies in proportion to the ratio of actual annual premium
revenue to the anticipated total premium revenue. Such anticipated premium
revenue was estimated using the same assumptions as were used for computing
liabilities for future policy benefits. For universal life and investment
products, deferred policy acquisition costs are being amortized with
interest over the lives of the policies in relation to the present value of
estimated future gross profits from projected interest margins, cost of
insurance, policy administration and surrender charges. For years in which
gross profits are negative, deferred policy acquisition costs are amortized
based on the present value of gross revenues. Beginning January 1, 1994,
deferred policy acquisition costs are adjusted to reflect the impact of
unrealized gains and losses on fixed maturity securities
available-for-sale. See note 2(b).
(e) Separate Accounts
Separate Account assets and liabilities represent contractholders' funds
which have been segregated into accounts with specific investment
objectives. The investment income and gains or losses of these accounts
accrue directly to the contractholders. The activity of the Separate
Accounts is not reflected in the consolidated statements of income and cash
flows except for the fees the Company receives for administrative services
and risks assumed.
(f) Future Policy Benefits
Future policy benefits for traditional life and individual health policies
have been calculated using a net level premium method based on estimates of
mortality, morbidity, investment yields and withdrawals which were used or
which were being experienced at the time the policies were issued, rather
than the assumptions prescribed by state regulatory authorities. See note
6.
Future policy benefits for annuity policies in the accumulation phase,
universal life and variable universal life policies have been calculated
based on participants' contributions plus interest credited less applicable
contract charges.
Future policy benefits and claims for group long-term disability policies
are the present value (primarily discounted at 5.5%) of amounts not yet due
on reported claims and an estimate of amounts to be paid on incurred but
unreported claims. The impact of reserve discounting is not material.
Future policy benefits and claims on other group health policies are not
discounted.
75 of 125
<PAGE> 76
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Corporation)
Notes to Consolidated Financial Statements, Continued
(g) Participating Business
Participating business represents approximately 45% (48% in 1993 and 1992)
of the Company's ordinary life insurance in force, 72% (72% in 1993; 71% in
1992) of the number of policies in force, and 41% (45% in 1993 and 1992) of
life insurance premiums. The provision for policyholder dividends is based
on current dividend scales. Future dividends are provided for ratably in
future policy benefits based on dividend scales in effect at the time the
policies were issued. Dividend scales are approved by the Board of
Directors.
Income attributable to participating policies in excess of policyholder
dividends is accounted for as belonging to the shareholder. See note 13.
(h) Federal Income Tax
NLIC, FHLIC, WCLIC and NCC file a consolidated Federal income tax return
with Nationwide Mutual Insurance Company (NMIC), the majority shareholder
of Corp. Through 1994, ELICW filed a consolidated Federal income tax
return with Employers Insurance of Wausau A Mutual Company. Beginning in
1995, ELICW will file a separate Federal income tax return.
In 1993, the Company adopted Statement of Financial Accounting Standards
No. 109 - Accounting for Income Taxes, which required a change from the
deferred method of accounting for income tax of APB Opinion 11 to the asset
and liability method of accounting for income tax. Under the asset and
liability method, deferred tax assets and liabilities are recognized for
the future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and liabilities and
their respective tax bases and operating loss and tax credit carryforwards.
Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. Under this method,
the effect on deferred tax assets and liabilities of a change in tax rates
is recognized in income in the period that includes the enactment date.
Valuation allowances are established when necessary to reduce the deferred
tax assets to the amounts expected to be realized.
Prior to 1993, the Company applied the deferred method of accounting for
income tax which recognized deferred income tax for income and expense
items that are reported in different years for financial reporting purposes
and income tax purposes using the tax rate applicable for the year of
calculation. Under the deferred method, deferred tax is not adjusted for
subsequent changes in tax rates. See note 7.
The Company has reported the cumulative effect of the change in method of
accounting for income tax in the 1993 consolidated statement of income.
See note 3.
(i) Reinsurance Ceded
Reinsurance premiums ceded and reinsurance recoveries on benefits and
claims incurred are deducted from the respective income and expense
accounts. Assets and liabilities related to reinsurance ceded are reported
on a gross basis.
(j) Cash Equivalents
For purposes of the consolidated statements of cash flows, the Company
considers all short-term investments with original maturities of three
months or less to be cash equivalents.
(k) Reclassification
Certain items in the 1993 and 1992 consolidated financial statements have
been reclassified to conform to the 1994 presentation.
76 of 125
<PAGE> 77
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Corporation)
Notes to Consolidated Financial Statements, Continued
(3) Changes in Accounting Principles
Effective January 1, 1994, the Company changed its method of
accounting for certain investments in debt and equity securities in
connection with the issuance of a new accounting standard by the
FASB as described in Note 2(b). As of January 1, 1994, the company
classified fixed maturity securities with amortized cost and fair
value of $6,593,844 and $7,024,736, respectively, as available-for-
sale and recorded the securities at fair value. Previously, these
securities were recorded at amortized cost. The effect as of
January 1, 1994 has been recorded as a direct credit to
shareholder's equity as follows:
<TABLE>
<S> <C>
Excess of fair value over amortized cost of fixed maturity
securities available-for-sale $ 430,892
Adjustment to deferred policy acquisition costs (97,177)
Deferred Federal income tax (116,800)
---------
$ 216,915
=========
</TABLE>
During 1993, the Company adopted accounting principles in connection
with the issuance of two accounting standards by the FASB. The
effect as of January 1, 1993, the date of adoption, has been
recognized in the 1993 consolidated statement of income as the
cumulative effect of changes in accounting principles, as follows:
<TABLE>
<S> <C>
Asset/liability method of recognizing income tax (note 7) $ 26,344
Accrual method of recognizing postretirement benefits other
than pensions (net of tax benefit of $11,296), (note 11) (20,979)
------
Net cumulative effect of changes in accounting principles $ 5,365
===========
</TABLE>
(4) Basis of Presentation
The consolidated financial statements have been prepared in
accordance with GAAP. Annual Statements for NLIC and FHLIC, WCLIC,
ELICW and NCC, filed with the Department of Insurance of the State
of Ohio, California Department of Insurance, Wisconsin Insurance
Department and Michigan Bureau of Insurance, respectively, are
prepared on the basis of accounting practices prescribed or
permitted by such regulatory authorities. Prescribed statutory
accounting practices include a variety of publications of the
National Association of Insurance Commissioners (NAIC), as well as
state laws, regulations and general administrative rules. Permitted
statutory accounting practices encompass all accounting practices
not so prescribed. The Company has no material permitted statutory
accounting practices.
The following reconciles the statutory net income of NLIC as
reported to regulatory authorities to the net income as shown in the
accompanying consolidated financial statements:
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Statutory net income $ 76,532 185,943 33,812
Adjustments to restate to the basis of GAAP:
Consolidating statutory net income of subsidiaries 14,350 19,545 21,519
Increase in deferred policy acquisition costs, net 167,166 89,860 78,731
Future policy benefits (76,310) (70,640) (63,355)
Deferred Federal income tax (expense) benefit (9,657) (31,634) 13,660
Equity in earnings of affiliates 1,013 7,121 4,618
Valuation allowances and other than temporary
declines accounted for directly in surplus 6,275 (6,638) 3,402
Interest maintenance reserve (7,332) 13,754 7,588
Cumulative effect of changes in accounting principles, net of tax - 5,365 -
Other, net 11,689 (1,168) (3,158)
------ ----- -----
Net income per accompanying consolidated
statements of income $ 183,726 211,508 96,817
======== ======= ======
</TABLE>
77 of 125
<PAGE> 78
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Corporation)
Notes to Consolidated Financial Statements, Continued
The following reconciles the statutory capital shares and surplus of
NLIC as reported to regulatory authorities to the shareholder's
equity as shown in the accompanying consolidated financial statements:
<TABLE>
<CAPTION>
1994 1993 1992
---------- --------- ----------
<S> <C> <C> <C>
Statutory capital shares and surplus $1,262,861 992,631 647,307
Add (deduct) cumulative effect of adjustments:
Deferred policy acquisition costs 1,064,159 811,944 722,084
Nonadmitted assets and furniture and equipment charged to
income in the year of acquisition, net of accumulated
depreciation 16,120 22,573 15,712
Asset valuation reserve 153,387 105,596 138,727
Interest maintenance reserve 18,843 21,069 7,315
Future policy benefits (310,302) (238,231) (167,591)
Deferred Federal income tax, including effect of changes in
accounting principles in 1993 36,515 (31,659) (82,724)
Cumulative effect of change in accounting principles for
postretirement benefits other than pensions, gross - (32,275) -
Difference between amortized cost and fair value of fixed
maturity securities available-for-sale, gross (272,959) - -
Other, net (60,145) (480) 149,412
---------- --------- ---------
Shareholder's equity per accompanying consolidated
balance sheets $1,908,479 1,651,168 1,430,242
========== ========= =========
</TABLE>
(5) Investments
An analysis of investment income by investment type follows for the
years ended December 31:
<TABLE>
<CAPTION>
1994 1993 1992
--------- --------- ----------
<S> <C> <C> <C>
Gross investment income:
Securities available-for-sale:
Fixed maturities $ 674,346 - -
Equity securities 550 7,230 6,949
Fixed maturities held-to-maturity 193,009 800,255 754,876
Mortgage loans on real estate 376,783 364,810 334,769
Real estate 40,280 39,684 27,410
Short-term 6,990 5,080 7,298
Other 42,831 33,832 30,717
--------- --------- ---------
Total investment income 1,334,789 1,250,891 1,162,019
Less investment expenses 45,288 46,465 41,862
--------- --------- ---------
Net investment income $1,289,501 1,204,426 1,120,157
========== ========= =========
</TABLE>
An analysis of the change in gross unrealized gains (losses) on
securities available-for-sale and fixed maturities held-to-maturity
follows for the years ended December 31:
<TABLE>
<CAPTION>
1994 1993 1992
------------ --------- --------
<S> <C> <C> <C>
Securities available-for-sale:
Fixed maturities $ (703,851) - -
Equity securities (1,990) (128,837) (9,195)
Fixed maturities held-to-maturity (421,427) 223,392 17,774
------------ -------- ------
$ (1,127,268) 94,555 8,579
=========== ======== ======
</TABLE>
78 of 125
<PAGE> 79
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Corporation)
Notes to Consolidated Financial Statements, Continued
An analysis of realized gains (losses) on investments by investment type
follows for the years ended December 31:
<TABLE>
<CAPTION>
1994 1993 1992
-------- -------- ---------
<S> <C> <C> <C>
Realized on disposition of investments:
Securities available-for-sale:
Fixed maturities $(13,720) - -
Equity securities 1,427 129,728 7,215
Fixed maturities - 21,159 13,399
Mortgage loans on real estate (16,130) (17,763) (30,334)
Real estate and other 5,765 (12,813) (12,997)
-------- -------- --------
(22,658) 120,311 (22,717)
-------- -------- --------
Valuation allowances:
Securities available-for-sale:
Fixed maturities 6,600 - -
Fixed maturities - (934) 1,792
Mortgage loans on real estate (4,332) (10,478) (5,969)
Real estate and other 4,006 4,774 7,579
-------- -------- --------
6,274 (6,638) 3,402
-------- -------- --------
$(16,384) 113,673 (19,315)
======== ======== ========
</TABLE>
The amortized cost and estimated fair value of securities available-
for-sale and fixed maturities held-to-maturity were as follows as of
December 31, 1994:
<TABLE>
<CAPTION>
Gross Gross
Amortized unrealized unrealized Estimated
cost gains losses fair value
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Securities available-for-sale
-----------------------------
Fixed maturities:
US Treasury securities and obligations of US
government corporations and agencies $ 393,156 1,794 (18,941) 376,009
Obligations of states and political subdivisions 2,202 55 (21) 2,236
Debt securities issued by foreign governments 177,910 872 (9,205) 169,577
Corporate securities 4,201,738 50,405 (128,698) 4,123,445
Mortgage-backed securities 3,543,859 18,125 (187,345) 3,374,639
--------- ------ -------- ---------
Total fixed maturities 8,318,865 71,251 (344,210) 8,045,906
Equity securities 18,373 6,636 (296) 24,713
---------- ------ -------- ---------
$8,337,238 77,887 (344,506) 8,070,619
========== ====== ======== =========
Fixed maturity securities held-to-maturity
------------------------------------------
Obligations of states and political subdivisions $ 11,613 92 (255) 11,450
Debt securities issued by foreign governments 16,131 111 (39) 16,203
Corporate securities 3,661,043 34,180 (120,566) 3,574,657
---------- ------ -------- ---------
$3,688,787 34,383 (120,860) 3,602,310
========== ====== ======== =========
</TABLE>
79 of 125
<PAGE> 80
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Corporation)
Notes to Consolidated Financial Statements, Continued
The amortized cost and estimated fair value of investments of fixed
maturity securities were as follows as of December 31, 1993:
<TABLE>
<CAPTION>
Gross Gross
Amortized unrealized unrealized Estimated
cost gains losses fair value
------------ ------- -------- ----------
<S> <C> <C> <C> <C>
US Treasury securities and obligations of US
government corporations and agencies $ 287,738 18,204 (392) 305,550
Obligations of states and political subdivisions 16,519 2,700 (5) 19,214
Debt securities issued by foreign governments 137,092 7,719 (1,213) 143,598
Corporate securities 6,819,355 647,778 (15,648) 7,451,485
Mortgage-backed securities 2,860,274 121,721 (15,022) 2,966,973
------------- ------- -------- ----------
$ 10,120,978 798,122 (32,280) 10,886,820
============= ======= ======== ==========
</TABLE>
As of December 31, 1993 the net unrealized gain on equity securities,
before providing for deferred Federal income tax, was $8,330,
comprised of gross unrealized gains of $8,345 and gross unrealized
losses of $15.
The amortized cost and estimated fair value of fixed maturity securities
available-for-sale and fixed maturity securities held-to-maturity as of
December 31, 1994, by contractual maturity, are shown below. Expected
maturities will differ from contractual maturities because borrowers
may have the right to call or prepay obligations with or without call
or prepayment penalties.
<TABLE>
<CAPTION>
Amortized Estimated
cost fair value
----------- ----------
<S> <C> <C>
Fixed maturity securities available-for-sale
--------------------------------------------
Due in one year or less $ 294,779 294,778
Due after one year through five years 2,553,825 2,490,886
Due after five years through ten years 1,382,311 1,327,089
Due after ten years 544,091 558,514
----------- ---------
4,775,006 4,671,267
Mortgage-backed securities 3,543,859 3,374,639
----------- ---------
$ 8,318,865 8,045,906
=========== =========
Fixed maturity securities held-to-maturity
------------------------------------------
Due in one year or less $ 333,517 333,000
Due after one year through five years 1,953,179 1,942,260
Due after five years through ten years 1,080,069 1,013,083
Due after ten years 322,022 313,967
----------- ---------
$ 3,688,787 3,602,310
=========== =========
</TABLE>
Proceeds from the sale of securities available-for-sale during 1994 were
$247,876, while proceeds from sales of investments in fixed maturity
securities during 1993 were $33,959 ($123,422 during 1992). Gross
gains of $3,406 ($2,413 in 1993 and $3,194 in 1992) and gross losses
of $21,866 ($39 in 1993 and $513 in 1992) were realized on those sales.
Investments that were non-income producing for the twelve month period
preceding December 31, 1994 amounted to $11,513 ($13,158 for 1993) and
consisted of $11,111 ($10,907 in 1993) in real estate and $402
($2,251 in 1993) in other long-term investments.
Real estate is presented at cost less accumulated depreciation of
$29,275 in 1994 ($24,717 in 1993) and valuation allowances of
$27,330 in 1994 ($31,357 in 1993). Other valuation allowances are $0
in 1994 ($6,680 in 1993) on fixed maturities and $47,892 in 1994
($42,350 in 1993) on mortgage loans on real estate.
80 of 125
<PAGE> 81
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Corporation)
Notes to Consolidated Financial Statements, Continued
The Company generally initiates foreclosure proceedings on all
mortgage loans on real estate delinquent sixty days. Foresclosures
of mortgage loans on real estate were $37,187 in 1994 ($39,281 in
1993) and mortgage loans on real estate in process of foreclosure or
in-substance foreclosed as of December 31, 1994 totaled $19,878
($24,658 as of December 31, 1993), which approximates fair value.
Investments with an amortized cost of $11,137 and $11,383 as of
December 31, 1994 and 1993, respectively, were on deposit with
various regulatory agencies as required by law.
(6) Future Policy Benefits and Claims
The liability for future policy benefits for traditional life and
individual health policies has been established based upon the
following assumptions:
Interest rates: Interest rates vary as follows:
<TABLE>
<CAPTION>
Year of issue Life Health
------------- ---- ------
<S> <C> <C>
1994 7.2 %, not graded - permanent contracts with loan provisions; 5.0%
6.0%, not graded - all other contracts
1984-1993 7.4% to 10.5%, not graded 5.0% to 6%
1966-1983 6% to 8.1%, graded over 20 years to 4% to 6.6% 3.5% to 6%
1965 and prior generally lower than post 1965 issues 3.5% to 4%
</TABLE>
Withdrawals: Rates, which vary by issue age, type of coverage
and policy duration, are based on Company experience.
Mortality: Mortality and morbidity rates are based on published
tables, modified for the Company's actual experience.
The liability for future policy benefits for investment contracts
(approximately 81% and 80% of the total liability for future policy
benefits as of December 31, 1994 and 1993, respectively) has been
established based on policy term, interest rates and various
contract provisions. The average interest rate credited on
investment product policies was 6.5%, 7.0% and 7.5% for the years
ended December 31, 1994, 1993 and 1992, respectively.
Future policy benefits and claims for group long-term disability
policies are the present value (primarily discounted at 5.5%) of
amounts not yet due on reported claims and an estimate of amounts to
be paid on incurred but unreported claims. The impact of reserve
discounting is not material. Future policy benefits and claims on
other group health policies are not discounted.
Activity in the liability for unpaid claims and claim adjustment
expenses is summarized for the years ended December 31:
<TABLE>
<CAPTION>
1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
Balance as of January 1 $591,258 760,312 672,581
Less reinsurance recoverables 429,798 547,786 445,934
-------- -------- --------
Net balance as of January 1 161,460 212,526 226,647
-------- -------- --------
Incurred related to:
Current year 273,299 309,721 360,545
Prior years (26,156) (26,248) (17,433)
-------- -------- --------
Total incurred 247,143 283,473 343,112
-------- -------- --------
Paid related to:
Current year 175,700 208,978 226,886
Prior years 73,889 125,561 130,347
-------- -------- --------
Total paid 249,589 334,539 357,233
-------- -------- --------
Unpaid claims of ELICW (note 14) 40,223 - -
-------- -------- --------
Net balance as of December 31 199,237 161,460 212,526
Plus reinsurance recoverables 457,694 429,798 547,786
-------- -------- --------
Balance as of December 31 $656,931 591,258 760,312
======== ======== ========
</TABLE>
81 of 125
<PAGE> 82
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Corporation)
Notes to Consolidated Financial Statements, Continued
As a result of changes in estimates for insured events of prior
years, the provision for claims and claim adjustment expenses
decreased in each of the three years ended December 31, 1994 due to
lower-than-anticipated costs to settle accident and health claims.
(7) Federal Income Tax
Prior to 1984, the Life Insurance Company Income Tax Act of 1959 as
amended by the Deficit Reduction Act of 1984 (DRA), permitted the
deferral from taxation of a portion of statutory income under
certain circumstances. In these situations, the deferred income was
accumulated in the Policyholders' Surplus Account (PSA). Management
considers the likelihood of distributions from the PSA to be remote;
therefore, no Federal income tax has been provided for such
distributions in the consolidated financial statements. The DRA
eliminated any additional deferrals to the PSA. Any distributions
from the PSA, however, will continue to be taxable at the then
current tax rate. The balance of the PSA is approximately $35,344
as of December 31, 1994.
The Company adopted Statement of Financial Accounting Standards No.
109 - Accounting for Income Taxes (SFAS 109), as of January 1,
1993. See note 3. The 1992 consolidated financial statements have
not been restated to apply the provisions of SFAS 109.
The significant components of deferred income tax expense for the
years ended December 31 are as follows:
<TABLE>
<CAPTION>
1994 1993
------ ------
<S> <C> <C>
Deferred income tax expense (exclusive of the
effects of other components listed below) $9,657 29,930
Adjustments to deferred income tax assets and
liabilities for enacted changes in tax laws and
rates - 1,704
------ ------
$9,657 31,634
====== ======
</TABLE>
For the year ended December 31, 1992, the deferred income tax
benefit results from timing differences in the recognition of income
and expense for income tax and financial reporting purposes. The
primary sources of those timing differences were deferred policy
acquisition costs (deferred expense of $16,457) and reserves for
future policy benefits (deferred benefit of $32,045).
Total Federal income tax expense for the years ended December 31,
1994, 1993 and 1992 differs from the amount computed by applying the
U.S. Federal income tax rate to income before tax as follows:
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
Amount % Amount % Amount %
------- ---- -------- ---- ------- ----
<S> <C> <C> <C> <C> <C> <C>
Computed (expected) tax expense $95,631 35.0 $109,515 35.0 $44,390 34.0
Tax exempt interest and dividends
received deduction (194) (0.1) (2,322) (0.7) (4,172) (3.2)
Current year increase in U.S. Federal
income tax rate - - 1,704 0.5 - -
Real estate valuation allowance
adjustment - - - - (3,463) (2.7)
Other, net (5,933) (2.1) (2,139) (0.7) (3,013) (2.3)
-------- ---- -------- ---- ------- ----
Total (effective rate of each year) $89,504 32.8 $106,758 34.1 $33,742 25.8
======== ==== ======== ==== ======= ====
</TABLE>
Total Federal income tax paid was $87,576, $58,286 and $63,124
during the years ended December 31, 1994, 1993 and 1992, respectively.
82 of 125
<PAGE> 83
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Corporation)
Notes to Consolidated Financial Statements, Continued
The tax effects of temporary differences that give rise to significant
components of the net deferred tax asset (liability) as of
December 31, 1994 and 1993 are as follows:
<TABLE>
<S> <C> <C>
1994 1993
-------- -------
Deferred tax assets:
Future policy benefits $124,044 129,995
Fixed maturity securities available-for-sale 95,536 -
Liabilities in Separate Accounts 94,783 64,722
Mortgage loans on real estate and real estate 25,632 24,020
Other policyholder funds 7,137 7,759
Other assets and other liabilities 57,528 41,390
-------- -------
Total gross deferred tax assets 404,660 267,886
-------- -------
Deferred tax liabilities:
Deferred policy acquisition costs 317,224 243,731
Fixed maturities, equity securities and other
long-term investments 3,620 11,137
Other 47,301 44,677
-------- -------
Total gross deferred tax liabilities 368,145 299,545
-------- -------
Net deferred tax asset (liability) $ 36,515 (31,659)
-------- -------
</TABLE>
The Company has determined that valuation allowances are not
necessary as of December 31, 1994 and 1993 and January 1, 1993
(date of adoption of SFAS 109) based on its analysis of future
deductible amounts. All future deductible amounts can be offset by
future taxable amounts or recovery of Federal income tax paid
within the statutory carryback period. In addition, for future
deductible amounts for securities available-for-sale, affiliates of
the Company which are included in the same consolidated Federal
income tax return hold investments that could be sold for capital
gains that could offset capital losses realized by the Company
should securities available-for-sale be sold at a loss.
(8) Disclosures about Fair Value of Financial Instruments
Statement of Financial Accounting Standards No. 107 - Disclosures
about Fair Value of Financial Instruments (SFAS 107) requires
disclosure of fair value information about existing on and off-
balance sheet financial instruments. In cases where quoted market
prices are not available, fair value is based on estimates using
present value or other valuation techniques.
These techniques are significantly affected by the assumptions
used, including the discount rate and estimates of future cash
flows. Although fair value estimates are calculated using
assumptions that management believes are appropriate, changes in
assumptions could cause these estimates to vary materially. In
that regard, the derived fair value estimates cannot be
substantiated by comparison to independent markets and, in many
cases, could not be realized in the immediate settlement of the
instruments. SFAS 107 excludes certain assets and liabilities from
its disclosure requirements. Accordingly, the aggregate fair value
amounts presented do not represent the underlying value of the
Company.
Although insurance contracts, other than policies such as annuities
that are classified as investment contracts, are specifically
exempted from SFAS 107 disclosures, estimated fair value of policy
reserves on insurance contracts are provided to make the fair value
disclosures more meaningful.
The tax ramifications of the related unrealized gains and losses
can have a significant effect on fair value estimates and have not
been considered in the estimates.
The following methods and assumptions were used by the Company in
estimating its fair value disclosures:
Cash, short-term investments and policy loans: The carrying
amount reported in the balance sheets for these instruments
approximate their fair value.
83 of 125
<PAGE> 84
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Corporation)
Notes to Consolidated Financial Statements, Continued
Investment securities: Fair value for fixed maturity securities is based
on quoted market prices, where available. For fixed maturity securities
not actively traded, fair value is estimated using values obtained from
independent pricing services or, in the case of private placements, is
estimated by discounting expected future cash flows using a current market
rate applicable to the yield, credit quality and maturity of the
investments. The fair value for equity securities is based on quoted
market prices.
Separate Account assets and liabilities: The fair value of assets held in
Separate Accounts is based on quoted market prices. The fair value of
liabilities related to Separate Accounts is the amount payable on demand.
Mortgage loans on real estate: The fair value for mortgage loans on real
estate is estimated using discounted cash flow analyses, using interest
rates currently being offered for similar loans to borrowers with similar
credit ratings. Loans with similar characteristics are aggregated for
purposes of the calculations. Fair value for mortgages in default is
valued at the estimated fair value of the underlying collateral.
Investment contracts: Fair value for the Company's liabilities under
investment type contracts is disclosed using two methods. For investment
contracts without defined maturities, fair value is the amount payable on
demand. For investment contracts with known or determined maturities, fair
value is estimated using discounted cash flow analysis. Interest rates
used are similar to currently offered contracts with maturities consistent
with those remaining for the contracts being valued.
Policy reserves on insurance contracts:. Included are disclosures for
individual life, universal life and supplementary contracts with life
contingencies for which the estimated fair value is the amount payable on
demand. Also included are disclosures for the Company's limited payment
policies, which the Company has used discounted cash flow analyses similar
to those used for investment contracts with known maturities to estimate
fair value.
Policyholders' dividend accumulations and other policyholder funds: The
carrying amount reported in the consolidated balance sheets for these
instruments approximates their fair value.
Carrying amount and estimated fair value of financial instruments subject to
SFAS 107 and policy reserves on insurance contracts were as follow as of
December 31:
<TABLE>
<CAPTION>
1994 1993
---- ----
Carrying Estimated Carrying Estimated
amount fair value amount fair value
-------- ---------- -------- ----------
<S> <C> <C> <C> <C>
Assets
------
Investments:
Securities available-for-sale:
Fixed maturities $ 8,045,906 8,045,906 - -
Equity securities 24,713 24,713 16,593 16,593
Fixed maturities held-to-maturity 3,688,787 3,602,310 10,120,978 10,886,820
Mortgage loans on real estate 4,222,284 4,173,284 3,871,560 4,175,271
Policy loans 340,491 340,491 315,898 315,898
Short-term investments 131,643 131,643 41,797 41,797
Cash 7,436 7,436 21,835 21,835
Assets held in Separate Accounts 12,222,461 12,222,461 9,006,388 9,006,388
Liabilities
-----------
Investment contracts 12,189,894 11,657,556 10,332,661 10,117,288
Policy reserves on insurance contracts 3,170,085 2,934,384 2,945,120 2,873,503
Policyholders' dividend accumulations 338,058 338,058 322,686 322,686
Other policyholder funds 72,770 72,770 71,959 71,959
Liabilities related to Separate Accounts 12,222,461 11,807,331 9,006,388 8,714,586
</TABLE>
84 of 125
<PAGE> 85
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Corporation)
Notes to Consolidated Financial Statements, Continued
(9) Additional Financial Instruments Disclosures
Financial Instruments with Off-Balance-Sheet Risk: The Company is a
party to financial instruments with off-balance-sheet risk in the
normal course of business through management of its investment
portfolio. These financial instruments include commitments to
extend credit in the form of loans. These instruments involve, to
varying degrees, elements of credit risk in excess of amounts
recognized on the consolidated balance sheets.
Commitments to fund fixed rate mortgage loans on real estate are
agreements to lend to a borrower, and are subject to conditions
established in the contract. Commitments generally have fixed
expiration dates or other termination clauses and may require
payment of a deposit. Commitments extended by the Company are based
on management's case-by-case credit evaluation of the borrower and the
borrower's loan collateral. The underlying mortgage property
represents the collateral if the commitment is funded. The
Company's policy for new mortgage loans on real estate is to lend no
more than 80% of collateral value. Should the commitment be funded,
the Company's exposure to credit loss in the event of nonperformance
by the borrower is represented by the contractual amounts of these
commitments less the net realizable value of the collateral. The
contractual amounts also represent the cash requirements for all
unfunded commitments. Commitments on mortgage loans on real estate
of $243,200 extending into 1995 were outstanding as of December 31,
1994.
Significant Concentrations of Credit Risk: The Company grants mainly
commercial mortgage loans on real estate to customers throughout the
United States. The Company has a diversified portfolio with no more
than 22% (23% in 1993) in any geographic area and no more than 2%
(2% in 1993) with any one borrower. The summary below depicts loans
by remaining principal balance as of each December 31:
<TABLE>
<CAPTION>
Apartment
Office Warehouse Retail & other Total
-------- --------- -------- ------- ---------
<S> <C> <C> <C> <C> <C>
1994:
East North Central $109,233 103,499 540,686 191,489 944,907
East South Central 24,298 10,803 127,845 76,897 239,843
Mountain 3,150 13,770 140,358 39,682 196,960
Middle Atlantic 61,299 53,285 140,847 30,111 285,542
New England 10,536 43,282 139,131 4 192,953
Pacific 195,393 210,930 397,911 68,768 873,002
South Atlantic 87,150 81,576 424,150 210,354 803,230
West North Central 127,760 11,766 80,854 4,738 225,118
West South Central 51,013 84,796 184,923 194,788 515,520
-------- ------- --------- ------- ----------
$669,832 613,707 2,176,705 816,831 4,277,075
======== ======= ========= ======= ==========
Less valuation allowances
and unamortized discount 54,791
----------
Total mortgage loans on
real estate, net $4,222,284
==========
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C>
1993:
East North Central $109,208 108,478 470,755 158,964 847,405
East South Central 27,562 1,460 117,341 69,991 216,354
Mountain 3,228 4,742 105,560 23,065 136,595
Middle Atlantic 56,664 52,766 132,821 15,414 257,665
New England 10,565 48,398 142,530 8 201,501
Pacific 174,409 185,116 389,428 65,497 814,450
South Atlantic 112,640 58,165 391,102 238,337 800,244
West North Central 104,933 13,458 78,408 3,917 200,716
West South Central 50,955 47,103 183,420 161,033 442,511
-------- ------- --------- ------- ----------
$650,164 519,686 2,011,365 736,226 3,917,441
======== ======= ========= =======
Less valuation allowances
and unamortized discount 45,881
----------
Total mortgage loans
on real estate, net $3,871,560
==========
</TABLE>
85 of 125
<PAGE> 86
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Corporation)
Notes to Consolidated Financial Statements, Continued
(10) Pension Plan
NLIC, FHLIC, WCLIC, NCC, and NFS participate together with other
affiliated companies, in a pension plan covering all employees who
have completed at least one thousand hours of service within a
twelve-month period and who have met certain age requirements. Plan
contributions are invested in a group annuity contract of NLIC.
Benefits are based upon the highest average annual salary of any
three consecutive years of the last ten years of service. The Company
funds pension costs accrued for direct employees plus an allocation
of pension costs accrued for employees of affiliates whose work
efforts benefit the Company.
Pension costs charged to operations by the Company during the years
ended December 31, 1994, 1993 and 1992 were $10,451, $6,702 and
$4,613, respectively.
The Company's net accrued pension expense as of December 31, 1994
and 1993 was $1,836 and $1,472, respectively.
The net periodic pension cost for the plan as a whole for the years
ended December 31, 1994, 1993 and 1992 follows:
<TABLE>
<CAPTION>
1994 1993 1992
-------- -------- -------
<S> <C> <C> <C>
Service cost (benefits earned during the period) $ 64,740 47,694 44,343
Interest cost on projected benefit obligation 73,951 70,543 68,215
Actual return on plan assets (21,495) (105,002) (62,307)
Net amortization and deferral (62,150) 20,832 (24,281)
-------- -------- -------
Net periodic pension cost $ 55,046 34,067 25,970
======== ======== =======
</TABLE>
Basis for measurements, net periodic pension cost:
<TABLE>
<S> <C> <C> <C>
Weighted average discount rate 5.75% 6.75% 7.25%
Rate of increase in future compensation levels 4.50% 4.75% 5.25%
Expected long-term rate of return on plan assets 7.00% 7.50% 8.00%
</TABLE>
Information regarding the funded status of the plan as a whole as of
December 31, 1994 and 1993 follows:
<TABLE>
<CAPTION>
1994 1993
---------- ---------
<S> <C> <C>
Accumulated benefit obligation:
Vested $ 914,850 972,475
Nonvested 7,570 10,227
---------- ---------
$ 922,420 982,702
========== =========
Projected benefit obligation for
services rendered to date 1,305,547 1,292,477
Plan assets at fair value 1,241,771 1,208,007
---------- ---------
Plan assets less than projected benefit (63,776) (84,470)
obligation
Unrecognized prior service cost 46,201 49,551
Unrecognized net losses 39,408 55,936
Unrecognized net assets at January 1, 1987 (21,994) (24,146)
----------- ---------
New accrued pension expense $ (161) (3,129)
========== =========
Basis for measurements, funded status of plan:
Weighted average discount rate 7.50% 5.75%
Rate of increase in future compensation levels 6.75% 4.50%
</TABLE>
86 of 125
<PAGE> 87
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Corporation)
Notes to Consolidated Financial Statements, Continued
(11) Postretirement Benefits Other Than Pensions
In addition to the defined benefit pension plan, NLIC, FHLIC, WCLIC,
NCC and NFS participate with other affiliated companies in life and
health care defined benefit plans for qualifying retirees.
Postretirement life and health care benefits are contributory and
available to full time employees who have attained age 55 and have
accumulated 15 years of service with the Company after reaching age
40. Postretirement life insurance contributions are based on age
and coverage amount of each retiree. Postretirement health care
benefit contributions are adjusted annually and contain cost-sharing
features such as deductibles and coinsurance. The accounting for
the health care plan anticipates future cost-sharing changes to the
written plan that are consistent with the Company's expressed intent
to increase the retiree contribution amount annually for expected
health care inflation. The Company's policy is to fund the cost of
health care benefits in amounts determined at the discretion of
management. The Company began funding in 1994. Plan assets are
invested in group annuity contracts of NLIC.
Effective January 1, 1993, the Company adopted the provisions of
Statement of Financial Accounting Standards No. 106 - Employers'
Accounting for Postretirement Benefits Other Than Pensions
(SFAS 106), which requires the accrual method of accounting for
postretirement life and health care insurance benefits based on
actuarially determined costs to be recognized over the period from
the date of hire to the full eligibility date of employees who are
expected to qualify for such benefits. Postretirement benefit cost
for 1992, which was recorded on a cash basis, has not been restated.
The Company elected to immediately recognize its estimated accumulated
postretirement benefit obligation as of January 1, 1993.
Accordingly, a noncash charge of $32,275 ($20,979 net of related
income tax benefit) was recorded in the consolidated statement of
income as a cumulative effect of a change in accounting principle.
See note 3. The adoption of SFAS 106, including the cumulative
effect of the change in accounting principle, increased the expense
for postretirement benefits by $35,277 to $36,544 in 1993. Net
periodic postretirement benefit cost for 1994 was $4,627. The
Company's accrued postretirement benefit obligation as of
December 31, 1994 and 1993 was $36,001 and $35,277, respectively.
Actuarial assumptions for the measurement of the December 31, 1994
accumulated postretirement benefit obligation include a discount
rate of 8% and an assumed health care cost trend rate of 11%,
uniformly declining to an ultimate rate of 6% over 12 years.
Actuarial assumptions for the measurement of the December 31, 1993
accumulated postretirement benefit obligation and the 1994 net
periodic postretirement benefit cost include a discount rate of 7%
and an assumed health care cost trend rate of 12%, uniformly
declining to an ultimate rate of 6% over 12 years.
Actuarial assumptions used to determine the accumulated
postretirement benefit obligation as of January 1, 1993 and the 1993
net periodic postretirement benefit cost include a discount rate of
8% and an assumed health care cost trend rate of 14%, uniformly
declining to an ultimate rate of 6% over 12 years.
Information regarding the funded status of the plan as a whole as of
December 31, 1994 and 1993 follows:
<TABLE>
<CAPTION>
1994 1993
--------- --------
<S> <C> <C>
Accumulated postretirement benefit obligation:
Retirees $ 76,677 90,312
Fully eligible, active plan participants 22,013 24,833
Other active plan participants 59,089 84,103
---------- --------
Accumulated postretirement benefit obligation 157,779 199,248
Plan assets at fair value 49,012 -
---------- --------
Plan assets less than accumulated postretirement benefit obligation (108,767) (199,248)
Unrecognized net (gains) losses (41,497) 15,128
---------- --------
Accrued postretirement benefit obligation $ (150,264) (184,120)
========== ========
</TABLE>
87 of 125
<PAGE> 88
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Corporation)
Notes to Consolidated Financial Statements, Continued
The amount of net periodic postretirement benefit cost for the plan
as a whole for the years ended December 31, 1994 and 1993 is as
follows:
<TABLE>
<CAPTION>
1994 1993
----- ------
<S> <C> <C>
Net periodic postretirement benefit cost:
Service cost - benefits attributed to employee service during the year $ 8,586 7,090
Interest cost on accumulated postretirement benefit obligation 14,011 13,928
Actual return on plan assets (1,622) -
Net amortization and deferral 1,622 -
-------- ------
Net periodic postretirement benefit cost $ 22,597 21,018
======== ======
</TABLE>
The health care cost trend rate assumption has a significant effect
on the amounts reported. A one percentage point increase in the
assumed health care cost trend rate would increase the accumulated
postretirement benefit obligation as of December 31, 1994 and 1993
by $8,109 and $15,621, respectively, and the net periodic
postretirement benefit cost for the years ended December 31, 1994
and 1993 by $866 and $2,377, respectively.
(12) Portfolio Transfer of Credit Life and Credit Accident and Health
On March 13, 1992, WCLIC entered into an assignment and assumption
agreement with American Bankers Life Assurance Company of Florida
(ABLAC) under which ABLAC assumed, by portfolio transfer,
substantially all of WCLIC's credit life and accident and health
policies in force as of January 1, 1992. A pre-tax loss of
approximately $15,000 was recognized from this transaction in 1992.
The loss represents approximately $34,000 of amortization of
deferred policy acquisition costs, less approximately $27,000 in
ceded commissions earned, plus death benefits incurred and other
expenses. Under the terms defined in the assignment and assumption
agreement, WCLIC is contingently liable for adverse development of
claims activity up to a defined limit. As of December 31, 1994,
WCLIC has provided for a contingent liability based on the
development of claims experience through December 31, 1994. As of
December 31, 1993, WCLIC had provided for the maximum contingent
liability in the absence of conclusive claims experience development.
(13) Regulatory Risk-Based Capital, Retained Earnings and Dividend
Restrictions
Each insurance company's state of domicile imposes minimum risk-
based capital requirements that were developed by the NAIC. The
formulas for determining the amount of risk-based capital specify
various weighting factors that are applied to financial balances or
various levels of activity based on the perceived degree of risk.
Regulatory compliance is determined by a ratio of the company's
regulatory total adjusted capital, as defined by the NAIC, to its
authorized control level risk-based capital, as defined by the
NAIC. Companies below specific trigger points or ratios are
classified within certain levels, each of which requires specified
corrective action. NLIC and each of its insurance subsidiaries
exceed the minimum risk-based capital requirements.
In accordance with the requirements of the New York statutes, the
Company has agreed with the Superintendent of Insurance of that
state that so long as participating policies and contracts are held
by residents of New York, no profits on participating policies and
contracts in excess of the larger of (a) ten percent of such
profits or (b) fifty cents per year per thousand dollars of
participating life insurance in force, exclusive of group term, at
the year-end shall inure to the benefit of the shareholders. Such
New York statutes further provide that so long as such agreement is
in effect, such excess of profits shall be exhibited as
"participating policyholders' surplus" in annual statements filed
with the Superintendent and shall be used only for the payment or
apportionment of dividends to participating policyholders at least
to the extent required by statute or for the purpose of making up
any loss on participating policies.
In the opinion of counsel for the Company, the ultimate ownership
of the entire surplus, however classified, of the Company resides
with the shareholder, subject to the usual requirements under state
laws and regulations that certain deposits, reserves and minimum
surplus be maintained for the protection of the policyholders until
all policy contracts are discharged.
88 of 125
<PAGE> 89
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Corporation)
Notes to Consolidated Financial Statements, Continued
Based on the opinion of counsel with respect to the ownership of its
surplus, the Company is of the opinion that the earnings attributable
to participating policies in excess of the amounts paid as dividends
to policyholders belong to the shareholder rather than the
policyholders, and such earnings are so treated by the Company.
The amount of shareholder's equity other than capital shares was
$1,904,664, $1,647,353, and $1,426,427 as of December 31, 1994, 1993
and 1992, respectively. The amount thereof not presently available
for dividends to the shareholder due to the New York restrictions and
to adjustments relating to GAAP was $929,934, $954,037 and $841,583 as
of December 31, 1994, 1993 and 1992, respectively.
Ohio law limits the payment of dividends to shareholders. The maximum
dividend that may be paid by the Company without prior approval of the
Director of the Department of Insurance of the State of Ohio is
limited to the greater of statutory gain from operations of the
preceding calendar year or 10% of statutory shareholder's surplus as
of the prior December 31. Therefore, $1,707,110, of shareholder's
equity, as presented in the accompanying consolidated financial
statements, is restricted as to dividend payments in 1995.
California law limits the payment of dividends to shareholders of
WCLIC. The maximum dividend that may be paid by WCLIC without prior
approval of the Commissioner of the State of California Department of
Insurance is limited to the greater of WCLIC's statutory net income of
the preceding calendar year or 10% of WCLIC's statutory shareholder's
surplus as of the prior December 31. Therefore, $126,489 of WCLIC's
shareholder's equity is restricted as to dividend payments in 1995.
Wisconsin law limits the payment of dividends to shareholders of
ELICW. The maximum dividend that may be paid by ELICW without prior
approval of the Commissioner of the State of Wisconsin is limited to
the greater of ELICW's statutory net income of the preceding calendar
year or 10% of ELICW's statutory surplus as of the prior December 31,
Therefore, $135,369 of ELICW's shareholders' equity is restricted as
to dividend payments in 1995.
Michigan law limits the payment of dividends to shareholders of
NCC. The maximum dividend that may be paid by NCC without prior
approval of the Commissioner of the State of Michigan Bureau of
Insurance is limited to the greater of NCC's statutory net income,
not including realized capital gains, of the preceding calendar year
or 10% of NCC's statutory shareholder's surplus as of the prior
December 31. Therefore, $66,564 of NCC's shareholder's equity is
restricted as to dividend payments in 1995. In addition, prior
approval is not required for a dividend which does not increase
gross leverage to a point in excess of the United States
consolidated industry average for the most recent available year.
(14) Transactions With Affiliates
Effective December 31, 1994, NLIC purchased all of the outstanding
shares of ELICW from Wausau Service Corporation (WSC) for an amount
approximating $165,000, subject to specified adjustments, if any,
subsequent to year end. NLIC transferred fixed maturity securities
and cash with a fair value of $155,000 to WSC on December 28, 1994,
which resulted in a realized loss of $19,239 on the disposition of
the securities. An accrual approximating $10,000 is reflected in
the accompanying consolidated balance sheet. The purchase price
approximated both the historical cost basis and fair value of net
assets of ELICW. ELICW has and will continue to share home office,
other facilities, equipment and common management and administrative
services with WSC.
The deferred compensation annuity line of business of the Company is
primarily sold through Public Employees Benefit Services Corporation
(PEBSCO). The Company paid PEBSCO commissions and administrative
fees of $26,699, $22,681 and $20,146 in 1994, 1993 and 1992,
respectively. PEBSCO is a wholly owned subsidiary of Corp.
The Company and NEA Valuebuilder Investor Services, Inc. (NEAVIS) have
contracted with the National Education Association (NEA) to provide
individual annuity contracts to be marketed exclusively to members
of the NEA. The Company paid NEAVIS a marketing development fee of
$11,095, $9,229 and $6,426 in 1994, 1993 and 1992, respectively.
NEAVIS is a wholly owned subsidiary of Corp.
The Company shares home office, other facilities, equipment and common
management and administrative services with affiliates.
89 of 125
<PAGE> 90
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Corporation)
Notes to Consolidated Financial Statements, Continued
The Company participates in intercompany repurchase agreements with
affiliates whereby the seller will transfer securities to the buyer
at a stated value. Upon demand or a stated period, the securities
will be repurchased by the seller at the original sales price plus a
price differential. Transactions under the agreements during 1994
and 1993 were not material.
During 1993, the Company sold equity securities with a market value
$194,515 to NMIC, resulting in a realized gain of $122,823. With
the proceeds, the Company purchased securities with a market value
of $194,139 and cash of $376 from NMIC.
Intercompany reinsurance contracts exist between NLIC and NMIC, NLIC
and WCLIC, NLIC and NCC, WCLIC and NMIC and WCLIC and ELICW as of
December 31, 1994. These contracts are immaterial to the
consolidated financial statements.
NCC participates in several 100% quota share reinsurance agreements
with NMIC. NCC serves as the licensed insurer as required for an
affiliated excess and surplus lines company and cedes 100% of direct
written premiums to NMIC. In 1989, NCC transferred 100% of assets
and unearned premiums and loss reserves related to a discontinued
block of assumed reinsurance to NMIC (95.3%) and Nationwide Mutual
Fire Insurance Company (4.7%). Effective January 1, 1993, NCC
entered into a 100% quota share reinsurance agreement to cede to
NMIC 100% of all written premiums not subject to any other
reinsurance agreements.
As a result of these agreements, and in accordance with Statement of
Financial Accounting Standards No. 113 - Accounting and Reporting
for Reinsurance of Short-Duration and Long-Duration Contracts, the
following amounts are included in the consolidated financial
statements as of December 31, 1994 and 1993 for reinsurance ceded:
<TABLE>
<CAPTION>
1994 1993
--------- --------
<S> <C> <C>
Reinsurance recoverable $ 575,721 533,401
Unearned premium reserves (118,092) (102,644)
Loss and claim reserves (371,974) (352,303)
Loss and expense reserves (85,655) (78,454)
--------- --------
$ 0 0
========= =========
</TABLE>
The ceding of reinsurance does not discharge the original insurer
from primary liability to its policyholder. The insurer which
assumes the coverage assumes the related liability and it is the
practice of insurers to treat insured risks, to the extent of
reinsurance ceded, as though they were risks for which the original
insurer is not liable. Management believes the financial strength
of NMIC reduces to an acceptable level any risk to NCC under these
intercompany reinsurance agreements.
The Company and various affiliates entered into agreements with
Nationwide Cash Management Company (NCMC) and California Cash
Management Company (CCMC), both affiliates, under which NCMC and
CCMC act as common agents in handling the purchase and sale of short-
term securities for the respective accounts of the participants.
Amounts on deposit with NCMC and CCMC were $92,531 and $28,683 at
December 31, 1994 and 1993, respectively, and are included in short-
term investments on the accompanying consolidated balance sheets.
(15) Bank Lines of Credit
As of December 31, 1994 and 1993, NLIC had $120,000 of confirmed but
unused bank lines of credit which support a $100,000 commercial
paper borrowing authorization. Additionally, NFS had $27,000 of
confirmed but unused bank lines of credit.
90 of 125
<PAGE> 91
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Corporation)
Notes to Consolidated Financial Statements, Continued
(16) Contingencies
The Company is a defendant in various lawsuits. In the opinion of
management, the effects, if any, of such lawsuits are not expected
to be material to the Company's financial position or results of
operations.
(17) Major Lines of Business
The Company operates in the life and accident and health lines of
business in the life insurance and property and casualty insurance
industries. Life insurance operations include whole life, universal
life, variable universal life, endowment and term life insurance and
annuity contracts issued to individuals and groups. Accident and
health operations also provide coverage to individuals and groups.
The following table summarizes the revenues and income before
Federal income tax and cumulative effect of changes in accounting
principles for the years ended December 31, 1994, 1993 and 1992 and
assets as of December 31, 1994, 1993 and 1992, by line of business.
<TABLE>
<CAPTION>
1994 1993 1992
Revenues: ------------ ---------- ----------
<S> <C> <C> <C>
Life insurance $ 1,577,809 1,479,956 1,406,417
Accident and health 345,544 339,764 475,290
Investment income allocated to capital and surplus 122,847 214,806 51,611
------------ ---------- ----------
Total $ 2,046,200 2,034,526 1,933,318
============ ========== ==========
Income before Federal income tax and cumulative
effect of changes in accounting principles:
Life insurance 141,650 83,917 78,627
Accident and health 13,220 15,043 436
Investment income allocated to capital and surplus 118,360 213,941 51,496
------------ ---------- ----------
Total $ 273,230 312,901 130,559
============ ========== ==========
Assets:
Life insurance 28,351,628 22,982,186 19,180,561
Accident and health 852,026 773,007 343,535
Capital and surplus 1,908,479 1,651,168 1,430,242
------------ ---------- ----------
Total $ 31,112,133 25,406,361 20,954,338
============ ========== ==========
</TABLE>
Included in life insurance revenues are premiums from certain
annuities with life contingencies of $20,134 ($35,341 and $54,066
for the years ended December 31, 1993 and 1992, respectively) as
well as universal life and investment product policy charges of
$239,021 ($188,057 and $148,464 for the years ended December 31,
1993 and 1992 respectively) for the year ended December 31, 1994.
Allocations of investment income and certain general expenses were
based on a number of assumptions and estimates, and reported
operating results would change by line if different methods were
applied. Investment income and realized gains allocable to
policyholders in 1994 were $1,193,292 and $1,775, respectively.
(18) Subsequent Event
On January 30, 1995, FHLIC received approval from the Ohio Secretary
of State to change its name to Nationwide Life and Annuity Insurance
Company.
91 of 125
<PAGE> 92
Part C. OTHER INFORMATION
Item 24. FINANCIAL STATEMENTS AND EXHIBITS
<TABLE>
<S> <C>
(a) Financial Statements: Page
(1) Financial statements and schedule included in
Prospectus (Part A):
Condensed Financial Information for each of the ten
years in the period ended December 31, 1994. 16
(2) Financial statements and schedule included in Part B: 54
Those financial statements and schedules required by
Item 23 to be included in Part B have been incorporated
therein by reference to the Prospectus (Part A).
Nationwide DC Variable Account:
Independent Auditors' Report. 54
Statement of Assets, Liabilities and Contract Owners'
Equity as of December 31, 1994. 55
Statements of Operations and Changes in Contract
Owners' Equity for the years ended December 31, 1994,
1993 and 1992. 58
Notes to Financial Statements 59
Schedule I 63
Nationwide Life Insurance Company:
Independent Auditors' Report. 68
Consolidated Balance Sheets as of December 31, 1994
and 1993. 69
Consolidated Statements of Income for the years ended
December 31, 1994, 1993 and 1992. 70
Consolidated Statements of Shareholder's Equity for the
years ended December 31, 1994, 1993 and 1992. 71
Consolidated Statements of Cash Flows for the years
ended December 31, 1994, 1993 and 1992. 72
Notes to Consolidated Financial Statements 73
</TABLE>
92 of 125
<PAGE> 93
Item 24.(b) Exhibits
(1) Resolution of the Depositor's Board
of Directors authorizing the estab-
lishment of the Registrant--Filed
previously with the Registration
Statement, and hereby incorporated
by reference.
(2) Not Applicable.
(3) Underwriting or Distribution of con-
tracts between the Registrant and
Principal Underwriter--Filed pre-
viously with the Registration State-
ment and pre-effective amendments
thereto, and hereby incorporated by
reference.
(4) The form of the variable annuity
contract--Filed previously with
Post-Effective Amendment No. 28 to
the Registration Statement and
hereby incorporated by reference.
(5) Variable Annuity Application--Filed
previously with the Registration
Statement, and hereby incorporated
by reference.
(6) Articles of Incorporation of Depositor
--Filed previously with the
Registration Statement, and hereby
incorporated by reference.
(7) Not Applicable
(8) Not Applicable
(9) Opinion of Counsel--Filed pre-
viously with the Registration
Statement, and hereby incorporated
by reference.
(10) Not Applicable
(11) Not Applicable
(12) Not Applicable
(13) Performance Advertising Calculation
Schedule--Filed previously with
Post-Effective Amendment No. 27 to
the Registration Statement and
hereby incorporated by reference.
93 of 125
<PAGE> 94
ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITIONS AND OFFICES
BUSINESS ADDRESS WITH DEPOSITOR
<S> <C>
Lewis J. Alphin Director
519 Bethel Church Road
Mount Olive, NC 28365
Willard J. Engel Director
1100 East Main Street
Marshall, MN 56258
Fred C. Finney Director
1558 West Moreland Road
Wooster, OH 44691
Peter F. Frenzer President and Chief Operating
One Nationwide Plaza Officer and Director
Columbus, OH 43215
Charles L. Fuellgraf, Jr. Director
600 South Washington Street
Butler, PA 16001
Henry S. Holloway Chairman of the Board
1247 Stafford Road and Director
Darlington, MD 21034
D. Richard McFerson President and Chief
One Nationwide Plaza Executive Officer - Nationwide
Columbus, Ohio 43215 Insurance Enterprise and Director
David O. Miller Director
115 Sprague Drive
Hebron, OH 43025
C. Ray Noecker Director
2770 State Route 674 South
Ashville, OH 43103
James F. Patterson Director
8765 Mulberry Road
Chesterland, OH 44026
Robert H. Rickel Director
P.O. Box 319
Bayview, ID 83803
</TABLE>
94 of 125
<PAGE> 95
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITIONS AND OFFICES
BUSINESS ADDRESS WITH DEPOSITOR
<S> <C>
Arden L. Shisler Director
2724 West Lebanon Road
Dalton, OH 44618
Robert L. Stewart Director
88740 Fairview Road
Jewett, OH 43986
Nancy C. Thomas Director
10835 Georgetown Street NE
Louisville, OH 44641
Harold W. Weihl Director
14282 King Road
Bowling Green, OH 43402
Gordon E. McCutchan Executive Vice President --
One Nationwide Plaza Law and Corporate Services
Columbus, OH 43215 and Secretary
James E. Brock Senior Vice President --
One Nationwide Plaza Investment Product Operations
Columbus, OH 43215
W. Sidney Druen Senior Vice President, and General
One Nationwide Plaza Counsel and Assistant Secretary
Columbus, OH 43215
Harvey S. Galloway, Jr. Senior Vice President --
One Nationwide Plaza Chief Actuary - Life, Health and Annuities
Columbus, OH 43215
Richard A. Karas Senior Vice President--Sales
One Nationwide Plaza Financial Services
Columbus, OH 43215
Robert A. Oakley Senior Vice President--
One Nationwide Plaza Chief Financial Officer
Columbus, OH 43215
Carl J. Santillo Senior Vice President--
One Nationwide Plaza Life and Health Operations
Columbus, OH 43215
Michael D. Bleiweiss Vice President-- Deferred Compensation
One Nationwide Plaza
Columbus, OH 43215
Joseph F. Ciminero Vice President-- Financial Operations
One Nationwide Plaza
Columbus, OH 43215
</TABLE>
95 of 125
<PAGE> 96
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITIONS AND OFFICES
BUSINESS ADDRESS WITH DEPOSITOR
<S> <C>
Matthew S. Easley Vice President--
One Nationwide Plaza Annuity and Pension Actuarial
Columbus, OH 43215
Ronald L. Eppley Vice President-- Pensions
One Nationwide Plaza
Columbus, OH 43215
Timothy E. Murphy Vice President-- Strategic
One Nationwide Plaza Marketing
Columbus, OH 43215
R. Dennis Noice Vice President-- Individual Investment
One Nationwide Plaza Products
Columbus, OH 43215
Joseph P. Rath Vice President--
One Nationwide Plaza Associate General Counsel
Columbus, OH 43215
</TABLE>
Item 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR
OR REGISTRANT.
* Subsidiaries for which separate financial statements are filed
** Subsidiaries included in the respective consolidated financial
statements
*** Subsidiaries included in the respective group financial statements
filed for unconsolidated subsidiaries
**** other subsidiaries
<TABLE>
<CAPTION>
NO. VOTING
SECURITIES
(see Attached Chart)
unless otherwise
STATE OF indicated PRINCIPAL
COMPANY ORGANIZATION BUSINESS
<S> <C> <C>
Affiliate Agency, Inc. Delaware Life Insurance Agency
Affiliate Agency Ohio Life Insurance Agency
of Ohio, Inc.
Allnations, Inc. Ohio Promotes cooperative
insurance corporations
worldwide.
American Marine Florida Underwriting Manager
Underwriters, Inc.
Auto-Direkt Insurance Germany Insurance Company
Company
The Beak and Wire Ohio Radio Tower Joint Venture
Corporation
California Cash California Investment Securities Agent
Management Company
Colonial County Mutual Texas Insurance Company
Insurance Company
</TABLE>
96 of 125
<PAGE> 97
<TABLE>
<CAPTION>
SECURITIES
(see Attached Chart)
STATE OF unless otherwise PRINCIPAL
COMPANY ORGANIZATION indicated BUSINESS
<S> <C> <C>
Colonial General Arizona Insurance Agency
Insurance Agency, Inc.
Colonial Insurance California Insurance Company
Company of California
Columbus Service, Germany Insurance Broker
GMBH
Companies Agency, Wisconsin Insurance Broker
Inc. (Wisconsin)
Companies Agency California Insurance Broker
Insurance Services
of California, Inc.
Companies Agency Alabama Insurance Broker
of Alabama, Inc.
Companies Agency Idaho Insurance Broker
of Idaho, Inc.
Companies Agency of Illinois Acts as Collection Agent
Illinois, Inc. for Policies Placed
through Brokers
Companies Agency of Kentucky Insurance Broker
Kentucky, Inc.
Companies Agency Massachusetts Insurance Broker
of Massachusetts, Inc.
Companies Agency New York Insurance Broker
of New York, Inc.
Companies Agency Pennsylvania Insurance Broker
of Pennsylvania, Inc.
Companies Agency Arizona Insurance Broker
of Phoenix, Inc.
Countrywide Services Delaware Products Liability,
Corporation Investigative and Claims
Management Services
Employers Insurance Wisconsin Insurance Company
of Wausau A Mutual
Company
** Employers Life Wisconsin Life Insurance Company
Insurance Company
of Wausau
F&B, Inc. Iowa Insurance Agency
Farmland Life Iowa Life Insurance Company
Insurance Company
</TABLE>
97 of 125
<PAGE> 98
<TABLE>
<CAPTION>
NO. VOTING
SECURITIES
(see Attached Chart)
STATE OF unless otherwise PRINCIPAL
COMPANY ORGANIZATION indicated BUSINESS
<S> <C> <C>
Farmland Mutual Iowa Insurance Company
Insurance Company
Financial Horizons Delaware Insurance Agency
Distributors Agency, Inc.
Financial Horizons Alabama Life Insurance Agency
Distributors Agency
of Alabama, Inc.
Financial Horizons Ohio Insurance Agency
Distributors Agency
of Ohio, Inc.
Financial Horizons Oklahoma Life Insurance Agency
Distributors Agency of
Oklahoma, Inc.
Financial Horizons Texas Life Insurance Agency
Distributors Agency
of Texas, Inc.
Financial Horizons Massachusetts Investment Company
Investment Trust
Financial Horizons Oklahoma Broker-Dealer
Securities Corporation
Gates, McDonald & Ohio Cost Control Business
Company
Gates, McDonald & Nevada Self-Insurance
Company of Nevada Administration, Claims
Examination, and
Data Processing
Services
Gates, McDonald & New York Workers Compensation
Company of New York Claims Administration
Greater La Crosse Wisconsin Writes Commercial Health
Health Plans, Inc. and Medicare Supplement
Insurance
InHealth, Inc. Ohio Health Maintenance
Organization
InHealth Agency, Ohio Insurance Agency
Inc.
InHealth Management Ohio Develops and
Systems, Inc. operates Managed Care
Delivery System
Insurance Ohio Insurance Broker and
Intermediaries, Inc. Insurance Agency
</TABLE>
98 of 125
<PAGE> 99
<TABLE>
<CAPTION>
NO. VOTING
SECURITIES
(see Attached Chart)
unless otherwise
STATE OF indicated PRINCIPAL
COMPANY ORGANIZATION BUSINESS
<S> <C> <C>
Key Health Plan, Inc. California Pre-paid health plans
Landmark Financial New York Life Insurance Agency
Services of New York,
Inc.
Leben Direkt Germany Life Insurance Company
Insurance Company
Lone Star General Texas Insurance Agency
Agency, Inc.
** MRM Investments, Ohio Owns and operates a
Inc. Recreational
Ski Facility
** National Casualty Michigan Insurance Company
Company
** National Premium Delaware Insurance Administrative
and Benefit Administration Services
Company
Nationwide Agri- Iowa Insurance Company
business Insurance Company
Nationwide Cash Ohio Investment Securities Agent
Management Company
Nationwide Ohio Radio Broadcasting
Communications Inc. Business
Nationwide Ohio Redevelopment
Community Urban of blighted areas within
Redevelopment the City of Columbus, Ohio
Corporation
Nationwide Ohio Organized for the purpose
Corporation of acquiring, holding,
encumbering, transferring, or
otherwise disposing of shares,
bonds, and other evidences of
indebtedness, securities, and
contracts of other persons,
associations, corporations,
domestic or foreign and to form
or acquire the control of other
corporations
NWE, Inc. Ohio Special Investments
</TABLE>
99 of 125
<PAGE> 100
<TABLE>
<CAPTION>
NO. VOTING
SECURITIES
(see Attached Chart)
STATE OF unless otherwise PRINCIPAL
COMPANY ORGANIZATION indicated BUSINESS
<S> <C> <C>
Nationwide Ohio Owns, leases and manages
Development Company commercial real estate
** Nationwide Financial Ohio Registered Broker-Dealer,
Services, Inc. Investment Manager
and Administrator
Nationwide General Ohio Insurance Company
Insurance Company
Nationwide Health Ohio Develops and operates
Care Corporation Managed Care Delivery
System
Nationwide Indemnity Ohio Reinsurance Company
Company
Nationwide Insurance Ohio Membership Non-Profit
Enterprise Foundation Corporation
Nationwide Insurance Ohio Membership Non-Profit
Golf Charities, Inc. Corporation
Nationwide Investing Michigan Investment Company
Foundation
Nationwide Investing Massachusetts Investment Company
Foundation II
Nationwide Investors Ohio Stock Transfer Agent
Services, Inc.
** Nationwide Life and Ohio Life Insurance Company
Annuity Insurance
Company
** Nationwide Life Insurance Ohio Life Insurance
Company Company
Nationwide Mutual Ohio Insurance Company
Insurance Company
(Casualty)
Nationwide Mutual Ohio Insurance Company
Fire Insurance
Company
Nationwide Property Ohio Insurance Company
& Casualty Insurance
Company
** Nationwide Property Ohio Owns, leases, manages and
Management, Inc. deals in Real Property
Nationwide Separate Massachusetts Investment Company
Account Trust
NEA Valuebuilder Delaware Life Insurance Agency
Investor Services, Inc.
</TABLE>
100 of 125
<PAGE> 101
<TABLE>
<CAPTION>
NO. VOTING
SECURITIES
(see Attached Chart)
STATE OF unless otherwise PRINCIPAL
COMPANY ORGANIZATION indicated BUSINESS
<S> <C> <C>
NEA Valuebuilder Alabama Life Insurance Agency
Investor Services of
Alabama, Inc.
NEA Valuebuilder Massachusetts Life Insurance Agency
Investor Services of
Massachusetts, Inc.
NEA Valuebuilder Ohio Life Insurance Agency
Investor Services of
Ohio, Inc.
NEA Valuebuilder Oklahoma Life Insurance Agency
Investor Services of
Oklahoma, Inc.
NEA Valuebuilder Texas Life Insurance Agency
Investor Services of
Texas, Inc.
Neckura General Germany Insurance Company
Insurance Company
Neckura Holding Germany Administrative Service for
Company Neckura Insurance Group
Neckura Insurance Germany Insurance Company
Company
Neckura Life Germany Life Insurance
Insurance Company Company
PEBSCO of Massachusetts Markets and Administers
Massachusetts Insurance Deferred Compensation
Agency, Inc. Plans for Public Employees
PEBSCO of Texas, Texas Markets and Administers
Inc. Deferred Compensation
Plans for Public Employees
PEBSCO Securities Oklahoma Registered Broker-Dealer in
Corp. Deferred Compensation
Market
Pension Associates of Wisconsin Pension plan
Wausau, Inc. administration,
recordkeeping and consult-
ing and compensation con-
sulting
Public Employees Delaware Marketing and Administration
Benefit Services of Deferred Employee
Corporation Compensation Plans for
Public Employees
Public Employees Alabama Markets and Administers
Benefit Services Deferred Compensation
Corporation of Alabama Plans for Public Employees
</TABLE>
101 of 125
<PAGE> 102
<TABLE>
<CAPTION>
NO. VOTING
SECURITIES
(see Attached Chart)
STATE OF unless otherwise PRINCIPAL
COMPANY ORGANIZATION indicated BUSINESS
<S> <C> <C>
Public Employees Arkansas Markets and Administers
Benefit Services Deferred Compensation
Corporation of Arkansas Plans for Public
Employees
Public Employees Montana Markets and Administers
Benefit Services Deferred Compensation
Corporation of Montana Plans for Public
Employees
Public Employees New Mexico Markets and Administers
Benefit Services Deferred Compensation
Corporation of New Mexico Plans for Public Employees
SVM Sales GMBH, Germany Sales support for Neckura
Neckura Insurance Insurance Group
Group
Scottsdale Insurance Ohio Insurance Company
Company
Scottsdale Indemnity Ohio Insurance CompanyCompany
Video Eagle, Inc. Ohio Operates Several Video
Cable Systems
Wausau Business Illinois Insurance Company
Insurance Company
Wausau General Illinois Insurance Company
Insurance Company
Wausau Insurance United Kingdom Insurance and Reinsurance
Co. Limited (U.K.) Company
Wausau International California Special Risks, Excess &
Underwriters Surplus Lines Insurance
Underwriting Manager
Wausau Lloyds Texas Texas Lloyds Company
** Wausau Preferred Wisconsin Insurance and Reinsurance
Health Insurance Company
Company
Wausau Service Wisconsin Holding Company
Corporation
Wausau Underwriters Wisconsin Insurance Company
Insurance Company
** West Coast Life California Life Insurance Company
Insurance Company
</TABLE>
102 of 125
<PAGE> 103
<TABLE>
<CAPTION>
NO. VOTING
SECURITIES
(see Attached Chart)
STATE OF unless otherwise PRINCIPAL
COMPANY ORGANIZATION indicated BUSINESS
<S> <C> <C> <C>
* MFS Variable Account Ohio Nationwide Life Issuer of Annuity
Separate Account Contracts
* NACo Variable Ohio Nationwide Life Issuer of Annuity
Account Separate Account Contracts
* Nationwide DC Ohio Nationwide Life Issuer of Annuity
Variable Account Separate Account Contracts
* Nationwide Fidelity Ohio Nationwide Life Issuer of Annuity
Advisor Separate Account Contracts
* Nationwide Multi-Flex Ohio Nationwide Life Issuer of Annuity
Variable Account Separate Account Contracts
* Nationwide VA Ohio Nationwide Life and Annuity Issuer of Annuity
Separate Account- A Separate Account Contracts
* Nationwide VA Separate Ohio Nationwide Life and Annuity Issuer of Annuity
Account - B Separate Account Contracts
* Nationwide VA Separate Ohio Nationwide Life and Annuity Issuer of Annuity
Account - C Separate Account Contracts
* Nationwide VA Separate Ohio Nationwide Life and Annuity Issuer of Annuity
Account - Q Separate Account Contracts
* Nationwide Variable Ohio Nationwide Life Issuer of Annuity
Account Separate Account Contracts
* Nationwide Variable Ohio Nationwide Life Issuer of Annuity
Account-II Separate Account Contracts
* Nationwide Variable Ohio Nationwide Life Issuer of Annuity
Account-3 Separate Account Contacts
* Nationwide Variable Ohio Nationwide Life Issuer of Annuity
Account-4 Separate Account Contracts
* Nationwide Variable Ohio Nationwide Life Issuer of Annuity
Account-5 Separate Account Contracts
* Nationwide Variable Ohio Nationwide Life Issuer of Annuity
Account - 6 Separate Account Contracts
* Nationwide VL Ohio Nationwide Life and Annuity Issuer of Life
Separate Account-A Separate Account Insurance Contracts
* Nationwide VLI Ohio Nationwide Life Issuer of Life
Separate Account Separate Account Insurance Contracts
* Nationwide VLI Ohio Nationwide Life Issuer of Life
Separate Account-2 Separate Account Insurance Contracts
* Nationwide VLI Ohio Nationwide Life Issuer of Life
Separate Account-3 Separate Account Insurance Contracts
* Separate Account Ohio Nationwide Life Issuer of Annuity
No. 1 Separate Account Contracts
</TABLE>
103 of 125
<PAGE> 104
<TABLE>
<CAPTION>
NATIONWIDE INSURANCE ENTERPRISE (left side}
______________________
| NATIONWIDE INSURANCE |
| GOLF CHARITIES, INC. |
| |
| MEMBERSHIP |
| NONPROFIT |
| CORPORATION |
|______________________|
<S> <C> <C>
________________________________________________________________________________________________
| EMPLOYERS INSURANCE OF WAUSAU |
| A MUTUAL COMPANY |
| |=================================
| Contribution Note Cost |
| ----------------- ---- |
| Casualty $400,000,000 |
|________________________________________________________________________________________________|
| |
_____________|_________________ _____________|__________________ _____________________
| WAUSAU INSURANCE CO. | | WAUSAU SERVICE | | |
| (U.K.) LIMITED | | CORPORATION (WSC) | | |
| | | | | WAUSAU LLOYDS |
| Common Stock: 8,506,800 | | Common Stock: 1,000 | | |
| ------------- Shares | | ------------- Shares |=============| |
| | | | | |
| Cost | | Cost | | |
| ---- | | ---- | | A TEXAS LLOYDS |
| Employers-- | | Employers-- | | |
| 100% $15,683,300 | | 100% $106,763,000 | | |
|_______________________________| |________________________________| |_____________________|
|
| ______________________________
| | WAUSAU BUSINESS |
| | INSURANCE COMPANY |
| | |
| | Common Stock: 5,900,000 |
|____| ------------- Shares |
| | |
| | Cost |
| | ----- |
| | WSC-100% $11,800,000 |
| |______________________________|
|
| ______________________________
| | WAUSAU UNDERWRITERS |
| | INSURANCE COMPANY |
| | |
| | Common Stock: 8,750 |
|____| ------------- Shares |
| | |
| | Cost |
| | ---- |
| | WSC-100% $24,560,006 |
| |______________________________|
|
| ______________________________
| | GREATER LA CROSSE |
| | HEALTH PLANS, INC. |
| | |
| | Common Stock: 3,000 |
|____| ------------- Shares |
| | |
| | Cost |
| | ---- |
| | WSC-33.3% $861,761 |
| |______________________________|
|
| ______________________________
| | COMPANIES AGENCY |
| | OF ALABAMA, INC. |
| | |
| | Common Stock: 1,000 |
|____| ------------- Shares |
| | |
| | Cost |
| | ---- |
| | WSC-100% $100 |
| |______________________________|
|
|
|
| ______________________________
| | COMPANIES AGENCY |
| | OF KENTUCKY, INC. |
| | |
| | Common Stock: 1,000 |
|____| ------------ Shares |
| | |
| | Cost |
| | ---- |
| | WSC-100% $1,000 |
| |______________________________|
|
|
| ______________________________
| | COMPANIES AGENCY |
| | OF PENNSYLVANIA, INC. |
| | |
| | Common Stock: 1,000 |
|____| ------------- Shares |
| | |
| | Cost |
| | ---- |
| | WSC-100% $100 |
| |______________________________|
|
|
| ______________________________
| | COMPANIES AGENCY |
| | OF MASSACHUSETTS, INC. |
| | |
| | Common Stock: 1,000 |
|____| ------------- Shares |
| | |
| | Cost |
| | ---- |
| | WSC-100% $1,000 |
| |______________________________|
|
|
| ______________________________
| | COMPANIES AGENCY |
| | OF NEW YORK, INC. |
| | |
| | Common Stock: 1,000 |
|____| ------------- Shares |
| | |
| | Cost |
| | ---- |
| | WSC-100% $1,000 |
| |______________________________|
|
|
| ______________________________
| | COMPANIES AGENCY |
| | OF IDAHO, INC. |
| | |
| | Common Stock: 1,000 |
|____| ------------- Shares |
| | |
| | Cost |
| | ---- |
| | WSC-100% $1,000 |
| |______________________________|
|
|
| ______________________________
| | COMPANIES AGENCY |
| | OF PHOENIX |
| | |
| | Common Stock: 1,000 |
|____| ------------- Shares |
| | |
| | Cost |
| | ---- |
| | WSC-100% $1,000 |
| |______________________________|
|
|
| ______________________________
| | COUNTRYWIDE SERVICES |
| | CORPORATION |
| | |
| | Common Stock: 100 |
|____| ------------- Shares |
| | |
| | Cost |
| | ---- |
| | WSC-100% $145,852 |
| |______________________________|
|
|
| ______________________________
| | WAUSAU GENERAL |
| | INSURANCE COMPANY |
| | |
| | Common Stock: 200,000 |
|____| ------------ Shares |
| | |
| | Cost |
| | ---- |
| | WSC-100% $31,000,000 |
| |______________________________|
|
| ______________________________
| | WAUSAU INTERNATIONAL |
| | UNDERWRITERS |
| | |
| | Common Stock: 1,000 |
|____| ------------- Shares |
| | |
| | Cost |
| | ---- |
| | WSC-100% $10,000 |
| |______________________________|
|
| ______________________________
| | COMPANIES AGENCY |
| | INSURANCE SERVICES |
| | OF CALIFORNIA |
| | |
|____| Common Stock: 1,000 |
| | ------------- Shares |
| | |
| | Cost |
| | ---- |
| | WSC-100% $1,000 |
| |______________________________|
|
| ______________________________
| | AMERICAN MARINE |
| | UNDERWRITERS, INC. (AMU) |
| | |
| | Common Stock: 20 |
|____| ------------- Shares |
| | |
| | Cost |
| | ---- |
| | WSC-100% $248,222 |
| |______________________________|
|
| ______________________________
| | COMPANIES AGENCY |
| | OF ILLINOIS, INC. |
| | |
| | Common Stock: 250 |
|____| ------------- Shares |
| | |
| | Cost |
| | ---- |
| | WSC-100% $2,500 |
| |______________________________|
|
| ______________________________ _____________________________
| | COMPANIES AGENCY, INC. | | PENSION ASSOCIATES |
| | (WISCONSIN) | | OF WAUSAU, INC. |
| | | | |
| | Common Stock: 100 | | Common Stock: 1,000 |
|____| ------------- Shares |____| ------------- Shares |
| | | |
| Cost | | Companies Cost |
| ---- | | Agency, Inc. ---- |
| WSC-100% $10,000 | | (Wisconsin) -- $10,000 |
|______________________________| | 100% |
|_____________________________|
</TABLE>
<PAGE> 105
<TABLE>
<CAPTION>
NATIONWIDE INSURANCE ENTERPRISE (right side)
<S> <C> <C> <C>
_________________________________
| NATIONWIDE ENTERPRISE INSURANCE |
| FOUNDATION |
| |
| MEMBERSHIP |
| NONPROFIT |
| CORPORATION |
|_________________________________|
_________________________________________ ___________________________
| | | |
===| NATIONWIDE MUTUAL |=============================================| NATIONWIDE MUTUAL |
| (CASUALTY) | | FIRE |
|_________________________________________| |___________________________|
| | | |__________________________________________________________________ :
| | | | | :
______________|__________ | | | _____________________________ _____________|_:____________________
| ALLNATIONS | | | | | NATIONWIDE | | NATIONWIDE |
| | | | | | GENERAL | | CORPORATION |
| Common Stock: 2,939 | | | | | | | |
| ------------- Shares | | | | | Common Stock: 20,000 Shares | | Common Stock: Control |
| | | | |___| ------------- | | ------------- ------- |
| Cost | | | | | | | $13,092,790 100% |
| ---- | | | | | Cost | | |
| Casualty-26% $88,320 | | | | | ---- | | Shares Cost |
| Fire-26% $88,463 | | | | | Casualty-100% $5,944,422 | | ----- ---- |
|_________________________| | | | |_____________________________| | Casualty $12,443,280 $710,293,557 |
| | | | Fire 649,510 24,007,936 |
_________________________ | | | _____________________________ | |
| FARMLAND MUTUAL | | | | | NATIONWIDE PROPERTY | | (See Page 2) |
| INSURANCE COMPANY | | | | | AND CASUALTY | |____________________________________|
| | | | | | |
| Guaranty Fund |____| | | | Common Stock: 60,000 Shares |
| ------------- |______| |___| ------------- |
| Certificate | | | |
| ----------- | | | Cost |
| | | | ---- |
| Cost | | | Casualty-100% $6,000,000 |
| ---- | | |_____________________________|
| Casualty $500,000 | |
|_________________________| | _____________________________
| | | COLONIAL INS. CO. |
_______________|___________ | | OF CALIFORNIA |
| F & B, INC. | | | |
| | | | Common Stock: 1,750 Shares |
| Common Stock: 1 Share | |___| ------------- |
| ------------- | | | |
| | | | Cost |
| Cost | | | ---- |
| ---- | | | Casualty-100% $11,750,000 |
| Farmland Mutual- $10 | | |_____________________________|
| 100% | |
|___________________________| | _____________________________ __________________________
____________________________ | | SCOTTSDALE | | COLONIAL GENERAL |
| FARMLAND LIFE | | | INSURANCE COMPANY | | INSURANCE AGENCY, INC. |
| INSURANCE COMPANY | | | | | |
| | | | Common Stock: 30,136 Shares | | Common Stock: 1 Share |
| Common Stock: 1,000,000 |___|___| ------------- |______| ------------ |
| ------------- Shares | | | | | |
| | | | Cost | | Cost |
| Cost | | | ---- | | ---- |
| ---- | | | Casualty-100% $150,000,000 | | Scottsdale- $1,082,336 |
| Casualty-100% $23,826,196 | | |_____________________________| | 100% |
|____________________________| | |__________________________|
| _____________________________
| | NATIONWIDE AGRIBUSINESS |
| | INS. CO. |
| | |
| | Common Stock: 1,000,000 |
| | ------------- Shares |
| | |
|___| Casualty- Cost |
| | 99.9% ---- |
| | $26,300,981 |
| | Other Capital: |
| | Casualty- |
| | Ptd. $713,567 |
| |_____________________________|
|
| _____________________________ ______________________________
| | NECKURA HOLDING CO. | | NECKURA |
| | (NECKURA) | | INSURANCE CO. |
| | | | |
| | Common Stock: 10,000 Shares | | Common Stock: 6,000 Shares |
|___| ------------- |____________________| ------------- |
| | | | | |
| | Cost | | | Cost |
| | --- | | | ---- |
| | Casualty-100% $87,943,140 | | | Neckura-100% DM 6,000,000 |
| |_____________________________| | |______________________________|
| |
| | _____________________________
| | | NECKURA LIFE |
| | | |
| | | Common Stock: 4,000 Shares |
| |_____| ------------- |
| | | |
| | | Cost |
| | | ---- |
| | | Neckura-100% DM 15,825,681 |
| | |_____________________________|
| |
| | _____________________________
| | | NECKURA GENERAL |
| | | AUTO INSURANCE CO. |
| | | |
| | | Common Stock: 1,500 Shares |
| |_____| ------------ |
| | | |
| | | Cost |
| | | ---- |
| | | Neckura-100% DM 1,656,925 |
| | |_____________________________|
| |
| | _____________________________
| | | COLUMBUS SERVICE |
| | | GmbH |
| | | |
| | | Common Stock: 1 Share |
| |_____| ------------- |
| | | |
| | | Cost |
| | | ----- |
| | | Neckura-100% DM 51,639 |
| | |_____________________________|
| |
| | _____________________________
| | | AUTO DIRECT |
| | | INSURANCE CO. |
| | | |
| | | Common Stock: 1,500 Shares |
| | | ------------- |
| |_____| |
| | | Cost |
| | | ---- |
| | | Neckura-100% DM 1,643,149 |
| | |_____________________________|
| |
| _____________________________ | ____________________________
| | NATIONWIDE | | | SVM SALES |
| | DEVELOPMENT | | | GmbH |
| | | | | |
| | Common Stock: 99,000 Shares | | | Common Stock: 50 Shares |
| | ------------- | |_____| ------------- |
| | | | |
|___| Cost | | Cost |
| | --- | | ---- |
| | Casualty-100% $15,100,000 | | Neckura-100% DM 50,000 |
| | Other Capital: | |____________________________|
| | -------------- |
| | Casualty-Ptd. $ 2,796,100 |
| |_____________________________|
|
|
| _____________________________
| | SCOTTSDALE |
| | INDEMNITY |
| | |
|___| Common Stock: 50,000 Shares |
| | ------------- |
| | |
| | Cost |
| | ---- |
| | Casualty-100% $8,800,000 |
| |_____________________________|
|
| _____________________________
| | NATIONWIDE INDEMNITY |
| | |
| | Common Stock: 28,000 Shares |
|___| ------------- |
| | |
| | Cost |
| | ---- |
| | Casualty-100% $294,529,000 |
| |_____________________________|
|
| _____________________________ __________________________
| | LONE STAR | | COLONIAL COUNTY MUTUAL |
| | GENERAL AGENCY, INC. | | INSURANCE COMPANY |
| | | | |
| | Common Stock: 1,000 Shares | | Surplus Debentures: |
|___| ------------- |______| ------------------- |
| | |______| |
| | Cost | | Cost |
| | ---- | | ---- |
| | Casualty $5,000,000 | | Colonial $500,000 |
| | 100% | | Lone Star 150,000 |
| |_____________________________| |__________________________|
|
| _____________________________
| | NATIONWIDE |
| | COMMUNITY URBAN |
| | REDEVELOPMENT |
| | |
| | Common Stock: 10 Shares |
|___| ------------- |
| | |
| | Cost |
| | ---- |
| | Casualty-100% $1,000 |
| |_____________________________|
|
| _____________________________
| | INSURANCE |
| | INTERMEDIARIES, INC. |
| | |
| | Common Stock: 1,615 Shares |
|___| ------------- |
| | |
| | Cost |
| | ---- |
| | Casualty-100% $1,615,000 |
| |_____________________________|
|
| _____________________________
| | NATIONWIDE |
| | CASH MANAGEMENT |
| | |
| | Common Stock: 100 Shares |
| | ------------- |
|___| |
| | Cost |
| | ---- |
| | Casualty-90% $9,000 |
| | NW Fin Serv- 1,000 |
| | 10% |
| |_____________________________|
|
|
| _____________________________ __________________________
| | CALIFORNIA | | VIDEO EAGLE INC. |
| | CASH MANAGEMENT | | |
| | | | Common Stock: 750 Shares |
| | Common Stock: 90 Shares | | ------------- |
|___| ------------- | ____| |
| | | | | Cost |
| | Cost | | | ---- |
| | ---- | | | NW Comm.- $0 |
| | Casualty-100% $9,000 | | | 100% |
| |_____________________________| | |__________________________|
| |
| |
| |
| _____________________________ | __________________________
| | NATIONWIDE | | | THE BEAK AND |
| | COMMUNICATIONS INC. | | | WIRE CORPORATION |
| | | | | |
| | Common Stock: 14,750 Shares | | | Common Stock: 750 Shares |
|___| ------------- |__|___| ------------- |
| | | |
| Cost | | Cost |
| ---- | | ---- |
| Casualty-100% $11,510,000 | | NW Comm- $531,000 |
| | | 100% |
| Other Capital: | |__________________________|
| -------------- |
| Casualty-Ptd. 1,000,000 |
|_____________________________|
<FN>
Subsidiary Companies - Solid Line
Associated Companies - Dotted Line
Contractural Association - Double Line
December 31, 1994
</TABLE>
<PAGE> 106
<TABLE>
<CAPTION>
NATIONWIDE INSURANCE ENTERPRISE (left side)
<S> <C> <C>
_______________________________________
| |
| EMPLOYERS INSURANCE |___________________________________________
| OF WAUSAU |___________________________________________
| A MUTUAL COMPANY |
|_______________________________________|
__________________________
|
____________|__________________
| NATIONWIDE LIFE |
| Common Stock: 3,814,779 |
| ------------- Shares |
| |
| NW Corp.- Cost |
| 100% ---- |
| $909,179,664 |
|______________________________|
|
_________________________________________________________________________________|
| | |
____________|____________ ___________|_______________ | ______________________________
| NATIONWIDE | | NATIONAL CASUALTY | | | FINANCIAL HORIZONS |
| FINANCIAL SERVICES | | Common Stock: 100 Shares | | | LIFE |
| Common Stock: 7,676 | | ------------- | | | Common Stock: 66,000 |
______| ------------- Shares | _____| | |_______| ------------- Shares |
| ____| Cost | | | Cost | | | NW Life- Cost |
| | | ---- | | | ---- | | | 100% ---- |
| | | NW Life-100% $5,996,261 | | | NW Life-100% $66,132,811 | | | $58,070,003 |
| | |_________________________| | |___________________________| | |______________________________|
| | | | | |
| | _________________________ | ___________|_|_____________ |
| | | NATIONWIDE | | | | |
| | | INVESTOR SERVICES | | | | |
| | | Common Stock: 5 Shares | | | NCC OF AMERICA, | |
| |____| ------------- | | | INC. (INACTIVE) | | ______________________________
| | | | | | | | | WEST COAST LIFE |
| | | NW Fin. Serv.- Cost | | | | | | Common Stock: 1,000,000 |
| | | 100% ---- | | | | | | ------------- Shares |
| | | $5,000 | | | | |_______| Cost |
| | |_________________________| | |___________________________| | | ---- |
| | | | | NW Life-100% $92,762,014 |
| | _________________________ | ___________________________ | |______________________________|
| | | NATIONWIDE | | | HICKEY-MITCHELL | |
| | | INVESTING | | | INSURANCE AGENCY | |
| | | FOUNDATION | | | Common Stock: 101 Shares | |
| |____| | |_____| ----------- | |
| ____| | | | | ______________________________
| | | | | Cost | | | EMPLOYERS LIFE INSURANCE CO. |
| | | | | ---- | | | OF WAUSAU (EL) |
| | | COMMON LAW TRUST | | Nat. Cas.-100% $4,701,200 | | | |
| | |_________________________| |___________________________| | | Common Stock: 250,000 Shares |
| | | |_______| ------------- |
| | _________________________ ____________|______________ | | ---- |
| | | NATIONWIDE | | NATIONAL PREMIUM & | | | NW Life-100% $165,627,416 |
| | | INVESTING | | BENEFIT ADMINISTRATION | | |______________________________|
| |____| FOUNDATION II | | Common Stock: 10,000 | | |
| ____| | | ------------ Shares | | |
| | | | | Cost | | |
| | | | | Hickey- ---- | | ___________|_________________
| | | COMMON LAW TRUST | | Mitchell-100% $1,319,469 | | | WAUSAU PREFERRED |
| | |_________________________| |___________________________| | | HEALTH INS. CO. |
| | | | |
| | | | Common Stock: 200 Shares |
| | _________________________ | | ------------- |
| | | NATIONWIDE | | | EL -- 100% Cost |
| |____| SEPARATE ACCOUNT | | | ---- |
| ____| TRUST | | | $51,413,193 |
| | | COMMON LAW TRUST | | |_____________________________|
| | |_________________________| |
| | |
| | |
| | _________________________ |
| | | FINANCIAL HORIZONS | | ______________________________
| |____| INVESTMENT TRUST | | | NATIONWIDE |
|______| TRUST | | | PROPERTY MANAGEMENT |
| COMMON LAW TRUST | | | Common Stock: 59 Shares |
|_________________________| |_______| ------------- |
| | |
| | Cost |
| | ---- |
| | NW Life-100% $1,907,896 |
| |______________________________|
| |
| |
| |
| |
| ____________|_________________
| | MRM INVESTMENTS, INC. |
| | Common Stock: 1 Share |
| | ------------ |
| | |
| | Cost |
| | Nat. Prop. ---- |
| | Mgmt.-100% $550,000 |
| |______________________________|
|
|
| ___________________________
| | NWE, INC. |
| | |
| | Common Stock: 100 Shares |
|_______| |
| NW Life-100% Cost |
| ---- |
| $35,971,375 |
|___________________________|
</TABLE>
<PAGE> 107
<TABLE>
<CAPTION>
NATIONWIDE INSURANCE ENTERPRISE (middle)
<S> <C> <C> <C>
_______________________________________
| |
________________________________| NATIONWIDE MUTUAL |___________________________________________________________
________________________________| (CASUALTY) |___________________________________________________________
| |
|_______________________________________|
| _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
__________________|______________|___
| NATIONWIDE CORPORATION |
| Common Stock: Control: |
| ------------- ------- |
| 13,092,790 100% |
| |
| Shares Cost |
| ------ ---- |
| Casualty $12,443,280 $710,293,557 |
| Fire 649,510 24,007,936 |
|_____________________________________|
|
____________________________________________________|______________________________________________________________________________
| | |
___________|_______________ _____________|_____________ ____________|______________
| PUBLIC EMPLOYEES | | GATES, McDONALD | | FINANCIAL HORIZONS |
| BENEFIT SERV. CORP. | | & COMPANY (GATES) | | DISTRIBUTORS AGY., INC. |
______| Common Stock: 236,494 | | Common Stock: 254 Shares | | Common Stock: 1,000 Shares|
| ____| ------------- Shares | | ------------- |___ _____| ------------- |
| | | Cost | | | | | ___| |
| | | NW Corp.- ---- | | Cost | | | | | Cost |
| | | 100% $12,830,936 | | ---- | | | | | NW Corp. ---- |
| | |___________________________| | MW Corp.- $22,126,323 | | | | | 100% $19,501,000 |
| | | 100% | | | | |___________________________|
| | |___________________________| | | |
| | | | |
| | ___________________________ | | |
| | ___________________________ | GATES, McDONALD & Co. | | | | ___________________________
| | | PEBSCO SECURITIES | | OF NEW YORK | | | | | FINANCIAL HORIZONS |
| | | CORP. | | Common Stock: 3 Shares | | | | | DISTRIBUTORS AGY. |
| |____| Common Stock: 5,000 | | ------------- |___| | | | OF ALABAMA, INC. |
| | | ------------- Shares | | | | | |___| Common Stock: 10,000 |
| | | Cost | | Cost | | | | | ----------- Shares |
| | | Pub. Emp. Ben. ---- | | ---- | | | | | Cost |
| | | Serv.Corp.-100% $25,000 | | Gates-100% $106,947 | | | | | ---- |
| | |___________________________| | | | | | | FHDAI-100% $100 |
| | |___________________________| | | | |___________________________|
| | | | |
| | | | |
| | ___________________________ | | |
| | ___________________________ | GATES, McDONALD & Co. | | | |
| | | PEBSCO OF | | OF NEVADA | | | | ___________________________
| | | NEW MEXICO | | | | | | | LANDMARK FINANCIAL |
| | | Common Stock: 1,000 | | Common Stock: 40 Shares |___| | | | SERVICES OF |
| |____| ------------- Shares | | | | | | NEW YORK, INC. |
| | | Cost | | Gates-100% Cost | | |___| Common Stock: 10,000 |
| | | Pub. Emp. Ben. ---- | | ---- | | | | ------------- Shares |
| | | Serv.Corp.-100% $1,000 | | $93,750 | | | | Cost |
| | |___________________________| |___________________________| | | | ---- |
| | | | | FHDAI-100% $10,100 |
| | | | |___________________________|
| | | |
| | | |
| | ___________________________ | |
| | | PEBSCO OF | | |
| | | ARKANSAS | | | ___________________________
| | | Common Stock: 50,000 | | | | FINANCIAL HORIZONS |
| |____| ------------- Shares | | | | SECURITIES CORP. |
| | | Cost | | |___| Common Stock: 10,000 |
| | | Pub. Emp. Ben. ---- | | | | ------------- Shares |
| | | Serv.Corp. 100% $500 | | | | Cost |
| | |___________________________| | | | ---- |
| | | | | FHDAI-100% $153,000 |
| | | | |___________________________|
| | | |
| | ___________________________ | |
| | | PEBSCO OF | ___________________________ | |
| | | MONTANA | | AFFILIATE AGENCY, INC. | | | ___________________________
| |____| Common Stock: 500 | | | | | | |
| | | ------------- Shares | | Common Stock: 100 Shares |__ | | | FINANCIAL HORIZONS |
| | | Cost | | | | |___| DISTRIBUTORS |
| | | Pub. Emp. Ben. ---- | | FHDAI-100% Cost | | ___| AGENCY OF TEXAS, |
| | | Serv.Corp.-100% $500 | | ---- | | | | INC. |
| | |___________________________| | $100 | | | |___________________________|
| | |___________________________| | |
| | | |
| | | |
| | ___________________________ | | ___________________________
| | | PEBSCO OF | | | | |
| | | ALABAMA | | |___| FINANCIAL HORIZONS |
| |____| Common Stock: 100,000 | | ___| DISTRIBUTORS AGY. |
| | | ------------- Shares | | | | OF OHIO, INC. |
| | | Cost | | | |___________________________|
| | | Pub. Emp. Ben. ---- | | |
| | | Serv.Corp.-100% $1,000 | | |
| | |___________________________| | |
| | | |
| | ___________________________ | |
| | | PEBSCO OF | | | ___________________________
| | | MASSACHUSETTS | | | | |
| | | INSURANCE AGENY, INC. | | |___| FINANCIAL HORIZONS |
| |____| Common Stock: 1,000 | | ___| DISTRIBUTORS AGY. |
| | | ------------- Shares | | | | OF OKLAHOMA, INC. |
| | | Cost | | | |___________________________|
| | | Pub. Emp. Ben. ----- | | |
| | | Serv.Corp.-100% $1,000 | | |
| | |___________________________| | | ___________________________
| | | | | |
| | ___________________________ | |___| AFFILIATE |
| |____| | |_____ AGENCY OF |
|______| PEBSCO OF | | OHIO, INC. |
| TEXAS | | |
|___________________________| |___________________________|
</TABLE>
<PAGE> 108
<TABLE>
<CAPTION>
NATIONWIDE INSURANCE ENTERPRISE (right side)
<S> <C> <C>
_______________________________________
| |
______________________| NATIONWIDE MUTUAL |
______________________| FIRE (FIRE) |
| |
|_______________________________________|
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _|
____________________________________________________________________
| | |
_____________|_____________ | ____________|______________
| NEA VALUEBUILDER | | | INHEALTH, INC. |
| INVESTOR SERVICES, INC. | | | Common Stock: 100 |
_______| Common Stock: 500 | | | ------------ Shares |
| _____| ------------- Shares | | | Cost |
| | | Cost | | | ---- |
| | | NW Corp.- ---- | | | NW Corp.- |
| | | 100% $5,000 | | | 100% $12,046,413 |
| | |___________________________| | |___________________________|
| | |
| | ___________________________ | ___________________________
| | | NEA VALUEBUILDER | | | NATIONWIDE |
| | | INVESTOR SERVICES | | | HEALTH CARE |
| |_____| OF ALABAMA, INC. | |_____| Common Stock: 15 Shares |
| | | Common Stock: 500 | _____| ------------ |
| | | ------------- Shares | | | |
| | | Cost | | | Cost |
| | | ---- | | | NW Corp.- ---- |
| | | NEA-100% $5,000 | | | 100% $16,850,000 |
| | |___________________________| | |___________________________|
| | |
| | ___________________________ | ___________________________
| | | NEA VALUEBUILDER | | | INHEALTH MGT. |
| | | INVESTOR SERVICES | | | SYSTEMS, INC. |
| | | OF OHIO, INC. | | | Common Stock: 100 Shares |
| |_____| Common Stock: 100 | |_____| ------------- |
| | | ------------- Shares | | | |
| | | Cost | | | Cost |
| | | ----- | | | NW Health ---- |
| | | NEA-91% $5,000 | | | Care-100% $25,149 |
| | |___________________________| | |___________________________|
| | |
| | ___________________________ | ___________________________
| | | | | | INHEALTH |
| | | | | | AGENCY, INC. |
| | | NEA VALUEBUILDER | | | Common Stock: 99 Shares |
| |_____| INVESTOR SERVICES | |_____| ------------- |
| | | OF TEXAS, INC. | | Cost |
| | | | | NW Health ---- |
| | | | | Corp.-99% $116,077 |
| | |___________________________| |___________________________|
| |
| | ___________________________
| | | |
| | | |
| |_____| NEA VALUEBUILDER |
|_______| INVESTOR SERVICES |
| OF OKLAHOMA, INC. |
| |
|___________________________|
<FN>
Subsidiary Companies -- Solid Line
Associated Companies -- Dotted Line
Contractual Association -- Double Line
December 31, 1994
</TABLE>
Page 2
<PAGE> 109
ITEM 27. NUMBER OF CONTRACT OWNERS
The number of Owners of Contracts as of February 28, 1995 was 2,803.
ITEM 28. INDEMNIFICATION
Provision is made in the Company's Amended Code of Regulations and
expressly authorized by the General Corporation Law of the State of
Ohio, for indemnification by the Company of any person who was or is a
party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative by reason of the fact that such person
is or was a director, officer or employee of the Company, against
expenses, including attorneys' fees, judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding, to the extent and
under the circumstances permitted by the General Corporation Law of
the State of Ohio.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 ("Act") may be permitted to directors, officers
or persons controlling the Company pursuant to the foregoing
provisions, the Company has been informed that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore,
unenforceable.
ITEM 29. PRINCIPAL UNDERWRITERS
(a) Nationwide Financial Services, Inc. ("NFS") acts as general
distributor for the Nationwide Multi-Flex Variable Account, Nationwide
Variable Account-II, Nationwide DC Variable Account, Financial
Horizons VA Separate Account-1, Financial Horizons VL Separate
Account-1, Nationwide VLI Separate Account-3, NACo Variable Account,
and Nationwide Variable Account, all of which are separate investment
accounts of the Company or its affiliates.
NFS also acts as principal underwriter for the Nationwide Investing
Foundation, Nationwide Separate Account Trust, Financial Horizons
Investment Trust, and Nationwide Investing Foundation II, which are
open-end management investment companies.
(b) NATIONWIDE FINANCIAL SERVICES, INC.
DIRECTORS AND OFFICERS
<TABLE>
<CAPTION>
POSITIONS AND OFFICES
NAME AND BUSINESS ADDRESS WITH UNDERWRITER
<S> <C>
Lewis J. Alphin Director
519 Bethel Church Road
Mount Olive, NC 28365
Willard J. Engel Director
1100 E. Main Street
Marshall, MN 56258
Fred C. Finney Director
1558 West Moreland Road
Wooster, OH 44691
</TABLE>
106 OF 125
<PAGE> 110
(b)
NATIONWIDE FINANCIAL SERVICES, INC.
DIRECTORS AND OFFICERS (CONTINUED)
<TABLE>
<CAPTION>
NAME AND BUSINESS ADDRESS POSITIONS AND OFFICES
WITH UNDERWRITER
<S> <C>
Peter F. Frenzer Vice Chairman, President
One Nationwide Plaza and Director
Columbus, OH 43215
Charles L. Fuellgraf, Jr. Director
600 South Washington Street
Butler, PA 16001
Henry S. Holloway Director
1247 Stafford Road
Darlington, MD 21034
Gordon E. McCutchan Executive Vice President -
One Nationwide Plaza Law and Corporate Services
Columbus, OH 43215 and Director
D. Richard McFerson President and Chief Executive
One Nationwide Plaza Officer--Nationwide Insurance
Columbus, Ohio 43215 Enterprise and Director
David O. Miller Director
115 Sprague Drive
Hebron, OH 43025
C. Ray Noecker Director
2770 State Route 674 South
Ashville, OH 43103
James F. Patterson Director
8765 Mulberry Road
Chesterland, OH 44026
Robert H. Rickel Director
P.O. Box 319
Bayview, ID 83803
Arden L. Shisler Director
2724 West Lebanon Road
Dalton, OH 44618
Robert L. Stewart Director
88740 Fairview Road
Jewett, OH 43986
</TABLE>
107 of 125
<PAGE> 111
(b)
NATIONWIDE FINANCIAL SERVICES, INC.
DIRECTORS AND OFFICERS (CONTINUED)
<TABLE>
<CAPTION>
NAME AND BUSINESS ADDRESS POSITIONS AND OFFICES
WITH UNDERWRITER
<S> <C>
Nancy C. Thomas Director
10835 Georgetown Street NE
Louisville, OH 44641
Harold W. Weihl Chairman of the Board of
14282 King Road Directors
Bowling Green, OH 43402
W. Sidney Druen Senior Vice President, and General
One Nationwide Plaza Counsel and Assistant
Columbus, OH 43215 Secretary
Robert A. Oakley Senior Vice President--
One Nationwide Plaza Chief Financial Officer
Columbus, OH 43215
James F. Laird, Jr. Vice President and
One Nationwide Plaza General Manager
Columbus, OH 43215 and Treasurer
Peter J. Neckermann Vice President
One Nationwide Plaza
Columbus, OH 43215
Harry S. Schermer Vice President-Investments
One Nationwide Plaza
Columbus, OH 43215
Rae I. Mercer Secretary
One Nationwide Plaza
Columbus, OH 43215
</TABLE>
108 of 125
<PAGE> 112
<TABLE>
<CAPTION>
(c) NAME OF NET UNDERWRITING COMPENSATION ON
PRINCIPAL DISCOUNTS AND REDEMPTION OR BROKERAGE
UNDERWRITER COMMISSIONS ANNUITIZATION COMMISSIONS COMPENSATION
<S> <C> <C> <C> <C>
Nationwide N/A N/A N/A N/A
Financial
Services,
Inc.
</TABLE>
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
Joseph F. Ciminero
Nationwide Life Insurance Company
One Nationwide Plaza
Columbus, OH 43215
ITEM 31. MANAGEMENT SERVICES
Not Applicable
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.
(d) The Registrant hereby represents that any contract offered by
the prospectus and which is issued pursuant to Section 403(b)
of the Internal Revenue Code of 1986, as amended, is issued by
the Registrant in reliance upon, and in compliance with, the
Securities and Exchange Commission's no-action letter to the
American Council of Life Insurance (publicly available
November 28, 1988) which permits withdrawal restrictions to
the extent necessary to comply with IRC Section 403(b)(11).
109 of 125
<PAGE> 113
OFFERED BY
NATIONWIDE
LIFE INSURANCE COMPANY
Group
Flexible Fund
Retirement
Contracts
PROSPECTUS
MAY 1, 1995
110 of 125
<PAGE> 114
NATIONWIDE LIFE INSURANCE COMPANY
GROUP FLEXIBLE FUND RETIREMENT CONTRACTS
Issued Through THE NATIONWIDE DC VARIABLE ACCOUNT
(Supplement Dated May 1, 1995 to Prospectus Dated May 1, 1995)
THIS SUPPLEMENT UPDATES CERTAIN INFORMATION CONTAINED IN THE PROSPECTUS AND
SHOULD BE KEPT FOR FUTURE REFERENCE. THIS SUPPLEMENT IS FOR USE ONLY WITH
CONTRACTS ISSUED PURSUANT TO SECTION 403(B) OF THE CODE ("TAX-SHELTERED ANNUITY
CONTRACTS").
1. The section entitled "SUMMARY OF CONTRACT EXPENSES" in the prospectus is
amended by including the following Fund options available only for
Tax-Sheltered Annuity Contracts.
<TABLE>
<CAPTION>
SUMMARY OF CONTRACT EXPENSES
<S> <C>
PARTICIPANT TRANSACTION EXPENSES
Maximum Deferred Sales Load . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 %
---------
(as a percentage of purchase payments)
ANNUAL CONTRACT FEE(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $15
---------
SEPARATE ACCOUNT ANNUAL EXPENSES
(as a percentage of average account value)
Mortality and Expense Risk Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.50 %
---------
Administration Charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.45 %
---------
Total Separate Account Annual Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 0.95 %
---------
</TABLE>
MUTUAL FUND ANNUAL EXPENSES(2)
(as a percentage of mutual fund average net assets)
<TABLE>
<CAPTION>
-----------------------------------------------
Management Other Expenses Total Mutual
Fees Fund Expenses
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Dreyfus Socially Responsible Growth Fund, .00 .25 .25
Inc.
- ---------------------------------------------------------------------------------------------
Dreyfus Stock Index Fund .14 .26 .40
- ---------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance .52 .06 .58
Products Fund: Equity Income Portfolio
- ---------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance .62 .07 .69
Products Fund: Growth Portfolio
- ---------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance .61 .10 .71
Products Fund: High Income Portfolio(3)
- ---------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance .77 .15 .92
Products Fund: Overseas Portfolio
- ---------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance .72 .07 .79
Products Fund II: Asset Manager Portfolio
- ---------------------------------------------------------------------------------------------
Neuberger & Berman Advisers Management
Trust - Growth Portfolio .79 .12 .91
- ---------------------------------------------------------------------------------------------
</TABLE>
(continued on next page)
(1) The Annual Contract Fee will also be assessed on the date that amounts
held with respect to a Participant are fully withdrawn from the Contract.
(2) The mutual fund expenses shown above are assessed at the underlying
mutual fund level and are not direct charges against DCVA assets or
reductions from Contract values. These mutual expenses are taken into
consideration in computing each mutual fund's net asset value, which is the
share price used to calculate the DCVA's unit value.
(3) The High Income Portfolio may invest in lower quality debt securities
commonly referred to as junk bonds.
111 of 125
<PAGE> 115
MUTUAL FUND ANNUAL EXPENSES (continued)
(as a percentage of mutual fund average net assets)
<TABLE>
<CAPTION>
-----------------------------------------------
Management Other Expenses Total Mutual
Fees Fund Expenses
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Neuberger & Berman Advisers Management .60 .13 .73
Trust - Limited Maturity Bond Portfolio
- ---------------------------------------------------------------------------------------------
Neuberger & Berman Advisers Management .80 .50 1.30
Trust - Partners Portfolio
- ---------------------------------------------------------------------------------------------
NSAT Capital Appreciation Fund .50 .06 .56
- ---------------------------------------------------------------------------------------------
NSAT Government Bond Fund .50 .01 .51
- ---------------------------------------------------------------------------------------------
NSAT Money Market Fund .50 .04 .54
- ---------------------------------------------------------------------------------------------
NSAT Total Return Fund .50 .02 .52
- ---------------------------------------------------------------------------------------------
TCI Portfolios, Inc. - TCI Balanced 1.00 .00 1.00
- ---------------------------------------------------------------------------------------------
TCI Portfolios, Inc. - TCI Growth 1.00 .00 1.00
- ---------------------------------------------------------------------------------------------
</TABLE>
EXAMPLE
The following chart depicts the dollar amount of expenses that would be
incurred under this Contract assuming a $1000 initial purchase payment and 5%
annual return on assets.
<TABLE>
<CAPTION>
------------------------------------------------
If you surrender your Contract
at the end of the applicable time period
------------------------------------------------
1 Yr. 3 Yrs. 5 Yrs. 10 Yrs.
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Dreyfus Socially Responsible Growth 54 83 114 203
Fund, Inc.
- ----------------------------------------------------------------------------------------------
Dreyfus Stock Index Fund 55 88 123 221
- ----------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance 57 94 132 241
Products Fund: Equity Income Portfolio
- ----------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance 58 97 138 253
Products Fund: Growth Portfolio
- ----------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance 59 98 139 256
Products Fund: High Income Portfolio
- ----------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance 61 105 151 279
Products Fund: Overseas Portfolio
- ----------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance 60 100 144 264
Products Fund II: Asset Manager
Portfolio
- ----------------------------------------------------------------------------------------------
Neuberger & Berman Advisers Management 61 104 150 277
Trust - Growth Portfolio
- ----------------------------------------------------------------------------------------------
Neuberger & Berman Advisers Management 59 98 141 258
Trust - Limited Maturity Bond Portfolio
- ----------------------------------------------------------------------------------------------
Neuberger & Berman Advisers Management 65 117 171 319
Trust - Partners Portfolio
- ----------------------------------------------------------------------------------------------
NSAT Capital Appreciation Fund 57 93 131 239
- ----------------------------------------------------------------------------------------------
NSAT Government Bond Fund 57 91 129 233
- ----------------------------------------------------------------------------------------------
NSAT Money Market Fund 57 92 130 237
- ----------------------------------------------------------------------------------------------
NSAT Total Return Fund 57 92 129 234
- ----------------------------------------------------------------------------------------------
TCI Portfolios, Inc. - TCI Balanced 62 107 155 287
- ----------------------------------------------------------------------------------------------
TCI Portfolios, Inc. - TCI Growth 62 107 155 287
- ----------------------------------------------------------------------------------------------
</TABLE>
(continued on next page)
112 of 125
<PAGE> 116
EXAMPLE (continued)
The following chart depicts the dollar amount of expenses that would be
incurred under this Contract assuming a $1000 initial purchase payment and 5%
annual return on assets.
<TABLE>
<CAPTION>
------------------------------------------------
If you do not surrender your Contract
at the end of the applicable time period
------------------------------------------------
1 Yr. 3 Yrs. 5 Yrs. 10 Yrs.
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Dreyfus Socially Responsible Growth 14 43 74 163
Fund, Inc.
- ----------------------------------------------------------------------------------------------
Dreyfus Stock Index Fund 15 48 83 181
- ----------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance 20 60 104 224
Products Fund II: Asset Manager
Portfolio
- ----------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance 17 54 92 201
Products Fund: Equity Income Portfolio
- ----------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance 18 57 98 213
Products Fund: Growth Portfolio
- ----------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance 19 58 99 216
Products Fund: High Income Portfolio
- ----------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance 21 65 111 239
Products Fund: Overseas Portfolio
- ----------------------------------------------------------------------------------------------
Neuberger & Berman Advisers Management 21 64 110 237
Trust - Growth Portfolio
- ----------------------------------------------------------------------------------------------
Neuberger & Berman Advisers Management 19 58 101 218
Trust - Limited Maturity Bond Portfolio
- ----------------------------------------------------------------------------------------------
Neuberger & Berman Advisers Management 25 77 131 279
Trust - Partners Portfolio
- ----------------------------------------------------------------------------------------------
NSAT Capital Appreciation Fund 17 53 91 199
- ----------------------------------------------------------------------------------------------
NSAT Government Bond Fund 17 51 89 193
- ----------------------------------------------------------------------------------------------
NSAT Money Market Fund 17 52 90 197
- ----------------------------------------------------------------------------------------------
NSAT Total Return Fund 17 52 89 194
- ----------------------------------------------------------------------------------------------
TCI Portfolios, Inc. - TCI Balanced 22 67 115 247
- ----------------------------------------------------------------------------------------------
TCI Portfolios, Inc. - TCI Growth 22 67 115 247
- ----------------------------------------------------------------------------------------------
</TABLE>
(continued on next page)
113 of 125
<PAGE> 117
EXAMPLE (continued)
The following chart depicts the dollar amount of expenses that would be
incurred under this Contract assuming a $1000 initial purchase payment and 5%
annual return on assets.
<TABLE>
<CAPTION>
---------------------------------------------
If you annuitize your Contract
at the end of the applicable time period
---------------------------------------------
1 Yr. 3 Yrs. 5 Yrs. 10 Yrs.
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Dreyfus Socially Responsible Growth 14 43 74 163
Fund, Inc.
- --------------------------------------------------------------------------------------------
Dreyfus Stock Index Fund 15 48 83 181
- --------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance 17 54 92 201
Products Fund: Equity Income Portfolio
- --------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance 18 57 98 213
Products Fund: Growth Portfolio
- --------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance 19 58 99 216
Products Fund: High Income Portfolio
- --------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance 21 65 111 239
Products Fund: Overseas Portfolio
- --------------------------------------------------------------------------------------------
Fidelity Investments Variable Insurance 20 60 104 224
Products Fund II: Asset Manager
Portfolio
- --------------------------------------------------------------------------------------------
Neuberger & Berman Advisers Management 21 64 110 237
Trust - Growth Portfolio
- --------------------------------------------------------------------------------------------
Neuberger & Berman Advisers Management 19 58 101 218
Trust - Limited Maturity Bond Portfolio
- --------------------------------------------------------------------------------------------
Neuberger & Berman Advisers Management 25 77 131 279
Trust - Partners Portfolio
- --------------------------------------------------------------------------------------------
NSAT Capital Appreciation Fund 17 53 91 199
- --------------------------------------------------------------------------------------------
NSAT Government Bond Fund 17 51 89 193
- --------------------------------------------------------------------------------------------
NSAT Money Market Fund 17 52 90 197
- --------------------------------------------------------------------------------------------
NSAT Total Return Fund 17 52 89 194
- --------------------------------------------------------------------------------------------
TCI Portfolios, Inc. - TCI Balanced 22 67 115 247
- --------------------------------------------------------------------------------------------
TCI Portfolios, Inc. - TCI Growth 22 67 115 247
- --------------------------------------------------------------------------------------------
</TABLE>
This example should not be considered a representation of past or future
expenses. Actual expenses may be greater or lesser than those shown.
The purpose of the preceding table is to assist the Participant in understanding
the various costs and expenses that a Participant will bear directly or
indirectly when investing in the Contract. The table reflects expenses of the
DCVA as well as the underlying mutual fund investment options. For a more
detailed explanation of these expenses, see "DCVA Charges and Other Deductions"
in the prospectus. In addition to the expenses shown above, deductions for
premium taxes may also be applicable, depending upon the jurisdiction in which
the Contract is sold (See "Premium Taxes" in the prospectus).
114 of 125
<PAGE> 118
2. The section entitled "CONDENSED FINANCIAL INFORMATION" in the prospectus is
amended by adding the following information about the Fund options available
for Tax-Sheltered Annuity Contracts.
CONDENSED FINANCIAL INFORMATION
Accumulation Unit Values (For an accumulation unit outstanding throughout the
period)
NATIONWIDE DC VARIABLE ACCOUNT
<TABLE>
<CAPTION>
ACCUMULATION ACCUMULATION NUMBER OF
UNIT VALUE UNIT VALUE ACCUMULATION UNITS
AT BEGINNING AT END OUTSTANDING AT THE
FUND OF PERIOD OF PERIOD END OF THE PERIOD YEAR
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Dreyfus Stock Index 1.000000 0.975745 782 1994
Fund
=============================================================================================================
Dreyfus Socially 1.000000 0.977428 0 1994
Responsible Growth
Fund
=============================================================================================================
Fidelity Investments 1.000000 1.018963 7,026 1994
Variable Insurance
Products Fund: Growth
Portfolio
=============================================================================================================
Fidelity Investments 1.000000 0.974175 5,699 1994
Variable Insurance
Products Fund: Equity
Income Portfolio
=============================================================================================================
Fidelity Investments 1.000000 0.992271 1,484 1994
Variable Insurance
Products Fund: High
Income Portfolio
=============================================================================================================
Fidelity Investments 1.000000 0.955979 2,037 1994
Variable Insurance
Products Fund II: Asset
Manager Portfolio
=============================================================================================================
Fidelity Investments 1.000000 0.947883 10,984 1994
Variable Insurance
Products Fund:
Overseas Portfolio
=============================================================================================================
Neuberger & Berman 1.352530 1.272940 17,238 1994
--------------------------------------------------------------------------------------
Advisers Management 1.278609 1.352530 12,520 1993
--------------------------------------------------------------------------------------
Trust - 1.178398 1.278609 8,757 1992
--------------------------------------------------------------------------------------
Growth Portfolio 0.917001 1.178398 4,358 1991
--------------------------------------------------------------------------------------
1.000000 0.917001 0 1990
- -------------------------------------------------------------------------------------------------------------
</TABLE>
115 of 125
<PAGE> 119
CONDENSED FINANCIAL INFORMATION, Continued
<TABLE>
<CAPTION>
ACCUMULATION ACCUMULATION NUMBER OF
UNIT VALUE UNIT VALUE ACCUMULATION UNITS
AT BEGINNING AT END OUTSTANDING AT THE
FUND OF PERIOD OF PERIOD END OF THE PERIOD YEAR
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Neuberger & Berman 1.000000 0.995462 597 1994
Advisers Management
Trust - Limited Maturity
Bond Portfolio
===========================================================================================================
Neuberger & Berman 1.000000 0.966223 3,237 1994
Advisers Management
Trust - Partners Portfolio
===========================================================================================================
NSAT Government 1.396125 1.338281 971 1994
------------------------------------------------------------------------------------
Bond Fund 1.286974 1.396125 632 1993
------------------------------------------------------------------------------------
1.204500 1.286974 1,660 1992
------------------------------------------------------------------------------------
1.041986 1.204500 527 1991
------------------------------------------------------------------------------------
1.000000 1.041986 0 1990
===========================================================================================================
NSAT Money 1.123427 1.155984 2,543 1994
------------------------------------------------------------------------------------
Market Fund 1.103814 1.123427 0 1993
------------------------------------------------------------------------------------
1.077714 1.103814 0 1992
------------------------------------------------------------------------------------
1.028111 1.077714 0 1991
------------------------------------------------------------------------------------
1.000000 1.028111 0 1990
===========================================================================================================
NSAT Total 1.523742 1.525590 3,996 1994
------------------------------------------------------------------------------------
Return Fund 1.386859 1.523742 845 1993
------------------------------------------------------------------------------------
(formerly 1.294230 1.386859 500 1992
------------------------------------------------------------------------------------
"Common 0.943464 1.294230 69 1991
------------------------------------------------------------------------------------
Stock Fund") 1.000000 0.943464 0 1990
===========================================================================================================
TCI Portfolios, Inc. - TCI 1.000000 0.986992 0 1994
Balanced
===========================================================================================================
TCI Portfolios, 1.360119 1.331537 38,898 1994
------------------------------------------------------------------------------------
Inc. - 1.244720 1.360119 33,128 1993
------------------------------------------------------------------------------------
TCI Growth 1.273681 1.244720 21,051 1992
------------------------------------------------------------------------------------
0.906306 1.273681 10,348 1991
------------------------------------------------------------------------------------
1.000000 0.906306 4,711 1990
- -----------------------------------------------------------------------------------------------------------
</TABLE>
NSAT Capital Appreciation Fund first became available through the 403(b) in
1995; therefore, no 1994 unit value information is available for this fund.
116 of 125
<PAGE> 120
3. The section entitled "Administrative Charge" in the prospectus is amended
by adding the following paragraph:
For Tax-Sheltered Annuity Contracts, the Company will make a maximum
charge of $15 per Participant per year to reimburse the Company for certain
administrative expenses relating to the maintenance of individual
Participant records and the mailing of periodic statements to Participants.
The Administrative Charges, which are guaranteed never to increase, are
designed only to help the Company offset such administrative expenses, and
such charges will not exceed the Company's actual administration expenses
under the Contracts.
4. The section entitled "DESCRIPTION OF THE CONTRACTS" in the prospectus is
amended by adding the following new section:
PARTICIPANT RIGHTS UNDER TAX-SHELTERED ANNUITY CONTRACTS
Participant rights under the Contract are set forth in the Plan, if
any, and are described more fully in the Certificate of Participation
issued to each Participant by the Company and which describes the rights
and benefits to which the Participant is entitled under the Contract. The
term Owner, as used throughout the Contract, refers to the purchaser and
the holder of the Contract. However, the Owner's rights are limited by the
Plan, if any, the Code and applicable regulations. Participant Accounts
held under the Contract shall be non-forfeitable at all times. No amounts
payable under the Contract with respect to a Participant may be sold,
assigned, discounted, or pledged as collateral for a loan or as a security
for the performance of an obligation or for any other purpose to any person
other than the Company. In addition, to the extent permitted by law, no
such sum shall in any way be subject to legal process requiring the payment
of any claim against the payee. The Company will accept direction only from
the Participant except as otherwise specifically provided in the Plan, if
any. The Company shall be entitled to rely on any action taken or omitted
by the Participant, pursuant to the terms of the Contract.
5. The section entitled "SUSPENSION AND TERMINATION" in the prospectus is
amended by deleting the last two sentences of that section.
6. The section entitled "APPLICATION OF PURCHASE PAYMENTS" in the prospectus
is amended by adding the following paragraph at the end:
With respect to Tax-Sheltered Annuity Contracts, Purchase Payments for
each Participant may not exceed the Contract's allowable portion of the
lesser of the maximum exclusion allowance under Code Section 403(b), or the
elective deferral limits set forth in Code Section 402(g), except for
amounts eligible for rollover, transfer or exchange treatment under the
Code. In no event may the Purchase Payments exceed the limits described in
Code Section 415. The amount of the Purchase Payments and earnings thereon
in excess of the limits set forth in Code Section 402(g) ("excess
deferrals") shall be returned in accordance with that section to the
Participant upon written request, without application of the Contingent
Deferred Sales Charge, if any, and in accordance with the Plan, if any. The
Company may change the required minimum annual Purchase Payment to any
amount which does not violate the applicable provisions of the Code.
117 of 125
<PAGE> 121
7. The section entitled "REDEMPTION OF PARTICIPANT ACCOUNTS (TERMINATION)" in
the prospectus is amended by adding the following paragraph at the end:
With respect to Tax-Sheltered Annuity Contracts, Section 403(b)(11) of
the Code, prohibits redemptions of Purchase Payments made pursuant to a
salary reduction agreement (within the meaning of 402(g)(3)(C) of the Code)
before the person reaches age 59 1/2, separates from service, dies, becomes
disabled (within the meaning of Code Section 72(m)(7), or faces a financial
hardship as defined by the Plan, or, if no Plan is specified, as used in
Section 403(b)(11)(B) of the Code and applicable regulations. This
prohibition applies to Purchase Payments made in years beginning after
December 31, 1988, to earnings on those Purchase Payments, and to earnings
on amounts held as of December 31, 1988. Hardship redemptions are limited
to the amount of Purchase Payments attributable to Participant elective
contributions and earnings on Purchase Payments held as of December 31,
1988, and may be subject to a 10% tax penalty. The value of contracts
issued pursuant to Section 403(b) may be transferred to other contracts of
other carriers. However, the exchange, under Section 1035 of the Code, of a
contract which had an accumulated value prior to January 1, 1989, for a new
contract may subject the pre-1989 value to the limits of Section
403(b)(11). The Company issues this Contract in reliance upon, and in
compliance with, a Securities and Exchange Commission industry-wide
no-action letter (publicly available November 28, 1988) which permits
withdrawal restrictions to the extent necessary to comply with Section
403(b)(11).
8. The section entitled "DISTRIBUTION OF PARTICIPANT ACCOUNTS (RETIREMENT
PERIOD)" in the prospectus is amended by Including the following section:
REQUIRED DISTRIBUTION FOR TAX-SHELTERED ANNUITY CONTRACTS
The entire interest of a Participant under a Contract issued pursuant
to Code Section 403(b) accruing after December 31, 1986, will,
notwithstanding anything else contained herein, be distributed to the
Participant under the Optional Retirement Income Form selected over--
A. the life of the Participant or the lives of the Participant and
the Participant's designated Beneficiary or
B. a period not extending beyond the life expectancy of the
Participant or the life expectancy of the Participant and the
Participant's designated Beneficiary.
If the Participant's entire interest is to be distributed in equal or
substantially equal payments over a period described in A or B, such
payments will commence no later than the first day of April following the
calendar year In which the Participant attains age 70 1/2 (the Required
Beginning Date). In the case of a governmental plan or church plan (as
defined in Code Section 89(i)(4)), the Required Beginning Date will be the
later of the dates determined under the preceding sentence or April 1 of
the calendar year following the calendar year in which the Participant
retires.
Payments commencing on the Required Beginning Date will not be less
than the lesser of the quotient obtained by dividing the entire interest of
the Participant by the life expectancy of the Participant, or the joint and
last survivor expectancy of the Participant and the Participant's
designated beneficiary (whichever is applicable). Life expectancy and joint
and last survivor expectancy are computed by the use of return multiples
contained in Section 1.72-9 of the Treasury Regulations.
All Optional Retirement Income Forms described in the Prospectus must
comply with the minimum distribution and incidental death benefit provision
of Code Section 401(a)(9) and applicable regulations.
118 of 125
<PAGE> 122
9. The section entitled "DEATH BENEFIT BEFORE RETIREMENT" in the prospectus is
deleted in its entirety and replaced with the following:
DEATH BENEFIT BEFORE RETIREMENT
If the Participant dies before his or her retirement income commences,
generally the entire Participant Account Value must be distributed within
five years after the Participant's death. There are two exceptions: (1) if
payments are to be made to the Participant's designated beneficiary and the
distributions begin within one year of the Participant's death, payments
may be extended over the life (or a period not exceeding the life
expectancy) of the beneficiary; and (2) if the beneficiary is the surviving
spouse and the distributions begin by the time the Participant would have
reached age 70 1/2, payments may be made over the life (or a period not
exceeding life expectancy) of the surviving spouse.
10. References throughout the Prospectus to the "Group Fixed Fund Retirement
Contract" are hereby changed to "Group Fixed Tax Deferred Annuity Contract
(APO-1835)".
11. The APPENDIX of Participating Funds in the prospectus is amended in its
entirety by the following Funds. These Funds are available only to serve as
the underlying investment for variable annuity and variable life contracts
issued through separate accounts of life Insurance companies which may or
may not be affiliated. A full description of the Funds, their investment
policies and restrictions, risks, charges and expenses and all other
aspects of their operation is contained in the prospectuses of the Funds,
which should be read in conjunction with this Prospectus before investing.
DREYFUS STOCK FUND INDEX
The Dreyfus Stock Index Fund, Inc. is an open-end, non-diversified,
management investment company. It was incorporated under Maryland law on
January 24, 1989 and commenced operations on September 29, 1989. Wells
Fargo Nikko Investment Advisors serves as the Fund's index fund manager.
As of May 1, 1994, the Dreyfus Life and Annuity Index Fund began doing
business as the Dreyfus Stock Index Fund.
The investment objective of the Fund is to provide investment results
that correspond to the price and yield performance of publicly traded
common stocks in the aggregate, as represented by the Standard & Poor's
Composite Index of 500 Stocks. The Fund is neither sponsored by nor
affiliated with Standard & Poor's Corporation.
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND
The Dreyfus Socially Responsible Growth Fund, Inc. is an open-end,
diversified, management investment company. It was incorporated under
Maryland law on July 20, 1992, and commenced operations on October 7, 1993.
The Dreyfus Corporation serves as the Fund's investment advisor. Tiffany
Capital Advisors, Inc. serves as the Fund's sub-investment adviser and
provides day-to-day management of the Fund's portfolio.
The investment objective of the Fund is to provide capital growth
equity investment in companies that, in the opinion of the Fund's
management, not only meet traditional investment standards, but which also
show evidence that they conduct their business in a manner that contributed
to the enhancement of the quality of life in America. Current income is
secondary to the primary goal.
119 of 125
<PAGE> 123
FIDELITY INVESTMENTS VARIABLE INSURANCE PRODUCTS FUND:
The fund is an open-end, diversified, management investment company
organized as a Massachusetts business trust on November 13, 1981. The
funds shares are purchased by insurance companies to fund benefits under
variable insurance and annuity policies. Fidelity Management & Research
Company ("FMR") is the Fund's manager.
EQUITY-INCOME PORTFOLIO
The investment objective of the Fund is to seek reasonable
income by investing primarily in income-producing equity securities.
In choosing these securities FMR also will consider the potential for
capital appreciation. The Portfolio's goal is to achieve a yield
which exceeds the composite yield on the securities comprising the
Standard & Poor's Composite Index of 500 Stocks.
GROWTH PORTFOLIO
The investment objective of the Fund seeks to achieve capital
appreciation. This Portfolio will invest in the securities of both
well-known and established companies, and smaller, less well-known
companies which may have a narrow product line or whose securities are
thinly traded. These latter securities will often involve greater
risk than may be found in the ordinary investment security. FMR's
analysis and expertise plays an integral role in the selection of
securities and, therefore, the performance of the Portfolio. Many
securities which FMR believes would have the greatest potential may be
regarded as speculative, and investment in the Portfolio may involve
greater risk than is inherent in other mutual funds. It is also
important to point out that the Portfolio makes most sense for you if
you can afford to ride out changes in the stock market, because it
invests primarily in common stocks. FMR also can make temporary
investments in securities such as investment-grade bonds, high-quality
preferred stocks and short-term notes, for defensive purposes when it
believes market conditions warrant.
HIGH INCOME PORTFOLIO
The investment objective of the Fund seeks to obtain a high
level of current income by investing primarily in high- risk,
lower-rated, high-yielding, fixed-income securities, while also
considering growth of capital. The Portfolio manager will seek high
current income normally by investing the Portfolio's assets as
follows:
- at least 65% in income-producing debt securities and preferred
stocks, including convertible securities
- up to 20% in common stocks and other equity securities when
consistent with the Portfolio's primary objective or acquired as
part of a unit combining fixed-income and equity securities.
Higher yields are usually available on securities that are
lower-rated or that are unrated. Lower-rated securities are usually
defined as Baa or lower by Moody's; BBB or lower by Standard & Poor's
and may be deemed to be of a speculative nature. The Portfolio may
also purchase lower-quality bonds such as those rated Ca3 by Moody's
or C- by Standard & Poor's which provide poor protection for payment
of principal and interest (commonly referred to as "junk bonds"). For
a further discussion of lower-rated securities, please see the "Risks
of Lower-Rated Debt Securities" section of the Portfolio's prospectus.
120 of 125
<PAGE> 124
OVERSEAS PORTFOLIO
The investment objective of the Fund is to seek long term
growth of capital primarily through investments in foreign securities.
The Overseas Portfolio provides a means for investors to diversify
their own portfolios by participating in companies and economies
outside of the United States.
FIDELITY INVESTMENTS VARIABLE INSURANCE PRODUCTS FUND II:
The Variable Insurance Products Fund II is an open-end, diversified,
management investment company organized as a Massachusetts business trust
on March 21, 1988. The fund's shares are purchased by insurance companies
to fund benefits under variable insurance and annuity policies. FMR is the
fund's manager.
ASSET MANAGER PORTFOLIO
The investment objective of the Fund is to seek high total
return with reduced risk over the long-term by allocating its assets
among domestic and foreign stocks, bonds and short-term fixed income
instruments.
NATIONWIDE SEPARATE ACCOUNT TRUST
Nationwide Separate Account Trust (the "Trust") is a diversified
open-end investment company created under the laws of Massachusetts. The
Trust offers shares in the four separate Funds listed below, each with its
own investment objectives. Currently, shares of the Trust will be sold
only to life insurance company separate accounts to fund the benefits under
variable insurance or annuity policies issued by life Insurance companies.
The assets of the Trust are managed by Nationwide Financial Services, Inc.
of One Nationwide Plaza, Columbus, Ohio 43215, a wholly-owned subsidiary of
Nationwide Life Insurance Company.
--CAPITAL APPRECIATION FUND
The Fund is designed for investors who are interested in
long-term growth. The Fund seeks to meet its objectives primarily
through a diversified portfolio of the common stock of companies
which the investment manager determines to have a
better-than-average potential for sustained capital growth over the
long-term.
--GOVERNMENT BOND FUND
The investment objective of the Fund is to provide as high a
level of income as is consistent with the preservation of capital.
It seeks to achieve its objective by investing in a diversified
portfolio of securities issued or backed by the U.S. Government, its
agencies or instrumentalities.
--TOTAL RETURN FUND (FORMERLY "COMMON STOCK FUND")
The investment objective of the Fund is to obtain a reasonable
long-term total return (i.e., earnings growth plus potential
dividend yield) on invested capital from a flexible combination of
current return and capital gains through investments in common
stocks, convertible issues, money market instruments and bonds with
a primary emphasis on common stocks.
--MONEY MARKET FUND
The investment objective of the Fund is to seek as high a
level of current income as is considered consistent with the
preservation of capital and liquidity by investing primarily In
money market instruments.
121 of 125
<PAGE> 125
NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST
Neuberger & Berman Advisers Management Trust is an open-ended
diversified management investment company established as a Massachusetts
business trust on December 14, 1983. The distribution of trust shares is
only in connection with certain variable annuity contracts and variable
life insurance policies issued through the insurance company separate
accounts. The investment adviser is Neuberger & Berman Management
Incorporated.
--GROWTH PORTFOLIO
The investment objective of the Fund is capital growth through
investments in common stocks of companies that the investment adviser
believes will have above average earnings or otherwise provide
investors with above average potential for capital appreciation. To
maximize this potential, the investment adviser may also utilize, from
time to time, securities convertible into common stocks, warrants and
options to purchase such stocks.
--LIMITED MATURITY BOND PORTFOLIO
The investment objective of the Fund is to provide the highest
level of current income, consistent with low risk to principal and
liquidity. As a secondary objective, it also seeks to enhance its
total return through capital appreciation when market factors, such as
falling interest rates and rising bond prices, indicate that capital
appreciation may be available without significant risk to principal.
It seeks to achieve its objectives through investments in a
diversified portfolio of limited maturity debt securities.
--PARTNERS PORTFOLIO
The investment objective of the Fund is to seek capital growth
through an investment approach designed to increase capital with
reasonable risk. The Fund uses the value-oriented investment approach
investing primarily in common stocks of established companies. Its
investment program seeks securities believed to be undervalued based
on factors such as low price-to-earnings ratios, consistent cash flow,
and support from asset values.
TCI PORTFOLIOS, INC., A MEMBER OF THE TWENTIETH CENTURY FAMILY OF MUTUAL
FUNDS
TCI Portfolios, Inc. was organized as a Maryland corporation in 1987.
It is a diversified, open-end investment company, designed only to provide
investment vehicles for variable annuity and variable life insurance
products of insurance companies. The investment manager is Investors
Research Corporation which is wholly owned by Twentieth Century Companies,
Inc., and also manages the Twentieth Century family of funds.
-- TCI BALANCED
The investment objective of the Fund is capital growth and
current income. The fund will seek to achieve its objective by
maintaining approximately 60% of the assets of the fund in common
stocks (including securities convertible into common stocks and other
equity equivalents) that are considered by management to have
better-than-average prospects for appreciation and approximately 40%
in fixed income securities. A minimum of 25% of the fixed income
portion of the fund will be invested in fixed income senior
securities. There can be no assurance that the Fund will achieve its
investment objective.
--TCI GROWTH
The investment objective of the Fund is capital growth. The
Fund will seek to achieve its objective by investing primarily in
common stocks (including securities convertible into common stocks and
other equity equivalents) that meet certain fundamental and technical
standards of
122 of 125
<PAGE> 126
selection and, in the opinion of the Fund's management have better
than average potential for appreciation. The Fund tries to stay fully
invested in such stocks, regardless of the movement of stock prices
generally.
The Fund may invest in cash and cash equivalents temporarily
or when it is unable to find common stocks meeting its criteria of
selection. It may purchase securities only of companies that have a
record of at least three years continuous operation. All securities
in the Fund's portfolio are listed on major stock exchanges or traded
over-the-counter.
(Although the Statement of Additional Information concerning
TCI Portfolios, Inc., refers to redemptions of securities in kind
under certain conditions, all surrendering or redeeming Owners will
receive cash from the Company.)
12. The section entitled "Federal Tax Status" in the prospectus is amended by
adding the following paragraphs at the end:
Recent changes to the Code permit the rollover of most distributions
from qualified Plans to other qualified Plans, Individual Retirement
Accounts, or Individual Retirement Annuities. Most distributions from Tax
Sheltered Annuities may be rolled over to other Tax Sheltered Annuities,
Individual Retirement Accounts or Individual Retirement Annuities.
Distributions which may not be rolled over are those which are:
1. one of a series of substantially equal annual (or more
frequent) payments made: a) over the life (or life expectancy) of the
employee, b) the joint lives (or joint life expectancies) of the
employee and the employee's designated beneficiary, or c) for a
specified period of ten years or more, and
2. a required minimum distribution
Any distribution eligible for rollover will be subject to federal tax
withholding at a 20 percent rate unless the distribution is transferred
directly to a Qualified Plan, Individual Retirement Account, or Individual
Retirement Annuity.
You should consult your financial or tax consultant to discuss in
detail your particular tax situation and the use of the Contracts.
123 of 125
<PAGE> 127
ACCOUNTANTS' CONSENT
The Board of Directors
Nationwide Life Insurance Company and
Contract Owners of Nationwide DC Variable Account:
We consent to the use of our reports included herein and to the reference to
our firm under the heading "Services" in the Statement of Additional
Information.
KPMG Peat Marwick LLP
Columbus, Ohio
April 26, 1995
124 of 125
<PAGE> 128
SIGNATURES
As required by the Securities Act of 1933, and the Investment Company
Act of 1940, the Registrant, NATIONWIDE DC VARIABLE ACCOUNT, certifies that it
meets the requirements of Securities Act Rule 485(b) for effectiveness of the
Post-Effective Amendment and has caused this Post-Effective Amendment to be
signed on its behalf in the City of Columbus, and State of Ohio, on this 26th
day of April, 1995.
NATIONWIDE DC VARIABLE ACCOUNT
------------------------------
(Registrant)
NATIONWIDE LIFE INSURANCE COMPANY
---------------------------------
(Depositor)
By /s/ JOSEPH P. RATH
---------------------
Joseph P. Rath,
Vice President and
Associate General Counsel
As required by the Securities Act of 1933, this Post-Effective
Amendment has been signed by the following persons in the capacities indicated
on the 26th day of April, 1995.
<TABLE>
<CAPTION>
Signature Title
<S> <C> <C>
LEWIS J. ALPHIN Director
- --------------------------
Lewis J. Alphin
WILLARD J. ENGEL Director
- --------------------------
Willard J. Engel
FRED C. FINNEY Director
- --------------------------
Fred C. Finney
PETER F. FRENZER President and Chief Operating
- --------------------------
Peter F. Frenzer Officer and Director
CHARLES L. FUELLGRAF, JR. Director
- --------------------------
Charles L. Fuellgraf, Jr.
HENRY S. HOLLOWAY Chairman of the Board
- --------------------------
Henry S. Holloway and Director
D. RICHARD McFERSON Chief Executive Officer By /s/ JOSEPH P. RATH
- -------------------------- ---------------------
D. Richard McFerson and Director Joseph P. Rath
Attorney-in-Fact
DAVID O. MILLER Director
- --------------------------
David O. Miller
C. RAY NOECKER Director
- --------------------------
C. Ray Noecker
ROBERT A. OAKLEY Senior Vice President -
- --------------------------
Robert A. Oakley Chief Financial Officer
JAMES F. PATTERSON Director
- --------------------------
James F. Patterson
ROBERT H. RICKEL Director
- --------------------------
Robert H. Rickel
ARDEN L. SHISLER Director
- --------------------------
Arden L. Shisler
ROBERT L. STEWART Director
- --------------------------
Robert L. Stewart
NANCY C. THOMAS Director
- --------------------------
Nancy C. Thomas
HAROLD W. WEIHL Director
- --------------------------
Harold W. Weihl
</TABLE>
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<PAGE> 129
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned as
directors and/or officers of NATIONWIDE LIFE INSURANCE COMPANY, an Ohio
corporation, which has filed or will file with the Securities and Exchange
Commission under the provisions of the Securities Act of 1933, as amended,
various Registration Statements and amendments thereto for the registration
under said Act of Individual Deferred Variable Annuity Contracts in connection
with the MFS Variable Account, Nationwide Variable Account, Nationwide Variable
Account-II, Nationwide Variable Account-3, Nationwide Variable Account-4,
Nationwide Variable Account-5, Nationwide Variable Account-6, Nationwide
Fidelity Advisor Variable Account and Nationwide Multi-Flex Variable Account;
and the registration of fixed interest rate options subject to a market value
adjustment offered under some or all of the aforementioned Individual Variable
Annuity Contracts in connection with the Nationwide Multiple Maturity Separate
Account; and the registration of Group Flexible Fund Retirement Contracts in
connection with the Nationwide DC Variable Account and the NACo Variable
Account; and the registration of Group Common Stock Variable Annuity Contracts
in connection with Separate Account No.1; and the registration of variable life
insurance policies in connection with the Nationwide VU Separate Account,
Nationwide VU Separate Account-2 and Nationwide VU Separate Account-3 of
Nationwide Life Insurance Company, hereby constitutes and appoints D. Richard
McFerson, Peter F. Frenzer, Gordon E. McCutchan, W. Sidney Druen, and Joseph P.
Rath, and each of them with power to act without the others, his/her attorney,
with full power of substitution and resubstitution, for and in his/her name,
place and stead, in any and all capacities, to approve, and sign such
Registration Statements and any and all amendments thereto, with power to affix
the corporate seal of said corporation thereto and to attest said seal and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby granting unto
said attorneys, and each of them, full power and authority to do and perform
all and every act and thing requisite to all intents and purposes as he/she
might or could do in person, hereby ratifying and confirming that which said
attorneys, or any of them, may lawfully do or cause to be done by virtue
hereof. This instrument may be executed in one or more counterparts.
IN WITNESS WHEREOF, the undersigned have herewith set their names and
seals as of this fifth day of April, 1995.
/s/ Lewis J. Alphin /s/ C. Ray Noecker
- ------------------------------------- --------------------------------------
Lewis J. Alphin, Director C. Ray Noecker, Director
/s/ Willard J. Engel /s/ Robert A. Oakley
- ------------------------------------- --------------------------------------
Willard J. Engel, Director Robert A. Oakley, Senior Vice
President and Chief Financial Officer
/s/ Fred C. Finney
- ------------------------------------- /s/ James F. Patterson
Fred C. Finney, Director --------------------------------------
James F. Patterson, Director
/s/ Peter F. Frenzer
- ------------------------------------- /s/ Robert H. Rickel
Peter F. Frenzer, President/Chief -------------------------------------
Operating Officer and Director Robert H. Rickel, Director
/s/ Charles L. Fuellgraf, Jr. /s/ Arden L. Shisler
- ------------------------------------- --------------------------------------
Charles L. Fuellgraf, Jr., Director Arden L. Shisler, Director
/s/ Henry S. Holloway /s/ Robert L. Stewart
- ------------------------------------- --------------------------------------
Henry S. Holloway, Chairman of the Robert L. Stewart, Director
Board, Director
/s/ Nancy C. Thomas
/s/ D. Richard McFerson --------------------------------------
- ------------------------------------- Nancy C. Thomas, Director
D. Richard McFerson, Chief Executive
Officer and Director /s/ Harold W. Weihl
-------------------------------------
/s/ David O. Miller Harold W. Weihl, Director
- -------------------------------------
David O. Miller, Director
