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[NATIONWIDE LOGO(R)]
NATIONWIDE (R)
VLI SEPARATE
ACCOUNT-3
SEMI-ANNUAL REPORT
TO
CONTRACT OWNERS
JUNE 30, 1995
NATIONWIDE LIFE INSURANCE COMPANY
HOME OFFICE: COLUMBUS, OHIO
APO-2413-F (6/95)
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[NATIONWIDE LOGO(R)]
NATIONWIDE LIFE INSURANCE COMPANY
ONE NATIONWIDE PLAZA, COLUMBUS, OHIO 43216
[PHOTO]
PRESIDENT'S MESSAGE
We are pleased to present the 1995 semi-annual report of the Nationwide VLI
Separate Account-3.
The first half of 1995 proved rewarding for both stock and bond fund investors.
During this period, stock funds as a group scored a gain of almost 17 percent
while bond funds were ahead by over 9 percent, as measured by Lipper Analytical
Services, Inc.
The economy slowed during the second quarter in deference to the Federal
Reserve's goal of a "soft landing". In early July the Fed trimmed the federal
funds rate 25 basis points, the first easing by the Fed in almost three years.
This move provided additional fuel to the markets in the current quarter.
Continued low inflation, favorable corporate earnings and slow but sustainable
economic growth should support further advances in the equity and fixed income
markets for the remainder of the year and into 1996.
We extend our thanks that you have selected our investment products to help you
meet your financial planning and retirement needs.
/s/ Peter F. Frenzer
Peter F. Frenzer, President
Nationwide(R) is a registered federal service mark of Nationwide Mutual
Insurance Company
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<TABLE>
NATIONWIDE VLI SEPARATE ACCOUNT-3
STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY
June 30, 1995
(UNAUDITED)
<CAPTION>
<S> <C>
ASSETS:
Investments at market value:
Nationwide SAT - Capital Appreciation Fund (NWCapApp)
237,061 shares (cost $2,581,009) ....................................... $ 2,823,395
Nationwide SAT - Government Bond Fund (NWGvtBd)
129,038 shares (cost $1,421,401) ....................................... 1,425,865
Nationwide SAT - Money Market Fund (NWMyMkt)
556,777 shares (cost $556,777) ......................................... 556,777
Nationwide SAT - Total Return Fund (NWTotRet)
766,093 shares (cost $7,826,763) ....................................... 8,503,633
Neuberger & Berman Advisers Management Trust - Balanced Portfolio (NBBal)
64,066 shares (cost $956,991) .......................................... 1,051,327
TCI Portfolios, Inc. - TCI Advantage (TCIAdv)
118,161 shares (cost $630,581) ......................................... 700,693
-------------
Total assets ................................................... 15,061,690
ACCOUNTS PAYABLE................................................................ 737
-------------
CONTRACT OWNERS' EQUITY ........................................................ $ 15,060,953
=============
</TABLE>
<TABLE>
<CAPTION> <C> <C> <C>
Contract owners' equity represented by: UNITS UNIT VALUE
------- ----------
Nationwide SAT - Capital Appreciation Fund 224,665 $12.567376 $ 2,823,450
Nationwide SAT - Government Bond Fund 100,592 14.175062 1,425,898
Nationwide SAT - Money Market Fund 48,554 11.447246 555,810
Nationwide SAT - Total Return Fund 517,941 16.418447 8,503,787
Neuberger & Berman Advisers Management
Trust - Balanced Portfolio 78,967 13.313655 1,051,339
TCI Portfolios, Inc. - TCI Advantage 30,372 12.383103 376,100
TCI Portfolios, Inc. - TCI Advantage -
Initial Funding by Depositor (note 1a) 25,000 12.982772 324,569
======= ========= -------------
$ 15,060,953
=============
</TABLE>
See accompanying notes to financial statements.
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<TABLE>
NATIONWIDE VLI SEPARATE ACCOUNT-3
STATEMENTS OF OPERATIONS AND CHANGES IN CONTRACT OWNERS' EQUITY
SIX MONTH PERIODS ENDED JUNE 30, 1995, 1994 AND 1993
(UNAUDITED)
<CAPTION>
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
INVESTMENT ACTIVITY:
Reinvested capital gains and dividends $ 229,606 144,981 30,034
---------- ---------- ----------
Gain (loss) on investments:
Proceeds from redemptions of mutual fund shares 998,011 2,753,473 1,182,543
Cost of mutual fund shares sold (967,008) (2,729,611) (1,175,916)
---------- ---------- ----------
Realized gain on investments 31,003 23,862 6,627
Change in unrealized gain (loss) on investments 1,513,088 (383,089) 33,925
---------- ---------- ----------
Net gain (loss) on investments 1,544,091 (359,227) 40,552
---------- ---------- ----------
Net investment activity 1,773,697 (214,246) 70,586
---------- ---------- ----------
EQUITY TRANSACTIONS:
Purchase payments received from contract owners 1,918,822 4,470,935 1,675,248
Surrenders (note 2d) (106,759) (33,762) (122,501)
Death Benefits (note 4) (10,991) (16,283) _
Policy loans (net of repayments) (note 5) (136,713) (33,177) 5,049
---------- ---------- ----------
Net equity transactions 1,664,359 4,387,713 1,557,796
---------- ---------- ----------
EXPENSES:
Deductions for surrender charges (note 2d) (299) _ (14,618)
Redemptions to pay cost of insurance charges
and administrative charges (notes 2b and 2c) (983,343) (1,151,728) (364,101)
Deductions for asset charges (note 3) (54,574) (34,132) (6,986)
---------- ---------- ----------
Total expenses (1,038,216) (1,185,860) (385,705)
---------- ---------- ----------
NET CHANGE IN CONTRACT OWNERS' EQUITY 2,399,840 2,987,607 1,242,677
CONTRACT OWNERS' EQUITY BEGINNING OF PERIOD 12,661,113 7,313,397 1,536,925
---------- ---------- ----------
CONTRACT OWNERS' EQUITY END OF PERIOD $ 15,060,953 10,301,004 2,779,602
========== ========== ==========
</TABLE>
See accompanying notes to financial statements.
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NATIONWIDE VLI SEPARATE ACCOUNT-3
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1995, 1994 AND 1993
(UNAUDITED)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Organization
The Nationwide VLI Separate Account-3 (the Account) was established
pursuant to a resolution of the Board of Directors of Nationwide Life Insurance
Company (the Company) on August 8, 1984. The Account has been registered as a
unit investment trust under the Investment Company Act of 1940. On August 21,
1991, the Company (Depositor) transferred to the Account 50,000 shares of TCI
Portfolios, Inc.-TCI Advantage, for which it was credited with 25,000
accumulation units. The value of the accumulation units purchased by the
Company on August 21, 1991 was $250,000.
(b) The Contracts
Flexible premium life insurance contracts with a front-end sales load, a
surrender charge and certain other fees have been purchased. See note 2 for a
discussion of policy charges.
Contract owners may invest in the following funds:
Funds of the Nationwide Separate Account Trust (Nationwide SAT) (managed
for a fee by an affiliated investment adviser);
Nationwide SAT - Capital Appreciation Fund (NWCapApp)
Nationwide SAT - Government Bond Fund (NWGvtBd)
Nationwide SAT - Money Market Fund (NWMyMkt)
Nationwide SAT - Total Return Fund (NWTotRet)
Neuberger & Berman Advisers Management Trust - Balanced Portfolio (NBBal)
TCI Portfolios, Inc. - TCI Advantage (TCIAdv)
At June 30, 1995, contract owners have invested in all of the above funds.
The contract owners' equity is affected by the investment results of each fund
and certain policy charges (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
June 30, 1995. The cost of investments sold is determined on a 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 provisions of the Internal Revenue Code.
The Company does not provide for income taxes within the Account. Taxes
are the responsibility of the contract owner upon termination or withdrawal.
(2) POLICY CHARGES
(a) Deductions from Premium
On flexible premium life insurance contracts, the Company deducts a charge
for state premium taxes equal to 2.5% of all premiums received to cover the
payment of these premium taxes. Additionally, the Company deducts a front-end
sales load of up to 3.5% from each premium payment received. The Company may
at its sole discretion reduce this sales loading.
(b) Cost of Insurance
A cost of insurance charge is assessed monthly against each contract. The
amount of the charge is based upon age, sex, rate class and net amount at risk
(death benefit less total contract value).
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(c) Administrative Charges
For flexible premium contracts, the Company currently deducts a monthly
administrative charge of $25 during the first policy year and $5 per month
thereafter (may deduct up to $7.50, maximum) to recover policy maintenance,
accounting, record keeping and other administrative expenses. Additionally, the
Company deducts an increase charge of $2.04 per year per $1,000 applied to any
increase in the specified amount during the first 12 months after the increase
becomes effective.
The above charges are assessed against each contract by liquidating units.
(d) Surrenders
Policy surrenders result in a redemption of the contract value from
the Separate Account and payment of the surrender proceeds to the contract
owner or designee. The surrender proceeds consist of the contract value, less
any outstanding policy loans, and less a surrender charge, if applicable. The
amount of the charge is based upon a specified percentage of the initial
surrender charge which varies by issue age, sex and rate class. For flexible
premium contracts, the charge is 100% of the initial surrender charge in the
first year, declining to 30% of the initial surrender charge in the ninth
year.
No surrender charge is assessed on any contract surrendered after the
ninth year.
The Company may waive the surrender charge for certain contracts in which
the sales expenses normally associated with the distribution of a contract are
not incurred.
(3) ASSET CHARGES
The Company deducts a charge equal to an annual rate of.80%, with certain
exceptions, to cover mortality and expense risk charges related to operations.
This charge is assessed through the unit value calculation.
(4) DEATH BENEFITS
Death benefits result in a redemption of the contract value from the
Separate Account and payment of the death benefit proceeds, less any
outstanding policy loans and policy charges, to the legal beneficiary. The
excess of the death benefit proceeds over the contract value on the date of
death is paid by the Company's general account.
(5) POLICY LOANS (NET OF REPAYMENTS)
Contract provisions allow contract owners to borrow 90% of a policy's cash
surrender value. The contract is charged 6% on the outstanding loan and is due
and payable in advance on the policy anniversary.
At the time the loan is granted, the amount of the loan plus interest, if
any, is transferred from the Account to the Company's general account as
collateral for the outstanding loan. Collateral amounts in the general account
are credited with the stated rate of interest in effect at the time the loan
is made, subject to a guaranteed minimum rate. Interest credited is paid by
the Company's general account to the Account. Loan repayments result in a
transfer of collateral back to the Account.
(6) 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.)
* Asset charges
(This amount reflects the decrease in the unit value due to the
charges discussed in note 3.)
* Ending unit value - June 30
* Percentage increase (decrease) in unit value.
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<TABLE>
NATIONWIDE VLI SEPARATE ACCOUNT-3 Schedule I
SCHEDULES OF CHANGES IN UNIT VALUE
SIX MONTH PERIODS ENDED JUNE 30, 1995, 1994 AND 1993
(UNAUDITED)
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
NWCapApp NWGvtBd NWMyMkt NWTotRet NBBal TCIAdv TCIAdv+
---------- --------- --------- --------- --------- --------- ---------
1995
Beginning unit value - Jan. 1 $11.465403 12.720514 11.176411 14.205723 11.531273 11.321934 11.822996
- ----------------------------------------------------------------------------------------------------------------------------------
Reinvested capital
gains and dividends .110173 .438811 .316243 .219815 .293664 .176395 .184730
- ----------------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) 1.039681 1.069274 .000000 2.053852 1.537987 .931473 .975046
- ----------------------------------------------------------------------------------------------------------------------------------
Asset charges (.047881) (.053537) (.045408) (.060943) (.049269) (.046699) .000000
- ----------------------------------------------------------------------------------------------------------------------------------
Ending unit value - June 30 $12.567376 14.175062 11.447246 16.418447 13.313655 12.383103 12.982772
- ----------------------------------------------------------------------------------------------------------------------------------
Percentage increase
(decrease) in
unit value* 10% 11% 2% 16% 15% 9% 10%
==================================================================================================================================
1994
Beginning unit value - Jan.1 $11.662121 13.250482 10.845265 14.167308 12.027618 11.295721 11.701906
- ----------------------------------------------------------------------------------------------------------------------------------
Reinvested capital
gains and dividends .072792 .396083 .171513 .175370 .469287 .128749 .133775
- ----------------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) (.654655) (.921057) .000000 (.208324) (1.303131) (.304481) (.316874)
- ----------------------------------------------------------------------------------------------------------------------------------
Asset charges (.045583) (.051463) (.043483) (.056410) (.047045) (.045033) .000000
- ----------------------------------------------------------------------------------------------------------------------------------
Ending unit value - June 30 $11.034675 12.674045 10.973295 14.077944 11.146729 11.074956 11.518807
- ----------------------------------------------------------------------------------------------------------------------------------
Percentage increase
(decrease) in
unit value* (5)% (4)% 1% (1)% (7)% (2)% (2)%
==================================================================================================================================
1993
Beginning unit value - Jan. 1 $10.725293 12.196370 10.639809 12.875439 11.389202 10.657984 10.953160
- ----------------------------------------------------------------------------------------------------------------------------------
Reinvested capital
gains and dividends .081943 .387141 .145196 .156513 .175648 .104077 .107273
- ----------------------------------------------------------------------------------------------------------------------------------
Unrealized gain (loss) (.020854) .504522 .000000 .558380 (.069895) .281009 .289584
- ----------------------------------------------------------------------------------------------------------------------------------
Asset charges (.042312) (.050272) (.042642) (.052349) (.044977) (.042757) .000000
- ----------------------------------------------------------------------------------------------------------------------------------
Ending unit value - June 30 $10.744070 13.037761 10.742363 13.537983 11.449978 11.000313 11.350017
- ----------------------------------------------------------------------------------------------------------------------------------
Percentage increase
(decrease) in
unit value* 0% 7% 1% 5% 1% 3% 4%
==================================================================================================================================
* This is not an annualized rate of return as it is the change for a six month period and asset charges do not include the policy
charges discussed in note 2.
+ For Depositor, see note 1a.
</TABLE>
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NATIONWIDE LIFE INSURANCE COMPANY BULK RATE
HOME OFFICE: ONE NATIONWIDE PLAZA * COLUMBUS, OHIO 43215-2220 U.S. POSTAGE
P A I D
COLUMBUS, OHIO
PERMIT NO. 521
