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Registration No. 333-53728
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
PRE-EFFECTIVE AMENDMENT NO. 2
TO
FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF
SECURITIES OF UNIT INVESTMENT TRUSTS REGISTERED ON FORM N-8B-2
----------------------------
NATIONWIDE VLI SEPARATE ACCOUNT-4
(Exact Name of Trust)
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NATIONWIDE LIFE INSURANCE COMPANY
One Nationwide Plaza
Columbus, Ohio 43215
(Exact Name and Address of Depositor and Registrant)
Patricia R. Hatler
Secretary
One Nationwide Plaza
Columbus, Ohio 43215
(Name and address of Agent for Service)
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Approximate date of proposed public offering: (Upon the effective date of this
Registration Statement. July 10, 2001 requested.)
The Registrant hereby agrees to amend this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall therefore become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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CROSS REFERENCE TO ITEMS REQUIRED
BY FORM N-8B-2
N-8B-2 ITEM CAPTION IN PROSPECTUS
1.....................................................................Nationwide Life Insurance Company
The Variable Account
2.....................................................................Nationwide Life Insurance Company
3.....................................................................Custodian of Assets
4.....................................................................Distribution of the Policies
5.....................................................................The Variable Account
6.....................................................................Not Applicable
7.....................................................................Not Applicable
8.....................................................................Not Applicable
9.....................................................................Legal Proceedings
10.....................................................................Information About the Policies; How the Cash Value Varies;
Right to Exchange for a Fixed Benefit Policy; Reinstatement;
Other Policy Provisions
11.....................................................................Investments of the Variable Account
12.....................................................................The Variable Account
13.....................................................................Policy Charges
Reinstatement
14.....................................................................Underwriting and Issuance - Premium Payments, Minimum
Requirements for Issuance of a Policy
15.....................................................................Investments of the Variable Account; Premium Payments
16.....................................................................Underwriting and Issuance - Allocation of Cash Value
17.....................................................................Surrendering the Policy for Cash
18.....................................................................Reinvestment
19.....................................................................Not Applicable
20.....................................................................Not Applicable
21.....................................................................Policy Loans
22.....................................................................Not Applicable
23.....................................................................Not Applicable
24.....................................................................Not Applicable
25.....................................................................Nationwide Life Insurance Company
26.....................................................................Not Applicable
27.....................................................................Nationwide Life Insurance Company
28.....................................................................Company Management
29.....................................................................Company Management
30.....................................................................Not Applicable
31.....................................................................Not Applicable
32.....................................................................Not Applicable
33.....................................................................Not Applicable
34.....................................................................Not Applicable
35.....................................................................Nationwide Life Insurance Company
36.....................................................................Not Applicable
37.....................................................................Not Applicable
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N-8B-2 ITEM CAPTION IN PROSPECTUS
38.....................................................................Distribution of the Policies
39.....................................................................Distribution of the Policies
40.....................................................................Not Applicable
41(a)..................................................................Distribution of the Policies
42.....................................................................Not Applicable
43.....................................................................Not Applicable
44.....................................................................How the Cash Value Varies
45.....................................................................Not Applicable
46.....................................................................How the Cash Value Varies
47.....................................................................Not Applicable
48.....................................................................Custodian of Assets
49.....................................................................Not Applicable
50.....................................................................Not Applicable
51.....................................................................Summary of the Policies;
Information About the Policies
52.....................................................................Substitution of Securities
53.....................................................................Taxation of the Company
54.....................................................................Not Applicable
55.....................................................................Not Applicable
56.....................................................................Not Applicable
57.....................................................................Not Applicable
58.....................................................................Not Applicable
59.....................................................................Financial Statements
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NATIONWIDE LIFE INSURANCE COMPANY
Flexible Premium Variable Universal Life Insurance Policies
Issued by Nationwide Life Insurance Company through its Nationwide VLI
Separate Account-4
The date of this prospectus is July 10, 2001.
This prospectus contains basic information you should know about the policies
before investing. Please read it and keep it for future reference
The following underlying mutual funds are available under the policies:
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC., A MEMBER OF THE AMERICAN CENTURY(SM)
FAMILY OF INVESTMENTS
- American Century VP Income & Growth
- American Century VP International
- American Century VP Value
DREYFUS
- Dreyfus Investment Portfolios - European Equity Portfolio: Initial
Shares
- The Dreyfus Socially Responsible Growth Fund, Inc.: Initial Shares
- Dreyfus Stock Index Fund, Inc.: Initial Shares
- Dreyfus Variable Investment Fund - Appreciation Portfolio: Initial
Shares (formerly, Dreyfus Variable Investment Fund - Capital
Appreciation Portfolio)
FEDERATED INSURANCE SERIES
- Federated Quality Bond Fund II
FIDELITY VARIABLE INSURANCE PRODUCTS FUND
- VIP Equity-Income Portfolio: Service Class
- VIP Growth Portfolio: Service Class
- VIP High Income Portfolio: Service Class*
- VIP Overseas Portfolio: Service Class
FIDELITY VARIABLE INSURANCE PRODUCTS FUND II
- VIP II Contrafund(R) Portfolio: Service Class
FIDELITY VARIABLE INSURANCE PRODUCTS FUND III
- VIP III Growth Opportunities Portfolio: Service Class
JANUS ASPEN SERIES
- Capital Appreciation Portfolio: Service Shares
- Global Technology Portfolio: Service Shares
- International Growth Portfolio: Service Shares
MORGAN STANLEY
THE UNIVERSAL INSTITUTIONAL FUNDS, INC. (FORMERLY, MORGAN STANLEY DEAN WITTER
UNIVERSAL FUNDS, INC.)
- Emerging Markets Debt Portfolio
- Mid Cap Growth Portfolio
- U.S. Real Estate Portfolio
NATIONWIDE SEPARATE ACCOUNT TRUST
- Capital Appreciation Fund
- Dreyfus NSAT Mid Cap Index Fund (formerly, Nationwide(R) Mid Cap Index
Fund) (formerly, Nationwide(R)Select Advisers Mid Cap Fund)
- Federated NSAT Equity Income Fund (formerly, Nationwide(R) Equity
Income Fund)
- Federated NSAT High Income Bond Fund* (formerly, Nationwide(R) High
Income Bond Fund)
- Gartmore NSAT Emerging Markets Fund
- Gartmore NSAT Global Technology and Communications Fund
- Gartmore NSAT International Growth Fund
- Government Bond Fund
- J.P. Morgan NSAT Balanced Fund (formerly, Nationwide(R) Balanced Fund)
- MAS NSAT Multi Sector Bond Fund* (formerly, Nationwide(R) Multi Sector
Bond Fund)
- Money Market Fund
- Nationwide(R) Global 50 Fund (formerly, Nationwide(R) Global Equity
Fund) (subadviser: J.P. Morgan Investment Management Inc.)
- Nationwide(R) Small Cap Growth Fund (formerly, Nationwide(R) Select
Advisers Small Cap Growth Fund) (subadvisers: Miller Anderson &
Sherrerd, LLP, Neuberger Berman, LLC, Waddell & Reed Investment
Management Company)
- Nationwide(R) Small Cap Value Fund (subadviser: The Dreyfus
Corporation)
- Nationwide(R) Small Company Fund (subadvisers: The Dreyfus Corporation,
Neuberger Berman, LLC, Lazard Asset Management, Strong Capital
Management, Inc., and Waddell & Reed Investment Management Company)
- Strong NSAT Mid Cap Growth Fund (formerly, Nationwide(R) Strategic
Growth Fund)-Total Return Fund
- Turner NSAT Growth Focus Fund
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST
- AMT Guardian Portfolio
- AMT Mid-Cap Growth Portfolio
- AMT Partners Portfolio
OPPENHEIMER VARIABLE ACCOUNT FUNDS
- Oppenheimer Aggressive Growth Fund/VA (formerly, Oppenheimer Capital
Appreciation Fund)
- Oppenheimer Capital Appreciation Fund/VA (formerly, Oppenheimer Growth
Fund)
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- Oppenheimer Global Securities Fund/VA
- Oppenheimer Main Street Growth & Income Fund/VA (formerly, Oppenheimer
Growth & Income Fund)
STRONG OPPORTUNITY FUND II, INC.
VAN ECK WORLDWIDE INSURANCE TRUST
- Worldwide Emerging Markets Fund
- Worldwide Hard Assets Fund
*These underlying mutual funds invest in lower quality debt securities commonly
referred to as junk bonds.
For general information or to obtain FREE copies of the:
- prospectus, annual report or semi-annual report for any underlying
mutual fund; and
- any required Nationwide forms,
call: 1-800-547-7548
TDD 1-800-238-3035
or write:
NATIONWIDE LIFE INSURANCE COMPANY
P.O. BOX 182150
COLUMBUS, OHIO 43218-2150
Material incorporated by reference in this prospectus can be found on the SEC
website at:
www.sec.gov
Information about this and other Best of America products can be found on the
world-wide web at:
www.bestofamerica.com
THIS POLICY:
- IS NOT A BANK DEPOSIT
- IS NOT FDIC INSURED
- IS NOT INSURED OR ENDORSED BY A BANK OR ANY FEDERAL GOVERNMENT AGENCY
- IS NOT AVAILABLE IN EVERY STATE
- MAY GO DOWN IN VALUE
The life insurance policies offered by this prospectus are flexible premium
variable universal life insurance policies (flexible premium variable adjustable
life insurance policies in Puerto Rico). They provide flexibility to vary the
amount and frequency of premium payments. A cash surrender value may be offered
if the policy is terminated during the lifetime of the insured.
The purpose of this policy is to provide life insurance protection for the
beneficiary named in the policy. No claim is made that the policy is in any way
similar or comparable to a systematic investment plan of a mutual fund.
The death benefit and cash value of this policy may vary to reflect the
experience of the Nationwide VLI Separate Account-4 (the "variable account") or
the fixed account, depending on how premium payments are invested.
Investors assume certain risks when investing in the policies, including the
risk of losing money.
Nationwide guarantees the death benefit for as long as the policy is in force.
The cash surrender value is not guaranteed. The policy will lapse if the cash
surrender value is insufficient to cover policy charges.
Nationwide guarantees to keep the policy in force so long as minimum premium
requirements have been met.
Benefits described in this prospectus may not be available in every jurisdiction
- - refer to your policy for specific benefit information.
THIS PROSPECTUS IS NOT AN OFFERING IN ANY JURISDICTION WHERE SUCH OFFERING MAY
NOT LAWFULLY BE MADE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC NOR HAS THE
SEC PASSED UPON THE ACCURACY OR ADEQUACY OF THE PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
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GLOSSARY OF SPECIAL TERMS
ATTAINED AGE- The insured's age on the policy date, plus the number of full
years since the policy date.
ACCUMULATION UNIT- An accounting unit of measure used to calculate the cash
value of the variable account.
CASH VALUE- The sum of the value of the assets in the sub-accounts, the fixed
account and any amount in the policy loan account.
FIXED ACCOUNT- An investment option which is funded by the general account of
Nationwide.
GENERAL ACCOUNT- All assets of Nationwide other than those of the variable
account or in other separate accounts that have been or may be established by
Nationwide.
IRS GUIDELINE LEVEL PREMIUM- The amount of level annual premiums required to
provide the requested amount of insurance coverage, calculated in accordance
with the Internal Revenue Code.
MATURITY DATE- The policy anniversary on or next following the insured's 100th
birthday.
MINIMUM REQUIRED DEATH BENEFIT- The lowest death benefit which will qualify the
policy as life insurance under Section 7702 of the Internal Revenue Code.
MONTHLY ANNIVERSARY DATE- The monthly anniversary of the date the policy was
issued.
NATIONWIDE- Nationwide Life Insurance Company.
NET AMOUNT AT RISK- The death benefit minus the cash value. On a monthly
anniversary day, the net amount at risk is the death benefit minus the cash
value prior to subtraction of the base policy cost of insurance charge.
NET INVESTMENT FACTOR- For each sub-account, the net investment factor shows the
investment performance of the underlying mutual fund in which that sub-account
invests for a valuation period.
SPECIFIED AMOUNT- The dollar amount used to determine the policy's death
benefit.
SUB-ACCOUNTS- Divisions of the variable account to which underlying mutual fund
shares are allocated and for which accumulation units are separately maintained.
VALUATION PERIOD- Each day the New York Stock Exchange is open.
VARIABLE ACCOUNT- Nationwide VLI Separate Account-4, a separate account of
Nationwide that contains variable account allocations. The variable account is
divided into sub-accounts, each of which invests in shares of a separate
underlying mutual fund.
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TABLE OF CONTENTS
GLOSSARY OF SPECIAL TERMS.....................................
SUMMARY OF POLICY EXPENSES....................................
UNDERLYING MUTUAL FUND ANNUAL EXPENSES........................
SYNOPSIS OF THE POLICIES......................................
NATIONWIDE LIFE INSURANCE COMPANY.............................
NATIONWIDE INVESTMENT SERVICES CORPORATION....................
INVESTING IN THE POLICY.......................................
The Variable Account and Underlying Mutual Funds
The Fixed Account
INFORMATION ABOUT THE POLICIES................................
Minimum Requirements for Policy Issuance
Premium Payments
Pricing
POLICY CHARGES................................................
Cost of Insurance Charge
Mortality and Expense Risk Charge
Other Expenses Charge
Surrender Charge
Partial Surrender Processing Fee
Income Tax
Reduction of Charges
SURRENDERING THE POLICY FOR CASH..............................
Surrender (Redemption)
Cash Surrender Value
Partial Surrenders
Income Tax Withholding
VARIATION IN CASH VALUE.......................................
POLICY PROVISIONS.............................................
Policy Owner
Beneficiary
Changes in Existing Insurance Coverage
OPERATION OF THE POLICY.......................................
Allocation of Premiums and Cash Value
Transfers
How the Investment Experience is Determined
Net Investment Factor
Determining the Cash Value
RIGHT TO REVOKE...............................................
POLICY LOANS..................................................
Taking a Policy Loan
Effect on Investment Performance
Interest
Effect on Death Benefit and Cash Value
Repayment
ASSIGNMENT....................................................
POLICY OWNER SERVICES.........................................
Dollar Cost Averaging
DEATH BENEFIT INFORMATION.....................................
Calculation of the Death Benefit
Changes in the Death Benefit Option
Proceeds Payable on Death
Incontestability
Error in Age or Sex
Suicide
Maturity Proceeds
EXCHANGE RIGHTS...............................................
GRACE PERIOD..................................................
Reinstatement
TAX MATTERS...................................................
Policy Proceeds
Withholding
Federal Estate and Generation-Skipping
Transfers Taxes
Non-Resident Aliens
Taxation of Nationwide
Tax Changes
LEGAL CONSIDERATIONS..........................................
STATE REGULATION..............................................
REPORTS TO POLICY OWNERS......................................
ADVERTISING...................................................
LEGAL PROCEEDINGS.............................................
EXPERTS.......................................................
REGISTRATION STATEMENT........................................
DISTRIBUTION OF THE POLICIES..................................
ADDITIONAL INFORMATION ABOUT NATIONWIDE.......................
Company Management
APPENDIX A: OBJECTIVES FOR UNDERLYING MUTUAL
FUNDS....................................................
APPENDIX B: ILLUSTRATIONS OF CASH VALUES, CASH
SURRENDER VALUES, AND DEATH BENEFITS.....................
APPENDIX C: PERFORMANCE SUMMARY
INFORMATION..............................................
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SUMMARY OF POLICY EXPENSES
MONTHLY CHARGES
MORTALITY AND EXPENSE RISK CHARGE.....................0.60% of the policy's
variable account assets on each monthly anniversary date
OTHER EXPENSES CHARGE.......................0.60% of the policy's fixed and
variable account assets on each monthly anniversary date
COST OF INSURANCE CHARGE............................varies based on insurability
For each policy, the sum of the Mortality and Expense Risk Charge and Other
Expenses Charge will be at least $20 per month but will not exceed 0.60% of the
policy's fixed account assets on each monthly anniversary date and 1.20% of the
policy's variable account assets on each monthly anniversary date.
OTHER CHARGES
MAXIMUM SURRENDER CHARGE............................................30% of first
year premiums up to the IRS guideline level premium
PARTIAL SURRENDER PROCESSING FEE (PER PARTIAL SURRENDER)..................lesser
of $25 or 2% of the amount surrendered
INTEREST ASSESSED ON LOANED AMOUNTS.........................................3.9%
For more information about any policy charge, see "Policy Charges" in
this prospectus.
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UNDERLYING MUTUAL FUND ANNUAL EXPENSES
(as a percentage of underlying mutual fund net assets, after expense reimbursement)
Management Other 12b-1 Total Underlying
Fees Expenses Fees Mutual Fund
Expenses
American Century Variable Portfolios, Inc. - American Century VP 0.70% 0.00% 0.00% 0.70%
Income & Growth
American Century Variable Portfolios, Inc. - American Century VP 1.23% 0.00% 0.00% 1.23%
International
American Century Variable Portfolios, Inc. - American Century VP 1.00% 0.00% 0.00% 1.00%
Value
Dreyfus Investment Portfolios - European Equity Portfolio: Initial 1.00% 0.25% 0.00% 1.25%
Shares
The Dreyfus Socially Responsible Growth Fund, Inc.: Initial Shares 0.75% 0.03% 0.00% 0.78%
Dreyfus Stock Index Fund, Inc.: Initial Shares 0.25% 0.01% 0.00% 0.26%
Dreyfus Variable Investment Fund - Appreciation Portfolio: Initial 0.75% 0.03% 0.00% 0.78%
Shares (formerly, Capital Appreciation Portfolio)
Federated Insurance Series - Federated Quality Bond Fund II 0.28% 0.42% 0.00% 0.70%
Fidelity VIP Equity-Income Portfolio: Service Class* 0.48% 0.08% 0.10% 0.66%
Fidelity VIP Growth Portfolio: Service Class* 0.57% 0.09% 0.10% 0.76%
Fidelity VIP High Income Portfolio: Service Class 0.58% 0.10% 0.10% 0.78%
Fidelity VIP Overseas Portfolio: Service Class* 0.72% 0.17% 0.10% 0.99%
Fidelity VIP II Contrafund(R) Portfolio: Service Class* 0.57% 0.09% 0.10% 0.76%
Fidelity VIP III Growth Opportunities Portfolio: Service Class* 0.58% 0.11% 0.10% 0.79%
Janus Aspen Series - Capital Appreciation Portfolio: Service Shares 0.65% 0.02% 0.25% 0.92%
Janus Aspen Series - Global Technology Portfolio: Service Shares 0.65% 0.04% 0.25% 0.94%
Janus Aspen Series - International Growth Portfolio: Service Shares 0.65% 0.06% 0.25% 0.96%
NSAT Capital Appreciation Fund 0.60% 0.20% 0.00% 0.80%
NSAT Dreyfus NSAT Mid Cap Index Fund (formerly, Nationwide Mid Cap 0.50% 0.15% 0.00% 0.65%
Index Fund) (formerly, Nationwide Select Advisers Mid Cap Fund)
NSAT Federated NSAT Equity Income Fund (formerly, Nationwide Equity 0.80% 0.15% 0.00% 0.95%
Income Fund)
NSAT Federated NSAT High Income Bond Fund (formerly, Nationwide 0.80% 0.15% 0.00% 0.95%
High Income Bond Fund)
NSAT Gartmore NSAT Emerging Markets Fund 1.15% 0.60% 0.00% 1.75%
NSAT Gartmore NSAT Global Technology and Communications Fund 0.98% 0.37% 0.00% 1.35%
NSAT Gartmore NSAT International Growth Fund 1.00% 0.60% 0.00% 1.60%
NSAT Government Bond Fund 0.50% 0.16% 0.00% 0.66%
NSAT J.P. Morgan NSAT Balanced Fund (formerly, Nationwide Balanced 0.75% 0.15% 0.00% 0.90%
Fund)
NSAT MAS NSAT Multi Sector Bond Fund (formerly, Nationwide Multi 0.75% 0.15% 0.00% 0.90%
Sector Bond Fund)
NSAT Money Market Fund 0.39% 0.16% 0.00% 0.55%
NSAT Nationwide Global 50 Fund (formerly, Nationwide Global Equity 1.00% 0.20% 0.00% 1.20%
Fund)
NSAT Nationwide Small Cap Growth Fund (formerly, Nationwide Select 1.10% 0.20% 0.00% 1.30%
Advisers Small Cap Growth Fund)
NSAT Nationwide Small Cap Value Fund 0.90% 0.15% 0.00% 1.05%
NSAT Nationwide Small Company Fund 0.93% 0.28% 0.00% 1.21%
NSAT Strong NSAT Mid Cap Growth Fund (formerly, Nationwide 0.90% 0.10% 0.00% 1.00%
Strategic Growth Fund)
NSAT Total Return Fund 0.58% 0.20% 0.00% 0.78%
NSAT Turner NSAT Growth Focus Fund 0.90% 0.45% 0.00% 1.35%
Neuberger Berman AMT Guardian Portfolio 0.85% 0.15% 0.00% 1.00%
Neuberger Berman AMT Mid-Cap Growth Portfolio 0.84% 0.14% 0.00% 0.98%
Neuberger Berman AMT Partners Portfolio 0.82% 0.10% 0.00% 0.92%
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UNDERLYING MUTUAL FUND ANNUAL EXPENSES (CONTINUED)
(as a percentage of underlying mutual fund net assets, after expense reimbursement)
Management Other 12b-1 Total Underlying
Fees Expenses Fees Mutual Fund
Expenses
Oppenheimer Variable Account Funds - Oppenheimer Aggressive Growth 0.62% 0.02% 0.00% 0.64%
Fund/VA (formerly, Oppenheimer Capital Appreciation Fund)
Oppenheimer Variable Account Funds - Oppenheimer Capital 0.64% 0.03% 0.00% 0.67%
Appreciation Fund/VA (formerly, Oppenheimer Growth Fund)
Oppenheimer Variable Account Funds - Oppenheimer Global Securities 0.64% 0.04% 0.00% 0.68%
Fund/VA
Oppenheimer Variable Account Funds - Oppenheimer Main Street Growth 0.70% 0.03% 0.00% 0.73%
& Income Fund/VA (formerly, Oppenheimer Growth & Income Fund)
Strong Opportunity Fund II, Inc. 1.00% 0.11% 0.00% 1.11%
The Universal Institutional Funds, Inc. - Emerging Markets Debt 0.59% 0.81% 0.00% 1.40%
Portfolio (formerly, Morgan Stanley Dean Witter Universal Funds -
Emerging Markets Debt Portfolio)
The Universal Institutional Funds, Inc. - Mid Cap Growth Portfolio 0.00% 1.05% 0.00% 1.05%
(formerly, Morgan Stanley Dean Witter Universal Funds - Mid Cap
Growth Portfolio)
The Universal Institutional Funds, Inc. - U.S. Real Estate 0.74% 0.36% 0.00% 1.10%
Portfolio (formerly, Morgan Stanley Dean Witter Universal Funds -
U.S. Real Estate Portfolio)
Van Eck Worldwide Insurance Trust - Worldwide Emerging Markets Fund 1.00% 0.26% 0.00% 1.26%
Van Eck Worldwide Insurance Trust - Worldwide Hard Assets Fund 1.00% 0.14% 0.00% 1.14%
*Actual Annual Class operating expenses were lower because a portion of the
brokerage commissions that the Fund paid was used to reduce the Fund's
expenses, and/or because through arrangements with the Fund's custodian,
credits realized as a result of uninvested cash balances were used to reduce a
portion of the Fund's custodian expenses.
The expenses shown above are deducted by the underlying mutual fund before it
provides Nationwide with the daily net asset value. Nationwide then calculates
the unit value of the corresponding sub-account. The management fees and other
expenses are more fully described in the prospectus for each underlying mutual
fund. Information relating to the underlying mutual funds was provided by the
underlying mutual funds and not independently verified by Nationwide.
Some underlying mutual funds are subject to fee waivers, expense reimbursements
and/or custodial credits. The following chart shows what the expenses would have
been for such funds without fee waivers, expense reimbursements or custodial
credits.
UNDERLYING MUTUAL FUND ANNUAL EXPENSES
(as a percentage of underlying mutual fund net assets, before expense reimbursements and custodial credits)
Management Other 12b-1 Total Underlying
Fees Expenses Fees Mutual Fund
Expenses
Dreyfus Investment Portfolios - European Equity Portfolio: Initial 1.00% 0.60% 0.00% 1.60%
Shares
Federated Insurance Series - Federated Quality Bond Fund II 0.60% 0.67% 0.25% 1.52%
NSAT Capital Appreciation Fund 0.60% 0.23% 0.00% 0.83%
NSAT Dreyfus NSAT Mid Cap Index Fund (formerly, Nationwide Mid Cap 0.50% 0.40% 0.00% 0.90%
Index Fund) (formerly, Nationwide Select Advisers Mid Cap Fund)
NSAT Federated NSAT Equity Income Fund (formerly, Nationwide Equity 0.80% 0.31% 0.00% 1.11%
Income Fund)
NSAT Federated NSAT High Income Bond Fund (formerly, Nationwide High 0.80% 0.32% 0.00% 1.12%
Income Bond Fund)
NSAT Gartmore NSAT Emerging Markets Fund 1.15% 2.94% 0.00% 4.09%
NSAT Gartmore NSAT Global Technology and Communications Fund 0.98% 1.59% 0.00% 2.57%
NSAT Gartmore NSAT International Growth Fund 1.00% 1.88% 0.00% 2.88%
NSAT Government Bond Fund 0.50% 0.23% 0.00% 0.73%
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UNDERLYING MUTUAL FUND ANNUAL EXPENSES (CONTINUED)
(as a percentage of underlying mutual fund net assets, before expense reimbursements and custodial credits)
Management Other 12b-1 Total Underlying
Fees Expenses Fees Mutual Fund
Expenses
NSAT J.P. Morgan NSAT Balanced Fund (formerly, Nationwide Balanced 0.75% 0.32% 0.00% 1.07%
Fund)
NSAT MAS NSAT Multi Sector Bond Fund (formerly, Nationwide Multi 0.75% 0.34% 0.00% 1.09%
Sector Bond Fund)
NSAT Money Market Fund 0.39% 0.22% 0.00% 0.61%
NSAT Nationwide Global 50 Fund (formerly, Nationwide Global Equity 1.00% 0.42% 0.00% 1.42%
Fund)
NSAT Nationwide Small Cap Growth Fund (formerly, Nationwide Select 1.10% 0.50% 0.00% 1.60%
Advisers Small Cap Growth Fund)
NSAT Nationwide Small Cap Value Fund 0.90% 0.30% 0.00% 1.20%
NSAT Strong NSAT Mid Cap Growth Fund (formerly, Nationwide Strategic 0.90% 0.27% 0.00% 1.17%
Value Fund)
NSAT Total Return Fund 0.58% 0.23% 0.00% 0.81%
NSAT Turner NSAT Growth Focus Fund 0.90% 4.13% 0.00% 5.03%
Strong Opportunity Fund II, Inc. 1.00% 0.18% 0.00% 1.18%
The Universal Institutional Funds, Inc. - Emerging Markets Debt 0.80% 0.81% 0.00% 1.61%
Portfolio (formerly, Morgan Stanley Dean Witter Universal Funds -
Emerging Markets Debt Portfolio)
The Universal Institutional Funds, Inc. - Mid Cap Growth Portfolio 0.75% 1.54% 0.00% 2.29%
(formerly, Morgan Stanley Dean Witter Universal Funds - Mid Cap
Growth Portfolio)
The Universal Institutional Funds, Inc. - U.S. Real Estate Portfolio 0.80% 0.36% 0.00% 1.16%
(formerly, Morgan Stanley Dean Witter Universal Funds - U.S. Real
Estate Portfolio)
Van Eck Worldwide Insurance Trust - Worldwide Emerging Markets Fund 1.00% 0.33% 0.00% 1.33%
Van Eck Worldwide Insurance Trust - Worldwide Hard Assets Fund 1.00% 0.16% 0.00% 1.16%
SYNOPSIS OF THE POLICIES
The policy offered by this prospectus provides for life insurance coverage on
the insured. The death benefit and cash value of the policy may increase or
decrease to reflect the performance of the investment options chosen by the
policy owner (see "Death Benefit Information").
CASH SURRENDER VALUE
If the policy is terminated during the insured's lifetime, a cash surrender
value may be payable under the policy. However, there is no guaranteed cash
surrender value (see "Variation in Cash Value "). The policy will lapse without
value if the cash surrender value falls below what is needed to cover policy
charges.
PREMIUMS
The initial premium is shown on the policy data page. Each premium payment must
be at least $50.
Additional premium payments may be made at any time while the policy is in
force, subject to certain restrictions (see "Premium Payments").
TAXATION
The policies described in this prospectus meet the definition of "life
insurance" under Section 7702 of the Internal Revenue Code. Nationwide will
monitor compliance with the tests provided by Section 7702 to insure the
policies continue to receive this favored tax treatment (see "Tax Matters").
NONPARTICIPATING POLICIES
The policies are nonparticipating policies on which no dividends are payable.
The policies do not share in the profits or surplus earnings of Nationwide.
POLICY CANCELLATION
Policy owners may return the policy for any reason within certain time periods
and Nationwide will refund the policy's cash value or the amount required by
law. In New York, Nationwide will refund any premiums paid (see "Right to
Revoke").
NATIONWIDE LIFE INSURANCE COMPANY
Nationwide is a stock life insurance company organized under the laws of the
State of Ohio in March 1929 with its home office at One Nationwide Plaza,
Columbus,
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Ohio 43215. Nationwide is a provider of life insurance, annuities and retirement
products. It is admitted to do business in all states, the District of Columbia
and Puerto Rico.
CUSTODIAN OF ASSETS
Nationwide serves as the custodian of the assets of the variable account.
OTHER CONTRACTS ISSUED BY NATIONWIDE
Nationwide offers variable contracts and policies with benefits that vary in
accordance with the investment experience of a separate account of Nationwide.
NATIONWIDE INVESTMENT SERVICES CORPORATION
The policies are distributed by Nationwide Investment Services Corporation
("NISC" or "Nationwide Investment Svcs. Corporation" for policies issued in the
State of Michigan), Two Nationwide Plaza, Columbus, Ohio 43215. NISC is a wholly
owned subsidiary of Nationwide.
INVESTING IN THE POLICY
THE VARIABLE ACCOUNT AND UNDERLYING MUTUAL FUNDS
Nationwide VLI Separate Account-4 is a separate account that invests in the
underlying mutual funds listed in Appendix A. Nationwide established the
separate account on December 3, 1987 pursuant to Ohio law. Although the separate
account is registered with the SEC as a unit investment trust pursuant to the
Investment Company Act of 1940 ("1940 Act"), the SEC does not supervise the
management of Nationwide or the variable account.
Income, gains and losses credited to, or charged against the variable account
reflect the variable account's own investment experience and not the investment
experience of Nationwide's other assets. The variable account's assets are held
separately from Nationwide's assets and in general are not chargeable with
liabilities incurred in any other business of Nationwide. Nationwide is
obligated to pay all amounts promised to policy owners under the policies.
The variable account is divided into sub-accounts. Policy owners elect to have
premiums allocated among the sub-accounts and the fixed account at the time of
application.
Nationwide uses the assets of each sub-account to buy shares of the underlying
mutual funds based on policy owner instructions. A policy's investment
performance depends upon the performance of the underlying mutual funds chosen
by the policy owner.
Each underlying mutual fund's prospectus contains more detailed information
about that fund. Prospectuses for the underlying mutual funds should be read in
conjunction with this prospectus.
Underlying mutual funds in the variable account are NOT publicly traded mutual
funds. They are only available as investment options in variable life insurance
policies or variable annuity contracts issued by life insurance companies or, in
some cases, through participation in certain qualified pension or retirement
plans.
The investment advisers of the underlying mutual funds may manage publicly
traded mutual funds with similar names and objectives. However the underlying
mutual funds are NOT directly related to any publicly traded mutual fund. Policy
owners should not compare the performance of a publicly traded fund with the
performance of underlying mutual funds participating in the variable account.
The performance of the underlying mutual funds could differ substantially from
that of any publicly traded funds.
Changes of Investment Policy
Nationwide may materially change the investment policy of the variable account.
Nationwide must inform policy owners and obtain all necessary regulatory
approvals. Any change must be submitted to the various state insurance
departments which may disapprove it if deemed detrimental to the interests of
the policy owners or if it renders Nationwide's operations hazardous to the
public. If a policy owner objects, the policy may be converted to a
substantially comparable general account life insurance policy offered by
Nationwide. The policy owner has the later of 60 days (6 months in Pennsylvania)
from the date of the investment policy change or 60 days (6 months in
Pennsylvania) from being informed of the change to make the conversion.
Nationwide will not require evidence of insurability for this conversion.
Upon electing such a policy conversion, Nationwide will transfer the cash value
of the policy (as of the conversion date) to the new policy, which will provide
for an amount of insurance not exceeding the death benefit of the original
policy. The new policy will not be affected by the investment experience of any
separate account.
Voting Rights
Policy owners who have allocated assets to the underlying mutual funds are
entitled to certain voting rights. Nationwide will vote policy owner shares at
special shareholder meetings based on policy owner instructions. However, if the
law changes allowing Nationwide to vote in its own right, it may elect to do so.
Policy owners with voting interests in an underlying mutual fund will be
notified of issues requiring the
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shareholder's vote as soon as possible prior to the shareholder meeting.
Notification will contain proxy materials and a form to return to Nationwide
with voting instructions. Nationwide will vote shares for which no instructions
are received in the same proportion as those that are received.
The number of shares which a policy owner may vote is determined by dividing the
cash value of the amount they have allocated to an underlying mutual fund by the
net asset value of that underlying mutual fund. Nationwide will designate a date
for this determination not more than 90 days before the shareholder meeting.
Material Conflicts
The underlying mutual funds may be offered through separate accounts of other
insurance companies, as well as through other separate accounts of Nationwide.
Nationwide does not anticipate any disadvantages to this. However, it is
possible that a conflict may arise between the interests of the variable account
and one or more of the other separate accounts in which these underlying mutual
funds participate.
Material conflicts may occur due to a change in law affecting the operations of
variable life insurance policies and variable annuity contracts, or differences
in the voting instructions of the contract owners and those of other companies.
If a material conflict occurs, Nationwide will take whatever steps are necessary
to protect policy owners and payees, including withdrawal of the variable
account from participation in the underlying mutual fund(s) involved in the
conflict.
Substitution of Securities
Nationwide may substitute, eliminate and/or combine shares of another underlying
mutual fund for shares already purchased or to be purchased in the future if
either of the following occur:
1) shares of a current underlying mutual fund option are no longer
available for investment; or
2) further investment in an underlying mutual fund option is inappropriate.
No substitution, elimination, and/or combination of shares may take place
without the prior approval of the SEC.
THE FIXED ACCOUNT
The fixed account is an investment option that is funded by assets of
Nationwide's general account. The general account contains all of Nationwide's
assets other than those in this and other Nationwide separate accounts. The
general account is used to support Nationwide's annuity and insurance
obligations and may contain compensation for mortality and expense risks.
Under exemptive and exclusionary provisions, Nationwide's general account has
not been registered under the Securities Act of 1933 and has not been registered
as an investment company under the Investment Company Act of 1940. Accordingly,
neither the general account nor any interest therein is subject to the
provisions of these Acts. Nationwide has been advised that the staff of the SEC
has not reviewed the disclosures in this prospectus relating to the fixed
account. Disclosures regarding the general account may, however, be subject to
certain generally applicable provisions of the federal securities laws
concerning the accuracy and completeness of statements made in prospectuses.
Premium payments will be allocated to the fixed account by election of the
policy owner.
The investment income earned by the fixed account will be allocated to the
policies at varying rate(s) set by Nationwide. The guaranteed rate for any
premium payment will be effective for not less than twelve months. Nationwide
guarantees that the rate will not be less than 3.0% per year.
Any interest in excess of 3.0% will be credited to fixed account allocations at
Nationwide's sole discretion. The policy owner assumes the risk that interest
credited to fixed account allocations may not exceed the minimum guarantee of
3.0% for any given year.
New premium payments deposited to the policy which are allocated to the fixed
account may receive a different rate of interest than amounts transferred from
the sub-accounts to the fixed account and amounts maturing in the fixed account.
INFORMATION ABOUT THE POLICIES
MINIMUM REQUIREMENTS FOR POLICY ISSUANCE
This policy provides life insurance coverage with the flexibility to vary the
amount and frequency of premium payments. Minimum requirements for policy
issuance include:
- the insured must be 80 or younger;
- Nationwide may require satisfactory evidence of insurability (including a
medical exam); and
- a minimum specified amount of $100,000.
PREMIUM PAYMENTS
Each premium payment must be at least $50. The initial premium is payable in
full at Nationwide's home office or to an authorized agent of Nationwide.
Initial premiums allocated to a sub-account on the application are allocated to
the NSAT Money Market Fund during the period in which the policy owner may
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cancel the policy, unless a specific state requires premiums to be allocated to
the fixed account. (In New York, premiums are allocated to either the NSAT Money
Market Fund or the fixed account based on the policy owner's election. If the
policy owner makes no election, premiums are allocated to the NSAT Money Market
Fund.) At the expiration of this period, the premiums are used to purchase
shares of the underlying mutual funds specified by the policy owner at net asset
value for the respective sub-account(s).
Upon payment of the initial premium, temporary insurance may be provided.
Issuance of continuing insurance coverage is dependent upon completion of all
underwriting requirements, payment of the initial premium, and delivery of the
policy while the insured is still living.
Additional premium payments may be made at any time while the policy is in
force, subject to the following conditions:
- Nationwide may require satisfactory evidence of insurability before
accepting any additional premium payment which results in an increase in
the net amount at risk;
- premium payments in excess of the premium limit established by the IRS to
qualify the policy as a contract for life insurance will be refunded; and
- Nationwide may require policy indebtedness be repaid prior to accepting
any additional premium payments.
Additional premium payments or other changes to the policy may jeopardize the
policy's non-modified endowment status. Nationwide will monitor premiums paid
and other policy transactions and will notify the policy owner when non-modified
endowment contract status is in jeopardy.
Nationwide will send scheduled premium payment reminder notices to policy owners
according to the premium mode shown on the policy data page.
PRICING
Premiums will not be used to purchase accumulation units when the New York Stock
Exchange is closed or on the following nationally recognized holidays:
- - New Year's Day - Independence Day
- - Martin Luther King, Jr. Day - Labor Day
- - Presidents' Day - Thanksgiving
- - Good Friday - Christmas
- - Memorial Day
Nationwide will not use premiums to purchase accumulation units if:
1) trading on the New York Stock Exchange is restricted;
2) an emergency exists making disposal or valuation of securities held in
the variable account impracticable; or
3) the SEC, by order, permits a suspension or postponement for the
protection of security holders.
Rules and regulations of the SEC will govern as to when the conditions described
in (2) and (3) exist. If Nationwide is closed on days when the New York Stock
Exchange is open, a policy's cash value may be affected since the policy owner
would not have access to their account.
POLICY CHARGES
COST OF INSURANCE CHARGE
Nationwide deducts a Cost of Insurance Charge from the cash value on a monthly
basis. This charge is determined by multiplying the monthly cost of insurance
rate by the net amount at risk (the death benefit minus the policy's cash
value). This deduction is charged proportionately to the cash value in each
sub-account and the fixed account.
If the policy owner elects to increase the specified amount (the amount used to
calculate the death benefit), the net amount at risk will also increase. In
order for Nationwide to support this increased risk, Nationwide will assess an
additional Cost of Insurance Charge to the increase. However, because
underwriting criteria, such as age and health, may be different at the time of
the specified amount increase than at the time of application, the monthly cost
of insurance rate used to calculate the Cost of Insurance Charge for the
increase may be different than the rate used to calculate the Cost of Insurance
Charge associated with the initial specified amount. More specifically, the cost
of insurance rates used to calculate Cost of Insurance Charges for the initial
specified amount and increases in specified amount will not necessarily be the
same.
Monthly cost of insurance rates will not exceed those guaranteed in the policy.
Guaranteed cost of insurance rates are based on the 1980 Commissioners' Standard
Ordinary Mortality Table, Age Last Birthday (1980 CSO). These mortality tables
are sex distinct. In addition, separate mortality tables will be used for
tobacco and non-tobacco.
MORTALITY AND EXPENSE RISK CHARGE
Nationwide assumes certain risks for guaranteeing the mortality and expense
charges. The mortality risk assumed under the policies is that the insured may
not live as long as expected. The expense risk assumed is that the actual
expenses incurred in issuing and administering the policies may be greater than
expected.
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In addition, Nationwide assumes risks associated with the non-recovery of policy
issue, underwriting and other administrative expenses due to policies that lapse
or are surrendered in the early policy years.
In exchange for assuming the risks described above, Nationwide deducts a
Mortality and Expense Risk Charge from the variable account on a monthly basis.
For each policy, this charge is equal to an annualized rate of 0.60% of the
policy's variable account assets on each monthly anniversary date. Mortality and
Expense Risk Charge deductions will be charged proportionally to the cash value
in each sub-account in which the policy owner invests.
Nationwide may realize a profit from this charge.
OTHER EXPENSES CHARGE
Nationwide deducts an Other Expenses Charge from the cash value on a monthly
basis. For each policy, this charge is equal to an annualized rate of 0.60% of
the policy's variable account and fixed account assets on each monthly
anniversary date. The Other Expenses Charge compensates Nationwide for taxes,
actual administrative expenses and sales expenses.
Tax expenses include premium or other taxes imposed by various state and local
jurisdictions, as well as federal taxes imposed under Section 848 of the
Internal Revenue Code. The amount charged may be more or less than the amount
actually assessed by the state in which a particular policy owner lives.
Administrative expenses include actual expenses related to the maintenance of
the policies including account and record keeping, and periodic reporting to
policy owners.
Sales expenses include actual expenses paid to the broker or agent who is
servicing the policy owner.
Nationwide does not expect to make a profit from this charge.
For each policy, the sum of the Mortality and Expense Risk Charge and Other
Expenses Charge will be at least $20 per month but will not exceed 0.60% of the
policy's fixed account assets on each monthly anniversary date and 1.20% of the
policy's variable account assets on each monthly anniversary date.
SURRENDER CHARGE
A policy owner may surrender the policy and receive the policy's cash surrender
value, which is the policy's cash value, less indebtedness or other deductions.
If the policy owner elects to surrender the entire policy during the first 20
policy years, Nationwide deducts a surrender charge from the policy's cash
value. The charge is deducted proportionally from the cash value in each
sub-account and the fixed account.
The maximum initial surrender charge varies by issue age, sex, specified amount
and underwriting classification. The maximum initial surrender charge will not
exceed the lesser of:
1. 30% of premiums paid during the first year; or
2. 30% of the IRS guideline level premium.
Surrender charges for years 2 through 20 are a percentage of the initial
surrender charge as shown in the following chart:
POLICY YEAR SURRENDER CHARGE POLICY SURRENDER
YEAR CHARGE
1 100% of initial 11 50% of initial
surrender charge surrender
charge
2 95% of initial 12 45% of initial
surrender charge surrender
charge
3 90% of initial 13 40% of initial
surrender charge surrender
charge
4 85% of initial 14 35% of initial
surrender charge surrender
charge
5 80% of initial 15 30% of initial
surrender charge surrender
charge
6 75% of initial 16 25% of initial
surrender charge surrender
charge
7 70% of initial 17 20% of initial
surrender charge surrender
charge
8 65% of initial 18 15% of initial
surrender charge surrender
charge
9 60% of initial 19 10% of initial
surrender charge surrender
charge
10 55% of initial 20 5% of initial
surrender charge surrender
charge
21 and 0% of initial
later surrender
charge
The surrender charge schedule will be fixed at the end of the first policy year
and will remain the same for the life of the policy. The surrender charge
schedule will not vary due to changes in specified amount or cash value.
Surrender charges reimburse Nationwide for certain expenses related to the sale
of the policies, including commissions, costs of sales literature, and other
promotional activity. The surrender charges may be insufficient to recover
certain expenses related to the sale of the policies. Unrecovered expenses are
borne by Nationwide's general assets which may include profits, if any, from
Mortality and Expense Risk Charges. Additional premiums and/or income earned on
assets in the variable account have no effect on these charges.
If, at any time, the policy's cash surrender value is less than the surrender
charge, the grace period will begin. Policy owners will be notified that the
policy has negative cash surrender value and will be given the opportunity pay
premiums to bring the policy out of the grace period (see "Grace Period").
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PARTIAL SURRENDER PROCESSING FEE
Currently, Nationwide does not assess a fee for processing partial surrenders.
However, Nationwide reserves the right to assess a Partial Surrender Processing
Fee equal to the lesser of $25 or 2% of the amount surrendered for each partial
surrender.
INCOME TAX
No charge is assessed to policy owners for income taxes incurred by Nationwide
as a result of the operations of the sub-accounts. However, Nationwide reserves
the right to assess a charge for income taxes against the variable account if
income taxes are incurred.
REDUCTION OF CHARGES
The policy is available for purchase by individuals, corporations and other
groups. Nationwide may reduce or eliminate certain charges (surrender charges,
Administrative Expense Charge, Cost of Insurance Charge, or other charges) where
the size or nature of the group results in savings in sales, underwriting,
administrative or other costs to Nationwide.
Eligibility for reduction in charges and the amount of any reduction is
determined by a number of factors, including:
- the number of insureds;
- the total premium expected to be paid;
- total assets under management for the policy owner;
- the nature of the relationship among individual insureds;
- the purpose for which the policies are being purchased;
- the expected persistency of individual policies; and
- any other circumstances which are rationally related to the expected
reduction in expenses.
The extent and nature of reductions may change from time to time. The charge
structure may vary. Variations are determined in a manner not unfairly
discriminatory to policy owners which reflects differences in costs of services.
SURRENDERING THE POLICY FOR CASH
SURRENDER (REDEMPTION)
A policy owner may surrender a policy for the cash surrender value any time
while the insured is living. The cancellation will be effective as of the date
Nationwide receives the policy accompanied by a signed, written request for
cancellation. In some cases, Nationwide may require additional documentation of
a customary nature.
Nationwide is required by state law to reserve the right to postpone payment of
assets in the fixed account for a period of up to 6 months from the date of
surrender request.
CASH SURRENDER VALUE
The cash surrender value equals the policy's cash value, next computed after the
date Nationwide receives a proper written request for surrender and the policy,
minus any charges, indebtedness or other deductions due on that date, which may
also include a surrender charge.
The cash surrender value increases or decreases daily to reflect the investment
experience of the variable account and the daily crediting of interest in the
fixed account and the policy loan account.
If, at any time, the policy's cash surrender value falls below zero, the grace
period will begin. Policy owners will be notified that the policy has negative
cash surrender value and will be given the opportunity pay premiums to bring the
policy out of the grace period (see "Grace Period").
PARTIAL SURRENDERS
After the policy has been in force for one year, the policy owner may request a
partial surrender. Partial surrenders will be deducted proportionately from the
assets in each sub-account. Amounts will be deducted from the fixed account only
to the extent that there are insufficient assets in the variable account.
When a policy owner takes a partial surrender, Nationwide reduces the policy's
cash value by the amount of the partial surrender.
Additionally, if death benefit Option 1 is in effect, Nationwide will reduce the
specified amount (the amount used to determine the death benefit) in order to
keep the net amount at risk (the death benefit minus the policy's cash value)
constant. In order to preserve the amount of coverage originally purchased,
Nationwide will not process a partial surrender that would cause the total
specified amount to fall below the specified amount indicated on the original
application.
Partial surrenders are permitted if they satisfy the following:
1) the minimum partial surrender is $200;
2) during the first 10 policy years, the sum of all partial surrenders in a
given year may not exceed 10% of the policy's cash surrender value as of
the beginning of that policy year;
3) after the 10th policy year, the maximum partial surrender is limited to
the cash surrender value less the greater of $500 or 3 month's policy
charges;
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4) in order to preserve the amount of coverage initially purchased, a
partial surrender may not cause the total specified amount to be reduced
below the specified amount indicated on the initial application; and
5) after the partial surrender, the policy continues to qualify as life
insurance.
Nationwide reserves the right to limit the number of partial surrenders to one
in each policy year.
Reduction of the Specified Amount
If death benefit Option 1 is in effect and a policy owner takes a partial
surrender, in addition to reducing the cash value by the amount of the partial
surrender, Nationwide will also reduce the specified amount. The reduction to
the specified amount will be made as follows:
1) against the most recent increase in the specified amount;
2) against the next most recent increases in the specified amount in
succession; and
3) against the specified amount under the original application.
Certain partial surrenders may result in currently taxable income and tax
penalties.
Nationwide reserves the right to assess a Partial Surrender Processing Fee equal
to the lesser of $25 or 2% of the amount surrendered for each partial surrender.
INCOME TAX WITHHOLDING
Federal law requires Nationwide to withhold income tax from any portion of
surrender proceeds subject to tax. Nationwide will withhold income tax unless
the policy owner advises Nationwide, in writing, of his or her request not to
withhold. If a policy owner requests that taxes not be withheld, or if the taxes
withheld are insufficient, the policy owner may be liable for payment of an
estimated tax. Policy owners should consult a tax adviser.
In certain employer-sponsored life insurance arrangements, participants may be
required to report for income tax purposes, one or more of the following:
1) the value each year of the life insurance protection provided;
2) an amount equal to any employer-paid premiums; or
3) some or all of the amount by which the current value exceeds the
employer's interest in the policy.
Participants should consult with the sponsor or the administrator of the plan,
and/or with their personal tax or legal adviser, to determine the tax
consequences, if any, of their employer-sponsored life insurance arrangements.
VARIATION IN CASH VALUE
On any date during the policy year, the cash value equals;
1) the cash value on the preceding valuation date, plus
2) any net premium applied since the previous valuation date, minus
3) any partial surrenders, plus or minus
4) any investment results, minus
5) any surrender charge, minus
6) any policy charges.
There is no guaranteed cash value. The cash value will vary with the investment
experience of the variable account and/or the daily crediting of interest in the
fixed account and policy loan account depending on the allocation of cash value
by the policy owner.
POLICY PROVISIONS
POLICY OWNER
While the insured is living, all rights in this policy are vested in the policy
owner named in the application or as subsequently changed, subject to
assignment, if any.
The policy owner may name a contingent policy owner or a new policy owner while
the insured is living. Any change must be in a written form satisfactory to
Nationwide and received at Nationwide's home office. Once received, the change
will be effective when signed. The change will not affect any payment made or
action taken by Nationwide before it was received. Nationwide may require that
the policy be submitted for endorsement before making a change.
If the policy owner is other than the insured, names no contingent policy owner,
and dies before the insured, the policy owner's rights in this policy belong to
the policy owner's estate.
BENEFICIARY
The beneficiary(ies) will be as named in the application or as subsequently
changed, subject to assignment, if any.
The policy owner may name a new beneficiary while the insured is living. Any
change must be in a written form satisfactory to Nationwide and received at
Nationwide's home office. Once received, the change will be effective when
signed. The change will not affect any payment made or action taken by
Nationwide before it was received.
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If any beneficiary predeceases the insured, that beneficiary's interest passes
to any surviving beneficiary(ies), unless otherwise provided. Multiple
beneficiaries will be paid in equal shares, unless otherwise provided. If no
named beneficiary survives the insured, the death proceeds will be paid to the
policy owner or the policy owner's estate.
CHANGES IN EXISTING INSURANCE COVERAGE
The policy owner may request certain changes in the insurance coverage under the
policy. Requests must be in writing and received by Nationwide. No change in
specified amount will take effect unless the cash surrender value after the
change is sufficient to keep the policy in force for at least 3 months.
Specified Amount Increases
After the first policy year, the policy owner may request an increase to the
specified amount. Any increase will be subject to the following conditions:
1) the request must be applied for in writing;
2) satisfactory evidence of insurability must be provided;
3) the increase must be for a minimum of $10,000;
4) the cash surrender value is sufficient to keep the policy in force for at
least 3 months; and
5) the age at the time of increase must satisfy the same age requirements as
new issues.
Any approved increase will have an effective date of the monthly anniversary
date on or next following the date Nationwide approves the supplemental
application. Nationwide reserves the right to limit the number of specified
amount increases to one each policy year.
Specified Amount Decreases
After the first policy year, the policy owner may request a decrease to the
specified amount. Any approved decrease will be effective on the monthly
anniversary date on or next following the date Nationwide receives the request.
Any such decrease shall reduce the insurance in the following order:
1) against insurance provided by the most recent increase;
2) against the next most recent increases successively; and
3) against insurance provided under the original application.
Nationwide reserves the right to limit the number of specified amount decreases
to one each policy year. Nationwide will refuse a request for a decrease which
would:
1) reduce the specified amount below the specified amount indicated on the
initial application; or
2) disqualify the policy as a contract for life insurance.
OPERATION OF THE POLICY
ALLOCATION OF PREMIUMS AND CASH VALUE
Nationwide allocates premium payments to sub-accounts and/or the fixed account,
as instructed by policy owners. All percentage allocations must be in whole
numbers, and must be at least 1%. The sum of allocations must equal 100%. Future
premium allocations may be changed by giving written notice to Nationwide.
Premiums allocated to a sub-account on the application are allocated to the NSAT
Money Market Fund during the period the policy owner may cancel the policy,
unless a specific state requires premiums to be allocated to the fixed account.
(In New York, premiums are allocated to either the NSAT Money Market Fund or the
fixed account based on the policy owner's election. If the policy owner makes no
election, premiums are allocated to the NSAT Money Market Fund.) At the
expiration of this period, the premiums are used to purchase shares of the
underlying mutual funds specified by the policy owner at net asset value for the
respective sub-account(s).
The policy owner may change the allocation of premiums or may transfer cash
value from one sub-account to another. Cash value transferred to the variable
account from the fixed account, or between sub-accounts, will receive the
accumulation unit value next determined after the transfer request is received.
Allocation changes and transfers are subject to the terms and conditions imposed
by each underlying mutual fund and those found in this prospectus. Premiums
allocated to the fixed account at the time of application may not be transferred
from the fixed account prior to the first policy anniversary.
TRANSFERS
Policy owners can transfer allocations without penalty or adjustment subject to
the following conditions:
- Nationwide reserves the right to restrict transfers between the fixed
account and the sub-accounts to one per policy year;
- transfers made to the fixed account may not be made in the first policy
year or within 12 months of a prior transfer;
- Nationwide reserves the right to restrict the amount transferred
from the fixed account to 20% of that portion of the cash value
attributable to the fixed account as of the end of the previous
policy year
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(subject to state restrictions). Policy owners who have entered into Dollar
Cost Averaging agreements with Nationwide may transfer under the terms of
that agreement;
- Nationwide reserves the right to restrict the amount transferred to the
fixed account to 20% of that portion of cash value attributable to the
sub-accounts as of the close of business of the prior valuation period; and
- Nationwide reserves the right to refuse a transfer to the fixed account if
the fixed account value is greater than or equal to 30% of the policy's
cash value.
Transfer Requests
Nationwide will accept transfer requests in writing, over the telephone or via
the internet. See the following table for specific contact information.
Form of Request Contact Information
Written request Nationwide Life Insurance Company
P.O. Box 182150
Columbus, OH 43218-2150
Telephone request 1-800-547-7548
TDD 1-800-238-3035
Internet request www.bestofamerica.com
Transfer requests may be submitted at any time. Requests received by Nationwide
after the close of business of a valuation period will be processed the next
valuation period.
Nationwide will use reasonable procedures to confirm that instructions received
are genuine and will not be liable for following instructions it reasonably
determined to be genuine. Nationwide may withdraw the telephone and/or internet
exchange privilege upon 30 days written notice to policy owners.
Market-Timing Firms
Some policy owners may use market-timing firms or other third parties to make
transfers on their behalf. Generally, in order to take advantage of perceived
market trends, market-timing firms will submit transfer requests on behalf of
multiple policy owners at the same time. Sometimes this can result in unusually
large transfers of funds. These large transfers might interfere with the ability
of Nationwide or the underlying mutual fund to process transactions. This can
potentially disadvantage policy owners not using market-timing firms. To avoid
this, Nationwide may modify the transfer rights of policy owners who use
market-timing firms (or other third parties) to initiate transfers on their
behalf.
The transfer rights of individual policy owners will not be modified in any way
when instructions are submitted directly by the policy owner, or by the policy
owner's representative (as authorized by the execution of a valid Nationwide
Limited Power of Attorney Form).
To protect policy owners, Nationwide may refuse transfer requests:
- submitted by any agent acting under a power of attorney on behalf of more
than one policy owner; or
- submitted on behalf of individual policy owners who have executed
pre-authorized exchange forms which are submitted by market-timing firms
(or other third parties) on behalf of more than one policy owner at the
same time.
Nationwide will not restrict transfer rights unless Nationwide believes it to be
necessary for the protection of all policy owners.
HOW THE INVESTMENT EXPERIENCE IS DETERMINED
The accumulation unit value for a valuation period is determined by multiplying
the accumulation unit value for each sub-account for the immediately preceding
valuation period by the net investment factor for the sub-account for the
subsequent valuation period. Though the number of accumulation units will not
change as a result of investment experience, the value of an accumulation unit
may increase or decrease from valuation period to valuation period.
NET INVESTMENT FACTOR
Nationwide uses the net investment factor as a way to calculate the investment
performance of a sub-account from valuation period to valuation period. For each
sub-account, the net investment factor shows the investment performance of the
underlying mutual fund in which a particular sub-account invests, including the
underlying mutual fund charges assessed against that sub-account for a valuation
period.
The net investment factor for any valuation period is determined by dividing (a)
by (b) where:
a) is the sum of:
1) the net asset value per share of the underlying mutual fund held
in the sub-account as of the end of the current valuation period;
and
2) the per share amount of any dividend or income distributions made
by the underlying mutual fund (if the date of the dividend or
income distribution occurs during the current valuation period).
b) is the net asset value per share of the underlying mutual fund determined
as of the end of the immediately preceding valuation period.
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The net investment factor may be greater or less than one; therefore, the value
of an accumulation unit may increase or decrease.
Currently, Nationwide does not maintain a tax reserve with respect to the
policies since income with respect to the underlying mutual funds is not taxable
to Nationwide or the variable account. Nationwide reserves the right to adjust
the calculation of the net investment factor to reflect a tax reserve should
such income or other items become taxable to Nationwide. 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 mutual fund shares because of the deduction
for Mortality and Expense Risk Charge, and any charge or credit for tax
reserves.
DETERMINING THE CASH VALUE
The cash value is the sum of the value of all variable account accumulation
units attributable to the policy plus amounts credited to the fixed account and
the policy loan account. Nationwide will determine the value of the assets in a
variable account at the end of each valuation day. The cash value will be
determined at least monthly.
The number of accumulation units credited to each sub-account is determined by
dividing the net amount allocated to the sub-account by the accumulation unit
value for the sub-account for the valuation period during which the premium is
received by Nationwide. In the event part or all of the cash value is
surrendered, Nationwide will deduct an appropriate number of accumulation units
from the variable account sub-accounts in the same proportion that the policy
owner's interest in the variable account sub-accounts are allocated. Deductions
will be taken from the fixed account only to the extent that there are
insufficient assets in the sub-accounts.
The cash value in the fixed account and the policy loan account is credited with
interest daily at an effective annual rate which Nationwide periodically
declares. The annual effective rate will never be less than 3%. (For a
description of the annual effective credited rates, see "The Fixed Account" and
"Policy Loans.") Upon request, Nationwide will inform the policy owner of the
then applicable rates for each account.
RIGHT TO REVOKE
A policy owner may cancel the policy by returning it by the latest of:
- - 10 days after receiving the policy;
- - 45 days after signing the application; or
- - 10 days after Nationwide delivers a Notice of Right of Withdrawal.
The policy can be mailed to the registered representative who sold it, or
returned directly to Nationwide. The cancellation will be effective as of the
date the request to cancel is postmarked, or if returned directly to Nationwide,
the date Nationwide receives the returned policy and request to cancel.
Returned policies are deemed void from the beginning. Nationwide will refund the
amount prescribed by the state in which the policy was issued within 7 days
after it receives the policy. (In New York, Nationwide will refund any premiums
paid.) The refunded amount will reflect the policy's investment experience from
the time of issuance to the time of termination, as well as the deduction of any
policy charges, unless a certain state requires another amount to be refunded.
POLICY LOANS
TAKING A POLICY LOAN
The policy owner may request a policy loan at any time using the policy as
security. Policy loans are subject to the following:
- - Nationwide will not grant a loan for an amount less than $200.
- - Each policy loan is limited to 60% of the policy's cash value as of the
date the loan request is processed, minus the first year's surrender
charge.
- - A subsequent loan will not be permitted if such loan would cause the total
aggregate policy indebtedness (the total of all outstanding loans, plus
accrued interest) to exceed a total of 90% of the policy's cash value as of
the date the subsequent loan request is processed, minus the surrender
charge.
- - If, at any time, the policy's cash surrender value (cash value less policy
indebtedness and other charges) falls below zero, the grace period will
begin. Policy owners will be notified that the policy has negative cash
surrender value and will be given the opportunity pay premiums to bring the
policy out of the grace period (see "Grace Period").
Policy indebtedness will be deducted from the death benefit, cash surrender
value upon surrender, or the maturity proceeds.
Any request for a policy loan must be in written form. The request must be
signed. Certain policy loans may result in currently taxable income and tax
penalties.
A policy owner considering the use of policy loans in connection with his or her
retirement income plan should consult his or her personal tax adviser regarding
potential tax consequences that may arise if necessary payments are not made to
keep the policy from lapsing.
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The amount of the payments necessary to prevent the policy from lapsing will
increase with age.
EFFECT ON INVESTMENT PERFORMANCE
When a loan is made, an amount equal to the amount of the loan is transferred
from the variable account to the policy loan account. If the assets relating to
a policy are held in more than one sub-account, withdrawals from the
sub-accounts will be made in proportion to the assets in each sub-account at the
time of the loan. Policy loans will be transferred from the fixed account only
when sufficient amounts are not available in the sub-accounts.
The amount taken out of the variable account will not be affected by the
variable account's investment experience while the loan is outstanding.
INTEREST
The annual effective loan interest rate charged on policy loans is 3.9%.
On a current basis, the cash value in the policy loan account is credited with
an annual effective rate of 3% during policy years 1 through 10 and an annual
effective rate of 3.9% during the 11th and subsequent policy years. Nationwide
may change the current interest crediting rate on the policy loans at any time
at its sole discretion. However, the crediting rate is guaranteed never to be
lower than 3% during policy years 1 through 10 and 3.65% during the 11th and
subsequent policy years.
If it is determined that such loans will be treated, as a result of the
differential between the interest crediting rate and the loan interest rate, as
taxable distributions under any applicable ruling, regulation, or court
decision, Nationwide retains the right to increase the net cost (by decreasing
the interest crediting rate) on all subsequent policy loans to an amount that
would result in the transaction being treated as a loan under federal tax law.
If this amount is not prescribed by such ruling, regulation, or court decision,
the amount will be that which Nationwide considers to be more likely to result
in the transaction being treated as a loan under federal tax law.
Amounts transferred to the policy loan account will earn interest daily from the
date of transfer. The earned interest is transferred from the policy loan
account to the variable account or the fixed account on each policy anniversary,
at the time a new loan is requested, or at the time of loan repayment. It will
be allocated according to the fund allocation factors in effect at the time of
the transfer.
Interest is charged daily and is payable at the end of each policy year or at
the time of loan repayment. Unpaid interest will be added to the existing policy
indebtedness as of the due date and will be charged interest at the same rate as
the rest of the indebtedness.
Whenever the total policy indebtedness exceeds the cash value less any surrender
charges, Nationwide will send a notice to the policy owner and the assignee, if
any. The policy will terminate without value 61 days after the mailing of the
notice unless a sufficient repayment is made during that period. A repayment is
sufficient if it is large enough to reduce the total policy indebtedness to an
amount equal to the total cash value less any surrender charge plus an amount
sufficient to continue the policy in force for 3 months.
EFFECT ON DEATH BENEFIT AND CASH VALUE
A policy loan, whether or not repaid, will have a permanent effect on the death
benefit and cash value because the investment results of the variable account or
the fixed account will apply only to the non-loaned portion of the cash value.
The longer the loan is outstanding, the greater the effect is likely to be.
Depending on the investment results of the variable account or the fixed account
while the loan is outstanding, the effect could be favorable or unfavorable.
REPAYMENT
All or part of the indebtedness may be repaid at any time while the policy is in
force during the insured's lifetime. Any payment intended as a loan repayment,
rather than a premium payment, must be identified as such. Loan repayments will
be credited to the sub-accounts and the fixed account in proportion to the
policy owner's underlying mutual fund allocation factors in effect at the time
of the repayment. Each repayment must be at least $50. Nationwide reserves the
right to require that any loan repayments resulting from policy loans
transferred from the fixed account must be first allocated to the fixed account.
ASSIGNMENT
While the insured is living, the policy owner may assign his or her rights in
the policy. The assignment must be in writing, signed by the policy owner and
received at Nationwide's home office. Assignments will not affect any payments
made or actions taken by Nationwide prior to Nationwide's receipt of the
assignment request. Nationwide is not responsible for any assignment not
submitted, nor is Nationwide responsible for the sufficiency of any assignment.
Assignments are subject to any indebtedness owed to Nationwide before being
recorded.
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POLICY OWNER SERVICES
DOLLAR COST AVERAGING
Dollar Cost Averaging is a long-term transfer program that allows you to make
regular, level investments over time. It involves the automatic transfer of a
specified amount from the fixed account and/or certain sub-accounts into other
sub-accounts. This program is not available in the State of New York. Nationwide
does not guarantee that this program will result in profit or protect policy
owners from loss.
Policy owners direct Nationwide to automatically transfer specified amounts from
the fixed account, Federated Insurance Series - Federated Quality Bond Fund II,
Fidelity VIP High Income Portfolio: Service Class, NSAT Government Bond Fund,
NSAT Federated NSAT High Income Bond Fund (formerly, NSAT Nationwide High Income
Bond Fund), and the NSAT Money Market Fund.
Transfers occur monthly or on another frequency if permitted by Nationwide.
Nationwide will process transfers until either the value in the originating
investment option is exhausted, or the policy owner instructs Nationwide in
writing to stop the transfers.
Transfers from the fixed account must be equal to or less than 1/30th of the
fixed account value at the time the program is requested.
No charge is assessed for using a Dollar Cost Averaging program. Nationwide
reserves the right to stop establishing new Dollar Cost Averaging programs.
DEATH BENEFIT INFORMATION
CALCULATION OF THE DEATH BENEFIT
The policy qualifies as life insurance using the guideline premium/cash value
corridor test of Section 7702 of the Internal Revenue Code.
While the policy is in force, the death benefit will never be less than the
specified amount. The death benefit may vary with the cash value of the policy,
which depends on investment performance.
The policy owner may choose one of two death benefit options.
Option 1. The death benefit will be the greater of the specified amount or
minimum required death benefit. Under Option 1, the amount of the death benefit
will ordinarily not change for several years to reflect the investment
performance and may not change at all. If investment performance is favorable,
the amount of the death benefit may increase. To see how and when investment
performance will begin to affect death benefits, see the illustrations in
Appendix B.
Option 2. The death benefit will be the greater of the specified amount plus the
cash value as of the date of death, or the minimum required death benefit and
will vary directly with the investment performance.
The calculation of the minimum required death benefit is shown on the policy
data page. The minimum required death benefit is the lowest death benefit which
will qualify the policy as life insurance under the guideline premium/cash value
corridor test of Section 7702 of the Internal Revenue Code.
CHANGES IN THE DEATH BENEFIT OPTION
After the first policy year, the policy owner may elect to change the death
benefit option under the policy. Only one change of death benefit option is
permitted per policy year. The effective date of a change will be the monthly
anniversary date following the date the change is approved by Nationwide.
In order for any change in the death benefit option to become effective, the
cash surrender value, after the change, must be sufficient to keep the policy in
force for at least 3 months.
Nationwide will adjust the specified amount so that the net amount at risk
remains constant before and after the death benefit option change. A change in
death benefit option will not be permitted if it results in the total premiums
paid exceeding the then current maximum premium limitations under the guideline
premium/cash value corridor test of Section 7702 of the Internal Revenue Code.
PROCEEDS PAYABLE ON DEATH
The actual death proceeds payable on the insured's death will be the death
benefit as described above, less any policy indebtedness, and less any unpaid
policy charges. Under certain circumstances, the death proceeds may be adjusted
(see "Incontestability," "Error in Age or Sex," and "Suicide").
INCONTESTABILITY
Nationwide will not contest payment of the death proceeds based on the initial
specified amount after the policy has been in force during the insured's
lifetime for 2 years from the policy date. Nationwide will not contest payment
of the death proceeds based on an increase in specified amount requiring
evidence of insurability after it has been in force during the insured's
lifetime for 2 years from its effective date.
ERROR IN AGE OR SEX
If the age or sex of the insured has been misstated, the death benefit and cash
value will be adjusted. The cash value will be adjusted to reflect the cost of
insurance charges on the correct age and sex from the policy date.
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SUICIDE
If the insured dies by suicide, while sane or insane, within 2 years from the
policy date, Nationwide will pay no more than the sum of the premiums paid, less
any indebtedness and less any partial surrenders. If the insured dies by
suicide, while sane or insane, within 2 years from the date Nationwide accepts
an application for an increase in the specified amount, Nationwide will pay no
more than the death benefit associated with the initial specified amount, plus
the Cost of Insurance Charges associated with the increase in specified amount.
MATURITY PROCEEDS
The maturity date is the policy anniversary on or next following the insured's
100th birthday. If the policy is still in force, maturity proceeds are payable
to the policy owner on the maturity date. Maturity proceeds are equal to the
amount of the policy's cash value, less any indebtedness.
EXCHANGE RIGHTS
The policy owner may, at any time during the first 24 months after a policy is
issued, submit a written request to Nationwide for an irrevocable one-time
election to transfer all sub-account cash value to the fixed account. This right
of conversion is subject to state availability.
GRACE PERIOD
If the cash surrender value on a monthly anniversary date is not sufficient to
cover that month's policy charges, a grace period will be allowed for the
payment of a premium. Such premium must equal or exceed 4 times the estimated
monthly charges.
Nationwide will send the policy owner a notice at the start of the grace period,
at the address on the application or another address specified by the policy
owner, stating the amount of premium required. The grace period will end 61 days
after the date the notice is mailed. If sufficient premium is not received by
Nationwide by the end of the grace period, the policy will lapse without value.
If death proceeds become payable during the grace period, Nationwide will pay
the death proceeds.
REINSTATEMENT
If the grace period ends and the policy owner has neither paid the required
premium nor surrendered the policy for its cash surrender value, the policy
owner may reinstate the policy by:
1) submitting a written request at any time within 3 years after the end of
the grace period and prior to the maturity date;
2) providing evidence of insurability satisfactory to Nationwide;
3) paying sufficient premium to cover all policy charges that were due and
unpaid during the grace period;
4) paying sufficient premium to keep the policy in force for 3 months from
the date of reinstatement; and
5) paying or reinstating any indebtedness against the policy which existed
at the end of the grace period.
The effective date of a reinstated policy will be the monthly anniversary date
on or next following the date the application for reinstatement is approved by
Nationwide. If the policy is reinstated, the cash value on the date of
reinstatement, but prior to applying any premiums or loan repayments, will be
set equal to the lesser of:
1) the cash value at the end of the grace period; or
2) the surrender charge for the policy year in which the policy is
reinstated.
Unless otherwise specified, all amounts will be invested according to the
investment instructions in effect at the start of the grace period.
TAX MATTERS
POLICY PROCEEDS
Section 7702 of the Internal Revenue Code provides that if certain tests are
met, a policy will be treated as a life insurance policy for federal tax
purposes. Nationwide will monitor compliance with these tests. The policy should
thus receive the same federal income tax treatment as fixed benefit life
insurance. As a result, the death proceeds payable under a policy are generally
excludable from gross income of the beneficiary under Section 101 of the
Internal Revenue Code. However, if the policy is transferred for valuable
consideration, then a portion of the death proceeds may be includable in the
beneficiary's gross income.
Section 7702A of the Internal Revenue Code defines modified endowment contracts
as those life insurance policies issued or materially changed on or after June
21, 1988 on which the total premiums paid during the first seven years exceed
the amount that would have been paid if the policy provided for paid up benefits
after seven level annual premiums (see "Information about the Policies").
As a general rule, distributions from a life insurance policy (other than a
modified endowment contract) during the life of the insured are treated as the
non-taxable return of premium, to the extent of premiums previously paid. For
this purpose, dividends that are
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used to purchase paid-up additions or to reduce premiums are not treated as
distributions. Aggregate amounts distributed in excess of aggregate premiums
paid are generally treated as taxable ordinary income. A loan from a life
insurance policy that is not a modified endowment contract generally is not
treated as a taxable distribution. However, if the total loan is not repaid and
is forgiven (such as if the life insurance policy lapses or is surrendered),
then the amount of the outstanding loan balance is treated as a distribution to
the policy owner and may be treated as ordinary income in whole or in part.
The Internal Revenue Code provides special rules for the taxation of surrenders,
partial surrenders, loans, collateral assignments and other pre-death
distributions from modified endowment contracts (other than certain
distributions to terminally ill individuals). Under these special rules, such
transactions are taxable to the extent the cash value of the policy exceeds, at
the time of distribution, the premiums paid into the policy. In addition, a 10%
tax penalty generally applies to the taxable portion of such distributions
unless the policy owner is over age 59 1/2 or disabled, or the distribution is
part of a series of substantially equal periodic payments as defined in the
Internal Revenue Code.
Under certain circumstances, certain distributions made under a policy on the
life of a "terminally ill individual," as that term is defined in the Internal
Revenue Code, are treated as death proceeds and are subject to the death benefit
rules of Section 101 of the Internal Revenue Code, described above.
The policies offered by this prospectus may or may not be issued as modified
endowment contracts. If the policy is not issued as a modified endowment
contract, Nationwide will monitor the premium payment and will notify the policy
owner when the policy's non-modified endowment status is in jeopardy. If a
policy is not a modified endowment contract, a cash distribution during the
first 15 years after a policy is issued which causes a reduction in death
benefits may still become fully or partially taxable to the policy owner
pursuant to Section 7702(f)(7) of the Internal Revenue Code. The policy owner
should carefully consider this potential effect and seek further information
before initiating any changes in the terms of the policy. Under certain
conditions, a policy may become a modified endowment, or may become subject to a
new 7 year testing period, as a result of a material change or a reduction in
benefits as defined by Section 7702A(c) of the Internal Revenue Code.
In addition to the tests required under Section 7702, Section 817(h) of the
Internal Revenue Code requires that the investments of separate accounts such as
the variable account be adequately diversified. Regulations under 817(h) provide
that a variable life policy that fails to satisfy the diversification standards
will not be treated as life insurance unless such failure was inadvertent, is
corrected, and the policy owner or the issuer pays an amount to the IRS. The
amount will be based on the tax that would have been paid by the policy owner if
the income, for the period the policy was not diversified, had been received by
the policy owner.
If the failure to diversify is not corrected in this manner, the policy owner
will be deemed to be the owner of the underlying securities and taxed on the
earnings of his or her account.
Representatives of the IRS have suggested, from time to time, that the number of
underlying mutual funds available or the number of transfer opportunities
available under a variable product may be relevant in determining whether the
product qualifies for the desired tax treatment. No formal guidance has been
issued in this area. Should the U.S. Secretary of the Treasury issue additional
rules or regulations limiting the number of underlying mutual funds, transfers
between underlying mutual funds, exchanges of underlying mutual funds or changes
in investment objectives of underlying mutual funds such that the policy would
no longer qualify as life insurance under Section 7702 of the Internal Revenue
Code, Nationwide will take whatever steps are available to remain in compliance.
Nationwide will monitor compliance with these regulations and, to the extent
necessary, will change the objectives or assets of the sub-account investments
to remain in compliance.
A total surrender or cancellation of the policy by lapse or the maturity of the
policy on its maturity date may have adverse tax consequences. If the amount
received by the policy owner plus total policy indebtedness exceeds the premiums
paid into the policy, then the excess generally will be treated as taxable
income, regardless of whether or not the policy is a modified endowment
contract.
WITHHOLDING
Distributions of income from a life insurance policy (including a modified
endowment contract) are subject to federal income tax withholding; however, the
recipient may elect not to have the withholding taken from the distribution. A
distribution of income may be subject to mandatory back-up withholding (which
cannot be waived). The mandatory back-up withholding rate is 31% of the income
that is distributed and will arise of no taxpayer identification number is
provided to Nationwide, or if the IRS notifies Nationwide that back-up
withholding is required.
FEDERAL ESTATE AND GENERATION-SKIPPING TRANSFER TAXES
The federal estate tax is integrated with the federal gift tax under a unified
tax rate schedule. In general, in 2001, an estate of less than $675,000
(inclusive of
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certain pre-death gifts) will not incur a federal estate tax liability. In
addition, an unlimited marital deduction may be available for federal estate tax
purposes, for certain amounts that pass to the surviving spouse.
When the insured dies, the death benefit will generally be included in the
insured's federal gross estate if:
1) the proceeds were payable to or for the benefit of the insured's estate;
or
2) the insured held any "incident of ownership" in the policy at death or at
any time within 3 years of death. An incident of ownership is, in general,
any right that may be exercised by the policy owner, such as the right to
borrow on the policy, or the right to name a new beneficiary.
If the policy owner (whether or not he or she is the insured) transfers
ownership of the policy to another person, such transfer may be subject to a
federal gift tax. In addition, if such policy owner transfers the policy to
someone two or more generations younger than the policy owner, the transfer may
be subject to the federal generation-skipping transfer tax ("GSTT"), the taxable
amount being the value of the policy.
Similarly, if the beneficiary is two or more generations younger than the
insured, the payment of the death proceeds at the death of the insured may be
subject to the GSTT. Pursuant to regulations recently promulgated by the U.S.
Secretary of the Treasury, Nationwide may be required to withhold a portion of
the death proceeds and pay them directly to the IRS as the GSTT liability.
The GSTT provisions generally apply to the same transfers that are subject to
estate or gift taxes.
The tax rate is a flat rate equal to the maximum estate tax rate (currently
55%), and there is a provision for an aggregate $1 million exemption. Due to the
complexity of these rules, the policy owner should consult with counsel and
other competent advisors regarding these taxes.
NON-RESIDENT ALIENS
Pre-death distributions from modified endowment contracts to nonresident aliens
("NRAs") are generally subject to federal income tax and tax withholding, at a
statutory rate of 30% of the amount of income that is distributed. Nationwide is
required to withhold such amount from the distribution and remit it to the IRS.
Distributions to certain NRAs may be subject to lower, or in certain instances
zero, tax and withholding rates, if the United States has entered into an
applicable treaty. However, in order to obtain the benefits of such treaty
provisions, the NRA must give to Nationwide sufficient proof of his or her
residency and citizenship in the form and manner prescribed by the IRS. In
addition, the NRA must obtain an individual taxpayer identification number from
the IRS, and furnish that number to Nationwide prior to the distribution. If
Nationwide does not have the proper proof of citizenship or residency and a
proper individual taxpayer identification number prior to any distribution,
Nationwide will be required to withhold 30% of the income, regardless of any
treaty provision.
A pre-death distribution may not be subject to withholding where the recipient
sufficiently establishes to Nationwide that such payment is effectively
connected to the recipient's conduct of a trade or business in the United States
and that such payment is includable in the recipient's gross income for United
States federal income tax purposes. Any such distributions may be subject to
back-up withholding at the statutory rate (currently 31%) if no taxpayer
identification number, or an incorrect taxpayer identification number, is
provided.
State and local estate, inheritance, income and other tax consequences of
ownership or receipt of policy proceeds depend on the circumstances of each
policy owner or beneficiary.
TAXATION OF NATIONWIDE
Nationwide is taxed as a life insurance company under the Internal Revenue Code.
Since the variable account is not a separate entity from Nationwide and its
operations form a part of Nationwide, it will not be taxed separately as a
"regulated investment company" under Sub-chapter M of the Internal Revenue Code.
Investment income and realized capital gains on the assets of the variable
account are reinvested and taken into account in determining the value of
accumulation units. As a result, such investment income and realized capital
gains are automatically applied to increase reserves under the policies.
Nationwide does not initially expect to incur any federal income tax liability
that would be chargeable to the variable account. Based upon these expectations,
no charge is currently being made against the variable account for federal
income taxes. If, however, Nationwide determines that on a separate company
basis such taxes may be incurred, it reserves the right to assess a charge for
such taxes against the variable account.
Nationwide may also incur state and local taxes (in addition to premium taxes)
in several states. At present, these taxes are not significant. If they
increase, however, charges for such taxes may be made.
TAX CHANGES
The foregoing discussion, which is based on Nationwide's understanding of
federal tax laws as they are currently interpreted by the IRS, is general and is
not intended as tax advice.
The Internal Revenue Code has been subjected to
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numerous amendments and changes, and it is reasonable to believe that it will
continue to be revised. The United States Congress has, in the past, considered
numerous legislative proposals that, if enacted, could change the tax treatment
of the policies. It is reasonable to believe that such proposals, and future
proposals, may be enacted into law. In addition, the U.S. Treasury Department
may amend existing regulations, issue new regulations, or adopt new
interpretations of existing law that may be at variance with its current
positions on these matters. In addition, current state law (which is not
discussed herein), and future amendments to state law, may affect the tax
consequences of the policy.
If the policy owner, insured, or beneficiary or other person receiving any
benefit or interest in or from the policy is not both a resident and citizen of
the United States, there may be a tax imposed by a foreign country, in addition
to any tax imposed by the United States. The foreign law (including regulations,
rulings, and case law) may change and impose additional taxes on the policy, the
death proceeds, or other distributions and/or ownership of the policy, or a
treaty may be amended and all or part of the favorable treatment may be
eliminated.
Any or all of the foregoing may change from time to time without any notice, and
the tax consequences arising out of a policy may be changed retroactively. There
is no way of predicting if, when, or to what extent any such change may take
place. No representation is made as to the likelihood of the continuation of
these current laws, interpretations, and policies.
The foregoing is a general explanation as to certain tax matters pertaining to
insurance policies. It is not intended to be legal or tax advice. You should
consult with your independent legal, tax and/or financial adviser for more
information.
LEGAL CONSIDERATIONS
On July 6, 1983, the U.S. Supreme Court held in Arizona Governing Committee v.
Norris that certain annuity benefits provided by employers' retirement and
fringe benefit programs may not vary between men and women on the basis of sex.
This decision applies only to benefits derived from premiums made on or after
August 1, 1983. The policies offered by this prospectus are based upon actuarial
tables which distinguish between men and women. Thus the policies provide
different benefits to men and women of the same age. Accordingly, employers and
employee organizations should consider, in consultation with legal counsel, the
impact of Norris on any employment related insurance or benefit program before
purchasing this policy.
STATE REGULATION
Nationwide is subject to the laws of Ohio governing insurance companies and to
regulation by the Ohio Insurance Department. An annual statement in a prescribed
form is filed with the Insurance Department each year covering the operation of
Nationwide for the preceding year and its financial condition as of the end of
such year. Regulation by the Insurance Department includes periodic examination
to determine Nationwide's contract liabilities and reserves so that the
Insurance Department may certify the items are correct. Nationwide's books and
accounts are subject to review by the Insurance Department at all times and a
full examination of its operations is conducted periodically by the National
Association of Insurance Commissioners. Such regulation does not, however,
involve any supervision of management or investment practices or policies. In
addition, Nationwide is subject to regulation under the insurance laws of other
jurisdictions in which it may operate.
REPORTS TO POLICY OWNERS
Nationwide will mail to the policy owner at the last known address of record:
- an annual statement containing: the amount of the current death benefit,
cash value, cash surrender value, premiums paid, monthly charges deducted,
amounts invested in the fixed account and the sub-accounts, and policy
indebtedness;
- annual and semi-annual reports containing all applicable information and
financial statements or their equivalent, which must be sent to the
underlying mutual fund beneficial shareholders as required by the rules
under the Investment Company Act of 1940 for the variable account; and
- statements of significant transactions, such as changes in specified
amount, changes in death benefit options, changes in future premium
allocations, transfers among sub-accounts, premium payments, loans, loan
repayments, reinstatement and termination.
ADVERTISING
Nationwide is ranked and rated by independent financial rating services,
including 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
Nationwide. The ratings are not intended to reflect the investment experience or
financial strength of the variable account. Nationwide may advertise these
ratings from time to time. In addition, Nationwide may include in certain
advertisements, endorsements in the
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form of a list of organizations, individuals or other parties which recommend
Nationwide or the policies. Furthermore, Nationwide 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.
LEGAL PROCEEDINGS
Nationwide is a party to litigation and arbitration proceedings in the ordinary
course of its business, none of which is expected to have a material adverse
effect on Nationwide.
In recent years, life insurance companies have been named as defendants in
lawsuits, including class action lawsuits, relating to life insurance and
annuity pricing and sales practices. A number of these lawsuits have resulted in
substantial jury awards or settlements.
On October 29, 1998, Nationwide was named in a lawsuit filed in Ohio state court
related to the sale of deferred annuity products for use as investments in
tax-deferred contributory retirement plans (Mercedes Castillo v. Nationwide
Financial Services, Inc., Nationwide Life Insurance Company and Nationwide Life
and Annuity Insurance Company). On May 3, 1999, the complaint was amended to,
among other things, add Marcus Shore as a second plaintiff. The amended
complaint is brought as a class action on behalf of all persons who purchased
individual deferred annuity contracts or participated in group annuity contracts
sold by Nationwide and the other named Nationwide affiliates which were used to
fund certain tax-deferred retirement plans. The amended complaint seeks
unspecified compensatory and punitive damages. No class has been certified. On
June 11, 1999, Nationwide and the other named defendants filed a motion to
dismiss the amended complaint. On March 8, 2000, the court denied the motion to
dismiss the amended complaint filed by Nationwide and other named defendants.
Nationwide intends to defend this lawsuit vigorously.
There can be no assurance that any litigation relating to pricing or sales
practices will not have a material adverse effect on Nationwide in the future.
The general distributor, NISC, is not engaged in any litigation of any material
nature.
EXPERTS
The financial statements of Nationwide and Nationwide VLI Separate Account-4
have been included herein in reliance upon the reports of KPMG LLP, independent
certified public accountants, appearing elsewhere herein, and upon the authority
of said firm as experts in accounting and auditing.
REGISTRATION STATEMENT
Nationwide has filed a registration statement with the SEC under the Securities
Act of 1933, as amended, for the policies discussed in this prospectus. However,
the prospectus does not contain all the information included in the registration
statement. The registration statement may also contain amendments and exhibits
that are not included in the prospectus. The prospectus is meant to be a summary
and explanation of the policy, which is the legal binding instrument for the
policies. Please refer to the policy for additional information.
DISTRIBUTION OF THE POLICIES
The policies will be sold by licensed insurance agents in those states where the
policies may lawfully be sold. Agents are registered representatives of broker
dealers registered under the Securities Exchange Act of 1934 who are member
firms of the National Association of Securities Dealers, Inc. ("NASD"). The
policies will be distributed by the general distributor, NISC. NISC was
organized as an Oklahoma corporation on March 19, 1974. NISC is a wholly owned
subsidiary of Nationwide and a member of the NASD.
NISC acts as general distributor for the following separate accounts, all of
which are separate investment accounts of Nationwide or its affiliates:
- Nationwide VLI Separate Account-2;
- Nationwide VLI Separate Account-3;
- Nationwide VLI Separate Account-4;
- Nationwide VLI Separate Account-5;
- Nationwide Multi-Flex Variable Account;
- Nationwide Variable Account;
- Nationwide Variable Account-II;
- Nationwide Variable Account-4;
- Nationwide Variable Account-5;
- Nationwide Variable Account-6;
- Nationwide Variable Account-8;
- Nationwide Variable Account-9;
- Nationwide Variable Account-10;
- Nationwide VA Separate Account-A;
- Nationwide VA Separate Account-B;
- Nationwide VA Separate Account-C;
- Nationwide VL Separate Account-A;
- Nationwide VL Separate Account-B;
- Nationwide VL Separate Account-C; and
- Nationwide VL Separate Account-D.
Gross first year commissions paid by Nationwide on the sale of these policies
plus fees for marketing services are not more than 20% of the premiums paid up
to commission target premium, 5% of premium in excess of commission target
premium. Commission target premium is equal to the IRS guideline level premium.
No underwriting commissions have been paid by Nationwide to NISC.
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NISC DIRECTORS AND OFFICERS
- ---------------------------------------------------------------------------------------------------------------------------------
POSITIONS AND OFFICES
NAME AND BUSINESS ADDRESS WITH UNDERWRITER
- ---------------------------------------------------------------------------------------------------------------------------------
W. G. Jurgensen Chief Executive Officer and
One Nationwide Plaza Director
Columbus, OH 43215
- ---------------------------------------------------------------------------------------------------------------------------------
Joseph J. Gasper Chairman of the Board and Director
One Nationwide Plaza
Columbus, OH 43215
- ---------------------------------------------------------------------------------------------------------------------------------
Richard A. Karas Vice Chairman and Director
One Nationwide Plaza
Columbus, OH 43215
- ---------------------------------------------------------------------------------------------------------------------------------
Duane C. Meek President
One Nationwide Plaza
Columbus, OH 43215
- ---------------------------------------------------------------------------------------------------------------------------------
Philip C. Gath Director
One Nationwide Plaza
Columbus, OH 43215
- ---------------------------------------------------------------------------------------------------------------------------------
Susan A. Wolken Director
One Nationwide Plaza
Columbus, OH 43215
- ---------------------------------------------------------------------------------------------------------------------------------
Robert A. Oakley Executive Vice President - Chief Financial Officer
One Nationwide Plaza
Columbus, OH 43215
- ---------------------------------------------------------------------------------------------------------------------------------
Robert J. Woodward, Jr. Executive Vice President - Chief Investment Officer
One Nationwide Plaza
Columbus, OH 43215
- ---------------------------------------------------------------------------------------------------------------------------------
Mark R. Thresher Senior Vice President and Treasurer
One Nationwide Plaza
Columbus, OH 43215
- ---------------------------------------------------------------------------------------------------------------------------------
Barbara J. Shane Vice President - Compliance Officer
Two Nationwide Plaza
Columbus, OH 43215
- ---------------------------------------------------------------------------------------------------------------------------------
Alan A. Todryk Vice President - Taxation
One Nationwide Plaza
Columbus, OH 43215
- ---------------------------------------------------------------------------------------------------------------------------------
John F. Delaloye Assistant Secretary
One Nationwide Plaza
Columbus, OH 43215
- ---------------------------------------------------------------------------------------------------------------------------------
Glenn W. Soden Associate Vice President and Secretary
One Nationwide Plaza
Columbus, OH 43215
- ---------------------------------------------------------------------------------------------------------------------------------
E. Gary Berndt Assistant Treasurer
One Nationwide Plaza
Columbus, OH 43215
- ---------------------------------------------------------------------------------------------------------------------------------
Carol L. Dove Associate Vice President - Treasury Services and Assistant Treasurer
One Nationwide Plaza
Columbus, OH 43215
- ---------------------------------------------------------------------------------------------------------------------------------
Terry C. Smetzer Assistant Treasurer
One Nationwide Plaza
Columbus, OH 43215
- ---------------------------------------------------------------------------------------------------------------------------------
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ADDITIONAL INFORMATION ABOUT NATIONWIDE
The life insurance business, including annuities, is the only business in which
Nationwide is engaged.
Nationwide markets its policies through independent insurance brokers, general
agents, and registered representatives of registered NASD broker/dealer firms.
Nationwide serves as depositor for the following separate investment accounts,
each of which is a registered investment company:
- 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;
- Nationwide Variable Account-8;
- Nationwide Variable Account-9;
- Nationwide Variable Account-10;
- MFS Variable Account;
- Nationwide Multi-Flex Variable Account;
- Nationwide VLI Separate Account;
- Nationwide VLI Separate Account-2;
- Nationwide VLI Separate Account-3;
- Nationwide VLI Separate Account-4; and
- Nationwide VLI Separate Account-5.
Nationwide, in common with other insurance companies, is subject to regulation
and supervision by the regulatory authorities of the states in which it is
licensed to do business. A license from the state insurance department is a
prerequisite to the transaction of insurance business in that state. In general,
all states have statutory administrative powers. Such regulation relates, among
other things, to licensing of insurers and their agents, the approval of policy
forms, the methods of computing reserves, the form and content of statutory
financial statements, the amount of policyholders' and stockholders' dividends,
and the type of distribution of investments permitted.
Nationwide operates in the highly competitive field of life insurance. There are
approximately 2,300 stock, mutual and other types of insurers in the life
insurance business in the United States, and a large number of them compete with
the registrant in the sale of insurance policies.
As is customary in insurance company groups, employees are shared with the other
insurance companies in the group. In addition to its direct salaried employees,
Nationwide shares employees with Nationwide Mutual Insurance Company and
Nationwide Mutual Fire Insurance Company.
Nationwide does not presently own or lease any materially important physical
properties when its property holdings are viewed in relation to its total
assets. Nationwide shares its home office, other facilities and equipment with
Nationwide Mutual Insurance Company.
COMPANY MANAGEMENT
Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance
Company, together with Nationwide Mutual Insurance Company, Nationwide Mutual
Fire Insurance Company, Nationwide Property and Casualty Insurance Company and
Nationwide General Insurance Company and their affiliated companies comprise the
Nationwide group of companies. The companies listed above have substantially
common boards of directors and officers.
Nationwide Financial Services, Inc. ("NFS") is the sole shareholder of
Nationwide. NFS serves as a holding company for other financial institutions.
Nationwide is the sole owner of Nationwide Life and Annuity Insurance Company.
Each of the directors and officers listed below is a director or officer
respectively of at least one or more of the other major insurance affiliates of
the Nationwide group of companies. Messrs. Gasper and Woodward are also trustees
of one or more of the registered investment companies distributed by NISC, a
registered broker-dealer affiliated with the Nationwide group of companies.
DIRECTORS OF NATIONWIDE
- ---------------------------------------- ------------------------ -------------------------------------------------------------
DIRECTORS OF THE DEPOSITOR NAME AND POSITIONS AND OFFICES
PRINCIPAL BUSINESS ADDRESS WITH DEPOSITOR PRINCIPAL OCCUPATION
- ---------------------------------------- ------------------------ -------------------------------------------------------------
Lewis J. Alphin Director Farm Owner and Operator, Bell Farms (1)
519 Bethel Church Road
Mount Olive, NC 28365-6107
- ---------------------------------------- ------------------------ -------------------------------------------------------------
A. I. Bell Director Farm Owner and Operator (1)
4121 North River Road West
Zanesville, OH 43701
- ---------------------------------------- ------------------------ -------------------------------------------------------------
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- -------------------------------------- ------------------------ ------------------------------------------------------------------
DIRECTORS OF THE DEPOSITOR NAME AND POSITIONS AND OFFICES
PRINCIPAL BUSINESS ADDRESS WITH DEPOSITOR PRINCIPAL OCCUPATION
- -------------------------------------- ------------------------ ------------------------------------------------------------------
Yvonne M. Curl Director Vice President, Chief Marketing Officer for Avaya Inc.(2)
Avaya Inc.
Room 3C322
211 Mt. Airy Road
Basing Ridge, NJ 07920
- -------------------------------------- ------------------------ ------------------------------------------------------------------
Kenneth D. Davis Director Farm Owner and Operator (1)
7229 Woodmansee Road
Leesburg, OH 45135
- -------------------------------------- ------------------------ ------------------------------------------------------------------
Keith W. Eckel Director Partner, Fred W. Eckel Sons; President, Eckel Farms, Inc. (1)
1647 Falls Road
Clarks Summit, PA 18411
- -------------------------------------- ------------------------ ------------------------------------------------------------------
Willard J. Engel Director Retired General Manager, Lyon County Co-operative Oil Company (1)
301 East Marshall Street
Marshall, MN 56258
- -------------------------------------- ------------------------ ------------------------------------------------------------------
Fred C. Finney Director Owner and Operator, Moreland Fruit Farm; Operator, Melrose
1558 West Moreland Road Orchard (1)
Wooster, OH 44691
- -------------------------------------- ------------------------ ------------------------------------------------------------------
Joseph J. Gasper President and Chief President and Chief Operating Officer, Nationwide Life Insurance
One Nationwide Plaza Operating Officer and Company and Nationwide Life and Annuity Insurance Company (1)
Columbus, OH 43215 Director
- -------------------------------------- ------------------------ ------------------------------------------------------------------
W.G. Jurgensen Chief Executive Chairman and Chief Executive Officer (3)
One Nationwide Plaza Officer and Director
Columbus, OH 43215
- -------------------------------------- ------------------------ ------------------------------------------------------------------
David O. Miller Chairman of the Board President, Owen Potato Farm, Inc.; Partner, M&M Enterprises (1)
115 Sprague Drive and Director
Hebron, OH 43025
- -------------------------------------- ------------------------ ------------------------------------------------------------------
Ralph M. Paige Director Executive Director Federation of Southern Cooperatives/Land
Federation of Southern Assistance Fund (1)
Cooperatives/Land Assistance Fund
2769 Church Street
East Point, GA 30344
- -------------------------------------- ------------------------ ------------------------------------------------------------------
James F. Patterson Director Vice President, Pattersons, Inc.; President, Patterson Farms,
8765 Mulberry Road Inc. (1)
Chesterland, OH 44026
- -------------------------------------- ------------------------ ------------------------------------------------------------------
Arden L. Shisler Director President and Chief Executive Officer, K&B Transport, Inc. (1)
1356 North Wenger Road
Dalton, OH 44618
- -------------------------------------- ------------------------ ------------------------------------------------------------------
Robert L. Stewart Director Owner and Operator Sunnydale Farms and Mining (1)
88740 Fairview Road
Jewett, OH 43986
- -------------------------------------- ------------------------ ------------------------------------------------------------------
(1) Principal occupation for last 5 years.
(2) Prior to assuming this current position, Ms. Curl held other executive
management positions with the Xerox Corporation.
(3) Prior to assuming this current position, Mr. Jurgensen was Executive
Vice President of Bank One Corporation. Prior to that, Mr. Jurgensen was
Executive Vice President of First Chicago NBD.
Each of the directors is a director of the other major insurance affiliates of
the Nationwide group of companies except Mr. Gasper who is a director only of
Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance
Company. Mr. Gasper is a director of NISC, a registered broker-dealer.
Messrs. Miller, Patterson, and Shisler are directors of Nationwide Financial
Services, Inc. Messrs. Gasper and Woodward are trustees of Nationwide Separate
Account Trust and Nationwide Asset Allocation Trust, registered investment
companies.
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EXECUTIVE OFFICERS OF NATIONWIDE
- -------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE DEPOSITOR
NAME AND PRINCIPAL BUSINESS ADDRESS OFFICES OF THE DEPOSITOR
- -------------------------------------------------------------------------------------------------------------------------------
Richard D. Headley Executive Vice President
One Nationwide Plaza
Columbus, OH 43215
- -------------------------------------------------------------------------------------------------------------------------------
Michael S. Helfer Executive Vice President - Corporate Strategy
One Nationwide Plaza
Columbus, OH 43215
- -------------------------------------------------------------------------------------------------------------------------------
Donna A. James Executive Vice President - Chief Administrative Officer
One Nationwide Plaza
Columbus, OH 43215
- -------------------------------------------------------------------------------------------------------------------------------
Robert A. Oakley Executive Vice President - Chief Financial Officer and Treasurer
One Nationwide Plaza
Columbus, OH 43215
- -------------------------------------------------------------------------------------------------------------------------------
Robert J. Woodward, Jr. Executive Vice President - Chief Investment Officer
One Nationwide Plaza
Columbus, OH 43215
- -------------------------------------------------------------------------------------------------------------------------------
John R. Cook, Jr. Senior Vice President - Chief Communications Officer
One Nationwide Plaza
Columbus, OH 43215
- -------------------------------------------------------------------------------------------------------------------------------
Thomas L. Crumrine Senior Vice President
One Nationwide Plaza
Columbus, OH 43215
- -------------------------------------------------------------------------------------------------------------------------------
David A. Diamond Senior Vice President - Corporate Strategy
One Nationwide Plaza
Columbus, OH 43215
- -------------------------------------------------------------------------------------------------------------------------------
Philip C. Gath Senior Vice President - Chief Actuary - Nationwide Financial
One Nationwide Plaza
Columbus, OH 43215
- -------------------------------------------------------------------------------------------------------------------------------
Patricia R. Hatler Senior Vice President, General Counsel and Secretary
One Nationwide Plaza
Columbus, OH 43215
- -------------------------------------------------------------------------------------------------------------------------------
David K. Hollingsworth Senior Vice President - Business Development and Sponsor Relations
One Nationwide Plaza
Columbus, OH 43215
- -------------------------------------------------------------------------------------------------------------------------------
David R. Jahn Senior Vice President - Product Management
One Nationwide Plaza
Columbus, OH 43215
- -------------------------------------------------------------------------------------------------------------------------------
Richard A. Karas Senior Vice President - Sales - Financial Services
One Nationwide Plaza
Columbus, OH 43215
- -------------------------------------------------------------------------------------------------------------------------------
Gregory S. Lashutka Senior Vice President - Corporate Relations
One Nationwide Plaza
Columbus, OH 43215
- -------------------------------------------------------------------------------------------------------------------------------
Edwin P. McCausland, Jr. Senior Vice President - Fixed Income Securities
One Nationwide Plaza
Columbus, OH 43215
- -------------------------------------------------------------------------------------------------------------------------------
Mark D. Phelan Senior Vice President - Technology and Operations
One Nationwide Plaza
Columbus, OH 43215
- -------------------------------------------------------------------------------------------------------------------------------
Douglas C. Robinette Senior Vice President - Claims
One Nationwide Plaza
Columbus, OH 43215
- -------------------------------------------------------------------------------------------------------------------------------
Mark R. Thresher Senior Vice President - Finance - Nationwide Financial
One Nationwide Plaza
Columbus, OH 43215
- -------------------------------------------------------------------------------------------------------------------------------
Richard M. Waggoner Senior Vice President - Operations
One Nationwide Plaza
Columbus, OH 43215
- -------------------------------------------------------------------------------------------------------------------------------
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- ----------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE DEPOSITOR
NAME AND PRINCIPAL BUSINESS ADDRESS OFFICES OF THE DEPOSITOR
- ----------------------------------------------------------------------------------------------------------------------------------
Susan A. Wolken Senior Vice President - Product Management and Nationwide Financial
One Nationwide Plaza Marketing
Columbus, OH 43215
- ----------------------------------------------------------------------------------------------------------------------------------
W.G. JURGENSEN has been a Director and Chief Executive Officer since 2000.
Previously, he was Executive Vice President of Bank One Corporation from 1998 to
May 2000. Prior to Bank One's merger with First Chicago NBD, Mr. Jurgensen
served from 1990 to 1998 as Executive Vice President with First Chicago, leading
various business units. For 17 years, Mr. Jurgensen was with Norwest
Corporation, beginning as a corporate banking officer and serving in
increasingly responsible roles including president and CEO of Norwest Investment
Services and management of the treasury function. Mr. Jurgensen's final post was
Executive Vice President - Corporate Banking.
JOSEPH J. GASPER has been President and Chief Operating Officer and Director of
Nationwide since April 1996. Previously, he was Executive Vice President -
Property/Casualty Operations of Nationwide Mutual Insurance Company from April
1995 to April 1996. He was Senior Vice President - Property/Casualty Operations
of Nationwide Mutual Insurance Company from September 1993 to April 1995. Prior
to that time, Mr. Gasper held numerous positions within Nationwide. Mr. Gasper
has been with Nationwide for 34 years.
LEWIS J. ALPHIN has been a Director of Nationwide since 1993. Mr. Alphin owns
and operates an 800-acre farm in Mt. Olive, NC. He taught agriculture business
at James Sprunt Community Collegy in Kenansville, NC for more than 22 years
before retiring in 1994. He is the former board chairman of the Cape Fear Farm
Credit Association, a member and former vice president, secretary/treasurer, and
director of the Duplin County Agribusiness Council, and a former board member of
the Southern States Cooperative (1986 to 1993). Mr. Alphin is a member of the
Duplin County Farm Bureau, the North Carolina Farm Bureau, ad the Farm Credit
Council. He is a member and former director of the Oak Wolfe Fire Department.
A. I. BELL has been a Director of Nationwide since April, 1998. Mr. Bell has
served as a state trustee of the Ohio Farm Bureau Federation from 1991 to 1998
and as president that last four years. He oversees the Bell family farm in
Zanesville, Ohio. The farm is the hub of a multi-family swine network, in
addition to grain and beef operations. Mr. Bell has represented the Ohio Farm
Bureau at state and national level activities, and has traveled internationally
representing Ohio agriculture. In 1995, he was introduced into The Ohio State
University Department of Animal Sciences Hall of Fame.
YVONNE M. CURL has been a Director of Nationwide since April 1998. Ms. Curl is
Vice President - Chief Marketing Officer for Avaya Inc. located in Basking
Ridge, NJ. Prior to joining Avaya Inc. in November 2000, she was employed by the
Xerox Corporation. She joined Xerox in 1976 as a sales representative and
progressed through management positions, including vice president - field
operations; executive assistant to te chairman and CEO; and as corporate vice
president serving as senior vice president and general manager, public sector
worldwide/global solutions group.
JOHN R. COOK, JR. has been Senior Vice President - Chief Communications Officer
since May 1997. Previously, Mr. Cook was Senior Vice President - Chief
Communications Officer of USAA from July 1989 to May 1997. Mr. Cook has been
with Nationwide for 3 years.
THOMAS L. CRUMRINE has been Senior Vice President of Nationwide since September
1997. Previously he was Senior Vice President - Property/Casualty from March
1996 to September 1997. Prior to that time, he was Senior Vice President -
Claims from April 1995 to March 1996, Vice President - Claims from 1993 to March
1996, Vice President - Agency Sales from 1991 to 1993 and Vice President -
Agency Services from 1989 to 1991. Prior to 1989 Mr. Crumrine held several
positions with Nationwide.
KENNETH D. DAVIS has been a Director of Nationwide since April 1999. Mr. Davis
is the immediate past president of the Ohio Farm Bureau Federation. He served as
a member of the Ohio Farm Bureau Federation's board of trustees from 1989 until
1999. He served as first vice president of the board from 1994 until 1998. Mr.
Davis serves on the board of directors of his local rural electric cooperatives
and is a member of many agriculture organizations including the Ohio Corn
Growers, Ohio Cattlemen's and Ohio Soybean associations.
DAVID A. DIAMOND has been Senior Vice President - Corporate Strategy since
December 11, 2000. Previously, Mr. Diamond was Senior Vice President - Corporate
Controller from August 1999 to December 2000. He was Vice President - Controller
from October 1993 to August 1999. Prior to that time, Mr. Diamond held several
positions within Nationwide. Mr. Diamond has been with Nationwide for 12 years.
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KEITH W. ECKEL has been a Director of Nationwide since April 1996. Mr. Eckel is
a partner of Fred W. Eckel Sons and president of Eckel Farms, Inc. in northeast
Pennsylvania. He received the Master Farmer award from Penn State University in
1982. Mr. Eckel is a member of the Pennsylvania Agricultural Land Preservation
Board. He is a former president of the Pennsylvania Farm Bureau, a position he
held for 15 years, and the Lackawanna County Cooperative Extension Association.
He has served as a board member and executive committee member of the American
Farm Bureau Federation. He is a former vice president of the Pennsylvania
Council of Cooperative Extension Associations and former board member of the
Pennsylvania Vegetable Growers Association.
WILLARD J. ENGEL has been a Director of Nationwide since 1994. Mr. Engel served
as general manager of Lyon County Co-Operative Oil Co. in Marshall, MN from 1975
to 1997, and occasionally serves on a consulting basis. He previously was a
division manager of the Truman Farmers Elevator. He is a former director of the
Western Co-op Transport in Montevideo, MN, a former director and legislative
committee chairman of the Northwest Petroleum Association in St. Paul, and a
former director of Farmland Industries in Kansas City.
FRED C. FINNEY has been a Director of Nationwide since 1992. Mr. Finney is the
owner and operator of the Moreland Fruit Farm and operator of Melrose Orchard in
Wooster, OH. He is past president of the Ohio Farm Bureau Federation, the Ohio
Fruit Growers Society, Wayne County Farm Bureau, and the Westwood Ruritan Club.
He is a member of the American Berry Cooperative.
PHILIP C. GATH has been Senior Vice President - Chief Actuary - Nationwide
Financial since May 1998. Previously, Mr. Gath was Vice President - Product
Manager - Individual Variable Annuity from July 1997 to May 1998. Mr. Gath was
Vice President - Individual Life Actuary from August 1989 to July 1997. Prior to
that time, Mr. Gath held several positions within Nationwide. Mr. Gath has been
with Nationwide for 32 years.
PATRICIA R. HATLER has been Senior Vice President, General Counsel and Secretary
since April 2000. Previously, she was Senior Vice President and General Counsel
from July 1999 to April 2000. Prior to that time, she was General Counsel and
Corporate Secretary of Independence Blue Cross from 1983 to July 1999.
RICHARD D. HEADLEY has been Executive Vice President for Nationwide since July
2000. Previously, he was Executive Vice President - Chief Information Technology
Officer from May 1999 to July 2000. He was Senior Vice President - Chief
Information Technology Officer from October 1997 to May 1999. Previously, Mr.
Headly was Chairman and Chief Executive Officer of Banc One Services Corporation
from 1992 to Octover 1997. From January 1975 until 1992, Mr. Headley held
several positions with Banc One Corporation. Mr. Headley has been with
Nationwide for 3 years.
MICHAEL S. HELFER has been Executive Vice President - Corporate Strategy since
August 2000. He is a former partner and head of the financial institutions group
at Wilmer, Cutler and Pickering, a 350-lawyer international law firm
headquartered in Washington, D.C. He served as that firm's Chairman and Chief
Executive Officer from 1995 to 1998.
DAVID K. HOLLINGSWORTH has been Senior Vice President - Business Development and
Sponsor Relations since April 2000. Previouly, he was Senior Vice President -
Multi Channel and Sponsor relations from August 1999 until April 2000.
Previously, he was Senior Vice President - Marketing from June 1999 to August
1999. Prior to that time, Mr. Hollingsworth held numerous positions within
Nationwide. Mr. Hollingsworth has been with Nationwide for 26 years.
DAVID R. JAHN has been Senior Vice President - Product Management since November
2000. Previously, he was Senior Vice President - Commercial Insurance from March
1998 to November 2000. Previously, he was Vice President - Property/Casualty
Operations and Vice President - Resource Management from March 1996 to January
1998. Prior to that time, Mr. Jahn has held numerous positions within
Nationwide. Mr. Jahn has been with Nationwide for 29 years.
DONNA A. JAMES has been Executive Vice President - Chief Administrative Officer
since July 2000. Previously, she was Senior Vice President - Chief Human
Resources Officer from May 1999 to July 2000. She was Senior Vice President -
Human Resources from December 1997 to May 1999. Previously, she was Vice
President - Human Resources from July 1996 to December 1997. Prior to that time,
Ms. James was Vice President - Assistant to the CEO of Nationwide from March
1996 to July 1996. From May 1994 to March 1996, she was Associate Vice President
- - Assistant to the CEO of Nationwide. Previously, Ms. James held several
positions within Nationwide. Ms. James has been with Nationwide for 19 years.
RICHARD A. KARAS has been Senior Vice President - Sales - Financial Services
since March 1993. Previously, he was Vice President - Sales - Financial Services
from February 1989 to March 1993. Prior to that time, Mr. Karas held several
positions within Nationwide. Mr. Karas has been with Nationwide for 36 years.
GREGORY S. LASHUTKA has been Senior Vice President - Corporate Relations since
January 2000. Previously, he
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was the Mayor of the City of Columbus (Ohio) from January 1992 to December 1999.
From January 1986 to December 1991, Mr. Lashutka was a Partner with Squire,
Sanders & Dempsey. From January 1978 to December 1985, he was City Attorney for
the City of Columbus (Ohio).
EDWIN P. MCCAUSLAND, JR. has been Senior Vice President - Fixed Income
Securities since 1999. Mr. McCausland has 29 years of experience in insurance
investments beginning his career in 1970 with Connecticut Mutual Life Insurance
Company. He joined Phoenix Mutual Life Insurance Company in 1981 as second Vice
President of Bond Investments and rising to Vice President of Pension
Operations. He was Vice President and Managing Director of Mass Mutual Life
Insurance Company prior to joining Nationwide.
DAVID O. MILLER has been a Director of Nationwide since November 1996. Mr.
Miller has been Chairman of the Board since 1998. Mr. Miller is president of
Owen Potato Farm, Inc. and a partner of M&M Enterprises in Licking County, OH.
He is a director and board chairman of the National Cooperative Business
Association, director of Cooperative Business International and the
International Cooperative Alliance, and serves on the educational executive
committee of the National Council of Farmer Cooperatives. He was president of
the Ohio Farm Bureau Federation from 1981 to 1985 and was vice president for six
years. Mr. Miller served a two year term on the board of the American Farm
Bureau Association. He is past president of the Ohio Vegetable and Potato
Growers Association, and was a director of Landmark, Inc., a farm supply
cooperative which is now part of Indianapolis-based Countrymark.
ROBERT A. OAKLEY has been Executive Vice President - Chief Financial Officer and
Treasurer since December 2000. Previously, Mr. Oakley was Executive Vice
President - Chief Financial Officer from April 1995 to December 2000. Prior to
that, Mr. Oakley was Senior Vice President - Chief Financial Officer from
October 1993 to April 1995. Prior to that time, Mr. Oakley held several
positions within Nationwide. Mr. Oakley has been with Nationwide for 25 years.
RALPH M. PAIGE has been a Director of Nationwide since April 1999. Mr. Paige has
been the Executive Director of the Federation of Southern Cooperatives/Land
Assistance Fund since 1969. Mr. Paige also served as the National Field
Director/Georgia State Director from 1981 to 1984.
JAMES F. PATTERSON has been a Director of Nationwide since April 1989. Mr.
Patterson is president of Patterson Farms, Inc. and has operated Patterson Fruit
Farm in Chesterland, OH since 1964. Mr. Patterson is on the boards of The Ohio
State University Hospitals Health System in Cleveland, Geauga Hospital, Inc. and
the National Cooperative Business Association. He is past president of the Ohio
Farm Bureau Federation and former member of Cleveland Foundation's Lake and
Geauga Advisory Committees.
MARK D. PHELAN has been Senior Vice President - Technology and Operations since
December 2000. Previously, he was Senior Vice President - Technology Services
from 1998 to December 2000. His previous management experience includes five
years (1977 - 1982) with the data processing division's sales group at IBM
Corporation. From 1982 through 1990, Mr. Phelan served as Director of AT&T's
Consumer Communications Services Group and he was subsequently promoted to Sales
Vice President for the Eastern Region of the Business Communications Services
Division. In 1992, he became Executive Vice President - Sales and Marketing for
the Electronic Commerce Division of Checkfree Corporation, a position he held
for five years. From 1997 until 1998, he was in private consulting.
DOUGLAS C. ROBINETTE has been Senior Vice President - Claims since November
2000. Previously he was Senior Vice President - Claims and Financial Services
from 1999 to November 2000. Prior to that time, Mr. Robinette was Senior Vice
President - Marketing and Product Management from May 1998 to 1999. Mr.
Robinette was Executive Vice President, Customer Services of Employers Insurance
of Wausau, a member of the Nationwide group until 1998, from September 1996 to
May 1998. Prior to that time, he was Executive Vice President, Finance and
Insurance Services of Wausau from May 1995 to September 1996. From November 1994
to May 1995, Mr. Robinette was Senior Vice President, Finance and Insurance
Services of Wausau. From May 1993 to November 1994, he was Senior Vice
President, Finance of Wausau. Prior to that time, Mr. Robinette held several
positions within the Nationwide group. Mr. Robinette has been with Nationwide
for 14 years.
ARDEN L. SHISLER has been a Director of Nationwide since 1984. Mr. Shisler is
president and chief executive officer of K&B Transport, Inc., a trucking firm in
Dalton, OH. He is a director of the National Cooperative Business Association in
Washington, DC. He is a former board member and vice president of the Ohio Farm
Bureau Federation and past president of the Ohio Agricultural Marketing
Association, an Ohio Farm Bureau Federation subsidiary. He is a member of the
Ohio Trucking Association, the Ohio Trucking Safety Council, the Wayne County
Farm Bureau, Cornerstone Community Church, the Advisory Committee of The Ohio
State University Agriculture Technical Institute and a board member of the
Wilderness Center.
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ROBERT L. STEWART has been a Director of Nationwide since 1989. Mr. Stewart is
the owner and operator of Sunnydale Farms and Mining in Jewett, OH. He served on
the board of the Ohio Farm Bureau Federation and as president of the Ohio
Holstein Association board. Mr. Stewart was a director of the Ohio Agricultural
Stabilization and Conservation Service board and Landmark, Inc. a farm supply
cooperative which is now part of Indianapolis-based Countrymark.
MARK R. THRESHER has been Senior Vice President - Finance - Nationwide Financial
since May 1999. He was Vice President - Controller from August 1996 to May 1999.
He was Vice President and Treasurer from November 1996 to February 1997.
Previously, he was Vice President and Treasurer from June 1996 to November 1996.
Prior to joining Nationwide, Mr. Thresher served as a partner with KPMG LLP from
July 1988 to June 1996.
RICHARD M. WAGGONER has been Senior Vice President - Operations since May 1999.
Previously, he was President of Nationwide Services from May 1997 to May 1999.
Prior to that time, Mr. Waggoner has held numerous positions within the
Nationwide group of companies. Mr. Waggoner has been with Nationwide for 24
years.
SUSAN A. WOLKEN has been Senior Vice President - Product Management and
Nationwide Financial Marketing since May 1999. Previously, Ms. Wolken was Senior
Vice President - Life Company Operations from June 1997 to May 1999. She was
Senior Vice President - Enterprise Administration from July 1996 to June 1997.
Prior to that time, she was Senior Vice President - Human Resources from April
1995 to July 1996. From September 1993 to April 1995, Ms. Wolken was Vice
President - Human Resources. From October 1989 to September 1993 she was Vice
President - Individual Life and Health Operations. Ms. Wolken has been with
Nationwide for 26 years.
ROBERT J. WOODWARD, JR. has been Executive Vice President - Chief Investment
Officer since August 1995. Previously, he was Senior Vice President - Fixed
Income Investments from March 1991 to August 1995. Prior to that time, Mr.
Woodward held several positions within Nationwide. Mr. Woodward has been with
Nationwide for 36 years.
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APPENDIX A: OBJECTIVES FOR UNDERLYING MUTUAL FUNDS
The underlying mutual funds listed below are designed primarily as investment
vehicles for variable annuity contracts and variable life insurance policies
issued by insurance companies.
There is no guarantee that the investment objectives will be met.
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC., A MEMBER OF THE AMERICAN CENTURY(SM)
FAMILY OF INVESTMENTS.
American Century Variable Portfolios, Inc. was organized as a Maryland
corporation in 1987. It is a diversified, open-end investment management company
which offers its shares only as investment vehicles for variable annuity and
variable life insurance products of insurance companies. American Century
Variable Portfolios, Inc. is managed by American Century Investment Management,
Inc.
AMERICAN CENTURY VP INCOME & GROWTH
Investment Objective: Dividend growth, current income and capital
appreciation. The Fund seeks to achieve its investment objective by
investing in common stocks. The investment manager constructs the portfolio
to match the risk characteristics of the S&P 500 Stock Index and then
optimizes each portfolio to achieve the desired balance of risk and return
potential. This includes targeting a dividend yield that exceeds that of
the S&P 500. Such a management technique known as "portfolio optimization"
may cause the Fund to be more heavily invested in some industries than in
others. However, the Fund may not invest more than 25% of its total assets
in companies whose principal business activities are in the same industry.
AMERICAN CENTURY VP INTERNATIONAL
Investment Objective: Capital growth. The Fund will seek to achieve its
investment objective by investing primarily in securities of foreign
companies that meet certain fundamental and technical standards of
selection and, in the opinion of the investment manager, have potential for
appreciation. Under normal conditions, the Fund will invest at least 65% of
its assets in common stocks or other equity securities of issuers from at
least three countries outside the United States. While securities of United
States issuers may be included in the portfolio from time to time, it is
the primary intent of the manager to diversify investments across a broad
range of foreign issuers. Although the primary investment of the Fund will
be common stocks (defined to include depository receipts for common stock
and other equity equivalents), the Fund may also invest in other types of
securities consistent with the Fund's objective. When the manager believes
that the total capital growth potential of other securities equals or
exceeds the potential return of common stocks, the Fund may invest up to
35% of its assets in such other securities.
AMERICAN CENTURY VP VALUE
Investment Objective: Long-term capital growth; income is a secondary
objective. The equity securities in which the Fund will invest will be
primarily securities of well-established companies with
intermediate-to-large market capitalizations that are believed by
management to be undervalued at the time of purchase. Under normal market
conditions, the Fund expects to invest at least 80% of the value of its
total assets in equity securities, including common and preferred stock,
convertible preferred stock and convertible debt obligations.
DREYFUS INVESTMENT PORTFOLIOS
Dreyfus Investment Portfolios (the "Fund") is an open-end, management investment
company known as a mutual fund. Shares are offered only to variable annuity and
variable life insurance separate accounts established by insurance companies to
fund variable annuity contracts and variable life insurance policies and to
qualified pension and retirement plans. Individuals may not purchase shares
directly from the Fund. The Dreyfus Corporation serves as the Fund's investment
adviser.
EUROPEAN EQUITY PORTFOLIO: INITIAL SHARES
Investment Objective: Long-term capital growth. To pursue this goal, the
Portfolio generally invests at least 80% of its total assets in stocks
included within the universe of the 300 largest European companies. The
Portfolio's stock investments may include common stocks, preferred stocks
and convertible securities.
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.: INITIAL SHARES
The Dreyfus Socially Responsible Growth Fund, Inc. is an open-end, diversified,
management investment company incorporated under Maryland law on July 20, 1992
and commenced operations on October 7, 1993. The Fund offers its share only as
investment vehicles for variable annuity and variable life insurance products of
insurance companies. The Dreyfus Corporation serves as the Fund's investment
adviser. NCM Capital Management Group, Inc. serves as the Fund's sub-investment
adviser and provides day-to-day management of the Fund's portfolio.
Investment Objective: Capital growth through equity investment in companies
that, in the opinion of the Fund's advisers, not only meet traditional
investment
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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.
DREYFUS STOCK INDEX FUND, INC.: INITIAL SHARES
The Dreyfus Stock Index Fund, Inc. ("Fund") is an open-end, non-diversified,
management investment company incorporated under Maryland law on January 24,
1989 and commenced operations on September 29, 1989. The Fund offers its shares
only as investment vehicles for variable annuity and variable life insurance
products of insurance companies. The Dreyfus Corporation ("Dreyfus") serves as
the Fund's manager, while Mellon Equity Associates, an affiliate of Dreyfus,
serves as the Fund's index manager. Dreyfus is a wholly-owned subsidiary of
Mellon Bank, N.A., which is a wholly-owned subsidiary of Mellon Bank
Corporation.
Investment Objective: 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 500 Composite Stock
Price Index. The Fund is neither sponsored by nor affiliated with Standard
& Poor's Corporation.
DREYFUS VARIABLE INVESTMENT FUND
Dreyfus Variable Investment Fund ("Fund") is an open-end, management investment
company. It was organized as an unincorporated business trust under the laws of
the Commonwealth of Massachusetts on October 29, 1986 and commenced operations
on August 31, 1990. The Fund offers its shares only as investment vehicles for
variable annuity and variable life insurance products of insurance companies.
The Dreyfus Corporation serves as the Fund's manager. Fayez Sarofim & Company
serves as the sub-adviser and provides day-to-day management of the portfolio.
APPRECIATION PORTFOLIO: INITIAL SHARES (FORMERLY, CAPITAL APPRECIATION
PORTFOLIO)
Investment Objective: Primarily long-term capital growth consistent with
the preservation of capital; current income is a secondary investment
objective. This Portfolio invests primarily in the common stocks of
domestic and foreign issuers.
FEDERATED INSURANCE SERIES
Federated Insurance Series (the "Trust"), an open-end management investment
company, was established as a Massachusetts business trust, under a Declaration
of Trust dated September 15, 1993. The Trust offers its shares only as
investment vehicles for variable annuity and variable life insurance products of
insurance companies. Federated Investment Management Company serves as the
investment adviser.
FEDERATED QUALITY BOND FUND II
Investment Objective: Current income by investing in investment grade fixed
income securities.
FIDELITY VARIABLE INSURANCE PRODUCTS FUND
The Fidelity Variable Insurance Products Fund ("VIP") is an open-end,
diversified, management investment company organized as a Massachusetts business
trust on November 13, 1981. Shares of VIP are purchased by insurance companies
to fund benefits under variable life insurance policies and variable annuity
contracts. Fidelity Management & Research Company ("FMR") is the manager for VIP
and its portfolios.
VIP EQUITY-INCOME PORTFOLIO: SERVICE CLASS
Investment Objective: 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 500 Composite Stock Price Index.
VIP GROWTH PORTFOLIO: SERVICE CLASS
Investment Objective: 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 underlying mutual funds. It is also
important to point out that this Portfolio makes sense for you if you can
afford to ride out changes in the stock market because it invests primarily
in common stocks. FMR can also 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.
VIP HIGH INCOME PORTFOLIO: SERVICE CLASS
Investment Objective: High level of current income by investing primarily
in high-risk, lower-rated, high-yielding, fixed-income securities, while
also considering growth of capital. FMR 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; and
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- 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 Ba or lower
by Moody's Investor Service, Inc. ("Moody's"); BB 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.
VIP OVERSEAS PORTFOLIO: SERVICE CLASS
Investment Objective: Long-term capital growth primarily through
investments in foreign securities. This Portfolio provides a means for
investors to diversify their own portfolios by participating in companies
and economies outside the United States.
FIDELITY VARIABLE INSURANCE PRODUCTS FUND II
The Fidelity Variable Insurance Products Fund II ("VIP II") is an open-end,
diversified, management investment company organized as a Massachusetts business
trust on March 21, 1988. VIP II's shares are purchased by insurance companies to
fund benefits under variable life insurance policies and variable annuity
contracts. Fidelity Management & Research Company ("FMR") is the manager of VIP
II and its portfolios.
VIP II CONTRAFUND(R) PORTFOLIO: SERVICE CLASS
Investment Objective: Capital appreciation by investing primarily in
companies that FMR believes to be undervalued due to an overly pessimistic
appraisal by the public. This strategy can lead to investments in domestic
or foreign companies, small and large, many of which may not be well known.
The Portfolio primarily invests in common stock and securities convertible
into common stock, but it has the flexibility to invest in any type of
security that may produce capital appreciation.
FIDELITY VARIABLE INSURANCE PRODUCTS FUND III
The Fidelity Variable Insurance Products Fund III ("VIP III") is an open-end,
diversified, management investment company organized as a Massachusetts business
trust on July 14, 1994. VIP III's shares are purchased by insurance companies to
fund benefits under variable life insurance policies and variable annuity
contracts. Fidelity Management & Research Company ("FMR") is the manager of VIP
III and it's portfolios.
VIP III GROWTH OPPORTUNITIES PORTFOLIO: SERVICE CLASS
Investment Objective: Capital growth by investing primarily in common
stocks and securities convertible into common stocks. The Portfolio, under
normal conditions, will invest at least 65% of its total assets in
securities of companies that FMR believes have long-term growth potential.
Although the Portfolio invests primarily in common stock and securities
convertible into common stock, it has the ability to purchase other
securities, such as preferred stock and bonds that may produce capital
growth. The Portfolio may invest in foreign securities without limitation.
JANUS ASPEN SERIES
The Janus Aspen Series is an open-end management investment company whose shares
are offered in connection with investment in and payments under variable annuity
contracts and variable life insurance policies, as well as certain qualified
retirement plans. Janus Capital Corporation serves as investment adviser to each
Portfolio.
CAPITAL APPRECIATION PORTFOLIO: SERVICE SHARES
Investment Objective: Long-term growth of capital by investing primarily in
common stocks selected for their growth potential. The Portfolio may invest
in companies of any size, from larger, well-established companies to
smaller, emerging growth companies.
GLOBAL TECHNOLOGY PORTFOLIO: SERVICE SHARES
Investment Objective: Long-term growth of capital by investing primarily in
equity securities of U.S. and foreign companies selected for their growth
potential. Under normal circumstances, the Portfolio invests at least 65%
of its total assets in securities of companies that the Portfolio manager
believes will benefit significantly from advances or improvements in
technology.
INTERNATIONAL GROWTH PORTFOLIO: SERVICE SHARES
Investment Objective: Long-term growth of capital by investing at least 65%
of its total assets in securities of issuers from at least five different
countries, excluding the United States. Although the Portfolio intends to
invest substantially all of its assets in issuers located outside the
United States, it may invest in U.S. issuers and it may at times invest all
of its assets in fewer than five countries, or even a single country.
NATIONWIDE SEPARATE ACCOUNT TRUST
Nationwide Separate Account Trust ("NSAT") is a diversified open-end management
investment company created under the laws of Massachusetts. NSAT offers shares
in the mutual funds listed below, each with its own investment objectives.
Shares of NSAT will be
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sold primarily to separate accounts to fund the benefits under variable life
insurance policies and variable annuity contracts issued by life insurance
companies. Villanova Global Asset Management Trust, an indirect subsidiary of
Nationwide Mutual Insurance Company, manages the assets of the Gartmore NSAT
Emerging Markets Fund and Gartmore NSAT International Growth Fund. The remaining
assets of NSAT are managed by Villanova Mutual Fund Capital Trust ("VMF"), an
indirect subsidiary of Nationwide Financial Services, Inc.
CAPITAL APPRECIATION FUND
Investment Objective: Long-term capital appreciation.
DREYFUS NSAT MID CAP INDEX FUND (FORMERLY, NATIONWIDE MID CAP INDEX FUND)
(FORMERLY, NATIONWIDE SELECT ADVISERS MID CAP FUND) Subadviser: The Dreyfus
Corporation Investment Objective: Capital appreciation. The Fund seeks to
match the performance of the Standard & Poor's MidCap 400 Index. To pursue
this goal, the Fund generally is fully invested in all 400 stocks included
in this index in proportion to their weighting in the index, and in futures
whose performance is tied to the index. The Fund is neither sponsored by
nor affiliated with Standard & Poor's Corporation.
FEDERATED NSAT EQUITY INCOME FUND (FORMERLY, NATIONWIDE EQUITY INCOME FUND)
Subadviser: Federated Investment Counseling
Investment Objective: Above average income and capital appreciation by
investing primarily in income producing U.S. and foreign equity securities
and securities that are convertible into common stock.
FEDERATED NSAT HIGH INCOME BOND FUND (FORMERLY, NATIONWIDE HIGH INCOME BOND
FUND)
Subadviser: Federated Investment Counseling
Investment Objective: High current income by investing at least 65% of the
Fund's total assets in corporate bonds that are rated BBB or lower by a
rating agency or that are unrated but of comparable quality. Such funds are
commonly referred to as "junk bonds."
GARTMORE NSAT EMERGING MARKETS FUND
Subadviser: Gartmore Global Partners
Investment Objective: Long-term capital growth by investing primarily in
equity securities of companies located in emerging market countries.
GARTMORE NSAT GLOBAL TECHNOLOGY AND COMMUNICATIONS FUND
Investment Objective: Long-term capital appreciation by investing primarily
and at least 65% of its total assets in equity securities issued by U.S.
and foreign companies with business operations in technology and
communications and technology and communication related industries.
GARTMORE NSAT INTERNATIONAL GROWTH FUND
Subadviser: Gartmore Global Partners
Investment Objective: Long-term capital growth by investing primarily in
equity securities of companies in Europe, Australia, the Far East and other
regions, including developing countries. The Fund invests at least 65% of
its assets in established companies located in at least three countries
other than the U.S.
GOVERNMENT BOND FUND
Investment Objective: As high a level of income as is consistent with the
preservation of capital by investing at least 65% of its total assets in
U.S. government and agency bonds, bills and notes.
J.P. MORGAN NSAT BALANCED FUND (FORMERLY, NATIONWIDE BALANCED FUND)
Subadviser: J.P. Morgan Investment Management, Inc.
Investment Objective: High total return from a diversified portfolio of
equity and fixed income securities. Under normal circumstances, the Fund
invests approximately 60% of its assets in equity securities and 40% of its
assets in fixed income securities. The equity securities held by the Fund
generally are common stocks of large and medium sized companies included in
the Standard & Poor's 500 Index. Generally, most of the Fund's fixed income
securities will consist of "investment grade" securities, but the Fund may
invest in securities rated below investment grade or determined by the
subadviser to be of comparable quality. These securities are commonly known
as junk bonds.
MAS NSAT MULTI SECTOR BOND FUND (FORMERLY, NATIONWIDE MULTI SECTOR BOND
FUND)
Subadviser: Miller, Anderson & Sherrerd, LLP
Investment Objective: Primarily, above average total return over a market
cycle of three to five years. The Fund invests in a diversified portfolio
of U.S. and foreign fixed income securities, including high yield
securities (commonly referred to as "junk bonds") and emerging markets
securities. The subadviser will use futures, swaps and other derivatives in
managing the Fund.
MONEY MARKET FUND
Investment Objective: As high a level of current income as is considered
consistent with the preservation of capital and maintenance of liquidity.
NATIONWIDE GLOBAL 50 FUND (FORMERLY, NATIONWIDE GLOBAL EQUITY FUND)
Subadviser: J. P. Morgan Investment Management, Inc.
Investment Objective: High total return from a globally diversified
portfolio of equity securities.
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The Fund seeks its investment objective through stock selection and
management of currency exposure. The Fund invests in approximately fifty
stocks of primarily large and midcap companies located throughout the
world.
NATIONWIDE SMALL CAP GROWTH FUND (FORMERLY, NATIONWIDE SELECT ADVISERS
SMALL CAP GROWTH FUND)
Subadvisers: Miller Anderson & Sherrerd, LLP, Neuberger Berman, LLC,
Waddell & Reed Investment Management Company Investment Objective: Capital
growth by investing in a broadly diversified portfolio of equity securities
issued by U.S. and foreign companies with market capitalizations in the
range of companies represented by the Russell 2000, known as small cap
companies. Under normal market conditions, the Fund will invest at least
65% of its total assets in the equity securities of small cap companies.
The balance of the Fund's assets may be invested in equity securities of
larger cap companies. The Fund may also invest in foreign securities.
NATIONWIDE SMALL CAP VALUE FUND
Subadviser: The Dreyfus Corporation
Investment Objective: Capital appreciation through investment in a
diversified portfolio of equity securities of companies with a medial
market capitalization of approximately $1 billion. Under normal market
conditions, at least 75% of the Fund's total assets in equity securities of
companies whose equity market capitalizations at the time of investment are
similar to the market capitalizations of companies in the Russell 2000
Index.
NATIONWIDE SMALL COMPANY FUND
Subadvisers: The Dreyfus Corporation, Neuberger Berman, LLC, Lazard Asset
Management, Strong Capital Management, Inc., Waddell & Reed Investment
Management Company Investment Objective: Long-term growth of capital. Under
normal market conditions, the Fund will invest at least 65% of its total
assets in equity securities of companies whose equity market
capitalizations at the time of investment are similar to the market
capitalizations of companies in the Russell 2000 Index.
STRONG NSAT MID CAP GROWTH FUND (FORMERLY, NATIONWIDE STRATEGIC GROWTH
FUND)
Subadviser: Strong Capital Management Inc.
Investment Objective: Capital growth by focusing on common stocks of U.S.
and foreign companies that the subadviser believes are reasonably priced
and have above-average growth potential. The Fund invests primarily in
stocks of medium sized companies but its portfolio can include stocks of
companies of any size.
TOTAL RETURN FUND
Investment Objective: To obtain a reasonable, long-term total return on
invested capital.
TURNER NSAT GROWTH FOCUS FUND
Subadviser: Turner Investment Partners, Inc.
Investment Objective: Long-term capital appreciation by investing primarily
in U.S. common stocks, American depository receipts and foreign companies
that demonstrate strong earnings growth potential. The Fund is
non-diversified and typically focuses its investments in a core group of 20
to 30 common stocks.
NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST ("AMT")
Neuberger Berman AMT is an open-end, diversified management investment company
that offers its portfolios in connection with variable annuity contracts and
variable life insurance policies, and certain qualified plans. Prior to May 1,
2000, the portfolios invested through a two-tier master/feeder structure,
whereby each portfolio invested its assets in another fund that served as a
corresponding "master series;" the master series invested in securities.
Effective May 1, 2000, the portfolios converted to a conventional one-tier
structure, whereby each portfolio holds its securities directly. Neuberger
Berman Management Inc. is the investment adviser.
AMT GUARDIAN PORTFOLIO
Investment Objective: Long-term capital growth, with current income as a
secondary objective. The Portfolio pursues these goals by investing mainly
in common stocks of large-capitalization companies.
AMT MID-CAP GROWTH PORTFOLIO
Investment Objective: Capital growth. The Portfolio pursues this goal by
investing mainly in common stocks of mid-capitalization companies. The
managers look for fast-growing companies that are in new or rapidly
evolving industries and seek to reduce risk by diversifying among many
companies, industries and sectors.
AMT PARTNERS PORTFOLIO
Investment Objective: Capital growth. The Portfolio pursues its goal by
investing mainly in common stocks of mid- to large-capitalization
companies.
OPPENHEIMER VARIABLE ACCOUNT FUNDS
The Oppenheimer Variable Account Funds are an open-end, diversified management
investment company organized as a Massachusetts business trust in 1984. Shares
of the Funds are sold to provide benefits under variable life insurance policies
and variable annuity contracts. OppenheimerFunds, Inc. is the investment
adviser.
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OPPENHEIMER AGGRESSIVE GROWTH FUND/VA (FORMERLY, OPPENHEIMER CAPITAL
APPRECIATION FUND)
Investment Objective: Capital appreciation by investing in "growth type"
companies. Such companies are believed to have relatively favorable
long-term prospects for increasing demand for their goods or services, or
to be developing new products, services or markets and normally retain a
relatively larger portion of their earnings for research, development and
investment in capital assets. The Fund may also invest in cyclical
industries in "special situations" that OppenheimerFunds, Inc. believes
present opportunities for capital growth.
OPPENHEIMER CAPITAL APPRECIATION FUND/VA (FORMERLY, OPPENHEIMER GROWTH
FUND)
Investment Objective: Capital appreciation by investing in securities of
well-known established companies. Such securities generally have a history
of earnings and dividends and are issued by seasoned companies (companies
which have an operating history of at least five years including
predecessors). Current income is a secondary consideration in the selection
of the Fund's portfolio securities.
OPPENHEIMER GLOBAL SECURITIES FUND/VA
Investment Objective: Long-term capital appreciation by investing a
substantial portion of assets in securities of foreign issuers,
"growth-type" companies, cyclical industries and special appreciation
possibilities. These securities may be considered speculative.
OPPENHEIMER MAIN STREET GROWTH & INCOME FUND/VA (FORMERLY, OPPENHEIMER
GROWTH & INCOME FUND)
Investment Objective: High total return, which stocks, preferred stocks,
convertible securities and warrants. Debt investments will include bonds,
participation includes growth in the value of its shares as well as current
income from quality and debt securities. In seeking its investment
objectives, the Fund may invest in equity and debt securities. Equity
investments will include common interests, asset-backed securities,
private-label mortgage-backed securities and CMOs, zero coupon securities
and U.S. debt obligations, and cash and cash equivalents. From time to
time, the Fund may focus on small to medium capitalization issuers, the
securities of which may be subject to greater price volatility than those
of larger capitalized issuers.
STRONG OPPORTUNITY FUND II, INC.
The Strong Opportunity Fund II, Inc. is a diversified, open-end management
company commonly called a mutual fund. The Strong Opportunity Fund II, Inc. was
incorporated in Wisconsin and may only be purchased by the separate accounts of
insurance companies for the purpose of funding variable annuity contracts and
variable life insurance policies. Strong Capital Management, Inc. is the
investment adviser for the Fund.
Investment Objective: Capital appreciation through investments in a diversified
portfolio of equity securities.
THE UNIVERSAL INSTITUTIONAL FUNDS, INC. (FORMERLY, MORGAN STANLEY DEAN WITTER
UNIVERSAL FUNDS, INC.)
The Universal Institutional Funds, Inc. is a mutual fund designed to provide
investment vehicles for variable annuity contracts and variable life insurance
policies and for certain tax-qualified investors.
EMERGING MARKETS DEBT PORTFOLIO
Investment Objective: High total return by investing primarily in dollar
and non-dollar denominated fixed income securities of government and
government-related issuers located in emerging market countries, which
securities provide a high level of current income, while at the same time
holding the potential for capital appreciation if the perceived
creditworthiness of the issuer improves due to improving economic,
financial, political, social or other conditions in the country in which
the issuer is located. Morgan Stanley Dean Witter Investment Management,
Inc. is the Portfolio's investment adviser.
MID CAP GROWTH PORTFOLIO
Investment Objective: Long-term capital growth by investing primarily in
common stocks and other equity securities of issuers with equity
capitalizations in the range of the companies represented in the Standard &
Poor's Rating Group ("S&P") MidCap 400 Index. Such range is generally $500
million to $6 billion but the range fluctuates over time with changes in
the equity market. Miller, Anderson & Sherrerd, LLP is the Portfolio's
investment adviser.
U. S. REAL ESTATE PORTFOLIO
Investment Objective: Long-term capital growth by investing principally in
a diversified portfolio of securities of companies operating in the real
estate industry ("Real Estate Securities"). Current income is a secondary
consideration. Real Estate Securities include equity securities, including
common stocks and convertible securities, as well as non-convertible
preferred stocks and debt securities of real estate industry companies. A
"real estate industry company" is a company that derives at least 50% of
its assets (marked to market), gross income or net profits from the
ownership, construction, management or sale of residential, commercial or
industrial real estate. Under normal market conditions, at least 65% of the
Portfolio's total assets
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will be invested in Real Estate Securities, primarily equity securities of
real estate investment trusts. The Portfolio may invest up to 25% of its
total assets in securities issued by foreign issuers, some or all of which
may also be Real Estate Securities. Morgan Stanley Asset Management, Inc.
serves as the Portfolio's investment adviser.
VAN ECK WORLDWIDE INSURANCE TRUST
Van Eck Worldwide Insurance Trust ("Van Eck Trust") is an open-end management
investment company organized as a business trust under the laws of the
Commonwealth of Massachusetts on January 7, 1987. Shares of Van Eck Trust are
offered only to separate accounts of insurance companies to fund the benefits of
variable life insurance policies and variable annuity contracts. The investment
advisor and manager is Van Eck Associates Corporation.
WORLDWIDE EMERGING MARKETS FUND
Investment Objective: Long-term capital appreciation by investing primarily
in equity securities in emerging markets around the world. The Fund
emphasizes investment in countries that, compared to the world's major
economies, exhibit relatively low gross national product per capita, as
well as the potential for rapid economic growth.
WORLDWIDE HARD ASSETS FUND
Investment Objective: Long-term capital appreciation by investing primarily
in "Hard Asset Securities." For the Fund's purpose, "Hard Assets" are real
estate, energy, timber, and industrial and precious metals. Income is a
secondary consideration.
39
43
APPENDIX B: ILLUSTRATIONS OF CASH VALUES, CASH SURRENDER VALUES,
AND DEATH BENEFITS
The illustrations in this prospectus have been prepared to help show how values
under the policies change with investment performance. The illustrations
illustrate how cash values, cash surrender values and death benefits under a
policy would vary over time if the hypothetical gross investment rates of return
were a uniform annual effective rate of either 0%, 6% or 12%. If the
hypothetical gross investment rate of return averages 0%, 6% or 12% over a
period of years, but fluctuates above or below those averages for individual
years, the cash values, cash surrender values and death benefits may be
different. For hypothetical returns of 0% and 6%, the illustrations also
illustrate when the policies would go into default, at which time additional
premium payments would be required to continue the policy in force. The
illustrations also assume there is no policy indebtedness, no additional premium
payments are made, no cash values are allocated to the fixed account, and there
are no changes in the specified amount or death benefit option.
The amounts shown for the cash value, cash surrender value and death benefit as
of each policy anniversary reflect the fact that the net investment return on
the assets held in the sub-accounts is lower than the gross return. This is due
to the deduction of underlying mutual fund investment advisory fees and other
expenses, which are equivalent to an annual effective rate of 0.95%. This
effective rate is based on the average of the fund expenses, after expense
reimbursement, for the preceding year for all underlying mutual fund options
available under the policy as of December 31, 2000. Some underlying mutual funds
are subject to expense reimbursements and fee waivers. Absent expense
reimbursement and fees waivers, the annual effective rate would have been 0.97%.
Nationwide anticipates that the expense reimbursement and fee waiver
arrangements will continue past the current year. Should there be an increase or
decrease in the expense reimbursements or fee waivers of these underlying mutual
funds, such change will be reflected in the net asset value of the corresponding
underlying mutual fund.
Taking into account the underlying mutual fund expenses, gross annual rates of
return of 0%, 6% and 12% correspond to net investment experience at constant
annual rates of -0.95%, 5.05% and 11.05%.
The illustrations also reflect the fact that Nationwide makes monthly charges
for providing insurance protection, recovering taxes, providing for
administrative expenses, and assuming mortality and expense risks. Current
values reflect current cost of insurance charges and guaranteed values reflect
the maximum cost of insurance charges guaranteed in the policy. The values shown
are for policies which are issued as standard. Policies issued on a substandard
basis would result in lower cash values and death benefits than those
illustrated.
The cash surrender values shown in the illustrations reflect the fact that
Nationwide will deduct a surrender charge from the policy's cash value for any
policy surrendered in full during the first 20 policy years.
The illustrations also reflect the fact that no charges for federal or state
income taxes are currently made against the variable account. If such a charge
is made in the future, it will require a higher gross investment return than
illustrated in order to produce the net after-tax returns shown in the
illustrations.
Upon request, Nationwide will furnish a comparable illustration based on the
proposed insured's age, sex, smoking classification, rating classification and
premium payment requested.
40
44
DEATH BENEFIT OPTION 1
$750 ANNUAL PREMIUM: $50,000 SPECIFIED AMOUNT
MALE: NON-TOBACCO: AGE 45
CURRENT VALUES
0% HYPOTHETICAL 6% HYPOTHETICAL 12% HYPOTHETICAL
PREMIUMS GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN
PAID PLUS
POLICY INTEREST AT
YEAR 5% CASH CASH CASH
CASH SURR. DEATH CASH SURR. DEATH CASH SURR. DEATH
VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
1 788 364 60 50,000 397 92 50,000 429 125 50,000
2 1,614 718 429 50,000 806 517 50,000 898 609 50,000
3 2,483 1,061 787 50,000 1,229 955 50,000 1,412 1,138 50,000
4 3,394 1,393 1,134 50,000 1,665 1,406 50,000 1,973 1,715 50,000
5 4,351 1,714 1,470 50,000 2,114 1,871 50,000 2,589 2,346 50,000
6 5,357 2,022 1,794 50,000 2,578 2,349 50,000 3,264 3,035 50,000
7 6,412 2,318 2,105 50,000 3,055 2,841 50,000 4,004 3,790 50,000
8 7,520 2,599 2,401 50,000 3,545 3,347 50,000 4,815 4,617 50,000
9 8,683 2,865 2,682 50,000 4,047 3,865 50,000 5,704 5,522 50,000
10 9,905 3,114 2,947 50,000 4,562 4,395 50,000 6,681 6,514 50,000
11 11,188 3,342 3,190 50,000 5,085 4,933 50,000 7,750 7,597 50,000
12 12,535 3,549 3,412 50,000 5,618 5,480 50,000 8,923 8,786 50,000
13 13,949 3,732 3,610 50,000 6,157 6,035 50,000 10,211 10,089 50,000
14 15,434 3,888 3,781 50,000 6,701 6,594 50,000 11,625 11,518 50,000
15 16,993 4,014 3,922 50,000 7,248 7,157 50,000 13,179 13,087 50,000
16 18,630 4,108 4,031 50,000 7,796 7,720 50,000 14,889 14,813 50,000
17 20,349 4,165 4,104 50,000 8,342 8,281 50,000 16,773 16,713 50,000
18 22,154 4,183 4,137 50,000 8,884 8,839 50,000 18,854 18,808 50,000
19 24,049 4,144 4,113 50,000 9,406 9,376 50,000 21,141 21,111 50,000
20 26,039 4,071 4,056 50,000 9,930 9,915 50,000 23,657 23,642 50,000
21 28,129 3,939 3,939 50,000 10,434 10,434 50,000 26,415 26,415 50,000
22 30,323 3,742 3,742 50,000 10,913 10,913 50,000 29,445 29,445 50,000
23 32,626 3,471 3,471 50,000 11,361 11,361 50,000 32,784 32,784 50,000
24 35,045 3,116 3,116 50,000 11,770 11,770 50,000 36,477 36,477 50,000
25 37,585 2,668 2,668 50,000 12,131 12,131 50,000 40,574 40,574 50,000
26 40,252 2,117 2,117 50,000 12,438 12,438 50,000 45,134 45,134 51,905
27 43,052 1,448 1,448 50,000 12,679 12,679 50,000 50,145 50,145 56,663
28 45,992 638 638 50,000 12,834 12,834 50,000 55,630 55,630 61,750
29 49,079 (*) (*) (*) 12,853 12,853 50,000 61,638 61,638 67,186
30 52,321 (*) (*) (*) 12,812 12,812 50,000 68,241 68,241 73,017
(1) NO POLICY LOANS AND NO PARTIAL WITHDRAWALS HAVE BEEN MADE.
(2) CURRENT VALUES REFLECT CURRENT COST OF INSURANCE CHARGES AND AN ASSET
CHARGE AS DESCRIBED IN THE PROSPECTUS.
(3) NET INVESTMENT RETURNS ARE CALCULATED AS THE HYPOTHETICAL GROSS INVESTMENT
RETURN LESS ALL CHARGES AND DEDUCTIONS SHOWN IN THE PROSPECTUS APPENDIX.
(*) UNLESS ADDITIONAL PREMIUM IS PAID, THE POLICY WILL LAPSE WITHOUT VALUE.
The hypothetical investment rates of return shown above and elsewhere in this
prospectus are illustrative only and should not be deemed a representation of
past or future investment rates of return. Actual rates of return may be more or
less than those shown and will depend on a number of factors, including the
investment allocations made by an owner, prevailing rates and rates of
inflation. The death benefit and cash value for a policy would be different from
those shown if the actual rates of return averaged 0%, 6%, and 12% over a period
of years but also fluctuated above or below those averages for individual policy
years. No representation can be made by Nationwide or the trust that these
hypothetical rates of return can be achieved for any one year or sustained over
any period of time.
41
45
DEATH BENEFIT OPTION 1
$750 ANNUAL PREMIUM: $50,000 SPECIFIED AMOUNT
MALE: NON-TOBACCO: AGE 45
GUARANTEED VALUES
0% HYPOTHETICAL 6% HYPOTHETICAL 12% HYPOTHETICAL
PREMIUMS GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN
PAID PLUS
POLICY INTEREST
YEAR AT 5% CASH CASH CASH
CASH SURR. DEATH CASH SURR. DEATH CASH SURR. DEATH
VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
1 788 197 0 50,000 224 0 50,000 252 0 50,000
2 1,614 371 82 50,000 438 149 50,000 509 220 50,000
3 2,483 521 247 50,000 640 366 50,000 771 497 50,000
4 3,394 647 388 50,000 828 569 50,000 1,039 780 50,000
5 4,351 744 500 50,000 999 755 50,000 1,308 1,065 50,000
6 5,357 812 583 50,000 1,150 921 50,000 1,579 1,351 50,000
7 6,412 848 635 50,000 1,277 1,064 50,000 1,850 1,636 50,000
8 7,520 849 651 50,000 1,375 1,177 50,000 2,115 1,917 50,000
9 8,683 810 627 50,000 1,439 1,257 50,000 2,372 2,189 50,000
10 9,905 730 563 50,000 1,466 1,299 50,000 2,618 2,451 50,000
11 11,188 608 456 50,000 1,452 1,300 50,000 2,852 2,700 50,000
12 12,535 445 308 50,000 1,395 1,258 50,000 3,073 2,936 50,000
13 13,949 242 120 50,000 1,295 1,173 50,000 3,283 3,161 50,000
14 15,434 (*) (*) (*) 1,150 1,043 50,000 3,480 3,374 50,000
15 16,993 (*) (*) (*) 953 862 50,000 3,662 3,571 50,000
16 18,630 (*) (*) (*) 694 618 50,000 3,819 3,743 50,000
17 20,349 (*) (*) (*) 353 292 50,000 3,935 3,874 50,000
18 22,154 (*) (*) (*) (*) (*) (*) 3,988 3,943 50,000
19 24,049 (*) (*) (*) (*) (*) (*) 3,954 3,923 50,000
20 26,039 (*) (*) (*) (*) (*) (*) 3,808 3,792 50,000
21 28,129 (*) (*) (*) (*) (*) (*) 3,529 3,529 50,000
22 30,323 (*) (*) (*) (*) (*) (*) 3,095 3,095 50,000
23 32,626 (*) (*) (*) (*) (*) (*) 2,487 2,487 50,000
24 35,045 (*) (*) (*) (*) (*) (*) 1,672 1,672 50,000
25 37,585 (*) (*) (*) (*) (*) (*) 608 608 50,000
26 40,252 (*) (*) (*) (*) (*) (*) (*) (*) (*)
27 43,052 (*) (*) (*) (*) (*) (*) (*) (*) (*)
28 45,992 (*) (*) (*) (*) (*) (*) (*) (*) (*)
29 49,079 (*) (*) (*) (*) (*) (*) (*) (*) (*)
30 52,321 (*) (*) (*) (*) (*) (*) (*) (*) (*)
(1) NO POLICY LOANS AND NO PARTIAL WITHDRAWALS HAVE BEEN MADE.
(2) GUARANTEED VALUES REFLECT GUARANTEED COST OF INSURANCE CHARGES AND AN
ASSET CHARGE AS DESCRIBED IN THE PROSPECTUS.
(3) NET INVESTMENT RETURNS ARE CALCULATED AS THE HYPOTHETICAL GROSS INVESTMENT
RETURN LESS ALL CHARGES AND DEDUCTIONS SHOWN IN THE PROSPECTUS APPENDIX.
(*) UNLESS ADDITIONAL PREMIUM IS PAID, THE POLICY WILL LAPSE WITHOUT VALUE.
The hypothetical investment rates of return shown above and elsewhere in this
prospectus are illustrative only and should not be deemed a representation of
past or future investment rates of return. Actual rates of return may be more or
less than those shown and will depend on a number of factors, including the
investment allocations made by an owner, prevailing rates and rates of
inflation. The death benefit and cash value for a policy would be different from
those shown if the actual rates of return averaged 0%, 6%, and 12% over a period
of years but also fluctuated above or below those averages for individual policy
years. No representation can be made by Nationwide or the trust that these
hypothetical rates of return can be achieved for any one year or sustained over
any period of time.
42
46
DEATH BENEFIT OPTION 1
$1,500 ANNUAL PREMIUM: $100,000 SPECIFIED AMOUNT
MALE: NON-TOBACCO: AGE 45
CURRENT VALUES
0% HYPOTHETICAL 6% HYPOTHETICAL 12% HYPOTHETICAL
PREMIUMS GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN
PAID PLUS
POLICY INTEREST
YEAR AT 5% CASH CASH CASH
CASH SURR. DEATH CASH SURR. DEATH CASH SURR. DEATH
VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
1 1,575 968 359 100,000 1,040 431 100,000 1,113 504 100,000
2 3,229 1,913 1,334 100,000 2,119 1,540 100,000 2,334 1,756 100,000
3 4,965 2,835 2,287 100,000 3,238 2,690 100,000 3,676 3,128 100,000
4 6,788 3,734 3,217 100,000 4,399 3,881 100,000 5,151 4,633 100,000
5 8,703 4,609 4,122 100,000 5,603 5,115 100,000 6,773 6,286 100,000
6 10,713 5,459 5,002 100,000 6,851 6,394 100,000 8,558 8,101 100,000
7 12,824 6,282 5,855 100,000 8,143 7,717 100,000 10,524 10,097 100,000
8 15,040 7,075 6,679 100,000 9,481 9,085 100,000 12,688 12,292 100,000
9 17,367 7,837 7,471 100,000 10,865 10,499 100,000 15,072 14,707 100,000
10 19,810 8,566 8,231 100,000 12,295 11,960 100,000 17,702 17,367 100,000
11 22,376 9,250 8,946 100,000 13,764 13,459 100,000 20,594 20,289 100,000
12 25,069 9,895 9,621 100,000 15,278 15,004 100,000 23,752 23,478 100,000
13 27,898 10,491 10,247 100,000 16,833 16,589 100,000 27,193 26,950 100,000
14 30,868 11,035 10,821 100,000 18,427 18,214 100,000 30,948 30,734 100,000
15 33,986 11,520 11,338 100,000 20,060 19,877 100,000 35,047 34,864 100,000
16 37,261 11,943 11,791 100,000 21,712 21,559 100,000 39,528 39,376 100,000
17 40,699 12,296 12,174 100,000 23,376 23,255 100,000 44,433 44,311 100,000
18 44,309 12,574 12,483 100,000 25,053 24,962 100,000 49,811 49,719 100,000
19 48,099 12,743 12,682 100,000 26,715 26,654 100,000 55,703 55,642 100,000
20 52,079 12,848 12,818 100,000 28,404 28,374 100,000 62,202 62,172 100,000
21 56,258 12,843 12,843 100,000 30,085 30,085 100,000 69,367 69,367 100,000
22 60,646 12,714 12,714 100,000 31,753 31,753 100,000 77,286 77,286 100,000
23 65,253 12,448 12,448 100,000 33,400 33,400 100,000 86,064 86,064 101,556
24 70,091 12,027 12,027 100,000 35,019 35,019 100,000 95,704 95,704 111,974
25 75,170 11,433 11,433 100,000 36,604 36,604 100,000 106,226 106,226 123,222
26 80,504 10,649 10,649 100,000 38,148 38,148 100,000 117,711 117,711 135,368
27 86,104 9,649 9,649 100,000 39,642 39,642 100,000 130,280 130,280 147,216
28 91,984 8,389 8,389 100,000 41,065 41,065 100,000 144,042 144,042 159,886
29 98,158 6,748 6,748 100,000 42,352 42,352 100,000 159,114 159,114 173,435
30 104,641 4,918 4,918 100,000 43,632 43,632 100,000 175,681 175,681 187,978
(1) NO POLICY LOANS AND NO PARTIAL WITHDRAWALS HAVE BEEN MADE.
(2) CURRENT VALUES REFLECT CURRENT COST OF INSURANCE CHARGES AND AN ASSET
CHARGE AS DESCRIBED IN THE PROSPECTUS.
(3) NET INVESTMENT RETURNS ARE CALCULATED AS THE HYPOTHETICAL GROSS INVESTMENT
RETURN LESS ALL CHARGES AND DEDUCTIONS SHOWN IN THE PROSPECTUS APPENDIX.
The hypothetical investment rates of return shown above and elsewhere in this
prospectus are illustrative only and should not be deemed a representation of
past or future investment rates of return. Actual rates of return may be more or
less than those shown and will depend on a number of factors, including the
investment allocations made by an owner, prevailing rates and rates of
inflation. The death benefit and cash value for a policy would be different from
those shown if the actual rates of return averaged 0%, 6%, and 12% over a period
of years but also fluctuated above or below those averages for individual policy
years. No representation can be made by Nationwide or the trust that these
hypothetical rates of return can be achieved for any one year or sustained over
any period of time.
43
47
DEATH BENEFIT OPTION 1
$1,500 ANNUAL PREMIUM: $100,000 SPECIFIED AMOUNT
MALE: NON-TOBACCO: AGE 45
GUARANTEED VALUES
0% HYPOTHETICAL 6% HYPOTHETICAL 12% HYPOTHETICAL
PREMIUMS GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN
PAID PLUS
POLICY INTEREST
YEAR AT 5% CASH CASH CASH
CASH SURR. DEATH CASH SURR. DEATH CASH SURR. DEATH
VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
1 1,575 634 25 100,000 696 87 100,000 759 150 100,000
2 3,229 1,221 642 100,000 1,385 806 100,000 1,557 979 100,000
3 4,965 1,760 1,212 100,000 2,066 1,517 100,000 2,401 1,853 100,000
4 6,788 2,249 1,731 100,000 2,735 2,217 100,000 3,292 2,774 100,000
5 8,703 2,682 2,195 100,000 3,388 2,900 100,000 4,230 3,743 100,000
6 10,713 3,057 2,600 100,000 4,019 3,562 100,000 5,220 4,763 100,000
7 12,824 3,370 2,944 100,000 4,625 4,198 100,000 6,263 5,837 100,000
8 15,040 3,612 3,216 100,000 5,195 4,799 100,000 7,359 6,963 100,000
9 17,367 3,777 3,412 100,000 5,722 5,356 100,000 8,509 8,144 100,000
10 19,810 3,864 3,529 100,000 6,201 5,866 100,000 9,720 9,385 100,000
11 22,376 3,869 3,564 100,000 6,629 6,324 100,000 10,998 10,694 100,000
12 25,069 3,793 3,519 100,000 7,003 6,729 100,000 12,356 12,082 100,000
13 27,898 3,642 3,398 100,000 7,326 7,082 100,000 13,810 13,566 100,000
14 30,868 3,415 3,202 100,000 7,596 7,383 100,000 15,376 15,163 100,000
15 33,986 3,108 2,926 100,000 7,806 7,623 100,000 17,068 16,885 100,000
16 37,261 2,703 2,551 100,000 7,936 7,784 100,000 18,889 18,736 100,000
17 40,699 2,175 2,053 100,000 7,958 7,836 100,000 20,832 20,710 100,000
18 44,309 1,486 1,395 100,000 7,831 7,739 100,000 22,870 22,779 100,000
19 48,099 597 536 100,000 7,509 7,448 100,000 24,992 24,931 100,000
20 52,079 (*) (*) (*) 6,956 6,925 100,000 27,201 27,170 100,000
21 56,258 (*) (*) (*) 6,140 6,140 100,000 29,506 29,506 100,000
22 60,646 (*) (*) (*) 5,033 5,033 100,000 31,930 31,930 100,000
23 65,253 (*) (*) (*) 3,613 3,613 100,000 34,504 34,504 100,000
24 70,091 (*) (*) (*) 1,843 1,843 100,000 37,258 37,258 100,000
25 75,170 (*) (*) (*) (*) (*) (*) 40,216 40,216 100,000
26 80,504 (*) (*) (*) (*) (*) (*) 43,393 43,393 100,000
27 86,104 (*) (*) (*) (*) (*) (*) 46,793 46,793 100,000
28 91,984 (*) (*) (*) (*) (*) (*) 50,428 50,428 100,000
29 98,158 (*) (*) (*) (*) (*) (*) 54,322 54,322 100,000
30 104,641 (*) (*) (*) (*) (*) (*) 58,527 58,527 100,000
(1) NO POLICY LOANS AND NO PARTIAL WITHDRAWALS HAVE BEEN MADE.
(2) GUARANTEED VALUES REFLECT GUARANTEED COST OF INSURANCE CHARGES AND AN
ASSET CHARGE AS DESCRIBED IN THE PROSPECTUS.
(3) NET INVESTMENT RETURNS ARE CALCULATED AS THE HYPOTHETICAL GROSS INVESTMENT
RETURN LESS ALL CHARGES AND DEDUCTIONS SHOWN IN THE PROSPECTUS APPENDIX.
(*) UNLESS ADDITIONAL PREMIUM IS PAID, THE POLICY WILL LAPSE WITHOUT VALUE.
The hypothetical investment rates of return shown above and elsewhere in this
prospectus are illustrative only and should not be deemed a representation of
past or future investment rates of return. Actual rates of return may be more or
less than those shown and will depend on a number of factors, including the
investment allocations made by an owner, prevailing rates and rates of
inflation. The death benefit and cash value for a policy would be different from
those shown if the actual rates of return averaged 0%, 6%, and 12% over a period
of years but also fluctuated above or below those averages for individual policy
years. No representation can be made by Nationwide or the trust that these
hypothetical rates of return can be achieved for any one year or sustained over
any period of time.
44
48
DEATH BENEFIT OPTION 2
$750 ANNUAL PREMIUM: $50,000 SPECIFIED AMOUNT
MALE: NON-TOBACCO: AGE 45
CURRENT VALUES
0% HYPOTHETICAL 6% HYPOTHETICAL 12% HYPOTHETICAL
PREMIUMS GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN
PAID PLUS
POLICY INTEREST
YEAR AT 5% CASH CASH CASH
CASH SURR. DEATH CASH SURR. DEATH CASH SURR. DEATH
VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
1 788 363 58 50,363 395 90 50,395 428 123 50,428
2 1,614 714 424 50,714 801 512 50,801 893 604 50,893
3 2,483 1,053 779 51,053 1,219 945 51,219 1,401 1,127 51,401
4 3,394 1,380 1,121 51,380 1,648 1,389 51,648 1,954 1,695 51,954
5 4,351 1,694 1,450 51,694 2,089 1,845 52,089 2,558 2,314 52,558
6 5,357 1,994 1,766 51,994 2,541 2,312 52,541 3,216 2,987 53,216
7 6,412 2,280 2,066 52,280 3,002 2,789 53,002 3,933 3,720 53,933
8 7,520 2,549 2,351 52,549 3,474 3,276 53,474 4,715 4,517 54,715
9 8,683 2,801 2,619 52,801 3,953 3,770 53,953 5,567 5,384 55,567
10 9,905 3,035 2,867 53,035 4,440 4,272 54,440 6,494 6,327 56,494
11 11,188 3,244 3,091 53,244 4,928 4,776 54,928 7,499 7,347 57,499
12 12,535 3,430 3,293 53,430 5,419 5,282 55,419 8,593 8,456 58,593
13 13,949 3,589 3,467 53,589 5,908 5,786 55,908 9,778 9,656 59,778
14 15,434 3,717 3,611 53,717 6,391 6,285 56,391 11,063 10,956 61,063
15 16,993 3,813 3,721 53,813 6,866 6,775 56,866 12,455 12,363 62,455
16 18,630 3,872 3,796 53,872 7,329 7,253 57,329 13,961 13,885 63,961
17 20,349 3,891 3,830 53,891 7,773 7,712 57,773 15,590 15,529 65,590
18 22,154 3,867 3,821 53,867 8,196 8,150 58,196 17,351 17,306 67,351
19 24,049 3,780 3,750 53,780 8,574 8,544 58,574 19,239 19,208 69,239
20 26,039 3,657 3,642 53,657 8,934 8,919 58,934 21,288 21,273 71,288
21 28,129 3,472 3,472 53,472 9,246 9,246 59,246 23,467 23,467 73,467
22 30,323 3,217 3,217 53,217 9,500 9,500 59,500 25,781 25,781 75,781
23 32,626 2,887 2,887 52,887 9,686 9,686 59,686 28,235 28,235 78,235
24 35,045 2,472 2,472 52,472 9,791 9,791 59,791 30,832 30,832 80,832
25 37,585 1,965 1,965 51,965 9,802 9,802 59,802 33,578 33,578 83,578
26 40,252 1,359 1,359 51,359 9,707 9,707 59,707 36,479 36,479 86,479
27 43,052 645 645 50,645 9,489 9,489 59,489 39,539 39,539 89,539
28 45,992 (*) (*) (*) 9,121 9,121 59,121 42,750 42,750 92,750
29 49,079 (*) (*) (*) 8,536 8,536 58,536 46,067 46,067 96,067
30 52,321 (*) (*) (*) 7,837 7,837 57,837 49,616 49,616 99,616
(1) NO POLICY LOANS AND NO PARTIAL WITHDRAWALS HAVE BEEN MADE.
(2) CURRENT VALUES REFLECT CURRENT COST OF INSURANCE CHARGES AND AN ASSET
CHARGE AS DESCRIBED IN THE PROSPECTUS.
(3) NET INVESTMENT RETURNS ARE CALCULATED AS THE HYPOTHETICAL GROSS INVESTMENT
RETURN LESS ALL CHARGES AND DEDUCTIONS SHOWN IN THE PROSPECTUS APPENDIX.
(*) UNLESS ADDITIONAL PREMIUM IS PAID, THE POLICY WILL LAPSE WITHOUT VALUE.
The hypothetical investment rates of return shown above and elsewhere in this
prospectus are illustrative only and should not be deemed a representation of
past or future investment rates of return. Actual rates of return may be more or
less than those shown and will depend on a number of factors, including the
investment allocations made by an owner, prevailing rates and rates of
inflation. The death benefit and cash value for a policy would be different from
those shown if the actual rates of return averaged 0%, 6%, and 12% over a period
of years but also fluctuated above or below those averages for individual policy
years. No representation can be made by Nationwide or the trust that these
hypothetical rates of return can be achieved for any one year or sustained over
any period of time.
45
49
DEATH BENEFIT OPTION 2
$750 ANNUAL PREMIUM: $50,000 SPECIFIED AMOUNT
MALE: NON-TOBACCO: AGE 45
GUARANTEED VALUES
0% HYPOTHETICAL 6% HYPOTHETICAL 12% HYPOTHETICAL
PREMIUMS GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN
PAID PLUS
POLICY INTEREST
YEAR AT 5% CASH CASH CASH
CASH SURR. DEATH CASH SURR. DEATH CASH SURR. DEATH
VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
1 788 194 0 50,194 221 0 50,221 249 0 50,249
2 1,614 364 75 50,364 430 141 50,430 500 210 50,500
3 2,483 508 234 50,508 625 351 50,625 753 479 50,753
4 3,394 626 367 50,626 803 544 50,803 1,008 749 51,008
5 4,351 715 471 50,715 962 718 50,962 1,261 1,018 51,261
6 5,357 773 545 50,773 1,097 869 51,097 1,510 1,281 51,510
7 6,412 798 585 50,798 1,207 993 51,207 1,751 1,538 51,751
8 7,520 787 589 50,787 1,283 1,085 51,283 1,981 1,783 51,981
9 8,683 735 552 50,735 1,322 1,140 51,322 2,192 2,009 52,192
10 9,905 642 475 50,642 1,321 1,154 51,321 2,383 2,215 52,383
11 11,188 508 356 50,508 1,275 1,123 51,275 2,549 2,396 52,549
12 12,535 333 196 50,333 1,184 1,047 51,184 2,689 2,551 52,689
13 13,949 (*) (*) (*) 1,048 926 51,048 2,802 2,680 52,802
14 15,434 (*) (*) (*) 865 758 50,865 2,886 2,780 52,886
15 16,993 (*) (*) (*) 631 539 50,631 2,936 2,845 52,936
16 18,630 (*) (*) (*) 333 257 50,333 2,939 2,863 52,939
17 20,349 (*) (*) (*) (*) (*) (*) 2,877 2,816 52,877
18 22,154 (*) (*) (*) (*) (*) (*) 2,724 2,678 52,724
19 24,049 (*) (*) (*) (*) (*) (*) 2,450 2,419 52,450
20 26,039 (*) (*) (*) (*) (*) (*) 2,031 2,015 52,031
21 28,129 (*) (*) (*) (*) (*) (*) 1,444 1,444 51,444
22 30,323 (*) (*) (*) (*) (*) (*) 669 669 50,669
23 32,626 (*) (*) (*) (*) (*) (*) (*) (*) (*)
24 35,045 (*) (*) (*) (*) (*) (*) (*) (*) (*)
25 37,585 (*) (*) (*) (*) (*) (*) (*) (*) (*)
26 40,252 (*) (*) (*) (*) (*) (*) (*) (*) (*)
27 43,052 (*) (*) (*) (*) (*) (*) (*) (*) (*)
28 45,992 (*) (*) (*) (*) (*) (*) (*) (*) (*)
29 49,079 (*) (*) (*) (*) (*) (*) (*) (*) (*)
30 52,321 (*) (*) (*) (*) (*) (*) (*) (*) (*)
(1) NO POLICY LOANS AND NO PARTIAL WITHDRAWALS HAVE BEEN MADE.
(2) GUARANTEED VALUES REFLECT GUARANTEED COST OF INSURANCE CHARGES AND AN
ASSET CHARGE AS DESCRIBED IN THE PROSPECTUS.
(3) NET INVESTMENT RETURNS ARE CALCULATED AS THE HYPOTHETICAL GROSS INVESTMENT
RETURN LESS ALL CHARGES AND DEDUCTIONS SHOWN IN THE PROSPECTUS APPENDIX.
(*) UNLESS ADDITIONAL PREMIUM IS PAID, THE POLICY WILL LAPSE WITHOUT VALUE.
The hypothetical investment rates of return shown above and elsewhere in this
prospectus are illustrative only and should not be deemed a representation of
past or future investment rates of return. Actual rates of return may be more or
less than those shown and will depend on a number of factors, including the
investment allocations made by an owner, prevailing rates and rates of
inflation. The death benefit and cash value for a policy would be different from
those shown if the actual rates of return averaged 0%, 6%, and 12% over a period
of years but also fluctuated above or below those averages for individual policy
years. No representation can be made by Nationwide or the trust that these
hypothetical rates of return can be achieved for any one year or sustained over
any period of time.
46
50
DEATH BENEFIT OPTION 2
$1,500 ANNUAL PREMIUM: $100,000 SPECIFIED AMOUNT
MALE: NON-TOBACCO: AGE 45
CURRENT VALUES
0% HYPOTHETICAL 6% HYPOTHETICAL 12% HYPOTHETICAL
PREMIUMS GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN
PAID PLUS
POLICY INTEREST
YEAR AT 5% CASH CASH CASH
CASH SURR. DEATH CASH SURR. DEATH CASH SURR. DEATH
VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
1 1,575 964 355 100,964 1,036 427 101,036 1,109 500 101,109
2 3,229 1,903 1,324 101,903 2,108 1,529 102,108 2,322 1,743 102,322
3 4,965 2,815 2,267 102,815 3,215 2,667 103,215 3,650 3,102 103,650
4 6,788 3,701 3,183 103,701 4,359 3,841 104,359 5,103 4,586 105,103
5 8,703 4,559 4,072 104,559 5,540 5,053 105,540 6,695 6,208 106,695
6 10,713 5,387 4,931 105,387 6,758 6,301 106,758 8,438 7,982 108,438
7 12,824 6,184 5,758 106,184 8,012 7,585 108,012 10,347 9,921 110,347
8 15,040 6,947 6,551 106,947 9,301 8,905 109,301 12,437 12,041 112,437
9 17,367 7,672 7,307 107,672 10,624 10,259 110,624 14,723 14,357 114,723
10 19,810 8,359 8,024 108,359 11,980 11,645 111,980 17,225 16,890 117,225
11 22,376 8,994 8,689 108,994 13,357 13,053 113,357 19,953 19,649 119,953
12 25,069 9,581 9,307 109,581 14,761 14,487 114,761 22,911 22,637 122,911
13 27,898 10,112 9,868 110,112 16,181 15,938 116,181 26,099 25,855 126,099
14 30,868 10,580 10,367 110,580 17,614 17,400 117,614 29,533 29,320 129,533
15 33,986 10,980 10,798 110,980 19,052 18,869 119,052 33,231 33,048 133,231
16 37,261 11,306 11,154 111,306 20,484 20,332 120,484 37,210 37,057 137,210
17 40,699 11,549 11,427 111,549 21,888 21,766 121,888 41,487 41,366 141,487
18 44,309 11,704 11,613 111,704 23,258 23,167 123,258 46,087 45,996 146,087
19 48,099 11,732 11,671 111,732 24,549 24,488 124,549 50,996 50,935 150,996
20 52,079 11,686 11,656 111,686 25,814 25,784 125,814 56,300 56,270 156,300
21 56,258 11,513 11,513 111,513 26,995 26,995 126,995 61,980 61,980 161,980
22 60,646 11,200 11,200 111,200 28,075 28,075 128,075 68,057 68,057 168,057
23 65,253 10,733 10,733 110,733 29,034 29,034 129,034 74,553 74,553 174,553
24 70,091 10,095 10,095 110,095 29,850 29,850 129,850 81,489 81,489 181,489
25 75,170 9,271 9,271 109,271 30,499 30,499 130,499 88,890 88,890 188,890
26 80,504 8,248 8,248 108,248 30,961 30,961 130,961 96,785 96,785 196,785
27 86,104 7,006 7,006 107,006 31,204 31,204 131,204 105,198 105,198 205,198
28 91,984 5,506 5,506 105,506 31,181 31,181 131,181 114,136 114,136 214,136
29 98,158 3,634 3,634 103,634 30,760 30,760 130,760 123,527 123,527 223,527
30 104,641 1,617 1,617 101,617 30,156 30,156 130,156 133,649 133,649 233,649
(1) NO POLICY LOANS AND NO PARTIAL WITHDRAWALS HAVE BEEN MADE.
(2) CURRENT VALUES REFLECT CURRENT COST OF INSURANCE CHARGES AND AN ASSET CHARGE AS DESCRIBED IN THE PROSPECTUS.
(3) NET INVESTMENT RETURNS ARE CALCULATED AS THE HYPOTHETICAL GROSS INVESTMENT RETURN LESS ALL CHARGES AND DEDUCTIONS SHOWN IN
THE PROSPECTUS APPENDIX.
The hypothetical investment rates of return shown above and elsewhere in this
prospectus are illustrative only and should not be deemed a representation of
past or future investment rates of return. Actual rates of return may be more or
less than those shown and will depend on a number of factors, including the
investment allocations made by an owner, prevailing rates and rates of
inflation. The death benefit and cash value for a policy would be different from
those shown if the actual rates of return averaged 0%, 6%, and 12% over a period
of years but also fluctuated above or below those averages for individual policy
years. No representation can be made by Nationwide or the trust that these
hypothetical rates of return can be achieved for any one year or sustained over
any period of time.
47
51
DEATH BENEFIT OPTION 2
$1,500 ANNUAL PREMIUM: $100,000 SPECIFIED AMOUNT
MALE: NON-TOBACCO: AGE 45
GUARANTEED VALUES
0% HYPOTHETICAL 6% HYPOTHETICAL 12% HYPOTHETICAL
PREMIUMS GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN
PAID PLUS
POLICY INTEREST
YEAR AT 5% CASH CASH CASH
CASH SURR. DEATH CASH SURR. DEATH CASH SURR. DEATH
VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
1 1,575 628 18 100,628 689 80 100,689 751 142 100,751
2 3,229 1,203 624 101,203 1,365 786 101,365 1,535 957 101,535
3 4,965 1,726 1,178 101,726 2,026 1,478 102,026 2,355 1,807 102,355
4 6,788 2,194 1,676 102,194 2,669 2,151 102,669 3,212 2,694 103,212
5 8,703 2,602 2,114 102,602 3,286 2,798 103,286 4,103 3,615 104,103
6 10,713 2,945 2,488 102,945 3,871 3,414 103,871 5,027 4,570 105,027
7 12,824 3,221 2,795 103,221 4,420 3,994 104,420 5,984 5,557 105,984
8 15,040 3,422 3,026 103,422 4,920 4,524 104,920 6,967 6,572 106,967
9 17,367 3,539 3,174 103,539 5,363 4,997 105,363 7,973 7,608 107,973
10 19,810 3,574 3,239 103,574 5,742 5,407 105,742 9,002 8,667 109,002
11 22,376 3,522 3,218 103,522 6,052 5,748 106,052 10,052 9,747 110,052
12 25,069 3,388 3,114 103,388 6,292 6,018 106,292 11,128 10,854 111,128
13 27,898 3,176 2,932 103,176 6,462 6,219 106,462 12,238 11,994 112,238
14 30,868 2,888 2,675 102,888 6,561 6,348 106,561 13,387 13,174 113,387
15 33,986 2,522 2,339 102,522 6,580 6,398 106,580 14,575 14,392 114,575
16 37,261 2,060 1,907 102,060 6,498 6,346 106,498 15,787 15,635 115,787
17 40,699 1,479 1,357 101,479 6,285 6,163 106,285 17,001 16,879 117,001
18 44,309 744 653 100,744 5,897 5,806 105,897 18,179 18,088 118,179
19 48,099 (*) (*) (*) 5,289 5,228 105,289 19,279 19,218 119,279
20 52,079 (*) (*) (*) 4,426 4,396 104,426 20,263 20,233 120,263
21 56,258 (*) (*) (*) 3,285 3,285 103,285 21,100 21,100 121,100
22 60,646 (*) (*) (*) 1,846 1,846 101,846 21,772 21,772 121,772
23 65,253 (*) (*) (*) 102 102 100,102 22,269 22,269 122,269
24 70,091 (*) (*) (*) (*) (*) (*) 22,571 22,571 122,571
25 75,170 (*) (*) (*) (*) (*) (*) 22,638 22,638 122,638
26 80,504 (*) (*) (*) (*) (*) (*) 22,399 22,399 122,399
27 86,104 (*) (*) (*) (*) (*) (*) 21,740 21,740 121,740
28 91,984 (*) (*) (*) (*) (*) (*) 20,528 20,528 120,528
29 98,158 (*) (*) (*) (*) (*) (*) 18,611 18,611 118,611
30 104,641 (*) (*) (*) (*) (*) (*) 15,819 15,819 115,819
(1) NO POLICY LOANS AND NO PARTIAL WITHDRAWALS HAVE BEEN MADE.
(2) GUARANTEED VALUES REFLECT GUARANTEED COST OF INSURANCE CHARGES AND AN ASSET CHARGE AS DESCRIBED IN THE PROSPECTUS.
(3) NET INVESTMENT RETURNS ARE CALCULATED AS THE HYPOTHETICAL GROSS INVESTMENT RETURN LESS ALL CHARGES AND DEDUCTIONS SHOWN IN
THE PROSPECTUS APPENDIX.
(*) UNLESS ADDITIONAL PREMIUM IS PAID, THE POLICY WILL LAPSE WITHOUT VALUE.
The hypothetical investment rates of return shown above and elsewhere in this
prospectus are illustrative only and should not be deemed a representation of
past or future investment rates of return. Actual rates of return may be more or
less than those shown and will depend on a number of factors, including the
investment allocations made by an owner, prevailing rates and rates of
inflation. The death benefit and cash value for a policy would be different from
those shown if the actual rates of return averaged 0%, 6%, and 12% over a period
of years but also fluctuated above or below those averages for individual policy
years. No representation can be made by Nationwide or the trust that these
hypothetical rates of return can be achieved for any one year or sustained over
any period of time.
48
52
DEATH BENEFIT OPTION 1
$1,200 ANNUAL PREMIUM: $50,000 SPECIFIED AMOUNT
MALE: NON-TOBACCO: AGE 55
CURRENT VALUES
0% HYPOTHETICAL 6% HYPOTHETICAL 12% HYPOTHETICAL
PREMIUMS GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN
PAID PLUS
POLICY INTEREST
YEAR AT 5% CASH CASH CASH
CASH SURR. DEATH CASH SURR. DEATH CASH SURR. DEATH
VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
1 1,260 688 196 50,000 744 251 50,000 799 307 50,000
2 2,583 1,354 886 50,000 1,508 1,040 50,000 1,670 1,202 50,000
3 3,972 1,992 1,549 50,000 2,290 1,847 50,000 2,615 2,172 50,000
4 5,431 2,601 2,182 50,000 3,088 2,670 50,000 3,642 3,223 50,000
5 6,962 3,179 2,785 50,000 3,902 3,508 50,000 4,758 4,364 50,000
6 8,570 3,723 3,354 50,000 4,730 4,361 50,000 5,973 5,604 50,000
7 10,259 4,230 3,885 50,000 5,570 5,226 50,000 7,295 6,951 50,000
8 12,032 4,699 4,379 50,000 6,422 6,102 50,000 8,738 8,418 50,000
9 13,893 5,111 4,816 50,000 7,270 6,975 50,000 10,301 10,006 50,000
10 15,848 5,492 5,221 50,000 8,138 7,868 50,000 12,024 11,754 50,000
11 17,901 5,817 5,571 50,000 9,007 8,761 50,000 13,909 13,663 50,000
12 20,056 6,081 5,860 50,000 9,872 9,650 50,000 15,976 15,754 50,000
13 22,318 6,279 6,082 50,000 10,730 10,533 50,000 18,248 18,051 50,000
14 24,694 6,402 6,230 50,000 11,576 11,404 50,000 20,752 20,579 50,000
15 27,189 6,443 6,296 50,000 12,406 12,258 50,000 23,493 23,345 50,000
16 29,808 6,395 6,272 50,000 13,216 13,093 50,000 26,504 26,381 50,000
17 32,559 6,247 6,148 50,000 13,999 13,901 50,000 29,826 29,728 50,000
18 35,447 5,978 5,905 50,000 14,744 14,670 50,000 33,506 33,432 50,000
19 38,479 5,535 5,486 50,000 15,409 15,360 50,000 37,592 37,543 50,000
20 41,663 5,009 4,985 50,000 16,072 16,047 50,000 42,194 42,170 50,000
21 45,006 4,330 4,330 50,000 16,683 16,683 50,000 47,390 47,390 50,000
22 48,517 3,452 3,452 50,000 17,214 17,214 50,000 53,163 53,163 55,822
23 52,202 2,337 2,337 50,000 17,644 17,644 50,000 59,467 59,467 62,441
24 56,073 941 941 50,000 17,952 17,952 50,000 66,346 66,346 69,664
25 60,136 (*) (*) (*) 18,115 18,115 50,000 73,850 73,850 77,542
26 64,403 (*) (*) (*) 18,099 18,099 50,000 82,029 82,029 86,130
27 68,883 (*) (*) (*) 17,866 17,866 50,000 90,939 90,939 95,486
28 73,587 (*) (*) (*) 17,369 17,369 50,000 100,639 100,639 105,671
29 78,527 (*) (*) (*) 16,544 16,544 50,000 111,191 111,191 116,751
30 83,713 (*) (*) (*) 15,300 15,300 50,000 122,660 122,660 128,793
(1) NO POLICY LOANS AND NO PARTIAL WITHDRAWALS HAVE BEEN MADE.
(2) CURRENT VALUES REFLECT CURRENT COST OF INSURANCE CHARGES AND AN ASSET CHARGE AS DESCRIBED IN THE PROSPECTUS.
(3) NET INVESTMENT RETURNS ARE CALCULATED AS THE HYPOTHETICAL GROSS INVESTMENT RETURN LESS ALL CHARGES AND DEDUCTIONS SHOWN IN
THE PROSPECTUS APPENDIX.
(*) UNLESS ADDITIONAL PREMIUM IS PAID, THE POLICY WILL LAPSE WITHOUT VALUE.
The hypothetical investment rates of return shown above and elsewhere in this
prospectus are illustrative only and should not be deemed a representation of
past or future investment rates of return. Actual rates of return may be more or
less than those shown and will depend on a number of factors, including the
investment allocations made by an owner, prevailing rates and rates of
inflation. The death benefit and cash value for a policy would be different from
those shown if the actual rates of return averaged 0%, 6%, and 12% over a period
of years but also fluctuated above or below those averages for individual policy
years. No representation can be made by Nationwide or the trust that these
hypothetical rates of return can be achieved for any one year or sustained over
any period of time.
49
53
DEATH BENEFIT OPTION 1
$1,200 ANNUAL PREMIUM: $50,000 SPECIFIED AMOUNT
MALE: NON-TOBACCO: AGE 55
GUARANTEED VALUES
0% HYPOTHETICAL 6% HYPOTHETICAL 12% HYPOTHETICAL
PREMIUMS GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN
PAID PLUS
POLICY INTEREST
YEAR AT 5% CASH CASH CASH
CASH SURR. DEATH CASH SURR. DEATH CASH SURR. DEATH
VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
1 1,260 327 0 50,000 371 0 50,000 416 0 50,000
2 2,583 615 147 50,000 724 256 50,000 839 372 50,000
3 3,972 865 422 50,000 1,059 616 50,000 1,275 832 50,000
4 5,431 1,078 660 50,000 1,378 960 50,000 1,726 1,307 50,000
5 6,962 1,253 859 50,000 1,677 1,283 50,000 2,192 1,798 50,000
6 8,570 1,381 1,012 50,000 1,947 1,578 50,000 2,667 2,298 50,000
7 10,259 1,450 1,106 50,000 2,175 1,830 50,000 3,142 2,798 50,000
8 12,032 1,444 1,124 50,000 2,340 2,020 50,000 3,601 3,281 50,000
9 13,893 1,343 1,047 50,000 2,422 2,127 50,000 4,024 3,729 50,000
10 15,848 1,135 865 50,000 2,405 2,134 50,000 4,399 4,128 50,000
11 17,901 813 567 50,000 2,273 2,027 50,000 4,715 4,469 50,000
12 20,056 370 149 50,000 2,016 1,795 50,000 4,963 4,741 50,000
13 22,318 (*) (*) (*) 1,627 1,430 50,000 5,138 4,941 50,000
14 24,694 (*) (*) (*) 1,090 918 50,000 5,230 5,057 50,000
15 27,189 (*) (*) (*) 380 233 50,000 5,215 5,067 50,000
16 29,808 (*) (*) (*) (*) (*) (*) 5,057 4,934 50,000
17 32,559 (*) (*) (*) (*) (*) (*) 4,695 4,596 50,000
18 35,447 (*) (*) (*) (*) (*) (*) 4,049 3,976 50,000
19 38,479 (*) (*) (*) (*) (*) (*) 3,024 2,975 50,000
20 41,663 (*) (*) (*) (*) (*) (*) 1,501 1,477 50,000
21 45,006 (*) (*) (*) (*) (*) (*) (*) (*) (*)
22 48,517 (*) (*) (*) (*) (*) (*) (*) (*) (*)
23 52,202 (*) (*) (*) (*) (*) (*) (*) (*) (*)
24 56,073 (*) (*) (*) (*) (*) (*) (*) (*) (*)
25 60,136 (*) (*) (*) (*) (*) (*) (*) (*) (*)
26 64,403 (*) (*) (*) (*) (*) (*) (*) (*) (*)
27 68,883 (*) (*) (*) (*) (*) (*) (*) (*) (*)
28 73,587 (*) (*) (*) (*) (*) (*) (*) (*) (*)
29 78,527 (*) (*) (*) (*) (*) (*) (*) (*) (*)
30 83,713 (*) (*) (*) (*) (*) (*) (*) (*) (*)
(1) NO POLICY LOANS AND NO PARTIAL WITHDRAWALS HAVE BEEN MADE.
(2) GUARANTEED VALUES REFLECT GUARANTEED COST OF INSURANCE CHARGES AND AN ASSET CHARGE AS DESCRIBED IN THE PROSPECTUS.
(3) NET INVESTMENT RETURNS ARE CALCULATED AS THE HYPOTHETICAL GROSS INVESTMENT RETURN LESS ALL CHARGES AND DEDUCTIONS SHOWN IN
THE PROSPECTUS APPENDIX.
(*) UNLESS ADDITIONAL PREMIUM IS PAID, THE POLICY WILL LAPSE WITHOUT VALUE.
The hypothetical investment rates of return shown above and elsewhere in this
prospectus are illustrative only and should not be deemed a representation of
past or future investment rates of return. Actual rates of return may be more or
less than those shown and will depend on a number of factors, including the
investment allocations made by an owner, prevailing rates and rates of
inflation. The death benefit and cash value for a policy would be different from
those shown if the actual rates of return averaged 0%, 6%, and 12% over a period
of years but also fluctuated above or below those averages for individual policy
years. No representation can be made by Nationwide or the trust that these
hypothetical rates of return can be achieved for any one year or sustained over
any period of time.
50
54
DEATH BENEFIT OPTION 1
$2,500 ANNUAL PREMIUM: $100,000 SPECIFIED AMOUNT
MALE: NON-TOBACCO: AGE 55
CURRENT VALUES
0% HYPOTHETICAL 6% HYPOTHETICAL 12% HYPOTHETICAL
PREMIUMS GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN
PAID PLUS
POLICY INTEREST
YEAR AT 5% CASH CASH CASH
CASH SURR. DEATH CASH SURR. DEATH CASH SURR. DEATH
VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
1 2,625 1,715 731 100,000 1,840 855 100,000 1,965 980 100,000
2 5,381 3,384 2,449 100,000 3,741 2,806 100,000 4,114 3,179 100,000
3 8,275 4,998 4,112 100,000 5,699 4,813 100,000 6,461 5,575 100,000
4 11,314 6,553 5,716 100,000 7,713 6,876 100,000 9,026 8,189 100,000
5 14,505 8,045 7,258 100,000 9,783 8,996 100,000 11,831 11,044 100,000
6 17,855 9,471 8,733 100,000 11,909 11,171 100,000 14,903 14,164 100,000
7 21,373 10,825 10,135 100,000 14,089 13,400 100,000 18,268 17,579 100,000
8 25,066 12,103 11,463 100,000 16,325 15,685 100,000 21,949 21,309 100,000
9 28,945 13,272 12,682 100,000 18,589 17,998 100,000 25,924 25,334 100,000
10 33,017 14,382 13,840 100,000 20,922 20,381 100,000 30,276 29,735 100,000
11 37,293 15,385 14,893 100,000 23,271 22,778 100,000 35,014 34,521 100,000
12 41,782 16,275 15,832 100,000 25,631 25,188 100,000 40,184 39,741 100,000
13 46,497 17,040 16,646 100,000 27,999 27,606 100,000 45,841 45,448 100,000
14 51,446 17,666 17,321 100,000 30,371 30,026 100,000 52,051 51,707 100,000
15 56,644 18,141 17,846 100,000 32,742 32,447 100,000 58,893 58,598 100,000
16 62,101 18,453 18,206 100,000 35,113 34,867 100,000 66,464 66,218 100,000
17 67,831 18,581 18,384 100,000 37,479 37,282 100,000 74,878 74,681 100,000
18 73,848 18,493 18,346 100,000 39,826 39,678 100,000 84,271 84,123 100,000
19 80,165 18,090 17,992 100,000 42,095 41,997 100,000 94,796 94,697 103,327
20 86,798 17,546 17,497 100,000 44,430 44,380 100,000 106,422 106,373 113,872
21 93,763 16,734 16,734 100,000 46,759 46,759 100,000 119,199 119,199 125,159
22 101,076 15,571 15,571 100,000 49,055 49,055 100,000 133,154 133,154 139,812
23 108,755 13,991 13,991 100,000 51,307 51,307 100,000 148,390 148,390 155,809
24 116,818 11,925 11,925 100,000 53,507 53,507 100,000 165,015 165,015 173,266
25 125,284 9,294 9,294 100,000 55,657 55,657 100,000 183,147 183,147 192,305
26 134,173 5,992 5,992 100,000 57,749 57,749 100,000 202,911 202,911 213,057
27 143,506 1,887 1,887 100,000 59,780 59,780 100,000 224,440 224,440 235,662
28 153,307 (*) (*) (*) 61,753 61,753 100,000 247,876 247,876 260,270
29 163,597 (*) (*) (*) 63,664 63,664 100,000 273,369 273,369 287,037
30 174,402 (*) (*) (*) 65,504 65,504 100,000 301,075 301,075 316,128
(1) NO POLICY LOANS AND NO PARTIAL WITHDRAWALS HAVE BEEN MADE.
(2) CURRENT VALUES REFLECT CURRENT COST OF INSURANCE CHARGES AND AN ASSET CHARGE AS DESCRIBED IN THE PROSPECTUS.
(3) NET INVESTMENT RETURNS ARE CALCULATED AS THE HYPOTHETICAL GROSS INVESTMENT RETURN LESS ALL CHARGES AND DEDUCTIONS SHOWN IN
THE PROSPECTUS APPENDIX.
(*) UNLESS ADDITIONAL PREMIUM IS PAID, THE POLICY WILL LAPSE WITHOUT VALUE.
The hypothetical investment rates of return shown above and elsewhere in this
prospectus are illustrative only and should not be deemed a representation of
past or future investment rates of return. Actual rates of return may be more or
less than those shown and will depend on a number of factors, including the
investment allocations made by an owner, prevailing rates and rates of
inflation. The death benefit and cash value for a policy would be different from
those shown if the actual rates of return averaged 0%, 6%, and 12% over a period
of years but also fluctuated above or below those averages for individual policy
years. No representation can be made by Nationwide or the trust that these
hypothetical rates of return can be achieved for any one year or sustained over
any period of time.
51
55
DEATH BENEFIT OPTION 1
$2,500 ANNUAL PREMIUM: $100,000 SPECIFIED AMOUNT
MALE: NON-TOBACCO: AGE 55
GUARANTEED VALUES
0% HYPOTHETICAL 6% HYPOTHETICAL 12% HYPOTHETICAL
PREMIUMS GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN
PAID PLUS
POLICY INTEREST
YEAR AT 5% CASH CASH CASH
CASH SURR. DEATH CASH SURR. DEATH CASH SURR. DEATH
VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
1 2,625 995 11 100,000 1,097 113 100,000 1,200 215 100,000
2 5,381 1,912 977 100,000 2,180 1,244 100,000 2,461 1,526 100,000
3 8,275 2,757 1,871 100,000 3,254 2,367 100,000 3,799 2,913 100,000
4 11,314 3,531 2,694 100,000 4,321 3,484 100,000 5,227 4,390 100,000
5 14,505 4,231 3,443 100,000 5,379 4,591 100,000 6,754 5,966 100,000
6 17,855 4,842 4,103 100,000 6,412 5,674 100,000 8,379 7,640 100,000
7 21,373 5,341 4,652 100,000 7,398 6,708 100,000 10,094 9,404 100,000
8 25,066 5,695 5,055 100,000 8,301 7,661 100,000 11,882 11,242 100,000
9 28,945 5,871 5,280 100,000 9,087 8,496 100,000 13,725 13,134 100,000
10 33,017 5,845 5,304 100,000 9,728 9,187 100,000 15,620 15,078 100,000
11 37,293 5,605 5,112 100,000 10,206 9,714 100,000 17,571 17,078 100,000
12 41,782 5,140 4,697 100,000 10,506 10,063 100,000 19,592 19,148 100,000
13 46,497 4,452 4,058 100,000 10,623 10,229 100,000 21,685 21,291 100,000
14 51,446 3,529 3,184 100,000 10,537 10,192 100,000 23,865 23,520 100,000
15 56,644 2,341 2,045 100,000 10,213 9,918 100,000 26,137 25,841 100,000
16 62,101 830 584 100,000 9,586 9,340 100,000 28,491 28,245 100,000
17 67,831 (*) (*) (*) 8,549 8,352 100,000 30,894 30,697 100,000
18 73,848 (*) (*) (*) 6,970 6,822 100,000 33,309 33,161 100,000
19 80,165 (*) (*) (*) 4,692 4,594 100,000 35,700 35,601 100,000
20 86,798 (*) (*) (*) 1,534 1,485 100,000 38,037 37,988 100,000
21 93,763 (*) (*) (*) (*) (*) (*) 40,303 40,303 100,000
22 101,076 (*) (*) (*) (*) (*) (*) 42,491 42,491 100,000
23 108,755 (*) (*) (*) (*) (*) (*) 44,598 44,598 100,000
24 116,818 (*) (*) (*) (*) (*) (*) 46,615 46,615 100,000
25 125,284 (*) (*) (*) (*) (*) (*) 48,517 48,517 100,000
26 134,173 (*) (*) (*) (*) (*) (*) 50,252 50,252 100,000
27 143,506 (*) (*) (*) (*) (*) (*) 51,741 51,741 100,000
28 153,307 (*) (*) (*) (*) (*) (*) 52,875 52,875 100,000
29 163,597 (*) (*) (*) (*) (*) (*) 53,477 53,477 100,000
30 174,402 (*) (*) (*) (*) (*) (*) 53,341 53,341 100,000
(1) NO POLICY LOANS AND NO PARTIAL WITHDRAWALS HAVE BEEN MADE.
(2) GUARANTEED VALUES REFLECT GUARANTEED COST OF INSURANCE CHARGES AND AN ASSET CHARGE AS DESCRIBED IN THE PROSPECTUS.
(3) NET INVESTMENT RETURNS ARE CALCULATED AS THE HYPOTHETICAL GROSS INVESTMENT RETURN LESS ALL CHARGES AND DEDUCTIONS SHOWN IN
THE PROSPECTUS APPENDIX.
(*) UNLESS ADDITIONAL PREMIUM IS PAID, THE POLICY WILL LAPSE WITHOUT VALUE.
The hypothetical investment rates of return shown above and elsewhere in this
prospectus are illustrative only and should not be deemed a representation of
past or future investment rates of return. Actual rates of return may be more or
less than those shown and will depend on a number of factors, including the
investment allocations made by an owner, prevailing rates and rates of
inflation. The death benefit and cash value for a policy would be different from
those shown if the actual rates of return averaged 0%, 6%, and 12% over a period
of years but also fluctuated above or below those averages for individual policy
years. No representation can be made by Nationwide or the trust that these
hypothetical rates of return can be achieved for any one year or sustained over
any period of time.
52
56
DEATH BENEFIT OPTION 2
$1,200 ANNUAL PREMIUM: $50,000 SPECIFIED AMOUNT
MALE: NON-TOBACCO: AGE 55
CURRENT VALUES
0% HYPOTHETICAL 6% HYPOTHETICAL 12% HYPOTHETICAL
PREMIUMS GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN
PAID PLUS
POLICY INTEREST
YEAR AT 5% CASH CASH CASH
CASH SURR. DEATH CASH SURR. DEATH CASH SURR. DEATH
VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
1 1,260 683 191 50,683 738 246 50,738 794 301 50,794
2 2,583 1,339 872 51,339 1,492 1,024 51,492 1,652 1,184 51,652
3 3,972 1,963 1,520 51,963 2,257 1,814 52,257 2,577 2,134 52,577
4 5,431 2,553 2,134 52,553 3,031 2,612 53,031 3,573 3,154 53,573
5 6,962 3,105 2,711 53,105 3,810 3,416 53,810 4,644 4,250 54,644
6 8,570 3,617 3,248 53,617 4,592 4,223 54,592 5,794 5,425 55,794
7 10,259 4,084 3,739 54,084 5,372 5,027 55,372 7,028 6,684 57,028
8 12,032 4,504 4,184 54,504 6,147 5,827 56,147 8,352 8,032 58,352
9 13,893 4,857 4,561 54,857 6,896 6,600 56,896 9,754 9,458 59,754
10 15,848 5,170 4,899 55,170 7,644 7,373 57,644 11,270 10,999 61,270
11 17,901 5,416 5,170 55,416 8,364 8,117 58,364 12,884 12,638 62,884
12 20,056 5,589 5,367 55,589 9,046 8,825 59,046 14,599 14,378 64,599
13 22,318 5,682 5,485 55,682 9,682 9,485 59,682 16,419 16,222 66,419
14 24,694 5,686 5,514 55,686 10,259 10,087 60,259 18,345 18,172 68,345
15 27,189 5,595 5,447 55,595 10,767 10,619 60,767 20,379 20,231 70,379
16 29,808 5,401 5,277 55,401 11,192 11,069 61,192 22,502 22,379 72,502
17 32,559 5,094 4,995 55,094 11,521 11,422 61,521 24,709 24,610 74,709
18 35,447 4,655 4,582 54,655 11,727 11,654 61,727 26,986 26,912 76,986
19 38,479 4,028 3,979 54,028 11,745 11,695 61,745 29,277 29,228 79,277
20 41,663 3,325 3,300 53,325 11,679 11,654 61,679 31,704 31,679 81,704
21 45,006 2,473 2,473 52,473 11,449 11,449 61,449 34,199 34,199 84,199
22 48,517 1,433 1,433 51,433 11,006 11,006 61,006 36,728 36,728 86,728
23 52,202 180 180 50,180 10,310 10,310 60,310 39,263 39,263 89,263
24 56,073 (*) (*) (*) 9,324 9,324 59,324 41,782 41,782 91,782
25 60,136 (*) (*) (*) 8,012 8,012 58,012 44,259 44,259 94,259
26 64,403 (*) (*) (*) 6,330 6,330 56,330 46,663 46,663 96,663
27 68,883 (*) (*) (*) 4,228 4,228 54,228 48,955 48,955 98,955
28 73,587 (*) (*) (*) 1,663 1,663 51,663 51,099 51,099 101,099
29 78,527 (*) (*) (*) (*) (*) (*) 53,045 53,045 103,045
30 83,713 (*) (*) (*) (*) (*) (*) 54,730 54,730 104,730
(1) NO POLICY LOANS AND NO PARTIAL WITHDRAWALS HAVE BEEN MADE.
(2) CURRENT VALUES REFLECT CURRENT COST OF INSURANCE CHARGES AND AN ASSET CHARGE AS DESCRIBED IN THE PROSPECTUS.
(3) NET INVESTMENT RETURNS ARE CALCULATED AS THE HYPOTHETICAL GROSS INVESTMENT RETURN LESS ALL CHARGES AND DEDUCTIONS SHOWN IN
THE PROSPECTUS APPENDIX.
(*) UNLESS ADDITIONAL PREMIUM IS PAID, THE POLICY WILL LAPSE WITHOUT VALUE.
The hypothetical investment rates of return shown above and elsewhere in this
prospectus are illustrative only and should not be deemed a representation of
past or future investment rates of return. Actual rates of return may be more or
less than those shown and will depend on a number of factors, including the
investment allocations made by an owner, prevailing rates and rates of
inflation. The death benefit and cash value for a policy would be different from
those shown if the actual rates of return averaged 0%, 6%, and 12% over a period
of years but also fluctuated above or below those averages for individual policy
years. No representation can be made by Nationwide or the trust that these
hypothetical rates of return can be achieved for any one year or sustained over
any period of time.
53
57
DEATH BENEFIT OPTION 2
$1,200 ANNUAL PREMIUM: $50,000 SPECIFIED AMOUNT
MALE: NON-TOBACCO: AGE 55
GUARANTEED VALUES
0% HYPOTHETICAL 6% HYPOTHETICAL 12% HYPOTHETICAL
PREMIUMS GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN
PAID PLUS
POLICY INTEREST
YEAR AT 5% CASH CASH CASH
CASH SURR. DEATH CASH SURR. DEATH CASH SURR. DEATH
VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
1 1,260 317 0 50,317 361 0 50,361 405 0 50,405
2 2,583 590 122 50,590 696 229 50,696 809 341 50,809
3 3,972 821 378 50,821 1,008 565 51,008 1,216 773 51,216
4 5,431 1,011 592 51,011 1,296 877 51,296 1,626 1,207 51,626
5 6,962 1,158 764 51,158 1,555 1,162 51,555 2,037 1,643 52,037
6 8,570 1,254 885 51,254 1,777 1,408 51,777 2,441 2,072 52,441
7 10,259 1,288 943 51,288 1,946 1,601 51,946 2,824 2,479 52,824
8 12,032 1,242 922 51,242 2,041 1,721 52,041 3,163 2,843 53,163
9 13,893 1,099 804 51,099 2,041 1,746 52,041 3,437 3,141 53,437
10 15,848 849 578 50,849 1,929 1,658 51,929 3,625 3,354 53,625
11 17,901 487 241 50,487 1,693 1,447 51,693 3,712 3,466 53,712
12 20,056 (*) (*) (*) 1,326 1,104 51,326 3,685 3,464 53,685
13 22,318 (*) (*) (*) 823 626 50,823 3,535 3,338 53,535
14 24,694 (*) (*) (*) 177 4 50,177 3,246 3,074 53,246
15 27,189 (*) (*) (*) (*) (*) (*) 2,793 2,645 52,793
16 29,808 (*) (*) (*) (*) (*) (*) 2,133 2,010 52,133
17 32,559 (*) (*) (*) (*) (*) (*) 1,201 1,102 51,201
18 35,447 (*) (*) (*) (*) (*) (*) (*) (*) (*)
19 38,479 (*) (*) (*) (*) (*) (*) (*) (*) (*)
20 41,663 (*) (*) (*) (*) (*) (*) (*) (*) (*)
21 45,006 (*) (*) (*) (*) (*) (*) (*) (*) (*)
22 48,517 (*) (*) (*) (*) (*) (*) (*) (*) (*)
23 52,202 (*) (*) (*) (*) (*) (*) (*) (*) (*)
24 56,073 (*) (*) (*) (*) (*) (*) (*) (*) (*)
25 60,136 (*) (*) (*) (*) (*) (*) (*) (*) (*)
26 64,403 (*) (*) (*) (*) (*) (*) (*) (*) (*)
27 68,883 (*) (*) (*) (*) (*) (*) (*) (*) (*)
28 73,587 (*) (*) (*) (*) (*) (*) (*) (*) (*)
29 78,527 (*) (*) (*) (*) (*) (*) (*) (*) (*)
30 83,713 (*) (*) (*) (*) (*) (*) (*) (*) (*)
(1) NO POLICY LOANS AND NO PARTIAL WITHDRAWALS HAVE BEEN MADE.
(2) GUARANTEED VALUES REFLECT GUARANTEED COST OF INSURANCE CHARGES AND AN ASSET CHARGE AS DESCRIBED IN THE PROSPECTUS.
(3) NET INVESTMENT RETURNS ARE CALCULATED AS THE HYPOTHETICAL GROSS INVESTMENT RETURN LESS ALL CHARGES AND DEDUCTIONS SHOWN IN
THE PROSPECTUS APPENDIX.
(*) UNLESS ADDITIONAL PREMIUM IS PAID, THE POLICY WILL LAPSE WITHOUT VALUE.
The hypothetical investment rates of return shown above and elsewhere in this
prospectus are illustrative only and should not be deemed a representation of
past or future investment rates of return. Actual rates of return may be more or
less than those shown and will depend on a number of factors, including the
investment allocations made by an owner, prevailing rates and rates of
inflation. The death benefit and cash value for a policy would be different from
those shown if the actual rates of return averaged 0%, 6%, and 12% over a period
of years but also fluctuated above or below those averages for individual policy
years. No representation can be made by Nationwide or the trust that these
hypothetical rates of return can be achieved for any one year or sustained over
any period of time.
54
58
DEATH BENEFIT OPTION 2
$2,500 ANNUAL PREMIUM: $100,000 SPECIFIED AMOUNT
MALE: NON-TOBACCO: AGE 55
CURRENT VALUES
0% HYPOTHETICAL 6% HYPOTHETICAL 12% HYPOTHETICAL
PREMIUMS GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN
PAID PLUS
POLICY INTEREST
YEAR AT 5% CASH CASH CASH
CASH SURR. DEATH CASH SURR. DEATH CASH SURR. DEATH
VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
1 2,625 1,704 720 101,704 1,828 843 101,828 1,952 967 101,952
2 5,381 3,351 2,416 103,351 3,705 2,769 103,705 4,074 3,139 104,074
3 8,275 4,931 4,045 104,931 5,622 4,736 105,622 6,373 5,487 106,373
4 11,314 6,438 5,601 106,438 7,576 6,739 107,576 8,863 8,026 108,863
5 14,505 7,868 7,080 107,868 9,562 8,775 109,562 11,558 10,770 111,558
6 17,855 9,213 8,475 109,213 11,575 10,836 111,575 14,472 13,734 114,472
7 21,373 10,467 9,777 110,467 13,606 12,916 113,606 17,621 16,932 117,621
8 25,066 11,623 10,983 111,623 15,651 15,011 115,651 21,019 20,379 121,019
9 28,945 12,642 12,051 112,642 17,667 17,076 117,667 24,610 24,019 124,610
10 33,017 13,578 13,037 113,578 19,709 19,168 119,709 28,470 27,928 128,470
11 37,293 14,378 13,885 114,378 21,698 21,206 121,698 32,566 32,073 132,566
12 41,782 15,028 14,585 115,028 23,617 23,174 123,617 36,906 36,463 136,906
13 46,497 15,516 15,122 115,516 25,446 25,052 125,446 41,499 41,105 141,499
14 51,446 15,823 15,479 115,823 27,165 26,820 127,165 46,349 46,004 146,349
15 56,644 15,936 15,641 115,936 28,751 28,456 128,751 51,462 51,167 151,462
16 62,101 15,841 15,595 115,841 30,184 29,938 130,184 56,849 56,603 156,849
17 67,831 15,518 15,321 115,518 31,436 31,239 131,436 62,513 62,316 162,513
18 73,848 14,929 14,781 114,929 32,459 32,311 132,459 68,437 68,290 168,437
19 80,165 13,959 13,860 113,959 33,124 33,025 133,124 74,523 74,425 174,523
20 86,798 12,835 12,786 112,835 33,646 33,597 133,646 81,023 80,974 181,023
21 93,763 11,411 11,411 111,411 33,869 33,869 133,869 87,821 87,821 187,821
22 101,076 9,608 9,608 109,608 33,698 33,698 133,698 94,857 94,857 194,857
23 108,755 7,376 7,376 107,376 33,062 33,062 133,062 102,099 102,099 202,099
24 116,818 4,670 4,670 104,670 31,895 31,895 131,895 109,515 109,515 209,515
25 125,284 1,455 1,455 101,455 30,135 30,135 130,135 117,080 117,080 217,080
26 134,173 (*) (*) (*) 27,701 27,701 127,701 124,747 124,747 224,747
27 143,506 (*) (*) (*) 24,509 24,509 124,509 132,465 132,465 232,465
28 153,307 (*) (*) (*) 20,484 20,484 120,484 140,191 140,191 240,191
29 163,597 (*) (*) (*) 15,508 15,508 115,508 147,852 147,852 247,852
30 174,402 (*) (*) (*) 9,414 9,414 109,414 155,352 155,352 255,352
(1) NO POLICY LOANS AND NO PARTIAL WITHDRAWALS HAVE BEEN MADE.
(2) CURRENT VALUES REFLECT CURRENT COST OF INSURANCE CHARGES AND AN ASSET CHARGE AS DESCRIBED IN THE PROSPECTUS.
(3) NET INVESTMENT RETURNS ARE CALCULATED AS THE HYPOTHETICAL GROSS INVESTMENT RETURN LESS ALL CHARGES AND DEDUCTIONS SHOWN IN
THE PROSPECTUS APPENDIX.
(*) UNLESS ADDITIONAL PREMIUM IS PAID, THE POLICY WILL LAPSE WITHOUT VALUE.
The hypothetical investment rates of return shown above and elsewhere in this
prospectus are illustrative only and should not be deemed a representation of
past or future investment rates of return. Actual rates of return may be more or
less than those shown and will depend on a number of factors, including the
investment allocations made by an owner, prevailing rates and rates of
inflation. The death benefit and cash value for a policy would be different from
those shown if the actual rates of return averaged 0%, 6%, and 12% over a period
of years but also fluctuated above or below those averages for individual policy
years. No representation can be made by Nationwide or the trust that these
hypothetical rates of return can be achieved for any one year or sustained over
any period of time.
55
59
DEATH BENEFIT OPTION 2
$2,500 ANNUAL PREMIUM: $100,000 SPECIFIED AMOUNT
MALE: NON-TOBACCO: AGE 55
GUARANTEED VALUES
0% HYPOTHETICAL 6% HYPOTHETICAL 12% HYPOTHETICAL
PREMIUMS GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN GROSS INVESTMENT RETURN
PAID PLUS
POLICY INTEREST
YEAR AT 5% CASH CASH CASH
CASH SURR. DEATH CASH SURR. DEATH CASH SURR. DEATH
VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT
1 2,625 973 0 100,973 1,073 88 101,073 1,174 189 101,174
2 5,381 1,853 917 101,853 2,113 1,178 102,113 2,388 1,452 102,388
3 8,275 2,646 1,760 102,646 3,125 2,239 103,125 3,651 2,764 103,651
4 11,314 3,354 2,517 103,354 4,107 3,270 104,107 4,969 4,132 104,969
5 14,505 3,974 3,186 103,974 5,053 4,265 105,053 6,345 5,557 106,345
6 17,855 4,488 3,750 104,488 5,945 5,206 105,945 7,766 7,028 107,766
7 21,373 4,875 4,186 104,875 6,754 6,064 106,754 9,212 8,522 109,212
8 25,066 5,099 4,459 105,099 7,439 6,799 107,439 10,646 10,006 110,646
9 28,945 5,126 4,536 105,126 7,958 7,367 107,958 12,031 11,440 112,031
10 33,017 4,937 4,395 104,937 8,279 7,738 108,279 13,337 12,796 113,337
11 37,293 4,520 4,028 104,520 8,380 7,888 108,380 14,543 14,050 114,543
12 41,782 3,875 3,432 103,875 8,246 7,803 108,246 15,632 15,189 115,632
13 46,497 3,010 2,616 103,010 7,872 7,478 107,872 16,601 16,207 116,601
14 51,446 1,923 1,579 101,923 7,243 6,898 107,243 17,432 17,087 117,432
15 56,644 597 302 100,597 6,324 6,029 106,324 18,088 17,793 118,088
16 62,101 (*) (*) (*) 5,055 4,808 105,055 18,501 18,255 118,501
17 67,831 (*) (*) (*) 3,334 3,137 103,334 18,557 18,360 118,557
18 73,848 (*) (*) (*) 1,050 902 101,050 18,128 17,980 118,128
19 80,165 (*) (*) (*) (*) (*) (*) 17,065 16,967 117,065
20 86,798 (*) (*) (*) (*) (*) (*) 15,214 15,165 115,214
21 93,763 (*) (*) (*) (*) (*) (*) 12,420 12,420 112,420
22 101,076 (*) (*) (*) (*) (*) (*) 8,527 8,527 108,527
23 108,755 (*) (*) (*) (*) (*) (*) 3,376 3,376 103,376
24 116,818 (*) (*) (*) (*) (*) (*) (*) (*) (*)
25 125,284 (*) (*) (*) (*) (*) (*) (*) (*) (*)
26 134,173 (*) (*) (*) (*) (*) (*) (*) (*) (*)
27 143,506 (*) (*) (*) (*) (*) (*) (*) (*) (*)
28 153,307 (*) (*) (*) (*) (*) (*) (*) (*) (*)
29 163,597 (*) (*) (*) (*) (*) (*) (*) (*) (*)
30 174,402 (*) (*) (*) (*) (*) (*) (*) (*) (*)
(1) NO POLICY LOANS AND NO PARTIAL WITHDRAWALS HAVE BEEN MADE.
(2) GUARANTEED VALUES REFLECT GUARANTEED COST OF INSURANCE CHARGES AND AN ASSET CHARGE AS DESCRIBED IN THE PROSPECTUS.
(3) NET INVESTMENT RETURNS ARE CALCULATED AS THE HYPOTHETICAL GROSS INVESTMENT RETURN LESS ALL CHARGES AND DEDUCTIONS SHOWN IN
THE PROSPECTUS APPENDIX.
(*) UNLESS ADDITIONAL PREMIUM IS PAID, THE POLICY WILL LAPSE WITHOUT VALUE.
The hypothetical investment rates of return shown above and elsewhere in this
prospectus are illustrative only and should not be deemed a representation of
past or future investment rates of return. Actual rates of return may be more or
less than those shown and will depend on a number of factors, including the
investment allocations made by an owner, prevailing rates and rates of
inflation. The death benefit and cash value for a policy would be different from
those shown if the actual rates of return averaged 0%, 6%, and 12% over a period
of years but also fluctuated above or below those averages for individual policy
years. No representation can be made by Nationwide or the trust that these
hypothetical rates of return can be achieved for any one year or sustained over
any period of time.
56
60
APPENDIX C: PERFORMANCE SUMMARY INFORMATION
The following performance tables display historical investments results of the
underlying mutual fund sub-accounts. This information may be useful in helping
potential investors in deciding which underlying mutual fund sub-accounts to
choose and in assessing the competence of the underlying mutual funds'
investment advisers. The performance figures shown be considered in light of the
investment objectives and policies, characteristics and quality of the
underlying portfolios of the underlying mutual funds, and the market conditions
during the periods of time quoted. The performance figures should not be
considered as estimates or predictions of future performance. Investment return
and the principal value of the underlying mutual fund sub-accounts are not
guaranteed and will fluctuate so that a policy owner's units, when redeemed, may
be worth more or less than their original cost.
CASH VALUES
1 YEAR TO 2 YEARS TO 3 YEARS TO 5 YEARS TO 10 YEARS TO INCEPTION TO
12/31/00 12/31/00 12/31/00 12/31/00 12/31/00 12/31/00
FUND CASH CASH CASH CASH CASH CASH
UNDERLYING INCEPTION ACCUM. SURR. ACCUM. SURR. ACCUM. SURR. ACCUM. SURR. ACCUM. SURR. ACCUM. SURR.
INVESTMENT OPTIONS DATE** VALUE VALUE VALUE VALUE VALUE VALUE VALUE VALUE VALUE VALUE VALUE VALUE
American Century VP 10/30/97 $7,432 $4,432 $16,313 $13,463 $27,516 $24,816 NA NA NA NA $40,648 $38,098
Income & Growth
American Century VP 05/01/94 $6,874 $3,874 $18,426 $15,576 $32,053 $29,353 $65,684 $63,284 NA NA $99,247 $97,147
International
American Century VP 05/01/96 $9,895 $6,895 $19,700 $16,850 $29,828 $27,128 NA NA NA NA $55,560 $53,160
Value
Dreyfus Investment 04/30/99 $8,219 $5,219 NA NA NA NA NA NA NA NA $19,103 $16,253
Portfolios -
European Equity
Portfolio: Initial
Shares
Dreyfus Socially 10/06/93 $7,449 $4,449 $17,253 $14,403 $29,767 $27,067 $64,704 $62,304 NA NA $130,541 $128,591
Responsible Growth
Fund, Inc.: Initial
Shares
Dreyfus Stock Index 09/29/89 $7,572 $4,572 $16,815 $13,965 $28,557 $25,857 $62,657 $60,257 $204,765 $203,115 $261,743 $275,243
Fund, Inc.: Initial
Shares
Dreyfus Variable 04/05/93 $8,337 $5,337 $17,643 $14,793 $29,759 $27,059 $63,979 $61,579 NA NA $137,066 $135,116
Investment Fund -
Appreciation
Portfolio: Initial
Shares
Federated Insurance 04/22/99 $9,315 $6,315 NA NA NA NA NA NA NA NA $18,569 $15,719
Series - Federated
Quality Bond Fund II
Fidelity VIP 10/09/86 $9,067 $6,067 $18,748 $15,898 $29,385 $26,685 $58,108 $55,708 $192,585 $190,935 $355,036 $373,036
Equity-Income
Portfolio: Service
Class
Fidelity VIP Growth 10/09/86 $7,471 $4,471 $17,846 $14,996 $32,134 $29,434 $69,081 $66,681 $232,496 $230,846 $476,902 $494,902
Portfolio: Service
Class
Fidelity VIP High 09/15/85 $6,385 $3,385 $13,419 $10,569 $19,979 $17,279 $36,293 $33,893 $102,696 $101,046 $211,355 $230,855
Income Portfolio:
Service Class
Fidelity VIP 01/28/87 $6,668 $3,668 $16,423 $13,573 $27,236 $24,536 $52,326 $49,926 $135,282 $133,632 $218,511 $235,011
Overseas Portfolio:
Service Class
Fidelity VIP II 01/03/95 $7,795 $4,795 $17,577 $14,727 $30,142 $27,442 $63,922 $61,522 NA NA $89,788 $87,538
Contrafund(R)
Portfolio: Service
Class
Fidelity VIP III 01/03/95 $6,858 $3,858 $14,059 $11,209 $23,023 $20,323 $47,892 $45,492 NA NA $65,616 $63,366
Growth
Opportunities
Portfolio: Service
Class
Janus Aspen Series 05/01/97 $6,705 $3,705 $18,285 $15,435 $36,281 $33,581 NA NA NA NA $53,643 $51,093
- - Capital
Appreciation
Portfolio: Service
Shares
Janus Aspen Series 01/18/00 NA NA NA NA NA NA NA NA NA NA $5,456 $2,456
- - Global Technology
Portfolio: Service
Shares
Janus Aspen Series 05/02/94 $6,954 $3,954 $19,816 $16,966 $34,691 $31,991 $75,422 $73,022 NA NA $123,707 $121,607
- - International
Growth Portfolio:
Service Shares
NSAT Capital 04/15/92 $6,093 $3,093 $12,512 $9,662 $20,875 $18,175 $45,764 $43,364 NA NA $115,891 $114,091
Appreciation Fund
NSAT Dreyfus NSAT 10/31/97 $9,814 $6,814 $21,526 $18,676 $34,250 $31,550 NA NA NA NA $46,609 $44,059
Mid Cap Index Fund
NSAT Federated NSAT 10/31/97 $7,501 $4,501 $16,425 $13,575 $26,522 $23,822 NA NA NA NA $36,981 $34,431
Equity Income Fund
NSAT Federated NSAT 10/31/97 $7,645 $4,645 $15,562 $12,712 $23,846 $21,146 NA NA NA NA $34,206 $31,656
High Income Bond
Fund
NSAT Gartmore NSAT 08/30/00 NA NA NA NA NA NA NA NA NA NA $7,037 $4,037
Emerging Markets
Fund
NSAT Gartmore NSAT 06/30/00 NA NA NA NA NA NA NA NA NA NA $6,923 $3,923
Global Technology
and Communications
Fund
NSAT Gartmore NSAT 08/30/00 NA NA NA NA NA NA NA NA NA NA $8,118 $5,118
International
Growth Fund
57
61
CASH VALUES (CONTINUED)
1 YEAR TO 2 YEARS TO 3 YEARS TO 5 YEARS TO 10 YEARS TO INCEPTION TO
12/31/00 12/31/00 12/31/00 12/31/00 12/31/00 12/31/00
FUND CASH CASH CASH CASH CASH CASH
UNDERLYING INCEPTION ACCUM. SURR. ACCUM. SURR. ACCUM. SURR. ACCUM. SURR. ACCUM. SURR. ACCUM. SURR.
INVESTMENT OPTIONS DATE** VALUE VALUE VALUE VALUE VALUE VALUE VALUE VALUE VALUE VALUE VALUE VALUE
NSAT Government 11/08/82 $9,506 $6,506 $18,636 $15,786 $28,540 $25,840 $49,961 $47,561 $117,530 $115,880 $321,951 $345,951
Bond Fund
NSAT JP Morgan NSAT 10/31/97 $8,373 $5,373 $16,780 $13,930 $25,773 $23,073 NA NA NA NA $35,548 $32,998
Balanced Fund
NSAT MAS NSAT Multi 10/31/97 $8,884 $5,884 $17,817 $14,967 $26,873 $24,173 NA NA NA NA $37,320 $34,770
Sector Bond Fund
NSAT Money Market 11/10/81 $8,935 $5,935 $18,239 $15,389 $27,890 $25,190 $48,190 $45,790 $103,601 $101,951 $261,649 $287,149
Fund
NSAT Nationwide 10/31/97 $7,292 $4,292 $16,385 $13,535 $27,098 $24,398 NA NA NA NA $38,525 $35,975
Global 50 Fund
NSAT Nationwide 05/03/99 $7,032 $4,032 NA NA NA NA NA NA NA NA $22,622 $19,772
Small Cap Growth
Fund
NSAT Nationwide 10/31/97 $9,456 $6,456 $21,501 $18,651 $32,694 $29,994 NA NA NA NA $45,107 $42,557
Small Cap Value Fund
NSAT Nationwide 10/23/95 $9,241 $6,241 $22,425 $19,575 $35,379 $32,679 $69,265 $66,865 NA NA $86,742 $84,492
Small Company Fund
NSAT Strong NSAT 10/31/97 $7,134 $4,134 $20,581 $17,731 $35,345 $32,645 NA NA NA NA $49,279 $46,729
Mid Cap Growth Fund
NSAT Total Return 11/08/82 $8,215 $5,215 $17,003 $14,153 $27,301 $24,601 $56,364 $53,964 $174,509 $172,859 $596,711 $620,711
Fund
NSAT Turner NSAT 07/03/95 NA NA NA NA NA NA NA NA NA NA $5,416 $2,416
Growth Focus Fund
Neuberger Berman 11/03/97 $8,518 $5,518 $18,337 $15,487 $31,313 $28,613 NA NA NA NA $42,817 $40,267
AMT Guardian
Portfolio
Neuberger Berman 11/03/97 $7,875 $4,875 $19,811 $16,961 $36,478 $33,778 NA NA NA NA $54,783 $52,233
AMT Mid-Cap Growth
Portfolio
Neuberger Berman 03/22/94 $8,424 $5,424 $17,506 $14,656 $26,778 $24,078 $54,650 $52,250 NA NA $93,769 $91,669
AMT Partners
Portfolio
Oppenheimer 08/15/86 $7,618 $4,618 $21,572 $18,722 $36,679 $33,979 $73,507 $71,107 $240,179 $238,529 $484,069 $502,069
Variable Account
Funds - Oppenheimer
Aggressive Growth
Fund/VA
Oppenheimer 04/03/85 $8,460 $5,460 $20,450 $17,600 $35,045 $32,345 $76,168 $73,768 $250,290 $248,640 $573,669 $593,169
Variable Account
Funds - Oppenheimer
Capital
Appreciation Fund/VA
Oppenheimer 06/30/95 $8,925 $5,925 $23,065 $20,215 $38,836 $36,136 $80,339 $77,939 $222,586 $220,936 $239,997 $251,997
Variable Account
Funds - Oppenheimer
Global Securities
Fund/VA
Oppenheimer 07/05/95 $7,631 $4,631 $17,033 $14,183 $26,613 $23,913 $56,092 $53,692 NA NA $71,224 $68,974
Variable Account
Funds - Oppenheimer
Main Street Growth
& Income Fund/VA
Strong Opportunity 06/30/95 $8,982 $5,982 $21,202 $18,352 $34,726 $32,026 $71,153 $68,753 NA NA $177,870 $176,070
Fund II, Inc.
The Universal 06/16/97 $9,442 $6,442 $21,654 $18,804 $29,792 $27,092 NA NA NA NA $37,265 $34,715
Institutional
Funds, Inc. -
Emerging Markets
Debt Portfolio
The Universal 11/08/82 $7,833 $4,833 NA NA NA NA NA NA NA NA $19,179 $16,329
Institutional
Funds, Inc. - Mid
Cap Growth Portfolio
The Universal 07/03/95 $10,948 $7,948 $21,266 $18,416 $30,061 $27,361 $56,067 $53,667 NA NA $69,838 $67,588
Institutional
Funds, Inc. - US
Real Estate
Portfolio
Van Eck Worldwide 12/27/95 $4,697 $1,697 $14,762 $11,912 $20,655 $17,955 $33,152 $30,752 NA NA $44,300 $42,050
Insurance Trust -
Worldwide Emerging
Markets Fund
Van Eck Worldwide 09/01/89 $9,375 $6,375 $20,818 $17,968 $28,089 $25,389 $44,187 $41,787 $103,303 $101,653 $122,116 $135,616
Insurance Trust -
Worldwide Hard
Assets Fund
**The underlying mutual fund Inception Date is the date the underlying mutual
fund first became effective, which is not necessarily the same date the
underlying mutual fund was first made available through the variable account.
For those underlying mutual funds which have not been offered as sub-accounts
through the variable account for one of the quoted periods, the total return
figures will show the investment performance that the underlying mutual funds
would have achieved (reduced by the current asset charge and fund investment
advisory fees and expenses) had they been offered as sub-accounts through the
variable account for the period quoted. Certain underlying mutual funds are not
as old as some of the periods quoted, therefore, total return figures may not be
available for all of the periods shown.
The preceding table displays three types of total return. Simply stated, total
return shows the percent change in unit values, with dividends and capital gains
reinvested, after the deduction of the current asset charge (and the deduction
of applicable investment advisory fees and other expenses of the underlying
mutual funds). The total return figures shown in the Annual Percentage Change
and Annualized Percentage Change columns represent annualized figures, i.e.,
they show the rate of growth that would have produced the corresponding
cumulative
58
62
return had performance been constant over the entire period quoted. The
Non-Annualized Percentage Change total return figures are not annual return
figures but instead represent the total percentage change in unit value over the
stated periods without annualization. THE TOTAL RETURN FIGURES DO NOT TAKE INTO
ACCOUNT THE SEVERAL OTHER POLICY CHARGES WHICH ARE DESCRIBED IN THE "POLICY
CHARGES" SECTION. THESE OTHER CHARGES INCLUDE COST OF INSURANCE CHARGES AND
SURRENDER CHARGES.
59
63
TOTAL RETURN
ANNUAL PERCENTAGE CHANGE NON ANNUALIZED PERCENTAGE CHANGE
FUND UNIT 1 MO. 1 YR. 2 YRS. 3 YRS. 5 YRS. INCEPTION
UNDERLYING INVESTMENT INCEPTION VALUES 1998 1999 2000 TO TO TO TO TO TO
OPTIONS DATE** 12/31/00 12/31/00 12/31/00 12/31/00 12/31/00 12/31/00 12/31/00
American Century VP 10/30/97 13.38 26.86% 18.02% -10.62% 1.28% -10.62% 5.49% 33.83% NA 44.27%
Income & Growth
American Century VP 05/01/94 16.20 18.76% 64.04% -16.83% 5.14% -16.83% 36.44% 62.04% 119.92% 134.44%
International
American Century VP Value 05/01/96 12.28 4.81% -0.85% 18.14% 5.71% 18.14% 17.14% 22.77% NA 73.81%
Dreyfus Investment 04/30/99 12.67 NA NA -2.00% 6.60% -2.00% NA NA NA 26.62%
Portfolios - European
Equity Portfolio: Initial
Shares
Dreyfus Socially 10/06/93 14.97 29.38% 30.08% -11.03% 0.13% -11.03% 15.73% 49.73% 133.13% 241.79%
Responsible Growth Fund,
Inc: Initial Shares
Dreyfus Stock Index Fund, 09/29/89 14.03 28.21% 20.60% -9.28% 0.49% -9.28% 9.41% 40.28% 128.54% 372.79%
Inc.: Initial Shares
Dreyfus Variable 04/05/93 14.42 30.22% 11.46% -0.65% -0.01% -0.65% 10.73% 44.19% 131.81% 240.42%
Investment Fund -
Appreciation Portfolio:
Initial Shares
Federated Insurance 04/22/99 10.90 NA NA 10.45% 2.00% 10.45% NA NA NA 8.24%
Series - Federated
Quality Bond Fund II
Fidelity VIP 10/09/86 12.84 11.54% 6.25% 8.30% 4.26% 8.30% 15.08% 28.36% 87.85% 496.75%
Equity-Income Portfolio:
Service Class
Fidelity VIP Growth 10/09/86 17.02 39.38% 37.29% -11.07% 0.23% -11.07% 22.09% 70.17% 140.96% 763.87%
Portfolio: Service Class
Fidelity VIP High Income 09/15/85 7.99 -4.42% 8.07% -22.61% 2.13% -22.61%- 16.36% -20.06% 7.18% 239.56%
Portfolio: Service Class
Fidelity VIP Overseas 01/28/87 12.97 12.64% 42.46% -19.15% 0.25% -19.15% 15.18% 29.74% 63.85% 207.59%
Portfolio: Service Class
Fidelity VIP II 01/03/95 15.05 29.94% 24.15% -6.71% 3.36% -6.71% 15.81% 50.48% 126.50% 216.24%
Contrafund(R)Portfolio:
Service Class
Fidelity VIP III Growth 01/03/95 10.74 24.51% 4.18% -17.18% 0.80% -17.18%- 13.71% 7.43% 65.12% 118.81%
Opportunities Portfolio:
Service Class
Janus Aspen Series - 05/01/97 8.24 58.11% 66.95% -19.35% 2.73% -19.35% 34.64% 112.88% NA 169.51%
Capital Appreciation
Portfolio: Service Shares
Janus Aspen Series - 01/18/00 6.58 NA NA NA -1.51% NA NA NA NA -34.11%
Global Technology
Portfolio: Service Shares
Janus Aspen Series - 05/02/94 8.27 17.24% 82.31% -16.97% 0.89% -16.97% 51.38% 77.48% 183.19% 238.98%
International Growth
Portfolio: Service Shares
NSAT Capital Appreciation 04/15/92 9.96 29.96% 4.28% -26.53% -2.25% -26.53%- 23.39% -0.43% 68.91% 151.05%
Fund
NSAT Dreyfus NSAT Mid Cap 10/31/97 15.44 10.81% 20.92% 15.21% 7.36% 15.21% 39.31% 54.37% NA 53.81%
Index Fund
NSAT Federated NSAT 10/31/97 12.19 15.13% 18.49% -10.62% 2.38% -10.62% 5.90% 21.93% NA 24.09%
Equity Income Fund
NSAT Federated NSAT High 10/31/97 10.01 5.80% 3.19% -8.28% 3.01% -8.28% -5.35% 0.14% NA 2.42%
Income Bond Fund
NSAT Gartmore NSAT 08/30/00 8.71 NA NA NA 3.30% NA NA NA NA -24.83%
Emerging Markets Fund
NSAT Gartmore NSAT Global 06/30/00 6.02 NA NA NA -0.87% NA NA NA NA -24.96%
Technology and
Communications Fund
NSAT Gartmore NSAT 08/30/00 9.25 NA NA NA 4.10% NA NA NA NA -13.70%
International Growth Fund
NSAT Government Bond Fund 11/08/82 11.97 8.91% -2.35% 12.54% 1.89% 12.54% 9.90% 19.69% 35.83% 365.31%
NSAT JP Morgan NSAT 10/31/97 10.86 8.07% 0.87% -0.35% 1.28% -0.35% 0.51% 8.62% NA 10.21%
Balanced Fund
NSAT MAS NSAT Multi 10/31/97 11.01 2.60% 1.56% 5.65% 3.41% 5.65% 7.30% 10.09% NA 11.23%
Sector Bond Fund
NSAT Money Market Fund 11/10/81 11.70 5.27% 4.85% 6.03% 0.52% 6.03% 11.17% 17.03% 29.51% 251.64%
NSAT Nationwide Global 50 10/31/97 12.84 19.14% 22.92% -12.32% 3.21% -12.32% 7.78% 28.41% NA 29.91%
Fund
NSAT Nationwide Small Cap 05/03/99 17.19 NA NA -16.17% 7.27% -16.17% NA NA NA 71.86%
Growth Fund
NSAT Nationwide Small Cap 10/31/97 13.78 -3.06% 27.84% 11.20% 7.53% 11.20% 42.15% 37.80% NA 35.58%
Value Fund
NSAT Nationwide Small 10/23/95 15.84 1.01% 44.02% 8.90% 9.13% 8.90% 56.83% 58.42% 128.34% 161.16%
Company Fund
NSAT Strong NSAT Mid Cap 10/31/97 17.92 14.59% 84.75% -15.38% 13.44% -15.38% 56.34% 79.16% NA 83.09%
Growth Fund
NSAT Total Return Fund 11/08/82 12.36 18.07% 6.94% -2.12% 0.61% -2.12% 4.67% 23.59% 94.91% 1106.41%
NSAT Turner NSAT Growth 07/03/95 6.34 NA NA NA -0.50% NA NA NA NA -40.30%
Focus Fund
Neuberger Berman AMT 11/03/97 15.30 31.67% 14.93% 1.13% 3.17% 1.13% 16.23% 53.04% NA 61.00%
Guardian Portfolio
Neuberger Berman AMT 11/03/97 19.84 39.28% 53.89% -7.46% 6.79% -7.46% 42.41% 98.35% NA 132.47%
Mid-Cap Growth Portfolio
Neuberger Berman AMT 03/22/94 11.27 4.21% 7.37% 0.70% 5.89% 0.70% 8.12% 12.67% 91.61% 155.48%
Partners Portfolio
Oppenheimer Variable 08/15/86 18.31 12.36% 83.60% -11.24% 2.67% -11.24% 62.97% 83.11% 145.85% 826.36%
Account Funds -
Oppenheimer Aggressive
Growth Fund/VA
Oppenheimer Variable 04/03/85 17.52 24.00% 41.66% -0.23% 3.26% -0.23% 41.33% 75.25% 177.99% 992.62%
Account Funds -
Oppenheimer Capital
Appreciation Fund/VA
Oppenheimer Variable 06/30/95 9.60 14.10% 58.48% 5.09% 5.53% 5.09% 66.55% 90.04% 174.06% 333.84%
Account Funds -
Oppenheimer Global
Securities Fund/VA
ANNUALIZED PERCENTAGE CHANGE
3 YRS. 5 TRS. INCEPTION
UNDERLYING INVESTMENT TO TO TO
OPTIONS 12/31/00 12/31/00 12/31/00
American Century VP 10.20% NA 12.26%
Income & Growth
American Century VP 17.45% 17.07% 13.64%
International
American Century VP Value 7.08% NA 12.58%
Dreyfus Investment NA NA 15.21%
Portfolios - European
Equity Portfolio: Initial
Shares
Dreyfus Socially 14.40% 18.45% 18.52%
Responsible Growth Fund,
Inc: Initial Shares
Dreyfus Stock Index Fund, 11.94% 17.98% 14.80%
Inc.: Initial Shares
Dreyfus Variable 12.97% 18.31% 17.16%
Investment Fund -
Appreciation Portfolio:
Initial Shares
Federated Insurance NA NA 4.80%
Series - Federated
Quality Bond Fund II
Fidelity VIP 8.68% 13.44% 13.38%
Equity-Income Portfolio:
Service Class
Fidelity VIP Growth 19.39% 19.23% 16.37%
Portfolio: Service Class
Fidelity VIP High Income -7.19% 1.40% 8.33%
Portfolio: Service Class
Fidelity VIP Overseas 9.07% 10.38% 8.40%
Portfolio: Service Class
Fidelity VIP II 14.59% 17.76% 21.18%
Contrafund(R)Portfolio:
Service Class
Fidelity VIP III Growth 2.42% 10.55% 13.96%
Opportunities Portfolio:
Service Class
Janus Aspen Series - 28.64% NA 31.07%
Capital Appreciation
Portfolio: Service Shares
Janus Aspen Series - NA NA NA
Global Technology
Portfolio: Service Shares
Janus Aspen Series - 21.07% 23.14% 20.11%
International Growth
Portfolio: Service Shares
NSAT Capital Appreciation -0.15% 11.05% 11.15%
Fund
NSAT Dreyfus NSAT Mid Cap 15.57% NA 14.56%
Index Fund
NSAT Federated NSAT 6.83% NA 7.05%
Equity Income Fund
NSAT Federated NSAT High 0.05% NA 0.76%
Income Bond Fund
NSAT Gartmore NSAT NA NA NA
Emerging Markets Fund
NSAT Gartmore NSAT Global NA NA NA
Technology and
Communications Fund
NSAT Gartmore NSAT NA NA NA
International Growth Fund
NSAT Government Bond Fund 6.17% 6.32% 8.84%
NSAT JP Morgan NSAT 2.80% NA 3.12%
Balanced Fund
NSAT MAS NSAT Multi 3.26% NA 3.42%
Sector Bond Fund
NSAT Money Market Fund 5.38% 5.31% 6.79%
NSAT Nationwide Global 50 8.69% NA 8.62%
Fund
NSAT Nationwide Small Cap NA NA 38.61%
Growth Fund
NSAT Nationwide Small Cap 11.28% NA 10.09%
Value Fund
NSAT Nationwide Small 16.57% 17.95% 20.33%
Company Fund
NSAT Strong NSAT Mid Cap 21.45% NA 21.04%
Growth Fund
NSAT Total Return Fund 7.32% 14.28% 14.71%
NSAT Turner NSAT Growth NA NA NA
Focus Fund
Neuberger Berman AMT 15.24% NA 16.27%
Guardian Portfolio
Neuberger Berman AMT 25.65% NA 30.62%
Mid-Cap Growth Portfolio
Neuberger Berman AMT 4.06% 13.89% 14.85%
Partners Portfolio
Oppenheimer Variable 22.34% 19.71% 16.75%
Account Funds -
Oppenheimer Aggressive
Growth Fund/VA
Oppenheimer Variable 20.56% 22.69% 16.40%
Account Funds -
Oppenheimer Capital
Appreciation Fund/VA
Oppenheimer Variable 23.86% 22.34% 15.58%
Account Funds -
Oppenheimer Global
Securities Fund/VA
64
TOTAL RETURN (CONTINUED)
ANNUAL PERCENTAGE CHANGE NON ANNUALIZED PERCENTAGE CHANGE
FUND UNIT 1 MO. 1 YR. 2 YRS. 3 YRS. 5 YRS. INCEPTION
UNDERLYING INVESTMENT INCEPTION VALUES 1998 1999 2000 TO TO TO TO TO TO
OPTIONS DATE** 12/31/00 12/31/00 12/31/00 12/31/00 12/31/00 12/31/00 12/31/00
Oppenheimer Variable 07/05/95 11.62 4.70% 21.71% -8.78% 2.16% -8.78% 11.03% 16.25% 104.07% 155.61%
Account Funds -
Oppenheimer Main Street
Growth & Income Fund/VA
Strong Opportunity Fund 06/30/95 9.85 13.54% 34.91% 6.35% 6.85% 6.35% 43.48% 62.91% 141.47% 357.67%
II, Inc.
The Universal 06/16/97 10.32 -28.38% 29.37% 11.39% 3.31% 11.39% 44.11% 3.21% NA 4.01%
Institutional Funds, Inc.
- - Emerging Markets Debt
Portfolio
The Universal 11/08/82 8.69 NA NA -7.33% 7.58% -7.33% NA NA NA 28.25%
Institutional Funds, Inc.
- - Mid Cap Growth Portfolio
The Universal 07/03/95 10.94 -11.62% -3.37% 28.06% 6.00% 28.06% 23.74% 9.36% 86.69% 102.27%
Institutional Funds, Inc.
- - US Real Estate Portfolio
Van Eck Worldwide 12/27/95 7.67 -34.13% 100.28% -41.87% -2.47% -41.87% 16.43% -23.31% -14.02% -14.88%
Insurance Trust -
Worldwide Emerging
Markets Fund
Van Eck Worldwide 09/01/89 9.31 -30.97% 21.00% 11.40% 11.97% 11.40% 34.80% -6.95% 8.02% 63.62%
Insurance Trust -
Worldwide Hard Assets Fund
ANNUALIZED PERCENTAGE CHANGE
3 YRS. 5 TRS. INCEPTION
UNDERLYING INVESTMENT TO TO TO
OPTIONS 12/31/00 12/31/00 12/31/00
Oppenheimer Variable 5.15% 15.33% 18.65%
Account Funds -
Oppenheimer Main Street
Growth & Income Fund/VA
Strong Opportunity Fund 17.67% 19.28% 19.24%
II, Inc.
The Universal 1.06% NA 1.12%
Institutional Funds, Inc.
- - Emerging Markets Debt
Portfolio
The Universal NA NA 23.01%
Institutional Funds, Inc.
- - Mid Cap Growth Portfolio
The Universal 3.03% 13.30% 13.69%
Institutional Funds, Inc.
- - US Real Estate Portfolio
Van Eck Worldwide -8.46% -2.98% -3.15%
Insurance Trust -
Worldwide Emerging
Markets Fund
Van Eck Worldwide -2.37% 1.55% 4.44%
Insurance Trust -
Worldwide Hard Assets Fund
**The underlying mutual fund Inception Date is the date the underlying mutual
fund first became effective, which is not necessarily the same date the
underlying mutual fund was first made available through the variable account.
For those underlying mutual funds which have not been offered as sub-accounts
through the variable account for one of the quoted periods, the total return
figures will show the investment performance that the underlying mutual funds
would have achieved (reduced by the current asset charge and fund investment
advisory fees and expenses) had they been offered as sub-accounts through the
variable account for the period quoted. Certain underlying mutual funds are not
as old as some of the periods quoted, therefore, total return figures may not be
available for all of the periods shown.
The preceding table displays three types of total return. Simply stated, total
return shows the percent change in unit values, with dividends and capital gains
reinvested, after the deduction of the current asset charge (and the deduction
of applicable investment advisory fees and other expenses of the underlying
mutual funds). The total return figures shown in the Annual Percentage Change
and Annualized Percentage Change columns represent annualized figures, i.e.,
they show the rate of growth that would have produced the corresponding
cumulative return had performance been constant over the entire period quoted.
The Non-Annualized Percentage Change total return figures are not annual return
figures but instead represent the total percentage change in unit value over the
stated periods without annualization. THE TOTAL RETURN FIGURES DO NOT TAKE INTO
ACCOUNT THE SEVERAL OTHER POLICY CHARGES WHICH ARE DESCRIBED IN THE "POLICY
CHARGES" SECTION. THESE OTHER CHARGES INCLUDE COST OF INSURANCE CHARGES AND
SURRENDER CHARGES.
61
65
1
- --------------------------------------------------------------------------------
Independent Auditors' Report
----------------------------
The Board of Directors of Nationwide Life Insurance Company and
Contract Owners of Nationwide VLI Separate Account-4:
We have audited the accompanying statement of assets, liabilities and
contract owners' equity of Nationwide VLI Separate Account-4 (comprised of the
sub-accounts listed in note 1(b)) (collectively, "the Account") as of December
31, 2000, and the related statements of operations and changes in contract
owners' equity for each of the years in the two year period then ended and for
the period February 18, 1998 (commencement of operations) through December 31,
1998, and the financial highlights for each of the years in the two year period
then ended and for the period February 18, 1998 (commencement of operations)
through December 31, 1998. These financial statements and financial highlights
are the responsibility of the Account's management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights 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, 2000, by correspondence with 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 and financial highlights referred
to above present fairly, in all material respects, the financial position of the
Account as of December 31, 2000, the results of its operations and its changes
in contract owners' equity for each of the years in the two year period then
ended and for the period February 18, 1998 (commencement of operations) through
December 31, 1998, and the finan- cial highlights for each of the years in the
two year period then ended and for the period February 18, 1998 (commencement of
operations) through December 31, 1998, in conformity with accounting principles
generally accepted in the United States of America.
KPMG LLP
Columbus, Ohio
February 16, 2001
- --------------------------------------------------------------------------------
2
NATIONWIDE VLI SEPARATE ACCOUNT-4
STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY
DECEMBER 31, 2000
ASSETS:
Investments at fair value:
American Century VP - American Century VP Income & Growth (ACVPIncGr)
3,520,844 shares (cost $26,492,915) ............................................... $ 25,033,199
American Century VP - American Century VP International (ACVPInt)
4,327,440 shares (cost $50,107,521) ............................................... 44,269,706
American Century VP - American Century VP Value (ACVPValue)
1,110,522 shares (cost $6,655,647) ................................................ 7,407,179
The Dreyfus Socially Responsible Growth Fund, Inc. (DrySRGr)
478,283 shares (cost $17,868,978) ................................................. 16,486,409
Dreyfus Stock Index Fund (DryStkIx)
6,822,189 shares (cost $247,280,744) .............................................. 231,954,425
Dreyfus IP - European Equity Portfolio (DryEuroEq)
97,382 shares (cost $1,422,509) ................................................... 1,458,779
Dreyfus VIF - Appreciation Portfolio (DryVApp)
829,567 shares (cost $32,580,787) ................................................. 32,278,459
Federated Insurance Series - Quality Bond Fund II (FedQualBd2)
4,888,937 shares (cost $49,393,596) ............................................... 52,409,408
Fidelity VIP - Equity-Income Portfolio - Service Class (FidVEqInS)
1,123,826 shares (cost $26,958,864) ............................................... 28,601,378
Fidelity VIP - Growth Portfolio - Service Class (FidVGrS)
2,288,448 shares (cost $112,282,101) .............................................. 99,547,490
Fidelity VIP - High Income Portfolio - Service Class (FidVHiInS)
1,742,262 shares (cost $17,700,937) ............................................... 14,199,438
Fidelity VIP - Overseas Portfolio - Service Class (FidVOvSeS)
1,219,554 shares (cost $26,879,872) ............................................... 24,317,914
Fidelity VIP-II - Contrafund Portfolio - Service Class (FidVConS)
2,001,473 shares (cost $50,647,030) ............................................... 47,374,866
Fidelity VIP-III - Growth Opportunities Portfolio - Service Class (FidVGrOpS)
800,720 shares (cost $16,998,621) ................................................. 14,172,737
Gartmore NSAT - Emerging Markets Fund (NSATEmMGM)
2,782 shares (cost $20,588) ....................................................... 20,895
Gartmore NSAT - Global Technology & Communications Fund (NSATGTecGM)
75,628 shares (cost $751,824) ..................................................... 555,867
Gartmore NSAT - International Growth Fund (NSATIntGGM)
2,891 shares (cost $24,686) ....................................................... 24,946
3
NATIONWIDE VLI SEPARATE ACCOUNT-4
STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS' EQUITY, CONTINUED
Janus Aspen Series - Capital Appreciation Portfolio - Service Shares (JanACapApS)
835,840 shares (cost $25,584,669) ................................................. 22,183,187
Janus Aspen Series - Global Technology Portfolio - Service Shares (JanAGlTchS)
2,391,105 shares (cost $21,271,695) ............................................... 15,661,738
Janus Aspen Series - International Growth Portfolio - Service Shares (JanAIntGrS)
607,844 shares (cost $21,433,733) ................................................. 18,624,342
Nationwide SAT - Balanced Fund - J.P. Morgan (NSATBalJPM)
679,412 shares (cost $7,039,214) .................................................. 6,787,329
Nationwide SAT - Capital Appreciation Fund (NSATCapAp)
1,479,309 shares (cost $34,225,912) ............................................... 21,716,260
Nationwide SAT - Equity Income Fund - Federated (NSATEqIFED)
180,950 shares (cost $2,405,433) .................................................. 2,169,595
Nationwide SAT - Global 50 Fund (NSATGlob50)
2,316,205 shares (cost $30,284,783) ............................................... 26,983,784
Nationwide SAT - Government Bond Fund (NSATGvtBd)
4,350,728 shares (cost $48,110,219) ............................................... 49,772,326
Nationwide SAT - High Income Bond Fund - Federated (NSATHiIFED)
1,949,660 shares (cost $17,083,991) ............................................... 15,363,317
Nationwide SAT - Mid Cap Growth Fund - Strong (NSATMCpSTR)
1,663,974 shares (cost $34,257,943) ............................................... 27,671,892
Nationwide SAT - Mid Cap Index Fund - Dreyfus (NSATMCIxDR)
494,827 shares (cost $6,960,647) .................................................. 6,704,912
Nationwide SAT - Money Market Fund (NSATMMkt)
232,950,632 shares (cost $232,950,632) ............................................ 232,950,632
Nationwide SAT - Multi Sector Bond Fund - MAS (NSATMBdMAS)
2,835,859 shares (cost $26,553,198) ............................................... 26,316,776
Nationwide SAT - Small Cap Growth Fund (NSATSmCapG)
433,027 shares (cost $7,290,920) .................................................. 7,032,358
Nationwide SAT - Small Cap Value Fund (NSATSmCapV)
1,751,521 shares (cost $17,697,372) ............................................... 15,238,231
Nationwide SAT - Small Company Fund (NSATSmCo)
2,150,419 shares (cost $46,873,187) ............................................... 43,008,379
Nationwide SAT - Strategic Value Fund (NSATStrVal)
122,367 shares (cost $1,221,340) .................................................. 1,228,560
Nationwide SAT - Total Return Fund (NSATTotRtn)
2,841,975 shares (cost $46,180,109) ............................................... 33,080,588
Neuberger & Berman AMT - Guardian Portfolio (NBAMTGuard)
341,544 shares (cost $5,466,763) .................................................. 5,440,792
Neuberger & Berman AMT - Mid-Cap Growth Portfolio (NBAMTMCGr)
1,637,648 shares (cost $43,888,979) ............................................... 36,814,318
Neuberger & Berman AMT - Partners Portfolio (NBAMTPart)
601,581 shares (cost $10,164,616) ................................................. 9,727,567
4
Oppenheimer Aggressive Growth Fund/VA (OppAggGrVA)
805,091 shares (cost $73,635,576) ................................................................ 56,976,278
Oppenheimer Capital Appreciation Fund/VA (OppCapApVA)
966,962 shares (cost $47,676,455) ................................................................ 45,089,423
Oppenheimer Global Securities Fund/VA (OppGlSecVA)
132,214 shares (cost $3,939,556) ................................................................. 4,010,040
Oppenheimer Main Street Growth & Income Fund/VA (OppMGrInVA)
981,886 shares (cost $22,848,695) ................................................................ 20,874,887
Strong Opportunity Fund II, Inc. (StOpp2)
211,464 shares (cost $5,540,840) ................................................................. 5,062,438
Turner NSAT - Growth Focus Fund (NSATGFocTU)
13,155 shares (cost $82,744) ..................................................................... 78,534
The Universal Institutional Funds, Inc. - Emerging Markets Debt Portfolio ((MSUEmMkt)
(formerly Morgan Stanley - Emerging Markets Debt Portfolio)
216,626 shares (cost $1,602,945) .................................................................. 1,496,887
The Universal Institutional Funds, Inc. - Mid Cap Growth Portfolio (MSUMCapGr)
(formerly Morgan Stanley - Mid Cap Growth Portfolio)
68,097 shares (cost $939,349) ..................................................................... 840,998
The Universal Institutional Funds, Inc. - U.S. Real Estate Portfolio (MSUUSRealE)
(formerly Van Kampen American Capital - Morgan Stanley U.S. Real Estate Portfolio)
437,348 shares (cost $4,980,785) .................................................................. 5,033,881
Van Eck WIT - Worldwide Emerging Markets Fund (VEWwEmgMkt)
435,385 shares (cost $4,582,831) ................................................................. 3,609,340
Van Eck WIT - Worldwide Hard Assets Fund (VEWwHrdAst)
109,063 shares (cost $1,275,365) ................................................................. 1,316,394
Warburg Pincus Trust - Global Post Venture Capital Portfolio (WPTGloPVC)
191,645 shares (cost $2,340,455) ................................................................. 2,431,981
Warburg Pincus Trust - International Equity Portfolio (WPTIntEq)
225,970 shares (cost $3,107,770) ................................................................. 2,424,657
Warburg Pincus Trust - Value Portfolio (WPTValue)
81,531 shares (cost $1,588,695) .................................................................. 1,110,451
-----------
Total investments.............................................................................. 1,414,946,167
Accounts receivable .................................................................................... -
-----------
Total assets .................................................................................. 1,414,946,167
ACCOUNTS PAYABLE........................................................................................... 53,726
-----------
CONTRACT OWNERS' EQUITY (NOTE 7) .......................................................................... $ 1,414,892,441
===========
See accompanying notes to financial statements.
5
NATIONWIDE VLI SEPARATE ACCOUNT-4
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 2000 AND 1999 AND FOR THE PERIOD FEBRUARY 18, 1998
(COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 1998
Total ACVPincGr
------------------------------------------- -------------------------------
2000 1999 1998 2000 1999
------------- ------------- ------------- ------------- -------------
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 21,039,631 6,784,764 795,996 89,434 345
Mortality and expense risk charges (note 3) ... (1,473,980) (382,102) (7,523) (33,218) (4,870)
------------- ------------- ------------- ------------- -------------
Net investment income ....................... 19,565,651 6,402,662 788,473 56,216 (4,525)
------------- ------------- ------------- ------------- -------------
Proceeds from mutual funds shares sold ...... 537,305,272 201,999,339 61,803,110 4,190,922 4,238,041
Cost of mutual fund shares sold ............. (520,733,854) (195,191,587) (62,074,770) (4,127,013) (3,971,748)
------------- ------------- ------------- ------------- -------------
Realized gain (loss) on investment .......... 16,571,418 6,807,752 (271,660) 63,909 266,293
Change in unrealized gain (loss)
on investments .............................. (178,984,942) 42,568,531 6,208,890 (2,277,235) 692,513
------------- ------------- ------------- ------------- -------------
Net gain (loss) on investments .............. (162,413,524) 49,376,283 5,937,230 (2,213,326) 958,806
------------- ------------- ------------- ------------- -------------
Reinvested capital gains ...................... 50,385,356 6,941,880 597,466 -- --
------------- ------------- ------------- ------------- -------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ $ (92,462,517) 62,720,825 7,323,169 (2,157,110) 954,281
============= ============= ============= ============= =============
ACVPincGr ACVPint
--------------- ---------------------------------------------
1998 2000 1999 1998
------------- ------------- ------------- -------------
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 5,125 29,817 -- 355
Mortality and expense risk charges (note 3) ... (86) (43,822) (3,029) (173)
------------- ------------- ------------- -------------
Net investment income ....................... 5,039 (14,005) (3,029) 182
------------- ------------- ------------- -------------
Proceeds from mutual funds shares sold ...... 60,422 11,287,808 2,517,615 613,620
Cost of mutual fund shares sold ............. (58,667) (8,439,891) (1,889,551) (614,510)
------------- ------------- ------------- -------------
Realized gain (loss) on investment .......... 1,755 2,847,917 628,064 (890)
Change in unrealized gain (loss)
on investments .............................. 125,007 (10,029,310) 4,031,727 159,768
------------- ------------- ------------- -------------
Net gain (loss) on investments .............. 126,762 (7,181,393) 4,659,791 158,878
------------- ------------- ------------- -------------
Reinvested capital gains ...................... -- 445,800 -- 3,644
------------- ------------- ------------- -------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ $ 131,801 (6,749,598) 4,656,762 162,704
============= ============= ============= =============
ACVPValue DrySRGr
---------------------------------------------- --------------------------------
2000 1999 1998 2000 1999
------------- ------------- ------------- ------------- -------------
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 29,260 9,053 169 133,052 1,039
Mortality and expense risk charges (note 3) ... (2,491) (698) (44) (5,466) (849)
------------- ------------- ------------- ------------- -------------
Net investment income ....................... 26,769 8,355 125 127,586 190
------------- ------------- ------------- ------------- -------------
Proceeds from mutual funds shares sold ........ 5,835,158 1,027,473 216,392 1,524,094 620,665
Cost of mutual fund shares sold ............... (5,829,916) (1,065,502) (220,562) (1,237,290) (483,300)
------------- ------------- ------------- ------------- -------------
Realized gain (loss) on investments ......... $ 5,242 (38,029) (4,170) 286,804 137,365
Change in unrealized gain (loss)
on investments .............................. 865,295 (142,040) 28,277 (2,392,732) 901,808
------------- ------------- ------------- ------------- -------------
Net gain (loss) on investments .............. 870,537 (180,069) 24,107 (2,105,928) 1,039,173
------------- ------------- ------------- ------------- -------------
Reinvested capital gains ...................... 74,870 85,768 1,997 -- 279,678
------------- ------------- ------------- ------------- -------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ $ 972,176 (85,946) 26,229 (1,978,342) 1,319,041
============= ============= ============= ============= =============
DrySRGr DryStkix
----------- ----------------------------------------------
1998 2000 1999 1998
------------ ------------- ------------- -------------
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 2,114 1,776,028 694,199 64,671
Mortality and expense risk charges (note 3) ... (96) (301,447) (80,224) (1,001)
------------ ------------- ------------- -------------
Net investment income ....................... 2,018 1,474,581 613,975 63,670
------------ ------------- ------------- -------------
Proceeds from mutual funds shares sold ........ 292,403 17,394,755 3,651,059 2,855,607
Cost of mutual fund shares sold ............... (279,293) (13,809,069) (3,038,322) (2,928,820)
------------ ------------- ------------- -------------
Realized gain (loss) on investments ......... 13,110 3,585,686 612,737 (73,213)
Change in unrealized gain (loss)
on investments .............................. 108,355 (27,898,576) 11,117,238 1,455,019
------------ ------------- ------------- -------------
Net gain (loss) on investments .............. 121,465 (24,312,890) 11,729,975 1,381,806
------------ ------------- ------------- -------------
Reinvested capital gains ...................... 47,900 3,654,055 672,634 12,311
------------ ------------- ------------- -------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ $ 171,383 (19,184,254) 13,016,584 1,457,787
============ ============= ============= =============
6
NATIONWIDE VLI SEPARATE ACCOUNT-4
STATEMENTS OF OPERATIONS, CONTINUED
YEARS ENDED DECEMBER 31, 2000 AND 1999 AND FOR THE PERIOD FEBRUARY 18, 1998
(COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 1998
DryEuroEq DryVApp
---------------------------------------- -------------------------------
2000 1999 1998 2000 1999
----------- ----------- ----------- ----------- -----------
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 3,040 266 -- 209,082 102,225
Mortality and expense risk charges (note 3) ... (647) -- -- (61,134) (19,902)
----------- ----------- ----------- ----------- -----------
Net investment income ....................... 2,393 266 -- 147,948 82,323
----------- ----------- ----------- ----------- -----------
Proceeds from mutual funds shares sold ........ 4,915,237 9,724 -- 5,802,885 6,596,135
Cost of mutual fund shares sold ............... (4,976,743) (9,364) -- (5,449,137) (6,226,765)
----------- ----------- ----------- ----------- -----------
Realized gain (loss) on investments ......... (61,506) 360 -- 353,748 369,370
Change in unrealized gain (loss)
on investments .............................. 26,273 9,997 -- (1,102,409) 649,339
----------- ----------- ----------- ----------- -----------
Net gain (loss) on investments .............. (35,233) 10,357 -- (748,661) 1,018,709
----------- ----------- ----------- ----------- -----------
Reinvested capital gains ...................... 39,799 1,251 -- 355,671 68,742
----------- ----------- ----------- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ $ 6,959 11,874 -- (245,042) 1,169,774
=========== =========== =========== =========== ===========
DryVApp FedQualBd2
------------- ----------------------------------------
1998 2000 1999 1998
----------- ----------- ----------- -----------
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 7,616 284,124 -- --
Mortality and expense risk charges (note 3) ... (108) (36,034) (3,162) --
----------- ----------- ----------- -----------
Net investment income ....................... 7,508 248,090 (3,162) --
----------- ----------- ----------- -----------
Proceeds from mutual funds shares sold ........ 191,690 5,070,565 193,269 --
Cost of mutual fund shares sold ............... (192,584) (4,943,810) (195,176) --
----------- ----------- ----------- -----------
Realized gain (loss) on investments ......... (894) 126,755 (1,907) --
Change in unrealized gain (loss)
on investments .............................. 150,742 2,975,611 40,201 --
----------- ----------- ----------- -----------
Net gain (loss) on investments .............. 149,848 3,102,366 38,294 --
----------- ----------- ----------- -----------
Reinvested capital gains ...................... -- -- -- --
----------- ----------- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ $ 157,356 3,350,456 35,132 --
=========== =========== =========== ===========
FidVEqinS FidVGrS
---------------------------------------- ------------------------------
2000 1999 1998 2000 1999
----------- ----------- ----------- ----------- -----------
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 275,597 97,065 -- 46,538 8,639
Mortality and expense risk charges (note 3) ... (12,713) (3,265) (402) (106,544) (12,917)
----------- ----------- ----------- ----------- -----------
Net investment income ....................... 262,884 93,800 (402) (60,006) (4,278)
----------- ----------- ----------- ----------- -----------
Proceeds from mutual funds shares sold ........ 8,769,366 2,794,623 1,186,510 8,193,032 1,070,026
Cost of mutual fund shares sold ............... (9,316,337) (2,491,032) (1,221,597) (6,947,939) (923,816)
----------- ----------- ----------- ----------- -----------
Realized gain (loss) on investments ......... (546,971) 303,591 (35,087) 1,245,093 146,210
Change in unrealized gain (loss)
on investments .............................. 1,470,791 (277,459) 449,182 (19,309,179) 6,093,883
----------- ----------- ----------- ----------- -----------
Net gain (loss) on investments .............. 923,820 26,132 414,095 (18,064,086) 6,240,093
----------- ----------- ----------- ----------- -----------
Reinvested capital gains ...................... 1,063,019 214,564 -- 5,556,689 543,154
----------- ----------- ----------- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ $ 2,249,723 334,496 413,693 (12,567,403) 6,778,969
=========== =========== =========== =========== ===========
FidVGrS FidVHiInS
------------- ----------------------------------------
1998 2000 1999 1998
----------- ----------- ----------- -----------
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ -- 711,532 364,862 --
Mortality and expense risk charges (note 3) ... (249) (21,719) (1,521) (245)
----------- ----------- ----------- -----------
Net investment income ....................... (249) 689,813 363,341 (245)
----------- ----------- ----------- -----------
Proceeds from mutual funds shares sold ........ 759,197 5,669,988 926,716 848,212
Cost of mutual fund shares sold ............... (750,697) (6,842,047) (1,041,180) (901,996)
----------- ----------- ----------- -----------
Realized gain (loss) on investments ......... 8,500 (1,172,059) (114,464) (53,784)
Change in unrealized gain (loss)
on investments .............................. 480,684 (3,641,858) 103,063 37,295
----------- ----------- ----------- -----------
Net gain (loss) on investments .............. 489,184 (4,813,917) (11,401) (16,489)
----------- ----------- ----------- -----------
Reinvested capital gains ...................... -- -- 13,640 --
----------- ----------- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ $ 488,935 (4,124,104) 365,580 (16,734)
=========== =========== =========== ===========
(Continued)
7
NATIONWIDE VLI SEPARATE ACCOUNT-4
STATEMENTS OF OPERATIONS, CONTINUED
YEARS ENDED DECEMBER 31, 2000 AND 1999 AND FOR THE PERIOD FEBRUARY 18, 1998
(COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 1998
FidVOvSeS FidVConS
------------------------------------------- --------------------------------
2000 1999 1998 2000 1999
------------ ------------ ------------ ------------ ------------
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 217,766 21,110 -- 93,712 26,713
Mortality and expense risk charges (note 3) ... (49,878) (9,859) (75) (27,798) (4,360)
------------ ------------ ------------ ------------ ------------
Net investment income ....................... 167,888 11,251 (75) 65,914 22,353
------------ ------------ ------------ ------------ ------------
Proceeds from mutual funds shares sold ........ 23,478,026 7,592,272 528,529 2,681,172 1,218,202
Cost of mutual fund shares sold ............... (25,243,216) (6,861,807) (553,402) (2,152,820) (1,003,352)
------------ ------------ ------------ ------------ ------------
Realized gain (loss) on investments ......... (1,765,190) 730,465 (24,873) 528,352 214,850
Change in unrealized gain (loss)
on investments .............................. (4,479,931) 1,849,661 68,313 (6,926,956) 3,006,379
------------ ------------ ------------ ------------ ------------
Net gain (loss) on investments .............. $ (6,245,121) 2,580,126 43,440 (6,398,604) 3,221,229
------------ ------------ ------------ ------------ ------------
Reinvested capital gains ...................... 1,409,432 34,048 -- 3,401,735 195,897
------------ ------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ $ (4,667,801) 2,625,425 43,365 (2,930,955) 3,439,479
============ ============ ============ ============ ============
FidVConS FidVGrOpS
-------------- -----------------------------------------
1998 2000 1999 1998
------------ ------------ ------------ ------------
INVESTMENT ACTIVITY:
Reinvested dividends .................... $ -- 125,878 28,246 --
Mortality and expense risk
charges (note 3) ....................... (330) (11,570) (3,130) (168)
------------ ------------ ------------ ------------
Net investment income ................. (330) 114,308 25,116 (168)
------------ ------------ ------------ ------------
Proceeds from mutual funds shares sold .. 974,276 2,790,417 613,535 309,151
Cost of mutual fund shares sold ......... (947,452) (2,995,674) (559,981) (296,203)
------------ ------------ ------------ ------------
Realized gain (loss) on investments ... 26,824 (205,257) 53,554 12,948
Change in unrealized gain (loss)
on investments ........................ 648,413 (3,225,818) 137,134 262,800
------------ ------------ ------------ ------------
Net gain (loss) on investments ........ 675,237 (3,431,075) 190,688 275,748
------------ ------------ ------------ ------------
Reinvested capital gains ................ -- 662,022 55,207 --
------------ ------------ ------------ ------------
Net increase (decrease) in contract
owners' equity resulting from
operations ........................ $ 674,907 (2,654,745) 271,011 275,580
============ ============ ============ ============
NSATEmMGM NSATGTecGM
------------------------------------------- --------------------------------
2000 1999 1998 2000 1999
------------ ------------ ------------ ------------ ------------
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ -- -- -- -- --
Mortality and expense risk charges (note 3) ... -- -- -- -- --
------------ ------------ ------------ ------------ ------------
Net investment income ....................... -- -- -- -- --
------------ ------------ ------------ ------------ ------------
Proceeds from mutual funds shares sold ........ 641,425 -- -- 9,643 --
Cost of mutual fund shares sold ............... (644,443) -- -- (14,069) --
------------ ------------ ------------ ------------ ------------
Realized gain (loss) on investments ......... (3,018) -- -- (4,426) --
Change in unrealized gain (loss)
on investments .............................. 336 -- -- (195,957) --
------------ ------------ ------------ ------------ ------------
Net gain (loss) on investments .............. (2,682) -- -- (200,383) --
------------ ------------ ------------ ------------ ------------
Reinvested capital gains ...................... -- -- -- 10,013 --
------------ ------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ $ (2,682) -- -- (190,370) --
============ ============ ============ ============ ============
NSATGTecGM NSATIntGGm
------------ ---------------------------------------------
1998 2000 1999 1998
------------ ------------ ------------ ------------
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ -- -- -- --
Mortality and expense risk charges (note 3) ... -- -- -- --
------------ ------------ ------------ ------------
Net investment income ....................... -- -- -- --
------------ ------------ ------------ ------------
Proceeds from mutual funds shares sold ........ -- 355,202 -- --
Cost of mutual fund shares sold ............... -- (354,541) -- --
------------ ------------ ------------ ------------
Realized gain (loss) on investments ......... -- 661 -- --
Change in unrealized gain (loss)
on investments .............................. -- 260 -- --
------------ ------------ ------------ ------------
Net gain (loss) on investments .............. -- 921 -- --
------------ ------------ ------------ ------------
Reinvested capital gains ...................... -- -- -- --
------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ $ -- 921 -- --
============ ============ ============ ============
8
NATIONWIDE VLI SEPARATE ACCOUNT-4
STATEMENTS OF OPERATIONS, CONTINUED
YEARS ENDED DECEMBER 31, 2000 AND 1999 AND FOR THE PERIOD FEBRUARY 18, 1998
(COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 1998
JanACapApS JanAGlTchS
---------------------------------------- ----------------------------
2000 1999 1998 2000 1999
----------- ----------- ----------- ----------- -----------
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 135,185 -- -- 94,337 --
Mortality and expense risk charges (note 3) ... (5,130) -- -- (5,864) --
----------- ----------- ----------- ----------- -----------
Net investment income ....................... 130,055 -- -- 88,473 --
----------- ----------- ----------- ----------- -----------
Proceeds from mutual funds shares sold ........ 2,667,595 -- -- 6,627,712 --
Cost of mutual fund shares sold ............... (3,199,056) -- -- (8,282,161) --
----------- ----------- ----------- ----------- -----------
Realized gain (loss) on investments ......... (531,461) -- -- (1,654,449) --
Change in unrealized gain (loss)
on investments .............................. (3,401,482) -- -- (5,609,957) --
----------- ----------- ----------- ----------- -----------
Net gain (loss) on investments .............. (3,932,943) -- -- (7,264,406) --
----------- ----------- ----------- ----------- -----------
Reinvested capital gains ...................... -- -- -- -- --
----------- ----------- ----------- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ $(3,802,888) -- -- (7,175,933) --
=========== =========== =========== =========== ===========
JanAGlTchS JanAintGrS
-------------- ----------------------------------------
1998 2000 1999 1998
----------- ----------- ----------- -----------
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ -- 482,954 -- --
Mortality and expense risk charges (note 3) ... -- (5,407) -- --
----------- ----------- ----------- -----------
Net investment income ....................... -- 477,547 -- --
----------- ----------- ----------- -----------
Proceeds from mutual funds shares sold ........ -- 8,802,259 -- --
Cost of mutual fund shares sold ............... -- (10,182,763) -- --
----------- ----------- ----------- -----------
Realized gain (loss) on investments ......... -- (1,380,504) -- --
Change in unrealized gain (loss)
on investments .............................. -- (2,809,392) -- --
----------- ----------- ----------- -----------
Net gain (loss) on investments .............. -- (4,189,896) -- --
----------- ----------- ----------- -----------
Reinvested capital gains ...................... -- -- -- --
----------- ----------- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ $ -- (3,712,349) -- --
=========== =========== =========== ===========
NSATBalJPM NSATCapAp
---------------------------------------- ----------------------------
2000 1999 1998 2000 1999
----------- ----------- ----------- ----------- -----------
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 172,981 80,095 9,854 41,174 96,180
Mortality and expense risk charges (note 3) ... (5,434) (1,605) (51) (10,414) (2,498)
----------- ----------- ----------- ----------- -----------
Net investment income ....................... 167,547 78,490 9,803 30,760 93,682
----------- ----------- ----------- ----------- -----------
Proceeds from mutual funds shares sold ........ 5,501,271 2,788,299 316,297 6,534,873 4,176,681
Cost of mutual fund shares sold ............... (5,437,733) (2,830,503) (315,924) (7,187,743) (3,638,494)
----------- ----------- ----------- ----------- -----------
Realized gain (loss) on investments ......... 63,538 (42,204) 373 (652,870) 538,187
Change in unrealized gain (loss)
on investments .............................. (241,628) (33,063) 22,806 (11,341,220) (1,637,699)
----------- ----------- ----------- ----------- -----------
Net gain (loss) on investments .............. (178,090) (75,267) 23,179 (11,994,090) (1,099,512)
----------- ----------- ----------- ----------- -----------
Reinvested capital gains ...................... -- 495 2,184 4,845,304 1,352,393
----------- ----------- ----------- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ $ (10,543) 3,718 35,166 (7,118,026) 346,563
=========== =========== =========== =========== ===========
NSATCapAp NSATEqIFED
------------ ----------------------------------------
1998 2000 1999 1998
----------- ----------- ----------- -----------
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 14,834 15,802 1,722 896
Mortality and expense risk charges (note 3) ... (440) (1,543) (71) (17)
----------- ----------- ----------- -----------
Net investment income ....................... 14,394 14,259 1,651 879
----------- ----------- ----------- -----------
Proceeds from mutual funds shares sold ........ 703,904 1,130,737 116,995 18,085
Cost of mutual fund shares sold ............... (686,965) (1,084,332) (100,117) (17,928)
----------- ----------- ----------- -----------
Realized gain (loss) on investments ......... 16,939 46,405 16,878 157
Change in unrealized gain (loss)
on investments .............................. 469,266 (334,972) 84,114 15,021
----------- ----------- ----------- -----------
Net gain (loss) on investments .............. 486,205 (288,567) 100,992 15,178
----------- ----------- ----------- -----------
Reinvested capital gains ...................... 174,093 -- 202 2,636
----------- ----------- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ $ 674,692 (274,308) 102,845 18,693
=========== =========== =========== ===========
(Continued)
9
NATIONWIDE VLI SEPARATE ACCOUNT-4
STATEMENTS OF OPERATIONS, CONTINUED
YEARS ENDED DECEMBER 31, 2000 AND 1999 AND FOR THE PERIOD FEBRUARY 18, 1998
(COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 1998
NSATGlob50 NSATGvtBd
------------------------------------------- ------------------------------
2000 1999 1998 2000 1999
------------ ------------ ------------ ------------ ------------
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 199,386 8,364 1,950 2,182,498 798,788
Mortality and expense risk charges (note 3) ... (37,311) (10,207) (34) (99,138) (37,827)
------------ ------------ ------------ ------------ ------------
Net investment income ....................... 162,075 (1,843) 1,916 2,083,360 760,961
------------ ------------ ------------ ------------ ------------
Proceeds from mutual funds shares sold ........ 5,122,679 1,039,009 57,978 5,456,678 10,418,680
Cost of mutual fund shares sold ............... (5,037,852) (930,501) (57,852) (5,620,925) (11,072,171)
------------ ------------ ------------ ------------ ------------
Realized gain (loss) on investments ......... 84,827 108,508 126 (164,247) (653,491)
Change in unrealized gain (loss)
on investments .............................. (4,336,580) 997,392 38,188 2,189,054 (442,511)
------------ ------------ ------------ ------------ ------------
Net gain (loss) on investments .............. (4,251,753) 1,105,900 38,314 2,024,807 (1,096,002)
------------ ------------ ------------ ------------ ------------
Reinvested capital gains ...................... 945,098 456,545 3,213 -- 35,939
------------ ------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ $ (3,144,580) 1,560,602 43,443 4,108,167 (299,102)
============ ============ ============ ============ ============
NSATGvtBd NSATHiIFED
------------- --------------------------------------------
1998 2000 1999 1998
------------ ------------ ------------ ------------
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 83,382 1,119,466 308,481 22,707
Mortality and expense risk charges (note 3) ... (327) (9,331) (3,120) (68)
------------ ------------ ------------ ------------
Net investment income ....................... 83,055 1,110,135 305,361 22,639
------------ ------------ ------------ ------------
Proceeds from mutual funds shares sold ........ 1,043,507 3,240,993 689,933 206,929
Cost of mutual fund shares sold ............... (1,033,771) (3,550,410) (687,767) (213,860)
------------ ------------ ------------ ------------
Realized gain (loss) on investments ......... 9,736 (309,417) 2,166 (6,931)
Change in unrealized gain (loss)
on investments .............................. (84,436) (1,573,020) (155,595) 7,941
------------ ------------ ------------ ------------
Net gain (loss) on investments .............. (74,700) (1,882,437) (153,429) 1,010
------------ ------------ ------------ ------------
Reinvested capital gains ...................... 22,403 -- 645 --
------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ $ 30,758 (772,302) 152,577 23,649
============ ============ ============ ============
NSATMCpSTR NSATMCIxDR
------------------------------------------- ------------------------------
2000 1999 1998 2000 1999
------------ ------------ ------------ ------------ ------------
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ -- -- -- 24,820 1,219
Mortality and expense risk charges (note 3) ... (36,857) (2,128) (30) (1,304) (9)
------------ ------------ ------------ ------------ ------------
Net investment income ....................... (36,857) (2,128) (30) 23,516 1,210
------------ ------------ ------------ ------------ ------------
Proceeds from mutual funds shares sold ........ 10,455,471 2,132,323 150,535 3,068,344 104,264
Cost of mutual fund shares sold ............... (9,038,986) (1,804,973) (150,564) (2,777,066) (89,446)
------------ ------------ ------------ ------------ ------------
Realized gain (loss) on investments ......... 1,416,485 327,350 (29) 291,278 14,818
Change in unrealized gain (loss)
on investments .............................. (7,958,483) 1,323,586 48,847 (336,854) 51,305
------------ ------------ ------------ ------------ ------------
Net gain (loss) on investments .............. (6,541,998) 1,650,936 48,818 (45,576) 66,123
------------ ------------ ------------ ------------ ------------
Reinvested capital gains ...................... 922,208 515,885 -- 238,697 47,431
------------ ------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ $ (5,656,647) 2,164,693 48,788 216,637 114,764
============ ============ ============ ============ ============
NSATMCIxDR NSATMMkt
------------ --------------------------------------------
1998 2000 1999 1998
------------ ------------ ------------ ------------
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 782 10,355,160 3,376,535 506,347
Mortality and expense risk charges (note 3) ... (21) (307,209) (139,891) (1,751)
------------ ------------ ------------ ------------
Net investment income ....................... 761 10,047,951 3,236,644 504,596
------------ ------------ ------------ ------------
Proceeds from mutual funds shares sold ........ 48,915 263,535,916 104,229,444 44,230,768
Cost of mutual fund shares sold ............... (51,817) (263,535,916) (104,229,444) (44,230,768)
------------ ------------ ------------ ------------
Realized gain (loss) on investments ......... (2,902) -- -- --
Change in unrealized gain (loss)
on investments .............................. 29,815 -- -- --
------------ ------------ ------------ ------------
Net gain (loss) on investments .............. 26,913 -- -- --
------------ ------------ ------------ ------------
Reinvested capital gains ...................... -- -- -- --
------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ $ 27,674 10,047,951 3,236,644 504,596
============ ============ ============ ============
10
NATIONWIDE VLI SEPARATE ACCOUNT-4
STATEMENTS OF OPERATIONS, CONTINUED
YEARS ENDED DECEMBER 31, 2000 AND 1999 AND FOR THE PERIOD FEBRUARY 18, 1998
(COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 1998
NSATMBdMAS NSATSmCapG
---------------------------------------- ----------------------------
2000 1999 1998 2000 1999
----------- ----------- ----------- ----------- -----------
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 1,380,209 405,079 20,456 -- --
Mortality and expense risk charges (note 3) ... (35,618) (8,904) (64) (1,793) (31)
----------- ----------- ----------- ----------- -----------
Net investment income ....................... 1,344,591 396,175 20,392 (1,793) (31)
----------- ----------- ----------- ----------- -----------
Proceeds from mutual funds shares sold ........ 1,457,359 824,473 678,560 4,671,162 11,249,953
Cost of mutual fund shares sold ............... (1,524,119) (850,875) (682,489) (4,701,490) (11,295,118)
----------- ----------- ----------- ----------- -----------
Realized gain (loss) on investments ......... (66,760) (26,402) (3,929) (30,328) (45,165)
Change in unrealized gain (loss)
on investments .............................. (112,147) (125,056) 781 (1,279,267) 1,020,705
----------- ----------- ----------- ----------- -----------
Net gain (loss) on investments .............. (178,907) (151,458) (3,148) (1,309,595) 975,540
----------- ----------- ----------- ----------- -----------
Reinvested capital gains ...................... -- -- 691 72,445 101,886
----------- ----------- ----------- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ $ 1,165,684 244,717 17,935 (1,238,943) 1,077,395
=========== =========== =========== =========== ===========
NSATSmCapG NSATSmCapV
------------- ------------------------------------------
1998 2000 1999 1998
----------- ----------- ----------- -----------
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ -- -- -- --
Mortality and expense risk charges (note 3) ... -- (6,507) (609) (72)
----------- ----------- ----------- -----------
Net investment income ....................... -- (6,507) (609) (72)
----------- ----------- ----------- -----------
Proceeds from mutual funds shares sold ........ -- 5,713,553 1,400,366 119,432
Cost of mutual fund shares sold ............... -- (5,334,666) (1,184,849) (127,976)
----------- ----------- ----------- -----------
Realized gain (loss) on investments ......... -- 378,887 215,517 (8,544)
Change in unrealized gain (loss)
on investments .............................. -- (2,383,146) (194,598) 118,603
----------- ----------- ----------- -----------
Net gain (loss) on investments .............. -- (2,004,259) 20,919 110,059
----------- ----------- ----------- -----------
Reinvested capital gains ...................... -- 2,830,882 651,318 --
----------- ----------- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ $ -- 820,116 671,628 109,987
=========== =========== =========== ===========
NSATSmCo NSATStrVal
---------------------------------------- ----------------------------
2000 1999 1998 2000 1999
----------- ----------- ----------- ----------- -----------
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 6,404 -- -- 12,032 5,676
Mortality and expense risk charges (note 3) ... (24,879) (4,091) (112) (439) (137)
----------- ----------- ----------- ----------- -----------
Net investment income ....................... (18,475) (4,091) (112) 11,593 5,539
----------- ----------- ----------- ----------- -----------
Proceeds from mutual funds shares sold ........ 5,986,277 1,854,552 303,745 6,700,644 173,459
Cost of mutual fund shares sold ............... (4,024,143) (1,415,009) (310,124) (6,640,337) (155,571)
----------- ----------- ----------- ----------- -----------
Realized gain (loss) on investments ......... 1,962,134 439,543 (6,379) 60,307 17,888
Change in unrealized gain (loss)
on investments .............................. (6,709,330) 2,711,547 132,974 33,455 (70,115)
----------- ----------- ----------- ----------- -----------
Net gain (loss) on investments .............. (4,747,196) 3,151,090 126,595 93,762 (52,227)
----------- ----------- ----------- ----------- -----------
Reinvested capital gains ...................... 6,779,344 500,536 -- -- 22,264
----------- ----------- ----------- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ $ 2,013,673 3,647,535 126,483 105,355 (24,424)
=========== =========== =========== =========== ===========
NSATStrVal NSATTotRtn
------------ ------------------------------------------
1998 2000 1999 1998
----------- ----------- ----------- -----------
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 1,052 193,418 96,396 27,487
Mortality and expense risk charges (note 3) ... (24) (5,805) (606) (578)
----------- ----------- ----------- -----------
Net investment income ....................... 1,028 187,613 95,790 26,909
----------- ----------- ----------- -----------
Proceeds from mutual funds shares sold ........ 81,326 3,055,349 806,876 1,201,208
Cost of mutual fund shares sold ............... (89,165) (2,710,595) (784,668) (1,222,228)
----------- ----------- ----------- -----------
Realized gain (loss) on investments ......... (7,839) 344,754 22,208 (21,020)
Change in unrealized gain (loss)
on investments .............................. 43,881 (13,348,541) (33,899) 283,836
----------- ----------- ----------- -----------
Net gain (loss) on investments .............. 36,042 (13,003,787) (11,691) 262,816
----------- ----------- ----------- -----------
Reinvested capital gains ...................... -- 11,991,779 809,302 321,440
----------- ----------- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ $ 37,070 (824,395) 893,401 611,165
=========== =========== =========== ===========
(Continued)
11
NATIONWIDE VLI SEPARATE ACCOUNT-4
STATEMENTS OF OPERATIONS, CONTINUED
YEARS ENDED DECEMBER 31, 2000 AND 1999 AND FOR THE PERIOD FEBRUARY 18, 1998
(COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 1998
NBAMTGuard NBAMTMCGr
-------------------------------------------- ------------------------------
2000 1999 1998 2000 1999
------------ ------------ ------------ ------------ ------------
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 16,882 3,977 -- -- --
Mortality and expense risk charges (note 3) ... (1,965) (679) (83) (41,606) (7,463)
------------ ------------ ------------ ------------ ------------
Net investment income ....................... 14,917 3,298 (83) (41,606) (7,463)
------------ ------------ ------------ ------------ ------------
Proceeds from mutual funds shares sold ........ 1,626,130 807,995 117,578 13,583,260 7,840,757
Cost of mutual fund shares sold ............... (1,517,104) (670,629) (123,077) (9,016,924) (6,652,007)
------------ ------------ ------------ ------------ ------------
Realized gain (loss) on investments ......... 109,026 137,366 (5,499) 4,566,336 1,188,750
Change in unrealized gain (loss)
on investments .............................. (185,904) 77,047 82,886 (10,290,829) 3,039,884
------------ ------------ ------------ ------------ ------------
Net gain (loss) on investments .............. (76,878) 214,413 77,387 (5,724,493) 4,228,634
------------ ------------ ------------ ------------ ------------
Reinvested capital gains ...................... -- -- -- 6,497 37,807
------------ ------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ $ (61,961) 217,711 77,304 (5,759,602) 4,258,978
============ ============ ============ ============ ============
BAMTMCGr NBAMTPart
------------ ----------------------------------------------
1998 2000 1999 1998
------------ ------------ ------------ ------------
INVESTMENT ACTIVITY:
Reinvested dividends .......................... -- 55,679 56,853 114
Mortality and expense risk charges (note 3) ... $ (52) (5,009) (2,109) (290)
------------ ------------ ------------ ------------
Net investment income ....................... (52) 50,670 54,744 (176)
------------ ------------ ------------ ------------
Proceeds from mutual funds shares sold ........ 140,913 3,401,374 787,143 862,257
Cost of mutual fund shares sold ............... (137,009) (3,678,166) (785,895) (875,740)
------------ ------------ ------------ ------------
Realized gain (loss) on investments ......... 3,904 (276,792) 1,248 (13,483)
Change in unrealized gain (loss)
on investments .............................. 176,285 (888,222) 196,040 255,133
------------ ------------ ------------ ------------
Net gain (loss) on investments .............. 180,189 (1,165,014) 197,288 241,650
------------ ------------ ------------ ------------
Reinvested capital gains ...................... -- 1,184,100 98,874 3,599
------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ $ 180,137 69,756 350,906 245,073
============ ============ ============ ============
OppAggGrVA OppCapApVA
-------------------------------------------- ------------------------------
2000 1999 1998 2000 1999
------------ ------------ ------------ ------------ ------------
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ -- -- 26 26,876 10,044
Mortality and expense risk charges (note 3) ... (52,493) (2,942) (80) (35,238) (4,168)
------------ ------------ ------------ ------------ ------------
Net investment income ....................... (52,493) (2,942) (54) (8,362) 5,876
------------ ------------ ------------ ------------ ------------
Proceeds from mutual funds shares sold ........ 13,833,125 1,971,772 120,154 6,304,788 993,762
Cost of mutual fund shares sold ............... (9,344,555) (1,353,384) (118,908) (4,511,928) (802,267)
------------ ------------ ------------ ------------ ------------
Realized gain (loss) on investments ......... 4,488,570 618,388 1,246 1,792,860 191,495
Change in unrealized gain (loss)
on investments .............................. (19,721,439) 2,906,737 155,404 (5,403,446) 2,561,317
------------ ------------ ------------ ------------ ------------
Net gain (loss) on investments .............. (15,232,869) 3,525,125 156,650 (3,610,586) 2,752,812
------------ ------------ ------------ ------------ ------------
Reinvested capital gains ...................... 950,033 -- 270 1,434,225 110,334
------------ ------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ $(14,335,329) 3,522,183 156,866 (2,184,723) 2,869,022
============ ============ ============ ============ ============
OppCapApVA OppGlSecVA
------------ --------------------------------------------
1998 2000 1999 1998
------------ ------------ ------------ ------------
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 8 -- -- --
Mortality and expense risk charges (note 3) ... (142) (1,051) -- --
------------ ------------ ------------ ------------
Net investment income ....................... (134) (1,051) -- --
------------ ------------ ------------ ------------
Proceeds from mutual funds shares sold ........ 412,555 3,569,728 -- --
Cost of mutual fund shares sold ............... (391,820) (3,708,378) -- --
------------ ------------ ------------ ------------
Realized gain (loss) on investments ......... 20,735 (138,650) -- --
Change in unrealized gain (loss)
on investments .............................. 255,097 70,484 -- --
------------ ------------ ------------ ------------
Net gain (loss) on investments .............. 275,832 (68,166) -- --
------------ ------------ ------------ ------------
Reinvested capital gains ...................... 101 -- -- --
------------ ------------ ------------ ------------
Net increase (decrease) in contract owners'
equity resulting from operations ........ $ 275,799 (69,217) -- --
============ ============ ============ ============
12
NATIONWIDE VLI SEPARATE ACCOUNT-4
STATEMENTS OF OPERATIONS, CONTINUED
YEARS ENDED DECEMBER 31, 2000 AND 1999 AND FOR THE PERIOD FEBRUARY 18, 1998
(COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 1998
OppMGrInVA StOpp2
---------------------------------------- ------------------------------------
2000 1999 1998 2000 1999 1998
----------- ----------- ----------- ----------- ---------- --------
INVESTMENT ACTIVITY:
Reinvested dividends ........................ $ 38,554 10,187 29 -- -- --
Mortality and expense risk charges (note 3) . (10,265) (2,014) (113) (1,449) -- --
----------- ----------- ----------- ----------- ---------- --------
Net investment income ..................... 28,289 8,173 (84) (1,449) -- --
----------- ----------- ----------- ----------- ---------- --------
Proceeds from mutual funds shares sold ...... 1,958,100 570,677 698,919 2,262,742 -- --
Cost of mutual fund shares sold ............. (1,608,534) (582,947) (718,580) (2,255,273) -- --
----------- ----------- ----------- ----------- ---------- --------
Realized gain (loss) on investments ....... 349,566 (12,270) (19,661) 7,469 -- --
Change in unrealized gain (loss)
on investments ............................ (2,767,885) 713,752 80,325 (478,402) -- --
----------- ----------- ----------- ----------- ---------- --------
Net gain (loss) on investments ............ (2,418,319) 701,482 60,664 (470,933) -- --
----------- ----------- ----------- ----------- ---------- --------
Reinvested capital gains .................... 509,013 17,163 645 501,505 -- --
----------- ----------- ----------- ----------- ---------- --------
Net increase (decrease) in contract owners'
equity resulting from operations ..... $(1,881,017) 726,818 61,225 29,123 -- --
=========== =========== =========== =========== ========== =========
NSATGFocTU
----------------------------------------
2000 1999 1998
----------- ----------- -----------
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ -- -- --
Mortality and expense risk charges (note 3) ... -- -- --
----------- ----------- -----------
Net investment income ....................... -- -- --
----------- ----------- -----------
Proceeds from mutual funds shares sold ........ 290,188 -- --
Cost of mutual fund shares sold ............... (317,405) -- --
----------- ----------- -----------
Realized gain (loss) on investments ......... (27,217) -- --
Change in unrealized gain (loss)
on investments .............................. (4,210) -- --
----------- ----------- -----------
Net gain (loss) on investments .............. (31,427) -- --
----------- ----------- -----------
Reinvested capital gains ...................... -- -- --
----------- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ $ (31,427) -- --
=========== =========== ===========
MSUEmMkt MSUMCapGr
---------------------------------------- -------------------------------------
2000 1999 1998 2000 1999 1998
----------- ----------- ----------- ----------- ---------- ---------
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 151,314 85,097 18,594 -- -- --
Mortality and expense risk charges (note 3) ... (963) (166) (11) (162) -- --
----------- ----------- ----------- ----------- ---------- ----------
Net investment income ....................... 150,351 84,931 18,583 (162) -- --
----------- ----------- ----------- ----------- ---------- ----------
Proceeds from mutual funds shares sold ........ 1,344,335 218,023 268,442 769,277 -- --
Cost of mutual fund shares sold ............... (1,256,230) (200,881) (301,322) (782,583) -- --
----------- ----------- ----------- ----------- ---------- ----------
Realized gain (loss) on investments ......... 88,105 17,142 (32,880) (13,306) -- --
Change in unrealized gain (loss)
on investments .............................. (119,691) 20,955 (7,323) (98,350) -- --
----------- ----------- ----------- ----------- ---------- ----------
Net gain (loss) on investments .............. (31,586) 38,097 (40,203) (111,656) -- --
----------- ----------- ----------- ----------- ---------- ----------
Reinvested capital gains ...................... -- -- -- 800 -- --
----------- ----------- ----------- ----------- ---------- ----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ $ 118,765 123,028 (21,620) (111,018) -- --
=========== =========== =========== =========== ========== ==========
MSUUSRealE
----------------------------------------
2000 1999 1998
----------- ----------- -----------
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 265,214 54,408 34
Mortality and expense risk charges (note 3) ... (2,123) (1,163) (50)
----------- ----------- -----------
Net investment income ....................... 263,091 53,245 (16)
----------- ----------- -----------
Proceeds from mutual funds shares sold ........ 10,682,231 10,399,298 357,742
Cost of mutual fund shares sold ............... (10,383,636) (10,439,502) (388,797)
----------- ----------- -----------
Realized gain (loss) on investments ......... 298,595 (40,204) (31,055)
Change in unrealized gain (loss)
on investments .............................. 155,839 (130,048) 27,306
----------- ----------- -----------
Net gain (loss) on investments .............. 454,434 (170,252) (3,749)
----------- ----------- -----------
Reinvested capital gains ...................... 25,130 -- 339
----------- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ $ 742,655 (117,007) (3,426)
=========== =========== ===========
(Continued)
13
NATIONWIDE VLI SEPARATE ACCOUNT-4
STATEMENTS OF OPERATIONS, CONTINUED
YEARS ENDED DECEMBER 31, 2000 AND 1999 AND FOR THE PERIOD FEBRUARY 18, 1998
(COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 1998
VEWwEmgMkt VEWwHrdAst
----------------------------------------- ----------------------------
2000 1999 1998 2000 1999
----------- ----------- ----------- ----------- -----------
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ -- -- -- 6,160 2,469
Mortality and expense risk charges (note 3) ... (1,640) (139) (20) (124) (295)
----------- ----------- ----------- ----------- -----------
Net investment income ....................... (1,640) (139) (20) 6,036 2,174
----------- ----------- ----------- ----------- -----------
Proceeds from mutual funds shares sold ........ 8,541,759 1,092,848 70,482 6,042,759 718,765
Cost of mutual fund shares sold ............... (8,950,297) (857,511) (84,625) (6,013,577) (692,370)
----------- ----------- ----------- ----------- -----------
Realized gain (loss) on investments ......... (408,538) 235,337 (14,143) 29,182 26,395
Change in unrealized gain (loss)
on investments .............................. (1,655,251) 663,413 18,347 20,687 22,444
----------- ----------- ----------- ----------- -----------
Net gain (loss) on investments .............. (2,063,789) 898,750 4,204 49,869 48,839
----------- ----------- ----------- ----------- -----------
Reinvested capital gains ...................... -- -- -- -- --
----------- ----------- ----------- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ $(2,065,429) 898,611 4,184 55,905 51,013
=========== =========== =========== =========== ===========
VEWwHrdAst WPTGloPVC
------------ ----------------------------------------
1998 2000 1999 1998
----------- ----------- ----------- -----------
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ -- 25,366 10,150 4,521
Mortality and expense risk charges (note 3) ... (11) (2,889) (1,209) (50)
----------- ----------- ----------- -----------
Net investment income ....................... (11) 22,477 8,941 4,471
----------- ----------- ----------- -----------
Proceeds from mutual funds shares sold ........ 46,572 1,991,744 372,724 345,457
Cost of mutual fund shares sold ............... (49,623) (1,898,600) (375,164) (337,050)
----------- ----------- ----------- -----------
Realized gain (loss) on investments ......... (3,051) 93,144 (2,440) 8,407
Change in unrealized gain (loss)
on investments .............................. (2,102) 87,894 (2,238) 5,870
----------- ----------- ----------- -----------
Net gain (loss) on investments .............. (5,153) 181,038 (4,678) 14,277
----------- ----------- ----------- -----------
Reinvested capital gains ...................... -- 23,283 18,278 --
----------- ----------- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ $ (5,164) 226,798 22,541 18,748
=========== =========== =========== ===========
WPTInteq
-----------------------------------------
2000 1999 1998
----------- ----------- -----------
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ 12,900 19,282 2,873
Mortality and expense risk charges (note 3) ... (1,340) (81) (42)
----------- ----------- -----------
Net investment income ....................... 11,560 19,201 2,831
----------- ----------- -----------
Proceeds from mutual funds shares sold ........ 992,359 785,974 277,515
Cost of mutual fund shares sold ............... (749,434) (670,363) (301,573)
----------- ----------- -----------
Realized gain (loss) on investments ......... 242,925 115,611 (24,058)
Change in unrealized gain (loss)
on investments .............................. (1,294,832) 581,395 30,323
----------- ----------- -----------
Net gain (loss) on investments .............. (1,051,907) 697,006 6,265
----------- ----------- -----------
Reinvested capital gains ...................... 310,165 -- --
----------- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ $ (730,182) 716,207 9,096
=========== =========== ===========
WPTValue
----------------------------------------
2000 1999 1998
----------- ----------- -----------
INVESTMENT ACTIVITY:
Reinvested dividends .......................... $ -- -- --
Mortality and expense risk charges (note 3) ... (1,199) (154) (13)
----------- ----------- -----------
Net investment income ....................... (1,199) (154) (13)
----------- ----------- -----------
Proceeds from mutual funds shares sold ........ 1,772,806 364,939 87,326
Cost of mutual fund shares sold ............... (1,546,982) (278,265) (89,432)
----------- ----------- -----------
Realized gain (loss) on investments ......... 225,824 86,674 (2,106)
Change in unrealized gain (loss)
on investments .............................. (716,480) 208,276 29,961
----------- ----------- -----------
Net gain (loss) on investments .............. (490,656) 294,950 27,855
----------- ----------- -----------
Reinvested capital gains ...................... 141,743 -- --
----------- ----------- -----------
Net increase (decrease) in contract owners'
equity resulting from operations ........ $ (350,112) 294,796 27,842
=========== =========== ===========
See accompanying notes to financial statements.
14
NATIONWIDE VLI SEPARATE ACCOUNT-4
STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY
YEARS ENDED DECEMBER 31, 2000 AND 1999 AND FOR THE PERIOD FEBRUARY 18, 1998
(COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 1998
Total ACVPincGr
---------------------------------------------- ----------------------------------------------
2000 1999 1998 2000 1999 1998
-------------- -------------- -------------- -------------- ------------- -------------
INVESTMENT ACTIVITY:
Net investment income............... $ 19,565,651 6,402,662 788,473 56,216 (4,525) 5,039
Realized gain (loss) on investments 16,571,418 6,807,752 (271,660) 63,909 266,293 1,755
Change in unrealized gain (loss)
on investments.................... (178,984,942) 42,568,531 6,208,888 (2,277,235) 692,513 125,007
Reinvested capital gains............ 50,385,356 6,941,880 597,466 - - -
-------------- -------------- -------------- -------------- ------------- ------------
Net increase (decrease) in
contract owners' equity
resulting from operations ...... (92,462,517) 62,720,825 7,323,167 (2,157,110) 954,281 131,801
-------------- -------------- -------------- -------------- ------------- ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners................... 947,537,536 515,112,072 106,894,981 9,141,279 4,843,884 168,731
Transfers between funds............. - - - 7,485,967 5,659,068 959,762
Surrenders.......................... (10,694,705) (2,953,250) (205,540) (307,329) (25,955) (64)
Death benefits...................... (65,736) (165,946) - (1,577) (1,531) -
Policy loans (net of repayments)
(note 5).......................... (9,821,909) (4,792,558) (1,093,563) (57,111) (99,683) -
Deductions for surrender charges
(note 2d)......................... (1,692,311) (378,228) (2,405) (48,631) (3,324) (1)
Redemptions to pay cost of insurance
charges and administrative charges
(notes 2b and 2c)................. (63,687,230) (28,207,228) (4,765,148) (1,117,246) (410,626) (23,721)
Asset charges (note 3):
FPVUL & VEL contracts............. (1,989,545) (882,295) (148,735) (32,044) (13,701) (985)
MSP contracts..................... (359,299) (49,709) (535) (6,176) (1,582) (4)
SL contracts...................... (165,436) (99,794) (12,520) (4,637) (1,422) (83)
-------------- -------------- -------------- -------------- ------------- ------------
Net equity transactions......... 859,061,365 477,583,064 100,666,535 15,052,495 9,945,128 1,103,635
-------------- -------------- -------------- -------------- ------------- ------------
NET CHANGE IN CONTRACT
OWNERS' EQUITY...................... 766,598,848 540,303,889 107,989,702 12,895,385 10,899,409 1,235,436
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD........................... 648,293,593 107,989,704 - 12,134,845 1,235,436 -
-------------- -------------- -------------- -------------- ------------- ------------
CONTRACT OWNERS' EQUITY END
OF PERIOD........................... $1,414,892,441 648,293,593 107,989,702 25,030,230 12,134,845 1,235,436
============== ============== ============== ============== ============= ============
CHANGES IN UNITS:
Beginning units.............. 50,045,344 9,506,248 - 874,749 97,382 -
------------ -------------- -------------- -------------- ------------- --------------
Units purchased.............. 109,550,329 66,964,330 16,180,186 1,358,922 990,326 99,550
Units redeemed............... (43,498,824) (26,425,234) (6,673,938) (125,099) (212,959) (2,168
------------ -------------- -------------- -------------- ------------- --------------
Ending units................. 116,096,849 50,045,344 9,506,248 2,108,572 874,749 97,382
============ ============== ============== ============== ============= ==============
ACVPint
-----------------------------------------------
2000 1999 1998
-------------- -------------- --------------
INVESTMENT ACTIVITY:
Net investment income........ ........ $ (14,005) (3,029) 182
Realized gain (loss) on investments .. 2,847,917 628,064 (890)
Change in unrealized gain (loss)
on investments...................... (10,029,310) 4,031,727 159,768
Reinvested capital gains.............. 445,800 - 3,644
-------------- -------------- --------------
Net increase (decrease) in
contract owners' equity
resulting from operations ........ (6,749,598) 4,656,762 162,704
-------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners..................... 17,266,035 3,440,338 489,914
Transfers between funds............... 20,394,660 5,542,573 1,905,042
Surrenders............................ (174,891) (6,193) -
Death benefits........................ (5,691) (3,352) -
Policy loans (net of repayments)
(note 5)............................ (199,083) (114,731) (2,833)
Deductions for surrender charges
(note 2d)........................... (27,674) (793) -
Redemptions to pay cost of insurance
charges and administrative charges
(notes 2b and 2c)................... (1,602,834) (514,310) (73,254)
Asset charges (note 3):
FPVUL & VEL contracts............... (60,820) (21,791) (2,574)
MSP contracts....................... (7,381) (570) (9)
SL contracts........................ (7,846) (1,478) (217)
-------------- -------------- --------------
Net equity transactions........... 35,574,475 8,319,693 2,316,069
-------------- -------------- --------------
NET CHANGE IN CONTRACT
OWNERS' EQUITY........................ 28,824,877 12,976,455 2,478,773
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD............................. 15,455,228 2,478,773 -
-------------- -------------- --------------
CONTRACT OWNERS' EQUITY END
OF PERIOD............................. $ 44,280,105 15,455,228 2,478,773
============== ============== ==============
CHANGES IN UNITS:
Beginning units.............. 830,394 209,297 -
-------------- -------------- --------------
Units purchased.............. 2,368,251 682,334 216,428
Units redeemed............... (135,307) (61,237) (7,131)
-------------- -------------- --------------
Ending units................. 3,063,338 830,394 209,297
============== ============== ==============
(Continued)
15
NATIONWIDE VLI SEPARATE ACCOUNT-4
STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED
YEARS ENDED DECEMBER 31, 2000 AND 1999 AND FOR THE PERIOD FEBRUARY 18, 1998
(COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 1998
ACVPValue DrySRGr
-------------------------------------------- -----------------------------------------
2000 1999 1998 2000 1999 1998
------------ ------------ ------------ ------------ ------------ ----------
INVESTMENT ACTIVITY:
Net investment income .............. $ 26,769 8,355 125 127,586 190 2,018
Realized gain (loss) on investments 5,242 (38,029) (4,170) 286,804 137,365 13,110
Change in unrealized gain (loss)
on investments ................... 865,295 (142,040) 28,277 (2,392,732) 901,808 108,355
Reinvested capital gains ........... 74,870 85,768 1,997 -- 279,678 47,900
------------ ------------ ------------ ------------ ------------ ----------
Net increase (decrease) in
contract owners' equity
resulting from operations ...... 972,176 (85,946) 26,229 (1,978,342) 1,319,041 171,383
------------ ------------ ------------ ------------ ------------ ----------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .................. 2,380,936 698,376 218,019 5,340,142 2,335,241 544,259
Transfers between funds ............ 2,477,656 905,970 409,201 6,492,229 4,065,765 721,262
Surrenders ......................... (104,084) (7,715) (20) (161,374) (13,484) (97)
Death benefits ..................... -- -- -- 17,714 (18,063) --
Policy loans (net of repayments)
(note 5) ......................... (8,731) (15,452) (1,893) (253,461) (33,299) (1,497)
Deductions for surrender charges
(note 2d) ........................ (16,470) (988) -- (25,536) (1,727) (1)
Redemptions to pay cost of insurance
charges and administrative charges
(notes 2b and 2c) ................ (264,459) (132,120) (23,676) (1,388,349) (506,680) (61,633)
Asset charges (note 3):
FPVUL & VEL contracts ............ (10,699) (5,363) (827) (49,907) (17,385) (1,607)
MSP contracts .................... (992) (203) (3) (4,193) (332) (6)
SL contracts ..................... (751) (147) (70) (2,607) (913) (135)
------------ ------------ ------------ ------------ ------------ ----------
Net equity transactions ........ 4,452,406 1,442,358 600,731 9,964,658 5,809,123 1,200,545
------------ ------------ ------------ ------------ ------------ ----------
NET CHANGE IN CONTRACT
OWNERS' EQUITY ..................... 5,424,582 1,356,412 626,960 7,986,316 7,128,164 1,371,928
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD .......................... 1,983,372 626,960 -- 8,500,092 1,371,928 --
------------ ------------ ------------ ------------ ------------ ----------
CONTRACT OWNERS' EQUITY END
OF PERIOD .......................... $ 7,407,954 1,983,372 626,960 16,486,408 8,500,092 1,371,928
============ ============ ============ ============ ============ ==========
CHANGES IN UNITS:
Beginning units .................... 193,386 59,864 -- 509,172 106,093 --
------------ ------------ ------------ ------------ ------------ ----------
Units purchased .................... 464,887 171,328 62,522 741,714 445,091 111,810
Units redeemed ..................... (40,889) (37,806) (2,658) (118,327) (42,012) (5,717)
------------ ------------ ------------ ------------ ------------ ----------
Ending units ....................... 617,384 193,386 59,864 1,132,559 509,172 106,093
============ ============ ============ ============ ============ ==========
DryStkIx
-----------------------------------------
2000 1999 1998
------------ ------------ ------------
INVESTMENT ACTIVITY:
Net investment income .............. $ 1,474,581 613,975 63,670
Realized gain (loss) on investments 3,585,686 612,737 (73,213)
Change in unrealized gain (loss)
on investments ................... (27,898,576) 11,117,238 1,455,019
Reinvested capital gains ........... 3,654,055 672,634 12,311
------------ ------------ ------------
Net increase (decrease) in
contract owners' equity
resulting from operations ...... (19,184,254) 13,016,584 1,457,787
------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .................. 68,654,997 41,330,848 3,047,695
Transfers between funds ............ 72,727,790 57,817,925 10,358,645
Surrenders ......................... (1,341,027) (626,906) (430)
Death benefits ..................... 2,224 (24,555) --
Policy loans (net of repayments)
(note 5) ......................... (792,260) (192,790) (9,416)
Deductions for surrender charges
(note 2d) ........................ (212,202) (80,289) (5)
Redemptions to pay cost of insurance
charges and administrative charges
(notes 2b and 2c) ................ (8,955,356) (4,045,059) (463,310)
Asset charges (note 3):
FPVUL & VEL contracts ............ (279,995) (134,875) (15,073)
MSP contracts .................... (49,600) (4,126) (54)
SL contracts ..................... (28,362) (11,443) (1,269)
------------ ------------ ------------
Net equity transactions ........ 129,726,209 94,028,730 12,916,783
------------ ------------ ------------
NET CHANGE IN CONTRACT
OWNERS' EQUITY ..................... 110,541,955 107,045,314 14,374,570
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD .......................... 121,419,884 14,374,570 --
------------ ------------ ------------
CONTRACT OWNERS' EQUITY END
OF PERIOD .......................... $231,961,839 121,419,884 14,374,570
============ ============ ============
CHANGES IN UNITS:
Beginning units .................... 8,707,267 1,136,754 --
------------ ------------ ------------
Units purchased .................... 11,088,744 7,959,543 1,180,333
Units redeemed ..................... (888,358) (389,030) (43,579)
------------ ------------ ------------
Ending units ....................... 18,907,653 8,707,267 1,136,754
============ ============ ============
16
NATIONWIDE VLI SEPARATE ACCOUNT-4
STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED
YEARS ENDED DECEMBER 31, 2000 AND 1999 AND FOR THE PERIOD FEBRUARY 18, 1998
(COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 1998
DryEuroEq DryVApp
-------------------------------------------- -----------------------------------------
2000 1999 1998 2000 1999 1998
----------- ----------- -------------- ----------- ----------- -----------
INVESTMENT ACTIVITY:
Net investment income .............. $ 2,393 266 -- 147,948 82,323 7,508
Realized gain (loss) on investments (61,506) 360 -- 353,748 369,370 (894)
Change in unrealized gain (loss)
on investments ................... 26,273 9,997 -- (1,102,409) 649,339 150,742
Reinvested capital gains ........... 39,799 1,251 -- 355,671 68,742 --
----------- ----------- -------------- ----------- ----------- -----------
Net increase (decrease) in
contract owners' equity
resulting from operations ...... 6,959 11,874 -- (245,042) 1,169,774 157,356
----------- ----------- -------------- ----------- ----------- -----------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .................. 298,004 8,625 -- 13,754,528 12,955,621 381,182
Transfers between funds ............ 1,063,297 114,306 -- 1,480,475 4,076,889 1,070,054
Surrenders ......................... (23) -- -- (176,111) (56,786) (44)
Death benefits ..................... -- -- -- -- (6,440) --
Policy loans (net of repayments)
(note 5) ......................... (310) -- -- (114,896) (32,681) (289)
Deductions for surrender charges
(note 2d) ........................ (4) -- -- (27,867) (7,273) (1)
Redemptions to pay cost of insurance
charges and administrative charges
(notes 2b and 2c) ................ (41,463) (92) -- (1,277,668) (701,318) (58,099)
Asset charges (note 3):
FPVUL & VEL contracts ............ (1,518) (32) -- (33,727) (17,976) (1,594)
MSP contracts .................... (296) (8) -- (5,950) (683) (6)
SL contracts ..................... (300) -- -- (1,121) (1,755) (134)
----------- ----------- -------------- ----------- ----------- -----------
Net equity transactions ........ 1,317,387 122,799 -- 13,597,663 16,207,598 1,391,069
----------- ----------- -------------- ----------- ----------- -----------
NET CHANGE IN CONTRACT
OWNERS' EQUITY ..................... 1,324,346 134,673 -- 13,352,621 17,377,372 1,548,425
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD .......................... 134,673 -- -- 18,925,797 1,548,425 --
----------- ----------- -------------- ----------- ----------- -----------
CONTRACT OWNERS' EQUITY END
OF PERIOD .......................... $ 1,459,019 134,673 -- 32,278,418 18,925,797 1,548,425
=========== =========== ============== =========== =========== ===========
CHANGES IN UNITS:
Beginning units .................... 10,415 -- -- 1,466,981 120,461 --
----------- ----------- -------------- ----------- ----------- -----------
Units purchased .................. 110,285 10,455 -- 1,345,193 1,811,470 125,573
Units redeemed ................... (5,477) (40) -- (224,132) (464,950) (5,112)
----------- ----------- -------------- ----------- ----------- -----------
Ending units ....................... 115,223 10,415 -- 2,588,042 1,466,981 120,461
=========== =========== ============== =========== =========== ===========
FedQualBd2
---------------------------------------------
2000 1999 1998
----------- ----------- --------------
INVESTMENT ACTIVITY:
Net investment income .............. 248,090 (3,162) --
Realized gain (loss) on investments 126,755 (1,907) --
Change in unrealized gain (loss)
on investments ................... 2,975,611 40,201 --
Reinvested capital gains ........... -- -- --
----------- ----------- --------------
Net increase (decrease) in
contract owners' equity
resulting from operations ...... 3,350,456 35,132 --
----------- ----------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .................. 18,965,217 3,119,190 --
Transfers between funds ............ 19,532,260 8,049,110 --
Surrenders ......................... -- -- --
Death benefits ..................... (5,851) -- --
Policy loans (net of repayments)
(note 5) ......................... (6,815) -- --
Deductions for surrender charges
(note 2d) ........................ -- -- --
Redemptions to pay cost of insurance
charges and administrative charges
(notes 2b and 2c) ................ (606,106) (20,060) --
Asset charges (note 3):
FPVUL & VEL contracts ............ (2,155) (31) --
MSP contracts .................... (611) (21) --
SL contracts ..................... (235) -- --
----------- ----------- --------------
Net equity transactions ........ 37,875,704 11,148,188 --
----------- ----------- --------------
NET CHANGE IN CONTRACT
OWNERS' EQUITY ..................... 41,226,160 11,183,320 --
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD .......................... 11,183,320 -- --
----------- ----------- --------------
CONTRACT OWNERS' EQUITY END
OF PERIOD .......................... 52,409,480 11,183,320 --
=========== =========== ==============
CHANGES IN UNITS:
Beginning units .................... 1,133,916 -- --
Units purchased ...................... 3,748,621 1,141,400 --
Units redeemed ....................... (63,800) (7,484) --
----------- ----------- --------------
Ending units ....................... 4,818,737 1,133,916 --
=========== =========== ==============
(Continued)
17
NATIONWIDE VLI SEPARATE ACCOUNT-4
STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED
YEARS ENDED DECEMBER 31, 2000 AND 1999 AND FOR THE PERIOD FEBRUARY 18, 1998
(COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 1998
FIDVEQINS FIDVGRS
-------------------------------------------- --------------------------------------------
2000 1999 1998 2000 1999 1998
------------ ------------ ------------ ------------ ------------ ------------
INVESTMENT ACTIVITY:
Net investment income .............. $ 262,884 93,800 (402) (60,006) (4,278) (249)
Realized gain (loss) on investments (546,971) 303,591 (35,087) 1,245,093 146,210 8,500
Change in unrealized gain (loss)
on investments ................... 1,470,791 (277,459) 449,182 (19,309,179) 6,093,883 480,684
Reinvested capital gains ........... 1,063,019 214,564 -- 5,556,689 543,154 --
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in
contract owners' equity
resulting from operations ...... 2,249,723 334,496 413,693 (12,567,403) 6,778,969 488,935
------------ ------------ ------------ ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .................. 7,850,333 4,448,956 1,622,388 37,211,019 13,666,314 742,777
Transfers between funds ............ 4,967,158 6,896,656 3,964,871 39,402,444 20,406,545 2,489,085
Surrenders ......................... (341,944) (80,452) (401) (572,831) (63,057) (1,445)
Death benefits ..................... (6,617) (1,391) -- (17,086) (10,491) --
Policy loans (net of repayments)
(note 5) ......................... (315,976) (144,802) (6,242) (799,676) (177,397) (5,968)
Deductions for surrender charges
(note 2d) ........................ (54,109) (10,304) (5) (90,644) (8,076) (17)
Redemptions to pay cost of insurance
charges and administrative charges
(notes 2b and 2c) ................ (1,698,463) (1,124,439) (217,638) (5,241,119) (1,671,275) (140,842)
Asset charges (note 3):
FPVUL & VEL contracts ............ (68,189) (43,634) (6,715) (178,345) (55,807) (4,257)
MSP contracts .................... (4,739) (1,965) (24) (24,381) (2,486) (15)
SL contracts ..................... (5,991) (1,316) (565) (12,861) (3,848) (358)
------------ ------------ ------------ ------------ ------------ ------------
Net equity transactions ........ 10,321,463 9,937,309 5,355,669 69,676,520 32,080,422 3,078,960
------------ ------------ ------------ ------------ ------------ ------------
NET CHANGE IN CONTRACT
OWNERS' EQUITY ..................... 12,571,186 10,271,805 5,769,362 57,109,117 38,859,391 3,567,895
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD .......................... 16,041,167 5,769,362 -- 42,427,286 3,567,895 --
------------ ------------ ------------ ------------ ------------ ------------
CONTRACT OWNERS' EQUITY END
OF PERIOD .......................... $ 28,612,353 16,041,167 5,769,362 99,536,403 42,427,286 3,567,895
============ ============ ============ ============ ============ ============
CHANGES IN UNITS:
Beginning units .................... 1,374,484 517,910 -- 2,322,709 256,014 --
------------ ------------ ------------ ------------ ------------ ------------
Units purchased .................... 1,252,718 975,907 540,577 4,664,500 2,192,613 268,539
Units redeemed ..................... (329,618) (119,333) (22,667) (425,983) (125,918) (12,525)
------------ ------------ ------------ ------------ ------------ ------------
Ending units ....................... 2,297,584 1,374,484 517,910 6,561,226 2,322,709 256,014
============ ============ ============ ============ ============ ============
FIDVHIINS
---------------------------------------------
2000 1999 1998
------------ ------------ ------------
INVESTMENT ACTIVITY:
Net investment income .............. 689,813 363,341 (245)
Realized gain (loss) on investments (1,172,059) (114,464) (53,784)
Change in unrealized gain (loss)
on investments ................... (3,641,858) 103,063 37,295
Reinvested capital gains ........... -- 13,640 --
------------ ------------ ------------
Net increase (decrease) in
contract owners' equity
resulting from operations ...... (4,124,104) 365,580 (16,734)
------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .................. 7,533,788 2,442,012 685,592
Transfers between funds ............ 3,220,351 3,417,897 2,964,332
Surrenders ......................... (716,896) (30,819) --
Death benefits ..................... -- (1,204) --
Policy loans (net of repayments)
(note 5) ......................... (1,732) (134,160) (1,581)
Deductions for surrender charges
(note 2d) ........................ (113,440) (3,947) --
Redemptions to pay cost of insurance
charges and administrative charges
(notes 2b and 2c) ................ (677,508) (455,068) (103,400)
Asset charges (note 3):
FPVUL & VEL contracts ............ (22,619) (18,072) (3,432)
MSP contracts .................... (3,871) (1,135) (12)
SL contracts ..................... (2,510) (1,596) (289)
------------ ------------ ------------
Net equity transactions ........ 9,215,563 5,213,908 3,541,210
------------ ------------ ------------
NET CHANGE IN CONTRACT
OWNERS' EQUITY ..................... 5,091,459 5,579,488 3,524,476
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD .......................... 9,103,964 3,524,476 --
------------ ------------ ------------
CONTRACT OWNERS' EQUITY END
OF PERIOD .......................... 14,195,423 9,103,964 3,524,476
============ ============ ============
CHANGES IN UNITS:
Beginning units .................... 895,631 368,766 --
------------ ------------ ------------
Units purchased .................... 1,222,377 623,361 380,291
Units redeemed ..................... (310,119) (96,496) (11,525)
------------ ------------ ------------
Ending units ....................... 1,807,889 895,631 368,766
============ ============ ============
18
NATIONWIDE VLI SEPARATE ACCOUNT-4
STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED
YEARS ENDED DECEMBER 31, 2000 AND 1999 AND FOR THE PERIOD FEBRUARY 18, 1998
(COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 1998
FIDVOVSES FIDVCONS
------------------------------------------ --------------------------------------------
2000 1999 1998 2000 1999 1998
------------ ------------ ------------ ------------ ------------ ------------
INVESTMENT ACTIVITY:
Net investment income .............. $ 167,888 11,251 (75) 65,914 22,353 (330)
Realized gain (loss) on investments (1,765,190) 730,465 (24,873) 528,352 214,850 26,824
Change in unrealized gain (loss)
on investments ................... (4,479,931) 1,849,661 68,313 (6,926,956) 3,006,379 648,413
Reinvested capital gains ........... 1,409,432 34,048 -- 3,401,735 195,897 --
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in
contract owners' equity
resulting from operations ...... (4,667,801) 2,625,425 43,365 (2,930,955) 3,439,479 674,907
------------ ------------ ------------ ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .................. 8,505,042 1,371,398 233,314 13,331,258 6,884,353 1,117,315
Transfers between funds ............ 8,652,600 8,415,589 835,812 16,551,717 11,647,164 3,133,469
Surrenders ......................... (105,541) (26,372) (16) (475,190) (454,009) (165)
Death benefits ..................... (10,322) (308) -- (21,261) (4,599) --
Policy loans (net of repayments)
(note 5) ......................... (59,458) (21,644) (1,574) (383,633) (155,019) (2,052)
Deductions for surrender charges
(note 2d) ........................ (16,701) (3,377) -- (75,193) (58,146) (2)
Redemptions to pay cost of insurance
charges and administrative charges
(notes 2b and 2c) ................ (1,042,254) (318,257) (34,849) (3,087,387) (1,389,362) (173,162)
Asset charges (note 3):
FPVUL & VEL contracts ............ (27,681) (10,339) (1,230) (119,105) (50,526) (5,299)
MSP contracts .................... (7,325) (724) (4) (13,801) (1,103) (19)
SL contracts ..................... (2,147) (955) (103) (4,789) (2,492) (446)
------------ ------------ ------------ ------------ ------------ ------------
Net equity transactions ........ 15,886,213 9,405,011 1,031,350 25,702,616 16,416,261 4,069,639
------------ ------------ ------------ ------------ ------------ ------------
NET CHANGE IN CONTRACT
OWNERS' EQUITY ..................... 11,218,412 12,030,436 1,074,715 22,771,661 19,855,740 4,744,546
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD .......................... 13,105,151 1,074,715 -- 24,600,286 4,744,546 --
------------ ------------ ------------ ------------ ------------ ------------
CONTRACT OWNERS' EQUITY END
OF PERIOD .......................... $ 24,323,563 13,105,151 1,074,715 47,371,947 24,600,286 4,744,546
============ ============ ============ ============ ============ ============
CHANGES IN UNITS:
Beginning units .................... 897,019 95,893 -- 1,555,137 365,486 --
------------ ------------ ------------ ------------ ------------ ------------
Units purchased .................... 1,314,737 863,392 99,416 2,019,106 1,338,819 381,598
Units redeemed ..................... (114,723) (62,266) (3,523) (278,479) (149,168) (16,112)
------------ ------------ ------------ ------------ ------------ ------------
Ending units ....................... 2,097,033 897,019 95,893 3,295,764 1,555,137 365,486
============ ============ ============ ============ ============ ============
FIDVGROPS
---------------------------------------------
2000 1999 1998
------------ ------------ ------------
INVESTMENT ACTIVITY:
Net investment income .............. 114,308 25,116 (168)
Realized gain (loss) on investments (205,257) 53,554 12,948
Change in unrealized gain (loss)
on investments ................... (3,225,818) 137,134 262,800
Reinvested capital gains ........... 662,022 55,207 --
------------ ------------ ------------
Net increase (decrease) in
contract owners' equity
resulting from operations ...... (2,654,745) 271,011 275,580
------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .................. 4,026,349 3,045,388 584,874
Transfers between funds ............ 4,007,402 5,377,081 1,646,479
Surrenders ......................... (106,913) (191,409) (36)
Death benefits ..................... (14,827) (1,216) --
Policy loans (net of repayments)
(note 5) ......................... (182,797) (42,620) 29
Deductions for surrender charges
(note 2d) ........................ (16,918) (24,514) --
Redemptions to pay cost of insurance
charges and administrative charges
(notes 2b and 2c) ................ (1,045,761) (632,760) (84,140)
Asset charges (note 3):
FPVUL & VEL contracts ............ (39,737) (23,008) (2,917)
MSP contracts .................... (3,764) (1,943) (10)
SL contracts ..................... (3,068) (1,552) (245)
------------ ------------ ------------
Net equity transactions ........ 6,619,966 7,503,447 2,144,034
------------ ------------ ------------
NET CHANGE IN CONTRACT
OWNERS' EQUITY ..................... 3,965,221 7,774,458 2,419,614
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD .......................... 10,194,072 2,419,614 --
------------ ------------ ------------
CONTRACT OWNERS' EQUITY END
OF PERIOD .......................... 14,159,293 10,194,072 2,419,614
============ ============ ============
CHANGES IN UNITS:
Beginning units .................... 798,468 194,457 --
------------ ------------ ------------
Units purchased .................... 797,422 679,802 202,309
Units redeemed ..................... (236,089) (75,791) (7,852)
------------ ------------ ------------
Ending units ....................... 1,359,801 798,468 194,457
============ ============ ============
(Continued)
19
NATIONWIDE VLI SEPARATE ACCOUNT-4
STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED
YEARS ENDED DECEMBER 31, 2000 AND 1999 AND FOR THE PERIOD FEBRUARY 18, 1998
(COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 1998
NSATEMMGM NSATGTECGM
---------------------------------------------- ------------------------------------------
2000 1999 1998 2000 1999 1998
-------------- -------------- ------------ -------------- --------- -------------
INVESTMENT ACTIVITY:
Net investment income....... $ - - - - - -
Realized gain (loss) on investments (3,018) - - (4,426) - -
Change in unrealized gain (loss)
on investments............. 336 - - (195,957) - -
Reinvested capital gains..... - - - 10,013 - -
-------------- -------------- ---------- -------------- ---------- ------------
Net increase (decrease) in
contract owners' equity
resulting from operations (2,682) - - (190,370) - -
-------------- -------------- ---------- -------------- ---------- ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners............ 430 - - 36,330 - -
Transfers between funds...... 23,571 - - 719,894 - -
Surrenders................... - - - - - -
Death benefits............... - - - - - -
Policy loans (net of repayments)
(note 5)................... - - - (22) - -
Deductions for surrender charges
(note 2d).................. - - - - - -
Redemptions to pay cost of insurance
charges and administrative charges
(notes 2b and 2c).......... (398) - - (14,760) - -
Asset charges (note 3):
FPVUL & VEL contracts...... (17) - - (358) - -
MSP contracts.............. - - - (4) - -
SL contracts............... (73) - - (108) - -
-------------- -------------- ---------- -------------- ---------- ------------
Net equity transactions.. 23,513 - - 740,972 - -
-------------- -------------- ---------- -------------- ---------- ------------
NET CHANGE IN CONTRACT
OWNERS' EQUITY............... 20,831 - - 550,602 - -
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD.................... - - - - - -
-------------- -------------- ---------- -------------- ---------- ------------
CONTRACT OWNERS' EQUITY END
OF PERIOD.................... $20,831 - - 550,602 - -
============== ============== ========== ============== ========== ============
CHANGES IN UNITS:
Beginning units.............. - - - - -
-------------- -------------- ---------- -------------- ---------- ------------
Units purchased.............. 2,438 - - 92,911 - -
Units redeemed............... (47) - - (1,413) - -
-------------- -------------- ---------- -------------- ---------- -----------
Ending units................. 2,391 - - 91,498 - -
============== ============== ========== ============== ========== ============
NSATINTGGM
---------------------------------------------
2000 1999 1998
------------- -------------- --------------
INVESTMENT ACTIVITY:
Net investment income....... - - -
Realized gain (loss) on investments 661 - -
Change in unrealized gain (loss)
on investments............. 260 - -
Reinvested capital gains..... - - -
-------------- -------------- --------------
Net increase (decrease) in
contract owners' equity
resulting from operations 921 - -
-------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners............ 1,248 - -
Transfers between funds...... 23,447 - -
Surrenders................... - - -
Death benefits............... - - -
Policy loans (net of repayments)
(note 5)................... - - -
Deductions for surrender charges
(note 2d).................. - - -
Redemptions to pay cost of insurance
charges and administrative charges
(notes 2b and 2c).......... (576) - -
Asset charges (note 3):
FPVUL & VEL contracts...... (20) - -
MSP contracts.............. - - -
SL contracts............... (73) - -
-------------- -------------- --------------
Net equity transactions.. 24,026 - -
-------------- -------------- --------------
NET CHANGE IN CONTRACT
OWNERS' EQUITY............... 24,947 - -
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD.................... - - -
-------------- -------------- --------------
CONTRACT OWNERS' EQUITY END
OF PERIOD.................... 24,947 - -
============== ============== ==============
CHANGES IN UNITS:
Beginning units.............. - - -
-------------- -------------- --------------
Units purchased.............. 2,770 - -
Units redeemed............... (73) - -
-------------- -------------- --------------
Ending units................. 2,697 - -
============== ============== ==============
20
NATIONWIDE VLI SEPARATE ACCOUNT-4
STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED
YEARS ENDED DECEMBER 31, 2000 AND 1999 AND FOR THE PERIOD FEBRUARY 18, 1998
(COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 1998
JANACAPAPS JANAGLTCHS
--------------------------------------------- --------------------------------
2000 1999 1998 2000 1999
-------------- -------------- -------------- -------------- -------------
INVESTMENT ACTIVITY:
Net investment income........ $ 130,055 - - 88,473 -
Realized gain (loss) on investments (531,461) - - (1,654,449) -
Change in unrealized gain (loss)
on investments............. (3,401,482) - - (5,609,957) -
Reinvested capital gains..... - - - - -
-------------- -------------- -------------- -------------- -------------
Net increase (decrease) in
contract owners' equity
resulting from operations (3,802,888) - - (7,175,933) -
-------------- -------------- -------------- -------------- -------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners............ 4,655,897 - - 5,576,181 -
Transfers between funds...... 22,374,018 - - 18,371,062 -
Surrenders................... (74,366) - - (65,589) -
Death benefits............... - - - (282) -
Policy loans (net of repayments)
(note 5)................... (27,728) - - (67,411) -
Deductions for surrender charges
(note 2d).................. (11,767) - - (10,379) -
Redemptions to pay cost of insurance
charges and administrative charges
(notes 2b and 2c).......... (892,334) - - (930,882) -
Asset charges (note 3):
FPVUL & VEL contracts...... (33,096) - - (32,832) -
MSP contracts.............. (4,072) - - (5,353) -
SL contracts............... (1,406) - - (670) -
-------------- -------------- -------------- -------------- -------------
Net equity transactions.. 25,985,146 - - 22,833,845 -
-------------- -------------- -------------- -------------- -------------
NET CHANGE IN CONTRACT
OWNERS' EQUITY............... 22,182,258 - - 15,657,912 -
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD.................... - - - - -
-------------- -------------- -------------- -------------- -------------
CONTRACT OWNERS' EQUITY END
OF PERIOD.................... $22,182,258 - - 15,657,912 -
============== ============== ============== ============== =============
CHANGES IN UNITS:
Beginning units.............. - - - - -
-------------- -------------- -------------- -------------- -------------
Units purchased.............. 2,815,308 - - 2,513,806 -
Units redeemed............... (120,018) - - (133,644) -
-------------- -------------- -------------- -------------- -------------
Ending units................. 2,695,290 - - 2,380,162 -
============== ============== ============== ============== =============
JANAGLTCHS JANAINTGRS
--------------- ----------------------------------------------
1998 2000 1999 1998
-------------- -------------- -------------- --------------
INVESTMENT ACTIVITY:
Net investment income........ - 477,547 - -
Realized gain (loss) on investments - (1,380,504) - -
Change in unrealized gain (loss)
on investments............. - (2,809,392) - -
Reinvested capital gains..... - - - -
-------------- -------------- -------------- --------------
Net increase (decrease) in
contract owners' equity
resulting from operations - (3,712,349) - -
-------------- -------------- -------------- --------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners............ - 3,860,854 - -
Transfers between funds...... - 19,317,238 - -
Surrenders................... - (64,857) - -
Death benefits............... - (1,321) - -
Policy loans (net of repayments)
(note 5)................... - (44,077) - -
Deductions for surrender charges
(note 2d).................. - (10,263) - -
Redemptions to pay cost of insurance
charges and administrative charges
(notes 2b and 2c).......... - (688,560) - -
Asset charges (note 3):
FPVUL & VEL contracts...... - (25,778) - -
MSP contracts.............. - (2,921) - -
SL contracts............... - (733) - -
-------------- -------------- -------------- --------------
Net equity transactions.. - 22,339,582 - -
-------------- -------------- -------------- --------------
NET CHANGE IN CONTRACT
OWNERS' EQUITY............... - 18,627,233 - -
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD.................... - - - -
-------------- -------------- -------------- --------------
CONTRACT OWNERS' EQUITY END
OF PERIOD.................... - 18,627,233 - -
============== ============== ============== ==============
CHANGES IN UNITS:
Beginning units.............. - - - -
-------------- -------------- -------------- --------------
Units purchased.............. - 2,353,803 - -
Units redeemed............... - (100,741) - -
-------------- -------------- -------------- --------------
Ending units................. - 2,253,062 - -
============== ============== ============== ==============
(Continued)
21
NATIONWIDE VLI SEPARATE ACCOUNT-4
STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED
YEARS ENDED DECEMBER 31, 2000 AND 1999 AND FOR THE PERIOD FEBRUARY 18, 1998
(COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 1998
NSATBALJPM NSATCAPAP
----------------------------------------- -----------------------------------------
2000 1999 1998 2000 1999 1998
----------- ----------- ----------- ----------- ----------- -----------
INVESTMENT ACTIVITY
Net investment income .............. $ 167,547 78,490 9,803 30,760 93,682 14,394
Realized gain (loss) on investments 63,538 (42,204) 373 (652,870) 538,187 16,939
Change in unrealized gain (loss)
on investments ................... (241,628) (33,063) 22,806 (11,341,220) (1,637,699) 469,266
Reinvested capital gains ........... -- 495 2,184 4,845,304 1,352,393 174,093
----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in
contract owners' equity
resulting from operations ...... (10,543) 3,718 35,166 (7,118,026) 346,563 674,692
----------- ----------- ----------- ----------- ----------- -----------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .................. 1,988,633 1,611,897 87,905 8,485,213 9,062,429 1,531,297
Transfers between funds ............ 1,908,503 1,487,269 640,480 1,967,580 7,693,905 4,379,971
Surrenders ......................... (157,913) (107,959) -- (306,983) (206,070) (118)
Death benefits ..................... (11,305) -- -- 10,787 (17,696) --
Policy loans (net of repayments)
(note 5) ......................... (49,949) (10,080) (2,200) (245,557) (72,988) 731
Deductions for surrender charges
(note 2d) ........................ (24,988) (13,826) -- (48,576) (26,392) (1)
Redemptions to pay cost of insurance
charges and administrative charges
(notes 2b and 2c) ................ (312,300) (211,528) (28,998) (2,322,085) (1,637,150) (265,208)
Asset charges (note 3):
FPVUL & VEL contracts ............ (10,757) (6,440) (840) (83,996) (57,366) (7,161)
MSP contracts .................... (2,649) (439) (3) (5,475) (1,785) (26)
SL contracts ..................... (1,847) (638) (71) (4,898) (1,205) (603)
----------- ----------- ----------- ----------- ----------- -----------
Net equity transactions ........ 3,325,428 2,748,256 696,273 7,446,010 14,735,682 5,638,882
----------- ----------- ----------- ----------- ----------- -----------
NET CHANGE IN CONTRACT
OWNERS' EQUITY ..................... 3,314,885 2,751,974 731,439 327,984 15,082,245 6,313,574
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD .......................... 3,483,413 731,439 -- 21,395,819 6,313,574 --
----------- ----------- ----------- ----------- ----------- -----------
CONTRACT OWNERS' EQUITY END
OF PERIOD .......................... $ 6,798,298 3,483,413 731,439 21,723,803 21,395,819 6,313,574
=========== =========== =========== =========== =========== ===========
CHANGES IN UNITS:
Beginning units .................... 327,982 67,709 -- 1,644,036 485,911 --
----------- ----------- ----------- ----------- ----------- -----------
Units purchased .................... 449,447 353,956 70,786 1,198,867 1,379,462 509,866
Units redeemed ..................... (129,366) (93,683) (3,077) (494,498) (221,337) (23,955)
----------- ----------- ----------- ----------- ----------- -----------
Ending units ....................... 648,063 327,982 67,709 2,348,405 1,644,036 485,911
=========== =========== =========== =========== =========== ===========
NSATEQIFED
-----------------------------------------
2000 1999 1998
----------- ----------- -----------
INVESTMENT ACTIVITY
Net investment income .............. 14,259 1,651 879
Realized gain (loss) on investments 46,405 16,878 157
Change in unrealized gain (loss)
on investments ................... (334,972) 84,114 15,021
Reinvested capital gains ........... -- 202 2,636
----------- ----------- -----------
Net increase (decrease) in
contract owners' equity
resulting from operations ...... (274,308) 102,845 18,693
----------- ----------- -----------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .................. 473,028 100,722 28,736
Transfers between funds ............ 1,253,216 527,196 202,838
Surrenders ......................... (6,869) (207) --
Death benefits ..................... -- -- --
Policy loans (net of repayments)
(note 5) ......................... (32,403) (1,768) --
Deductions for surrender charges
(note 2d) ........................ (1,087) (26) --
Redemptions to pay cost of insurance
charges and administrative charges
(notes 2b and 2c) ................ (157,503) (48,952) (5,984)
Asset charges (note 3):
FPVUL & VEL contracts ............ (5,044) (1,993) (247)
MSP contracts .................... (589) (80) (1)
SL contracts ..................... (503) (77) (21)
----------- ----------- -----------
Net equity transactions ........ 1,522,246 574,815 225,321
----------- ----------- -----------
NET CHANGE IN CONTRACT
OWNERS' EQUITY ..................... 1,247,938 677,660 244,014
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD .......................... 921,674 244,014 --
----------- ----------- -----------
CONTRACT OWNERS' EQUITY END
OF PERIOD .......................... 2,169,612 921,674 244,014
=========== =========== ===========
CHANGES IN UNITS:
Beginning units .................... 67,642 21,211 --
----------- ----------- -----------
Units purchased .................... 135,367 51,440 21,799
Units redeemed ..................... (22,437) (5,009) (588)
----------- ----------- -----------
Ending units ....................... 180,572 67,642 21,211
=========== =========== ===========
22
NATIONWIDE VLI SEPARATE ACCOUNT-4
STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED
YEARS ENDED DECEMBER 31, 2000 AND 1999 AND FOR THE PERIOD FEBRUARY 18, 1998
(COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 1998
NSATGLOB50 NSATGVTBD
-------------------------------------------- --------------------------------------------
2000 1999 1998 2000 1999 1998
------------ ------------ ------------ ------------ ------------ ------------
INVESTMENT ACTIVITY:
Net investment income .............. $ 162,075 (1,843) 1,916 2,083,360 760,961 83,055
Realized gain (loss) on investments 84,827 108,508 126 (164,247) (653,491) 9,736
Change in unrealized gain (loss)
on investments ................... (4,336,580) 997,392 38,188 2,189,054 (442,511) (84,436)
Reinvested capital gains ........... 945,098 456,545 3,213 -- 35,939 22,403
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in
contract owners' equity
resulting from operations ...... (3,144,580) 1,560,602 43,443 4,108,167 (299,102) 30,758
------------ ------------ ------------ ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .................. 12,463,148 1,045,536 96,340 17,668,928 5,188,264 480,508
Transfers between funds ............ 2,956,853 12,602,010 374,760 9,887,594 10,824,196 4,241,272
Surrenders ......................... (17,060) (149,120) (20) (72,334) (7,882) (58)
Death benefits ..................... -- (783) -- (652) (779) --
Policy loans (net of repayments)
(note 5) ......................... (18,038) (3,556) (199) (103,358) (10,210) (822)
Deductions for surrender charges
(note 2d) ........................ (2,700) (19,098) -- (11,446) (1,010) (1)
Redemptions to pay cost of insurance
charges and administrative charges
(notes 2b and 2c) ................ (486,956) (215,865) (19,705) (1,298,442) (747,310) (51,451)
Asset charges (note 3):
FPVUL & VEL contracts ............ (10,018) (4,771) (571) (21,054) (13,896) (2,112)
MSP contracts .................... (54,582) (78) (2) (3,139) (3,046) (8)
SL contracts ..................... (649) (8,899) (48) (7,679) (1,057) (178)
------------ ------------ ------------ ------------ ------------ ------------
Net equity transactions ........ 14,829,998 13,245,376 450,555 26,038,418 15,227,270 4,667,150
------------ ------------ ------------ ------------ ------------ ------------
NET CHANGE IN CONTRACT
OWNERS' EQUITY ..................... 11,685,418 14,805,978 493,998 30,146,585 14,928,168 4,697,908
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD .......................... 15,299,976 493,998 -- 19,626,076 4,697,908 --
------------ ------------ ------------ ------------ ------------ ------------
CONTRACT OWNERS' EQUITY END
OF PERIOD .......................... $ 26,985,394 15,299,976 493,998 49,772,661 19,626,076 4,697,908
============ ============ ============ ============ ============ ============
CHANGES IN UNITS:
Beginning units .................... 1,116,697 41,464 -- 1,882,004 436,992 --
------------ ------------ ------------ ------------ ------------ ------------
Units purchased .................... 1,201,157 1,104,898 43,495 2,670,982 1,601,216 442,110
Units redeemed ..................... (61,297) (29,665) (2,031) (282,166) (156,204) (5,118)
------------ ------------ ------------ ------------ ------------ ------------
Ending units ....................... 2,256,557 1,116,697 41,464 4,270,820 1,882,004 436,992
============ ============ ============ ============ ============ ============
NSATHIIFED
--- -----------------------------------------
2000 1999 1998
------------ ------------ ------------
INVESTMENT ACTIVITY:
Net investment income .............. 1,110,135 305,361 22,639
Realized gain (loss) on investments (309,417) 2,166 (6,931)
Change in unrealized gain (loss)
on investments ................... (1,573,020) (155,595) 7,941
Reinvested capital gains ........... -- 645 --
------------ ------------ ------------
Net increase (decrease) in
contract owners' equity
resulting from operations ...... (772,302) 152,577 23,649
------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .................. 5,531,190 4,145,976 116,422
Transfers between funds ............ 2,945,536 3,041,733 850,224
Surrenders ......................... (202,047) (1,402) --
Death benefits ..................... (243) -- --
Policy loans (net of repayments)
(note 5) ......................... 27,348 (1,976) --
Deductions for surrender charges
(note 2d) ........................ (31,972) (180) --
Redemptions to pay cost of insurance
charges and administrative charges
(notes 2b and 2c) ................ (295,849) (134,672) (18,455)
Asset charges (note 3):
FPVUL & VEL contracts ............ (5,820) (4,222) (756)
MSP contracts .................... (873) (16) (3)
SL contracts ..................... (176) (549) (64)
------------ ------------ ------------
Net equity transactions ........ 7,967,094 7,044,692 947,368
------------ ------------ ------------
NET CHANGE IN CONTRACT
OWNERS' EQUITY ..................... 7,194,792 7,197,269 971,017
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD .......................... 8,168,286 971,017 --
------------ ------------ ------------
CONTRACT OWNERS' EQUITY END
OF PERIOD .......................... 15,363,078 8,168,286 971,017
============ ============ ============
CHANGES IN UNITS:
Beginning units .................... 805,022 92,454 --
------------ ------------ ------------
Units purchased .................... 918,997 756,587 94,321
Units redeemed ..................... (63,618) (44,019) (1,867)
------------ ------------ ------------
Ending units ....................... 1,660,401 805,022 92,454
============ ============ ============
(Continued)
23
NATIONWIDE VLI SEPARATE ACCOUNT-4
STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED
YEARS ENDED DECEMBER 31, 2000 AND 1999 AND FOR THE PERIOD FEBRUARY 18, 1998
(COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 1998
NSATMCPSTR NSATMCIXDR
-------------------------------------------- ------------------------------------------
2000 1999 1998 2000 1999 1998
------------ ------------ ------------ ------------ ------------ ------------
INVESTMENT ACTIVITY:
Net investment income .............. $ (36,857) (2,128) (30) 23,516 1,210 761
Realized gain (loss) on investments 1,416,485 327,350 (29) 291,278 14,818 (2,902)
Change in unrealized gain (loss)
on investments ................... (7,958,483) 1,323,586 48,847 (336,854) 51,305 29,815
Reinvested capital gains ........... 922,208 515,885 -- 238,697 47,431 --
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in
contract owners' equity
resulting from operations ...... (5,656,647) 2,164,693 48,788 216,637 114,764 27,674
------------ ------------ ------------ ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .................. 11,164,429 2,422,960 106,807 1,349,384 29,706 38,598
Transfers between funds ............ 12,673,990 6,109,550 294,315 4,514,754 418,208 239,349
Surrenders ......................... (176,519) (8,289) -- (1,416) (445) --
Death benefits ..................... (276) (1,613) -- -- -- --
Policy loans (net of repayments)
(note 5) ......................... (111,058) (24,425) (514) (1,227) (3,245) --
Deductions for surrender charges
(note 2d) ........................ (27,932) (1,062) -- (224) (57) --
Redemptions to pay cost of insurance
charges and administrative charges
(notes 2b and 2c) ................ (1,032,843) (166,998) (20,594) (182,757) (35,179) (6,590)
Asset charges (note 3):
FPVUL & VEL contracts ............ (33,805) (5,799) (658) (7,127) (2,054) (289)
MSP contracts .................... (2,152) (79) (2) (2,018) (35) (1)
SL contracts ..................... (1,262) (147) (55) (272) (34) (24)
------------ ------------ ------------ ------------ ------------ ------------
Net equity transactions ........ 22,452,572 8,324,098 379,299 5,669,097 406,865 271,043
------------ ------------ ------------ ------------ ------------ ------------
NET CHANGE IN CONTRACT
OWNERS' EQUITY ..................... 16,795,925 10,488,791 428,087 5,885,734 521,629 298,717
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD .......................... 10,916,878 428,087 -- 820,346 298,717 --
------------ ------------ ------------ ------------ ------------ ------------
CONTRACT OWNERS' EQUITY END
OF PERIOD .......................... $ 27,712,803 10,916,878 428,087 6,706,080 820,346 298,717
============ ============ ============ ============ ============ ============
CHANGES IN UNITS:
Beginning units .................... 580,219 37,396 -- 61,224 26,958 --
------------ ------------ ------------ ------------ ------------ ------------
Units purchased .................... 1,233,405 556,514 39,590 399,626 37,816 27,645
Units redeemed ..................... (97,413) (13,691) (2,194) (13,571) (3,550) (687)
------------ ------------ ------------ ------------ ------------ ------------
Ending units ....................... 1,716,211 580,219 37,396 447,279 61,224 26,958
============ ============ ============ ============ ============ ============
NSATMMKT
-----------------------------------------
2000 1999 1998
------------ ------------ ------------
INVESTMENT ACTIVITY:
Net investment income .............. 10,047,951 3,236,644 504,596
Realized gain (loss) on investments -- -- --
Change in unrealized gain (loss)
on investments ................... -- -- --
Reinvested capital gains ........... -- -- --
------------ ------------ ------------
Net increase (decrease) in
contract owners' equity
resulting from operations ...... 10,047,951 3,236,644 504,596
------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .................. 551,344,398 352,373,390 88,272,542
Transfers between funds ............ (450,193,315) (230,478,324) (60,507,727)
Surrenders ......................... (1,793,468) (235,503) (201,196)
Death benefits ..................... -- (27,182) --
Policy loans (net of repayments)
(note 5) ......................... (3,989,346) (2,684,887) (1,000,116)
Deductions for surrender charges
(note 2d) ........................ (283,795) (30,161) (2,354)
Redemptions to pay cost of insurance
charges and administrative charges
(notes 2b and 2c) ................ (11,953,409) (7,099,744) (1,866,745)
Asset charges (note 3):
FPVUL & VEL contracts ............ (251,927) (155,882) (58,762)
MSP contracts .................... (45,487) (18,983) (210)
SL contracts ..................... (26,948) (43,454) (4,947)
------------ ------------ ------------
Net equity transactions ........ 82,806,703 111,599,270 24,630,485
------------ ------------ ------------
NET CHANGE IN CONTRACT
OWNERS' EQUITY ..................... 92,854,654 114,835,914 25,135,081
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD .......................... 139,970,995 25,135,081 --
------------ ------------ ------------
CONTRACT OWNERS' EQUITY END
OF PERIOD .......................... 232,825,649 139,970,995 25,135,081
============ ============ ============
CHANGES IN UNITS:
Beginning units .................... 13,058,280 2,395,406 --
------------ ------------ ------------
Units purchased .................... 44,348,389 33,458,797 8,773,206
Units redeemed ..................... (36,845,146) (22,795,923) (6,377,800)
------------ ------------ ------------
Ending units ....................... 20,561,523 13,058,280 2,395,406
============ ============ ============
24
NATIONWIDE VLI SEPARATE ACCOUNT-4
STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED
YEARS ENDED DECEMBER 31, 2000 AND 1999 AND FOR THE PERIOD FEBRUARY 18, 1998
(COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 1998
NSATMBDMAS NSATSMCAPG
-------------------------------------------- -----------------------------------------
2000 1999 1998 2000 1999 1998
------------ ------------ ------------ ------------ ------------ ----------
INVESTMENT ACTIVITY:
Net investment income .............. $ 1,344,591 396,175 20,392 (1,793) (31) --
Realized gain (loss) on investments (66,760) (26,402) (3,929) (30,328) (45,165) --
Change in unrealized gain (loss)
on investments ................... (112,147) (125,056) 781 (1,279,267) 1,020,705 --
Reinvested capital gains ........... -- -- 691 72,445 101,886 --
------------ ------------ ------------ ------------ ------------ ----------
Net increase (decrease) in
contract owners' equity
resulting from operations ...... 1,165,684 244,717 17,935 (1,238,943) 1,077,395 --
------------ ------------ ------------ ------------ ------------ ----------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .................. 9,346,749 3,583,938 238,773 1,154,557 1,120,048 --
Transfers between funds ............ 3,298,958 8,648,087 687,922 4,644,251 516,673 --
Surrenders ......................... (62,839) (4,080) -- (1,187) -- --
Death benefits ..................... -- 21 -- -- -- --
Policy loans (net of repayments)
(note 5) ......................... (10,119) (7,035) (427) (11,214) -- --
Deductions for surrender charges
(note 2d) ........................ (9,943) (523) -- (188) -- --
Redemptions to pay cost of insurance
charges and administrative charges
(notes 2b and 2c) ................ (538,746) (202,496) (20,588) (216,886) (3,049) --
Asset charges (note 3):
FPVUL & VEL contracts ............ (8,327) (5,111) (994) (7,874) (190) --
MSP contracts .................... (37,227) (340) (4) (1,016) (16) --
SL contracts ..................... (891) (6,384) (84) (401) (68) --
------------ ------------ ------------ ------------ ------------ ----------
Net equity transactions ........ 11,977,615 12,006,077 904,598 5,560,042 1,633,398 --
------------ ------------ ------------ ------------ ------------ ----------
NET CHANGE IN CONTRACT
OWNERS' EQUITY ..................... 13,143,299 12,250,794 922,533 4,321,099 2,710,793 --
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD .......................... 13,173,327 922,533 -- 2,710,793 -- --
------------ ------------ ------------ ------------ ------------ ----------
CONTRACT OWNERS' EQUITY END
OF PERIOD .......................... $ 26,316,626 13,173,327 922,533 7,031,892 2,710,793 --
============ ============ ============ ============ ============ ==========
CHANGES IN UNITS:
Beginning units .................... 1,283,724 90,322 -- 132,226 -- --
------------ ------------ ------------ ------------ ------------ ----------
Units purchased .................... 1,242,287 1,252,855 96,867 290,611 132,396 --
Units redeemed ..................... (92,882) (59,453) (6,545) (13,237) (170) --
------------ ------------ ------------ ------------ ------------ ----------
Ending units ....................... 2,433,129 1,283,724 90,322 409,600 132,226 --
============ ============ ============ ============ ============ ==========
NSATSMCAPV
---------------------------------------------
2000 1999 1998
------------ ------------ ------------
INVESTMENT ACTIVITY:
Net investment income .............. (6,507) (609) (72)
Realized gain (loss) on investments 378,887 215,517 (8,544)
Change in unrealized gain (loss)
on investments ................... (2,383,146) (194,598) 118,603
Reinvested capital gains ........... 2,830,882 651,318 --
------------ ------------ ------------
Net increase (decrease) in
contract owners' equity
resulting from operations ...... 820,116 671,628 109,987
------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .................. 4,858,757 837,148 186,610
Transfers between funds ............ 6,033,116 2,112,202 774,453
Surrenders ......................... (80,683) (7,439) --
Death benefits ..................... -- 222 --
Policy loans (net of repayments)
(note 5) ......................... (42,449) (13,801) (2,782)
Deductions for surrender charges
(note 2d) ........................ (12,767) (953) --
Redemptions to pay cost of insurance
charges and administrative charges
(notes 2b and 2c) ................ (687,469) (244,824) (34,791)
Asset charges (note 3):
FPVUL & VEL contracts ............ (26,379) (10,039) (1,048)
MSP contracts .................... (2,432) (356) (4)
SL contracts ..................... (1,182) (386) (88)
------------ ------------ ------------
Net equity transactions ........ 10,038,512 2,671,774 922,350
------------ ------------ ------------
NET CHANGE IN CONTRACT
OWNERS' EQUITY ..................... 10,858,628 3,343,402 1,032,337
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD .......................... 4,375,739 1,032,337 --
------------ ------------ ------------
CONTRACT OWNERS' EQUITY END
OF PERIOD .......................... 15,234,367 4,375,739 1,032,337
============ ============ ============
CHANGES IN UNITS:
Beginning units .................... 354,123 106,497 --
------------ ------------ ------------
Units purchased .................... 821,558 273,364 110,966
Units redeemed ..................... (69,600) (25,738) (4,469)
------------ ------------ ------------
Ending units ....................... 1,106,081 354,123 106,497
============ ============ ============
(Continued)
25
NATIONWIDE VLI SEPARATE ACCOUNT-4
STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED
YEARS ENDED DECEMBER 31, 2000 AND 1999 AND FOR THE PERIOD FEBRUARY 18, 1998
(COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 1998
NSATSMCO NSATSTRVAL
-------------------------------------------- ------------------------------------------
2000 1999 1998 2000 1999 1998
------------ ------------ ------------ ------------ ------------ ----------
INVESTMENT ACTIVITY:
Net investment income .............. $ (18,475) (4,091) (112) 11,593 5,539 1,028
Realized gain (loss) on investments 1,962,134 439,543 (6,379) 60,307 17,888 (7,839)
Change in unrealized gain (loss)
on investments ................... (6,709,330) 2,711,547 132,974 33,455 (70,115) 43,881
Reinvested capital gains ........... 6,779,344 500,536 -- -- 22,264 --
------------ ------------ ------------ ------------ ------------ ----------
Net increase (decrease) in
contract owners' equity
resulting from operations ...... 2,013,673 3,647,535 126,483 105,355 (24,424) 37,070
------------ ------------ ------------ ------------ ------------ ----------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .................. 13,832,839 2,908,526 360,233 217,062 113,739 26,097
Transfers between funds ............ 15,651,034 5,337,212 1,192,844 36,281 555,257 290,790
Surrenders ......................... (181,834) (6,177) (43) (2,555) (534) --
Death benefits ..................... (2,655) (1,172) -- -- -- --
Policy loans (net of repayments)
(note 5) ......................... (173,061) (23,244) (2,442) 5,717 (6,758) 368
Deductions for surrender charges
(note 2d) ........................ (28,773) (791) (1) (404) (68) --
Redemptions to pay cost of insurance
charges and administrative charges
(notes 2b and 2c) ................ (1,154,682) (349,442) (64,333) (70,189) (38,618) (7,966)
Asset charges (note 3):
FPVUL & VEL contracts ............ (39,974) (13,385) (2,107) (3,692) (2,342) (354)
MSP contracts .................... (4,563) (382) (8) (245) (47) (1)
SL contracts ..................... (2,226) (788) (177) (704) (54) (30)
------------ ------------ ------------ ------------ ------------ ----------
Net equity transactions ........ 27,896,105 7,850,357 1,483,966 181,271 620,575 308,904
------------ ------------ ------------ ------------ ------------ ----------
NET CHANGE IN CONTRACT
OWNERS' EQUITY ..................... 29,909,778 11,497,892 1,610,449 286,626 596,151 345,974
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD .......................... 13,108,341 1,610,449 -- 942,125 345,974 --
------------ ------------ ------------ ------------ ------------ ----------
CONTRACT OWNERS' EQUITY END
OF PERIOD .......................... $ 43,018,119 13,108,341 1,610,449 1,228,751 942,125 345,974
============ ============ ============ ============ ============ ==========
CHANGES IN UNITS:
Beginning units .................... 900,802 159,462 -- 96,897 34,463 --
------------ ------------ ------------ ------------ ------------ ----------
Units purchased .................... 1,953,863 777,178 167,063 45,789 67,374 35,384
Units redeemed ..................... (108,007) (35,838) (7,601) (25,096) (4,940) (921)
------------ ------------ ------------ ------------ ------------ ----------
Ending units ....................... 2,746,658 900,802 159,462 117,590 96,897 34,463
============ ============ ============ ============ ============ ==========
NSATTOTRTN
-----------------------------------------
2000 1999 1998
------------ ------------ ------------
INVESTMENT ACTIVITY:
Net investment income .............. 187,613 95,790 26,909
Realized gain (loss) on investments 344,754 22,208 (21,020)
Change in unrealized gain (loss)
on investments ................... (13,348,541) (33,899) 283,836
Reinvested capital gains ........... 11,991,779 809,302 321,440
------------ ------------ ------------
Net increase (decrease) in
contract owners' equity
resulting from operations ...... (824,395) 893,401 611,165
------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .................. 10,272,164 7,871,786 2,620,309
Transfers between funds ............ 4,280,493 9,589,090 5,463,668
Surrenders ......................... (358,609) (153,144) (81)
Death benefits ..................... 16,036 (25,003) --
Policy loans (net of repayments)
(note 5) ......................... (580,464) (318,100) (4,594)
Deductions for surrender charges
(note 2d) ........................ (56,746) (19,613) (1)
Redemptions to pay cost of insurance
charges and administrative charges
(notes 2b and 2c) ................ (3,360,137) (2,208,818) (385,652)
Asset charges (note 3):
FPVUL & VEL contracts ............ (122,772) (73,719) (10,105)
MSP contracts .................... (6,483) (3,448) (36)
SL contracts ..................... (10,831) (2,037) (851)
------------ ------------ ------------
Net equity transactions ........ 10,072,651 14,656,994 7,682,657
------------ ------------ ------------
NET CHANGE IN CONTRACT
OWNERS' EQUITY ..................... 9,248,256 15,550,395 8,293,822
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD .......................... 23,844,217 8,293,822 --
------------ ------------ ------------
CONTRACT OWNERS' EQUITY END
OF PERIOD .......................... 33,092,473 23,844,217 8,293,822
============ ============ ============
CHANGES IN UNITS:
Beginning units .................... 1,894,394 702,435 --
------------ ------------ ------------
Units purchased .................... 1,307,532 1,426,646 740,122
Units redeemed ..................... (485,526) (234,687) (37,687)
------------ ------------ ------------
Ending units ....................... 2,716,400 1,894,394 702,435
============ ============ ============
26
NATIONWIDE VLI SEPARATE ACCOUNT-4
STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED
YEARS ENDED DECEMBER 31, 2000 AND 1999 AND FOR THE PERIOD FEBRUARY 18, 1998
(COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 1998
NBAMTGUARD NBAMTMCGR
----------------------------------------- -----------------------------------------
2000 1999 1998 2000 1999 1998
----------- ----------- ----------- ----------- ----------- -----------
INVESTMENT ACTIVITY:
Net investment income .............. $ 14,917 3,298 (83) (41,606) (7,463) (52)
Realized gain (loss) on investments 109,026 137,366 (5,499) 4,566,336 1,188,750 3,904
Change in unrealized gain (loss)
on investments ................... (185,904) 77,047 82,886 (10,290,829) 3,039,884 176,285
Reinvested capital gains ........... -- -- -- 6,497 37,807 --
----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in
contract owners' equity
resulting from operations ...... (61,961) 217,711 77,304 (5,759,602) 4,258,978 180,137
----------- ----------- ----------- ----------- ----------- -----------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .................. 791,413 436,993 246,176 15,764,083 9,784,832 57,715
Transfers between funds ............ 2,086,291 1,360,544 891,240 16,272,282 (2,147,643) 560,630
Surrenders ......................... (37,547) (62,331) (2) (82,297) (16,427) (20)
Death benefits ..................... -- -- -- (5,370) (4,321) --
Policy loans (net of repayments)
(note 5) ......................... (16,305) (3,869) (318) (106,262) (67,280) (140)
Deductions for surrender charges
(note 2d) ........................ (5,941) (7,983) -- (13,023) (2,104) --
Redemptions to pay cost of insurance
charges and administrative charges
(notes 2b and 2c) ................ (259,871) (169,963) (17,719) (1,383,172) (350,946) (55,646)
Asset charges (note 3):
FPVUL & VEL contracts ............ (12,978) (8,142) (742) (48,371) (11,378) (1,407)
MSP contracts .................... (543) (127) (3) (5,311) (459) (5)
SL contracts ..................... (579) (100) (62) (2,701) (716) (118)
----------- ----------- ----------- ----------- ----------- -----------
Net equity transactions ........ 2,543,940 1,545,022 1,118,570 30,389,858 7,183,558 561,009
----------- ----------- ----------- ----------- ----------- -----------
NET CHANGE IN CONTRACT
OWNERS' EQUITY ..................... 2,481,979 1,762,733 1,195,874 24,630,256 11,442,536 741,146
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD .......................... 2,958,607 1,195,874 -- 12,183,682 741,146 --
----------- ----------- ----------- ----------- ----------- -----------
CONTRACT OWNERS' EQUITY END
OF PERIOD .......................... $ 5,440,586 2,958,607 1,195,874 36,813,938 12,183,682 741,146
=========== =========== =========== =========== =========== ===========
CHANGES IN UNITS:
Beginning units .................... 202,892 56,533 -- 640,951 85,872 --
----------- ----------- ----------- ----------- ----------- -----------
Units purchased .................... 252,130 167,370 58,160 1,560,513 995,573 90,761
Units redeemed ..................... (58,231) (21,011) (1,627) (79,404) (440,494) (4,889)
----------- ----------- ----------- ----------- ----------- -----------
Ending units ....................... 396,791 202,892 56,533 2,122,060 640,951 85,872
=========== =========== =========== =========== =========== ===========
NBAMTPART
---------------------------------------
2000 1999 1998
----------- ----------- -----------
INVESTMENT ACTIVITY:
Net investment income .............. 50,670 54,744 (176)
Realized gain (loss) on investments (276,792) 1,248 (13,483)
Change in unrealized gain (loss)
on investments ................... (888,222) 196,040 255,133
Reinvested capital gains ........... 1,184,100 98,874 3,599
----------- ----------- -----------
Net increase (decrease) in
contract owners' equity
resulting from operations ...... 69,756 350,906 245,073
----------- ----------- -----------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .................. 2,034,154 2,049,277 831,946
Transfers between funds ............ 1,022,755 1,699,822 3,231,525
Surrenders ......................... (165,342) (78,561) (16)
Death benefits ..................... (502) (2,713) --
Policy loans (net of repayments)
(note 5) ......................... (95,808) (216,206) (174)
Deductions for surrender charges
(note 2d) ........................ (26,163) (10,061) --
Redemptions to pay cost of insurance
charges and administrative charges
(notes 2b and 2c) ................ (540,817) (464,515) (144,625)
Asset charges (note 3):
FPVUL & VEL contracts ............ (25,778) (22,616) (4,977)
MSP contracts .................... (3,445) (622) (18)
SL contracts ..................... (1,681) (1,766) (419)
----------- ----------- -----------
Net equity transactions ........ 2,197,373 2,952,039 3,913,242
----------- ----------- -----------
NET CHANGE IN CONTRACT
OWNERS' EQUITY ..................... 2,267,129 3,302,945 4,158,315
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD .......................... 7,461,260 4,158,315 --
----------- ----------- -----------
CONTRACT OWNERS' EQUITY END
OF PERIOD .......................... 9,728,389 7,461,260 4,158,315
=========== =========== ===========
CHANGES IN UNITS:
Beginning units .................... 676,989 401,819 --
----------- ----------- -----------
Units purchased .................... 383,557 382,626 417,585
Units redeemed ..................... (170,279) (107,456) (15,766)
----------- ----------- -----------
Ending units ....................... 890,267 676,989 401,819
=========== =========== ===========
(Continued)
27
NATIONWIDE VLI SEPARATE ACCOUNT-4
STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED
YEARS ENDED DECEMBER 31, 2000 AND 1999 AND FOR THE PERIOD FEBRUARY 18, 1998
(COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 1998
OPPAGGGRVA OPPCAPAPVA
------------------------------------------- -----------------------------------------
2000 1999 1998 2000 1999 1998
------------ ------------ ------------ ------------ ------------ ------------
INVESTMENT ACTIVITY:
Net investment income .............. $ (52,493) (2,942) (54) (8,362) 5,876 (134)
Realized gain (loss) on investments 4,488,570 618,388 1,246 1,792,860 191,495 20,735
Change in unrealized gain (loss)
on investments ................... (19,721,439) 2,906,737 155,404 (5,403,446) 2,561,317 255,097
Reinvested capital gains ........... 950,033 -- 270 1,434,225 110,334 101
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in
contract owners' equity
resulting from operations ...... (14,335,329) 3,522,183 156,866 (2,184,723) 2,869,022 275,799
------------ ------------ ------------ ------------ ------------ ------------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .................. 24,690,515 2,894,019 298,181 12,133,627 2,754,479 522,163
Transfers between funds ............ 38,617,778 4,290,831 753,401 25,912,373 7,064,837 1,352,464
Surrenders ......................... (184,820) (25,306) (318) (1,774,425) (254,161) (369)
Death benefits ..................... (6,793) 295 -- (7,097) (300) --
Policy loans (net of repayments)
(note 5) ......................... (384,286) (37,694) (2,146) (290,219) (72,268) (10,091)
Deductions for surrender charges
(note 2d) ........................ (29,245) (3,241) (4) (280,781) (32,551) (4)
Redemptions to pay cost of insurance
charges and administrative charges
(notes 2b and 2c) ................ (2,643,790) (416,901) (60,958) (2,024,385) (655,772) (91,465)
Asset charges (note 3):
FPVUL & VEL contracts ............ (84,929) (13,629) (1,372) (73,662) (23,800) (2,763)
MSP contracts .................... (14,660) (182) (5) (8,607) (983) (10)
SL contracts ..................... (7,197) (488) (115) (4,224) (390) (233)
------------ ------------ ------------ ------------ ------------ ------------
Net equity transactions ........ 59,952,573 6,687,704 986,664 33,582,600 8,779,091 1,769,692
------------ ------------ ------------ ------------ ------------ ------------
NET CHANGE IN CONTRACT
OWNERS' EQUITY ..................... 45,617,244 10,209,887 1,143,530 31,397,877 11,648,113 2,045,491
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD .......................... 11,353,417 1,143,530 -- 13,693,604 2,045,491 --
------------ ------------ ------------ ------------ ------------ ------------
CONTRACT OWNERS' EQUITY END
OF PERIOD....................$ ..... 56,970,661 11,353,417 1,143,530 45,091,481 13,693,604 2,045,491
============ ============ ============ ============ ============ ============
CHANGES IN UNITS:
Beginning units .................... 570,019 101,944 -- 806,675 165,067 --
------------ ------------ ------------ ------------ ------------ ------------
Units purchased .................... 3,007,222 544,229 108,530 2,290,226 715,374 174,797
Units redeemed ..................... (149,167) (76,154) (6,586) (257,837) (73,766) (9,730)
------------ ------------ ------------ ------------ ------------ ------------
Ending units ....................... 3,428,074 570,019 101,944 2,839,064 806,675 165,067
============ ============ ============ ============ ============ ============
OPPGLSECVA
-----------------------------------------
2000 1999 1998
------------ --------- ---------
INVESTMENT ACTIVITY:
Net investment income .............. (1,051) -- --
Realized gain (loss) on investments (138,650) -- --
Change in unrealized gain (loss)
on investments ................... 70,484 -- --
Reinvested capital gains ........... -- -- --
------------ --------- ---------
Net increase (decrease) in
contract owners' equity
resulting from operations ...... (69,217) -- --
------------ --------- ---------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .................. 756,191 -- --
Transfers between funds ............ 3,400,619 -- --
Surrenders ......................... (1,589) -- --
Death benefits ..................... -- -- --
Policy loans (net of repayments)
(note 5) ......................... (2,407) -- --
Deductions for surrender charges
(note 2d) ........................ (252) -- --
Redemptions to pay cost of insurance
charges and administrative charges
(notes 2b and 2c) ................ (70,452) -- --
Asset charges (note 3):
FPVUL & VEL contracts ............ (1,673) -- --
MSP contracts .................... (1,076) -- --
SL contracts ..................... (94) -- --
------------ --------- ---------
Net equity transactions ........ 4,079,267 -- --
------------ --------- ---------
NET CHANGE IN CONTRACT
OWNERS' EQUITY ..................... 4,010,050 -- --
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD .......................... -- -- --
------------ --------- ---------
CONTRACT OWNERS' EQUITY END
OF PERIOD....................$ ..... 4,010,050 -- --
============ ========= =========
CHANGES IN UNITS:
Beginning units .................... -- -- --
------------ --------- ---------
Units purchased .................... 426,089 -- --
Units redeemed ..................... (8,082) -- --
------------ --------- ---------
Ending units ....................... 418,007 -- --
============ ========= =========
28
NATIONWIDE VLI SEPARATE ACCOUNT-4
STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED
YEARS ENDED DECEMBER 31, 2000 AND 1999 AND FOR THE PERIOD FEBRUARY 18, 1998
(COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 1998
OPPMGRINVA STOPP2
-------------------------------------------- ---------------------------------------
2000 1999 1998 2000 1999 1998
------------ ------------ ------------ ------------ --------- ---------
INVESTMENT ACTIVITY:
Net investment income .............. $ 28,289 8,173 (84) (1,449) -- --
Realized gain (loss) on investments 349,566 (12,270) (19,661) 7,469 -- --
Change in unrealized gain (loss)
on investments ................... (2,767,885) 713,752 80,325 (478,402) -- --
Reinvested capital gains ........... 509,013 17,163 645 501,505 -- --
------------ ------------ ------------ ------------ --------- ---------
Net increase (decrease) in
contract owners' equity
resulting from operations ...... (1,881,017) 726,818 61,225 29,123 -- --
------------ ------------ ------------ ------------ --------- ---------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .................. 6,051,658 1,687,758 284,513 1,381,833 -- --
Transfers between funds ............ 11,215,475 3,276,499 1,343,627 3,738,013 -- --
Surrenders ......................... (108,972) (24,107) (418) (11,246) -- --
Death benefits ..................... 7,734 (9,603) -- -- -- --
Policy loans (net of repayments)
(note 5) ......................... (207,915) (23,549) (16,228) (10,320) -- --
Deductions for surrender charges
(note 2d) ........................ (17,244) (3,088) (5) (1,779) -- --
Redemptions to pay cost of insurance
charges and administrative charges
(notes 2b and 2c) ................ (1,065,069) (314,964) (43,383) (61,655) -- --
Asset charges (note 3):
FPVUL & VEL contracts ............ (39,206) (12,409) (1,608) (1,167) -- --
MSP contracts .................... (6,649) (626) (6) (206) -- --
SL contracts ..................... (3,480) (620) (135) (147) -- --
------------ ------------ ------------ ------------ --------- ---------
Net equity transactions ........ 15,826,332 4,575,291 1,566,357 5,033,326 -- --
------------ ------------ ------------ ------------ --------- ---------
NET CHANGE IN CONTRACT
OWNERS' EQUITY ..................... 13,945,315 5,302,109 1,627,582 5,062,449 -- --
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD .......................... 6,929,691 1,627,582 -- -- -- --
------------ ------------ ------------ ------------ --------- ---------
CONTRACT OWNERS' EQUITY END
OF PERIOD....................$ ..... 20,875,006 6,929,691 1,627,582 5,062,449 -- --
============ ============ ============ ============ ========= =========
CHANGES IN UNITS:
Beginning units .................... 558,424 158,153 -- -- -- --
------------ ------------ ------------ ------------ --------- ---------
Units purchased .................... 1,423,961 436,576 164,578 523,047 -- --
Units redeemed ..................... (119,721) (36,305) (6,425) (8,938) -- --
------------ ------------ ------------ ------------ --------- ---------
Ending units ....................... 1,862,664 558,424 158,153 514,109 -- --
============ ============ ============ ============ ========= =========
NSATGFOCTU
-----------------------------------------
2000 1999 1998
------------ --------- ---------
INVESTMENT ACTIVITY:
Net investment income .............. -- -- --
Realized gain (loss) on investments (27,217) -- --
Change in unrealized gain (loss)
on investments ................... (4,210) -- --
Reinvested capital gains ........... -- -- --
------------ --------- ---------
Net increase (decrease) in
contract owners' equity
resulting from operations ...... (31,427) -- --
------------ --------- ---------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .................. 8,564 -- --
Transfers between funds ............ 102,537 -- --
Surrenders ......................... -- -- --
Death benefits ..................... -- -- --
Policy loans (net of repayments)
(note 5) ......................... -- -- --
Deductions for surrender charges
(note 2d) ........................ -- -- --
Redemptions to pay cost of insurance
charges and administrative charges
(notes 2b and 2c) ................ (1,091) -- --
Asset charges (note 3):
FPVUL & VEL contracts ............ (35) -- --
MSP contracts .................... (4) -- --
SL contracts ..................... (8) -- --
------------ --------- ---------
Net equity transactions ........ 109,963 -- --
------------ --------- ---------
NET CHANGE IN CONTRACT
OWNERS' EQUITY ..................... 78,536 -- --
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD .......................... -- -- --
------------ --------- ---------
CONTRACT OWNERS' EQUITY END
OF PERIOD....................$ ..... 78,536 -- --
============ ========= =========
CHANGES IN UNITS:
Beginning units .................... -- -- --
------------ --------- ---------
Units purchased .................... 12,533 -- --
Units redeemed ..................... (154) -- --
------------ --------- ---------
Ending units ....................... 12,379 -- --
============ ========= =========
(Continued)
29
NATIONWIDE VLI SEPARATE ACCOUNT-4
STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED
YEARS ENDED DECEMBER 31, 2000 AND 1999 AND FOR THE PERIOD FEBRUARY 18, 1998
(COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 1998
MSUEMMKT MSUMCAPGR
----------------------------------------- -----------------------------------------
2000 1999 1998 2000 1999 1998
----------- ----------- ----------- ----------- ------------- -----------
INVESTMENT ACTIVITY:
Net investment income .............. $ 150,351 84,931 18,583 (162) -- --
Realized gain (loss) on investments 88,105 17,142 (32,880) (13,306) -- --
Change in unrealized gain (loss)
on investments ................... (119,691) 20,955 (7,323) (98,350) -- --
Reinvested capital gains ........... -- -- -- 800 -- --
----------- ----------- ----------- ----------- ------------- -----------
Net increase (decrease) in
contract owners' equity
resulting from operations ...... 118,765 123,028 (21,620) (111,018) -- --
----------- ----------- ----------- ----------- ------------- -----------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .................. 423,869 176,047 41,423 88,544 -- --
Transfers between funds ............ 353,545 265,717 144,407 877,199 -- --
Surrenders ......................... (956) (137) -- (650) -- --
Death benefits ..................... -- -- -- -- -- --
Policy loans (net of repayments)
(note 5) ......................... (6,273) (792) -- (83) -- --
Deductions for surrender charges
(note 2d) ........................ (151) (17) -- (103) -- --
Redemptions to pay cost of insurance
charges and administrative charges
(notes 2b and 2c) ................ (78,727) (30,191) (6,534) (12,506) -- --
Asset charges (note 3):
FPVUL & VEL contracts ............ (3,151) (1,369) (152) (300) -- --
MSP contracts .................... (105) (2) (1) (74) -- --
SL contracts ..................... (173) (2) (13) (2) -- --
----------- ----------- ----------- ----------- ------------- -----------
Net equity transactions ........ 687,878 409,254 179,130 952,025 -- --
----------- ----------- ----------- ----------- ------------- -----------
NET CHANGE IN CONTRACT
OWNERS' EQUITY ..................... 806,643 532,282 157,510 841,007 -- --
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD .......................... 689,792 157,510 -- -- -- --
----------- ----------- ----------- ----------- ------------- -----------
CONTRACT OWNERS' EQUITY END
OF PERIOD....................$ ..... 1,496,435 689,792 157,510 841,007 -- --
=========== =========== =========== =========== ============= ===========
CHANGES IN UNITS: ....................
Beginning units .................... 75,186 21,992 -- -- -- --
-- -- -- -- -- --
Units purchased .................... 90,977 57,926 22,914 98,221 -- --
Units redeemed ..................... (19,742) (4,732) (922) (1,379) -- --
-- -- -- -- -- --
Ending units ....................... 146,421 75,186 21,992 96,842 -- --
=========== =========== =========== =========== ============= ===========
MSUUSREALE
-----------------------------------------
2000 1999 1998
----------- ----------- -----------
INVESTMENT ACTIVITY:
Net investment income .............. 263,091 53,245 (16)
Realized gain (loss) on investments 298,595 (40,204) (31,055)
Change in unrealized gain (loss)
on investments ................... 155,839 (130,048) 27,306
Reinvested capital gains ........... 25,130 -- 339
----------- ----------- -----------
Net increase (decrease) in
contract owners' equity
resulting from operations ...... 742,655 (117,007) (3,426)
----------- ----------- -----------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .................. 1,587,036 754,790 233,023
Transfers between funds ............ 1,297,880 440,087 517,845
Surrenders ......................... (14,855) (8,017) --
Death benefits ..................... (503) (1,020) --
Policy loans (net of repayments)
(note 5) ......................... 8,244 (8,547) (834)
Deductions for surrender charges
(note 2d) ........................ (2,351) (1,027) --
Redemptions to pay cost of insurance
charges and administrative charges
(notes 2b and 2c) ................ (156,453) (188,335) (28,277)
Asset charges (note 3):
FPVUL & VEL contracts ............ (7,652) (4,322) (1,116)
MSP contracts .................... (893) (107) (4)
SL contracts ..................... (715) (227) (94)
----------- ----------- -----------
Net equity transactions ........ 2,709,738 983,275 720,543
----------- ----------- -----------
NET CHANGE IN CONTRACT
OWNERS' EQUITY ..................... 3,452,393 866,268 717,117
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD .......................... 1,583,385 717,117 --
----------- ----------- -----------
CONTRACT OWNERS' EQUITY END
OF PERIOD....................$ ..... 5,035,778 1,583,385 717,117
=========== =========== ===========
CHANGES IN UNITS: ....................
Beginning units .................... 185,170 81,141 --
-- -- --
Units purchased .................... 321,028 119,546 84,716
Units redeemed ..................... (50,354) (15,517) (3,575)
-- -- --
Ending units ....................... 455,844 185,170 81,141
=========== =========== ===========
30
NATIONWIDE VLI SEPARATE ACCOUNT-4
STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED
YEARS ENDED DECEMBER 31, 2000 AND 1999 AND FOR THE PERIOD FEBRUARY 18, 1998
(COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 1998
VEWWEMGMKT VEWWHRDAST
----------------------------------------- -----------------------------------------
2000 1999 1998 2000 1999 1998
----------- ----------- ----------- ----------- ----------- -----------
INVESTMENT ACTIVITY:
Net investment income .............. $ (1,640) (139) (20) 6,036 2,174 (11)
Realized gain (loss) on investments (408,538) 235,337 (14,143) 29,182 26,395 (3,051)
Change in unrealized gain (loss)
on investments ................... (1,655,251) 663,413 18,347 20,687 22,444 (2,102)
Reinvested capital gains ........... -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in
contract owners' equity
resulting from operations ...... (2,065,429) 898,611 4,184 55,905 51,013 (5,164)
----------- ----------- ----------- ----------- ----------- -----------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .................. 1,719,241 322,588 90,144 140,736 201,802 23,363
Transfers between funds ............ 1,679,789 1,279,757 207,921 728,352 69,474 144,721
Surrenders ......................... (45,027) (1,334) -- (5,248) (679) --
Death benefits ..................... -- (1,149) -- -- -- --
Policy loans (net of repayments)
(note 5) ......................... (19,011) (5,485) 410 3,590 216 235
Deductions for surrender charges
(note 2d) ........................ (7,125) (171) -- (831) (87) --
Redemptions to pay cost of insurance
charges and administrative charges
(notes 2b and 2c) ................ (324,544) (90,731) (13,062) (48,413) (29,846) (8,707)
Asset charges (note 3):
FPVUL & VEL contracts ............ (13,663) (4,040) (370) (2,162) (1,079) (186)
MSP contracts .................... (1,248) (151) (1) (343) (2) (1)
SL contracts ..................... (1,292) (184) (31) (135) (159) (16)
----------- ----------- ----------- ----------- ----------- -----------
Net equity transactions ........ 2,987,120 1,499,100 285,011 815,546 239,640 159,409
----------- ----------- ----------- ----------- ----------- -----------
NET CHANGE IN CONTRACT
OWNERS' EQUITY ..................... 921,691 2,397,711 289,195 871,451 290,653 154,245
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD .......................... 2,686,906 289,195 -- 444,898 154,245 --
----------- ----------- ----------- ----------- ----------- -----------
CONTRACT OWNERS' EQUITY END
OF PERIOD....................$ ..... 3,608,597 2,686,906 289,195 1,316,349 444,898 154,245
=========== =========== =========== =========== =========== ===========
CHANGES IN UNITS: .................... 204,110 43,904 -- 53,265 22,344 --
Beginning units .................... -- -- -- -- -- --
316,404 171,741 46,042 106,332 51,882 23,601
Units purchased .................... (53,994) (11,535) (2,138) (18,085) (20,961) (1,257)
Units redeemed ..................... -- -- -- -- -- --
466,520 204,110 43,904 141,512 53,265 22,344
Ending units ....................... ============== ============== ============== ============== ============= ============
WPTGLOPVC
-----------------------------------------
2000 1999 1998
----------- ----------- -----------
INVESTMENT ACTIVITY:
Net investment income .............. 22,477 8,941 4,471
Realized gain (loss) on investments 93,144 (2,440) 8,407
Change in unrealized gain (loss)
on investments ................... 87,894 (2,238) 5,870
Reinvested capital gains ........... 23,283 18,278 --
----------- ----------- -----------
Net increase (decrease) in
contract owners' equity
resulting from operations ...... 226,798 22,541 18,748
----------- ----------- -----------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .................. 576,937 486,214 76,711
Transfers between funds ............ 628,024 (106) 655,643
Surrenders ......................... (4,490) (2,612) --
Death benefits ..................... -- -- --
Policy loans (net of repayments)
(note 5) ......................... (20,705) (3,476) (17,477
Deductions for surrender charges
(note 2d) ........................ (710) (334) --
Redemptions to pay cost of insurance
charges and administrative charges
(notes 2b and 2c) ................ (131,580) (53,820) (13,090
Asset charges (note 3):
FPVUL & VEL contracts ............ (4,272) (2,591) (558
MSP contracts .................... (428) (46) (2
SL contracts ..................... (681) (57) (47
----------- ----------- -----------
Net equity transactions ........ 1,042,095 423,172 701,180
----------- ----------- -----------
NET CHANGE IN CONTRACT
OWNERS' EQUITY ..................... 1,268,893 445,713 719,928
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD .......................... 1,165,641 719,928 --
----------- ----------- -----------
CONTRACT OWNERS' EQUITY END
OF PERIOD....................$ ..... 2,434,534 1,165,641 719,928
=========== =========== ===========
CHANGES IN UNITS: .................... 102,845 66,036 --
Beginning units .................... -- -- --
114,059 67,676 69,022
Units purchased .................... (16,387) (30,867) (2,986
Units redeemed ..................... -- -- --
200,517 102,845 66,036
Ending units ....................... ============== ============== ==============
(Continued)
31
NATIONWIDE VLI SEPARATE ACCOUNT-4
STATEMENTS OF CHANGES IN CONTRACT OWNERS' EQUITY, CONTINUED
YEARS ENDED DECEMBER 31, 2000 AND 1999 AND FOR THE PERIOD FEBRUARY 18, 1998
(COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 1998
WPTINTEQ WPTVALUE
----------------------------------------- -----------------------------------------
2000 1999 1998 2000 1999 1998
----------- ----------- ----------- ----------- ----------- -----------
INVESTMENT ACTIVITY:
Net investment income .............. $ 11,560 19,201 2,831 (1,199) (154) (13)
Realized gain (loss) on investments 242,925 115,611 (24,058) 225,824 86,674 (2,106)
Change in unrealized gain (loss)
on investments ................... (1,294,832) 581,395 30,323 (716,480) 208,276 29,961
Reinvested capital gains ........... 310,165 -- -- 141,743 -- --
----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in
contract owners' equity
resulting from operations ...... (730,182) 716,207 9,096 (350,112) 294,796 27,842
----------- ----------- ----------- ----------- ----------- -----------
EQUITY TRANSACTIONS:
Purchase payments received from
contract owners .................. 467,135 386,407 114,374 381,654 170,257 48,012
Transfers between funds ............ 625,009 716,698 495,343 297,999 306,681 118,060
Surrenders ......................... (33,371) (6,378) -- (12,588) (1,792) (163)
Death benefits ..................... -- -- -- -- -- --
Policy loans (net of repayments)
(note 5) ......................... (16,955) (4,356) (891) (6,839) (2,901) 404
Deductions for surrender charges
(note 2d) ........................ (5,281) (817) -- (1,992) (229) (2)
Redemptions to pay cost of insurance
charges and administrative charges
(notes 2b and 2c) ................ (157,048) (114,080) (19,101) (83,921) (61,093) (7,797)
Asset charges (note 3):
FPVUL & VEL contracts ............ (8,846) (5,328) (733) (4,492) (1,843) (237)
MSP contracts .................... (866) (367) (3) (481) (24) (1)
SL contracts ..................... (834) (328) (62) (736) (63) (20)
----------- ----------- ----------- ----------- ----------- -----------
Net equity transactions ........ 868,943 971,451 588,927 568,604 408,993 158,256
----------- ----------- ----------- ----------- ----------- -----------
NET CHANGE IN CONTRACT
OWNERS' EQUITY ..................... 138,761 1,687,658 598,023 218,492 703,789 186,098
CONTRACT OWNERS' EQUITY BEGINNING
OF PERIOD .......................... 2,285,681 598,023 -- 889,887 186,098 --
----------- ----------- ----------- ----------- ----------- -----------
CONTRACT OWNERS' EQUITY END
OF PERIOD....................$ ..... 2,424,442 2,285,681 598,023 1,108,379 889,887 186,098
=========== =========== =========== =========== =========== ===========
CHANGES IN UNITS: .................... 141,958 56,767 -- 51,860 17,619 --
----------- ----------- ----------- ----------- ----------- -----------
Beginning units .................... -- -- -- -- -- --
84,215 98,872 58,807 43,425 38,599 18,507
Units purchased .................... (15,819) (13,681) (2,040) (15,055) (4,358) (888)
Units redeemed ..................... -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
210,354 141,958 56,767 80,230 51,860 17,619
Ending units ....................... ============== ============== ============== ============== ============= ==============
See accompanying notes to financial statements.
32
- --------------------------------------------------------------------------------
NATIONWIDE VLI SEPARATE ACCOUNT-4
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2000, 1999 AND 1998
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Organization and Nature of Operations
The Nationwide VLI Separate Account-4 (the Account) was established
pursuant to a resolution of the Board of Directors of Nationwide Life
Insurance Company (the Company) on December 3, 1997. The Account has
been registered as a unit investment trust under the Investment Company
Act of 1940. On May 3, 1999, the Company (Depositor) transferred to the
Account 100,000 shares of the Nationwide SAT - Small Cap Growth Fund
for which the Account was credited with 100,000 units of the Nationwide
SAT - Small Cap Growth Fund. The value of the units purchased by the
Company on May 3, 1999 was $1,000,000.
The Company offers Flexible Premium, Modified Single Premium and
Survivorship Life Variable Life Insurance Policies through the Account.
(b) The Contracts
Only contracts without a front-end sales charge, but with a contingent
deferred sales charge and certain other fees are offered for purchase.
See note 2 for a discussion of policy charges and note 3 for asset
charges.
Contract owners may invest in the following:
Portfolios of the American Century Variable Portfolios, Inc.
(American Century VP);
American Century VP - American Century VP Income & Growth
(ACVPIncGr)
American Century VP - American Century VP International
(ACVPInt)
American Century VP - American Century VP Value (ACVPValue)
The Dreyfus Socially Responsible Growth Fund, Inc. (DrySRGr)
Dreyfus Stock Index Fund (DryStkIx)
Dreyfus IP - European Equity Portfolio (DryEuroEq)
Portfolio of the Dreyfus Variable Investment Fund (Dreyfus VIF);
Dreyfus VIF - Appreciation Portfolio (DryVApp)
Federated Insurance Series - Quality Bond Fund II (FedQualBd2)
Portfolios of the Fidelity Variable Insurance Products Fund
(Fidelity VIP);
Fidelity VIP - Equity-Income Portfolio - Service Class
(FidVEqInS)
Fidelity VIP - Growth Portfolio - Service Class (FidVGrS)
Fidelity VIP - High Income Portfolio - Service Class (FidVHiInS)
Fidelity VIP - Overseas Portfolio - Service Class (FidVOvSeS)
Portfolio of the Fidelity Variable Insurance Products Fund II
(Fidelity VIP-II);
Fidelity VIP-II - Contrafund Portfolio - Service Class
(FidVConS)
Portfolio of the Fidelity Variable Insurance Products Fund III
(Fidelity VIP-III);
Fidelity VIP-III - Growth Opportunities Portfolio - Service
Class (FidVGrOpS)
Funds of the Gartmore NSAT;
Gartmore NSAT - Emerging Markets Fund (NSATEmMGM)
Gartmore NSAT - Global Technology & Communication Fund
(NSATGTecGM)
Gartmore NSAT - International Growth Fund (NSATIntGGM)
(Continued)
33
Portfolios of Janus Aspen Series;
Janus Aspen Series - Capital Appreciation Portfolio - Service
Shares (JanACapApS)
Janus Aspen Series - Global Technology Portfolio - Service
Shares (JanAGlTchS)
Janus Aspen Series - International Growth Portfolio - Service
Shares (JanAIntGrS)
Funds of the Nationwide Separate Account Trust (Nationwide SAT)
(managed for a fee by an affiliated investment advisor);
Nationwide SAT - Balanced Fund - J.P. Morgan (NSATBalJPM)
Nationwide SAT - Capital Appreciation Fund (NSATCapAp)
Nationwide SAT - Equity Income Fund - Federated (NSATEqIFED)
Nationwide SAT - Global 50 Fund (NSATGlob50)
Nationwide SAT - Government Bond Fund (NSATGvtBd)
Nationwide SAT - High Income Bond Fund - Federated (NSATHiIFED)
Nationwide SAT - Mid Cap Growth Fund - Strong (NSATMCpSTR)
Nationwide SAT - Mid Cap Index Fund - Dreyfus (NSATMCIxDR)
Nationwide SAT - Money Market Fund (NSATMMkt)
Nationwide SAT - Multi Sector Bond Fund - MAS (NSATMBdMAS)
Nationwide SAT - Small Cap Growth Fund (NSATSmCapG)
Nationwide SAT - Small Cap Value Fund (NSATSmCapV)
Nationwide SAT - Small Company Fund (NSATSmCo)
Nationwide SAT - Strategic Value Fund (NSATStrVal)
Nationwide SAT - Total Return Fund (NSATTotRtn)
Portfolios of the Neuberger & Berman Advisers Management Trust
(Neuberger &Berman AMT);
Neuberger & Berman AMT - Guardian Portfolio (NBAMTGuard)
Neuberger & Berman AMT - Mid-Cap Growth Portfolio (NBAMTMCGr)
Neuberger & Berman AMT - Partners Portfolio (NBAMTPart)
Funds of the Oppenheimer Variable Account Funds;
Oppenheimer Aggressive Growth Fund/VA (OppAggGrVA)
Oppenheimer Capital Appreciation Fund/VA (OppCapApVA)
Oppenheimer Global Securities Fund/VA (OppGlSecVA)
Oppenheimer Growth & Income Fund/VA (OppMGrInVA)
Strong Opportunity Fund II, Inc. (StOpp2)
Turner NSAT - Growth Focus Fund (NSATGFocTU)
Portfolios of The Universal Institutional Funds, Inc.
The Universal Institutional Funds, Inc. - Emerging Markets Debt
Portfolio (MSUEmMkt)
(formerly Morgan Stanley - Emerging Markets Debt Portfolio)
The Universal Institutional Funds, Inc. - Mid Cap Growth
Portfolio (MSUMCapGr)
(formerly Morgan Stanley - Mid Cap Growth Portfolio)
The Universal Institutional Funds, Inc. - U.S. Real Estate
Portfolio (MSUUSRealE)
(formerly Van Kampen Morgan Stanley - U.S. Real Estate
Portfolio)
Funds of the Van Eck Worldwide Insurance Trust (Van Eck WIT);
Van Eck WIT - Worldwide Emerging Markets Fund (VEWwEmgMkt)
Van Eck WIT - Worldwide Hard Assets Fund (VEWwHrdAst)
Portfolios of the Warburg Pincus Trust;
Warburg Pincus Trust - Global Post - Venture Capital Portfolio
(WPTGloPVC)
Warburg Pincus Trust - International Equity Portfolio (WPTIntEq)
Warburg Pincus Trust - Value Portfolio (WPTValue)
34
At December 31, 2000, contract owners have invested in all of the above
funds. The contract owners' equity is affected by the investment
results of each fund, equity transactions by contract owners and
certain contract expenses (see notes 2 and 3). 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.
A contract owner may choose from among a number of different underlying
mutual fund options. The underlying mutual fund options are not
available to the general public directly. The underlying mutual funds
are available as investment options in variable life insurance policies
or variable annuity contracts issued by life insurance companies or, in
some cases, through participation in certain qualified pension or
retirement plans.
Some of the underlying mutual funds have been established by investment
advisers which manage publicly traded mutual funds having similar names
and investment objectives. While some of the underlying mutual funds
may be similar to, and may in fact be modeled after, publicly traded
mutual funds, the underlying mutual funds are not otherwise directly
related to any publicly traded mutual fund. Consequently, the
investment performance of publicly traded mutual funds and any
corresponding underlying mutual funds may differ substantially.
(c) Security Valuation, Transactions and Related Investment Income
The fair value of the underlying mutual funds is based on the closing
net asset value per share at December 31, 2000. The cost of investments
sold is determined on the specific identification basis. Investment
transactions are accounted for on the trade date (date the order to buy
or sell is executed) and dividend income is recorded on the ex-dividend
date.
(d) Federal Income Taxes
Operations of the Account form a part of, and are taxed with,
operations of the Company which is taxed as a life insurance company
under the Internal Revenue Code.
The Company does not provide for income taxes within the Account. Taxes
are the responsibility of the contract owner upon termination or
withdrawal.
(e) Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States may require
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets
and liabilities, if any, at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
(2) POLICY CHARGES
(a) Deductions from Premium
On flexible premium, modified single premium and survivorship life
variable life insurance contracts, the Company deducts a charge for
state premium taxes not to exceed 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).
(Continued)
35
NATIONWIDE VLI SEPARATE ACCOUNT-4
NOTES TO FINANCIAL STATEMENTS, Continued
(c) Administrative Charges
For flexible premium, modified single premium and survivorship life
variable life insurance contracts, the Company currently deducts a
monthly administrative charge of $10 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.
The above charges are assessed against each contract by liquidating
units.
(d) Surrender Charges
Policy surrenders result in a redemption of the contract value from the
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 eighth year.
No surrender charge is assessed on any contract surrendered after the
eighth 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. No charges were deducted from the initial
funding, or from earnings thereon.
(3) ASSET CHARGES
For flexible premium variable universal life (FPVUL) and variable executive
life (VEL) contracts, the Company deducts a charge equal to an annual
effective rate multiplied by the Cash Value attributable to the Variable
Account. The annual effective rate is 0.60% for the first $25,000 of Cash
Value attributable to the Variable Account, 0.30% for the next $225,000 of
Cash Value attributable to the Variable Account and 0.10% for all Cash
Value attributable to the Variable Account in excess of $250,000. This
charge is assessed monthly against each contract by liquidating units.
For modified single premium contracts (MSP), the Company deducts an annual
rate of .70% charged against the cash value of the contracts. This charge
is assessed monthly against each contract by liquidating units.
For surivorship life contracts (SL), the Company deducts an annual rate of
.55% in policy years one through ten. In policy years eleven and greater,
the Company deducts an annual rate of .55% if the cash value of the
contract is less than $25,000. If the cash value is greater than $25,000
but less than $100,000, the Company reduces the annual rate to .35%. If the
cash value is greater than $100,000, the company reduces the annual rate to
.20%. This charge is assessed monthly by liquidating units.
For Corporate Variable Universal Life Series, the Company deducts on a
daily basis from the assets of the Variable Account, a charge to provide
for mortality and expense risks. This charge is guaranteed not to exceed an
annual effective rate of 0.75% of the daily net assets of the Variable
Account. Currently, this rate is 0.40% during the first through fourth
Policy Years, 0.25% during the fifth through twentieth Policy Years, and
0.10% thereafter. This charge is assessed through the daily unit value
calculation.
Nationwide may reduce or eliminate certain charges where the size or nature
of the group results in savings in sales, underwriting, administrative or
other costs to Nationwide. These charges may be reduced in certain group
sponsored arrangements or special exchange programs made available by
Nationwide.
36
(4) DEATH BENEFITS
Death benefit proceeds result in a redemption of the contract value from
the Account and payment of those proceeds, less any outstanding policy
loans (and policy charges), to the legal beneficiary. For last survivor
flexible premium contracts, the proceeds are payable on the death of the
last surviving insured. In the event that the guaranteed death benefit
exceeds the contract value on the date of death, the excess 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. Interest is charged on the outstanding loan and is due and
payable in advance on the policy anniversary.
At the time the loan is granted, the amount of the loan is transferred from
the Account to the Company's general account as collateral for the
outstanding loan. Collateral amounts in the general account are credited
with the stated rate of interest in effect at the time the loan is made,
subject to a guaranteed minimum rate. Interest credited is paid by the
Company's general account to the Account. Loan repayments result in a
transfer of collateral including interest back to the Account.
(6) RELATED PARTY TRANSACTIONS
The Company performs various services on behalf of the Mutual Fund
Companies in which the Account invests and may receive fees for the
services performed. These services include, among other things, shareholder
communications, preparation, postage, fund transfer agency and various
other record keeping and customer service functions. These fees are paid to
an affiliate of the Company.
(Continued)
37
NATIONWIDE VLI SEPARATE ACCOUNT-4
NOTES TO FINANCIAL STATEMENTS, Continued
(7) FINANCIAL HIGHLIGHTS
The following is a summary of units, unit fair values and contract owners'
equity outstanding for variable life and annuity contracts as of the end of
the period indicated, and the expense ratios and total return for each of
the years in the period ended December 31, 2000, and the period February
18, 1998 (commencement of operations) through December 1998.
The following is a summary for 2000:
UNIT CONTRACT TOTAL
UNITS FAIR VALUE OWNERS' EQUITY EXPENSES* RETURN**
----------- ----------- -------------- --------- ---------
The BEST of AMERICA(R)
America's FUTURE Life Series(SM):
American Century VP -
American Century VP Income & Growth .............. 804,658 $13.383115 $10,768,831 0.00% (10.62)%
American Century VP -
American Century VP International ................ 1,252,780 16.203538 20,299,468 0.00% (16.83)%
American Century VP -
American Century VP Value ........................ 380,941 12.277397 4,676,964 0.00% 18.14%
The Dreyfus Socially Responsible
Growth Fund, Inc. ................................ 953,352 14.972899 14,274,443 0.00% (11.03)%
Dreyfus Stock Index Fund .......................... 6,631,938 14.027609 93,030,233 0.00% (9.28)%
Dreyfus IP - European Equity Portfolio ............ 70,183 12.672265 889,378 0.00% (0.65)%
Dreyfus VIF - Appreciation Portfolio .............. 721,134 14.418721 10,397,830 0.00% (2.00)%
Federated Insurance Series -
Quality Bond Fund II ............................. 184,168 10.900349 2,007,495 0.00% 10.45%
Fidelity VIP -
Equity-Income Portfolio - Service Class .......... 1,731,014 12.835974 22,219,251 0.00% 8.30%
Fidelity VIP - Growth Portfolio - Service Class ... 3,245,205 17.016859 55,223,196 0.00% (11.07)%
Fidelity VIP -
High Income Portfolio - Service Class ............ 775,357 7.993621 6,197,910 0.00% (22.61)%
Fidelity VIP -
Overseas Portfolio - Service Class ............... 709,131 12.973519 9,199,925 0.00% (19.15)%
Fidelity VIP-II -
Contrafund Portfolio - Service Class ............. 2,414,828 15.048072 36,338,506 0.00% (6.71)%
Fidelity VIP-III - Growth Opportunities Portfolio -
Service Class .................................... 959,519 10.743116 10,308,224 0.00% (17.18)%
Gartmore NSAT Emerging Markets Fund ............... 2,391 8.712299 20,831 0.00% (51.70)%***
Gartmore NSAT Global Technology &
Communications Fund .............................. 91,498 6.017639 550,602 0.00% (159.83)%***
Gartmore NSAT International Growth Fund ........... 2,697 9.249730 24,947 0.00% (30.10)%***
Janus Aspen Series - Capital Appreciation
Portfolio - Service Shares ....................... 2,083,464 8.236248 17,159,926 0.00% (18.95)%***
38
UNIT CONTRACT TOTAL
UNITS FAIR VALUE OWNERS' EQUITY EXPENSES* RETURN**
----------- ----------- -------------- --------- ---------
Janus Aspen Series -
Global Technology Portfolio - Service Shares ....... 1,878,974 6.582411 12,368,179 0.00% (36.72)%***
Janus Aspen Series - International Growth
Portfolio - Service Shares ......................... 1,639,208 8.273482 13,561,958 0.00% (18.55)%***
Nationwide SAT - Balanced Fund ...................... 382,020 10.862308 4,149,619 0.00% (0.35)%
Nationwide SAT - Capital Appreciation Fund .......... 1,582,653 9.956531 15,757,734 0.00% (26.53)%
Nationwide SAT - Equity Income Fund ................. 150,717 12.193117 1,837,710 0.00% (10.62)%
Nationwide SAT - Global 50 Fund ..................... 1,172,113 12.840541 15,050,565 0.00% (12.32)%
Nationwide SAT - Government Bond Fund ............... 796,198 11.968657 9,529,421 0.00% 12.54%
Nationwide SAT - High Income Bond Fund .............. 167,390 10.013612 1,676,179 0.00% (8.28)%
Nationwide SAT - Mid Cap Growth Portfolio
(formerly Nationwide SAT -
Strategic Growth Portfolio) ........................ 569,923 17.915535 10,210,475 0.00% (15.38)%
Nationwide SAT - Mid Cap Index Fund ................. 312,214 15.436663 4,819,542 0.00% 15.21%
Nationwide SAT - Money Market Fund .................. 6,735,623 11.702768 78,825,433 0.00% 6.03%
Nationwide SAT - Multi Sector Bond Fund ............. 1,105,931 11.008804 12,174,978 0.00% 5.65%
Nationwide SAT - Small Cap Growth Fund .............. 220,651 17.186287 3,792,171 0.00% (16.17)%
Nationwide SAT - Small Cap Growth Fund
Initial Funding by Depositor (note 1a) ............. 100,000 17.186295 1,718,630 0.00% (16.17)%
Nationwide SAT - Small Cap Value Fund ............... 731,305 13.779795 10,077,233 0.00% 11.20%
Nationwide SAT - Small Company Fund ................. 922,404 15.841678 14,612,427 0.00% 8.90%
Nationwide SAT - Strategic Value Fund ............... 114,604 10.471261 1,200,048 0.00% 7.61%
Nationwide SAT - Total Return Fund .................. 2,459,963 12.359389 30,403,640 0.00% (2.12)%
Neuberger & Berman AMT - Guardian Portfolio ......... 253,627 15.303939 3,881,492 0.00% 1.13%
Neuberger & Berman AMT -
Mid Cap Growth Portfolio ........................... 903,690 19.835316 17,924,977 0.00% (7.46)%
Neuberger & Berman AMT - Partners Portfolio ......... 648,616 11.267369 7,308,196 0.00% 0.70%
Oppenheimer Aggressive Growth Fund / VA ............. 1,531,755 18.311377 28,048,543 0.00% (11.24)%
Oppenheimer Capital Appreciation Fund / VA .......... 1,394,931 17.524709 24,445,760 0.00% (0.23)%
Oppenheimer Global Securities Fund / VA ............. 228,958 9.598100 2,197,562 0.00% (5.99)%***
Oppenheimer
Main Street Growth & Income / VA ................... 1,325,991 11.624742 15,414,303 0.00% (8.78)%
Strong Opportunity Fund II, Inc. .................... 156,475 9.854316 1,541,954 0.00% (1.83)%***
The Universal Institutional Funds, Inc. -
Emerging Markets Debt Portfolio
(formerly Morgan Stanley -
Emerging Markets Debt Portfolio) ................... 116,206 10.321107 1,199,375 0.00% 11.39%
The Universal Institutional Funds, Inc. -
Mid Cap Growth Portfolio
(formerly Morgan Stanley -
Mid Cap Growth Portfolio) ........................ 38,928 8.689212 338,254 0.00% (19.54)%***
(Continued)
39
NATIONWIDE VLI SEPARATE ACCOUNT-4
NOTES TO FINANCIAL STATEMENTS, Continued
UNIT CONTRACT TOTAL
UNITS FAIR VALUE OWNERS' EQUITY EXPENSES* RETURN**
----------- ----------- -------------- --------- ---------
The Universal Institutional Funds, Inc. -
U.S. Real Estate Portfolio
(formerly Van Kampen American Capital -
Morgan Stanley U.S. Real Estate Portfolio) ....... 320,762 10.935907 3,507,823 0.00% 15.43%***
Turner NSAT Growth Focus Fund ..................... 12,379 6.344311 78,536 0.00% (146.74)%***
Van Eck WIT -
Worldwide Emerging Markets Fund .................. 408,641 7.669407 3,134,034 0.00% (41.87)%
Van Eck WIT - Worldwide Hard Assets Fund .......... 138,471 9.305371 1,288,524 0.00% 11.40%
Warburg Pincus Trust -
Global Post-Venture Capital Portfolio ............ 93,621 12.974256 1,214,663 0.00% (18.94)%
Warburg Pincus Trust -
International Equity Portfolio ................... 161,421 11.977804 1,933,469 0.00% (25.90)%
Warburg Pincus Trust - Value Portfolio ............ 69,236 14.116099 977,342 0.00% 8.91%
The BEST of AMERICA(R)
Corporate Variable Universal Life SeriesSM:
American Century VP -
American Century VP Income & Growth .............. 763,555 11.398555 8,703,424 0.31% (10.97)%
American Century VP -
American Century VP International ................ 1,191,245 13.221985 15,750,624 0.30% (17.16)%
American Century VP -
American Century VP Value ........................ 111,911 10.893612 1,219,115 0.16% 17.67%
The Dreyfus Socially Responsible
Growth Fund, Inc. ................................ 136,511 12.795380 1,746,710 0.40% (11.39)%
Dreyfus Stock Index Fund .......................... 7,299,831 11.972080 87,394,161 0.28% (9.64)%
Dreyfus IP - European Equity Portfolio ............ 8,448 12.608842 106,519 0.23% (1.05)%
Dreyfus VIF - Appreciation Portfolio .............. 1,368,457 12.111451 16,574,000 0.34% (2.39)%
Federated Insurance Series -
Quality Bond Fund II ............................. 607,272 10.828312 6,575,731 0.14% 10.01%
Fidelity VIP -
Equity-Income Portfolio - Service Class .......... 351,542 11.310203 3,976,011 0.30% 7.87%
Fidelity VIP - Growth Portfolio - Service Class ... 2,131,137 14.593603 31,100,967 0.34% (11.42)%
Fidelity VIP -
High Income Portfolio - Service Class ............ 441,041 7.470194 3,294,662 0.32% (22.92)%
Fidelity VIP -
Overseas Portfolio - Service Class ............... 1,216,616 10.864367 13,217,763 0.44% (19.47)%
Fidelity VIP-II -
Contrafund Portfolio - Service Class ............. 671,658 13.026647 8,749,452 0.37% (7.09)%
Fidelity VIP-III - Growth Opportunities Portfolio -
Service Class .................................... 397,095 9.628054 3,823,252 0.43% (17.51)%
Janus Aspen Series -
Capital Appreciation Portfolio - Service Class ... 535,891 8.205940 4,397,489 0.22%*** (19.27)%***
40
UNIT CONTRACT TOTAL
UNITS FAIR VALUE OWNERS' EQUITY EXPENSES* RETURN**
----------- ----------- -------------- --------- ---------
Janus Aspen Series -
Global Technology Portfolio - Service Class ..... 343,351 6.558143 2,251,745 0.38%*** (36.98)%***
Janus Aspen Series -
International Growth Portfolio - Service Class .. 383,403 8.243024 3,160,400 0.23%*** (18.87)%***
Nationwide SAT - Balanced Fund ................... 117,858 9.980967 1,176,337 0.30% (0.75)%
Nationwide SAT - Capital Appreciation Fund ....... 178,360 8.505270 1,517,000 0.23% (26.82)%
Nationwide SAT - Equity Income Fund .............. 29,855 11.117142 331,902 0.90% (10.98)%
Nationwide SAT - Global 50 Fund .................. 942,496 11.093053 10,455,158 0.40% (12.67)%
Nationwide SAT - Government Bond Fund ............ 3,170,399 11.626380 36,860,264 0.36% 12.09%
Nationwide SAT - High Income Bond Fund ........... 224,564 9.436226 2,119,037 0.10% (8.64)%
Nationwide SAT - Mid Cap Growth Fund ............. 647,094 16.319202 10,560,058 0.42% (15.72)%
Nationwide SAT - Mid Cap Index Fund .............. 38,007 13.573326 515,881 0.14% 14.75%
Nationwide SAT - Money Market Fund ............... 5,646,634 11.380873 64,263,624 0.24% 5.60%
Nationwide SAT - Multi Sector Bond Fund .......... 1,055,243 10.635225 11,222,747 0.36% 5.23%
Nationwide SAT - Small Cap Growth Fund ........... 59,757 17.072794 1,020,219 0.24% (16.50)%
Nationwide SAT - Small Cap Value Fund ............ 152,675 12.101060 1,847,529 0.24% 10.76%
Nationwide SAT - Small Company Fund .............. 493,035 14.091380 6,947,544 0.15% 8.47%
Nationwide SAT - Strategic Value Fund ............ 2,481 9.402302 23,327 0.59% 7.18%
Nationwide SAT - Total Return Fund ............... 212,989 10.534111 2,243,650 0.36% (2.51)%
Neuberger & Berman AMT - Guardian Portfolio ...... 86,066 10.768698 926,819 0.20% 0.73%
Neuberger & Berman AMT -
Mid Cap Growth Portfolio ........................ 827,220 15.959556 13,202,064 0.31% (7.83)%
Neuberger & Berman AMT - Partners Portfolio ...... 241,651 10.015242 2,420,193 0.30% 0.03%
Oppenheimer Aggressive Growth Fund / VA .......... 1,068,591 15.659821 16,733,944 0.32% (11.59)%
Oppenheimer Capital Appreciation Fund / VA ....... 911,021 14.945030 13,615,236 0.28% (0.63)%
Oppenheimer Global Securities Fund / VA .......... 43,440 9.572769 415,841 0.17%*** (6.37)%***
Oppenheimer
Main Street Growth & Income / VA ................ 327,513 9.845729 3,224,604 0.28% (9.14)%
Strong Opportunity Fund II, Inc. ................. 72,473 9.828296 712,286 0.28% (1.49)%
The Universal Institutional Funds, Inc. -
Emerging Markets Debt Portfolio ................. 28,939 9.671636 279,887 0.47% 10.94%
The Universal Institutional Funds, Inc. -
Mid Cap Growth Portfolio ....................... 8,201 8.666239 71,072 0.54%*** (19.89)%***
The Universal Institutional Funds, Inc. -
U.S. Real Estate Portfolio ...................... 111,390 10.960329 1,220,871 0.38%*** 15.00%***
Van Eck WIT - Worldwide Emerging Markets Fund .... 41,537 7.303734 303,375 0.49% (42.10)%
Van Eck WIT - Worldwide Hard Assets Fund ......... 3,041 9.149843 27,825 0.83% 10.96%
(Continued)
41
NATIONWIDE VLI SEPARATE ACCOUNT-4
NOTES TO FINANCIAL STATEMENTS, Continued
UNIT CONTRACT TOTAL
UNITS FAIR VALUE OWNERS' EQUITY EXPENSES* RETURN**
----------- ----------- -------------- --------- ---------
Warburg Pincus Trust -
Global Post-Venture Capital Portfolio ........... 106,896 11.411760 1,219,871 0.59% (19.26)%
Warburg Pincus Trust -
International Equity Portfolio .................. 48,933 10.033586 490,973 0.50% (26.19)%
Warburg Pincus Trust - Value Portfolio ........... 10,994 11.918959 131,037 0.35% 8.48%
The BEST of AMERICA(R)
Corporate Variable Universal Life SeriesSM:
Reduced Fee Tier:
American Century VP -
American Century VP Income & Growth ............. 540,359 10.285709 5,557,975 0.42% (10.70)%
American Century VP -
American Century VP International ............... 619,313 13.288939 8,230,013 0.37% (16.91)%
American Century VP -
American Century VP Value ....................... 124,532 12.140456 1,511,875 0.18% 18.02%
The Dreyfus Socially Responsible
Growth Fund, Inc. ............................... 42,696 10.896922 465,255 0.49% (11.12)%
Dreyfus Stock Index Fund ......................... 4,975,884 10.357445 51,537,445 0.34% (9.37)%
Dreyfus IP - European Equity Portfolio ........... 36,592 12.656379 463,122 0.23% (0.75)%
Dreyfus VIF - Appreciation Portfolio ............. 498,451 10.646157 5,306,588 0.45% (2.10)%
Federated Insurance Series -
Quality Bond Fund II ............................... 4,027,297 10.882300 43,826,254 0.11% 10.34%
Fidelity VIP -
Equity-Income Portfolio - Service Class ......... 215,028 11.240819 2,417,091 0.32% 8.20%
Fidelity VIP - Growth Portfolio - Service Class .. 1,184,884 11.150661 13,212,240 0.48% (11.16)%
Fidelity VIP -
High Income Portfolio - Service Class ........... 591,491 7.950841 4,702,851 0.54% (22.69)%
Fidelity VIP -
Overseas Portfolio - Service Class .............. 171,286 11.126859 1,905,875 0.66% (19.23)%
Fidelity VIP-II -
Contrafund Portfolio - Service Class ............ 209,278 10.913660 2,283,989 0.50% (6.81)%
Fidelity VIP-III - Growth Opportunities Portfolio -
Service Class ................................... 3,187 8.728402 27,817 0.60% (17.26)%
Janus Aspen Series -
Capital Appreciation Portfolio - Service Class .. 75,935 8.228654 624,843 0.22%*** (19.03)%***
Janus Aspen Series -
Global Technology Portfolio - Service Class ..... 157,837 6.576328 1,037,988 0.38%*** (36.78)%***
Janus Aspen Series -
International Growth Portfolio - Service Class .. 230,451 8.265856 1,904,875 0.23%*** (18.63)%***
Nationwide SAT - Balanced Fund ................... 148,185 9.935839 1,472,342 0.29% (0.45)%
Nationwide SAT - Capital Appreciation Fund ....... 587,392 7.574275 4,449,069 0.23% (26.61)%
Nationwide SAT - Global 50 Fund .................. 141,948 10.424035 1,479,671 0.44% (12.41)%
42
UNIT CONTRACT TOTAL
UNITS FAIR VALUE OWNERS' EQUITY EXPENSES* RETURN**
----------- ----------- -------------- --------- ---------
Nationwide SAT - Government Bond Fund ............ 304,223 11.120055 3,382,976 0.42% 12.43%
Nationwide SAT - High Income Bond Fund ........... 1,268,447 9.119705 11,567,862 0.09% (8.37)%
Nationwide SAT - Mid Cap Growth Fund ............. 499,194 13.906958 6,942,270 0.42% (15.46)%
Nationwide SAT - Mid Cap Index Fund .............. 97,058 14.122042 1,370,657 0.14% 15.09%
Nationwide SAT - Money Market Fund ............... 8,179,266 10.971228 89,736,592 0.26% 5.92%
Nationwide SAT - Multi Sector Bond Fund .......... 271,955 10.733031 2,918,901 0.28% 5.55%
Nationwide SAT - Small Cap Growth Fund ........... 29,192 17.157856 500,872 0.24% (16.25)%
Nationwide SAT - Small Cap Value Fund ............ 222,101 14.901350 3,309,605 0.25% 11.09%
Nationwide SAT - Small Company Fund .............. 1,331,219 16.119172 21,458,148 0.13% 8.79%
Nationwide SAT - Strategic Value Fund ............ 505 10.645991 5,376 0.53% 7.50%
Nationwide SAT - Total Return Fund ............... 43,448 10.246333 445,183 0.43% (2.22)%
Neuberger & Berman AMT - Guardian Portfolio ...... 57,098 11.073505 632,275 0.25% 1.03%
Neuberger & Berman AMT -
Mid Cap Growth Portfolio ........................ 391,150 14.538915 5,686,897 0.39% (7.55)%
Oppenheimer Aggressive Growth Fund / VA .......... 827,728 14.724854 12,188,174 0.36% (11.33)%
Oppenheimer Capital Appreciation Fund / VA ....... 533,112 13.187632 7,030,485 0.34% (0.33)%
Oppenheimer Global Securities Fund / VA .......... 145,609 9.591764 1,396,647 0.17%*** (6.08)%***
Oppenheimer
Main Street Growth & Income / VA ................ 209,160 10.690852 2,236,099 0.38% (8.87)%
Strong Opportunity Fund II, Inc. ................. 285,161 9.847803 2,808,209 0.12%*** (1.94)%***
The Universal Institutional Funds, Inc. -
Emerging Markets Debt Portfolio ................. 1,276 13.458822 17,173 0.65% 11.28%
The Universal Institutional Funds, Inc. -
Mid Cap Growth Portfolio ....................... 49,713 8.683462 431,681 0.46%*** (19.63)%***
The Universal Institutional Funds, Inc. -
U.S. Real Estate Portfolio ...................... 23,692 12.961511 307,084 0.39%*** 15.33%***
Van Eck WIT -
Worldwide Emerging Markets Fund ................. 16,342 10.475365 171,188 0.69% (41.92)%
======== ==========
$1,414,892,441
==============
The following is a summary for 1999:
The BEST of AMERICA(R)
America's FUTURE Life Series(SM):
American Century VP -
American Century VP Income & Growth ............. 463,779 $14.972547 $ 6,943,953 0.00% 18.02%
American Century VP -
American Century VP International ............... 625,339 19.481449 12,182,510 0.00% 64.04%
American Century VP -
American Century VP Value ....................... 169,333 10.392110 1,759,727 0.00% (0.85)%
(Continued)
43
NATIONWIDE VLI SEPARATE ACCOUNT-4
NOTES TO FINANCIAL STATEMENTS, Continued
UNIT CONTRACT TOTAL
UNITS FAIR VALUE OWNERS' EQUITY EXPENSES* RETURN**
----------- ----------- -------------- --------- ---------
The Dreyfus Socially Responsible
Growth Fund, Inc. ............................... 480,241 16.829763 8,082,342 0.00% 30.08%
Dreyfus Stock Index Fund ......................... 3,757,311 15.462782 58,098,481 0.00% 20.60%
Dreyfus IP - European Equity Portfolio ........... 10,415 12.930654 134,673 0.00% 11.46%
Dreyfus VIF - Appreciation Portfolio ............. 505,299 14.513370 7,333,591 0.00% 111.52%***
Federated Insurance Series -
Quality Bond Fund II ............................ 3,972 9.869090 39,200 0.00% (1.97)%***
Fidelity VIP -
Equity-Income Portfolio - Service Class ......... 1,196,502 11.851816 14,180,722 0.00% 6.25%
Fidelity VIP - Growth Portfolio - Service Class .. 1,564,447 19.134456 29,934,842 0.00% 37.29%
Fidelity VIP -
High Income Portfolio - Service Class ........... 664,736 10.329299 6,866,257 0.00% 8.07%
Fidelity VIP -
Overseas Portfolio - Service Class .............. 392,522 16.046561 6,298,628 0.00% 42.46%
Fidelity VIP-II -
Contrafund Portfolio - Service Class ............ 1,324,909 16.131283 21,372,482 0.00% 24.15%
Fidelity VIP-III - Growth Opportunities Portfolio -
Service Class ................................... 673,044 12.971233 8,730,211 0.00% 4.18%
Morgan Stanley -
Emerging Markets Debt Portfolio ................. 62,633 9.266040 580,360 0.00% 29.37%
Nationwide SAT - Balanced Fund ................... 224,583 10.900657 2,448,102 0.00% 0.87%
Nationwide SAT - Capital Appreciation Fund ....... 1,343,877 13.552350 18,212,691 0.00% 4.28%
Nationwide SAT - Equity Income Fund .............. 66,677 13.642236 909,623 0.00% 18.49%
Nationwide SAT - Global 50 Fund .................. 595,841 14.645021 8,726,104 0.00% 22.92%
Nationwide SAT - Government Bond Fund ............ 509,816 10.635188 5,421,989 0.00% (2.35)%
Nationwide SAT - High Income Bond Fund ........... 130,767 10.917180 1,427,607 0.00% 3.19%
Nationwide SAT - Mid Cap Index Fund .............. 61,224 13.399089 820,346 0.00% 20.92%
Nationwide SAT - Money Market Fund ............... 4,602,015 11.037591 50,795,159 0.00% 4.85%
Nationwide SAT - Multi Sector Bond Fund .......... 590,762 10.419701 6,155,563 0.00% 1.56%
Nationwide SAT - Small Cap Growth Fund ........... 32,108 20.501257 658,254 0.00% 157.84%***
Nationwide SAT - Small Cap Growth Fund
Initial Funding by Depositor (note 1a) .......... 100,000 20.501257 2,050,126 0.00% 157.84%***
Nationwide SAT - Small Cap Value Fund ............ 345,575 12.391945 4,282,346 0.00% 27.84%
Nationwide SAT - Small Company Fund .............. 393,286 14.547287 5,721,244 0.00% 44.02%
Nationwide SAT - Strategic Growth Fund ........... 211,257 21.171385 4,472,603 0.00% 84.75%
Nationwide SAT - Strategic Value Fund ............ 96,106 9.730781 935,186 0.00% (3.07)%
Nationwide SAT - Total Return Fund ............... 1,852,310 12.627200 23,389,489 0.00% 6.94%
Neuberger & Berman AMT - Guardian Portfolio ...... 177,738 15.132896 2,689,691 0.00% 14.93%
44
UNIT CONTRACT TOTAL
UNITS FAIR VALUE OWNERS' EQUITY EXPENSES* RETURN**
----------- ----------- -------------- --------- ---------
Neuberger & Berman AMT -
Mid Cap Growth Portfolio ........................ 280,847 21.434231 6,019,739 0.00% 53.89%
Neuberger & Berman AMT - Partners Portfolio ...... 582,704 11.188893 6,519,813 0.00% 7.37%
Oppenheimer Aggressive Growth Fund / VA .......... 431,151 20.629873 8,894,590 0.00% 83.60%
Oppenheimer Capital Appreciation Fund / VA ....... 618,285 17.565274 10,860,345 0.00% 41.66%
Oppenheimer
Main Street Growth & Income / VA ................ 460,733 12.743006 5,871,123 0.00% 21.71%
Van Eck WIT -
Worldwide Emerging Markets Fund ................. 194,066 13.192491 2,560,214 0.00% 100.28%
Van Eck WIT - Worldwide Hard Assets Fund ......... 53,013 8.353043 442,820 0.00% 21.00%
Van Kampen LIT - Morgan Stanley
Real Estate Securities Portfolio ................... 146,473 8.539870 1,250,860 0.00% (3.37)%
Warburg Pincus Trust -
Global Post-Venture Capital Portfolio ........... 46,879 17.414110 816,356 0.00% 63.50%
Warburg Pincus Trust -
Growth & Income Portfolio ....................... 60,100 11.912913 715,966 0.00% 6.24%
Warburg Pincus Trust -
International Equity Portfolio .................. 138,513 16.163464 2,238,850 0.00% 53.43%
The BEST of AMERICA(R)
Corporate Variable Universal Life SeriesSM:
American Century VP -
American Century VP Income & Growth ............. 355,846 12.803106 4,555,934 0.19% 17.55%
American Century VP -
American Century VP International ............... 204,837 15.960157 3,269,231 0.18% 63.39%
American Century VP -
American Century VP Value ....................... 23,107 9.257533 213,914 0.61% (1.25)%
The Dreyfus Socially Responsible
Growth Fund, Inc. ............................... 28,931 14.439525 417,750 0.40% 29.56%
Dreyfus Stock Index Fund ......................... 3,707,136 13.249543 49,117,858 0.25% 20.12%
Dreyfus VIF - Appreciation Portfolio ............. 843,808 12.239522 10,327,807 0.34% 11.01%
Federated Insurance Series -
Quality Bond Fund II ............................ 18 9.842943 177 0.39%*** (2.36)%***
Fidelity VIP -
Equity-Income Portfolio - Service Class ......... 118,952 10.484615 1,247,166 0.34% 5.83%
Fidelity VIP - Growth Portfolio - Service Class .. 758,262 16.475102 12,492,444 0.21% 36.74%
Fidelity VIP -
High Income Portfolio - Service Class ........... 230,895 9.691447 2,237,707 0.14% 7.64%
Fidelity VIP -
Overseas Portfolio - Service Class .............. 504,007 13.491426 6,799,773 0.29% 41.89%
Fidelity VIP-II -
Contrafund Portfolio - Service Class ............ 230,228 14.020034 3,227,804 0.27% 23.65%
(Continued)
45
NATIONWIDE VLI SEPARATE ACCOUNT-4
NOTES TO FINANCIAL STATEMENTS, Continued
UNIT CONTRACT TOTAL
UNITS FAIR VALUE OWNERS' EQUITY EXPENSES* RETURN**
----------- ----------- -------------- --------- ---------
Fidelity VIP-III - Growth Opportunities Portfolio -
Service Class ................................... 125,424 11.671298 1,463,861 0.42% 3.77%
Morgan Stanley -
Emerging Markets Debt Portfolio ................. 12,553 8.717559 109,432 0.30% 28.86%
Nationwide SAT - Balanced Fund ................... 43,881 10.056111 441,272 0.31% 0.47%
Nationwide SAT - Capital Appreciation Fund ....... 65,598 11.623180 762,457 0.16% 3.86%
Nationwide SAT - Equity Income Fund .............. 965 12.487973 12,051 0.99% 18.02%
Nationwide SAT - Global 50 Fund .................. 468,148 12.702408 5,946,607 0.31% 22.43%
Nationwide SAT - Government Bond Fund ............ 1,312,872 10.372218 13,617,395 0.44% (2.74)%
Nationwide SAT - High Income Bond Fund ........... 80,137 10.328712 827,712 0.08% 2.78%
Nationwide SAT - Money Market Fund ............... 3,786,796 10.776865 40,809,789 0.29% 4.43%
Nationwide SAT - Multi Sector Bond Fund .......... 460,632 10.106222 4,655,249 0.25% 1.15%
Nationwide SAT - Small Cap Growth Fund ........... 118 20.447188 2,413 0.64%*** 157.03%***
Nationwide SAT - Small Cap Value Fund ............ 8,548 10.925665 93,393 0.65% 27.33%
Nationwide SAT - Small Company Fund .............. 72,698 12.991606 944,464 0.11% 43.45%
Nationwide SAT - Strategic Growth Fund ........... 128,669 19.361969 2,491,285 0.37% 84.02%
Nationwide SAT - Strategic Value Fund ............ 791 8.772237 6,939 0.37% (3.46)%
Nationwide SAT - Total Return Fund ............... 42,084 10.805244 454,728 0.27% 6.52%
Neuberger & Berman AMT - Guardian Portfolio ...... 25,154 10.690765 268,916 0.49% 14.47%
Neuberger & Berman AMT -
Mid Cap Growth Portfolio ........................ 315,266 17.314889 5,458,796 0.24% 53.28%
Neuberger & Berman AMT - Partners Portfolio ...... 94,285 9.985118 941,447 0.35% 6.94%
Oppenheimer Aggressive Growth Fund / VA .......... 138,018 17.712996 2,444,712 0.24% 82.87%
Oppenheimer Capital Appreciation Fund / VA ....... 188,390 15.039330 2,833,259 0.29% 41.09%
Oppenheimer
Main Street Growth & Income / VA ................ 97,691 10.835877 1,058,568 0.33% 21.22%
Van Eck WIT -
Worldwide Emerging Markets Fund ................. 10,044 12.613718 126,692 0.22% 99.48%
Van Eck WIT - Worldwide Hard Assets Fund ......... 252 8.246159 2,078 0.70% 20.52%
Van Kampen LIT - Morgan Stanley
Real Estate Securities Portfolio ................ 38,697 8.593033 332,525 0.70% (3.76)%
Warburg Pincus Trust -
Global Post-Venture Capital Portfolio ........... 4,981 14.762349 73,531 0.37% 62.85%
Warburg Pincus Trust -
Growth & Income Portfolio ....................... 42,745 10.519954 449,675 0.40% 5.82%
Warburg Pincus Trust -
International Equity Portfolio .................. 3,445 13.593893 46,831 0.35% 52.82%
46
UNIT CONTRACT TOTAL
UNITS FAIR VALUE OWNERS' EQUITY EXPENSES* RETURN**
----------- ----------- -------------- --------- ---------
The BEST of AMERICA(R)
Corporate Variable Universal Life SeriesSM:
Reduced Fee Tier:
American Century VP -
American Century VP Income & Growth ............. 55,124 11.518727 634,958 0.25%*** 20.10%***
American Century VP -
American Century VP International ............... 218 15.993145 3,487 0.25%*** 79.60%***
American Century VP -
American Century VP Value ....................... 946 10.286399 9,731 0.83%*** 3.80%***
Dreyfus Stock Index Fund ......................... 1,242,820 11.428481 14,203,545 0.34%*** 18.97%***
Dreyfus VIF - Appreciation Portfolio ............. 117,874 10.726699 1,264,399 0.46%*** 9.66%***
Federated Insurance Series -
Quality Bond Fund II ............................ 1,129,926 9.862542 11,143,943 0.08%*** (1.82)%***
Fidelity VIP -
Equity-Income Portfolio - Service Class ......... 59,030 10.389282 613,279 0.47%*** 5.17%***
Fidelity VIP -
Overseas Portfolio - Service Class .............. 490 13.776193 6,750 0.38%*** 50.15%***
Nationwide SAT - Balanced Fund ................... 59,518 9.980828 594,039 0.41%*** (0.25)%***
Nationwide SAT - Capital Appreciation Fund ....... 234,561 10.320007 2,420,671 0.21%*** 4.25%***
Nationwide SAT - Global 50 Fund .................. 52,708 11.900760 627,265 0.41%*** 25.25%***
Nationwide SAT - Government Bond Fund ............ 59,316 9.890955 586,692 0.71%*** (1.45)%***
Nationwide SAT - High Income Bond Fund ........... 594,118 9.952512 5,912,967 0.12%*** (0.62)%***
Nationwide SAT - Money Market Fund ............... 4,669,469 10.357933 48,366,047 0.41%*** 4.72%***
Nationwide SAT - Multi Sector Bond Fund .......... 232,330 10.168791 2,362,515 0.34%*** 2.24%***
Nationwide SAT - Small Company Fund .............. 434,818 14.816849 6,442,633 0.15%*** 63.98%***
Nationwide SAT - Strategic Growth Fund ........... 240,293 16.450708 3,952,990 0.09%*** 85.68%***
Neuberger & Berman AMT -
Mid Cap Growth Portfolio ........................ 44,838 15.726546 705,147 0.32%*** 76.06%***
Oppenheimer Aggressive Growth Fund / VA .......... 850 16.605768 14,115 0.32%*** 87.74%***
======== ==========
$648,293,593
============
The following is a summary for 1998:
The BEST of AMERICA(R)
America's FUTURE Life Series(SM):
American Century VP -
American Century VP Income & Growth ............. 97,382 $12.686493 $ 1,235,436 0.00% 26.86%
American Century VP -
American Century VP International .................. 206,063 11.875895 2,447,183 0.00% 18.76%
American Century VP -
American Century VP Value ....................... 59,424 10.481205 622,835 0.00% 4.81%
(Continued)
47
NATIONWIDE VLI SEPARATE ACCOUNT-4
NOTES TO FINANCIAL STATEMENTS, Continued
UNIT CONTRACT TOTAL
UNITS FAIR VALUE OWNERS' EQUITY EXPENSES* RETURN**
----------- ----------- -------------- --------- ---------
The Dreyfus Socially Responsible
Growth Fund, Inc. ............................... 105,696 12.938078 1,367,503 0.00% 29.38%
Dreyfus Stock Index Fund ......................... 1,025,141 12.821142 13,143,478 0.00% 28.21%
Dreyfus VIF - Appreciation Portfolio ............. 110,355 13.021619 1,437,001 0.00% 30.22%
Fidelity VIP -
Equity-Income Portfolio - Service Class ......... 511,915 11.154137 5,709,970 0.00% 11.54%
Fidelity VIP - Growth Portfolio - Service Class .. 255,829 13.937692 3,565,666 0.00% 39.38%
Fidelity VIP -
High Income Portfolio - Service Class ........... 368,689 9.557602 3,523,783 0.00% (4.42)%
Fidelity VIP -
Overseas Portfolio - Service Class .............. 92,817 11.263759 1,045,468 0.00% 12.64%
Fidelity VIP-II -
Contrafund Portfolio - Service Class ............ 362,774 12.993755 4,713,796 0.00% 29.94%
Fidelity VIP-III - Growth Opportunities Portfolio -
Service Class ................................... 193,229 12.450522 2,405,802 0.00% 24.51%
Morgan Stanley -
Emerging Markets Debt Portfolio ................. 21,992 7.162164 157,510 0.00% (28.38)%
Nationwide SAT - Balanced Fund ................... 67,360 10.806799 727,946 0.00% 8.07%
Nationwide SAT - Capital Appreciation Fund ....... 485,064 12.996420 6,304,095 0.00% 29.96%
Nationwide SAT - Equity Income Fund .............. 21,000 11.513398 241,781 0.00% 15.13%
Nationwide SAT - Global 50 Fund .................. 41,464 11.913908 493,998 0.00% 19.14%
Nationwide SAT - Government Bond Fund ............ 166,631 10.890820 1,814,748 0.00% 8.91%
Nationwide SAT - High Income Bond Fund ........... 79,031 10.579676 836,122 0.00% 5.80%
Nationwide SAT - Mid Cap Index Fund .............. 26,958 11.080816 298,717 0.00% 10.81%
Nationwide SAT - Money Market Fund ............... 2,000,515 10.527225 21,059,872 0.00% 5.27%
Nationwide SAT - Multi Sector Bond Fund .......... 74,773 10.260092 767,178 0.00% 2.60%
Nationwide SAT - Small Cap Value Fund ............ 106,497 9.693575 1,032,337 0.00% (3.06)%
Nationwide SAT - Small Company Fund .............. 159,205 10.100944 1,608,121 0.00% 1.01%
Nationwide SAT - Strategic Growth Fund ........... 36,919 11.459357 423,068 0.00% 14.59%
Nationwide SAT - Strategic Value Fund ............ 34,463 10.038994 345,974 0.00% 0.39%
Nationwide SAT - Total Return Fund ............... 702,365 11.807411 8,293,112 0.00% 18.07%
Neuberger & Berman AMT - Guardian Portfolio ...... 55,695 13.166703 733,320 0.00% 31.67%
Neuberger & Berman AMT -
Mid Cap Growth Portfolio ........................ 85,802 13.928381 1,195,083 0.00% 39.28%
Neuberger & Berman AMT - Partners Portfolio ...... 375,069 10.420882 3,908,550 0.00% 4.21%
Oppenheimer Aggressive Growth Fund / VA .......... 100,709 11.236019 1,131,568 0.00% 12.36%
Oppenheimer Capital Appreciation Fund / VA ....... 164,300 12.399968 2,037,315 0.00% 24.00%
48
UNIT CONTRACT TOTAL
UNITS FAIR VALUE OWNERS' EQUITY EXPENSES* RETURN**
----------- ----------- -------------- --------- ---------
Oppenheimer
Main Street Growth & Income / VA ................ 139,668 10.470163 1,462,347 0.00% 4.70%
Van Eck WIT -
Worldwide Emerging Markets Fund ................. 43,904 6.586990 289,195 0.00% (34.13)%
Van Eck WIT - Worldwide Hard Assets Fund ......... 22,344 6.903203 154,245 0.00% (30.97)%
Van Kampen LIT - Morgan Stanley
Real Estate Securities Portfolio ................ 81,141 8.837916 717,117 0.00% (11.62)%
Warburg Pincus Trust -
Global Post-Venture Capital Portfolio ........... 16,634 10.651002 177,169 0.00% 6.51%
Warburg Pincus Trust -
Growth & Income Portfolio ....................... 49,891 11.212895 559,423 0.00% 12.13%
Warburg Pincus Trust -
International Equity Portfolio .................. 56,767 10.534701 598,023 0.00% 5.35%
The BEST of AMERICA(R)
Corporate Variable Universal Life SeriesSM:
American Century VP -
American Century VP International ............... 3,234 9.768200 31,590 0.16%*** (3.46)%***
American Century VP -
American Century VP Value ....................... 440 9.374321 4,125 0.23%*** (9.33)%***
The Dreyfus Socially Responsible
Growth Fund, Inc. ............................... 397 11.144998 4,425 0.18%*** 17.07%***
Dreyfus Stock Index Fund ......................... 111,613 11.030001 1,231,092 0.24%*** 15.36%***
Dreyfus VIF - Appreciation Portfolio ............. 10,106 11.025485 111,424 0.29%*** 15.28%***
Fidelity VIP -
Equity-Income Portfolio - Service Class ......... 5,995 9.906965 59,392 0.20%*** (1.39)%***
Fidelity VIP - Growth Portfolio - Service Class .. 185 12.048634 2,229 0.26%*** 30.55%***
Fidelity VIP -
High Income Portfolio - Service Class ........... 77 9.003329 693 0.21%*** (14.86)%***
Fidelity VIP -
Overseas Portfolio - Service Class .............. 3,076 9.508092 29,247 0.16%*** (7.33)%***
Fidelity VIP-II -
Contrafund Portfolio - Service Class ............ 2,712 11.338370 30,750 0.16%*** 19.95%***
Fidelity VIP-III - Growth Opportunities Portfolio -
Service Class ................................... 1,228 11.247664 13,812 0.18%*** 18.61%***
Nationwide SAT - Balanced Fund ................... 349 10.009481 3,493 0.21%*** 0.13%***
Nationwide SAT - Capital Appreciation Fund ....... 847 11.191056 9,479 0.20%*** 17.76%***
Nationwide SAT - Equity Income Fund .............. 211 10.581467 2,233 0.22%*** 8.66%***
Nationwide SAT - Government Bond Fund ............ 270,361 10.664112 2,883,160 0.23%*** 9.90%***
Nationwide SAT - High Income Bond Fund ........... 13,423 10.049520 134,895 0.15%*** 0.75%***
Nationwide SAT - Money Market Fund ............... 394,891 10.319833 4,075,209 0.13%*** 4.75%***
Nationwide SAT - Multi Sector Bond Fund .......... 15,549 9.991296 155,355 0.12%*** (0.13)%***
(Continued)
49
NATIONWIDE VLI SEPARATE ACCOUNT-4
NOTES TO FINANCIAL STATEMENTS, Continued
UNIT CONTRACT TOTAL
UNITS FAIR VALUE OWNERS' EQUITY EXPENSES* RETURN**
----------- ----------- -------------- --------- ---------
Nationwide SAT - Small Company Fund .............. 257 9.056852 2,328 0.20%*** (14.06)%***
Nationwide SAT - Strategic Growth Fund ........... 477 10.521882 5,019 0.17%*** 7.78%***
Nationwide SAT - Total Return Fund ............... 70 10.144232 710 0.14%*** 2.15%***
Neuberger & Berman AMT - Guardian Portfolio ...... 838 9.338993 7,826 0.15%*** (9.85)%***
Neuberger & Berman AMT -
Mid Cap Growth Portfolio ........................ 70 11.296584 791 0.22%*** 19.34%***
Neuberger & Berman AMT - Partners Portfolio ...... 26,750 9.337008 249,765 0.35%*** (9.88)%***
Oppenheimer Aggressive Growth Fund / VA .......... 1,235 9.685930 11,962 0.19%*** (4.68)%***
Oppenheimer Capital Appreciation Fund / VA ....... 767 10.659314 8,176 0.25%*** 9.82%***
Oppenheimer
Main Street Growth and Income / VA .............. 18,485 8.938847 165,235 0.16%*** (15.82)%***
Warburg Pincus Trust -
Global Post-Venture Capital Portfolio ........... 985 9.065227 8,929 0.15%*** (13.94)%***
Warburg Pincus Trust -
Growth & Income Portfolio ....................... 16,145 9.941469 160,505 0.18%*** (0.88)%***
========= =========
$107,989,704
============
* This represents expenses as a percentage of the average net assets of the
variable account for the period indicated and includes only those expenses
that are charged through a reduction in the unit values. Excluded are
expenses of the underlying fund portfolios and charges made directly to
contract owner accounts through the redemption of units.
** This represents the annual total return for the period indicated and
includes a deduction only for expenses assessed through the daily unit
value calculation. The total return does not include any expenses assessed
through the redemption of units; inclusion of these expenses in the
calculation would result in a reduction of the total return presented.
*** Annualized as this investment option was not utilized for the entire period
indicated.
- --------------------------------------------------------------------------------
66
1
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Nationwide Life Insurance Company:
We have audited the accompanying consolidated balance sheets of Nationwide Life
Insurance Company and subsidiaries (collectively the Company), a wholly owned
subsidiary of Nationwide Financial Services, Inc., as of December 31, 2000 and
1999, 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,
2000. 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 auditing standards generally accepted
in the United States of America. 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.
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, 2000 and 1999, and the
results of their operations and their cash flows for each of the years in the
three-year period ended December 31, 2000, in conformity with accounting
principles generally accepted in the United States of America.
KPMG LLP
January 26, 2001
2
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Consolidated Balance Sheets
(in millions, except per share amounts)
December 31,
------------------------------------
2000 1999
============================================================================================================================
ASSETS
Investments:
Securities available-for-sale, at fair value:
Fixed maturity securities $ 15,443.0 $ 15,294.0
Equity securities 109.0 92.9
Mortgage loans on real estate, net 6,168.3 5,786.3
Real estate, net 310.7 254.8
Policy loans 562.6 519.6
Other long-term investments 101.8 73.8
Short-term investments 442.6 416.0
- ----------------------------------------------------------------------------------------------------------------------------
23,138.0 22,437.4
- ----------------------------------------------------------------------------------------------------------------------------
Cash 18.4 4.8
Accrued investment income 251.4 238.6
Deferred policy acquisition costs 2,865.6 2,554.1
Other assets 396.7 305.9
Assets held in separate accounts 65,897.2 67,135.1
- ----------------------------------------------------------------------------------------------------------------------------
$ 92,567.3 $ 92,675.9
============================================================================================================================
LIABILITIES AND SHAREHOLDER'S EQUITY
Future policy benefits and claims $ 22,183.6 $ 21,861.6
Short-term borrowings 118.7 -
Other liabilities 1,164.9 914.2
Liabilities related to separate accounts 65,897.2 67,135.1
- ----------------------------------------------------------------------------------------------------------------------------
89,364.4 89,910.9
- ----------------------------------------------------------------------------------------------------------------------------
Commitments and contingencies (notes 9 and 14)
Shareholder's equity:
Common stock, $1 par value. Authorized 5.0 million shares;
3.8 million shares issued and outstanding 3.8 3.8
Additional paid-in capital 646.1 766.1
Retained earnings 2,436.3 2,011.0
Accumulated other comprehensive income (loss) 116.7 (15.9)
- ----------------------------------------------------------------------------------------------------------------------------
3,202.9 2,765.0
- ----------------------------------------------------------------------------------------------------------------------------
$ 92,567.3 $ 92,675.9
============================================================================================================================
See accompanying notes to consolidated financial statements.
3
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Consolidated Statements of Income
(in millions)
Years ended December 31,
---------------------------------------------
2000 1999 1998
===========================================================================================================================
Revenues:
Policy charges $ 1,091.4 $ 895.5 $ 698.9
Life insurance premiums 240.0 220.8 200.0
Net investment income 1,654.9 1,520.8 1,481.6
Realized (losses) gains on investments (19.4) (11.6) 28.4
Other 17.0 66.1 66.8
- ---------------------------------------------------------------------------------------------------------------------------
2,983.9 2,691.6 2,475.7
- ---------------------------------------------------------------------------------------------------------------------------
Benefits and expenses:
Interest credited to policyholder account balances 1,182.4 1,096.3 1,069.0
Other benefits and claims 241.6 210.4 175.8
Policyholder dividends on participating policies 44.5 42.4 39.6
Amortization of deferred policy acquisition costs 352.1 272.6 214.5
Interest expense on short-term borrowings 1.3 - -
Other operating expenses 479.0 463.4 419.7
- ---------------------------------------------------------------------------------------------------------------------------
2,300.9 2,085.1 1,918.6
- ---------------------------------------------------------------------------------------------------------------------------
Income before federal income tax expense 683.0 606.5 557.1
Federal income tax expense 207.7 201.4 190.4
- ---------------------------------------------------------------------------------------------------------------------------
Net income $ 475.3 $ 405.1 $ 366.7
===========================================================================================================================
See accompanying notes to consolidated financial statements.
4
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Consolidated Statements of Shareholder's Equity
Years ended December 31, 2000, 1999 and 1998
(in millions)
Accumulated
Additional other Total
Common paid-in Retained comprehensive shareholder's
stock capital earnings income (loss) equity
=========================================================================================================================
December 31, 1997 $ 3.8 $ 914.7 $ 1,312.3 $ 247.1 $ 2,477.9
Comprehensive income:
Net income - - 366.7 - 366.7
Net unrealized gains on securities
available-for-sale arising during
the year - - - 28.5 28.5
---------------
Total comprehensive income 395.2
---------------
Dividend to shareholder - - (100.0) - (100.0)
- -------------------------------------------------------------------------------------------------------------------------
December 31, 1998 3.8 914.7 1,579.0 275.6 2,773.1
=========================================================================================================================
Comprehensive income:
Net income - - 405.1 - 405.1
Net unrealized losses on securities
available-for-sale arising during
the year - - - (315.0) (315.0)
---------------
Total comprehensive income 90.1
---------------
Capital contribution - 26.4 87.9 23.5 137.8
Return of capital to shareholder - (175.0) - - (175.0)
Dividends to shareholder - - (61.0) - (61.0)
- -------------------------------------------------------------------------------------------------------------------------
December 31, 1999 3.8 766.1 2,011.0 (15.9) 2,765.0
=========================================================================================================================
Comprehensive income:
Net income - - 475.3 - 475.3
Net unrealized gains on securities
available-for-sale arising during
the year - - - 132.6 132.6
---------------
Total comprehensive income 607.9
---------------
Return of capital to shareholder - (120.0) - - (120.0)
Dividends to shareholder - - (50.0) - (50.0)
- -------------------------------------------------------------------------------------------------------------------------
December 31, 2000 $ 3.8 $ 646.1 $ 2,436.3 $ 116.7 $ 3,202.9
=========================================================================================================================
See accompanying notes to consolidated financial statements.
5
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Consolidated Statements of Cash Flows
(in millions)
Years ended December 31,
----------------------------------------------
2000 1999 1998
==============================================================================================================================
Cash flows from operating activities:
Net income $ 475.3 $ 405.1 $ 366.7
Adjustments to reconcile net income to net cash provided by operating
activities:
Interest credited to policyholder account balances 1,182.4 1,096.3 1,069.0
Capitalization of deferred policy acquisition costs (778.9) (637.0) (584.2)
Amortization of deferred policy acquisition costs 352.1 272.6 214.5
Amortization and depreciation (12.7) 2.4 (8.5)
Realized losses (gains) on invested assets, net 19.4 11.6 (28.4)
Increase in accrued investment income (12.8) (7.9) (8.2)
(Increase) decrease in other assets (92.0) 122.9 16.4
Decrease in policy liabilities (0.3) (20.9) (8.3)
Increase (decrease) in other liabilities 229.3 149.7 (34.8)
Other, net 22.3 (8.6) (11.3)
- ------------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 1,384.1 1,386.2 982.9
- ------------------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Proceeds from maturity of securities available-for-sale 2,988.7 2,307.9 1,557.0
Proceeds from sale of securities available-for-sale 602.0 513.1 610.5
Proceeds from repayments of mortgage loans on real estate 911.7 696.7 678.2
Proceeds from sale of real estate 18.7 5.7 103.8
Proceeds from repayments of policy loans and sale of other invested assets 79.3 40.9 23.6
Cost of securities available-for-sale acquired (3,475.5) (3,724.9) (3,182.8)
Cost of mortgage loans on real estate acquired (1,318.0) (971.4) (829.1)
Cost of real estate acquired (7.1) (14.2) (0.8)
Short-term investments, net (26.6) (27.5) 69.3
Other, net (182.3) (110.9) (88.4)
- ------------------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities (409.1) (1,284.6) (1,058.7)
- ------------------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Capital returned to shareholder (120.0) (175.0) -
Net proceeds from issuance of short-term borrowings (commercial paper) 118.7 - -
Cash dividends paid (100.0) (13.5) (100.0)
Increase in investment product and universal life insurance
product account balances 4,517.0 3,799.4 2,682.1
Decrease in investment product and universal life insurance
product account balances (5,377.1) (3,711.1) (2,678.5)
- ------------------------------------------------------------------------------------------------------------------------------
Net cash used in financing activities (961.4) (100.2) (96.4)
- ------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash 13.6 1.4 (172.2)
Cash, beginning of year 4.8 3.4 175.6
- ------------------------------------------------------------------------------------------------------------------------------
Cash, end of year $ 18.4 $ 4.8 $ 3.4
==============================================================================================================================
See accompanying notes to consolidated financial statements.
6
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Notes to Consolidated Financial Statements
December 31, 2000, 1999 and 1998
(1) ORGANIZATION AND DESCRIPTION OF BUSINESS
Nationwide Life Insurance Company (NLIC, or collectively with its
subsidiaries, the Company) is a leading provider of long-term savings
and retirement products in the United States and is a wholly owned
subsidiary of Nationwide Financial Services, Inc. (NFS). The Company
develops and sells a diverse range of products including individual
annuities, private and public sector pension plans and other investment
products sold to institutions and life insurance. NLIC markets its
products through a broad network of distribution channels, including
independent broker/dealers, national and regional brokerage firms,
financial institutions, pension plan administrators, life insurance
specialists, Nationwide Retirement Solutions and Nationwide agents.
Wholly owned subsidiaries of NLIC include Nationwide Life and Annuity
Insurance Company (NLAIC), Nationwide Advisory Services, Inc., and
Nationwide Investment Services Corporation.
(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 accounting principles generally accepted in the United
States of America which differ from statutory accounting practices
prescribed or permitted by regulatory authorities. Annual Statements
for NLIC and NLAIC, filed with the Department of Insurance of the State
of Ohio (the Department), are prepared on the basis of accounting
practices prescribed or permitted by the Department. 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.
In preparing the consolidated financial statements, management is
required to make estimates and assumptions that affect the reported
amounts of assets and liabilities and the disclosures of contingent
assets and liabilities as of the date of the consolidated financial
statements and the reported amounts of revenues and expenses for the
reporting period. Actual results could differ significantly from those
estimates.
The most significant estimates include those used in determining
deferred policy acquisition costs, valuation allowances for mortgage
loans on real estate and real estate investments, the liability for
future policy benefits and claims and federal income taxes. Although
some variability is inherent in these estimates, management believes
the amounts provided are adequate.
(a) CONSOLIDATION POLICY
The consolidated financial statements include the accounts of NLIC
and its wholly owned subsidiaries. All significant intercompany
balances and transactions have been eliminated.
7
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Notes to Consolidated Financial Statements, Continued
(b) VALUATION OF INVESTMENTS AND RELATED GAINS AND LOSSES
The Company is required to classify its fixed maturity securities
and equity securities as either held-to-maturity,
available-for-sale or trading. The Company classifies fixed
maturity and equity securities as available-for-sale.
Available-for-sale securities 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 accumulated other comprehensive income in
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. The measurement of impaired
loans is 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 fair value of the collateral, if the
loan is collateral dependent. Loans in foreclosure and loans
considered to be impaired are placed on non-accrual status.
Interest received on non-accrual status mortgage loans on real
estate is included in interest income in the period received.
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. Impairment
losses are recorded on long-lived assets used in operations when
indicators of impairment are present and the undiscounted cash
flows estimated to be generated by those assets are less than the
assets' carrying amount.
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.
(c) REVENUES AND BENEFITS
INVESTMENT PRODUCTS AND UNIVERSAL LIFE INSURANCE PRODUCTS:
Investment products consist primarily of individual and group
variable and fixed deferred annuities. Universal life insurance
products include universal life insurance, variable universal life
insurance, corporate-owned life insurance and other
interest-sensitive life insurance policies. Revenues for
investment products and universal life insurance products consist
of net investment income, asset fees, 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 interest
credited to policy account balances and benefits and claims
incurred in the period in excess of related policy account
balances.
TRADITIONAL LIFE INSURANCE PRODUCTS: Traditional life insurance
products include those products with fixed and guaranteed premiums
and benefits and consist primarily of whole life insurance,
limited-payment life insurance, term life insurance and certain
annuities with life contingencies. Premiums for traditional life
insurance products are recognized as revenue when due. 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.
8
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Notes to Consolidated Financial Statements, Continued
(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 sales expenses have been deferred. For
investment products and universal life insurance 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, asset fees, 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. Deferred policy acquisition costs
are adjusted to reflect the impact of unrealized gains and losses
on fixed maturity securities available-for-sale as described in
note 2(b). For traditional life insurance products, these deferred
policy 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.
(e) SEPARATE ACCOUNTS
Separate account assets and liabilities represent contractholders'
funds which have been segregated into accounts with specific
investment objectives. For all but $1.12 billion and $915.4
million of separate account assets at December 31, 2000 and 1999,
respectively, 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.
(f) FUTURE POLICY BENEFITS
Future policy benefits for investment products in the accumulation
phase, universal life insurance and variable universal life
insurance policies have been calculated based on participants'
contributions plus interest credited less applicable contract
charges.
Future policy benefits for traditional life insurance policies
have been calculated by the net level premium method using
interest rates varying from 6.0% to 10.5% and estimates of
mortality, morbidity, investment yields and withdrawals which were
used or which were being experienced at the time the policies were
issued.
(g) PARTICIPATING BUSINESS
Participating business represents approximately 21% in 2000 (29%
in 1999 and 40% in 1998) of the Company's life insurance in force,
66% in 2000 (69% in 1999 and 74% in 1998) of the number of life
insurance policies in force, and 8% in 2000 (13% in 1999 and 14%
in 1998) of life insurance statutory premiums. The provision for
policyholder dividends is based on current dividend scales and is
included in "Future policy benefits and claims" in the
accompanying consolidated balance sheets.
(h) FEDERAL INCOME TAX
The Company files a consolidated federal income tax return with
Nationwide Mutual Insurance Company (NMIC), the majority
shareholder of NFS. The members of the consolidated tax return
group have a tax sharing arrangement which provides, in effect,
for each member to bear essentially the same federal income tax
liability as if separate tax returns were filed.
9
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Notes to Consolidated Financial Statements, Continued
The Company utilizes the asset and liability method of accounting
for income tax. Under this 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.
(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) RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standards (SFAS) No. 133,
Accounting for Derivative Instruments and Hedging Activities (SFAS
133). SFAS 133, as amended by SFAS 137, Accounting for Derivative
Instruments and Hedging Activities - Deferral of the Effective
Date of FASB Statement No. 133 and SFAS 138, Accounting for
Certain Derivative Instruments and Certain Hedging Activities, is
effective for the Company as of January 1, 2001.
SFAS 133 establishes accounting and reporting standards for
derivative instruments and hedging activities. It requires an
entity to recognize all derivatives as either assets or
liabilities on the balance sheet and measure those instruments at
fair value.
As of January 1, 2001, the Company had $755.4 million notional
amount of freestanding derivatives with a market value of ($7.0)
million. All other derivatives qualified for hedge accounting
under SFAS 133. Adoption of SFAS 133 will result in the Company
recording a net transition adjustment loss of $4.8 million (net of
related income tax of $2.6 million) in net income. In addition, a
net transition adjustment loss of $3.6 million (net of related
income tax of $2.0 million) will be recorded in accumulated other
comprehensive income at January 1, 2001. The adoption of SFAS 133
will result in the Company derecognizing $17.0 million of deferred
assets related to hedges, recognizing $10.9 million of additional
derivative instrument liabilities and $1.3 million of additional
firm commitment assets, while also decreasing hedged future policy
benefits by $3.0 million and increasing the carrying amount of
hedged investments by $10.6 million. Further, the adoption of SFAS
133 will result in the Company reporting total derivative
instrument assets and liabilities of $44.8 million and $107.1
million, respectively.
Also, the Company expects that the adoption of SFAS 133 will
increase the volatility of reported earnings and other
comprehensive income. The amount of volatility will vary with the
level of derivative and hedging activities and fluctuations in
market interest rates and foreign currency exchange rates during
any period.
(k) RECLASSIFICATION
Certain items in the 1999 and 1998 consolidated financial
statements have been reclassified to conform to the 2000
presentation.
10
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Notes to Consolidated Financial Statements, Continued
(3) INVESTMENTS
The amortized cost, gross unrealized gains and losses and estimated
fair value of securities available-for-sale as of December 31, 2000 and
1999 were:
Gross Gross
Amortized unrealized unrealized Estimated
(in millions) cost gains losses fair value
=========================================================================================================================
December 31, 2000
Fixed maturity securities:
U.S. Treasury securities and obligations of U.S.
Government corporations and agencies $ 277.5 $ 33.4 $ 0.1 $ 310.8
Obligations of states and political subdivisions 8.6 0.2 - 8.8
Debt securities issued by foreign governments 94.1 1.5 0.1 95.5
Corporate securities 9,758.3 235.0 135.1 9,858.2
Mortgage-backed securities - U.S. Government backed 2,719.1 46.1 3.8 2,761.4
Asset-backed securities 2,388.2 36.3 16.2 2,408.3
-------------------------------------------------------------------------------------------------------------------------
Total fixed maturity securities 15,245.8 352.5 155.3 15,443.0
Equity securities 103.5 9.5 4.0 109.0
-------------------------------------------------------------------------------------------------------------------------
$ 15,349.3 $ 362.0 $ 159.3 $ 15,552.0
=========================================================================================================================
December 31, 1999
Fixed maturity securities:
U.S. Treasury securities and obligations of U.S.
Government corporations and agencies $ 428.4 $ 23.4 $ 2.4 $ 449.4
Obligations of states and political subdivisions 0.8 - - 0.8
Debt securities issued by foreign governments 110.6 0.6 0.8 110.4
Corporate securities 9,390.4 110.3 179.9 9,320.8
Mortgage-backed securities - U.S. Government backed 3,423.1 25.8 30.3 3,418.6
Asset-backed securities 2,024.0 8.6 38.6 1,994.0
-------------------------------------------------------------------------------------------------------------------------
Total fixed maturity securities 15,377.3 168.7 252.0 15,294.0
Equity securities 84.9 12.4 4.4 92.9
-------------------------------------------------------------------------------------------------------------------------
$ 15,462.2 $ 181.1 $ 256.4 $ 15,386.9
=========================================================================================================================
The amortized cost and estimated fair value of fixed maturity
securities available-for-sale as of December 31, 2000, by expected
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.
11
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Notes to Consolidated Financial Statements, Continued
Amortized Estimated
(in millions) cost fair value
===========================================================================================================
Fixed maturity securities available for sale:
Due in one year or less $ 1,288.7 $ 1,287.0
Due after one year through five years 4,577.9 4,572.4
Due after five years through ten years 3,071.3 3,136.6
Due after ten years 1,200.6 1,277.3
-----------------------------------------------------------------------------------------------------------
10,138.5 10,273.3
Mortgage-backed securities 2,719.1 2,761.4
Asset-backed securities 2,388.2 2,408.3
-----------------------------------------------------------------------------------------------------------
$ 15,245.8 $ 15,443.0
===========================================================================================================
The components of unrealized gains (losses) on securities available-for-sale, net, were as follows as of
each December 31:
(in millions)
2000 1999
===========================================================================================================
Gross unrealized gains (losses) $ 202.7 $ (75.3)
Adjustment to deferred policy acquisition costs (23.2) 50.9
Deferred federal income tax (62.8) 8.5
-----------------------------------------------------------------------------------------------------------
$ 116.7 $ (15.9)
===========================================================================================================
An analysis of the change in gross unrealized gains (losses) on securities available-for-sale for the years
ended December 31:
(in millions) 2000 1999 1998
===========================================================================================================
Securities available-for-sale:
Fixed maturity securities $ 280.5 $ (607.1) $ 52.6
Equity securities (2.5) (8.8) 4.2
-----------------------------------------------------------------------------------------------------------
$ 278.0 $ (615.9) $ 56.8
===========================================================================================================
Proceeds from the sale of securities available-for-sale during 2000,
1999 and 1998 were $602.0 million, $513.1 million and $610.5 million,
respectively. During 2000, gross gains of $12.1 million ($10.4 million
and $9.0 million in 1999 and 1998, respectively) and gross losses of
$25.6 million ($28.0 million and $7.6 million in 1999 and 1998,
respectively) were realized on those sales.
The Company had $13.0 million and $15.6 million of real estate
investments at December 31, 2000 and 1999, respectively, that were
non-income producing the preceding twelve months.
Real estate is presented at cost less accumulated depreciation of $25.7
million as of December 31, 2000 ($24.8 million as of December 31, 1999)
and valuation allowances of $5.2 million as of December 31, 2000 ($5.5
million as of December 31, 1999).
12
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Notes to Consolidated Financial Statements, Continued
The recorded investment of mortgage loans on real estate considered to
be impaired was $9.8 million as of December 31, 2000 ($3.7 million as
of December 31, 1999), which includes $5.3 million (none as of December
31, 1999) of impaired mortgage loans on real estate for which the
related valuation allowance was $1.6 million (none as of December 31,
1999) and $4.5 million ($3.7 million as of December 31, 1999) of
impaired mortgage loans on real estate for which there was no valuation
allowance. During 2000, the average recorded investment in impaired
mortgage loans on real estate was $7.7 million ($3.7 million in 1999)
and interest income recognized on those loans totaled $0.4 million in
2000 (none in 1999) which is equal to interest income recognized using
a cash-basis method of income recognition.
Activity in the valuation allowance account for mortgage loans on real
estate is summarized for the years ended December 31:
(in millions) 2000 1999 1998
===========================================================================================================
Allowance, beginning of year $ 44.4 $ 42.4 $ 42.5
Additions (reductions) charged to operations 4.1 0.7 (0.1)
Direct write-downs charged against the allowance (3.2) -- --
Allowance on acquired mortgage loans -- 1.3 --
-----------------------------------------------------------------------------------------------------------
Allowance, end of year $ 45.3 $ 44.4 $ 42.4
===========================================================================================================
An analysis of investment income by investment type follows for the years ended December 31:
(in millions) 2000 1999 1998
===========================================================================================================
Gross investment income:
Securities available-for-sale:
Fixed maturity securities $ 1,095.5 $ 1,031.3 $ 982.5
Equity securities 2.6 2.5 0.8
Mortgage loans on real estate 494.5 460.4 458.9
Real estate 32.2 28.8 40.4
Short-term investments 27.0 18.6 17.8
Other 53.2 26.5 30.7
-----------------------------------------------------------------------------------------------------------
Total investment income 1,705.0 1,568.1 1,531.1
Less investment expenses 50.1 47.3 49.5
-----------------------------------------------------------------------------------------------------------
Net investment income $ 1,654.9 $ 1,520.8 $ 1,481.6
===========================================================================================================
An analysis of realized gains (losses) on investments, net of valuation allowances, by investment type
follows for the years ended December 31:
(in millions) 2000 1999 1998
===========================================================================================================
Securities available-for-sale:
Fixed maturity securities $ (18.2) $ (25.0) $ (0.7)
Equity securities 4.7 7.4 2.1
Mortgage loans on real estate (4.2) (0.6) 3.9
Real estate and other (1.7) 6.6 23.1
-----------------------------------------------------------------------------------------------------------
$ (19.4) $ (11.6) $ 28.4
===========================================================================================================
Fixed maturity securities with an amortized cost of $12.8 million and
$9.1 million were on deposit with various regulatory agencies as
required by law as of December 31, 2000 and 1999, respectively.
13
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Notes to Consolidated Financial Statements, Continued
(4) SHORT-TERM BORROWINGS
NLIC established a $300 million commercial paper program in October
2000. Borrowings under the commercial paper program are unsecured and
are issued for terms of 364 days or less. As of December 31, 2000 the
Company had $118.7 million of commercial paper outstanding at an
average effective rate of 6.48%. See also note 13.
(5) DERIVATIVE FINANCIAL INSTRUMENTS
The Company uses derivative financial instruments, principally interest
rate swaps, interest rate futures contracts and foreign currency swaps,
to manage market risk exposures associated with changes in interest
rates and foreign currency exchange rates. Provided they meet specific
criteria, interest rate and foreign currency swaps and futures are
considered hedges and are accounted for under the accrual method and
deferral method, respectively. The Company has no significant
derivative positions that are not considered hedges. See note 2 (j)
regarding accounting for derivatives under SFAS 133 effective January
1, 2001.
Interest rate swaps are primarily used to convert specific investment
securities and interest bearing policy liabilities from a fixed-rate to
a floating-rate basis. Amounts receivable or payable under these
agreements are recognized as an adjustment to net investment income or
interest credited to policyholder account balances consistent with the
nature of the hedged item. Currently, changes in fair value of the
interest rate swap agreements are not recognized on the balance sheet,
except for interest rate swaps designated as hedges of fixed maturity
securities available-for-sale and cross currency swaps hedging foreign
denominated debt instruments, for which changes in fair values are
reported in accumulated other comprehensive income.
Interest rate futures contracts are primarily used to hedge the risk of
adverse interest rate changes related to the Company's mortgage loan
commitments and anticipated purchases of fixed rate investments. Gains
and losses are deferred and, at the time of closing, reflected as an
adjustment to the carrying value of the related mortgage loans or
investments. The carrying value adjustments are amortized into net
investment income over the life of the related mortgage loans or
investments.
Foreign currency swaps are used to convert cash flows from specific
policy liabilities and investments denominated in foreign currencies
into U.S. dollars at specified exchange rates. Amounts receivable or
payable under these agreements are recognized as an adjustment to net
investment income or interest credited to policyholder account balances
consistent with the nature of the hedged item. Gains and losses on
foreign currency swaps are recorded in earnings based on the related
spot foreign exchange rate at the end of the reporting period. Gains
and losses on these contracts offset those recorded as a result of
translating the hedged foreign currency denominated liabilities and
investments to U.S. dollars.
14
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Notes to Consolidated Financial Statements, Continued
The notional amount of derivative financial instruments outstanding as
of December 31, 2000 and 1999 were as follows:
(in millions ) 2000 1999
===========================================================================================================
Interest rate swaps
Pay fixed/receive variable rate swaps hedging investments $ 934.8 $ 362.7
Pay variable/receive fixed rate swaps hedging investments 98.8 28.5
Pay variable/receive variable rate swaps hedging investments 184.0 9.0
Other contracts hedging investments 20.4 10.1
Pay variable/receive fixed rate swaps hedging liabilities 965.3 577.2
Pay variable/receive variable rate swaps hedging liabilities 546.9 --
Foreign currency swaps
Hedging foreign currency denominated investments $ 30.5 $ 14.8
Hedging foreign currency denominated liabilities 1,542.2 577.2
Interest rate futures contracts $ 5,659.8 $ 781.6
-----------------------------------------------------------------------------------------------------------
(6) FEDERAL INCOME TAX
The tax effects of temporary differences that give rise to significant components of the net deferred tax
liability as of December 31, 2000 and 1999 were as follows:
(in millions) 2000 1999
===========================================================================================================
Deferred tax assets:
Fixed maturity securities $ -- $ 5.3
Future policy benefits 34.7 149.5
Liabilities in separate accounts 462.7 373.6
Mortgage loans on real estate and real estate 18.8 18.5
Other assets and other liabilities 40.3 51.1
-----------------------------------------------------------------------------------------------------------
Total gross deferred tax assets 556.5 598.0
Valuation allowance (7.0) (7.0)
-----------------------------------------------------------------------------------------------------------
Net deferred tax assets 549.5 591.0
-----------------------------------------------------------------------------------------------------------
Deferred tax liabilities:
Fixed maturity securities 98.8 --
Equity securities and other long-term investments 6.4 10.8
Deferred policy acquisition costs 783.7 724.4
Deferred tax on realized investment gains 29.0 34.7
Other 38.1 26.5
-----------------------------------------------------------------------------------------------------------
Total gross deferred tax liabilities 956.0 796.4
-----------------------------------------------------------------------------------------------------------
Net deferred tax liability $ 406.5 $ 205.4
===========================================================================================================
In assessing the realizability of deferred tax assets, management
considers whether it is more likely than not that some portion of the
total gross deferred tax assets will not be realized. Future taxable
amounts or recovery of federal income tax paid within the statutory
carryback period can offset nearly all future deductible amounts. The
valuation allowance was unchanged for the years ended December 31,
2000, 1999 and 1998.
15
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Notes to Consolidated Financial Statements, Continued
The Company's current federal income tax liability was $108.9 million
and $104.7 million as of December 31, 2000 and 1999, respectively.
Federal income tax expense for the years ended December 31 was as
follows:
(in millions) 2000 1999 1998
===========================================================================================================
Currently payable $ 78.0 $ 53.6 $ 186.1
Deferred tax expense 129.7 147.8 4.3
-----------------------------------------------------------------------------------------------------------
$ 207.7 $ 201.4 $ 190.4
===========================================================================================================
Total federal income tax expense for the years ended December 31, 2000,
1999 and 1998 differs from the amount computed by applying the U.S.
federal income tax rate to income before tax as follows:
2000 1999 1998
---------------------- ---------------------- ----------------------
(in millions) Amount % Amount % Amount %
==================================================================================================================
Computed (expected) tax expense $239.1 35.0 $212.3 35.0 $195.0 35.0
Tax exempt interest and dividends
received deduction (24.7) (3.6) (7.3) (1.2) (4.9) (0.9)
Income tax credits (8.0) (1.2) (4.3) (0.7) - -
Other, net 1.3 0.2 0.7 0.1 0.3 0.1
------------------------------------------------------------------------------------------------------------------
Total (effective rate of each year) $207.7 30.4 $201.4 33.2 $190.4 34.2
==================================================================================================================
Total federal income tax paid was $74.6 million, $29.8 million and
$173.4 million during the years ended December 31, 2000, 1999 and 1998,
respectively.
(7) COMPREHENSIVE INCOME
Comprehensive Income includes net income as well as certain items that
are reported directly within separate components of shareholder's
equity that bypass net income. Currently, the Company's only component
of Other Comprehensive Income is unrealized gains (losses) on
securities available-for-sale. The related before and after federal tax
amounts for the years ended December 31, 2000, 1999 and 1998 were as
follows:
(in millions) 2000 1999 1998
===========================================================================================================
Unrealized gains (losses) on securities available-for-sale arising
during the period:
Gross $ 264.5 $ (665.3) $ 58.2
Adjustment to deferred policy acquisition costs (74.0) 167.5 (12.9)
Related federal income tax (expense) benefit (66.7) 171.4 (15.9)
-----------------------------------------------------------------------------------------------------------
Net 123.8 (326.4) 29.4
-----------------------------------------------------------------------------------------------------------
Reclassification adjustment for net (gains) losses on securities
available-for-sale realized during the period:
Gross 13.5 17.6 (1.4)
Related federal income tax expense (benefit) (4.7) (6.2) 0.5
-----------------------------------------------------------------------------------------------------------
Net 8.8 11.4 (0.9)
-----------------------------------------------------------------------------------------------------------
Total Other Comprehensive Income (Loss) $ 132.6 $ (315.0) $ 28.5
===========================================================================================================
16
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Notes to Consolidated Financial Statements, Continued
(8) FAIR VALUE OF FINANCIAL INSTRUMENTS
The following disclosures summarize the carrying amount and estimated
fair value of the Company's financial instruments. Certain assets and
liabilities are specifically excluded from the disclosure requirements
of financial instruments. Accordingly, the aggregate fair value amounts
presented do not represent the underlying value of the Company.
The fair value of a financial instrument is defined as the amount at
which the financial instrument could be exchanged in a current
transaction between willing parties. In cases where quoted market
prices are not available, fair value is to be based on estimates using
present value or other valuation techniques. Many of the Company's
assets and liabilities subject to the disclosure requirements are not
actively traded, requiring fair values to be estimated by management
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.
Although insurance contracts, other than policies such as annuities
that are classified as investment contracts, are specifically exempted
from the disclosure requirements, estimated fair value of policy
reserves on life insurance contracts is 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 Company in estimating its fair value disclosures used the following
methods and assumptions:
FIXED MATURITY AND EQUITY SECURITIES: The 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. The carrying amount and fair value for fixed
maturity and equity securities exclude the fair value of
derivatives contracts designated as hedges of fixed maturity and
equity securities.
MORTGAGE LOANS ON REAL ESTATE, NET: 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 impaired mortgage loans is the estimated fair value
of the underlying collateral.
POLICY LOANS, SHORT-TERM INVESTMENTS AND CASH: The carrying amount
reported in the consolidated balance sheets for these instruments
approximates their fair value.
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, which is net of certain surrender
charges.
INVESTMENT CONTRACTS: The fair value for the Company's liabilities
under investment type contracts is based on one of 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.
17
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Notes to Consolidated Financial Statements, Continued
POLICY RESERVES ON LIFE INSURANCE CONTRACTS: Included are
disclosures for individual life insurance, universal life
insurance 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.
SHORT-TERM BORROWINGS: The carrying amount reported in the
consolidated balance sheets for these instruments approximates
their fair value.
COMMITMENTS TO EXTEND CREDIT: Commitments to extend credit have
nominal fair value because of the short-term nature of such
commitments. See note 9.
FUTURES CONTRACTS: The fair value for futures contracts is
based on quoted market prices.
INTEREST RATE AND FOREIGN CURRENCY SWAPS: The fair value for
interest rate and foreign currency swaps are calculated with
pricing models using current rate assumptions.
Carrying amount and estimated fair value of financial instruments
subject to disclosure requirements and policy reserves on life
insurance contracts were as follows as of December 31:
2000 1999
------------------------------- -------------------------------
Carrying Estimated Carrying Estimated
(in millions) amount fair value amount fair value
==============================================================================================================
Assets:
Investments:
Securities available-for-sale:
Fixed maturity securities $ 15,451.3 $ 15,451.3 $ 15,289.7 $ 15,289.7
Equity securities 109.0 109.0 92.9 92.9
Mortgage loans on real estate, net 6,168.3 6,327.8 5,786.3 5,745.5
Policy loans 562.6 562.6 519.6 519.6
Short-term investments 442.6 442.6 416.0 416.0
Cash 18.4 18.4 4.8 4.8
Assets held in separate accounts 65,897.2 65,897.2 67,135.1 67,135.1
Liabilities:
Investment contracts (16,815.3) (15,979.8) (16,977.7) (16,428.6)
Policy reserves on life insurance contracts (5,368.4) (5,128.5) (4,883.9) (4,607.9)
Short-term borrowings (118.7) (118.7) -- --
Liabilities related to separate accounts (65,897.2) (64,237.6) (67,135.1) (66,318.7)
Derivative financial instruments:
Interest rate swaps hedging assets (8.3) (8.3) 4.3 4.3
Interest rate swaps hedging liabilities (26.2) (32.2) (11.5) (24.2)
Foreign currency swaps (24.3) (30.9) (11.8) (11.8)
Futures contracts (16.0) (16.0) 1.3 1.3
--------------------------------------------------------------------------------------------------------------
(9) RISK DISCLOSURES
The following is a description of the most significant risks
facing life insurers and how the Company mitigates those risks:
18
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Notes to Consolidated Financial Statements, Continued
CREDIT RISK: 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
reinsurance and credit and collection policies and by providing for any
amounts deemed uncollectible.
INTEREST RATE RISK: 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 could
potentially have to borrow funds or sell assets prior to maturity and
potentially recognize a gain or loss.
LEGAL/REGULATORY RISK: The risk that changes in the legal or regulatory
environment in which an insurer operates will result in increased
competition, reduced demand for a company's products, or create
additional expenses not anticipated by the insurer in pricing its
products. 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.
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 and derivative financial instruments. 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 75% 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 $360.6 million
extending into 2001 were outstanding as of December 31, 2000. The
Company also had $55.6 million of commitments to purchase fixed
maturity securities outstanding as of December 31, 2000.
Notional amounts of derivative financial instruments, primarily
interest rate swaps, interest rate futures contracts and foreign
currency swaps, significantly exceed the credit risk associated with
these instruments and represent contractual balances on which
calculations of amounts to be exchanged are based. Credit exposure is
limited to the sum of the aggregate fair value of positions that have
become favorable to NLIC, including accrued interest receivable due
from counterparties. Potential credit losses are minimized through
careful evaluation of counterparty credit standing, selection of
counterparties from a limited group of high quality institutions,
collateral agreements and other contract provisions. As of December 31,
2000, NLIC's credit risk from these derivative financial instruments
was $44.8 million.
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 1999) in any geographic area and no more than 1% (2%
in 1999) with any one borrower as of December 31, 2000. As of December
31, 2000, 36% (39% in 1999) of the remaining principal balance of the
Company's commercial mortgage loan portfolio financed retail
properties.
19
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Notes to Consolidated Financial Statements, Continued
REINSURANCE: The Company has entered into reinsurance contracts to cede
a portion of its individual annuity business to The Franklin Life
Insurance Company (Franklin) and beginning in 2000 with Security
Benefit Life Insurance Company (SBL). Total recoveries due from
Franklin were $97.7 million and $143.6 million as of December 31, 2000
and 1999, respectively, while amounts due from SBL totaled $45.4
million at December 31, 2000. The contracts are immaterial to the
Company's results of operations. The ceding of risk does not discharge
the original insurer from its primary obligation to the policyholder.
Under the terms of the contract, Franklin and SBL have each established
a trust as collateral for the recoveries. The trust assets are invested
in investment grade securities, the market value of which must at all
times be greater than or equal to 102% and 100% of the reinsured
reserves for Franklin and SBL, respectively.
(10) PENSION PLAN AND POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
The Company is a participant, together with other affiliated companies,
in a pension plan covering all employees who have completed at least
one year of service 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 a
specified number of 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 cost (benefit) charged to operations by the Company during the
years ended December 31, 2000, 1999 and 1998 were $1.9 million, $(8.3)
million and $2.0 million, respectively. The Company has recorded a
prepaid pension asset of $13.6 million and $13.3 million as of December
31, 2000 and 1999, respectively.
In addition to the defined benefit pension plan, the Company, together
with other affiliated companies, participates in life and health care
defined benefit plans for qualifying retirees. Postretirement life and
health care benefits are contributory and generally 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
health care benefit contributions are adjusted annually and contain
cost-sharing features such as deductibles and coinsurance. In addition,
there are caps on the Company's portion of the per-participant cost of
the postretirement health care benefits. These caps can increase
annually, but not more than three percent. The Company's policy is to
fund the cost of health care benefits in amounts determined at the
discretion of management. Plan assets are invested primarily in group
annuity contracts of NLIC.
The Company elected to immediately recognize its estimated accumulated
postretirement benefit obligation (APBO), however, certain affiliated
companies elected to amortize their initial transition obligation over
periods ranging from 10 to 20 years.
The Company's accrued postretirement benefit expense as of December 31,
2000 and 1999 was $51.0 million and $49.6 million, respectively and the
net periodic postretirement benefit cost (NPPBC) for 2000, 1999 and
1998 was $3.8 million, $4.9 million and $4.1 million, respectively.
20
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Notes to Consolidated Financial Statements, Continued
Information regarding the funded status of the pension plan as a whole
and the postretirement life and health care benefit plan as a whole as
of December 31, 2000 and 1999 follows:
Pension Benefits Postretirement Benefits
---------------------------- ---------------------------
(in millions) 2000 1999 2000 1999
===================================================================================================================
Change in benefit obligation:
Benefit obligation at beginning of year $ 1,811.4 $ 2,185.0 $ 239.8 $ 270.1
Service cost 81.4 80.0 12.2 14.2
Interest cost 125.3 109.9 18.7 17.6
Actuarial loss (gain) 34.8 (95.0) 16.1 (64.4)
Plan settlement -- (396.1) -- --
Benefits paid (71.2) (72.4) (10.4) (11.0)
Acquired companies -- -- -- 13.3
-------------------------------------------------------------------------------------------------------------------
Benefit obligation at end of year 1,981.7 1,811.4 276.4 239.8
-------------------------------------------------------------------------------------------------------------------
Change in plan assets:
Fair value of plan assets at beginning of year 2,247.6 2,541.9 91.3 77.9
Actual return on plan assets 140.9 161.8 12.2 3.5
Employer contribution -- 12.4 26.3 20.9
Plan curtailment in 2000/settlement in 1999 19.8 (396.1) -- --
Benefits paid (71.2) (72.4) (10.4) (11.0)
-------------------------------------------------------------------------------------------------------------------
Fair value of plan assets at end of year 2,337.1 2,247.6 119.4 91.3
-------------------------------------------------------------------------------------------------------------------
Funded status 355.4 436.2 (157.0) (148.5)
Unrecognized prior service cost 25.0 28.2 -- --
Unrecognized net gains (311.7) (402.0) (34.1) (46.7)
Unrecognized net (asset) obligation at transition (6.4) (7.7) 1.0 1.1
-------------------------------------------------------------------------------------------------------------------
Prepaid (accrued) benefit cost $ 62.3 $ 54.7 $ (190.1) $ (194.1)
===================================================================================================================
Assumptions used in calculating the funded status of the pension plan
and postretirement life and health care benefit plan were as follows:
Pension Benefits Postretirement Benefits
--------------------------- ---------------------------
2000 1999 2000 1999
===================================================================================================================
Weighted average discount rate 6.75% 7.00% 7.50% 7.80%
Rate of increase in future compensation levels 5.00% 5.25% -- --
Assumed health care cost trend rate:
Initial rate -- -- 15.00% 15.00%
Ultimate rate -- -- 5.50% 5.50%
Uniform declining period -- -- 5 Years 5 Years
-------------------------------------------------------------------------------------------------------------------
21
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Notes to Consolidated Financial Statements, Continued
The components of net periodic pension cost for the pension plan as a
whole for the years ended December 31, 2000, 1999 and 1998 were as
follows:
(in millions) 2000 1999 1998
=========================================================================================================
Service cost (benefits earned during the period) $ 81.4 $ 80.0 $ 87.6
Interest cost on projected benefit obligation 125.3 109.9 123.4
Expected return on plan assets (184.5) (160.3) (159.0)
Recognized gains (11.8) (9.1) (3.8)
Amortization of prior service cost 3.2 3.2 3.2
Amortization of unrecognized transition obligation (asset) (1.3) (1.4) 4.2
---------------------------------------------------------------------------------------------------------
$ 12.3 $ 22.3 $ 55.6
=========================================================================================================
Effective December 31, 1998, Wausau Service Corporation (WSC) ended its
affiliation with Nationwide and employees of WSC ended participation in
the plan resulting in a curtailment gain of $67.1 million. During 1999,
the Plan transferred assets to settle its obligation related to WSC
employees, resulting in a gain of $32.9 million. The spin-off of
liabilities and assets was completed in the year 2000, resulting in an
adjustment to the curtailment gain of $19.8 million.
Assumptions used in calculating the net periodic pension cost for the
pension plan were as follows:
2000 1999 1998
================================================================================================================
Weighted average discount rate 7.00% 6.08% 6.00%
Rate of increase in future compensation levels 5.25% 4.33% 4.25%
Expected long-term rate of return on plan assets 8.25% 7.33% 7.25%
----------------------------------------------------------------------------------------------------------------
The components of NPPBC for the postretirement benefit plan as a whole for the years ended December 31, 2000,
1999 and 1998 were as follows:
(in millions) 2000 1999 1998
================================================================================================================
Service cost (benefits attributed to employee service during the year) $ 12.2 $ 14.2 $ 9.8
Interest cost on accumulated postretirement benefit obligation 18.7 17.6 15.4
Expected return on plan assets (7.9) (4.8) (4.4)
Amortization of unrecognized transition obligation of affiliates 0.6 0.6 0.2
Net amortization and deferral (1.3) (0.5) 0.6
----------------------------------------------------------------------------------------------------------------
$ 22.3 $ 27.1 $ 21.6
================================================================================================================
Actuarial assumptions used for the measurement of the NPPBC for the
postretirement benefit plan for 2000, 1999 and 1998 were as follows:
2000 1999 1998
================================================================================================================
Discount rate 7.80% 6.65% 6.70%
Long-term rate of return on plan assets, net of tax in 1999 and 1998 8.30% 7.15% 5.83%
Assumed health care cost trend rate:
Initial rate 15.00% 15.00% 12.00%
Ultimate rate 5.50% 5.50% 6.00%
Uniform declining period 5 Years 5 Years 12 Years
----------------------------------------------------------------------------------------------------------------
22
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Notes to Consolidated Financial Statements, Continued
Because current plan costs are very close to the employer dollar caps,
the health care cost trend has an immaterial effect on plan obligations
for the postretirement benefit plan as a whole. For this reason, the
effect of a one percentage point increase or decrease in the assumed
health care cost trend rate on the APBO as of December 31, 2000 and on
the NPPBC for the year ended December 31, 2000 was not calculated.
(11) SHAREHOLDER'S EQUITY, REGULATORY RISK-BASED CAPITAL, RETAINED EARNINGS
AND DIVIDEND RESTRICTIONS
Ohio, NLIC's and NLAIC'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 NLAIC each exceed
the minimum risk-based capital requirements.
The statutory capital and surplus of NLIC as of December 31, 2000, 1999
and 1998 was $1.28 billion, $1.35 billion and $1.32 billion,
respectively. The statutory net income of NLIC for the years ended
December 31, 2000, 1999 and 1998 was $158.7 million, $276.2 million and
$171.0 million, respectively.
The NAIC completed a project to codify statutory accounting principles
(Codification), which is effective January 1, 2001 for NLIC and its
insurance company subsidiary. The resulting change to NLIC's January 1,
2001 surplus was an increase of approximately $80.0 million. The
significant change for NLIC, as a result of Codification, was the
recording of deferred taxes, which were not recorded prior to the
adoption of Codification.
The Company is limited in the amount of shareholder dividends it may
pay without prior approval by the Department. As of December 31, 2000
no dividends could be paid by NLIC without prior approval.
In addition, the payment of dividends by NLIC may also be subject to
restrictions set forth in the insurance laws of New York that limit the
amount of statutory profits on NLIC's participating policies (measured
before dividends to policyholders) that can inure to the benefit of the
Company and its shareholders.
The Company currently does not expect such regulatory requirements to
impair its ability to pay operating expenses and shareholder dividends
in the future.
(12) TRANSACTIONS WITH AFFILIATES
During second quarter 1999, the Company entered into a modified
coinsurance arrangement to reinsure the 1999 operating results of an
affiliated company, Employers Life Insurance Company of Wausau (ELOW)
retroactive to January 1, 1999. In September 1999, NFS acquired ELOW
for $120.8 million and immediately merged ELOW into NLIC terminating
the modified coinsurance arrangement. Because ELOW was an affiliate,
the Company accounted for the merger similar to poolings-of-interests;
however, prior period financial statements were not restated due to
immateriality. The reinsurance and merger combined contributed $1.46
million to net income in 1999.
23
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Notes to Consolidated Financial Statements, Continued
The Company has a reinsurance agreement with NMIC whereby all of the
Company's accident and health business is ceded to NMIC on a modified
coinsurance basis. The agreement covers individual accident and health
business for all periods presented and group and franchise accident and
health business since July 1, 1999. Either party may terminate the
agreement on January 1 of any year with prior notice. Prior to July 1,
1999 group and franchise accident and health business and a block of
group life insurance policies were ceded to ELOW under a modified
coinsurance agreement. Under a modified coinsurance agreement, invested
assets are retained by the ceding company and investment earnings are
paid to the reinsurer. Under the terms of the Company's agreements, the
investment risk associated with changes in interest rates is borne by
the reinsurer. Risk of asset default is retained by the Company,
although a fee is paid to the Company for the retention of such risk.
The ceding of risk does not discharge the original insurer from its
primary obligation to the policyholder. The Company believes that the
terms of the modified coinsurance agreements are consistent in all
material respects with what the Company could have obtained with
unaffiliated parties. Revenues ceded to NMIC and ELOW for the years
ended December 31, 2000, 1999 and 1998 were $170.1 million, $193.0
million, and $216.9 million, respectively, while benefits, claims and
expenses ceded were $168.0 million, $197.3 million and $259.3 million,
respectively.
Pursuant to a cost sharing agreement among NMIC and certain of its
direct and indirect subsidiaries, including the Company, NMIC provides
certain operational and administrative services, such as sales support,
advertising, personnel and general management services, to those
subsidiaries. Expenses covered by such agreement are subject to
allocation among NMIC and such subsidiaries. Measures used to allocate
expenses among companies include individual employee estimates of time
spent, special cost studies, salary expense, commission expense and
other methods agreed to by the participating companies that are within
industry guidelines and practices. In addition, beginning in 1999
Nationwide Services Company, a subsidiary of NMIC, provides computer,
telephone, mail, employee benefits administration, and other services
to NMIC and certain of its direct and indirect subsidiaries, including
the Company, based on specified rates for units of service consumed.
For the years ended December 31, 2000, 1999 and 1998, the Company made
payments to NMIC and Nationwide Services Company totaling $150.3
million, $124.1 million, and $95.0 million, respectively. The Company
does not believe that expenses recognized under these agreements are
materially different than expenses that would have been recognized had
the Company operated on a stand-alone basis.
The Company leases office space from NMIC and certain of its
subsidiaries. For the years ended December 31, 2000, 1999 and 1998, the
Company made lease payments to NMIC and its subsidiaries of $14.1
million, $9.9 million and $8.0 million, respectively.
The Company also participates in intercompany repurchase agreements
with affiliates whereby the seller will transfer securities to the
buyer at a stated value. Upon demand or after a stated period, the
seller will repurchase the securities at the original sales price plus
a price differential. Transactions under the agreements during 2000,
1999 and 1998 were not material. The Company believes that the terms of
the repurchase agreements are materially consistent with what the
Company could have obtained with unaffiliated parties.
The Company and various affiliates entered into agreements with
Nationwide Cash Management Company (NCMC), an affiliate, under which
NCMC acts as a common agent in handling the purchase and sale of
short-term securities for the respective accounts of the participants.
Amounts on deposit with NCMC were $321.1 million and $411.7 million as
of December 31, 2000 and 1999, respectively, and are included in
short-term investments on the accompanying consolidated balance sheets.
Certain annuity products are sold through affiliated companies, which
are also subsidiaries of NFS. Total commissions and fees paid to these
affiliates for the three years ended December 31, 2000 were $65.0
million, $79.7 million and $74.9 million, respectively.
24
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Notes to Consolidated Financial Statements, Continued
(13) BANK LINES OF CREDIT
Also available as a source of funds to the Company is a $1 billion
revolving credit facility entered into by NFS, NLIC and NMIC. The
facility is comprised of a five year $700 million agreement and a 364
day $300 million agreement with a group of national financial
institutions. The facility provides for several and not joint liability
with respect to any amount drawn by any party. The facility provides
covenants, including, but not limited to, requirements that NLIC
maintain statutory surplus in excess of $935 million. The Company had
no amounts outstanding under this agreement as of December 31, 2000. Of
the total facility, $300 million is designated to back NLIC's $300
million commercial paper program. Therefore, borrowing capacity under
this facility would be reduced by the amount of any commercial paper
outstanding.
(14) CONTINGENCIES
On October 29, 1998, the Company was named in a lawsuit filed in Ohio
state court related to the sale of deferred annuity products for use as
investments in tax-deferred contributory retirement plans (Mercedes
Castillo v. Nationwide Financial Services, Inc., Nationwide Life
Insurance Company and Nationwide Life and Annuity Insurance Company).
On May 3, 1999, the complaint was amended to, among other things, add
Marcus Shore as a second plaintiff. The amended complaint is brought as
a class action on behalf of all persons who purchased individual
deferred annuity contracts or participated in group annuity contracts
sold by the Company and the other named Company affiliates which were
used to fund certain tax-deferred retirement plans. The amended
complaint seeks unspecified compensatory and punitive damages. No class
has been certified. On June 11, 1999, the Company and the other named
defendants filed a motion to dismiss the amended complaint. On March 8,
2000, the court denied the motion to dismiss the amended complaint
filed by the Company and other named defendants. The Company intends to
defend this lawsuit vigorously.
(15) SEGMENT INFORMATION
The Company has redefined its business segments in order to align this
disclosure with the way management currently views its core operations.
This updated view better reflects the different economics of the
Company's various businesses and also aligns well with the current
market focus. As a result, the Company now reports three product
segments: Individual Annuity, Institutional Products and Life
Insurance. In addition, the Company reports certain other revenues and
expenses in a Corporate segment. All 1999 and 1998 amounts have been
restated to reflect the new business segments.
The Individual Annuity segment consists of both variable and fixed
annuity contracts. Individual annuity contracts provide the customer
with tax-deferred accumulation of savings and flexible payout options
including lump sum, systematic withdrawal or a stream of payments for
life. In addition, variable annuity contracts provide the customer with
access to a wide range of investment options and asset protection in
the event of an untimely death, while fixed annuity contracts generate
a return for the customer at a specified interest rate fixed for a
prescribed period. The Company's individual annuity products consist of
single premium deferred annuities, flexible premium deferred annuities
and single premium immediate annuities.
The Institutional Products segment is comprised of the Company's group
pension and payroll deduction business, both public and private
sectors, and medium-term note program. The public sector includes the
457 business in the form of fixed and variable annuities. The private
sector includes the 401(k) business generated through fixed and
variable annuities.
The Life Insurance segment consists of insurance products, including
universal life insurance, corporate-owned life insurance and bank-owned
life insurance products, which provide a death benefit and also allow
the customer to build cash value on a tax-advantaged basis.
25
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Notes to Consolidated Financial Statements, Continued
In addition to the product segments, the Company reports a Corporate
segment. The Corporate segment includes net investment income not
allocated to the three product segments, certain revenues and expenses
of the Company's investment advisory and broker/dealer subsidiary,
unallocated expenses and interest expense on short-term borrowings. In
addition to these operating revenues and expenses, the Company also
reports net realized gains and losses on investments in the Corporate
segment.
The following table summarizes the financial results of the Company's
business segments for the years ended December 31, 2000, 1999 and 1998.
Individual Institutional Life
(in millions) Annuity Products Insurance Corporate Total
===================================================================================================================
2000:
Net investment income $ 483.2 $ 827.4 $ 289.2 $ 55.1 $ 1,654.9
Other operating revenue 625.9 251.6 453.9 17.0 1,348.4
-------------------------------------------------------------------------------------------------------------------
Total operating revenue(1) 1,109.1 1,079.0 743.1 72.1 3,003.3
-------------------------------------------------------------------------------------------------------------------
Interest credited to policyholder
account balances 396.4 628.8 157.2 -- 1,182.4
Amortization of deferred policy
acquisition costs 238.7 49.2 64.2 -- 352.1
Interest expense on short-term
borrowings -- -- -- 1.3 1.3
Other benefits and expenses 192.3 170.3 368.8 33.7 765.1
-------------------------------------------------------------------------------------------------------------------
Total expenses 827.4 848.3 590.2 35.0 2,300.9
-------------------------------------------------------------------------------------------------------------------
Operating income before
federal income tax 281.7 230.7 152.9 37.1 702.4
Realized losses on investments -- -- -- (19.4) (19.4)
-------------------------------------------------------------------------------------------------------------------
Income before
federal income tax $ 281.7 $ 230.7 $ 152.9 $ 17.7 $ 683.0
===================================================================================================================
Assets as of year end $45,422.5 $37,217.3 $ 8,103.3 $ 1,824.2 $92,567.3
-------------------------------------------------------------------------------------------------------------------
1999:
Net investment income $ 458.9 $ 771.2 $ 253.1 $ 37.6 $ 1,520.8
Other operating revenue 511.4 211.9 393.0 66.1 1,182.4
-------------------------------------------------------------------------------------------------------------------
Total operating revenue(1) 970.3 983.1 646.1 103.7 2,703.2
-------------------------------------------------------------------------------------------------------------------
Interest credited to policyholder
account balances 384.9 580.9 130.5 -- 1,096.3
Amortization of deferred policy
acquisition costs 170.9 41.6 60.1 -- 272.6
Other benefits and expenses 155.3 142.8 334.7 83.4 716.2
-------------------------------------------------------------------------------------------------------------------
Total expenses 711.1 765.3 525.3 83.4 2,085.1
-------------------------------------------------------------------------------------------------------------------
Operating income before
federal income tax 259.2 217.8 120.8 20.3 618.1
Realized losses on investments -- -- -- (11.6) (11.6)
-------------------------------------------------------------------------------------------------------------------
Income before
federal income tax $ 259.2 $ 217.8 $ 120.8 $ 8.7 $ 606.5
===================================================================================================================
Assets as of year end $45,667.8 $39,045.1 $ 6,616.7 $ 1,346.3 $92,675.9
-------------------------------------------------------------------------------------------------------------------
26
NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of Nationwide Financial Services, Inc.)
Notes to Consolidated Financial Statements, Continued
Individual Institutional Life
(in millions) Annuity Products Insurance Corporate Total
===================================================================================================================
1998:
Net investment income $ 431.7 $ 784.7 $ 225.6 $ 39.6 $ 1,481.6
Other operating revenue 412.6 167.8 318.5 66.8 965.7
-------------------------------------------------------------------------------------------------------------------
Total operating revenue(1) 844.3 952.5 544.1 106.4 2,447.3
-------------------------------------------------------------------------------------------------------------------
Interest credited to policyholder
account balances 357.9 595.7 115.4 -- 1,069.0
Amortization of deferred policy
acquisition costs 129.2 38.9 46.4 -- 214.5
Other benefits and expenses 125.7 137.5 293.5 78.4 635.1
-------------------------------------------------------------------------------------------------------------------
Total expenses 612.8 772.1 455.3 78.4 1,918.6
-------------------------------------------------------------------------------------------------------------------
Operating income before federal
income tax 231.5 180.4 88.8 28.0 528.7
Realized gains on investments -- -- -- 28.4 28.4
-------------------------------------------------------------------------------------------------------------------
Income before
federal income tax $ 231.5 $ 180.4 $ 88.8 $ 56.4 $ 557.1
===================================================================================================================
Assets as of year end $36,641.8 $30,618.4 $ 5,187.6 $ 1,894.3 $74,342.1
-------------------------------------------------------------------------------------------------------------------
----------
1 Excludes net realized gains and losses on investments.
The Company has no significant revenue from customers located outside
of the United States nor does the Company have any significant
long-lived assets located outside the United States.
67
PART II - OTHER INFORMATION
CONTENTS OF REGISTRATION STATEMENT
This Form S-6 Registration Statement comprises the following papers and
documents:
- The facing sheet.
- Cross-reference to items required by Form N-8B-2.
- The prospectus consisting of 146 pages.
- Representations and Undertakings.
- Signatures.
- Independent Auditors' Consent
The following exhibits required by Forms N-8B-2 and S-6:
1. Power of Attorney dated April 4, 2001. Filed previously in connection with Securities and Exchange Commission
File No. 333-53728 (Pre-Effective Amendment No. 1) and hereby
incorporated by reference.
2. Resolution of the Depositor's Board of Filed previously in connection with Securities and Exchange Commission
Directors authorizing the establishment of File No. 333-31725 and is hereby incorporated by reference.
the Registrant, adopted
3. Distribution Contracts Filed previously in connection with Securities and Exchange Commission
File No. 333-27133 and is hereby incorporated by reference.
4. Form of Security Filed previously in connection with Securities and Exchange Commission
File No. 333-53728 (Pre-Effective Amendment No. 1) and hereby
incorporated by reference.
5. Articles of Incorporation of Depositor Filed previously in connection with Securities and Exchange Commission
File No. 333-27133 and is hereby incorporated by reference.
6. Application form of Security Filed previously in connection with Securities and Exchange Commission
File No. 333-53728 (Pre-Effective Amendment No. 1) and hereby
incorporated by reference.
7. Opinion of Counsel Filed previously in connection with Securities and Exchange Commission
File No. 333-53728 (Pre-Effective Amendment No. 1) and hereby
incorporated by reference.
68
REPRESENTATIONS AND UNDERTAKINGS
The Registrant and Nationwide hereby make the following representations and
undertakings:
(a) This filing is made pursuant to Rules 6c-3 and 6e-3(T) under the Investment
Company Act of 1940 (the "Act"). The Registrant and Nationwide elect to be
governed by Rule 6e-3(T)(b)(13)(i)(A) under the Act with respect to the
policies described in the prospectus. The policies have been designed in a
way as to qualify for the exemptive relief from various provisions of the
Act afforded by Rule 6e-3(T).
(b) Paragraph (b)(13)(iii)(F) of Rule 6e-3(T) is being relied on for the
deduction of the mortality and expense risk charges ("risk charges")
assumed by Nationwide under the policies. Nationwide represents that the
risk charges are within the range of industry practice for comparable
policies and reasonable in relation to all of the risks assumed by the
issuer under the policies. Actuarial memoranda demonstrating the
reasonableness of these charges are maintained by Nationwide, and will be
made available to the Securities and Exchange Commission (the "SEC") on
request.
(c) Nationwide has concluded that there is a reasonable likelihood that the
distribution financing arrangement of the separate account will benefit the
separate account and the contractholders and will keep and make available
to the SEC on request a memorandum setting forth the basis for this
representation.
(d) Nationwide represents that the separate account will invest only in
management investment companies which have undertaken to have a board of
directors, a majority of whom are not interested persons of Nationwide,
formulate and approve any plan under Rule 12b-1 to finance distribution
expenses.
(e) Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the Registrant hereby undertakes to file with the SEC
such supplementary and periodic information, documents, and reports as may
be prescribed by any rule or regulation of the SEC heretofore or hereafter
duly adopted pursuant to authority conferred in that section.
(f) The fees and charges deducted under the policy in the aggregate are
reasonable in relation to the services rendered, the expenses expected to
be incurred, and the risks assumed by Nationwide.
69
INDEPENDENT AUDITORS' CONSENT
The Board of Directors of Nationwide Life Insurance Company and Contract Owners
of Nationwide VLI Separate Account-4:
We consent to the use of our reports included herein and to the reference to our
firm under the heading "Experts" in the prospectus.
Columbus, Ohio KPMG LLP
May 15, 2001
70
SIGNATURES
As required by the Securities Act of 1933, the Registrant, Nationwide VLI
Separate Account-4 has caused this Pre-Effective Amendment No. 2 to the
Registration Statement to be signed on its behalf in the City of Columbus, and
the State of Ohio, on this 14th day of June, 2001.
NATIONWIDE VLI SEPARATE ACCOUNT-4
-------------------------------------------------------------------------------
(Registrant)
NATIONWIDE LIFE INSURANCE COMPANY
(Seal) -------------------------------------------------------------------------------
Attest: (Depositor)
By: /s/ GLENN W. SODEN By: /s/STEVEN SAVINI
- ---------------------------------------------- -------------------------------------------------------------------------------
Glenn W. Soden Steven Savini
Assistant Secretary
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the
following persons in the capacities indicated on the 14th day of June, 2001.
SIGNATURE TITLE
LEWIS J. ALPHIN Director
- ----------------------------------------
Lewis J. Alphin
A. I. BELL Director
- ----------------------------------------
A. I. Bell
YVONNE M. CURL Director
- ----------------------------------------
Yvonne M. Curl
KENNETH D. DAVIS Director
- ----------------------------------------
Kenneth D. Davis
KEITH W. ECKEL Director
- ----------------------------------------
Keith W. Eckel
WILLARD J. ENGEL Director
- ----------------------------------------
Willard J. Engel
FRED C. FINNEY Director
- ----------------------------------------
Fred C. Finney
JOSEPH J. GASPER President and Chief Operating
- ---------------------------------------- Officer and Director
Joseph J. Gasper
W.G. JURGENSEN Chief Executive Officer
- ---------------------------------------- And Director
W.G. Jurgensen
DAVID O. MILLER Chairman of the Board and
- ---------------------------------------- Director
David O. Miller
RALPH M. PAIGE Director
- ----------------------------------------
Ralph M. Paige
JAMES F. PATTERSON Director
- ----------------------------------------
James F. Patterson
ARDEN L. SHISLER Director By /s/ STEVEN SAVINI
- ---------------------------------------- -----------------------------------------------
Arden L. Shisler Steven Savini
Attorney-in-Fact
ROBERT L. STEWART Director
- ----------------------------------------
Robert L. Stewart