485BPOS

'33 Act File No. 333-137202

'40 Act File No. 811-08301

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-6

REGISTRATION UNDER THE SECURITIES ACT OF 1933
Pre-effective Amendment No.	o
Post-effective Amendment No. 7	þ

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 153	þ

(Check appropriate box or boxes.)

NATIONWIDE VLI SEPARATE ACCOUNT-4

(Exact Name of Registrant)

NATIONWIDE LIFE INSURANCE COMPANY

(Name of Depositor)

One Nationwide Plaza

Columbus, Ohio 43215

(Address of Depositor’s Principal Executive Offices)  (Zip Code)

Depositor’s Telephone Number, including Area Code:  (614) 249-7111

Robert W. Horner, III

Vice President - Corporate Governance and Secretary

One Nationwide Plaza

Columbus, Ohio 43215-2220

(Name and Address of Agent for Service)

Approximate Date of Proposed Public Offering:  August 12 , 2009.

It is proposed that this filing will become effective (check appropriate box)

þ            immediately upon filing pursuant to paragraph (b)

o           on (date) pursuant to paragraph (b)

o           60 days after filing pursuant to paragraph (a)(1)

o            on (date) pursuant to paragraph (a)(1)

If appropriate, check the following box:

o           this post-effective amendment designates a new effective date for a previously filed post-effective amendment.

Nationwide Life Insurance Company:

·    Nationwide VLI Separate Account – 4

Supplement dated August 12, 2009 to Prospectus dated May 1, 2009

This supplement updates certain information contained in your prospectus.  Please read it and keep it with your prospectus for future reference.

The following modifies the Prospectus dated May 1, 2009.

1. Fixed Account Transfer Restrictions and Limitations:   The "Fixed Account Transfer Restrictions and Limitations" sub-section of the "In Summary:  Policy Risks" section is amended by adding the following as the fourth paragraph:

On a current basis we limit transfers from the fixed account during a policy year to the greater of:  (a) 20% of that portion of the Cash Value attributable to the fixed account at the end of the prior policy year, and (b) 120% of the amount transferred from the fixed account during the preceding policy year.

2. Fixed Account Transfers:   The "Fixed Account Transfers" sub-section of the "Transfers Among and Between the Policy Investment Options" section is amended by adding the following as the fourth paragraph:

On a current basis we limit transfers from the fixed account during a policy year to the greater of:  (a) 20% of that portion of the Cash Value attributable to the fixed account at the end of the prior policy year, and (b) 120% of the amount transferred from the fixed account during the preceding policy year.

3. Dollar Cost Averaging:   The "Dollar Cost Averaging" sub-section of the "Policy Owner Services" section is amended by adding the following:

Dollar Cost Averaging is not available for polices with applications signed on or after August 12, 2009, or for policies issued before September 28, 2009 that were not participating in Dollar Cost Averaging as of September 28, 2009.  For policies that were participating in Dollar Cost Averaging as of September 28, 2009, existing Dollar Cost Averaging programs will continue to be available until the policy owner terminates participation.  Once participation in Dollar Cost Averaging is terminated, the policy owner cannot re-elect Dollar Cost Averaging.

Next Generation

Corporate Owned Flexible Premium Variable Universal Life Insurance Policies

Issued by

Nationwide Life Insurance Company

Through its

Nationwide VLI Separate Account-4

Supplement dated May 1, 2009 to Prospectus dated May 1, 2009

This supplement updates certain information contained in your prospectus.  Please read it and keep it with your prospectus for future reference.

THIS SUPPLEMENT UPDATES INFORMATION IN THE PROSPECTUS ASSOCIATED WITH POLICIES WITH  APPLICATIONS DATED ON OR AFTER SEPTEMBER 30, 2008.  IF YOUR POLICY'S APPLICATION IS DATED BEFORE SEPTEMBER 30, 2008.  THE CONTENTS OF THIS SUPPLEMENT ARE NOT APPLICABLE TO YOUR POLICY.

1. Fee Table.  The “Periodic Charges Other Than Mutual Fund Operating Expenses” table is amended by deleting the Base Policy Cost of Insurance, Supplemental Insurance Rider Cost of Insurance, Base Policy Specified Amount Charge, and Supplemental Insurance Rider Specified Amount Charge and replacing them with the following:

Periodic Charges Other Than Mutual Fund Operating Expenses
Charge	When Charge is Deducted	Amount Deducted From Cash Value (deductions are separated by Policy Component A, B, C and D where applicable)
Base Policy Cost of Insurance(1) Maximum(2) Minimum Representative: an individual issue age 40, non-tobacco, in the tenth policy year, Death Benefit option 1, issued on a short-form, non-medical basis. Representative Cost by Policy Component Net Amount At Risk (3)	Monthly	A	B	C	D
		$83.33 per $1,000 of Net Amount At Risk. $0.03 per $1,000 of Net Amount At Risk. $0.24	$83.33 per $1,000 of Net Amount At Risk. $0.03 per $1,000 of Net Amount At Risk. $0.21	$83.33 per $1,000 of Net Amount At Risk. $0.03 per $1,000 of Net Amount At Risk. $0.22	$83.33 per $1,000 of Net Amount At Risk. $0.03 per $1,000 of Net Amount At Risk. $0.24

Periodic Charges Other Than Mutual Fund Operating Expenses (Continued)
Supplemental Insurance Rider Cost of Insurance(4) Maximum (2) Minimum Representative: an individual issue age 40, non-tobacco, in the tenth policy year, issued on a short-form, non-medical basis. Representative Cost by Policy Component Net Amount at Risk(3)	Monthly	A	B	C	D
		$83.33 per $1,000 of Rider Net Amount at Risk. $0.02 per $1,000 of Rider Net Amount at Risk. $0.16	$83.33 per $1,000 of Rider Net Amount at Risk. $0.02 per $1,000 of Rider Net Amount at Risk. $0.15	$83.33 per $1,000 of Rider Net Amount at Risk. $0.02 per $1,000 of Rider Net Amount at Risk. $0.15	$83.33 per $1,000 of Rider Net Amount at Risk. $0.02 per $1,000 of Rider Net Amount at Risk. $0.10
Base Policy Specified Amount Charge Maximum Current(5)	Monthly	$0.40 per $1,000 of Base Specified Amount. $0.08 per $1,000 of Base Specified Amount.
Supplemental Insurance Rider Specified Amount Charge Maximum Current(6)	Monthly(4)	$0.40 per $1,000 of Rider Specified Amount. $0.02 per $1,000 of Rider Specified Amount.

 (1) The Cost of Insurance Charge varies according to the Insured’s age, sex (if not unisex classified), tobacco use, Substandard Ratings, underwriting class, the number of years from the Policy Date, the Base Specified Amount, and the elected policy component configurations.  The Cost of Insurance Charge for coverage under the Supplemental Insurance Rider is different.

(2) The maximum Cost of Insurance does not include substandard rated policies.  For substandard rated policies, the maximum Cost of Insurance is $125.00 per $1,000 of Net Amount at Risk, taken proportionally from the Sub-Accounts and fixed account.

(3) This amount may not be representative of your cost.  Ask for a policy illustration for information on your cost.

(4) This charge will only be assessed if you purchase this optional rider.

 (5) This charge is only assessed on the Base Specified Amount.  A different charge will be applied for any Rider Specified Amount under the Supplemental Insurance Rider.  For policy years 21 and later, the charge applied per $1,000 is reduced to $0.01 per $1,000 of Base Specified Amount.

(6) This charge is only assessed on the Rider Specified Amount.  A different charge will be applied for any Base Specified Amount under the policy.  For policy years 21 and later, the charge applied per $1,000 is reduced to $0.01 per $1,000 of Rider Specified Amount.

2. Purchasing the Policy.  The "Purchasing the Policy" sub-section of "The Policy" section of the prospectus is amended by adding the following:

We reserve the right to modify the minimum annual premium per owner on a prospective basis to newly issued policies at any time.

3. Base Specified Amount Charge.  The "Base Specified Amount Charge" sub-section of the "Policy Charges" section of the prospectus is deleted and replaced with the following:

Base Specified Amount Charge

We deduct a monthly Base Specified Amount Charge from the policy's Cash Value to compensate us for sales, underwriting, distribution and issuance of the policy.  The charge applicable to your policy depends on the Total Specified Amount and is the same for all base policy component configurations.  The maximum guaranteed Base Specified Amount Charge is $0.40 per $1,000 of Specified Amount.

The table below shows the current Base Specified Amount Charges.  The Base Specified Amount Charge will be deducted proportionally from your Sub-Account allocations and the fixed account.

Base Specified Amount Charges

Policy Year	Amount of Total Specified Amount
1 through 20	$0.08 per $1,000
21 and thereafter	$0.01 per $1,000

A distinct Rider Specified Amount charge applies to the Supplemental Insurance Rider.  If you elect that rider, the total specified amount charges you pay will depend upon the allocation of Total Specified Amount between the base policy and the Supplemental Insurance Rider.  To determine total specified amount charges, you must add the amount of the Base Specified Amount charge to the Rider Specified Amount charge.  Total charges are a weighted average of the amount of Base Specified Amount and Rider Specified Amount.  The end result is a charge blending.  For further explanation of this blending, including an example, see the “Supplemental Insurance Rider Specified Amount Charge” section below.

4. Supplemental Insurance Rider Specified Amount Charge.  The paragraphs under the sub-heading "Rider Specified Amount Charge" of the sub-section "Supplemental Insurance Rider Specified Amount Charge" in the "Policy Riders and Rider Charges" section of the prospectus is deleted and replaced with the following:

Rider Specified Amount Charge

If you purchase the Supplemental Insurance Rider, we deduct a monthly Rider Specified Amount Charge from the policy's Cash Value to compensate us for sales, underwriting, distribution, and issuance of the rider.  The charge applicable to your policy depends on the Total Specified Amount and the allocation of the Total Specified Amount between Base Specified Amount and Rider Specified Amount. The Rider Specified Amount Charge is the same for all policy component configurations.

The Rider Specified Amount Charge will be deducted proportionally from your Sub-Account allocations and the fixed account. The table below shows the current Rider Specified Amount Charges.

Rider Specified Amount Charges

Policy Year	Amount of Total Specified Amount
1 through 20	$0.02 per $1,000
21 and thereafter	$0.01 per $1,000

The maximum guaranteed Supplemental Insurance Rider Specified Amount Charge is $0.40 per $1,000 of Specified Amount.

To determine total specified amount charges, you must add the amount of the Base Specified Amount charge to the Rider Specified Amount charge.  Total charges are a weighted average of the amount of Base Specified Amount and Rider Specified Amount you elected.  The end result is a charge blending.

Here is an example of how charges are blended if you elect Base Specified Amount and Rider Specified Amount.

For this example, assume the following:

Total Specified Amount = $150,000.

Base Specified Amount = 50% or $75,000.

Rider Specified Amount = 50% or $75,000.

The policy is less than 20 years old.

The charges are calculated in three parts.

The first part uses the following formula:

Base Specified Amount Charge  = [(BA x BSAC)] x [$TSA/$1,000]

Where:

BA = Base Specified Amount Allocation (as a percentage)

BSAC = Base Specified Amount Charge

TSA = Total Specified Amount Base Specified Amount Charge = [(50%x$0.08)]x[$150,000/$1,000] = $6.00

           The second part uses the following formula:

Rider Specified Amount Charge  = [(RA x RSAC)] x [$TSA/$1,000]

Where:

RA = Rider Specified Amount Allocation (as a percentage)

RSAC = Rider Specified Amount Charge

TSA = Total Specified Amount

Rider Specified Amount Charge = [(50%x$0.02)]x[$150,000/$1,000] = $1.50

The third part simply adds the results of the first two formulas:

= [$6.00] + [$1.50]

= $7.50

5.   Policy Maturity.  The "Policy Maturity" section of the prospectus is deleted and replaced with the following:

Policy Maturity

The Maturity Date of the policy will automatically be extended if the policy is In Force on the Maturity Date, unless you elect otherwise.  Refer to the Extending the Maturity Date section below for additional information.  Note:  if the Supplemental Insurance rider is in effect, the Maturity Date with respect to Rider Specified Amount is not extended.  The Maturity Date will not be extended if such extension would cause the policy to fail the definition of life insurance under the Code.

If you elect not to extend the Maturity Date and the policy is In Force, we will pay the Proceeds to you, generally, within 7 days after we receive your written request at our Home Office.  The payment of Proceeds will be postponed, however, when: the New York Stock Exchange is closed; the SEC restricts trading or declares an emergency; the SEC permits us to defer it for the protection of our policy owners; or the Proceeds are to be paid from the fixed account.  The Proceeds will equal the policy's Cash Value minus any Indebtedness and will be paid directly to you in a lump sum, unless you elect to leave the Proceeds on deposit with us (or an affiliate) in an interest-bearing account.  After we pay the Proceeds, the policy is terminated.

Extending the Maturity Date

If the Maturity Date is extended the new Maturity Date will be the date of the Insured's death, at which time we will pay the Proceeds to the Beneficiary.  During this Maturity Date extension, the policy will operate the same as it did prior to the extension, except as follows:

(1)   no changes to the Total Specified Amount will be allowed;

(2)   the Proceeds will equal the Cash Value;

(3)   Death Benefit Options 2 and 3 will be changed to a revised Death Benefit 1 where the death benefit equals the Cash Value only;

(4)   no additional Premium payments will be allowed;

(5)   no additional periodic charges will be deducted; and

(6)   100% of the policy's Cash Value will be transferred to the fixed account.

When the Maturity Date has been extended, we will endorse the policy to reflect the changes above.

The primary purpose of Maturity Date extension is to continue the life insurance coverage, and avoid current income taxes on any earnings in excess of your cost basis if the maturity Proceeds are taken.  See, "Surrendering the Policy," in the "Taxes" section of this prospectus for additional information.

Assuming you have no outstanding loans on the Maturity Date and that no partial surrenders or loans are taken after the Maturity Date, the Proceeds after the Maturity Date will equal or exceed the Proceeds at maturity.  However, because the loan interest rate charged may be greater than loan interest credited, if you have an outstanding loan on or after the Maturity Date, Proceeds after the Maturity Date may be less than the Proceeds at maturity.

6. The definition of Maturity Date.  The Maturity Date definition in the "Appendix B: Definitions" section of the prospectus is deleted and replaced with the following:

Maturity Date – The date on which insurance coverage provided by the Policy is scheduled to end.  The Policy is automatically extended past the Maturity Date with modified benefits unless you elect otherwise. The Maturity Date is the anniversary of the Policy Date on or next following the Insured's 100th birthday.

7. Appendix C: Blending Examples of Policy Charges.  The Blending Examples of Policy Charges in the "Appendix C: Blending Examples of Policy Charges" section of the prospectus is deleted and replaced with the following:

Blending Examples of Policy Charges
Guaranteed Issue Policy With Specified Amount of $150,000
(Assuming No Premiums From Section 1035 Exchange)
Example #1 - Total Specified  Amount Equals
Base Specified Amount
			Blended
	Component B	Component D	50% Comp B and
			50% Comp D
	Premium Load
Yr 1	10.00%	0.00%	5.00%(1)
Yr 2	8.00%	0.00%	4.00%
Yr 3	6.00%	0.00%	3.00%
Yr 4	4.00%	0.00%	2.00%
Yr 5+	2.00%	0.00%	1.00%
	Deferred Premium Load
Yr 1	0.00%	0.00%	0.00%
Yr 2-5	0.00%	0.00%	0.00%

Monthly Charges
Ratio of Cash Value to 7-Pay Premium(2) (on a monthly anniversary)Ratio of CV to 7-Pay	Annualized Variable Sub-Account Asset Charge
Under 125%	0.25%	0.60%	0.43%(3)
125%-249%	0.23%	0.55%	0.39%
250%-374%	0.20%	0.50%	0.35%
375%-499%	0.18%	0.46%	0.32%
500%-649%	0.16%	0.42%	0.29%
	Specified Amount Charge
Yr 1	$12.00(4)	$12.00	$12.00
Yr 2	$12.00	$12.00	$12.00
Yr 3	$12.00	$12.00	$12.00
Yr 4	$12.00	$12.00	$12.00
Yr 5	$12.00	$12.00	$12.00
	Cost of Insurance Per $1,000 for Issue Age 45
Yr 1	0.082	0.160	0.121
Yr 2	0.101	0.174	0.138
Yr 3	0.120	0.190	0.155
Yr 4	0.140	0.207	0.174
Yr 5	0.163	0.225	0.194
(1)Blended 5.00% = [50% x (Component B @ 10.00%)] plus [50% x (Component D @ 0%)]
(2)The 7-Pay Premium is established as of the Policy Date and will not change.
(3)Blended 0.43% = [50% x (Component B @ 0.25%)] plus [50% x (Component D @ 0.60%)]
(4)$12.00 Specified Amount Charge = [(Total Specified Amount) ($.08)/1,000]

Blending Examples of Policy Charges
Guaranteed Issue Policy With Specified Amount of $150,000
(Assuming No Premiums From Section 1035 Exchange)
Example #2 - Base and Rider Specified Amounts Equal 80% and 20% of Total Specified Amount, Respectively
							Blended 50% Comp B
	Component B			Component D			and 50% Comp D
		Target	Excess		Target	Excess				Target	Excess
	Premium Load
Yr 1		10.00%	2.00%		0.00%	0.00%			5.00%(4)		1.00%
Yr 2		8.00%	2.00%		0.00%	0.00%			4.00%		1.00%
Yr 3		6.00%	2.00%		0.00%	0.00%			3.00%		1.00%
Yr 4		4.00%	2.00%		0.00%	0.00%			2.00%		1.00%
Yr 5+		2.00%	2.00%		0.00%	0.00%			1.00%		1.00%
	Deferred Premium Load
Yr 1		0.00%	0.00%		0.00%	0.00%				0.00%	0.00%
Yr 2-5		0.00%	0.00%		0.00%	0.00%				0.00%	0.00%
Monthly Charges
			80/20 Blend Component B			80/20 Blend Component D					80/20 Blend
Ratio of Cash Value to 7-Pay Premium(5) (on a monthly anniversary)	Base	Rider		Base	Rider			Base		Rider
	Annualized Variable Sub-Account Asset Charge
Ratio of CV to 7-Payay
Under 125%	0.25%	0.16%	0.23%(6)	0.60%	0.30%	0.54%		0.43%		0.23%	0.39%(7)
125%-249%	0.23%	0.15%	0.21%	0.55%	0.27%	0.49%		0.39%		0.21%	0.35%
250%-374%	0.20%	0.14%	0.19%	0.50%	0.24%	0.45%		0.35%		0.19%	0.32%
375%-499%	0.18%	0.13%	0.17%	0.46%	0.22%	0.41%		0.32%		0.18%	0.29%
500%-649%	0.16%	0.12%	0.15%	0.42%	0.20%	0.38%		0.29%		0.16%	0.26%
	Specified Amount Charge
Yr 1	$12.00	$3.00	$10.20	$12.00	$3.00	$10.20		$12.00		$3.00	$10.20
Yr 2	$12.00	$3.00	$10.20	$12.00	$3.00	$10.20		$12.00		$3.00	$10.20
Yr 3	$12.00	$3.00	$10.20	$12.00	$3.00	$10.20		$12.00		$3.00	$10.20
Yr 4	$12.00	$3.00	$10.20	$12.00	$3.00	$10.20		$12.00		$3.00	$10.20
Yr 5	$12.00	$3.00	$10.20	$12.00	$3.00	$10.20		$12.00		$3.00	$10.20
	Cost of Insurance Per $1,000 for Issue Age 45
Yr 1	0.082	0.059	0.077	0.160	0.072	0.142		0.121		0.066	0.110
Yr 2	0.101	0.068	0.094	0.174	0.078	0.155		0.138		0.073	0.125
Yr 3	0.120	0.079	0.112	0.190	0.086	0.169		0.155		0.083	0.141
Yr 4	0.139	0.092	0.130	0.207	0.093	0.184		0.173		0.093	0.157
Yr 5	0.163	0.107	0.152	0.225	0.102	0.200		0.194		0.105	0.176
(4)       5.00% Blended Premium Load on Target Premium = [50% x (Component B @ 10.00%)] plus  [50% x (Component D @ 0%)]
(5)       The 7-Pay Premium is established as of the Policy Date and will not change.
(6)       0.23% Variable Sub-account Asset Charge for Component B = [80% x (Base Policy @ 0.25%)] plus [20% x (Supplemental Insurance Rider @ 0.16%)]
(7)       0.39% Blended Variable Sub-account Asset Charge = [50% x (Component B @ 0.23%)] plus [50% x (Component D @ 0.54%)]

Next Generation

Corporate Owned Flexible Premium Variable Universal Life Insurance Policies

issued by

Nationwide Life Insurance Company

through

Nationwide VLI Separate Account-4

The date of this prospectus is May 1, 2009

PLEASE KEEP THIS PROSPECTUS FOR FUTURE REFERENCE.

Variable life insurance is complex, and this prospectus is designed to help you become as fully informed as possible in making your decision to purchase or not to purchase this variable life insurance policy.  We encourage you to take the time to understand the policy, its potential benefits and risks, and how it might or might not benefit you.  In consultation with your financial adviser, you should use this prospectus in conjunction with the policy and composite illustration to compare the benefits and risks of this policy against those of other life insurance policies and alternative investment instruments.

Please read this entire prospectus and consult with a trusted financial adviser.  If you have policy-specific questions or need additional information, contact us.  Also, contact us for free copies of the prospectuses for the mutual funds available in the policy.

Telephone:	1-877-351-8808
TDD:	1-800-238-3035
U.S. Mail:	Nationwide Life Insurance Company
	Corporate Insurance Markets
	One Nationwide Plaza (1-11-08)
	Columbus, OH  43215-2220

You should carefully read your policy along with this prospectus. 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.

This policy is NOT: FDIC insured; a bank deposit; available in every state; or insured or endorsed by a bank or any federal government agency.

This policy MAY decrease in value to the point of being valueless.

The purpose of this policy is to provide corporate entities a vehicle to informally finance certain employee benefit plans.. If your primary need is not life insurance protection, then purchasing this policy may not be in your best interest.  We make no claim that the policy is in any way similar or comparable to a systematic investment plan of a mutual fund.

This policy includes an Enhancement Benefit which is a partial return of charges upon certain surrenders.  Policies without such a benefit may have lower overall charges when compared to the policies described in this prospectus.  There are no additional charges associated with the Enhancement Benefit, but the Enhancement Benefit does result in overall charges of the policy being slightly higher when compared to not having an Enhancement Benefit as part of the policy.  The value of this benefit may be more than off-set by the additional charges associated with offering such a benefit.

In thinking about buying this policy to replace existing life insurance, please carefully consider its advantages versus those of the policy you intend to replace, as well as any replacement costs.  As always, consult your financial adviser.

Not all terms, conditions, benefits, programs, features and investment options are available or approved for use in every state.

We offer a variety of variable universal life policies.  Despite offering substantially similar features and investment options, certain policies may have lower overall charges than others, including this policy.  These differences in charges may be attributable to differences in sales and related expenses incurred in one distribution channel versus another.

Table of Contents

	Page
In Summary: Policy Benefits	3
In Summary: Policy Risks	4
In Summary: Fee Tables	6
Policy Investment Options	11
Fixed Account
Variable Investment Options
Valuation of Accumulation Units
How Sub-Account Investment Experience is Determined
Transfers Among and Between the Policy Investment Options	14
Sub-Account Transfers
Fixed Account Transfers
Submitting a Transfer Request
The Policy	15
Generally
Policy Owner and Beneficiaries
Purchasing a Policy
Right to Cancel (Examination Right)
Premium Payments
Cash Value
Enhancement Benefit
Changing the Amount of Base Policy Insurance Coverage
The Minimum Required Death Benefit
Exchanging the Policy
Terminating the Policy
Assigning the Policy
Reports, and Illustrations
Policy Charges	21
Premium Load
Deferred Premium Load
Base Policy Cost of Insurance
Sub-Account Asset Charge
Base Specified Amount Charge
Administrative Charge
Illustration Charge
Policy Rider Charges
Mutual Fund Operating Expenses
A Note on Charges
Information on Underlying Mutual Fund Payments
Policy Riders and Rider Charges	27
Change of Insured Rider
Supplemental Insurance Rider
Policy Owner Services	32
Dollar Cost Averaging
Policy Loans	32
Loan Amount and Interest Charged
Collateral and Interest Earned
Net Effect on Policy Loans
Repayment
Lapse	33
Grace Period
Reinstatement
Surrenders	34
Full Surrender
Partial Surrender

1

Table of Contents (continued)
The Death Benefit	34
Calculation of the Death Benefit
Death Benefit Options
Maximum Death Benefit
Changes in the Death Benefit Option
Incontestability
Suicide
Policy Maturity	37
Extending the Maturity Date
Payment of Policy Proceeds	37
Taxes	37
Types of Taxes
Buying the Policy
Investment Gain in the Policy
Periodic Withdrawals, Non-Periodic Withdrawals, and Loans
Surrendering the Policy; Maturity
Withholding
Exchanging the Policy for Another Life Insurance Policy
Taxation of Death Benefits
Terminal Illness
Special Considerations for Corporations
Taxes and the Value of Your Policy
Business Uses of the Policy
Non-Resident Aliens and Other Persons Who are not Citizens of the United States
Tax Changes
Nationwide Life Insurance Company	43
Nationwide VLI Separate Account-4	43
Organization, Registration, and Operation
Addition, Deletion, or Substitution of Mutual Funds
Voting Rights
Legal Proceedings	44
Nationwide Life Insurance Company
Nationwide Investment Services Corporation
Financial Statements	47
Appendix A: Sub-Account Information	48
Appendix B: Definitions	60
Appendix C: Blending Examples of Policy Charges	63
Appendix D: State Variations	65

2

Appendix B defines certain words and phrases used in this prospectus.

In Summary: Policy Benefits

Death Benefit

The primary benefit of your policy is life insurance coverage.  While the policy is In Force, we will pay the Death Benefit to your Beneficiary when the Insured dies.

Your Choice of Death Benefit Options

You choose one of three (3) available Death Benefit options.

Payout

You or your Beneficiary may choose to receive the Policy Proceeds: (1) in a lump sum, or (2) or may leave the proceeds on deposit with us in an interest-bearing account.

Riders

You may elect any of the available Riders.  Rider availability varies by state and there may be an additional charge.  Riders available:

·   Change of Insured Rider (available at no charge); and

·   Supplemental Insurance Rider.

Operation and benefits of the riders described in this prospectus may vary by the state where the policy is issued.  For detailed information regarding Rider availability and variations, see "Appendix D: State Variations."

Choice of Charge Structure

We offer charge structures, or "policy components," that permit policy purchasers to determine how to apportion policy expenses (including distribution expenses) over the life of the policy.  Each of the policy components applicable to the Base Specified Amount and Rider Specified Amount apportions charges in a different manner between monthly charges, premium loads and deferred premium loads.  At the time of application, you select a policy component configuration to apply to your Total Specified Amount.  Some of the charges associated with the policy are lower under the policy components applied to Rider Specified Amount when compared to the corresponding policy component applied to Base Specified Amount.  Compensation paid to broker-dealer firms will depend upon the configuration of policy components chosen.  We have summarized below the policy components that currently are available under the policy.

·   Policy Component A has a Premium Load that declines each year over the first 5 policy years, and a Deferred Premium Load that is based on Premium paid in the first policy year and is charged in policy years 2-5.  The aggregate current monthly charges (i.e., the cost of insurance charge, the specified amount charge, the administrative charge, and the sub-account asset charge) under this policy component will be lower than those under Policy Components B and C during the first four years, and lower than Policy Component D in all years.

·   Policy Component B has a Premium Load that declines over the first five policy years.  No Deferred Premium Load applies under this policy component.  The aggregate current monthly charges are lower than those for:  Policy Component A after the first four policy years; Policy Component C after the first ten policy years; and Policy Component D in all policy years.

·   Policy Component C has a current Premium Load that is lower than the Premium Load on Policy Components A and B, and declines over a shorter, 4 year, period.  No Deferred Premium Load applies.  The aggregate current monthly charges are higher than those for Policy Component B during the first ten policy years, and similar thereafter.  The aggregate current monthly charges are higher than those for Policy Component A during the first four policy years, and similar thereafter.  The current monthly charges are lower than those for Policy Component D in all policy years.

·   Policy Component D has no Premium Load or Deferred Premium Load, and higher aggregate current monthly charges when compared to Policy Components A, B and C.

Your representative can provide you illustrations demonstrating the differences among various policy component configurations and combinations of coverage under the base policy and the Supplemental Insurance Rider.  You should consider your policy component configurations carefully, as they impact the charges assessed and total compensation paid on your policy.  Once the policy has been issued, changes to the policy component configurations are permitted only with our approval.

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Coverage Flexibility

Subject to conditions, you may choose to:

·   change the Death Benefit option;

·   increase or decrease the Base Specified Amount and Rider Specified Amount;

·   change your beneficiaries; and

·   change who owns the policy.

Access to Cash Value

Subject to conditions, you may:

·   Take a policy loan of no more than 90% of the Cash Value.  The minimum loan amount is $500.

·   Take a partial surrender of at least $500.

·   Surrender the policy for its Cash Surrender Value at any time while the Insured is alive.  The Cash Surrender Value will be the Cash Value, less any Indebtedness, plus any Enhancement Benefit.

Premium Flexibility

You will not be required to make Premium payments according to a schedule.  Within limits, you may vary the frequency and amount of Premium payments, and you might even be able to skip making a Premium payment.

Investment Options

You may choose to allocate your Net Premiums to the fixed account or to one or more Sub-Accounts.

The fixed account will earn interest daily at an annual effective rate of no less than the stated interest crediting rate shown on the Policy Data Page.

The variable investment options offered under the policy are mutual funds designed to be the underlying investment options of variable insurance products.  Nationwide VLI Separate Account-4 contains one Sub-Account for each of the mutual funds offered in the policy.  The value of that portion of your Cash Value invested in the Sub-Accounts will depend on the Investment Experience of the Sub-Accounts you choose.

Transfers Between and Among Investment Options

You may transfer Cash Value between the fixed account and the variable investment options, subject to certain conditions.  You may transfer among the Sub-Accounts within limits.  We have implemented procedures intended to reduce the potentially detrimental impact that disruptive trading has on Sub-Account Investment Experience.  We also offer dollar cost averaging, an automated investment strategy that spreads out transfers over time to try to reduce the investment risks of market fluctuations.

Taxes

Unless you make a withdrawal, generally, you will not be taxed on any earnings of the policy.  This is known as tax deferral.  Also, the Beneficiary generally will not have to include the Death Benefit as taxable income.  Estate taxes will apply if the policy is transferred to an individual.

Assignment

You may assign the policy as collateral for a loan or another obligation while the Insured is alive.

Examination Right

For a limited time, you may cancel the policy and receive a refund.  When you cancel the policy during your examination right the amount we refund will be Cash Value or, in certain states, the greater of the initial Premium payment or the policy's Cash Value.  If the policy is canceled, we will treat the policy as if it was never issued.

In Summary: Policy Risks

Improper Use

Variable universal life insurance is not suitable as an investment vehicle for short-term savings.  It is designed for long-term financial planning.  You will incur fees at the time of purchase that may more than offset any favorable Investment Experience.  You should not purchase the policy if you expect that you will need to access its Cash Value in the near future.

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Unfavorable Investment Experience

The Sub-Accounts to which you choose to allocate Net Premium may not generate a sufficient return to keep the policy from Lapsing.  Poor Investment Experience could cause the Cash Value of your policy to decrease, which could result in a Lapse of insurance coverage.

Policy Component Allocations

There is an increased risk of Lapse in instances where there is too great an allocation to policy components A, B, or C, in conjunction with little or no renewal Premiums paid.

Effect of Partial Surrenders and Policy Loans on Investment Experience

Partial surrenders or policy loans may accelerate a Lapse.  A partial surrender will reduce the amount of Cash Value allocated among the Sub-Accounts you choose and the fixed account, too, if there is insufficient cash value in the Sub-Accounts.  Thus, the remainder of your policy's Cash Value would have to generate enough positive Investment Experience to cover policy and Sub-Account charges to keep the policy In Force (at least until you repay the policy loan or make another Premium payment).   Partial surrenders will also decrease the Death Benefit and Total Specified Amount.  Policy loans do not participate in positive Investment Experience; therefore loans may increase the risk of Lapse or the need to make additional Premium payments to keep the policy In Force.  The policy does have a Grace Period and the opportunity to reinstate insurance coverage.  Under certain circumstances, however, the policy could terminate without value and insurance coverage would cease.

Reduction of the Death Benefit

A partial surrender may decrease the policy’s Death Benefit, depending on how the Death Benefit relates to the policy’s Cash Value and whether the partial surrender qualifies as “Preferred.”

Adverse Tax Consequences

Existing federal tax laws that benefit this policy may change at any time.  These changes could alter the favorable federal income tax treatment the policy enjoys, such as the deferral of taxation on the gains in the policy's Cash Value and the exclusion from taxable income of the Proceeds we pay to the policy's Beneficiary.  Partial and full surrenders from the policy may be subject to taxes.  The income tax treatment of the surrender of Cash Value is different in the event the policy is treated as a modified endowment contract under the Code.  Generally, tax treatment of modified endowment contracts will be less favorable when compared to having the policy treated as a life insurance contract that is not a modified endowment contract.  For example, distributions and loans from modified endowment contracts may currently be taxed as ordinary income not a return of investment.  For more detailed information concerning the tax consequences of this policy please see the Taxes provision. For detailed information regarding tax treatment of modified endowment contracts, please see the Periodic Withdrawals, Non-Periodic Withdrawals and Loans section of the Taxes provision. Consult a qualified tax adviser on all tax matters involving your policy.

Fixed Account Transfer Restrictions and Limitations

In addition to allocating your Net Premium to one or more of the Sub-Accounts described above, you may direct part of your Net Premium into the fixed account.

Transfers to the fixed account.  You may transfer amounts between the fixed account and the Sub-Accounts, subject to limits, without penalty or adjustment.  Except as outlined in the “Exchanging the Policy Provisions,” we reserve the right to limit the allocations to the fixed account to no more than 25% of the Cash Value.

Transfers from the fixed account.  We reserve the right to limit you to one transfer from the fixed account to the Sub-Accounts during any ninety (90) day period.  We reserve the right to limit the amount that you may transfer during a policy year to the greater of:  (a) 15% of that portion of the Cash Value attributable to the fixed account at the end of the prior policy year, and (b) 120% of the amount transferred from the fixed account during the preceding policy year.

Sub-Account Limitations

Frequent trading among the Sub-Accounts may dilute the value of Accumulation Units, cause the Sub-Account to incur higher transaction costs, and interfere with the Sub-Accounts' ability to pursue their stated investment objectives.  This could result in lower Investment Experience and Cash Value.  We have instituted procedures to minimize disruptive transfers.  While we expect these procedures to reduce the adverse effect of disruptive transfers, we cannot ensure that we have eliminated these risks.

Sub-Account Investment Risk

A comprehensive discussion of the risks of the mutual funds held by each Sub-Account may be found in each mutual fund's prospectus.  Read each mutual fund's prospectus before investing.

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In Summary: Fee Tables

The following tables describe the fees and expenses that you will pay when buying, owning, and surrendering from the policy.  Fees in this table may be rounded to the hundredth decimal.  The first table describes the fees and expenses that you will pay at the time that you apply Premium to the policy.

Transaction Fees
Charge	When Charge is Deducted	Amount Deducted By Policy Component (A, B, C and D)
Premium Load(1) Target Premium Maximum(2) Current(3) Excess Premium Maximum Current	Upon making a Premium payment	A	B	C	D
		10% 10% 10% 2%	10% 10% 10% 2%	10% 8% 10% 2%	10% 0% 10% 0%
Illustration Charge(4) Maximum Current	Upon requesting an illustration	$25 (flat fee applies regardless of policy component configurations) $0 (flat fee applies regardless of policy component configurations)

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The next table describes the fees and expenses that you will pay periodically during the time that you own the policy, not including mutual fund operating expenses.  Unless otherwise specified, all charges are deducted proportionally from the Sub-Accounts and the fixed account.

Periodic Charges Other Than Mutual Fund Operating Expenses
Charge	When Charge is Deducted	Amount Deducted From Cash Value (deductions are separated by Policy Component A, B, C and D where applicable)
Deferred Premium Load(5) Target Premium Maximum Current(6) Excess Premium Maximum Current	On the anniversary of the Policy Date in policy years 2 through 5	A	B		C	D
		2% 2% 2% 0.5%	2% 0% 2% 0%		2% 0% 2% 0%	2% 0% 2% 0%
Base Policy Cost of Insurance(7) Maximum(8) Minimum Representative: an individual issue age 40, non-tobacco, in the tenth policy year, Death Benefit option 1, issued on a short-form, non-medical basis. Representative Cost by Policy Component Net Amount At Risk (9)	Monthly	A		B	C	D
		$83.33 per $1,000 of Net Amount At Risk. $0.03 per $1,000 of Net Amount At Risk. $0.33		$83.33 per $1,000 of Net Amount At Risk. $0.03 per $1,000 of Net Amount At Risk. $0.31	$83.33 per $1,000 of Net Amount At Risk. $0.03 per $1,000 of Net Amount At Risk. $0.32	$83.33 per $1,000 of Net Amount At Risk. $0.03 per $1,000 of Net Amount At Risk. $0.30

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Periodic Charges Other Than Mutual Fund Operating Expenses (Continued)
Supplemental Insurance Rider Cost of Insurance(10) Maximum (8) Minimum Representative: an individual issue age 40, non-tobacco, in the tenth policy year, issued on a short-form, non-medical basis. Representative Cost by Policy Component Net Amount at Risk(9)	Monthly	A	B		C			D
		$83.33 per $1,000 of Rider Net Amount at Risk. $0.02 per $1,000 of Rider Net Amount at Risk. $0.20	$83.33 per $1,000 of Rider Net Amount at Risk. $0.02 per $1,000 of Rider Net Amount at Risk. $0.24		$83.33 per $1,000 of Rider Net Amount at Risk. $0.02 per $1,000 of Rider Net Amount at Risk. $0.24			$83.33 per $1,000 of Rider Net Amount at Risk. $0.02 per $1,000 of Rider Net Amount at Risk. $0.15
Base Sub-Account Asset Factor Charge(11) (taken proportionally from the Sub-Accounts) Maximum Current(13)	Monthly, based on an annual rate(12)	A		B	C	D
		1.25% 0.30%		1.25% 0.25%	1.25% 0.25%		1.25% 0.60%
Supplemental Insurance Rider Sub-Account Asset Factor Charge(11) Maximum Current	Monthly, based on an annual rate(12)	A		B	C		D
		1.25% 0.20%		1.25% 0.16%	1.25% 0.16%		1.25% 0.30%
Base Policy Specified Amount Charge Maximum Current(14)	Monthly	$0.40 per $1,000 of Base Specified Amount. $0.30 per $1,000 of Base Specified Amount.
Supplemental Insurance Rider Specified Amount Charge Maximum Current(15)	Monthly(10)	$0.40 per $1,000 of Rider Specified Amount. $0.05 per $1,000 of Rider Specified Amount.

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Periodic Charges Other Than Mutual Fund Operating Expenses (Continued)
Administrative Charge Maximum Current	Monthly	$10 per policy. $5 per policy.
Policy Loan Interest Charge (16) Maximum Current	Annually, or on an increase or repayment of the loan	3.50% of Indebtedness. 2.80% of Indebtedness.(17)

Representative costs may vary from the cost you would incur.  Ask for an illustration for information on the costs applicable to your policy.

The next item shows the minimum and maximum total operating expenses, as of December 31, 2008, charged by the underlying mutual funds that you may pay periodically during the time that you own the policy.  More detail concerning each mutual fund's fees and expenses is contained in the mutual fund's prospectus.  Please contact us, at the telephone numbers or address on the first page of this prospectus, for free copies of the prospectuses for the mutual funds available under the policy.

Total Annual Mutual Fund Operating Expenses
Total Annual Mutual Fund Operating Expenses (expenses that are deducted from the mutual fund assets, including management fees, distribution (12b-1) fees, and other expenses)	Minimum 0.28%	Maximum 1.64%

(1) The Premium Load will vary according to the amount of annual Target Premium and Excess Premium, and the blending of the policy component configuration you select.

(2) The maximum guaranteed premium load applied to all policy components as a percentage of each Premium (whether Target Premium or Excess Premium) declines on the following schedule:

Policy Year	1	2 through 5	6 and thereafter
Premium Load	10%	8%	5%

(3) Each policy component has a different declining premium load assessed on each Premium payment in accordance with the table listed below.  The ultimate Premium Load you pay depends on your policy component configuration and whether Premium paid is Target Premium or Excess Premium.

Premium Loads on Target Premium

Policy Year	Policy Component A	Policy Component B	Policy Component C	Policy Component D
1	10%	10%	8%	0%
2	8%	8%	6%	0%
3	6%	6%	4%	0%
4	4%	4%	2%	0%
5	2%	2%	2%	0%
6 and thereafter	2%	2%	2%	0%

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Premium in excess of target is assessed a different Premium Load in accordance with the table below.

Premium Loads on Excess Premium

Policy Year	Policy Component A	Policy Component B	Policy Component C	Policy Component D
1	2%	2%	2%	0%
2 – 5	2%	2%	2%	0%
6 and thereafter	2%	2%	2%	0%

Target Premium is 100% of the maximum annual Premium allowed under the Internal Revenue Code assuming that: (i) the policy is not a modified endowment contract; (ii) the policy's death benefit is equal to the Base Specified Amount; (iii) you are paying seven level, annual Premiums; (iv) there are no premiums resulting from a Section 1035 exchange; and (v) there are no adjustments due to a state imposed requirement or substandard underwriting ratings.

(4) If we begin to charge for illustrations, you will be expected to pay the Illustration Charge by check at the time of the request.  This charge will not be deducted from the policy’s Cash Value.

(5) The Deferred Premium Load (maximum guaranteed and current) will vary according to the amount of aggregate Premium payments made in policy year 1, the amount of term insurance coverage purchased via the Supplemental Insurance Rider, and the policy component configurations you select.

(6) Each policy component has a different deferred premium load assessed on each Premium payment in accordance with the tables listed below.  The ultimate deferred premium load you pay depends on your policy component configuration and whether Premium paid is Target Premium or Excess Premium.

Deferred Premium Loads on Target Premium

Policy Year	Policy Component A	Policy Component B	Policy Component C	Policy Component D
1	0%	0%	0%	0%
2-5	2%	0%	0%	0%
6 and thereafter	0%	0%	0%	0%

Deferred Premium Loads on Excess Premium

Policy Year	Policy Component A	Policy Component B	Policy Component C	Policy Component D
1	0%	0%	0%	0%
2-5	0.5%	0%	0%	0%
6 and thereafter	0%	0%	0%	0%

(7) The Cost of Insurance Charge varies according to the Insured’s age, sex (if not unisex classified), tobacco use, Substandard Ratings, underwriting class, the number of years from the Policy Date, the Base Specified Amount, and the elected policy component configurations.  The Cost of Insurance Charge for coverage under the Supplemental Insurance Rider is different.

(8) The maximum Cost of Insurance does not include substandard rated policies.  For substandard rated policies, the maximum Cost of Insurance is $125.00 per $1,000 of Net Amount at Risk, taken proportionally from the Sub-Accounts and fixed account.

(9) This amount may not be representative of your cost.  Ask for a policy illustration for information on your cost.

(10) This charge will only be assessed if you purchase this optional rider.

(11) This charge is a charge assessed by us based on assets allocated to the Sub-Accounts and is in addition to any charges assessed by the mutual funds underlying the Sub-Accounts.

(12) The maximum guaranteed annual rate for this charge is 1.25%, but ultimate charges assessed may be higher or lower because the charge is taken monthly rather than annually.  Values in the table are listed at the annual rate. Maximum guaranteed annual and monthly rates are also shown on the Policy Data Pages.  A detailed table of annual rate charges is listed in the “Sub-Account Asset Charge” sub-section of the “Policy Charges” section of this prospectus.

(13) The Sub-Account Asset Charges vary according to the ratio of the Cash Value to the maximum annual Premium allowed under the Internal Revenue Code assuming that: (i) the policy is not a modified endowment contract; (ii) the policy's death benefit is equal to the Total Specified Amount; and (iii) seven level, annual Premiums are paid; (iv) there are no premiums resulting from a Section 1035

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exchange; and (v) there are no adjustments due to a state imposed requirement or substandard underwriting ratings.  The current charges shown here are the highest amounts we currently apply.  For details, see the Base Sub-Account Asset Charge sub-section of the “Policy Charge” section of this prospectus and the Rider Sub-Account Asset Charge sub-section of the “Policy Riders and Rider Charges” section of this prospectus.

(14) This charge is only assessed on the Base Specified Amount.  A different charge will be applied for any Rider Specified Amount under the Supplemental Insurance Rider.  For policy years 21 and later, the charge applied per $1,000 is reduced to $0.01 per $1,000 of Base Specified Amount.  For Total Specified Amount in excess of $50,000, the current charge applied to amounts attributable to Base Specified Amount per $1,000 for such excess amounts is $0.09 for policy years 1 through 20 and $0.01 for policy years 21 and later.

(15) This charge is only assessed on the Rider Specified Amount.  A different charge will be applied for any Base Specified Amount under the policy.  For policy years 21 and later, the charge applied per $1,000 is reduced to $0.01 per $1,000 of Rider Specified Amount.  For Total Specified Amount in excess of $50,000, the current charge applied per $1,000 for such excess amounts is $0.01 for all policy years.

(16) The current and maximum guaranteed charges shown do not reflect the interest that is credited to amounts in the Policy Loan Account.  When the interest charged is netted against the interest credited, the net cost of a policy loan is lower than that which is stated above.

(17) The current charge is reduced in policy years 16 through 30 to 2.55% and to 2.10% policy years 31 and later.

Policy Investment Options

You designate how your Net Premium payments are allocated among the Sub-Accounts and/or the fixed account.  Allocation instructions must be in whole percentages and must be at least one percent (1%) and the sum of the allocations must equal 100%.

Fixed Account

Net Premium that you allocate to the fixed investment option is held in the fixed account, which is part of our general account.  Except as provided in the “Exchanging the Policy” section later in this prospectus, we reserve the right to limit allocations to the fixed account to no more than 25% of the policy’s Cash Value.

The general account is not subject to the same laws as the separate account and the SEC has not reviewed the disclosures in this prospectus relating to the fixed account.

The general account contains all of our assets other than those in the separate accounts, and funds the fixed account.  These assets are subject to our general liabilities from business operations and are used to support our insurance and annuity obligations.  We bear the full investment risk for all amounts allocated to the fixed account.  The amounts you allocate to the fixed account will not share in the investment performance of our general account.  Rather, the investment income you earn on your allocations will be based on varying interest crediting rates that we set.

We guarantee that the amounts you allocate to the fixed account will be credited interest daily at a net effective annual interest rate of no less than 2%.  Interest crediting rates are set at the beginning of each calendar month, but are subject to change at any time, in our sole discretion.  We will credit any interest in excess of the guaranteed interest crediting rate at our sole discretion.  You assume the risk that the actual interest crediting rate may not exceed the guaranteed interest crediting rate.  Interest that we credit to the fixed account may be insufficient to pay the policy’s charges.

Variable Investment Options

The variable investment options available under the policy are Sub-Accounts that correspond to mutual funds that are registered with the SEC.  The mutual funds' registration with the SEC does not involve the SEC's supervision of the management or investment practices or policies of the mutual funds.  The mutual funds listed are designed primarily as investments for variable annuity contracts and variable life insurance policies issued by insurance companies.

Underlying mutual funds in the variable account are NOT publicly traded mutual funds.  They are only available as investment options in variable life insurance policies or variable annuity contracts issued by life insurance companies, or in some cases, through participation in certain qualified pension or retirement plans.

The investment advisers of the underlying mutual funds may manage publicly traded mutual funds with similar names and investment objectives.  However, the underlying mutual funds are NOT directly related to any publicly traded mutual fund.  Policy owners should not compare the performance of a publicly traded fund with the performance of underlying mutual funds participating in the separate account.  The performance of the underlying mutual funds could differ substantially from that of any publicly traded funds.

The particular underlying mutual funds available under the policy may change from time to time.  Specifically, underlying mutual funds or underlying mutual fund share classes that are currently available may be removed or closed off to future investment.  New underlying mutual funds or new share classes of currently available underlying mutual funds may be added.  Policy owners will

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receive notice of any such changes that affect their contract.  Additionally, not all of the underlying mutual funds are available in every state.

In the future, additional underlying mutual funds managed by certain financial institutions, brokerage firms or their affiliates may be added to the separate account.  These additional underlying mutual funds may be offered exclusively to purchasing customers of the particular financial institution or brokerage firm, or through other exclusive distribution arrangements.

Each Sub-Account’s assets are held separately from the assets of the other Sub-Accounts, and each Sub-Account portfolio has investment objectives and policies that are different from those of the other Sub-Accounts.  The result is that each Sub-Account operates independently of the other Sub-Accounts so the income or losses of one Sub-Account will not affect the Investment Experience of any other Sub-Account.  For purposes of federal securities laws, the separate account is, and will remain, fully funded at all times.

The Sub-Accounts available through this policy invest in the underlying mutual funds of the companies listed below.  For a complete list of the available Sub-Accounts, please refer to “Appendix A: Sub-Account Information.”  For more information on the underlying mutual funds, please refer to the prospectus for the mutual fund.

AIM Variable Insurance Funds

AllianceBernstein Variable Products Series Fund, Inc.

American Century Variable Portfolios, Inc.

American Funds Insurance Series

BlackRock Variable Series Funds, Inc.

Davis Variable Account Fund, Inc.

Dreyfus

Dreyfus Investment Portfolios

Dreyfus Variable Investment Fund

DWS Variable Series II

Federated Insurance Series

Fidelity Variable Insurance Products Fund

Franklin Templeton Variable Insurance Products Trust

Ivy Funds Variable Insurance Portfolios, Inc.

Janus Aspen Series

Legg Mason Partners Variable Equity Trust

Lincoln Variable Insurance Products

Lord Abbett Series Fund, Inc.

MFS® Variable Insurance Trust

MFS® Variable Insurance Trust II

Nationwide Variable Insurance Trust

Neuberger Berman Advisers Management Trust

Oppenheimer Variable Account Funds

PIMCO Variable Insurance Trust

Pioneer Variable Contracts Trust

Putnam Variable Trust

Royce Capital Fund

T. Rowe Price Equity Series, Inc.

The Universal Institutional Funds, Inc.

Van Eck Worldwide Insurance Trust

Wells Fargo Advantage Funds® Variable Trust

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Valuation of Accumulation Units

We account for the value of your interest in the Sub-Accounts by using Accumulation Units.  The number of Accumulation Units associated with a given Premium allocation is determined by dividing the dollar amount of Net Premium you allocated to the Sub-Account by the Accumulation Unit value for the Sub-Account, which is determined at the end of the Valuation Period that the allocation was received.  The value of each Accumulation Unit varies daily based on the Investment Experience of the mutual fund in which the Sub-Account invests.

On each day that the New York Stock Exchange (“NYSE”) is open, each of the mutual funds in which the Sub-Accounts invest will determine its Net Asset Value (“NAV”) per share.  We use each mutual fund's NAV to calculate the daily Accumulation Unit value for the corresponding Sub-Account.  Note, however, that the Accumulation Unit value will not equal the mutual fund's NAV.  This daily Accumulation Unit valuation process is referred to as “pricing” the Accumulation Units.

We will price Accumulation Units on any day that the NYSE is open for business.  Any transaction that you submit on a day when the NYSE is closed will not be effective until the next day that the NYSE is open for business.  Accordingly, we will not price Accumulation Units on these recognized holidays:

●New Year's Day	●Independence Day
●Martin Luther King, Jr. Day	●Labor Day
●Presidents’ Day	●Thanksgiving
●Good Friday	●Christmas
●Memorial Day

In addition, we will not price Accumulation Units if:

(1)   trading on the NYSE is restricted;

(2)   an emergency exists making disposal or valuation of securities held in the separate account impracticable; or

(3)   the SEC, by order, permits a suspension or postponement for the protection of security holders.

SEC rules and regulations govern when the conditions described items (2) and (3) exist.

Any transactions that we receive after the close of the NYSE will be effective as of the next Valuation Period that the NYSE is open.

How Sub-Account Investment Experience is Determined

The value of the Accumulation Units in your policy will vary daily depending on the Investment Experience of the mutual fund in which the Sub-Account invests.  We account for these performance fluctuations by using a “net investment factor,” as described below, in our daily Sub-Account valuation calculations.  Changes in the net investment factor may not be directly proportional to changes in the NAV of the mutual fund shares.

We determine the net investment factor for each Sub-Account on each Valuation Period by dividing (a) by (b), where:

(a) is the sum of:

·   the NAV per share of the mutual fund held in the Sub-Account as of the end of the current Valuation Period; and

·   the per share amount of any dividend or income distributions made by the mutual fund (if the date of the dividend or income distribution occurs during the current Valuation Period); plus or minus

·   a per share charge or credit for any taxes reserved for as a result of the Sub-Account's investment operations if changes to the law result in a modification to the tax treatment of the separate account; and

(b) is the NAV per share of the mutual fund determined as of the end of the immediately preceding Valuation Period.

At the end of each Valuation Period, we determine the Sub-Account's Accumulation Unit value.  The Accumulation Unit value for any Valuation Period is determined by multiplying the Accumulation Unit value as of the prior Valuation Period by the net investment factor for the Sub-Account for the current Valuation Period.

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Transfers Among and Between the Policy Investment Options

Sub-Account Transfers

Policy owners may request transfers to or from the Sub-Accounts once per valuation day, subject to the terms and conditions of the policy and the mutual funds.

Neither the policies nor the mutual funds are designed to support active trading strategies that require frequent movement between or among Sub-Accounts (sometimes referred to as “market-timing” or “short-term trading”).  If you intend to use an active trading strategy, you should consult your registered representative and request information on other Nationwide policies that offer mutual funds that are designed specifically to support active trading strategies.

We discourage (and will take action to deter) short-term trading in this policy because the frequent movement between or among Sub-Accounts may negatively impact other investors in the policy.  Short-term trading can result in:

·   the dilution of the value of the investors' interests in the mutual fund;

·   mutual fund managers taking actions that negatively impact performance (i.e., keeping a larger portion of the mutual fund assets in cash or liquidating investments prematurely in order to support redemption requests); and/or

·   increased administrative costs due to frequent purchases and redemptions.

To protect investors in this policy from the negative impact of these practices, we have implemented, or reserve the right to implement, several processes and/or restrictions aimed at eliminating the negative impact of active trading strategies.  We cannot guarantee that our attempts to deter active trading strategies will be successful.  If active trading strategies are not successfully deterred by our actions, the performance of Sub-Accounts that are actively traded will be adversely impacted. Policy owners remaining in the affected Sub-Account will bear any resulting increased costs.

Policies Owned by Non-Natural Persons.  For policies owned by a corporation or another legal entity, we monitor transfer activity for potentially harmful investment practices, but we do not systematically monitor the transfer instructions of individual persons.  Our procedures include the review of aggregate entity-level transfers, not individual transfer instructions.  It is our intention to protect the interests of all policy owners.  It is possible, however, for some harmful trading to go on undetected by us.  For example, in some instances, an entity may make transfers based on the instructions of multiple parties such as employees, partners, or other affiliated persons based on those persons participation in entity sponsored programs.  We do not systematically monitor the transfer instructions of these individual persons.  We monitor aggregate trades among the Sub-Accounts for frequency, pattern, and size.  If two or more transfer events are submitted within a 30-day period, we may impose conditions on your ability to submit trades.  These restrictions include revoking your privilege to make trades by any means other than written communication submitted via U.S. mail for a 12-month period.

Other Restrictions.  We reserve the right to refuse, restrict or limit transfer requests, or take any other action we deem necessary, in order to protect policy owners and beneficiaries from the negative investment results that may result from short-term trading or other harmful investment practices employed by some policy owners (or third parties acting on their behalf).  In particular, trading strategies designed to avoid or take advantage of Nationwide's monitoring procedures (and other measures aimed at curbing harmful trading practices) that are nevertheless determined by us to constitute harmful trading practices, may be restricted.

In addition, we may add new underlying mutual funds, or new share classes of currently available underlying mutual funds, that assess short-term trading fees.  In the case of new share class additions, your subsequent allocations may be limited to that new share class.  Short-term trading fees are a charge assessed by an underlying mutual fund when you transfer out of a Sub-Account before the end of a stated period.  These fees will only apply to Sub-Accounts corresponding to underlying mutual funds that impose such a charge.  The underlying mutual fund intends short-term trading fees to compensate the fund and its shareholders for the negative impact on fund performance that may result from disruptive trading practices, including frequent trading and short-term trading (market timing) strategies.  The fees are not intended to adversely impact policy owners not engaged in such strategies.  The separate account will collect the short-term trading fees at the time of the transfer by reducing the policy owner’s Sub-Account value.  We will remit all such fees to the underlying mutual fund.

Any restrictions that we implement will be applied consistently and uniformly.  In the event a restriction we impose results in a transfer request being rejected, we will notify you that your transfer request has been rejected.  If a short-term trading fee is assessed on your transfer, we will provide you a confirmation of the amount of the fee assessed.

Underlying Mutual Fund Restrictions and Prohibitions.  Pursuant to regulations adopted by the SEC, we are required to enter into written agreements with the underlying mutual funds which allow the underlying mutual funds to:

(1)   request the taxpayer identification number, international taxpayer identification number, or other government issued identifier of any of our policy owners;

(2)   request the amounts and dates of any purchase, redemption, transfer or exchange request (“transaction information”); and

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(3)   instruct us to restrict or prohibit further purchases or exchanges by policy owners that violate policies established by the underlying mutual fund (whose policies may be more restrictive than our policies).

We are required to provide such transaction information to the underlying mutual funds upon their request.  In addition, we are required to restrict or prohibit further purchases or exchange requests upon instruction from the underlying mutual fund.

We and any affected policy owner may not have advance notice of such instructions from an underlying mutual fund to restrict or prohibit further purchases or exchange requests.  If an underlying mutual fund refuses to accept a purchase or exchange request submitted by us, we will keep any affected policy owner in their current underlying mutual fund allocation.

Fixed Account Transfers

Prior to the policy’s Maturity Date, you may make transfers involving the fixed account subject to the limits below, without penalty or adjustment.  These transfers will be in dollars.  We reserve the right to limit the frequency of transfers involving the fixed account.

Transfers to the Fixed Account.  Except as provided in the “Exchanging the Policy” section later in this prospectus for transfers tothe fixed account, we reserve the right to refuse any transfer to the fixed account if after such transfer, the fixed account would comprise more than 25% of the policy’s Cash Value.

Transfers from the Fixed Account.  On transfers fromthe fixed account, we reserve the right to limit: (1) the amount you can transfer from the fixed account to the Sub-Account(s) to the greater of: (a) 15% of that portion of the Cash Value attributable to the fixed account as of the end of the previous policy year; or (b) 120% of the amount transferred from the fixed account during the previous policy year; and (2) the number of transfers to one during any ninety day period.

Submitting a Transfer Request

You can submit transfer requests in writing to our Home Office via first class U.S. mail. Our contact information is on the first page of this prospectus.  When we have received your transfer request we will process it at the end of the current Valuation Period.  This is when the Accumulation Unit value will be next determined.  We may also allow you to use other methods of communication, subject to limitations.

In instances of disruptive trading that we may determine, or may have already determined to be harmful to policy owners, we will, through the use of appropriate means available to us, attempt to curtail or limit the disruptive trading.  If your trading activities, or those of a third party acting on your behalf, constitute disruptive trading, we will not limit your ability to initiate the trades as provided in your policy; however, we may limit your means for making a transfer or take other action we deem necessary to protect the interests of those investing in the affected Sub-Accounts.  Please see “Sub-Account Transfers” earlier in this prospectus.

We will use reasonable procedures to confirm that transfer instructions are genuine and will not be liable for following instructions that we reasonably determine to be genuine.

Any computer system or telephone can experience slowdowns or outages that could delay or prevent our ability to process your request.  Although we have taken precautions to help our systems handle heavy usage, we cannot promise complete reliability under all circumstances.  If you are experiencing problems, please make your transfer request in writing.

The Policy

Generally

The policy is a legal contract.  It will comprise and be evidenced by: a written contract; any Riders; any endorsements; the Policy Data Page(s); and the application, including any supplemental application.  The benefits described in the policy and this prospectus, including any optional riders or modifications in coverage, may be subject to our underwriting and approval.  We will consider the statements you make in the application as representations, and we will rely on them as being true and complete.  However, we will not void the policy or deny a claim unless a statement is a material misrepresentation.  If you make an error or misstatement on the application, we will adjust the Death Benefit (including the Supplemental Insurance Rider Death Benefit, if applicable) and Cash Value accordingly.

Operation of the policy, optional Riders, programs, benefits and features described in this prospectus may vary by the state where the policy is issued.  In addition, some optional Riders, programs and features may not be available or approved for use in every state.  For additional information regarding availability and provisions that vary by state, please see "Appendix D: State Variations" later in this prospectus.

Any modification (or waiver) of our rights or requirements under the policy must be in writing and signed by our president and corporate secretary.  No agent may bind us by making any promise not contained in the policy.

We may modify the policy, our operations, or the separate account’s operations to meet the requirements of any law (or regulation issued by a government agency) to which the policy, our company, or the separate account is subject.  We may modify the policy to assure that it continues to qualify as a life insurance contract under the federal tax laws.  We will notify you of all modifications and we will make appropriate endorsements to the policy.

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The policy is nonparticipating, meaning that we will not be contributing any operating profits or surplus earnings toward the policy Proceeds.

To the extent permitted by law, policy benefits are not subject to any legal process on the part of a third-party for the payment of any claim, and no right or benefit will be subject to the claims of creditors (except as may be provided by assignment).

In order to comply with the USA Patriot Act and rules promulgated thereunder, Nationwide has implemented procedures designed to prevent policies described in this prospectus from being used to facilitate money laundering or the financing of terrorist activities.

Nationwide is relying on the exemption in Rule 12h-7 of the Securities Exchange Act of 1934 (the “’34 Act”) relating to its duty to file reports otherwise required by Sections 15(d) and 13(a) of the ‘34 Act.

Policy Owner and Beneficiaries

Policy Owner.  The policy belongs to the Owner named in the application or as a result of a valid assignment.  The purchaser and initial Owner must be: (i) a corporation; or (ii) a legal entity established by a corporation.  The Insured is the person named in the application.  The Owner must have an insurable interest in the Insured up to the full amount of coverage.  Otherwise, this policy will not qualify as life insurance under applicable state and federal tax law.  You should consult with a qualified adviser when determining the amount of coverage and before taking any action to increase the amount of coverage to ensure that you maintain a sufficient insurable interest.

The Owner may exercise all policy rights and options while the Insured is alive and may change the policy to the extent permitted by its terms.

You may name a different policy owner (while the Insured is alive) by submitting a written request satisfactory to us to our Home Office.  Any such change request will become effective as of the date signed.  However, it will not affect any payment made or action taken by us before the change was recorded by us.  There may be adverse tax consequences to changing parties of the policy.  We reserve the right to modify the Enhancement Benefit if a new Owner is named.

Beneficiaries.  The principal right of a Beneficiary is to receive the Death Benefit upon the Insured's death.  You designate the Beneficiary(ies) in the application for the policy.  As long as the Insured is alive, you may: name more than one Beneficiary, designate primary and contingent Beneficiaries, and change or add Beneficiaries and direct us to distribute Proceeds other than described below.

If a primary Beneficiary dies before the Insured, we will pay the Death Benefit to any surviving primary Beneficiaries.  Unless you specify otherwise, we will pay multiple primary Beneficiaries in equal shares.  A contingent Beneficiary will become the primary Beneficiary if all primary Beneficiaries die before the Insured and before any Proceeds become payable.  You may name more than one contingent Beneficiary.  Unless you specify otherwise, we will also pay multiple contingent Beneficiaries in equal shares.  If no Beneficiary or contingent Beneficiary is alive upon the Insured’s death, we will pay the Death Benefit to you.

To change or add Beneficiaries, you must submit a written request to us at our Home Office.  A change request is effective as of the date we record it. We may also require that you send us your policy for endorsement before we record the change.

Purchasing a Policy

The policy is available for Insureds between the ages of 18 and 79 (ages may vary in your state).  To purchase the policy, you must submit to us a completed application and the minimum initial Premium payment as stated on the Policy Data Page.

We must receive evidence of insurability that satisfies our underwriting standards (this may require a medical examination) before we will issue a policy.  Because this is Corporate Owned Variable Universal Life Insurance, we may also underwrite at a corporate level to determine whether or not the risks and expenses associated with the insurance applied for (including policy component configurations) is appropriate for us to assume in placing the policy.  We can provide you with the details of our underwriting standards.  We reserve the right to reject an application for any reason permitted by law.  Specifically, if we have previously issued you policies that have aggregate scheduled annual premiums in excess of $15 million, we reserve the right to refuse to issue an additional policy to you.  Additionally, we reserve the right to modify our underwriting standards on a prospective basis to newly issued policies at any time.

The minimum initial Total Specified Amount in most states is $50,000.  We reserve the right to modify the minimum Total Specified Amount on a prospective basis to newly issued policies at any time.

Initial Premium Payment:  The initial Premium payment is due on the Policy Date.  Any due and unpaid policy charges will be subtracted from the initial Premium payment.  Insurance coverage will not be effective until the initial Premium is paid, even if the Policy Date precedes the date the initial Premium is paid.  You may pay the initial Premium to our Home Office or to our authorized representative.  The minimum initial Premium payment is shown on the Policy Data Page.  The initial Premium payment will not be applied to the policy until the underwriting process is complete.

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The amount of your required minimum initial Premium payment will depend on the following factors: the initial Total Specified Amount, Death Benefit option elected, any Riders elected, the policy component allocation you select, the Insured's age, health, and activities.

Depending on the right to examine law of the state in which you live, initial Net Premium designated to be allocated to the Sub-Accounts may not be so allocated immediately upon our receipt.  (Any initial Net Premium designated to be allocated to the fixed account will be so allocated immediately upon receipt.)  If you live in a state that requires us to refund the initial Premium upon exercise of the free look provision, we will hold all of the initial Net Premium designated to be allocated to the Sub-Accounts in the available money market Sub-Account or in the fixed account until the free look period expires.  At the expiration of the free look period, we will transfer the amount designated to be allocated to the Sub-Accounts to the Sub-Accounts based on the allocation instructions in effect at the time of the transfer.  If you live in a state that requires us to refund the Cash Value upon exercise of the free look provision, we will allocate all of the initial Net Premium to the available money market Sub-Account.  On the next Valuation Period, we will allocate all of the Cash Value to the designated Sub-Accounts based on the allocation instructions in effect at that time.

Insurance Coverage Effective Date:  Unless your policy is issued pursuant to an exchange under Section 1035 of the Code, issuance of full insurance coverage occurs on the latest of:

·   the date we certify that the complete application materials have been submitted by the Owner and the underwriting conditions have been satisfied; or

·   the Policy Date; or

·   the date the initial Premium is received at our Home Office.

If your policy is issued as a result of an exchange under Section 1035 of the Code, issuance of full insurance coverage occurs on the later of:

·   the date the insurance carrier of the exchanged policy authorizes payment of such policy’s proceeds to us; or

·   the date we certify that the complete application materials have been submitted and the underwriting conditions have been satisfied, provided there is sufficient Premium to pay policy charges for at least 3 months.

We have the right to reject any application for insurance; in which case we will return your Premium within 2 business days of the date we make the decision to reject your application.

With respect to policy reinstatement, the effective date of coverage will be the monthly anniversary of the Policy Date on or next following the date we approve the reinstatement.  With respect to Base Specified Amount or Rider Specified Amount increases, an approved increase will have an effective date of the monthly anniversary of the Policy Date on or next following the date we approve the supplemental application unless you request, and we approve a different date.With respect to any decrease in coverage, the effective date of coverage will be the monthly anniversary of the Policy Date that falls on or next following the date we receive your request.

Insurance coverage will end upon the occurrence of any of the following: you request in writing to terminate coverage, the Insured dies, we pay the Maturity Proceeds, the Grace Period ends, or you surrender the policy in full.

Right to Cancel (Examination Right)

For a limited time, commonly referred to as the “free look” period, you may cancel the policy and receive a refund.    The free look period expires on the latest of: (i) 10 days after you receive the policy (or longer if required by state law); (ii) 45 days after you sign the application for this policy; or (iii) 10 days after we deliver to you a “Notice of Withdrawal Right.” If you decide to cancel during the free look period, return the policy to the sales representative who sold it, or to us at our Home Office, along with your written cancellation request. Your written request must be received, if returned by means other than U.S. mail, or post-marked, if returned by U.S. mail, by the last day of the free look period.  When you cancel the policy during the free look period the amount we refund will be Cash Value or, in certain states, the greater of the initial Premium payment or the policy's Cash Value.  If we do not receive your policy at our Home Office on the close of business on the date the free look period expires, you will not be allowed to cancel your policy free of charge.  Within seven days of a cancellation request, we will refund the amount prescribed by law.  If the policy is canceled, we will treat the policy as if it was never issued.

Premium Payments

This policy does not require a payment of a scheduled Premium amount to keep it In Force.  It will remain In Force as long as the conditions that cause a policy to Lapse do not exist.  If you decide to make a subsequent Premium payment, you must send it to our Home Office.  Each Premium payment must be at least $25.  We will furnish Premium payment receipts.

You may make additional Premium payments at any time while the policy is In Force, subject to the following:

·   We may require satisfactory evidence of insurability before accepting any additional Premium payment that results in an increase in the policy’s Net Amount At Risk.

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·   We will refund Premium payments that exceed the applicable premium limit established by the IRS to qualify the policy as a contract for life insurance. We will monitor Premiums paid and will notify you when the policy is in jeopardy of becoming a modified endowment contract.

Premium payments will be allocated according to the allocation instructions in effect at the time the Premium is received.

Cash Value

The Cash Value of the policy is not guaranteed.  The Cash Value will vary depending on how you allocate your Net Premium.  Amounts allocated to the fixed account and Policy Loan Account vary based on the daily crediting of interest to those accounts.  Amounts allocated to the Sub-Accounts vary daily based on the Investment Experience.  The Cash Value will also vary because we deduct the policy's periodic charges from it, as described below.  So, if the policy's Cash Value is part of the Death Benefit option you have chosen, then your Death Benefit will fluctuate.

We compute the Cash Value of your policy by adding the following values:

1.   Accumulation Unit values resulting from the Net Premium you have allocated to the fixed investment option:

2.   amounts held in the Policy Loan Account; and

3.   Accumulation Unit values resulting from Net Premium you have allocated to the Sub-Accounts.

In the event of surrender of your policy, the value of the Policy Loan Account on the date of surrender will be subtracted from proceeds.

We will determine the value of the assets in the Sub-Accounts at the end of each Valuation Period.  We will determine your Cash Value at least monthly. To determine the number of Accumulation Units credited to each Sub-Account, we divide the net amount you allocate to the Sub-Account by the Accumulation Unit value for the Sub-Account (using the next Valuation Period following when we receive the Premium).

If you surrender part or all of the policy, we will deduct a number of Accumulation Units from the Sub-Accounts and, if necessary, an amount from the fixed account that corresponds to the surrendered amount.  Thus, your policy’s Cash Value will be reduced by the surrendered amount.

Similarly, when we assess certain charges or deductions, a number of Accumulation Units from the Sub-Accounts and an amount from the fixed account that corresponds with the charge or deduction will be deducted from the Cash Value.  Unless you direct otherwise, we make these deductions in the same proportion that your interests in the Sub-Accounts and the fixed account bear to the policy’s Cash Value.

The Cash Value in the fixed account and the Policy Loan Account are credited with interest daily at the guaranteed minimum annual effective rate stated on the Policy Data Page.  We may decide to credit interest in excess of the guaranteed minimum annual effective rate.  Upon request, we will inform you of the current applicable rates for each account.

On any date during the policy year, the Cash Value equals the Cash Value on the preceding Valuation Period, plus any Net Premium applied since the previous Valuation Period, minus any monthly deductions for policy charges, plus or minus any Investment Experience, and minus any partial surrenders.

The Cash Value will be impacted by the monthly deductions.  For each month, beginning on the Policy Date, the monthly deductions shall be calculated as:

1.Sub-Account Asset Charge; plus

2.Administrative Charge; plus

3.Base Specified Amount Charge, plus

4.   Deferred Premium Load (only applied during years 2 through 5 to the monthly deduction associated with the Policy Anniversary in those years); plus

5.the monthly cost of any additional benefits provided by any Riders; plus

6.Base Policy Cost of Insurance.

Enhancement Benefit

An Enhancement Benefit is included in the policy and is added to the Cash Value when there is a complete surrender of the policy but is not applied to 1035 exchanges, policy loans and partial surrenders.  The Enhancement Benefit is essentially a partial return of policy charges assessed.  In most instances, the Enhancement Benefit will not exceed the sum of all charges assessed on the policy.

The purpose of the Enhancement Benefit is to allow the policy during earlier years to more closely track the corporate liability it is intended to off-set.  This is accomplished by lowering the cost associated with a surrender in early policy years.

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The minimum Enhancement Benefit available in policy year 1 equals 0.10% of Premium in policy year 1.  The Enhancement Benefit will vary based on the following:

·   sex (if not unisex classified) of the Insured;

·   the elapsed time since the Policy Date;

·   Investment Experience;

·   the charges assessed to the policy;

·   the policy component configurations you select;

·   the pattern of renewal Premium payments you make.

The Enhancement Benefit may increase or decrease by policy year, but it is designed to decline to zero at the end of its scheduled duration, which is ten (10) years.  If the Supplemental Insurance Rider is in effect, the Enhancement Benefit is reduced.  The Supplemental Insurance Rider reduces the Enhancement Benefit because the lower charges associated with the Rider result in less of an enhancement required to off-set early policy year costs associated with surrender.

The Enhancement Benefit is paid from our General Account at the time the policy is completely surrendered.  We reserve the right to postpone payment of the Enhancement Benefit for up to six (6) months from the date of your surrender request.

Changing the Amount of Base Policy Insurance Coverage

You may request to change the Base Specified Amount.  Changes to the Base Specified Amount will typically alter the Death Benefit.  For more information, see “Changes in the Death Benefit Option,” beginning on page 37. Changes may result in additional charges.  We reserve the right to limit the number of changes to the Base Specified Amount to one (1) each policy year.

Increases.  To increase the Base Specified Amount, you must submit a written request to our Home Office and you must provide us with evidence of insurability that satisfies our underwriting standards.  In most instances we do not medically underwrite, but we will medically underwrite under certain circumstances, such as a request for a large increase in Base Specified Amount.  Any request to increase the Base Specified Amount must be for at least $10,000 and the Base Specified Amount after the increase may not exceed the Maximum Death Benefit.  We always apply requests to increase Base Specified Amount in proportion it bears to Total Specified Amount.  This means if you have the Supplemental Insurance Rider, all increases will be done proportionally between your Base Specified Amount and Rider Specified Amount.  You may not elect how to allocate increases in Total Specified Amount after the Policy Date.  The Insured must be between 18 and 79 years old at the time of the request and after the increase, the Cash Surrender Value must be sufficient to keep the policy In Force for at least 3 months.  An increase in the Base Specified Amount may cause an increase in the Net Amount At Risk.  Because the Cost of Insurance Charge is based on the Net Amount At Risk, and because there will be a separate cost of insurance rate for the increase, this will usually cause the policy's Cost of Insurance Charge to increase.  An increase in Base Specified Amount may require you to make larger or additional Premium payments in order to avoid Lapsing the policy.  Increases will be allocated among the policy components in the same manner as the most recent increase (in the absence thereof, in accordance with the original policy), unless an alternative allocation is specifically requested and approved by us.  Approved increases to the Base Specified Amount will become effective on the next monthly anniversary of the Policy Date after we approve the supplemental application unless you request, and we approve, a different date.

Decreases.  You may request to decrease the Base Specified Amount at any time after the first policy year.  We apply Base Specified Amount decreases to the most recent Base Specified Amount increase, and continue applying the decrease backwards, ending with the original Base Specified Amount.  The decreases will be applied in the same allocation of policy components that exists in the insurance being decreased, unless an alternative allocation is specifically requested and approved by us.  Decreases to the Base Specified Amount may decrease the Base Policy Cost of Insurance Charges and the Base Specified Amount Charges, depending on the Death Benefit option elected and the amount of the Cash Value.

We will deny any request to reduce the Base Specified Amount below the minimum Total Specified Amount shown on the Policy Data Page.  We will also deny any request that would disqualify the policy as a contract for life insurance.  To decrease the Base Specified Amount, you must submit a request to our Home Office.

The Minimum Required Death Benefit

The policy has a Minimum Required Death Benefit.  The Minimum Required Death Benefit is the lowest Death Benefit that will qualify the policy as life insurance under Section 7702 of the Code.

The tax tests for life insurance generally require that the policy have a significant element of life insurance and not be primarily an investment vehicle.  At the time we issue the policy, you irrevocably elect one of the following tests to qualify the policy as life insurance under Section 7702 of the Code:

·   the cash value accumulation test; or

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·   the guideline premium/cash value corridor test.

The cash value accumulation test will always result in a Death Benefit that is lower in the early years and higher in the later years when compared to the guideline premium/cash value corridor test.  The guideline premium/cash value corridor test tends to produce a more favorable return if you are paying three or fewer premiums.  If you pay Premium in excess of the 7 pay Premium in a given year, then it could cause the policy to become a modified endowment contract.  If you do not elect a test, we will assume that you intended to elect the cash value accumulation test.

The cash value accumulation test determines the Minimum Required Death Benefit by multiplying the Cash Value by a percentage described in the federal tax regulations.  The percentages depend upon the Insured's age, sex (if not unisex classified) and underwriting classification.  Under the cash value accumulation test, there is no limit to the amount that may be paid in Premiums as long as there is sufficient Death Benefit in relation to the Cash Value at all times.

The guideline premium/cash value corridor test determines the Minimum Required Death Benefit by comparing the Death Benefit to an applicable percentage of the Cash Value.  These percentages are set out in the Code, but the percentage varies only by the Attained Age of the Insured.

Regardless of which test you elect, we will monitor compliance to ensure that the policy meets the statutory definition of life insurance for federal tax purposes.  As a result, the Death Benefit payable under the policy should be excludable from gross income of the Beneficiary for federal income tax purposes.  We may refuse additional Premium payments or return Premium payments to you so that the policy continues to meet the Code's definition of life insurance.

Exchanging the Policy

At any time within the first 24 months of coverage from the Policy Date, you have a right to irrevocably elect to transfer 100% of the policy's Cash Value to the fixed account, irrespective of our right to limit transfers to the fixed account.  After this election, your policy will no longer participate in the Investment Experience of the Sub-Accounts.  Rather, the policy's Cash Value will be credited with the fixed account's interest rate.  To invoke this right, you must submit your request to our Home Office on our specified forms.

In addition to your right to transfer the policy’s Cash Value to the fixed account, you also have the right to exchange the policy for another policy issued by us that is not a variable insurance policy.  To make an exchange with us you will surrender this policy and use its Cash Surrender Value to purchase the new policy we underwrite on the Insured’s life, subject to: (i) our approval; (ii) our right to not permit an exchange for 24 months after the policy is issued; (iii) the Insured (a) satisfies our underwriting standards of insurability and (b) you pay all costs associated with the exchange.  You may transfer Indebtedness to the new policy.

To invoke this right, you must submit your exchange request to our Home Office on our specified forms.  The policy must be In Force and not in a Grace Period.  The exchange may have tax consequences.  The new policy will take effect on the exchange date only if the Insured is alive.  This policy will terminate when the new policy takes effect.

Terminating the Policy

There are several ways that the policy can terminate.  All coverage under your policy will terminate when any one of the following events occurs:

·   we receive your written request to our Home Office to terminate coverage;

·   the Insured dies;

·   the Insured is alive on the Maturity Date (and you elect not to extend the Maturity Date);

·   the policy Lapses; or

·   you surrender the policy for its Cash Surrender Value (which may result in adverse tax consequences).

Assigning the Policy

You may assign any or all rights under the policy while the Insured is alive, subject to our approval.  If you do, your Beneficiary’s interest will be subject to the person(s)/entity(ies) to whom you have assigned such rights.  Your assignment must be in a form satisfactory to us and must be recorded at our Home Office before it will become effective.  Your assignment will be subject to any outstanding Indebtedness.  If the assignment qualifies as an exchange under Section 1035 of the Code, there shall be no Enhancement Benefit applied.  An assignment is effective as of the date we record it.  We shall not be responsible for the sufficiency or validity of any assignment.

Reports and Illustrations

We will send you transaction confirmations.  We will also send you an annual report that shows:

·   the Total Specified Amount;

·   Premiums paid;

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·   all charges since the last report;

·   the current Cash Value;

·   the Cash Surrender Value; and

·   Indebtedness.

The report will also include any other information required by laws and regulations, both federal and state.  We will send these reports to the address you provide on the application unless directed otherwise.  At any time you may ask for an illustration of future benefits and values under the policy.  We reserve the right to assess a charge for illustrations.

Policy Charges

We will take deductions from Premium payments and/or the Cash Value, as applicable, to compensate us for the services and benefits we provide, the costs and expenses we incur, and the risks we assume.  We may generate a profit from any of the charges assessed under the policy.  We begin to deduct monthly charges from your policy's Cash Value on the Policy Date.  If you have a policy loan, a complete description of how interest credited and charged results in costs to you is described in the Policy Loans section of this prospectus.

The charges reflect the costs and risks associated with your policy. Each Insured is assigned to an underwriting class based upon his/her age, sex (if not unisex classified), smoker status, type of evidence of insurability, and insurability status.  In evaluating and underwriting the corporate or legal entity purchasing the Policy, and setting cost of insurance charges, we may take into account several factors, including the purpose for which the Policy is being purchased, the anticipated amount and timing of Premium payments, and the expected asset persistency.

We offer several charge structures, or "policy components," which can be selected and blended—i.e., you may elect to apply 100% of your Total Specified Amount to a single policy component, or apply portions (totaling 100%) of your Total Specified Amount to one or more policy components.  The policy components permit policy purchasers to determine how to allocate policy charges (including charges for distribution expenses) over the life of the policy.  (For information about the compensation arrangements with broker-dealer firms that sell the Policy, please refer to the Distribution, Promotional, and Sales Expenses section of this prospectus.)  Certain policy components rely on premium loads to cover expenses, while others prefer to rely on periodic charges that spread expenses over the years.  Different policy components consist of different patterns of current policy charges.

·   Policy Component A calls for the greatest apportionment of charges on the front-end.  This policy component includes a Premium Load that declines over the first 5 policy years, as well as a Deferred Premium Load that is assessed in policy years 2-5 and is based on Premium paid in the first policy year.  The aggregate current monthly charges (i.e., the cost of insurance charge, the specified amount charge, and the sub-account asset charge) under this policy component are lower than those for Policy Components B and C during the first four policy years, and lower than those for Policy Component D in all policy years.

·   Policy Component B includes a Premium Load that declines over the first 5 policy years, but does not include a Deferred Premium Load.  The aggregate current monthly charges are lower than those for Policy Component A after the first four policy years, lower than those for Policy Component C after the first ten policy years, and lower than those for Policy Component D in all policy years.

·   Policy Component C apportions charges on the front-end to a lesser extent than under either Policy Component A or B:  the Premium Load is at a lower, declining rate and for a shorter duration (i.e., for four rather than five years).  The aggregate current monthly charges are higher than those for Policy Component B during the first ten policy years, and similar thereafter.  The aggregate current monthly charges are higher than those for Policy Component A during the first four policy years, and similar thereafter.  The aggregate current monthly charges are lower than those for Policy Component D in all years.

·   Policy Component D has no Premium Load—either front-end or deferred.  The aggregate current monthly charges under this policy component are always higher than those under Policy Components A, B, and C.

The charges assessed under your policy will depend upon the policy component configurations you select for your Total Specified Amount, and whether you elect coverage under the Supplemental Insurance Rider.  Generally, if you choose to purchase coverage under the Supplemental Insurance Rider, and concurrently reduce the Base Specified Amount by an off-setting amount, some of the charges associated with your policy will be lower because the charges under the rider are generally lower than those available under a base policy (i.e., a policy without any riders). (For more information about the benefits and operation of the Supplemental Insurance Rider, see the Policy Riders and Rider Charges section of this prospectus.)  Depending on the actual amount and timing of Premium payments and Investment Experience, at any point in time, the Cash Value and death benefit associated with one policy component may turn out to be less favorable than they would have been if another component had been selected.  While we reserve the right to change the pattern of charges under a policy component at any time, the levels of charges associated with each policy component will never exceed the maximum charges in the Periodic Charges Other Than Mutual Fund Operating Expenses table in the Summary: Fee Tables section of this prospectus.

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When you submit your application to purchase the policy, you select a policy component configuration to apply to your Base Specified Amount—for example, you might elect to apply 25% of your Base Specified Amount to each policy component, or 50% to Policy Component B and 50% to Policy Component D.  This selection of policy component configurations determines how we weight the current policy charges to calculate the amount of each charge that you pay.  In other words, the charge that you pay is a proportional blending of the charges associated with each of the policy components that apply to your Total Specified Amount.  For example, if you elect to apply 25% of your Base Specified Amount to each policy component, then we would add 25% of the Premium Load for each policy component to determine the amount of Premium Load you would pay; we would follow the same procedure to determine the Deferred Premium Load or the monthly policy charges that you would pay under that policy component configuration.  Similarly, if you elect to apply 50% of your Base Specified Amount to Policy Component B and 50% to Policy Component D, then we would add 50% of the Premium Load for Policy Component B to 50% of the Premium Load for Policy Component D to determine the amount of Premium Load you would pay, and we would follow the same procedure to determine the Deferred Premium Load or the monthly policy charges that you would pay under that policy component configuration.  See Appendix C to this prospectus for examples showing how the amount and timing of charges under the Policy vary under the different policy components, and how those charges are "blended" when you elect the Supplemental Insurance Rider and/or apply portions of your Total Specified Amount (i.e., Base Specified Amount plus Rider Specified Amount) to one or more policy components.

We underwrite the corporate purchaser and we may reject applications with certain policy component configurations based on:  (1) the amount of overall expenses under the policy and the timing of the allocation of those expenses over the life of the policy; (2) the anticipated amount and timing of Premium payments; and (3) the expected asset persistency based on the purpose for which the corporation/entity is purchasing the policy.  Any rejection of an application with certain policy component configurations is based on whether we can assume expenses and risks based on our assessment of the corporate purchaser and the preceding factors.  Our underwriting policies are available upon request.  Once the policy has been issued, changes to the policy component configurations are permitted only with our approval.  Your chosen policy component configuration is documented on the Policy Data Page.

This policy is complex.  The amount of charges assessed under your policy will depend upon policy component configuration(s) applied to your policy, and whether you elect the Supplemental Insurance Rider.  Your registered representative can provide you with illustrations showing the results of various policy component allocation configurations and the benefits/detriments of electing available riders.  By comparing and discussing the various scenarios with your registered representative, he or she can answer any questions you have and help you to identify the policy component configuration(s) that is/are consistent with your objectives.

Premium Load

We deduct a Premium Load from each Premium payment to partially reimburse us for our sales expenses and premium taxes, and certain actual expenses--including acquisition costs.  The Premium Load also provides revenue to compensate us for assuming risks associated with the policy, and revenue that may be a profit to us.  In your policy, this charge is referred to as the “Percentage of Premium Charge.”  The Premium Load applicable to your policy depends on the policy component configurations you select, the number of years since the Policy Date, the amount of annual Premium, and the amount of term insurance coverage you purchased via the Supplemental Insurance Rider.

We divide each Premium payment into contributions towards Target Premium and Excess Premium.  Target Premium is an annual premium based on the specified amount under the base policy (i.e., the policy without any riders) and the Insured's age and underwriting class.  A portion of each Premium payment is considered a contribution towards Target Premium until the total of such contributions in a policy year equals the Target Premium.   The portion considered a contribution towards Target Premium is equal to the Premium payment multiplied by the ratio of the Base Specified Amount to the Total Specified Amount. The portion of each premium payment that exceeds the Target Premium is Excess Premium. The chart below shows the current Premium Loads on Target Premium and Excess Premium that are assessed under each policy component. See Appendix C to this prospectus for examples showing how Premium Loads are assessed.

Premium Loads on Target and Excess Premium

Policy Year	1		2		3		4		5 and thereafter
	Target	Excess	Target	Excess	Target	Excess	Target	Excess	Target	Excess
Policy Component A	10%	2%	8%	2%	6%	2%	4%	2%	2%	2%
Policy Component B	10%	2%	8%	2%	6%	2%	4%	2%	2%	2%
Policy Component C	8%	2%	6%	2%	4%	2%	2%	2%	2%	2%
Policy Component D	0%	0%	0%	0%	0%	0%	0%	0%	0%	0%

The Premium Load that you pay is determined by multiplying the Premium payment by the weighted average (i.e., a

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proportional blending)of the Premium Loads for each policy component based on the policy component configuration(s) that you have selected.

We treat each increase in the Base Specified Amount as new coverage, with the Premium Load attributable to the increase determined as if it is part of a newly issued policy.

Deferred Premium Load

We deduct a Deferred Premium Load from the Cash Value to partially compensate us for our sales expenses and premium taxes.  This charge also may provide revenue to compensate us for assuming risks associated with the policy, and revenue that may be a profit to us.  In your policy, this charge is referred to as the “Deferred Percentage of Premium Charge.”  The Deferred Premium Load applicable to your policy depends on the aggregate Premium payments made to the policy in the first policy year, the policy component configuration(s) you select, and the amount of term insurance coverage you purchased via the Supplemental Insurance Rider.  Currently, we deduct the Deferred Premium Load only under Policy Component A, on the anniversary of the Policy Date in policy years 2 through 5, and the charge is taken proportionally from your Sub-Account allocations and the fixed account.  This charge is in addition to the Premium Load assessed in those years, and is assessed regardless of whether any Premium is paid in those years.

The amount of Deferred Premium Load that you pay depends on the classification of your Premium payment(s) as contributing towards Target Premium or Excess Premium, and the policy component configuration(s) you select.  The chart below shows the current Deferred Premium Loads on Target Premium and Excess Premium that are assessed under each policy component.

Deferred Premium Loads on Target and Excess Premium

Policy Year	1		2-5		6 and thereafter
	Target	Excess	Target	Excess	Target	Excess
Deferred Premium Load: Policy Component A	0%	0%	2%	0.5%	0%	0%
Deferred Premium Load: Policy Component B	0%	0%	0%	0%	0%	0%
Deferred Premium Load: Policy Component C	0%	0%	0%	0%	0%	0%
Deferred Premium Load: Policy Component D	0%	0%	0%	0%	0%	0%

The Deferred Premium Load is determined by multiplying the Premium payment by the weighted average (i.e., a proportional blending) of the Deferred Premium Loads for each policy component, based on the policy component configuration(s) that you have selected.  The Deferred Premium Load currently is (and is guaranteed never to exceed) 2% of aggregate Premium payments made in policy year 1.

Base Policy Cost of Insurance

We deduct a Cost of Insurance Charge from the policy's Cash Value on the Policy Date and on each monthly anniversary of the Policy Date to compensate us for providing expected mortality benefits, and to reimburse us for certain actual expenses, including acquisition costs and state and federal taxes.  This charge also provides revenue to compensate us for assuming certain risks associated with the policy, and revenue that may be profit to us.  The Cost of Insurance Charge is the product of the Net Amount At Risk and the cost of insurance rate.  The cost of insurance rate will vary by the Insured’s age, sex (if not unisex classified), tobacco use, Substandard Ratings, and underwriting class, the number of years from the Policy Date, and the policy component configuration(s) you select.  The cost of insurance rates are based on our expectations as to future mortality, investment earnings, persistency, expenses, and taxes.  The Base Policy Cost of Insurance Charge that you pay is determined by multiplying the Base Policy Net Amount At Risk by the weighted average (i.e., a proportional blending)of the cost of insurance rates for each policy component based on the policy component configuration(s) that you have selected.  There may be a separate cost of insurance rate for the initial Base Specified Amount and any Base Specified Amount increase.  The cost of insurance rates will never be greater than those shown on the Policy Data Page.

We will uniformly apply any change in cost of insurance rates for Insureds of the same age, underwriting class and any Substandard Ratings, selected policy component configurations, and In Force policy duration.  If a change in the cost of insurance rates causes the amount of your Cost of Insurance Charge to increase, your policy’s Cash Value could decrease.  If a change in the cost of insurance rates causes your Cost of Insurance Charge to decrease, your policy's Cash Value could increase.

We may underwrite your policy on a non-medical basis that may result in a higher Cost of Insurance Charge.  Non-medical underwriting means that a physical examination to obtain medical information on the proposed Insured is not required to issue the policy.  The higher Cost of Insurance Charge would compensate us for assuming additional mortality risk as a result of issuing without the information that results from medical underwriting.  The result is that healthy individuals will subsidize less healthy individuals because there is no medical underwriting, which typically results in lower cost of

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insurance rates being applied to fully underwritten policies.  If you were to purchase one of our policies that is medically underwritten and you are healthy, your cost of insurance rates would be lower.

The Cost of Insurance Charge will be deducted proportionally from your Sub-Account allocations and the fixed account.

Sub-Account Asset Charge

We deduct a Sub-Account Asset Charge from the policy's Cash Value allocated to the Sub-Accounts on each monthly anniversary of the Policy Date to compensate us for certain actual expenses, including acquisitions costs and premium taxes.  This charge also provides revenues to compensate us for assuming certain risks associated with the policy, and revenues that may be profit to us.  In your policy, this charge is referred to as the “Monthly Variable Sub-Account Asset Charge.”

The Sub-Account Asset Charge will be deducted proportionally from your Sub-Account allocations on each monthly anniversary of the Policy Date.  The Sub-Account Asset Charge applicable to your policy depends on the policy component configuration(s) you select, the amount of your Cash Value, and whether there is any specified amount attributable to the Supplemental Insurance Rider. We determine this charge for the base policy by multiplying your Cash Value allocated to the Sub-Accounts by the weighted average (i.e., a proportional blending) of the Sub-Account Asset factors for each policy component, based on the policy component configuration(s) that you have selected.  (Different Sub-Account Asset factors apply to the Rider.  Information on Sub-Account Asset Charges associated with the Supplemental Insurance Rider is provided under Policy Riders and Rider Charges section below.)  We assess this charge in addition to any charges assessed by the mutual funds underlying the Sub-Accounts.

The Sub-Account Asset Charge applicable to your policy depends on the policy component configuration(s) you select.  The table below shows the current Sub-Account Asset Factors (presented as an annual rate) for policy components for the Base Specified Amount.  (See the Policy Riders and Rider Charges section of this prospectus for the Sub-Account Asset Factor associated with the Supplemental Insurance Rider.)

Current Base Policy Sub-Account Asset Factor Charges (shown as an annual rate)1

Ratio of Cash Value to 7-Pay Premium2 (on a monthly anniversary)	Policy Component A	Policy Component B	Policy Component C	Policy Component D
Under 125%	0.30%	0.25%	0.25%	0.60%
125% -   249%	0.26%	0.23%	0.23%	0.55%
250% -   374%	0.22%	0.20%	0.20%	0.50%
375% -   499%	0.19%	0.18%	0.18%	0.46%
500% -   649%	0.17%	0.16%	0.16%	0.42%
650% -   799%	0.15%	0.14%	0.14%	0.38%
800% -   999%	0.13%	0.13%	0.13%	0.35%
1000% - 1299%	0.11%	0.11%	0.11%	0.33%
1300% - 1599%	0.10%	0.10%	0.10%	0.31%
1600% - 1999%	0.09%	0.09%	0.09%	0.29%
2000% - 2499%	0.08%	0.08%	0.08%	0.27%
2500% & over	0.06%	0.06%	0.06%	0.25%

1  To calculate the monthly deduction based on the annual rates listed above, use the following formula:

        Monthly Rate = (1+ Annual Rate) (Number of days in the Month / Number of days in the year) – 1

2  The 7-Pay Premium is established as of the Policy Date and will not change.

The maximum Base Policy Sub-Account Asset Factor Charge for each of the policy components is 1.25% (annual rate), the greatest current charge we assess by component is listed below.

Policy Component A	Policy Component B	Policy Component C	Policy Component D
0.30%	0.25%	0.25%	0.60%

The Sub-Account Asset Charge is determined by proportionally blending the sub-account asset factors for the policy components you have selected to a single factor that is then applied to the Policy’s Cash Value.  The guaranteed maximum annual and monthly charges are shown on the Policy Data Pages.

Base Specified Amount Charge

We deduct a monthly Base Specified Amount Charge from the policy's Cash Value to compensate us for sales, underwriting, distribution and issuance of the policy.  The charge applicable to your policy depends on the Total Specified Amount and is the same for all base policy component configurations.  The charge associated with the first $50,000 of Total Specified Amount is determined separately from the charge associated with the Total Specified Amount in excess of $50,000. The

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maximum guaranteed Base Specified Amount Charge is $0.40 per $1,000 of Specified Amount.

The table below shows the current Base Specified Amount Charges.  The Base Specified Amount Charge will be deducted proportionally from your Sub-Account allocations and the fixed account.

Base Specified Amount Charges

Policy Year	Amount of Total Specified Amount
	Up to $50,000	Over $50,000
1 through 20	$0.30 per $1,000	$0.09 per $1,000
21 and thereafter	$0.01 per $1,000	$0.01 per $1,000

The total charges applied to Base Specified Amount are determined by adding the amount of the charges of the first $50,000 of Total Specified Amount attributable to Base Specified Amount to the amount of charges attributable to Base Specified Amount on Total Specified Amount in excess of $50,000.  Base Specified Amount will equal Total Specified Amount, unless you have elected any Rider Specified Amount.

A distinct Rider Specified Amount charge applies to the Supplemental Insurance Rider.  If you elect that rider, the total specified amount charges you pay will depend upon the allocation of Total Specified Amount between the base policy and the Supplemental Insurance Rider.  To determine total specified amount charges, you must add the amount of the Base Specified Amount charge to the Rider Specified Amount charge.  Total charges are a weighted average of the amount of Base Specified Amount and Rider Specified Amount.  The end result is a charge blending.  For further explanation of this blending, including an example, see the “Supplemental Insurance Rider” sub-section of the “Policy Riders and Rider Charges” section of this prospectus beginning on page 27.

Administrative Charge

We deduct a monthly Administrative Charge from the policy's Cash Value to reimburse us for the costs of maintaining the policy, including accounting and recordkeeping.  Currently, the Administrative Charge is $5 per month per policy.  The maximum guaranteed Administrative Charge is $10 per month per policy.

The Administrative Charge will be deducted proportionally from your Sub-Account allocations and the fixed account.

Illustration Charge

Currently, we do not assess an Illustration Charge, which would compensate us for the administrative costs of generating the illustration.  However, we may, in the future, assess an Illustration Charge, which will not exceed $25 per illustration requested.  Any Illustration Charge must be paid by check at the time of the illustration request.  The Illustration Charge will not be deducted from the policy's Cash Value.

Policy Rider Charges

·   Change of Insured Rider--There currently is no charge associated with this rider.

·   Supplemental Insured Rider – If you purchase this rider and increase the Total Specified Amount (i.e., by the Rider Specified Amount attributable to the Supplemental Insurance Rider), then you will increase the overall monthly charges associated with this policy, even if the Base Specified Amount is not changed.  If, however, you purchase the rider and do not increase the Total Specified Amount and instead reduce the Base Specified Amount by an off-setting amount of Rider Specified Amount, then electing the Supplemental Insurance Rider will potentially reduce the overall monthly charges associated with the policy.  Please see the Policy Riders and Rider Charges section of this prospectus for further information about the charges associated with the Supplemental Insurance Rider.

Mutual Fund Operating Expenses

In addition to the charges listed above, there are also charges associated with the mutual funds in which the Sub-Accounts invest.  While you will not pay these charges directly, they will affect the value of the assets you have allocated to the Sub-Accounts because these charges are reflected in the underlying mutual fund prices that we subsequently use to value your Sub-Account units.  Please see the underlying mutual funds’ prospectuses for additional information about these charges.  You may request FREE OF CHARGE copies of any of the underlying mutual funds’ prospectuses available under the policy.  Information on how to contact us is located on the front page of this prospectus.

A Note on Charges

During a policy's early years, the expenses we incur in distributing and establishing the policy exceed the deductions we take.  Nevertheless, we expect to make a profit over time because variable life insurance is intended to be a long-term financial investment.  Accordingly, we have designed the policy with features and investment options that we believe support and encourage long-term ownership.

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We make many assumptions and account for many economic and financial factors when we establish the policy's fees and charges.  The following is a discussion of some of the factors that are relevant to the policy's pricing structure.

Distribution, Promotional, and Sales Expenses.  Distribution, promotional and sales expenses include amounts we pay to broker-dealer firms as commissions, expense allowances and marketing allowances.  We refer to these expenses collectively as "total compensation." The maximum total compensation we pay to any broker-dealer firm in conjunction with policy sales is 44.10% of first year premiums and 11.25% of renewal premium after the first year.

We have the ability to customize the total compensation package of our broker-dealer firms.  We may vary the form of compensation paid or the amounts paid as commission, expense allowance or marketing allowance; however, the total compensation will not exceed the maximum (44.10% of first year premiums and 11.25% of renewal premium after the first year).  Commission may also be paid as an asset-based amount instead of a premium based amount.  If an asset-based commission is paid, it will not exceed 0.83% of the non-loaned cash value per year.

The actual amount and/or forms of total compensation we pay depend on factors such as the level of premiums we receive from respective broker-dealer firms and the scope of services they provide.  Some broker-dealer firms may not receive maximum total compensation.

Individual registered representatives typically receive a portion of the commissions/total compensation we pay, depending on their arrangement with their broker-dealer firm.  If you would like to know the exact compensation arrangement associated with this product, you should consult your registered representative.

Information on Underlying Mutual Fund Payments

Our Relationship with the Underlying Mutual Funds.  The underlying mutual funds incur expenses each time they sell, administer, or redeem their shares.  The separate account aggregates policy owner purchase, redemption, and transfer requests and submits net or aggregated purchase/redemption requests to each underlying mutual fund daily.  The separate account (and not the policy owners) is the underlying mutual fund shareholder.  When the separate account aggregates transactions, the underlying mutual fund does not incur the expense of processing individual transactions it would normally incur if it sold its shares directly to the public.  We incur these expenses instead.

We also incur the distribution costs of selling the policy (as discussed above), which benefit the underlying mutual funds by providing policy owners with Sub-Account options that correspond to the underlying mutual funds.

An investment adviser or subadviser of an underlying mutual fund or its affiliates may provide us or our affiliates with wholesaling services that assist in the distribution of the policy and may pay us or our affiliates to participate in educational and/or marketing activities.  These activities may provide the adviser or subadviser (or their affiliates) with increased exposure to persons involved in the distribution of the policy.

Types of Payments We Receive.  In light of the above, the underlying mutual funds or their affiliates make certain payments to us or our affiliates.  The amount of these payments is typically based on a percentage of assets invested in the underlying mutual funds attributable to the policies and other variable policies we and our affiliates issue, but in some cases may involve a flat fee.  These payments may be used by us for any corporate purpose, which include reducing the prices of the policies, paying expenses that we or our affiliates incur in promoting, marketing, and administering the policies and the underlying mutual funds, and achieving a profit.

We or our affiliates receive the following types of payments:

· Underlying mutual fund 12b-1 fees, which are deducted from underlying mutual fund assets;

·   Sub-transfer agent fees or fees pursuant to administrative service plans adopted by the underlying mutual fund, which may be deducted from underlying mutual fund assets; and

·   Payments by an underlying mutual fund’s adviser or subadviser (or its affiliates).  Such payments may be derived, in whole or in part, from the advisory fee, which is deducted from underlying mutual fund assets and is reflected in underlying mutual fund charges.

Furthermore, we benefit from assets invested in our affiliated underlying mutual funds (i.e., Nationwide Variable Insurance Trust) because our affiliates also receive compensation from the underlying mutual funds for investment advisory, administrative, transfer agency, distribution, and/or other services.  Thus, we may receive more revenue with respect to affiliated underlying mutual funds than unaffiliated underlying mutual funds.

We took into consideration the anticipated payments from the underlying mutual funds when we determined the charges imposed under the policies (apart from fees and expenses imposed by the underlying mutual funds).  Without these payments, we would have imposed higher charges under the policy.

Amount of Payments We Receive.  For the year ended December 31, 2008, the underlying mutual fund payments we and our affiliates received from the underlying mutual funds did not exceed 0.55% (as a percentage of the average daily net assets invested in the underlying mutual funds) offered through the policy or other variable policies that we and our affiliates issue.  

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Payments from investment advisers or subadvisers to participate in educational and/or marketing activities have not been taken into account in this percentage.

Most underlying mutual funds or their affiliates have agreed to make payments to us or our affiliates, although the applicable percentages may vary from underlying mutual fund to underlying mutual fund and some may not make any payments at all.  Because the amount of the actual payments we or our affiliates receive depends on the assets of the underlying mutual funds attributable to the policy, we and our affiliates may receive higher payments from underlying mutual funds with lower percentages (but greater assets) than from underlying mutual funds that have higher percentages (but fewer assets).

For additional information related to the amount of payments Nationwide receives, go to www.nationwide.com.

Identification of Underlying Mutual Funds.  We may consider several criteria when identifying the underlying mutual funds, including some or all of the following:  investment objectives, investment process, investment performance, risk characteristics, investment capabilities, experience and resources, investment consistency, and fund expenses.  Another factor we consider during the identification process is whether the underlying mutual fund’s adviser or subadviser is one of our affiliates or whether the underlying mutual fund, its adviser, its subadviser(s), or an affiliate will make payments to us or our affiliates.

There may be underlying mutual funds with lower fees, as well as other variable policies that offer underlying mutual funds with lower fees.  You should consider all of the fees and charges of the policy in relation to its features and benefits when making your decision to invest.  Please note that higher policy and underlying mutual fund fees and charges have a direct effect on your investment performance.

Policy Riders and Rider Charges

You may elect/purchase one or more riders available under the policy to meet your specific needs.  Rider availability varies by state.  Riders may not be elected/purchased independently of the policy.  Upon termination of this policy, all riders will also terminate.  Operation and benefits of the riders described in this prospectus may vary by the state where the policy is issued.  For detailed information regarding Rider availability and variations, see "Appendix D:  State variations."

We will assess any rider charge by taking deductions from the Cash Value to compensate us for the services and benefits we provide, the costs and expenses we incur, and the risks we assume.  We may generate a profit from any of the rider charges.  We begin to deduct monthly rider charges from your policy's Cash Value on the Policy Date or on the first monthly anniversary of the Policy Date after the rider is effective.

Change of Insured Rider

The benefit associated with the Change of Insured Rider is that you may designate a new Insured, subject to insurability and the conditions below.  The costs and benefits under the policy after the change will be based on the underwriting classification and characteristics of the new Insured.  The amount of insurance coverage after the Change Date shall be the Total Specified Amount shown on the application to change the Insured provided that (1) the policy continues to qualify as life insurance under the Code and (2) such specified amount equals or exceeds the minimum Total Specified Amount shown on the Policy Data Page.  You may elect this rider at the time of application or at any time while the policy is In Force.  Coverage on the new Insured will become effective on the Change Date.  Coverage on the previous Insured will terminate on the day before the Change Date.  The Change Date is the first monthly anniversary on or next following the date the change of insured conditions are met.  The Policy Date will not change.

Change of Insured Conditions:

1.   At the time of the change, the new Insured must have the same business relationship to the Owner as did the previous Insured.

2.   The new Insured may be required to submit evidence of insurability to us.

3.   The new Insured must satisfy our underwriting requirements.

4.   The policy must be In Force and not be in a grace period at the time of the change.

5.   The new Insured must have been at least age eighteen on the Policy Date.

6.   The Owner must make written application to change the Insured.

Change of Insured Rider Charge.  There is no charge associated with the Change of Insured Rider.

Supplemental Insurance Rider

General Information on the Benefits and Operation of the Supplemental Insurance Rider

This rider will modify the amount of insurance coverage (Death Benefit) under the policy.  The benefit associated with the Supplemental Insurance Rider is term life insurance on the Insured that is:  (1) in addition to the Base Specified Amount; (2) payable to the Beneficiary upon the Insured’s death; and (3) annually renewable until the Insured reaches Attained Age 100.  

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The charges for the Rider are calculated in the same manner as those applicable to the base policy, although different rates may apply under the various policy components available with the Supplemental Insurance Rider.  Currently, if you choose to purchase coverage under this Rider and concurrently reduce the Base Specified Amount by an off-setting amount, some of the charges associated with your policy will be reduced because charges under the policy components available with the Rider may be lower than the corresponding charges under the policy components available for a base policy.  Rider policy component charges are lower in most cases because the rider is term insurance.  The greater the allocation is to rider policy components, the lower the overall charges will be under the policy.  See Appendix C to this prospectus for examples showing how charges are "blended" when you elect the Supplemental Insurance Rider and/or apply portions of your Total Specified Amount to one or more policy components.

Note that:

·   Certain benefits that are normally available under the policy may be reduced or eliminated when this rider is in effect.

o   Adding this rider results in a lower Enhancement Benefit;

o   In some years and/or at some ages, the cost of insurance charge for the rider is more expensive than the cost of insurance for the base policy; and

o   You may not extend the Maturity Date with respect to the Rider Specified Amount.

·   The rider’s death benefit terminates if the Insured is living on the Maturity Date.

·   The compensation rates payable to the selling broker-dealer are lower on this Rider than those on the base policy.

You may purchase this rider at the time of application or, subject to our approval, at a later time provided that the policy is In Force and the rider is purchased before the Insured reaches Attained Age 100.  If purchased at the time of application, the effective date of the rider is the same as the effective date of insurance coverage.  (See the “Insurance Coverage Effective Date” provision earlier in this prospectus.)  If purchased subsequently, the effective date will be the monthly anniversary of the Policy Date on or next following the date we approve your written request, unless you specify and we approve, a different date.  The Rider Specified Amount may be combined with the Base Specified Amount to satisfy the minimum Total Specified Amount shown on the Policy Data Page.  However, while the rider is in effect, the Base Specified Amount must be at least 10% of the minimum Total Specified Amount.  You may request to either increase or decrease the Total Specified Amount, subject to certain restrictions.

Rider Specified Amount Increases and Reductions Due to Partial Surrender

All increases and decreases of Rider Specified Amount, including decreases due to partial surrender or forced surrender partial, are done proportionally between the amounts you have allocated to Base Specified Amount and Rider Specified Amount.

Charges Associated with the Supplemental Insurance Rider

The Supplemental Insurance Rider charges listed below are different from the charges under the base policy.  These charges will be applied to coverage under the Supplemental Insurance Rider and are in addition to the charges you pay on coverage under the base policy.

·   Sub-Account Asset Charge;

·   Specified Amount Charge; and

·   Cost of Insurance Charge

·   Rider Sub-Account Asset Charge

The table below shows the current factors used to determine the Sub-Account Asset Charges applicable to the Rider Specified Amount.

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Current Supplemental Insurance Rider Sub-Account Asset Factor Charges (shown as an annual rate)1

Ratio of Cash Value to 7-Pay Premium2 (on a monthly anniversary)	Policy Component A	Policy Component B	Policy Component C	Policy Component D
Under 125%	0.20%	0.16%	0.16%	0.30%
125% -   249%	0.18%	0.15%	0.15%	0.27%
250% -   374%	0.16%	0.14%	0.14%	0.24%
375% -   499%	0.14%	0.13%	0.13%	0.22%
500% -   649%	0.12%	0.12%	0.12%	0.20%
650% -   799%	0.11%	0.11%	0.11%	0.18%
800% -   999%	0.10%	0.10%	0.10%	0.16%
1000% - 1299%	0.09%	0.09%	0.09%	0.14%
1300% - 1599%	0.08%	0.08%	0.08%	0.13%
1600% - 1999%	0.07%	0.07%	0.07%	0.12%
2000% - 2499%	0.06%	0.06%	0.06%	0.11%
2500% & over	0.05%	0.05%	0.05%	0.10%

1  To calculate the monthly deduction based on the annual rates listed above, use the following formula.

              Monthly Rate = (1+ Annual Rate) (Number of days in the Month / Number of days in the year) - 1

2  The 7-Pay Premium is established as of the Policy Date and will not change.

The maximum Rider Sub-Account Asset Factor Charge for each of the policy components is 1.25% (annual rate), the greatest current charge we assess by component is listed below.

Policy Component A	Policy Component B	Policy Component C	Policy Component D
0.20%	0.16%	0.16%	0.30%

We determine the Sub-Account Asset Charge by multiplying your Cash Value by the weighted average (i.e., a blend that uses the relative proportions of the Base and Rider Specified Amounts) of the Sub-Account Asset Factors for the Base Policy and the Supplemental Insurance Rider, where each Factor is based on the policy component configuration(s) that you have selected.  Currently, the Sub-Account Asset Charge is no more than (and is guaranteed never to exceed) 0.10357% on a monthly basis (and ranges between 0.05% and 1.25% on an annual basis), of the net assets you have allocated to the Sub-Accounts.  The guaranteed maximum annual and monthly charges applicable to your policy are shown on the Policy Data Pages.

Rider Specified Amount Charge

If you purchase the Supplemental Insurance Rider, we deduct a monthly Rider Specified Amount Charge from the policy's Cash Value to compensate us for sales, underwriting, distribution, and issuance of the rider.  The charge applicable to your policy depends on the Total Specified Amount and the allocation of the Total Specified Amount between Base Specified Amount and Rider Specified Amount. The Rider Specified Amount Charge is the same for all policy component configurations.

The charge associated with the first $50,000 of Total Specified Amount is determined separately from the charge associated with the Total Specified Amount in excess of $50,000.   Each of these charges is determined using a weighted average (i.e., a blend that uses the relative proportions of the Base and Rider Specified Amounts) of the base and rider charges.

The Rider Specified Amount Charge will be deducted proportionally from your Sub-Account allocations and the fixed account. The table below shows the current Rider Specified Amount Charges.

Rider Specified Amount Charges

Policy Year	Amount of Total Specified Amount
	Up to $50,000	Over $50,000
1 through 20	$0.05 per $1,000	$0.01 per $1,000
21 and thereafter	$0.01 per $1,000	$0.01 per $1,000

The maximum guaranteed Supplemental Insurance Rider Specified Amount Charge is $0.40 per $1,000 of Specified Amount.

To determine total specified amount charges, you must add the amount of the Base Specified Amount charge to the Rider Specified Amount charge.  Total charges are a weighted average of the amount of Base Specified Amount and Rider

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Specified Amount you elected.  The end result is a charge blending.

Here is an example of how charges are blended if you elect Base Specified Amount and Rider Specified Amount.

For this example, assume the following.

Total Specified Amount = $150,000.

Base Specified Amount = 50% or $75,000.

Rider Specified Amount = 50% or $75,000.

The policy is less than 20 years old.

The charges are calculated in three parts.

The first part involves calculating the charge on the first $50,000 of Total Specified Amount.  This is accomplished using the following formula.

Blended Total Specified Amount Charges (first $50,000) = [(BA x BSAC) + (RA x RSAC)] x [$50,000/$1,000]

Where:

BA = Base Specified Amount Allocation (as a percentage)

BSAC = Base Specified Amount Charge

RA = Rider Specified Amount Allocation (as a percentage)

RSAC = Rider Specified Amount Charge

Using this formula and the assumptions described above, here is how the calculation would work on the first $50,000 of Total Specified Amount.

= [(0.50 x $0.30) + (0.50 x $0.05)] x [$50,000/$1,000]

= [($0.15) + ($0.025)] x [50]

= [$0.175] x [50]

= $8.75

The second part involves calculating amounts in excess of the first $50,000, under which different charges apply.  This is accomplished using the following formula.

Blended Total Specified Amount Charges (excess of $50,000) = [(BA x BSAC) + (RA x RSAC)] x [(TSA - $50,000)/$1,000]

Where:

BA = Base Specified Amount Allocation (as a percentage)

BSAC = Base Specified Amount Charge

RA = Rider Specified Amount Allocation (as a percentage)

RSAC = Rider Specified Amount Charge

TSA = Total Specified Amount

Using this formula, and the assumptions described above, here is this second calculation would work on specified amount in excess of $50,000.

=[(0.50 x $0.09) + (0.50 x $0.01)] x [($150,000 - $50,000/$1,000)]

= [($0.045) + ($0.005)] x [100]

= [$0.05] x [100]

= $5.00

The third part is to add the results of the first calculation to the second calculation.  In this example, merely add $5.00 to $8.75 for Total Specified Amount charges of $13.75 per month.

Rider Cost of Insurance Charge

If you elect the Supplemental Insurance Rider, we deduct a monthly Supplemental Insurance Rider Cost of Insurance charge to compensate us for providing term life insurance on the Insured.  This charge is determined by multiplying the rider’s cost of insurance rate by the rider’s death benefit (described below).  We base the supplemental insurance cost of insurance rate

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on our expectations as to future experience for factors such as mortality, persistency, expenses, and taxes.  The supplemental insurance cost of insurance rate will vary by the Insured’s Issue Age, sex (if not unisex classified), tobacco use, Substandard Ratings, underwriting class, the number of years from the Policy Date, and the policy component configurations you select.  The same policy component configuration(s) you select for the base policy will apply for the rider unless you request, and we approve, a different configuration.

The Supplemental Insurance Rider Cost of Insurance Charge will be deducted proportionally from your Sub-Account allocations and the fixed account.  Because we deduct the Rider charge from the Cash Value, purchase of this Rider could reduce the amount of the Death Benefit when the Death Benefit depends on Cash Value.

Death Benefit Calculations with the Supplemental Insurance Rider

The death benefit option chosen for the base policy will also be the death benefit option for the rider and calculation of the Death Benefit.  The current death benefit option in effect is shown on the Policy Data Page.  The Death Benefit is calculated as the greater of: (1) the Total Specified Amount; or (2) the Minimum Required Death Benefit (which will differ depending on whether the guideline premium/cash value corridor test or the cash value accumulation test is used).

After the Death Benefit is calculated, it is allocated between your elected amounts of base policy and this rider.

1. Base Policy Death Benefit – The amount of the Death Benefit we allocate to the base policy is calculated using the formula below.

Base Policy Death Benefit =                                                      CV  +   (Total NAAR)   x    (Base Specified Amount)

(Total Specified Amount)

Where:

CV = the Cash Value of the policy

Total NAAR = the total Net Amount At Risk which is the Death Benefit minus the Cash Value

The formula above determines the portion of the Death Benefit applied to base by determining the ratio Base Specified Amount bears to Total Specified Amount.

2. Supplemental Insurance Rider Death Benefit – The amount of the Death Benefit we allocate to the Supplemental Insurance Rider is calculated by taking the Death Benefit and subtracting the Base Policy Death Benefit (as calculated in item 1 above).

In most instances, your charges end up being lower if you apply as much coverage as possible to the rider.

Total Specified Amount remains the same unless you specifically request an increase or decrease.  All increases or decreases are done proportionally based on your established allocation between Rider Specified Amount and Base Specified Amount.

If the Cash Value increases, the portion of the Death Benefit attributable to this rider may, at times, be less than the Rider Specified Amount.  If the Cash Value decreases, the portion of the Death Benefit attributable to the base policy may, at times, be less than the Base Specified Amount.

Terminating the Rider

You may terminate this rider by submitting a written request to us at our Home Office.  We may require that you submit the policy for endorsement.  Terminating this rider will likely result in increased policy charges because of the difference in the pattern of policy charges under the corresponding policy components for the base policy and this rider.  If the rider is terminated, the calculation of the Death Benefit will apply exclusively to the base policy.  Termination may require that the amount of Death Benefit coverage provided by the base policy be increased to maintain the qualification of the policy as a contract of life insurance under the Code.

We reserve the right to deny any request to terminate this rider that would disqualify the policy as a contract of life insurance under the Code.  If the policy is not issued as a modified endowment contract, terminating this rider may result in the policy becoming a modified endowment contract.  We will notify the Owner if the policy's status is in jeopardy.

This rider also terminates upon the earliest of the following dates:

·   The date policy is surrendered or terminated;

·   The date the policy Lapses;

·   The Insured’s death; or

·   The date the Insured reaches Attained Age 100.

There is no Cash Value attributable to this rider.  Therefore, there is no Cash Surrender Value attributable to this rider available to you upon termination of this rider.

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In most instances, terminating the rider will not be to your advantage.  If you decide to terminate the rider, you should carefully discuss this decision with your registered representative or a qualified financial advisor.

Policy Owner Services

Dollar Cost Averaging

You may elect to participate in a dollar cost averaging program.  Dollar cost averaging is an investment strategy designed to reduce the investment risks associated with market fluctuations and promote a more stable Cash Value and Death Benefit over time.  Policy owners may direct us to automatically transfer specific dollar amounts from the fixed account and the

Federated Insurance Series

·Federated Quality Bond Fund II: Primary Shares

Nationwide Variable Insurance Trust ("NVIT")

·Federated NVIT High Income Bond Fund: Class I

·NVIT Government Bond Fund: Class I

·NVIT Money Market Fund: Class V

to any other Sub-Account.  Transfers from the fixed account must be no more than 1/30th of the fixed account value at the time you elect to participate in the program.  These funds may or may not be available depending on when you purchased this policy. Please refer to “Appendix A: Sub-Account Information” for Sub-Account for details on fund availability.

You may elect to participate in the dollar cost averaging program at the time of application or at a later date by submitting an election form.  An election to participate in the program that is submitted after application will be effective on the date provided on the election form or, if the date provided has passed upon our receipt of your submitted election form participation will be effective at the beginning of the next policy month.  There is no charge for dollar cost averaging and dollar cost averaging transfers do not count as transfer events.  We will continue to process dollar cost averaging transfers until there is no more value left in originating investment option(s) or until you instruct us to terminate your participation in the service.

We do not assure the success of these strategies and we cannot guarantee that dollar cost averaging will result in a profit or protect against a loss.  You should carefully consider your financial ability to continue these programs over a long enough period of time to purchase Accumulation Units when their value is low, as well as when their value is high.  We may modify, suspend or discontinue these programs at any time.  We will notify you in writing 30 days before we do so.

Policy Loans

After the expiration of the free-look period and while the policy is In Force, you may take a loan against the policy's Cash Value.  Loan requests must be submitted in writing to our Home Office.  You may increase your risk of Lapse if you take a policy loan.  There also may be adverse tax consequences.  You should obtain competent tax advice before you decide to take a policy loan.

Loan Amount and Interest Charged

While the policy is In Force, you may request a policy loan provided that, at the time of the loan request, the loan amount plus the Policy Loan Account does not exceed 90% of the Cash Value.  Any applicable Enhancement Benefit is not available to be taken as a policy loan.  The minimum loan amount is $500.

We charge interest on the amount of outstanding Indebtedness at the current rate of between 2.00% and 3.50% per annum.  The maximum guaranteed rate is 3.50% per annum.  The interest rate applicable to your policy depends on the policy components you select.  Policy loan interest charge may provide revenue for risk charges and profit.  We expect to charge an effective annual interest rate of 2.80% on the outstanding balance of your loan for the first fifteen policy years, 2.55% for years 16 through 30, and 2.10% thereafter.

The interest will accrue daily and is payable at the end of each policy year, or at the time of a new loan, a loan repayment, the Insured’s Death, a policy lapse, or a full surrender.  If the interest is not paid when due, we will add it to the outstanding loan amount by transferring a corresponding amount of Cash Value from each Sub-Account to the Policy Loan Account in the same proportion as your Sub-Account allocations.

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Collateral and Interest Earned

As collateral for the policy loan, we will transfer Cash Value equal to the policy loan amount to the Policy Loan Account.  Amounts transferred from the Sub-Accounts will be in the same proportion as your Sub-Account allocations, unless you instruct otherwise.  We will only transfer amounts from the fixed account if the loan amount exceeds 90% of the Cash Value allocated to the Sub-Accounts.

Amounts in the Policy Loan Account will accrue and be credited daily interest at a rate not less than the stated interest crediting rate shown on your Policy Data Page.

Net Effect of Policy Loans

We will charge interest on the outstanding policy loan amount and credit interest to the Policy Loan Account at the same time.  In effect, the policy loan interest rate is netted against the interest crediting rate, and this is the amount that you are “charged” for taking the policy loan.  The Policy Loan Interest Charged is reflected in the Periodic Charges Other Than Mutual fund Operating Expenses table in the “In Summary: Fee Tables” section of this prospectus.

The amount transferred to the Policy Loan Account will neither be affected by the Investment Experience of the Sub-Accounts, nor will it be credited with the same interest rates credited to fixed account allocations.  Even if it is repaid, a policy loan will affect the policy, the Policy Loan Account, the Cash Surrender Value and the Death Benefit.  If your total Indebtedness ever exceeds the policy's Cash Value, your policy may Lapse.

Repayment

You may repay all or part of a policy loan at any time while the policy is In Force during the Insured’s lifetime.  The minimum repayment amount is $25.  We will apply all loan repayments to the Sub-Accounts in the same proportion as your current Sub-Account allocations, unless you indicate otherwise.  While your policy loan is outstanding, we will treat any payments that you make as Premium payments, unless you request that they be applied as policy loan repayments.  Repaying a policy loan will cause the Cash Surrender Value to increase accordingly.

Lapse

The policy is at risk of Lapsing when the Cash Surrender Value is insufficient to cover the monthly policy charges.  Before any policy Lapses, there is a Grace Period during which you can take action to prevent the Lapse.  Subject to certain conditions, you may reinstate a policy that has Lapsed.

Grace Period

At the beginning of a Grace Period, we will send you a notice that will indicate the amount of Premium you must pay to avoid Lapsing the policy.  This amount is equal to at least 4 times the current month’s policy charges.  If you do not pay the indicated amount within 61 days, the policy and all Riders will Lapse.

The Grace Period will not alter the operation of the policy or the payment of the Proceeds.

Reinstatement

You may reinstate a Lapsed policy by:

·   submitting, at any time within three year after the end of the Grace Period and before the Maturity Date, a written request to reinstate the policy;

·   providing any evidence of insurability that we may require;

·   paying sufficient Premium to keep the policy In Force for 3 months from the date of reinstatement;

·   paying sufficient Premium to cover all policy charges that were due and unpaid during the Grace Period; and

·   repaying or reinstating any Indebtedness that existed at the end of the Grace Period.

Subject to satisfactory evidence of insurability at the same rates, you may also reinstate the Supplemental Insurance rider.

The effective date of a reinstated policy (including any Riders) will be the monthly anniversary of the Policy Date on or next following the date we approve the application for reinstatement.  If the policy is reinstated, the Cash Value on the date of reinstatement will be set equal to the Cash Value at the end of the Grace Period.  We will then add to the Cash Value any Premiums or loan repayments that you made to reinstate the policy.

The Sub-Account allocations that were in effect at the start of the Grace Period will be reinstated, unless you indicate otherwise.

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Surrenders

Full Surrender

You may entirely surrender the policy for the Cash Surrender Value at any time while the Insured is alive and the policy is In Force.  A surrender will be effective as of the date we receive your written surrender request on a form acceptable to us at our Home Office.  We may also require you to return the policy.  We reserve the right to postpone payment of that portion of the Cash Surrender Value attributable to the fixed account for up to 6 months.  The Cash Surrender Value will be paid to you in a lump sum, unless you elect to leave the Proceeds on deposit with us (or an affiliate).

No Enhancement Benefit will be applied to a policy that is surrendered pursuant to Section 1035 of the Code.

Partial Surrender

You may request, in writing to our Home Office, a partial surrender of the policy’s Cash Surrender Value at any time after the policy has been In Force for one year.  We may require that you send the policy to us for endorsement.

We reserve the right to limit the number of partial surrenders to one per policy year.  The minimum amount of any partial surrender request is $500; the maximum amount of a partial surrender is the Cash Value less the greater of $500 or the amount equal to 3 months of policy charges.  Any applicable Enhancement Benefit is not available to be taken as a partial surrender.  A partial surrender cannot cause the Total Specified Amount to be reduced below the minimum Total Specified Amount indicated on the Policy Data Page, and after any partial surrender, the policy must continue to qualify as life insurance under Section 7702 of the Code.  Partial surrenders may be subject to income tax penalties.  They could also cause your policy to become a “modified endowment contract” under the Code, which could change the income tax treatment of any distribution from the policy.  We reserve the right to postpone payment of that portion of the partial surrender attributable to the fixed account for up to 6 months.

If you take a partial surrender, we will surrender Accumulation Units from the Sub-Accounts proportionally based on the current assets allocated to each Sub-Account to equal the amount of the partial surrender.  If there are insufficient Accumulation Units available, we will surrender amounts from the fixed account.

Reduction of the Total Specified Amount due to a Partial Surrender.  When you take a partial surrender, we reduce the Total Specified Amount to prevent an increase in the Net Amount At Risk, unless your partial surrender is a preferred partial surrender.  Preferred partial surrenders and how they are applied to a reduction in Total Specified Amount are described in more detail below.  Reduction of Total Specified Amount is proportional between elected Base Specified Amount and Rider Specified Amount.

The policy’s charges going forward will be based on the new Total Specified Amount.  Any reduction of the Total Specified Amount will be made in the following order: against the most recent increase in the Total Specified Amount, then against the next most recent increases in the Total Specified Amount in succession, and finally, against the initial Total Specified Amount.

We do not reduce the Total Specified Amount on any portion of the total partial surrender that is a preferred partial surrender.  For preferred partial surrenders, we reduce the Total Specified Amount by an amount that is no more than the difference between the total partial surrender and any portion that is a preferred partial surrender.  A preferred partial surrender is a partial surrender that:

·   occurs before the 15th anniversary of the Policy Date; and

·   when added to any prior preferred policy surrenders taken in same policy year, does not exceed 10% of the Cash Surrender Value as of the beginning of that policy year.

Normally, we will pay the surrender amount within thirty days after we receive your written request in good order at our Home Office.  We reserve the right to delay payment of the Cash Surrender Value arising from the fixed account for six months.  Generally, if the policy has a Cash Surrender Value in excess of the Premiums you have paid, the excess upon surrender will be included in your income for federal income tax purposes.

The Death Benefit

Calculation of the Death Benefit

We will calculate the Death Benefit and pay it to the Beneficiary when we receive (at our Home Office) all information required to process the Death Benefit, including, but not limited to, proof that the Insured has died.  The Death Benefit may be subject to an adjustment if you make an error or misstatement upon application, or if the Insured dies by suicide.  The Death Benefit will be paid to the Beneficiary in a lump sum, unless the Beneficiary elects to leave the Death Benefit on deposit with us (or an affiliate).

While the policy is In Force, the Death Benefit attributable to the base policy will never be less than the Base Specified Amount associated with the base policy.  The Death Benefit will depend on which Death Benefit option you have chosen,

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any coverage elected under the Supplemental Insurance Rider, and the tax test you have elected, as discussed in greater detail below.  Also, the Death Benefit may vary with the Cash Value of the policy, which is affected by Investment Experience, outstanding Indebtedness, and any due and unpaid policy charges that accrued during a Grace Period.

Death Benefit Options

There are 3 Death Benefit options under the policy.  You may choose one.  If you do not choose one of the following Death Benefit options, we will assume that you intended to choose Death Benefit Option 1.  Not all Death Benefit options are available in all states.

Death Benefit Option 1.  The Death Benefit will be the greater of:

·   the Total Specified Amount as of the date of the Insured’s death, or

·   the applicable percentage defined in Section 7702 of the Code of the Enhanced Cash Value as of the date of the Insured’s death.

Death Benefit Option 2.  The Death Benefit will be the greater of:

·   the Total Specified Amount plus the Enhanced Cash Value as of the date of the Insured’s death, or

·   the applicable percentage defined in Section 7702 of the Code of the Enhanced Cash Value as of the date of the Insured’s death.

Death Benefit Option 3.  The Death Benefit will be the greater of:

·   (a) plus (b), where:

(a) = the Total Specified Amount as of the date of the Insured’s death; and

(b) = the greater of zero or the lesser of (i) and (ii), where

(i) = the Death Benefit Option 3 maximum increase shown on the Policy Data Page; and

(ii) = the accumulated premium amount.  The accumulated premium amount equals all Premium payments as of the date of the Insured’s death accumulated at the Death Benefit Option 3 interest rate shown on the Policy Data Page, less the total of all partial surrenders taken from the policy as of the date of the Insured’s death accumulated at the Death Benefit Option 3 interest rate shown on the Policy Data Page; or

·   the applicable percentage defined in Section 7702 of the Code of the Enhanced Cash Value as of the date of the Insured’s death.

Maximum Death Benefit

We reserve the right to limit the Death Benefit to the Maximum Death Benefit shown on the Policy Data Page.  Currently, for Option 1 and Option 2, the Maximum Death Benefit is equal to the sum of the Cash Value and the lesser of (i) 200% of the Specified Amount on the policy issue date and (ii) $8,000,000.  For Option 3, the maximum Death Benefit is equal to the lesser of (i) 200% of the Specified Amount plus the lesser of (a) the Option 3 maximum increase and (b) the accumulated premium amount; and (ii)  the sum of the Cash Value and $8,000,000.  We may increase the Maximum Death Benefit in our sole discretion.

For each Valuation Period and upon the death of the Insured, we will determine whether the policy’s Cash Value would cause the Death Benefit to be greater than the Maximum Death Benefit.  If the Death Benefit would exceed the Maximum Death Benefit, and we choose to exercise our limitation right, we will surrender an amount from the policy to lower the Cash Value.  The partial surrender will be for the amount necessary to lower the Cash Value to a level that would result in the Death Benefit not exceeding the sum of the Cash Value and the lesser of (i) 180% of the Total Specified Amount on the policy issue date and (ii) $7,200,000.  The forced partial surrender will reduce the Cash Value and Total Specified Amount below the Maximum Death Benefit.  We do this to avoid constant and small forced partial surrenders.   If you have elected the Supplemental Insurance Rider, the Rider Specified Amount and the Base Specified Amount will be proportionally reduced.  A forced partial surrender of this nature will ultimately reduce total policy charges because of the decreased Total Specified Amount (decreased coverage results in lower charges).

There is no action you can take to prevent a forced partial surrender.  In addition, there may be adverse tax consequences on a forced partial surrender.  We will provide you notice of any forced partial surrender.  A forced partial surrender has the same impact as a requested partial surrender which means your Total Specified Amount will be reduced proportionally between any elected Base Specified Amount and Rider Specified Amount and will result in a corresponding decrease in charges.

If Death Benefit Option 3 is applicable and the accumulated premium amount is greater than the Cash Value, we reserve the right to reduce the amount previously credited to the accumulated premium amount to an amount equal to 90% of the Cash Value immediately before the distribution.  For example, if at the time of the pre-death distribution, your Cash Value is $100 and your accumulated premium amount is $102, we would reduce your accumulated premium amount by $12 to $90 (i.e.,

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90% of the Cash Value). The accumulated premium amount will not become less than zero because of a pre-death distribution.  The partial surrender will be deducted proportionally from your Sub-Account allocations and the fixed account.  The partial surrender amount will be paid to the Owner via check and will be accompanied by a confirmation statement.  Partial surrenders may result in adverse tax consequences that are the sole responsibility of the Owner.

The Maximum Death Benefit may, under certain circumstances, curtail the flexibility that the policy affords you.  For example, the policy's Cash Value may increase at a rate that outpaces the ratio of Cash Value to life insurance permitted under the Internal Revenue Code.  In some instances, you and we may address this situation by increasing the Total Specified Amount of insurance so that the policy's ratio of Cash Value to life insurance is readjusted to comply with the Code definition.  If, however, an increase in the Specified Amount would cause the Death Benefit to exceed the Maximum Death Benefit, then this method of achieving compliance with the Code definition of life insurance may not be available.

We will notify you that a pre-death distribution and/or a reduction in the accumulated premium amount has been generated.  We will send this notice no later than thirty days after we become aware that the maximum Death Benefit has been exceeded.  Taxes arising from the pre-death distribution, if any, are your responsibility.  We urge you to confer with your tax adviser regarding tax implications of receiving a pre-death distribution prior to the purchase of this policy.

If the Death Benefit would exceed the Maximum Death Benefit, and we choose not to exercise our limitation right, we will increase the Maximum Death Benefit amount by endorsing the policy or reissuing the Policy Data Page.

Changes in the Death Benefit Option

After the first policy year, you may elect to change the Death Benefit option from either Death Benefit Option 1 to Death Benefit Option 2, or from Death Benefit Option 2 to Death Benefit Option 1.  You may not change to Death Benefit Option 3.  However, you may change from Death Benefit Option 3 to Death Benefit Option 1 or Death Benefit Option 2.  We will permit only one change of Death Benefit option per policy year.  The effective date of a change will be the monthly anniversary of the Policy Date following the date we approve the change.

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 three months.

Upon effecting a Death Benefit option change, we will adjust the Total Specified Amount so that the Net Amount At Risk remains the same.  The policy’s charges going forward will be based on the adjusted Total Specified Amount causing the charges to be higher or lower than they were prior to the change.  We will refuse a Death Benefit option change that would reduce the Total Specified Amount to a level where the Premium you have already paid would exceed any premium limit under the tax tests for life insurance.

Where the policy owner has selected the guideline premium/cash value corridor test, a change in Death Benefit option will not be permitted if it results in the total Premiums paid exceeding the maximum premium limitations under Section 7702 of the Code.

Incontestability

Except for material misrepresentations, we will not contest payment of the Death Benefit based on the initial Total Specified Amount, if applicable, after the policy has been In Force during the Insured's lifetime for 2 years from the Policy Date.

For any change in Total Specified Amount requiring evidence of insurability, we will not contest payment of the Death Benefit based on such increase after it has been In Force during the Insured's lifetime for 2 years from its effective date.

We will not contest the reinstatement of the policy after the reinstated policy has been In Force during the Insured’s lifetime for 2 years from the effective date of the reinstatement.  We will not contest the policy after a change in the Insured (pursuant to election of the Change of Insured Rider) after it has been In Force during the new Insured’s lifetime for 2 years from the Change Date.

Suicide

If the Insured dies by suicide, while sane or insane, within 2 years from the Policy Date or the reinstatement date, we will pay no more than the sum of the Premiums paid, less any Indebtedness, and less any partial surrenders.  If such Insured’s policy had a Supplemental Insurance Rider, we will return the charges deducted for such rider, but not pay the death benefit.

If the Insured dies by suicide, while sane or insane, within 2 years from the date we accept an application for an increase in the Total Specified Amount, we will pay no more than the Death Benefit associated with insurance that has been In Force for at least 2 years from the Policy Date, plus the Cost of Insurance Charges associated with any increase in Total Specified Amount that has been In Force for a shorter period.

If the Insured dies by suicide, while sane or insane, within 2 years from the effective date of a change of Insured (pursuant to the terms of the Change of Insured Rider, if elected), we will pay no more than the Cash Value as of the Change Date, plus any Premium paid since such date, less any Indebtedness, and less any partial surrenders.

If the policy was issued pursuant to an exchange under Section 1035 of the Code, and the Insured dies by suicide within 2

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years of the Policy Date, we will pay a Death Benefit equal to the lesser of: (a) the amount of insurance under the exchanged policy as of the Policy Date; or (b) the Total Specified Amount of this policy.  This provision only applies if the Owner is also the Beneficiary, and if the exchanged policy was originally issued more than 2 years prior to the Policy Date of this policy.  If the Owner and Beneficiary are not the same, the amount of insurance received will be the amount of insurance under the exchanged (predecessor) policy as of the Policy Date.

Policy Maturity

If the policy is In Force on the Maturity Date, we will pay the Maturity Proceeds to you, generally, within 7 days of the Maturity Date.  The payment will be postponed, however, when: the New York Stock Exchange is closed; the SEC restricts trading or declares an emergency; the SEC permits us to defer it for the protection of our policy owners; or the Proceeds are to be paid from the fixed account.  The Proceeds will equal the policy's Cash Value minus any Indebtedness and will be paid directly to you in a lump sum, unless you elect to leave the Proceeds on deposit with us (or an affiliate) in an interest-bearing account.  After we pay the Proceeds, the policy is terminated.

Extending the Maturity Date

Prior to the Maturity Date, we will send you a notice and election form informing you of your option to extend the Maturity Date of this policy.  To invoke the option, you must return the properly executed election form to our Home Office by the Maturity Date.  If you do not invoke the option or we do not receive the form by the Maturity Date, the Maturity Proceeds will be paid to you according to your policy’s settlement provisions.  Note:  if the Supplemental Insurance rider is in effect, you may not extend the Maturity Date with respect to Rider Specified Amount.

If you elect to extend the Maturity Date, the extended Maturity Date will be the date of the Insured's death, at which time we will pay the Proceeds to the Beneficiary.  During this Maturity Date extension, the policy will operate the same as it did prior to the extension, except as follows:

(1)   no changes to the Total Specified Amount will be allowed;

(2)   the Proceeds will equal the Cash Value;

(3)   Death Benefit Options 2 and 3 will be changed to a revised Death Benefit 1 where the death benefit equals the Cash Value only;

(4)   no additional Premium payments will be allowed;

(5)   no additional periodic charges will be deducted; and

(6)   100% of the policy's Cash Value will be transferred to the fixed account.

If you extend the Maturity Date, we will endorse the policy to reflect the changes above.  The Maturity Date will not be extended if such extension would cause the policy to fail the definition of life insurance under the Code.

The primary purpose of Maturity Date extension is to continue the life insurance coverage, and avoid current income taxes on any earnings in excess of your cost basis if the maturity Proceeds are taken.  See, "Surrendering the Policy; Maturity," in the "Taxes" section of this prospectus for additional information.

Assuming you have no outstanding loans on the Maturity Date and that no partial surrenders or loans are taken after the Maturity Date, the Proceeds after the Maturity Date will equal or exceed the Proceeds at maturity.  However, because the loan interest rate charged may be greater than loan interest credited, if you have an outstanding loan on or after the Maturity Date, Proceeds after the Maturity Date may be less than the Proceeds at maturity.

Payment of Policy Proceeds

We will pay Proceeds within 30 days after we receive your written request in good order at our Home Office, unless you elect to leave the Proceeds on deposit with us (or an affiliate) in an interest-bearing account.

We may make two lump sum payments of the Proceeds.  The first lump sum will be the portion of the Cash Surrender Value in the separate account attributable to Proceeds and will be paid within seven days of the date we receive your written request in good order at our Home Office.  We may delay payment of the first lump sum in cases where the SEC permits us by emergency order to do so.  Any remaining Proceeds will be paid by us in a second lump sum within thirty days after we receive your written request in good order at our Home Office.  We reserve the right to delay payment of any portion of the Cash Surrender Value attributable to the fixed account for up to six months, or as permitted under state law.

Taxes

The tax treatment of life insurance policies under the Code is complex and the tax treatment of your policy will depend on your particular circumstances.   Seek competent tax advice regarding the tax treatment of the policy given your situation.  The following discussion provides an overview of the Code’s provisions relating to certain common life insurance policy transactions.  It is not and cannot be comprehensive, and it cannot replace personalized advice provided by a competent tax professional.

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Types of Taxes

Federal Income Tax.  Generally, the United States assesses a tax on income, which is broadly defined to include all items of income from whatever source, unless specifically excluded.  Certain expenditures can reduce income for tax purposes and correspondingly the amount of tax payable.  These expenditures are called deductions.  While there are many more income tax concepts under the Code, the concepts of "income" and "deduction" are the most fundamental to the federal income tax treatment that pertains to this policy.

Federal Transfer Tax.  In addition to the income tax, the United States also assesses a tax on some or all of the value of certain transfers of wealth made by gift while a person is living (the federal gift tax), and by bequest or otherwise at the time of a person’s death (the federal estate tax).

The federal gift tax is imposed on the value of the property (including cash) transferred by gift.  Each donor is allowed to exclude an amount (in 2009, up to $13,000 per recipient) from the value of present interest gifts.  In addition, each donor is allowed a credit against the tax on the first million dollars in lifetime gifts (calculated after taking into account the $13,000 exclusion amount).  An unlimited marital deduction may be available for certain lifetime gifts made by the donor to the donor's spouse.  Unlike the estate tax, the gift tax is not scheduled to be repealed.

In general, in 2009, an estate of less than $3,500,000 (inclusive of certain pre-death gifts) will not incur a federal estate tax liability.  The federal estate tax (but not the federal gift tax) is scheduled to be repealed effective after 2009; however, unless Congress acts to make that repeal permanent, the estate tax is scheduled to be reinstated with respect to decedents who die after December 31, 2010.  If the estate tax is reinstated and Congress has not acted further, the size of estates that will not incur an estate tax will revert to $1 million.

An unlimited marital deduction may be available for federal estate tax purposes for certain amounts that pass to the surviving spouse.

If the transfer is made to someone two or more generations younger than the transferor, the transfer may be subject to the federal generation-skipping transfer tax ("GSTT").  The GSTT provisions generally apply to the same transfers that are subject to estate or gift taxes.  The tax is imposed at a flat rate equal to the maximum estate tax rate (for 2009, 45%), and there is a provision for an exemption (for 2009, 3.5 million).  The GSTT tax is scheduled to be repealed effective after 2009; however, unless Congress acts to make that repeal permanent, the GSTT tax is scheduled to be reinstated on January 1, 2011 at a rate of 55%.

State and Local Taxes.  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.  While these taxes may or may not be substantial in your case, state by state differences of these taxes preclude a useful description of them in this prospectus.

Buying the Policy

Federal Income Tax.  Generally, the Code treats life insurance Premiums as a personal expense.  This means that under the general rule you cannot deduct from your taxable income the Premiums paid to purchase the policy.

Federal Transfer Tax.  Generally, the Code treats the payment of Premiums on a life insurance policy as a gift when the Premium payment benefits someone else (such as when premium payments are paid by someone other than the policy owner).  Gifts are not generally included in the recipient’s taxable income.  If you (whether or not you are the Insured) transfer ownership of the policy to another person, the transfer may be subject to a federal gift tax.

Investment Gain in the Policy

The income tax treatment of changes in the policy’s Cash Value depends on whether the policy is "life insurance" under the Code.  If the policy meets the definition of life insurance, then the increase in the policy’s Cash Value is not included in your taxable income for federal income tax purposes unless it is distributed to you before the death of the Insured.

To qualify as life insurance, the policy must meet certain tests set out in Section 7702 of the Code.  We will monitor the Policy’s compliance with Code Section 7702, and take whatever steps are necessary to stay in compliance.

Diversification.  In addition to meeting the tests required under Section 7702, Section 817(h) of the Code requires that the investments of the separate account be adequately diversified.  Regulations under Code Section 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.  If the failure to diversify is not corrected, the income and gain in the policy would be treated as taxable ordinary income for federal income tax purposes.

We will also monitor compliance with Code Section 817(h) and the regulations applicable to Section 817(h) and, to the extent necessary, will change the objectives or assets of underlying investment options to remain in compliance.  Thus, the policy should receive federal income tax treatment as life insurance.

Representatives of the IRS have informally 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.  In 2003, the IRS issued formal guidance, in Revenue Ruling 2003-91, that

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indicates that if the number of underlying mutual funds available in a variable insurance product does not exceed 20, the number of funds alone would not cause the policy to not qualify for the desired tax treatment.  The IRS has also indicated that exceeding 20 investment options may be considered a factor, along with other factors including the number of transfer opportunities available under the policy, when determining whether the policy qualifies for the desired tax treatment.  The revenue ruling did not indicate the number of fund options, if any, that would cause the policy to not provide the desired tax treatment.  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 the investment objectives of underlying mutual funds such that the policy would no longer qualify as life insurance under Section 7702 of the Code, we will take whatever steps are available to remain in compliance.

Periodic Withdrawals, Non-Periodic Withdrawals and Loans

The tax treatment described in this section applies to withdrawals and loans you choose to take from the policy.  It also applies to Premiums we accept but then return to meet the Code's definition of life insurance, and amounts used to pay the Premium on any rider to the policy.

The income tax treatment of distributions of cash from the policy depends on whether the policy is also a "modified endowment contract" under the Code. Generally, the income tax consequences of owning a life insurance policy that is not a modified endowment contract are more advantageous than the tax consequences of owning a life insurance policy that is a modified endowment contract.

The policies offered by this prospectus may or may not be issued as modified endowment contracts.  If a policy is issued as a modified endowment contract, it will always be a modified endowment contract; a policy that is not issued as a modified endowment contract can become a modified endowment contract due to subsequent transactions with respect to the policy, such as payment of additional Premiums.  If the policy is not issued as a modified endowment contract, we will monitor it and advise you if the payment of a Premium, or other transaction, may cause the policy to become a modified endowment contract.

When the Policy is Life Insurance that is a Modified Endowment Contract.  Section 7702A of the 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.  Under certain conditions, a policy may become a modified endowment contract, 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 Code.

All modified endowment contracts issued to the same owner by the same company during a single calendar year are required to be aggregated and treated as a single policy for purposes of determining the amount that is includible in income when a distribution occurs.

The Code provides special rules for the taxation of surrenders, partial surrenders, loans, collateral assignments and other pre-death distributions from modified endowment contracts.  Under these special rules, such transactions are taxable to the extent that at the time of the transaction the Cash Value of the policy exceeds the investment in the policy (generally, the Premiums paid for the policy).  In addition, a 10% tax penalty generally applies to the taxable portion of such distributions unless the policy owner is over age 59½ or disabled, or the distribution is part of a series of substantially equal periodic payments as defined in the Code.

When the Policy is Life Insurance that is NOT a Modified Endowment Contract.  If the policy is not issued as a modified endowment contract, we will monitor Premiums paid and will notify the policy owner when the policy is in jeopardy of becoming a modified endowment contract.

Distributions from life insurance policies that are not modified endowment contracts generally are treated as being from the investment in the policy (generally, the Premiums paid for the policy), and then from the income in the policy.  Because Premium payments are generally nondeductible, distributions not in excess of investment in the policy are generally not includible in income; instead, they reduce the owner’s investment in the policy.

However, if a policy is not a modified endowment contract, a cash distribution during the first 15 years after a policy is issued that causes a reduction in Death Benefits may still be fully or partially taxable to the policy owner pursuant to Section 7702(f)(7) of the Code.  You should carefully consider this potential tax ramification and seek further information before requesting any changes in the terms of the policy.

In addition, a loan from a life insurance policy that is not a modified endowment contract is not taxable when made, although it can be treated as a distribution if it is forgiven during the owner’s lifetime.  Distributions from policies that are not modified endowment contracts are not subject to the 10% early distribution penalty tax.

Surrendering the Policy; Maturity

A full surrender, cancellation of the policy by Lapse, or the maturity of the policy on its Maturity Date may have adverse tax consequences.  If the amount you receive (or are deemed to receive upon maturity) plus total policy Indebtedness exceeds the

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investment in the policy (generally, the Premiums paid into the policy), then the excess generally will be treated as taxable ordinary income, regardless of whether or not the policy is a modified endowment contract.  In certain circumstances, for example when the policy Indebtedness is very large, the amount of tax could exceed the amount distributed to you at surrender.

The purpose of the Maturity Date extension feature is to permit the policy to continue to be treated as life insurance for tax purposes.  Although we believe that the extension provision will cause the Contract to continue to be treated as life insurance after the initially scheduled maturity date, that result is not certain due to a lack of specificity in the guidance on the issue.  You should consult with your qualified tax advisor regarding the possible adverse tax consequences that could result from an extension of the scheduled Maturity Date.

Withholding

Distributions of income from a life insurance policy, including a life insurance policy that is a modified endowment contract, are subject to federal income tax withholding.  Generally, the recipient may elect not to have the withholding taken from the distribution.  We will withhold income tax unless you advise us, in writing, of your request not to withhold.  If you request that taxes not be withheld, or if the taxes withheld are insufficient, you may be liable for payment of an estimated tax.

A distribution of income from a life insurance policy may be subject to mandatory back-up withholding.  Mandatory backup withholding means that we are required to withhold taxes on a distribution, at the rate established by Section 3406 of the Code, and the recipient cannot elect to receive the entire distribution at once.  Mandatory backup withholding may arise if we have not been provided a taxpayer identification number, or if the IRS notifies us that back-up withholding is required.

In certain employer-sponsored life insurance arrangements, participants may be required to report for income tax purposes, one or more of the following:

·  the value each year of the life insurance protection provided;

·   an amount equal to any employer-paid Premiums; or

·  some or all of the amount by which the current value exceeds the employer’s interest in the policy; or

·   interest that is deemed to have been forgiven on a loan that we deemed to have been made by the employer.

Participants in an employer-sponsored plan relating to this policy 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.

Exchanging the Policy for Another Life Insurance Policy

Generally, you will pay taxes on amounts that you receive in excess of your Premium payments when you completely surrender the policy.  If, however, you exchange the policy for another life insurance policy, modified endowment contract, or annuity contract, you will not be taxed on the excess amount if the exchange meets the requirements of Code Section 1035.  To meet Section 1035 requirements, the Insured named in the policy must be the Insured for the new policy  Generally, the new policy or contract will be treated as having the same issue date and tax basis as the old policy or contract.

If the policy or contract is subject to a policy Indebtedness that is discharged as part of the exchange transaction, the discharge of the Indebtedness may be taxable.  Owners should consult with their personal tax or legal advisors in structuring any policy exchange transaction.

Taxation of Death Benefits

Federal Income Tax.  The Death Benefit is generally excludable from the beneficiary's gross income under Section 101 of the Code.  However, if the policy had been transferred to a new policy owner for valuable consideration (e.g., through a sale of the contract), a portion of the Death Benefit may be includable in the beneficiary’s gross income when it is paid.

The payout option selected by your beneficiary may affect how the payments received by the beneficiary are taxed.  Under the various payout options, the amount payable to the beneficiary may include earnings on the Death Benefit, which will be taxable as ordinary income.  For example, if the beneficiary elects to receive interest only, then the entire amount of the interest payment will be taxable to the beneficiary; if a periodic payment (whether for a fixed period or for life) is selected, then a portion of each payment will be taxable interest income, and a portion will be treated as the nontaxable payment of the Death Benefit.  Your beneficiaries should consult with their tax advisors to determine the tax consequences of electing a payout option, based on their individual circumstances.

Special federal income tax considerations for life insurance policies owned by employers.  In 2006, President Bush signed the Pension Protection Act of 2006, which contains new Code Sections 101(j) and 6039I, which affect the tax treatment of life insurance policies owned by the employer of the Insured.  These provisions are generally effective for life insurance policies issued after August 17, 2006.  If a life insurance policy was issued on or before August 17, 2006, but materially modified after that date, it will be treated as having been issued after that date for purposes of section 101(j).  Policies issued after August 17, 2006 pursuant to a Section 1035 exchange generally are excluded from the operation of these new provisions,

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provided that the policy received in the exchange does not have a material increase in death benefit or other material change with respect to the old policy.

New Section 101(j) provides the general rule that, with respect to an employer-owned life insurance policy, the amount of death benefit payable directly or indirectly to the employer that may be excluded from income cannot exceed the sum of Premiums and other payments paid by the policyholder for the policy.  Consequently, under this general rule, the entire death benefit, less the cost to the policyholder, will be taxable.  Although Section 101(j) is not clear, if lifetime distributions from the policy are made as a nontaxable return of premium, it appears that the reduction would apply for Section 101(j) purposes and reduce the amount of Premiums for this purpose.

There are 2 exceptions to this general rule of taxability, provided that statutory notice, consent, and information requirements are satisfied.  These requirements are as follows:  Prior to the issuance of the company, (a) the employee is notified in writing that the employer intends to insure the employee's life, and the maximum face amount for which the employee could be Insured at the time that the policy is issued; (b) the employee provides written consent to being insured under the policy and that such coverage may continue after the Insured terminates employment; and (c) the employee is informed in writing that the employer will be a beneficiary of any proceeds payable upon the death of the employee.  If the employer fails to meet all of those requirements, then neither exception can apply.

The 2 exceptions are as follows.  First, if proper notice and consent are given and received, and if the Insured was an employee at any time during the 12-month period before the Insured’s death, then new Section 101(j) would not apply.

Second, if proper notice and consent are given and received and, at the time that the policy is issued, and the Insured is either a director, a “highly compensated employee” (within the meaning of Section 414(q) of the Code without regard to paragraph (a)(B)(ii) thereof), or a “highly compensated individual” (within the meaning of Section 105(h)(5), except “35%” is substituted for “25%” in paragraph (C) thereof), then the new Section 101(j) would not apply.

Code Section 6039I requires any policyholder of an employer-owned policy to file an annual return showing (a) the number of employees of the policyholder, (b) the number of such employees insured under employee-owned policies at the end of the year, (c) the total amount of insurance In Force with respect to those policies at the end of the year, (d) the name, address, taxpayer identification number and type of business of the policyholder, and (e) that the policyholder has a valid consent for each Insured (or, if all consents are not obtained, the number of insured employees for whom such consent was not obtained).  Proper recordkeeping is also required by this section.

It is your responsibility to (a) provide the proper notice to each Insured, (b) obtain the proper consent from each Insured, (c) inform each Insured in writing that you will be the beneficiary of any proceeds payable upon the death of the Insured, and (d) file the annual return required by Section 6039I.  If you fail to provide the necessary notice and information, or fail to obtain the necessary consent, the death benefit will be taxable to you when received.  If you fail to file a properly completed return under Section 6039I, you could be required to pay a penalty.

Federal Transfer Taxes.  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, in general, is any right in the policy 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 beneficiary is two or more generations younger than the Insured, the Death Benefit may be subject to the GSTT.  Pursuant to regulations issued by the U.S. Secretary of the Treasury, we may be required to withhold a portion of the Proceeds and pay them directly to the IRS as the GSTT tax payment.

If the policy owner is not the Insured or a beneficiary, payment of the Death Benefit to the beneficiary will be treated as a gift to the beneficiary from the policy owner.

Terminal Illness

Certain distributions made under a policy on the life of a “terminally ill individual” or a “chronically ill individual,” as those terms are defined in the Code, are treated as death proceeds.  See, “Taxation of Death Benefits,” above.

Special Considerations for Corporations

Section 264 of the Code imposes a number of limitations on the interest and other business deductions that may otherwise be available to businesses that own life insurance policies.  In addition, the Premium paid by a business for a life insurance policy is not deductible as a business expense or otherwise if the business is directly or indirectly a beneficiary of the policy.

For purposes of the alternative minimum tax ("AMT") that may be imposed on corporations, the death benefit from a life insurance policy, even though excluded from gross income for normal tax purposes, is included in "adjusted current earnings" for AMT purposes.  In addition, although increases to the Cash Surrender Value of a life insurance policy are generally excluded from gross income for normal income tax purposes, such increases are included in adjusted current earnings for income tax purposes.

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Due to the complexity of these rules, and because they are affected by your facts and circumstances, you should consult with legal and tax counsel and other competent advisers regarding these matters.

Federal appellate and trial courts have examined the economic substance of transactions involving life insurance policies owned by corporations.  These cases involved relatively large loans against the policy’s Cash Value as well as tax deductions for the interest paid on the policy loans by the corporate policy owner to the insurance company.  Under the particular factual circumstances in these cases, the courts determined that the corporate policy owners should not have taken tax deductions for the interest paid.  Accordingly, the court determined that the corporations should have paid taxes on the amounts deducted.  Corporations should consider, in consultation with tax professionals familiar with these matters, the impact of these decisions on the corporation’s intended use of the policy.

See, also, Taxation of Death Benefits, Special federal income tax considerations for life insurance policies owned by employers, above; and Business Uses of the Policy, below.

Taxes and the Value of Your Policy

For federal income tax purposes, a separate account is not a separate entity from the company.  Thus, the tax status of the separate account is not distinct from our status as a life insurance company.  Investment income and realized capital gains on the assets of the separate 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.

At present, we do not expect to incur any federal income tax liability that would be chargeable to the Accumulation Units.  Based upon these expectations, no charge is being made against your Accumulation Units for federal income taxes.  If, however, we determine that taxes may be incurred, we reserve the right to assess a charge for these taxes.

We may also incur state and local taxes (in addition to those described in the discussion of the Premium Taxes) in several states.  At present, these taxes are not significant.  If they increase, however, charges for such taxes may be made that would decrease the value of your Accumulation Units.

Business Uses of the Policy

The life insurance policy may be used in various arrangements, including nonqualified deferred compensation or salary continuance plans, split dollar insurance plans, executive bonus plans, retiree medical benefit plans, and others.  The tax consequences of these plans may vary depending on the particular facts and circumstances of each individual arrangement.  The IRS has also recently issued new guidance on split dollar insurance plans.  In addition, Internal Revenue Code Section 409A, which sets forth new rules for taxation of nonqualified deferred compensation, was added to the Code for deferrals after December 31, 2004.  Therefore, if you are contemplating using the policy in any arrangement the value of which depends in part on its tax consequences, you should be sure to consult a tax adviser as to tax attributes of the arrangement.

Non-Resident Aliens and Other Persons Who are not Citizens of the United States

Special income tax laws and rules apply to non-resident aliens of the United States including certain withholding requirements with respect to pre-death distributions from the policy.  In addition, foreign law may impose additional taxes on the policy, the Death Benefit, or other distributions and/or ownership of the policy.

In addition, special gift, estate and GSTT laws and rules may apply to non-resident aliens, and to transfers to persons who are not citizens of the United States, including limitations on the marital deduction if the surviving or donee spouse is not a citizen of the United States.

If you are a non-resident alien, or a resident alien, or if any of your beneficiaries (including your spouse) are not citizens of the United States, you should confer with a competent tax professional with respect to the tax treatment if this policy.

If you, the Insured, the beneficiary, or other person receiving any benefit or interest in or from the policy, are not both a resident and citizen of the United States, there may be a tax imposed by a foreign country that is in addition to any tax imposed by the United States.  The foreign law (including regulations, rulings, treaties with the United States, and case law) may change and impose additional or increased taxes on the policy, payment of the Death Benefit, or other distributions and/or ownership of the policy.

Tax Changes

The foregoing discussion, which is based on our understanding of federal tax laws as currently interpreted by the IRS, is general and is not intended as tax advice.

The Code has been subjected to 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 life insurance policies.  It is reasonable to believe that such proposals, and future proposals, may be enacted into law.  The U.S. Treasury Department may amend existing regulations, issue new regulations, or adopt new interpretations of existing law that may be differ from 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.

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In 2001, the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) was enacted into law.  EGTRRA contained numerous changes to the federal income, gift, estate and generation skipping transfer taxes, many of which are not scheduled to become effective until a future date.  Among other matters, EGTRRA provides for the repeal of the federal estate and generation-skipping transfer taxes after 2009; however, unless Congress and the President enact additional legislation, EGTRRA also provides that all of those changes will "sunset" after 2010, and the estate and generation skipping transfer taxes will be reinstated as if EGTRRA had never been enacted.

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 your independent legal, tax and/or financial adviser.

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.  We make no representation as to the likelihood of the continuation of these current laws, interpretations, and policies.

Nationwide Life Insurance Company

We are a stock life insurance company organized under Ohio law.  We were founded in March, 1929 and our Home Office is One Nationwide Plaza, Columbus, Ohio 43215.  We provide long-term savings products by issuing life insurance, annuities and other retirement products.

Nationwide VLI Separate Account–4

Organization, Registration and Operation

Nationwide VLI Separate Account-4 is a separate account established under Ohio law.  We own the assets in this account and we are obligated to pay all benefits under the policies.  We may use the separate account to support other variable life insurance policies that we issue.  The separate account is registered with the SEC as a unit investment trust under the Investment Company Act of 1940 (“1940 Act”) and qualifies as a “separate account” within the meaning of the federal securities laws.  This registration does not involve the SEC’s supervision of the separate account’s management or investment practices or policies.

The separate account is divided into Sub-Accounts that invest in shares of the underlying mutual funds.  We buy and sell the mutual shares at their respective NAV.  Any dividends and distributions from a mutual fund are reinvested at NAV in shares of that mutual fund.

Income, gains, and losses, whether or not realized, from the assets in the separate account will be credited.  The substitute mutual fund may have different fees and expenses.  Substitution may be made with respect to existing to, or charged against, the separate account without regard to Nationwide's other income, gains, or losses.  Income, gains, and losses credited to, or charged against, a Sub-Account reflect the Sub-Account’s own Investment Experience and not the investment experience of our other assets.  The separate account's assets are held separately from our other assets and are not part of our general account.  We may not use the separate account’s assets to pay any of our liabilities other than those arising from the policies.  We will hold assets in the separate account equal to its liabilities.  For purposes of federal securities laws, the separate account is, and will remain, fully funded at all times.  The separate account may include other Sub-Accounts that are not available under the policies, and are not discussed in this prospectus.

We do not guarantee any money you place in this separate account.  The value of each Sub-Account will increase or decrease, depending on the Investment Experience of the corresponding mutual fund.  You could lose some or all of your money.

Addition, Deletion or Substitution of Mutual Funds

Where permitted by applicable law, we reserve the right to:

·   remove, combine, or add Sub-Accounts and make new Sub-Accounts available;

·   close Sub-Accounts to allocations;

·   transfer assets supporting the policies from one Sub-Account to another, or from one separate account to another;

·   combine the separate account with other separate accounts, and/or create new separate accounts; and

·   modify the policy provisions to reflect changes in the Sub-Accounts and the separate account to comply with applicable law.

We reserve the right to make other structural and operational changes affecting this separate account.

We will notify you if we make any of the changes above.  Also, to the extent required by law, we will obtain the required orders, approvals and/or regulatory clearance from the appropriate government agencies (such as the various insurance regulators or the SEC).

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Substitution of Securities. We may substitute, eliminate, or combine shares of another underlying mutual fund for shares already purchased or to be purchased in the future if either of the following occurs:

(1)           shares of a current underlying mutual fund are no longer available for investment; or

(2)           further investment in an underlying mutual fund is inappropriate.

No substitution of shares may take place without the prior approval of the SEC. All affected policy owners will be notified in the event there is a substitution, elimination or combination of shares.

The substitute mutual fund may have different fees and expenses.  Substitution may be made with respect to existing investments or the investment of future Premium, or both.  We may close Sub-Accounts to allocations of Premiums or policy value, or both, at any time in our sole discretion.  The mutual funds, which sell their shares to the Sub-Accounts pursuant to participation agreements, also may terminate these agreements and discontinue offering their shares to the Sub-Accounts.

Deregistration of the Separate Account. We may deregister Nationwide VLI Separate Account-4 under the 1940 Act in the event the separate account meets an exemption from registration under the 1940 Act, if there are no shareholders in the separate account or for any other purpose approved by the SEC.

No deregistration may take place without the prior approval of the SEC.  All policy owners will be notified in the event Nationwide deregisters Nationwide VLI Separate Account-4.

Voting Rights

Although the separate account owns the mutual fund shares, you are the beneficial owner of those shares.  When a matter involving a mutual fund is subject to shareholder vote, unless there is a change in existing law, we will vote the separate account's shares only as you instruct.

When a shareholder vote occurs, you will have the right to instruct us how to vote.  The weight of your vote is based on the number of mutual fund shares that corresponds to the amount of Cash Value you have allocated to that mutual fund's Sub-Account (as of a date set by the portfolio).  We will vote shares for which no instructions are received in the same proportion as those that are received.  What this means to you is that when only a small number of policy owners vote, each vote has a greater impact on, and may control the outcome of the vote.

Legal Proceedings

Nationwide Life Insurance Company

Nationwide Financial Services, Inc. (NFS, or collectively with its subsidiaries, the Company) was formed in November 1996. NFS is the holding company for Nationwide Life Insurance Company (NLIC), Nationwide Life and Annuity Insurance Company (NLAIC) and other companies that comprise the life insurance and retirement savings operations of the Nationwide group of companies (Nationwide). This group includes Nationwide Financial Network (NFN), which refers to Nationwide Life Insurance Company of America (NLICA), Nationwide Life and Annuity Company of America (NLACA) and subsidiaries, including the affiliated distribution network. NFS is incorporated in Delaware and maintains its principal executive offices in Columbus, Ohio.

The Company is a party to litigation and arbitration proceedings in the ordinary course of its business. It is often not possible to determine the ultimate outcome of the pending investigations and legal proceedings or to provide reasonable ranges of potential losses with any degree of certainty. Some matters, including certain of those referred to below, are in very preliminary stages, and the Company does not have sufficient information to make an assessment of the plaintiffs’ claims for liability or damages. In some of the cases seeking to be certified as class actions, the court has not yet decided whether a class will be certified or (in the event of certification) the size of the class and class period. In many of the cases, the plaintiffs are seeking undefined amounts of damages or other relief, including punitive damages and equitable remedies, which are difficult to quantify and cannot be defined based on the information currently available. The Company does not believe, based on information currently known by management, that the outcomes of such pending investigations and legal proceedings are likely to have a material adverse effect on the Company’s consolidated financial position. However, given the large and/or indeterminate amounts sought in certain of these matters and inherent unpredictability of litigation, it is possible that an adverse outcome in certain matters could have a material adverse effect on the Company’s consolidated financial position or results of operations in a particular period.

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 against life insurers other than the Company.

The financial services industry, including mutual fund, variable annuity, retirement plan, life insurance and distribution companies, has also been the subject of increasing scrutiny by regulators, legislators and the media over the past few years. Numerous regulatory agencies, including the SEC, the Financial Industry Regulatory Authority and the New York State Attorney General, have commenced industry-wide investigations regarding late trading and market timing in connection with mutual funds and variable insurance contracts, and have commenced enforcement actions against some mutual fund and life insurance companies on those issues. The

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Company has been contacted by or received subpoenas from the SEC and the New York State Attorney General, who are investigating market timing in certain mutual funds offered in insurance products sponsored by the Company. The Company has cooperated with these investigations. Information requests from the New York State Attorney General and the SEC with respect to investigations into late trading and market timing were last responded to by the Company and its affiliates in December 2003 and June 2005, respectively, and no further information requests have been received with respect to these matters.

In addition, state and federal regulators and other governmental bodies have commenced investigations, proceedings or inquiries relating to compensation and bidding arrangements and possible anti-competitive activities between insurance producers and brokers and issuers of insurance products, and unsuitable sales and replacements by producers on behalf of the issuer. Also under investigation are compensation and revenue sharing arrangements between the issuers of variable insurance contracts and mutual funds or their affiliates, fee arrangements in retirement plans, the use of side agreements and finite reinsurance agreements, funding agreements issued to back medium-term note (MTN) programs, recordkeeping and retention compliance by broker/dealers, and supervision of former registered representatives. Related investigations, proceedings or inquiries may be commenced in the future. The Company and/or its affiliates have been contacted by or received subpoenas from state and federal regulatory agencies and other governmental bodies, state securities law regulators and state attorneys general for information relating to certain of these investigations, including those relating to compensation, revenue sharing and bidding arrangements, anti-competitive activities, unsuitable sales or replacement practices, fee arrangements in retirement plans, the use of side agreements and finite reinsurance agreements, and funding agreements backing the NLIC MTN program. The Company is cooperating with regulators in connection with these inquiries and will cooperate with Nationwide Mutual Insurance Company (NMIC) in responding to these inquiries to the extent that any inquiries encompass NMIC’s operations.

A promotional and marketing arrangement associated with the Company’s offering of a retirement plan product and related services in Alabama is under investigation by the Alabama Securities Commission. The Company currently expects that any damages paid to settle this matter will not have a material adverse impact on its consolidated financial position. It is not possible to predict what effect, if any, the outcome of this investigation may have on the Company’s retirement plan operations with respect to promotional and marketing arrangements in general in the future.

These proceedings are expected to continue in the future and could result in legal precedents and new industry-wide legislation, rules and regulations that could significantly affect the financial services industry, including mutual fund, retirement plan, life insurance and annuity companies. These proceedings also could affect the outcome of one or more of the Company’s litigation matters. There can be no assurance that any such litigation or regulatory actions will not have a material adverse effect on the Company’s consolidated financial position or results of operations in the future.

Nationwide Financial Services, Inc. (NFS), NMIC, Nationwide Mutual Fire Insurance Company (NMFIC), Nationwide Corporation and the directors of NFS have been named as defendants in several class actions brought by NFS shareholders. These lawsuits arose following the announcement of the joint offer by NMIC, NMFIC and Nationwide Corporation to acquire all of the outstanding shares of NFS’ Class A common stock. The defendants deny any and all allegations of wrongdoing and have defended these lawsuits vigorously. On August 6, 2008, NFS and NMIC, NMFIC and Nationwide Corporation announced that they had entered into a definitive agreement for the acquisition of all of the outstanding shares of NFS’ Class A common stock for $52.25 per share by Nationwide Corporation, subject to the satisfaction of specific closing conditions. Simultaneously, the plaintiffs and defendants entered into a memorandum of understanding for the settlement of these lawsuits. The memorandum of understanding provides, among other things, for the settlement of the lawsuits and release of the defendants and, in exchange for the release and without admitting any wrongdoing, defendant NMIC shall acknowledge that the pending lawsuits were a factor, among others, that led it to offer an increased share price in the transaction. NMIC shall agree to pay plaintiffs’ attorneys’ fees and the costs of notifying the class members of the settlement. The memorandum of understanding is conditioned upon court approval of the proposed settlement. The court has scheduled the fairness hearing for approval of the proposed settlement for June 23, 2009. The lawsuits are pending in multiple jurisdictions and allege that the offer price was inadequate, that the process for reviewing the offer was procedurally unfair and that the defendants have breached their fiduciary duties to the holders of the NFS Class A common stock. NFS continues to defend these lawsuits vigorously.

On November 20, 2007, Nationwide Retirement Solutions, Inc. (NRS) and NLIC were named in a lawsuit filed in the Circuit Court of Jefferson County, Alabama entitled Ruth A. Gwin and Sandra H. Turner, and a class of similarly situated individuals v Nationwide Life Insurance Company, Nationwide Retirement Solutions, Inc., Alabama State Employees Association, PEBCO, Inc. and Fictitious Defendants A to Z. On December 2, 2008, the plaintiffs filed an amended complaint. The plaintiffs claim to represent a class of all participants in the Alabama State Employees Association (ASEA) Plan, excluding members of the Deferred Compensation Committee, members of the Board of Control, ASEA’s directors, officers and board members, and PEBCO’s directors, officers and board members. The class period is from November 20, 2001, to the date of trial. In the amended class action complaint, the plaintiffs allege breach of fiduciary duty, wantonness and breach of contract. The amended class action complaint seeks a declaratory judgment, an injunction, an appointment of an independent fiduciary to protect Plan participants, disgorgement of amounts paid, reformation of Plan documents, compensatory damages and punitive damages, plus interest, attorneys’ fees and costs and such other equitable and legal relief to which plaintiffs and class members may be entitled. Also, on December 2, 2008, the plaintiffs filed a motion for preliminary injunction seeking an order requiring periodic payments made by NRS and/or NLIC to ASEA or PEBCO to be held in a

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trust account for the benefit of Plan participants. On December 4, 2008, the Alabama State Personnel Board and the State of Alabama by, and through the State Personnel Board, filed a motion to intervene and a complaint in intervention. On December 16, 2008, the Companies filed their Answer. On February 4, 2009, the court provisionally agreed to add the State of Alabama, by and through the State Personnel Board as a party. NRS and NLIC continue to defend this case vigorously.

On July 11, 2007, NLIC was named in a lawsuit filed in the United States District Court for the Western District of Washington at Tacoma entitled Jerre Daniels-Hall and David Hamblen, Individually and on behalf of All Others Similarly Situated v. National Education Association, NEA Member Benefits Corporation, Nationwide Life Insurance Company, Security Benefit Life Insurance Company, Security Benefit Group, Inc., Security Distributors, Inc., et. al. The plaintiffs seek to represent a class of all current or former National Education Association (NEA) members who participated in the NEA Valuebuilder 403(b) program at any time between January 1, 1991 and the present (and their heirs and/or beneficiaries). The plaintiffs allege that the defendants violated the Employee Retirement Income Security Act of 1974, as amended (ERISA) by failing to prudently and loyally manage plan assets, by failing to provide complete and accurate information, by engaging in prohibited transactions, and by breaching their fiduciary duties when they failed to prevent other fiduciaries from breaching their fiduciary duties. The complaint seeks to have the defendants restore all losses to the plan, restoration of plan assets and profits to participants, disgorgement of endorsement fees, disgorgement of service fee payments, disgorgement of excessive fees charged to plan participants, other unspecified relief for restitution, declaratory and injunctive relief, and attorneys’ fees. On May 23, 2008, the Court granted the defendants’ motion to dismiss. On June 19, 2008, the plaintiffs filed a notice of appeal. On October 17, 2008, the plaintiffs filed their opening brief. On December 19, 2008 the defendants filed their briefs. On January 26, 2009, the plaintiffs filed Appellants’ Reply Brief. NLIC continues to defend this lawsuit vigorously.

On November 15, 2006, NFS, NLIC and NRS were named in a lawsuit filed in the United States District Court for the Southern District of Ohio entitled Kevin Beary, Sheriff of Orange County, Florida, In His Official Capacity, Individually and On Behalf of All Others Similarly Situated v. Nationwide Life Insurance Co., Nationwide Retirement Solutions, Inc. and Nationwide Financial Services, Inc. The plaintiff seeks to represent a class of all sponsors of 457(b) deferred compensation plans in the United States that had variable annuity contracts with the defendants at any time during the class period, or in the alternative, all sponsors of 457(b) deferred compensation plans in Florida that had variable annuity contracts with the defendants during the class period. The class period is from January 1, 1996 until the class notice is provided. The plaintiff alleges that the defendants breached their fiduciary duties by arranging for and retaining service payments from certain mutual funds. The complaint seeks an accounting, a declaratory judgment, a permanent injunction and disgorgement or restitution of the service fee payments allegedly received by the defendants, including interest. On January 25, 2007, NFS, NLIC and NRS filed a motion to dismiss. On September 17, 2007, the Court granted the motion to dismiss. On October 1, 2007, the plaintiff filed a motion to vacate judgment and for leave to file an amended complaint. On September 15, 2008, the Court denied the plaintiffs’ motion to vacate judgment and for leave to file an amended complaint. On October 15, 2008, the plaintiffs filed a notice of appeal. NFS, NLIC and NRS continue to defend this lawsuit vigorously.

On February 11, 2005, NLIC was named in a class action lawsuit filed in Common Pleas Court, Franklin County, Ohio entitled Michael Carr v. Nationwide Life Insurance Company. The complaint seeks recovery for breach of contract, fraud by omission, violation of the Ohio Deceptive Trade Practices Act and unjust enrichment. The complaint also seeks unspecified compensatory damages, disgorgement of all amounts in excess of the guaranteed maximum premium and attorneys’ fees. On February 2, 2006, the court granted the plaintiff’s motion for class certification on the breach of contract and unjust enrichment claims. The court certified a class consisting of all residents of the United States and the Virgin Islands who, during the class period, paid premiums on a modal basis to NLIC for term life insurance policies issued by NLIC during the class period that provide for guaranteed maximum premiums, excluding certain specified products. Excluded from the class are NLIC; any parent, subsidiary or affiliate of NLIC; all employees, officers and directors of NLIC; and any justice, judge or magistrate judge of the State of Ohio who may hear the case. The class period is from February 10, 1990 through February 2, 2006, the date the class was certified. On January 26, 2007, the plaintiff filed a motion for summary judgment. On April 30, 2007, NLIC filed a motion for summary judgment. On February 4, 2008, the Court granted the class’s motion for summary judgment on the breach of contract claims arising from the term policies in 43 of 51 jurisdictions. The Court granted NLIC’s motion for summary judgment on the breach of contract claims on all decreasing term policies. On November 7, 2008, the case was settled.

On April 13, 2004, NLIC was named in a class action lawsuit filed in Circuit Court, Third Judicial Circuit, Madison County, Illinois, entitled Woodbury v. Nationwide Life Insurance Company. NLIC removed this case to the United States District Court for the Southern District of Illinois on June 1, 2004. On December 27, 2004, the case was transferred to the United States District Court for the District of Maryland and included in the multi-district proceeding entitled In Re Mutual Funds Investment Litigation. In response, on May 13, 2005, the plaintiff filed the first amended complaint purporting to represent, with certain exceptions, a class of all persons who held (through their ownership of an NLIC annuity or insurance product) units of any NLIC sub-account invested in mutual funds that included foreign securities in their portfolios and that experienced market timing or stale price trading activity. The first amended complaint purports to disclaim, with respect to market timing or stale price trading in NLIC’s annuities sub-accounts, any allegation based on NLIC’s untrue statement, failure to disclose any material fact, or usage of any manipulative or deceptive device or contrivance in connection with any class member’s purchases or sales of NLIC annuities or units in annuities sub-accounts. The plaintiff claims, in the alternative, that if NLIC is found with respect to market timing or stale price trading in its annuities sub-accounts, to have made any untrue statement, to have failed to disclose any material fact or to have used or employed any manipulative or deceptive device or contrivance, then the plaintiff purports to represent a class, with certain exceptions, of all persons

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who, prior to NLIC’s untrue statement, omission of material fact, use or employment of any manipulative or deceptive device or contrivance, held (through their ownership of an NLIC annuity or insurance product) units of any NLIC sub-account invested in mutual funds that included foreign securities in their portfolios and that experienced market timing activity. The first amended complaint alleges common law negligence and seeks to recover damages not to exceed $75,000 per plaintiff or class member, including all compensatory damages and costs. On June 1, 2006, the District Court granted NLIC’s motion to dismiss the plaintiff’s complaint. On January 30, 2009, the United States Court of Appeals for the Fourth Circuit affirmed that dismissal. NLIC continues to defend this lawsuit vigorously.

On August 15, 2001, NFS and NLIC were named in a lawsuit filed in the United States District Court for the District of Connecticut entitled Lou Haddock, as trustee of the Flyte Tool & Die, Incorporated Deferred Compensation Plan, et al v. Nationwide Financial Services, Inc. and Nationwide Life Insurance Company. Currently, the plaintiffs’ fifth amended complaint, filed March 21, 2006, purports to represent a class of qualified retirement plans under ERISA that purchased variable annuities from NLIC. The plaintiffs allege that they invested ERISA plan assets in their variable annuity contracts and that NLIC and NFS breached ERISA fiduciary duties by allegedly accepting service payments from certain mutual funds. The complaint seeks disgorgement of some or all of the payments allegedly received by NFS and NLIC, other unspecified relief for restitution, declaratory and injunctive relief, and attorneys’ fees. To date, the District Court has rejected the plaintiffs’ request for certification of the alleged class. On September 25, 2007, NFS’ and NLIC’s motion to dismiss the plaintiffs’ fifth amended complaint was denied. On October 12, 2007, NFS and NLIC filed their answer to the plaintiffs’ fifth amended complaint and amended counterclaims. On November 1, 2007, the plaintiffs filed a motion to dismiss NFS’ and NLIC’s amended counterclaims. On November 15, 2007, the plaintiffs filed a motion for class certification. On February 8, 2008, the Court denied the plaintiffs’ motion to dismiss the amended counterclaim, with the exception that it was tentatively granting the plaintiffs’ motion to dismiss with respect to NFS’ and NLIC’s claim that it could recover any “disgorgement remedy” from plan sponsors. On April 25, 2008, NFS and NLIC filed their opposition to the plaintiffs’ motion for class certification. On September 29, 2008, the plaintiffs filed their reply to NFS’ and NLIC’s opposition to class certification. The Court has set a hearing on the class certification motion for February 27, 2009. NFS and NLIC continue to defend this lawsuit vigorously.

Nationwide Investment Services Corporation

The general distributor, Nationwide Investment Services Corporation, is not engaged in litigation of a material nature.

Financial Statements

The Statement of Additional Information (“SAI”) contains the financial statements of Nationwide VLI Separate Account-4 and the consolidated financial statements of Nationwide Life Insurance Company and subsidiaries.  You may obtain a copy of the SAI FREE OF CHARGE by contacting us at the address or telephone number on the first page of this prospectus.  Please consider the consolidated financial statements of the company and subsidiaries only as bearing on our ability to meet the obligations under the policy.  You should not consider the consolidated financial statements of the company as affecting the investment performance of the assets of the separate account.

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Appendix A: Sub-Account Information

The Sub-Accounts listed below invest in corresponding mutual funds that are designed primarily as investments for variable annuity contracts and variable life insurance policies issued by insurance companies.  There is no guarantee that the investment objectives will be met.

Please refer to the prospectus for each underlying mutual fund for more detailed information.

AIM Variable Insurance Funds - AIM V.I. Basic Value Fund: Series I Shares

This sub-account is only available in policies issued before December 31, 2008

Investment Adviser:	Invesco Aim Advisors, Inc.
Sub-adviser:	Invesco Trimark Investment Management, Inc.; Invesco Global Asset
	Management (N.A.), Inc.; Invesco Institutional (N.A.), Inc.; Invesco Senior
	Secured Management, Inc.; Invesco Hong Kong Limited; Invesco Asset
	Management Limited; Invesco Asset Management (Japan) Limited; Invesco Asset
	Management Deutschland, GmbH; and Invesco Australia Limited
Investment Objective:	Long-term growth of capital.

AIM Variable Insurance Funds - AIM V.I. Capital Development Fund: Series I Shares

Investment Adviser:	Invesco Aim Advisors, Inc.
Sub-adviser:	Invesco Trimark Investment Management, Inc.; Invesco Global Asset
	Management (N.A.), Inc.; Invesco Institutional (N.A.), Inc.; Invesco Senior
	Secured Management, Inc.; Invesco Hong Kong Limited; Invesco Asset
	Management Limited; Invesco Asset Management (Japan) Limited; Invesco Asset
	Management Deutschland, GmbH; and Invesco Australia Limited
Investment Objective:	Long-term capital growth.

This underlying mutual fund or sub-account may invest in other funds.  Therefore, a proportionate share of the fees and expenses of

any acquired funds are indirectly borne by investors.  As a result, investors may incur higher charges in this underlying mutual

fund or sub-account than a fund that does not invest in other funds.

AIM Variable Insurance Funds - AIM V.I. International Growth Fund: Series I Shares

Investment Adviser:	Invesco Aim Advisors, Inc.
Sub-adviser:	Invesco Trimark Investment Management, Inc.; Invesco Global Asset
	Management (N.A.), Inc.; Invesco Institutional (N.A.), Inc.; Invesco Senior
	Secured Management, Inc.; Invesco Hong Kong Limited; Invesco Asset
	Management Limited; Invesco Asset Management (Japan) Limited; Invesco Asset
	Management Deutschland, GmbH; and Invesco Australia Limited
Investment Objective:	Long-term growth of capital.

This underlying mutual fund or sub-account may invest in other funds.  Therefore, a proportionate share of the fees and expenses of

any acquired funds are indirectly borne by investors.  As a result, investors may incur higher charges in this underlying mutual

fund or sub-account than a fund that does not invest in other funds.

AIM Variable Insurance Funds - AIM V.I. Mid Cap Core Equity Fund: Series I Shares

Investment Adviser:	Invesco Aim Advisors, Inc.
Sub-adviser:	Invesco Trimark Investment Management, Inc.; Invesco Global Asset
	Management (N.A.), Inc.; Invesco Institutional (N.A.), Inc.; Invesco Senior
	Secured Management, Inc.; Invesco Hong Kong Limited; Invesco Asset
	Management Limited; Invesco Asset Management (Japan) Limited; Invesco Asset
	Management Deutschland, GmbH; and Invesco Australia Limited
Investment Objective:	Long-term growth of capital.

This underlying mutual fund or sub-account may invest in other funds.  Therefore, a proportionate share of the fees and expenses of

any acquired funds are indirectly borne by investors.  As a result, investors may incur higher charges in this underlying mutual

fund or sub-account than a fund that does not invest in other funds.

AllianceBernstein Variable Products Series Fund, Inc. - AllianceBernstein Growth and Income Portfolio: Class A

Investment Adviser:	AllianceBernstein L.P.
Investment Objective:	Long-term growth of capital.

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AllianceBernstein Variable Products Series Fund, Inc. - AllianceBernstein International Value Portfolio: Class A

Investment Adviser:	AllianceBernstein L.P.
Investment Objective:	Long-term growth of capital.

AllianceBernstein Variable Products Series Fund, Inc. - AllianceBernstein Small/Mid Cap Value Portfolio: Class A

Investment Adviser:	AllianceBernstein L.P.
Investment Objective:	Long-term growth of capital.

American Century Variable Portfolios, Inc. - American Century VP Mid Cap Value Fund: Class I

Investment Adviser:	American Century Investment Management, Inc.
Investment Objective:	Long-term capital growth with income as a secondary objective.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

American Century Variable Portfolios, Inc. - American Century VP Value Fund: Class I

Investment Adviser:	American Century Investment Management, Inc.
Investment Objective:	Long-term capital growth with income as a secondary objective.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

American Century Variable Portfolios, Inc. - American Century VP Vista Fund: Class I

Investment Adviser:	American Century Investment Management, Inc.
Investment Objective:	Long-term capital growth.

American Funds Insurance Series - Asset Allocation Fund: Class 2

Investment Adviser:	Capital Research and Management Company
Investment Objective:	Seeks high total return (including income and capital gains) consistent with the
	preservation of capital over the long term.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

American Funds Insurance Series - Bond Fund: Class 2

Investment Adviser:	Capital Research and Management Company
Investment Objective:	Seeks to maximize current income and preserve capital by investing primarily in
	fixed-income securities.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

BlackRock Variable Series Funds, Inc. - BlackRock Large Cap Core V.I. Fund: Class II

Investment Adviser:	BlackRock Advisors, LLC
Sub-adviser:	BlackRock Investment Management, LLC
Investment Objective:	The investment objective of the Fund is to seek high total investment return (i.e.
	the combination of capital appreciation (from increases or decreases in the market
	value) and current income (from interest or dividends).

Davis Variable Account Fund, Inc. - Davis Value Portfolio

Investment Adviser:	Davis Selected Advisors, L.P.
Sub-adviser:	Davis Selected Advisors - NY, Inc.
Investment Objective:	Long-term growth of capital.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

Dreyfus Investment Portfolios - Small Cap Stock Index Portfolio: Service Shares

Investment Adviser:	The Dreyfus Corporation
Sub-adviser:	Mellon Capital Management
Investment Objective:	To match performance of the S&P SmallCap 600 Index®.

Dreyfus Stock Index Fund, Inc.: Initial Shares

Investment Adviser:	The Dreyfus Corporation
Sub-adviser:	Mellon Capital Management
Investment Objective:	To match performance of the S&P 500.

Dreyfus Variable Investment Fund - Appreciation Portfolio: Initial Shares

Investment Adviser:	The Dreyfus Corporation
Sub-adviser:	Fayez Sarofim
Investment Objective:	Long-term capital growth consistent with the preservation of capital.

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Dreyfus Variable Investment Fund - International Value Portfolio: Initial Shares

Investment Adviser:	The Dreyfus Corporation
Sub-adviser:	Boston Company Asset Management
Investment Objective:	Long-term capital growth.

DWS Variable Series II - Dreman High Return Equity VIP: Class B

Investment Adviser:	Deutsche Investment Management Americas Inc.
Sub-adviser:	Dreman Value Management L.L.C.
Investment Objective:	High rate of total return.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

DWS Variable Series II - Dreman Small Mid Cap Value VIP: Class B

Investment Adviser:	Deutsche Investment Management Americas Inc.
Sub-adviser:	Dreman Value Management L.L.C.
Investment Objective:	Long-term capital appreciation.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

Federated Insurance Series - Federated Quality Bond Fund II: Primary Shares

Investment Adviser:	Federated Investment Management Company
Investment Objective:	Current income.

Fidelity Variable Insurance Products Fund - VIP Contrafund® Portfolio: Service Class

This sub-account is only available in policies issued before December 31, 2009

Investment Adviser:	Fidelity Management & Research Company (FMR)
Sub-adviser:	Fidelity Management & Research Co., Inc. (FMR Co., Inc.); Fidelity Research
	& Analysis Company (FRAC)
Investment Objective:	Long-term capital appreciation.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

Fidelity Variable Insurance Products Fund - VIP Equity-Income Portfolio: Service Class

Investment Adviser:	Fidelity Management & Research Company (FMR)
Sub-adviser:	Fidelity Management & Research Co., Inc. (FMR Co., Inc.); Fidelity Research
	& Analysis Company (FRAC)
Investment Objective:	Reasonable income.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

Fidelity Variable Insurance Products Fund - VIP Freedom 2015 Portfolio: Service Class

Investment Adviser:	Fidelity Management & Research Company (FMR)
Sub-adviser:	Fidelity Management & Research Co., Inc. (FMR Co., Inc.); Fidelity Research
	& Analysis Company (FRAC)
Investment Objective:	Seeks high total return with a secondary objective of principal preservation as the
	fund approaches its target date and beyond.

The VIP Freedom Funds are designed to provide diversification and asset allocation across several types of investments and asset

classes, primarily by investing in underlying funds.  Therefore, a proportionate share of the fees and expenses of the underlying

funds are indirectly borne by investors.  Please refer to the prospectus for VIP Freedom Funds for more information.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

Fidelity Variable Insurance Products Fund - VIP Freedom 2020 Portfolio: Service Class

Investment Adviser:	Fidelity Management & Research Company (FMR)
Sub-adviser:	Fidelity Management & Research Co., Inc. (FMR Co., Inc.); Fidelity Research
	& Analysis Company (FRAC)
Investment Objective:	High total return with a secondary objective of principal preservation as the fund
	approaches its target date and beyond.

The VIP Freedom Funds are designed to provide diversification and asset allocation across several types of investments and asset

classes, primarily by investing in underlying funds.  Therefore, a proportionate share of the fees and expenses of the underlying

funds are indirectly borne by investors.  Please refer to the prospectus for VIP Freedom Funds for more information.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

50

Fidelity Variable Insurance Products Fund - VIP Freedom 2025 Portfolio: Service Class

Investment Adviser:	Fidelity Management & Research Company (FMR)
Sub-adviser:	Fidelity Management & Research Co., Inc. (FMR Co., Inc.); Fidelity Research
	& Analysis Company (FRAC)
Investment Objective:		Seeks high total return with a secondary objective of principal preservation as the
		fund approaches its target date and beyond.

The VIP Freedom Funds are designed to provide diversification and asset allocation across several types of investments and asset

classes, primarily by investing in underlying funds.  Therefore, a proportionate share of the fees and expenses of the underlying

funds are indirectly borne by investors.  Please refer to the prospectus for VIP Freedom Funds for more information.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

Fidelity Variable Insurance Products Fund - VIP Freedom 2030 Portfolio: Service Class

Investment Adviser:                                                        Fidelity Management & Research Company (FMR)

Sub-adviser:                                                        Fidelity Management & Research Co., Inc. (FMR Co., Inc.); Fidelity Research

	& Analysis Company (FRAC)
Investment Objective:	High total return with a secondary objective of principal preservation as the fund
	approaches its target date and beyond.

The VIP Freedom Funds are designed to provide diversification and asset allocation across several types of investments and asset

classes, primarily by investing in underlying funds.  Therefore, a proportionate share of the fees and expenses of the underlying

funds are indirectly borne by investors.  Please refer to the prospectus for VIP Freedom Funds for more information.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

Fidelity Variable Insurance Products Fund - VIP Growth Portfolio: Service Class

Investment Adviser:	Fidelity Management & Research Company (FMR)
Sub-adviser:	Fidelity Management & Research Co., Inc. (FMR Co., Inc.); Fidelity Research
	& Analysis Company (FRAC)
Investment Objective:	Capital appreciation.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

Fidelity Variable Insurance Products Fund - VIP Investment Grade Bond Portfolio: Service Class

Investment Adviser:	Fidelity Management & Research Company (FMR)
Sub-adviser:	Fidelity Management & Research Co., Inc. (FMR Co., Inc.); Fidelity Research
	& Analysis Company (FRAC)
Investment Objective:	High level of current income.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

Fidelity Variable Insurance Products Fund - VIP Mid Cap Portfolio: Service Class

Investment Adviser:	Fidelity Management & Research Company (FMR)
Sub-adviser:	Fidelity Management & Research Co., Inc. (FMR Co., Inc.); Fidelity Research
	& Analysis Company (FRAC)
Investment Objective:	Long-term growth of capital.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

Franklin Templeton Variable Insurance Products Trust - Franklin Small Cap Value Securities Fund: Class 2

Investment Adviser:	Franklin Advisory Services, LLC
Investment Objective:	Long-term total return.

This underlying mutual fund or sub-account may invest in other funds.  Therefore, a proportionate share of the fees and expenses of

any acquired funds are indirectly borne by investors.  As a result, investors may incur higher charges in this underlying mutual

fund or sub-account than a fund that does not invest in other funds.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

Franklin Templeton Variable Insurance Products Trust - Templeton Global Bond Securities Fund: Class 2 (formerly, Templeton

Global Income Securities Fund: Class 2)

Investment Adviser:	Franklin Advisors, Inc.
Investment Objective:	High current income, consistent with preservation of capital, with capital
	appreciation as a secondary consideration.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

51

Ivy Funds Variable Insurance Portfolios, Inc. - Asset Strategy

Investment Adviser:	Waddell & Reed Investment Management Company
Investment Objective:	High total return over the long run.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

Ivy Funds Variable Insurance Portfolios, Inc. - Growth

Investment Adviser:	Waddell & Reed Investment Management Company
Investment Objective:	Capital growth with a secondary objective of current income.

Ivy Funds Variable Insurance Portfolios, Inc. - Real Estate Securities

Investment Adviser:	Waddell & Reed Investment Management Company
Sub-adviser:	Advantus Capital Management, Inc.
Investment Objective:	Total return through a combination of capital appreciation and current income.

Ivy Funds Variable Insurance Portfolios, Inc. - Science and Technology

Investment Adviser:	Waddell & Reed Investment Management Company
Investment Objective:	Long-term capital growth.

Janus Aspen Series - Balanced Portfolio: Service Shares

Investment Adviser:	Janus Capital Management LLC
Investment Objective:	Long-term growth of capital, consistent with preservation of capital and balanced
	by current income.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

Janus Aspen Series - Forty Portfolio: Service Shares

Investment Adviser:	Janus Capital Management LLC
Investment Objective:	Long-term growth of capital.

This underlying mutual fund or sub-account may invest in other funds.  Therefore, a proportionate share of the fees and expenses of

any acquired funds are indirectly borne by investors.  As a result, investors may incur higher charges in this underlying mutual

fund or sub-account than a fund that does not invest in other funds.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

Janus Aspen Series - Global Technology Portfolio: Service Shares

Investment Adviser:	Janus Capital Management LLC
Investment Objective:	Long-term growth of capital.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

Janus Aspen Series - Overseas Portfolio: Service Shares (formerly, International Growth Portfolio: Service Shares)

Investment Adviser:	Janus Capital Management LLC
Investment Objective:	Long-term growth of capital.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

Legg Mason Partners Variable Equity Trust - Legg Mason Partners Variable Small Cap Growth Portfolio: Class I

Investment Adviser:	Legg Mason Partners Fund Advisor, LLC
Sub-adviser:	ClearBridge Advisors, LLC
Investment Objective:	The fund seeks long-term growth of capital.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

Lincoln Variable Insurance Products Trust – Baron Growth Opportunities Fund: Service Class

Investment Adviser:	Lincoln Investment Advisors Corporation
Sub-adviser:	BAMCO, Inc.
Investment Objective:	Capital appreciation.

Lord Abbett Series Fund, Inc. - Mid-Cap Value Portfolio: Class VC

Investment Adviser:	Lord, Abbett & Co. LLC
Investment Objective:	Capital appreciation through investments, primarily in equity securities, which
	are believed to be undervalued in the market place.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

MFS® Variable Insurance Trust - MFS Research International Series: Service Class

Investment Adviser:	Massachusetts Financial Services Company
Investment Objective:	To seek capital appreciation.

52

MFS® Variable Insurance Trust - MFS Value Series: Service Class

Investment Adviser:	Massachusetts Financial Services Company
Investment Objective:	To seek capital appreciation.

MFS® Variable Insurance Trust II - MFS® International Value Portfolio: Service Class

Investment Adviser:	Massachusetts Financial Services Company
Investment Objective:	The fund’s investment objective is to seek capital appreciation.   MFS normally
	invests the fund’s assets primarily in foreign equity securities, including
	emerging market equity securities.

Nationwide Variable Insurance Trust - Federated NVIT High Income Bond Fund: Class I

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Federated Investment Management Company
Investment Objective:	High current income.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

Nationwide Variable Insurance Trust - Gartmore NVIT Emerging Markets Fund: Class I

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Gartmore Global Partners
Investment Objective:	Long-term capital growth by investing primarily in equity securities of
	companies located in emerging market countries.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

Nationwide Variable Insurance Trust - Gartmore NVIT International Equity Fund: Class I

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Gartmore Global Partners
Investment Objective:	Long-term capital growth by investing primarily in equity securities of
	companies in Europe, Australasia, the Far East and other regions, including
	developing countries.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

Nationwide Variable Insurance Trust - Gartmore NVIT Worldwide Leaders Fund: Class I

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Gartmore Global Partners
Investment Objective:	Long-term capital growth.

Nationwide Variable Insurance Trust - NVIT Cardinal(SM) Aggressive Fund: Class I

Investment Adviser:	Nationwide Fund Advisors
Investment Objective:	Seeks maximum growth of capital consistent with a more aggressive level of risk
	as compared to other Cardinal Funds.

The NVIT Cardinal Funds are designed to provide diversification and asset allocation across several types of investments and asset

classes, primarily by investing in underlying funds.  Therefore, a proportionate share of the fees and expenses of the underlying

funds are indirectly borne by investors.  Please refer to the prospectus for NVIT Cardinal Funds for more information.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

Nationwide Variable Insurance Trust - NVIT Cardinal(SM) Balanced Fund: Class I

Investment Adviser:	Nationwide Fund Advisors
Investment Objective:	Seeks a high level of total return through investment in both equity and fixed
	income securities.

The NVIT Cardinal Funds are designed to provide diversification and asset allocation across several types of investments and asset

classes, primarily by investing in underlying funds.  Therefore, a proportionate share of the fees and expenses of the underlying

funds are indirectly borne by investors.  Please refer to the prospectus for NVIT Cardinal Funds for more information.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

53

Nationwide Variable Insurance Trust - NVIT Cardinal(SM) Capital Appreciation Fund: Class I

Investment Adviser:	Nationwide Fund Advisors
Investment Objective:	Seeks growth of capital, but also seeks income consistent with a less aggressive
	level of risk as compared to other Cardinal Funds.

The NVIT Cardinal Funds are designed to provide diversification and asset allocation across several types of investments and asset

classes, primarily by investing in underlying funds.  Therefore, a proportionate share of the fees and expenses of the underlying

funds are indirectly borne by investors.  Please refer to the prospectus for NVIT Cardinal Funds for more information.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

Nationwide Variable Insurance Trust - NVIT Cardinal(SM) Conservative Fund: Class I

Investment Adviser:	Nationwide Fund Advisors
Investment Objective:	Seeks a high level of total return consistent with a conservative level of risk as
	compared to other Cardinal Funds.

The NVIT Cardinal Funds are designed to provide diversification and asset allocation across several types of investments and asset

classes, primarily by investing in underlying funds.  Therefore, a proportionate share of the fees and expenses of the underlying

funds are indirectly borne by investors.  Please refer to the prospectus for NVIT Cardinal Funds for more information.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

Nationwide Variable Insurance Trust - NVIT Cardinal(SM) Moderate Fund: Class I

Investment Adviser:	Nationwide Fund Advisors
Investment Objective:	Seeks a high level of total return consistent with a moderate level of risk as
	compared to other Cardinal Funds

The NVIT Cardinal Funds are designed to provide diversification and asset allocation across several types of investments and asset

classes, primarily by investing in underlying funds.  Therefore, a proportionate share of the fees and expenses of the underlying

funds are indirectly borne by investors.  Please refer to the prospectus for NVIT Cardinal Funds for more information.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

Nationwide Variable Insurance Trust - NVIT Cardinal(SM) Moderately Aggressive Fund: Class I

Investment Adviser:	Nationwide Fund Advisors
Investment Objective:	Seeks growth of capital, but also seeks income consistent with a moderately
	aggressive level of risk as compared to other Cardinal Funds.

The NVIT Cardinal Funds are designed to provide diversification and asset allocation across several types of investments and asset

classes, primarily by investing in underlying funds.  Therefore, a proportionate share of the fees and expenses of the underlying

funds are indirectly borne by investors.  Please refer to the prospectus for NVIT Cardinal Funds for more information.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

Nationwide Variable Insurance Trust - NVIT Cardinal(SM) Moderately Conservative Fund: Class I

Investment Adviser:	Nationwide Fund Advisors
Investment Objective:	Seeks a high level of total return consistent with a moderately conservative level
	of risk.

The NVIT Cardinal Funds are designed to provide diversification and asset allocation across several types of investments and asset

classes, primarily by investing in underlying funds.  Therefore, a proportionate share of the fees and expenses of the underlying

funds are indirectly borne by investors.  Please refer to the prospectus for NVIT Cardinal Funds for more information.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

Nationwide Variable Insurance Trust - NVIT Government Bond Fund: Class I

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Nationwide Asset Management, LLC
Investment Objective:	To provide a high level of income as is consistent with the preservation of capital.

Nationwide Variable Insurance Trust - NVIT International Index Fund: Class II

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	BlackRock Investment Management, LLC
Investment Objective:	To match the performance of the Morgan Stanley Capital International Europe,
	Australasia and Far East Index ("MSCI EAFE® Index") as closely as possible
	before the deduction of Fund expenses.

54

Nationwide Variable Insurance Trust - NVIT Investor Destinations Aggressive Fund: Class II

Investment Adviser:	Nationwide Fund Advisors
Investment Objective:	To maximize growth of capital consistent with a more aggressive level of risk as
	compared to the other Investor Destinations Funds.

The Nationwide NVIT Investor Destinations Funds are designed to provide diversification and asset allocation across several types

of investments and asset classes, primarily by investing in underlying funds.  Therefore, a proportionate share of the fees and

expenses of the underlying funds are indirectly borne by investors.  Please refer to the prospectus for Nationwide NVIT Investor

Destinations Funds for more information.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

Nationwide Variable Insurance Trust - NVIT Investor Destinations Conservative Fund: Class II

Investment Adviser:	Nationwide Fund Advisors
Investment Objective:	High level of return consistent with a conservative level of risk compared to the
	other Investor Destinations Funds.

The Nationwide NVIT Investor Destinations Funds are designed to provide diversification and asset allocation across several types

of investments and asset classes, primarily by investing in underlying funds.  Therefore, a proportionate share of the fees and

expenses of the underlying funds are indirectly borne by investors.  Please refer to the prospectus for Nationwide NVIT Investor

Destinations Funds for more information.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

Nationwide Variable Insurance Trust - NVIT Investor Destinations Moderate Fund: Class II

Investment Adviser:	Nationwide Fund Advisors
Investment Objective:	High level of total return consistent with a moderate level of risk as compared to
	other Investor Destinations Funds.

The Nationwide NVIT Investor Destinations Funds are designed to provide diversification and asset allocation across several types

of investments and asset classes, primarily by investing in underlying funds.  Therefore, a proportionate share of the fees and

expenses of the underlying funds are indirectly borne by investors.  Please refer to the prospectus for Nationwide NVIT Investor

Destinations Funds for more information.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

Nationwide Variable Insurance Trust - NVIT Investor Destinations Moderately Aggressive Fund: Class II

Investment Adviser:	Nationwide Fund Advisors
Investment Objective:	Growth of capital, but also seeks income consistent with a moderately aggressive
	level of risk as compared to the other Investor Destinations Funds.

The Nationwide NVIT Investor Destinations Funds are designed to provide diversification and asset allocation across several types

of investments and asset classes, primarily by investing in underlying funds.  Therefore, a proportionate share of the fees and

expenses of the underlying funds are indirectly borne by investors.  Please refer to the prospectus for Nationwide NVIT Investor

Destinations Funds for more information.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

Nationwide Variable Insurance Trust - NVIT Investor Destinations Moderately Conservative Fund: Class II

Investment Adviser:	Nationwide Fund Advisors
Investment Objective:	High level of total return consistent with a moderately conservative level of risk.

The Nationwide NVIT Investor Destinations Funds are designed to provide diversification and asset allocation across several types

of investments and asset classes, primarily by investing in underlying funds.  Therefore, a proportionate share of the fees and

expenses of the underlying funds are indirectly borne by investors.  Please refer to the prospectus for Nationwide NVIT Investor

Destinations Funds for more information.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

Nationwide Variable Insurance Trust - NVIT Mid Cap Index Fund: Class I

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	BlackRock Investment Management, LLC
Investment Objective:	Capital appreciation.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

55

Nationwide Variable Insurance Trust - NVIT Money Market Fund: Class V

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Federated Investment Management Company
Investment Objective:	The fund seeks as high a level of current income as is consistent with preserving
	capital and maintaining liquidity.

Nationwide Variable Insurance Trust - NVIT Multi Sector Bond Fund: Class I

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Logan Circle Partners, L.P.
Investment Objective:	Above average total return over a market cycle of three to five years.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

Nationwide Variable Insurance Trust - NVIT Multi-Manager Large Cap Growth Fund: Class I

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Goldman Sachs Asset Management, L.P.; Neuberger Berman Management Inc.;
	Wells Capital Management, Inc.
Investment Objective:	The fund seeks long-term capital growth.

Nationwide Variable Insurance Trust - NVIT Multi-Manager Mid Cap Growth Fund: Class I

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Neuberger Berman Management Inc. and American Century Investment
	Management Inc.
Investment Objective:	The fund seeks long-term capital growth.

Nationwide Variable Insurance Trust - NVIT Multi-Manager Mid Cap Value Fund: Class I

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	American Century Investment Management, Inc.; RiverSource Investments,
	LLC; Thompson Siegel & Walmsley LLC
Investment Objective:	The fund seeks long-term capital appreciation.

Nationwide Variable Insurance Trust - NVIT Multi-Manager Small Cap Growth Fund: Class I

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Waddell & Reed Investment Management Company; OppenheimerFunds, Inc.
Investment Objective:	Capital growth.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

Nationwide Variable Insurance Trust - NVIT Multi-Manager Small Cap Value Fund: Class I

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Aberdeen Asset Management, Inc.; Epoch Investment Partners, Inc.; J.P. Morgan
	Investment Management Inc.
Investment Objective:	Capital appreciation.

Nationwide Variable Insurance Trust - NVIT Multi-Manager Small Company Fund: Class I

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Aberdeen Asset Management, Inc.: American Century Investment Management
	Inc.; Gartmore Global Partners; Morgan Stanley Investment Management;
	Neuberger Berman Management, Inc.; Putnam Investment Management, LLC;
	Waddell & Reed Investment Management Company
Investment Objective:	Long-term growth of capital.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

Nationwide Variable Insurance Trust - NVIT Nationwide Fund: Class I

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Aberdeen Asset Management, Inc.
Investment Objective:	Total return through a flexible combination of capital appreciation and current
	income.

Nationwide Variable Insurance Trust - NVIT Short Term Bond Fund: Class I

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Nationwide Asset Management, LLC
Investment Objective:	The fund seeks to provide a high level of current income while preserving capital
	and minimizing fluctuations in share value.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

56

Nationwide Variable Insurance Trust - Van Kampen NVIT Real Estate Fund: Class I

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Van Kampen Asset Management
Investment Objective:	The fund seeks current income and long-term capital appreciation.

Neuberger Berman Advisers Management Trust - AMT Partners Portfolio: I Class

Investment Adviser:	Neuberger Berman Management LLC.
Sub-adviser:	Neuberger Berman, LLC
Investment Objective:	Capital growth.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

Neuberger Berman Advisers Management Trust - AMT Regency Portfolio: I Class

Investment Adviser:	Neuberger Berman Management LLC.
Sub-adviser:	Neuberger Berman, LLC
Investment Objective:	Growth of capital.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

Oppenheimer Variable Account Funds - Oppenheimer Capital Appreciation Fund/VA: Non-Service Shares

Investment Adviser:	OppenheimerFunds, Inc.
Investment Objective:	Capital appreciation by investing in securities of well-known, established
	companies.

Oppenheimer Variable Account Funds - Oppenheimer Global Securities Fund/VA: Non-Service Shares

Investment Adviser:	OppenheimerFunds, Inc.
Investment Objective:	Long-term capital appreciation by investing a substantial portion of its assets in
	securities of foreign issuers, "growth-type" companies, cyclical industries and
	special situations that are considered to have appreciation possibilities.

PIMCO Variable Insurance Trust - All Asset Portfolio: Administrative Class

Investment Adviser:	Pacific Investment Management Company LLC
Sub-adviser:	Research Affiliates
Investment Objective:	Maximum total return consistent with preservation of capital and prudent
	investment management.

This underlying mutual fund or sub-account may invest in other funds.  Therefore, a proportionate share of the fees and expenses of

any acquired funds are indirectly borne by investors.  As a result, investors may incur higher charges in this underlying mutual

fund or sub-account than a fund that does not invest in other funds.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

PIMCO Variable Insurance Trust - Foreign Bond Portfolio (Unhedged): Administrative Class

Investment Adviser:	Pacific Investment Management Company LLC
Investment Objective:	Maximum total return consistent with preservation of capital and prudent
	investment management.

PIMCO Variable Insurance Trust - Low Duration Portfolio: Administrative Class

Investment Adviser:	Pacific Investment Management Company LLC
Investment Objective:	Maximum total return consistent with preservation of capital and prudent
	investment management.

PIMCO Variable Insurance Trust - Real Return Portfolio: Administrative Class

Investment Adviser:	Pacific Investment Management Company LLC
Investment Objective:	Maximum real return consistent with preservation of real capital and prudent
	investment management.

PIMCO Variable Insurance Trust - Total Return Portfolio: Administrative Class

Investment Adviser:	Pacific Investment Management Company LLC
Investment Objective:	Maximum total return consistent with preservation of capital and prudent
	investment management.

Pioneer Variable Contracts Trust - Pioneer Emerging Markets VCT Portfolio: Class I

Investment Adviser:	Pioneer Investment Management, Inc.
Investment Objective:	Long-term growth of capital.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

57

Pioneer Variable Contracts Trust - Pioneer High Yield VCT Portfolio: Class I

Investment Adviser:	Pioneer Investment Management, Inc.
Investment Objective:	Maximize total return through a combination of income and capital appreciation.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

Putnam Variable Trust - Putnam VT Small Cap Value Fund: Class IB

Investment Adviser:	Putnam Investment Management, LLC
Investment Objective:	Capital appreciation.

This underlying mutual fund or sub-account may invest in other funds.  Therefore, a proportionate share of the fees and expenses of

any acquired funds are indirectly borne by investors.  As a result, investors may incur higher charges in this underlying mutual

fund or sub-account than a fund that does not invest in other funds.

Royce Capital Fund - Royce Micro-Cap Portfolio: Investment Class

Investment Adviser:	Royce & Associates, LLC
Investment Objective:	Long-term capital growth.

T. Rowe Price Equity Series, Inc. - T. Rowe Price Equity Income Portfolio: Class II

Investment Adviser:	T. Rowe Price Investment Services
Investment Objective:	Substantial dividend income as well as long-term growth of capital through
	investments in the common stocks of established companies.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

T. Rowe Price Equity Series, Inc. - T. Rowe Price New America Growth Portfolio

Investment Adviser:	T. Rowe Price Investment Services
Investment Objective:	Long-term growth of capital primarily in the common stocks of growth
	companies.

T. Rowe Price Equity Series, Inc. - T. Rowe Price Personal Strategy Balanced Portfolio

Investment Adviser:	T. Rowe Price Investment Services
Investment Objective:	Seeks capital appreciation and income from stocks and bonds.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

The Universal Institutional Funds, Inc. - Capital Growth Portfolio: Class I

Investment Adviser:	Morgan Stanley Investment Management Inc.
Investment Objective:	Long-term capital appreciation by investing primarily in growth-oriented equity
	securities of large capitalization companies.

This underlying mutual fund or sub-account may invest in other funds.  Therefore, a proportionate share of the fees and expenses of

any acquired funds are indirectly borne by investors.  As a result, investors may incur higher charges in this underlying mutual

fund or sub-account than a fund that does not invest in other funds.

The Universal Institutional Funds, Inc. - Emerging Markets Debt Portfolio: Class I

Investment Adviser:	Morgan Stanley Investment Management Inc.
Investment Objective:	High total return by investing primarily in fixed income securities of government
	and government-related issuers and, to a lesser extent, of corporate issuers in
	emerging market countries.

This underlying mutual fund or sub-account may invest in other funds.  Therefore, a proportionate share of the fees and expenses of

any acquired funds are indirectly borne by investors.  As a result, investors may incur higher charges in this underlying mutual

fund or sub-account than a fund that does not invest in other funds.

This underlying mutual fund or sub-account may invest in lower quality debt securities commonly referred to as junk bonds.

The Universal Institutional Funds, Inc. - Global Real Estate Portfolio: Class II

Investment Adviser:	Morgan Stanley Investment Management Inc.
Investment Objective:	The Portfolio seeks to provide current income and capital appreciation.

This underlying mutual fund or sub-account may invest in other funds.  Therefore, a proportionate share of the fees and expenses of

any acquired funds are indirectly borne by investors.  As a result, investors may incur higher charges in this underlying mutual

fund or sub-account than a fund that does not invest in other funds.

58

The Universal Institutional Funds, Inc. - Mid Cap Growth Portfolio: Class I

Investment Adviser:	Morgan Stanley Investment Management Inc.
Investment Objective:	Long-term capital growth by investing primarily in common stocks and other
	equity securities.

This underlying mutual fund or sub-account may invest in other funds.  Therefore, a proportionate share of the fees and expenses of

any acquired funds are indirectly borne by investors.  As a result, investors may incur higher charges in this underlying mutual

fund or sub-account than a fund that does not invest in other funds.

Van Eck Worldwide Insurance Trust - Worldwide Hard Assets Fund: Initial Class

Investment Adviser:	Van Eck Associates Corporation
Investment Objective:	Long-term capital appreciation by investing primarily in hard asset securities.
	Income is a secondary consideration.

Wells Fargo Advantage Funds® Variable Trust - VT Discovery Fund

Investment Adviser:	Wells Fargo Funds Management, LLC
Sub-adviser:	Wells Capital Management Incorporated
Investment Objective:	Long-term capital appreciation.

Wells Fargo Advantage Funds® Variable Trust - VT Small Cap Growth Fund

Investment Adviser:	Wells Fargo Funds Management, LLC
Sub-adviser:	Wells Capital Management Incorporated
Investment Objective:	Long-term capital appreciation.

59

Appendix B: Definitions

Accumulation Unit – The measure of your investment in, or share of, a Sub-Account after we deduct for transaction fees and periodic charges.  Initially, we set the Accumulation Unit value at $10 for each Sub-Account.

Attained Age – The Insured’s age on the Policy Date plus the number of full years since the Policy Date.

Base Specified Amount – The amount of Death Benefit coverage under the policy on the Policy Date, excluding any Rider Specified Amount.  Subsequent to the Policy Date, the Death Benefit coverage will equal or exceed this amount unless you request a decrease in the Base Specified Amount or take a partial surrender.

Beneficiary – The person or legal entity to whom/which the Death Benefit is paid upon the Insured’s death.

Cash Surrender Value – The amount payable to you upon a full surrender of the policy.  This amount is equal to the Enhanced Cash Value, minus Indebtedness and outstanding policy charges.

Cash Value – The sum of the value your allocations to the Sub-Accounts, the fixed account, and the Policy Loan Account.

Code – The Internal Revenue Code of 1986, as amended.

Death Benefit – The amount of insurance coverage provided by the base policy, and the Supplemental Insurance Rider, if purchased, upon the Insured’s death while the policy is In Force and before the Maturity Date.  The actual amount we pay to the Beneficiary is the amount of insurance coverage provided by the base policy, and the Supplemental Insurance Rider, if purchased, less any Indebtedness and any due and unpaid policy charges.

Enhanced Cash Value – The sum of the policy’s Cash Value plus the Enhancement Benefit, if applicable.

Enhancement Benefit – An additional amount added to the policy’s Cash Surrender Value upon a full surrender of the policy, provided the qualifying conditions have been satisfied.

Excess Premium – The sum of (i) each Premium multiplied by the ratio of the Rider Specified Amount to the Total Specified Amount and (ii) the amount of paid Premiums in a policy year in excess of the Target Premium multiplied by the ratio of the Base Specified Amount to the Total Specified Amount.

FDIC – Federal Deposit Insurance Corporation.

Grace Period – A 61-day period after which the policy will Lapse if you do not remit sufficient Premium to keep the policy In Force.

Home Office – Our Home Office is located at One Nationwide Plaza, Columbus, Ohio 43215.

In Force – The insurance coverage is in effect.

Indebtedness – The total amount of all outstanding policy loans, including principal and interest due.

Insured – The person whose life we insure under the policy and whose death results in the payment the Death Benefit.

Investment Experience – The market performance of a mutual fund (in which a) Sub-Account invests.

Lapse – The policy terminates without value.

Maturity Date – The anniversary of the Policy Date on or next following the Insured's 100th birthday (unless extended).

Maturity Proceeds – The amount of money payable to you on the Maturity Date if your policy is In Force.  The Maturity Proceeds are equal to the Cash Value minus any Indebtedness.

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Minimum Required Death Benefit – The least amount of Death Benefit that will qualify the policy as life insurance under the Code.

Net Amount At Risk – The policy’s Death Benefit minus the policy’s Cash Value.

Net Asset Value (NAV) – The price of a share of a mutual fund in which a Sub-Account invests.  It is calculated by subtracting the mutual fund’s liabilities from its total assets, and dividing that figure by the number of shares outstanding.  We use the NAV to calculate the value of Accumulation Units.  The NAV does not reflect deductions we make for charges we take from Sub-Accounts.  Accumulation Unit values do reflect these deductions.

Net Premium – The amount of Premium applied to your policy after the deduction of the Premium Load.

Policy Data Page(s) – The Policy Data Page contains more detailed information about the policy, some of which is unique and particular to the Owner, the Beneficiary and the Insured.  The charges shown on the Policy Data Page reflect the guaranteed maximum policy charges, which may not be the amount you will actually be charged.  Please request an illustration for specific information about your particular charges.

Policy Date – The date we begin assessing charges under the policy, as shown on the Policy Data Page.  Policy years and months are measured from this date.  This date will be the date the initial Premium is paid, unless you request and we approve another date.

Policy Loan Account – An account used as collateral for policy loans.  Upon approval of a policy loan, we transfer an amount from the Cash Value that equals the policy loan amount to this account.  Amounts transferred from the Sub-Accounts will be in the same proportion as your Sub-Account allocations, unless you instruct otherwise.  We will only transfer amounts from the fixed account if the loan amount exceeds 90% of the Cash Value allocated to the Sub-Accounts.  Amounts in this account will accrue and be credited daily interest at a rate not less than the stated interest crediting rate shown on your Policy Data Page.

Policy Proceeds or Proceeds – Policy Proceeds are the amount payable upon termination of the policy.  Policy Proceeds could be comprised of the Death Benefit, the Maturity Proceeds, or the Cash Surrender Value upon a full surrender of the policy.

Premium – The amount of money you pay into the policy.

Rider – An optional benefit you may purchase/elect under the policy.

Rider Specified Amount – The amount of Death Benefit coverage under the Supplemental Insurance rider on the Policy Date.

SEC – The Securities and Exchange Commission.

Section 1035 – The Code section describing an exchange between a life insurance policy and/or annuity contract.

Seven-Pay Premium (7-Pay Premium) - 100% of the unadjusted maximum annual premium allowed under the Code assuming that: (i) the policy is not a modified endowment contract; (ii) the policy’s death benefit is equal to the Total Specified Amount, and (iii) seven level, annual premiums are paid; (iv) there are no premiums resulting from a Section 1035 exchange; and (v) there are no adjustments due to a state imposed requirement or substandard underwriting ratings.

Sub-Accounts – The mechanisms we use to account for your allocations of Net Premium and Cash Value among the policy’s variable investment options.

Substandard Rating – An underwriting classification based on medical and/or non-medical factors used to determine what to charge for life insurance based on characteristics of the Insured beyond traditional factors for standard risks, which include age, sex, and smoking habits of the Insured.  Substandard Ratings are shown in the Policy Data Pages as rate class multiples (medical factors) and/or monthly flat extras (medical and/or non-medical factors).  The higher the rate class multiple or monthly flat extra, the greater the risk assessed and the higher cost of coverage.

Target Premium – If the policy is not a modified endowment contract, the Target Premium is the Unadjusted Seven-Pay Premium for a policy whose Total Specified Amount equals the Base Specified Amount.  If the policy is a modified endowment contract, the Target Premium equals the amount that would have been the Unadjusted Seven-Pay Premium if the policy were not a modified endowment contract and the Total Specified Amount equaled the Base Specified Amount.

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Total Specified Amount – The sum of the Base Specified Amount and the Rider Specified Amount.

Unadjusted Seven-Pay Premium - 100% of the  maximum annual premium allowed under the Code assuming that: (i) the policy is not a modified endowment contract; (ii) the policy’s death benefit is equal to the Total Specified Amount, and (iii) seven level, annual premiums are paid; (iv) there are no premiums resulting from a Section 1035 exchange; and (v) there are no adjustments due to a state imposed requirement or underwriting Substandard Ratings.

Us, we, our, Nationwide, or the company – Nationwide Life Insurance Company.

Valuation Period – The period during which we determine the change in the value of the Sub-Accounts.  One Valuation Period ends and another begins with the close of trading on the New York Stock Exchange.

You, your or the policy owner or Owner – The corporation or legal entity named as the owner (i) in the application, or (ii) to which ownership rights in the policy have been validly assigned.

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Appendix C: Blending Examples of Policy Charges

Blending Examples of Policy Charges

Guaranteed Issue Policy With Specified Amount of $150,000

(Assuming No Premiums From Section 1035 Exchange)

(1)   Blended 5.00% = [50% x (Component B @ 10.00%)] plus [50% x (Component D @ 0%)]

(2)   Blended 0.43% = [50% x (Component B @ 0.25%)] plus [50% x (Component D @ 0.60%)]

(3)   $16.00 Specified Amount Charge = [(the first $50,000 of Total Specified Amount) x (.0003) plus (the Total Specified Amount in excess of $50,000 of $100,000) x (.00001)]

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Blending Examples of Policy Charges

Guaranteed Issue Policy With Specified Amount of $150,000

(Assuming No Premiums From Section 1035 Exchange)

(4)   5.00% Blended Premium Load on Target Premium = [50% x (Component B @ 10.00%)] plus [50% x (Component D @ 0%)]

(5)   0.23% Variable Sub-account Asset Charge for Component B = [80% x (Base Policy @ 0.25%)] plus [20% x (Supplemental Insurance Rider @ 0.16%)]

(6)   0.39% Blended Variable Sub-account Asset Charge = [50% x (Component B @ 0.23%)] plus [50% x (Component D @ 0.54%)]

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Appendix D: State Variations

Described below are the variations to certain prospectus disclosures resulting from state law or the instruction provided by state insurance authorities as of the date of this prospectus. Information regarding a state’s requirements does not mean that Nationwide currently offers policies within that jurisdiction.  These variations are subject to change without notice and additional variations may be imposed as required by specific states.

Colorado – In addition to the right to elect to irrevocably transfer 100% of the policy's Cash Value to the fixed account within the first twenty-four months from the Policy Date provided under "Exchanging The Policy," you may also elect to irrevocably transfer 100% of the policy's Cash Value to the fixed account within the later of sixty days from the date of a change in the investment policy of a Sub-Account or sixty days from when we notify you of your option to make such transfer.  See the "Exchanging The Policy" sub-section of "The Policy" section and the "Nationwide VLI Separate Account – 4" section of this prospectus.

The suicide provision in the policy and in any Rider is limited to one year from the Policy Date, reinstatement date, effective date of a Specified Amount increase, or Rider effective date.  See the "Suicide" sub-section of "The Death Benefit" section of the prospectus.

Connecticut– In addition to the right to exchange the policy for a different policy provided under "Exchanging the Policy," you may within twenty-four months from the Policy Date, exchange the policy for a new fixed benefit life insurance policy on the life of the Insured wherein no additional evidence of insurability is required.  See the "Exchanging the Policy" sub-section of "The Policy" section of this prospectus.

Additionally, under the "Grace Period" sub-section of the "Lapse" section, the amount you must pay to avoid Lapsing the policy is equal to at least three times the current month's policy charges.  See the "Grace Period" sub-section of the "Lapse" section of this prospectus.

Florida – The Enhancement Benefit described under the "Enhancement Benefit" sub-section of "The Policy" section is not available or applicable where a new Owner is named, except where the new Owner is also a corporation or an entity established by a corporation (such as a corporate affiliate).  See the "Policy Owner and Beneficiaries" and "Enhancement Benefit" sub-sections of "The Policy" section of this prospectus.

Massachusetts -In addition to the right to elect to irrevocably transfer 100% of the policy's Cash Value to the fixed account within the first twenty-four months from the Policy Date provided under "Exchanging the Policy," you may also elect to irrevocably transfer 100% of the policy's Cash Value to the fixed account within the later of sixty days from the date of a change in the investment policy of a Sub-Account or sixty days from when we notify you of your option to make such transfer.  See the "Exchanging the Policy" sub-section of "The Policy" section and the "Nationwide VLI Separate Account – 4" section of this prospectus.

Missouri - The suicide provision in the policy and in any Rider is limited to one year from the Policy Date, reinstatement date, effective date of a Specified Amount increase, or Rider effective date.  See the "Suicide" sub-section of "The Death Benefit" section of the prospectus.

Montana – Policy and Rider charges are required to be on a unisex basis.  This is accomplished by treating all Insured's as male for purposes of charges that otherwise would vary by sex.  Therefore, none of the charges described in the prospectus as varying by sex, or by characteristics of the Insured, will vary by sex for policies issued in Montana.

The Change of Insured Rider is not currently approved for sale as of the date of this prospectus; please consult your registered representative for future availability.  See the "Riders" section of this prospectus.

Nebraska - Under the "Grace Period" sub-section of the "Lapse" section, the amount you must pay to avoid Lapsing the policy is equal to at least three times the current month's policy charges.  See the "Grace Period" sub-section of the "Lapse" section of this prospectus.

New Hampshire – This policy is not available for issuance in the state of New Hampshire.

New York - This policy is not available for issuance in the state of New York

North Dakota - The suicide provision in the policy and in any Rider is limited to one year from the Policy Date, reinstatement date, effective date of a Specified Amount increase, or Rider effective date.  See the "Suicide" sub-section of "The Death Benefit" section of the prospectus.

Pennsylvania - Under the "Grace Period" sub-section of the "Lapse" section, the amount you must pay to avoid Lapsing the policy is equal to at least three times the current month's policy charges.  See the "Grace Period" sub-section of the "Lapse" section of this prospectus.

Texas – Under the "Grace Period" sub-section of the "Lapse" section, the amount you must pay to avoid Lapsing the policy is equal to at least three times the current month's policy charges.  See the "Grace Period" sub-section of the "Lapse" section of this prospectus.

West Virginia – Under the "Reinstatement" sub-section of the "Lapse" section, you must pay sufficient Premium to keep the policy In Force for one month from the date of reinstatement.  See the "Grace Period" sub-section of the "Lapse" section of this prospectus.

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Outside back cover page

To learn more about this policy, you should read the Statement of Additional Information (the “SAI”) dated the same date as this prospectus.  For a free copy of the SAI, to receive personalized illustrations of Death Benefits, net cash surrender values, and cash values, and to request other information about this policy please call our Service Center at 1-877-351-8808 (TDD: 1-800-238-3035) or write to us at Nationwide Life Insurance Company, Corporate Insurance Markets, One Nationwide Plaza, 1-11-08, Columbus, OH 43215-2220.

The SAI has been filed with the SEC and is incorporated by reference into this prospectus. The SEC maintains an Internet website (http://www.sec.gov) that contains the SAI and other information about us and the policy.  Information about us and the policy (including the SAI) may also be reviewed and copied at the SEC's Public Reference Room in Washington, D.C., or may be obtained, upon payment of a duplicating fee, by writing the Public Reference Section of the SEC, 100 F Street NE, Washington, D.C. 20549-8090.  Additional information on the operation of the Public Reference Room may be obtained by calling the SEC at (202) 551-8090.

Investment Company Act of 1940 Registration File No. 811-08301

Securities Act of 1933 Registration File No. 333-137202

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Nationwide VLI Separate Account-4

(Registrant)

Nationwide Life Insurance Company

(Depositor)

Corporate Insurance Markets

One Nationwide Plaza, 1-11-08

Columbus, OH 43215-2220

1-877-351-8808

TDD: 1-800-238-3035

STATEMENT OF ADDITIONAL INFORMATION

Corporate Flexible Premium Variable Universal Life Insurance Policies

This Statement of Additional Information (“SAI'') contains additional information regarding the corporate flexible premium variable universal life insurance policy offered by Nationwide Life Insurance Company (“Nationwide”).  This SAI is not a prospectus and should be read together with the policy prospectus dated May 1, 2009, and the prospectuses for the mutual funds.  The prospectus is incorporated by reference in this SAI.  You may obtain a copy of these prospectuses FREE OF CHARGE by writing or calling us at our address or phone number shown above.

The date of this Statement of Additional Information is May 1, 2009.

Table of Contents
	Page
Nationwide Life Insurance Company	1
Nationwide VLI Separate Account-4	1
Nationwide Investment Services Corporation (NISC)	1
Services	2
Underwriting Procedure	2
Net Amount at Risk	3
Illustrations	3
Advertising	3
Tax Definition of Life Insurance	3
Financial Statements	5

Nationwide Life Insurance Company

We are a stock life insurance company organized under the laws of the State of Ohio in March 1929 with our Home Office at One Nationwide Plaza, Columbus, Ohio 43215.  We provide life insurance, annuities and retirement products.  We are admitted to do business in all states, the District of Columbia and Puerto Rico.  Nationwide is a member of the Nationwide group of companies and all of our common stock is owned by Nationwide Financial Services, Inc. (“NFS”), a holding company.   The Nationwide group of companies is one of America’s largest insurance and financial services family of companies, with combined assets of over $135 billion as of December 31, 2008.

Nationwide VLI Separate Account-4

Nationwide VLI Separate Account-4 is a separate account that invests in mutual funds offered and sold to insurance companies and certain retirement plans.  We 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 the SEC does not supervise our management or the management of the variable account. We serve as the custodian of the assets of the variable account.

Nationwide Investment Services Corporation (NISC)

The policies are distributed by NISC, located at One Nationwide Plaza, Columbus, Ohio 43215, a wholly owned subsidiary of Nationwide.  For contracts issued in Michigan, all references to NISC will mean Nationwide Investment Svcs. Corporation.

The policies will be sold on a continuous basis 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 Financial Industry Regulatory Authority (“FINRA”).

Gross first year commissions plus any expense allowance payments paid by Nationwide on the sale of these policies provided by NISC will not exceed 41% of the Premium.  After the first policy year, we pay gross renewal commissions on the sale of the policies provided by NISC that will not exceed 11% of actual premium payment.

We paid no underwriting commissions to NISC for this separate account in 2008, 2007 and 2006.

1

Services

We have responsibility for administration of the policies and the variable account.  We also maintain the records of the name, address, taxpayer identification number, and other pertinent information for each policy owner and the number and type of policy issued to each policy owner and records with respect to the policy value of each policy.

We are the custodian of the assets of the variable account.  We will maintain a record of all purchases and redemption of shares of the mutual funds.  We or our affiliates may have entered into agreements with either the investment adviser or distributor for the mutual funds.  The agreements relate to administrative services we or our affiliate furnish.  Some of the services provided include distribution of underlying fund prospectuses, semi-annual and annual fund reports, proxy materials and fund communications, as well as maintaining the websites and voice response systems necessary for contract owners to execute trades in the funds.  We also act as a limited agent for the fund for purposes of accepting the trades.  For these services the funds agree to pay us an annual fee based on the average aggregate net assets of the variable account (and other separate accounts of Nationwide or life insurance company subsidiaries of Nationwide) invested in the particular fund.

We take these anticipated fee payments into consideration when determining the expenses necessary to support the policies.  Without these payments, policy charges would be higher.  Only those funds that agree to pay us a fee will be offered in the policy.  Generally, we expect to receive somewhere between 0.10% to 0.45% (an annualized rate of the daily net assets of the variable account) from the funds offered in the policies.  What is actually received depends upon many factors, including but not limited to the type of fund (i.e., money market funds generally pay less revenue than other fund types) and the actual services rendered to the fund company.

Independent Registered Public Accounting Firm

The financial statements of Nationwide VLI Separate Account-4 and the consolidated financial statements and schedules of Nationwide Life Insurance Company and subsidiaries for the periods indicated have been included herein in reliance upon the reports of KPMG LLP, independent registered public accounting firm, appearing elsewhere herein, and upon the authority of said firm as experts in accounting and auditing.  The audit report of KPMG LLP covering the December 31, 2008 consolidated financial statements and schedules of Nationwide Life Insurance Company and subsidiaries contains an explanatory paragraph that states that Nationwide Life Insurance Company and subsidiaries adopted the American Institute of Certified Public Accountants' Statement of Position 05-1, Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection with Modifications or Exchanges of Insurance Contracts, in 2007.  KPMG LLP is located at 191 West Nationwide Blvd., Columbus, Ohio 43215.

Underwriting Procedure

We underwrite the policies issued through Nationwide VLI Separate Account-4.  The policy's cost of insurance depends upon the Insured's issue age, underwriting class, length of time the policy has been In Force, and policy components selected.  The rates will vary depending upon tobacco use and other risk factors.  Monthly cost of insurance rates will not exceed those guaranteed in the policy.

For policies with applications dated before September 30, 2008, guaranteed cost of insurance rates for base coverage and coverage pursuant to the Supplemental Insurance Rider under policies issued on a non-medical basis are based on (i) the 1980 Commissioners’ Standard Ordinary 80% Male Mortality Table, (ii) Age Last Birthday, and (iii) tobacco distinct status.  Guaranteed cost of insurance rates for base coverage and coverage pursuant to the Supplemental Insurance Rider under policies issued on a medical basis are based on (i) either (a) the 1980 Commissioners’ Standard Ordinary 100% Male Mortality Table or (b) the 1980 Commissioners’ Standard Ordinary 100% Female Mortality Table, (ii) Age Last Birthday, and (iii) tobacco distinct status. Guaranteed cost of insurance rates for base coverage and coverage pursuant to the Supplemental Insurance Rider on substandard risks will equal the guaranteed cost of insurance rates for standard risks times a percentage greater than 100%.

For policies with applications dated on or after September 30, 2008, guaranteed cost of insurance rates for base coverage and coverage pursuant to the Supplemental Insurance Rider under policies issued on a non-medical basis are based on (i) the 2001 Commissioners’ Standard Ordinary 80% Male Mortality Table, (ii) Age Last Birthday, and (iii) tobacco distinct status.  Guaranteed cost of insurance rates for base coverage and coverage pursuant to the Supplemental Insurance Rider under policies issued on a medical basis are based on (i) either (a) the 2001 Commissioners’ Standard Ordinary 100% Male Mortality Table or (b) the 2001 Commissioners’ Standard Ordinary 100% Female Mortality Table, (ii) Age Last Birthday, and (iii) tobacco distinct status. Guaranteed cost of insurance rates for base coverage and coverage pursuant to the Supplemental Insurance Rider on substandard risks will equal the guaranteed cost of insurance rates for standard risks times a percentage greater than 100%.

The underwriting class of an Insured may affect the cost of insurance rate.  There are three underwriting classes into which Insureds are placed, depending on the Insureds’ mortality characteristics: Guaranteed Issue, Simplified Issue, and Regular Issue.  Within each of these mortality risk classes, there are three sub-classifications based on other risk factors of the case and the associated employee benefit plan.  The most favorable is Class A, followed by Class B, and then Class C.

In an otherwise identical policy, an Insured in the Regular Issue underwriting class will have a lower cost of insurance than an Insured in a rate class with higher mortality risks.

The rating class is determined using questionnaires, medical records, and physical exams, depending on the amount of insurance and the attributes of the Insured.  On groups, we may underwrite using short-form questionnaires or abbreviated medical evaluations.

2

Net Amount at Risk

The policy’s cost of insurance is also dependent on the policy’s Net Amount at Risk.  The Net Amount at Risk is allocated between the base coverage and the Supplemental Insurance Rider.  The Net Amount at Risk for the base policy is the base policy Death Benefit minus the policy’s Cash Value.  The Net Amount at Risk for the Supplemental Insurance Rider is the rider Death Benefit (as described in the “Supplemental Insurance Rider” section of the “Policy Riders and Rider Charges” provision of the prospectus).

Illustrations

Before you purchase the policy and upon request thereafter, we will provide illustrations of future benefits under the policy based upon the proposed Insured's age and premium class, the Death Benefit option elected, Specified Amount, planned periodic Premiums, policy components you select, and Riders requested.  An illustration will also demonstrate how the current charges associated with your policy may be reduced if you elect the Supplemental Insurance Rider.

Advertising

Rating Agencies.  Independent financial rating services, including Moody's, Standard & Poor's and A.M. Best Company rank and rate us.  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.  We may advertise these ratings from time to time.  In addition, we may include in certain advertisements, endorsements in the form of a list of organizations, individuals or other parties which recommend us or the policies.  Furthermore, we 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.

Money Market Yields.We may advertise the “yield” and “effective yield” for the money market Sub-Account.  Yield and effective yield are annualized, which means that it is assumed that the underlying mutual fund generates the same level of net income throughout a year.

Yield is a measure of the net dividend and interest income earned over a specific seven-day period (which period will be stated in the advertisement) expressed as a percentage of the offering price of the underlying mutual fund’s units.  The effective yield is calculated similarly, but reflects assumed compounding, calculated under rules prescribed by the SEC.  Thus, effective yield will be slightly higher than yield, due to the compounding.

Historical Performance of the Sub-Accounts.  We will advertise historical performance of the Sub-Accounts in accordance with SEC prescribed calculations.  Please note that performance information is annualized.  However, if a Sub-Account has been available in the variable account for less than one year, the performance information for that Sub-Account is not annualized.  Performance information is based on historical earnings and is not intended to predict or project future results.

Additional Materials.  We may provide information on various topics to you and prospective policy owners in advertising, sales literature or other materials.

Tax Definition of Life Insurance

Section 7702(b)(1) of the Internal Revenue Code provides that if one of two alternate tests is met, a policy will be treated as life insurance for federal tax purposes.  The two tests are referred to as the Cash Value Accumulation Test and the Guideline Premium/Cash Value Corridor Test.  Both tests are available to flexible premium policies such as this one.

The tables that follow show, numerically, the requirements for each test.

3

Guideline Premium/Cash Value Corridor Test

Table of Applicable Percentages of Cash Value

Attained Age of Insured	Percentage of Cash Value	Attained Age of Insured	Percentage of Cash Value	Attained Age of Insured	Percentage of Cash Value
0-40	250%	61	128%	81	105%
41	243%	62	126%	82	105%
42	236%	63	124%	83	105%
43	229%	64	122%	84	105%
44	222%	65	120%	85	105%
45	215%	66	119%	86	105%
46	209%	67	118%	87	105%
47	203%	68	117%	88	105%
48	197%	69	116%	89	105%
49	191%	70	115%	90	105%
50	185%	71	113%	91	104%
51	178%	72	111%	92	103%
52	171%	73	109%	93	102%
53	164%	74	107%	94	101%
54	157%	75	105%	95	101%
55	150%	76	105%	96	101%
56	146%	77	105%	97	101%
57	142%	78	105%	98	101%
58	138%	79	105%	99	101%
59	134%	80	105%	100	100%
60	130%

Cash Value Accumulation Test

The Cash Value Accumulation Test requires the Death Benefit to exceed an applicable percentage of the cash value.  These applicable percentages are calculated by determining net single premiums, as defined in Code Section 7702(b), for each policy year given a set of actuarial assumptions.  The relevant material assumptions include an interest rate of 4% and 1980 CSO guaranteed mortality as prescribed in Revenue Code Section 7702 for the Cash Value Accumulation Test.  The resulting net single premiums are then inverted (i.e., multiplied by 1/net single premium) to give the applicable cash value percentages.  These premiums vary with the ages, sexes, and risk classifications of the Insureds.

The table below provides an example for policies with applications dated before September 30, 2008 of applicable percentages for the Cash Value Accumulation Test.  This example is for a male non-tobacco age 40.

Policy Year	Percentage of Cash Value	Policy Year	Percentage of Cash Value	Policy Year	Percentage of Cash Value
1	365%	16	226%	31	153%
2	353%	17	220%	32	149%
3	341%	18	213%	33	146%
4	330%	19	207%	34	143%
5	320%	20	202%	35	140%
6	309%	21	196%	36	138%
7	300%	22	191%	37	135%
8	290%	23	186%	38	133%
9	281%	24	181%	39	131%
10	272%	25	176%	40	129%
11	264%	26	172%	41	127%
12	256%	27	167%	42	125%
13	248%	28	163%	43	123%
14	240%	29	160%	44	122%
15	233%	30	156%	45	120%

4

The table below provides an example for policies with applications dated on or after September 30, 2008 of the applicable percentages for the Cash Value Accumulation Test. This example is for a male non-tobacco age 40.

Policy Year	Percentage of Cash Value	Policy Year	Percentage of Cash Value	Policy Year	Percentage of Cash Value
1	413%	16	251%	31	165%
2	399%	17	243%	32	161%
3	385%	18	236%	33	158%
4	372%	19	229%	34	154%
5	360%	20	222%	35	151%
6	348%	21	215%	36	147%
7	336%	22	209%	37	146%
8	325%	23	203%	38	144%
9	314%	24	198%	39	143%
10	304%	25	193%	40	141%
11	294%	26	187%	41	140%
12	285%	27	183%	42	139%
13	276%	28	178%	43	138%
14	267%	29	174%	44	135%
15	259%	30	169%	45	132%

5

Report of Independent Registered Public Accounting Firm

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 Accounts”)) as of December 31, 2008, and the related statements of operations and changes in contract owners’ equity, and the financial highlights for each of the periods indicated herein. These financial statements and financial highlights are the responsibility of the Accounts’ 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits 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, 2008, 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 Accounts as of December 31, 2008, and the results of their operations, changes in contract owners’ equity, and financial highlights for each of the periods indicated herein, in conformity with accounting principles generally accepted in the United States of America.

/s/    KPMG LLP

Columbus, Ohio

March 13, 2009

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY

December 31, 2008

Assets:
Investments at fair value:
AIM VIF - Basic Value Fund - Series I (AVBVI)
863,098 shares (cost $7,997,255)	$	3,538,703
AIM VIF - Capital Appreciation Fund - Series I (AVCA)
42,727 shares (cost $1,054,112)		721,656
AIM VIF - Capital Development Fund - Series I (AVCDI)
826,509 shares (cost $12,969,903)		6,554,217
AIM VIF - International Growth Fund - Series I (AVIE)
1,155,588 shares (cost $34,555,721)		22,522,415
AllianceBernstein VPS - Growth and Income Portfolio - Class A (ALVGIA)
765,413 shares (cost $17,676,644)		10,026,917
AllianceBernstein VPS - International Value Portfolio - Class A (ALVIVA)
2,364,922 shares (cost $46,757,859)		26,132,387
AllianceBernstein VPS - Small-Mid Cap Value Portfolio - Class A (ALVSVA)
434,642 shares (cost $6,814,480)		4,311,646
American Century VP - Income & Growth Fund - Class I (ACVIG)
3,098,080 shares (cost $21,861,166)		14,932,744
American Century VP - Inflation Protection Fund - Class II (ACVIP2)
1,804,707 shares (cost $19,025,429)		17,866,601
American Century VP - International Fund - Class I (ACVI)
4,051,488 shares (cost $31,861,368)		24,065,838
American Century VP - International Fund - Class III (ACVI3)
1,096,205 shares (cost $10,088,665)		6,511,457
American Century VP - Mid Cap Value Fund - Class I (ACVMV1)
182,662 shares (cost $2,288,931)		1,786,437
American Century VP - Ultra(R) Fund - Class I (ACVU1)
413,302 shares (cost $4,158,480)		2,504,612
American Century VP - Value Fund - Class I (ACVV)
9,622,678 shares (cost $70,660,052)		45,034,134
American Century VP - Vista(SM) Fund - Class I (ACVVS1)
300,380 shares (cost $5,532,271)		3,235,091
American Funds IS - Asset Allocation Fund - Class 2 (AMVAA2)
65,816 shares (cost $1,037,734)		795,060
American Funds IS - Bond Fund - Class 2 (AMVBD2)
60,462 shares (cost $596,356)		566,531
American Funds IS - Global Small Capitalization Fund - Class 2 (AMVGS2)
22,538 shares (cost $466,407)		248,589
American Funds IS - Growth Fund - Class 2 (AMVGR2)
25,478 shares (cost $1,316,221)		847,651
BlackRock Large Cap Core V.I. Fund - Class II (MLVLC2)
52,098 shares (cost $1,286,866)		906,497
Calvert Variable Series Inc. - Social Equity Portfolio (CVSSE)
8,780 shares (cost $162,513)		113,701
Credit Suisse Trust - Global Small Cap Portfolio (WVCP)
39,745 shares (cost $488,590)		292,524
Credit Suisse Trust - International Focus Portfolio (WIEP)
123,730 shares (cost $1,186,980)		1,134,601

(Continued)

2

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY, Continued

Credit Suisse Trust - Large Cap Value Portfolio (WGIP)
128,060 shares (cost $1,632,980)	$	968,130
Davis Variable Account Fund, Inc. - Davis Value Portfolio (DAVVL)
54,216 shares (cost $620,974)		447,828
Dreyfus IP - Mid Cap Stock Portfolio - Initial Class (DVMCS)
72,673 shares (cost $985,338)		570,484
Dreyfus IP - Small Cap Stock Index Portfolio - Service Class (DVSCS)
1,946,846 shares (cost $30,748,199)		20,169,324
Dreyfus Stock Index Fund, Inc. - Initial Class (DSIF)
10,482,642 shares (cost $324,855,168)		240,891,119
Dreyfus VIF - Appreciation Portfolio - Initial Class (DCAP)
704,059 shares (cost $26,601,209)		20,333,227
Dreyfus VIF - Developing Leaders Portfolio - Initial Class (DSC)
27,811 shares (cost $898,126)		528,679
Dreyfus VIF - International Value Portfolio - Initial Class (DVIV)
2,265,851 shares (cost $33,518,077)		19,916,834
DWS Variable Series II - Dreman High Return Equity VIP - Class B (SVSHEB)
89,460 shares (cost $929,392)		556,444
DWS Variable Series II - Dreman Small Mid Cap Value VIP - Class B (SVSSVB)
535,027 shares (cost $5,929,385)		4,237,413
Federated IS - American Leaders Fund II - Primary Class (FALF)
22,448 shares (cost $367,622)		182,724
Federated IS - Capital Appreciation Fund II - Primary Class (FVCA2P)
86,063 shares (cost $549,800)		438,923
Federated IS - Market Opportunity Fund II - Service Class (FVMOS)
77,687 shares (cost $793,662)		776,874
Federated IS - Quality Bond Fund II - Primary Class (FQB)
2,922,067 shares (cost $32,568,031)		29,220,671
Fidelity(R) VIP - Equity-Income Portfolio - Service Class (FEIS)
4,370,478 shares (cost $103,317,334)		57,428,076
Fidelity(R) VIP - Freedom 2015 Portfolio - Service Class (FF15S)
107,586 shares (cost $1,155,999)		881,130
Fidelity(R) VIP - Freedom 2025 Portfolio - Service Class (FF25S)
32,230 shares (cost $345,876)		241,401
Fidelity(R) VIP - Growth Portfolio - Service Class (FGS)
2,591,958 shares (cost $83,431,209)		60,833,253
Fidelity(R) VIP - High Income Portfolio - Service Class (FHIS)
3,582,920 shares (cost $21,341,765)		14,116,704
Fidelity(R) VIP - High Income Portfolio - Service Class R (FHISR)
435,122 shares (cost $2,342,622)		1,710,031
Fidelity(R) VIP - Overseas Portfolio - Service Class (FOS)
2,263,567 shares (cost $45,344,382)		27,434,437
Fidelity(R) VIP - Overseas Portfolio - Service Class R (FOSR)
879,228 shares (cost $18,496,631)		10,638,662
Fidelity(R) VIP II - Contrafund(R) Portfolio - Service Class (FCS)
9,002,898 shares (cost $243,932,828)		138,014,425
Fidelity(R) VIP II - Index 500 Portfolio - Initial Class (FIP)
35,450 shares (cost $4,931,749)		3,516,317

(Continued)

3

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY, Continued

Fidelity(R) VIP II - Investment Grade Bond Portfolio - Service Class (FIGBS)
1,221,821 shares (cost $14,985,618)	$	14,356,394
Fidelity(R) VIP III - Growth Opportunities Portfolio - Service Class (FGOS)
575,893 shares (cost $9,604,777)		5,741,650
Fidelity(R) VIP III - Mid Cap Portfolio - Service Class (FMCS)
1,529,205 shares (cost $45,454,557)		28,030,327
Fidelity(R) VIP III - Value Strategies Portfolio - Service Class (FVSS)
544,905 shares (cost $5,913,578)		2,680,935
Fidelity(R) VIP IV - Energy Portfolio - Service Class 2 (FNRS2)
685,874 shares (cost $15,377,666)		7,818,961
Fidelity(R) VIP IV - Freedom Fund 2010 Portfolio - Service Class (FF10S)
158,619 shares (cost $1,802,981)		1,305,435
Fidelity(R) VIP IV - Freedom Fund 2020 Portfolio - Service Class (FF20S)
487,791 shares (cost $5,459,763)		3,755,991
Fidelity(R) VIP IV - Freedom Fund 2030 Portfolio - Service Class (FF30S)
268,035 shares (cost $3,090,168)		1,908,411
Franklin Templeton VIP - Developing Markets Securities Fund - Class 3 (FTVDM3)
458,304 shares (cost $6,093,793)		2,758,988
Franklin Templeton VIP - Foreign Securities Fund - Class 1 (TIF)
133,101 shares (cost $2,038,529)		1,457,456
Franklin Templeton VIP - Foreign Securities Fund - Class 2 (TIF2)
929,617 shares (cost $16,955,814)		10,002,675
Franklin Templeton VIP - Foreign Securities Fund - Class 3 (TIF3)
443,181 shares (cost $7,618,129)		4,742,036
Franklin Templeton VIP - Founding Funds Allocation Fund - Class 2 (FTVFA2)
20,693 shares (cost $158,353)		116,090
Franklin Templeton VIP - Global Income Securities Fund - Class 2 (FTVGI2)
59,886 shares (cost $1,028,297)		1,024,052
Franklin Templeton VIP - Global Income Securities Fund - Class 3 (FTVGI3)
377,217 shares (cost $6,474,735)		6,446,639
Franklin Templeton VIP - Income Securities Fund - Class 2 (FTVIS2)
304,396 shares (cost $5,215,898)		3,451,856
Franklin Templeton VIP - Mutual Discovery Securities Fund - Class 2 (FTVMD2)
4,298 shares (cost $86,051)		68,129
Franklin Templeton VIP - Rising Dividends Securities Fund - Class 1 (FTVRDI)
670,665 shares (cost $12,585,624)		9,362,477
Franklin Templeton VIP - Small Cap Value Securities Fund - Class 1 (FTVSVI)
726,658 shares (cost $12,783,247)		7,797,038
Franklin Templeton VIP - Small Cap Value Securities Fund - Class 2 (FTVSV2)
311,542 shares (cost $5,090,679)		3,286,767
Goldman Sachs VIT - Mid Cap Value Fund (GVMCE)
4,383,088 shares (cost $63,537,107)		37,957,538
Ivy Fund VIP, Inc. - Asset Strategy (WRASP)
47,126 shares (cost $479,871)		389,961
Ivy Fund VIP, Inc. - Growth (WRGP)
83,966 shares (cost $807,797)		634,189
Ivy Fund VIP, Inc. - Real Estate Securities (WRRESP)
59,341 shares (cost $347,765)		255,402

(Continued)

4

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY, Continued

Ivy Fund VIP, Inc. - Science and Technology (WRSTP)
58,184 shares (cost $852,801)	$	664,753
Janus Aspen Series - Balanced Portfolio - Service Class (JABS)
262,930 shares (cost $7,621,817)		6,244,587
Janus Aspen Series - Forty Portfolio - Service Class (JACAS)
1,766,155 shares (cost $54,454,697)		40,127,041
Janus Aspen Series - Global Technology Portfolio - Service Class (JAGTS)
2,797,737 shares (cost $11,087,706)		8,113,438
Janus Aspen Series - INTECH Risk Managed Core Portfolio - Service Class (JARLCS)
51,009 shares (cost $635,469)		403,989
Janus Aspen Series - International Growth Portfolio - Service Class (JAIGS)
1,620,666 shares (cost $65,164,075)		42,153,521
Janus Aspen Series - International Growth Portfolio - Service II Class (JAIGS2)
460,792 shares (cost $24,201,085)		12,049,717
JPMorgan Insurance Trust - Diversified Mid Cap Growth Portfolio 1 (OGGO)
291,847 shares (cost $2,845,880)		2,746,285
JPMorgan Insurance Trust - Diversified Mid Cap Value Portfolio 1 (OGMVP)
30,137 shares (cost $320,305)		134,712
Legg Mason Partners VET - Small Cap Growth Portfolio - Class I (SBVSG)
12,309 shares (cost $151,394)		106,472
Lehman Brothers AMT - Short Duration Bond Portfolio - I Class (AMTB)
380,243 shares (cost $4,829,797)		4,072,402
Lincoln VIP - Baron Growth Opportunities Funds - Service Class (BNCAI)
438,796 shares (cost $12,494,820)		7,597,747
Lord Abbett Series Fund, Inc. - Mid Cap Value Portfolio - Class VC (LOVMCV)
98,188 shares (cost $1,497,969)		1,031,959
MFS(R) VIT - Investors Growth Stock Series - Initial Class (MIGIC)
371,608 shares (cost $3,654,144)		2,638,415
MFS(R) VIT - Research International Series - Service Class (MVRISC)
27,570 shares (cost $277,356)		243,447
MFS(R) VIT - Value Series - Initial Class (MVFIC)
555,865 shares (cost $7,821,257)		5,425,246
MFS(R) VIT - Value Series - Service Class (MVFSC)
210,951 shares (cost $2,276,275)		2,039,895
Nationwide VIT - American Funds Asset Allocation Fund - Class II (GVAAA2)
238,977 shares (cost $4,460,685)		3,109,092
Nationwide VIT - American Funds Bond Fund - Class II (GVABD2)
260,213 shares (cost $2,892,538)		2,479,825
Nationwide VIT - American Funds Global Growth Fund - Class II (GVAGG2)
264,260 shares (cost $6,362,563)		3,948,050
Nationwide VIT - American Funds Growth Fund - Class II (GVAGR2)
140,322 shares (cost $9,039,750)		5,184,900
Nationwide VIT - American Funds Growth-Income Fund - Class II (GVAGI2)
54,382 shares (cost $2,151,892)		1,427,521
Nationwide VIT - Cardinal Aggressive Fund - Class I (NVCRA1)
42,880 shares (cost $386,304)		281,719
Nationwide VIT - Cardinal Balanced Fund - Class I (NVCRB1)
64,159 shares (cost $543,920)		520,971

(Continued)

5

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY, Continued

Nationwide VIT - Cardinal Capital Appreciation Fund - Class I (NVCCA1)
69,427 shares (cost $642,201)	$	515,839
Nationwide VIT - Cardinal Conservative Fund - Class I (NVCCN1)
32,922 shares (cost $315,554)		300,250
Nationwide VIT - Cardinal Moderate Fund - Class I (NVCMD1)
81,552 shares (cost $719,036)		634,474
Nationwide VIT - Cardinal Moderately Aggressive Fund - Class I (NVCMA1)
217,925 shares (cost $1,883,898)		1,542,905
Nationwide VIT - Cardinal Moderately Conservative Fund - Class I (NVCMC1)
33,452 shares (cost $279,541)		283,335
Nationwide VIT - Core Bond Fund - Class I (NVCBD1)
21,735 shares (cost $207,873)		210,617
Nationwide VIT - Federated High Income Bond Fund - Class I (HIBF)
3,054,589 shares (cost $22,471,778)		15,242,398
Nationwide VIT - Federated High Income Bond Fund - Class III (HIBF3)
1,229,392 shares (cost $8,310,345)		6,122,371
Nationwide VIT - Gartmore Emerging Markets Fund - Class I (GEM)
2,624,166 shares (cost $41,146,475)		18,500,372
Nationwide VIT - Gartmore Emerging Markets Fund - Class III (GEM3)
1,291,257 shares (cost $20,735,981)		9,077,538
Nationwide VIT - Gartmore Global Utilities Fund - Class I (GVGU1)
401,129 shares (cost $4,893,707)		3,120,786
Nationwide VIT - Gartmore International Equity Fund - Class I (GIG)
963,799 shares (cost $10,867,581)		6,023,746
Nationwide VIT - Gartmore International Equity Fund - Class III (GIG3)
21,861 shares (cost $212,711)		136,851
Nationwide VIT - Gartmore International Equity Fund - Class VI (NVIE6)
5,923 shares (cost $67,900)		37,020
Nationwide VIT - Gartmore Worldwide Leaders Fund - Class I (GEF)
403,572 shares (cost $5,552,351)		3,333,502
Nationwide VIT - Global Financial Services Fund - Class I (GVGF1)
314,746 shares (cost $3,177,924)		1,803,495
Nationwide VIT - Government Bond Fund - Class I (GBF)
10,777,564 shares (cost $125,259,192)		129,438,538
Nationwide VIT - Growth Fund - Class I (CAF)
1,276,896 shares (cost $12,313,451)		11,313,300
Nationwide VIT - Health Sciences Fund - Class I (GVGH1)
320,568 shares (cost $3,390,609)		2,590,186
Nationwide VIT - Health Sciences Fund - Class III (GVGHS)
300,940 shares (cost $3,185,092)		2,437,614
Nationwide VIT - International Index Fund - Class II (GVIX2)
101,346 shares (cost $1,007,911)		655,710
Nationwide VIT - International Index Fund - Class VI (GVIX6)
76,048 shares (cost $832,893)		491,270
Nationwide VIT - Investor Destinations Aggressive Fund - Class II (GVIDA)
3,171,571 shares (cost $37,715,587)		21,852,122
Nationwide VIT - Investor Destinations Conservative Fund - Class II (GVIDC)
2,722,205 shares (cost $27,508,341)		25,234,842

(Continued)

6

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY, Continued

Nationwide VIT - Investor Destinations Moderate Fund - Class II (GVIDM)
6,734,484 shares (cost $76,296,186)	$	56,973,735
Nationwide VIT - Investor Destinations Moderately Aggressive Fund - Class II (GVDMA)
7,612,966 shares (cost $89,588,888)		60,599,207
Nationwide VIT - Investor Destinations Moderately Conservative Fund - Class II (GVDMC)
1,938,550 shares (cost $21,355,471)		17,156,166
Nationwide VIT - J.P. Morgan Balanced Fund - Class I (BF)
1,503,773 shares (cost $14,853,780)		10,526,410
Nationwide VIT - Lehman Brothers Core Plus Bond Fund - Class I (NVLCP1)
13,778 shares (cost $130,657)		134,746
Nationwide VIT - Mid Cap Growth Fund - Class I (SGRF)
453,276 shares (cost $12,158,033)		7,945,921
Nationwide VIT - Mid Cap Index Fund - Class I (MCIF)
3,607,294 shares (cost $63,935,398)		40,582,060
Nationwide VIT - Money Market Fund - Class I (SAM)
133,849,215 shares (cost $133,849,215)		133,849,215
Nationwide VIT - Money Market Fund - Class V (SAM5)
372,633,028 shares (cost $372,633,028)		372,633,028
Nationwide VIT - Multi-Manager International Growth Fund - Class III (NVMIG3)
1,063 shares (cost $9,750)		6,815
Nationwide VIT - Multi-Manager International Value Fund - Class I (GVDIVI)
127,754 shares (cost $1,921,271)		987,538
Nationwide VIT - Multi-Manager International Value Fund - Class III (GVDIV3)
640,757 shares (cost $10,262,795)		4,933,829
Nationwide VIT - Multi-Manager Large Cap Growth Fund - Class I (NVMLG1)
2,283 shares (cost $22,612)		15,389
Nationwide VIT - Multi-Manager Large Cap Value Fund - Class I (NVMLV1)
36,277 shares (cost $250,143)		240,157
Nationwide VIT - Multi-Manager Mid Cap Growth Fund - Class I (NVMMG1)
456 shares (cost $4,428)		3,010
Nationwide VIT - Multi-Manager Mid Cap Value Fund - Class I (NVMMV1)
343 shares (cost $2,346)		2,427
Nationwide VIT - Multi-Manager Mid Cap Value Fund - Class II (NVMMV2)
781 shares (cost $5,683)		5,523
Nationwide VIT - Multi-Manager Small Cap Growth Fund - Class I (SCGF)
1,080,724 shares (cost $16,386,281)		10,428,987
Nationwide VIT - Multi-Manager Small Cap Value Fund - Class I (SCVF)
5,007,132 shares (cost $58,232,745)		33,147,216
Nationwide VIT - Multi-Manager Small Company Fund - Class I (SCF)
5,168,689 shares (cost $107,263,640)		55,615,091
Nationwide VIT - Nationwide Fund - Class I (TRF)
38,393,308 shares (cost $397,182,878)		250,324,371
Nationwide VIT - Nationwide Leaders Fund - Class I (GVUS1)
153,069 shares (cost $2,036,785)		990,355
Nationwide VIT - Neuberger Berman Multi-Cap Opportunities Fund - Class I (NVNMO1)
170 shares (cost $1,111)		943
Nationwide VIT - Neuberger Berman Socially Responsible Fund - Class I (NVNSR1)
4,834 shares (cost $44,027)		31,133

(Continued)

7

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY, Continued

Nationwide VIT - Short Term Bond Fund - Class II (NVSTB2)
98,303 shares (cost $961,415)	$	960,419
Nationwide VIT - Technology and Communications Fund - Class I (GGTC)
1,266,862 shares (cost $5,327,210)		2,825,102
Nationwide VIT - Technology and Communications Fund - Class III (GGTC3)
667,969 shares (cost $2,789,214)		1,502,930
Nationwide VIT - U.S. Growth Leaders Fund - Class I (GVUG1)
655,907 shares (cost $6,943,162)		3,909,207
Nationwide VIT - Van Kampen Comstock Value Fund - Class I (EIF)
1,148,061 shares (cost $13,241,331)		8,024,948
Nationwide VIT - Van Kampen Multi-Sector Bond Fund - Class I (MSBF)
1,515,329 shares (cost $14,291,797)		11,092,209
Nationwide VIT - Van Kampen Real Estate Fund - Class I (NVRE1)
19,769 shares (cost $151,337)		112,879
Neuberger Berman AMT - Guardian Portfolio - Class I (AMGP)
564,694 shares (cost $9,519,670)		7,030,444
Neuberger Berman AMT - International Portfolio - Class S (AMINS)
272,863 shares (cost $3,809,296)		1,989,172
Neuberger Berman AMT - Mid Cap Growth Portfolio - I Class (AMCG)
1,625,534 shares (cost $28,377,738)		26,236,126
Neuberger Berman AMT - Partners Portfolio - Class I (AMTP)
1,153,996 shares (cost $19,392,871)		8,204,912
Neuberger Berman AMT - Regency Portfolio - Class I (AMRI)
234,668 shares (cost $2,863,603)		2,018,146
Neuberger Berman AMT - Regency Portfolio - Class S (AMRS)
76,033 shares (cost $1,262,599)		701,020
Neuberger Berman AMT - Small Cap Growth Portfolio - Class S (AMFAS)
139,086 shares (cost $1,947,063)		1,161,372
Neuberger Berman AMT - Socially Responsive Portfolio - Class I (AMSRS)
267,801 shares (cost $4,198,300)		2,514,650
Oppenheimer VAF - Capital Appreciation Fund - Non-Service Class (OVGR)
2,702,727 shares (cost $98,166,596)		69,379,008
Oppenheimer VAF - Global Securities Fund - Class 3 (OVGS3)
572,747 shares (cost $19,127,681)		11,649,665
Oppenheimer VAF - Global Securities Fund - Non-Service Class (OVGS)
1,913,256 shares (cost $61,505,360)		38,666,903
Oppenheimer VAF - High Income Fund - Class 3 (OVHI3)
308,430 shares (cost $1,504,108)		484,234
Oppenheimer VAF - High Income Fund - Non-Service Class (OVHI)
271,888 shares (cost $2,245,463)		429,583
Oppenheimer VAF - Main Street Small Cap Fund(R) - Non-Service Class (OVSC)
288,637 shares (cost $5,158,367)		3,073,980
Oppenheimer VAF - Main Street(R) - Non-Service Class (OVGI)
1,596,926 shares (cost $32,881,346)		23,251,243
Oppenheimer VAF - Mid Cap Fund - Non-Service Class (OVAG)
699,059 shares (cost $29,647,825)		19,252,088
Oppenheimer VAF - Strategic Bond Fund - Non-Service Class (OVSB)
216,703 shares (cost $1,105,570)		972,996

(Continued)

8

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY, Continued

PIMCO VIT - All Asset Portfolio - Administrative Class (PMVAAA)
64,836 shares (cost $607,773)	$	596,491
PIMCO VIT - Low Duration Portfolio - Administrative Class (PMVLDA)
3,801,385 shares (cost $38,296,349)		36,797,406
PIMCO VIT - Real Return Portfolio - Administrative Class (PMVRRA)
5,317,624 shares (cost $65,292,343)		59,876,450
PIMCO VIT - Total Return Portfolio - Administrative Class (PMVTRA)
16,513,898 shares (cost $169,146,426)		170,258,284
Pioneer VCT - Pioneer Emerging Markets Portfolio - Class I (PIVEMI)
9,238 shares (cost $163,630)		146,324
Pioneer VCT - Pioneer High Yield Portfolio - Class I (PIHYB1)
1,912,223 shares (cost $18,678,368)		12,352,962
Putnam VT - Growth and Income Fund - Class IB (PVGIB)
53,978 shares (cost $1,148,475)		619,131
Putnam VT - International Equity Fund - Class IB (PVTIGB)
143,181 shares (cost $2,484,094)		1,272,879
Putnam VT - OTC & Emerging Growth Fund - Class IB (PVOEGB)
7,862 shares (cost $42,195)		34,907
Putnam VT - Small Cap Value Fund - Class IB (PVTSCB)
41 shares (cost $537)		352
Putnam VT - Voyager Fund - Class IB (PVTVB)
25,286 shares (cost $580,422)		505,208
Royce Capital Fund - Micro Cap Portfolio (ROCMC)
4,371,834 shares (cost $49,908,729)		26,362,162
Royce Capital Fund - Small Cap Portfolio (ROCSC)
13,739 shares (cost $115,366)		88,202
T. Rowe Price Blue Chip Growth Portfolio - II (TRBCG2)
355,895 shares (cost $3,573,948)		2,384,493
T. Rowe Price Equity Income Portfolio - II (TREI2)
4,110,835 shares (cost $89,074,854)		58,826,043
T. Rowe Price Health Sciences Portfolio - II (TRHS2)
132,288 shares (cost $1,646,849)		1,269,970
T. Rowe Price Limited Term Bond Portfolio - Class II (TRLT2)
413,660 shares (cost $2,033,171)		1,997,980
T. Rowe Price Mid Cap Growth Portfolio - II (TRMCG2)
1,116,284 shares (cost $25,534,992)		15,281,923
T. Rowe Price New America Growth Portfolio (TRNAG1)
609,377 shares (cost $10,640,719)		7,775,646
T. Rowe Price Personal Strategy Balanced Portfolio (TRPSB1)
33,277 shares (cost $535,614)		422,620
The Dreyfus Socially Responsible Growth Fund, Inc. - Initial Shares (DSRG)
449,741 shares (cost $10,550,533)		8,931,849
The Universal IF, Inc. - Capital Growth Portfolio - Class I (MSVEG)
19,688 shares (cost $309,424)		200,619
Van Eck Worldwide Insurance Trust - Emerging Markets Fund - Initial Class (VWEM)
1,482,460 shares (cost $25,481,736)		8,716,867
Van Eck Worldwide Insurance Trust - Hard Assets Fund - Initial Class (VWHA)
943,174 shares (cost $32,673,172)		17,684,517

(Continued)

9

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY, Continued

Van Kampen UIF - Core Plus Fixed Income Portfolio - Class I (MSVFI)
291,905 shares (cost $3,257,323)	$	2,892,782
Van Kampen UIF - Emerging Markets Debt Portfolio - Class I (MSEM)
1,570,027 shares (cost $12,599,987)		10,158,077
Van Kampen UIF - Global Real Estate Portfolio - Class II (VKVGR2)
88,891 shares (cost $582,579)		485,342
Van Kampen UIF - Mid Cap Growth Portfolio- Class I (MSVMG)
1,225,298 shares (cost $13,237,840)		7,118,980
Van Kampen UIF - U.S. Real Estate Portfolio - Class I (MSVRE)
4,482,977 shares (cost $78,189,492)		36,805,243
Vanguard(R) VIF - Balanced Portfolio (VVB)
62,212 shares (cost $1,059,223)		923,847
Vanguard(R) VIF - Diversified Value Portfolio (VVDV)
105,755 shares (cost $1,399,691)		1,012,073
Vanguard(R) VIF - International Portfolio (VVI)
182,316 shares (cost $3,384,849)		2,151,331
Vanguard(R) VIF - Mid Cap Index Portfolio (VVMCI)
210,778 shares (cost $2,842,254)		1,943,375
Vanguard(R) VIF - Short-Term Investment-Grade Portfolio (VVSTC)
234,568 shares (cost $2,407,750)		2,333,953
Wells Fargo AVT - Discovery Fund(SM) (SVDF)
85,706 shares (cost $1,154,844)		959,056
Wells Fargo AVT - Opportunity Fund(SM) (SVOF)
1,364,172 shares (cost $27,460,394)		13,859,985
Wells Fargo AVT - Small Cap Growth Fund (WFVSCG)
176,402 shares (cost $1,063,477)		733,831
Total Investments		3,234,054,969
Total Assets		3,234,054,969
Accounts Payable		151,674
	$	3,233,903,295
Contract Owners’ Equity:
Accumulation units		3,233,903,295
Total Contract Owners’ Equity (note 8)	$	3,233,903,295

See accompanying notes to financial statements.

10

Nationwide VLI Separate Account-4

STATEMENTS OF OPERATIONS

Year Ended December 31, 2008

Investment Activity:	Total			AVBVI		AVCA		AVCDI		AVIE		ALVGIA		ALVIVA		ALVSVA
Reinvested dividends	$	84,561,489		50,966		-		-		170,333		298,859		369,479		34,876
Asset charges (note 3)		(5,372,650	)	(3,623	)	-		(19,941	)	(81,806	)	(26,017	)	(88,055	)	(2,790	)
Net investment income (loss)		79,188,839		47,343		-		(19,941	)	88,527		272,842		281,424		32,086
Proceeds from mutual fund shares sold		1,252,327,024		2,123,209		641,748		5,751,822		13,735,628		7,030,639		9,551,917		1,997,782
Cost of mutual fund shares sold		(1,316,768,075	)	(2,430,442	)	(666,700	)	(6,689,880	)	(12,916,765	)	(7,972,517	)	(15,643,843	)	(2,230,882	)
Realized gain (loss) on investments		(64,441,051	)	(307,233	)	(24,952	)	(938,058	)	818,863		(941,878	)	(6,091,926	)	(233,100	)
Change in unrealized gain (loss) on investments		(1,787,300,699	)	(4,575,481	)	(635,043	)	(6,874,273	)	(16,773,325	)	(9,189,587	)	(21,079,201	)	(2,153,893	)
Net gain (loss) on investments		(1,851,741,750	)	(4,882,714	)	(659,995	)	(7,812,331	)	(15,954,462	)	(10,131,465	)	(27,171,127	)	(2,386,993	)
Reinvested capital gains		265,246,757		1,102,495		-		1,332,482		411,886		2,544,323		2,037,831		495,807
Net increase (decrease) in contract owners’ equity resulting from operations	$	(1,507,306,154	)	(3,732,876	)	(659,995	)	(6,499,790	)	(15,454,049	)	(7,314,300	)	(24,851,872	)	(1,859,100	)
Investment Activity:	ACVIG			ACVIP2		ACVI		ACVI3		ACVMV1		ACVU1		ACVV		ACVVS1
Reinvested dividends	$	421,839		666,076		296,050		81,052		1,765		-		1,388,632		-
Asset charges (note 3)		(8,087	)	-		(38,569	)	-		(45	)	(1,778	)	(42,920	)	(2,028	)
Net investment income (loss)		413,752		666,076		257,481		81,052		1,720		(1,778	)	1,345,712		(2,028	)
Proceeds from mutual fund shares sold		3,678,658		4,262,450		9,538,921		1,418,080		1,190,999		2,533,026		12,526,304		2,296,273
Cost of mutual fund shares sold		(3,355,917	)	(4,227,394	)	(7,069,639	)	(1,340,876	)	(1,405,957	)	(2,724,021	)	(17,223,703	)	(2,732,014	)
Realized gain (loss) on investments		322,741		35,056		2,469,282		77,204		(214,958	)	(190,995	)	(4,697,399	)	(435,741	)
Change in unrealized gain (loss) on investments		(11,498,018	)	(1,411,755	)	(25,813,579	)	(6,681,859	)	(282,036	)	(2,431,983	)	(21,487,997	)	(2,649,965	)
Net gain (loss) on investments		(11,175,277	)	(1,376,699	)	(23,344,297	)	(6,604,655	)	(496,994	)	(2,622,978	)	(26,185,396	)	(3,085,706	)
Reinvested capital gains		2,527,186		-		3,477,537		952,078		-		624,097		7,372,247		198,639
Net increase (decrease) in contract owners’ equity resulting from operations	$	(8,234,339	)	(710,623	)	(19,609,279	)	(5,571,525	)	(495,274	)	(2,000,659	)	(17,467,437	)	(2,889,095	)

(Continued)

11

Nationwide VLI Separate Account-4

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2008

Investment Activity:	AMVAA2			AMVBD2		AMVGS2		AMVGR2		MLVLC2		CVSSE		WVCP		WIEP
Reinvested dividends	$	23,805		33,917		-		10,153		12,428		-		8,260		32,251
Asset charges (note 3)		(1,081	)	(1,003	)	(549	)	(1,791	)	(5,885	)	(306	)	(120	)	(335	)
Net investment income (loss)		22,724		32,914		(549	)	8,362		6,543		(306	)	8,140		31,916
Proceeds from mutual fund shares sold		58,963		699,165		54,249		322,369		2,728,044		84,075		93,811		375,938
Cost of mutual fund shares sold		(70,863	)	(775,995	)	(125,591	)	(511,952	)	(3,735,529	)	(106,111	)	(78,252	)	(272,919	)
Realized gain (loss) on investments		(11,900	)	(76,830	)	(71,342	)	(189,583	)	(1,007,485	)	(22,036	)	15,559		103,019
Change in unrealized gain (loss) on investments		(242,674	)	(29,824	)	(217,818	)	(468,570	)	11,025		(50,892	)	(292,705	)	(1,064,586	)
Net gain (loss) on investments		(254,574	)	(106,654	)	(289,160	)	(658,153	)	(996,460	)	(72,928	)	(277,146	)	(961,567	)
Reinvested capital gains		29,648		1,410		50,646		120,744		26,100		1,159		-		-
Net increase (decrease) in contract owners’ equity resulting from operations	$	(202,202	)	(72,330	)	(239,063	)	(529,047	)	(963,817	)	(72,075	)	(269,006	)	(929,651	)
Investment Activity:	WGIP			DAVVL		DVMCS		DVSCS		DSIF		DCAP		DSC		DVIV
Reinvested dividends	$	39,352		6,613		7,725		192,899		6,803,934		600,953		4,928		673,870
Asset charges (note 3)		(117	)	(667	)	(1,524	)	(35,982	)	(484,074	)	(26,597	)	-		(63,931	)
Net investment income (loss)		39,235		5,946		6,201		156,917		6,319,860		574,356		4,928		609,939
Proceeds from mutual fund shares sold		402,338		57,272		651,813		5,472,882		66,494,072		9,861,527		145,388		10,736,573
Cost of mutual fund shares sold		(472,280	)	(71,611	)	(905,471	)	(6,798,667	)	(50,675,273	)	(8,318,387	)	(226,270	)	(15,438,156	)
Realized gain (loss) on investments		(69,942	)	(14,339	)	(253,658	)	(1,325,785	)	15,818,799		1,543,140		(80,882	)	(4,701,583	)
Change in unrealized gain (loss) on investments		(661,518	)	(173,146	)	(322,041	)	(10,876,821	)	(163,666,840	)	(13,273,742	)	(205,053	)	(13,304,437	)
Net gain (loss) on investments		(731,460	)	(187,485	)	(575,699	)	(12,202,606	)	(147,848,041	)	(11,730,602	)	(285,935	)	(18,006,020	)
Reinvested capital gains		125,539		10,250		125,095		3,338,301		-		2,238,570		29,526		5,147,830
Net increase (decrease) in contract owners’ equity resulting from operations	$	(566,686	)	(171,289	)	(444,403	)	(8,707,388	)	(141,528,181	)	(8,917,676	)	(251,481	)	(12,248,251	)

(Continued)

12

Nationwide VLI Separate Account-4

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2008

Investment Activity:	SVSHEB			SVSSVB		FALF		FVCA2P		FVMOS		FQB		FEIS		FF15S
Reinvested dividends	$	16,459		26,279		4,437		1,756		6,586		2,072,489		2,044,682		29,361
Asset charges (note 3)		(1,773	)	(5,643	)	-		-		-		(32,913	)	(79,536	)	(1,599	)
Net investment income (loss)		14,686		20,636		4,437		1,756		6,586		2,039,576		1,965,146		27,762
Proceeds from mutual fund shares sold		297,279		1,398,593		27,198		50,330		1,232,147		14,442,755		12,801,471		63,750
Cost of mutual fund shares sold		(522,699	)	(2,557,142	)	(53,688	)	(48,330	)	(1,316,173	)	(15,037,887	)	(14,141,107	)	(82,001	)
Realized gain (loss) on investments		(225,420	)	(1,158,549	)	(26,490	)	2,000		(84,026	)	(595,132	)	(1,339,636	)	(18,251	)
Change in unrealized gain (loss) on investments		(340,683	)	(1,691,972	)	(140,537	)	(185,047	)	(16,844	)	(3,824,604	)	(45,577,309	)	(274,869	)
Net gain (loss) on investments		(566,103	)	(2,850,521	)	(167,027	)	(183,047	)	(100,870	)	(4,419,736	)	(46,916,945	)	(293,120	)
Reinvested capital gains		119,020		843,807		68,651		10,715		-		-		90,581		28,462
Net increase (decrease) in contract owners’ equity resulting from operations	$	(432,397	)	(1,986,078	)	(93,939	)	(170,576	)	(94,284	)	(2,380,160	)	(44,861,218	)	(236,896	)
Investment Activity:	FF25S			FGS		FHIS		FHISR		FOS		FOSR		FCS		FIP
Reinvested dividends	$	7,855		687,038		1,582,966		181,702		1,033,784		398,857		1,791,086		105,047
Asset charges (note 3)		(514	)	(73,168	)	(15,952	)	-		(69,758	)	-		(224,073	)	(7,729	)
Net investment income (loss)		7,341		613,870		1,567,014		181,702		964,026		398,857		1,567,013		97,318
Proceeds from mutual fund shares sold		34,570		14,216,563		8,173,775		2,117,019		10,382,076		2,668,174		41,477,947		1,123,166
Cost of mutual fund shares sold		(41,824	)	(9,034,720	)	(9,837,209	)	(2,505,519	)	(8,484,624	)	(2,752,614	)	(44,479,965	)	(1,562,813	)
Realized gain (loss) on investments		(7,254	)	5,181,843		(1,663,434	)	(388,500	)	1,897,452		(84,440	)	(3,002,018	)	(439,647	)
Change in unrealized gain (loss) on investments		(104,475	)	(59,635,200	)	(5,012,716	)	(443,840	)	(30,619,099	)	(10,589,282	)	(106,447,811	)	(1,415,432	)
Net gain (loss) on investments		(111,729	)	(54,453,357	)	(6,676,150	)	(832,340	)	(28,721,647	)	(10,673,722	)	(109,449,829	)	(1,855,079	)
Reinvested capital gains		10,967		-		-		-		5,319,862		1,841,509		5,516,799		-
Net increase (decrease) in contract owners’ equity resulting from operations	$	(93,421	)	(53,839,487	)	(5,109,136	)	(650,638	)	(22,437,759	)	(8,433,356	)	(102,366,017	)	(1,757,761	)

(Continued)

13

Nationwide VLI Separate Account-4

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2008

Investment Activity:	FIGBS			FGIS		FGOS		FMCS		FVSS		FNRS2		FF10S		FF20S
Reinvested dividends	$	581,911		-		34,931		135,488		30,534		-		44,313		122,183
Asset charges (note 3)		(4,409	)	(24	)	(2,242	)	(28,237	)	(1,477	)	-		(32	)	(1,344	)
Net investment income (loss)		577,502		(24	)	32,689		107,251		29,057		-		44,281		120,839
Proceeds from mutual fund shares sold		6,299,495		29,761		2,409,501		7,959,679		4,475,834		5,587,817		506,983		628,627
Cost of mutual fund shares sold		(6,523,551	)	(37,510	)	(1,780,588	)	(10,280,653	)	(6,507,802	)	(5,332,558	)	(560,415	)	(787,719	)
Realized gain (loss) on investments		(224,056	)	(7,749	)	628,913		(2,320,974	)	(2,031,968	)	255,259		(53,432	)	(159,092	)
Change in unrealized gain (loss) on investments		(878,509	)	-		(8,114,515	)	(20,681,917	)	(2,944,133	)	(9,827,149	)	(505,036	)	(1,785,136	)
Net gain (loss) on investments		(1,102,565	)	(7,749	)	(7,485,602	)	(23,002,891	)	(4,976,101	)	(9,571,890	)	(558,468	)	(1,944,228	)
Reinvested capital gains		11,500		-		-		5,673,851		1,635,580		470,633		66,308		210,061
Net increase (decrease) in contract owners’ equity resulting from operations	$	(513,563	)	(7,773	)	(7,452,913	)	(17,221,789	)	(3,311,464	)	(9,101,257	)	(447,879	)	(1,613,328	)
Investment Activity:	FF30S			FTVDM3		TIF		TIF2		TIF3		FTVFA2		FTVGI2		FTVGI3
Reinvested dividends	$	56,786		151,739		66,199		352,279		164,729		3,349		22,119		233,513
Asset charges (note 3)		(434	)	-		-		(32,056	)	-		-		(1,521	)	-
Net investment income (loss)		56,352		151,739		66,199		320,223		164,729		3,349		20,598		233,513
Proceeds from mutual fund shares sold		260,505		2,221,775		564,393		8,363,774		719,685		3,823		85,960		3,853,157
Cost of mutual fund shares sold		(286,958	)	(2,491,106	)	(595,891	)	(8,337,514	)	(791,389	)	(5,507	)	(85,961	)	(3,674,502	)
Realized gain (loss) on investments		(26,453	)	(269,331	)	(31,498	)	26,260		(71,704	)	(1,684	)	(1	)	178,655
Change in unrealized gain (loss) on investments		(1,220,170	)	(4,596,789	)	(1,488,551	)	(9,427,721	)	(3,947,571	)	(42,263	)	(4,244	)	(225,501	)
Net gain (loss) on investments		(1,246,623	)	(4,866,120	)	(1,520,049	)	(9,401,461	)	(4,019,275	)	(43,947	)	(4,245	)	(46,846	)
Reinvested capital gains		163,010		1,100,871		239,532		1,441,783		635,903		3,322		-		-
Net increase (decrease) in contract owners’ equity resulting from operations	$	(1,027,261	)	(3,613,510	)	(1,214,318	)	(7,639,455	)	(3,218,643	)	(37,276	)	16,353		186,667

(Continued)

14

Nationwide VLI Separate Account-4

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2008

Investment Activity:	FTVIS2			FTVMD2		FTVRDI		FTVSVI		FTVSV2		GVMCE		WRASP		WRGP
Reinvested dividends	$	247,666		1,509		246,107		147,861		50,555		576,098		2,042		-
Asset charges (note 3)		-		(129	)	-		-		(10,943	)	(150,174	)	(268	)	(626	)
Net investment income (loss)		247,666		1,380		246,107		147,861		39,612		425,924		1,774		(626	)
Proceeds from mutual fund shares sold		1,054,036		58,040		2,626,930		1,469,391		2,049,257		29,163,045		49,684		105,629
Cost of mutual fund shares sold		(1,253,633	)	(61,470	)	(2,587,822	)	(1,629,788	)	(2,632,193	)	(39,644,058	)	(64,514	)	(141,724	)
Realized gain (loss) on investments		(199,597	)	(3,430	)	39,108		(160,397	)	(582,936	)	(10,481,013	)	(14,830	)	(36,095	)
Change in unrealized gain (loss) on investments		(1,655,102	)	(17,922	)	(3,991,162	)	(4,661,084	)	(1,378,961	)	(14,754,743	)	(89,911	)	(167,825	)
Net gain (loss) on investments		(1,854,699	)	(21,352	)	(3,952,054	)	(4,821,481	)	(1,961,897	)	(25,235,756	)	(104,741	)	(203,920	)
Reinvested capital gains		103,703		2,827		91,080		799,863		350,132		103,156		33,568		8,776
Net increase (decrease) in contract owners’ equity resulting from operations	$	(1,503,330	)	(17,145	)	(3,614,867	)	(3,873,757	)	(1,572,153	)	(24,706,676	)	(69,399	)	(195,770	)
Investment Activity:	WRRESP			WRSTP		JABS		JACAS		JAGTS		JARLCS		JAIGS		JAIGS2
Reinvested dividends	$	2,202		-		200,123		6,439		10,979		3,703		1,535,851		553,994
Asset charges (note 3)		(365	)	(837	)	(16,440	)	(62,761	)	(4,442	)	-		(66,852	)	-
Net investment income (loss)		1,837		(837	)	183,683		(56,322	)	6,537		3,703		1,468,999		553,994
Proceeds from mutual fund shares sold		283,122		129,758		6,552,958		11,063,376		2,983,813		68,430		12,616,149		4,638,721
Cost of mutual fund shares sold		(364,263	)	(175,861	)	(6,864,878	)	(6,694,776	)	(2,446,697	)	(83,365	)	(6,931,744	)	(4,243,688	)
Realized gain (loss) on investments		(81,141	)	(46,103	)	(311,920	)	4,368,600		537,116		(14,935	)	5,684,405		395,033
Change in unrealized gain (loss) on investments		(66,352	)	(187,296	)	(1,914,827	)	(37,016,154	)	(7,484,264	)	(242,489	)	(56,149,301	)	(17,126,656	)
Net gain (loss) on investments		(147,493	)	(233,399	)	(2,226,747	)	(32,647,554	)	(6,947,148	)	(257,424	)	(50,464,896	)	(16,731,623	)
Reinvested capital gains		6,363		24,938		603,351		-		-		31,638		8,232,296		2,970,977
Net increase (decrease) in contract owners’ equity resulting from operations	$	(139,293	)	(209,298	)	(1,439,713	)	(32,703,876	)	(6,940,611	)	(222,083	)	(40,763,601	)	(13,206,652	)

(Continued)

15

Nationwide VLI Separate Account-4

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2008

Investment Activity:	OGGO			OGMVP		SBVSG		AMTB		BNCAI		LOVMCV		MIGIC		MVRISC
Reinvested dividends	$	-		2,729		-		226,384		-		19,059		22,201		40
Asset charges (note 3)		(12,040	)	(279	)	(165	)	-		(31,367	)	(3,304	)	-		(186	)
Net investment income (loss)		(12,040	)	2,450		(165	)	226,384		(31,367	)	15,755		22,201		(146	)
Proceeds from mutual fund shares sold		7,689,759		2,085		31,039		4,713,101		6,326,805		1,143,381		1,254,416		16,031
Cost of mutual fund shares sold		(10,656,545	)	(5,715	)	(41,930	)	(4,915,401	)	(7,404,515	)	(1,862,247	)	(1,111,574	)	(19,770	)
Realized gain (loss) on investments		(2,966,786	)	(3,630	)	(10,891	)	(202,300	)	(1,077,710	)	(718,866	)	142,842		(3,739	)
Change in unrealized gain (loss) on investments		(148,137	)	(115,404	)	(44,922	)	(861,945	)	(4,879,350	)	(98,152	)	(1,810,696	)	(34,172	)
Net gain (loss) on investments		(3,114,923	)	(119,034	)	(55,813	)	(1,064,245	)	(5,957,060	)	(817,018	)	(1,667,854	)	(37,911	)
Reinvested capital gains		853,551		41,787		724		-		623,887		63,687		181,434		333
Net increase (decrease) in contract owners’ equity resulting from operations	$	(2,273,412	)	(74,797	)	(55,254	)	(837,861	)	(5,364,540	)	(737,576	)	(1,464,219	)	(37,724	)
Investment Activity:	MVFIC			MVFSC		GVAAA2		GVABD2		GVAGG2		GVAGR2		GVAGI2		NVCRA1
Reinvested dividends	$	77,102		14,343		95,090		145,928		146,319		148,113		39,487		8,583
Asset charges (note 3)		-		(1,702	)	-		-		-		-		-		-
Net investment income (loss)		77,102		12,641		95,090		145,928		146,319		148,113		39,487		8,583
Proceeds from mutual fund shares sold		1,478,163		1,824,746		474,782		1,091,926		982,502		1,055,418		185,613		429,632
Cost of mutual fund shares sold		(1,501,795	)	(1,987,443	)	(535,319	)	(1,208,502	)	(1,037,681	)	(1,203,605	)	(263,205	)	(578,809	)
Realized gain (loss) on investments		(23,632	)	(162,697	)	(60,537	)	(116,576	)	(55,179	)	(148,187	)	(77,592	)	(149,177	)
Change in unrealized gain (loss) on investments		(2,829,368	)	(236,380	)	(1,338,937	)	(324,421	)	(2,766,102	)	(4,212,956	)	(689,449	)	(104,586	)
Net gain (loss) on investments		(2,853,000	)	(399,077	)	(1,399,474	)	(440,997	)	(2,821,281	)	(4,361,143	)	(767,041	)	(253,763	)
Reinvested capital gains		260,163		58,650		44,225		2,005		177,920		425,788		529		6,286
Net increase (decrease) in contract owners’ equity resulting from operations	$	(2,515,735	)	(327,786	)	(1,260,159	)	(293,064	)	(2,497,042	)	(3,787,242	)	(727,025	)	(238,894	)

(Continued)

16

Nationwide VLI Separate Account-4

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2008

Investment Activity:	NVCRB1			NVCCA1		NVCCN1		NVCMD1		NVCMA1		NVCMC1		NVCBD1		HIBF
Reinvested dividends	$	4,809		5,387		3,653		7,925		16,044		2,407		3,407		1,781,742
Asset charges (note 3)		-		-		-		-		-		-		-		(38,756	)
Net investment income (loss)		4,809		5,387		3,653		7,925		16,044		2,407		3,407		1,742,986
Proceeds from mutual fund shares sold		98,157		25,115		320,495		199,765		787,928		6,930		85,388		8,940,341
Cost of mutual fund shares sold		(105,102	)	(36,970	)	(347,213	)	(237,787	)	(851,140	)	(8,488	)	(87,140	)	(10,464,224	)
Realized gain (loss) on investments		(6,945	)	(11,855	)	(26,718	)	(38,022	)	(63,212	)	(1,558	)	(1,752	)	(1,523,883	)
Change in unrealized gain (loss) on investments		(22,948	)	(126,362	)	(15,304	)	(84,562	)	(340,993	)	3,794		2,744		(6,224,368	)
Net gain (loss) on investments		(29,893	)	(138,217	)	(42,022	)	(122,584	)	(404,205	)	2,236		992		(7,748,251	)
Reinvested capital gains		2,502		4,934		516		4,218		17,352		840		-		-
Net increase (decrease) in contract owners’ equity resulting from operations	$	(22,582	)	(127,896	)	(37,853	)	(110,441	)	(370,809	)	5,483		4,399		(6,005,265	)
Investment Activity:	HIBF3			GEM		GEM3		GVGU1		GIG		GIG3		NVIE6		GEF
Reinvested dividends	$	681,184		437,397		199,623		136,936		129,015		1,697		566		39,968
Asset charges (note 3)		-		(80,061	)	-		(2,413	)	(3,606	)	-		-		(1,618	)
Net investment income (loss)		681,184		357,336		199,623		134,523		125,409		1,697		566		38,350
Proceeds from mutual fund shares sold		12,583,196		14,571,327		5,543,474		2,411,837		3,948,957		131,711		8,699		1,771,927
Cost of mutual fund shares sold		(13,755,302	)	(14,822,992	)	(4,672,107	)	(2,883,507	)	(3,597,602	)	(157,634	)	(12,003	)	(1,361,781	)
Realized gain (loss) on investments		(1,172,106	)	(251,665	)	871,367		(471,670	)	351,355		(25,923	)	(3,304	)	410,146
Change in unrealized gain (loss) on investments		(1,576,546	)	(36,615,968	)	(17,624,735	)	(1,543,783	)	(6,955,844	)	(75,860	)	(30,880	)	(4,484,104	)
Net gain (loss) on investments		(2,748,652	)	(36,867,633	)	(16,753,368	)	(2,015,453	)	(6,604,489	)	(101,783	)	(34,184	)	(4,073,958	)
Reinvested capital gains		-		8,032,732		3,501,526		56,626		1,330,793		24,894		7,996		1,004,518
Net increase (decrease) in contract owners’ equity resulting from operations	$	(2,067,468	)	(28,477,565	)	(13,052,219	)	(1,824,304	)	(5,148,287	)	(75,192	)	(25,622	)	(3,031,090	)

(Continued)

17

Nationwide VLI Separate Account-4

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2008

Investment Activity:	GVGF1			GBF		CAF		GVGH1		GVGHS		GVIX2		GVIX6		GVIDA
Reinvested dividends	$	60,465		5,066,706		43,924		7,343		7,181		23,164		13,096		621,298
Asset charges (note 3)		(2,670	)	(175,359	)	(2,913	)	(2,702	)	-		(4,236	)	-		(21,679	)
Net investment income (loss)		57,795		4,891,347		41,011		4,641		7,181		18,928		13,096		599,619
Proceeds from mutual fund shares sold		2,590,532		28,485,627		1,425,803		2,485,133		1,278,938		1,815,752		153,616		5,508,095
Cost of mutual fund shares sold		(4,062,230	)	(28,876,510	)	(1,298,868	)	(2,515,600	)	(1,412,493	)	(2,019,748	)	(187,903	)	(6,205,966	)
Realized gain (loss) on investments		(1,471,698	)	(390,883	)	126,935		(30,467	)	(133,555	)	(203,996	)	(34,287	)	(697,871	)
Change in unrealized gain (loss) on investments		(463,964	)	4,017,269		(7,585,727	)	(1,118,755	)	(952,956	)	(339,766	)	(362,215	)	(18,129,999	)
Net gain (loss) on investments		(1,935,662	)	3,626,386		(7,458,792	)	(1,149,222	)	(1,086,511	)	(543,762	)	(396,502	)	(18,827,870	)
Reinvested capital gains		-		-		-		230,802		250,351		1,405		1,033		5,187,862
Net increase (decrease) in contract owners’ equity resulting from operations	$	(1,877,867	)	8,517,733		(7,417,781	)	(913,779	)	(828,979	)	(523,429	)	(382,373	)	(13,040,389	)
Investment Activity:	GVIDC			GVIDM		GVDMA		GVDMC		BF		NVLCP1		SGRF		MCIF
Reinvested dividends	$	693,394		1,890,203		1,918,405		848,012		391,166		1,613		-		770,003
Asset charges (note 3)		(25,099	)	(36,809	)	(18,868	)	(55,474	)	(8,114	)	-		(2,953	)	(75,755	)
Net investment income (loss)		668,295		1,853,394		1,899,537		792,538		383,052		1,613		(2,953	)	694,248
Proceeds from mutual fund shares sold		3,931,283		10,746,587		6,938,024		22,388,424		3,881,577		9,872		4,068,791		25,469,346
Cost of mutual fund shares sold		(4,110,671	)	(10,648,060	)	(7,543,344	)	(23,531,877	)	(3,943,475	)	(10,106	)	(3,655,350	)	(25,325,548	)
Realized gain (loss) on investments		(179,388	)	98,527		(605,320	)	(1,143,453	)	(61,898	)	(234	)	413,441		143,798
Change in unrealized gain (loss) on investments		(2,270,607	)	(24,869,374	)	(37,181,566	)	(4,816,383	)	(6,090,269	)	4,089		(7,610,626	)	(29,419,372	)
Net gain (loss) on investments		(2,449,995	)	(24,770,847	)	(37,786,886	)	(5,959,836	)	(6,152,167	)	3,855		(7,197,185	)	(29,275,574	)
Reinvested capital gains		451,853		5,784,847		8,097,876		959,038		1,615,670		-		-		3,794,309
Net increase (decrease) in contract owners’ equity resulting from operations	$	(1,329,847	)	(17,132,606	)	(27,789,473	)	(4,208,260	)	(4,153,445	)	5,468		(7,200,138	)	(24,787,017	)

(Continued)

18

Nationwide VLI Separate Account-4

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2008

Investment Activity:	SAM			SAM5		NVMIG3		GVDIVI		GVDIV3		NVMLG1		NVMLV1		NVMMG1
Reinvested dividends	$	2,598,471		7,615,469		7		28,833		128,039		51		1,065		-
Asset charges (note 3)		(23,868	)	(795,715	)	-		-		-		-		-		(58	)
Net investment income (loss)		2,574,603		6,819,754		7		28,833		128,039		51		1,065		(58	)
Proceeds from mutual fund shares sold		62,912,956		165,973,848		17,999		298,737		1,396,339		43,910		27,534		803,992
Cost of mutual fund shares sold		(62,912,956	)	(165,973,848	)	(21,453	)	(375,287	)	(1,553,990	)	(46,438	)	(30,188	)	(836,116	)
Realized gain (loss) on investments		-		-		(3,454	)	(76,550	)	(157,651	)	(2,528	)	(2,654	)	(32,124	)
Change in unrealized gain (loss) on investments		-		-		(2,935	)	(1,132,458	)	(5,223,038	)	(7,223	)	(9,985	)	(1,417	)
Net gain (loss) on investments		-		-		(6,389	)	(1,209,008	)	(5,380,689	)	(9,751	)	(12,639	)	(33,541	)
Reinvested capital gains		-		-		-		240,731		1,087,474		-		-		-
Net increase (decrease) in contract owners’ equity resulting from operations	$	2,574,603		6,819,754		(6,382	)	(939,444	)	(4,165,176	)	(9,700	)	(11,574	)	(33,599	)
Investment Activity:	NVMMV1			NVMMV2		SCGF		SCVF		SCF		TRF		GVUS1		NVNMO1
Reinvested dividends	$	11		49		-		521,776		656,000		5,123,727		13,588		-
Asset charges (note 3)		-		-		(13,425	)	(33,271	)	(101,823	)	(320,134	)	(756	)	-
Net investment income (loss)		11		49		(13,425	)	488,505		554,177		4,803,593		12,832		-
Proceeds from mutual fund shares sold		-		7,506		8,012,779		18,012,635		17,364,869		6,801,082		786,745		8,827
Cost of mutual fund shares sold		-		(8,362	)	(9,152,986	)	(24,637,495	)	(22,791,825	)	(5,444,189	)	(1,035,845	)	(16,565	)
Realized gain (loss) on investments		-		(856	)	(1,140,207	)	(6,624,860	)	(5,426,956	)	1,356,893		(249,100	)	(7,738	)
Change in unrealized gain (loss) on investments		81		(160	)	(9,003,247	)	(10,935,610	)	(45,734,209	)	(245,372,431	)	(895,663	)	(168	)
Net gain (loss) on investments		81		(1,016	)	(10,143,454	)	(17,560,470	)	(51,161,165	)	(244,015,538	)	(1,144,763	)	(7,906	)
Reinvested capital gains		-		-		-		-		15,926,545		59,388,629		-		-
Net increase (decrease) in contract owners’ equity resulting from operations	$	92		(967	)	(10,156,879	)	(17,071,965	)	(34,680,443	)	(179,823,316	)	(1,131,931	)	(7,906	)

(Continued)

19

Nationwide VLI Separate Account-4

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2008

Investment Activity:	NVNSR1			NVSTB2		GGTC		GGTC3		GVUG1		EIF		MSBF		NVRE1
Reinvested dividends	$	108		10,320		-		-		-		231,545		1,073,514		2,895
Asset charges (note 3)		-		-		(8,064	)	-		(4,341	)	(1,690	)	(16,925	)	-
Net investment income (loss)		108		10,320		(8,064	)	-		(4,341	)	229,855		1,056,589		2,895
Proceeds from mutual fund shares sold		545		350,690		2,463,480		1,821,062		2,751,698		2,437,631		14,402,289		46,686
Cost of mutual fund shares sold		(757	)	(349,584	)	(2,605,054	)	(2,070,267	)	(3,070,492	)	(2,627,023	)	(15,857,328	)	(54,179	)
Realized gain (loss) on investments		(212	)	1,106		(141,574	)	(249,205	)	(318,794	)	(189,392	)	(1,455,039	)	(7,493	)
Change in unrealized gain (loss) on investments		(12,894	)	(996	)	(3,735,503	)	(1,724,987	)	(3,986,197	)	(5,113,403	)	(3,180,202	)	(38,458	)
Net gain (loss) on investments		(13,106	)	110		(3,877,077	)	(1,974,192	)	(4,304,991	)	(5,302,795	)	(4,635,241	)	(45,951	)
Reinvested capital gains		-		-		730,340		343,893		1,191,538		166,922		358,044		-
Net increase (decrease) in contract owners’ equity resulting from operations	$	(12,998	)	10,430		(3,154,801	)	(1,630,299	)	(3,117,794	)	(4,906,018	)	(3,220,608	)	(43,056	)
Investment Activity:	AMGP			AMINS		AMCG		AMTP		AMRI		AMRS		AMFAS		AMSRS
Reinvested dividends	$	56,434		-		-		76,567		41,011		9,627		-		78,334
Asset charges (note 3)		(4,111	)	-		(20,752	)	(3,212	)	(3,888	)	-		(1,252	)	-
Net investment income (loss)		52,323		-		(20,752	)	73,355		37,123		9,627		(1,252	)	78,334
Proceeds from mutual fund shares sold		2,362,138		847,786		5,381,832		4,938,376		1,244,035		346,791		565,510		990,130
Cost of mutual fund shares sold		(1,755,033	)	(979,578	)	(2,948,540	)	(5,359,731	)	(1,749,287	)	(368,140	)	(655,849	)	(891,227	)
Realized gain (loss) on investments		607,105		(131,792	)	2,433,292		(421,355	)	(505,252	)	(21,349	)	(90,339	)	98,903
Change in unrealized gain (loss) on investments		(5,426,146	)	(1,655,919	)	(23,546,784	)	(11,677,741	)	(828,907	)	(533,333	)	(721,945	)	(2,095,483	)
Net gain (loss) on investments		(4,819,041	)	(1,787,711	)	(21,113,492	)	(12,099,096	)	(1,334,159	)	(554,682	)	(812,284	)	(1,996,580	)
Reinvested capital gains		386,741		(47	)	-		2,415,975		7,577		2,094		57,762		267,832
Net increase (decrease) in contract owners’ equity resulting from operations	$	(4,379,977	)	(1,787,758	)	(21,134,244	)	(9,609,766	)	(1,289,459	)	(542,961	)	(755,774	)	(1,650,414	)

(Continued)

20

Nationwide VLI Separate Account-4

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2008

Investment Activity:	OVGR			OVGS3		OVGS		OVHI3		OVHI		OVSC		OVGI		OVAG
Reinvested dividends	$	150,815		261,264		960,485		58,804		149,441		23,275		515,060		-
Asset charges (note 3)		(142,502	)	-		(114,927	)	-		-		-		(10,427	)	(23,328	)
Net investment income (loss)		8,313		261,264		845,558		58,804		149,441		23,275		504,633		(23,328	)
Proceeds from mutual fund shares sold		23,244,831		3,088,177		19,065,143		923,712		584,089		843,513		6,872,040		8,359,352
Cost of mutual fund shares sold		(18,676,358	)	(3,377,472	)	(20,030,296	)	(1,082,969	)	(750,280	)	(940,763	)	(5,733,890	)	(6,631,499	)
Realized gain (loss) on investments		4,568,473		(289,295	)	(965,153	)	(159,257	)	(166,191	)	(97,250	)	1,138,150		1,727,853
Change in unrealized gain (loss) on investments		(62,205,433	)	(9,114,516	)	(34,242,609	)	(1,000,576	)	(1,660,237	)	(2,212,248	)	(19,355,708	)	(21,121,810	)
Net gain (loss) on investments		(57,636,960	)	(9,403,811	)	(35,207,762	)	(1,159,833	)	(1,826,428	)	(2,309,498	)	(18,217,558	)	(19,393,957	)
Reinvested capital gains		-		1,150,196		4,220,261		-		-		258,437		2,237,977		-
Net increase (decrease) in contract owners’ equity resulting from operations	$	(57,628,647	)	(7,992,351	)	(30,141,943	)	(1,101,029	)	(1,676,987	)	(2,027,786	)	(15,474,948	)	(19,417,285	)
Investment Activity:	OVSB			PMVAAA		PMVLDA		PMVRRA		PMVTRA		PIVEMI		PIHYB1		PVGIB
Reinvested dividends	$	38,483		78,920		1,831,667		2,236,199		7,625,148		287		1,229,301		16,107
Asset charges (note 3)		(1,935	)	(4,278	)	(103,356	)	(176,882	)	(406,887	)	(139	)	(31,360	)	-
Net investment income (loss)		36,548		74,642		1,728,311		2,059,317		7,218,261		148		1,197,941		16,107
Proceeds from mutual fund shares sold		669,672		2,092,201		24,210,437		26,113,918		51,800,891		54,769		5,037,115		272,113
Cost of mutual fund shares sold		(791,626	)	(2,655,303	)	(24,629,634	)	(28,137,307	)	(51,445,899	)	(111,263	)	(6,001,042	)	(380,387	)
Realized gain (loss) on investments		(121,954	)	(563,102	)	(419,197	)	(2,023,389	)	354,992		(56,494	)	(963,927	)	(108,274	)
Change in unrealized gain (loss) on investments		(132,574	)	11,957		(2,328,192	)	(5,605,641	)	(3,481,322	)	(17,307	)	(6,240,402	)	(415,966	)
Net gain (loss) on investments		(254,528	)	(551,145	)	(2,747,389	)	(7,629,030	)	(3,126,330	)	(73,801	)	(7,204,329	)	(524,240	)
Reinvested capital gains		8,893		1,935		711,450		93,651		3,186,763		11,846		144,329		138,494
Net increase (decrease) in contract owners’ equity resulting from operations	$	(209,087	)	(474,568	)	(307,628	)	(5,476,062	)	7,278,694		(61,807	)	(5,862,059	)	(369,639	)

(Continued)

21

Nationwide VLI Separate Account-4

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2008

Investment Activity:	PVTIGB			PVOEGB		PVTSCB		PVTVB		ROCMC		ROCSC		TRBCG2		TREI2
Reinvested dividends	$	47,275		-		-		-		1,049,742		716		3,503		1,722,330
Asset charges (note 3)		-		(101	)	-		-		(102,016	)	(280	)	(457	)	(182,864	)
Net investment income (loss)		47,275		(101	)	-		-		947,726		436		3,046		1,539,466
Proceeds from mutual fund shares sold		1,172,175		62,553		28		60,561		20,739,625		154,112		780,476		31,839,298
Cost of mutual fund shares sold		(1,449,780	)	(80,519	)	(33	)	(62,519	)	(25,677,152	)	(182,026	)	(839,978	)	(38,011,870	)
Realized gain (loss) on investments		(277,605	)	(17,966	)	(5	)	(1,958	)	(4,937,527	)	(27,914	)	(59,502	)	(6,172,572	)
Change in unrealized gain (loss) on investments		(1,264,839	)	(7,288	)	(185	)	(127,926	)	(22,022,108	)	(27,164	)	(1,474,808	)	(31,210,378	)
Net gain (loss) on investments		(1,542,444	)	(25,254	)	(190	)	(129,884	)	(26,959,635	)	(55,078	)	(1,534,310	)	(37,382,950	)
Reinvested capital gains		363,224		-		-		-		4,399,048		9,209		-		2,480,253
Net increase (decrease) in contract owners’ equity resulting from operations	$	(1,131,945	)	(25,355	)	(190	)	(129,884	)	(21,612,861	)	(45,433	)	(1,531,264	)	(33,363,231	)
Investment Activity:	TRHS2			TRLT2		TRMCG2		TRNAG1		TRPSB1		DSRG		MSVEG		VWEM
Reinvested dividends	$	-		59,606		-		-		12,111		93,309		3		-
Asset charges (note 3)		(2,656	)	-		(51,496	)	(35,943	)	(721	)	(1,777	)	(184	)	(14,781	)
Net investment income (loss)		(2,656	)	59,606		(51,496	)	(35,943	)	11,390		91,532		(181	)	(14,781	)
Proceeds from mutual fund shares sold		523,375		411,147		9,843,314		11,076,399		736,824		1,554,436		25,502		8,406,612
Cost of mutual fund shares sold		(668,211	)	(408,449	)	(12,322,541	)	(12,452,617	)	(803,024	)	(1,592,279	)	(38,861	)	(12,933,133	)
Realized gain (loss) on investments		(144,836	)	2,698		(2,479,227	)	(1,376,218	)	(66,200	)	(37,843	)	(13,359	)	(4,526,521	)
Change in unrealized gain (loss) on investments		(376,879	)	(49,239	)	(9,104,416	)	(3,452,913	)	(106,121	)	(4,914,476	)	(108,805	)	(23,938,240	)
Net gain (loss) on investments		(521,715	)	(46,541	)	(11,583,643	)	(4,829,131	)	(172,321	)	(4,952,319	)	(122,164	)	(28,464,761	)
Reinvested capital gains		15,673		-		1,211,901		491,458		2,733		-		-		10,596,053
Net increase (decrease) in contract owners’ equity resulting from operations	$	(508,698	)	13,065		(10,423,238	)	(4,373,616	)	(158,198	)	(4,860,787	)	(122,345	)	(17,883,489	)

(Continued)

22

Nationwide VLI Separate Account-4

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2008

Investment Activity:	VWHA			MSVFI		MSEM		VKVGR2		MSVMG		MSVRE		VVB		VVDV
Reinvested dividends	$	89,221		154,326		834,643		17,295		72,673		1,998,389		-		-
Asset charges (note 3)		(35,003	)	-		(14,749	)	(1,091	)	(16,053	)	(66,442	)	(1,229	)	(1,565	)
Net investment income (loss)		54,218		154,326		819,894		16,204		56,620		1,931,947		(1,229	)	(1,565	)
Proceeds from mutual fund shares sold		18,699,377		1,160,138		5,223,033		1,274,603		2,514,261		23,264,504		320,787		238,552
Cost of mutual fund shares sold		(19,321,613	)	(1,267,808	)	(6,065,028	)	(1,520,005	)	(3,496,056	)	(32,063,956	)	(430,161	)	(327,651	)
Realized gain (loss) on investments		(622,236	)	(107,670	)	(841,995	)	(245,402	)	(981,795	)	(8,799,452	)	(109,374	)	(89,099	)
Change in unrealized gain (loss) on investments		(21,816,757	)	(413,202	)	(2,401,089	)	(97,237	)	(7,029,521	)	(37,903,882	)	(135,377	)	(387,618	)
Net gain (loss) on investments		(22,438,993	)	(520,872	)	(3,243,084	)	(342,639	)	(8,011,316	)	(46,703,334	)	(244,751	)	(476,717	)
Reinvested capital gains		4,885,678		-		481,742		40,355		2,360,835		21,917,133		-		-
Net increase (decrease) in contract owners’ equity resulting from operations	$	(17,499,097	)	(366,546	)	(1,941,448	)	(286,080	)	(5,593,861	)	(22,854,254	)	(245,980	)	(478,282	)
Investment Activity:	VVI			VVMCI		VVSTC		SVDF		SVOF		WFVSCG
Reinvested dividends	$	-		-		-		-		403,938		-
Asset charges (note 3)		(3,937	)	(3,403	)	(2,912	)	(266	)	(15,916	)	(1,482	)
Net investment income (loss)		(3,937	)	(3,403	)	(2,912	)	(266	)	388,022		(1,482	)
Proceeds from mutual fund shares sold		825,547		689,283		937,864		299,128		5,333,523		289,675
Cost of mutual fund shares sold		(1,358,259	)	(1,049,903	)	(989,942	)	(329,441	)	(6,288,524	)	(526,049	)
Realized gain (loss) on investments		(532,712	)	(360,620	)	(52,078	)	(30,313	)	(955,001	)	(236,374	)
Change in unrealized gain (loss) on investments		(1,233,518	)	(898,879	)	(73,797	)	(195,789	)	(13,787,129	)	(329,646	)
Net gain (loss) on investments		(1,766,230	)	(1,259,499	)	(125,875	)	(226,102	)	(14,742,130	)	(566,020	)
Reinvested capital gains		-		-		-		-		4,767,838		195,059
Net increase (decrease) in contract owners’ equity resulting from operations	$	(1,770,167	)	(1,262,902	)	(128,787	)	(226,368	)	(9,586,270	)	(372,443	)

See accompanying notes to financial statements.

23

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2008 and 2007

	Total					AVBVI				AVCA				AVCDI
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	79,188,839		85,461,783		47,343		43,908		-		-		(19,941	)	(26,701	)
Realized gain (loss) on investments		(64,441,051	)	207,586,387		(307,233	)	348,417		(24,952	)	74,023		(938,058	)	1,048,026
Change in unrealized gain (loss) on investments		(1,787,300,699	)	(135,244,323	)	(4,575,481	)	(710,460	)	(635,043	)	106,701		(6,874,273	)	(966,703	)
Reinvested capital gains		265,246,757		219,084,030		1,102,495		470,561		-		-		1,332,482		1,262,845
Net increase (decrease) in contract owners’ equity resulting from operations		(1,507,306,154	)	376,887,877		(3,732,876	)	152,426		(659,995	)	180,724		(6,499,790	)	1,317,467
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		354,312,622		417,190,529		678,683		1,197,541		193,096		250,700		754,828		1,151,457
Transfers between funds		-		-		(904,300	)	(748,208	)	(389,819	)	(121,938	)	(2,885,546	)	1,923,219
Surrenders (note 6)		(249,501,663	)	(256,215,304	)	(213,281	)	(641,252	)	(55,110	)	(18,388	)	(228,022	)	(719,451	)
Death benefits (note 4)		(9,350,811	)	(11,792,491	)	(1,384	)	(26,674	)	-		(154	)	(11,234	)	(31,305	)
Net policy repayments (loans) (note 5)		(32,613,869	)	(29,372,844	)	(12,791	)	(34,194	)	(5,773	)	(14,072	)	(27,582	)	(31,954	)
Deductions for surrender charges (note 2d)		(5,918,247	)	(6,501,412	)	(31,670	)	(29,400	)	(11,388	)	(6,471	)	(13,506	)	(15,744	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(126,435,392	)	(128,028,675	)	(285,368	)	(356,962	)	(78,422	)	(87,879	)	(310,462	)	(437,771	)
Asset charges (note 3):
FPVUL & VEL contracts		(5,877,081	)	(6,839,415	)	(17,045	)	(22,990	)	(4,498	)	(5,437	)	(11,480	)	(15,294	)
MSP contracts		(304,548	)	(318,936	)	(345	)	(395	)	(182	)	(195	)	(323	)	(359	)
SL contracts or LSFP contracts		(1,120,126	)	(1,297,927	)	(2,028	)	(2,809	)	(1,818	)	(2,236	)	(1,096	)	(1,105	)
Adjustments to maintain reserves		(110,891	)	(24,315	)	531		34		(199	)	6		(2,240	)	916
Net equity transactions		(76,920,006	)	(23,200,790	)	(788,998	)	(665,309	)	(354,113	)	(6,064	)	(2,736,663	)	1,822,608
Net change in contract owners’ equity		(1,584,226,160	)	353,687,087		(4,521,874	)	(512,883	)	(1,014,108	)	174,660		(9,236,453	)	3,140,075
Contract owners’ equity beginning of period		4,818,129,455		4,464,442,368		8,061,764		8,574,647		1,735,690		1,561,030		15,790,110		12,650,035
Contract owners’ equity end of period	$	3,233,903,295		4,818,129,455		3,539,890		8,061,764		721,582		1,735,690		6,553,657		15,790,110
CHANGES IN UNITS:
Beginning units		307,056,666		307,762,808		455,382		491,676		101,352		102,104		733,388		650,168
Units purchased		69,158,972		70,093,417		61,865		94,233		16,781		17,135		116,206		183,074
Units redeemed		(69,176,952	)	(70,799,559	)	(102,881	)	(130,527	)	(44,864	)	(17,887	)	(274,173	)	(99,854	)
Ending units		307,038,686		307,056,666		414,366		455,382		73,269		101,352		575,421		733,388

(Continued)

24

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	AVIE					ALVGIA				ALVIVA				ALVSVA
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	88,527		61,812		272,842		251,947		281,424		211,324		32,086		45,628
Realized gain (loss) on investments		818,863		1,596,611		(941,878	)	591,281		(6,091,926	)	677,301		(233,100	)	202,495
Change in unrealized gain (loss) on investments		(16,773,325	)	1,281,739		(9,189,587	)	(848,511	)	(21,079,201	)	(1,000,621	)	(2,153,893	)	(661,993	)
Reinvested capital gains		411,886		-		2,544,323		1,017,690		2,037,831		932,439		495,807		346,724
Net increase (decrease) in contract owners’ equity resulting from operations		(15,454,049	)	2,940,162		(7,314,300	)	1,012,407		(24,851,872	)	820,443		(1,859,100	)	(67,146	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		2,504,764		2,910,438		993,170		1,244,527		2,954,187		572,520		660,079		352,912
Transfers between funds		2,442,403		11,396,412		(980,081	)	863,443		16,470,977		19,294,463		414,837		2,409,121
Surrenders (note 6)		(1,640,799	)	(335,911	)	(3,492,018	)	(1,212,807	)	(415,232	)	(7,839	)	(378,852	)	(217,939	)
Death benefits (note 4)		(15,227	)	(21,095	)	(42,645	)	(14,872	)	(23,915	)	(56,986	)	(2,356	)	(5,672	)
Net policy repayments (loans) (note 5)		(674,107	)	(242,049	)	(190,144	)	(118,508	)	(16,455	)	(35,361	)	14,542		(7,831	)
Deductions for surrender charges (note 2d)		-		-		(10,141	)	(9,122	)	-		-		(10,346	)	(15,937	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(527,462	)	(427,246	)	(273,538	)	(358,485	)	(546,479	)	(308,813	)	(166,604	)	(161,134	)
Asset charges (note 3):
FPVUL & VEL contracts		-		-		(11,522	)	(14,823	)	-		-		(11,978	)	(15,421	)
MSP contracts		-		-		(85	)	(121	)	-		-		(273	)	(331	)
SL contracts or LSFP contracts		-		-		(1,611	)	(1,930	)	-		-		(1,991	)	(2,042	)
Adjustments to maintain reserves		(3,999	)	886		(954	)	596		(1,802	)	1,897		(402	)	(11	)
Net equity transactions		2,085,573		13,281,435		(4,009,569	)	377,898		18,421,281		19,459,881		516,656		2,335,715
Net change in contract owners’ equity		(13,368,476	)	16,221,597		(11,323,869	)	1,390,305		(6,430,591	)	20,280,324		(1,342,444	)	2,268,569
Contract owners’ equity beginning of period		35,890,353		19,668,756		21,350,544		19,960,239		32,562,696		12,282,372		5,653,964		3,385,395
Contract owners’ equity end of period	$	22,521,877		35,890,353		10,026,675		21,350,544		26,132,105		32,562,696		4,311,520		5,653,964
CHANGES IN UNITS:
Beginning units		1,750,012		1,098,252		1,127,146		1,107,894		2,725,346		1,085,100		276,826		168,136
Units purchased		716,633		850,615		124,500		472,578		2,478,645		1,879,153		98,801		129,927
Units redeemed		(621,795	)	(198,855	)	(359,790	)	(453,326	)	(520,868	)	(238,907	)	(47,459	)	(21,237	)
Ending units		1,844,850		1,750,012		891,856		1,127,146		4,683,123		2,725,346		328,168		276,826

(Continued)

25

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	ACVIG					ACVIP2				ACVI				ACVI3
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	413,752		511,828		666,076		296,823		257,481		284,353		81,052		61,541
Realized gain (loss) on investments		322,741		2,565,198		35,056		(46,841	)	2,469,282		5,761,892		77,204		148,430
Change in unrealized gain (loss) on investments		(11,498,018	)	(3,011,606	)	(1,411,755	)	393,108		(25,813,579	)	1,798,877		(6,681,859	)	1,432,507
Reinvested capital gains		2,527,186		-		-		-		3,477,537		-		952,078		-
Net increase (decrease) in contract owners’ equity resulting from operations		(8,234,339	)	65,420		(710,623	)	643,090		(19,609,279	)	7,845,122		(5,571,525	)	1,642,478
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		1,416,534		1,912,420		1,932,422		586,693		618,884		1,129,512		1,731,418		2,004,931
Transfers between funds		(1,104,166	)	(2,582,550	)	10,918,151		70,579		(1,613,073	)	(3,168,405	)	(418,966	)	1,486,520
Surrenders (note 6)		(1,530,492	)	(1,531,841	)	(438,886	)	(286,864	)	(2,316,247	)	(4,446,804	)	(700,271	)	(454,710	)
Death benefits (note 4)		(190,033	)	(37,993	)	(388	)	(27,458	)	(95,546	)	(45,503	)	(64,410	)	(5,183	)
Net policy repayments (loans) (note 5)		(43,973	)	(177,542	)	(202,460	)	(59,228	)	(255,864	)	(344,380	)	85,585		13,108
Deductions for surrender charges (note 2d)		(66,767	)	(76,984	)	(26,158	)	(30,809	)	(34,952	)	(54,603	)	(30,035	)	(33,510	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(968,369	)	(1,114,346	)	(413,495	)	(268,880	)	(1,288,114	)	(1,414,634	)	(577,322	)	(521,041	)
Asset charges (note 3):
FPVUL & VEL contracts		(59,962	)	(80,140	)	(25,806	)	(22,072	)	(50,189	)	(67,758	)	(37,215	)	(37,100	)
MSP contracts		(2,178	)	(3,709	)	(966	)	(538	)	(2,236	)	(2,679	)	(455	)	(267	)
SL contracts or LSFP contracts		(11,070	)	(14,574	)	(23,222	)	(4,114	)	(9,635	)	(12,923	)	(5,044	)	(4,937	)
Adjustments to maintain reserves		(502	)	161		338		(693	)	1,053		399		(305	)	73
Net equity transactions		(2,560,978	)	(3,707,098	)	11,719,530		(43,383	)	(5,045,919	)	(8,427,778	)	(17,020	)	(2,447,883	)
Net change in contract owners’ equity		(10,795,317	)	(3,641,678	)	11,008,907		599,707		(24,655,198	)	(582,656	)	(5,588,545	)	4,090,361
Contract owners’ equity beginning of period		25,727,927		29,369,605		6,857,769		6,258,062		48,720,936		49,303,592		12,099,920		8,009,559
Contract owners’ equity end of period	$	14,932,610		25,727,927		17,866,676		6,857,769		24,065,738		48,720,936		6,511,375		12,099,920
CHANGES IN UNITS:
Beginning units		1,557,702		1,778,146		555,690		555,240		2,830,064		3,354,086		702,238		548,782
Units purchased		122,432		200,389		1,008,618		145,441		161,571		289,620		141,038		224,236
Units redeemed		(302,138	)	(420,833	)	(93,187	)	(144,991	)	(428,191	)	(813,642	)	(158,394	)	(70,780	)
Ending units		1,377,996		1,557,702		1,471,121		555,690		2,563,444		2,830,064		684,882		702,238

(Continued)

26

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	ACVMV1					ACVU1				ACVV				ACVVS1
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	1,720		17,552		(1,778	)	(2,826	)	1,345,712		1,146,462		(2,028	)	(1,573	)
Realized gain (loss) on investments		(214,958	)	84,641		(190,995	)	101,810		(4,697,399	)	1,847,610		(435,741	)	149,244
Change in unrealized gain (loss) on investments		(282,036	)	(281,936	)	(2,431,983	)	772,249		(21,487,997	)	(12,797,015	)	(2,649,965	)	352,778
Reinvested capital gains		-		36,360		624,097		-		7,372,247		6,248,743		198,639		-
Net increase (decrease) in contract owners’ equity resulting from operations		(495,274	)	(143,383	)	(2,000,659	)	871,233		(17,467,437	)	(3,554,200	)	(2,889,095	)	500,449
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		324,352		245,102		448,760		733,652		4,823,008		6,271,631		516,181		285,433
Transfers between funds		(6,246	)	1,178,146		(1,306,825	)	911,467		(3,231,628	)	(1,015,182	)	747,552		4,544,583
Surrenders (note 6)		(194,757	)	(43,795	)	(145,283	)	(401,827	)	(4,571,675	)	(4,735,105	)	(399,396	)	(122,930	)
Death benefits (note 4)		-		(1,833	)	(7,417	)	(97,580	)	(147,725	)	(157,391	)	(745	)	-
Net policy repayments (loans) (note 5)		(9,526	)	(36,091	)	(31,965	)	17,070		(235,198	)	(746,037	)	(19,896	)	(25,416	)
Deductions for surrender charges (note 2d)		(6,118	)	(2,369	)	(10,461	)	(23,662	)	(151,004	)	(126,136	)	(6,505	)	(1,382	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(109,028	)	(106,743	)	(194,006	)	(205,932	)	(2,224,770	)	(2,586,369	)	(168,664	)	(55,422	)
Asset charges (note 3):
FPVUL & VEL contracts		(6,661	)	(8,168	)	(9,889	)	(11,192	)	(140,594	)	(186,534	)	(10,567	)	(4,984	)
MSP contracts		(415	)	(402	)	(266	)	(237	)	(4,101	)	(5,553	)	(234	)	(82	)
SL contracts or LSFP contracts		(1,109	)	(1,231	)	(1,283	)	(1,442	)	(22,819	)	(34,123	)	(1,613	)	(571	)
Adjustments to maintain reserves		(271	)	28		6,318		(9,407	)	1,214		177		(251	)	66
Net equity transactions		(9,779	)	1,222,644		(1,252,317	)	910,910		(5,905,292	)	(3,320,623	)	655,862		4,619,295
Net change in contract owners’ equity		(505,053	)	1,079,261		(3,252,976	)	1,782,143		(23,372,729	)	(6,874,823	)	(2,233,233	)	5,119,744
Contract owners’ equity beginning of period		2,291,374		1,212,113		5,760,420		3,978,277		68,406,819		75,281,642		5,468,209		348,465
Contract owners’ equity end of period	$	1,786,321		2,291,374		2,507,444		5,760,420		45,034,090		68,406,819		3,234,976		5,468,209
CHANGES IN UNITS:
Beginning units		172,200		88,992		435,218		363,362		3,401,962		3,537,736		313,570		27,968
Units purchased		47,130		98,031		45,560		150,554		463,575		545,786		156,951		293,455
Units redeemed		(41,742	)	(14,823	)	(157,513	)	(78,698	)	(799,961	)	(681,560	)	(108,826	)	(7,853	)
Ending units		177,588		172,200		323,265		435,218		3,065,576		3,401,962		361,695		313,570

(Continued)

27

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	AMVAA2				AMVBD2			AMVGS2			AMVGR2
	2008			2007	2008		2007	2008		2007	2008		2007
Investment activity:
Net investment income (loss)	$	22,724		-	32,914		-	(549	)	-	8,362		-
Realized gain (loss) on investments		(11,900	)	-	(76,830	)	-	(71,342	)	-	(189,583	)	-
Change in unrealized gain (loss) on investments		(242,674	)	-	(29,824	)	-	(217,818	)	-	(468,570	)	-
Reinvested capital gains		29,648		-	1,410		-	50,646		-	120,744		-
Net increase (decrease) in contract owners’ equity resulting from operations		(202,202	)	-	(72,330	)	-	(239,063	)	-	(529,047	)	-
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		40,861		-	10,249		-	9,318		-	(742	)	-
Transfers between funds		984,907		-	634,364		-	480,877		-	1,386,022		-
Surrenders (note 6)		(7,923	)	-	-		-	-		-	-		-
Death benefits (note 4)		-		-	-		-	-		-	-		-
Net policy repayments (loans) (note 5)		-		-	-		-	-		-	-		-
Deductions for surrender charges (note 2d)		-		-	-		-	-		-	-		-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(20,574	)	-	(5,739	)	-	(2,542	)	-	(8,558	)	-
Asset charges (note 3):
FPVUL & VEL contracts		-		-	-		-	-		-	-		-
MSP contracts		-		-	-		-	-		-	-		-
SL contracts or LSFP contracts		-		-	-		-	-		-	-		-
Adjustments to maintain reserves		(20	)	-	(27	)	-	(11	)	-	(35	)	-
Net equity transactions		997,251		-	638,847		-	487,642		-	1,376,687		-
Net change in contract owners’ equity		795,049		-	566,517		-	248,579		-	847,640		-
Contract owners’ equity beginning of period		-		-	-		-	-		-	-		-
Contract owners’ equity end of period	$	795,049		-	566,517		-	248,579		-	847,640		-
CHANGES IN UNITS:
Beginning units		-		-	-		-	-		-	-		-
Units purchased		120,686		-	62,941		-	49,656		-	151,812		-
Units redeemed		(3,845	)	-	(605	)	-	(325	)	-	(1,061	)	-
Ending units		116,841		-	62,336		-	49,331		-	150,751		-

(Continued)

28

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	MLVIX2				MLVLC2				CVSSE				WVCP
	2008		2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	-	(1,459	)	6,543		25,787		(306	)	(281	)	8,140		(211	)
Realized gain (loss) on investments		-	(46,062	)	(1,007,485	)	11,008		(22,036	)	14,192		15,559		84,356
Change in unrealized gain (loss) on investments		-	180,030		11,025		(384,037	)	(50,892	)	(10,352	)	(292,705	)	(105,235	)
Reinvested capital gains		-	-		26,100		515,034		1,159		6,543		-		-
Net increase (decrease) in contract owners’ equity resulting from operations		-	132,509		(963,817	)	167,792		(72,075	)	10,102		(269,006	)	(21,090	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		-	83,852		125,565		47,721		6,049		14,065		32,466		51,793
Transfers between funds		-	(1,595,988	)	(1,831,055	)	1,589,664		57,071		54,446		(51,855	)	(92,106	)
Surrenders (note 6)		-	(18,921	)	(5,793	)	(14,083	)	(10,675	)	(73,635	)	(21,312	)	(83,913	)
Death benefits (note 4)		-	(10,826	)	-		(5,537	)	(19	)	(81	)	(1,092	)	-
Net policy repayments (loans) (note 5)		-	-		(120,170	)	-		-		-		(405	)	(6,212	)
Deductions for surrender charges (note 2d)		-	-		-		-		-		-		(373	)	(938	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		-	(11,115	)	(34,365	)	(21,324	)	(1,253	)	(1,312	)	(21,975	)	(27,327	)
Asset charges (note 3):
FPVUL & VEL contracts		-	-		-		-		-		-		(1,809	)	(2,735	)
MSP contracts		-	-		-		-		-		-		(11	)	(16	)
SL contracts or LSFP contracts		-	-		-		-		-		-		(34	)	(233	)
Adjustments to maintain reserves		-	(44,731	)	(163	)	7		(47	)	(3	)	(115	)	27
Net equity transactions		-	(1,597,729	)	(1,865,981	)	1,596,448		51,126		(6,520	)	(66,515	)	(161,660	)
Net change in contract owners’ equity		-	(1,465,220	)	(2,829,798	)	1,764,240		(20,949	)	3,582		(335,521	)	(182,750	)
Contract owners’ equity beginning of period		-	1,465,220		3,736,270		1,972,030		134,636		131,054		627,990		810,740
Contract owners’ equity end of period	$	-	-		906,472		3,736,270		113,687		134,636		292,469		627,990
CHANGES IN UNITS:
Beginning units		-	100,516		261,702		149,024		7,972		8,540		44,824		56,062
Units purchased		-	8,535		27,156		126,531		3,624		4,618		3,054		3,480
Units redeemed		-	(109,051	)	(184,910	)	(13,853	)	(1,093	)	(5,186	)	(8,759	)	(14,718	)
Ending units		-	-		103,948		261,702		10,503		7,972		39,119		44,824

(Continued)

29

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	WIEP					WGIP				DAVVL			DVMCS
	2008			2007		2008		2007		2008		2007	2008		2007
Investment activity:
Net investment income (loss)	$	31,916		24,452		39,235		23,333		5,946		-	6,201		2,294
Realized gain (loss) on investments		103,019		99,635		(69,942	)	118,314		(14,339	)	-	(253,658	)	(41,974	)
Change in unrealized gain (loss) on investments		(1,064,586	)	219,876		(661,518	)	(439,671	)	(173,146	)	-	(322,041	)	(74,440	)
Reinvested capital gains		-		-		125,539		348,824		10,250		-	125,095		132,936
Net increase (decrease) in contract owners’ equity resulting from operations		(929,651	)	343,963		(566,686	)	50,800		(171,289	)	-	(444,403	)	18,816
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		93,414		81,341		89,615		128,063		78,937		-	45,518		111,885
Transfers between funds		(139,771	)	100,028		(29,496	)	(47,961	)	559,615		-	(328,793	)	403,087
Surrenders (note 6)		(94,130	)	(123,744	)	(72,339	)	(135,042	)	-		-	(10,341	)	(282,055	)
Death benefits (note 4)		(33,988	)	(8,395	)	(22,535	)	(72,029	)	-		-	(6,063	)	(214	)
Net policy repayments (loans) (note 5)		(6,551	)	(9,044	)	(30,028	)	(21,503	)	(9,443	)	-	(9,720	)	-
Deductions for surrender charges (note 2d)		(212	)	(855	)	(696	)	(5,349	)	-		-	-		-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(73,440	)	(76,002	)	(55,773	)	(61,573	)	(9,996	)	-	(12,866	)	(12,776	)
Asset charges (note 3):
FPVUL & VEL contracts		(5,754	)	(7,110	)	(3,899	)	(5,446	)	-		-	-		-
MSP contracts		(542	)	(655	)	(131	)	(245	)	-		-	-		-
SL contracts or LSFP contracts		(1,646	)	(2,077	)	(1,343	)	(1,931	)	-		-	-		-
Adjustments to maintain reserves		(302	)	59		(115	)	(36	)	20		-	(107	)	(5	)
Net equity transactions		(262,922	)	(46,454	)	(126,740	)	(223,051	)	619,133		-	(322,372	)	219,922
Net change in contract owners’ equity		(1,192,573	)	297,509		(693,426	)	(172,251	)	447,844		-	(766,775	)	238,738
Contract owners’ equity beginning of period		2,326,924		2,029,415		1,661,505		1,833,756		-		-	1,337,267		1,098,529
Contract owners’ equity end of period	$	1,134,351		2,326,924		968,079		1,661,505		447,844		-	570,492		1,337,267
CHANGES IN UNITS:
Beginning units		127,440		129,014		90,762		102,220		-		-	75,190		62,728
Units purchased		5,441		12,795		18,196		8,719		79,367		-	11,865		37,635
Units redeemed		(27,446	)	(14,369	)	(25,404	)	(20,177	)	(2,586	)	-	(33,220	)	(25,173	)
Ending units		105,435		127,440		83,554		90,762		76,781		-	53,835		75,190

(Continued)

30

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	DVSCS					DSIF				DCAP				DSC
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	156,917		56,147		6,319,860		6,206,965		574,356		516,003		4,928		5,945
Realized gain (loss) on investments		(1,325,785	)	1,430,465		15,818,799		25,261,854		1,543,140		2,000,102		(80,882	)	(8,908	)
Change in unrealized gain (loss) on investments		(10,876,821	)	(2,636,043	)	(163,666,840	)	(11,213,766	)	(13,273,742	)	(36,012	)	(205,053	)	(186,955	)
Reinvested capital gains		3,338,301		1,029,058		-		-		2,238,570		-		29,526		103,932
Net increase (decrease) in contract owners’ equity resulting from operations		(8,707,388	)	(120,373	)	(141,528,181	)	20,255,053		(8,917,676	)	2,480,093		(251,481	)	(85,986	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		1,708,490		2,283,100		19,761,732		24,508,912		2,992,016		3,353,471		117,657		87,987
Transfers between funds		3,465,034		1,678,848		12,743,215		1,308,614		(6,507,327	)	(1,547,247	)	50,080		(97,980	)
Surrenders (note 6)		(813,933	)	(2,061,319	)	(22,570,115	)	(29,844,299	)	(1,322,133	)	(2,082,693	)	(65,557	)	(22,898	)
Death benefits (note 4)		(18,274	)	(4,170	)	(676,774	)	(769,297	)	(129,710	)	(79,654	)	-		-
Net policy repayments (loans) (note 5)		(48,295	)	(174,364	)	(1,079,838	)	(3,201,321	)	(31,928	)	(140,908	)	57,724		(12,090	)
Deductions for surrender charges (note 2d)		(48,324	)	(38,645	)	(450,561	)	(501,356	)	(52,971	)	(80,259	)	(5,085	)	(2,621	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(635,055	)	(655,341	)	(10,510,403	)	(11,291,321	)	(1,092,938	)	(1,198,375	)	(29,350	)	(36,440	)
Asset charges (note 3):
FPVUL & VEL contracts		(27,993	)	(34,319	)	(441,190	)	(547,091	)	(62,716	)	(76,825	)	(2,165	)	(2,983	)
MSP contracts		(428	)	(509	)	(15,136	)	(19,329	)	(1,343	)	(1,628	)	-		-
SL contracts or LSFP contracts		(6,019	)	(12,395	)	(131,293	)	(191,574	)	(10,042	)	(11,144	)	(225	)	(287	)
Adjustments to maintain reserves		11,814		(76	)	910		6,952		(978	)	(14	)	(185	)	21
Net equity transactions		3,587,017		980,809		(3,369,453	)	(20,541,110	)	(6,220,070	)	(1,865,277	)	122,894		(87,291	)
Net change in contract owners’ equity		(5,120,371	)	860,436		(144,897,634	)	(286,057	)	(15,137,746	)	614,816		(128,587	)	(173,277	)
Contract owners’ equity beginning of period		25,289,490		24,429,054		385,793,636		386,079,693		35,470,838		34,856,022		657,205		830,482
Contract owners’ equity end of period	$	20,169,119		25,289,490		240,896,002		385,793,636		20,333,092		35,470,838		528,618		657,205
CHANGES IN UNITS:
Beginning units		1,623,344		1,557,038		27,146,494		28,048,062		2,352,372		2,409,358		46,856		52,662
Units purchased		487,411		602,368		5,271,091		4,719,678		282,871		607,099		18,551		5,842
Units redeemed		(233,100	)	(536,062	)	(4,936,614	)	(5,621,246	)	(787,860	)	(664,085	)	(5,017	)	(11,648	)
Ending units		1,877,655		1,623,344		27,480,971		27,146,494		1,847,383		2,352,372		60,390		46,856

(Continued)

31

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	DVIV					SVSHEB				SVSSVB			FALF
	2008			2007		2008		2007		2008		2007	2008		2007
Investment activity:
Net investment income (loss)	$	609,939		507,706		14,686		4,245		20,636		-	4,437		4,935
Realized gain (loss) on investments		(4,701,583	)	2,076,858		(225,420	)	3,825		(1,158,549	)	-	(26,490	)	5,747
Change in unrealized gain (loss) on investments		(13,304,437	)	(5,890,842	)	(340,683	)	(35,281	)	(1,691,972	)	-	(140,537	)	(77,319	)
Reinvested capital gains		5,147,830		4,852,609		119,020		4,673		843,807		-	68,651		36,771
Net increase (decrease) in contract owners’ equity resulting from operations		(12,248,251	)	1,546,331		(432,397	)	(22,538	)	(1,986,078	)	-	(93,939	)	(29,866	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		1,726,807		3,426,310		38,562		49,254		2,522		-	23,058		28,866
Transfers between funds		(4,503,936	)	(7,669,883	)	222,436		559,320		6,624,162		-	(11,035	)	(55,029	)
Surrenders (note 6)		(330,732	)	(1,507,377	)	(105	)	-		(235,438	)	-	(11,851	)	(2,842	)
Death benefits (note 4)		(26,287	)	(99,136	)	-		(1,116	)	-		-	-		-
Net policy repayments (loans) (note 5)		(309,795	)	(2,323	)	-		-		-		-	4,050		(1,178	)
Deductions for surrender charges (note 2d)		-		-		-		-		-		-	(737	)	(792	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(326,358	)	(419,219	)	(15,906	)	(11,816	)	(167,687	)	-	(11,184	)	(14,388	)
Asset charges (note 3):
FPVUL & VEL contracts		-		-		-		-		-		-	(958	)	(1,294	)
MSP contracts		-		-		-		-		-		-	-		-
SL contracts or LSFP contracts		-		-		-		-		-		-	(173	)	(218	)
Adjustments to maintain reserves		(1,657	)	114		(163	)	16		(90	)	-	(116	)	4
Net equity transactions		(3,771,958	)	(6,271,514	)	244,824		595,658		6,223,469		-	(8,946	)	(46,871	)
Net change in contract owners’ equity		(16,020,209	)	(4,725,183	)	(187,573	)	573,120		4,237,391		-	(102,885	)	(76,737	)
Contract owners’ equity beginning of period		35,936,944		40,662,127		744,005		170,885		-		-	285,577		362,314
Contract owners’ equity end of period	$	19,916,735		35,936,944		556,432		744,005		4,237,391		-	182,692		285,577
CHANGES IN UNITS:
Beginning units		1,649,104		1,939,658		67,742		15,180		-		-	18,632		21,354
Units purchased		186,855		269,097		28,497		53,687		753,052		-	1,861		1,768
Units redeemed		(375,036	)	(559,651	)	(1,882	)	(1,125	)	(80,292	)	-	(2,490	)	(4,490	)
Ending units		1,460,923		1,649,104		94,357		67,742		672,760		-	18,003		18,632

(Continued)

32

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	FVCA2P					FVMOS				FQB				FEIS
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	1,756		3,604		6,586		483		2,039,576		2,953,403		1,965,146		1,815,435
Realized gain (loss) on investments		2,000		33,440		(84,026	)	(129	)	(595,132	)	(1,214,559	)	(1,339,636	)	6,804,728
Change in unrealized gain (loss) on investments		(185,047	)	9,103		(16,844	)	(1,040	)	(3,824,604	)	608,709		(45,577,309	)	(15,905,975	)
Reinvested capital gains		10,715		-		-		-		-		-		90,581		9,084,163
Net increase (decrease) in contract owners’ equity resulting from operations		(170,576	)	46,147		(94,284	)	(686	)	(2,380,160	)	2,347,553		(44,861,218	)	1,798,351
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		58,118		60,780		61,741		4,266		2,289,439		3,486,840		6,381,226		9,436,395
Transfers between funds		95,605		29,775		881,580		3,199		(7,238,739	)	(3,943,312	)	(4,012,784	)	(4,324,122	)
Surrenders (note 6)		(23,553	)	(13,727	)	(71,987	)	-		(4,274,629	)	(8,246,164	)	(4,511,875	)	(7,905,307	)
Death benefits (note 4)		-		(13,721	)	-		-		(214,209	)	(41,641	)	(231,324	)	(304,543	)
Net policy repayments (loans) (note 5)		(13,483	)	(4,101	)	(17,796	)	-		(33,306	)	(299,044	)	116,709		(773,918	)
Deductions for surrender charges (note 2d)		(487	)	(2,438	)	(1,339	)	-		(65,824	)	(110,230	)	(145,202	)	(146,063	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(18,910	)	(14,174	)	(24,923	)	(1,614	)	(1,380,424	)	(1,647,824	)	(3,408,744	)	(3,867,630	)
Asset charges (note 3):
FPVUL & VEL contracts		(1,528	)	(1,541	)	(2,111	)	(168	)	(75,175	)	(77,644	)	(190,746	)	(251,651	)
MSP contracts		(35	)	-		(36	)	-		(3,442	)	(3,713	)	(7,457	)	(9,992	)
SL contracts or LSFP contracts		(420	)	(437	)	(17	)	-		(13,206	)	(26,222	)	(36,863	)	(45,843	)
Adjustments to maintain reserves		(111	)	(3	)	(201	)	3		(1,454	)	15		(2,214	)	42
Net equity transactions		95,196		40,413		824,911		5,686		(11,010,969	)	(10,908,939	)	(6,049,274	)	(8,192,633	)
Net change in contract owners’ equity		(75,380	)	86,560		730,627		5,000		(13,391,129	)	(8,561,386	)	(50,910,492	)	(6,394,282	)
Contract owners’ equity beginning of period		514,262		427,702		46,207		41,207		42,611,572		51,172,958		108,338,859		114,733,141
Contract owners’ equity end of period	$	438,882		514,262		776,834		46,207		29,220,443		42,611,572		57,428,367		108,338,859
CHANGES IN UNITS:
Beginning units		30,528		27,898		4,512		3,964		2,769,010		3,505,854		6,259,548		6,732,512
Units purchased		10,291		5,907		80,667		723		180,046		355,799		725,390		1,067,632
Units redeemed		(3,934	)	(3,277	)	(8,663	)	(175	)	(899,857	)	(1,092,643	)	(1,187,056	)	(1,540,596	)
Ending units		36,885		30,528		76,516		4,512		2,049,199		2,769,010		5,797,882		6,259,548

(Continued)

33

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	FF15S				FF25S			FGS				FHIS
	2008			2007	2008		2007	2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	27,762		-	7,341		-	613,870		569,631		1,567,014		2,059,223
Realized gain (loss) on investments		(18,251	)	-	(7,254	)	-	5,181,843		5,603,662		(1,663,434	)	(189,067	)
Change in unrealized gain (loss) on investments		(274,869	)	-	(104,475	)	-	(59,635,200	)	18,441,027		(5,012,716	)	(1,231,809	)
Reinvested capital gains		28,462		-	10,967		-	-		97,886		-		-
Net increase (decrease) in contract owners’ equity resulting from operations		(236,896	)	-	(93,421	)	-	(53,839,487	)	24,712,206		(5,109,136	)	638,347
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		51,117		-	6,501		-	7,046,371		8,468,007		1,027,626		923,789
Transfers between funds		1,074,503		-	330,456		-	(136,368	)	121,521		(4,639,572	)	2,505,872
Surrenders (note 6)		-		-	-		-	(5,407,244	)	(8,666,206	)	(1,029,366	)	(1,812,283	)
Death benefits (note 4)		-		-	-		-	(215,391	)	(256,936	)	(158,716	)	(59,045	)
Net policy repayments (loans) (note 5)		-		-	-		-	(987,857	)	(925,611	)	(191,243	)	(168,450	)
Deductions for surrender charges (note 2d)		-		-	-		-	(163,052	)	(219,666	)	(12,074	)	(34,988	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(7,580	)	-	(2,128	)	-	(4,490,214	)	(4,546,257	)	(826,341	)	(850,419	)
Asset charges (note 3):
FPVUL & VEL contracts		-		-	-		-	(224,291	)	(265,028	)	(29,429	)	(41,429	)
MSP contracts		-		-	-		-	(6,818	)	(8,414	)	(1,554	)	(1,984	)
SL contracts or LSFP contracts		-		-	-		-	(29,683	)	(34,104	)	(4,833	)	(6,809	)
Adjustments to maintain reserves		(27	)	-	(20	)	-	(1,061	)	105		909		5
Net equity transactions		1,118,013		-	334,809		-	(4,615,608	)	(6,332,589	)	(5,864,593	)	454,259
Net change in contract owners’ equity		881,117		-	241,388		-	(58,455,095	)	18,379,617		(10,973,729	)	1,092,606
Contract owners’ equity beginning of period		-		-	-		-	119,288,714		100,909,097		25,091,685		23,999,079
Contract owners’ equity end of period	$	881,117		-	241,388		-	60,833,619		119,288,714		14,117,956		25,091,685
CHANGES IN UNITS:
Beginning units		-		-	-		-	7,780,228		8,389,342		2,023,784		2,029,708
Units purchased		123,230		-	36,206		-	1,467,717		1,052,833		71,249		437,840
Units redeemed		(4,478	)	-	(490	)	-	(1,547,544	)	(1,661,947	)	(557,022	)	(443,764	)
Ending units		118,752		-	35,716		-	7,700,401		7,780,228		1,538,011		2,023,784

(Continued)

34

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	FHISR					FOS				FOSR				FCS
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	181,702		190,145		964,026		1,538,186		398,857		538,729		1,567,013		1,651,948
Realized gain (loss) on investments		(388,500	)	(11,525	)	1,897,452		3,463,896		(84,440	)	738,640		(3,002,018	)	10,847,502
Change in unrealized gain (loss) on investments		(443,840	)	(188,751	)	(30,619,099	)	(432,859	)	(10,589,282	)	309,061		(106,447,811	)	(35,362,204	)
Reinvested capital gains		-		-		5,319,862		3,263,967		1,841,509		1,044,686		5,516,799		57,020,823
Net increase (decrease) in contract owners’ equity resulting from operations		(650,638	)	(10,131	)	(22,437,759	)	7,833,190		(8,433,356	)	2,631,116		(102,366,017	)	34,158,069
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		633,647		506,305		1,220,793		1,393,703		2,343,181		2,730,506		13,173,081		15,364,595
Transfers between funds		(263,516	)	1,866,571		(2,974,098	)	3,832,575		(336,009	)	859,448		8,374,973		12,122,488
Surrenders (note 6)		(217,629	)	(91,357	)	(1,837,054	)	(3,929,899	)	(734,218	)	(1,032,737	)	(10,812,520	)	(10,820,047	)
Death benefits (note 4)		(11,673	)	(60	)	(43,879	)	(116,465	)	(10,456	)	(58,006	)	(639,622	)	(388,082	)
Net policy repayments (loans) (note 5)		71,429		66,310		(201,285	)	(209,007	)	(9,704	)	(71,019	)	(546,140	)	(2,377,897	)
Deductions for surrender charges (note 2d)		(5,323	)	(1,366	)	(31,395	)	(43,263	)	(42,099	)	(57,649	)	(272,763	)	(261,504	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(126,364	)	(43,218	)	(1,085,797	)	(1,145,573	)	(753,965	)	(789,336	)	(6,160,319	)	(6,306,046	)
Asset charges (note 3):
FPVUL & VEL contracts		(7,521	)	(3,211	)	(40,454	)	(54,563	)	(53,803	)	(59,242	)	(341,997	)	(407,397	)
MSP contracts		(63	)	(39	)	(1,046	)	(1,869	)	(710	)	(749	)	(11,685	)	(12,811	)
SL contracts or LSFP contracts		(1,520	)	(717	)	(11,790	)	(18,308	)	(9,676	)	(9,858	)	(60,093	)	(71,024	)
Adjustments to maintain reserves		(109	)	177		(1,827	)	851		(297	)	46		(7,996	)	2,206
Net equity transactions		71,358		2,299,395		(5,007,832	)	(291,819	)	392,244		1,511,404		2,694,919		6,844,480
Net change in contract owners’ equity		(579,280	)	2,289,264		(27,445,591	)	7,541,371		(8,041,112	)	4,142,520		(99,671,098	)	41,002,549
Contract owners’ equity beginning of period		2,289,264		-		54,879,554		47,338,183		18,679,648		14,537,128		237,684,427		196,681,878
Contract owners’ equity end of period	$	1,709,984		2,289,264		27,433,963		54,879,554		10,638,536		18,679,648		138,013,329		237,684,427
CHANGES IN UNITS:
Beginning units		231,578		-		3,039,326		2,993,058		1,080,792		985,990		10,608,174		10,119,864
Units purchased		77,010		243,213		323,334		881,861		204,196		243,519		2,481,947		2,134,906
Units redeemed		(78,017	)	(11,635	)	(638,112	)	(835,593	)	(188,214	)	(148,717	)	(2,076,347	)	(1,646,596	)
Ending units		230,571		231,578		2,724,548		3,039,326		1,096,774		1,080,792		11,013,774		10,608,174

(Continued)

35

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	FIP				FIGBS				FGIS			FGOS
	2008			2007	2008		2007		2008		2007	2008		2007
Investment activity:
Net investment income (loss)	$	97,318		-	577,502		472,089		(24	)	-	32,689		(2,839	)
Realized gain (loss) on investments		(439,647	)	-	(224,056	)	(159,012	)	(7,749	)	-	628,913		1,376,636
Change in unrealized gain (loss) on investments		(1,415,432	)	-	(878,509	)	191,770		-		-	(8,114,515	)	1,321,560
Reinvested capital gains		-		-	11,500		-		-		-	-		-
Net increase (decrease) in contract owners’ equity resulting from operations		(1,757,761	)	-	(513,563	)	504,847		(7,773	)	-	(7,452,913	)	2,695,357
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		(11,553	)	-	1,077,108		1,397,081		(1,085	)	-	792,028		1,022,660
Transfers between funds		5,323,184		-	876,503		2,828,218		8,964		-	(290,519	)	(881,067	)
Surrenders (note 6)		-		-	(846,344	)	(486,145	)	-		-	(905,202	)	(916,941	)
Death benefits (note 4)		-		-	(13,793	)	(11,839	)	-		-	(16,992	)	(44,567	)
Net policy repayments (loans) (note 5)		-		-	(100,225	)	(212,271	)	-		-	149,683		(117,826	)
Deductions for surrender charges (note 2d)		-		-	(42,234	)	(26,502	)	-		-	(26,134	)	(40,849	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(37,441	)	-	(556,665	)	(424,645	)	(108	)	-	(578,450	)	(645,559	)
Asset charges (note 3):
FPVUL & VEL contracts		-		-	(36,049	)	(29,342	)	-		-	(34,630	)	(45,857	)
MSP contracts		-		-	(2,793	)	(2,328	)	-		-	(1,373	)	(1,877	)
SL contracts or LSFP contracts		-		-	(12,012	)	(10,192	)	-		-	(7,293	)	(9,373	)
Adjustments to maintain reserves		(132	)	-	(387	)	48		2		-	(129	)	(40	)
Net equity transactions		5,274,058		-	343,109		3,022,082		7,773		-	(919,011	)	(1,681,296	)
Net change in contract owners’ equity		3,516,297		-	(170,454	)	3,526,929		-		-	(8,371,924	)	1,014,061
Contract owners’ equity beginning of period		-		-	14,526,686		10,999,757		-		-	14,113,560		13,099,499
Contract owners’ equity end of period	$	3,516,297		-	14,356,232		14,526,686		-		-	5,741,636		14,113,560
CHANGES IN UNITS:
Beginning units		-		-	1,230,686		970,196		-		-	1,026,154		1,160,140
Units purchased		555,792		-	249,793		472,236		12		-	105,532		165,625
Units redeemed		(4,481	)	-	(222,625	)	(211,746	)	(12	)	-	(203,006	)	(299,611	)
Ending units		551,311		-	1,257,854		1,230,686		-		-	928,680		1,026,154

(Continued)

36

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	FMCS					FVSS				FNRS2				FF10S
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	107,251		243,277		29,057		78,528		-		12,190		44,281		37,076
Realized gain (loss) on investments		(2,320,974	)	745,569		(2,031,968	)	47,654		255,259		96,216		(53,432	)	35,962
Change in unrealized gain (loss) on investments		(20,681,917	)	1,091,975		(2,944,133	)	(544,851	)	(9,827,149	)	3,011,353		(505,036	)	(16,903	)
Reinvested capital gains		5,673,851		3,082,876		1,635,580		911,629		470,633		563,500		66,308		35,183
Net increase (decrease) in contract owners’ equity resulting from operations		(17,221,789	)	5,163,697		(3,311,464	)	492,960		(9,101,257	)	3,683,259		(447,879	)	91,318
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		2,941,912		3,383,726		503,372		622,938		1,058,931		1,284,348		43,955		45,536
Transfers between funds		4,315,996		6,786,942		(2,915,680	)	922,325		3,529,605		2,883,022		298,272		1,016,747
Surrenders (note 6)		(1,267,097	)	(1,073,399	)	(366,990	)	(400,485	)	(2,227,420	)	(507,955	)	(54,598	)	(69,321	)
Death benefits (note 4)		(16,839	)	(228,522	)	(3,790	)	(3,257	)	(9,548	)	(114,902	)	(33,852	)	(143,179	)
Net policy repayments (loans) (note 5)		(594,321	)	(309,506	)	(223,440	)	(74,159	)	1,031,690		(217,115	)	(2,234	)	20
Deductions for surrender charges (note 2d)		(76,297	)	(65,796	)	(21,043	)	(25,264	)	(46,203	)	(16,741	)	(996	)	(810	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(1,371,833	)	(1,314,125	)	(211,568	)	(322,891	)	(616,991	)	(404,623	)	(62,548	)	(38,423	)
Asset charges (note 3):
FPVUL & VEL contracts		(80,400	)	(90,744	)	(14,825	)	(25,512	)	(43,503	)	(32,035	)	(5,557	)	(3,412	)
MSP contracts		(2,958	)	(2,757	)	(248	)	(371	)	(2,895	)	(1,698	)	(664	)	(582	)
SL contracts or LSFP contracts		(18,178	)	(18,372	)	(1,011	)	(1,051	)	(8,529	)	(5,935	)	(130	)	(66	)
Adjustments to maintain reserves		(1,358	)	(10	)	(275	)	(31	)	(456	)	169		(84	)	8
Net equity transactions		3,828,627		7,067,437		(3,255,498	)	692,242		2,664,681		2,866,535		181,564		806,518
Net change in contract owners’ equity		(13,393,162	)	12,231,134		(6,566,962	)	1,185,202		(6,436,576	)	6,549,794		(266,315	)	897,836
Contract owners’ equity beginning of period		41,423,216		29,192,082		9,247,832		8,062,630		14,255,413		7,705,619		1,571,711		673,875
Contract owners’ equity end of period	$	28,030,054		41,423,216		2,680,870		9,247,832		7,818,837		14,255,413		1,305,396		1,571,711
CHANGES IN UNITS:
Beginning units		1,538,812		1,250,190		544,410		500,988		621,068		488,940		121,944		56,804
Units purchased		429,420		428,117		79,391		92,710		222,629		193,864		24,022		85,446
Units redeemed		(242,504	)	(139,495	)	(299,905	)	(49,288	)	(96,610	)	(61,736	)	(10,774	)	(20,306	)
Ending units		1,725,728		1,538,812		323,896		544,410		747,087		621,068		135,192		121,944

(Continued)

37

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	FF20S					FF30S				FTVDM3				TIF
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	120,839		61,125		56,352		38,873		151,739		134,911		66,199		69,784
Realized gain (loss) on investments		(159,092	)	51,780		(26,453	)	33,257		(269,331	)	437,427		(31,498	)	334,410
Change in unrealized gain (loss) on investments		(1,785,136	)	(8,653	)	(1,220,170	)	(2,052	)	(4,596,789	)	427,527		(1,488,551	)	(64,148	)
Reinvested capital gains		210,061		84,690		163,010		65,958		1,100,871		445,938		239,532		144,496
Net increase (decrease) in contract owners’ equity resulting from operations		(1,613,328	)	188,942		(1,027,261	)	136,036		(3,613,510	)	1,445,803		(1,214,318	)	484,542
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		778,261		456,951		381,816		380,310		417,586		436,065		-		(17	)
Transfers between funds		2,166,797		1,313,283		873,657		904,966		(1,200,348	)	1,457,224		(351,962	)	(571,939	)
Surrenders (note 6)		(443,408	)	(10,812	)	(59,154	)	(41,147	)	(243,005	)	(364,302	)	(79,037	)	(205,918	)
Death benefits (note 4)		-		(145,369	)	-		(162	)	-		-		-		(16,922	)
Net policy repayments (loans) (note 5)		(7,371	)	(5,729	)	(33,677	)	(17,613	)	(29,337	)	(92,473	)	(41,203	)	(35,558	)
Deductions for surrender charges (note 2d)		(5,843	)	(2,669	)	(7,172	)	(4,763	)	(13,881	)	(16,266	)	(5,221	)	(13,907	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(151,659	)	(91,873	)	(152,296	)	(108,147	)	(232,057	)	(236,537	)	(76,321	)	(93,251	)
Asset charges (note 3):
FPVUL & VEL contracts		(7,390	)	(5,159	)	(8,423	)	(5,809	)	(17,056	)	(18,724	)	(7,701	)	(10,207	)
MSP contracts		(3,799	)	(2,732	)	(1,456	)	(1,555	)	(854	)	(1,062	)	(462	)	(574	)
SL contracts or LSFP contracts		(3,981	)	(2,253	)	(751	)	(607	)	(4,523	)	(4,564	)	(1,821	)	(2,232	)
Adjustments to maintain reserves		(174	)	33		1,699		60		(359	)	49		(348	)	59
Net equity transactions		2,321,433		1,503,671		994,243		1,105,534		(1,323,834	)	1,159,410		(564,076	)	(950,466	)
Net change in contract owners’ equity		708,105		1,692,613		(33,018	)	1,241,570		(4,937,344	)	2,605,213		(1,778,394	)	(465,924	)
Contract owners’ equity beginning of period		3,047,817		1,355,204		1,943,254		701,684		7,696,212		5,090,999		3,235,725		3,701,649
Contract owners’ equity end of period	$	3,755,922		3,047,817		1,910,236		1,943,254		2,758,868		7,696,212		1,457,331		3,235,725
CHANGES IN UNITS:
Beginning units		222,540		109,012		136,304		54,734		364,400		310,222		131,776		174,552
Units purchased		227,186		133,511		106,946		92,704		39,126		97,891		-		2
Units redeemed		(41,340	)	(19,983	)	(26,583	)	(11,134	)	(127,529	)	(43,713	)	(32,471	)	(42,778	)
Ending units		408,386		222,540		216,667		136,304		275,997		364,400		99,305		131,776

(Continued)

38

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	TIF2					TIF3				FTVFA2			FTVGI2
	2008			2007		2008		2007		2008		2007	2008		2007
Investment activity:
Net investment income (loss)	$	320,223		291,105		164,729		141,669		3,349		-	20,598		-
Realized gain (loss) on investments		26,260		1,756,067		(71,704	)	272,831		(1,684	)	-	(1	)	-
Change in unrealized gain (loss) on investments		(9,427,721	)	(279,035	)	(3,947,571	)	238,423		(42,263	)	-	(4,244	)	-
Reinvested capital gains		1,441,783		785,608		635,903		307,222		3,322		-	-		-
Net increase (decrease) in contract owners’ equity resulting from operations		(7,639,455	)	2,553,745		(3,218,643	)	960,145		(37,276	)	-	16,353		-
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		848,633		1,138,365		719,233		1,044,736		5,786		-	553,199		-
Transfers between funds		(2,730,461	)	2,848,026		454,678		17,194		151,723		-	466,055		-
Surrenders (note 6)		(2,772,588	)	(2,722,193	)	(197,681	)	(190,511	)	-		-	(252	)	-
Death benefits (note 4)		(37,130	)	(171	)	(608	)	-		-		-	-		-
Net policy repayments (loans) (note 5)		(6,035	)	(104,369	)	(16,792	)	(55,581	)	(778	)	-	214		-
Deductions for surrender charges (note 2d)		-		-		(18,517	)	(12,135	)	-		-	-		-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(155,830	)	(288,174	)	(273,111	)	(242,517	)	(3,084	)	-	(11,492	)	-
Asset charges (note 3):
FPVUL & VEL contracts		-		-		(18,536	)	(18,765	)	(265	)	-	-		-
MSP contracts		-		-		(614	)	(481	)	(16	)	-	-		-
SL contracts or LSFP contracts		-		-		(5,795	)	(5,881	)	-		-	-		-
Adjustments to maintain reserves		(3,716	)	538		(295	)	28		(7	)	-	(44	)	-
Net equity transactions		(4,857,127	)	872,022		641,962		536,087		153,359		-	1,007,680		-
Net change in contract owners’ equity		(12,496,582	)	3,425,767		(2,576,681	)	1,496,232		116,083		-	1,024,033		-
Contract owners’ equity beginning of period		22,498,939		19,073,172		7,318,617		5,822,385		-		-	-		-
Contract owners’ equity end of period	$	10,002,357		22,498,939		4,741,936		7,318,617		116,083		-	1,024,033		-
CHANGES IN UNITS:
Beginning units		991,386		972,254		462,356		424,646		-		-	-		-
Units purchased		90,226		621,052		86,001		95,614		18,023		-	96,058		-
Units redeemed		(341,152	)	(601,920	)	(45,787	)	(57,904	)	(583	)	-	(1,133	)	-
Ending units		740,460		991,386		502,570		462,356		17,440		-	94,925		-

(Continued)

39

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	FTVGI3					FTVIS2				FTVMD2			FTVRDI
	2008			2007		2008		2007		2008		2007	2008		2007
Investment activity:
Net investment income (loss)	$	233,513		59,433		247,666		127,625		1,380		-	246,107		401,727
Realized gain (loss) on investments		178,655		40,603		(199,597	)	43,240		(3,430	)	-	39,108		595,926
Change in unrealized gain (loss) on investments		(225,501	)	120,126		(1,655,102	)	(153,756	)	(17,922	)	-	(3,991,162	)	(1,588,215	)
Reinvested capital gains		-		-		103,703		23,668		2,827		-	91,080		227,655
Net increase (decrease) in contract owners’ equity resulting from operations		186,667		220,162		(1,503,330	)	40,777		(17,145	)	-	(3,614,867	)	(362,907	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		486,537		218,342		340,125		481,609		(45	)	-	1,080,065		1,682,953
Transfers between funds		2,901,911		1,751,529		110,349		3,212,051		85,962		-	(1,454,085	)	(654,804	)
Surrenders (note 6)		(241,708	)	(16,918	)	(124,660	)	(29,418	)	-		-	(608,305	)	(532,665	)
Death benefits (note 4)		(6,220	)	-		(9,041	)	-		-		-	(48,605	)	(31,330	)
Net policy repayments (loans) (note 5)		(73,593	)	(141,288	)	16,642		(27,299	)	-		-	(83,502	)	(179,926	)
Deductions for surrender charges (note 2d)		(6,389	)	(629	)	(2,074	)	(1,090	)	-		-	(86,276	)	(67,503	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(257,301	)	(91,814	)	(201,583	)	(138,913	)	(641	)	-	(583,283	)	(698,883	)
Asset charges (note 3):
FPVUL & VEL contracts		(16,181	)	(7,058	)	(10,220	)	(8,409	)	-		-	(43,888	)	(57,222	)
MSP contracts		(600	)	(309	)	(1,946	)	(1,191	)	-		-	(1,255	)	(1,612	)
SL contracts or LSFP contracts		(3,196	)	(1,098	)	(5,748	)	(3,854	)	-		-	(6,266	)	(7,727	)
Adjustments to maintain reserves		(253	)	55		(684	)	266		(14	)	-	(271	)	(16	)
Net equity transactions		2,783,007		1,710,812		111,160		3,483,751		85,262		-	(1,835,671	)	(548,735	)
Net change in contract owners’ equity		2,969,674		1,930,974		(1,392,170	)	3,524,528		68,117		-	(5,450,538	)	(911,642	)
Contract owners’ equity beginning of period		3,476,832		1,545,858		4,843,453		1,318,925		-		-	14,812,894		15,724,536
Contract owners’ equity end of period	$	6,446,506		3,476,832		3,451,283		4,843,453		68,117		-	9,362,356		14,812,894
CHANGES IN UNITS:
Beginning units		280,836		138,640		416,188		117,590		-		-	910,630		943,340
Units purchased		255,186		165,117		55,768		318,316		9,583		-	86,336		101,264
Units redeemed		(45,744	)	(22,921	)	(50,370	)	(19,718	)	(75	)	-	(209,160	)	(133,974	)
Ending units		490,278		280,836		421,586		416,188		9,508		-	787,806		910,630

(Continued)

40

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	FTVSVI					FTVSV2				GVMCE				WRASP
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	147,861		106,122		39,612		15,663		425,924		417,161		1,774		-
Realized gain (loss) on investments		(160,397	)	320,677		(582,936	)	115,629		(10,481,013	)	1,808,000		(14,830	)	-
Change in unrealized gain (loss) on investments		(4,661,084	)	(1,564,171	)	(1,378,961	)	(654,836	)	(14,754,743	)	(11,651,421	)	(89,911	)	-
Reinvested capital gains		799,863		811,996		350,132		288,566		103,156		11,581,061		33,568		-
Net increase (decrease) in contract owners’ equity resulting from operations		(3,873,757	)	(325,376	)	(1,572,153	)	(234,978	)	(24,706,676	)	2,154,801		(69,399	)	-
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		1,041,503		1,344,014		254,804		590,192		2,501,850		6,980,186		25,757		-
Transfers between funds		244,305		1,120,441		(317,724	)	1,205,853		(14,131,346	)	2,766,842		441,048		-
Surrenders (note 6)		(293,697	)	(476,936	)	(87,532	)	(682	)	(2,264,344	)	(2,517,435	)	(133	)	-
Death benefits (note 4)		(63,349	)	(1,669	)	-		(7,582	)	(98,115	)	(94,325	)	-		-
Net policy repayments (loans) (note 5)		(56,607	)	(40,823	)	-		-		(533,852	)	(140,364	)	(2,079	)	-
Deductions for surrender charges (note 2d)		(34,396	)	(39,850	)	-		-		-		-		-		-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(430,515	)	(483,810	)	(70,001	)	(58,388	)	(807,319	)	(900,790	)	(5,092	)	-
Asset charges (note 3):
FPVUL & VEL contracts		(32,483	)	(38,132	)	-		-		-		-		-		-
MSP contracts		(1,242	)	(1,196	)	-		-		-		-		-		-
SL contracts or LSFP contracts		(8,155	)	(8,544	)	-		-		-		-		-		-
Adjustments to maintain reserves		(363	)	(16	)	356		16		296		577		(149	)	-
Net equity transactions		365,001		1,373,478		(220,097	)	1,729,409		(15,332,830	)	6,094,691		459,352		-
Net change in contract owners’ equity		(3,508,756	)	1,048,102		(1,792,250	)	1,494,431		(40,039,506	)	8,249,492		389,953		-
Contract owners’ equity beginning of period		11,305,644		10,257,542		5,078,964		3,584,533		77,997,154		69,747,662		-		-
Contract owners’ equity end of period	$	7,796,888		11,305,644		3,286,714		5,078,964		37,957,648		77,997,154		389,953		-
CHANGES IN UNITS:
Beginning units		545,164		484,062		393,948		270,758		3,657,366		3,369,886		-		-
Units purchased		73,627		108,171		106,273		144,327		400,664		976,050		47,251		-
Units redeemed		(58,734	)	(47,069	)	(119,084	)	(21,137	)	(1,225,064	)	(688,570	)	(735	)	-
Ending units		560,057		545,164		381,137		393,948		2,832,966		3,657,366		46,516		-

(Continued)

41

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	WRGP					WRRESP				WRSTP				JABS
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	(626	)	(108	)	1,837		753		(837	)	(1	)	183,683		172,447
Realized gain (loss) on investments		(36,095	)	6,486		(81,141	)	1,347		(46,103	)	1		(311,920	)	385,511
Change in unrealized gain (loss) on investments		(167,825	)	(6,613	)	(66,352	)	(30,222	)	(187,296	)	(752	)	(1,914,827	)	149,402
Reinvested capital gains		8,776		5,561		6,363		6,902		24,938		833		603,351		-
Net increase (decrease) in contract owners’ equity resulting from operations		(195,770	)	5,326		(139,293	)	(21,220	)	(209,298	)	81		(1,439,713	)	707,360
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		5,435		446		7,209		8,026		72,014		-		693,224		663,113
Transfers between funds		587,958		213,856		249,341		119,692		806,472		4,475		(999,771	)	2,280,431
Surrenders (note 6)		(196	)	(97	)	(8,175	)	-		(53	)	-		(1,000,338	)	(669,412	)
Death benefits (note 4)		-		-		-		(13	)	-		-		(18,617	)	(19,138	)
Net policy repayments (loans) (note 5)		-		-		-		-		(527	)	-		47,892		(7,435	)
Deductions for surrender charges (note 2d)		-		-		-		-		-		-		(15,890	)	(4,994	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(5,434	)	(579	)	(4,992	)	(1,748	)	(8,362	)	-		(177,585	)	(156,437	)
Asset charges (note 3):
FPVUL & VEL contracts		-		-		-		-		-		-		(5,573	)	(5,278	)
MSP contracts		-		-		-		-		-		-		(17	)	-
SL contracts or LSFP contracts		-		-		-		-		-		-		(1,899	)	(1,189	)
Adjustments to maintain reserves		5,695		(5,512	)	(152	)	(13	)	(79	)	8		(503	)	1,218
Net equity transactions		593,458		208,114		243,231		125,944		869,465		4,483		(1,479,077	)	2,080,879
Net change in contract owners’ equity		397,688		213,440		103,938		104,724		660,167		4,564		(2,918,790	)	2,788,239
Contract owners’ equity beginning of period		236,483		23,043		151,438		46,714		4,564		-		9,163,028		6,374,789
Contract owners’ equity end of period	$	634,171		236,483		255,376		151,438		664,731		4,564		6,244,238		9,163,028
CHANGES IN UNITS:
Beginning units		15,662		1,882		12,120		3,140		448		-		571,358		437,726
Units purchased		49,475		15,885		22,910		9,507		99,627		448		184,145		266,386
Units redeemed		(489	)	(2,105	)	(3,101	)	(527	)	(1,145	)	-		(291,760	)	(132,754	)
Ending units		64,648		15,662		31,929		12,120		98,930		448		463,743		571,358

(Continued)

42

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	JACAS					JAGTS				JARLCS				JAIGS
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	(56,322	)	48,697		6,537		47,169		3,703		2,302		1,468,999		221,436
Realized gain (loss) on investments		4,368,600		3,858,538		537,116		2,241,803		(14,935	)	(6,446	)	5,684,405		8,720,014
Change in unrealized gain (loss) on investments		(37,016,154	)	12,121,690		(7,484,264	)	748,048		(242,489	)	33,823		(56,149,301	)	6,681,827
Reinvested capital gains		-		-		-		-		31,638		3,990		8,232,296		-
Net increase (decrease) in contract owners’ equity resulting from operations		(32,703,876	)	16,028,925		(6,940,611	)	3,037,020		(222,083	)	33,669		(40,763,601	)	15,623,277
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		3,889,289		3,904,384		1,209,005		1,444,016		25,019		43,891		1,672,411		1,817,999
Transfers between funds		7,464,889		7,945,412		(1,097,436	)	(2,466,495	)	136,801		(84,139	)	14,281,939		(305,785	)
Surrenders (note 6)		(2,661,445	)	(3,604,125	)	(573,286	)	(1,199,719	)	(22,488	)	(1,583	)	(2,829,197	)	(2,821,312	)
Death benefits (note 4)		(117,974	)	(68,772	)	(26,452	)	(11,091	)	-		-		(115,692	)	(117,426	)
Net policy repayments (loans) (note 5)		(256,623	)	(289,899	)	(275,180	)	(117,589	)	(1,095	)	(3,835	)	(544,504	)	(830,463	)
Deductions for surrender charges (note 2d)		(100,155	)	(102,529	)	(23,265	)	(47,628	)	(2,850	)	(214	)	(62,246	)	(102,258	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(2,071,717	)	(1,670,311	)	(603,740	)	(638,647	)	(15,790	)	(13,564	)	(1,618,549	)	(1,717,077	)
Asset charges (note 3):
FPVUL & VEL contracts		(118,875	)	(113,167	)	(37,035	)	(45,238	)	(1,414	)	(1,453	)	(94,060	)	(124,611	)
MSP contracts		(2,644	)	(2,586	)	(715	)	(859	)	(293	)	(387	)	(3,114	)	(3,786	)
SL contracts or LSFP contracts		(18,885	)	(15,304	)	(5,854	)	(8,218	)	(212	)	(153	)	(15,065	)	(18,807	)
Adjustments to maintain reserves		2,783		207		(163	)	82		(185	)	54		5,005		201
Net equity transactions		6,008,643		5,983,309		(1,434,121	)	(3,091,386	)	117,493		(61,383	)	10,676,928		(4,223,325	)
Net change in contract owners’ equity		(26,695,233	)	22,012,234		(8,374,732	)	(54,366	)	(104,590	)	(27,714	)	(30,086,673	)	11,399,952
Contract owners’ equity beginning of period		66,826,811		44,814,577		16,488,137		16,542,503		508,513		536,227		72,247,184		60,847,232
Contract owners’ equity end of period	$	40,131,578		66,826,811		8,113,405		16,488,137		403,923		508,513		42,160,511		72,247,184
CHANGES IN UNITS:
Beginning units		5,227,208		4,785,398		3,145,552		3,845,242		26,988		30,204		3,915,734		4,214,566
Units purchased		1,023,547		1,272,407		335,026		435,598		10,038		2,653		1,582,325		404,502
Units redeemed		(603,966	)	(830,597	)	(715,663	)	(1,135,288	)	(3,404	)	(5,869	)	(691,730	)	(703,334	)
Ending units		5,646,789		5,227,208		2,764,915		3,145,552		33,622		26,988		4,806,329		3,915,734

(Continued)

43

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	JAIGS2					OGGO				OGMVP				SBVSG
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	553,994		86,238		(12,040	)	(13,419	)	2,450		4,475		(165	)	-
Realized gain (loss) on investments		395,033		371,799		(2,966,786	)	124,431		(3,630	)	(32,851	)	(10,891	)	-
Change in unrealized gain (loss) on investments		(17,126,656	)	3,732,278		(148,137	)	(248,142	)	(115,404	)	(84,540	)	(44,922	)	-
Reinvested capital gains		2,970,977		-		853,551		863,461		41,787		116,564		724		-
Net increase (decrease) in contract owners’ equity resulting from operations		(13,206,652	)	4,190,315		(2,273,412	)	726,331		(74,797	)	3,648		(55,254	)	-
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		3,035,699		3,350,991		103,324		562,550		(7	)	6		628		-
Transfers between funds		86,450		9,877,759		(1,562,266	)	1,743,291		67		(28,514	)	162,834		-
Surrenders (note 6)		(1,331,076	)	(557,665	)	(73,614	)	(162,901	)	-		(68,885	)	-		-
Death benefits (note 4)		(61,395	)	(82,333	)	(23,060	)	(2,971	)	(127	)	(596	)	-		-
Net policy repayments (loans) (note 5)		4,009		(103,681	)	(104,328	)	-		-		-		-		-
Deductions for surrender charges (note 2d)		(45,204	)	(19,680	)	-		-		-		-		-		-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(973,497	)	(745,604	)	(83,433	)	(81,081	)	(1,727	)	(2,161	)	(1,728	)	-
Asset charges (note 3):
FPVUL & VEL contracts		(64,270	)	(54,491	)	-		-		-		-		-		-
MSP contracts		(1,741	)	(1,035	)	-		-		-		-		-		-
SL contracts or LSFP contracts		(14,059	)	(11,759	)	-		-		-		-		-		-
Adjustments to maintain reserves		(906	)	519		2,687		47		(28	)	(75	)	(16	)	-
Net equity transactions		634,010		11,653,021		(1,740,690	)	2,058,935		(1,822	)	(100,225	)	161,718		-
Net change in contract owners’ equity		(12,572,642	)	15,843,336		(4,014,102	)	2,785,266		(76,619	)	(96,577	)	106,464		-
Contract owners’ equity beginning of period		24,621,598		8,778,262		6,760,355		3,975,089		211,316		307,893		-		-
Contract owners’ equity end of period	$	12,048,956		24,621,598		2,746,253		6,760,355		134,697		211,316		106,464		-
CHANGES IN UNITS:
Beginning units		1,653,148		754,850		327,330		225,124		10,832		15,930		-		-
Units purchased		331,920		1,014,616		76,989		124,457		1		-		18,423		-
Units redeemed		(292,298	)	(116,318	)	(167,017	)	(22,251	)	(114	)	(5,098	)	(226	)	-
Ending units		1,692,770		1,653,148		237,302		327,330		10,719		10,832		18,197		-

(Continued)

44

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	AMTB					BNCAI				LOVMCV				MIGIC
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	226,384		235,067		(31,367	)	(37,013	)	15,755		4,797		22,201		15,269
Realized gain (loss) on investments		(202,300	)	16,528		(1,077,710	)	460,109		(718,866	)	49,953		142,842		243,719
Change in unrealized gain (loss) on investments		(861,945	)	149,231		(4,879,350	)	(1,486,508	)	(98,152	)	(364,934	)	(1,810,696	)	229,819
Reinvested capital gains		-		-		623,887		1,458,483		63,687		253,561		181,434		-
Net increase (decrease) in contract owners’ equity resulting from operations		(837,861	)	400,826		(5,364,540	)	395,071		(737,576	)	(56,623	)	(1,464,219	)	488,807
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		425,247		555,419		630,425		1,060,728		146,016		51,577		439,224		524,096
Transfers between funds		(2,716,615	)	(1,436,045	)	(3,146,668	)	2,145,519		(219,861	)	1,562,245		(479,285	)	(230,707	)
Surrenders (note 6)		(994,617	)	(308,534	)	(85,809	)	(405,413	)	(19,539	)	(314,757	)	(168,808	)	(307,318	)
Death benefits (note 4)		(946	)	(21,919	)	(17,260	)	(11,654	)	-		(620	)	-		(42,448	)
Net policy repayments (loans) (note 5)		(58,672	)	(20,588	)	(48,609	)	(60,228	)	-		-		(16,203	)	(24,261	)
Deductions for surrender charges (note 2d)		(20,517	)	(24,858	)	-		-		-		-		(25,849	)	(31,561	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(245,227	)	(287,735	)	(218,704	)	(205,960	)	(26,092	)	(20,662	)	(217,020	)	(250,135	)
Asset charges (note 3):
FPVUL & VEL contracts		(19,149	)	(24,496	)	-		-		-		-		(15,544	)	(19,201	)
MSP contracts		(1,153	)	(1,221	)	-		-		-		-		(177	)	(230	)
SL contracts or LSFP contracts		(2,542	)	(2,835	)	-		-		-		-		(922	)	(842	)
Adjustments to maintain reserves		(191	)	13		(819	)	(8	)	179		(27	)	(201	)	(18	)
Net equity transactions		(3,634,382	)	(1,572,798	)	(2,887,444	)	2,522,984		(119,297	)	1,277,756		(484,785	)	(382,625	)
Net change in contract owners’ equity		(4,472,243	)	(1,171,972	)	(8,251,984	)	2,918,055		(856,873	)	1,221,133		(1,949,004	)	106,182
Contract owners’ equity beginning of period		8,544,559		9,716,531		15,849,750		12,931,695		1,888,877		667,744		4,587,340		4,481,158
Contract owners’ equity end of period	$	4,072,316		8,544,559		7,597,766		15,849,750		1,032,004		1,888,877		2,638,336		4,587,340
CHANGES IN UNITS:
Beginning units		757,962		903,048		819,894		690,768		149,088		52,940		289,412		314,824
Units purchased		44,660		64,515		120,270		243,845		25,994		125,650		34,762		36,248
Units redeemed		(385,345	)	(209,601	)	(292,702	)	(114,719	)	(40,504	)	(29,502	)	(60,501	)	(61,660	)
Ending units		417,277		757,962		647,462		819,894		134,578		149,088		263,673		289,412

(Continued)

45

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	MVRISC					MVFIC				MVFSC			GVAAA2
	2008			2007		2008		2007		2008		2007	2008		2007
Investment activity:
Net investment income (loss)	$	(146	)	(8	)	77,102		49,384		12,641		-	95,090		68,968
Realized gain (loss) on investments		(3,739	)	98		(23,632	)	219,343		(162,697	)	-	(60,537	)	140,127
Change in unrealized gain (loss) on investments		(34,172	)	264		(2,829,368	)	14,453		(236,380	)	-	(1,338,937	)	(63,468	)
Reinvested capital gains		333		-		260,163		84,573		58,650		-	44,225		1,640
Net increase (decrease) in contract owners’ equity resulting from operations		(37,724	)	354		(2,515,735	)	367,753		(327,786	)	-	(1,260,159	)	147,267
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		61,855		2		689,723		600,850		210,588		-	427,926		260,108
Transfers between funds		211,054		9,266		1,208,415		2,607,442		2,179,192		-	442,407		1,898,840
Surrenders (note 6)		-		-		(516,130	)	(72,432	)	(779	)	-	(30,944	)	(17,869	)
Death benefits (note 4)		-		-		(13,567	)	-		-		-	(1,471	)	(23,466	)
Net policy repayments (loans) (note 5)		-		-		21,875		(9,423	)	-		-	(17,227	)	(35,332	)
Deductions for surrender charges (note 2d)		-		-		(14,309	)	(5,972	)	-		-	(2,456	)	(1,187	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(1,229	)	(130	)	(312,111	)	(240,520	)	(21,193	)	-	(241,638	)	(155,589	)
Asset charges (note 3):
FPVUL & VEL contracts		-		-		(19,144	)	(18,671	)	-		-	(11,821	)	(10,425	)
MSP contracts		-		-		(446	)	(471	)	-		-	(4,167	)	(1,849	)
SL contracts or LSFP contracts		-		-		(5,238	)	(3,274	)	-		-	(2,579	)	(1,867	)
Adjustments to maintain reserves		(16	)	7		(364	)	37		(139	)	-	(334	)	56
Net equity transactions		271,664		9,145		1,038,704		2,857,567		2,367,669		-	557,696		1,911,419
Net change in contract owners’ equity		233,940		9,499		(1,477,031	)	3,225,320		2,039,883		-	(702,463	)	2,058,686
Contract owners’ equity beginning of period		9,499		-		6,902,137		3,676,817		-		-	3,811,401		1,752,715
Contract owners’ equity end of period	$	243,439		9,499		5,425,106		6,902,137		2,039,883		-	3,108,938		3,811,401
CHANGES IN UNITS:
Beginning units		900		-		348,380		200,260		-		-	340,142		166,024
Units purchased		39,606		912		115,578		168,836		313,653		-	95,603		199,129
Units redeemed		(272	)	(12	)	(57,794	)	(20,716	)	(4,288	)	-	(40,655	)	(25,011	)
Ending units		40,234		900		406,164		348,380		309,365		-	395,090		340,142

(Continued)

46

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	GVABD2					GVAGG2				GVAGR2				GVAGI2
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	145,928		142,989		146,319		111,882		148,113		34,454		39,487		11,382
Realized gain (loss) on investments		(116,576	)	2,005		(55,179	)	88,366		(148,187	)	63,442		(77,592	)	(293	)
Change in unrealized gain (loss) on investments		(324,421	)	(97,260	)	(2,766,102	)	251,313		(4,212,956	)	288,185		(689,449	)	(34,922	)
Reinvested capital gains		2,005		-		177,920		-		425,788		1,318		529		-
Net increase (decrease) in contract owners’ equity resulting from operations		(293,064	)	47,734		(2,497,042	)	451,561		(3,787,242	)	387,399		(727,025	)	(23,833	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		170,409		125,279		462,002		442,191		673,379		407,940		115,482		11,442
Transfers between funds		683,675		1,769,831		1,024,717		3,470,401		2,070,284		4,978,069		1,223,549		964,877
Surrenders (note 6)		(337,813	)	(170,306	)	(294,613	)	(177,182	)	(471,019	)	(201,950	)	(17,353	)	-
Death benefits (note 4)		(1,457	)	(18,196	)	(43,825	)	(19,979	)	-		-		(714	)	-
Net policy repayments (loans) (note 5)		(24,892	)	14,767		(34,640	)	(23,139	)	(53,226	)	(23,829	)	(33,442	)	(1,959	)
Deductions for surrender charges (note 2d)		(12,238	)	(19,403	)	(7,365	)	(20,052	)	(12,627	)	(15,982	)	(1,922	)	-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(115,271	)	(66,515	)	(235,827	)	(148,100	)	(291,463	)	(173,789	)	(62,322	)	(11,966	)
Asset charges (note 3):
FPVUL & VEL contracts		(7,895	)	(4,823	)	(16,120	)	(11,465	)	(21,059	)	(14,337	)	(4,699	)	(847	)
MSP contracts		(988	)	(519	)	(993	)	(852	)	(1,050	)	(497	)	(677	)	(199	)
SL contracts or LSFP contracts		(1,949	)	(655	)	(4,233	)	(2,637	)	(6,612	)	(4,026	)	(744	)	(126	)
Adjustments to maintain reserves		(192	)	54		(374	)	142		(387	)	89		(136	)	87
Net equity transactions		351,389		1,629,513		848,729		3,509,328		1,886,220		4,951,688		1,217,022		961,308
Net change in contract owners’ equity		58,325		1,677,247		(1,648,313	)	3,960,889		(1,901,022	)	5,339,087		489,997		937,475
Contract owners’ equity beginning of period		2,421,417		744,170		5,596,159		1,635,270		7,085,762		1,746,675		937,475		-
Contract owners’ equity end of period	$	2,479,742		2,421,417		3,947,846		5,596,159		5,184,740		7,085,762		1,427,472		937,475
CHANGES IN UNITS:
Beginning units		223,108		70,612		451,322		150,826		610,966		168,526		94,768		-
Units purchased		84,892		177,509		129,180		337,040		280,096		481,897		158,192		96,264
Units redeemed		(54,492	)	(25,013	)	(61,647	)	(36,544	)	(89,716	)	(39,457	)	(19,978	)	(1,496	)
Ending units		253,508		223,108		518,855		451,322		801,346		610,966		232,982		94,768

(Continued)

47

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	NVCRA1				NVCRB1			NVCCA1			NVCCN1
	2008			2007	2008		2007	2008		2007	2008		2007
Investment activity:
Net investment income (loss)	$	8,583		-	4,809		-	5,387		-	3,653		-
Realized gain (loss) on investments		(149,177	)	-	(6,945	)	-	(11,855	)	-	(26,718	)	-
Change in unrealized gain (loss) on investments		(104,586	)	-	(22,948	)	-	(126,362	)	-	(15,304	)	-
Reinvested capital gains		6,286		-	2,502		-	4,934		-	516		-
Net increase (decrease) in contract owners’ equity resulting from operations		(238,894	)	-	(22,582	)	-	(127,896	)	-	(37,853	)	-
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		15,734		-	11,963		-	33,781		-	10,172		-
Transfers between funds		525,197		-	553,058		-	629,911		-	314,970		-
Surrenders (note 6)		-		-	(5,957	)	-	(5,398	)	-	-		-
Death benefits (note 4)		-		-	-		-	-		-	-		-
Net policy repayments (loans) (note 5)		(6,995	)	-	(7,500	)	-	979		-	23,093		-
Deductions for surrender charges (note 2d)		-		-	-		-	-		-	-		-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(12,287	)	-	(7,426	)	-	(14,737	)	-	(9,396	)	-
Asset charges (note 3):
FPVUL & VEL contracts		(693	)	-	(394	)	-	(705	)	-	(731	)	-
MSP contracts		(4	)	-	(136	)	-	-		-	-		-
SL contracts or LSFP contracts		(338	)	-	(52	)	-	(98	)	-	-		-
Adjustments to maintain reserves		(31	)	-	(29	)	-	(22	)	-	(21	)	-
Net equity transactions		520,583		-	543,527		-	643,711		-	338,087		-
Net change in contract owners’ equity		281,689		-	520,945		-	515,815		-	300,234		-
Contract owners’ equity beginning of period		-		-	-		-	-		-	-		-
Contract owners’ equity end of period	$	281,689		-	520,945		-	515,815		-	300,234		-
CHANGES IN UNITS:
Beginning units		-		-	-		-	-		-	-		-
Units purchased		46,904		-	67,066		-	73,124		-	33,956		-
Units redeemed		(3,000	)	-	(1,965	)	-	(2,110	)	-	(1,118	)	-
Ending units		43,904		-	65,101		-	71,014		-	32,838		-

(Continued)

48

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	NVCMD1				NVCMA1			NVCMC1			NVCBD1
	2008			2007	2008		2007	2008		2007	2008		2007
Investment activity:
Net investment income (loss)	$	7,925		-	16,044		-	2,407		-	3,407		-
Realized gain (loss) on investments		(38,022	)	-	(63,212	)	-	(1,558	)	-	(1,752	)	-
Change in unrealized gain (loss) on investments		(84,562	)	-	(340,993	)	-	3,794		-	2,744		-
Reinvested capital gains		4,218		-	17,352		-	840		-	-		-
Net increase (decrease) in contract owners’ equity resulting from operations		(110,441	)	-	(370,809	)	-	5,483		-	4,399		-
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		188,465		-	49,267		-	4,548		-	1,178		-
Transfers between funds		700,762		-	1,894,471		-	284,050		-	208,321		-
Surrenders (note 6)		(134,828	)	-	-		-	-		-	-		-
Death benefits (note 4)		-		-	-		-	-		-	-		-
Net policy repayments (loans) (note 5)		100		-	(2,370	)	-	(3,747	)	-	(570	)	-
Deductions for surrender charges (note 2d)		-		-	-		-	(4,593	)	-	-		-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(8,638	)	-	(24,253	)	-	(2,141	)	-	(2,552	)	-
Asset charges (note 3):
FPVUL & VEL contracts		(826	)	-	(2,393	)	-	(140	)	-	(148	)	-
MSP contracts		(68	)	-	(861	)	-	(140	)	-	-		-
SL contracts or LSFP contracts		(52	)	-	(144	)	-	(8	)	-	(11	)	-
Adjustments to maintain reserves		(35	)	-	(33	)	-	(4	)	-	(18	)	-
Net equity transactions		744,880		-	1,913,684		-	277,825		-	206,200		-
Net change in contract owners’ equity		634,439		-	1,542,875		-	283,308		-	210,599		-
Contract owners’ equity beginning of period		-		-	-		-	-		-	-		-
Contract owners’ equity end of period	$	634,439		-	1,542,875		-	283,308		-	210,599		-
CHANGES IN UNITS:
Beginning units		-		-	-		-	-		-	-		-
Units purchased		84,626		-	227,730		-	35,201		-	21,515		-
Units redeemed		(1,442	)	-	(4,025	)	-	(1,377	)	-	(339	)	-
Ending units		83,184		-	223,705		-	33,824		-	21,176		-

(Continued)

49

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	HIBF					HIBF3				GEM				GEM3
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	1,742,986		1,847,429		681,184		959,716		357,336		191,515		199,623		127,640
Realized gain (loss) on investments		(1,523,883	)	(275,677	)	(1,172,106	)	(20,268	)	(251,665	)	3,567,602		871,367		1,070,771
Change in unrealized gain (loss) on investments		(6,224,368	)	(819,124	)	(1,576,546	)	(686,065	)	(36,615,968	)	6,433,912		(17,624,735	)	3,392,089
Reinvested capital gains		-		-		-		-		8,032,732		3,989,041		3,501,526		1,739,899
Net increase (decrease) in contract owners’ equity resulting from operations		(6,005,265	)	752,628		(2,067,468	)	253,383		(28,477,565	)	14,182,070		(13,052,219	)	6,330,399
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		1,542,758		1,570,797		843,452		3,084,891		1,399,023		2,731,542		1,603,349		1,646,140
Transfers between funds		(2,315,421	)	(1,813,513	)	(7,516,602	)	4,741,260		(3,786,944	)	7,859,137		(2,562,510	)	5,271,428
Surrenders (note 6)		(605,538	)	(1,508,223	)	(458,680	)	(198,254	)	(2,068,596	)	(1,492,202	)	(869,785	)	(455,074	)
Death benefits (note 4)		(103,419	)	(97,975	)	(10,342	)	(2,985	)	(79,242	)	(14,459	)	(21,966	)	(1,443	)
Net policy repayments (loans) (note 5)		(80,984	)	(400,247	)	(50,003	)	235,147		(187,449	)	(154,392	)	(83,652	)	(225,024	)
Deductions for surrender charges (note 2d)		(13,132	)	(18,575	)	(15,507	)	(19,203	)	(20,263	)	(15,806	)	(45,052	)	(23,711	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(442,939	)	(468,260	)	(407,747	)	(395,169	)	(636,295	)	(594,619	)	(713,914	)	(612,973	)
Asset charges (note 3):
FPVUL & VEL contracts		(18,152	)	(23,264	)	(27,425	)	(23,359	)	(17,800	)	(23,926	)	(48,926	)	(48,062	)
MSP contracts		(1,111	)	(1,340	)	(416	)	(455	)	(995	)	(1,170	)	(2,123	)	(1,368	)
SL contracts or LSFP contracts		(2,817	)	(19,928	)	(4,334	)	(18,059	)	(1,582	)	(2,738	)	(10,895	)	(8,946	)
Adjustments to maintain reserves		(1,005	)	5		(212	)	24		15,550		926		(471	)	125
Net equity transactions		(2,041,760	)	(2,780,523	)	(7,647,816	)	7,403,838		(5,384,593	)	8,292,292		(2,755,945	)	5,541,092
Net change in contract owners’ equity		(8,047,025	)	(2,027,895	)	(9,715,284	)	7,657,221		(33,862,158	)	22,474,362		(15,808,164	)	11,871,491
Contract owners’ equity beginning of period		23,289,264		25,317,159		15,837,576		8,180,355		52,361,635		29,887,273		24,885,515		13,014,024
Contract owners’ equity end of period	$	15,242,239		23,289,264		6,122,292		15,837,576		18,499,477		52,361,635		9,077,351		24,885,515
CHANGES IN UNITS:
Beginning units		1,391,470		1,555,242		1,316,814		701,700		1,441,496		1,195,438		938,196		714,108
Units purchased		413,149		228,236		132,968		692,490		165,155		515,106		120,082		282,228
Units redeemed		(537,987	)	(392,008	)	(741,826	)	(77,376	)	(397,511	)	(269,048	)	(246,776	)	(58,140	)
Ending units		1,266,632		1,391,470		707,956		1,316,814		1,209,140		1,441,496		811,502		938,196

(Continued)

50

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	GVGU1					GIG				GIG3			NVIE6
	2008			2007		2008		2007		2008		2007	2008		2007
Investment activity:
Net investment income (loss)	$	134,523		124,359		125,409		35,653		1,697		-	566		-
Realized gain (loss) on investments		(471,670	)	265,669		351,355		1,390,839		(25,923	)	-	(3,304	)	-
Change in unrealized gain (loss) on investments		(1,543,783	)	(654,732	)	(6,955,844	)	(15,627	)	(75,860	)	-	(30,880	)	-
Reinvested capital gains		56,626		1,129,147		1,330,793		800,247		24,894		-	7,996		-
Net increase (decrease) in contract owners’ equity resulting from operations		(1,824,304	)	864,443		(5,148,287	)	2,211,112		(75,192	)	-	(25,622	)	-
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		281,860		361,010		591,618		355,820		44,198		-	24		-
Transfers between funds		(1,063,064	)	1,088,154		(1,235,463	)	4,001,925		214,521		-	63,441		-
Surrenders (note 6)		(245,241	)	(279,979	)	(422,321	)	(3,252,295	)	(44,286	)	-	(80	)	-
Death benefits (note 4)		(2,180	)	(1,120	)	(43,904	)	(9,980	)	-		-	-		-
Net policy repayments (loans) (note 5)		(23,769	)	(68,907	)	(50,011	)	(85,756	)	-		-	-		-
Deductions for surrender charges (note 2d)		(9,136	)	(4,429	)	(7,581	)	(50,862	)	-		-	-		-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(140,191	)	(141,759	)	(217,650	)	(223,485	)	(2,037	)	-	(639	)	-
Asset charges (note 3):
FPVUL & VEL contracts		(9,331	)	(11,401	)	(16,478	)	(19,502	)	(146	)	-	(10	)	-
MSP contracts		(613	)	(600	)	(428	)	(508	)	(1	)	-	-		-
SL contracts or LSFP contracts		(968	)	(1,639	)	(5,545	)	(5,117	)	(205	)	-	(94	)	-
Adjustments to maintain reserves		(321	)	37		(233	)	71		(17	)	-	(12	)	-
Net equity transactions		(1,212,954	)	939,367		(1,407,996	)	710,310		212,027		-	62,630		-
Net change in contract owners’ equity		(3,037,258	)	1,803,810		(6,556,283	)	2,921,422		136,835		-	37,008		-
Contract owners’ equity beginning of period		6,157,955		4,354,145		12,580,078		9,658,656		-		-	-		-
Contract owners’ equity end of period	$	3,120,697		6,157,955		6,023,795		12,580,078		136,835		-	37,008		-
CHANGES IN UNITS:
Beginning units		250,190		212,848		738,650		720,712		-		-	-		-
Units purchased		20,578		83,272		113,143		287,828		25,218		-	6,830		-
Units redeemed		(81,415	)	(45,930	)	(194,909	)	(269,890	)	(415	)	-	(111	)	-
Ending units		189,353		250,190		656,884		738,650		24,803		-	6,719		-

(Continued)

51

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	GEF					GVGF1				GBF				CAF
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	38,350		25,298		57,795		161,510		4,891,347		4,274,399		41,011		29,429
Realized gain (loss) on investments		410,146		429,789		(1,471,698	)	49,785		(390,883	)	(1,401,642	)	126,935		530,463
Change in unrealized gain (loss) on investments		(4,484,104	)	692,082		(463,964	)	(968,313	)	4,017,269		3,759,402		(7,585,727	)	2,553,716
Reinvested capital gains		1,004,518		-		-		695,341		-		-		-		-
Net increase (decrease) in contract owners’ equity resulting from operations		(3,031,090	)	1,147,169		(1,877,867	)	(61,677	)	8,517,733		6,632,159		(7,417,781	)	3,113,608
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		279,793		398,968		142,360		205,922		7,697,431		8,287,508		1,714,602		1,964,117
Transfers between funds		(1,083,159	)	1,254,688		(830,954	)	96,155		24,527,320		900,184		(261,433	)	543,825
Surrenders (note 6)		(222,560	)	(455,894	)	(117,660	)	(311,443	)	(8,332,389	)	(9,036,984	)	(902,395	)	(1,211,517	)
Death benefits (note 4)		(27,808	)	(8,994	)	(26,781	)	(9,970	)	(295,169	)	(88,161	)	(39,801	)	(53,928	)
Net policy repayments (loans) (note 5)		(33,823	)	(59,790	)	(2,571	)	1,478		(865,916	)	(263,254	)	(156,340	)	(244,672	)
Deductions for surrender charges (note 2d)		(8,857	)	(12,965	)	(8,479	)	(6,675	)	(112,385	)	(193,504	)	(24,712	)	(51,255	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(239,569	)	(263,167	)	(113,837	)	(147,497	)	(3,220,456	)	(2,712,671	)	(1,111,786	)	(1,160,744	)
Asset charges (note 3):
FPVUL & VEL contracts		(15,963	)	(20,402	)	(4,681	)	(6,986	)	(126,343	)	(119,155	)	(62,541	)	(75,831	)
MSP contracts		(488	)	(515	)	-		(1	)	(10,744	)	(11,699	)	(1,813	)	(2,163	)
SL contracts or LSFP contracts		(1,874	)	(2,448	)	(1,186	)	(1,553	)	(54,621	)	(35,026	)	(6,353	)	(8,014	)
Adjustments to maintain reserves		(286	)	8		(129	)	(64	)	19,268		154		(338	)	193
Net equity transactions		(1,354,594	)	829,489		(963,918	)	(180,634	)	19,225,996		(3,272,608	)	(852,910	)	(299,990	)
Net change in contract owners’ equity		(4,385,684	)	1,976,658		(2,841,785	)	(242,311	)	27,743,729		3,359,551		(8,270,691	)	2,813,618
Contract owners’ equity beginning of period		7,719,100		5,742,442		4,645,360		4,887,671		101,701,255		98,341,704		19,583,880		16,770,262
Contract owners’ equity end of period	$	3,333,416		7,719,100		1,803,575		4,645,360		129,444,984		101,701,255		11,313,189		19,583,880
CHANGES IN UNITS:
Beginning units		374,384		327,572		237,888		247,374		6,570,388		6,787,556		2,036,724		2,041,710
Units purchased		18,123		84,749		25,052		41,154		2,122,142		939,393		255,721		409,216
Units redeemed		(107,369	)	(37,937	)	(90,985	)	(50,640	)	(910,652	)	(1,156,561	)	(372,676	)	(414,202	)
Ending units		285,138		374,384		171,955		237,888		7,781,878		6,570,388		1,919,769		2,036,724

(Continued)

52

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	GVGH1					GVGHS				GVIX2				GVIX6
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	4,641		(1,920	)	7,181		2,051		18,928		20,166		13,096		8,079
Realized gain (loss) on investments		(30,467	)	31,789		(133,555	)	86,218		(203,996	)	(887	)	(34,287	)	14,607
Change in unrealized gain (loss) on investments		(1,118,755	)	339,170		(952,956	)	196,615		(339,766	)	(12,435	)	(362,215	)	4,283
Reinvested capital gains		230,802		71,596		250,351		55,688		1,405		4,192		1,033		1,322
Net increase (decrease) in contract owners’ equity resulting from operations		(913,779	)	440,635		(828,979	)	340,572		(523,429	)	11,036		(382,373	)	28,291
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		35,192		189,628		330,123		431,108		103,003		51,510		94,436		83,018
Transfers between funds		(1,029,342	)	732,613		610,583		(240,373	)	(55,449	)	2,181,326		211,758		358,286
Surrenders (note 6)		(72,454	)	(97,194	)	(289,350	)	(158,260	)	(1,061,320	)	-		(11,568	)	(14,557	)
Death benefits (note 4)		(5,587	)	(1,058	)	-		-		-		-		-		-
Net policy repayments (loans) (note 5)		(25,011	)	(14,439	)	111,163		48,471		-		-		(17,200	)	(5,875	)
Deductions for surrender charges (note 2d)		(3,649	)	(6,511	)	(6,977	)	(11,534	)	-		-		(53	)	-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(74,760	)	(81,639	)	(111,452	)	(112,012	)	(29,625	)	(21,286	)	(42,428	)	(28,927	)
Asset charges (note 3):
FPVUL & VEL contracts		(4,036	)	(5,409	)	(8,538	)	(9,993	)	-		-		(1,453	)	(1,249	)
MSP contracts		(187	)	(211	)	(65	)	(21	)	-		-		(389	)	(273	)
SL contracts or LSFP contracts		(1,039	)	(1,209	)	(1,426	)	(1,446	)	-		-		(724	)	(551	)
Adjustments to maintain reserves		(1,418	)	47		(193	)	3		(75	)	5		(152	)	25
Net equity transactions		(1,182,291	)	714,617		633,868		(54,057	)	(1,043,466	)	2,211,555		232,227		389,897
Net change in contract owners’ equity		(2,096,070	)	1,155,252		(195,111	)	286,515		(1,566,895	)	2,222,591		(150,146	)	418,188
Contract owners’ equity beginning of period		4,686,151		3,530,899		2,632,640		2,346,125		2,222,591		-		641,359		223,171
Contract owners’ equity end of period	$	2,590,081		4,686,151		2,437,529		2,632,640		655,696		2,222,591		491,213		641,359
CHANGES IN UNITS:
Beginning units		304,564		259,242		210,752		212,658		219,734		-		53,368		20,334
Units purchased		57,269		91,165		80,217		42,190		29,148		221,814		34,188		36,532
Units redeemed		(136,833	)	(45,843	)	(29,986	)	(44,096	)	(134,493	)	(2,080	)	(15,711	)	(3,498	)
Ending units		225,000		304,564		260,983		210,752		114,389		219,734		71,845		53,368

(Continued)

53

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	GVIDA					GVIDC				GVIDM				GVDMA
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	599,619		583,599		668,295		473,445		1,853,394		1,770,158		1,899,537		1,778,175
Realized gain (loss) on investments		(697,871	)	975,330		(179,388	)	18,973		98,527		1,399,355		(605,320	)	1,445,009
Change in unrealized gain (loss) on investments		(18,129,999	)	(1,210,646	)	(2,270,607	)	(111,573	)	(24,869,374	)	(729,998	)	(37,181,566	)	(491,544	)
Reinvested capital gains		5,187,862		960,583		451,853		324,884		5,784,847		1,019,405		8,097,876		1,501,624
Net increase (decrease) in contract owners’ equity resulting from operations		(13,040,389	)	1,308,866		(1,329,847	)	705,729		(17,132,606	)	3,458,920		(27,789,473	)	4,233,264
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		4,061,628		4,274,226		845,699		762,710		7,885,090		8,403,771		11,441,272		11,762,349
Transfers between funds		(935,195	)	7,452,537		12,150,512		1,114,999		2,033,029		6,307,955		166,766		10,270,896
Surrenders (note 6)		(1,269,009	)	(925,022	)	(317,058	)	(239,255	)	(4,171,435	)	(2,212,436	)	(2,748,548	)	(3,380,536	)
Death benefits (note 4)		(14,150	)	(56,081	)	(10,704	)	(84,565	)	(176,294	)	(669,579	)	(18,757	)	(73,357	)
Net policy repayments (loans) (note 5)		(252,946	)	(327,955	)	(50,732	)	(93,495	)	(767,488	)	(278,141	)	(800,048	)	(644,778	)
Deductions for surrender charges (note 2d)		(190,612	)	(103,250	)	(18,675	)	(22,485	)	(388,688	)	(207,181	)	(322,644	)	(311,493	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(1,503,074	)	(1,456,936	)	(642,562	)	(562,244	)	(3,420,054	)	(3,255,275	)	(4,201,771	)	(4,002,541	)
Asset charges (note 3):
FPVUL & VEL contracts		(79,423	)	(86,816	)	(23,066	)	(20,865	)	(176,935	)	(189,776	)	(262,265	)	(280,192	)
MSP contracts		(6,184	)	(5,860	)	(7,647	)	(7,024	)	(36,103	)	(27,626	)	(19,906	)	(19,829	)
SL contracts or LSFP contracts		(5,776	)	(5,416	)	(5,054	)	(4,601	)	(25,901	)	(24,957	)	(36,153	)	(30,748	)
Adjustments to maintain reserves		(818	)	422		(639	)	(4	)	(561	)	(45	)	(441	)	58
Net equity transactions		(195,559	)	8,759,849		11,920,074		843,171		754,660		7,846,710		3,197,505		13,289,829
Net change in contract owners’ equity		(13,235,948	)	10,068,715		10,590,227		1,548,900		(16,377,946	)	11,305,630		(24,591,968	)	17,523,093
Contract owners’ equity beginning of period		35,087,720		25,019,005		14,644,494		13,095,594		73,351,574		62,045,944		85,190,990		67,667,897
Contract owners’ equity end of period	$	21,851,772		35,087,720		25,234,721		14,644,494		56,973,628		73,351,574		60,599,022		85,190,990
CHANGES IN UNITS:
Beginning units		2,105,240		1,589,760		1,124,346		1,057,738		4,941,260		4,414,294		5,315,958		4,480,646
Units purchased		406,529		783,514		1,089,358		179,883		1,134,396		1,225,151		1,145,968		1,508,816
Units redeemed		(435,041	)	(268,034	)	(137,169	)	(113,275	)	(1,077,828	)	(698,185	)	(950,346	)	(673,504	)
Ending units		2,076,728		2,105,240		2,076,535		1,124,346		4,997,828		4,941,260		5,511,580		5,315,958

(Continued)

54

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	GVDMC					BF				NVLCP1			SGRF
	2008			2007		2008		2007		2008		2007	2008		2007
Investment activity:
Net investment income (loss)	$	792,538		924,969		383,052		372,176		1,613		-	(2,953	)	(4,547	)
Realized gain (loss) on investments		(1,143,453	)	335,326		(61,898	)	772,749		(234	)	-	413,441		1,051,935
Change in unrealized gain (loss) on investments		(4,816,383	)	(460,314	)	(6,090,269	)	(829,543	)	4,089		-	(7,610,626	)	474,143
Reinvested capital gains		959,038		847,408		1,615,670		472,649		-		-	-		-
Net increase (decrease) in contract owners’ equity resulting from operations		(4,208,260	)	1,647,389		(4,153,445	)	788,031		5,468		-	(7,200,138	)	1,521,531
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		4,900,897		6,780,776		1,052,975		1,134,991		230		-	1,115,813		1,924,858
Transfers between funds		(17,121,796	)	2,924,146		(1,782,086	)	(327,203	)	130,414		-	(1,251,125	)	(1,256,086	)
Surrenders (note 6)		(603,425	)	(609,466	)	(1,076,197	)	(595,074	)	-		-	(1,098,547	)	(916,472	)
Death benefits (note 4)		(13,524	)	(143,638	)	(205,108	)	(67,754	)	-		-	(72,248	)	(74,747	)
Net policy repayments (loans) (note 5)		(215,508	)	(21,165	)	(19,186	)	(140,471	)	-		-	(269,843	)	(137,133	)
Deductions for surrender charges (note 2d)		(25,774	)	(53,616	)	(16,932	)	(23,557	)	-		-	(35,685	)	(49,116	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(1,049,986	)	(973,179	)	(669,162	)	(678,947	)	(1,297	)	-	(724,726	)	(838,691	)
Asset charges (note 3):
FPVUL & VEL contracts		(43,260	)	(43,994	)	(35,434	)	(40,923	)	(70	)	-	(41,647	)	(54,459	)
MSP contracts		(17,084	)	(13,646	)	(1,427	)	(2,172	)	-		-	(1,178	)	(1,650	)
SL contracts or LSFP contracts		(9,954	)	(7,473	)	(8,243	)	(11,404	)	-		-	(6,027	)	(8,354	)
Adjustments to maintain reserves		(959	)	61		535		60		(12	)	-	(361	)	(2	)
Net equity transactions		(14,200,373	)	7,838,806		(2,760,265	)	(752,454	)	129,265		-	(2,385,574	)	(1,411,852	)
Net change in contract owners’ equity		(18,408,633	)	9,486,195		(6,913,710	)	35,577		134,733		-	(9,585,712	)	109,679
Contract owners’ equity beginning of period		35,564,678		26,078,483		17,440,940		17,405,363		-		-	17,531,524		17,421,845
Contract owners’ equity end of period	$	17,156,045		35,564,678		10,527,230		17,440,940		134,733		-	7,945,812		17,531,524
CHANGES IN UNITS:
Beginning units		2,554,760		1,976,998		1,263,008		1,315,664		-		-	1,115,074		1,217,840
Units purchased		620,805		769,370		100,580		162,528		13,689		-	130,643		123,380
Units redeemed		(1,738,297	)	(191,608	)	(345,069	)	(215,184	)	(144	)	-	(315,662	)	(226,146	)
Ending units		1,437,268		2,554,760		1,018,519		1,263,008		13,545		-	930,055		1,115,074

(Continued)

55

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	MCIF					SAM				SAM5				NVMIG3
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	694,248		991,682		2,574,603		5,446,932		6,819,754		15,711,908		7		-
Realized gain (loss) on investments		143,798		7,103,961		-		-		-		-		(3,454	)	-
Change in unrealized gain (loss) on investments		(29,419,372	)	(4,305,215	)	-		-		-		-		(2,935	)	-
Reinvested capital gains		3,794,309		2,350,170		-		-		-		-		-		-
Net increase (decrease) in contract owners’ equity resulting from operations		(24,787,017	)	6,140,598		2,574,603		5,446,932		6,819,754		15,711,908		(6,382	)	-
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		4,733,840		6,557,070		29,939,833		42,302,829		77,654,445		68,812,070		10,640		-
Transfers between funds		(6,359,556	)	(6,293,593	)	19,728,779		(16,434,437	)	(14,992,644	)	(45,150,872	)	3,578		-
Surrenders (note 6)		(6,808,352	)	(7,584,629	)	(28,701,969	)	(14,968,887	)	(25,597,209	)	(18,917,961	)	-		-
Death benefits (note 4)		(101,899	)	(191,521	)	(783,164	)	(393,264	)	(351,728	)	(450,281	)	-		-
Net policy repayments (loans) (note 5)		(276,542	)	(1,428,199	)	(2,357,126	)	(549,287	)	(11,219,758	)	(849,515	)	(209	)	-
Deductions for surrender charges (note 2d)		(90,842	)	(92,784	)	(707,143	)	(850,636	)	-		-		-		-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(1,757,256	)	(2,047,553	)	(7,543,989	)	(7,268,391	)	(5,616,989	)	(4,767,447	)	(780	)	-
Asset charges (note 3):
FPVUL & VEL contracts		(96,141	)	(117,548	)	(399,813	)	(380,951	)	-		-		(12	)	-
MSP contracts		(1,958	)	(2,326	)	(31,654	)	(30,308	)	-		-		(4	)	-
SL contracts or LSFP contracts		(20,299	)	(30,345	)	(105,490	)	(99,650	)	-		-		(14	)	-
Adjustments to maintain reserves		2,900		31		(887	)	(519	)	(12,128	)	(415	)	(20	)	-
Net equity transactions		(10,776,105	)	(11,231,397	)	9,037,377		1,326,499		19,863,989		(1,324,421	)	13,179		-
Net change in contract owners’ equity		(35,563,122	)	(5,090,799	)	11,611,980		6,773,431		26,683,743		14,387,487		6,797		-
Contract owners’ equity beginning of period		76,147,306		81,238,105		122,237,011		115,463,580		345,949,863		331,562,376		-		-
Contract owners’ equity end of period	$	40,584,184		76,147,306		133,848,991		122,237,011		372,633,606		345,949,863		6,797		-
CHANGES IN UNITS:
Beginning units		3,397,782		3,900,284		8,863,336		8,783,438		30,492,136		30,574,890		-		-
Units purchased		483,944		708,130		4,725,029		3,749,887		10,305,999		9,127,693		2,222		-
Units redeemed		(1,044,511	)	(1,210,632	)	(4,100,944	)	(3,669,989	)	(8,580,286	)	(9,210,447	)	(1,115	)	-
Ending units		2,837,215		3,397,782		9,487,421		8,863,336		32,217,849		30,492,136		1,107		-

(Continued)

56

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	GVDIVI					GVDIV3				NVMLG1			NVMLV1
	2008			2007		2008		2007		2008		2007	2008		2007
Investment activity:
Net investment income (loss)	$	28,833		53,925		128,039		209,918		51		-	1,065		-
Realized gain (loss) on investments		(76,550	)	180,626		(157,651	)	320,183		(2,528	)	-	(2,654	)	-
Change in unrealized gain (loss) on investments		(1,132,458	)	(315,435	)	(5,223,038	)	(931,852	)	(7,223	)	-	(9,985	)	-
Reinvested capital gains		240,731		181,307		1,087,474		679,607		-		-	-		-
Net increase (decrease) in contract owners’ equity resulting from operations		(939,444	)	100,423		(4,165,176	)	277,856		(9,700	)	-	(11,574	)	-
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		216		-		780,491		1,270,903		19,876		-	12,274		-
Transfers between funds		(111,859	)	(793,279	)	(399,069	)	977,584		6,749		-	241,887		-
Surrenders (note 6)		(89,054	)	(61,854	)	(461,394	)	(407,921	)	-		-	-		-
Death benefits (note 4)		-		-		-		(29,396	)	-		-	-		-
Net policy repayments (loans) (note 5)		(18,779	)	(19,962	)	(66,631	)	(104,054	)	(709	)	-	(484	)	-
Deductions for surrender charges (note 2d)		(6,815	)	(6,409	)	(22,189	)	(37,936	)	-		-	-		-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(65,626	)	(92,945	)	(329,351	)	(379,667	)	(790	)	-	(1,816	)	-
Asset charges (note 3):
FPVUL & VEL contracts		(5,356	)	(8,659	)	(24,696	)	(32,244	)	(31	)	-	(43	)	-
MSP contracts		(221	)	(425	)	(308	)	(432	)	-		-	-		-
SL contracts or LSFP contracts		(993	)	(1,457	)	(4,175	)	(4,686	)	(8	)	-	(82	)	-
Adjustments to maintain reserves		(221	)	(53	)	(228	)	24		(4	)	-	(17	)	-
Net equity transactions		(298,708	)	(985,043	)	(527,550	)	1,252,175		25,083		-	251,719		-
Net change in contract owners’ equity		(1,238,152	)	(884,620	)	(4,692,726	)	1,530,031		15,383		-	240,145		-
Contract owners’ equity beginning of period		2,225,629		3,110,249		9,626,479		8,096,448		-		-	-		-
Contract owners’ equity end of period	$	987,477		2,225,629		4,933,753		9,626,479		15,383		-	240,145		-
CHANGES IN UNITS:
Beginning units		93,770		134,862		665,320		575,980		-		-	-		-
Units purchased		-		-		91,296		169,451		4,652		-	39,465		-
Units redeemed		(16,274	)	(41,092	)	(121,243	)	(80,111	)	(2,235	)	-	(1,689	)	-
Ending units		77,496		93,770		635,373		665,320		2,417		-	37,776		-

(Continued)

57

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	NVMMG1				NVMMV1			NVMMV2			SCGF
	2008			2007	2008		2007	2008		2007	2008		2007
Investment activity:
Net investment income (loss)	$	(58	)	-	11		-	49		-	(13,425	)	(21,368	)
Realized gain (loss) on investments		(32,124	)	-	-		-	(856	)	-	(1,140,207	)	1,331,533
Change in unrealized gain (loss) on investments		(1,417	)	-	81		-	(160	)	-	(9,003,247	)	891,419
Reinvested capital gains		-		-	-		-	-		-	-		-
Net increase (decrease) in contract owners’ equity resulting from operations		(33,599	)	-	92		-	(967	)	-	(10,156,879	)	2,201,584
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		63,943		-	1,219		-	3,440		-	1,553,738		2,183,394
Transfers between funds		711		-	1,115		-	3,967		-	(2,396,104	)	(1,419,241	)
Surrenders (note 6)		(27,035	)	-	-		-	(743	)	-	(658,214	)	(1,741,558	)
Death benefits (note 4)		-		-	-		-	-		-	(30,157	)	(44,026	)
Net policy repayments (loans) (note 5)		-		-	-		-	-		-	(170,596	)	(239,725	)
Deductions for surrender charges (note 2d)		-		-	-		-	-		-	(46,082	)	(42,924	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(982	)	-	-		-	(168	)	-	(634,278	)	(761,772	)
Asset charges (note 3):
FPVUL & VEL contracts		(20	)	-	-		-	(6	)	-	(36,367	)	(49,431	)
MSP contracts		-		-	-		-	-		-	(859	)	(1,244	)
SL contracts or LSFP contracts		(8	)	-	-		-	(3	)	-	(3,848	)	(7,117	)
Adjustments to maintain reserves		(8	)	-	(5	)	-	(12	)	-	(86	)	(11	)
Net equity transactions		36,601		-	2,329		-	6,475		-	(2,422,853	)	(2,123,655	)
Net change in contract owners’ equity		3,002		-	2,421		-	5,508		-	(12,579,732	)	77,929
Contract owners’ equity beginning of period		-		-	-		-	-		-	23,009,414		22,931,485
Contract owners’ equity end of period	$	3,002		-	2,421		-	5,508		-	10,429,682		23,009,414
CHANGES IN UNITS:
Beginning units		-		-	-		-	-		-	1,216,658		1,330,056
Units purchased		1,035		-	359		-	1,159		-	131,847		259,030
Units redeemed		(557	)	-	(1	)	-	(344	)	-	(319,439	)	(372,428	)
Ending units		478		-	358		-	815		-	1,029,066		1,216,658

(Continued)

58

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	SCVF					SCF				TRF				GVUS1
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	488,505		783,828		554,177		(52,776	)	4,803,593		5,037,157		12,832		21,624
Realized gain (loss) on investments		(6,624,860	)	3,271,928		(5,426,956	)	1,774,957		1,356,893		36,597,476		(249,100	)	4,045
Change in unrealized gain (loss) on investments		(10,935,610	)	(18,612,733	)	(45,734,209	)	(13,324,530	)	(245,372,431	)	(23,147,644	)	(895,663	)	(179,532	)
Reinvested capital gains		-		9,528,527		15,926,545		13,780,217		59,388,629		26,261,593		-		322,938
Net increase (decrease) in contract owners’ equity resulting from operations		(17,071,965	)	(5,028,450	)	(34,680,443	)	2,177,868		(179,823,316	)	44,748,582		(1,131,931	)	169,075
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		3,305,026		5,598,766		5,521,541		7,676,882		4,070,480		5,052,311		57,554		101,207
Transfers between funds		(12,110,612	)	(8,336,203	)	(5,569,853	)	(3,150,515	)	(743,427	)	(130,747,319	)	(221,220	)	764,473
Surrenders (note 6)		(2,993,883	)	(4,285,947	)	(4,451,955	)	(5,980,795	)	(2,688,496	)	(2,255,466	)	(147,365	)	(37,183	)
Death benefits (note 4)		(164,811	)	(195,551	)	(163,695	)	(299,943	)	(778,607	)	(2,784,096	)	(165	)	(691	)
Net policy repayments (loans) (note 5)		(304,393	)	(779,559	)	(686,477	)	(329,828	)	(345,571	)	(567,731	)	12,696		(22,926	)
Deductions for surrender charges (note 2d)		(106,801	)	(126,970	)	(92,000	)	(134,196	)	(102,267	)	(140,442	)	(3,198	)	(805	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(1,847,814	)	(2,391,630	)	(2,417,473	)	(2,748,147	)	(4,997,680	)	(5,870,177	)	(43,175	)	(42,996	)
Asset charges (note 3):
FPVUL & VEL contracts		(117,889	)	(159,916	)	(124,091	)	(159,675	)	(165,533	)	(206,960	)	(3,105	)	(3,484	)
MSP contracts		(3,811	)	(5,301	)	(3,723	)	(5,500	)	(11,079	)	(14,530	)	-		(6	)
SL contracts or LSFP contracts		(14,864	)	(24,160	)	(20,380	)	(26,356	)	(13,636	)	(17,649	)	(779	)	(1,081	)
Adjustments to maintain reserves		1,021		211		7,177		(1,294	)	(4,482	)	411		(167	)	(20	)
Net equity transactions		(14,358,831	)	(10,706,260	)	(8,000,929	)	(5,159,367	)	(5,780,298	)	(137,551,648	)	(348,924	)	756,488
Net change in contract owners’ equity		(31,430,796	)	(15,734,710	)	(42,681,372	)	(2,981,499	)	(185,603,614	)	(92,803,066	)	(1,480,855	)	925,563
Contract owners’ equity beginning of period		64,578,678		80,313,388		98,301,764		101,283,263		435,927,433		528,730,499		2,471,158		1,545,595
Contract owners’ equity end of period	$	33,147,882		64,578,678		55,620,392		98,301,764		250,323,819		435,927,433		990,303		2,471,158
CHANGES IN UNITS:
Beginning units		2,607,354		3,035,848		4,590,160		4,807,692		31,215,436		41,070,072		137,750		95,970
Units purchased		169,366		348,871		617,632		775,425		357,645		361,685		17,190		53,784
Units redeemed		(809,590	)	(777,365	)	(995,226	)	(992,957	)	(834,600	)	(10,216,321	)	(44,701	)	(12,004	)
Ending units		1,967,130		2,607,354		4,212,566		4,590,160		30,738,481		31,215,436		110,239		137,750

(Continued)

59

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	NVNMO1				NVNSR1			NVSTB2			GGTC
	2008			2007	2008		2007	2008		2007	2008		2007
Investment activity:
Net investment income (loss)	$	-		-	108		-	10,320		-	(8,064	)	(8,401	)
Realized gain (loss) on investments		(7,738	)	-	(212	)	-	1,106		-	(141,574	)	450,153
Change in unrealized gain (loss) on investments		(168	)	-	(12,894	)	-	(996	)	-	(3,735,503	)	432,229
Reinvested capital gains		-		-	-		-	-		-	730,340		-
Net increase (decrease) in contract owners’ equity resulting from operations		(7,906	)	-	(12,998	)	-	10,430		-	(3,154,801	)	873,981
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		140		-	2,268		-	1,296		-	131,001		213,992
Transfers between funds		8,983		-	42,336		-	1,073,433		-	(748,104	)	407,614
Surrenders (note 6)		-		-	-		-	(114,817	)	-	(95,819	)	(71,579	)
Death benefits (note 4)		-		-	-		-	-		-	(16,970	)	(16,271	)
Net policy repayments (loans) (note 5)		-		-	-		-	-		-	(33,638	)	(32,280	)
Deductions for surrender charges (note 2d)		-		-	-		-	(1,963	)	-	(8,081	)	(7,102	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(251	)	-	(449	)	-	(7,470	)	-	(113,020	)	(130,148	)
Asset charges (note 3):
FPVUL & VEL contracts		(23	)	-	(23	)	-	(383	)	-	(4,485	)	(6,818	)
MSP contracts		-		-	-		-	-		-	(44	)	(307	)
SL contracts or LSFP contracts		-		-	(1	)	-	(107	)	-	(450	)	(725	)
Adjustments to maintain reserves		(10	)	-	(12	)	-	3,267		-	403		(64	)
Net equity transactions		8,839		-	44,119		-	953,256		-	(889,207	)	356,311
Net change in contract owners’ equity		933		-	31,121		-	963,686		-	(4,044,008	)	1,230,292
Contract owners’ equity beginning of period		-		-	-		-	-		-	6,869,152		5,638,860
Contract owners’ equity end of period	$	933		-	31,121		-	963,686		-	2,825,144		6,869,152
CHANGES IN UNITS:
Beginning units		-		-	-		-	-		-	1,638,454		1,613,876
Units purchased		216		-	5,105		-	108,708		-	258,620		482,115
Units redeemed		(36	)	-	(68	)	-	(11,790	)	-	(585,541	)	(457,537	)
Ending units		180		-	5,037		-	96,918		-	1,311,533		1,638,454

(Continued)

60

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	GGTC3					GVUG1				EIF				MSBF
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	-		-		(4,341	)	(4,713	)	229,855		252,458		1,056,589		894,111
Realized gain (loss) on investments		(249,205	)	106,294		(318,794	)	(7,974	)	(189,392	)	386,501		(1,455,039	)	(46,529	)
Change in unrealized gain (loss) on investments		(1,724,987	)	306,317		(3,986,197	)	1,327,479		(5,113,403	)	(1,615,122	)	(3,180,202	)	145,385
Reinvested capital gains		343,893		-		1,191,538		-		166,922		666,775		358,044		1,101
Net increase (decrease) in contract owners’ equity resulting from operations		(1,630,299	)	412,611		(3,117,794	)	1,314,792		(4,906,018	)	(309,388	)	(3,220,608	)	994,068
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		381,098		505,615		377,441		365,176		995,272		1,390,523		1,625,205		1,688,306
Transfers between funds		(1,027,268	)	1,536,945		(1,455,147	)	966,508		(1,095,713	)	1,111,088		(8,948,419	)	6,600,687
Surrenders (note 6)		(183,023	)	(56,211	)	(276,736	)	(249,522	)	(343,352	)	(767,489	)	(2,198,324	)	(2,352,346	)
Death benefits (note 4)		(3,895	)	(6,894	)	(4,272	)	(6,430	)	(48,102	)	(46,361	)	(15,711	)	(94,429	)
Net policy repayments (loans) (note 5)		6,564		(21,315	)	(26,965	)	(81,603	)	(85,839	)	(124,679	)	22,327		(124,144	)
Deductions for surrender charges (note 2d)		(11,101	)	(4,930	)	(8,842	)	(5,615	)	(35,973	)	(62,327	)	(43,255	)	(28,156	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(122,865	)	(113,213	)	(201,354	)	(192,936	)	(549,379	)	(612,654	)	(615,128	)	(647,554	)
Asset charges (note 3):
FPVUL & VEL contracts		(7,878	)	(8,187	)	(11,618	)	(12,654	)	(38,735	)	(49,353	)	(32,283	)	(34,649	)
MSP contracts		(266	)	(137	)	(488	)	(497	)	(1,487	)	(1,861	)	(1,774	)	(3,112	)
SL contracts or LSFP contracts		(1,680	)	(1,660	)	(1,500	)	(1,995	)	(6,031	)	(7,158	)	(6,937	)	(6,896	)
Adjustments to maintain reserves		(244	)	70		(495	)	84		(284	)	(31	)	(633	)	104
Net equity transactions		(970,558	)	1,830,083		(1,609,976	)	780,515		(1,209,623	)	829,698		(10,214,932	)	4,997,811
Net change in contract owners’ equity		(2,600,857	)	2,242,694		(4,727,770	)	2,095,307		(6,115,641	)	520,310		(13,435,540	)	5,991,879
Contract owners’ equity beginning of period		4,103,710		1,861,016		8,636,840		6,541,533		14,140,535		13,620,225		24,527,533		18,535,654
Contract owners’ equity end of period	$	1,502,853		4,103,710		3,909,070		8,636,840		8,024,894		14,140,535		11,091,993		24,527,533
CHANGES IN UNITS:
Beginning units		249,550		136,014		450,804		417,938		983,392		917,588		1,551,246		1,218,460
Units purchased		35,785		132,102		26,945		102,600		114,968		197,638		132,794		582,515
Units redeemed		(107,582	)	(18,566	)	(129,999	)	(69,734	)	(211,658	)	(131,834	)	(854,061	)	(249,729	)
Ending units		177,753		249,550		347,750		450,804		886,702		983,392		829,979		1,551,246

(Continued)

61

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	NVRE1				AMGP				AMINS				AMCG
	2008			2007	2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	2,895		-	52,323		28,394		-		69,179		(20,752	)	(24,011	)
Realized gain (loss) on investments		(7,493	)	-	607,105		1,423,112		(131,792	)	144,850		2,433,292		2,826,675
Change in unrealized gain (loss) on investments		(38,458	)	-	(5,426,146	)	(490,657	)	(1,655,919	)	(380,354	)	(23,546,784	)	6,405,275
Reinvested capital gains		-		-	386,741		-		(47	)	245,830		-		-
Net increase (decrease) in contract owners’ equity resulting from operations		(43,056	)	-	(4,379,977	)	960,849		(1,787,758	)	79,505		(21,134,244	)	9,207,939
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		8,943		-	533,544		865,049		240,129		358,782		2,145,143		2,615,746
Transfers between funds		149,247		-	(828,918	)	(1,518,839	)	(330,601	)	1,976,152		702,907		215,894
Surrenders (note 6)		-		-	(580,792	)	(831,265	)	(109,755	)	(68,663	)	(2,500,205	)	(2,411,434	)
Death benefits (note 4)		-		-	(1,810	)	(14,398	)	-		-		(94,449	)	(45,413	)
Net policy repayments (loans) (note 5)		(16	)	-	(11,762	)	(98,543	)	(76,321	)	(48,573	)	(149,167	)	(321,555	)
Deductions for surrender charges (note 2d)		-		-	(16,272	)	(33,345	)	(3,815	)	(4,016	)	(78,775	)	(91,950	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(2,038	)	-	(425,209	)	(456,772	)	(128,360	)	(125,872	)	(1,780,702	)	(1,819,681	)
Asset charges (note 3):
FPVUL & VEL contracts		(119	)	-	(28,304	)	(34,369	)	(9,210	)	(10,837	)	(91,519	)	(114,501	)
MSP contracts		(23	)	-	(677	)	(863	)	(622	)	(830	)	(1,799	)	(2,117	)
SL contracts or LSFP contracts		(54	)	-	(2,722	)	(3,821	)	(2,035	)	(1,919	)	(14,571	)	(17,643	)
Adjustments to maintain reserves		(21	)	-	(406	)	8		(18	)	(92	)	(905	)	126
Net equity transactions		155,919		-	(1,363,328	)	(2,127,158	)	(420,608	)	2,074,132		(1,864,042	)	(1,992,528	)
Net change in contract owners’ equity		112,863		-	(5,743,305	)	(1,166,309	)	(2,208,366	)	2,153,637		(22,998,286	)	7,215,411
Contract owners’ equity beginning of period		-		-	12,773,599		13,939,908		4,197,313		2,043,676		49,234,222		42,018,811
Contract owners’ equity end of period	$	112,863		-	7,030,294		12,773,599		1,988,947		4,197,313		26,235,936		49,234,222
CHANGES IN UNITS:
Beginning units		-		-	633,674		760,688		280,340		140,884		2,319,260		2,370,878
Units purchased		20,331		-	59,167		64,818		33,317		162,648		273,625		314,230
Units redeemed		(344	)	-	(141,071	)	(191,832	)	(65,648	)	(23,192	)	(385,761	)	(365,848	)
Ending units		19,987		-	551,770		633,674		248,009		280,340		2,207,124		2,319,260

(Continued)

62

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	AMTP					AMRI				AMRS				AMFAS
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	73,355		124,790		37,123		745		9,627		5,364		(1,252	)	(1,623	)
Realized gain (loss) on investments		(421,355	)	780,824		(505,252	)	33,868		(21,349	)	17,720		(90,339	)	81,135
Change in unrealized gain (loss) on investments		(11,677,741	)	(1,165,305	)	(828,907	)	(28,828	)	(533,333	)	(44,082	)	(721,945	)	(109,895	)
Reinvested capital gains		2,415,975		2,014,528		7,577		20,694		2,094		34,794		57,762		14,207
Net increase (decrease) in contract owners’ equity resulting from operations		(9,609,766	)	1,754,837		(1,289,459	)	26,479		(542,961	)	13,796		(755,774	)	(16,176	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		837,423		1,083,019		56,676		30,871		138,819		166,291		101,816		146,992
Transfers between funds		(1,868,595	)	87,747		2,466,371		425,549		(65,723	)	354,850		(109,239	)	476,028
Surrenders (note 6)		(1,781,243	)	(1,152,951	)	(35,429	)	(24,648	)	(24,804	)	(43,073	)	(31,777	)	(84,650	)
Death benefits (note 4)		(8,738	)	(46,278	)	-		(1,656	)	(11,532	)	-		(1,645	)	(485	)
Net policy repayments (loans) (note 5)		(12,816	)	(215,608	)	(21	)	(2,814	)	1,302		(1,403	)	(3,328	)	(10,951	)
Deductions for surrender charges (note 2d)		(42,668	)	(18,508	)	-		-		(2,907	)	(605	)	(3,025	)	(1,540	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(665,429	)	(721,945	)	(30,345	)	(24,688	)	(41,760	)	(36,655	)	(42,162	)	(42,991	)
Asset charges (note 3):
FPVUL & VEL contracts		(42,886	)	(54,526	)	-		-		(3,872	)	(4,106	)	(2,992	)	(3,587	)
MSP contracts		(1,254	)	(1,624	)	-		-		(94	)	(120	)	(1	)	(9	)
SL contracts or LSFP contracts		(7,616	)	(13,264	)	-		-		(531	)	(575	)	(488	)	(519	)
Adjustments to maintain reserves		(450	)	180		134		(21	)	(180	)	50		(233	)	(20	)
Net equity transactions		(3,594,272	)	(1,053,757	)	2,457,386		402,593		(11,282	)	434,654		(93,074	)	478,268
Net change in contract owners’ equity		(13,204,038	)	701,080		1,167,927		429,072		(554,243	)	448,450		(848,848	)	462,092
Contract owners’ equity beginning of period		21,408,794		20,707,714		850,249		421,177		1,255,217		806,767		2,010,133		1,548,041
Contract owners’ equity end of period	$	8,204,756		21,408,794		2,018,176		850,249		700,974		1,255,217		1,161,285		2,010,133
CHANGES IN UNITS:
Beginning units		1,122,738		1,186,366		80,562		41,094		94,148		62,360		131,640		101,912
Units purchased		82,274		127,991		315,418		54,649		16,313		36,883		20,799		49,468
Units redeemed		(304,393	)	(191,619	)	(42,809	)	(15,181	)	(13,193	)	(5,095	)	(26,750	)	(19,740	)
Ending units		900,619		1,122,738		353,171		80,562		97,268		94,148		125,689		131,640

(Continued)

63

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	AMSRS					OVGR				OVGS3				OVGS
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	78,334		3,373		8,313		101,507		261,264		244,490		845,558		846,098
Realized gain (loss) on investments		98,903		95,838		4,568,473		6,719,902		(289,295	)	407,900		(965,153	)	3,526,168
Change in unrealized gain (loss) on investments		(2,095,483	)	105,082		(62,205,433	)	9,684,670		(9,114,516	)	(391,749	)	(34,242,609	)	(3,673,827	)
Reinvested capital gains		267,832		12,686		-		-		1,150,196		890,130		4,220,261		3,596,308
Net increase (decrease) in contract owners’ equity resulting from operations		(1,650,414	)	216,979		(57,628,647	)	16,506,079		(7,992,351	)	1,150,771		(30,141,943	)	4,294,747
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		309,947		505,485		7,344,776		8,908,934		2,684,561		3,872,113		2,401,717		3,797,108
Transfers between funds		(435,771	)	1,576,590		(310,762	)	(4,903,637	)	(2,059,065	)	695,556		(5,865,197	)	276,478
Surrenders (note 6)		(85,548	)	(161,532	)	(7,454,657	)	(5,455,212	)	(829,253	)	(628,603	)	(1,776,719	)	(2,108,991	)
Death benefits (note 4)		(1,658	)	-		(191,646	)	(201,427	)	(20,918	)	(16,782	)	(148,172	)	(16,525	)
Net policy repayments (loans) (note 5)		(81,048	)	(22,401	)	(1,111,356	)	(969,994	)	3,287		(248,139	)	(262,820	)	(412,767	)
Deductions for surrender charges (note 2d)		(7,506	)	(11,783	)	(162,619	)	(181,339	)	(55,150	)	(52,984	)	(35,786	)	(59,987	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(174,838	)	(158,957	)	(3,654,611	)	(3,830,226	)	(817,887	)	(841,921	)	(1,332,970	)	(1,494,333	)
Asset charges (note 3):
FPVUL & VEL contracts		(11,164	)	(11,046	)	(167,420	)	(208,136	)	(56,150	)	(64,092	)	(50,045	)	(72,352	)
MSP contracts		(1,448	)	(1,270	)	(4,585	)	(6,183	)	(1,449	)	(1,529	)	(1,529	)	(2,218	)
SL contracts or LSFP contracts		(2,360	)	(2,779	)	(22,589	)	(28,295	)	(10,451	)	(11,539	)	(9,177	)	(12,664	)
Adjustments to maintain reserves		(334	)	15		5,396		842		(351	)	687		468		155
Net equity transactions		(491,728	)	1,712,322		(5,730,073	)	(6,874,673	)	(1,162,826	)	2,702,767		(7,080,230	)	(106,097	)
Net change in contract owners’ equity		(2,142,142	)	1,929,301		(63,358,720	)	9,631,406		(9,155,177	)	3,853,538		(37,222,173	)	4,188,650
Contract owners’ equity beginning of period		4,656,655		2,727,354		132,737,253		123,105,847		20,804,678		16,951,140		75,892,307		71,703,657
Contract owners’ equity end of period	$	2,514,513		4,656,655		69,378,533		132,737,253		11,649,501		20,804,678		38,670,134		75,892,307
CHANGES IN UNITS:
Beginning units		254,068		160,134		9,062,720		9,247,300		1,378,496		1,194,348		4,806,202		4,816,044
Units purchased		26,402		115,981		1,590,721		1,701,790		252,195		334,319		500,377		730,054
Units redeemed		(53,924	)	(22,047	)	(1,766,530	)	(1,886,370	)	(340,055	)	(150,171	)	(1,211,508	)	(739,896	)
Ending units		226,546		254,068		8,886,911		9,062,720		1,290,636		1,378,496		4,095,071		4,806,202

(Continued)

64

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	OVHI3					OVHI				OVSC				OVGI
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	58,804		-		149,441		314,323		23,275		15,649		504,633		435,438
Realized gain (loss) on investments		(159,257	)	(6,634	)	(166,191	)	86,244		(97,250	)	167,507		1,138,150		2,488,360
Change in unrealized gain (loss) on investments		(1,000,576	)	(19,298	)	(1,660,237	)	(343,433	)	(2,212,248	)	(459,107	)	(19,355,708	)	(967,352	)
Reinvested capital gains		-		-		-		-		258,437		166,883		2,237,977		-
Net increase (decrease) in contract owners’ equity resulting from operations		(1,101,029	)	(25,932	)	(1,676,987	)	57,134		(2,027,786	)	(109,068	)	(15,474,948	)	1,956,446
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		419,209		709,190		(387	)	1,082,944		450,600		780,405		3,363,400		3,690,819
Transfers between funds		341,131		250,372		(379,904	)	(2,419,418	)	(264,671	)	755,331		(4,055,339	)	(780,458	)
Surrenders (note 6)		(49,336	)	(25,203	)	(66,422	)	(159,395	)	(307,661	)	(104,836	)	(1,730,646	)	(2,533,652	)
Death benefits (note 4)		(226	)	-		(373	)	-		(2,511	)	(12,370	)	(343,056	)	(199,548	)
Net policy repayments (loans) (note 5)		10,055		54,725		(26,706	)	(39,080	)	(1,699	)	(89,390	)	(378,172	)	(281,305	)
Deductions for surrender charges (note 2d)		(3,652	)	(734	)	(5,718	)	(16,904	)	(14,692	)	(11,852	)	(92,080	)	(123,182	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(64,943	)	(21,896	)	(94,620	)	(222,796	)	(213,561	)	(225,202	)	(1,757,515	)	(1,995,539	)
Asset charges (note 3):
FPVUL & VEL contracts		(4,006	)	(1,313	)	(7,083	)	(13,593	)	(15,918	)	(18,899	)	(109,256	)	(140,142	)
MSP contracts		(160	)	(4	)	(240	)	(343	)	(199	)	(265	)	(4,122	)	(5,805	)
SL contracts or LSFP contracts		(1,233	)	(787	)	(907	)	(1,520	)	(2,812	)	(3,019	)	(13,912	)	(17,229	)
Adjustments to maintain reserves		(99	)	92		(245	)	38		(374	)	(18	)	159		35
Net equity transactions		646,740		964,442		(582,605	)	(1,790,066	)	(373,498	)	1,069,885		(5,120,539	)	(2,386,005	)
Net change in contract owners’ equity		(454,289	)	938,510		(2,259,592	)	(1,732,932	)	(2,401,284	)	960,817		(20,595,487	)	(429,559	)
Contract owners’ equity beginning of period		938,510		-		2,689,101		4,422,033		5,475,151		4,514,334		43,847,202		44,276,761
Contract owners’ equity end of period	$	484,221		938,510		429,509		2,689,101		3,073,867		5,475,151		23,251,715		43,847,202
CHANGES IN UNITS:
Beginning units		97,144		-		197,334		324,172		264,706		215,614		3,011,778		3,166,310
Units purchased		162,432		108,703		5		84,130		33,710		74,470		310,596		439,351
Units redeemed		(22,141	)	(11,559	)	(49,562	)	(210,968	)	(59,382	)	(25,378	)	(745,600	)	(593,883	)
Ending units		237,435		97,144		147,777		197,334		239,034		264,706		2,576,774		3,011,778

(Continued)

65

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	OVHI3					OVHI				OVSC				OVGI
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	58,804		-		149,441		314,323		23,275		15,649		504,633		435,438
Realized gain (loss) on investments		(159,257	)	(6,634	)	(166,191	)	86,244		(97,250	)	167,507		1,138,150		2,488,360
Change in unrealized gain (loss) on investments		(1,000,576	)	(19,298	)	(1,660,237	)	(343,433	)	(2,212,248	)	(459,107	)	(19,355,708	)	(967,352	)
Reinvested capital gains		-		-		-		-		258,437		166,883		2,237,977		-
Net increase (decrease) in contract owners’ equity resulting from operations		(1,101,029	)	(25,932	)	(1,676,987	)	57,134		(2,027,786	)	(109,068	)	(15,474,948	)	1,956,446
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		419,209		709,190		(387	)	1,082,944		450,600		780,405		3,363,400		3,690,819
Transfers between funds		341,131		250,372		(379,904	)	(2,419,418	)	(264,671	)	755,331		(4,055,339	)	(780,458	)
Surrenders (note 6)		(49,336	)	(25,203	)	(66,422	)	(159,395	)	(307,661	)	(104,836	)	(1,730,646	)	(2,533,652	)
Death benefits (note 4)		(226	)	-		(373	)	-		(2,511	)	(12,370	)	(343,056	)	(199,548	)
Net policy repayments (loans) (note 5)		10,055		54,725		(26,706	)	(39,080	)	(1,699	)	(89,390	)	(378,172	)	(281,305	)
Deductions for surrender charges (note 2d)		(3,652	)	(734	)	(5,718	)	(16,904	)	(14,692	)	(11,852	)	(92,080	)	(123,182	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(64,943	)	(21,896	)	(94,620	)	(222,796	)	(213,561	)	(225,202	)	(1,757,515	)	(1,995,539	)
Asset charges (note 3):
FPVUL & VEL contracts		(4,006	)	(1,313	)	(7,083	)	(13,593	)	(15,918	)	(18,899	)	(109,256	)	(140,142	)
MSP contracts		(160	)	(4	)	(240	)	(343	)	(199	)	(265	)	(4,122	)	(5,805	)
SL contracts or LSFP contracts		(1,233	)	(787	)	(907	)	(1,520	)	(2,812	)	(3,019	)	(13,912	)	(17,229	)
Adjustments to maintain reserves		(99	)	92		(245	)	38		(374	)	(18	)	159		35
Net equity transactions		646,740		964,442		(582,605	)	(1,790,066	)	(373,498	)	1,069,885		(5,120,539	)	(2,386,005	)
Net change in contract owners’ equity		(454,289	)	938,510		(2,259,592	)	(1,732,932	)	(2,401,284	)	960,817		(20,595,487	)	(429,559	)
Contract owners’ equity beginning of period		938,510		-		2,689,101		4,422,033		5,475,151		4,514,334		43,847,202		44,276,761
Contract owners’ equity end of period	$	484,221		938,510		429,509		2,689,101		3,073,867		5,475,151		23,251,715		43,847,202
CHANGES IN UNITS:
Beginning units		97,144		-		197,334		324,172		264,706		215,614		3,011,778		3,166,310
Units purchased		162,432		108,703		5		84,130		33,710		74,470		310,596		439,351
Units redeemed		(22,141	)	(11,559	)	(49,562	)	(210,968	)	(59,382	)	(25,378	)	(745,600	)	(593,883	)
Ending units		237,435		97,144		147,777		197,334		239,034		264,706		2,576,774		3,011,778

(Continued)

66

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	OVAG					OVSB			PMVAAA				PMVLDA
	2008			2007		2008		2007	2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	(23,328	)	(37,301	)	36,548		-	74,642		128,819		1,728,311		1,913,743
Realized gain (loss) on investments		1,727,853		2,820,783		(121,954	)	-	(563,102	)	8,648		(419,197	)	(167,628	)
Change in unrealized gain (loss) on investments		(21,121,810	)	141,986		(132,574	)	-	11,957		(16,995	)	(2,328,192	)	1,198,669
Reinvested capital gains		-		-		8,893		-	1,935		-		711,450		-
Net increase (decrease) in contract owners’ equity resulting from operations		(19,417,285	)	2,925,468		(209,087	)	-	(474,568	)	120,472		(307,628	)	2,944,784
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		3,038,005		3,427,890		(623	)	-	70,000		144,724		1,692,096		3,597,316
Transfers between funds		(5,705,434	)	(1,452,282	)	1,191,878		-	(972,523	)	482,973		(9,059,553	)	2,555,949
Surrenders (note 6)		(2,170,737	)	(4,254,620	)	-		-	(22,724	)	(232,208	)	(1,479,864	)	(986,777	)
Death benefits (note 4)		(102,026	)	(139,588	)	-		-	(204	)	(1,178	)	(49,806	)	(60,757	)
Net policy repayments (loans) (note 5)		(106,937	)	(378,872	)	-		-	(3,240	)	-		(1,047,811	)	(42,960	)
Deductions for surrender charges (note 2d)		(77,260	)	(111,321	)	-		-	-		-		-		-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(1,671,852	)	(1,992,158	)	(9,149	)	-	(29,399	)	(22,357	)	(633,058	)	(827,477	)
Asset charges (note 3):
FPVUL & VEL contracts		(91,808	)	(121,672	)	-		-	-		-		-		-
MSP contracts		(1,693	)	(2,609	)	-		-	-		-		-		-
SL contracts or LSFP contracts		(9,105	)	(12,439	)	-		-	-		-		-		-
Adjustments to maintain reserves		581		29		(30	)	-	(400	)	20		(12,472	)	4,838
Net equity transactions		(6,898,266	)	(5,037,642	)	1,182,076		-	(958,490	)	371,974		(10,590,468	)	4,240,132
Net change in contract owners’ equity		(26,315,551	)	(2,112,174	)	972,989		-	(1,433,058	)	492,446		(10,898,096	)	7,184,916
Contract owners’ equity beginning of period		45,568,660		47,680,834		-		-	2,029,293		1,536,847		47,677,006		40,492,090
Contract owners’ equity end of period	$	19,253,109		45,568,660		972,989		-	596,235		2,029,293		36,778,910		47,677,006
CHANGES IN UNITS:
Beginning units		3,363,248		3,773,684		-		-	151,384		123,954		4,028,120		3,670,596
Units purchased		291,129		348,013		115,419		-	11,263		48,196		233,784		1,479,479
Units redeemed		(915,230	)	(758,449	)	(958	)	-	(109,756	)	(20,766	)	(1,133,925	)	(1,121,955	)
Ending units		2,739,147		3,363,248		114,461		-	52,891		151,384		3,127,979		4,028,120

(Continued)

67

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	PMVRRA					PMVTRA				PIVEMI			PIHYB1
	2008			2007		2008		2007		2008		2007	2008		2007
Investment activity:
Net investment income (loss)	$	2,059,317		1,999,912		7,218,261		6,022,108		148		-	1,197,941		756,130
Realized gain (loss) on investments		(2,023,389	)	(620,299	)	354,992		(1,269,327	)	(56,494	)	-	(963,927	)	(27,374	)
Change in unrealized gain (loss) on investments		(5,605,641	)	3,064,499		(3,481,322	)	6,741,192		(17,307	)	-	(6,240,402	)	11,391
Reinvested capital gains		93,651		120,384		3,186,763		-		11,846		-	144,329		13,618
Net increase (decrease) in contract owners’ equity resulting from operations		(5,476,062	)	4,564,496		7,278,694		11,493,973		(61,807	)	-	(5,862,059	)	753,765
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		3,887,102		2,971,467		8,598,401		10,036,226		74,918		-	343,967		1,169,898
Transfers between funds		11,568,776		5,652,439		7,194,947		19,558,903		136,504		-	1,587,756		1,707,078
Surrenders (note 6)		(2,661,467	)	(1,694,488	)	(7,588,144	)	(4,425,966	)	-		-	(400,493	)	(183,443	)
Death benefits (note 4)		(104,005	)	(28,740	)	(105,782	)	(156,187	)	-		-	(21,596	)	(9,978	)
Net policy repayments (loans) (note 5)		(166,404	)	(372,736	)	(98,628	)	(1,354,201	)	-		-	(24,303	)	(11,848	)
Deductions for surrender charges (note 2d)		-		-		-		-		-		-	-		-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(835,606	)	(533,350	)	(2,703,684	)	(1,723,540	)	(3,279	)	-	(191,582	)	(175,606	)
Asset charges (note 3):
FPVUL & VEL contracts		-		-		-		-		-		-	-		-
MSP contracts		-		-		-		-		-		-	-		-
SL contracts or LSFP contracts		-		-		-		-		-		-	-		-
Adjustments to maintain reserves		1,190		5,410		(77,076	)	3,500		(15	)	-	805		(2,920	)
Net equity transactions		11,689,586		6,000,002		5,220,034		21,938,735		208,128		-	1,294,554		2,493,181
Net change in contract owners’ equity		6,213,524		10,564,498		12,498,728		33,432,708		146,321		-	(4,567,505	)	3,246,946
Contract owners’ equity beginning of period		53,660,681		43,096,183		157,654,475		124,221,767		-		-	16,922,106		13,675,160
Contract owners’ equity end of period	$	59,874,205		53,660,681		170,153,203		157,654,475		146,321		-	12,354,601		16,922,106
CHANGES IN UNITS:
Beginning units		3,896,610		3,453,452		12,123,210		10,375,034		-		-	982,886		840,566
Units purchased		1,726,978		843,355		3,703,813		3,930,079		34,037		-	310,809		298,319
Units redeemed		(941,502	)	(400,197	)	(3,318,405	)	(2,181,903	)	(491	)	-	(181,591	)	(155,999	)
Ending units		4,682,086		3,896,610		12,508,618		12,123,210		33,546		-	1,112,104		982,886

(Continued)

68

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	PVGIB					PVTIGB				PVOEGB			PVTSCB
	2008			2007		2008		2007		2008		2007	2008		2007
Investment activity:
Net investment income (loss)	$	16,107		17,993		47,275		71,341		(101	)	-	-		-
Realized gain (loss) on investments		(108,274	)	53,316		(277,605	)	601,287		(17,966	)	-	(5	)	-
Change in unrealized gain (loss) on investments		(415,966	)	(329,857	)	(1,264,839	)	(765,324	)	(7,288	)	-	(185	)	-
Reinvested capital gains		138,494		206,758		363,224		308,832		-		-	-		-
Net increase (decrease) in contract owners’ equity resulting from operations		(369,639	)	(51,790	)	(1,131,945	)	216,136		(25,355	)	-	(190	)	-
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		152,107		144,799		826,228		276,917		8		-	978		-
Transfers between funds		(96,968	)	(280,484	)	(427,634	)	654,875		60,750		-	(307	)	-
Surrenders (note 6)		(27,526	)	(11,050	)	(955,027	)	(2,705,953	)	-		-	-		-
Death benefits (note 4)		-		-		(963	)	-		-		-	-		-
Net policy repayments (loans) (note 5)		(2,247	)	(17,511	)	(2,074	)	(71,912	)	-		-	-		-
Deductions for surrender charges (note 2d)		(6,914	)	(3,348	)	(6,331	)	(42,978	)	-		-	-		-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(57,215	)	(77,473	)	(85,874	)	(107,212	)	(496	)	-	(128	)	-
Asset charges (note 3):
FPVUL & VEL contracts		(3,453	)	(5,034	)	(6,457	)	(8,968	)	-		-	-		-
MSP contracts		(29	)	(40	)	(208	)	(287	)	-		-	-		-
SL contracts or LSFP contracts		(282	)	(349	)	(710	)	(914	)	-		-	-		-
Adjustments to maintain reserves		(161	)	(20	)	(231	)	37		(7	)	-	(3	)	-
Net equity transactions		(42,688	)	(250,509	)	(659,281	)	(2,006,396	)	60,255		-	540		-
Net change in contract owners’ equity		(412,327	)	(302,299	)	(1,791,226	)	(1,790,260	)	34,900		-	350		-
Contract owners’ equity beginning of period		1,031,415		1,333,714		3,064,041		4,854,301		-		-	-		-
Contract owners’ equity end of period	$	619,088		1,031,415		1,272,815		3,064,041		34,900		-	350		-
CHANGES IN UNITS:
Beginning units		65,188		79,204		132,680		227,790		-		-	-		-
Units purchased		9,737		9,142		8,842		37,262		6,441		-	126		-
Units redeemed		(11,099	)	(23,158	)	(43,188	)	(132,372	)	(61	)	-	(61	)	-
Ending units		63,826		65,188		98,334		132,680		6,380		-	65		-

(Continued)

69

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	PVTVB					ROCMC				ROCSC			TRBCG2
	2008			2007		2008		2007		2008		2007	2008		2007
Investment activity:
Net investment income (loss)	$	-		-		947,726		666,825		436		-	3,046		2,508
Realized gain (loss) on investments		(1,958	)	12,981		(4,937,527	)	2,843,088		(27,914	)	-	(59,502	)	49,202
Change in unrealized gain (loss) on investments		(127,926	)	10,030		(22,022,108	)	(6,178,520	)	(27,164	)	-	(1,474,808	)	200,505
Reinvested capital gains		-		-		4,399,048		4,638,864		9,209		-	-		-
Net increase (decrease) in contract owners’ equity resulting from operations		(129,884	)	23,011		(21,612,861	)	1,970,257		(45,433	)	-	(1,531,264	)	252,215
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		59,978		93,868		2,812,562		3,535,598		(438	)	-	299,965		428,338
Transfers between funds		186,570		(29,054	)	(4,277,856	)	4,897,994		135,434		-	1,147,780		969,998
Surrenders (note 6)		(6,633	)	(11,432	)	(4,724,452	)	(3,340,590	)	-		-	(344,940	)	(28,609	)
Death benefits (note 4)		-		-		(71,800	)	(67,890	)	-		-	(1,351	)	-
Net policy repayments (loans) (note 5)		(6,164	)	(1,374	)	(73,410	)	(324,950	)	-		-	(12,096	)	(3,256	)
Deductions for surrender charges (note 2d)		(2,842	)	(4,601	)	-		-		-		-	(5,842	)	(1,412	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(29,124	)	(32,129	)	(630,156	)	(726,471	)	(1,358	)	-	(119,958	)	(94,502	)
Asset charges (note 3):
FPVUL & VEL contracts		(1,707	)	(2,070	)	-		-		-		-	(7,845	)	(6,487	)
MSP contracts		(6	)	(8	)	-		-		-		-	(532	)	(686	)
SL contracts or LSFP contracts		(327	)	(169	)	-		-		-		-	(1,777	)	(1,061	)
Adjustments to maintain reserves		(108	)	1		(3,199	)	1,829		(13	)	-	(220	)	55
Net equity transactions		199,637		13,032		(6,968,311	)	3,975,520		133,625		-	953,184		1,262,379
Net change in contract owners’ equity		69,753		36,043		(28,581,172	)	5,945,777		88,192		-	(578,080	)	1,514,593
Contract owners’ equity beginning of period		435,405		399,362		54,942,627		48,996,850		-		-	2,962,485		1,447,892
Contract owners’ equity end of period	$	505,158		435,405		26,361,455		54,942,627		88,192		-	2,384,405		2,962,485
CHANGES IN UNITS:
Beginning units		29,740		28,784		2,306,592		2,136,548		-		-	212,892		117,044
Units purchased		32,166		6,820		315,681		780,947		12,179		-	128,729		107,456
Units redeemed		(7,110	)	(5,864	)	(667,300	)	(610,903	)	(141	)	-	(42,652	)	(11,608	)
Ending units		54,796		29,740		1,954,973		2,306,592		12,038		-	298,969		212,892

(Continued)

70

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	TREI2					TRHS2			TRLT2				TRMCG2
	2008			2007		2008		2007	2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	1,539,466		1,217,141		(2,656	)	-	59,606		31,808		(51,496	)	(61,195	)
Realized gain (loss) on investments		(6,172,572	)	2,442,812		(144,836	)	-	2,698		505		(2,479,227	)	795,326
Change in unrealized gain (loss) on investments		(31,210,378	)	(7,086,343	)	(376,879	)	-	(49,239	)	9,510		(9,104,416	)	(119,402	)
Reinvested capital gains		2,480,253		5,888,178		15,673		-	-		-		1,211,901		2,917,556
Net increase (decrease) in contract owners’ equity resulting from operations		(33,363,231	)	2,461,788		(508,698	)	-	13,065		41,823		(10,423,238	)	3,532,285
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		4,232,449		6,699,108		5,594		-	112,013		39,059		925,312		1,551,393
Transfers between funds		(6,218,723	)	5,950,710		1,786,033		-	919,477		477,727		(1,414,889	)	1,142,298
Surrenders (note 6)		(2,795,104	)	(4,533,132	)	-		-	(11,282	)	(706	)	(361,231	)	(1,247,446	)
Death benefits (note 4)		(167,243	)	(348,000	)	-		-	(777	)	-		(35,088	)	(7,610	)
Net policy repayments (loans) (note 5)		(658,239	)	(390,286	)	-		-	(48,259	)	939		(566,879	)	-
Deductions for surrender charges (note 2d)		(7,186	)	(11,317	)	-		-	(255	)	(93	)	-		-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(1,347,179	)	(1,463,229	)	(12,928	)	-	(60,809	)	(19,732	)	(273,589	)	(255,221	)
Asset charges (note 3):
FPVUL & VEL contracts		(14,872	)	(13,769	)	-		-	(3,616	)	(1,583	)	-		-
MSP contracts		(983	)	(1,406	)	-		-	(651	)	(90	)	-		-
SL contracts or LSFP contracts		(2,366	)	(3,475	)	-		-	(1,485	)	(585	)	-		-
Adjustments to maintain reserves		(70,718	)	(31	)	(44	)	-	(177	)	97		(241	)	480
Net equity transactions		(7,050,164	)	5,885,173		1,778,655		-	904,179		495,032		(1,726,605	)	1,183,894
Net change in contract owners’ equity		(40,413,395	)	8,346,961		1,269,957		-	917,244		536,855		(12,149,843	)	4,716,179
Contract owners’ equity beginning of period		99,173,060		90,826,099		-		-	1,080,464		543,609		27,431,571		22,715,392
Contract owners’ equity end of period	$	58,759,665		99,173,060		1,269,957		-	1,997,708		1,080,464		15,281,728		27,431,571
CHANGES IN UNITS:
Beginning units		5,451,242		5,136,926		-		-	97,460		51,598		1,163,522		1,128,870
Units purchased		626,301		1,435,442		180,138		-	92,195		48,184		106,871		379,140
Units redeemed		(1,000,636	)	(1,121,126	)	(1,513	)	-	(11,780	)	(2,322	)	(189,114	)	(344,488	)
Ending units		5,076,907		5,451,242		178,625		-	177,875		97,460		1,081,279		1,163,522

(Continued)

71

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	TRNAG1					TRPSB1				DSRG				MSVEG
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	(35,943	)	(40,234	)	11,390		611		91,532		79,177		(181	)	-
Realized gain (loss) on investments		(1,376,218	)	358,825		(66,200	)	(153	)	(37,843	)	388,700		(13,359	)	-
Change in unrealized gain (loss) on investments		(3,452,913	)	(144,425	)	(106,121	)	(6,873	)	(4,914,476	)	673,725		(108,805	)	-
Reinvested capital gains		491,458		1,393,989		2,733		5,564		-		-		-		-
Net increase (decrease) in contract owners’ equity resulting from operations		(4,373,616	)	1,568,155		(158,198	)	(851	)	(4,860,787	)	1,141,602		(122,345	)	-
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		1,106,652		1,422,255		73,353		(1	)	1,404,443		1,669,314		28,868		-
Transfers between funds		(2,709,368	)	597,210		606,784		68,501		(436,901	)	(919,841	)	295,330		-
Surrenders (note 6)		(347,867	)	(312,800	)	(144,521	)	-		(928,362	)	(1,145,171	)	-		-
Death benefits (note 4)		(645	)	(2,395	)	-		-		(30,015	)	(70,515	)	-		-
Net policy repayments (loans) (note 5)		(121,973	)	-		-		-		(117,066	)	(145,670	)	-		-
Deductions for surrender charges (note 2d)		-		-		-		-		(34,630	)	(42,105	)	-		-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(190,490	)	(181,347	)	(20,264	)	(1,837	)	(907,724	)	(948,726	)	(1,231	)	-
Asset charges (note 3):
FPVUL & VEL contracts		-		-		-		-		(50,478	)	(61,327	)	-		-
MSP contracts		-		-		-		-		(1,555	)	(2,201	)	-		-
SL contracts or LSFP contracts		-		-		-		-		(3,926	)	(4,892	)	-		-
Adjustments to maintain reserves		12,991		217		(2,376	)	28		(349	)	127		(7	)	-
Net equity transactions		(2,250,700	)	1,523,140		512,976		66,691		(1,106,563	)	(1,671,007	)	322,960		-
Net change in contract owners’ equity		(6,624,316	)	3,091,295		354,778		65,840		(5,967,350	)	(529,405	)	200,615		-
Contract owners’ equity beginning of period		14,399,860		11,308,565		65,840		-		14,899,134		15,428,539		-		-
Contract owners’ equity end of period	$	7,775,544		14,399,860		420,618		65,840		8,931,784		14,899,134		200,615		-
CHANGES IN UNITS:
Beginning units		1,054,646		939,794		6,060		-		1,157,932		1,291,626		-		-
Units purchased		215,604		255,291		66,190		6,231		139,091		170,624		39,612		-
Units redeemed		(345,001	)	(140,439	)	(16,946	)	(171	)	(237,384	)	(304,318	)	(204	)	-
Ending units		925,249		1,054,646		55,304		6,060		1,059,639		1,157,932		39,408		-

(Continued)

72

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	VWEM					VWHA				MSVFI				MSEM
	2008			2007		2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	(14,781	)	80,751		54,218		3,145		154,326		101,028		819,894		780,351
Realized gain (loss) on investments		(4,526,521	)	2,424,018		(622,236	)	2,746,926		(107,670	)	(4,898	)	(841,995	)	(156,036	)
Change in unrealized gain (loss) on investments		(23,938,240	)	850,067		(21,816,757	)	3,778,614		(413,202	)	49,582		(2,401,089	)	(291,052	)
Reinvested capital gains		10,596,053		3,792,797		4,885,678		2,778,314		-		-		481,742		339,236
Net increase (decrease) in contract owners’ equity resulting from operations		(17,883,489	)	7,147,633		(17,499,097	)	9,306,999		(366,546	)	145,712		(1,941,448	)	672,499
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		2,007,668		2,180,732		1,902,431		1,842,459		305,945		331,884		613,187		899,552
Transfers between funds		(4,372,528	)	5,342,557		2,478,714		5,003,434		(24,028	)	935,694		324,466		506,893
Surrenders (note 6)		(768,579	)	(2,715,913	)	(2,488,620	)	(2,075,418	)	(244,066	)	(20,459	)	(461,545	)	(459,758	)
Death benefits (note 4)		(92,205	)	(17,254	)	(38,385	)	(63,440	)	(1,494	)	(12,161	)	(68,046	)	(6,488	)
Net policy repayments (loans) (note 5)		(447,465	)	(225,567	)	(214,120	)	(142,453	)	(21,270	)	(10,954	)	(145,616	)	(89,124	)
Deductions for surrender charges (note 2d)		(18,433	)	(67,425	)	(21,877	)	(15,474	)	(8,979	)	(3,439	)	(22,328	)	(8,810	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(598,991	)	(680,487	)	(749,021	)	(581,186	)	(162,370	)	(127,517	)	(340,928	)	(319,737	)
Asset charges (note 3):
FPVUL & VEL contracts		(41,362	)	(56,895	)	(42,083	)	(39,632	)	(10,290	)	(8,674	)	(20,654	)	(22,360	)
MSP contracts		(669	)	(933	)	(1,151	)	(1,097	)	(760	)	(818	)	(784	)	(909	)
SL contracts or LSFP contracts		(4,921	)	(6,996	)	(7,456	)	(6,656	)	(3,085	)	(2,520	)	(3,204	)	(3,833	)
Adjustments to maintain reserves		7,501		52		4,091		(1,244	)	(189	)	8		(1,977	)	82
Net equity transactions		(4,329,984	)	3,751,872		822,523		3,919,293		(170,586	)	1,081,045		(127,429	)	495,507
Net change in contract owners’ equity		(22,213,473	)	10,899,505		(16,676,574	)	13,226,292		(537,132	)	1,226,757		(2,068,877	)	1,168,006
Contract owners’ equity beginning of period		30,937,883		20,038,378		34,366,407		21,140,115		3,429,821		2,203,064		12,225,490		11,057,484
Contract owners’ equity end of period	$	8,724,410		30,937,883		17,689,833		34,366,407		2,892,689		3,429,821		10,156,613		12,225,490
CHANGES IN UNITS:
Beginning units		783,472		722,392		774,780		720,990		281,694		190,806		520,660		514,122
Units purchased		90,758		201,896		138,968		188,799		29,162		110,813		71,545		117,121
Units redeemed		(255,281	)	(140,816	)	(172,593	)	(135,009	)	(46,278	)	(19,925	)	(76,225	)	(110,583	)
Ending units		618,949		783,472		741,155		774,780		264,578		281,694		515,980		520,660

(Continued)

73

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	VKVGR2				MSVMG				MSVRE				VVB
	2008			2007	2008		2007		2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	16,204		-	56,620		(10,665	)	1,931,947		891,057		(1,229	)	-
Realized gain (loss) on investments		(245,402	)	-	(981,795	)	123,206		(8,799,452	)	13,619,379		(109,374	)	-
Change in unrealized gain (loss) on investments		(97,237	)	-	(7,029,521	)	902,460		(37,903,882	)	(37,103,354	)	(135,377	)	-
Reinvested capital gains		40,355		-	2,360,835		356,505		21,917,133		7,855,595		-		-
Net increase (decrease) in contract owners’ equity resulting from operations		(286,080	)	-	(5,593,861	)	1,371,506		(22,854,254	)	(14,737,323	)	(245,980	)	-
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		72,581		-	389,908		514,478		4,104,448		7,996,860		(4,174	)	-
Transfers between funds		784,940		-	3,845,128		2,083,000		(8,546,259	)	(14,575,193	)	1,179,310		-
Surrenders (note 6)		(72,650	)	-	(434,570	)	(397,963	)	(3,097,720	)	(5,715,823	)	-		-
Death benefits (note 4)		-		-	(7,483	)	(17,838	)	(128,638	)	(94,246	)	-		-
Net policy repayments (loans) (note 5)		-		-	(25,264	)	(118,658	)	(140,232	)	(871,143	)	-		-
Deductions for surrender charges (note 2d)		-		-	(8,625	)	(6,663	)	(102,435	)	(138,585	)	-		-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(13,354	)	-	(225,557	)	(179,405	)	(1,952,954	)	(2,680,819	)	(5,305	)	-
Asset charges (note 3):
FPVUL & VEL contracts		-		-	(9,007	)	(11,015	)	(105,281	)	(160,011	)	-		-
MSP contracts		-		-	(127	)	(154	)	(4,536	)	(7,515	)	-		-
SL contracts or LSFP contracts		-		-	(1,208	)	(1,350	)	(16,171	)	(22,906	)	-		-
Adjustments to maintain reserves		(115	)	-	(307	)	15		11,950		(1,594	)	(18	)	-
Net equity transactions		771,402		-	3,522,888		1,864,446		(9,977,828	)	(16,270,975	)	1,169,813		-
Net change in contract owners’ equity		485,322		-	(2,070,973	)	3,235,952		(32,832,082	)	(31,008,298	)	923,833		-
Contract owners’ equity beginning of period		-		-	9,189,887		5,953,935		69,636,509		100,644,807		-		-
Contract owners’ equity end of period	$	485,322		-	7,118,914		9,189,887		36,804,427		69,636,509		923,833		-
CHANGES IN UNITS:
Beginning units		-		-	809,774		641,876		2,337,392		2,819,290		-		-
Units purchased		114,455		-	520,416		242,918		288,801		452,612		119,655		-
Units redeemed		(15,144	)	-	(146,650	)	(75,020	)	(632,056	)	(934,510	)	(615	)	-
Ending units		99,311		-	1,183,540		809,774		1,994,137		2,337,392		119,040		-

(Continued)

74

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	VVDV				VVI			VVMCI			VVSTC
	2008			2007	2008		2007	2008		2007	2008		2007
Investment activity:
Net investment income (loss)	$	(1,565	)	-	(3,937	)	-	(3,403	)	-	(2,912	)	-
Realized gain (loss) on investments		(89,099	)	-	(532,712	)	-	(360,620	)	-	(52,078	)	-
Change in unrealized gain (loss) on investments		(387,618	)	-	(1,233,518	)	-	(898,879	)	-	(73,797	)	-
Reinvested capital gains		-		-	-		-	-		-	-		-
Net increase (decrease) in contract owners’ equity resulting from operations		(478,282	)	-	(1,770,167	)	-	(1,262,902	)	-	(128,787	)	-
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		(4,204	)	-	(23,058	)	-	(10,909	)	-	1,416		-
Transfers between funds		1,501,460		-	3,961,815		-	3,232,018		-	2,474,769		-
Surrenders (note 6)		-		-	-		-	-		-	-		-
Death benefits (note 4)		-		-	-		-	-		-	-		-
Net policy repayments (loans) (note 5)		-		-	-		-	-		-	-		-
Deductions for surrender charges (note 2d)		-		-	-		-	-		-	-		-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(6,894	)	-	(17,240	)	-	(14,818	)	-	(13,426	)	-
Asset charges (note 3):
FPVUL & VEL contracts		-		-	-		-	-		-	-		-
MSP contracts		-		-	-		-	-		-	-		-
SL contracts or LSFP contracts		-		-	-		-	-		-	-		-
Adjustments to maintain reserves		(19	)	-	(36	)	-	(28	)	-	(6	)	-
Net equity transactions		1,490,343		-	3,921,481		-	3,206,263		-	2,462,753		-
Net change in contract owners’ equity		1,012,061		-	2,151,314		-	1,943,361		-	2,333,966		-
Contract owners’ equity beginning of period		-		-	-		-	-		-	-		-
Contract owners’ equity end of period	$	1,012,061		-	2,151,314		-	1,943,361		-	2,333,966		-
CHANGES IN UNITS:
Beginning units		-		-	-		-	-		-	-		-
Units purchased		157,366		-	391,257		-	331,699		-	244,739		-
Units redeemed		(887	)	-	(2,367	)	-	(1,884	)	-	(1,375	)	-
Ending units		156,479		-	388,890		-	329,815		-	243,364		-

(Continued)

75

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2008 and 2007

	SVDF				SVOF				WFVSCG
	2008			2007	2008		2007		2008		2007
Investment activity:
Net investment income (loss)	$	(266	)	-	388,022		152,034		(1,482	)	-
Realized gain (loss) on investments		(30,313	)	-	(955,001	)	1,395,702		(236,374	)	-
Change in unrealized gain (loss) on investments		(195,789	)	-	(13,787,129	)	(3,753,806	)	(329,646	)	-
Reinvested capital gains		-		-	4,767,838		4,072,320		195,059		-
Net increase (decrease) in contract owners’ equity resulting from operations		(226,368	)	-	(9,586,270	)	1,866,250		(372,443	)	-
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		615,569		-	1,218,192		1,651,619		28,552		-
Transfers between funds		581,802		-	(2,983,915	)	(2,371,425	)	1,088,648		-
Surrenders (note 6)		-		-	(873,707	)	(1,259,320	)	-		-
Death benefits (note 4)		-		-	(22,889	)	(11,325	)	-		-
Net policy repayments (loans) (note 5)		-		-	(48,236	)	(454,366	)	-		-
Deductions for surrender charges (note 2d)		-		-	(56,570	)	(42,949	)	-		-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(11,578	)	-	(745,101	)	(824,682	)	(11,689	)	-
Asset charges (note 3):
FPVUL & VEL contracts		-		-	(45,030	)	(55,843	)	-		-
MSP contracts		-		-	(1,029	)	(1,246	)	-		-
SL contracts or LSFP contracts		-		-	(8,489	)	(12,989	)	-		-
Adjustments to maintain reserves		(385	)	-	(450	)	2,073		751		-
Net equity transactions		1,185,408		-	(3,567,224	)	(3,380,453	)	1,106,262		-
Net change in contract owners’ equity		959,040		-	(13,153,494	)	(1,514,203	)	733,819		-
Contract owners’ equity beginning of period		-		-	27,013,467		28,527,670		-		-
Contract owners’ equity end of period	$	959,040		-	13,859,973		27,013,467		733,819		-
CHANGES IN UNITS:
Beginning units		-		-	1,866,960		2,101,264		-		-
Units purchased		177,334		-	108,819		206,219		138,794		-
Units redeemed		(1,974	)	-	(375,291	)	(440,523	)	(8,207	)	-
Ending units		175,360		-	1,600,488		1,866,960		130,587		-

See accompanying notes to financial statements.

76

NATIONWIDE VLI SEPARATE ACCOUNT-4

NOTES TO FINANCIAL STATEMENTS

December 31, 2008 and 2007

(1) Background and 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 is registered as a unit investment trust under the Investment Company Act of 1940. The Company offers Flexible Premium, Modified Single Premium, Variable Executive Life and Survivorship Life Variable Life Insurance Policies through the Account. The primary distribution for contracts is through wholesalers and brokers.

(b) The Contracts

Only contracts with a front-end 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.

With certain exceptions, contract owners may invest in the following:

Portfolios of the AIM Variable Insurance Funds (AIM VIF);

AIM VIF - Basic Value Fund - Series I (AVBVI)

AIM VIF - Capital Appreciation Fund - Series I (AVCA)

AIM VIF - Capital Development Fund - Series I (AVCDI)

AIM VIF - International Growth Fund - Series I (AVIE)

AIM VIF - Mid Cap Core Equity Fund - Series I (AVMCCI)*

AllianceBernstein Growth and Income Fund - Class A (ALGIA)*

Portfolios of the AllianceBernstein Variable Products Series Fund, Inc. (AllianceBernstein VPS);

AllianceBernstein VPS - Growth and Income Portfolio - Class A (ALVGIA)

AllianceBernstein VPS - Growth and Income Portfolio - Class B (ALVGIB)*

AllianceBernstein VPS - International Value Portfolio - Class A (ALVIVA)

AllianceBernstein VPS - International Value Portfolio - Class B (ALVIVB)*

AllianceBernstein VPS - Small-Mid Cap Value Portfolio - Class A (ALVSVA)

AllianceBernstein VPS - Small-Mid Cap Value Portfolio - Class B (ALVSVB)*

Portfolios of the American Century Variable Portfolios, Inc. (American Century VP);

American Century VP - Income & Growth Fund - Class I (ACVIG)

American Century VP - Inflation Protection Fund - Class II (ACVIP2)

American Century VP - International Fund - Class I (ACVI)

American Century VP - International Fund - Class III (ACVI3)

American Century VP - Mid Cap Value Fund - Class I (ACVMV1)

American Century VP - Mid Cap Value Fund - Class II (ACVMV2)*

American Century VP - Ultra(R) Fund - Class I (ACVU1)

American Century VP - Value Fund - Class I (ACVV)

American Century VP - Value Fund - Class II (ACVV2)*

American Century VP - Vista(SM) Fund - Class I (ACVVS1)

American Century VP - Vista(SM) Fund - Class II (ACVVS2)*

Portfolios of the American Funds Insurance Series(R) (American Funds IS);

American Funds IS - Asset Allocation Fund - Class 2 (AMVAA2)

American Funds IS - Bond Fund - Class 2 (AMVBD2)

American Funds IS - Global Small Capitalization Fund - Class 2 (AMVGS2)

American Funds IS - Growth Fund - Class 2 (AMVGR2)

BlackRock International Index V.I. Fund - Class II (MLVIX2)*

BlackRock Large Cap Core V.I. Fund - Class II (MLVLC2)

Calvert Variable Series Inc. - Social Equity Portfolio (CVSSE)

Portfolios of the Credit Suisse Trust;

Credit Suisse Trust - Global Small Cap Portfolio (WVCP)

Credit Suisse Trust - International Focus Portfolio (WIEP)

Credit Suisse Trust - Large Cap Value Portfolio (WGIP)

Davis Variable Account Fund, Inc. - Davis Value Portfolio (DAVVL)

Portfolios of the Dreyfus Investment Portfolios (Dreyfus IP);

Dreyfus IP - European Equity Portfolio (DVEE)*

Dreyfus IP - Mid Cap Stock Portfolio - Initial Class (DVMCS)

Dreyfus IP - Small Cap Stock Index Portfolio - Service Class (DVSCS)

Dreyfus Mid Cap Index Fund, Inc. (DMCIX)*

Dreyfus Stock Index Fund, Inc. - Initial Class (DSIF)

(Continued)

77

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

Dreyfus Stock Index Fund, Inc. - Service Class (DSIFS)*

Portfolios of the Dreyfus Variable Investment Fund (Dreyfus VIF);

Dreyfus VIF - Appreciation Portfolio - Initial Class (DCAP)

Dreyfus VIF - Appreciation Portfolio - Service Class (DCAPS)*

Dreyfus VIF - Developing Leaders Portfolio - Initial Class (DSC)

Dreyfus VIF - International Value Portfolio - Initial Class (DVIV)

DWS Investments VIT Funds - DWS Small Cap Index VIP - Class A (BISCI)*

Portfolios of the DWS Variable Series II Funds;

DWS Variable Series II - Dreman High Return Equity VIP - Class B (SVSHEB)

DWS Variable Series II - Dreman Small Mid Cap Value VIP - Class B (SVSSVB)

Portfolios of the Federated Insurance Series (Federated IS);

Federated IS - American Leaders Fund II - Primary Class (FALF)

Federated IS - Capital Appreciation Fund II - Primary Class (FVCA2P)

Federated IS - Market Opportunity Fund II - Service Class (FVMOS)

Federated IS - Quality Bond Fund II - Primary Class (FQB)

Federated IS - Quality Bond Fund II - Service Class (FQBS)*

Portfolios of the Fidelity(R) Variable Insurance Products Fund (Fidelity(R) VIP);

Fidelity(R) VIP - Equity-Income Portfolio - Service Class (FEIS)

Fidelity(R) VIP - Equity-Income Portfolio - Service Class 2 (FEI2)*

Fidelity(R) VIP - Freedom 2015 Portfolio - Service Class (FF15S)

Fidelity(R) VIP - Freedom 2025 Portfolio - Service Class (FF25S)

Fidelity(R) VIP - Growth Portfolio - Service Class (FGS)

Fidelity(R) VIP - Growth Portfolio - Service Class 2 (FG2)*

Fidelity(R) VIP - High Income Portfolio - Service Class (FHIS)

Fidelity(R) VIP - High Income Portfolio - Service Class R (FHISR)

Fidelity(R) VIP - Overseas Portfolio - Service Class (FOS)

Fidelity(R) VIP - Overseas Portfolio - Service Class R (FOSR)

Portfolios of the Fidelity(R) Variable Insurance Products Fund II (Fidelity(R) VIP II);

Fidelity(R) VIP II - Contrafund(R) Portfolio - Service Class (FCS)

Fidelity(R) VIP II - Index 500 Portfolio - Initial Class (FIP)

Fidelity(R) VIP II - Investment Grade Bond Portfolio - Service Class (FIGBS)

Fidelity(R) VIP II - Investment Grade Bond Portfolio - Service Class 2 (FIGBP2)*

Portfolios of the Fidelity(R) Variable Insurance Products Fund III (Fidelity(R) VIP III);

Fidelity(R) VIP III - Growth & Income Portfolio - Service Class (FGIS)*

Fidelity(R) VIP III - Growth Opportunities Portfolio - Service Class (FGOS)

Fidelity(R) VIP III - Mid Cap Portfolio - Service Class (FMCS)

Fidelity(R) VIP III - Mid Cap Portfolio - Service Class 2 (FMC2)*

Fidelity(R) VIP III - Value Strategies Portfolio - Service Class (FVSS)

Portfolios of the Fidelity(R) Variable Insurance Products Fund IV (Fidelity(R) VIP IV);

Fidelity(R) VIP IV - Energy Portfolio - Service Class 2 (FNRS2)

Fidelity(R) VIP IV - Freedom Fund 2010 Portfolio - Service Class (FF10S)

Fidelity(R) VIP IV - Freedom Fund 2020 Portfolio - Service Class (FF20S)

Fidelity(R) VIP IV - Freedom Fund 2020 Portfolio - Service Class 2 (FF20S2)*

Fidelity(R) VIP IV - Freedom Fund 2030 Portfolio - Service Class (FF30S)

Fidelity(R) VIP IV - Freedom Fund 2030 Portfolio - Service Class 2 (FF30S2)*

Portfolios of the Franklin Templeton Variable Insurance Products Trust (Franklin Templeton VIP);

Franklin Templeton VIP - Developing Markets Securities Fund - Class 3 (FTVDM3)

Franklin Templeton VIP - Foreign Securities Fund - Class 1 (TIF)

Franklin Templeton VIP - Foreign Securities Fund - Class 2 (TIF2)

Franklin Templeton VIP - Foreign Securities Fund - Class 3 (TIF3)

Franklin Templeton VIP - Founding Funds Allocation Fund - Class 2 (FTVFA2)

Franklin Templeton VIP - Global Income Securities Fund - Class 2 (FTVGI2)

Franklin Templeton VIP - Global Income Securities Fund - Class 3 (FTVGI3)

Franklin Templeton VIP - Income Securities Fund - Class 2 (FTVIS2)

Franklin Templeton VIP - Mutual Discovery Securities Fund - Class 2 (FTVMD2)

Franklin Templeton VIP - Rising Dividends Securities Fund - Class 1 (FTVRDI)

Franklin Templeton VIP - Small Cap Value Securities Fund - Class 1 (FTVSVI)

Franklin Templeton VIP - Small Cap Value Securities Fund - Class 2 (FTVSV2)

Goldman Sachs Mid Cap Value Fund - Class A (GSMCE)*

Portfolios of the Goldman Sachs Variable Insurance Trust (Goldman Sachs VIT);

Goldman Sachs VIT - Mid Cap Value Fund (GVMCE)

Portfolios of the Ivy Fund Variable Insurance Portfolio, Inc. (Ivy Fund VIP,Inc.) ( formerly W&R Target Funds, Inc.);

Ivy Fund VIP, Inc. - Asset Strategy (WRASP)

(Continued)

78

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

Ivy Fund VIP, Inc. - Growth (WRGP)

Ivy Fund VIP, Inc. - Real Estate Securities (WRRESP)

Ivy Fund VIP, Inc. - Science and Technology (WRSTP)

Portfolios of the Janus Aspen Series;

Janus Aspen Series - Balanced Portfolio - Service Class (JABS)

Janus Aspen Series - Forty Portfolio - Service Class (JACAS)

Janus Aspen Series - Global Technology Portfolio - Service Class (JAGTS)

Janus Aspen Series - INTECH Risk Managed Core Portfolio - Service Class (JARLCS)

Janus Aspen Series - International Growth Portfolio - Service Class (JAIGS)

Janus Aspen Series - International Growth Portfolio - Service II Class (JAIGS2)

Portfolios of the JPMorgan Insurance Trust;

JPMorgan Insurance Trust - Balanced Portfolio 1 (OGAA)*

JPMorgan Insurance Trust - Core Bond Portfolio 1 (OGBDP)*

JPMorgan Insurance Trust - Diversified Equity Portfolio 1 (OGDEP)*

JPMorgan Insurance Trust - Diversified Mid Cap Growth Portfolio 1 (OGGO)

JPMorgan Insurance Trust - Diversified Mid Cap Value Portfolio 1 (OGMVP)

JPMorgan Insurance Trust - Equity-Index Portfolio 1 (OGEI)*

JPMorgan Insurance Trust - Government Bond Portfolio 1 (OGGB)*

JPMorgan Insurance Trust - Intrepid Growth Portfolio - Class 1 (OGLG) (formerly Large Cap Growth Portfolio -Class 1)*

JPMorgan Insurance Trust - Intrepid Mid Cap Portfolio 1 (OGDMP)*

Portfolios of the Legg Mason Partners Variable Equity Trust (Legg Mason Partners VET);

Legg Mason Partners VET - Small Cap Growth Portfolio - Class I (SBVSG)

Portfolios of the Lehman Brothers Advisers Management Trust (Lehman Brothers AMT);

Lehman Brothers AMT - Short Duration Bond Portfolio - I Class (AMTB)

Portfolios of the Lincoln Variable Insurance Products Trust (Lincoln VIP);

Lincoln VIP - Baron Growth Opportunities Funds - Service Class (BNCAI)

Lord Abbett Series Fund, Inc. - Mid Cap Value Portfolio - Class VC (LOVMCV)

M Fund, Inc. - Brandes International Equity Fund (MFBIE)*

M Fund, Inc. - Business Opportunity Value Fund (MFBOV)*

M Fund, Inc. - Frontier Capital Appreciation Fund (MFFCA)*

M Fund, Inc. - Turner Core Growth Fund (MFTCG)*

Portfolios of the MFS(R) Variable Insurance Trust (MFS(R) VIT);

MFS(R) VIT - Investors Growth Stock Series - Initial Class (MIGIC)

MFS(R) VIT - Research International Series - Service Class (MVRISC)

MFS(R) VIT - Value Series - Initial Class (MVFIC)

MFS(R) VIT - Value Series - Service Class (MVFSC)

Nationwide GVIT Strategic Value Fund - Class I (SVF)*

Portfolios of the Nationwide Variable Insurance Trust (Nationwide VIT);

Nationwide VIT - American Funds Asset Allocation Fund - Class II (GVAAA2)

Nationwide VIT - American Funds Bond Fund - Class II (GVABD2)

Nationwide VIT - American Funds Global Growth Fund - Class II (GVAGG2)

Nationwide VIT - American Funds Growth Fund - Class II (GVAGR2)

Nationwide VIT - American Funds Growth-Income Fund - Class II (GVAGI2)

Nationwide VIT - Cardinal Aggressive Fund - Class I (NVCRA1)

Nationwide VIT - Cardinal Balanced Fund - Class I (NVCRB1)

Nationwide VIT - Cardinal Capital Appreciation Fund - Class I (NVCCA1)

Nationwide VIT - Cardinal Conservative Fund - Class I (NVCCN1)

Nationwide VIT - Cardinal Moderate Fund - Class I (NVCMD1)

Nationwide VIT - Cardinal Moderately Aggressive Fund - Class I (NVCMA1)

Nationwide VIT - Cardinal Moderately Conservative Fund - Class I (NVCMC1)

Nationwide VIT - Core Bond Fund - Class I (NVCBD1)

Nationwide VIT - Federated High Income Bond Fund - Class I (HIBF)

Nationwide VIT - Federated High Income Bond Fund - Class III (HIBF3)

Nationwide VIT - Gartmore Emerging Markets Fund - Class I (GEM)

Nationwide VIT - Gartmore Emerging Markets Fund - Class III (GEM3)

Nationwide VIT - Gartmore Global Utilities Fund - Class I (GVGU1)

Nationwide VIT - Gartmore International Equity Fund - Class I (GIG) (formerly Gartmore International Growth Fund - Class I)

Nationwide VIT - Gartmore International Equity Fund - Class III (GIG3) (formerly Gartmore International Growth Fund - Class III)

Nationwide VIT - Gartmore International Equity Fund - Class VI (NVIE6)

Nationwide VIT - Gartmore Worldwide Leaders Fund - Class I (GEF)

Nationwide VIT - Global Financial Services Fund - Class I (GVGF1)

Nationwide VIT - Government Bond Fund - Class I (GBF)

(Continued)

79

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

Nationwide VIT - Growth Fund - Class I (CAF)

Nationwide VIT - Health Sciences Fund - Class I (GVGH1) (formerly Global Health Sciences Fund - Class I)

Nationwide VIT - Health Sciences Fund - Class III (GVGHS) (formerly Global Health Sciences Fund - Class III)

Nationwide VIT - International Index Fund - Class II (GVIX2)

Nationwide VIT - International Index Fund - Class VI (GVIX6)

Nationwide VIT - Investor Destinations Aggressive Fund - Class II (GVIDA)

Nationwide VIT - Investor Destinations Conservative Fund - Class II (GVIDC)

Nationwide VIT - Investor Destinations Moderate Fund - Class II (GVIDM)

Nationwide VIT - Investor Destinations Moderately Aggressive Fund - Class II (GVDMA)

Nationwide VIT - Investor Destinations Moderately Conservative Fund - Class II (GVDMC)

Nationwide VIT - J.P. Morgan Balanced Fund - Class I (BF)

Nationwide VIT - Lehman Brothers Core Plus Bond Fund - Class I (NVLCP1)

Nationwide VIT - Mid Cap Growth Fund - Class I (SGRF)

Nationwide VIT - Mid Cap Index Fund - Class I (MCIF)

Nationwide VIT - Mid Cap Index Fund - Class II (MCIF2)*

Nationwide VIT - Money Market Fund - Class I (SAM)

Nationwide VIT - Money Market Fund - Class V (SAM5)

Nationwide VIT - Multi-Manager International Growth Fund - Class III (NVMIG3)

Nationwide VIT - Multi-Manager International Value Fund - Class I (GVDIVI) (formerly International Value Fund - Class I)

Nationwide VIT - Multi-Manager International Value Fund - Class III (GVDIV3) (formerly International Value Fund - Class III)

Nationwide VIT - Multi-Manager Large Cap Growth Fund - Class I (NVMLG1)

Nationwide VIT - Multi-Manager Large Cap Value Fund - Class I (NVMLV1)

Nationwide VIT - Multi-Manager Mid Cap Growth Fund - Class I (NVMMG1)

Nationwide VIT - Multi-Manager Mid Cap Value Fund - Class I (NVMMV1)

Nationwide VIT - Multi-Manager Mid Cap Value Fund - Class II (NVMMV2)

Nationwide VIT - Multi-Manager Small Cap Growth Fund - Class I (SCGF)

Nationwide VIT - Multi-Manager Small Cap Value Fund - Class I (SCVF)

Nationwide VIT - Multi-Manager Small Company Fund - Class I (SCF)

Nationwide VIT - Nationwide Fund - Class I (TRF)

Nationwide VIT - Nationwide Leaders Fund - Class I (GVUS1)

Nationwide VIT - Neuberger Berman Multi-Cap Opportunities Fund - Class I (NVNMO1)

Nationwide VIT - Neuberger Berman Socially Responsible Fund - Class I (NVNSR1)

Nationwide VIT - Neuberger Berman Socially Responsible Fund - Class II (NVNSR2)*

Nationwide VIT - Short Term Bond Fund - Class I (NVSTB1)*

Nationwide VIT - Short Term Bond Fund - Class II (NVSTB2)

Nationwide VIT - Technology and Communications Fund - Class I (GGTC) (formerly Global Technology and Communications Fund - Class I)

Nationwide VIT - Technology and Communications Fund - Class III (GGTC3) (formerly Global Technology and Communications Fund - Class III)

Nationwide VIT - U.S. Growth Leaders Fund - Class I (GVUG1)

Nationwide VIT - Van Kampen Comstock Value Fund - Class I (EIF)

Nationwide VIT - Van Kampen Multi-Sector Bond Fund - Class I (MSBF)

Nationwide VIT - Van Kampen Real Estate Fund - Class I (NVRE1)

Portfolios of the Neuberger Berman Advisers Management Trust (Neuberger Berman AMT);

Neuberger Berman AMT - Guardian Portfolio - Class I (AMGP)

Neuberger Berman AMT - International Portfolio - Class S (AMINS)

Neuberger Berman AMT - Mid Cap Growth Portfolio - I Class (AMCG)

Neuberger Berman AMT - Partners Portfolio - Class I (AMTP)

Neuberger Berman AMT - Regency Portfolio - Class I (AMRI)

Neuberger Berman AMT - Regency Portfolio - Class S (AMRS)

Neuberger Berman AMT - Small Cap Growth Portfolio - Class S (AMFAS) (formerly Fasciano Portfolio – Class S)

Neuberger Berman AMT - Socially Responsive Portfolio - Class I (AMSRS)

Portfolios of the Oppenheimer Variable Account Funds (Oppenheimer VAF);

Oppenheimer VAF - Capital Appreciation Fund - Non-Service Class (OVGR)

Oppenheimer VAF - Capital Appreciation Fund - Service Class (OVCAFS)*

Oppenheimer VAF - Global Securities Fund - Class 3 (OVGS3)

Oppenheimer VAF - Global Securities Fund - Non-Service Class (OVGS)

Oppenheimer VAF - Global Securities Fund - Service Class (OVGSS)*

Oppenheimer VAF - High Income Fund - Class 3 (OVHI3)

Oppenheimer VAF - High Income Fund - Non-Service Class (OVHI)

Oppenheimer VAF - Main Street Small Cap Fund(R) - Non-Service Class (OVSC)

Oppenheimer VAF - Main Street(R) - Non-Service Class (OVGI)

Oppenheimer VAF - Mid Cap Fund - Non-Service Class (OVAG)

(Continued)

80

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

Oppenheimer VAF - Strategic Bond Fund - Non-Service Class (OVSB)

PIMCO Total Return Fund - Administrative Class (PMTRAD)*

Portfolios of the PIMCO Variable Insurance Trust (PIMCO VIT);

PIMCO VIT - All Asset Portfolio - Administrative Class (PMVAAA)

PIMCO VIT - Foreign Bond Portfolio (unhedged) - Administrative Class (PMVFBA)*

PIMCO VIT - Low Duration Portfolio - Administrative Class (PMVLDA)

PIMCO VIT - Real Return Portfolio - Administrative Class (PMVRRA)

PIMCO VIT - Total Return Portfolio - Administrative Class (PMVTRA)

Portfolios of the Pioneer Variable Contracts Trust (Pioneer VCT);

Pioneer VCT - Pioneer Emerging Markets Portfolio - Class I (PIVEMI)

Pioneer VCT - Pioneer High Yield Portfolio - Class I (PIHYB1)

Portfolios of the Putnam Variable Trust (Putnam VT);

Putnam VT - Growth and Income Fund - Class IB (PVGIB)

Putnam VT - International Equity Fund - Class IB (PVTIGB)

Putnam VT - OTC & Emerging Growth Fund - Class IB (PVOEGB)

Putnam VT - Small Cap Value Fund - Class IB (PVTSCB)

Putnam VT - Vista Fund - Class IB (PVVIB)*

Putnam VT - Voyager Fund - Class IB (PVTVB)

Royce Capital Fund - Micro Cap Portfolio (ROCMC)

Royce Capital Fund - Small Cap Portfolio (ROCSC)

Portfolios of T. Rowe Price;

T. Rowe Price Blue Chip Growth Portfolio - II (TRBCG2)

T. Rowe Price Equity Income Portfolio - II (TREI2)

T. Rowe Price Health Sciences Portfolio - II (TRHS2)

T. Rowe Price Limited Term Bond Portfolio - Class II (TRLT2)

T. Rowe Price Mid Cap Growth Portfolio - II (TRMCG2)

T. Rowe Price New America Growth Portfolio (TRNAG1)

T. Rowe Price Personal Strategy Balanced Portfolio (TRPSB1)

The Dreyfus Socially Responsible Growth Fund, Inc. - Initial Shares (DSRG)

Portfolios of The Universal Institutional Funds, Inc.(The Universal IF, Inc.);

The Universal IF, Inc. - Capital Growth Portfolio - Class I (MSVEG) (formerly Van Kampen UIF - Equity Growth Portfolio - Class I)

Turner GVIT Growth Focus Fund - Class I (TGF)*

Portfolios of the Van Eck Worldwide Insurance Trust;

Van Eck Worldwide Insurance Trust - Emerging Markets Fund - Initial Class (VWEM)

Van Eck Worldwide Insurance Trust - Hard Assets Fund - Initial Class (VWHA)

Portfolios of the Van Kampen Life Investment Trust (Van Kampen LIT);

Van Kampen LIT - Capital Growth Portfolio - Class II (ACEG2) (formerly Strategic Growth Portfolio - Class II)*

Portfolios of the Van Kampen - The Universal Institutional Funds, Inc. (Van Kampen UIF);

Van Kampen UIF - Core Plus Fixed Income Portfolio - Class I (MSVFI)

Van Kampen UIF - Emerging Markets Debt Portfolio - Class I (MSEM)

Van Kampen UIF - Emerging Markets Debt Portfolio - Class II (MSEMB)*

Van Kampen UIF - Global Real Estate Portfolio - Class II (VKVGR2)

Van Kampen UIF - Mid Cap Growth Portfolio - Class II (MSVMG2)*

Van Kampen UIF - Mid Cap Growth Portfolio- Class I (MSVMG)

Van Kampen UIF - U.S. Mid Cap Value Portfolio - Class I (MSVMV)*

Van Kampen UIF - U.S. Real Estate Portfolio - Class I (MSVRE)

Portfolios of the Vanguard(R) Variable Insurance Funds (Vanguard(R) VIF);

Vanguard(R) VIF - Balanced Portfolio (VVB)

Vanguard(R) VIF - Diversified Value Portfolio (VVDV)

Vanguard(R) VIF - International Portfolio (VVI)

Vanguard(R) VIF - Mid Cap Index Portfolio (VVMCI)

Vanguard(R) VIF - Short-Term Investment-Grade Portfolio (VVSTC)

Portfolios of the Wells Fargo Advantage Variable Trust Funds(SM) (Wells Fargo AVT);

Wells Fargo AVT - Discovery Fund(SM) (SVDF)

Wells Fargo AVT - Opportunity Fund(SM) (SVOF)

Wells Fargo AVT - Small Cap Growth Fund (WFVSCG)

* At December 31, 2008, contract owners were not invested in this fund.

The contract owners’ equity is affected by the investment results of each fund, equity transactions by contract owners and certain policy and asset charges (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.

(Continued)

81

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

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.

A purchase payment could be presented as a negative equity transaction in the Statements of Changes in Contract Owners’ Equity if a prior period purchase payment is refunded to a contract owner due to a contract cancellation during the free look period, and/or if a gain is realized by the contract owner during the free look period.

(c) Security Valuation, Transactions and Related Investment Income

Investments in underlying mutual funds are valued on the closing net asset value per share at December 31, 2008 of such funds, which value their investment securities at fair value. The cost of investments sold is determined on a first in – first out basis. Investment transactions are accounted for on the trade date (date the order to buy or sell is executed), and dividends and capital gain distributions are accrued as of the ex-dividend date and are reinvested in the underlying mutual funds.

(d) Federal Income Taxes

Operations of the Account form a part of, and are taxed with, operations of the Company, which is taxed as a life insurance company under the provisions of the Internal Revenue Code. The Company does not provide for income taxes within the Account. Taxes are generally 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 U.S. generally accepted accounting principles 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.

(f) Recently Issued Accounting Standard

In September 2006, the FASB issued SFAS 157, Fair Value Measurements (SFAS 157). SFAS 157 provides enhanced guidance for using fair value to measure assets and liabilities and requires new disclosures about fair value measurements. SFAS 157 also provides guidance regarding the extent to which companies measure assets and liabilities at fair value, the information used to measure fair value, and the effect of fair value measurements on earnings. For assets and liabilities that are measured at fair value on a recurring basis in periods subsequent to initial recognition, the reporting entity shall disclose information that enables financial statement users to assess the inputs used to develop those measurements. SFAS 157 applies whenever other standards require (or permit) assets or liabilities to be measured at fair value but does not expand the use of fair value in any new circumstances. SFAS 157 is effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years, with early adoption permitted. The Company will adopt SFAS 157 effective January 1, 2008. SFAS 157 is not expected to have a material impact on the Company’s financial position or results of operations upon adoption.

(2) Policy Charges

(a) Deductions from Premium

For individual flexible premium and survivorship contracts, the Company deducts a minimum of 0.5% to a maximum of 7.5% of all premiums received to cover premium tax and sales expense. The Company may, at its sole discretion, reduce the sales loading portion of the premium load.

There are no deductions from premium on modified single premium contracts.

For the Corporate Series, the Company deducts a front-end sales load of 9.0% (5.5% starting in the seventh policy year) from each premium payment received. The Company may reduce this charge where the size or nature of the group results in savings in sales, underwriting, or administrative costs. Variations due to differences in costs are determined in a manner not unfairly discriminatory to policy owners.

(Continued)

82

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

For Future Corporate Flexible Premium Variable Universal Life this charge is guaranteed not to exceed 12% (5.5% starting in the sixth policy year) from each premium payment received.

For Next Generation Corporate Owned Flexible Premium Variable Universal Life this charge is guaranteed not to exceed 10% from each premium payment received.

For the periods ended December 31, 2007 and 2006, total front-end sales charge deductions were $18,211,128 and $22,337,781, respectively and were recognized as a reduction of purchase payments on the Statement of Changes in Contract Owners’ Equity.

(b) Cost of Insurance

A cost of insurance charge is assessed monthly against each contract by liquidating units. The amount of the charge varies widely and is based upon age, sex, rate class and net amount at risk (death benefit less total contract value).

(c) Administrative Charges

For flexible premium survivorship, the Company currently deducts a minimum monthly administration charge of $5 per policy month to a maximum of $10 per policy month to recover policy maintenance, accounting, record keeping and other administrative expenses. These charges are assessed monthly against each contract by liquidating units.

For modified single premium contracts, for all states other than New York, the Company currently deducts a minimum monthly administration charge of $10 per policy per month. The actual charge is determined by multiplying 0.30% on an annualized basis by the policy’s cash value. This charge may be reduced to 0.15% on an annualized basis for policy years 11 and later. In New York, this charge is assessed in all policy years, with a maximum charge of $7.50 per month. These charges are assessed monthly against each contract by liquidating units.

For ProtectionSM flexible premium contracts, the Company deducts a policy expense per $1,000 of Specified Amount charge for the first two policy years. This charge varies with the age of the insured and will not exceed $0.30 per $1,000 of Specified Amount. For last survivor contracts, the Company deducts a per $1,000 of Specified Amount charge for the first 3 policy years. This charge varies with the age of the insured and will not exceed $0.40 per $1,000 of Specified Amount. These charges are assessed monthly against each contract by liquidating units.

For the Corporate Series, the Company deducts a monthly administrative expense charge to recover policy maintenance, accounting, record keeping and other administrative expenses. These charges are assessed against each contract by liquidating units. Currently, this charge is $5 per month in all policy years (guaranteed not to exceed $10 per month).

(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 individual flexible premium, flexible premium survivorship and modified single premium and corporate contracts, the charge is 100% of the initial surrender charge in the first year, and declines a Specified Amount each year to 0% of the initial surrender charge in the ninth year or later. 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. The charges are assessed against each contract by liquidating units.

Corporate contracts do not currently assess surrender charges.

(3) Asset Charges

The Company deducts a charge related to the assumption of mortality and expense risk.

(a) Modified Single Premium Contracts (MSP)

For modified single premium contracts, the Company deducts a charge equal to an annualized rate of 0.70% of the cash surrender value of the sub-accounts. This charge is assessed monthly against each contract by liquidating units.

(Continued)

83

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

(b) Flexible Premium and Variable Executive Life Contracts (FPVUL and VEL)

For Choice LifeSM contracts, the Company deducts a charge of $0.50 per $1,000 on the first $25,000 of cash surrender value attributable to the variable account, $0.25 per $1,000 on $25,001 up to $250,000 of cash surrender value attributable to the variable account and $0.08 per $1,000 over $250,000 of cash surrender value attributable to the variable account. This charge is assessed monthly against each contract by liquidating units. For Choice Life ProtectionSM contracts and Best of America® ProtectionSM contracts, the Company deducts $0.66 per $1,000 of cash surrender value attributable to the variable account during the first through fifteenth years from the Policy Date. Thereafter, this charge is $0.25 per $1,000 of cash surrender value attributable to the variable account. This charge is assessed monthly against each contract by liquidating units.

(c) Survivorship Life Contracts (SL)

For Choice Survivorship and Last Survivor contracts, during the first ten policy years, the Company deducts a charge of $0.46 per $1,000 on the first $25,000 of cash surrender value attributable to the variable account; $0.46 per $1,000 on $25,001 up to $99,999 of cash surrender value attributable to the variable account; and $0.46 per $1,000 on $100,000 or more of cash surrender value attributable to the variable account. After ten years from the Policy Date, the Company deducts $0.46 per $1,000 on the first $25,000 of cash surrender value attributable to the variable account; $0.29 per $1,000 on $25,001 up to $99,999 of cash surrender value attributable to the variable account; and $0.17 per $1,000 on $100,000 or more of cash surrender value attributable to the variable account. This charge is assessed monthly against each contract by liquidating units.

For ChoiceLifeSM Survivorship II and Next GenerationSM Survivorship Life contracts, during the first fifteen policy years, the Company deducts a charge of $0.50 per $1,000 on the first $25,000 of cash surrender value attributable to the variable account; $0.25 per $1,000 on $25,001 up to $250,000 of cash surrender value attributable to the variable account; and $0.08 per $1,000 over $250,000 of cash surrender value attributable to the variable account. After fifteen years from the Policy Date, the Company deducts $0.50 per $1,000 on the first $25,000 of cash surrender value attributable to the variable account and $0.08 per $1,000 over $25,000 of cash surrender value attributable to the variable account. This charge is assessed monthly against each contract by liquidating units.

For ProtectionSM Survivorship and ChoiceLife ProtectionSM Survivorship Life contracts, during the first fifteen policy years, the Company deducts a charge of $0.66 per $1,000 of cash surrender value attributable to the variable account. After fifteen years from the Policy Date, the Company deducts $0.25 per $1,000 of cash surrender value attributable to the variable account. This charge is assessed monthly against each contract by liquidating units.

(d) Corporate Contracts

For Future Corporate Flexible Premium Variable Universal Life, the Company deducts a charge guaranteed not to exceed an annualized rate of 0.90% of the daily net assets of the Account for the first five policy years. For policy years six and later this charge is guaranteed not to exceed 5.5%. Currently, this rate is 0.25% during the first through fourth policy years, 0.20% during the fifth through fifteenth policy years, and 0.10% thereafter. This charge is assessed monthly against each contract by liquidating units.

For Next Generation Corporate Owned Flexible Premium Variable Universal Life, the Company deducts a charge guaranteed not to exceed an annualized rate of 1.25% of the daily net assets of the Account. Currently, this rate will not exceed 0.60%. This charge is assessed monthly against each contract by liquidating units.

The Company 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 the Company. These charges may be reduced in certain group sponsored arrangements or special exchange programs made available by the Company.

(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 variable cash surrender value plus 100% of a policy’s fixed cash surrender value less applicable value of surrender charge. 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

(Continued)

84

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

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 credited 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, postage, fund transfer agency and various other record keeping and customer service functions. These fees are paid to an affiliate of the Company. Contract owners may, with certain restrictions, transfer their assets between the Account and a fixed dollar contract (fixed account) maintained in the accounts of the Company. These transfers are the result of the contract owner executing fund exchanges. Fund exchanges from the Account to the fixed account are included in surrenders, and fund exchanges from the fixed account to the Account are included in purchase payments received from contact owners, as applicable, on the accompanying Statements of Change in Contract Owners’ Equity. Policy loan transactions (note 5), executed at the direction of the contract owner, also result in transfers between the Account and the fixed account of the Company, but are included in Net Policy (Loans) Repayments. The fixed account assets are not reflected in the accompanying financial statements. For the periods ended December 31, 2007 and 2006, total transfers into the Account from the fixed account were $37,793,952 and $26,820,115, respectively, and total transfers from the Account to the fixed account were $78,945,707 and $52,254,217, respectively.

7) Fair Value Measurement

SFAS 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the Account generally uses the market approach as the valuation technique due to the nature of the mutual fund investments offered in the Account. This technique maximizes the use of observable inputs and minimizes the use of unobservable inputs.

In accordance with SFAS 157, the Account categorized its financial instruments into a three level hierarchy based on the priority of the inputs to the valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument in its entirety.

The Company categorizes financial assets recorded at fair value as follows:

• Level 1 – Unadjusted quoted prices accessible in active markets for identical assets at the measurement date. The assets utilizing Level 1 valuations represent investments in publicly-traded registered mutual funds with quoted market prices.  

• Level 2 – Unadjusted quoted prices for similar assets in active markets or inputs (other than quoted prices) that are observable or that are derived principally from or corroborated by observable market data through correlation or other means. The assets utilizing Level 2 valuations represent investments in privately-traded registered mutual funds only offered through insurance products.  

• Level 3 – Prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. The Account invests only in funds with fair value measurements in the first two levels of the fair value hierarchy.  

The following table summarizes assets measured at fair value on a recurring basis as of December 31, 2008:

	Level 1	Level 2		Level 3	Total
Separate Account Investments	0	$	3,234,054,969	0	$	3,234,054,969

Accounts Payable of $151,674 are measured at settlement value which approximates the fair value due to the short-term nature of such liabilities.

The Account did not have any assets or liabilities reported at fair value on a nonrecurring basis required to be disclosed under SFAS 157.

(Continued)

85

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

(8) Financial Highlights

The following tabular presentation is a summary of units, unit fair values and contract owners’ equity outstanding for variable annuity contracts as of the end of the periods indicated, and the contract expense rate, investment income ratio and total return for each of the periods in the five year period ended December 31, 2008.

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
AIM VIF - Basic Value Fund - Series I (AVBVI)
2008	0.00	%	322,494	$	8.572219	$	2,764,489	0.87	%	-51.77	%
2008	0.10	%	14,438		8.518126		122,985	0.87	%	-51.82	%
2008	0.25	%	65,576		8.437654		553,308	0.87	%	-51.89	%
2008	0.40	%	11,858		8.357923		99,108	0.87	%	-51.96	%
2007	0.00	%	315,430		17.772480		5,605,973	0.59	%	1.54	%
2007	0.10	%	14,780		17.678080		261,282	0.59	%	1.44	%
2007	0.20	%	34,052		17.584241		598,779	0.59	%	1.34	%
2007	0.25	%	74,740		17.537474		1,310,751	0.59	%	1.29	%
2007	0.40	%	16,380		17.397964		284,979	0.59	%	1.14	%
2006	0.00	%	334,122		17.502242		5,847,884	0.42	%	13.20	%
2006	0.10	%	1,258		17.426798		21,923	0.42	%	13.09	%
2006	0.20	%	55,730		17.351728		967,012	0.42	%	12.98	%
2006	0.25	%	70,154		17.314284		1,214,666	0.42	%	12.92	%
2006	0.40	%	30,412		17.202471		523,162	0.42	%	12.75	%
2005	0.00	%	300,432		15.460790		4,644,916	0.09	%	5.74	%
2005	0.10	%	174		15.409499		2,681	0.09	%	5.63	%
2005	0.20	%	46,214		15.358428		709,774	0.09	%	5.53	%
2005	0.25	%	54,050		15.332927		828,745	0.09	%	5.47	%
2005	0.40	%	44,502		15.256716		678,954	0.09	%	5.32	%
2004	0.00	%	218,854		14.622048		3,200,094	0.00	%	11.07	%
2004	0.10	%	27,138		14.588087		395,892	0.00	%	10.96	%
2004	0.20	%	23,358		14.554224		339,958	0.00	%	10.85	%
2004	0.25	%	98,126		14.537319		1,426,489	0.00	%	10.79	%
2004	0.40	%	73,606		14.486704		1,066,308	0.00	%	10.63	%
AIM VIF - Capital Appreciation Fund - Series I (AVCA)
2008	0.00	%	73,269		9.848393		721,582	0.00	%	-42.49	%
2007	0.00	%	101,352		17.125365		1,735,690	0.00	%	12.01	%
2006	0.00	%	102,104		15.288632		1,561,030	0.06	%	6.30	%
2005	0.00	%	85,976		14.382523		1,236,552	0.08	%	8.84	%
2004	0.00	%	57,596		13.214909		761,126	0.00	%	6.63	%
AIM VIF - Capital Development Fund - Series I (AVCDI)
2008	0.00	%	186,381		11.515462		2,146,263	0.00	%	-47.03	%
2008	0.10	%	18,486		11.442826		211,532	0.00	%	-47.08	%
2008	0.20	%	60,947		11.370648		693,007	0.00	%	-47.13	%
2008	0.25	%	249,314		11.334726		2,825,906	0.00	%	-47.16	%
2008	0.40	%	60,293		11.227657		676,949	0.00	%	-47.24	%
2007	0.00	%	192,610		21.737696		4,186,898	0.00	%	10.84	%
2007	0.10	%	113,300		21.622263		2,449,802	0.00	%	10.73	%
2007	0.20	%	105,866		21.507445		2,276,907	0.00	%	10.62	%
2007	0.25	%	191,752		21.450254		4,113,129	0.00	%	10.57	%
2007	0.40	%	129,860		21.279639		2,763,374	0.00	%	10.40	%
2006	0.00	%	180,668		19.610981		3,543,077	0.00	%	16.52	%
2006	0.10	%	100,288		19.526450		1,958,269	0.00	%	16.40	%
2006	0.20	%	73,000		19.442307		1,419,288	0.00	%	16.29	%
2006	0.25	%	158,748		19.400361		3,079,769	0.00	%	16.23	%
2006	0.40	%	137,464		19.275099		2,649,632	0.00	%	16.06	%
2005	0.00	%	164,886		16.830569		2,775,125	0.00	%	9.60	%
2005	0.10	%	29,388		16.774744		492,976	0.00	%	9.50	%
2005	0.20	%	21,682		16.719125		362,504	0.00	%	9.39	%
2005	0.25	%	93,372		16.691371		1,558,507	0.00	%	9.33	%
2005	0.40	%	247,510		16.608430		4,110,753	0.00	%	9.17	%
2004	0.00	%	122,266		15.355666		1,877,476	0.00	%	15.50	%
2004	0.10	%	12,220		15.320003		187,210	0.00	%	15.38	%
2004	0.20	%	996		15.284432		15,223	0.00	%	15.27	%
2004	0.25	%	27,246		15.266666		415,956	0.00	%	15.21	%
2004	0.40	%	59,864		15.213529		910,743	0.00	%	15.04	%

(Continued)

86

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
AIM VIF - International Growth Fund - Series I (AVIE)
2008	0.00	%	5,516	$	12.348500	$	68,114	0.54	%	-40.38	%
2008	0.10	%	207,823		12.291069		2,554,367	0.54	%	-40.44	%
2008	0.20	%	118,867		12.233919		1,454,209	0.54	%	-40.50	%
2008	0.25	%	1,309,467		12.205427		15,982,604	0.54	%	-40.53	%
2008	0.40	%	203,177		12.120383		2,462,583	0.54	%	-40.62	%
2007	0.10	%	183,632		20.636261		3,789,478	0.53	%	14.60	%
2007	0.20	%	187,080		20.560904		3,846,534	0.53	%	14.49	%
2007	0.25	%	903,590		20.523294		18,544,643	0.53	%	14.43	%
2007	0.40	%	475,710		20.410961		9,709,698	0.53	%	14.26	%
2006	0.20	%	189,366		17.958795		3,400,785	0.97	%	27.98	%
2006	0.25	%	447,740		17.934952		8,030,195	0.97	%	27.91	%
2006	0.40	%	461,146		17.863705		8,237,776	0.97	%	27.72	%
2005	0.20	%	451,992		14.032735		6,342,684	1.14	%	17.69	%
2005	0.25	%	202,258		14.021093		2,835,878	1.14	%	17.63	%
2005	0.40	%	457,728		13.986284		6,401,914	1.14	%	17.46	%
2004	0.20	%	126,346		11.923183		1,506,446	1.36	%	19.23	%	5/3/2004
2004	0.25	%	26,402		11.919243		314,692	1.36	%	19.19	%	5/3/2004
2004	0.40	%	152,296		11.907437		1,813,455	1.36	%	19.07	%	5/3/2004
AllianceBernstein VPS - Growth and Income Portfolio - Class A (ALVGIA)
2008	0.00	%	227,556		11.368917		2,587,065	2.03	%	-40.60	%
2008	0.10	%	84,717		11.297207		957,065	2.03	%	-40.66	%
2008	0.25	%	548,481		11.190516		6,137,785	2.03	%	-40.75	%
2008	0.40	%	31,102		11.084829		344,760	2.03	%	-40.84	%
2007	0.00	%	232,948		19.140759		4,458,802	1.44	%	5.12	%
2007	0.10	%	63,136		19.039121		1,202,054	1.44	%	5.01	%
2007	0.20	%	47,418		18.938067		898,005	1.44	%	4.91	%
2007	0.25	%	720,052		18.887703		13,600,128	1.44	%	4.85	%
2007	0.40	%	63,592		18.737498		1,191,555	1.44	%	4.70	%
2006	0.00	%	241,896		18.208779		4,404,631	1.37	%	17.29	%
2006	0.10	%	3,554		18.130310		64,435	1.37	%	17.17	%
2006	0.20	%	44,760		18.052215		808,017	1.37	%	17.05	%
2006	0.25	%	422,112		18.013258		7,603,612	1.37	%	16.99	%
2006	0.40	%	395,572		17.896979		7,079,544	1.37	%	16.82	%
2005	0.00	%	247,326		15.525074		3,839,754	1.48	%	4.87	%
2005	0.10	%	84,426		15.473584		1,306,373	1.48	%	4.76	%
2005	0.20	%	37,842		15.422290		583,610	1.48	%	4.66	%
2005	0.25	%	369,126		15.396687		5,683,317	1.48	%	4.61	%
2005	0.40	%	386,306		15.320186		5,918,280	1.48	%	4.45	%
2004	0.00	%	243,956		14.804614		3,611,674	0.92	%	11.46	%
2004	0.10	%	13,180		14.770235		194,672	0.92	%	11.35	%
2004	0.20	%	28,554		14.735953		420,770	0.92	%	11.24	%
2004	0.25	%	426,728		14.718823		6,280,934	0.92	%	11.18	%
2004	0.40	%	309,918		14.667608		4,545,756	0.92	%	11.02	%

(Continued)

87

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
AllianceBernstein VPS - International Value Portfolio - Class A (ALVIVA)
2008	0.00	%	84,052	$	5.619859	$	472,360	1.09	%	-53.18	%
2008	0.20	%	981,200		5.589904		5,484,814	1.09	%	-53.28	%
2008	0.25	%	2,650,624		5.582435		14,796,936	1.09	%	-53.30	%
2008	0.40	%	967,247		5.560105		5,377,995	1.09	%	-53.37	%
2007	0.20	%	656,858		11.964050		7,858,682	1.13	%	5.63	%
2007	0.25	%	1,304,024		11.954073		15,588,398	1.13	%	5.57	%
2007	0.40	%	764,464		11.924192		9,115,616	1.13	%	5.42	%
2006	0.20	%	287,868		11.326575		3,260,558	0.57	%	13.27	%	5/1/2006
2006	0.25	%	343,264		11.322832		3,886,721	0.57	%	13.23	%	5/1/2006
2006	0.40	%	453,968		11.311574		5,135,093	0.57	%	13.12	%	5/1/2006
AllianceBernstein VPS - Small-Mid Cap Value Portfolio - Class A (ALVSVA)
2008	0.00	%	231,734		13.192861		3,057,234	0.72	%	-35.58	%
2008	0.25	%	95,945		13.007237		1,247,979	0.72	%	-35.74	%
2008	0.40	%	489		12.897108		6,307	0.72	%	-35.83	%
2007	0.00	%	214,120		20.478040		4,384,758	0.89	%	1.70	%
2007	0.25	%	62,706		20.240586		1,269,206	0.89	%	1.45	%
2006	0.00	%	168,136		20.134859		3,385,395	0.45	%	14.42	%
2005	0.00	%	198,030		17.597332		3,484,800	0.74	%	6.91	%
2004	0.00	%	181,154		16.459431		2,981,692	0.13	%	19.30	%
American Century VP - Income & Growth Fund - Class I (ACVIG)
2008	0.00	%	1,027,223		11.575621		11,890,744	2.04	%	-34.59	%
2008	0.10	%	110,562		8.825580		975,774	2.04	%	-34.65	%
2008	0.20	%	111,787		8.619752		963,576	2.04	%	-34.72	%
2008	0.25	%	128,424		8.584965		1,102,516	2.04	%	-34.75	%
2007	0.00	%	1,143,260		17.695903		20,231,018	1.91	%	-0.07	%
2007	0.10	%	113,024		13.505398		1,526,434	1.91	%	-0.17	%
2007	0.20	%	101,346		13.203656		1,338,138	1.91	%	-0.27	%
2007	0.25	%	200,072		13.156950		2,632,337	1.91	%	-0.32	%
2006	0.00	%	1,305,236		17.707797		23,112,854	1.85	%	17.09	%
2006	0.10	%	23,772		13.528072		321,589	1.85	%	16.97	%
2006	0.20	%	163,996		13.239121		2,171,163	1.85	%	16.85	%
2006	0.25	%	284,862		13.198939		3,759,876	1.85	%	16.80	%
2006	0.40	%	280		14.724248		4,123	1.85	%	16.62	%
2005	0.00	%	1,496,010		15.123633		22,625,106	1.94	%	4.63	%
2005	0.10	%	27,068		11.565387		313,052	1.94	%	4.53	%
2005	0.20	%	123,222		11.329648		1,396,062	1.94	%	4.42	%
2005	0.25	%	284,088		11.300886		3,210,446	1.94	%	4.37	%
2005	0.40	%	1,326		12.625722		16,742	1.94	%	4.21	%
2004	0.00	%	1,546,166		14.454301		22,348,749	1.37	%	12.99	%
2004	0.10	%	39,010		11.064552		431,628	1.37	%	12.88	%
2004	0.20	%	141,218		10.849845		1,532,193	1.37	%	12.77	%
2004	0.25	%	368,640		10.827688		3,991,519	1.37	%	12.71	%
2004	0.40	%	177,026		12.115153		2,144,697	1.37	%	12.54	%

(Continued)

88

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
American Century VP - Inflation Protection Fund - Class II (ACVIP2)
2008	0.00	%	1,471,121	$	12.144940	$	17,866,676	4.70	%	-1.59	%
2007	0.00	%	555,690		12.340997		6,857,769	4.55	%	9.49	%
2006	0.00	%	555,240		11.270913		6,258,062	3.48	%	1.59	%
2005	0.00	%	535,932		11.094803		5,946,060	4.48	%	1.56	%
2004	0.00	%	457,932		10.924094		5,002,492	3.35	%	5.81	%
American Century VP - International Fund - Class I (ACVI)
2008	0.00	%	712,789		12.061113		8,597,029	0.81	%	-44.82	%
2008	0.10	%	585,318		9.812726		5,743,565	0.81	%	-44.88	%
2008	0.20	%	669,811		7.700423		5,157,828	0.81	%	-44.93	%
2008	0.25	%	595,526		7.669381		4,567,316	0.81	%	-44.96	%
2007	0.00	%	846,898		21.858923		18,512,278	0.70	%	18.06	%
2007	0.10	%	655,660		17.801907		11,671,998	0.70	%	17.94	%
2007	0.20	%	563,546		13.983846		7,880,540	0.70	%	17.82	%
2007	0.25	%	760,806		13.934456		10,601,418	0.70	%	17.76	%
2007	0.40	%	3,154		17.343787		54,702	0.70	%	17.58	%
2006	0.00	%	1,069,366		18.515660		19,800,017	1.58	%	25.03	%
2006	0.10	%	620,316		15.094317		9,363,246	1.58	%	24.90	%
2006	0.20	%	530,226		11.868885		6,293,191	1.58	%	24.78	%
2006	0.25	%	987,980		11.832909		11,690,677	1.58	%	24.71	%
2006	0.40	%	146,198		14.750278		2,156,461	1.58	%	24.53	%
2005	0.00	%	1,314,688		14.809535		19,469,918	1.25	%	13.25	%
2005	0.10	%	645,460		12.085047		7,800,414	1.25	%	13.14	%
2005	0.20	%	640,818		9.512128		6,095,543	1.25	%	13.03	%
2005	0.25	%	882,458		9.488028		8,372,786	1.25	%	12.97	%
2005	0.40	%	243,536		11.844974		2,884,678	1.25	%	12.80	%
2004	0.00	%	1,713,168		13.076396		22,402,063	0.56	%	14.92	%
2004	0.10	%	881,348		10.681395		9,414,026	0.56	%	14.81	%
2004	0.20	%	434,052		8.415693		3,652,848	0.56	%	14.69	%
2004	0.25	%	923,768		8.398563		7,758,324	0.56	%	14.64	%
2004	0.40	%	1,074,540		10.500552		11,283,263	0.56	%	14.47	%
American Century VP - International Fund - Class III (ACVI3)
2008	0.00	%	684,882		9.507294		6,511,375	0.80	%	-44.82	%
2007	0.00	%	702,238		17.230511		12,099,920	0.60	%	18.06	%
2006	0.00	%	548,782		14.595156		8,009,559	1.38	%	25.03	%
2005	0.00	%	366,150		11.673757		4,274,346	0.00	%	16.74	%	5/2/2005
American Century VP - Mid Cap Value Fund - Class I (ACVMV1)
2008	0.00	%	162,562		10.066767		1,636,474	0.10	%	-24.35	%
2008	0.25	%	14,371		9.974909		143,349	0.10	%	-24.54	%
2008	0.40	%	655		9.920204		6,498	0.10	%	-24.65	%
2007	0.00	%	172,152		13.306496		2,290,740	0.74	%	-2.31	%
2007	0.25	%	48		13.218157		634	0.74	%	-2.55	%
2006	0.00	%	88,992		13.620466		1,212,113	0.96	%	20.30	%
2005	0.00	%	57,178		11.322176		647,379	1.24	%	13.22	%	5/2/2005

(Continued)

89

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
American Century VP - Ultra(R) Fund - Class I (ACVU1)
2008	0.00	%	241,214	$	7.776182	$	1,875,724	0.00	%	-41.48	%
2008	0.10	%	55,133		7.724476		425,874	0.00	%	-41.54	%
2008	0.25	%	26,763		7.647567		204,672	0.00	%	-41.63	%
2008	0.40	%	155		7.571430		1,174	0.00	%	-41.71	%
2007	0.00	%	263,464		13.288079		3,500,930	0.00	%	21.02	%
2007	0.10	%	72,634		13.212973		959,711	0.00	%	20.89	%
2007	0.20	%	61,870		13.138291		812,866	0.00	%	20.77	%
2007	0.25	%	27,300		13.101110		357,660	0.00	%	20.71	%
2007	0.40	%	9,950		12.990210		129,253	0.00	%	20.53	%
2006	0.00	%	257,010		10.980437		2,822,082	0.00	%	-3.28	%
2006	0.10	%	28,308		10.929351		309,388	0.00	%	-3.37	%
2006	0.20	%	38,106		10.878509		414,536	0.00	%	-3.47	%
2006	0.25	%	24,306		10.853176		263,797	0.00	%	-3.52	%
2006	0.40	%	15,632		10.777532		168,474	0.00	%	-3.66	%
2005	0.00	%	263,874		11.352287		2,995,573	0.00	%	2.17	%
2005	0.10	%	28,300		11.310747		320,094	0.00	%	2.06	%
2005	0.20	%	34,792		11.269368		392,084	0.00	%	1.96	%
2005	0.25	%	252,658		11.248731		2,842,082	0.00	%	1.91	%
2005	0.40	%	28,284		11.187064		316,415	0.00	%	1.76	%
2004	0.00	%	229,742		11.111676		2,552,819	0.00	%	10.68	%
2004	0.10	%	9,976		11.082064		110,555	0.00	%	10.56	%
2004	0.20	%	7,212		11.052535		79,711	0.00	%	10.45	%
2004	0.25	%	212,496		11.037791		2,345,486	0.00	%	10.40	%
2004	0.40	%	102,910		10.993709		1,131,363	0.00	%	10.23	%
American Century VP - Value Fund - Class I (ACVV)
2008	0.00	%	1,960,285		15.448478		30,283,420	2.41	%	-26.78	%
2008	0.10	%	148,861		15.154320		2,255,887	2.41	%	-26.85	%
2008	0.20	%	126,637		13.087397		1,657,349	2.41	%	-26.92	%
2008	0.25	%	740,756		13.034585		9,655,447	2.41	%	-26.96	%
2008	0.40	%	89,037		13.275233		1,181,987	2.41	%	-27.07	%
2007	0.00	%	2,211,696		21.097489		46,661,232	1.58	%	-5.14	%
2007	0.10	%	146,596		20.716530		3,036,960	1.58	%	-5.23	%
2007	0.20	%	200,240		17.908888		3,586,076	1.58	%	-5.33	%
2007	0.25	%	644,276		17.845573		11,497,474	1.58	%	-5.38	%
2007	0.40	%	199,154		18.202380		3,625,077	1.58	%	-5.52	%
2006	0.00	%	2,442,604		22.240206		54,324,016	1.41	%	18.65	%
2006	0.10	%	62,962		21.860590		1,376,386	1.41	%	18.53	%
2006	0.20	%	228,952		18.916906		4,331,063	1.41	%	18.42	%
2006	0.25	%	552,364		18.859509		10,417,314	1.41	%	18.36	%
2006	0.40	%	250,854		19.265641		4,832,863	1.41	%	18.18	%
2005	0.00	%	2,800,196		18.743947		52,486,725	0.83	%	5.03	%
2005	0.10	%	71,456		18.442377		1,317,818	0.83	%	4.93	%
2005	0.20	%	421,892		15.974895		6,739,680	0.83	%	4.82	%
2005	0.25	%	496,994		15.934364		7,919,283	0.83	%	4.77	%
2005	0.40	%	371,836		16.301854		6,061,616	0.83	%	4.62	%
2004	0.00	%	2,668,438		17.845717		47,620,189	0.97	%	14.33	%
2004	0.10	%	59,642		17.576102		1,048,274	0.97	%	14.22	%
2004	0.20	%	321,958		15.239704		4,906,545	0.97	%	14.10	%
2004	0.25	%	351,012		15.208626		5,338,410	0.97	%	14.05	%
2004	0.40	%	572,678		15.582659		8,923,846	0.97	%	13.88	%

(Continued)

90

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
American Century VP - Vista(SM) Fund - Class I (ACVVS1)
2008	0.00	%	193,947	$	8.973691	$	1,740,420	0.00	%	-48.62	%
2008	0.10	%	71,127		8.940846		635,936	0.00	%	-48.67	%
2008	0.25	%	86,096		8.891784		765,547	0.00	%	-48.75	%
2008	0.40	%	10,525		8.843015		93,073	0.00	%	-48.83	%
2007	0.00	%	227,012		17.466180		3,965,032	0.00	%	39.77	%
2007	0.10	%	29,042		17.419741		505,904	0.00	%	39.63	%
2007	0.25	%	48,218		17.350253		836,594	0.00	%	39.42	%
2007	0.40	%	9,298		17.281076		160,679	0.00	%	39.21	%
2006	0.00	%	13,662		12.496264		170,724	0.00	%	9.01	%
2006	0.25	%	4,932		12.444525		61,376	0.00	%	8.74	%
2006	0.40	%	9,374		12.413582		116,365	0.00	%	8.57	%
2005	0.00	%	7,434		11.463606		85,220	0.00	%	14.64	%	5/2/2005
2005	0.25	%	248		11.444645		2,838	0.00	%	14.45	%	5/2/2005
2005	0.40	%	596		11.433293		6,814	0.00	%	14.33	%	5/2/2005
American Funds IS - Asset Allocation Fund - Class 2 (AMVAA2)
2008	0.00	%	25,201		6.821773		171,916	4.65	%	-29.51	%
2008	0.25	%	88,189		6.800279		599,710	4.65	%	-29.69	%
2008	0.40	%	3,451		6.787413		23,423	4.65	%	-29.79	%
American Funds IS - Bond Fund - Class 2 (AMVBD2)
2008	0.00	%	702		9.111914		6,397	5.81	%	-9.35	%
2008	0.20	%	49,461		9.088973		449,550	5.81	%	-9.53	%
2008	0.25	%	12,173		9.083242		110,570	5.81	%	-9.57	%
American Funds IS - Global Small Capitalization Fund - Class 2 (AMVGS2)
2008	0.20	%	45,204		5.039200		227,792	0.00	%	-49.61	%	1/16/2008
2008	0.25	%	4,127		5.036777		20,787	0.00	%	-49.63	%	1/16/2008
American Funds IS - Growth Fund - Class 2 (AMVGR2)
2008	0.20	%	138,139		5.623019		776,758	0.96	%	-43.77	%	1/2/2008
2008	0.25	%	12,612		5.620215		70,882	0.96	%	-43.80	%	1/2/2008
BlackRock International Index V.I. Fund - Class II (MLVIX2)
2006	0.25	%	82,570		14.583459		1,204,156	5.83	%	25.37	%
2006	0.40	%	17,946		14.547195		261,064	5.83	%	25.18	%
2005	0.25	%	732		11.632654		8,515	1.76	%	16.33	%	5/2/2005
2005	0.40	%	220		11.621096		2,557	1.76	%	16.21	%	5/2/2005
BlackRock Large Cap Core V.I. Fund - Class II (MLVLC2)
2008	0.00	%	2,673		8.791079		23,499	0.50	%	-38.83	%
2008	0.10	%	27,826		8.758902		243,725	0.50	%	-38.89	%
2008	0.25	%	61,843		8.710851		538,705	0.50	%	-38.99	%
2008	0.40	%	11,606		8.663056		100,543	0.50	%	-39.08	%
2007	0.10	%	16,026		14.333835		229,714	1.23	%	8.02	%
2007	0.25	%	230,248		14.276667		3,287,174	1.23	%	7.86	%
2007	0.40	%	15,428		14.219711		219,382	1.23	%	7.69	%
2006	0.25	%	131,296		13.236885		1,737,950	0.79	%	14.33	%
2006	0.40	%	17,728		13.203975		234,080	0.79	%	14.16	%
2005	0.25	%	101,208		11.577932		1,171,779	0.74	%	15.78	%	5/2/2005
2005	0.40	%	73,626		11.566434		851,590	0.74	%	15.66	%	5/2/2005
Calvert Variable Series Inc. - Social Equity Portfolio (CVSSE)
2008	0.10	%	4,626		10.881799		50,339	0.00	%	-35.86	%
2008	0.25	%	5,877		10.779017		63,348	0.00	%	-35.95	%
2007	0.10	%	3,460		16.964928		58,699	0.00	%	9.88	%
2007	0.25	%	4,512		16.829986		75,937	0.00	%	9.71	%
2006	0.10	%	1,026		15.439612		15,841	0.00	%	9.95	%
2006	0.25	%	7,002		15.339931		107,410	0.00	%	9.78	%
2006	0.40	%	512		15.240875		7,803	0.00	%	9.62	%
2005	0.10	%	1,026		14.042800		14,408	0.06	%	4.44	%
2005	0.25	%	1,152		13.973029		16,097	0.06	%	4.28	%
2005	0.40	%	428		13.903575		5,951	0.06	%	4.13	%
2004	0.10	%	1,026		13.445930		13,796	0.08	%	7.05	%
2004	0.25	%	826		13.399142		11,068	0.08	%	6.89	%
2004	0.40	%	6,064		13.352495		80,970	0.08	%	6.73	%

(Continued)

91

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
Credit Suisse Trust - Global Small Cap Portfolio (WVCP)
2008	0.00	%	33,935	$	7.770427	$	263,689	1.69	%	-46.75	%
2008	0.25	%	5,184		5.551756		28,780	1.69	%	-46.89	%
2007	0.00	%	38,516		14.592824		562,057	0.00	%	-3.96	%
2007	0.25	%	6,308		10.452361		65,933	0.00	%	-4.20	%
2006	0.00	%	46,476		15.193949		706,154	0.00	%	13.20	%
2006	0.25	%	9,586		10.910325		104,586	0.00	%	12.92	%
2005	0.00	%	48,980		13.421675		657,394	0.00	%	16.14	%
2005	0.25	%	15,838		9.661761		153,023	0.00	%	15.85	%
2004	0.00	%	54,638		11.556117		631,403	0.00	%	17.99	%
2004	0.20	%	7,744		8.356633		64,714	0.00	%	17.75	%
2004	0.25	%	25,520		8.339563		212,826	0.00	%	17.69	%
Credit Suisse Trust - International Focus Portfolio (WIEP)
2008	0.00	%	96,326		10.909328		1,050,852	1.75	%	-41.03	%
2008	0.25	%	9,109		9.166659		83,499	1.75	%	-41.18	%
2007	0.00	%	116,860		18.501094		2,162,038	1.09	%	16.60	%
2007	0.25	%	10,580		15.584704		164,886	1.09	%	16.30	%
2006	0.00	%	121,824		15.867715		1,933,069	1.01	%	18.65	%
2006	0.25	%	7,190		13.400060		96,346	1.01	%	18.36	%
2005	0.00	%	132,046		13.373190		1,765,876	0.88	%	17.44	%
2005	0.25	%	7,410		11.321642		83,893	0.88	%	17.15	%
2004	0.00	%	141,708		11.387391		1,613,684	0.99	%	14.74	%
2004	0.20	%	10,148		9.684322		98,276	0.99	%	14.51	%
2004	0.25	%	13,758		9.664537		132,965	0.99	%	14.46	%
Credit Suisse Trust - Large Cap Value Portfolio (WGIP)
2008	0.00	%	72,061		11.767861		848,004	3.07	%	-36.19	%
2008	0.10	%	11,493		10.447694		120,075	3.07	%	-36.25	%
2007	0.00	%	87,284		18.440646		1,609,573	1.30	%	1.79	%
2007	0.25	%	3,478		14.931536		51,932	1.30	%	1.53	%
2006	0.00	%	96,894		18.117019		1,755,430	0.89	%	19.35	%
2006	0.25	%	5,326		14.706419		78,326	0.89	%	19.05	%
2005	0.00	%	117,378		15.179777		1,781,772	0.73	%	8.14	%
2005	0.25	%	2,276		12.352874		28,115	0.73	%	7.87	%
2004	0.00	%	114,260		14.036771		1,603,841	0.58	%	11.34	%
2004	0.20	%	35,398		11.474634		406,179	0.58	%	11.12	%
2004	0.25	%	16,952		11.451229		194,121	0.58	%	11.07	%
Davis Variable Account Fund, Inc. - Davis Value Portfolio (DAVVL)
2008	0.25	%	76,781		5.832746		447,844	1.92	%	-40.47	%
Dreyfus IP - Mid Cap Stock Portfolio - Initial Class (DVMCS)
2008	0.10	%	33,401		10.637241		355,294	0.85	%	-40.48	%
2008	0.25	%	19,324		10.536775		203,613	0.85	%	-40.57	%
2008	0.40	%	1,110		10.437244		11,585	0.85	%	-40.66	%
2007	0.10	%	27,786		17.871247		496,570	0.45	%	1.40	%
2007	0.20	%	14,222		17.776343		252,815	0.45	%	1.29	%
2007	0.25	%	30,302		17.729117		537,228	0.45	%	1.24	%
2007	0.40	%	2,880		17.588091		50,654	0.45	%	1.09	%
2006	0.10	%	2,040		17.625316		35,956	0.37	%	7.64	%
2006	0.20	%	15,656		17.549344		274,753	0.37	%	7.53	%
2006	0.25	%	38,318		17.511529		671,007	0.37	%	7.48	%
2006	0.40	%	6,714		17.398454		116,813	0.37	%	7.32	%
2005	0.10	%	2,806		16.374088		45,946	0.02	%	9.06	%
2005	0.20	%	13,484		16.319776		220,056	0.02	%	8.95	%
2005	0.25	%	20,998		16.292721		342,115	0.02	%	8.90	%
2005	0.40	%	9,248		16.211755		149,926	0.02	%	8.74	%
2004	0.10	%	2,784		15.013547		41,798	0.43	%	14.36	%
2004	0.20	%	20,268		14.978665		303,588	0.43	%	14.25	%
2004	0.25	%	41,246		14.961281		617,093	0.43	%	14.19	%
2004	0.40	%	25,166		14.909204		375,205	0.43	%	14.02	%

(Continued)

92

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
Dreyfus IP - Small Cap Stock Index Portfolio - Service Class (DVSCS)
2008	0.00	%	615,900	$	10.853308	$	6,684,552	0.81	%	-30.91	%
2008	0.10	%	244,811		10.781160		2,639,347	0.81	%	-30.98	%
2008	0.20	%	202,504		10.709488		2,168,714	0.81	%	-31.05	%
2008	0.25	%	657,368		10.673834		7,016,637	0.81	%	-31.09	%
2008	0.40	%	157,072		10.567565		1,659,869	0.81	%	-31.19	%
2007	0.00	%	618,466		15.709599		9,715,853	0.38	%	-0.65	%
2007	0.10	%	227,178		15.620822		3,548,707	0.38	%	-0.75	%
2007	0.20	%	151,814		15.532546		2,358,058	0.38	%	-0.85	%
2007	0.25	%	418,268		15.488598		6,478,385	0.38	%	-0.90	%
2007	0.40	%	207,618		15.357469		3,188,487	0.38	%	-1.05	%
2006	0.00	%	707,480		15.813075		11,187,434	0.38	%	14.41	%
2006	0.10	%	28,070		15.739536		441,809	0.38	%	14.30	%
2006	0.20	%	155,436		15.666332		2,435,112	0.38	%	14.18	%
2006	0.25	%	247,338		15.629868		3,865,860	0.38	%	14.13	%
2006	0.40	%	418,714		15.520951		6,498,839	0.38	%	13.96	%
2005	0.00	%	581,680		13.821296		8,039,571	0.00	%	7.23	%
2005	0.10	%	37,378		13.770744		514,723	0.00	%	7.13	%
2005	0.20	%	219,726		13.720362		3,014,720	0.00	%	7.02	%
2005	0.25	%	162,720		13.695264		2,228,493	0.00	%	6.97	%
2005	0.40	%	434,388		13.620186		5,916,445	0.00	%	6.81	%
2004	0.00	%	589,810		12.889095		7,602,117	0.57	%	21.88	%
2004	0.10	%	219,642		12.854754		2,823,444	0.57	%	21.76	%
2004	0.20	%	330,608		12.820499		4,238,560	0.57	%	21.64	%
2004	0.25	%	376,014		12.803427		4,814,268	0.57	%	21.58	%
2004	0.40	%	164,998		12.752292		2,104,103	0.57	%	21.40	%
Dreyfus Stock Index Fund, Inc. - Initial Class (DSIF)
2008	0.00	%	8,607,774		10.866779		93,538,778	2.11	%	-37.14	%
2008	0.10	%	798,401		7.959597		6,354,950	2.11	%	-37.20	%
2008	0.20	%	3,600,239		7.659842		27,577,262	2.11	%	-37.27	%
2008	0.25	%	12,257,626		7.628923		93,512,485	2.11	%	-37.30	%
2008	0.40	%	2,216,931		8.982024		19,912,527	2.11	%	-37.39	%
2007	0.00	%	9,395,826		17.287487		162,430,220	1.72	%	5.26	%
2007	0.10	%	715,466		12.675284		9,068,735	1.72	%	5.15	%
2007	0.20	%	3,344,206		12.210172		40,833,330	1.72	%	5.04	%
2007	0.25	%	10,532,952		12.166992		128,154,343	1.72	%	4.99	%
2007	0.40	%	3,158,044		14.346541		45,307,008	1.72	%	4.83	%
2006	0.00	%	10,489,244		16.424348		172,278,994	1.64	%	15.50	%
2006	0.10	%	363,900		12.054530		4,386,643	1.64	%	15.38	%
2006	0.20	%	3,580,384		11.623891		41,617,993	1.64	%	15.27	%
2006	0.25	%	8,834,012		11.588607		102,373,893	1.64	%	15.21	%
2006	0.40	%	4,780,522		13.685152		65,422,170	1.64	%	15.04	%
2005	0.00	%	12,914,370		14.220511		183,648,941	1.63	%	4.69	%
2005	0.10	%	426,152		10.447448		4,452,201	1.63	%	4.59	%
2005	0.20	%	6,634,008		10.084272		66,899,141	1.63	%	4.48	%
2005	0.25	%	8,079,650		10.058674		81,270,565	1.63	%	4.43	%
2005	0.40	%	3,928,314		11.896207		46,732,037	1.63	%	4.27	%
2004	0.00	%	13,432,296		13.583304		182,454,960	1.82	%	10.64	%
2004	0.10	%	1,151,618		9.989249		11,503,799	1.82	%	10.53	%
2004	0.20	%	4,920,402		9.651621		47,489,855	1.82	%	10.42	%
2004	0.25	%	5,809,448		9.631920		55,956,138	1.82	%	10.36	%
2004	0.40	%	6,072,526		11.408542		69,278,668	1.82	%	10.20	%

(Continued)

93

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
Dreyfus VIF - Appreciation Portfolio - Initial Class (DCAP)
2008	0.00	%	1,041,473	$	12.719805	$	13,247,333	2.12	%	-29.55	%
2008	0.10	%	92,545		9.316859		862,229	2.12	%	-29.62	%
2008	0.20	%	101,573		8.679771		881,630	2.12	%	-29.69	%
2008	0.25	%	580,600		8.644744		5,019,138	2.12	%	-29.73	%
2008	0.40	%	31,192		10.347582		322,762	2.12	%	-29.83	%
2007	0.00	%	1,088,634		18.055279		19,655,591	1.56	%	7.13	%
2007	0.10	%	108,528		13.238181		1,436,713	1.56	%	7.02	%
2007	0.20	%	141,606		12.345312		1,748,170	1.56	%	6.92	%
2007	0.25	%	947,616		12.301651		11,657,241	1.56	%	6.86	%
2007	0.40	%	65,988		14.746966		973,123	1.56	%	6.70	%
2006	0.00	%	1,210,752		16.853206		20,405,053	1.53	%	16.48	%
2006	0.10	%	41,554		12.369250		513,992	1.53	%	16.36	%
2006	0.20	%	139,136		11.546593		1,606,547	1.53	%	16.24	%
2006	0.25	%	752,594		11.511538		8,663,514	1.53	%	16.19	%
2006	0.40	%	265,322		13.820624		3,666,916	1.53	%	16.01	%
2005	0.00	%	1,326,026		14.469157		19,186,478	0.02	%	4.38	%
2005	0.10	%	49,014		10.630084		521,023	0.02	%	4.27	%
2005	0.20	%	66,566		9.932997		661,200	0.02	%	4.17	%
2005	0.25	%	561,480		9.907772		5,563,016	0.02	%	4.12	%
2005	0.40	%	471,228		11.912967		5,613,724	0.02	%	3.96	%
2004	0.00	%	1,281,098		13.862320		17,758,990	1.67	%	5.05	%
2004	0.10	%	44,950		10.194416		458,239	1.67	%	4.94	%
2004	0.20	%	290,942		9.535398		2,774,248	1.67	%	4.84	%
2004	0.25	%	555,430		9.515935		5,285,436	1.67	%	4.78	%
2004	0.40	%	504,718		11.458946		5,783,536	1.67	%	4.63	%
Dreyfus VIF - Developing Leaders Portfolio - Initial Class (DSC)
2008	0.00	%	60,390		8.753397		528,618	0.83	%	-37.59	%
2007	0.00	%	46,856		14.026060		657,205	0.76	%	-11.06	%
2006	0.00	%	52,662		15.770049		830,482	0.40	%	3.77	%
2005	0.00	%	58,416		15.197076		887,752	0.00	%	5.80	%
2004	0.00	%	63,226		14.363942		908,175	0.28	%	11.34	%
Dreyfus VIF - International Value Portfolio - Initial Class (DVIV)
2008	0.10	%	93,781		13.747265		1,289,232	2.45	%	-37.38	%
2008	0.20	%	485,843		13.660576		6,636,895	2.45	%	-37.45	%
2008	0.25	%	800,273		13.617429		10,897,661	2.45	%	-37.48	%
2008	0.40	%	81,026		13.488849		1,092,947	2.45	%	-37.57	%
2007	0.10	%	105,712		21.954680		2,320,873	1.57	%	4.05	%
2007	0.20	%	553,448		21.838102		12,086,254	1.57	%	3.94	%
2007	0.25	%	809,738		21.780049		17,636,133	1.57	%	3.89	%
2007	0.40	%	180,206		21.606848		3,893,684	1.57	%	3.74	%
2006	0.10	%	70,076		21.100318		1,478,626	1.25	%	22.47	%
2006	0.20	%	644,284		21.009394		13,536,016	1.25	%	22.35	%
2006	0.25	%	931,538		20.964071		19,528,829	1.25	%	22.29	%
2006	0.40	%	293,760		20.828757		6,118,656	1.25	%	22.11	%
2005	0.10	%	71,656		17.228282		1,234,510	0.00	%	11.78	%
2005	0.20	%	679,392		17.171154		11,665,945	0.00	%	11.67	%
2005	0.25	%	640,638		17.142660		10,982,239	0.00	%	11.61	%
2005	0.40	%	369,294		17.057481		6,299,225	0.00	%	11.44	%
2004	0.10	%	69,786		15.412931		1,075,607	1.23	%	19.90	%
2004	0.20	%	1,014,594		15.377151		15,601,565	1.23	%	19.78	%
2004	0.25	%	481,030		15.359280		7,388,274	1.23	%	19.72	%
2004	0.40	%	507,212		15.305834		7,763,303	1.23	%	19.54	%

(Continued)

94

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
DWS Variable Series II - Dreman High Return Equity VIP - Class B (SVSHEB)
2008	0.25	%	88,068	$	5.898673	$	519,484	2.32	%	-46.29	%
2008	0.40	%	6,289		5.875072		36,948	2.32	%	-46.38	%
2007	0.25	%	66,654		10.983369		732,085	0.92	%	-2.43	%
2007	0.40	%	1,088		10.955918		11,920	0.92	%	-2.58	%
2006	0.25	%	15,180		11.257266		170,885	0.00	%	12.57	%	5/1/2006
DWS Variable Series II - Dreman Small Mid Cap Value VIP - Class B (SVSSVB)
2008	0.00	%	1,165		6.308994		7,350	0.57	%	-33.67	%
2008	0.10	%	469,621		6.301021		2,959,092	0.57	%	-33.74	%
2008	0.20	%	180,104		6.293064		1,133,406	0.57	%	-33.81	%
2008	0.25	%	21,870		6.289098		137,543	0.57	%	-33.84	%
Federated IS - American Leaders Fund II - Primary Class (FALF)
2008	0.00	%	18,003		10.147874		182,692	1.86	%	-33.79	%
2007	0.00	%	18,632		15.327257		285,577	1.51	%	-9.66	%
2006	0.00	%	21,354		16.967010		362,314	1.46	%	16.81	%
2005	0.00	%	21,684		14.525597		314,973	1.48	%	5.02	%
2004	0.00	%	22,444		13.830995		310,423	1.17	%	9.78	%
Federated IS - Capital Appreciation Fund II - Primary Class (FVCA2P)
2008	0.00	%	36,885		11.898648		438,882	0.34	%	-29.37	%
2007	0.00	%	30,528		16.845591		514,262	0.72	%	9.88	%
2006	0.00	%	27,898		15.330912		427,702	0.75	%	16.21	%
2005	0.00	%	26,192		13.192087		345,527	1.04	%	1.91	%
2004	0.00	%	28,136		12.944293		364,201	0.42	%	7.39	%
Federated IS - Market Opportunity Fund II - Service Class (FVMOS)
2008	0.00	%	76,516		10.152569		776,834	1.01	%	-0.86	%
2007	0.00	%	4,512		10.240958		46,207	1.07	%	-1.48	%
2006	0.00	%	3,964		10.395256		41,207	0.00	%	3.95	%	5/1/2006
Federated IS - Quality Bond Fund II - Primary Class (FQB)
2008	0.00	%	1,273,310		14.385247		18,316,879	5.71	%	-7.29	%
2008	0.10	%	48,074		14.246920		684,906	5.71	%	-7.38	%
2008	0.25	%	721,614		14.041907		10,132,837	5.71	%	-7.52	%
2008	0.40	%	6,201		13.839860		85,821	5.71	%	-7.66	%
2007	0.00	%	1,451,108		15.516026		22,515,429	5.83	%	5.38	%
2007	0.10	%	412,398		15.382206		6,343,591	5.83	%	5.28	%
2007	0.20	%	110,682		15.249527		1,687,848	5.83	%	5.17	%
2007	0.25	%	776,642		15.183610		11,792,229	5.83	%	5.12	%
2007	0.40	%	18,180		14.987597		272,475	5.83	%	4.96	%
2006	0.00	%	1,685,612		14.723396		24,817,933	5.17	%	4.15	%
2006	0.10	%	380,302		14.611096		5,556,629	5.17	%	4.05	%
2006	0.20	%	197,756		14.499637		2,867,390	5.17	%	3.95	%
2006	0.25	%	1,173,262		14.444216		16,946,850	5.17	%	3.89	%
2006	0.40	%	68,922		14.279265		984,156	5.17	%	3.74	%
2005	0.00	%	2,483,218		14.136175		35,103,204	3.55	%	1.30	%
2005	0.10	%	394,406		14.042347		5,538,386	3.55	%	1.20	%
2005	0.20	%	1,334,518		13.949122		18,615,354	3.55	%	1.10	%
2005	0.25	%	1,963,430		13.902748		27,297,073	3.55	%	1.05	%
2005	0.40	%	592,368		13.764550		8,153,679	3.55	%	0.89	%
2004	0.00	%	2,361,192		13.955112		32,950,699	3.92	%	3.62	%
2004	0.10	%	720,724		13.876320		10,000,997	3.92	%	3.52	%
2004	0.20	%	1,045,524		13.797947		14,426,085	3.92	%	3.41	%
2004	0.25	%	1,438,890		13.758938		19,797,598	3.92	%	3.36	%
2004	0.40	%	1,333,708		13.642560		18,195,191	3.92	%	3.21	%

(Continued)

95

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
Fidelity(R) VIP - Equity-Income Portfolio - Service Class (FEIS)
2008	0.00	%	3,254,696	$	10.823135	$	35,226,014	2.35	%	-42.70	%
2008	0.10	%	294,647		9.402510		2,770,421	2.35	%	-42.76	%
2008	0.20	%	412,573		8.650050		3,568,777	2.35	%	-42.82	%
2008	0.25	%	1,761,859		8.615165		15,178,706	2.35	%	-42.85	%
2008	0.40	%	74,107		9.235955		684,449	2.35	%	-42.93	%
2007	0.00	%	3,474,112		18.889723		65,625,013	1.67	%	1.42	%
2007	0.10	%	291,212		16.426769		4,783,672	1.67	%	1.32	%
2007	0.20	%	488,726		15.127358		7,393,133	1.67	%	1.21	%
2007	0.25	%	1,729,636		15.073906		26,072,370	1.67	%	1.16	%
2007	0.40	%	275,862		16.184435		4,464,671	1.67	%	1.01	%
2006	0.00	%	3,666,100		18.625658		68,283,525	3.15	%	20.08	%
2006	0.10	%	114,862		16.213431		1,862,307	3.15	%	19.96	%
2006	0.20	%	524,062		14.945916		7,832,587	3.15	%	19.84	%
2006	0.25	%	1,907,206		14.900594		28,418,502	3.15	%	19.78	%
2006	0.40	%	520,282		16.022504		8,336,220	3.15	%	19.60	%
2005	0.00	%	3,799,536		15.511120		58,935,059	1.56	%	5.76	%
2005	0.10	%	129,586		13.515730		1,751,449	1.56	%	5.65	%
2005	0.20	%	600,930		12.471541		7,494,523	1.56	%	5.55	%
2005	0.25	%	1,459,748		12.439919		18,159,147	1.56	%	5.49	%
2005	0.40	%	722,038		13.396579		9,672,839	1.56	%	5.34	%
2004	0.00	%	3,986,154		14.666699		58,463,721	1.39	%	11.38	%
2004	0.10	%	300,426		12.792683		3,843,255	1.39	%	11.27	%
2004	0.20	%	253,254		11.816128		2,992,482	1.39	%	11.16	%
2004	0.25	%	1,061,120		11.792032		12,512,761	1.39	%	11.10	%
2004	0.40	%	1,784,684		12.717880		22,697,397	1.39	%	10.94	%
Fidelity(R) VIP - Freedom 2015 Portfolio - Service Class (FF15S)
2008	0.25	%	37,047		7.424925		275,071	3.44	%	-25.75	%	5/1/2008
2008	0.40	%	81,705		7.417486		606,046	3.44	%	-25.83	%	5/1/2008
Fidelity(R) VIP - Freedom 2025 Portfolio - Service Class (FF25S)
2008	0.25	%	1,777		6.764989		12,021	3.09	%	-32.35	%	5/1/2008
2008	0.40	%	33,939		6.758199		229,367	3.09	%	-32.42	%	5/1/2008
Fidelity(R) VIP - Growth Portfolio - Service Class (FGS)
2008	0.00	%	3,467,374		10.117480		35,081,087	0.74	%	-47.23	%
2008	0.10	%	986,037		6.576790		6,484,958	0.74	%	-47.29	%
2008	0.20	%	580,783		5.863617		3,405,489	0.74	%	-47.34	%
2008	0.25	%	2,552,430		5.839928		14,906,007	0.74	%	-47.37	%
2008	0.40	%	113,777		8.403086		956,078	0.74	%	-47.44	%
2007	0.00	%	3,775,216		19.173877		72,385,527	0.62	%	26.87	%
2007	0.10	%	1,087,228		12.476360		13,564,648	0.62	%	26.74	%
2007	0.20	%	882,468		11.134607		9,825,934	0.62	%	26.62	%
2007	0.25	%	1,845,202		11.095199		20,472,883	0.62	%	26.55	%
2007	0.40	%	190,114		15.988944		3,039,722	0.62	%	26.36	%
2006	0.00	%	3,992,818		15.113032		60,343,586	0.28	%	6.73	%
2006	0.10	%	963,760		9.843867		9,487,125	0.28	%	6.63	%
2006	0.20	%	1,027,390		8.794051		9,034,920	0.28	%	6.52	%
2006	0.25	%	2,159,692		8.767341		18,934,756	0.28	%	6.47	%
2006	0.40	%	245,682		12.653389		3,108,710	0.28	%	6.31	%
2005	0.00	%	4,330,880		14.159785		61,324,330	0.41	%	5.67	%
2005	0.10	%	1,048,788		9.232178		9,682,598	0.41	%	5.57	%
2005	0.20	%	525,004		8.255819		4,334,338	0.41	%	5.46	%
2005	0.25	%	2,214,058		8.234853		18,232,442	0.41	%	5.41	%
2005	0.40	%	510,730		11.902677		6,079,054	0.41	%	5.25	%
2004	0.00	%	4,602,660		13.399667		61,674,111	0.16	%	3.26	%
2004	0.10	%	1,103,628		8.745297		9,651,555	0.16	%	3.16	%
2004	0.20	%	1,398,590		7.828218		10,948,467	0.16	%	3.06	%
2004	0.25	%	1,835,224		7.812236		14,337,203	0.16	%	3.01	%
2004	0.40	%	1,600,358		11.308717		18,097,996	0.16	%	2.85	%

(Continued)

96

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
Fidelity(R) VIP - High Income Portfolio - Service Class (FHIS)
2008	0.00	%	671,992	$	8.893725	$	5,976,512	8.01	%	-25.06	%
2008	0.10	%	637,990		8.775597		5,598,743	8.01	%	-25.14	%
2008	0.20	%	76,481		11.180781		855,117	8.01	%	-25.21	%
2008	0.25	%	151,548		11.135640		1,687,584	8.01	%	-25.25	%
2007	0.00	%	877,636		11.868272		10,416,023	8.58	%	2.66	%
2007	0.10	%	759,028		11.722369		8,897,606	8.58	%	2.55	%
2007	0.20	%	208,598		14.950148		3,118,571	8.58	%	2.45	%
2007	0.25	%	178,522		14.897237		2,659,485	8.58	%	2.40	%
2006	0.00	%	1,194,886		11.561165		13,814,274	7.58	%	11.18	%
2006	0.10	%	628,630		11.430519		7,185,567	7.58	%	11.07	%
2006	0.20	%	10,750		14.592608		156,871	7.58	%	10.96	%
2006	0.25	%	195,198		14.548271		2,839,793	7.58	%	10.90	%
2006	0.40	%	244		10.547905		2,574	7.58	%	10.73	%
2005	0.00	%	1,308,856		10.398866		13,610,618	14.70	%	2.52	%
2005	0.10	%	653,958		10.291612		6,730,282	14.70	%	2.42	%
2005	0.20	%	53,750		13.151735		706,906	14.70	%	2.32	%
2005	0.25	%	195,986		13.118317		2,571,006	14.70	%	2.27	%
2005	0.40	%	2,824		9.525383		26,900	14.70	%	2.11	%
2004	0.00	%	1,366,190		10.142968		13,857,221	8.03	%	9.47	%
2004	0.10	%	668,456		10.048366		6,716,891	8.03	%	9.36	%
2004	0.20	%	373,660		12.853699		4,802,913	8.03	%	9.25	%
2004	0.25	%	593,920		12.827432		7,618,468	8.03	%	9.19	%
2004	0.40	%	217,058		9.328110		2,024,741	8.03	%	9.03	%
Fidelity(R) VIP - High Income Portfolio - Service Class R (FHISR)
2008	0.00	%	230,571		7.416301		1,709,984	7.80	%	-24.98	%
2007	0.00	%	231,578		9.885500		2,289,264	10.69	%	-1.15	%	5/1/2007
Fidelity(R) VIP - Overseas Portfolio - Service Class (FOS)
2008	0.00	%	628,957		12.207782		7,678,170	2.43	%	-43.86	%
2008	0.10	%	283,593		10.386619		2,945,572	2.43	%	-43.92	%
2008	0.20	%	98,672		9.282079		915,881	2.43	%	-43.98	%
2008	0.25	%	1,629,016		9.244601		15,059,603	2.43	%	-44.00	%
2008	0.40	%	84,310		9.900810		834,737	2.43	%	-44.09	%
2007	0.00	%	761,402		21.746938		16,558,162	3.19	%	17.21	%
2007	0.10	%	223,530		18.521287		4,140,063	3.19	%	17.09	%
2007	0.20	%	308,712		16.568287		5,114,829	3.19	%	16.97	%
2007	0.25	%	1,540,530		16.509660		25,433,627	3.19	%	16.91	%
2007	0.40	%	205,152		17.708202		3,632,873	3.19	%	16.74	%
2006	0.00	%	963,186		18.554369		17,871,308	0.84	%	17.95	%
2006	0.10	%	106,768		15.818147		1,688,872	0.84	%	17.83	%
2006	0.20	%	271,410		14.164421		3,844,366	0.84	%	17.71	%
2006	0.25	%	1,070,198		14.121395		15,112,689	0.84	%	17.65	%
2006	0.40	%	581,496		15.169405		8,820,948	0.84	%	17.48	%
2005	0.00	%	1,411,140		15.731142		22,198,844	0.56	%	18.97	%
2005	0.10	%	116,010		13.424644		1,557,393	0.56	%	18.85	%
2005	0.20	%	473,692		12.033136		5,700,000	0.56	%	18.73	%
2005	0.25	%	742,572		12.002567		8,912,770	0.56	%	18.67	%
2005	0.40	%	700,420		12.912620		9,044,257	0.56	%	18.50	%
2004	0.00	%	1,749,970		13.222678		23,139,290	0.98	%	13.49	%
2004	0.10	%	127,656		11.295209		1,441,901	0.98	%	13.37	%
2004	0.20	%	373,770		10.134523		3,787,981	0.98	%	13.26	%
2004	0.25	%	460,116		10.113816		4,653,529	0.98	%	13.20	%
2004	0.40	%	912,684		10.896942		9,945,465	0.98	%	13.03	%

(Continued)

97

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
Fidelity(R) VIP - Overseas Portfolio - Service Class R (FOSR)
2008	0.00	%	1,096,774	$	9.699843	$	10,638,536	2.55	%	-43.88	%
2007	0.00	%	1,080,792		17.283296		18,679,648	3.16	%	17.23	%
2006	0.00	%	985,990		14.743687		14,537,128	0.62	%	17.95	%
2005	0.00	%	579,174		12.499996		7,239,673	0.00	%	25.00	%	5/2/2005
Fidelity(R) VIP II - Contrafund(R) Portfolio - Service Class (FCS)
2008	0.00	%	4,190,707		15.548565		65,159,480	0.93	%	-42.61	%
2008	0.10	%	522,978		11.186730		5,850,414	0.93	%	-42.67	%
2008	0.20	%	2,850,610		10.508698		29,956,200	0.93	%	-42.73	%
2008	0.25	%	3,082,104		10.466315		32,258,271	0.93	%	-42.76	%
2008	0.40	%	367,375		13.035628		4,788,964	0.93	%	-42.84	%
2007	0.00	%	4,524,124		27.094222		122,577,620	0.89	%	17.51	%
2007	0.10	%	503,350		19.513053		9,821,895	0.89	%	17.39	%
2007	0.20	%	1,674,382		18.348754		30,722,823	0.89	%	17.27	%
2007	0.25	%	3,212,196		18.283913		58,731,512	0.89	%	17.21	%
2007	0.40	%	694,122		22.806621		15,830,577	0.89	%	17.04	%
2006	0.00	%	4,668,602		23.057410		107,645,870	1.12	%	11.59	%
2006	0.10	%	155,940		16.622464		2,592,107	1.12	%	11.48	%
2006	0.20	%	1,713,066		15.646354		26,803,237	1.12	%	11.37	%
2006	0.25	%	2,614,782		15.598891		40,787,699	1.12	%	11.31	%
2006	0.40	%	967,474		19.486792		18,852,965	1.12	%	11.15	%
2005	0.00	%	4,501,900		20.662750		93,021,634	0.19	%	16.85	%
2005	0.10	%	216,460		14.910969		3,227,628	0.19	%	16.73	%
2005	0.20	%	1,838,026		14.049369		25,823,106	0.19	%	16.61	%
2005	0.25	%	1,766,496		14.013727		24,755,193	0.19	%	16.56	%
2005	0.40	%	1,090,144		17.532748		19,113,220	0.19	%	16.38	%
2004	0.00	%	4,151,040		17.683622		73,405,422	0.24	%	15.34	%
2004	0.10	%	194,978		12.773836		2,490,617	0.24	%	15.22	%
2004	0.20	%	708,896		12.047726		8,540,585	0.24	%	15.11	%
2004	0.25	%	970,084		12.023156		11,663,471	0.24	%	15.05	%
2004	0.40	%	1,506,264		15.064815		22,691,589	0.24	%	14.88	%
Fidelity(R) VIP II - Index 500 Portfolio - Initial Class (FIP)
2008	0.20	%	505,186		6.378330		3,222,243	2.29	%	-36.22	%	1/2/2008
2008	0.25	%	46,125		6.375146		294,054	2.29	%	-36.25	%	1/2/2008

(Continued)

98

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
Fidelity(R) VIP II - Investment Grade Bond Portfolio - Service Class (FIGBS)
2008	0.00	%	1,078,108	$	11.430864	$	12,323,706	3.94	%	-3.35	%
2008	0.10	%	75,054		11.366264		853,084	3.94	%	-3.44	%
2008	0.25	%	100,055		11.270047		1,127,625	3.94	%	-3.59	%
2008	0.40	%	4,637		11.174634		51,817	3.94	%	-3.73	%
2007	0.00	%	969,956		11.826500		11,471,185	3.80	%	4.21	%
2007	0.10	%	72,344		11.771423		851,592	3.80	%	4.11	%
2007	0.20	%	81,300		11.716596		952,559	3.80	%	4.00	%
2007	0.25	%	102,048		11.689304		1,192,870	3.80	%	3.95	%
2007	0.40	%	5,038		11.607727		58,480	3.80	%	3.79	%
2006	0.00	%	855,338		11.348586		9,706,877	3.34	%	4.30	%
2006	0.20	%	64,972		11.265752		731,958	3.34	%	4.09	%
2006	0.25	%	49,006		11.245144		551,080	3.34	%	4.04	%
2006	0.40	%	880		11.183530		9,842	3.34	%	3.88	%
2005	0.00	%	649,570		10.880732		7,067,797	2.69	%	2.08	%
2005	0.25	%	33,064		10.808463		357,371	2.69	%	1.83	%
2005	0.40	%	372		10.765329		4,005	2.69	%	1.67	%
2004	0.00	%	352,046		10.659014		3,752,463	1.68	%	4.32	%
Fidelity(R) VIP III - Growth Opportunities Portfolio - Service Class (FGOS)
2008	0.00	%	797,395		6.315602		5,036,029	0.34	%	-55.06	%
2008	0.10	%	79,193		5.090243		403,112	0.34	%	-55.10	%
2008	0.25	%	52,092		5.806945		302,495	0.34	%	-55.17	%
2007	0.00	%	876,024		14.053200		12,310,940	0.00	%	23.04	%
2007	0.10	%	87,966		11.337986		997,357	0.00	%	22.92	%
2007	0.25	%	62,164		12.953846		805,263	0.00	%	22.73	%
2006	0.00	%	1,014,378		11.421365		11,585,581	0.69	%	5.30	%
2006	0.10	%	18,424		9.223917		169,941	0.69	%	5.20	%
2006	0.25	%	127,338		10.554406		1,343,977	0.69	%	5.04	%
2005	0.00	%	1,129,706		10.846338		12,253,173	0.84	%	8.86	%
2005	0.10	%	18,822		8.768269		165,036	0.84	%	8.75	%
2005	0.25	%	326,516		10.048055		3,280,851	0.84	%	8.59	%
2005	0.40	%	608		9.527944		5,793	0.84	%	8.43	%
2004	0.00	%	1,211,402		9.963454		12,069,748	0.48	%	7.06	%
2004	0.10	%	19,294		8.062568		155,559	0.48	%	6.95	%
2004	0.20	%	24,564		9.272138		227,761	0.48	%	6.85	%
2004	0.25	%	451,498		9.253175		4,177,790	0.48	%	6.79	%
2004	0.40	%	20,800		8.787333		182,777	0.48	%	6.63	%
Fidelity(R) VIP III - Mid Cap Portfolio - Service Class (FMCS)
2008	0.00	%	1,053,808		16.339788		17,218,999	0.38	%	-39.51	%
2008	0.10	%	60,956		16.247436		990,379	0.38	%	-39.57	%
2008	0.20	%	40,911		16.155616		660,942	0.38	%	-39.63	%
2008	0.25	%	395,836		16.109892		6,376,875	0.38	%	-39.66	%
2008	0.40	%	174,217		15.973520		2,782,859	0.38	%	-39.75	%
2007	0.00	%	1,090,690		27.011367		29,461,028	0.72	%	15.49	%
2007	0.10	%	41,774		26.885640		1,123,121	0.72	%	15.37	%
2007	0.25	%	354,360		26.698163		9,460,761	0.72	%	15.20	%
2007	0.40	%	51,988		26.511996		1,378,306	0.72	%	15.02	%
2006	0.00	%	1,042,192		23.389128		24,375,962	0.23	%	12.59	%
2006	0.25	%	172,826		23.176101		4,005,433	0.23	%	12.31	%
2006	0.40	%	35,172		23.049221		810,687	0.23	%	12.14	%
2005	0.00	%	868,756		20.773676		18,047,256	0.00	%	18.20	%
2005	0.25	%	159,618		20.635857		3,293,854	0.00	%	17.91	%
2005	0.40	%	3,976		20.553596		81,721	0.00	%	17.73	%
2004	0.00	%	431,128		17.574515		7,576,866	0.00	%	24.77	%

(Continued)

99

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
Fidelity(R) VIP III - Value Strategies Portfolio - Service Class (FVSS)
2008	0.00	%	242,212	$	8.298533	$	2,010,004	0.56	%	-51.17	%
2008	0.10	%	51,422		8.243364		423,890	0.56	%	-51.22	%
2008	0.25	%	30,262		8.161269		246,976	0.56	%	-51.30	%
2007	0.00	%	495,906		16.996302		8,428,568	0.83	%	5.60	%
2007	0.10	%	45,242		16.900270		764,602	0.83	%	5.49	%
2007	0.25	%	3,262		16.757189		54,662	0.83	%	5.33	%
2006	0.00	%	494,372		16.095011		7,956,923	0.49	%	16.20	%
2006	0.10	%	4,096		16.020178		65,619	0.49	%	16.08	%
2006	0.25	%	2,506		15.908520		39,867	0.49	%	15.91	%
2006	0.40	%	14		15.797724		221	0.49	%	15.73	%
2005	0.00	%	510,536		13.851491		7,071,685	0.00	%	2.55	%
2005	0.10	%	6,844		13.800839		94,453	0.00	%	2.45	%
2005	0.25	%	884		13.725157		12,133	0.00	%	2.30	%
2005	0.40	%	2,310		13.649958		31,531	0.00	%	2.15	%
2004	0.00	%	337,180		13.506506		4,554,124	0.00	%	13.99	%
2004	0.10	%	9,532		13.470536		128,401	0.00	%	13.87	%
2004	0.20	%	7,530		13.434633		101,163	0.00	%	13.76	%
2004	0.25	%	29,960		13.416717		401,965	0.00	%	13.70	%
2004	0.40	%	64,044		13.363171		855,831	0.00	%	13.53	%
Fidelity(R) VIP IV - Energy Portfolio - Service Class 2 (FNRS2)
2008	0.00	%	747,087		10.465765		7,818,837	0.00	%	-54.40	%
2007	0.00	%	621,068		22.953063		14,255,413	0.12	%	45.64	%
2006	0.00	%	488,940		15.759845		7,705,619	0.75	%	16.62	%
2005	0.00	%	243,526		13.514321		3,291,089	0.64	%	35.14	%	5/2/2005
Fidelity(R) VIP IV - Freedom Fund 2010 Portfolio - Service Class (FF10S)
2008	0.00	%	133,384		9.656832		1,288,067	2.70	%	-25.08	%
2008	0.20	%	1,657		9.586290		15,884	2.70	%	-25.23	%
2008	0.25	%	151		9.568737		1,445	2.70	%	-25.26	%
2007	0.00	%	121,944		12.888793		1,571,711	3.28	%	8.65	%
2006	0.00	%	56,804		11.863160		673,875	2.70	%	9.78	%
2005	0.00	%	15,242		10.806063		164,706	0.47	%	8.06	%	5/2/2005
Fidelity(R) VIP IV - Freedom Fund 2020 Portfolio - Service Class (FF20S)
2008	0.00	%	331,111		9.215628		3,051,396	3.25	%	-32.71	%
2008	0.25	%	55,034		9.131542		502,545	3.25	%	-32.88	%
2008	0.40	%	22,241		9.081452		201,981	3.25	%	-32.98	%
2007	0.00	%	222,540		13.695591		3,047,817	2.67	%	10.17	%
2006	0.00	%	109,012		12.431698		1,355,204	2.11	%	11.81	%
2005	0.00	%	52,700		11.118664		585,954	1.32	%	11.19	%	5/2/2005
Fidelity(R) VIP IV - Freedom Fund 2030 Portfolio - Service Class (FF30S)
2008	0.00	%	189,269		8.828445		1,670,951	2.64	%	-38.08	%
2008	0.20	%	3,626		8.763926		31,778	2.64	%	-38.20	%
2008	0.25	%	14,454		8.747863		126,442	2.64	%	-38.23	%
2008	0.40	%	9,318		8.699870		81,065	2.64	%	-38.32	%
2007	0.00	%	136,304		14.256765		1,943,254	2.62	%	11.21	%
2006	0.00	%	54,734		12.819894		701,684	2.16	%	13.15	%
2005	0.00	%	23,432		11.329788		265,480	1.38	%	13.30	%	5/2/2005

(Continued)

100

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
Franklin Templeton VIP - Developing Markets Securities Fund - Class 3 (FTVDM3)
2008	0.00	%	275,997	$	9.996007	$	2,758,868	2.81	%	-52.67	%
2007	0.00	%	364,400		21.120230		7,696,212	2.19	%	28.70	%
2006	0.00	%	310,222		16.410826		5,090,999	1.29	%	28.17	%
2005	0.00	%	159,292		12.804274		2,039,618	0.06	%	28.04	%	5/2/2005
Franklin Templeton VIP - Foreign Securities Fund - Class 1 (TIF)
2008	0.00	%	99,305		14.675305		1,457,331	2.66	%	-40.23	%
2007	0.00	%	131,776		24.554735		3,235,725	2.08	%	15.79	%
2006	0.00	%	174,552		21.206570		3,701,649	1.39	%	21.70	%
2005	0.00	%	228,680		17.425708		3,984,911	1.53	%	10.48	%
2004	0.00	%	261,568		15.773327		4,125,798	1.08	%	18.87	%
Franklin Templeton VIP - Foreign Securities Fund - Class 2 (TIF2)
2008	0.10	%	199,971		13.605462		2,720,698	2.30	%	-40.44	%
2008	0.20	%	41,270		13.519674		557,957	2.30	%	-40.50	%
2008	0.25	%	465,751		13.476974		6,276,914	2.30	%	-40.53	%
2008	0.40	%	33,468		13.349706		446,788	2.30	%	-40.62	%
2007	0.10	%	205,828		22.842250		4,701,575	1.86	%	15.34	%
2007	0.20	%	130,208		22.720977		2,958,453	1.86	%	15.23	%
2007	0.25	%	590,458		22.660573		13,380,117	1.86	%	15.17	%
2007	0.40	%	64,892		22.480343		1,458,794	1.86	%	14.99	%
2006	0.10	%	8,186		19.804108		162,116	1.24	%	21.32	%
2006	0.20	%	109,726		19.718779		2,163,663	1.24	%	21.20	%
2006	0.25	%	359,658		19.676237		7,076,716	1.24	%	21.14	%
2006	0.40	%	494,684		19.549201		9,670,677	1.24	%	20.96	%
2005	0.10	%	25,200		16.323349		411,348	1.12	%	10.06	%
2005	0.20	%	69,050		16.269222		1,123,390	1.12	%	9.95	%
2005	0.25	%	241,412		16.242222		3,921,067	1.12	%	9.89	%
2005	0.40	%	485,970		16.161499		7,854,004	1.12	%	9.73	%
2004	0.10	%	202,324		14.831493		3,000,767	1.11	%	18.41	%
2004	0.20	%	41,174		14.797053		609,254	1.11	%	18.29	%
2004	0.25	%	173,760		14.779865		2,568,149	1.11	%	18.23	%
2004	0.40	%	397,492		14.728417		5,854,428	1.11	%	18.06	%
Franklin Templeton VIP - Foreign Securities Fund - Class 3 (TIF3)
2008	0.00	%	502,570		9.435374		4,741,936	2.55	%	-40.39	%
2007	0.00	%	462,356		15.828965		7,318,617	2.11	%	15.45	%
2006	0.00	%	424,646		13.711150		5,822,385	1.34	%	21.46	%
2005	0.00	%	237,992		11.288544		2,686,583	0.34	%	12.89	%	5/2/2005
Franklin Templeton VIP - Founding Funds Allocation Fund - Class 2 (FTVFA2)
2008	0.00	%	17,440		6.656135		116,083	3.75	%	-33.44	%	5/1/2008
Franklin Templeton VIP - Global Income Securities Fund - Class 2 (FTVGI2)
2008	0.00	%	1,646		10.821275		17,812	2.99	%	6.21	%
2008	0.25	%	93,179		10.787239		1,005,144	2.99	%	5.94	%
2008	0.40	%	100		10.766879		1,077	2.99	%	5.78	%
Franklin Templeton VIP - Global Income Securities Fund - Class 3 (FTVGI3)
2008	0.00	%	490,278		13.148675		6,446,506	4.25	%	6.21	%
2007	0.00	%	280,836		12.380292		3,476,832	2.62	%	11.03	%
2006	0.00	%	138,640		11.150160		1,545,858	2.84	%	12.84	%
2005	0.00	%	53,324		9.881172		526,904	1.81	%	-1.19	%	5/2/2005
Franklin Templeton VIP - Income Securities Fund - Class 2 (FTVIS2)
2008	0.00	%	421,586		8.186428		3,451,283	5.51	%	-29.66	%
2007	0.00	%	416,188		11.637657		4,843,453	3.54	%	3.76	%
2006	0.00	%	117,590		11.216304		1,318,925	0.07	%	12.16	%	5/1/2006
Franklin Templeton VIP - Mutual Discovery Securities Fund - Class 2 (FTVMD2)
2008	0.20	%	8,713		7.164503		62,424	1.90	%	-28.35	%	1/2/2008
2008	0.25	%	795		7.160940		5,693	1.90	%	-28.39	%	1/2/2008

(Continued)

101

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
Franklin Templeton VIP - Rising Dividends Securities Fund - Class 1 (FTVRDI)
2008	0.00	%	787,806	$	11.884088	$	9,362,356	2.02	%	-26.94	%
2007	0.00	%	910,630		16.266644		14,812,894	2.49	%	-2.41	%
2006	0.00	%	943,340		16.669002		15,724,536	1.23	%	17.43	%
2005	0.00	%	840,480		14.195085		11,930,685	1.01	%	3.68	%
2004	0.00	%	635,954		13.690957		8,706,819	0.70	%	11.25	%
Franklin Templeton VIP - Small Cap Value Securities Fund - Class 1 (FTVSVI)
2008	0.00	%	560,057		13.921598		7,796,888	1.42	%	-32.87	%
2007	0.00	%	545,164		20.738061		11,305,644	0.89	%	-2.14	%
2006	0.00	%	484,062		21.190555		10,257,542	0.82	%	17.30	%
2005	0.00	%	398,540		18.064784		7,199,539	0.92	%	8.99	%
2004	0.00	%	237,384		16.575156		3,934,677	0.23	%	24.09	%
Franklin Templeton VIP - Small Cap Value Securities Fund - Class 2 (FTVSV2)
2008	0.00	%	13,222		8.697893		115,004	1.16	%	-33.02	%
2008	0.10	%	42,469		8.666053		368,039	1.16	%	-33.08	%
2008	0.20	%	2,572		8.634328		22,207	1.16	%	-33.15	%
2008	0.25	%	297,041		8.618488		2,560,044	1.16	%	-33.18	%
2008	0.40	%	25,833		8.571211		221,420	1.16	%	-33.28	%
2007	0.10	%	14,194		12.950462		183,819	0.63	%	-2.48	%
2007	0.25	%	317,232		12.898779		4,091,905	0.63	%	-2.62	%
2007	0.40	%	62,522		12.847323		803,240	0.63	%	-2.77	%
2006	0.25	%	208,584		13.246445		2,762,996	0.76	%	16.69	%
2006	0.40	%	62,174		13.213518		821,537	0.76	%	16.52	%
2005	0.25	%	11,480		11.351855		130,319	0.00	%	13.52	%	5/2/2005
2005	0.40	%	199,332		11.340582		2,260,541	0.00	%	13.41	%	5/2/2005
Gartmore GVIT - Small Cap Growth Fund: Class I - Initial Funding by the Company (SCGFSD)
2006	0.00	%	807,056		17.366191		14,015,489	0.00	%	3.21	%
2006	0.10	%	82,090		17.233732		1,414,717	0.00	%	3.10	%
2006	0.20	%	159,120		17.102157		2,721,295	0.00	%	3.00	%
2006	0.25	%	174,802		17.036832		2,978,072	0.00	%	2.95	%
2006	0.40	%	106,988		16.842189		1,801,912	0.00	%	2.80	%
2005	0.00	%	925,228		16.826475		15,568,326	0.00	%	8.09	%
2005	0.10	%	123,464		16.714800		2,063,676	0.00	%	7.98	%
2005	0.20	%	196,494		16.603744		3,262,536	0.00	%	7.87	%
2005	0.25	%	186,986		16.548582		3,094,353	0.00	%	7.82	%
2005	0.40	%	123,110		16.384018		2,017,036	0.00	%	7.66	%
2004	0.00	%	936,378		15.567128		14,576,716	0.00	%	13.42	%
2004	0.10	%	70,962		15.479228		1,098,437	0.00	%	13.30	%
2004	0.20	%	269,788		15.391720		4,152,501	0.00	%	13.19	%
2004	0.25	%	283,520		15.348222		4,351,528	0.00	%	13.13	%
2004	0.40	%	302,750		15.218321		4,607,347	0.00	%	12.96	%
Goldman Sachs VIT - Mid Cap Value Fund (GVMCE)
2008	0.10	%	128,526		13.524296		1,738,224	0.95	%	-37.11	%
2008	0.20	%	831,665		13.439050		11,176,788	0.95	%	-37.18	%
2008	0.25	%	1,507,852		13.396598		20,200,087	0.95	%	-37.21	%
2008	0.40	%	364,923		13.270057		4,842,549	0.95	%	-37.30	%
2007	0.10	%	160,214		21.505877		3,445,543	0.81	%	3.10	%
2007	0.20	%	1,061,686		21.391758		22,711,330	0.81	%	3.00	%
2007	0.25	%	1,727,904		21.334874		36,864,614	0.81	%	2.94	%
2007	0.40	%	707,562		21.165166		14,975,667	0.81	%	2.79	%
2006	0.10	%	29,454		20.859259		614,389	0.98	%	16.05	%
2006	0.20	%	1,042,500		20.769434		21,652,135	0.98	%	15.93	%
2006	0.25	%	1,231,810		20.724643		25,528,822	0.98	%	15.87	%
2006	0.40	%	1,066,122		20.590810		21,952,316	0.98	%	15.70	%
2005	0.10	%	75,394		17.974716		1,355,186	0.60	%	12.71	%
2005	0.20	%	1,081,334		17.915150		19,372,261	0.60	%	12.60	%
2005	0.25	%	792,502		17.885426		14,174,236	0.60	%	12.54	%
2005	0.40	%	1,114,814		17.796530		19,839,821	0.60	%	12.38	%
2004	0.10	%	117,114		15.947340		1,867,657	0.74	%	25.76	%
2004	0.20	%	907,474		15.910334		14,438,214	0.74	%	25.63	%
2004	0.25	%	315,450		15.891856		5,013,086	0.74	%	25.57	%
2004	0.40	%	1,046,542		15.836525		16,573,589	0.74	%	25.38	%

(Continued)

102

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
Ivy Fund VIP, Inc. - Asset Strategy (WRASP)
2008	0.00	%	9,046	$	8.404777	$	76,030	1.01	%	-25.79	%
2008	0.25	%	36,675		8.378314		307,275	1.01	%	-25.98	%
2008	0.40	%	795		8.362478		6,648	1.01	%	-26.09	%
Ivy Fund VIP, Inc. - Growth (WRGP)
2008	0.10	%	21,448		9.845881		211,174	0.00	%	-36.34	%
2008	0.25	%	42,971		9.791882		420,767	0.00	%	-36.43	%
2008	0.40	%	229		9.738174		2,230	0.00	%	-36.53	%
2007	0.10	%	12,832		15.110144		193,893	0.00	%	22.80	%
2007	0.25	%	2,806		15.049872		43,230	0.00	%	22.61	%
2007	0.40	%	24		14.989837		360	0.00	%	22.43	%
2006	0.40	%	1,882		12.243877		23,043	0.00	%	4.62	%
Ivy Fund VIP, Inc. - Real Estate Securities (WRRESP)
2008	0.00	%	193		8.036688		1,551	0.94	%	-36.03	%
2008	0.10	%	25,624		8.007242		205,178	0.94	%	-36.10	%
2008	0.25	%	5,538		7.963301		44,101	0.94	%	-36.20	%
2008	0.40	%	574		7.919581		4,546	0.94	%	-36.29	%
2007	0.10	%	5,798		12.530753		72,653	1.28	%	-16.15	%
2007	0.25	%	3,926		12.480780		49,000	1.28	%	-16.28	%
2007	0.40	%	2,396		12.430983		29,785	1.28	%	-16.40	%
2006	0.25	%	594		14.907103		8,855	1.58	%	29.76	%
2006	0.40	%	2,546		14.870055		37,859	1.58	%	29.57	%
Ivy Fund VIP, Inc. - Science and Technology (WRSTP)
2008	0.00	%	3,163		6.739848		21,318	0.00	%	-33.89	%
2008	0.25	%	95,158		6.718607		639,329	0.00	%	-34.05	%
2008	0.40	%	609		6.705890		4,084	0.00	%	-34.15	%
2007	0.25	%	448		10.188127		4,564	0.00	%	1.88	%	9/27/2007
Janus Aspen Series - Balanced Portfolio - Service Class (JABS)
2008	0.00	%	103,832		13.616425		1,413,821	2.30	%	-16.06	%
2008	0.10	%	82,014		13.530581		1,109,697	2.30	%	-16.14	%
2008	0.20	%	24,988		13.445294		335,971	2.30	%	-16.23	%
2008	0.25	%	213,858		13.402810		2,866,298	2.30	%	-16.27	%
2008	0.40	%	39,051		13.276251		518,451	2.30	%	-16.39	%
2007	0.00	%	103,442		16.221536		1,677,988	2.47	%	10.29	%
2007	0.10	%	71,356		16.135395		1,151,357	2.47	%	10.18	%
2007	0.20	%	69,250		16.049753		1,111,445	2.47	%	10.07	%
2007	0.25	%	193,582		16.007046		3,098,676	2.47	%	10.01	%
2007	0.40	%	133,728		15.879713		2,123,562	2.47	%	9.84	%
2006	0.00	%	116,884		14.708447		1,719,182	1.99	%	10.41	%
2006	0.10	%	8,030		14.645065		117,600	1.99	%	10.30	%
2006	0.20	%	63,792		14.581974		930,213	1.99	%	10.19	%
2006	0.25	%	83,320		14.550491		1,212,347	1.99	%	10.14	%
2006	0.40	%	165,700		14.456527		2,395,447	1.99	%	9.98	%
2005	0.00	%	93,760		13.321108		1,248,987	2.04	%	7.66	%
2005	0.10	%	10,914		13.276935		144,904	2.04	%	7.55	%
2005	0.20	%	261,918		13.232912		3,465,938	2.04	%	7.45	%
2005	0.25	%	53,532		13.210934		707,208	2.04	%	7.39	%
2005	0.40	%	208,740		13.145265		2,743,943	2.04	%	7.23	%
2004	0.00	%	90,538		12.373264		1,120,251	2.45	%	8.29	%
2004	0.10	%	11,560		12.344530		142,703	2.45	%	8.18	%
2004	0.20	%	229,366		12.315866		2,824,841	2.45	%	8.08	%
2004	0.25	%	53,754		12.301545		661,257	2.45	%	8.02	%
2004	0.40	%	285,628		12.258707		3,501,430	2.45	%	7.86	%

(Continued)

103

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
Janus Aspen Series - Forty Portfolio - Service Class (JACAS)
2008	0.00	%	2,977,283	$	7.174977	$	21,361,937	0.01	%	-44.31	%
2008	0.10	%	364,911		7.111160		2,594,941	0.01	%	-44.36	%
2008	0.20	%	358,465		7.047942		2,526,441	0.01	%	-44.42	%
2008	0.25	%	1,873,016		7.016534		13,142,080	0.01	%	-44.45	%
2008	0.40	%	73,114		6.923153		506,179	0.01	%	-44.53	%
2007	0.00	%	2,924,576		12.883520		37,678,833	0.19	%	36.63	%
2007	0.10	%	400,482		12.781740		5,118,857	0.19	%	36.50	%
2007	0.20	%	250,814		12.680828		3,180,529	0.19	%	36.36	%
2007	0.25	%	1,592,000		12.630653		20,108,000	0.19	%	36.29	%
2007	0.40	%	59,336		12.481327		740,592	0.19	%	36.09	%
2006	0.00	%	2,885,418		9.429195		27,207,169	0.14	%	9.12	%
2006	0.10	%	124,964		9.364110		1,170,177	0.14	%	9.01	%
2006	0.20	%	291,224		9.299521		2,708,244	0.14	%	8.90	%
2006	0.25	%	1,255,440		9.267372		11,634,630	0.14	%	8.84	%
2006	0.40	%	228,352		9.171618		2,094,357	0.14	%	8.68	%
2005	0.00	%	3,170,060		8.641403		27,393,766	0.01	%	12.56	%
2005	0.10	%	217,972		8.590325		1,872,450	0.01	%	12.44	%
2005	0.20	%	294,576		8.539588		2,515,558	0.01	%	12.33	%
2005	0.25	%	1,090,640		8.514303		9,286,039	0.01	%	12.28	%
2005	0.40	%	217,772		8.438947		1,837,766	0.01	%	12.11	%
2004	0.00	%	3,379,686		7.677436		25,947,323	0.02	%	17.97	%
2004	0.10	%	112,522		7.639669		859,631	0.02	%	17.85	%
2004	0.20	%	233,906		7.602120		1,778,181	0.02	%	17.73	%
2004	0.25	%	956,584		7.583386		7,254,146	0.02	%	17.67	%
2004	0.40	%	878,196		7.527514		6,610,633	0.02	%	17.50	%
Janus Aspen Series - Global Technology Portfolio - Service Class (JAGTS)
2008	0.00	%	2,144,996		2.944514		6,315,971	0.09	%	-43.97	%
2008	0.10	%	319,290		2.918324		931,792	0.09	%	-44.03	%
2008	0.25	%	300,519		2.879447		865,329	0.09	%	-44.11	%
2008	0.40	%	110		2.841109		313	0.09	%	-44.20	%
2007	0.00	%	2,554,744		5.255324		13,426,007	0.34	%	21.70	%
2007	0.10	%	297,474		5.213806		1,550,972	0.34	%	21.58	%
2007	0.25	%	291,228		5.152101		1,500,436	0.34	%	21.39	%
2007	0.40	%	2,106		5.091162		10,722	0.34	%	21.21	%
2006	0.00	%	2,894,560		4.318333		12,499,674	0.00	%	7.83	%
2006	0.10	%	179,882		4.288525		771,428	0.00	%	7.72	%
2006	0.25	%	770,748		4.244167		3,271,183	0.00	%	7.56	%
2006	0.40	%	52		4.200294		218	0.00	%	7.40	%
2005	0.00	%	3,135,014		4.004823		12,555,176	0.00	%	11.55	%
2005	0.10	%	158,528		3.981148		631,123	0.00	%	11.44	%
2005	0.25	%	229,560		3.945872		905,814	0.00	%	11.27	%
2005	0.40	%	8,530		3.910937		33,360	0.00	%	11.11	%
2004	0.00	%	3,258,384		3.590186		11,698,205	0.00	%	0.57	%
2004	0.10	%	151,606		3.572518		541,615	0.00	%	0.47	%
2004	0.20	%	173,558		3.554928		616,986	0.00	%	0.37	%
2004	0.25	%	204,340		3.546168		724,624	0.00	%	0.32	%
2004	0.40	%	183,526		3.520024		646,016	0.00	%	0.16	%

(Continued)

104

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
Janus Aspen Series - INTECH Risk Managed Core Portfolio - Service Class (JARLCS)
2008	0.00	%	33,622	$	12.013653	$	403,923	0.75	%	-36.24	%
2007	0.00	%	26,988		18.842190		508,513	0.49	%	6.13	%
2006	0.00	%	30,204		17.753498		536,227	0.11	%	10.77	%
2005	0.00	%	31,826		16.027544		510,093	1.33	%	10.91	%
2004	0.00	%	23,542		14.450740		340,199	2.52	%	17.46	%
Janus Aspen Series - International Growth Portfolio - Service Class (JAIGS)
2008	0.00	%	1,658,237		8.885289		14,733,915	2.55	%	-52.23	%
2008	0.10	%	391,460		8.806322		3,447,323	2.55	%	-52.28	%
2008	0.20	%	1,506,012		8.728004		13,144,479	2.55	%	-52.32	%
2008	0.25	%	973,967		8.689119		8,462,915	2.55	%	-52.35	%
2008	0.40	%	276,653		8.573479		2,371,879	2.55	%	-52.42	%
2007	0.00	%	2,005,464		18.599320		37,300,267	0.44	%	28.02	%
2007	0.10	%	392,780		18.452535		7,247,787	0.44	%	27.89	%
2007	0.20	%	409,154		18.306795		7,490,298	0.44	%	27.76	%
2007	0.25	%	1,103,674		18.234395		20,124,828	0.44	%	27.70	%
2007	0.40	%	4,662		18.018848		84,004	0.44	%	27.50	%
2006	0.00	%	2,503,690		14.528655		36,375,248	1.89	%	46.63	%
2006	0.10	%	206,152		14.428484		2,974,461	1.89	%	46.48	%
2006	0.20	%	351,364		14.328921		5,034,667	1.89	%	46.34	%
2006	0.25	%	1,109,576		14.279422		15,844,104	1.89	%	46.26	%
2006	0.40	%	43,784		14.131910		618,752	1.89	%	46.05	%
2005	0.00	%	2,831,486		9.908475		28,055,708	1.05	%	31.94	%
2005	0.10	%	177,088		9.849961		1,744,310	1.05	%	31.81	%
2005	0.20	%	349,754		9.791747		3,424,703	1.05	%	31.68	%
2005	0.25	%	882,786		9.762789		8,618,453	1.05	%	31.61	%
2005	0.40	%	156,464		9.676381		1,514,005	1.05	%	31.41	%
2004	0.00	%	3,009,298		7.509901		22,599,530	0.85	%	18.69	%
2004	0.10	%	150,980		7.472984		1,128,271	0.85	%	18.57	%
2004	0.20	%	586,420		7.436235		4,360,757	0.85	%	18.45	%
2004	0.25	%	680,002		7.417926		5,044,205	0.85	%	18.39	%
2004	0.40	%	1,087,636		7.363272		8,008,560	0.85	%	18.21	%
Janus Aspen Series - International Growth Portfolio - Service II Class (JAIGS2)
2008	0.00	%	1,692,770		7.117893		12,048,956	2.73	%	-52.21	%
2007	0.00	%	1,653,148		14.893765		24,621,598	0.49	%	28.07	%
2006	0.00	%	754,850		11.629148		8,778,262	1.78	%	16.29	%	5/1/2006

(Continued)

105

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
JPMorgan Insurance Trust - Diversified Mid Cap Growth Portfolio 1 (OGGO)
2008	0.10	%	24,370	$	11.699757	$	285,123	0.00	%	-43.84	%
2008	0.25	%	150,923		11.589969		1,749,193	0.00	%	-43.93	%
2008	0.40	%	62,009		11.481181		711,937	0.00	%	-44.01	%
2007	0.10	%	50,026		20.833315		1,042,207	0.00	%	17.12	%
2007	0.20	%	71,184		20.723509		1,475,182	0.00	%	17.00	%
2007	0.25	%	100,032		20.668909		2,067,552	0.00	%	16.94	%
2007	0.40	%	106,088		20.505746		2,175,414	0.00	%	16.77	%
2006	0.10	%	35,396		17.787877		629,620	0.00	%	11.28	%
2006	0.20	%	43,296		17.711914		766,855	0.00	%	11.17	%
2006	0.25	%	62,906		17.674125		1,111,809	0.00	%	11.11	%
2006	0.40	%	83,526		17.561058		1,466,805	0.00	%	10.95	%
2005	0.10	%	24,994		15.985073		399,531	0.00	%	10.98	%
2005	0.20	%	23,694		15.932691		377,509	0.00	%	10.87	%
2005	0.25	%	75,420		15.906622		1,199,677	0.00	%	10.82	%
2005	0.40	%	90,134		15.828526		1,426,688	0.00	%	10.65	%
2004	0.10	%	2,456		14.403351		35,375	0.00	%	12.51	%
2004	0.20	%	8,286		14.370472		119,074	0.00	%	12.39	%
2004	0.25	%	82,778		14.354104		1,188,204	0.00	%	12.34	%
2004	0.40	%	99,214		14.304998		1,419,256	0.00	%	12.17	%
JPMorgan Insurance Trust - Diversified Mid Cap Value Portfolio 1 (OGMVP)
2008	0.10	%	4,372		12.612983		55,144	1.51	%	-35.55	%
2008	0.20	%	6,347		12.533943		79,553	1.51	%	-35.61	%
2007	0.10	%	4,412		19.569601		86,341	1.87	%	0.82	%
2007	0.20	%	6,420		19.466479		124,975	1.87	%	0.71	%
2006	0.10	%	5,886		19.411280		114,255	1.18	%	16.60	%
2006	0.20	%	6,476		19.328434		125,171	1.18	%	16.49	%
2006	0.25	%	730		19.287150		14,080	1.18	%	16.43	%
2006	0.40	%	2,838		19.163821		54,387	1.18	%	16.26	%
2005	0.10	%	5,916		16.647145		98,485	0.60	%	9.64	%
2005	0.20	%	22,284		16.592629		369,750	0.60	%	9.54	%
2005	0.25	%	10,644		16.565444		176,323	0.60	%	9.48	%
2005	0.40	%	14,156		16.484146		233,350	0.60	%	9.32	%
2004	0.10	%	5,950		15.182812		90,338	0.58	%	15.28	%
2004	0.20	%	14,900		15.148180		225,708	0.58	%	15.17	%
2004	0.25	%	22,074		15.130897		333,999	0.58	%	15.11	%
2004	0.40	%	35,252		15.079159		531,571	0.58	%	14.94	%
Legg Mason Partners VET - Small Cap Growth Portfolio - Class I (SBVSG)
2008	0.00	%	166		5.869001		974	0.00	%	-40.71	%
2008	0.25	%	18,031		5.850489		105,490	0.00	%	-40.86	%
Lehman Brothers AMT - Short Duration Bond Portfolio - I Class (AMTB)
2008	0.00	%	417,277		9.759262		4,072,316	3.91	%	-13.43	%
2007	0.00	%	757,962		11.273070		8,544,559	2.69	%	4.77	%
2006	0.00	%	903,048		10.759706		9,716,531	3.07	%	4.20	%
2005	0.00	%	748,972		10.325859		7,733,779	3.97	%	1.44	%
2004	0.00	%	335,648		10.178954		3,416,546	4.28	%	0.78	%

(Continued)

106

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
Lincoln VIP - Baron Growth Opportunities Funds - Service Class (BNCAI)
2008	0.00	%	8,641	$	11.917785	$	102,982	0.00	%	-39.14	%
2008	0.10	%	62,479		11.842641		739,916	0.00	%	-39.20	%
2008	0.20	%	120,684		11.767949		1,420,203	0.00	%	-39.26	%
2008	0.25	%	360,408		11.730770		4,227,863	0.00	%	-39.29	%
2008	0.40	%	95,250		11.619973		1,106,802	0.00	%	-39.38	%
2007	0.10	%	129,912		19.476896		2,530,283	0.00	%	3.32	%
2007	0.20	%	222,816		19.373459		4,316,717	0.00	%	3.21	%
2007	0.25	%	312,238		19.321952		6,033,048	0.00	%	3.16	%
2007	0.40	%	154,928		19.168269		2,969,702	0.00	%	3.01	%
2006	0.10	%	80,920		18.851618		1,525,473	0.00	%	15.41	%
2006	0.20	%	216,684		18.770366		4,067,238	0.00	%	15.29	%
2006	0.25	%	186,980		18.729880		3,502,113	0.00	%	15.23	%
2006	0.40	%	206,184		18.608964		3,836,871	0.00	%	15.06	%
2005	0.10	%	97,836		16.334885		1,598,140	0.00	%	3.26	%
2005	0.20	%	219,114		16.280709		3,567,331	0.00	%	3.16	%
2005	0.25	%	304,012		16.253697		4,941,319	0.00	%	3.11	%
2005	0.40	%	191,636		16.172933		3,099,316	0.00	%	2.95	%
2004	0.10	%	128,444		15.819001		2,031,856	0.00	%	25.51	%
2004	0.20	%	401,660		15.782247		6,339,097	0.00	%	25.39	%
2004	0.25	%	84,614		15.763932		1,333,849	0.00	%	25.33	%
2004	0.40	%	171,058		15.709055		2,687,160	0.00	%	25.14	%
Lord Abbett Series Fund, Inc. - Mid Cap Value Portfolio - Class VC (LOVMCV)
2008	0.10	%	43,763		7.699923		336,972	1.22	%	-39.42	%
2008	0.25	%	81,281		7.657684		622,424	1.22	%	-39.51	%
2008	0.40	%	9,534		7.615671		72,608	1.22	%	-39.60	%
2007	0.10	%	46,312		12.709507		588,603	0.59	%	0.48	%
2007	0.25	%	87,970		12.658811		1,113,596	0.59	%	0.33	%
2007	0.40	%	14,806		12.608296		186,678	0.59	%	0.18	%
2006	0.25	%	45,876		12.617407		578,836	0.89	%	11.95	%
2006	0.40	%	7,064		12.586028		88,908	0.89	%	11.78	%
2005	0.25	%	19,122		11.270434		215,513	0.52	%	12.70	%	5/2/2005
2005	0.40	%	1,690		11.259238		19,028	0.52	%	12.59	%	5/2/2005
MFS(R) VIT - Investors Growth Stock Series - Initial Class (MIGIC)
2008	0.00	%	263,673		10.006089		2,638,336	0.61	%	-36.87	%
2007	0.00	%	289,412		15.850552		4,587,340	0.33	%	11.36	%
2006	0.00	%	314,824		14.233850		4,481,158	0.00	%	7.58	%
2005	0.00	%	291,396		13.231476		3,855,599	0.34	%	4.49	%
2004	0.00	%	214,290		12.663111		2,713,578	0.00	%	9.18	%
MFS(R) VIT - Research International Series - Service Class (MVRISC)
2008	0.00	%	213		6.081781		1,295	0.06	%	-42.52	%
2008	0.25	%	24,151		6.056428		146,269	0.06	%	-42.67	%
2008	0.40	%	15,870		6.041270		95,875	0.06	%	-42.75	%
2007	0.25	%	128		10.563577		1,352	0.00	%	5.64	%	5/1/2007
2007	0.40	%	772		10.552986		8,147	0.00	%	5.53	%	5/1/2007
MFS(R) VIT - Value Series - Initial Class (MVFIC)
2008	0.00	%	406,164		13.356934		5,425,106	1.20	%	-32.58	%
2007	0.00	%	348,380		19.812092		6,902,137	0.87	%	7.91	%
2006	0.00	%	200,260		18.360218		3,676,817	0.97	%	20.84	%
2005	0.00	%	118,172		15.193770		1,795,478	0.73	%	6.66	%
2004	0.00	%	72,218		14.245099		1,028,753	0.45	%	15.18	%
MFS(R) VIT - Value Series - Service Class (MVFSC)
2008	0.00	%	37,486		6.612135		247,862	1.35	%	-32.74	%
2008	0.25	%	270,891		6.591290		1,785,521	1.35	%	-32.91	%
2008	0.40	%	988		6.578814		6,500	1.35	%	-33.01	%
Nationwide VIT - American Funds Asset Allocation Fund - Class II (GVAAA2)
2008	0.00	%	395,090		7.868935		3,108,938	2.59	%	-29.78	%
2007	0.00	%	340,142		11.205324		3,811,401	2.43	%	6.14	%
2006	0.00	%	166,024		10.556998		1,752,715	3.37	%	5.57	%	5/1/2006
Nationwide VIT - American Funds Bond Fund - Class II (GVABD2)
2008	0.00	%	253,508		9.781713		2,479,742	5.43	%	-9.87	%
2007	0.00	%	223,108		10.853118		2,421,417	8.46	%	2.98	%
2006	0.00	%	70,612		10.538858		744,170	0.90	%	5.39	%	5/1/2006

(Continued)

107

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
Nationwide VIT - American Funds Global Growth Fund - Class II (GVAGG2)
2008	0.00	%	518,855	$	7.608765	$	3,947,846	2.78	%	-38.64	%
2007	0.00	%	451,322		12.399481		5,596,159	2.98	%	14.36	%
2006	0.00	%	150,826		10.842096		1,635,270	0.23	%	8.42	%	5/1/2006
Nationwide VIT - American Funds Growth Fund - Class II (GVAGR2)
2008	0.00	%	801,346		6.470039		5,184,740	2.15	%	-44.21	%
2007	0.00	%	610,966		11.597638		7,085,762	0.75	%	11.90	%
2006	0.00	%	168,526		10.364424		1,746,675	1.12	%	3.64	%	5/1/2006
Nationwide VIT - American Funds Growth-Income Fund - Class II (GVAGI2)
2008	0.00	%	232,982		6.126963		1,427,472	2.61	%	-38.06	%
2007	0.00	%	94,768		9.892316		937,475	2.46	%	-1.08	%	5/1/2007
Nationwide VIT - Cardinal Aggressive Fund - Class I (NVCRA1)
2008	0.00	%	43,904		6.416027		281,689	2.01	%	-35.84	%	5/1/2008
Nationwide VIT - Cardinal Balanced Fund - Class I (NVCRB1)
2008	0.00	%	65,101		8.002099		520,945	2.15	%	-19.98	%	5/1/2008
Nationwide VIT - Cardinal Capital Appreciation Fund - Class I (NVCCA1)
2008	0.00	%	71,014		7.263571		515,815	1.50	%	-27.36	%	5/1/2008
Nationwide VIT - Cardinal Conservative Fund - Class I (NVCCN1)
2008	0.00	%	32,838		9.142885		300,234	1.40	%	-8.57	%	5/1/2008
Nationwide VIT - Cardinal Moderate Fund - Class I (NVCMD1)
2008	0.00	%	83,184		7.626933		634,439	2.04	%	-23.73	%	5/1/2008
Nationwide VIT - Cardinal Moderately Aggressive Fund - Class I (NVCMA1)
2008	0.00	%	223,705		6.896919		1,542,875	1.52	%	-31.03	%	5/1/2008
Nationwide VIT - Cardinal Moderately Conservative Fund - Class I (NVCMC1)
2008	0.00	%	33,824		8.375935		283,308	2.14	%	-16.24	%	5/1/2008
Nationwide VIT - Core Bond Fund - Class I (NVCBD1)
2008	0.00	%	21,176		9.945181		210,599	4.53	%	-0.55	%	5/1/2008
Nationwide VIT - Federated High Income Bond Fund - Class I (HIBF)
2008	0.00	%	312,224		12.195368		3,807,687	9.24	%	-27.99	%
2008	0.10	%	56,513		11.018160		622,669	9.24	%	-28.06	%
2008	0.20	%	70,677		12.343884		872,429	9.24	%	-28.13	%
2008	0.25	%	629,259		12.294086		7,736,164	9.24	%	-28.17	%
2008	0.40	%	197,959		11.130031		2,203,290	9.24	%	-28.28	%
2007	0.00	%	650,262		16.935434		11,012,469	7.29	%	3.13	%
2007	0.10	%	47,480		15.315998		727,204	7.29	%	3.03	%
2007	0.20	%	69,190		17.176023		1,188,409	7.29	%	2.93	%
2007	0.25	%	419,204		17.115297		7,174,801	7.29	%	2.88	%
2007	0.40	%	205,334		15.518038		3,186,381	7.29	%	2.72	%
2006	0.00	%	882,542		16.420739		14,491,992	7.41	%	10.60	%
2006	0.10	%	9,510		14.865456		141,370	7.41	%	10.49	%
2006	0.20	%	61,806		16.687538		1,031,390	7.41	%	10.38	%
2006	0.25	%	370,802		16.636894		6,168,994	7.41	%	10.33	%
2006	0.40	%	230,582		15.107048		3,483,413	7.41	%	10.16	%
2005	0.00	%	1,047,212		14.846585		15,547,522	6.92	%	2.38	%
2005	0.10	%	25,760		13.453811		346,570	6.92	%	2.28	%
2005	0.20	%	75,410		15.117925		1,140,043	6.92	%	2.18	%
2005	0.25	%	204,814		15.079557		3,088,504	6.92	%	2.13	%
2005	0.40	%	224,370		13.713412		3,076,878	6.92	%	1.97	%
2004	0.00	%	1,351,330		14.501407		19,596,186	7.58	%	10.10	%
2004	0.10	%	95,632		13.154128		1,257,956	7.58	%	9.99	%
2004	0.20	%	810,264		14.795923		11,988,604	7.58	%	9.88	%
2004	0.25	%	157,482		14.765731		2,325,337	7.58	%	9.82	%
2004	0.40	%	329,516		13.448117		4,431,370	7.58	%	9.66	%

(Continued)

108

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
Nationwide VIT - Federated High Income Bond Fund - Class III (HIBF3)
2008	0.00	%	707,956	$	8.647843	$	6,122,292	8.18	%	-28.10	%
2007	0.00	%	1,316,814		12.027193		15,837,576	7.98	%	3.17	%
2006	0.00	%	701,700		11.657910		8,180,355	7.85	%	10.60	%
2005	0.00	%	429,384		10.540776		4,526,041	6.02	%	5.41	%	5/2/2005
Nationwide VIT - Gartmore Emerging Markets Fund - Class I (GEM)
2008	0.00	%	149,822		15.581599		2,334,466	1.16	%	-57.76	%
2008	0.10	%	140,572		15.453591		2,172,342	1.16	%	-57.80	%
2008	0.20	%	249,942		15.326599		3,830,761	1.16	%	-57.85	%
2008	0.25	%	421,621		15.263531		6,435,425	1.16	%	-57.87	%
2008	0.40	%	247,183		15.075807		3,726,483	1.16	%	-57.93	%
2007	0.00	%	204,784		36.889137		7,554,305	0.71	%	45.58	%
2007	0.10	%	146,372		36.622841		5,360,558	0.71	%	45.43	%
2007	0.20	%	410,876		36.358404		14,938,796	0.71	%	45.29	%
2007	0.25	%	406,344		36.226972		14,720,613	0.71	%	45.21	%
2007	0.40	%	273,120		35.835395		9,787,363	0.71	%	44.99	%
2006	0.00	%	270,924		25.339713		6,865,136	0.71	%	36.72	%
2006	0.10	%	48,516		25.182064		1,221,733	0.71	%	36.58	%
2006	0.20	%	258,760		25.025345		6,475,558	0.71	%	36.45	%
2006	0.25	%	300,448		24.947405		7,495,398	0.71	%	36.38	%
2006	0.40	%	316,790		24.714946		7,829,448	0.71	%	36.17	%
2005	0.00	%	369,062		18.534273		6,840,296	0.60	%	32.64	%
2005	0.10	%	51,076		18.437333		941,705	0.60	%	32.50	%
2005	0.20	%	169,786		18.340864		3,114,022	0.60	%	32.37	%
2005	0.25	%	198,760		18.292860		3,635,889	0.60	%	32.31	%
2005	0.40	%	150,756		18.149525		2,736,150	0.60	%	32.11	%
2004	0.00	%	466,980		13.973799		6,525,485	1.04	%	20.74	%
2004	0.10	%	70,226		13.914559		977,164	1.04	%	20.62	%
2004	0.20	%	16,822		13.855548		233,078	1.04	%	20.50	%
2004	0.25	%	68,036		13.826171		940,677	1.04	%	20.44	%
2004	0.40	%	182,748		13.738334		2,510,653	1.04	%	20.26	%
Nationwide VIT - Gartmore Emerging Markets Fund - Class III (GEM3)
2008	0.00	%	811,502		11.185864		9,077,351	1.15	%	-57.83	%
2007	0.00	%	938,196		26.524857		24,885,515	0.72	%	45.55	%
2006	0.00	%	714,108		18.224168		13,014,024	0.72	%	36.64	%
2005	0.00	%	462,520		13.336908		6,168,587	0.20	%	33.37	%	5/2/2005
Nationwide VIT - Gartmore Global Utilities Fund - Class I (GVGU1)
2008	0.00	%	121,284		16.548066		2,007,016	3.05	%	-32.94	%
2008	0.10	%	36,003		16.438112		591,821	3.05	%	-33.01	%
2008	0.25	%	32,066		16.274553		521,860	3.05	%	-33.11	%
2007	0.00	%	177,796		24.676248		4,387,338	2.57	%	20.43	%
2007	0.10	%	44,916		24.536865		1,102,098	2.57	%	20.31	%
2007	0.25	%	27,478		24.329252		668,519	2.57	%	20.13	%
2006	0.00	%	178,132		20.489395		3,649,817	2.84	%	37.56	%
2006	0.10	%	11,378		20.394132		232,044	2.84	%	37.42	%
2006	0.25	%	20,796		20.252066		421,162	2.84	%	37.22	%
2006	0.40	%	2,542		20.110980		51,122	2.84	%	37.01	%
2005	0.00	%	118,088		14.894755		1,758,892	2.09	%	6.39	%
2005	0.10	%	16,528		14.840284		245,280	2.09	%	6.28	%
2005	0.25	%	15,934		14.758947		235,169	2.09	%	6.12	%
2005	0.40	%	2,742		14.678049		40,247	2.09	%	5.96	%
2004	0.00	%	134,138		14.000446		1,877,992	1.64	%	29.97	%
2004	0.10	%	13,192		13.963148		184,202	1.64	%	29.84	%
2004	0.20	%	21,186		13.925951		295,035	1.64	%	29.71	%
2004	0.25	%	17,668		13.907406		245,716	1.64	%	29.64	%
2004	0.40	%	15,120		13.851870		209,440	1.64	%	29.45	%

(Continued)

109

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
Nationwide VIT - Gartmore International Equity Fund - Class I (GIG)
2008	0.00	%	457,734	$	9.211762	$	4,216,537	1.36	%	-46.06	%
2008	0.10	%	91,345		9.136079		834,535	1.36	%	-46.11	%
2008	0.25	%	107,083		9.023725		966,288	1.36	%	-46.19	%
2008	0.40	%	722		8.912712		6,435	1.36	%	-46.27	%
2007	0.00	%	522,056		17.076402		8,914,838	0.38	%	27.15	%
2007	0.10	%	180,062		16.953079		3,052,605	0.38	%	27.02	%
2007	0.25	%	36,532		16.769826		612,635	0.38	%	26.83	%
2006	0.00	%	554,752		13.430598		7,450,651	0.84	%	32.96	%
2006	0.10	%	109,564		13.347009		1,462,352	0.84	%	32.83	%
2006	0.25	%	55,980		13.222655		740,204	0.84	%	32.63	%
2006	0.40	%	416		13.099372		5,449	0.84	%	32.44	%
2005	0.00	%	203,318		10.100861		2,053,687	1.10	%	30.21	%
2005	0.10	%	96,242		10.048006		967,040	1.10	%	30.08	%
2005	0.25	%	54,480		9.969281		543,126	1.10	%	29.89	%
2005	0.40	%	4		9.891115		40	1.10	%	29.69	%
2004	0.00	%	125,904		7.757434		976,692	0.85	%	14.19	%
2004	0.10	%	50,722		7.724537		391,804	0.85	%	14.08	%
2004	0.20	%	12,706		7.691798		97,732	0.85	%	13.97	%
2004	0.25	%	28,960		7.675467		222,282	0.85	%	13.91	%
2004	0.40	%	25,428		7.626680		193,931	0.85	%	13.74	%
Nationwide VIT - Gartmore International Equity Fund - Class III (GIG3)
2008	0.00	%	24,803		5.516874		136,835	1.55	%	-44.83	%	5/1/2008
Nationwide VIT - Gartmore International Equity Fund - Class VI (NVIE6)
2008	0.00	%	6,719		5.508000		37,008	1.45	%	-44.92	%	5/1/2008
Nationwide VIT - Gartmore Worldwide Leaders Fund - Class I (GEF)
2008	0.00	%	216,990		12.271930		2,662,886	0.73	%	-44.34	%
2008	0.10	%	54,435		9.882968		537,979	0.73	%	-44.40	%
2008	0.25	%	13,713		9.666117		132,551	0.73	%	-44.48	%
2007	0.00	%	250,388		22.048358		5,520,644	0.41	%	19.90	%
2007	0.10	%	109,004		17.774048		1,937,442	0.41	%	19.78	%
2007	0.25	%	14,992		17.410223		261,014	0.41	%	19.60	%
2006	0.00	%	249,376		18.389109		4,585,802	0.85	%	25.88	%
2006	0.10	%	64,922		14.839096		963,384	0.85	%	25.76	%
2006	0.25	%	13,250		14.557271		192,884	0.85	%	25.57	%
2006	0.40	%	24		15.509710		372	0.85	%	25.38	%
2005	0.00	%	262,448		14.608344		3,833,931	1.11	%	19.34	%
2005	0.10	%	79,212		11.799959		934,698	1.11	%	19.22	%
2005	0.25	%	12,984		11.593174		150,526	1.11	%	19.04	%
2005	0.40	%	78		12.370181		965	1.11	%	18.86	%
2004	0.00	%	281,954		12.241206		3,451,457	0.00	%	15.67	%
2004	0.10	%	120,048		9.897753		1,188,205	0.00	%	15.55	%
2004	0.20	%	2,874		9.758795		28,047	0.00	%	15.43	%
2004	0.25	%	34,068		9.738860		331,783	0.00	%	15.38	%
2004	0.40	%	1,704		10.407118		17,734	0.00	%	15.20	%

(Continued)

110

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
Nationwide VIT - Global Financial Services Fund - Class I (GVGF1)
2008	0.00	%	94,761	$	10.542078	$	998,978	1.83	%	-46.27	%
2008	0.10	%	40,964		10.471992		428,975	1.83	%	-46.33	%
2008	0.25	%	36,230		10.367711		375,622	1.83	%	-46.41	%
2007	0.00	%	93,918		19.621675		1,842,828	3.45	%	-1.05	%
2007	0.10	%	104,978		19.510815		2,048,206	3.45	%	-1.15	%
2007	0.25	%	38,992		19.345657		754,326	3.45	%	-1.30	%
2006	0.00	%	113,986		19.830405		2,260,389	1.89	%	20.32	%
2006	0.10	%	98,040		19.738206		1,935,134	1.89	%	20.20	%
2006	0.25	%	30,252		19.600661		592,959	1.89	%	20.02	%
2006	0.40	%	5,096		19.464132		99,189	1.89	%	19.84	%
2005	0.00	%	105,354		16.481268		1,736,368	2.00	%	11.15	%
2005	0.10	%	69,072		16.420998		1,134,231	2.00	%	11.04	%
2005	0.25	%	24,048		16.330978		392,727	2.00	%	10.87	%
2005	0.40	%	3,938		16.241486		63,959	2.00	%	10.71	%
2004	0.00	%	121,742		14.827817		1,805,168	1.37	%	20.99	%
2004	0.10	%	5,676		14.788326		83,939	1.37	%	20.87	%
2004	0.20	%	7,074		14.748909		104,334	1.37	%	20.75	%
2004	0.25	%	8,572		14.729262		126,259	1.37	%	20.69	%
2004	0.40	%	59,974		14.670465		879,846	1.37	%	20.51	%
Nationwide VIT - Government Bond Fund - Class I (GBF)
2008	0.00	%	2,666,781		18.484063		49,292,948	4.28	%	7.72	%
2008	0.10	%	149,239		17.036588		2,542,523	4.28	%	7.61	%
2008	0.20	%	1,179,027		15.483913		18,255,951	4.28	%	7.50	%
2008	0.25	%	3,301,654		15.421502		50,916,464	4.28	%	7.45	%
2008	0.40	%	485,177		17.389732		8,437,098	4.28	%	7.29	%
2007	0.00	%	2,247,294		17.159530		38,562,509	4.48	%	7.16	%
2007	0.10	%	160,904		15.831585		2,547,365	4.48	%	7.05	%
2007	0.20	%	717,380		14.403124		10,332,513	4.48	%	6.94	%
2007	0.25	%	3,004,026		14.352245		43,114,517	4.48	%	6.89	%
2007	0.40	%	440,784		16.208282		7,144,351	4.48	%	6.73	%
2006	0.00	%	2,428,156		16.013288		38,882,761	3.95	%	3.34	%
2006	0.10	%	78,218		14.788907		1,156,759	3.95	%	3.24	%
2006	0.20	%	826,566		13.468059		11,132,240	3.95	%	3.14	%
2006	0.25	%	3,008,954		13.427221		40,401,890	3.95	%	3.08	%
2006	0.40	%	445,662		15.186518		6,768,054	3.95	%	2.93	%
2005	0.00	%	3,195,842		15.495567		49,521,384	3.71	%	3.26	%
2005	0.10	%	100,704		14.325057		1,442,591	3.71	%	3.16	%
2005	0.20	%	1,941,614		13.058642		25,354,842	3.71	%	3.06	%
2005	0.25	%	3,496,292		13.025536		45,541,077	3.71	%	3.01	%
2005	0.40	%	800,072		14.754249		11,804,462	3.71	%	2.85	%
2004	0.00	%	3,187,198		15.005858		47,826,641	5.38	%	3.26	%
2004	0.10	%	68,418		13.886189		950,065	5.38	%	3.16	%
2004	0.20	%	1,951,516		12.671201		24,728,051	5.38	%	3.06	%
2004	0.25	%	2,572,680		12.645377		32,532,509	5.38	%	3.00	%
2004	0.40	%	2,350,974		14.345081		33,724,912	5.38	%	2.85	%

(Continued)

111

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
Nationwide VIT - Growth Fund - Class I (CAF)
2008	0.00	%	1,603,390	$	6.066573	$	9,727,082	0.28	%	-38.71	%
2008	0.10	%	208,878		4.578246		956,295	0.28	%	-38.77	%
2008	0.20	%	99,363		5.860450		582,312	0.28	%	-38.83	%
2008	0.25	%	8,138		5.836782		47,500	0.28	%	-38.86	%
2007	0.00	%	1,726,074		9.897441		17,083,716	0.18	%	19.54	%
2007	0.10	%	226,134		7.476755		1,690,749	0.18	%	19.42	%
2007	0.20	%	76,332		9.580341		731,287	0.18	%	19.30	%
2007	0.25	%	8,184		9.546438		78,128	0.18	%	19.24	%
2006	0.00	%	1,876,832		8.279324		15,538,900	0.05	%	6.17	%
2006	0.10	%	51,726		6.260681		323,840	0.05	%	6.06	%
2006	0.20	%	67,782		8.030198		544,303	0.05	%	5.96	%
2006	0.25	%	45,366		8.005797		363,191	0.05	%	5.90	%
2006	0.40	%	4		6.904680		28	0.05	%	5.75	%
2005	0.00	%	1,986,938		7.798327		15,494,792	0.08	%	6.50	%
2005	0.10	%	59,854		5.902844		353,309	0.08	%	6.39	%
2005	0.20	%	60,144		7.578777		455,818	0.08	%	6.29	%
2005	0.25	%	40,952		7.559516		309,577	0.08	%	6.24	%
2005	0.40	%	3,778		6.529541		24,669	0.08	%	6.08	%
2004	0.00	%	2,009,968		7.322345		14,717,679	0.34	%	8.16	%
2004	0.10	%	47,844		5.548096		265,443	0.34	%	8.05	%
2004	0.20	%	47,838		7.130400		341,104	0.34	%	7.94	%
2004	0.25	%	73,454		7.115834		522,686	0.34	%	7.89	%
2004	0.40	%	16,686		6.155504		102,711	0.34	%	7.72	%
Nationwide VIT - Health Sciences Fund - Class I (GVGH1)
2008	0.00	%	84,235		11.589966		976,281	0.26	%	-25.21	%
2008	0.10	%	81,523		11.512893		938,566	0.26	%	-25.29	%
2008	0.25	%	59,035		11.398285		672,898	0.26	%	-25.40	%
2008	0.40	%	207		11.284830		2,336	0.26	%	-25.51	%
2007	0.00	%	101,446		15.497697		1,572,179	0.07	%	13.16	%
2007	0.10	%	52,696		15.410067		812,049	0.07	%	13.05	%
2007	0.20	%	90,084		15.322977		1,380,355	0.07	%	12.93	%
2007	0.25	%	57,456		15.279611		877,905	0.07	%	12.88	%
2007	0.40	%	2,882		15.150267		43,663	0.07	%	12.71	%
2006	0.00	%	124,614		13.695316		1,706,628	0.00	%	2.71	%
2006	0.10	%	13,596		13.631572		185,335	0.00	%	2.61	%
2006	0.20	%	72,832		13.568156		988,196	0.00	%	2.50	%
2006	0.25	%	29,942		13.536569		405,312	0.00	%	2.45	%
2006	0.40	%	18,258		13.442227		245,428	0.00	%	2.30	%
2005	0.00	%	194,488		13.334230		2,593,348	0.00	%	8.44	%
2005	0.10	%	20,710		13.285419		275,141	0.00	%	8.33	%
2005	0.20	%	62,816		13.236814		831,484	0.00	%	8.22	%
2005	0.25	%	27,596		13.212593		364,615	0.00	%	8.17	%
2005	0.40	%	13,866		13.140144		182,201	0.00	%	8.01	%
2004	0.00	%	256,666		12.296466		3,156,085	0.00	%	7.86	%
2004	0.10	%	49,544		12.263680		607,592	0.00	%	7.75	%
2004	0.20	%	16,466		12.231005		201,396	0.00	%	7.64	%
2004	0.25	%	24,814		12.214711		303,096	0.00	%	7.59	%
2004	0.40	%	57,244		12.165918		696,426	0.00	%	7.43	%
Nationwide VIT - Health Sciences Fund - Class III (GVGHS)
2008	0.00	%	260,983		9.339799		2,437,529	0.29	%	-25.23	%
2007	0.00	%	210,752		12.491648		2,632,640	0.07	%	13.23	%
2006	0.00	%	212,658		11.032385		2,346,125	0.00	%	2.70	%
2005	0.00	%	128,282		10.742057		1,378,013	0.00	%	7.42	%	5/2/2005

(Continued)

112

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
Nationwide VIT - International Index Fund - Class II (GVIX2)
2008	0.00	%	592	$	5.765640	$	3,413	1.66	%	-43.11	%
2008	0.25	%	37,630		5.741605		216,057	1.66	%	-43.25	%
2008	0.40	%	76,167		5.727230		436,226	1.66	%	-43.34	%
2007	0.00	%	93,770		23.734976		2,225,629	2.02	%	2.92	%
2007	0.25	%	164,488		10.117465		1,664,202	1.19	%	1.17	%	5/1/2007
2007	0.40	%	55,246		10.107323		558,389	1.19	%	1.07	%	5/1/2007
2006	0.00	%	134,862		23.062454		3,110,249	2.07	%	22.67	%
2005	0.00	%	175,520		18.800450		3,299,855	1.31	%	12.09	%
2004	0.00	%	281,276		16.772215		4,717,622	1.91	%	20.29	%
Nationwide VIT - International Index Fund - Class VI (GVIX6)
2008	0.00	%	71,845		6.837123		491,213	2.06	%	-43.11	%
2007	0.00	%	53,368		12.017667		641,359	1.67	%	9.50	%
2006	0.00	%	20,334		10.975279		223,171	1.50	%	9.75	%	5/1/2006
Nationwide VIT - Investor Destinations Aggressive Fund - Class II (GVIDA)
2008	0.00	%	1,362,477		10.574854		14,407,995	2.07	%	-36.84	%
2008	0.10	%	206,669		10.501810		2,170,399	2.07	%	-36.91	%
2008	0.20	%	190,819		10.429261		1,990,101	2.07	%	-36.97	%
2008	0.25	%	234,097		10.393146		2,433,004	2.07	%	-37.00	%
2008	0.40	%	82,666		10.285643		850,273	2.07	%	-37.10	%
2007	0.00	%	1,376,510		16.743624		23,047,766	2.03	%	5.96	%
2007	0.10	%	211,970		16.644647		3,528,166	2.03	%	5.85	%
2007	0.20	%	198,282		16.546241		3,280,822	2.03	%	5.75	%
2007	0.25	%	160,792		16.497208		2,652,619	2.03	%	5.69	%
2007	0.40	%	157,686		16.351146		2,578,347	2.03	%	5.53	%
2006	0.00	%	1,105,550		15.802084		17,469,994	2.11	%	16.87	%
2006	0.10	%	23,050		15.724474		362,449	2.11	%	16.75	%
2006	0.20	%	211,872		15.647232		3,315,210	2.11	%	16.64	%
2006	0.25	%	77,654		15.608708		1,212,079	2.11	%	16.58	%
2006	0.40	%	171,634		15.493861		2,659,273	2.11	%	16.40	%
2005	0.00	%	1,044,556		13.521320		14,123,776	2.02	%	7.93	%
2005	0.10	%	24,154		13.468331		325,314	2.02	%	7.82	%
2005	0.20	%	170,910		13.415540		2,292,850	2.02	%	7.72	%
2005	0.25	%	24,354		13.389188		326,080	2.02	%	7.66	%
2005	0.40	%	104,554		13.310555		1,391,672	2.02	%	7.50	%
2004	0.00	%	937,068		12.527746		11,739,350	1.85	%	14.03	%
2004	0.10	%	24,186		12.491088		302,109	1.85	%	13.91	%
2004	0.20	%	7,054		12.454537		87,854	1.85	%	13.80	%
2004	0.25	%	14,712		12.436282		182,963	1.85	%	13.74	%
2004	0.40	%	63,674		12.381734		788,395	1.85	%	13.57	%
Nationwide VIT - Investor Destinations Conservative Fund - Class II (GVIDC)
2008	0.00	%	746,175		12.327359		9,198,367	3.88	%	-6.02	%
2008	0.10	%	36,290		12.242222		444,270	3.88	%	-6.12	%
2008	0.20	%	72,139		12.157648		877,041	3.88	%	-6.21	%
2008	0.25	%	508,679		12.115615		6,162,959	3.88	%	-6.26	%
2008	0.40	%	713,252		11.990270		8,552,084	3.88	%	-6.40	%
2007	0.00	%	621,536		13.117367		8,152,916	3.54	%	5.38	%
2007	0.10	%	35,914		13.039806		468,312	3.54	%	5.28	%
2007	0.20	%	28,608		12.962685		370,836	3.54	%	5.17	%
2007	0.25	%	332,180		12.924331		4,293,204	3.54	%	5.12	%
2007	0.40	%	106,108		12.809833		1,359,226	3.54	%	4.96	%
2006	0.00	%	628,508		12.447546		7,823,382	3.23	%	6.16	%
2006	0.10	%	26,518		12.386397		328,462	3.23	%	6.06	%
2006	0.20	%	22,320		12.325531		275,106	3.23	%	5.95	%
2006	0.25	%	287,996		12.295233		3,540,978	3.23	%	5.90	%
2006	0.40	%	92,396		12.204705		1,127,666	3.23	%	5.74	%
2005	0.00	%	706,430		11.724859		8,282,792	2.49	%	3.31	%
2005	0.10	%	29,088		11.678890		339,716	2.49	%	3.20	%
2005	0.20	%	34,084		11.633095		396,502	2.49	%	3.10	%
2005	0.25	%	4,440		11.610294		51,550	2.49	%	3.05	%
2005	0.40	%	49,050		11.542054		566,138	2.49	%	2.90	%
2004	0.00	%	593,680		11.349571		6,738,013	2.49	%	4.65	%
2004	0.10	%	21,194		11.316349		239,839	2.49	%	4.55	%
2004	0.20	%	2,950		11.283226		33,286	2.49	%	4.44	%
2004	0.25	%	6,398		11.266714		72,084	2.49	%	4.39	%
2004	0.40	%	95,536		11.217265		1,071,653	2.49	%	4.23	%

(Continued)

113

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
Nationwide VIT - Investor Destinations Moderate Fund - Class II (GVIDM)
2008	0.00	%	3,933,503	$	11.441586	$	45,005,513	2.82	%	-23.20	%
2008	0.10	%	117,688		11.362546		1,337,235	2.82	%	-23.27	%
2008	0.20	%	205,224		11.284040		2,315,756	2.82	%	-23.35	%
2008	0.25	%	551,789		11.244982		6,204,857	2.82	%	-23.39	%
2008	0.40	%	189,624		11.128694		2,110,267	2.82	%	-23.50	%
2007	0.00	%	3,877,166		14.896957		57,757,975	2.71	%	5.66	%
2007	0.10	%	117,560		14.808865		1,740,930	2.71	%	5.55	%
2007	0.20	%	221,366		14.721295		3,258,794	2.71	%	5.45	%
2007	0.25	%	341,144		14.677673		5,007,200	2.71	%	5.39	%
2007	0.40	%	384,024		14.547724		5,586,675	2.71	%	5.24	%
2006	0.00	%	3,554,252		14.099052		50,111,584	2.47	%	11.35	%
2006	0.10	%	1,864		14.029768		26,151	2.47	%	11.24	%
2006	0.20	%	206,458		13.960840		2,882,327	2.47	%	11.13	%
2006	0.25	%	161,088		13.926464		2,243,386	2.47	%	11.08	%
2006	0.40	%	490,632		13.823999		6,782,496	2.47	%	10.91	%
2005	0.00	%	3,150,642		12.661618		39,892,225	2.39	%	5.34	%
2005	0.10	%	1,874		12.611956		23,635	2.39	%	5.24	%
2005	0.20	%	114,016		12.562517		1,432,328	2.39	%	5.13	%
2005	0.25	%	31,934		12.537840		400,383	2.39	%	5.08	%
2005	0.40	%	390,100		12.464210		4,862,288	2.39	%	4.92	%
2004	0.00	%	2,369,740		12.019313		28,482,647	2.21	%	9.54	%
2004	0.10	%	39,950		11.984122		478,766	2.21	%	9.43	%
2004	0.20	%	28,510		11.949051		340,667	2.21	%	9.32	%
2004	0.25	%	18,974		11.931529		226,389	2.21	%	9.26	%
2004	0.40	%	264,480		11.879208		3,141,813	2.21	%	9.10	%
Nationwide VIT - Investor Destinations Moderately Aggressive Fund - Class II (GVDMA)
2008	0.00	%	4,832,634		11.015454		53,233,658	2.49	%	-31.39	%
2008	0.10	%	157,940		10.939329		1,727,758	2.49	%	-31.46	%
2008	0.20	%	45,387		10.863747		493,073	2.49	%	-31.53	%
2008	0.25	%	434,590		10.826159		4,704,940	2.49	%	-31.56	%
2008	0.40	%	41,029		10.714194		439,593	2.49	%	-31.66	%
2007	0.00	%	4,655,618		16.055259		74,747,153	2.31	%	6.15	%
2007	0.10	%	168,006		15.960296		2,681,425	2.31	%	6.04	%
2007	0.20	%	53,480		15.865910		848,509	2.31	%	5.94	%
2007	0.25	%	236,756		15.818947		3,745,231	2.31	%	5.88	%
2007	0.40	%	202,098		15.678888		3,168,672	2.31	%	5.72	%
2006	0.00	%	4,071,170		15.125018		61,576,520	2.25	%	14.54	%
2006	0.10	%	18,108		15.050687		272,538	2.25	%	14.43	%
2006	0.20	%	38,278		14.976735		573,279	2.25	%	14.31	%
2006	0.25	%	84,106		14.939913		1,256,536	2.25	%	14.26	%
2006	0.40	%	268,984		14.829966		3,989,024	2.25	%	14.08	%
2005	0.00	%	3,665,284		13.204972		48,399,973	2.19	%	7.07	%
2005	0.10	%	20,444		13.153196		268,904	2.19	%	6.97	%
2005	0.20	%	22,860		13.101623		299,503	2.19	%	6.86	%
2005	0.25	%	80,236		13.075926		1,049,160	2.19	%	6.81	%
2005	0.40	%	181,156		12.999118		2,354,868	2.19	%	6.65	%
2004	0.00	%	2,664,904		12.332826		32,865,797	2.01	%	12.09	%
2004	0.10	%	14,182		12.296725		174,392	2.01	%	11.98	%
2004	0.20	%	19,906		12.260724		244,062	2.01	%	11.87	%
2004	0.25	%	90,230		12.242773		1,104,665	2.01	%	11.81	%
2004	0.40	%	142,944		12.189084		1,742,356	2.01	%	11.65	%

(Continued)

114

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
Nationwide VIT - Investor Destinations Moderately Conservative Fund - Class II (GVDMC)
2008	0.00	%	1,167,584	$	11.969310	$	13,975,175	2.74	%	-15.04	%
2008	0.10	%	70,328		11.886643		835,964	2.74	%	-15.13	%
2008	0.20	%	21,399		11.804545		252,605	2.74	%	-15.21	%
2008	0.25	%	168,630		11.763719		1,983,716	2.74	%	-15.26	%
2008	0.40	%	9,327		11.642029		108,585	2.74	%	-15.38	%
2007	0.00	%	1,091,298		14.088774		15,375,051	3.18	%	5.86	%
2007	0.10	%	76,886		14.005474		1,076,825	3.18	%	5.75	%
2007	0.20	%	21,560		13.922670		300,173	3.18	%	5.65	%
2007	0.25	%	260,644		13.881453		3,618,117	3.18	%	5.59	%
2007	0.40	%	1,104,372		13.758509		15,194,512	3.18	%	5.43	%
2006	0.00	%	1,022,586		13.308971		13,609,567	2.84	%	8.42	%
2006	0.10	%	8,862		13.243591		117,365	2.84	%	8.31	%
2006	0.20	%	19,512		13.178536		257,140	2.84	%	8.21	%
2006	0.25	%	105,542		13.146115		1,387,467	2.84	%	8.15	%
2006	0.40	%	820,496		13.049356		10,706,944	2.84	%	7.99	%
2005	0.00	%	996,854		12.275099		12,236,482	2.78	%	4.49	%
2005	0.10	%	8,950		12.226987		109,432	2.78	%	4.38	%
2005	0.20	%	18,166		12.179054		221,245	2.78	%	4.28	%
2005	0.25	%	151,626		12.155154		1,843,037	2.78	%	4.23	%
2005	0.40	%	521,412		12.083751		6,300,613	2.78	%	4.07	%
2004	0.00	%	934,806		11.748118		10,982,211	2.38	%	7.16	%
2004	0.10	%	9,038		11.713743		105,869	2.38	%	7.05	%
2004	0.20	%	11,104		11.679461		129,689	2.38	%	6.94	%
2004	0.25	%	21,136		11.662359		246,496	2.38	%	6.89	%
2004	0.40	%	210,474		11.611205		2,443,857	2.38	%	6.73	%
Nationwide VIT - J.P. Morgan Balanced Fund - Class I (BF)
2008	0.00	%	757,878		10.568294		8,009,478	2.70	%	-25.55	%
2008	0.10	%	48,246		9.589808		462,670	2.70	%	-25.62	%
2008	0.20	%	104,098		9.695696		1,009,303	2.70	%	-25.70	%
2008	0.25	%	108,297		9.656587		1,045,779	2.70	%	-25.73	%
2007	0.00	%	856,726		14.194595		12,160,879	2.16	%	4.63	%
2007	0.10	%	83,510		12.893261		1,076,716	2.16	%	4.52	%
2007	0.20	%	140,532		13.048688		1,833,758	2.16	%	4.41	%
2007	0.25	%	182,240		13.002564		2,369,587	2.16	%	4.36	%
2006	0.00	%	919,452		13.567085		12,474,283	2.25	%	12.25	%
2006	0.10	%	64,592		12.335682		796,786	2.25	%	12.14	%
2006	0.20	%	73,958		12.496956		924,250	2.25	%	12.02	%
2006	0.25	%	257,054		12.459031		3,202,644	2.25	%	11.97	%
2006	0.40	%	608		12.170646		7,400	2.25	%	11.80	%
2005	0.00	%	1,170,652		12.086643		14,149,253	1.98	%	2.54	%
2005	0.10	%	81,682		11.000579		898,549	1.98	%	2.44	%
2005	0.20	%	119,512		11.155509		1,333,217	1.98	%	2.34	%
2005	0.25	%	234,374		11.127198		2,607,926	1.98	%	2.29	%
2005	0.40	%	39,454		10.885904		429,492	1.98	%	2.13	%
2004	0.00	%	1,256,734		11.786975		14,813,092	1.94	%	8.49	%
2004	0.10	%	59,166		10.738528		635,356	1.94	%	8.38	%
2004	0.20	%	132,248		10.900634		1,441,587	1.94	%	8.27	%
2004	0.25	%	138,252		10.878396		1,503,960	1.94	%	8.22	%
2004	0.40	%	241,606		10.658428		2,575,140	1.94	%	8.06	%

(Continued)

115

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
Nationwide VIT - Lehman Brothers Core Plus Bond Fund - Class I (NVLCP1)
2008	0.00	%	13,545	$	9.947099	$	134,733	3.73	%	-0.53	%	5/1/2008
Nationwide VIT - Mid Cap Growth Fund - Class I (SGRF)
2008	0.00	%	749,875		9.006596		6,753,821	0.00	%	-46.11	%
2008	0.10	%	137,374		6.935563		952,766	0.00	%	-46.17	%
2008	0.25	%	42,806		5.588576		239,225	0.00	%	-46.25	%
2007	0.00	%	898,950		16.713321		15,024,440	0.00	%	9.01	%
2007	0.10	%	104,616		12.883089		1,347,777	0.00	%	8.91	%
2007	0.25	%	111,508		10.396626		1,159,307	0.00	%	8.74	%
2006	0.00	%	961,292		15.331247		14,737,805	0.00	%	9.91	%
2006	0.10	%	101,742		11.829636		1,203,571	0.00	%	9.80	%
2006	0.25	%	154,712		9.560904		1,479,187	0.00	%	9.63	%
2006	0.40	%	94		13.633719		1,282	0.00	%	9.47	%
2005	0.00	%	989,192		13.949172		13,798,409	0.00	%	9.74	%
2005	0.10	%	102,290		10.773967		1,102,069	0.00	%	9.63	%
2005	0.25	%	161,102		8.720733		1,404,928	0.00	%	9.47	%
2005	0.40	%	468		12.454266		5,829	0.00	%	9.30	%
2004	0.00	%	1,022,504		12.710961		12,997,008	0.00	%	15.34	%
2004	0.10	%	102,944		9.827397		1,011,672	0.00	%	15.22	%
2004	0.20	%	763,680		7.982767		6,096,280	0.00	%	15.11	%
2004	0.25	%	989,792		7.966452		7,885,130	0.00	%	15.05	%
2004	0.40	%	114,718		11.394076		1,307,106	0.00	%	14.88	%
Nationwide VIT - Mid Cap Index Fund - Class I (MCIF)
2008	0.00	%	1,183,654		16.928443		20,037,419	1.25	%	-36.46	%
2008	0.10	%	204,375		15.363236		3,139,861	1.25	%	-36.53	%
2008	0.20	%	243,882		11.584754		2,825,313	1.25	%	-36.59	%
2008	0.25	%	970,816		11.537999		11,201,274	1.25	%	-36.62	%
2008	0.40	%	234,488		14.415737		3,380,317	1.25	%	-36.72	%
2007	0.00	%	1,320,468		26.643107		35,181,370	1.35	%	7.56	%
2007	0.10	%	234,870		24.203943		5,684,780	1.35	%	7.45	%
2007	0.20	%	433,092		18.269470		7,912,361	1.35	%	7.34	%
2007	0.25	%	1,035,184		18.204864		18,845,384	1.35	%	7.29	%
2007	0.40	%	374,168		22.779636		8,523,411	1.35	%	7.13	%
2006	0.00	%	1,451,458		24.770554		35,953,419	1.14	%	9.89	%
2006	0.10	%	154,944		22.525451		3,490,183	1.14	%	9.78	%
2006	0.20	%	639,140		17.019619		10,877,919	1.14	%	9.67	%
2006	0.25	%	993,900		16.967969		16,864,464	1.14	%	9.62	%
2006	0.40	%	660,842		21.263963		14,052,120	1.14	%	9.45	%
2005	0.00	%	1,705,870		22.541352		38,452,616	1.04	%	12.10	%
2005	0.10	%	169,140		20.518746		3,470,541	1.04	%	11.99	%
2005	0.20	%	704,782		15.518876		10,937,424	1.04	%	11.87	%
2005	0.25	%	613,462		15.479497		9,496,083	1.04	%	11.82	%
2005	0.40	%	746,512		19.427688		14,503,002	1.04	%	11.65	%
2004	0.00	%	1,662,184		20.108596		33,424,187	0.56	%	15.73	%
2004	0.10	%	193,708		18.322527		3,549,220	0.56	%	15.62	%
2004	0.20	%	458,242		13.871631		6,356,564	0.56	%	15.50	%
2004	0.25	%	317,498		13.843332		4,395,230	0.56	%	15.44	%
2004	0.40	%	1,048,696		17.400194		18,247,514	0.56	%	15.27	%

(Continued)

116

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
Nationwide VIT - Money Market Fund - Class I (SAM)
2008	0.00	%	8,735,601	$	14.287212	$	124,807,383	2.03	%	2.05	%
2008	0.20	%	4,546		12.074817		54,892	2.03	%	1.85	%
2008	0.25	%	747,274		12.025998		8,986,716	2.03	%	1.80	%
2007	0.00	%	8,018,358		13.999702		112,254,623	4.65	%	4.79	%
2007	0.20	%	5,226		11.855541		61,957	4.65	%	4.58	%
2007	0.25	%	839,752		11.813525		9,920,431	4.65	%	4.53	%
2006	0.00	%	7,870,664		13.359424		105,147,538	4.43	%	4.53	%
2006	0.20	%	5,784		11.336122		65,568	4.43	%	4.32	%
2006	0.25	%	906,990		11.301640		10,250,474	4.43	%	4.27	%
2005	0.00	%	8,487,334		12.780436		108,471,829	2.61	%	2.67	%
2005	0.20	%	12,740		10.866496		138,439	2.61	%	2.46	%
2005	0.25	%	997,352		10.838856		10,810,155	2.61	%	2.41	%
2005	0.40	%	1,872		12.182168		22,805	2.61	%	2.26	%
2004	0.00	%	9,274,680		12.448310		115,454,092	0.80	%	0.81	%
2004	0.20	%	30,788		10.605257		326,515	0.80	%	0.61	%
2004	0.25	%	877,048		10.583572		9,282,301	0.80	%	0.56	%
2004	0.40	%	165,086		11.913109		1,966,688	0.80	%	0.41	%
Nationwide VIT - Money Market Fund - Class V (SAM5)
2008	0.00	%	208,319		11.724390		2,442,413	2.10	%	2.14	%
2008	0.10	%	6,427,722		11.651947		74,895,476	2.10	%	2.04	%
2008	0.20	%	7,319,234		11.579888		84,755,910	2.10	%	1.94	%
2008	0.25	%	15,618,922		11.543990		180,304,679	2.10	%	1.89	%
2008	0.40	%	2,643,652		11.436879		30,235,128	2.10	%	1.73	%
2007	0.10	%	5,521,946		11.419178		63,056,084	4.74	%	4.76	%
2007	0.20	%	9,193,300		11.359928		104,435,226	4.74	%	4.66	%
2007	0.25	%	12,378,852		11.330392		140,257,246	4.74	%	4.60	%
2007	0.40	%	3,398,038		11.242166		38,201,307	4.74	%	4.44	%
2006	0.10	%	6,733,802		10.900267		73,400,240	4.63	%	4.51	%
2006	0.20	%	8,530,114		10.854633		92,591,257	4.63	%	4.40	%
2006	0.25	%	11,262,860		10.831867		121,997,802	4.63	%	4.35	%
2006	0.40	%	4,048,114		10.763797		43,573,077	4.63	%	4.20	%
2005	0.10	%	537,434		10.429961		5,605,416	2.74	%	2.65	%
2005	0.20	%	7,660,560		10.396676		79,644,360	2.74	%	2.55	%
2005	0.25	%	5,577,142		10.380057		57,891,052	2.74	%	2.49	%
2005	0.40	%	5,136,552		10.330316		53,062,205	2.74	%	2.34	%
2004	0.10	%	13,954,380		10.160839		141,788,209	0.91	%	0.79	%
2004	0.20	%	8,296,360		10.138533		84,112,920	0.91	%	0.69	%
2004	0.25	%	9,126,608		10.127388		92,428,700	0.91	%	0.64	%
2004	0.40	%	7,815,054		10.093995		78,885,116	0.91	%	0.49	%
Nationwide VIT - Multi-Manager International Growth Fund - Class III (NVMIG3)
2008	0.00	%	1,107		6.140389		6,797	0.06	%	-38.60	%	5/1/2008
Nationwide VIT - Multi-Manager International Value Fund - Class I (GVDIVI)
2008	0.00	%	77,496		12.742294		987,477	1.73	%	-46.31	%

(Continued)

117

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
Nationwide VIT - Multi-Manager International Value Fund - Class III (GVDIV3)
2008	0.00	%	635,373	$	7.765128	$	4,933,753	1.74	%	-46.33	%
2007	0.00	%	665,320		14.468946		9,626,479	2.15	%	2.93	%
2006	0.00	%	575,980		14.056822		8,096,448	2.01	%	22.75	%
2005	0.00	%	402,348		11.451970		4,607,677	0.95	%	14.52	%	5/2/2005
Nationwide VIT - Multi-Manager Large Cap Growth Fund - Class I (NVMLG1)
2008	0.00	%	2,417		6.364575		15,383	0.26	%	-36.35	%	5/1/2008
Nationwide VIT - Multi-Manager Large Cap Value Fund - Class I (NVMLV1)
2008	0.00	%	37,776		6.357067		240,145	0.95	%	-36.43	%	5/1/2008
Nationwide VIT - Multi-Manager Mid Cap Growth Fund - Class I (NVMMG1)
2008	0.00	%	478		6.279727		3,002	0.00	%	-37.20	%	5/1/2008
Nationwide VIT - Multi-Manager Mid Cap Value Fund - Class I (NVMMV1)
2008	0.25	%	358		6.761352		2,421	0.46	%	-32.39	%	5/1/2008
Nationwide VIT - Multi-Manager Mid Cap Value Fund - Class II (NVMMV2)
2008	0.00	%	815		6.757903		5,508	1.51	%	-32.42	%	5/1/2008
Nationwide VIT - Multi-Manager Small Cap Growth Fund - Class I (SCGF)
2008	0.00	%	659,708		10.212287		6,737,127	0.00	%	-46.42	%
2008	0.10	%	72,753		10.114063		735,828	0.00	%	-46.47	%
2008	0.20	%	18,977		10.016703		190,087	0.00	%	-46.53	%
2008	0.25	%	271,535		9.968426		2,706,777	0.00	%	-46.55	%
2008	0.40	%	6,093		9.824891		59,863	0.00	%	-46.63	%
2007	0.00	%	711,702		19.059414		13,564,623	0.00	%	9.75	%
2007	0.10	%	104,246		18.895046		1,969,733	0.00	%	9.64	%
2007	0.20	%	101,242		18.731944		1,896,459	0.00	%	9.53	%
2007	0.25	%	271,302		18.651020		5,060,059	0.00	%	9.47	%
2007	0.40	%	28,166		18.410147		518,540	0.00	%	9.31	%
Nationwide VIT - Multi-Manager Small Cap Value Fund - Class I (SCVF)
2008	0.00	%	1,246,918		18.091428		22,558,527	1.07	%	-32.15	%
2008	0.10	%	107,445		19.407862		2,085,278	1.07	%	-32.22	%
2008	0.20	%	117,819		13.890932		1,636,616	1.07	%	-32.29	%
2008	0.25	%	482,118		13.834895		6,670,052	1.07	%	-32.32	%
2008	0.40	%	12,830		15.386534		197,409	1.07	%	-32.42	%
2007	0.00	%	1,454,620		26.664377		38,786,536	1.13	%	-6.89	%
2007	0.10	%	262,148		28.633322		7,506,168	1.13	%	-6.99	%
2007	0.20	%	289,534		20.514502		5,939,646	1.13	%	-7.08	%
2007	0.25	%	575,424		20.441984		11,762,808	1.13	%	-7.13	%
2007	0.40	%	25,628		22.768858		583,520	1.13	%	-7.27	%
2006	0.00	%	1,678,046		28.638579		48,056,853	0.43	%	17.29	%
2006	0.10	%	237,134		30.784276		7,299,999	0.43	%	17.18	%
2006	0.20	%	348,296		22.077762		7,689,596	0.43	%	17.06	%
2006	0.25	%	667,586		22.010798		14,694,101	0.43	%	17.00	%
2006	0.40	%	104,786		24.553275		2,572,839	0.43	%	16.83	%
2005	0.00	%	1,914,388		24.416176		46,742,034	0.07	%	3.07	%
2005	0.10	%	250,094		26.271693		6,570,393	0.07	%	2.97	%
2005	0.20	%	458,988		18.860242		8,656,625	0.07	%	2.87	%
2005	0.25	%	848,398		18.812416		15,960,416	0.07	%	2.82	%
2005	0.40	%	395,632		21.016857		8,314,941	0.07	%	2.66	%
2004	0.00	%	2,111,792		23.688343		50,024,853	0.00	%	17.30	%
2004	0.10	%	250,742		25.513967		6,397,423	0.00	%	17.18	%
2004	0.20	%	271,422		18.334546		4,976,399	0.00	%	17.06	%
2004	0.25	%	557,634		18.297168		10,203,123	0.00	%	17.01	%
2004	0.40	%	1,039,852		20.471824		21,287,667	0.00	%	16.83	%

(Continued)

118

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
Nationwide VIT - Multi-Manager Small Company Fund - Class I (SCF)
2008	0.00	%	1,461,719	$	16.291230	$	23,813,200	0.83	%	-38.19	%
2008	0.10	%	200,454		16.444339		3,296,334	0.83	%	-38.25	%
2008	0.20	%	968,556		11.042145		10,694,936	0.83	%	-38.31	%
2008	0.25	%	1,443,694		10.997602		15,877,172	0.83	%	-38.34	%
2008	0.40	%	138,143		14.034369		1,938,750	0.83	%	-38.44	%
2007	0.00	%	1,568,836		26.356127		41,348,441	0.09	%	2.13	%
2007	0.10	%	214,492		26.630532		5,712,036	0.09	%	2.03	%
2007	0.20	%	773,666		17.899968		13,848,597	0.09	%	1.93	%
2007	0.25	%	1,805,786		17.836712		32,209,285	0.09	%	1.88	%
2007	0.40	%	227,380		22.796223		5,183,405	0.09	%	1.72	%
2006	0.00	%	1,691,018		25.805828		43,638,120	0.10	%	12.04	%
2006	0.10	%	109,004		26.100738		2,845,085	0.10	%	11.93	%
2006	0.20	%	730,292		17.561515		12,825,034	0.10	%	11.82	%
2006	0.25	%	1,848,548		17.508253		32,364,846	0.10	%	11.76	%
2006	0.40	%	428,830		22.410227		9,610,178	0.10	%	11.59	%
2005	0.00	%	1,752,846		23.033016		40,373,330	0.00	%	12.32	%
2005	0.10	%	123,158		23.319481		2,871,981	0.00	%	12.20	%
2005	0.20	%	1,146,078		15.705843		18,000,121	0.00	%	12.09	%
2005	0.25	%	1,912,752		15.666008		29,965,188	0.00	%	12.04	%
2005	0.40	%	832,540		20.082219		16,719,251	0.00	%	11.87	%
2004	0.00	%	1,765,320		20.507271		36,201,896	0.00	%	19.02	%
2004	0.10	%	254,060		20.783025		5,280,135	0.00	%	18.90	%
2004	0.20	%	346,438		14.011465		4,854,104	0.00	%	18.78	%
2004	0.25	%	766,554		13.982897		10,718,646	0.00	%	18.72	%
2004	0.40	%	1,815,822		17.951460		32,596,656	0.00	%	18.55	%
Nationwide VIT - Nationwide Fund - Class I (TRF)
2008	0.00	%	2,528,801		9.730137		24,605,580	1.41	%	-41.55	%
2008	0.10	%	28,106,065		8.002258		224,911,983	1.41	%	-41.61	%
2008	0.20	%	56,085		7.793622		437,105	1.41	%	-41.67	%
2008	0.25	%	46,732		7.762178		362,742	1.41	%	-41.70	%
2008	0.40	%	798		8.031680		6,409	1.41	%	-41.79	%
2007	0.00	%	2,766,768		16.648158		46,061,591	1.03	%	8.18	%
2007	0.10	%	28,344,872		13.705507		388,480,842	1.03	%	8.07	%
2007	0.20	%	50,032		13.361574		668,506	1.03	%	7.96	%
2007	0.25	%	52,394		13.314351		697,592	1.03	%	7.91	%
2007	0.40	%	1,370		13.797367		18,902	1.03	%	7.75	%
2006	0.00	%	2,948,242		15.389126		45,370,868	1.09	%	13.63	%
2006	0.10	%	37,804,244		12.681766		479,424,576	1.09	%	13.51	%
2006	0.20	%	49,380		12.375964		611,125	1.09	%	13.40	%
2006	0.25	%	236,736		12.338411		2,920,946	1.09	%	13.34	%
2006	0.40	%	31,470		12.805324		402,984	1.09	%	13.18	%
2005	0.00	%	3,161,412		13.543467		42,816,479	1.00	%	7.44	%
2005	0.10	%	38,013,326		11.171952		424,683,053	1.00	%	7.33	%
2005	0.20	%	56,248		10.913424		613,858	1.00	%	7.23	%
2005	0.25	%	230,206		10.885739		2,505,962	1.00	%	7.17	%
2005	0.40	%	28,310		11.314587		320,316	1.00	%	7.01	%
2004	0.00	%	3,312,776		12.605461		41,759,069	1.30	%	9.75	%
2004	0.10	%	19,034,918		10.408568		198,126,238	1.30	%	9.64	%
2004	0.20	%	32,724		10.177848		333,060	1.30	%	9.53	%
2004	0.25	%	200,466		10.157086		2,036,150	1.30	%	9.48	%
2004	0.40	%	119,314		10.573030		1,261,511	1.30	%	9.31	%

(Continued)

119

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
Nationwide VIT- Nationwide Leaders Fund - Class I (GVUS1)
2008	0.00	%	67,331	$	9.006647	$	606,427	0.76	%	-49.91	%
2008	0.10	%	42,776		8.946759		382,707	0.76	%	-49.96	%
2008	0.25	%	132		8.857680		1,169	0.76	%	-50.03	%
2007	0.00	%	89,306		17.979434		1,605,671	1.24	%	11.56	%
2007	0.10	%	44,572		17.877821		796,850	1.24	%	11.45	%
2007	0.25	%	3,872		17.726502		68,637	1.24	%	11.28	%
2006	0.00	%	85,138		16.116355		1,372,114	0.70	%	16.05	%
2006	0.10	%	8,386		16.041401		134,523	0.70	%	15.93	%
2006	0.25	%	2,392		15.929628		38,104	0.70	%	15.76	%
2006	0.40	%	54		15.818643		854	0.70	%	15.58	%
2005	0.00	%	40,072		13.887943		556,518	1.29	%	10.31	%
2005	0.10	%	13,776		13.837136		190,620	1.29	%	10.20	%
2005	0.25	%	8,298		13.761286		114,191	1.29	%	10.04	%
2005	0.40	%	212		13.685866		2,901	1.29	%	9.87	%
2004	0.00	%	24,720		12.589767		311,219	0.48	%	18.79	%
2004	0.10	%	12,564		12.556222		157,756	0.48	%	18.67	%
2004	0.20	%	3,700		12.522767		46,334	0.48	%	18.56	%
2004	0.25	%	13,762		12.506076		172,109	0.48	%	18.50	%
2004	0.40	%	996		12.456136		12,406	0.48	%	18.32	%
Nationwide VIT - Neuberger Berman Multi-Cap Opportunities Fund - Class I (NVNMO1)
2008	0.00	%	180		5.182412		933	0.00	%	-48.18	%	5/1/2008
Nationwide VIT - Neuberger Berman Socially Responsible Fund - Class I (NVNSR1)
2008	0.00	%	5,037		6.178465		31,121	0.45	%	-38.22	%	5/1/2008
Nationwide VIT - Short Term Bond Fund - Class II (NVSTB2)
2008	0.00	%	96,918		9.943310		963,686	3.46	%	-0.57	%	5/1/2008
Nationwide VIT - Technology and Communications Fund - Class I (GGTC)
2008	0.00	%	286,434		2.181418		624,832	0.00	%	-48.57	%
2008	0.10	%	259,568		2.163493		561,574	0.00	%	-48.62	%
2008	0.20	%	338,127		2.145696		725,518	0.00	%	-48.67	%
2008	0.25	%	424,273		2.136859		906,612	0.00	%	-48.70	%
2008	0.40	%	3,131		2.110566		6,608	0.00	%	-48.78	%
2007	0.00	%	400,856		4.241547		1,700,250	0.00	%	20.09	%
2007	0.10	%	257,506		4.210915		1,084,336	0.00	%	19.97	%
2007	0.20	%	380,790		4.180465		1,591,879	0.00	%	19.85	%
2007	0.25	%	519,226		4.165338		2,162,752	0.00	%	19.79	%
2007	0.40	%	80,076		4.120279		329,935	0.00	%	19.61	%
2006	0.00	%	515,480		3.531877		1,820,612	0.00	%	11.17	%
2006	0.10	%	101,564		3.509892		356,479	0.00	%	11.06	%
2006	0.20	%	311,356		3.488016		1,086,015	0.00	%	10.95	%
2006	0.25	%	446,826		3.477132		1,553,673	0.00	%	10.89	%
2006	0.40	%	238,650		3.444715		822,081	0.00	%	10.73	%
2005	0.00	%	740,614		3.177040		2,352,960	0.00	%	-0.52	%
2005	0.10	%	125,958		3.160408		398,079	0.00	%	-0.62	%
2005	0.20	%	273,712		3.143852		860,510	0.00	%	-0.71	%
2005	0.25	%	262,362		3.135604		822,663	0.00	%	-0.76	%
2005	0.40	%	232,710		3.111019		723,965	0.00	%	-0.91	%
2004	0.00	%	1,025,772		3.193545		3,275,849	0.00	%	4.31	%
2004	0.10	%	675,570		3.180008		2,148,318	0.00	%	4.21	%
2004	0.20	%	448,724		3.166487		1,420,879	0.00	%	4.10	%
2004	0.25	%	674,980		3.159750		2,132,768	0.00	%	4.05	%
2004	0.40	%	481,400		3.139672		1,511,438	0.00	%	3.90	%

(Continued)

120

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
Nationwide VIT - Technology and Communications Fund - Class III (GGTC3)
2008	0.00	%	177,753	$	8.454726	$	1,502,853	0.00	%	-48.59	%
2007	0.00	%	249,550		16.444438		4,103,710	0.00	%	20.19	%
2006	0.00	%	136,014		13.682536		1,861,016	0.00	%	11.08	%
2005	0.00	%	89,142		12.317458		1,098,003	0.00	%	23.17	%	5/2/2005
Nationwide VIT - U.S. Growth Leaders Fund - Class I (GVUG1)
2008	0.00	%	204,284		11.293974		2,307,178	0.00	%	-41.29	%
2008	0.10	%	75,068		11.218926		842,182	0.00	%	-41.35	%
2008	0.25	%	68,398		11.107192		759,710	0.00	%	-41.44	%
2007	0.00	%	231,876		19.237188		4,460,642	0.00	%	22.49	%
2007	0.10	%	147,470		19.128541		2,820,886	0.00	%	22.36	%
2007	0.25	%	71,458		18.966559		1,355,312	0.00	%	22.18	%
2006	0.00	%	250,268		15.705651		3,930,622	0.27	%	-0.29	%
2006	0.10	%	74,050		15.632647		1,157,598	0.27	%	-0.39	%
2006	0.25	%	93,502		15.523663		1,451,494	0.27	%	-0.54	%
2006	0.40	%	118		15.415524		1,819	0.27	%	-0.69	%
2005	0.00	%	279,900		15.751023		4,408,711	0.00	%	11.96	%
2005	0.10	%	70,284		15.693455		1,102,999	0.00	%	11.85	%
2005	0.25	%	80,480		15.607398		1,256,083	0.00	%	11.68	%
2005	0.40	%	816		15.521877		12,666	0.00	%	11.52	%
2004	0.00	%	184,294		14.068165		2,592,678	0.00	%	12.41	%
2004	0.10	%	44,170		14.030717		619,737	0.00	%	12.30	%
2004	0.20	%	8,230		13.993330		115,165	0.00	%	12.18	%
2004	0.25	%	50,246		13.974657		702,171	0.00	%	12.13	%
2004	0.40	%	3,866		13.918876		53,810	0.00	%	11.96	%
Nationwide VIT - Van Kampen Comstock Value Fund - Class I (EIF)
2008	0.00	%	790,298		9.218422		7,285,300	2.00	%	-36.99	%
2008	0.10	%	66,339		7.711029		511,542	2.00	%	-37.05	%
2008	0.25	%	30,065		7.585299		228,052	2.00	%	-37.15	%
2007	0.00	%	883,520		14.630092		12,925,979	1.74	%	-2.22	%
2007	0.10	%	50,950		12.250079		624,142	1.74	%	-2.31	%
2007	0.25	%	48,922		12.068473		590,414	1.74	%	-2.46	%
2006	0.00	%	875,334		14.961750		13,096,528	1.73	%	15.91	%
2006	0.10	%	5,264		12.540372		66,013	1.73	%	15.79	%
2006	0.25	%	36,988		12.373114		457,657	1.73	%	15.62	%
2006	0.40	%	2		13.317925		27	1.73	%	15.44	%
2005	0.00	%	825,902		12.908610		10,661,247	1.61	%	4.25	%
2005	0.10	%	5,204		10.830304		56,361	1.61	%	4.14	%
2005	0.25	%	42,010		10.701838		449,584	1.61	%	3.99	%
2005	0.40	%	262		11.536276		3,023	1.61	%	3.83	%
2004	0.00	%	665,190		12.382749		8,236,881	1.39	%	17.50	%
2004	0.10	%	230,518		10.399470		2,397,265	1.39	%	17.38	%
2004	0.20	%	49,480		10.312567		510,266	1.39	%	17.26	%
2004	0.25	%	36,102		10.291496		371,544	1.39	%	17.21	%
2004	0.40	%	28,772		11.110531		319,672	1.39	%	17.03	%

(Continued)

121

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
Nationwide VIT - Van Kampen Multi-Sector Bond Fund - Class I (MSBF)
2008	0.00	%	603,494	$	13.614701	$	8,216,390	6.15	%	-17.29	%
2008	0.10	%	55,384		13.167860		729,289	6.15	%	-17.37	%
2008	0.20	%	27,508		12.583839		346,156	6.15	%	-17.46	%
2008	0.25	%	141,197		12.533105		1,769,637	6.15	%	-17.50	%
2008	0.40	%	2,396		12.738274		30,521	6.15	%	-17.62	%
2007	0.00	%	697,366		16.461000		11,479,342	4.18	%	4.62	%
2007	0.10	%	81,530		15.936672		1,299,317	4.18	%	4.52	%
2007	0.20	%	70,520		15.245098		1,075,084	4.18	%	4.41	%
2007	0.25	%	657,186		15.191219		9,983,456	4.18	%	4.36	%
2007	0.40	%	44,644		15.463091		690,334	4.18	%	4.20	%
2006	0.00	%	657,636		15.733416		10,346,861	4.07	%	4.84	%
2006	0.10	%	18,772		15.247568		286,227	4.07	%	4.73	%
2006	0.20	%	57,084		14.600569		833,459	4.07	%	4.63	%
2006	0.25	%	450,402		14.556279		6,556,177	4.07	%	4.58	%
2006	0.40	%	34,566		14.839152		512,930	4.07	%	4.42	%
2005	0.00	%	636,228		15.007380		9,548,115	3.99	%	2.18	%
2005	0.10	%	28,056		14.558458		408,452	3.99	%	2.08	%
2005	0.20	%	114,922		13.954609		1,603,692	3.99	%	1.98	%
2005	0.25	%	483,160		13.919206		6,725,204	3.99	%	1.93	%
2005	0.40	%	89,110		14.210938		1,266,337	3.99	%	1.77	%
2004	0.00	%	588,866		14.687199		8,648,792	4.55	%	6.53	%
2004	0.10	%	6,318		14.262059		90,108	4.55	%	6.43	%
2004	0.20	%	13,584		13.684149		185,885	4.55	%	6.32	%
2004	0.25	%	63,742		13.656231		870,475	4.55	%	6.27	%
2004	0.40	%	307,698		13.963330		4,296,489	4.55	%	6.11	%
Nationwide VIT - Van Kampen Real Estate Fund - Class I (NVRE1)
2008	0.00	%	19,987		5.646840		112,863	4.37	%	-43.53	%	5/1/2008
Neuberger Berman AMT - Guardian Portfolio - Class I (AMGP)
2008	0.00	%	392,065		14.011166		5,493,288	0.54	%	-37.24	%
2008	0.10	%	73,276		10.057230		736,954	0.54	%	-37.31	%
2008	0.25	%	86,429		9.256750		800,052	0.54	%	-37.40	%
2007	0.00	%	434,652		22.326685		9,704,338	0.26	%	7.39	%
2007	0.10	%	100,594		16.042197		1,613,749	0.26	%	7.28	%
2007	0.25	%	98,428		14.787583		1,455,512	0.26	%	7.12	%
2006	0.00	%	477,638		20.790721		9,930,438	0.70	%	13.38	%
2006	0.10	%	88,754		14.953594		1,327,191	0.70	%	13.26	%
2006	0.25	%	194,222		13.804932		2,681,222	0.70	%	13.09	%
2006	0.40	%	74		14.282531		1,057	0.70	%	12.93	%
2005	0.00	%	509,104		18.337744		9,335,819	0.15	%	8.39	%
2005	0.10	%	34,424		13.202464		454,482	0.15	%	8.28	%
2005	0.20	%	234,680		12.237616		2,871,924	0.15	%	8.18	%
2005	0.25	%	75,766		12.206553		924,842	0.15	%	8.12	%
2005	0.40	%	80,808		12.647762		1,022,040	0.15	%	7.96	%
2004	0.00	%	572,382		16.918157		9,683,649	0.12	%	15.81	%
2004	0.10	%	26,978		12.192566		328,931	0.12	%	15.70	%
2004	0.20	%	19,660		11.312789		222,409	0.12	%	15.58	%
2004	0.25	%	91,408		11.289714		1,031,970	0.12	%	15.53	%
2004	0.40	%	290,396		11.715274		3,402,069	0.12	%	15.35	%
Neuberger Berman AMT - International Portfolio - Class S (AMINS)
2008	0.00	%	248,009		8.019658		1,988,947	0.00	%	-46.44	%
2007	0.00	%	280,340		14.972222		4,197,313	1.87	%	3.21	%
2006	0.00	%	140,884		14.506093		2,043,676	0.29	%	23.45	%
2005	0.00	%	53,950		11.750261		633,927	0.26	%	17.50	%	5/2/2005

(Continued)

122

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
Neuberger Berman AMT - Mid Cap Growth Portfolio - I Class (AMCG)
2008	0.00	%	1,241,103	$	14.241194	$	17,674,789	0.00	%	-43.37	%
2008	0.10	%	457,960		10.355229		4,742,281	0.00	%	-43.43	%
2008	0.20	%	43,749		7.544382		330,059	0.00	%	-43.48	%
2008	0.25	%	464,312		7.513928		3,488,807	0.00	%	-43.51	%
2007	0.00	%	1,375,816		25.147074		34,597,747	0.00	%	22.53	%
2007	0.10	%	412,472		18.303613		7,549,728	0.00	%	22.40	%
2007	0.20	%	38,324		13.348628		511,573	0.00	%	22.28	%
2007	0.25	%	489,154		13.301400		6,506,433	0.00	%	22.22	%
2007	0.40	%	3,494		19.674042		68,741	0.00	%	22.04	%
2006	0.00	%	1,474,382		20.523539		30,259,536	0.00	%	14.69	%
2006	0.10	%	366,596		14.953339		5,481,834	0.00	%	14.58	%
2006	0.20	%	41,698		10.916267		455,187	0.00	%	14.47	%
2006	0.25	%	391,016		10.883119		4,255,474	0.00	%	14.41	%
2006	0.40	%	97,186		16.121456		1,566,780	0.00	%	14.24	%
2005	0.00	%	1,544,990		17.894121		27,646,238	0.00	%	13.74	%
2005	0.10	%	383,494		13.050574		5,004,817	0.00	%	13.63	%
2005	0.20	%	23,118		9.536717		220,470	0.00	%	13.51	%
2005	0.25	%	365,056		9.512489		3,472,591	0.00	%	13.46	%
2005	0.40	%	127,004		14.112212		1,792,307	0.00	%	13.29	%
2004	0.00	%	1,604,468		15.732356		25,242,062	0.00	%	16.31	%
2004	0.10	%	394,394		11.485392		4,529,770	0.00	%	16.19	%
2004	0.20	%	470,456		8.401327		3,952,455	0.00	%	16.08	%
2004	0.25	%	678,994		8.384158		5,692,793	0.00	%	16.02	%
2004	0.40	%	322,438		12.456893		4,016,576	0.00	%	15.84	%
Neuberger Berman AMT - Partners Portfolio - Class I (AMTP)
2008	0.00	%	772,159		9.206209		7,108,657	0.48	%	-52.39	%
2008	0.10	%	101,292		8.553125		866,363	0.48	%	-52.44	%
2008	0.25	%	26,043		8.479038		220,820	0.48	%	-52.51	%
2008	0.40	%	1,125		7.925107		8,916	0.48	%	-52.58	%
2007	0.00	%	902,352		19.337705		17,449,417	0.62	%	9.34	%
2007	0.10	%	194,378		17.983949		3,495,684	0.62	%	9.23	%
2007	0.25	%	25,412		17.855044		453,732	0.62	%	9.06	%
2007	0.40	%	596		16.713743		9,961	0.62	%	8.90	%
2006	0.00	%	967,144		17.686426		17,105,321	0.68	%	12.24	%
2006	0.10	%	148,132		16.464820		2,438,967	0.68	%	12.13	%
2006	0.25	%	70,676		16.371496		1,157,072	0.68	%	11.96	%
2006	0.40	%	414		15.348160		6,354	0.68	%	11.79	%
2005	0.00	%	1,054,060		15.757590		16,609,445	0.98	%	18.04	%
2005	0.10	%	185,490		14.683836		2,723,705	0.98	%	17.93	%
2005	0.25	%	84,180		14.622460		1,230,919	0.98	%	17.75	%
2005	0.40	%	211,116		13.728969		2,898,405	0.98	%	17.58	%
2004	0.00	%	902,952		13.348803		12,053,328	0.01	%	18.98	%
2004	0.10	%	162,162		12.451586		2,019,174	0.01	%	18.86	%
2004	0.20	%	229,766		12.443485		2,859,090	0.01	%	18.74	%
2004	0.25	%	191,928		12.418080		2,383,377	0.01	%	18.68	%
2004	0.40	%	244,546		11.676716		2,855,494	0.01	%	18.50	%
Neuberger Berman AMT - Regency Portfolio - Class I (AMRI)
2008	0.00	%	23,511		5.750861		135,208	2.92	%	-45.82	%
2008	0.25	%	319,496		5.712555		1,825,138	2.92	%	-45.95	%
2008	0.40	%	10,164		5.689701		57,830	2.92	%	-46.04	%
2007	0.25	%	32,224		10.569832		340,602	0.46	%	3.04	%
2007	0.40	%	48,338		10.543396		509,647	0.46	%	2.89	%
2006	0.25	%	6,524		10.257708		66,921	0.44	%	2.58	%	5/1/2006
2006	0.40	%	34,570		10.247505		354,256	0.44	%	2.48	%	5/1/2006

(Continued)

123

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
Neuberger Berman AMT - Regency Portfolio - Class S (AMRS)
2008	0.00	%	97,268	$	7.206627	$	700,974	0.95	%	-45.95	%
2007	0.00	%	94,148		13.332382		1,255,217	0.47	%	3.05	%
2006	0.00	%	62,360		12.937253		806,767	0.48	%	10.94	%
2005	0.00	%	23,100		11.661977		269,392	0.00	%	16.62	%	5/2/2005
Neuberger Berman AMT - Small Cap Growth Portfolio - Class S (AMFAS)
2008	0.00	%	74,557		9.284535		692,227	0.00	%	-39.47	%
2008	0.10	%	20,820		9.225949		192,084	0.00	%	-39.53	%
2008	0.25	%	29,832		9.138805		272,629	0.00	%	-39.62	%
2008	0.40	%	480		9.052482		4,345	0.00	%	-39.72	%
2007	0.00	%	70,284		15.339463		1,078,119	0.00	%	0.52	%
2007	0.10	%	24,496		15.257956		373,759	0.00	%	0.41	%
2007	0.20	%	13,934		15.176941		211,475	0.00	%	0.31	%
2007	0.25	%	20,928		15.136586		316,778	0.00	%	0.26	%
2007	0.40	%	1,998		15.016171		30,002	0.00	%	0.11	%
2006	0.00	%	54,558		15.260818		832,600	0.00	%	5.25	%
2006	0.10	%	9,420		15.195016		143,137	0.00	%	5.15	%
2006	0.20	%	11,666		15.129543		176,501	0.00	%	5.04	%
2006	0.25	%	18,450		15.096902		278,538	0.00	%	4.99	%
2006	0.40	%	7,818		14.999423		117,265	0.00	%	4.83	%
2005	0.00	%	69,514		14.499238		1,007,900	0.00	%	2.90	%
2005	0.10	%	1,074		14.451137		15,521	0.00	%	2.79	%
2005	0.20	%	9,828		14.403227		141,555	0.00	%	2.69	%
2005	0.25	%	15,290		14.379334		219,860	0.00	%	2.64	%
2005	0.40	%	20,788		14.307871		297,432	0.00	%	2.49	%
2004	0.00	%	57,292		14.091031		807,303	0.00	%	11.88	%
2004	0.10	%	51,200		14.058294		719,785	0.00	%	11.76	%
2004	0.20	%	4,062		14.025658		56,972	0.00	%	11.65	%
2004	0.25	%	22,204		14.009370		311,064	0.00	%	11.60	%
2004	0.40	%	44,406		13.960609		619,935	0.00	%	11.43	%
Neuberger Berman AMT - Socially Responsive Portfolio - Class I (AMSRS)
2008	0.00	%	226,546		11.099348		2,514,513	2.16	%	-39.44	%
2007	0.00	%	254,068		18.328379		4,656,655	0.09	%	7.61	%
2006	0.00	%	160,134		17.031699		2,727,354	0.16	%	13.70	%
2005	0.00	%	104,292		14.979202		1,562,211	0.00	%	6.86	%
2004	0.00	%	42,274		14.018027		592,598	0.00	%	13.28	%
Oppenheimer VAF - Capital Appreciation Fund - Non-Service Class (OVGR)
2008	0.00	%	2,357,625		11.071272		26,101,908	0.14	%	-45.52	%
2008	0.10	%	586,696		8.264836		4,848,946	0.14	%	-45.57	%
2008	0.20	%	2,400,370		6.418454		15,406,664	0.14	%	-45.63	%
2008	0.25	%	3,405,107		6.392540		21,767,283	0.14	%	-45.65	%
2008	0.40	%	137,113		9.143789		1,253,732	0.14	%	-45.74	%
2007	0.00	%	2,560,294		20.320760		52,027,120	0.22	%	14.15	%
2007	0.10	%	671,050		15.184919		10,189,840	0.22	%	14.03	%
2007	0.20	%	1,732,160		11.804408		20,447,123	0.22	%	13.92	%
2007	0.25	%	3,734,518		11.762653		43,927,839	0.22	%	13.86	%
2007	0.40	%	364,698		16.850466		6,145,331	0.22	%	13.69	%
2006	0.00	%	2,846,436		17.801944		50,672,094	0.38	%	7.95	%
2006	0.10	%	530,754		13.316078		7,067,562	0.38	%	7.84	%
2006	0.20	%	1,641,104		10.362024		17,005,159	0.38	%	7.73	%
2006	0.25	%	3,188,414		10.330569		32,938,131	0.38	%	7.68	%
2006	0.40	%	1,040,592		14.821276		15,422,901	0.38	%	7.52	%
2005	0.00	%	2,994,184		16.491164		49,377,579	0.91	%	5.10	%
2005	0.10	%	558,612		12.347907		6,897,689	0.91	%	4.99	%
2005	0.20	%	1,970,560		9.618219		18,953,278	0.91	%	4.89	%
2005	0.25	%	3,734,142		9.593805		35,824,630	0.91	%	4.84	%
2005	0.40	%	1,425,776		13.784845		19,654,101	0.91	%	4.68	%
2004	0.00	%	3,086,788		15.691176		48,435,334	0.31	%	6.94	%
2004	0.10	%	876,150		11.760631		10,304,077	0.31	%	6.83	%
2004	0.20	%	1,451,308		9.169906		13,308,358	0.31	%	6.72	%
2004	0.25	%	1,591,142		9.151191		14,560,844	0.31	%	6.67	%
2004	0.40	%	4,419,620		13.168552		58,199,996	0.31	%	6.51	%

(Continued)

124

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
Oppenheimer VAF - Global Securities Fund - Class 3 (OVGS3)
2008	0.00	%	1,290,636	$	9.026171	$	11,649,501	1.57	%	-40.19	%
2007	0.00	%	1,378,496		15.092302		20,804,678	1.24	%	6.34	%
2006	0.00	%	1,194,348		14.192798		16,951,140	0.84	%	17.69	%
2005	0.00	%	723,136		12.059670		8,720,782	0.00	%	20.60	%	5/2/2005
Oppenheimer VAF - Global Securities Fund - Non-Service Class (OVGS)
2008	0.00	%	1,018,581		9.585005		9,763,104	1.55	%	-40.19	%
2008	0.10	%	292,991		9.502282		2,784,083	1.55	%	-40.25	%
2008	0.20	%	771,294		9.420249		7,265,782	1.55	%	-40.31	%
2008	0.25	%	1,877,301		9.379518		17,608,179	1.55	%	-40.34	%
2008	0.40	%	134,904		9.258335		1,248,986	1.55	%	-40.43	%
2007	0.00	%	1,244,300		16.025167		19,940,115	1.33	%	6.32	%
2007	0.10	%	319,328		15.902782		5,078,204	1.33	%	6.21	%
2007	0.20	%	664,384		15.781314		10,484,853	1.33	%	6.11	%
2007	0.25	%	1,785,708		15.720950		28,073,026	1.33	%	6.05	%
2007	0.40	%	792,482		15.541185		12,316,109	1.33	%	5.89	%
2006	0.00	%	1,579,632		15.072696		23,809,313	1.07	%	17.69	%
2006	0.10	%	150,202		14.972632		2,248,919	1.07	%	17.57	%
2006	0.20	%	578,604		14.873215		8,605,702	1.07	%	17.46	%
2006	0.25	%	1,608,848		14.823774		23,849,199	1.07	%	17.40	%
2006	0.40	%	898,758		14.676391		13,190,524	1.07	%	17.22	%
2005	0.00	%	2,017,894		12.806945		25,843,057	1.00	%	14.31	%
2005	0.10	%	183,864		12.734604		2,341,435	1.00	%	14.19	%
2005	0.20	%	1,091,788		12.662678		13,824,960	1.00	%	14.08	%
2005	0.25	%	1,169,740		12.626867		14,770,151	1.00	%	14.02	%
2005	0.40	%	810,028		12.520042		10,141,585	1.00	%	13.85	%
2004	0.00	%	2,460,964		11.203969		27,572,564	1.15	%	19.16	%
2004	0.10	%	419,770		11.151785		4,681,185	1.15	%	19.04	%
2004	0.20	%	342,972		11.099865		3,806,943	1.15	%	18.92	%
2004	0.25	%	436,776		11.073978		4,836,848	1.15	%	18.87	%
2004	0.40	%	1,770,284		10.996730		19,467,335	1.15	%	18.69	%
Oppenheimer VAF - High Income Fund - Class 3 (OVHI3)
2008	0.00	%	237,435		2.039384		484,221	5.39	%	-78.89	%
2007	0.00	%	97,144		9.661022		938,510	0.00	%	-3.39	%	5/1/2007
Oppenheimer VAF - High Income Fund - Non-Service Class (OVHI)
2008	0.00	%	147,777		2.906468		429,509	8.17	%	-78.67	%
2007	0.00	%	197,334		13.627157		2,689,101	7.57	%	-0.10	%
2006	0.00	%	324,172		13.641009		4,422,033	6.62	%	9.42	%
2005	0.00	%	304,496		12.466334		3,795,949	6.30	%	2.31	%
2004	0.00	%	260,866		12.184423		3,178,502	4.03	%	8.97	%

(Continued)

125

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
Oppenheimer VAF - Main Street Small Cap Fund(R) - Non-Service Class (OVSC)
2008	0.00	%	239,034	$	12.859537	$	3,073,867	0.51	%	-37.83	%
2007	0.00	%	264,706		20.683895		5,475,151	0.29	%	-1.21	%
2006	0.00	%	215,614		20.937110		4,514,334	0.13	%	15.00	%
2005	0.00	%	146,346		18.206560		2,664,457	0.00	%	9.92	%
2004	0.00	%	111,964		16.563464		1,854,512	0.00	%	19.42	%
Oppenheimer VAF - Main Street(R) - Non-Service Class (OVGI)
2008	0.00	%	2,155,808		9.213175		19,861,836	1.52	%	-38.47	%
2008	0.10	%	96,686		8.405452		812,690	1.52	%	-38.53	%
2008	0.20	%	127,115		7.966974		1,012,722	1.52	%	-38.59	%
2008	0.25	%	197,165		7.934811		1,564,467	1.52	%	-38.62	%
2007	0.00	%	2,359,688		14.973285		35,332,281	1.00	%	4.42	%
2007	0.10	%	92,924		13.674278		1,270,669	1.00	%	4.32	%
2007	0.20	%	333,966		12.973942		4,332,856	1.00	%	4.21	%
2007	0.25	%	225,200		12.928044		2,911,396	1.00	%	4.16	%
2006	0.00	%	2,564,464		14.338943		36,771,703	1.10	%	15.02	%
2006	0.10	%	43,364		13.108136		568,421	1.10	%	14.91	%
2006	0.20	%	184,798		12.449315		2,300,609	1.10	%	14.80	%
2006	0.25	%	370,160		12.411511		4,594,245	1.10	%	14.74	%
2006	0.40	%	3,524		11.856561		41,783	1.10	%	14.57	%
2005	0.00	%	2,675,742		12.465965		33,355,706	1.37	%	5.98	%
2005	0.10	%	65,504		11.407291		747,223	1.37	%	5.87	%
2005	0.20	%	185,032		10.844763		2,006,628	1.37	%	5.76	%
2005	0.25	%	381,782		10.817217		4,129,819	1.37	%	5.71	%
2005	0.40	%	5,684		10.349023		58,824	1.37	%	5.55	%
2004	0.00	%	2,802,124		11.763032		32,961,474	0.83	%	9.46	%
2004	0.10	%	62,892		10.774785		677,648	0.83	%	9.35	%
2004	0.20	%	86,940		10.253671		891,454	0.83	%	9.24	%
2004	0.25	%	192,090		10.232719		1,965,603	0.83	%	9.19	%
2004	0.40	%	606,518		9.804476		5,946,591	0.83	%	9.02	%
Oppenheimer VAF - Mid Cap Fund - Non-Service Class (OVAG)
2008	0.00	%	1,511,513		8.562806		12,942,793	0.00	%	-49.07	%
2008	0.10	%	250,167		6.830721		1,708,821	0.00	%	-49.12	%
2008	0.20	%	135,869		4.723995		641,844	0.00	%	-49.17	%
2008	0.25	%	841,598		4.704920		3,959,651	0.00	%	-49.19	%
2007	0.00	%	1,618,182		16.811588		27,204,209	0.00	%	6.33	%
2007	0.10	%	528,414		13.424400		7,093,641	0.00	%	6.23	%
2007	0.20	%	121,920		9.293377		1,133,049	0.00	%	6.12	%
2007	0.25	%	1,094,732		9.260496		10,137,761	0.00	%	6.07	%
2006	0.00	%	1,834,314		15.810416		29,001,267	0.00	%	2.96	%
2006	0.10	%	445,344		12.637642		5,628,098	0.00	%	2.85	%
2006	0.20	%	106,664		8.757520		934,112	0.00	%	2.75	%
2006	0.25	%	1,386,376		8.730923		12,104,342	0.00	%	2.70	%
2006	0.40	%	986		13.200215		13,015	0.00	%	2.55	%
2005	0.00	%	2,021,976		15.356470		31,050,414	0.00	%	12.33	%
2005	0.10	%	448,332		12.287042		5,508,674	0.00	%	12.21	%
2005	0.20	%	454,650		8.523068		3,875,013	0.00	%	12.10	%
2005	0.25	%	1,772,498		8.501413		15,068,738	0.00	%	12.05	%
2005	0.40	%	5,300		12.872483		68,224	0.00	%	11.88	%
2004	0.00	%	2,473,214		13.671269		33,811,974	0.00	%	19.78	%
2004	0.10	%	538,726		10.949589		5,898,828	0.00	%	19.66	%
2004	0.20	%	260,230		7.602891		1,978,500	0.00	%	19.54	%
2004	0.25	%	1,726,784		7.587355		13,101,723	0.00	%	19.48	%
2004	0.40	%	916,804		11.505640		10,548,417	0.00	%	19.30	%

(Continued)

126

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
Oppenheimer VAF - Strategic Bond Fund - Non-Service Class (OVSB)
2008	0.20	%	104,885	$	8.500963	$	891,624	3.48	%	-14.99	%	1/2/2008
2008	0.25	%	9,576		8.496736		81,365	3.48	%	-15.03	%	1/2/2008
PIMCO VIT - All Asset Portfolio - Administrative Class (PMVAAA)
2008	0.00	%	1,313		11.379397		14,941	4.28	%	-15.84	%
2008	0.10	%	15,498		11.326491		175,538	4.28	%	-15.93	%
2008	0.25	%	35,350		11.247576		397,602	4.28	%	-16.05	%
2008	0.40	%	730		11.169222		8,154	4.28	%	-16.18	%
2007	0.10	%	15,834		13.472183		213,319	8.25	%	8.22	%
2007	0.25	%	133,088		13.398414		1,783,168	8.25	%	8.06	%
2007	0.40	%	2,462		13.325057		32,806	8.25	%	7.89	%
2006	0.25	%	121,412		12.399544		1,505,453	4.03	%	4.40	%
2006	0.40	%	2,542		12.350260		31,394	4.03	%	4.24	%
2005	0.25	%	287,514		11.877133		3,414,842	4.94	%	5.96	%
2005	0.40	%	58,972		11.847635		698,679	4.94	%	5.81	%
2004	0.25	%	10,938		11.208609		122,600	6.86	%	12.09	%	5/3/2004
2004	0.40	%	13,676		11.197507		153,137	6.86	%	11.98	%	5/3/2004
PIMCO VIT - Low Duration Portfolio - Administrative Class (PMVLDA)
2008	0.00	%	15,497		11.927738		184,844	4.10	%	-0.45	%
2008	0.10	%	85,251		11.852482		1,010,436	4.10	%	-0.55	%
2008	0.20	%	1,648,644		11.777625		19,417,111	4.10	%	-0.65	%
2008	0.25	%	1,211,549		11.740354		14,224,014	4.10	%	-0.70	%
2008	0.40	%	167,038		11.629122		1,942,505	4.10	%	-0.85	%
2007	0.10	%	115,344		11.918100		1,374,681	4.75	%	7.27	%
2007	0.20	%	1,869,506		11.854696		22,162,425	4.75	%	7.16	%
2007	0.25	%	1,853,686		11.823104		21,916,322	4.75	%	7.10	%
2007	0.40	%	189,584		11.728722		2,223,578	4.75	%	6.94	%
2006	0.10	%	24,296		11.110721		269,946	4.19	%	3.86	%
2006	0.20	%	1,775,448		11.062747		19,641,332	4.19	%	3.75	%
2006	0.25	%	875,682		11.038824		9,666,499	4.19	%	3.70	%
2006	0.40	%	995,170		10.967285		10,914,313	4.19	%	3.55	%
2005	0.20	%	1,845,738		10.662435		19,680,061	2.71	%	0.80	%
2005	0.25	%	747,294		10.644694		7,954,716	2.71	%	0.75	%
2005	0.40	%	1,106,776		10.591594		11,722,522	2.71	%	0.60	%
2004	0.10	%	435,394		10.602263		4,616,162	1.29	%	1.74	%
2004	0.20	%	2,001,144		10.577591		21,167,283	1.29	%	1.64	%
2004	0.25	%	554,690		10.565271		5,860,450	1.29	%	1.58	%
2004	0.40	%	1,548,394		10.528355		16,302,042	1.29	%	1.43	%
PIMCO VIT - Real Return Portfolio - Administrative Class (PMVRRA)
2008	0.00	%	1,297		13.006263		16,869	3.55	%	-7.02	%
2008	0.10	%	150,898		12.924061		1,950,215	3.55	%	-7.12	%
2008	0.20	%	817,317		12.842295		10,496,226	3.55	%	-7.21	%
2008	0.25	%	2,758,640		12.801575		35,314,937	3.55	%	-7.26	%
2008	0.40	%	953,934		12.680079		12,095,958	3.55	%	-7.40	%
2007	0.10	%	93,920		13.914414		1,306,842	4.64	%	10.53	%
2007	0.20	%	777,912		13.840237		10,766,486	4.64	%	10.42	%
2007	0.25	%	1,535,174		13.803269		21,190,420	4.64	%	10.37	%
2007	0.40	%	1,489,604		13.692856		20,396,933	4.64	%	10.20	%
2006	0.10	%	50,474		12.588282		635,381	4.26	%	0.64	%
2006	0.20	%	672,656		12.533792		8,430,930	4.26	%	0.54	%
2006	0.25	%	1,287,852		12.506613		16,106,667	4.26	%	0.49	%
2006	0.40	%	1,442,470		12.425357		17,923,205	4.26	%	0.34	%
2005	0.10	%	80,408		12.508033		1,005,746	2.85	%	1.97	%
2005	0.20	%	628,146		12.466336		7,830,679	2.85	%	1.87	%
2005	0.25	%	1,206,896		12.445521		15,020,450	2.85	%	1.82	%
2005	0.40	%	640,224		12.383232		7,928,042	2.85	%	1.67	%
2004	0.10	%	96,300		12.266232		1,181,238	1.03	%	8.78	%
2004	0.20	%	225,144		12.237557		2,755,213	1.03	%	8.67	%
2004	0.25	%	309,916		12.223233		3,788,175	1.03	%	8.62	%
2004	0.40	%	907,634		12.180321		11,055,273	1.03	%	8.45	%

(Continued)

127

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
PIMCO VIT - Total Return Portfolio - Administrative Class (PMVTRA)
2008	0.00	%	72,078	$	13.802824	$	994,880	4.47	%	4.75	%
2008	0.10	%	1,250,843		13.715592		17,156,052	4.47	%	4.64	%
2008	0.20	%	2,728,440		13.628820		37,185,418	4.47	%	4.54	%
2008	0.25	%	7,835,547		13.585613		106,450,709	4.47	%	4.49	%
2008	0.40	%	621,710		13.456667		8,366,144	4.47	%	4.33	%
2007	0.10	%	832,700		13.106902		10,914,117	4.81	%	8.63	%
2007	0.20	%	3,931,096		13.037033		51,249,828	4.81	%	8.52	%
2007	0.25	%	5,454,364		13.002214		70,918,808	4.81	%	8.47	%
2007	0.40	%	1,905,050		12.898203		24,571,722	4.81	%	8.31	%
2006	0.10	%	8,770		12.065231		105,812	4.42	%	3.74	%
2006	0.20	%	3,889,630		12.013005		46,726,145	4.42	%	3.64	%
2006	0.25	%	3,326,500		11.986960		39,874,622	4.42	%	3.59	%
2006	0.40	%	3,150,134		11.909077		37,515,188	4.42	%	3.43	%
2005	0.10	%	30,398		11.629906		353,526	3.47	%	2.32	%
2005	0.20	%	3,110,384		11.591132		36,052,872	3.47	%	2.22	%
2005	0.25	%	2,083,246		11.571785		24,106,875	3.47	%	2.17	%
2005	0.40	%	2,531,932		11.513866		29,152,326	3.47	%	2.02	%
2004	0.10	%	50,172		11.365760		570,243	1.92	%	4.78	%
2004	0.20	%	1,390,690		11.339186		15,769,293	1.92	%	4.67	%
2004	0.25	%	1,511,060		11.325918		17,114,142	1.92	%	4.62	%
2004	0.40	%	3,142,992		11.286156		35,472,298	1.92	%	4.46	%
Pioneer VCT - Pioneer Emerging Markets Portfolio - Class I (PIVEMI)
2008	0.00	%	1,435		4.375030		6,278	0.36	%	-58.20	%
2008	0.25	%	32,111		4.361213		140,043	0.36	%	-58.31	%
Pioneer VCT - Pioneer High Yield Portfolio - Class I (PIHYB1)
2008	0.00	%	433		11.258511		4,875	8.46	%	-35.43	%
2008	0.10	%	110,077		11.187479		1,231,484	8.46	%	-35.49	%
2008	0.20	%	694,575		11.116824		7,721,468	8.46	%	-35.55	%
2008	0.25	%	254,649		11.081635		2,821,927	8.46	%	-35.59	%
2008	0.40	%	52,370		10.976641		574,847	8.46	%	-35.68	%
2007	0.10	%	100,470		17.342224		1,742,373	5.36	%	5.81	%
2007	0.20	%	507,564		17.249965		8,755,461	5.36	%	5.71	%
2007	0.25	%	195,182		17.203983		3,357,908	5.36	%	5.65	%
2007	0.40	%	179,670		17.066645		3,066,364	5.36	%	5.50	%
2006	0.10	%	10,514		16.389248		172,317	5.53	%	8.39	%
2006	0.20	%	467,554		16.318486		7,629,773	5.53	%	8.29	%
2006	0.25	%	82,444		16.283186		1,342,451	5.53	%	8.23	%
2006	0.40	%	280,054		16.177661		4,530,619	5.53	%	8.07	%
2005	0.10	%	11,722		15.120107		177,238	5.49	%	1.84	%
2005	0.20	%	438,236		15.069867		6,604,158	5.49	%	1.74	%
2005	0.25	%	36,528		15.044787		549,556	5.49	%	1.69	%
2005	0.40	%	252,932		14.969736		3,786,325	5.49	%	1.54	%
2004	0.10	%	16,298		14.846381		241,966	5.59	%	7.95	%
2004	0.20	%	41,538		14.811836		615,254	5.59	%	7.85	%
2004	0.25	%	53,634		14.794578		793,492	5.59	%	7.79	%
2004	0.40	%	473,190		14.742883		6,976,185	5.59	%	7.63	%

(Continued)

128

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
Putnam VT - Growth and Income Fund - Class IB (PVGIB)
2008	0.00	%	63,826	$	9.699626	$	619,088	2.04	%	-38.70	%
2007	0.00	%	65,188		15.822165		1,031,415	1.43	%	-6.04	%
2006	0.00	%	79,204		16.838971		1,333,714	1.47	%	15.91	%
2005	0.00	%	79,162		14.527575		1,150,032	1.49	%	5.23	%
2004	0.00	%	69,826		13.805820		964,005	1.11	%	11.11	%
Putnam VT - International Equity Fund - Class IB (PVTIGB)
2008	0.00	%	98,334		12.943794		1,272,815	2.18	%	-43.95	%
2007	0.00	%	132,680		23.093467		3,064,041	2.23	%	8.37	%
2006	0.00	%	227,790		21.310423		4,854,301	0.36	%	27.72	%
2005	0.00	%	138,276		16.685441		2,307,196	1.32	%	12.20	%
2004	0.00	%	107,542		14.871493		1,599,310	1.30	%	16.19	%
Putnam VT - OTC & Emerging Growth Fund - Class IB (PVOEGB)
2008	0.20	%	5,847		5.470558		31,986	0.00	%	-45.29	%	1/2/2008
2008	0.25	%	533		5.467827		2,914	0.00	%	-45.32	%	1/2/2008
Putnam VT - Small Cap Value Fund - Class IB (PVTSCB)
2008	0.25	%	65		5.389467		350	0.00	%	-39.51	%
Putnam VT - Voyager Fund - Class IB (PVTVB)
2008	0.00	%	54,796		9.218880		505,158	0.00	%	-37.03	%
2007	0.00	%	29,740		14.640393		435,405	0.00	%	5.52	%
2006	0.00	%	28,784		13.874456		399,362	0.11	%	5.44	%
2005	0.00	%	27,308		13.159164		359,350	0.59	%	5.69	%
2004	0.00	%	26,864		12.450430		334,468	0.20	%	5.03	%
Royce Capital Fund - Micro Cap Portfolio (ROCMC)
2008	0.00	%	3,305		13.694894		45,262	2.44	%	-43.27	%
2008	0.10	%	126,086		13.608530		1,715,845	2.44	%	-43.33	%
2008	0.20	%	526,233		13.522698		7,116,090	2.44	%	-43.38	%
2008	0.25	%	1,056,241		13.479984		14,238,112	2.44	%	-43.41	%
2008	0.40	%	243,108		13.352691		3,246,146	2.44	%	-43.50	%
2007	0.10	%	192,752		24.012175		4,628,395	1.50	%	3.87	%
2007	0.20	%	516,162		23.884685		12,328,367	1.50	%	3.77	%
2007	0.25	%	1,213,818		23.821182		28,914,579	1.50	%	3.72	%
2007	0.40	%	383,860		23.631757		9,071,286	1.50	%	3.56	%
2006	0.10	%	102,390		23.116715		2,366,920	0.17	%	20.95	%
2006	0.20	%	487,556		23.017122		11,222,136	0.17	%	20.83	%
2006	0.25	%	779,248		22.967474		17,897,358	0.17	%	20.77	%
2006	0.40	%	767,354		22.819241		17,510,436	0.17	%	20.59	%
2005	0.10	%	11,746		19.112697		224,498	0.60	%	11.50	%
2005	0.20	%	516,002		19.049333		9,829,494	0.60	%	11.39	%
2005	0.25	%	690,136		19.017724		13,124,816	0.60	%	11.33	%
2005	0.40	%	830,676		18.923254		15,719,093	0.60	%	11.17	%
2004	0.10	%	11,820		17.141696		202,615	0.00	%	13.73	%
2004	0.20	%	251,888		17.101898		4,307,763	0.00	%	13.62	%
2004	0.25	%	271,392		17.082044		4,635,930	0.00	%	13.56	%
2004	0.40	%	1,033,530		17.022607		17,593,375	0.00	%	13.39	%

(Continued)

129

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
Royce Capital Fund - Small Cap Portfolio (ROCSC)
2008	0.20	%	11,031	$	7.326443	$	80,818	0.43	%	-26.74	%	1/2/2008
2008	0.25	%	1,007		7.322794		7,374	0.43	%	-26.77	%	1/2/2008
T. Rowe Price Blue Chip Growth Portfolio - II (TRBCG2)
2008	0.00	%	273,286		7.980543		2,180,971	0.11	%	-42.65	%
2008	0.20	%	23,532		7.922205		186,425	0.11	%	-42.76	%
2008	0.25	%	2,151		7.907699		17,009	0.11	%	-42.79	%
2007	0.00	%	212,892		13.915435		2,962,485	0.11	%	12.49	%
2006	0.00	%	117,044		12.370493		1,447,892	0.34	%	9.33	%
2005	0.00	%	33,050		11.314946		373,959	0.16	%	13.15	%	5/2/2005
T. Rowe Price Equity Income Portfolio - II (TREI2)
2008	0.00	%	345,566		11.741384		4,057,423	2.12	%	-36.26	%
2008	0.10	%	166,121		11.667331		1,938,189	2.12	%	-36.33	%
2008	0.20	%	1,762,229		11.593772		20,430,881	2.12	%	-36.39	%
2008	0.25	%	2,240,330		11.557153		25,891,837	2.12	%	-36.42	%
2008	0.40	%	562,661		11.447985		6,441,335	2.12	%	-36.52	%
2007	0.00	%	342,686		18.422059		6,312,982	1.51	%	3.03	%
2007	0.10	%	160,922		18.324230		2,948,772	1.51	%	2.93	%
2007	0.20	%	1,884,266		18.226974		34,344,467	1.51	%	2.82	%
2007	0.25	%	2,229,008		18.178518		40,520,062	1.51	%	2.77	%
2007	0.40	%	834,360		18.033915		15,046,777	1.51	%	2.62	%
2006	0.00	%	232,318		17.880327		4,153,922	1.35	%	18.65	%
2006	0.10	%	17,014		17.803262		302,905	1.35	%	18.53	%
2006	0.20	%	1,955,804		17.726578		34,669,712	1.35	%	18.41	%
2006	0.25	%	1,540,034		17.688346		27,240,654	1.35	%	18.35	%
2006	0.40	%	1,391,756		17.574134		24,458,906	1.35	%	18.18	%
2005	0.00	%	69,938		15.070153		1,053,976	1.39	%	3.69	%
2005	0.10	%	22,826		15.020167		342,850	1.39	%	3.59	%
2005	0.20	%	1,993,558		14.970390		29,844,341	1.39	%	3.49	%
2005	0.25	%	892,058		14.945544		13,332,292	1.39	%	3.44	%
2005	0.40	%	1,649,340		14.871262		24,527,767	1.39	%	3.28	%
2004	0.10	%	11,962		14.499419		173,442	1.46	%	14.50	%
2004	0.20	%	1,400,944		14.465784		20,265,753	1.46	%	14.39	%
2004	0.25	%	366,698		14.448971		5,298,409	1.46	%	14.33	%
2004	0.40	%	1,661,986		14.398668		23,930,385	1.46	%	14.16	%
T. Rowe Price Health Sciences Portfolio - II (TRHS2)
2008	0.20	%	163,681		7.109924		1,163,759	0.00	%	-28.90	%	1/2/2008
2008	0.25	%	14,944		7.106377		106,198	0.00	%	-28.94	%	1/2/2008
T. Rowe Price Limited Term Bond Portfolio - Class II (TRLT2)
2008	0.00	%	177,875		11.230967		1,997,708	3.75	%	1.31	%
2007	0.00	%	97,460		11.086232		1,080,464	4.06	%	5.23	%
2006	0.00	%	51,598		10.535464		543,609	3.73	%	4.03	%
2005	0.00	%	19,896		10.127763		201,502	2.09	%	1.28	%	5/2/2005

(Continued)

130

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
T. Rowe Price Mid Cap Growth Portfolio - II (TRMCG2)
2008	0.10	%	97,962	$	14.242855	$	1,395,259	0.00	%	-40.00	%
2008	0.20	%	302,266		14.153026		4,277,979	0.00	%	-40.06	%
2008	0.25	%	681,051		14.108326		9,608,490	0.00	%	-40.09	%
2007	0.10	%	118,598		23.736199		2,815,066	0.00	%	17.11	%
2007	0.20	%	283,588		23.610164		6,695,559	0.00	%	16.99	%
2007	0.25	%	726,466		23.547392		17,106,380	0.00	%	16.93	%
2007	0.40	%	34,870		23.360091		814,566	0.00	%	16.75	%
2006	0.10	%	23,520		20.268825		476,723	0.00	%	6.28	%
2006	0.20	%	288,630		20.181467		5,824,977	0.00	%	6.17	%
2006	0.25	%	560,134		20.137940		11,279,945	0.00	%	6.12	%
2006	0.40	%	256,586		20.007898		5,133,747	0.00	%	5.96	%
2005	0.10	%	44,810		19.071958		854,614	0.00	%	14.32	%
2005	0.20	%	626,894		19.008705		11,916,443	0.00	%	14.21	%
2005	0.25	%	356,418		18.977178		6,763,808	0.00	%	14.15	%
2005	0.40	%	453,782		18.882872		8,568,707	0.00	%	13.98	%
2004	0.10	%	172,276		16.682608		2,874,013	0.00	%	17.94	%
2004	0.20	%	835,584		16.643864		13,907,346	0.00	%	17.82	%
2004	0.25	%	179,746		16.624542		2,988,195	0.00	%	17.76	%
2004	0.40	%	754,450		16.566668		12,498,723	0.00	%	17.58	%
T. Rowe Price New America Growth Portfolio (TRNAG1)
2008	0.10	%	52,850		8.488305		448,607	0.00	%	-38.30	%
2008	0.20	%	83,615		8.448808		706,447	0.00	%	-38.37	%
2008	0.25	%	307,465		8.429140		2,591,666	0.00	%	-38.40	%
2008	0.40	%	481,319		8.370383		4,028,824	0.00	%	-38.49	%
2007	0.10	%	25,334		13.758234		348,551	0.00	%	13.67	%
2007	0.20	%	299,098		13.707959		4,100,023	0.00	%	13.55	%
2007	0.25	%	194,180		13.682900		2,656,946	0.00	%	13.49	%
2007	0.40	%	536,034		13.607980		7,294,340	0.00	%	13.32	%
2006	0.20	%	301,726		12.072027		3,642,444	0.04	%	7.12	%
2006	0.25	%	86,392		12.056017		1,041,543	0.04	%	7.06	%
2006	0.40	%	551,676		12.008095		6,624,578	0.04	%	6.90	%
2005	0.20	%	690,950		11.269904		7,786,940	0.00	%	4.26	%
2005	0.25	%	2,404		11.260565		27,070	0.00	%	4.21	%
2005	0.40	%	584,706		11.232593		6,567,765	0.00	%	4.06	%
2004	0.20	%	222,430		10.808909		2,404,226	0.00	%	8.09	%	5/3/2004
2004	0.25	%	560		10.805340		6,051	0.00	%	8.05	%	5/3/2004
2004	0.40	%	19,964		10.794628		215,504	0.00	%	7.95	%	5/3/2004
T. Rowe Price Personal Strategy Balanced Portfolio (TRPSB1)
2008	0.00	%	7,764		7.640233		59,319	2.80	%	-29.88	%
2008	0.25	%	47,397		7.599968		360,216	2.80	%	-30.06	%
2008	0.40	%	143		7.575907		1,083	2.80	%	-30.16	%
2007	0.25	%	5,720		10.865761		62,152	1.34	%	7.34	%
2007	0.40	%	340		10.847653		3,688	1.34	%	7.18	%
The Dreyfus Socially Responsible Growth Fund, Inc. - Initial Shares (DSRG)
2008	0.00	%	903,627		8.816356		7,966,697	0.76	%	-34.42	%
2008	0.10	%	108,438		6.365134		690,222	0.76	%	-34.49	%
2008	0.25	%	47,574		5.777639		274,865	0.76	%	-34.59	%
2007	0.00	%	990,572		13.444500		13,317,745	0.54	%	7.79	%
2007	0.10	%	116,744		9.716245		1,134,313	0.54	%	7.68	%
2007	0.25	%	50,616		8.832711		447,076	0.54	%	7.51	%
2006	0.00	%	1,115,238		12.473391		13,910,800	0.11	%	9.20	%
2006	0.10	%	84,702		9.023502		764,309	0.11	%	9.09	%
2006	0.25	%	91,596		8.215346		752,493	0.11	%	8.93	%
2006	0.40	%	90		10.406467		937	0.11	%	8.77	%
2005	0.00	%	1,203,742		11.422458		13,749,692	0.00	%	3.62	%
2005	0.10	%	90,610		8.271484		749,479	0.00	%	3.51	%
2005	0.25	%	101,932		7.541951		768,766	0.00	%	3.36	%
2005	0.40	%	734		9.567773		7,023	0.00	%	3.20	%
2004	0.00	%	1,320,272		11.023895		14,554,540	0.40	%	6.21	%
2004	0.10	%	88,956		7.990838		710,833	0.40	%	6.10	%
2004	0.20	%	29,340		7.311886		214,531	0.40	%	6.00	%
2004	0.25	%	154,666		7.296964		1,128,592	0.40	%	5.95	%
2004	0.40	%	21,434		9.270823		198,711	0.40	%	5.79	%

(Continued)

131

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
The Universal IF, Inc. - Capital Growth Portfolio - Class I (MSVEG)
2008	0.25	%	39,408	$	5.090726	$	200,615	0.00	%	-49.31	%
Van Eck Worldwide Insurance Trust - Emerging Markets Fund - Initial Class (VWEM)
2008	0.00	%	379,342		12.666688		4,805,007	0.00	%	-64.78	%
2008	0.10	%	96,284		17.162939		1,652,516	0.00	%	-64.81	%
2008	0.20	%	70,043		15.849346		1,110,136	0.00	%	-64.85	%
2008	0.25	%	73,280		15.785351		1,156,751	0.00	%	-64.87	%
2007	0.00	%	517,190		35.963363		18,599,892	0.40	%	37.61	%
2007	0.10	%	94,388		48.778177		4,604,075	0.40	%	37.48	%
2007	0.20	%	66,494		45.090153		2,998,225	0.40	%	37.34	%
2007	0.25	%	105,400		44.930650		4,735,691	0.40	%	37.27	%
2006	0.00	%	565,466		26.133423		14,777,562	0.56	%	39.49	%
2006	0.10	%	43,526		35.481161		1,544,353	0.56	%	39.35	%
2006	0.20	%	46,954		32.831467		1,541,569	0.56	%	39.21	%
2006	0.25	%	66,446		32.731758		2,174,894	0.56	%	39.14	%
2005	0.00	%	573,050		18.734825		10,735,991	0.71	%	32.00	%
2005	0.10	%	38,212		25.461491		972,934	0.71	%	31.86	%
2005	0.20	%	45,066		23.583541		1,062,816	0.71	%	31.73	%
2005	0.25	%	41,596		23.523647		978,490	0.71	%	31.67	%
2005	0.40	%	596		17.488050		10,423	0.71	%	31.47	%
2004	0.00	%	535,204		14.193509		7,596,423	0.53	%	25.89	%
2004	0.10	%	32,436		19.308855		626,302	0.53	%	25.76	%
2004	0.20	%	120,164		17.902527		2,151,239	0.53	%	25.64	%
2004	0.25	%	212,994		17.865954		3,805,341	0.53	%	25.58	%
2004	0.40	%	53,740		13.301843		714,841	0.53	%	25.39	%
Van Eck Worldwide Insurance Trust - Hard Assets Fund - Initial Class (VWHA)
2008	0.00	%	387,879		21.535500		8,353,168	0.27	%	-46.12	%
2008	0.10	%	84,350		29.959857		2,527,114	0.27	%	-46.18	%
2008	0.20	%	129,114		25.496953		3,292,014	0.27	%	-46.23	%
2008	0.25	%	133,086		25.394095		3,379,599	0.27	%	-46.26	%
2008	0.40	%	6,726		20.508184		137,938	0.27	%	-46.34	%
2007	0.00	%	416,768		39.972562		16,659,285	0.11	%	45.36	%
2007	0.10	%	99,614		55.665036		5,545,017	0.11	%	45.21	%
2007	0.20	%	81,432		47.420563		3,861,551	0.11	%	45.06	%
2007	0.25	%	170,146		47.252962		8,039,902	0.11	%	44.99	%
2007	0.40	%	6,820		38.218809		260,652	0.11	%	44.77	%
2006	0.00	%	487,264		27.499610		13,399,570	0.06	%	24.49	%
2006	0.10	%	20,452		38.333948		784,006	0.06	%	24.37	%
2006	0.20	%	59,788		32.689202		1,954,422	0.06	%	24.24	%
2006	0.25	%	153,486		32.590053		5,002,117	0.06	%	24.18	%
2005	0.00	%	509,766		22.089482		11,260,467	0.31	%	51.67	%
2005	0.10	%	26,250		30.823042		809,105	0.31	%	51.52	%
2005	0.20	%	52,740		26.310503		1,387,616	0.31	%	51.37	%
2005	0.25	%	129,856		26.243783		3,407,913	0.31	%	51.29	%
2005	0.40	%	52		21.290146		1,107	0.31	%	51.07	%
2004	0.00	%	392,894		14.564221		5,722,195	0.31	%	24.23	%
2004	0.10	%	7,980		20.342743		162,335	0.31	%	24.10	%
2004	0.20	%	70,582		17.381825		1,226,844	0.31	%	23.98	%
2004	0.25	%	31,156		17.346378		540,444	0.31	%	23.92	%
2004	0.40	%	153,946		14.093195		2,169,591	0.31	%	23.73	%

(Continued)

132

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
Van Kampen UIF - Core Plus Fixed Income Portfolio - Class I (MSVFI)
2008	0.00	%	264,578	$	10.933218	$	2,892,689	4.73	%	-10.20	%
2007	0.00	%	281,694		12.175696		3,429,821	3.71	%	5.45	%
2006	0.00	%	190,806		11.546094		2,203,064	4.06	%	3.73	%
2005	0.00	%	126,012		11.130805		1,402,615	3.73	%	4.21	%
2004	0.00	%	50,918		10.680729		543,841	3.92	%	4.37	%
Van Kampen UIF - Emerging Markets Debt Portfolio - Class I (MSEM)
2008	0.00	%	235,478		19.678201		4,633,783	7.06	%	-14.98	%
2008	0.10	%	32,806		25.456014		835,110	7.06	%	-15.06	%
2008	0.20	%	94,088		19.381729		1,823,588	7.06	%	-15.15	%
2008	0.25	%	83,661		19.303549		1,614,954	7.06	%	-15.19	%
2008	0.40	%	69,947		17.858916		1,249,178	7.06	%	-15.32	%
2007	0.00	%	244,604		23.144388		5,661,210	7.13	%	6.53	%
2007	0.10	%	53,870		29.969902		1,614,479	7.13	%	6.42	%
2007	0.20	%	79,524		22.841354		1,816,436	7.13	%	6.32	%
2007	0.25	%	74,644		22.760599		1,698,942	7.13	%	6.26	%
2007	0.40	%	68,018		21.088867		1,434,423	7.13	%	6.10	%
2006	0.00	%	296,826		21.725302		6,448,634	10.28	%	10.81	%
2006	0.10	%	11,152		28.160613		314,047	10.28	%	10.70	%
2006	0.20	%	74,878		21.483999		1,608,679	10.28	%	10.59	%
2006	0.25	%	49,984		21.418803		1,070,597	10.28	%	10.53	%
2006	0.40	%	81,282		19.875581		1,615,527	10.28	%	10.37	%
2005	0.00	%	306,254		19.606425		6,004,546	7.14	%	12.25	%
2005	0.10	%	17,164		25.439451		436,643	7.14	%	12.14	%
2005	0.20	%	227,212		19.427363		4,414,130	7.14	%	12.03	%
2005	0.25	%	48,476		19.378063		939,371	7.14	%	11.97	%
2005	0.40	%	83,166		18.008789		1,497,719	7.14	%	11.80	%
2004	0.00	%	310,368		17.466655		5,421,091	7.52	%	10.06	%
2004	0.10	%	6,174		22.685707		140,062	7.52	%	9.95	%
2004	0.20	%	105,242		17.341685		1,825,074	7.52	%	9.84	%
2004	0.25	%	37,344		17.306300		646,286	7.52	%	9.79	%
2004	0.40	%	122,976		16.107486		1,980,834	7.52	%	9.62	%
Van Kampen UIF - Global Real Estate Portfolio - Class II (VKVGR2)
2008	0.00	%	9,686		4.901259		47,474	4.11	%	-44.34	%
2008	0.25	%	85,328		4.885787		416,894	4.11	%	-44.48	%
2008	0.40	%	4,297		4.876534		20,954	4.11	%	-44.57	%

(Continued)

133

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
Van Kampen UIF - Mid Cap Growth Portfolio- Class I (MSVMG)
2008	0.00	%	240,987	$	6.115056	$	1,473,649	0.80	%	-46.77	%
2008	0.10	%	79,376		6.062222		481,195	0.80	%	-46.82	%
2008	0.20	%	24,533		6.009877		147,440	0.80	%	-46.87	%
2008	0.25	%	816,330		5.983894		4,884,832	0.80	%	-46.90	%
2008	0.40	%	22,314		5.906531		131,798	0.80	%	-46.98	%
2007	0.00	%	283,210		11.486951		3,253,219	0.00	%	22.67	%
2007	0.10	%	59,566		11.399129		679,001	0.00	%	22.54	%
2007	0.20	%	20,784		11.312053		235,110	0.00	%	22.42	%
2007	0.25	%	401,714		11.268795		4,526,833	0.00	%	22.36	%
2007	0.40	%	44,500		11.139857		495,724	0.00	%	22.17	%
2006	0.00	%	282,660		9.364438		2,646,952	0.00	%	9.27	%
2006	0.10	%	21,636		9.302196		201,262	0.00	%	9.17	%
2006	0.20	%	26,838		9.240416		247,994	0.00	%	9.06	%
2006	0.25	%	265,862		9.209696		2,448,508	0.00	%	9.00	%
2006	0.40	%	44,880		9.118070		409,219	0.00	%	8.84	%
2005	0.00	%	300,668		8.569610		2,576,607	0.00	%	17.57	%
2005	0.10	%	21,748		8.521148		185,318	0.00	%	17.45	%
2005	0.20	%	20,382		8.473005		172,697	0.00	%	17.33	%
2005	0.25	%	144,664		8.449046		1,222,273	0.00	%	17.28	%
2005	0.40	%	49,068		8.377513		411,068	0.00	%	17.10	%
2004	0.00	%	328,124		7.289089		2,391,725	0.00	%	21.60	%
2004	0.10	%	21,882		7.255105		158,756	0.00	%	21.47	%
2004	0.20	%	98,272		7.221303		709,652	0.00	%	21.35	%
2004	0.25	%	137,920		7.204463		993,640	0.00	%	21.29	%
2004	0.40	%	30,098		7.154160		215,326	0.00	%	21.11	%
Van Kampen UIF - U.S. Real Estate Portfolio - Class I (MSVRE)
2008	0.00	%	1,007,215		18.602467		18,736,684	3.40	%	-37.89	%
2008	0.10	%	141,708		21.872227		3,099,470	3.40	%	-37.96	%
2008	0.20	%	136,212		17.741677		2,416,629	3.40	%	-38.02	%
2008	0.25	%	648,045		17.670052		11,450,989	3.40	%	-38.05	%
2008	0.40	%	60,957		18.056248		1,100,655	3.40	%	-38.14	%
2007	0.00	%	1,115,184		29.952335		33,402,365	1.11	%	-17.07	%
2007	0.10	%	183,278		35.252498		6,461,007	1.11	%	-17.15	%
2007	0.20	%	249,376		28.623844		7,138,100	1.11	%	-17.24	%
2007	0.25	%	617,432		28.522644		17,610,793	1.11	%	-17.28	%
2007	0.40	%	172,122		29.190018		5,024,244	1.11	%	-17.40	%
2006	0.00	%	1,384,756		36.117848		50,014,407	1.07	%	38.04	%
2006	0.10	%	109,384		42.551820		4,654,488	1.07	%	37.91	%
2006	0.20	%	324,820		34.585436		11,234,041	1.07	%	37.77	%
2006	0.25	%	709,670		34.480507		24,469,781	1.07	%	37.70	%
2006	0.40	%	290,660		35.340571		10,272,090	1.07	%	37.50	%
2005	0.00	%	1,409,392		26.163932		36,875,236	1.19	%	17.05	%
2005	0.10	%	125,524		30.855447		3,873,099	1.19	%	16.93	%
2005	0.20	%	250,510		25.103798		6,288,752	1.19	%	16.82	%
2005	0.25	%	546,448		25.040093		13,683,109	1.19	%	16.76	%
2005	0.40	%	377,610		25.703042		9,705,726	1.19	%	16.59	%
2004	0.00	%	1,415,482		22.352530		31,639,604	1.61	%	36.39	%
2004	0.10	%	110,058		26.386900		2,904,089	1.61	%	36.26	%
2004	0.20	%	98,428		21.489618		2,115,180	1.61	%	36.12	%
2004	0.25	%	352,704		21.445777		7,564,011	1.61	%	36.05	%
2004	0.40	%	716,826		22.046498		15,803,503	1.61	%	35.85	%

(Continued)

134

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
Vanguard(R) VIF - Balanced Portfolio (VVB)
2008	0.20	%	109,081	$	7.761012	$	846,579	0.00	%	-22.39	%	1/2/2008
2008	0.25	%	9,959		7.757156		77,254	0.00	%	-22.43	%	1/2/2008
Vanguard(R) VIF - Diversified Value Portfolio (VVDV)
2008	0.20	%	143,388		6.467982		927,431	0.00	%	-35.32	%	1/2/2008
2008	0.25	%	13,091		6.464759		84,630	0.00	%	-35.35	%	1/2/2008
Vanguard(R) VIF - International Portfolio (VVI)
2008	0.20	%	356,354		5.532166		1,971,409	0.00	%	-44.68	%	1/2/2008
2008	0.25	%	32,536		5.529407		179,905	0.00	%	-44.71	%	1/2/2008
Vanguard(R) VIF - Mid Cap Index Portfolio (VVMCI)
2008	0.20	%	301,906		5.892524		1,778,988	0.00	%	-41.07	%	1/2/2008
2008	0.25	%	27,909		5.889589		164,373	0.00	%	-41.10	%	1/2/2008
Vanguard(R) VIF - Short-Term Investment-Grade Portfolio (VVSTC)
2008	0.20	%	223,003		9.590829		2,138,784	0.00	%	-4.09	%	1/2/2008
2008	0.25	%	20,361		9.586056		195,182	0.00	%	-4.14	%	1/2/2008
Wells Fargo AVT - Discovery Fund(SM) (SVDF)
2008	0.00	%	97,543		5.474555		534,005	0.00	%	-44.36	%
2008	0.10	%	35,560		5.467646		194,429	0.00	%	-44.41	%
2008	0.25	%	42,095		5.457284		229,724	0.00	%	-44.50	%
2008	0.40	%	162		5.446950		882	0.00	%	-44.58	%
Wells Fargo AVT - Opportunity Fund(SM) (SVOF)
2008	0.00	%	966,983		8.718261		8,430,410	1.86	%	-40.10	%
2008	0.10	%	184,457		8.642979		1,594,258	1.86	%	-40.16	%
2008	0.20	%	117,180		8.568374		1,004,042	1.86	%	-40.22	%
2008	0.25	%	331,868		8.531293		2,831,263	1.86	%	-40.25	%
2007	0.00	%	1,129,684		14.553953		16,441,368	0.61	%	6.63	%
2007	0.10	%	224,604		14.442760		3,243,902	0.61	%	6.53	%
2007	0.20	%	154,478		14.332457		2,214,049	0.61	%	6.42	%
2007	0.25	%	358,194		14.277593		5,114,148	0.61	%	6.37	%
2006	0.00	%	1,303,766		13.648563		17,794,532	0.00	%	12.22	%
2006	0.10	%	143,310		13.557898		1,942,982	0.00	%	12.11	%
2006	0.20	%	199,708		13.467901		2,689,648	0.00	%	12.00	%
2006	0.25	%	454,354		13.423088		6,098,834	0.00	%	11.94	%
2006	0.40	%	126		13.289662		1,674	0.00	%	11.77	%
2005	0.00	%	1,428,994		12.162469		17,380,095	0.00	%	7.88	%
2005	0.10	%	114,460		12.093732		1,384,249	0.00	%	7.78	%
2005	0.20	%	360,812		12.025433		4,338,921	0.00	%	7.67	%
2005	0.25	%	470,806		11.991404		5,645,625	0.00	%	7.62	%
2005	0.40	%	110,270		11.889981		1,311,108	0.00	%	7.45	%
2004	0.00	%	1,509,654		11.273634		17,019,287	0.00	%	18.22	%
2004	0.10	%	184,596		11.221097		2,071,370	0.00	%	18.10	%
2004	0.20	%	266,180		11.168856		2,972,926	0.00	%	17.98	%
2004	0.25	%	469,872		11.142802		5,235,691	0.00	%	17.93	%
2004	0.40	%	898,190		11.065086		9,938,550	0.00	%	17.75	%

(Continued)

135

NATIONWIDE VLI SEPARATE ACCOUNT-4 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Initial Offering Date^
Wells Fargo AVT - Small Cap Growth Fund (WFVSCG)
2008	0.00	%	3,856	$	5.636741	$	21,735	0.00	%	-41.42	%
2008	0.25	%	125,618		5.618956		705,842	0.00	%	-41.57	%
2008	0.40	%	1,113		5.608316		6,242	0.00	%	-41.66	%
2008	Contract owners’ equity					$	3,233,903,295
2007	Contract owners’ equity					$	4,818,129,455
2006	Contract owners’ equity					$	4,464,442,368
2005	Contract owners’ equity					$	3,947,899,004
2004	Contract owners’ equity					$	3,677,896,359

* This represents the annual contract expense rate 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 mutual funds and charges made directly to contract owner accounts through the redemption of units.

** This represents the dividends for the period indicated, excluding distributions of capital gains, received by the subaccount from the underlying mutual fund, net of management fees assessed by the fund manager, divided by average net assets. The ratios exclude those expenses, such as policy and asset charges, that result in direct reductions to the contractholder accounts either through reductions in the unit values or redemption of units. The recognition of investment income by the subaccount is affected by the timing of the declaration of dividends by the underlying fund in which the subaccounts invest.

*** This represents the total return for the period indicated and includes a deduction only for expenses assessed through a reduction in the unit values. 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 in the total return presented. Total return is not annualized if the underlying mutual fund option is initially offered, funded, or both, during the period presented.

^ This represents the date the underlying mutual fund option was initially added and funded. Total returns presented in years of initial offering represent the return for the period from the initial offering through year end.

136

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholder

Nationwide Life Insurance Company:

We have audited the accompanying consolidated balance sheets of Nationwide Life Insurance Company and subsidiaries (the Company) as of December 31, 2008 and 2007, and the related consolidated statements of (loss) income, changes in shareholder’s equity and cash flows for each of the years in the three-year period ended December 31, 2008. In connection with our audits of the consolidated financial statements, we also have audited the financial statement schedules as listed in the accompanying index. These consolidated financial statements and financial statement schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedules based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated 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, 2008 and 2007, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2008, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the related financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

As discussed in Note 3 to the consolidated financial statements, the Company adopted the American Institute of Certified Public Accountants’ Statement of Position 05-1, Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection with Modifications or Exchanges of Insurance Contracts, in 2007.

/s/ KPMG LLP

Columbus, Ohio

March 2, 2009

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Consolidated Statements of (Loss) Income

(in millions)

	Years ended December 31,
	2008			2007			2006
Revenues:
Policy charges	$	1,168.0		$	1,208.3		$	1,132.6
Premiums		283.5			291.7			308.3
Net investment income		1,687.0			1,975.8			2,058.5
Net realized investment (losses) gains		(1,439.3	)		(166.2	)		7.1
Other income		6.4			7.5			0.2
Total revenues		1,705.6			3,317.1			3,506.7
Benefits and expenses:
Interest credited to policyholder accounts		1,130.6			1,262.6			1,330.1
Benefits and claims		660.3			479.3			450.3
Policyholder dividends		26.4			24.5			25.6
Amortization of deferred policy acquisition costs		674.5			368.5			450.3
Interest expense, primarily with Nationwide Financial Services, Inc. (NFS)		61.8			70.0			65.5
Other operating expenses		516.1			529.5			536.8
Total benefits and expenses		3,069.7			2,734.4			2,858.6
(Loss) income from continuing operations before federal income tax (benefit) expense		(1,364.1	)		582.7			648.1
Federal income tax (benefit) expense		(534.3	)		128.5			28.7
(Loss) income from continuing operations		(829.8	)		454.2			619.4
Cumulative effect of adoption of accounting principle, net of taxes		—			(6.0	)		—
Net (loss) income	$	(829.8	)	$	448.2		$	619.4

See accompanying notes to consolidated financial statements.

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,
	2008			2007
Assets
Investments:
Securities available-for-sale, at fair value:
Fixed maturity securities (amortized cost $21,820.9 and $24,021.2)	$	19,247.2		$	23,933.4
Equity securities (amortized cost $30.9 and $69.6)		26.5			72.9
Mortgage loans on real estate, net		7,189.9			7,615.4
Short-term investments, including amounts managed by a related party		2,780.9			959.1
Other investments		1,305.5			1,330.8
Total investments		30,550.0			33,911.6
Cash		36.7			1.3
Accrued investment income		300.9			314.3
Deferred policy acquisition costs		4,423.9			3,997.4
Other assets		2,564.0			1,638.9
Separate account assets		46,936.9			69,676.5
Total assets	$	84,812.4		$	109,540.0
Liabilities and Shareholder’s Equity
Liabilities:
Future policy benefits and claims	$	32,536.3		$	31,998.4
Short-term debt		249.7			285.3
Long-term debt, payable to NFS		700.0			700.0
Other liabilities		2,110.5			2,642.6
Separate account liabilities		46,936.9			69,676.5
Total liabilities		82,533.4			105,302.8
Shareholder’s equity:
Common stock ($1 par value; authorized - 5.0 shares; issued and outstanding - 3.8 shares)		3.8			3.8
Additional paid-in capital		613.2			274.4
Retained earnings		2,973.2			4,049.5
Accumulated other comprehensive loss		(1,311.2	)		(90.5	)
Total shareholder’s equity		2,279.0			4,237.2
Total liabilities and shareholder’s equity	$	84,812.4		$	109,540.0

See accompanying notes to consolidated financial statements.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Consolidated Statements of Changes in Shareholder’s Equity

(in millions)

	Capital shares		Additional paid-in capital		Retained earnings			Accumlated other comprehensive income (loss)			Total shareholder’s equity
Balance as of December 31, 2005		3.8		274.4		3,894.4			93.6			4,266.2
Dividends to NFS		—		—		(375.0	)		—			(375.0	)
Comprehensive income:
Net income		—		—		619.4			—			619.4
Other comprehensive loss, net of taxes		—		—		—			(64.9	)		(64.9	)
Total comprehensive income												554.5
Balance as of December 31, 2006		3.8		274.4		4,138.8			28.7			4,445.7
Dividends to NFS		—		—		(537.5	)		—			(537.5	)
Comprehensive income:
Net income		—		—		448.2			—			448.2
Other comprehensive loss, net of taxes		—		—		—			(119.2	)		(119.2	)
Total comprehensive income												329.0
Balance as of December 31, 2007	$	3.8	$	274.4	$	4,049.5		$	(90.5	)	$	4,237.2
Dividends to NFS						(246.5	)					(246.5	)
Capital contributed by NFS				338.8								338.8
Comprehensive income:
Net loss						(829.8	)					(829.8	)
Other comprehensive loss, net of taxes									(1,220.7	)		(1,220.7	)
Total comprehensive loss												(2,050.5	)
Balance as of December 31, 2008	$	3.8	$	613.2	$	2,973.2		$	(1,311.2	)	$	2,279.0

See accompanying notes to consolidated financial statements.

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,
	2008			2007			2006
Cash flows from operating activities:
Net (loss) income	$	(829.8	)	$	448.2		$	619.4
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Net realized investment losses (gains)		1,439.3			166.2			(7.1	)
Interest credited to policyholder accounts		1,130.6			1,262.6			1,330.1
Capitalization of deferred policy acquisition costs		(572.2	)		(612.6	)		(569.6	)
Amortization of deferred policy acquisition costs		674.5			368.5			450.3
Amortization and depreciation		6.7			22.3			46.6
Decrease (increase) in other assets		64.5			557.4			(336.2	)
(Decrease) increase in policy and other liabilities		(226.1	)		(331.8	)		54.1
(Increase) decrease in derivative assets		(1,030.7	)		(146.9	)		38.2
Increase in derivative liabilities		153.9			101.5			174.7
Other, net		3.7			8.5			0.1
Net cash provided by operating activities		814.4			1,843.9			1,800.6
Cash flows from investing activities:
Proceeds from maturity of securities available-for-sale		3,935.6			4,379.8			5,128.6
Proceeds from sale of securities available-for-sale		4,185.2			4,657.5			2,267.3
Proceeds from repayments or sales of mortgage loans on real estate		763.1			2,467.7			2,430.8
Cost of securities available-for-sale acquired		(6,831.8	)		(8,008.3	)		(5,658.9	)
Cost of mortgage loans on real estate originated or acquired		(358.7	)		(1,887.0	)		(2,180.4	)
Net decrease (increase) in short-term investments		(1,827.0	)		762.9			(125.4	)
Collateral received (paid), net		603.4			(175.6	)		(332.6	)
Other, net		(34.0	)		(68.6	)		52.1
Net cash provided by investing activities		435.8			2,128.4			1,581.5
Cash flows from financing activities:
Net increase (decrease) in short-term debt		(35.6	)		210.1			(167.1	)
Capital contributed by NFS		153.4			—			—
Cash dividends paid to NFS		(181.8	)		(537.5	)		(375.0	)
Investment and universal life insurance product deposits and other additions		3,511.1			3,586.1			3,400.8
Investment and universal life insurance product withdrawals and other deductions		(4,795.9	)		(7,230.2	)		(6,241.2	)
Other, net		134.0			—			—
Net cash used in financing activities		(1,214.8	)		(3,971.5	)		(3,382.5	)
Net increase (decrease) in cash		35.4			0.8			(0.4	)
Cash, beginning of period		1.3			0.5			0.9
Cash, end of period	$	36.7		$	1.3		$	0.5
Supplemental Non-cash Disclosure:
Dividends paid to NFS	$	(64.6	)	$	—		$	—
Capital contributed by NFS		185.4			—			—

See accompanying notes to consolidated financial statements.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements

December 31, 2008, 2007 and 2006

(1) Nature of Operations  

Nationwide Life Insurance Company (NLIC, or collectively with its subsidiaries, the Company) was incorporated in 1929 and is an Ohio stock legal reserve life insurance company. The Company is a member of the Nationwide group of companies (Nationwide), which is comprised of Nationwide Mutual Insurance Company (NMIC) and all of its subsidiaries and affiliates.

All of the outstanding shares of NLIC’s common stock are owned by NFS, a holding company formed by Nationwide Corporation (Nationwide Corp.), a majority-owned subsidiary of NMIC.

On August 6, 2008, NFS entered into a definitive agreement for NMIC, and Nationwide Corporation (Nationwide Corp.)., to acquire all of the outstanding publicly held Class A common shares of NFS for $52.25 per share in cash. The transaction closed on January 1, 2009 and NFS became a privately held subsidiary of Nationwide Corp.

Wholly-owned subsidiaries of NLIC as of December 31, 2008 include Nationwide Life and Annuity Insurance Company (NLAIC) and Nationwide Investment Services Corporation (NISC). NLAIC offers universal life insurance, variable universal life insurance, corporate-owned life insurance (COLI) and individual annuity contracts on a non-participating basis. NISC is a registered broker/dealer.

The Company is a leading provider of long-term savings and retirement products in the United States of America (U.S.). The Company develops and sells a diverse range of products including individual annuities, private and public sector group retirement plans, other investment products sold to institutions, life insurance and advisory services.

The Company sells its products through a diverse distribution network. Unaffiliated entities that sell the Company’s products to their own customer bases include independent broker/dealers, financial institutions, wirehouse and regional firms, pension plan administrators, and life insurance specialists. Representatives of affiliates who market products directly to a customer base include Nationwide Retirement Solutions, Inc. (NRS), and Nationwide Financial Network (NFN) producers. The Company also distributes products through the agency distribution force of its ultimate parent company, NMIC.

As of December 31, 2008 and 2007, the Company did not have a significant concentration of financial instruments in a single investee, industry or geographic region of the U.S. Also, the Company did not have a concentration of business transactions with a particular customer, lender, distribution source, market or geographic region of the U.S. in which business is conducted that makes it overly vulnerable to a single event which could cause a severe impact to the Company’s financial position.

(2) Summary of Significant Accounting Policies  

The Company’s significant accounting policies that materially affect financial reporting are summarized below. The accompanying consolidated financial statements were prepared in accordance with United States generally accepted accounting principles (GAAP).

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ significantly from those estimates.

The Company’s most significant estimates include those used to determine the following: the balance, recoverability and amortization of deferred policy acquisition costs (DAC); whether an available-for-sale security is other-than-temporarily impaired, valuation allowances for mortgage loans on real estate; valuation of derivatives; the liability for future policy benefits and claims, including the valuation of embedded derivative resulting from living benefit contracts; and federal income tax provision. Although some variability is inherent in these estimates, recorded amounts reflect management’s best estimates based on facts and circumstances as of the balance sheet date. Management believes the amounts provided are appropriate.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

The Company determined that certain cash flows related to future policy benefits and claims totaling $111.9 million for the three months ended March 31, 2008, which were included as cash flows provided by operating activities on the condensed consolidated statements of cash flows in the applicable Quarterly Report on Form 10-Q, should have been presented as financing activities. The net cash provided by operating activities for the three months ended March 31, 2008 as originally filed and revised was $351.1 million and $239.2 million, respectively. The net cash used in financing activities for the three months ended March 31, 2008 as originally filed and revised was $368.9 million and $257.0 million, respectively. They will be presented in that manner on a comparative basis in the 2009 filings. The consolidated statement of cash flows for 2008 included in this filing reflects the revised presentation described above.

Certain items in the 2007 and 2006 consolidated financial statements and related notes have been reclassified to conform to the current presentation.

(a) Consolidation Policy

The consolidated financial statements include the accounts of NLIC and companies in which NLIC directly or indirectly has a controlling financial interest. Minority interest expense is included in other operating expenses in the consolidated statements of (loss) income, and the minority interest liability is included in other liabilities on the consolidated balance sheets. All significant intercompany balances and transactions were eliminated in consolidation.

(b) Valuation of Investments, Investment Income and Related Gains and Losses

The Company is required to classify its fixed maturity securities and marketable equity securities as held-to-maturity, available-for-sale or trading. All fixed maturity and marketable equity securities are classified as available-for-sale. Available-for-sale securities are stated at fair value, with unrealized gains and losses, net of adjustments to DAC, future policy benefits and claims, and deferred federal income taxes reported as a separate component of accumulated other comprehensive (loss) income (AOCI) in shareholder’s equity. The adjustment to DAC represents the changes in amortization of DAC that would have been required as a charge or credit to operations had such unrealized amounts been realized and allocated to the product lines. The adjustment to future policy benefits and claims represents the increase in policy reserves from using a discount rate that would have been required had such unrealized amounts been realized and the proceeds reinvested at then current market interest rates, which were lower than the then current effective portfolio rate.

For fixed maturity and marketable equity securities for which market quotations generally are available, the Company generally uses independent pricing services to assist in determining the fair value measurement. For certain fixed maturity securities not priced by independent services (generally private placement securities without quoted market prices), an internally developed pricing model or “corporate pricing matrix” is most often used. The corporate pricing matrix is developed by obtaining private spreads versus the U.S. Treasury yield for corporate securities with varying weighted average lives and bond ratings. The weighted average life and bond rating of a particular fixed maturity security to be priced using the corporate matrix are important inputs into the model and are used to determine a corresponding spread that is added to the U.S. Treasury yield to create an estimated market yield for that bond. The estimated market yield and other relevant factors are then used to estimate the fair value of the particular fixed maturity security. The Company also utilized broker quotes in pricing securities or to validate modeled prices.

For mortgage-backed securities (MBSs), the Company recognizes income using a constant effective yield method based on prepayment assumptions and the estimated economic life of the securities. When estimated prepayments differ significantly from anticipated prepayments, the effective yield is recalculated to reflect actual payments to date and anticipated future payments. Any resulting adjustment is included in net investment income. All other investment income is recorded using the interest method without anticipating the impact of prepayments.

Management regularly reviews each investment in its fixed maturity and equity securities portfolios to evaluate the necessity of recording impairment losses for other-than-temporary declines in the fair value of investments.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

For debt securities not subject to Emerging Issues Task Force Issue (EITF) No. 99-20, Recognition of Interest Income and Impairment on Purchased and Retained Beneficial Interests in Securitized Financial Assets, as amended by Financial Accounting Standards Board (FASB) Staff Position (FSP) EITF 99-20-1 (EITF 99-20), as well as debt securities subject to EITF 99-20, an other-than-temporary impairment charge is taken when the Company does not have the ability and intent to hold the security until the forecasted recovery or if it is probable that the Company will not recover all contractual amounts when due. Furthermore, equity securities may experience other-than-temporary impairments based on prospects of recovery in a reasonable period of time. Many criteria are considered during this process including, but not limited to, specific credit issues and financial prospects related to the issuer, the quality of the underlying collateral, management’s intent and ability to hold the security until recovery, current economic conditions that could affect the creditworthiness of the issuer in the future, the current fair value as compared to the amortized cost of the security, the extent and duration of the unrealized loss, and the rating of the affected security. Other-than-temporary impairment losses result in a permanent reduction to the cost basis of the underlying investment.

In addition to the above, for certain beneficial interests in securitized financial assets with contractual cash flows, including asset-backed securities (ABSs), EITF 99-20 also requires the Company to periodically update its best estimate of cash flows over the life of the security. If the fair value of a securitized financial asset is not greater than or equal to its carrying value based on current information and events, and if there has been , or if it is probable that, an adverse change in estimated cash flows since the last revised estimate (considering both timing and amount), then the Company recognizes an other-than-temporary impairment and writes down the investment to fair value.

The Company provides valuation allowances for impairments of mortgage loans on real estate based on a review by portfolio managers. Mortgage loans on real estate are considered impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. When management determines that a loan is impaired, a provision for loss is established equal to either the difference between the carrying value and the present value of expected future cash flows discounted at the loan’s effective interest rate or the fair value of the collateral if the loan is collateral dependent. In addition to the valuation allowance on specific loans, the Company maintains an allowance not yet specifically identified by loan for probable losses inherent in the loan portfolio as of the balance sheet date. The valuation allowance account for mortgage loans on real estate reflects management’s best estimate of probable credit losses, including losses incurred at the balance sheet date but not yet identified by specific loan. Management’s periodic evaluation of the adequacy of the allowance for losses is based on past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of the underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. Changes in the valuation allowance are recorded in net realized investment gains and losses. Loans in foreclosure are placed on non-accrual status. Interest received on non-accrual status mortgage loans on real estate is included in net investment income in the period received.

Real estate to be held and used is carried at cost less accumulated depreciation. Real estate designated as held for disposal is not depreciated and is carried at the lower of the carrying value at the time of such designation or fair value less cost to sell. Other long-term investments are carried on the equity method of accounting.

Impairment losses are recorded on investments in 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 amounts.

Realized gains and losses on the sale of investments are determined on the basis of specific security identification. Changes in the Company’s mortgage loan valuation allowance and recognition of impairment losses for other-than-temporary declines in the fair values of applicable investments are included in net realized investment gains and losses.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

(c) Derivative Instruments

Derivatives are carried at fair value. On the date the derivative contract is entered into, the Company designates the derivative as a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (fair value hedge); a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (cash flow hedge); a foreign currency fair value or cash flow hedge (foreign currency hedge); or a non-hedge transaction. The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk-management objective and strategy for entering into various hedge transactions. This process includes linking all derivatives that are designated as fair value, cash flow or foreign currency hedges to specific assets and liabilities on the balance sheet or to specific firm commitments or forecasted transactions. The Company also formally assesses, both at the hedge’s inception and on an ongoing basis, whether the derivatives that are used for hedging transactions are expected to be and, for ongoing hedging relationships, have been highly effective in offsetting changes in fair values or cash flows of hedged items. When it is determined that a derivative is not, or is not expected to be, highly effective as a hedge or that it has ceased to be a highly effective hedge, the Company discontinues hedge accounting prospectively.

The Company enters into interest rate swaps, cross-currency swaps or Euro futures to hedge the fair value of existing fixed rate assets and liabilities. In addition, the Company uses short U.S. Treasury future positions to hedge the fair value of bond and mortgage loan commitments. Typically, the Company is hedging the risk of changes in fair value attributable to changes in benchmark interest rates. Derivative instruments classified as fair value hedges are carried at fair value, with changes in fair value recorded in net realized investment gains and losses. Changes in the fair value of the hedged item that are attributable to the risk being hedged are also recorded in net realized investment gains and losses.

The Company enters into interest rate swaps to hedge the variability in cash flows and investment income due to changes in the benchmark interest rates on variable rate assets and liabilities. The Company also enters into cross-currency interest rate swaps to eliminate the currency risk on variable rate and fixed rate foreign denominated assets. Derivative instruments classified as cash flow hedges are carried at fair value, with the effective portion of changes in fair value recorded in other comprehensive income and the ineffective portion recorded in net realized investment gains and losses.

Accrued interest receivable or payable under interest rate and foreign currency swaps are recognized as an adjustment to net investment income or interest credited to policyholder accounts consistent with the nature of the hedged item, except for interest rate swaps hedging the anticipated sale of investments where amounts receivable or payable under the swaps are recorded as net realized investment gains and losses, and except for interest rate swaps hedging the anticipated purchase of investments where amounts receivable or payable under the swaps are initially recorded in AOCI to the extent the hedging relationship is effective.

The Company periodically may enter into a derivative transaction that will not qualify for hedge accounting. The Company does not enter into speculative positions. Although these transactions do not qualify for hedge accounting, or have not been designated in hedging relationships by the Company, they are part of its overall risk management strategy. For example, the Company may sell credit default protection through a credit default swap. Although the credit default swap is not effective in hedging specific investments, the income stream allows the Company to manage overall investment yields while exposing the Company to acceptable credit risk. The Company may enter into a cross-currency basis swap (pay a variable U.S. rate and receive a variable foreign-denominated rate) to eliminate the foreign currency exposure of a variable rate foreign-denominated liability. Although basis swaps may qualify for hedge accounting, the Company has chosen not to designate these derivatives as hedging instruments due to the difficulty in assessing and monitoring effectiveness for both sides of the basis swap. Derivative instruments that do not qualify for hedge accounting or are not designated as hedging instruments are carried at fair value, with changes in fair value recorded in net realized investment gains and losses.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

(d) Revenues and Benefits

Investment 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 (COLI), bank-owned life insurance (BOLI) 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 charges, administrative fees and surrender charges that have been earned and assessed against policy account balances during the period. The timing of revenue recognition as it relates to fees assessed on investment contracts and universal life contracts is determined based on the nature of such fees. Asset fees, cost of insurance charges and administrative fees are assessed on a daily or monthly basis and recognized as revenue when assessed and earned. Certain amounts assessed that represent compensation for services to be provided in future periods are reported as unearned revenue and recognized in income over the periods benefited. Surrender charges are recognized upon surrender of a contract in accordance with contractual terms. Policy benefits and claims that are charged to expense include interest credited to policyholder accounts and benefits and claims incurred in the period in excess of related policyholder accounts.

Traditional Life Insurance Products: Traditional life insurance products include those products with fixed and guaranteed premiums and benefits, and primarily consist 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 that profits are recognized over the life of the contract. This association is accomplished through the provision for future policy benefits and the deferral and amortization of policy acquisition costs.

(e) Cash and Cash Equivalents

Cash and cash equivalents consist of short-term highly liquid investments with original maturities of less than three months at the time of purchase. The Company carries cash and cash equivalents at cost, which approximates fair value.

(f) Deferred Policy Acquisition Costs

Investment and universal life insurance products. The Company has deferred certain costs of acquiring investment and universal life insurance products business, principally commissions, certain expenses of the policy issue and underwriting department, and certain variable sales expenses that relate to and vary with the production of new and renewal business. In addition, the Company defers sales inducements, such as interest credit bonuses and jumbo deposit bonuses. Investment products primarily consist of individual and group variable and fixed deferred annuities in the Individual Investments and Retirement Plans segments. Universal life insurance products include universal life insurance, variable universal life insurance, COLI, BOLI and other interest-sensitive life insurance policies in the Individual Protection segment. DAC is subject to recoverability testing in the year of policy issuance and loss recognition testing at the end of each reporting period.

For investment and universal life insurance products, the Company amortizes DAC with interest over the lives of the policies in relation to the present value of estimated gross profits from projected interest margins, asset fees, cost of insurance charges, administrative fees, surrender charges, and net realized investment gains and losses less policy benefits and policy maintenance expenses. The Company adjusts the DAC asset related to investment and universal life insurance products to reflect the impact of unrealized gains and losses on fixed maturity securities available-for-sale, as described in Note 2(b).

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

The assumptions used in the estimation of future gross profits are based on the Company’s current best estimates of future events and are reviewed as part of an annual process during the second quarter. During the annual process, the Company performs a comprehensive study of assumptions, including mortality and persistency studies, maintenance expense studies, and an evaluation of projected general and separate account investment returns. The most significant assumptions that are involved in the estimation of future gross profits include future net separate account investment performance, surrender/lapse rates, interest margins and mortality. Currently, the Company’s long-term assumption for net separate account investment performance is approximately 7% growth per year and varies by product. The Company reviews this assumption, like others, as part of its annual process. If this assumption were unlocked, the date of the unlocking could become the anchor date used in the reversion to the mean process (defined below). Variances from the long-term assumption are expected since the majority of the investments in the underlying separate accounts are in equity securities, which strongly correlate in the aggregate with the Standard & Poor’s (S&P) 500 Index. The Company bases its reversion to the mean process on actual net separate account investment performance from the anchor date to the valuation date. The Company then assumes different performance levels over the next three years such that the separate account mean return measured from the anchor date to the end of the life of the product equals the long-term assumption. The assumed net separate account investment performance used in the DAC models is intended to reflect what is anticipated. However, based on historical returns of the S&P 500 Index, and as part of its pre-set parameters, the Company’s reversion to the mean process generally limits net separate account investment performance to 0-15% during the three-year reversion period. See below for a discussion of 2008 and 2007 assumption changes that impacted DAC amortization and related balances.

Changes in assumptions can have a significant impact on the amount of DAC reported for investment and universal life insurance products and their related amortization patterns. In the event actual experience differs from assumptions or future assumptions are revised, the Company is required to record an increase or decrease in DAC amortization expense, which could be significant. In general, increases in the estimated long-term general and separate account returns result in increased expected future profitability and may lower the rate of DAC amortization, while increases in long-term lapse/surrender and mortality assumptions reduce the expected future profitability of the underlying business and may increase the rate of DAC amortization.

In addition to the comprehensive annual study of assumptions, management evaluates the appropriateness of the individual variable annuity DAC balance quarterly within pre-set parameters. These parameters are designed to appropriately reflect the Company’s long-term expectations with respect to individual variable annuity contracts while also evaluating the potential impact of short-term experience on the Company’s recorded individual variable annuity DAC balance. If the recorded balance of individual variable annuity DAC falls outside of these parameters for a prescribed period, or if the recorded balance falls outside of these parameters and management determines it is not reasonably possible to get back within the parameters during a given period, assumptions are required to be unlocked, and DAC is recalculated using revised best estimate assumptions. When DAC assumptions are unlocked and revised, the Company continues to use the reversion to the mean process. See below for a discussion of 2008 and 2007 assumption changes that impacted DAC amortization and related balances.

During the second quarter of 2007, the Company conducted its annual comprehensive review of model assumptions used to project DAC and other related balances, including sales inducement assets, unearned revenue reserves, and guaranteed minimum death and income benefit reserves. This review included all assumptions, including expected separate account investment returns during the three-year reversion period, lapse rates, mortality and expenses. The Company determined as part of this annual review that the overall separate account returns were expected to exceed previous estimates due to favorable financial market trends. Additionally, while the Company estimated that the overall profitability of its variable products had improved, it expected the long-term net growth in separate account investment performance to moderate.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

Accordingly, the second quarter 2007 unlocking process included changes in several assumptions, including assumptions affecting net separate account investment performance. This unlocking resulted in a net increase in DAC and a benefit to DAC amortization and other related balances totaling $221.6 million pre-tax, which was reported in the following segments in the pre-tax amounts indicated: Individual Investments - $196.4 million; Retirement Plans - $10.5 million; and Individual Protection - $14.7 million. First, the Company reset the anchor date for its reversion to the mean calculations, which increased the annual net separate account growth rate to 7% during the first three years of the projection period from 0% (which was the rate of return for the three-year reversion period required from the previous anchor date). Second, as a result of its current analysis, including its evaluation of ongoing trends and expectations regarding financial market performance, the Company unlocked and reset its long-term assumption for net separate account growth rates to 7% from 8%. This decreased the net separate account growth rate by 1% to 7% for all years subsequent to the three-year reversion period. The combination of resetting these two factors resulted in a $167.0 million increase in DAC and benefit to DAC amortization and other related balances. The impact of changing the annual net separate account growth rate from 0% to 7% during the three-year reversion period had a much larger effect on the DAC balance when compared to the 1% incremental change in the long-term assumption for net separate account investment performance. The remainder of the increase in DAC and benefit to DAC amortization and other related balances resulting from the DAC unlocking process primarily was related to the recorded balance of individual variable annuity DAC falling outside the Company’s preset parameters for the prescribed period, which was driven by favorable market performance in excess of the assumed net separate account returns. Accordingly, the Company recalculated DAC using revised best estimate assumptions, which resulted in a $78.8 million increase in DAC and benefit to DAC amortization and other related balances. This was partially offset by a $24.2 million decrease in DAC and increase in DAC amortization and other related balances due to increasing estimated lapse rates for fixed annuity and BOLI products.

During the second quarter of 2007, the Company added a new feature to its existing guaranteed minimum withdrawal benefit rider, Lifetime Income (L.inc). This new feature resulted in a substantial change in the existing contracts and, therefore, an extinguishment of the DAC associated with those contracts pursuant to the American Institute of Certified Public Accountants’ (AICPA) Statement of Position (SOP) 05-1, Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection with Modifications or Exchanges of Insurance Contracts (SOP 05-1). As a result, the Company eliminated existing DAC and other related balances resulting in a $135.0 million pre-tax charge.

At the end of the second quarter of 2008, the Company determined as part of its comprehensive annual study of assumptions that certain assumptions should be unlocked. The unlocked assumptions primarily related to lapse and spread assumptions in the Individual Investments segment, the assumed growth rate on deposits per contract in the Retirement Plans segment, and mortality and lapse assumptions in the Individual Protection segment. Therefore, in the second quarter of 2008, the Company recorded the following pre-tax adjustments: 1) a decrease in DAC and additional DAC amortization of $13.4 million; 2) a decrease in other assets and additional benefits and claims of $0.6 million; and 3) a decrease in unearned revenue liability and additional administrative fees of $3.1 million. The net impact of this activity was a $10.9 million unfavorable pre-tax adjustment to net income in the second quarter of 2008, which was reported in the following segments in the pre-tax amounts indicated: Individual Investments - $9.4 million unfavorable; Retirement Plans - $2.3 million unfavorable; and Individual Protection - $0.8 million favorable.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

During the third quarter of 2008, the Company’s recorded balance of individual variable annuity DAC fell outside the Company’s preset parameters for the prescribed period, which primarily was driven by unfavorable market performance compared to the assumed net separate account returns. Accordingly, the Company recalculated DAC using revised best estimate assumptions, which resulted in a decrease in DAC and an increase in DAC amortization and other related balances totaling $177.2 million pre-tax in the Individual Investments segment. During the fourth quarter of 2008, the Company’s recorded balance of individual variable annuity DAC fell outside the Company’s preset parameters, which primarily was driven by continued unfavorable market performance compared to assumed net separate account returns. Management made a determination that it was not reasonably possible to get back within the preset parameters during the remaining prescribed period. Accordingly, the Company recalculated DAC using revised best estimate assumptions, which resulted in a decrease in DAC and an increase in DAC amortization and other related balances of $243.1 million pre-tax in the Individual Investments segment. The Company continues to use the reversion to the mean process with the anchor date that was reset during the second quarter 2007 unlocking as described above. The Company evaluated the assumed separate account performance level over the next three years and determined that the assumptions inherent in the reversion period were reasonable. The annual net separate account growth rate for the mean reversion period is 15%, the maximum rate under the Company’s parameters. Accordingly, future periods may incur additional amortization of DAC if the Company’s actual returns are less than assumed.

Traditional life insurance products. Generally, DAC related to traditional life insurance products is 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 is estimated using the same assumptions as those used for computing liabilities for future policy benefits at issuance. Under existing accounting guidance, the concept of DAC unlocking does not apply to traditional life insurance products, although evaluations of DAC for recoverability at the time of policy issuance and loss recognition testing at each reporting period are required.

(g) Separate Accounts

Separate account assets and liabilities represent contractholders’ funds that have been legally segregated into accounts with specific investment objectives. Separate account assets are recorded at fair value primarily based on market quotations of the underlying securities. Investment income and realized investment 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 (loss) income except for (1) the fees the Company receives, which are assessed on a daily or monthly basis and recognized as revenue when assessed and earned, and (2) the activity related to contract guarantees, which are riders to existing variable annuity contracts.

(h) Future Policy Benefits and Claims

The process of calculating reserve amounts for a life insurance organization involves the use of a number of assumptions, including those related to persistency (how long a contract stays with a company), mortality (the relative incidence of death in a given time), morbidity (the relative incidence of disability resulting from disease or physical impairment) and interest rates (the rates expected to be paid or received on financial instruments, including insurance or investment contracts).

The Company calculates its liability for future policy benefits and claims for investment products in the accumulation phase and universal life and variable universal life insurance policies as the policy account balance, which represents participants’ net premiums and deposits plus investment performance and interest credited less applicable contract charges.

The Company’s liability for funding agreements to an unrelated third party trust related to the Company’s medium-term note (MTN) program equals the balance that accrues to the benefit of the contractholder, including interest credited. The funding agreements constitute insurance obligations and are considered annuity contracts under Ohio insurance laws.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

The liability for future policy benefits and claims for traditional life insurance policies was determined using the net level premium method using interest rates varying from 2.0% to 10.5% and estimates of mortality, morbidity, investment yields and withdrawals that were used or being experienced at the time the policies were issued.

The liability for future policy benefits for payout annuities was calculated using the present value of future benefits and maintenance costs discounted using interest rates varying generally from 3.0% to 13.0%.

(i) Participating Business

Participating business, which refers to policies that participate in profits through policyholder dividends, represented approximately 5% of the Company’s life insurance in force in 2008 (6% in 2007 and 8% in 2006), 44% of the number of life insurance policies in force in 2008 (48% in 2007 and 50% in 2006) and 7% of life insurance statutory premiums in 2008 (7% in 2007 and 5% in 2006). The provision for policyholder dividends was based on the current dividend scales and has been included in future policy benefits and claims in the consolidated balance sheets.

(j) Federal Income Taxes

The Company provides for federal income taxes based on amounts the Company believes it ultimately will owe. Inherent in the provision for federal income taxes are estimates regarding the deductibility of certain items and the realization of certain tax credits. In the event the ultimate deductibility of certain items or the realization of certain tax credits differs from estimates, the Company may be required to significantly change the provision for federal income taxes recorded in the consolidated financial statements. Any such change could significantly affect the amounts reported in the consolidated statements of (loss) income. Management has established reserves in accordance with FIN 48 based on current facts and circumstances regarding tax exposure items where the ultimate deductibility is open to interpretation. Management evaluates the appropriateness of such reserves quarterly based on any new developments specific to their fact patterns. Information considered includes results of completed tax examinations, Technical Advice Memorandums and other rulings issued by the Internal Revenue Service (IRS) or the tax courts.

The Company utilizes the asset and liability method of accounting for income taxes. 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 it is determined that it is more likely than not that the deferred tax asset will not be fully realized.

(k) 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 generally are reported in the consolidated balance sheets on a gross basis, separately from the related future policy benefits and claims of the Company. The ceding of risk does not discharge the original insurer from its primary obligation to the policyholder.

(l) Change in Accounting Principle

Historically, the Company accrued for legal costs associated with litigation defense and regulatory investigations by estimating the ultimate costs of such activity. Beginning April 1, 2007, the Company’s accrual for such legal expenses includes only the amount for services that have been provided but not yet paid. The Company believes the newly adopted accounting principle is preferable because it more accurately reflects expenses in the periods in which they are incurred. The Company continues to estimate and accrue the ultimate amounts expected to be paid for litigation and regulatory investigation loss contingencies. The Company has presented its consolidated financial statements and accompanying notes as applicable for all periods presented to retroactively apply the adoption of this change in accounting principle.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

The following table summarizes the impact of the change in accounting principle described above for the years ended December 31:

(in millions)	2007			2006
Other operating expenses	$	2.8		$	5.0
Net income		(1.9	)		(3.1	)

The cumulative effect of the change on retained earnings as of January 1, 2006 was an $11.0 million increase.

(3) Recently Issued Accounting Standards  

In January 2009, the FASB issued FSP EITF 99-20-1, Amendments to the Impairment Guidance of EITF Issue No. 99-20 (FSP EITF 99-20-1). FSP EITF 99-20-1 amends the impairment guidance in EITF Issue No. 99-20, Recognition of Interest Income and Impairment on Purchased Beneficial Interests and Beneficial Interests That Continue to Be Held by a Transferor in Securitized Financial Assets, to achieve more consistent determination of whether an other-than-temporary impairment has occurred. FSP EITF 99-20-1 is effective for interim and annual reporting periods ending after December 15, 2008, and will be applied prospectively. Retrospective application to a prior interim or annual reporting period is not permitted. The Company will adopt FSP EITF 99-20-1 effective December 31, 2008 and will apply the standard prospectively, as is required.

In December 2008, the FASB issued FSP FAS 132R-1, Employers’ Disclosures about Postretirement Benefit Plan Assets (FSP FAS 132R-1). FSP FAS 132R-1 amends FASB Statement No. 132 revised 2003, Employers’ Disclosures about Pensions and Other Postretirement Benefits, to provide guidance on an employer’s disclosures about plan assets of a defined benefit pension or other postretirement plan. The portion of FSP FAS 132R-1 related to the disclosures about plan assets is effective for fiscal years ending after December 15, 2009. FSP FAS 132R-1 will have no impact on the Company’s disclosures.

In December 2008, the FASB issued FSP FAS 140-4 and FIN 46R-8, Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest Entities, (FSP FAS 140-4 and FIN 46R-8). FSP FAS 140-4 and FIN 46R-8 amends FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, to require public entities to provide additional disclosures about transfers of financial assets. It also amends FASB Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest Entities, to require public enterprises, including sponsors that have a variable interest in a variable interest entity, to provide additional disclosures about their involvement with variable interest entities. This FSP will be effective for the first reporting period (interim or annual) ending after December 15, 2008. The Company adopted FSP FAS 140-4 and FIN 46R-8 effective December 31, 2008. See Note 17 for the required disclosures.

In November 2008, the FASB Board ratified the Emerging Issues Task Force’s consensus EITF 08-7, Accounting for Defensive Intangible Assets (EITF 08-7). EITF 08-7 requires defensive intangible assets acquired in a business combination or asset acquisition to be accounted for as a separate unit of accounting. In doing so, the asset should not be included as part of the cost of an entity’s existing intangible asset(s) because the defensive intangible asset is separately identifiable. EITF 08-7 is effective for intangible assets acquired on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. EITF 08-7 is not expected to have a material impact on the Company’s financial position or results of operations upon adoption. The Company will adopt EITF 08-7 effective January 1, 2009 and will apply it prospectively for intangible assets acquired on or after that date.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

In November 2008, the FASB Board ratified the Emerging Issues Task Force’s consensus EITF 08-6, Equity Method Investment Accounting Considerations (EITF 08-6). EITF 08-6 clarifies how to account for certain transactions and impairment considerations involving equity method investments. Specifically, EITF 08-6 notes: 1) an entity shall measure its equity method investment initially at cost 2) an equity method investor is required to recognize other-than-temporary impairments of an equity method investment in accordance with paragraph 19(h) of Opinion 18 and an equity method investor shall not separately test an investee’s underlying indefinite-lived intangible asset(s) for impairment 3) an equity method investor shall account for a share issuance by an investee as if the investor had sold a proportionate share of its investment and any gain or loss to the investor resulting from an investee’s share issuance shall be recognized in earnings. This Issue shall be is effective on a prospective basis in fiscal years beginning on or after December 15, 2008, and interim periods within those fiscal years. The Company will adopt EITF 08-6 effective January 1, 2009 and will apply the standard prospectively, as is required.

In October 2008, the FASB issued FSP FAS 157-3, Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active (FSP FAS 157-3). FSP FAS 157-3 clarifies the application of SFAS No. 157, Fair Value Measurements (SFAS 157), in a market that is not active and provides an example to illustrate key considerations in determining the fair value of a financial asset when the market for that financial asset is not active. FSP FAS 157-3 was effective upon issuance and was adopted by the Company effective September 30, 2008. The adoption of FSP FAS 157-3 did not have a material impact on the Company’s financial position or results of operations.

In September 2008, the FASB issued FSP FAS 133-1 and FIN 45-4, Disclosures about Credit Derivatives and Certain Guarantees: An Amendment of FASB Statement No. 133 and FASB Interpretation No. 45; and Clarification of the Effective Date of FASB Statement No. 161 (FSP FAS 133-1 and FIN 45-4). FSP FAS 133-1 and FIN 45-4 requires additional disclosure about credit derivatives including their nature, potential amount of future payments, fair value, recourse provisions and current status of the payment/performance risk. FSP FAS 133-1 and FIN 45-4 also requires the disclosure of the current status of the payment/performance risk of a guarantee subject to FASB Interpretation (FIN) No. 45, Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others – an interpretation of FASB Statements No. 5, 57, and 107 and rescission of FASB Interpretation No. 34. FSP FAS 133-1 and FIN 45-4 is effective for reporting periods ending after November 15, 2008. The Company adopted FSP FAS 133-1 and FIN 45-4 effective for the December 31, 2008 reporting period. See Note 5 for the required disclosures

In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles (SFAS 162). SFAS 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with U.S. GAAP (the GAAP hierarchy). SFAS 162 will be effective 60 days following the approval by the United States Securities and Exchange Commission (SEC) of the Public Company Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles. The adoption of SFAS 162 did not the C result in a change in its current practices.

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133 (SFAS 161). SFAS 161 amends and expands the disclosure requirements of SFAS 133 with the intent to provide users of financial statements with an enhanced understanding of how and why an entity uses derivative instruments, how derivative instruments and related hedged items are accounted for under SFAS 133 and its related interpretations, and how derivative instruments and related hedged items affect an entity’s financial position, financial performance and cash flows. SFAS 161 requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about derivative instrument fair values and related gains and losses, and disclosures about credit-risk-related contingent features in derivative agreements. SFAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. The Company currently is evaluating the new disclosures required under SFAS 161 and will adopt it March 31, 2009.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

In February 2008, the FASB issued FSP FAS 157-2, Effective Date of FASB Statement No. 157 (FSP FAS 157-2). This FSP delays the effective date of SFAS 157 for nonfinancial assets and liabilities until fiscal years and interim periods beginning after November 15, 2008. FSP FAS 157-2 applies to nonfinancial assets and liabilities, except for items that are recognized or disclosed at fair value in the Company’s financial statements on a recurring basis (at least annually), and is effective upon issuance. The Company has not yet applied the provisions of SFAS 157 to the nonfinancial assets and liabilities within the scope of FSP FAS 157-2. However, the Company does not expect such application to have a material impact on its financial position or results of operations.

In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations (SFAS 141R), which replaces SFAS No. 141, Business Combinations (SFAS 141). The objective of SFAS 141R is to improve the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial reports about a business combination and its effects. Accordingly, SFAS 141R establishes principles and requirements for how the acquirer: 1) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree; 2) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase; and 3) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. SFAS 141R applies to all transactions or other events in which an entity obtains control of one or more businesses and retains the fundamental requirements in SFAS 141 that the acquisition method of accounting be used for all business combinations and for an acquirer to be identified for each business combination. SFAS 141R defines the acquirer as the entity that obtains control of one or more businesses in the business combination and establishes the acquisition date as the date that the acquirer achieves control. SFAS 141R is applicable prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. Earlier application is prohibited. The Company will adopt SFAS 141R effective January 1, 2009 and will apply it to any business combination on or after that date.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements, an Amendment of ARB No. 51 (SFAS 160). The objective of SFAS 160 is to improve the relevance, comparability, and transparency of the financial information that a reporting entity provides in its consolidated financial statements by establishing accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. SFAS 160 also amends certain consolidation procedures prescribed by Accounting Research Bulletin No. 51, Consolidated Financial Statements, for consistency with the requirements of SFAS 141R. SFAS 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. Earlier adoption is prohibited. The Company will adopt SFAS 160 effective January 1, 2009 and will apply it to any acquisitions or dispositions of noncontrolling interests on or after that date.

In June 2007, the Accounting Standards Executive Committee (AcSEC) of the AICPA issued SOP 07-1, Clarification of the Scope of the Audit and Accounting Guide Investment Companies and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies (SOP 07-1). SOP 07-1 provides guidance for determining whether an entity is within the scope of the AICPA Audit and Accounting Guide Investment Companies (the Guide). For those entities that are investment companies under SOP 07-1, this SOP also addresses whether the specialized industry accounting principles of the Guide (i.e., fair value accounting) should be retained by a parent company in consolidation or by an investor that has the ability to exercise significant influence over the investment company and applies the equity method of accounting to its investment in the entity (referred to as an equity method investor). In addition, SOP 07-1 includes certain disclosure requirements for parent companies and equity method investors in investment companies that retain investment company accounting in the parent company’s consolidated financial statements or the financial statements of an equity method investor. The provisions of SOP 07-1 were to be effective for fiscal years beginning on or after December 15, 2007. On February 14, 2008, the FASB issued FSP SOP 07-1-1, which delays indefinitely the effective date of SOP 07-1. The Company will monitor the FASB and AICPA deliberations regarding this standard.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

In April 2007, the FASB issued FSP FIN 39-1, An Amendment of FASB Interpretation No. 39 (FSP FIN 39-1). FSP FIN 39-1 addresses whether a reporting entity that is party to a master netting arrangement can offset fair value amounts recognized for the right to reclaim cash collateral (a receivable) or the obligation to return cash collateral (a payable) against fair value amounts recognized for derivative instruments that have been offset under the same master netting arrangement in accordance with paragraph 10 of Interpretation 39. FSP FIN 39-1 is effective for fiscal years beginning after November 15, 2007, with early application permitted. The Company adopted FSP FIN 39-1 effective January 1, 2008. The Company elected to present the fair value of cash collateral received separate from the obligation to return the collateral. The adoption of FSP FIN 39-1 did not impact the Company’s financial position or results of operations.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities, Including an amendment of FASB Statement No. 115 (SFAS 159). SFAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. SFAS 159 is expected to expand the use of fair value measurement, which is consistent with the FASB’s long-term measurement objectives for accounting for financial instruments. SFAS 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar types of assets and liabilities. SFAS 159 does not affect any existing accounting literature that requires certain assets and liabilities to be carried at fair value. In addition, SFAS 159 does not establish requirements for recognizing and measuring dividend income, interest income or interest expense, nor does it eliminate disclosure requirements included in other accounting standards, including requirements for disclosures about fair value measurements included in SFAS No. 157, Fair Value Measurements (SFAS 157), and SFAS No. 107, Disclosures about Fair Value of Financial Instruments. SFAS 159 is effective as of the beginning of an entity’s first fiscal year beginning after November 15, 2007. The Company adopted SFAS 159 for commercial mortgage loans held for sale effective January 1, 2008, which did not have a material impact on the Company’s financial position or results of operations. The Company will assess the fair value election for new financial assets or liabilities on a prospective basis. See Note 4 for disclosures required by SFAS 159.

In September 2006, the FASB issued SFAS No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans – an amendment of FASB Statements No. 87, 88, 106, and 132(R) (SFAS 158). SFAS 158 requires an employer to recognize the overfunded or underfunded status of a defined benefit postretirement plan (other than a multiemployer plan) as an asset or liability on its balance sheet and to recognize changes in that funded status in the year in which the changes occur through comprehensive income. SFAS 158 also requires an employer to measure the funded status of a plan as of the date of its year-end balance sheet, with limited exceptions. An employer with publicly traded equity securities is required to initially recognize the funded status of a defined benefit postretirement plan and to provide the required disclosures as of the end of the fiscal year ending after December 15, 2006. The requirement to measure plan assets and benefit obligations as of the date of the employer’s fiscal year-end balance sheet is effective for fiscal years ending after December 15, 2008. The Company adopted SFAS 158 effective December 31, 2006. The adoption of SFAS 158 did not have a material impact on the Company’s financial position or results of operations.

In September 2006, the FASB issued SFAS 157. SFAS 157 provides enhanced guidance for using fair value to measure assets and liabilities and requires new disclosures about fair value measurements. SFAS 157 also provides guidance regarding the extent to which companies measure assets and liabilities at fair value, the information used to measure fair value, and the effect of fair value measurements on earnings. For assets and liabilities that are measured at fair value on a recurring basis in periods subsequent to initial recognition, the reporting entity shall disclose information that enables financial statement users to assess the inputs used to develop those measurements. For recurring fair value measurements using significant unobservable inputs, the reporting entity shall disclose the effect of the measurements on earnings for the period. SFAS 157 applies whenever other standards require (or permit) assets or liabilities to be measured at fair value but does not expand the use of fair value in any new circumstances. SFAS 157 is effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years, with early adoption permitted. The Company adopted SFAS 157 effective January 1, 2008. The adoption of SFAS 157 did not have a material impact on the Company’s financial position or results of operations. See Note 4 for disclosures required by SFAS 157.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

In September 2006, the SEC issued Staff Accounting Bulletin (SAB) No. 108 (SAB 108). SAB 108 addresses how the effects of prior year uncorrected misstatements should be considered when quantifying misstatements in current-year financial statements. SAB 108 requires registrants to quantify misstatements using both the balance sheet and income-statement approaches and to evaluate whether either approach results in quantifying an error that is material in light of relevant quantitative and qualitative factors. SAB 108 does not change the SEC’s previous guidance in SAB No. 99 on evaluating the materiality of misstatements. The Company adopted SAB 108 effective December 31, 2006. SAB 108 did not have a material impact on the Company’s financial position or results of operations upon adoption.

In June 2006, the FASB issued FIN No. 48, Accounting for Uncertainty in Income Taxes, an Interpretation of FASB Statement No. 109, Accounting for Income Taxes (FIN 48). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with FASB Statement No. 109, Accounting for Income Taxes. FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. The Company adopted FIN 48 effective January 1, 2007. FIN 48 did not have a material impact on the Company’s financial position or results of operations upon adoption.

In March 2006, the FASB issued SFAS No. 156, Accounting for Servicing of Financial Assets (SFAS 156).SFAS 156 amends SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities (SFAS 140). SFAS 156 requires that all separately recognized servicing assets and servicing liabilities be initially measured at fair value, if practicable. SFAS 156 permits, but does not require, the subsequent measurement of separately recognized servicing assets and servicing liabilities at fair value. An entity that uses derivative instruments to mitigate the risks inherent in servicing assets and servicing liabilities is required to account for those derivative instruments at fair value. Under SFAS 156, an entity can elect subsequent fair value measurement to account for its separately recognized servicing assets and servicing liabilities. By electing that option, an entity may simplify its accounting because SFAS 156 permits income statement recognition of the potential offsetting changes in fair value of those servicing assets and servicing liabilities and derivative instruments in the same accounting period. SFAS 156 is effective for fiscal years beginning after September 15, 2006. The Company adopted SFAS 156 effective January 1, 2007. SFAS 156 did not have a material impact on the Company’s financial position or results of operations upon adoption.

In February 2006, the FASB issued SFAS No. 155, Accounting for Certain Hybrid Financial Instruments (SFAS 155). SFAS 155 amends SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities (SFAS 133), and SFAS 140. SFAS 155 also resolves issues addressed in SFAS 133 Implementation Issue No. D1, Application of Statement 133 to Beneficial Interests in Securitized Financial Assets. In summary, SFAS 155: (1) permits an entity to make an irrevocable election to measure any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation at fair value in its entirety, with changes in fair value recognized in earnings; (2) clarifies which interest-only strips and principal-only strips are not subject to the requirements of SFAS 133; (3) establishes a requirement to evaluate interests in securitized financial assets to identify interests that are freestanding derivatives or that are hybrid financial instruments that contain an embedded derivative requiring bifurcation; (4) clarifies that concentrations of credit risk in the form of subordination are not embedded derivatives; and (5) amends SFAS 140 to eliminate the prohibition on a qualifying special purpose entity from holding a derivative financial instrument that pertains to a beneficial interest other than another derivative financial instrument. SFAS 155 is effective for all financial instruments acquired or issued after the beginning of an entity’s first fiscal year that begins after September 15, 2006. Provisions of SFAS 155 may be applied to instruments that an entity holds at the date of adoption on an instrument-by-instrument basis. The Company adopted SFAS 155 effective January 1, 2006. On the date of adoption, there was no impact to the Company’s financial position or results of operations.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

In September 2005, AcSEC issued SOP 05-1. SOP 05-1 provides guidance on accounting by insurance enterprises for deferred acquisition costs on internal replacements of insurance and investment contracts other than those specifically described in SFAS No. 97, Accounting and Reporting by Insurance Enterprises for Certain Long-Duration Contracts and for Realized Gains and Losses from the Sale of Investments, issued by the FASB. SOP 05-1 defines an internal replacement as a modification in product benefits, features, rights or coverages that occurs as a result of the exchange of a contract for a new contract, or by amendment, endorsement or rider to a contract, or by the election of a new feature or coverage within a contract. SOP 05-1 is effective for internal replacements occurring in fiscal years beginning after December 15, 2006. Retrospective application of SOP 05-1 to previously issued financial statements is not permitted. Initial application of SOP 05-1 is required as of the beginning of an entity’s fiscal year. The Company adopted SOP 05-1 effective January 1, 2007, which resulted in a $6.0 million charge, net of taxes, as the cumulative effect of adoption of this accounting principle.

In May 2005, the FASB issued SFAS No. 154, Accounting Changes and Error Corrections (SFAS 154), which replaces Accounting Principles Board Opinion No. 20, Accounting Changes, and SFAS No. 3, Reporting Accounting Changes in Interim Financial Statements. SFAS 154 applies to all voluntary changes in accounting principle as well as to changes required by an accounting pronouncement in the unusual instance that the pronouncement does not include specific transition provisions. SFAS 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005, with earlier adoption permitted. The Company adopted SFAS 154 effective January 1, 2006. SFAS 154 did not have any impact on the Company’s financial position or results of operations upon adoption.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

(4) Fair Value Measurements  

Fair Value Option

As described in Note 3, the Company adopted SFAS 159 effective January 1, 2008 and elected SFAS 159 fair value treatment for commercial mortgage loans held for sale. Accordingly, the Company now records in earnings all market fluctuations associated with this portfolio. The Company previously recorded such loans at the lower of cost or market value. Balances for these loans will be measured at fair value prospectively with unrealized gains and losses included as a component of net realized investment gains and losses. The Company will assess the fair value option election for new financial assets or liabilities on a prospective basis.

Fair Value Hierarchy

As described in Note 3, the Company adopted SFAS 157 effective January 1, 2008. SFAS 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various methods including market, income and cost approaches. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.

In accordance with SFAS 157, the Company categorized its financial instruments into a three level hierarchy based on the priority of the inputs to the valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument in its entirety.

The Company categorizes financial assets and liabilities recorded at fair value in the consolidated balance sheets as follows:

• Level 1 – Unadjusted quoted prices accessible in active markets for identical assets or liabilities at the measurement date. The types of assets and liabilities utilizing Level 1 valuations include U.S. Treasury and agency securities, equity securities listed in active markets, investments in publicly traded mutual funds with quoted market prices, and listed derivatives.  

• Level 2 – Unadjusted quoted prices for similar assets or liabilities in active markets or inputs (other than quoted prices) that are observable or that are derived principally from or corroborated by observable market data through correlation or other means. The types of assets and liabilities utilizing Level 2 valuations generally include U.S. Government securities not backed by the full faith of the government, municipal bonds, structured notes and certain MBSs and ABSs, certain corporate debt, certain private placement investments, and certain derivatives, including basis swaps and commodity total return swaps.  

• Level 3 – Prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Inputs reflect management’s best estimate about the assumptions market participants would use at the measurement date in pricing the asset or liability. Consideration is given to the risk inherent in both the method of valuation and the valuation inputs. Generally, the types of assets and liabilities utilizing Level 3 valuations are certain MBSs and ABSs, certain corporate debt, certain private placement investments, certain mutual fund holdings, and certain derivatives, including embedded derivatives associated with living benefit contracts.  

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

The following table summarizes assets and liabilities measured at fair value on a recurring basis as of December 31, 2008:

(in millions)	Level 1			Level 2			Level 3			Total
Assets
Investments:
Securities available-for-sale:
Fixed maturity securities:
U.S. Treasury securities and obligations of U.S. Government corporations and agencies	$	561.3		$	10.0		$	—		$	571.3
Obligations of states and political subdivisions		—			217.1			—			217.1
Debt securities issued by foreign governments		—			38.9			—			38.9
Corporate securities		—			10,135.7			1,220.8			11,356.5
Mortgage-backed securities		520.8			1,936.4			2,219.6			4,676.8
Asset-backed securities		—			1,218.4			1,168.2			2,386.6
Total fixed maturity securities		1,082.1			13,556.5			4,608.6			19,247.2
Equity securities		1.4			15.2			9.9			26.5
Total securities available-for-sale		1,083.5			13,571.7			4,618.5			19,273.7
Mortgage loans held for sale1		—			—			124.5			124.5
Short-term investments		36.2			2,744.7			—			2,780.9
Total investments		1,119.7			16,316.4			4,743.0			22,179.1
Cash		36.7			—			—			36.7
Derivative assets2		—			708.5			597.6			1,306.1
Separate account assets3.5		9,530.3			35,270.0			2,136.6			46,936.9
Total assets	$	10,686.7		$	52,294.9		$	7,477.2		$	70,458.8
Liabilities
Future policy benefits and claims4	$	—		$	—		$	(1,739.7	)	$	(1,739.7	)
Derivative liabilities2		(6.0	)		(385.9	)		(4.2	)		(396.1	)
Total liabilities	$	(6.0	)	$	(385.9	)	$	(1,743.9	)	$	(2,135.8	)

1   Carried at fair value as elected under SFAS 159.  

2   Comprised of interest rate swaps, cross-currency interest rate swaps, credit default swaps, other non-hedging instruments, equity option contracts and interest rate futures contracts.  

3   Comprised of public, privately registered and non-registered mutual funds and investments in securities.  

4   Related to embedded derivatives associated with living benefit contracts. The Company’s guaranteed minimum accumulation benefits (GMABs), guaranteed lifetime withdrawal benefits (GLWBs) and hybrid GMABs/GLWBs are considered embedded derivatives under current accounting guidance, resulting in the related liabilities being separated from the host insurance product and recognized at fair value, with changes in fair value reported in earnings. This balance also includes embedded derivatives associated with fixed equity-indexed annuities (EIA) that provide for interest earnings that are linked to the performance of specified equity market indices.  

5   The value of separate account liabilities is set to equal the fair value of separate account assets  

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

The following table summarizes financial instruments for which the Company used significant unobservable inputs (Level 3) to determine fair value measurements for the year ended December 31, 2008:

				Net investment gains (losses)																	Change in unrealized gains (losses) in earnings due to assets still held
(in millions)	Balance as of December 31, 2007			In earnings (realized and unrealized)1			In OCI (unrealized)2			Purchases, issuances, sales and settlements			Transfers in to Level 3		Transfers out of Level 3			Balance as of December 31, 2008
Assets
Investments:
Securities available-for-sale3 :
Fixed maturity securities
Corporate securities	$	1,429.5		$	(179.4	)	$	(230.7	)	$	(360.3	)	$	816.6	$	(254.9	)	$	1,220.8		$	—
Mortgage-backed securities		176.6			(283.4	)		(556.9	)		(139.8	)		3,029.4		(6.3	)		2,219.6			—
Asset-backed securities		754.4			(382.4	)		(539.0	)		11.3			1,469.8		(145.9	)		1,168.2			—
Total fixed maturity securities		2,360.5			(845.2	)		(1,326.6	)		(488.8	)		5,315.8		(407.1	)		4,608.6			—
Equity securities		1.4			(54.9	)		(5.7	)		28.7			40.4		—			9.9			—
Total securities available-for-sale		2,361.9			(900.1	)		(1,332.3	)		(460.1	)		5,356.2		(407.1	)		4,618.5			—
Mortgage loans held for sale		86.1			(49.3	)		—			87.7			—		—			124.5			(49.3	)
Short-term investments		371.9			—			—			—			—		(371.9	)		—			—
Total investments		2,819.9			(949.4	)		(1,332.3	)		(372.4	)		5,356.2		(779.0	)		4,743.0			(49.3	)
Derivative assets		166.6			405.4			4.4			21.2			—		—			597.6			394.0
Separate account assets4.6		2,258.3			310.1			—			509.4			16.8		(958.0	)		2,136.6			333.9
Total assets	$	5,244.8		$	(233.9	)	$	(1,327.9	)	$	158.2		$	5,373.0	$	(1,737.0	)	$	7,477.2		$	678.6
Liabilities
Future policy benefits and claims5	$	(128.9	)	$	(1,602.1	)	$	—		$	(8.7	)	$	—	$	—		$	(1,739.7	)	$	1,602.1
Derivative liabilities		(16.3	)		3.9			—			8.2			—		—			(4.2	)		(12.0	)
Total liabilities	$	(145.2	)	$	(1,598.2	)	$	—		$	(0.5	)	$	—	$	—		$	(1,743.9	)	$	1,590.1

1   Includes gains and losses on sales of financial instruments, changes in market value of certain instruments and other-than-temporary impairments.  

2   Includes changes in market value of certain instruments.  

3   Includes non-investment grade collateralized mortgage obligations, MBSs and ABSs, ABS trust preferred notes, certain counterparty or internally priced securities, and securities that are at or near default based on designations assigned by the National Association of Insurance Commissioners (NAIC) (see Note 5 for a discussion of NAIC Designations). Equity securities represent holdings in non-registered mutual funds with significant unobservable inputs.  

4   Comprised of non-registered mutual funds with significant unobservable and/or liquidity restrictions. The net unrealized investment loss on these non-registered mutual funds is attributable to contractholders and, therefore, is not included in the Company’s earnings.  

5   Relates to GMAB, GMWB and EIA embedded derivatives associated with contracts with living benefit riders. Related derivatives are internally valued. The valuation of guaranteed minimum benefit embedded derivatives is based on capital market and actuarial risk assumptions, including risk margin considerations reflecting policyholder behavior. The Company uses observable inputs, such as published swap rates, in its capital market assumptions. Actuarial assumptions, including lapse behavior and mortality rates, are based on actual experience.  

6   The value of separate account liabilities is set to equal the fair value of separate account assets  

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

Transfers

The Company will review its fair value hierarchy classifications quarterly. Changes in observability of significant valuation inputs identified during these reviews may trigger reclassification of fair value hierarchy levels of financial assets and liabilities. These reclassifications will be reported as transfers in/out of Level 3 in the beginning of the period in which the change occurs. During 2008, certain of the Company’s investments in corporate securities, MBSs and ABSs were considered to be in inactive markets, due to concerns in the securities markets and resulting lack of liquidity. As a result, there have been significant changes in certain inputs which led to transfers into Level 3. During 2008, additional observable inputs were obtained on assets previously considered Level 3, which led to transfers out of that category.

Fair Value on a Nonrecurring Basis

The Company did not have any material assets or liabilities reported at fair value on a nonrecurring basis required to be disclosed under SFAS 157.

Financial Instruments Not Carried at Fair Value

SFAS No. 107, Disclosures about Fair Value of Financial Instruments (SFAS 107) requires additional disclosures of fair value information of financial instruments. The following include disclosures for the other financial instruments not carried at fair value and not included in the above SFAS 157 disclosure.

In estimating fair value for its SFAS 107 disclosures, the Company used the following methods and assumptions:

Mortgage loans on real estate, net: The fair values of mortgage loans on real estate are estimated using discounted cash flow analyses based on 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. Estimated fair value is based on the present value of expected future cash flows discounted at the loan’s effective market interest rate. In the current year, mortgage loans held for sale are included in the above SFAS 157 disclosure, as the Company elected to carry these assets at fair value under SFAS 159 (effective January 1, 2008).

Policy loans: The carrying amount reported in the consolidated balance sheets approximates fair value.

Investment contracts: The fair values of the Company’s liabilities under investment type contracts are based on one of two methods. For investment contracts without defined maturities, fair value is the amount payable on demand, net of certain surrender charges. For investment contracts with known or determined maturities, fair value is estimated using discounted cash flow analysis. Interest rates used in this analysis are similar to currently offered contracts with maturities consistent with those remaining for the contracts being valued.

Short-term debt: The carrying amount reported in the consolidated balance sheets approximates fair value.

Long-term debt: The fair values for senior notes are based on quoted market prices. The fair values of the junior subordinated debentures issued to a related party are based on quoted market prices of the capital securities of Nationwide Financial Services Capital Trust I (Trust I), which approximate the fair value of this obligation.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

The following table summarizes the carrying values and estimated fair values of financial instruments subject to disclosure requirements as of December 31:

	2008						2007
(in millions)	Carrying value			Estimated fair value			Carrying value			Estimated fair value
Assets
Investments:
Mortgage loans on real estate, net	$	7,065.4		$	6,335.3		$	7,615.4		$	7,659.9
Policy loans		767.4			767.4			687.9			687.9
Liabilities
Investment contracts		(24,978.2	)		(18,905.4	)		(24,671.0	)		(23,084.7	)
Short-term debt		(249.7	)		(249.7	)		(285.3	)		(285.3	)
Long-term debt, payable to NFS		(700.0	)		(568.7	)		(700.0	)		(751.3	)

(5) Derivative Financial Instruments  

Qualitative Disclosure

Interest Rate Risk Management

The Company periodically purchases fixed rate investments to back variable rate liabilities. As a result, the Company can be exposed to interest rate risk due to the mismatch between variable rate liabilities and fixed rate assets. In an effort to mitigate the risk from this mismatch, the Company enters into various types of derivative instruments, with fluctuations in the fair values of the derivatives offsetting changes in the fair values of the investments resulting from changes in interest rates. The Company principally uses pay fixed/receive variable interest rate swaps to manage this risk.

Under these interest rate swaps, the Company receives variable interest rate payments and makes fixed rate payments. The fixed interest paid on the swap offsets the fixed interest received on the investment, resulting in the Company receiving the variable interest payments on the swap, generally 3-month U.S. London Interbank Offered Rate (LIBOR), and the credit spread on the investment. The net receipt of a variable rate will then more closely match the variable rate paid on the liability.

As a result of entering into fixed rate commercial mortgage loan and private placement commitments, the Company is exposed to changes in the fair value of such commitments due to changes in interest rates during the commitment period prior to funding of the loans. In an effort to manage this risk, the Company enters into short U.S. Treasury futures and/or pay fixed interest rate swaps during the commitment period. With short U.S. Treasury futures or pay fixed interest rate swaps, if interest rates rise/fall, the gains/losses on the futures will offset the change in fair value of the commitment attributable to the change in interest rates.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

The Company periodically purchases variable rate investments such as commercial mortgage loans and corporate bonds. As a result, the Company can be exposed to variability in cash flows and investment income due to changes in interest rates. Such variability poses risks to the Company when the assets are funded with fixed rate liabilities. In an effort to manage this risk, the Company may enter into receive fixed/pay variable interest rate swaps. In using these interest rate swaps, the Company receives fixed interest rate payments and makes variable rate payments. The variable interest paid on the swap offsets the variable interest received on the investment, resulting in the Company receiving the fixed interest payments on the swap and the credit spread on the investment. The net receipt of a fixed rate will then more closely match the fixed rate paid on the liability.

The Company manages interest rate risk at the segment level. Different segments may simultaneously hedge interest rate risks associated with owning fixed and variable rate investments considering the risk relevant to a particular segment.

Foreign Currency Risk Management

In conjunction with the Company’s MTN program, the Company periodically issues both fixed and variable rate liabilities denominated in foreign currencies. As a result, the Company is exposed to changes in the fair value of liabilities due to changes in foreign currency exchange rates and related interest rates. In an effort to manage these risks, the Company enters into cross-currency interest rate swaps.

The Company is exposed to changes in the fair value of fixed rate investments denominated in a foreign currency due to changes in foreign currency exchange rates and related interest rates. In an effort to manage this risk, the Company uses cross-currency interest rate hedges to swap these asset characteristics to variable U.S. dollar rate instruments. Cross-currency interest rate swaps on assets are structured to pay a fixed rate, in a foreign currency, and receive a variable U.S. dollar rate, generally 3-month U.S. LIBOR. These derivative instruments are designated as a fair value hedge of a fixed rate foreign denominated asset.

Cross-currency interest rate swaps on variable rate investments are structured to pay a variable rate, in a foreign currency, and receive a fixed U.S. dollar rate. The terms of the foreign currency paid on the swap will exactly match the terms of the foreign currency received on the asset, thus eliminating currency risk. These derivative instruments are designated as a cash flow hedge.

Equity Market Risk Management

Asset fees calculated as a percentage of separate account assets are a significant source of revenue to the Company. As of December 31, 2008, approximately 71% of separate account assets were invested in equity mutual funds (approximately 82% as of December 31, 2007). Gains and losses in the equity markets result in corresponding increases and decreases in the Company’s separate account assets and asset fee revenue. In addition, a decrease in separate account assets may decrease the Company’s expectations of future profit margins due to a decrease in asset fee revenue and/or an increase in guaranteed contract claims, which also may require the Company to accelerate amortization of DAC.

The Company’s long-term assumption for net separate account returns is 7% annual growth. If equity markets were unchanged throughout a given year, the Company estimates that its net earnings per diluted share, calculated using current weighted average diluted shares outstanding, would be approximately $0.05 to $0.10 less than if the Company’s long-term assumption for net separate account returns were realized. This analysis assumes no other factors change and that an unlocking of DAC assumptions would not be required. However, as it does each quarter, the Company would evaluate its DAC balance and underlying assumptions to determine the need for unlocking. The Company can provide no assurance that the experience of flat equity market returns would not result in changes to other factors affecting profitability, including the possibility of unlocking of DAC assumptions.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

Many of the Company’s individual variable annuity contracts offer GMDB features. A GMDB generally provides a benefit if the annuitant dies and the contract value is less than a specified amount, which may be based on premiums paid less amounts withdrawn or contract value on a specified anniversary date. A decline in the stock market causing the contract value to fall below this specified amount, which varies from contract to contract based on the date the contract was entered into as well as the GMDB feature elected, will increase the net amount at risk, which is the GMDB in excess of the contract value. This could result in additional GMDB claims.

In an effort to mitigate this risk, the Company implemented a GMDB economic hedging program for certain new and existing business. Prior to implementation of the GMDB hedging program in 2000, the Company managed this risk primarily by entering into reinsurance arrangements. The GMDB economic hedging program is designed to offset changes in the economic value of the designated GMDB obligation. Currently the program shorts S&P 500 Index futures, which provides an offset to changes in the value of the designated obligation. The futures are not designated as hedges and, therefore, hedge accounting is not applied. The Company’s economic and accounting hedges are not perfectly offset. Therefore, the economic hedging activity is likely to lead to earnings volatility. As of December 31, 2008 and 2007, the Company’s net amount at risk was $8,718.7 million and $519.9 million before reinsurance, respectively, and $7,329.9 million and $317.2 million net of reinsurance, respectively. As of December 31, 2008 and 2007, the Company’s reserve for GMDB claims was $247.9 million and $38.9 million, respectively.

The Company also offers certain variable annuity products with guaranteed minimum accumulation benefit (GMAB), guaranteed lifetime withdrawal benefit (GLWB) and hybrid GMAB/GLWB riders (collectively referred to as living benefits). A GMAB provides the contractholder with a guaranteed return of premium, adjusted proportionately for withdrawals, after a specified time period (5, 7 or 10 years) selected by the contractholder at the time of issuance of a variable annuity contract. In some cases, the contractholder also has the option, after a specified time, to drop the rider and continue the variable annuity contract without the GMAB. The design of the GMAB rider limits the risk to the Company in a variety of ways including asset allocation requirements, which serve to reduce the Company’s potential exposure to underlying fund performance risks. Specifically, the terms in the GMAB rider limit policyholder asset allocation by either (1) requiring partial allocation of assets to a guaranteed term option (a fixed rate investment option) and excluding certain funds that are highly volatile or difficult to hedge or (2) requiring all assets be allocated to one of the approved asset allocation funds or models defined by the Company.

Beginning in March 2005, the Company began offering a hybrid GMAB/GLWB through its Capital Preservation Plus Lifetime Income (CPPLI) contract rider. This living benefit combines a GMAB feature in its first 5-10 years with a lifetime withdrawal benefit election at the end of the GMAB feature. Upon maturity of the GMAB, the contractholder can elect the lifetime withdrawal benefit, which would continue for the duration of the insured’s life; elect a new CPPLI rider; or drop the rider completely and continue the variable annuity contract without any rider. If the lifetime withdrawal benefit is elected and the insured’s contract value is exhausted through such withdrawals and market conditions, the Company will continue to fund future withdrawals at a pre-defined level until the insured’s death. In some cases, the contractholder has the right to drop the GLWB portion of this rider or periodically reset the guaranteed withdrawal basis to a higher level. This benefit requires a minimum allocation to guaranteed term options or adherence to limitations required by an approved asset allocation strategy as previously described above.

In March 2006, the Company added Lifetime Income (L.inc), a stand-alone GLWB, to complement CPPLI in its product offerings. This rider is very similar to the hybrid benefit discussed above in that L.inc and CPPLI both have guaranteed withdrawal rates that increase based on the age at which the contractholder begins taking income. The withdrawal rates are applied to a benefit base to determine the guaranteed lifetime income amount available to a contractholder. The benefit base is equal to the variable annuity premium at contract issuance and may increase as a result of a ratchet feature that is driven by account performance and a roll-up feature that is driven by policy duration. Generally, the longer the contractholder waits before commencing withdrawals, the greater the guaranteed lifetime income. One key difference between L.inc and CPPLI is that the charge associated with L.inc is assessed against the benefit base. This is a risk mitigation feature as it alleviates much of the uncertainty around account performance and customer withdrawal patterns, both of which can lead to lower than expected revenue streams if the charge were assessed on account value. In June 2007, the Company added a feature to L.inc to allow for a lump settlement in lieu of lifetime withdrawals in certain situations.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

The Company’s living benefit riders represent an embedded derivative in a variable annuity contract that is required to be separated from, and valued apart from, the host variable annuity contract. The embedded derivatives are carried at fair value. Subsequent changes in the fair value of the embedded derivatives are recognized in earnings as a component of net realized investment gains and losses. The fair value of the embedded derivatives is calculated based on a combination of capital market and actuarial assumptions. Projections of cash flows inherent in the valuation of the embedded derivative incorporate numerous assumptions including, but not limited to, expectations of contractholder persistency, contractholder withdrawal patterns, risk neutral market returns, correlations of market returns and market return volatility. As of December 31, 2008 and 2007, the net balance of the embedded derivatives for living benefits was a liability of $1.70 billion and $91.9 million, respectively. The Company does not expect any meaningful level of claims under the living benefit features for several years and believes any such claims would be mitigated by its economic hedging program.

Similar to the Company’s economic hedging for GMDBs, the living benefits features are also being economically hedged. The primary risks being hedged are the exposures associated with declining equity market returns and downward interest rate movements. The Company employs a variety of instruments to mitigate this exposure including S&P 500 Index futures, U.S. Treasury futures, interest rate swaps and long-dated over-the-counter put options. The positions used in the economic hedging program are not designated as hedges and, therefore, hedge accounting is not applied. The living benefits hedging program is designed to offset changes in the economic value of the living benefits obligation to contractholders. Changes in the fair value of the embedded derivatives are likely to create volatility in earnings. The hedging activity associated with changes in the economic value of the living benefits obligations will likely mitigate a portion of this earnings volatility.

Other Non-Hedging Derivatives

The Company periodically enters into basis swaps (receive one variable rate, pay another variable rate) to better match the cash flows received from the specific variable-rate investments with the variable rate paid on a group of liabilities. While the pay-side terms of the basis swap will be consistent with the terms of the asset, the Company is not able to match the receive-side terms of the derivative to a specific liability. Therefore, basis swaps do not receive hedge accounting treatment.

The Company sells credit default protection on selected debt instruments and combines the credit default swap with selected assets the Company owns to replicate a higher yielding bond. These selected assets may have sufficient duration for the related liability, but do not earn a sufficient credit spread. The combined credit default swap and investments provide cash flows with the duration and credit spread targeted by the Company. The credit default swaps do not qualify for hedge accounting treatment.

The Company also has purchased credit default protection on selected debt instruments exposed to short-term credit concerns, or because the combination of the corporate bond and purchased default protection provides sufficient spread and duration targeted by the Company. The purchased credit default protection is not designated for hedge accounting treatment.

Quantitative Disclosure

Fair Value Hedges

During the years ended December 31, 2008, 2007 and 2006, a net gain of $8.3 million, a net loss of $2.4 million and a net gain of $2.9 million, respectively, were recognized in net realized investment gains and losses related to the ineffective portion of fair value hedging relationships. There were no gains or losses attributable to the portion of the derivative instruments’ changes in fair value excluded from the assessment of hedge effectiveness. There were also no gains or losses recognized in earnings as a result of hedged firm commitments no longer qualifying as fair value hedges.

Cash Flow Hedges

For the years ended December 31, 2008, 2007 and 2006, the ineffective portion of cash flow hedges was a net gain of $3.1 million, a net loss of $1.4 million and a net loss of $1.5 million, respectively. There were no net gains or losses attributable to the portion of the derivative instruments’ changes in fair value excluded from the assessment of hedge effectiveness.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

In general, the maximum length of time over which the Company is hedging its exposure to the variability in future cash flows associated with forecasted transactions, other than those relating to variable interest on existing financial instruments, is twelve months or less. However, in 2003 the Company entered into a hedge of a forecasted purchase of shares of a mutual fund tied to the S&P 500 Index where delivery of the shares will occur in 2033.

During 2008, the Company did not discontinue any cash flow hedges because the original forecasted transaction was no longer probable. Additionally, no amounts were reclassified from AOCI into earnings due to the probability that a forecasted transaction would not occur.

Other Derivative Instruments, Including Embedded Derivatives

Net realized investment gains and losses for the years ended December 31, 2008, 2007 and 2006 included a net gain of $58.2 million, a net loss of $12.4 million and a net loss of $0.5 million, respectively, related to other derivative instruments, including embedded derivatives, not designated in hedging relationships. In addition, variable annuity contracts resulted in net losses of $442.5 million, $51.8 million, $11.4 million for the years ended December 31, 2008, 2007, and 2006, respectively, related to other derivative instruments, including embedded derivatives, not designated in hedging relationships.

For the years ended December 31, 2008, 2007 and 2006, net losses of $3.6 million, $0.5 million and $10.6 million, respectively, were recorded in net realized investment gains and losses reflecting the change in fair value of cross-currency interest rate swaps hedging variable rate MTNs denominated in foreign currencies. No additional net gains were recorded to reflect the change in spot rates of foreign currency denominated obligations during the year ended December 31, 2008 compared to none for the year ended December 31, 2007, and a net gain of $14.1 million for the year ended December 31, 2006.

The following table summarizes the notional amount of derivative financial instruments outstanding as of December 31:

(in millions)	2008		2007
Interest rate swaps:
Pay fixed/receive variable rate swaps hedging investments	$	1,218.4	$	1,692.9
Pay variable/receive fixed rate swaps hedging investments		924.5		21.0
Pay variable/receive variable rate swaps hedging liabilities		200.0		—
Pay fixed/receive variable rate swaps hedging liabilities		1,993.7		1,120.7
Pay variable/receive fixed rate swaps hedging liabilities		3,856.3		343.1
Cross-currency interest rate swaps:
Hedging foreign currency denominated investments		343.7		375.5
Hedging foreign currency denominated liabilities		463.4		1,144.1
Credit default swaps		271.2		300.3
Other non-hedging instruments		431.0		518.1
Equity option/futures contracts		3,675.3		2,361.8
Interest rate futures contracts		281.1		371.3
Total	$	13,658.6	$	8,248.8

The notional value is the amount upon which exchanges of interest are based. Exposure to a counterparty arises if the net expected cash flows are positive, as calculated based on forward interest rate curves and notional contract values.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

Credit Derivatives

The Company enters into two distinct types of credit derivative contracts (or credit default swaps) which allows the Company to either sell or buy credit protection on a specific creditor or credit index. When the Company sells credit protection against a specific creditor or credit index to a counterparty, it receives periodic premium payments similar to the risk premium received on an equivalent maturity bond from the same creditor. In return, the Company agrees to provide for losses if a credit event occurs during the lifetime of the contract, by buying a pre-determined cash bond from the counterparty at face value. In such a contract, a credit event will be defined in the trade settlement documentation and may include, but not be limited to, creditor bankruptcy or restructuring. There are no recourse provisions associated with these contracts.

The Company had exposure to credit protection contracts for the years ended December 31, 2008, 2007 and 2006 and experienced losses of $18.8 million in 2008 and no losses in 2007 or 2006, on such contracts. The following table presents the Company’s outstanding exposure to credit protection contracts, all of which are related to corporate debt instruments, as of December 31, 2008 by contract maturity and industry exposure:

	Less than or equal to one year				One to three years					Three to five years					Total
(in millions)	Maximum potential risk		Estimated fair value		Maximum potential risk		Estimated fair value			Maximum potential risk		Estimated fair value			Maximum potential risk		Estimated fair value
Single sector exposure:
Consumer goods	$	—	$	—	$	6.0	$	(0.8	)	$	—	$	—		$	6.0	$	(0.8	)
Financial		—		—		35.0		(5.8	)		13.0		(0.5	)		48.0		(6.3	)
Oil & gas pipelines		10.0		—		15.0		(0.8	)		—		—			25.0		(0.8	)
Services		—		—		—		—			35.0		(3.0	)		35.0		(3.0	)
Utilities		4.5		—		—		—			—		—			4.5		—
Total single sector exposure		14.5		—		56.0		(7.4	)		48.0		(3.5	)		118.5		(10.9	)
Index exposure:
Corporate bonds		—		—		—		—			110.9		(0.3	)		110.9		(0.3	)
Total index exposure		—		—		—		—			110.9		(0.3	)		110.9		(0.3	)
Total	$	14.5	$	—	$	56.0	$	(7.4	)	$	158.9	$	(3.8	)	$	229.4	$	(11.2	)

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

(6) Investments  

The following table summarizes the amortized cost, gross unrealized gains and losses, and estimated fair values of securities available-for-sale as of the dates indicated:

(in millions)	Amortized cost		Gross unrealized gains		Gross unrealized losses		Estimated fair value
December 31, 2008:
Fixed maturity securities:
U.S. Treasury securities and obligations of U.S. Government corporations	$	77.3	$	20.1	$	—	$	97.4
U. S. Government agencies1		384.6		89.3		—		473.9
Obligations of states and political subdivisions		223.0		1.5		7.4		217.1
Debt securities issued by foreign governments		33.9		5.0		—		38.9
Corporate securities
Public		8,042.9		85.4		1,040.3		7,088.0
Private		4,589.0		49.5		370.0		4,268.5
Mortgage-backed securities		5,248.2		68.2		639.6		4,676.8
Asset-backed securities		3,222.0		19.7		855.1		2,386.6
Total fixed maturity securities		21,820.9		338.7		2,912.4		19,247.2
Equity securities		30.9		0.7		5.1		26.5
Total securities available-for-sale	$	21,851.8	$	339.4	$	2,917.5	$	19,273.7
December 31, 2007:
Fixed maturity securities:
U.S. Treasury securities and obligations of U.S. Government corporations	$	110.8	$	14.3	$	0.4	$	124.7
U. S. Government agencies		406.1		61.2		—		467.3
Obligations of states and political subdivisions		245.3		1.6		2.7		244.2
Debt securities issued by foreign governments		40.0		2.5		0.1		42.4
Corporate securities
Public		8,253.8		133.4		161.6		8,225.6
Private		5,474.2		131.7		57.6		5,548.3
Mortgage-backed securities		5,855.9		31.3		98.4		5,788.8
Asset-backed securities		3,635.1		31.2		174.2		3,492.1
Total fixed maturity securities		24,021.2		407.2		495.0		23,933.4
Equity securities		69.6		4.8		1.5		72.9
Total securities available-for-sale	$	24,090.8	$	412.0	$	496.5	$	24,006.3

1   Includes $134.7 million of securities explicitly backed by the full faith and credit of the U.S. Government.  

The market value of the Company’s general account investments may fluctuate significantly in response to changes in interest rates, investment quality ratings and credit spreads. While the Company has the ability and intent to hold available-for-sale debt securities in unrealized loss positions that are not other-than-temporarily impaired until recovery, it may experience realized investment losses to the extent its liquidity needs require the disposition of general account fixed maturity securities in unfavorable interest rate, liquidity or credit spread environments.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

Debt securities accounted for under EITF 99-20 may experience other-than-temporary impairment in future periods in the event an adverse change in cash flows is anticipated or probable. Furthermore, equity securities may experience other-than-temporary impairment in the future based on the prospects for recovery in value in a reasonable period. In addition, debt securities may experience other-than-temporary impairment in the future based on the probability that that Company may not be able to receive all contractual payments when due.

The Company held securities issued by institutions in the financial sector with equity-type features, classified as fixed maturity, with estimated fair values of $634.2 million and $674.4 million, and gross unrealized losses of $366.6 million and $28.3 million, as of December 31, 2008 and December 31, 2007, respectively. Of these securities in an unrealized loss position as of December 31, 2008, $104.7 million, or 18%, were in an unrealized loss position for more than one year compared to $149.3 million, or 39%, as of December 31, 2007. As of December 31, 2008, the Company evaluates such securities for other-than-temporary impairment using the criteria of either a debt or an equity security depending on the facts and circumstances of the individual issuer.

The table below summarizes the amortized cost and estimated fair value of fixed maturity securities available-for-sale, by maturity, as of December 31, 2008. 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.

(in millions)	Amortized cost		Estimated fair value
Fixed maturity securities available-for-sale:
Due in one year or less	$	1,086.7	$	1,081.9
Due after one year through five years		6,697.6		6,173.1
Due after five years through ten years		2,704.5		2,537.5
Due after ten years		2,861.9		2,391.4
Subtotal		13,350.7		12,183.9
Mortgage-backed securities		5,248.2		4,676.7
Asset-backed securities		3,222.0		2,386.6
Total	$	21,820.9	$	19,247.2

The following table presents the components of net unrealized losses on securities available-for-sale as of December 31:

(in millions)	2008			2007
Net unrealized losses, before adjustments and taxes	$	(2,578.1	)	$	(84.5	)
Change in fair value attributable to fixed maturity securities designated in fair value hedging relationships		(57.8	)		—
Total net unrealized losses, before adjustments and taxes		(2,635.9	)		(84.5	)
Adjustment to deferred policy acquisition costs		615.9			87.1
Adjustment to future policy benefits and claims		43.8			(77.7	)
Deferred federal income tax benefit		691.7			26.1
Net unrealized losses	$	(1,284.5	)	$	(49.0	)

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

The following table presents an analysis of the net increase in net unrealized (losses) gains on securities available-for-sale before adjustments and taxes for the years ended December 31:

(in millions)	2008			2007			2006
Fixed maturity securities	$	(2,485.9	)	$	(166.0	)	$	(161.0	)
Equity securities		(7.7	)		(2.6	)		(1.1	)
Net increase	$	(2,493.6	)	$	(168.6	)	$	(162.1	)

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

For securities available-for-sale as of the dates indicated, the following table summarizes the Company’s gross unrealized losses based on the amount of time each type of security has been in an unrealized loss position:

	Less than or equal to one year				More than one year				Total
(in millions)	Estimated fair value		Gross unrealized losses		Estimated fair value		Gross unrealized losses		Estimated fair value		Gross unrealized losses
December 31, 2008:
Fixed maturity securities:
Obligations of states and political subdivisions	$	94.9	$	3.5	$	29.3	$	3.9	$	124.2	$	7.4
Corporate securities
Public		3,678.8		700.8		1,233.6		339.5		4,912.4		1,040.3
Private		2,108.1		262.1		838.6		107.9		2,946.7		370.0
Mortgage-backed securities		592.1		149.1		1,694.3		490.6		2,286.4		639.7
Asset-backed securities		1,026.9		248.6		1,171.4		606.4		2,198.3		855.0
Total fixed maturity securities		7,500.8		1,364.1		4,967.2		1,548.3		12,468.0		2,912.4
Equity securities		11.2		4.9		3.4		0.2		14.6		5.1
Total	$	7,512.0	$	1,369.0	$	4,970.6	$	1,548.5	$	12,482.6	$	2,917.5
% of total gross unrealized losses				47%				53%
December 31, 2007:
Fixed maturity securities:
U.S. Treasury securities and obligations of U.S. Government corporations	$	16.4	$	0.4	$	2.6	$	—	$	19.0	$	0.4
U.S. Government agencies		—		—		13.9		—		13.9		—
Obligations of states and political subdivisions		15.4		0.1		149.6		2.6		165.0		2.7
Debt securities issued by foreign governments		11.5		0.1		—		—		11.5		0.1
Corporate securities
Public		2,354.0		95.2		1,966.8		66.4		4,320.8		161.6
Private		680.6		17.1		1,814.7		40.5		2,495.3		57.6
Mortgage-backed securities		1,227.8		23.7		2,466.4		74.7		3,694.2		98.4
Asset-backed securities		1,453.8		127.1		1,078.1		47.1		2,531.9		174.2
Total fixed maturity securities		5,759.5		263.7		7,492.1		231.3		13,251.6		495.0
Equity securities		17.1		1.5		0.1		—		17.2		1.5
Total	$	5,776.6	$	265.2	$	7,492.2	$	231.3	$	13,268.8	$	496.5
% of total gross unrealized losses				53%				47%

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

The Company has fixed maturity securities that have been in an unrealized loss position for more than one year that are not other-than-temporarily impaired. The Company reviews assets in unrealized loss positions and evaluates whether or not the losses are other-than-temporary. Many criteria are considered during this process including, but not limited to, specific credit issues and financial prospects related to the issuer, the quality of the underlying collateral, management’s intent and ability to hold the security until recovery, current economic conditions that could affect the creditworthiness of the issuer in the future, the current fair value as compared to the amortized cost of the security, the extent and duration of the unrealized loss, and the rating of the affected security.

As of December 31, 2008, fixed maturity securities that have been in an unrealized loss position for more than one year totaled $1.55 billion, or 53% of the Company’s total unrealized losses on fixed maturity securities. Of this total, $1.31 billion, or 85%, were classified as investment grade securities, as defined by the National Association of Insurance Commissioners (NAIC).

As of December 31, 2008, 1,913, or 65%, of the Company’s investments in fixed maturity securities were in an unrealized loss position, in comparison to 1,725, or 53%, as of December 31, 2007.

The majority of the increases in the Company’s unrealized losses from December 31, 2007 to 2008 were attributable to corporate securities, MBSs and ABSs. These increased unrealized loss positions primarily were driven by the combined impact of volatility in investment quality ratings and credit spreads, illiquid markets, and interest rate movements. In particular, exposure to the financial sector, including through structured securities such as trust preferred, collateralized loan obligations and collateralized debt obligations, have been significantly affected by negative circumstances in those sectors. It is reasonably possible that further declines in estimated fair values of such investments, or changes in assumptions or estimates of anticipated recoveries and/or cash flows, may cause further other-than-temporary impairments in the near term, which could be significant.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

For fixed maturity securities available-for-sale, the following tables summarize as of the dates indicated the Company’s gross unrealized loss position categorized as investment grade vs. non-investment grade, as defined by the NAIC, for the period of time indicated, and based on the ratio of estimated fair value to amortized cost (in millions):

	Period of time for which unrealized loss has existed as of December 31, 2008
	Investment Grade						Non-Investment Grade						Total
Ratio of estimated fair value to amortized cost	Less than or equal to one year		More than one year		Total		Less than or equal to one year		More than one year		Total		Less than or equal to one year		More than one year		Total
Corporate securities - public and private
99.9% - 95.0%	$	50.0	$	16.4	$	66.4	$	1.7	$	0.1	$	1.8	$	51.7	$	16.5	$	68.2
94.9% - 90.0%		94.0		28.3		122.3		5.2		6.2		11.4		99.2		34.5		133.7
89.9% - 85.0%		82.8		32.2		115.0		7.9		7.3		15.2		90.7		39.5		130.2
84.9% - 80.0%		94.1		27.2		121.3		14.5		7.1		21.6		108.6		34.3		142.9
Below 80.0%		453.1		150.5		603.6		159.6		172.1		331.7		612.7		322.6		935.3
Total		774.0		254.6		1,028.6		188.9		192.8		381.7		962.9		447.4		1,410.3
Mortgage-backed securities
99.9% - 95.0%		1.1		2.9		4.0		—		—		—		1.1		2.9		4.0
94.9% - 90.0%		5.7		14.4		20.1		0.1		—		0.1		5.8		14.4		20.2
89.9% - 85.0%		13.8		23.9		37.7		5.7		—		5.7		19.5		23.9		43.4
84.9% - 80.0%		14.0		40.0		54.0		17.1		10.0		27.1		31.1		50.0		81.1
Below 80.0%		91.5		377.4		468.9		—		22.0		22.0		91.5		399.4		490.9
Total		126.1		458.6		584.7		22.9		32.0		54.9		149.0		490.6		639.6
Asset-backed securities
99.9% - 95.0%		4.9		2.0		6.9		0.4		—		0.4		5.3		2.0		7.3
94.9% - 90.0%		15.5		18.6		34.1		1.0		—		1.0		16.5		18.6		35.1
89.9% - 85.0%		23.3		27.5		50.8		0.3		0.8		1.1		23.6		28.3		51.9
84.9% - 80.0%		15.3		33.7		49.0		0.1		1.0		1.1		15.4		34.7		50.1
Below 80.0%		171.0		513.0		684.0		16.9		9.8		26.7		187.9		522.8		710.7
Total		230.0		594.8		824.8		18.7		11.6		30.3		248.7		606.4		855.1
Other fixed maturity securities1
99.9% - 95.0%		1.3		—		1.3		—		—		—		1.3		—		1.3
94.9% - 90.0%		2.2		—		2.2		—		—		—		2.2		—		2.2
89.9% - 85.0%		—		3.9		3.9		—		—		—		—		3.9		3.9
84.9% - 80.0%		—		—		—		—		—		—		—		—		—
Below 80.0%		—		—		—		—		—		—		—		—		—
Total		3.5		3.9		7.4		—		—		—		3.5		3.9		7.4
Total fixed maturity securities available-for-sale
99.9% - 95.0%		57.3		21.3		78.6		2.1		0.1		2.2		59.4		21.4		80.8
94.9% - 90.0%		117.4		61.3		178.7		6.3		6.2		12.5		123.7		67.5		191.2
89.9% - 85.0%		119.9		87.5		207.4		13.9		8.1		22.0		133.8		95.6		229.4
84.9% - 80.0%		123.4		100.9		224.3		31.7		18.1		49.8		155.1		119.0		274.1
Below 80.0%		715.6		1,040.9		1,756.5		176.5		203.9		380.4		892.1		1,244.8		2,136.9
Total	$	1,133.6	$	1,311.9	$	2,445.5	$	230.5	$	236.4	$	466.9	$	1,364.1	$	1,548.3	$	2,912.4
1        Includes U.S. Treasury securities, obligations of U.S. Government corporations, U.S. Government agency securities, obligations of state and political subdivisions, and debt issued by foreign governments.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

	Period of time for which unrealized loss has existed as of December 31, 2007
	Investment Grade						Non-Investment Grade						Total
Ratio of estimated fair value to amortized cost	Less than or equal to one year		More than one year		Total		Less than or equal to one year		More than one year		Total		Less than or equal to one year		More than one year		Total
Corporate securities - public and private
99.9% - 95.0%	$	21.2	$	43.6	$	64.8	$	12.9	$	5.2	$	18.1	$	34.1	$	48.8	$	82.9
94.9% - 90.0%		18.0		30.3		48.3		13.3		4.5		17.8		31.3		34.8		66.1
89.9% - 85.0%		16.5		10.7		27.2		3.1		6.3		9.4		19.6		17.0		36.6
84.9% - 80.0%		2.1		0.4		2.5		3.0		0.2		3.2		5.1		0.6		5.7
Below 80.0%		7.5		—		7.5		14.7		5.7		20.4		22.2		5.7		27.9
Total		65.3		85.0		150.3		47.0		21.9		68.9		112.3		106.9		219.2
Mortgage-backed securities
99.9% - 95.0%		18.6		35.3		53.9		—		—		—		18.6		35.3		53.9
94.9% - 90.0%		5.1		39.4		44.5		—		—		—		5.1		39.4		44.5
89.9% - 85.0%		—		—		—		—		—		—		—		—		—
84.9% - 80.0%		—		—		—		—		—		—		—		—		—
Below 80.0%		—		—		—		—		—		—		—		—		—
Total		23.7		74.7		98.4		—		—		—		23.7		74.7		98.4
Asset-backed securities
99.9% - 95.0%		14.7		13.2		27.9		0.2		—		0.2		14.9		13.2		28.1
94.9% - 90.0%		26.9		13.7		40.6		—		—		—		26.9		13.7		40.6
89.9% - 85.0%		18.0		8.6		26.6		—		—		—		18.0		8.6		26.6
84.9% - 80.0%		14.2		5.8		20.0		—		—		—		14.2		5.8		20.0
Below 80.0%		53.0		5.8		58.8		0.1		—		0.1		53.1		5.8		58.9
Total		126.8		47.1		173.9		0.3		—		0.3		127.1		47.1		174.2
Other fixed maturity securities1
99.9% - 95.0%		0.6		1.4		2.0		—		—		—		0.6		1.4		2.0
94.9% - 90.0%		—		1.2		1.2		—		—		—		—		1.2		1.2
89.9% - 85.0%		—		—		—		—		—		—		—		—		—
84.9% - 80.0%		—		—		—		—		—		—		—		—		—
Below 80.0%		—		—		—		—		—		—		—		—		—
Total		0.6		2.6		3.2		—		—		—		0.6		2.6		3.2
Total fixed maturity securities available-for-sale
99.9% - 95.0%		55.1		93.5		148.6		13.1		5.2		18.3		68.2		98.7		166.9
94.9% - 90.0%		50.0		84.6		134.6		13.3		4.5		17.8		63.3		89.1		152.4
89.9% - 85.0%		34.5		19.3		53.8		3.1		6.3		9.4		37.6		25.6		63.2
84.9% - 80.0%		16.3		6.2		22.5		3.0		0.2		3.2		19.3		6.4		25.7
Below 80.0%		60.5		5.8		66.3		14.8		5.7		20.5		75.3		11.5		86.8
Total	$	216.4	$	209.4	$	425.8	$	47.3	$	21.9	$	69.2	$	263.7	$	231.3	$	495.0
1        Includes U.S. Treasury securities, obligations of U.S. Government corporations, U.S. Government agency securities, obligations of state and political subdivisions, and debt issued by foreign governments.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

As of December 31, 2008, 27% of the Company’s investments in an unrealized loss position had ratios of estimated fair value to amortized cost of at least 80%. In addition, 84% of the Company’s investments in an unrealized loss position were classified as investment grade, as defined by the NAIC. Of the Company’s investments in unrealized loss positions classified as non-investment grade, 49% have been in an unrealized loss position for less than one year.

The NAIC assigns securities quality ratings and uniform valuations (called NAIC Designations), which are used by insurers when preparing their annual statements. For most securities, NAIC ratings are derived from ratings received from nationally recognized rating agencies. The NAIC also assigns ratings to securities that do not receive public ratings. The designations assigned by the NAIC range from class 1 (highest quality) to class 6 (lowest quality). Of the Company’s general account fixed maturity securities, 92% and 94% were in the two highest NAIC Designations as of December 31, 2008 and 2007, respectively.

The following table shows the equivalent ratings between the NAIC and nationally recognized rating agencies and summarizes the credit quality, as determined by NAIC Designation, of the Company’s general account fixed maturity securities portfolio as of December 31:

(in millions)		2008				2007
NAIC designation1	Rating agency equivalent designation2	Amortized cost		Estimated fair value		Amortized cost		Estimated fair value
1	Aaa/Aa/A	$	13,870.1	$	12,497.7	$	16,765.5	$	16,662.7
2	Baa		5,961.0		5,210.2		5,730.3		5,784.3
3	Ba		1,192.9		953.8		1,101.6		1,078.3
4	B		529.7		366.5		325.0		316.8
5	Caa and lower		166.9		128.9		60.2		52.7
6	In or near default		100.3		90.1		38.6		38.6
	Total	$	21,820.9	$	19,247.2	$	24,021.2	$	23,933.4
1        NAIC Designations are assigned at least annually. Some designations for securities shown have been assigned to securities not yet assigned an NAIC Designation in a manner approximating equivalent public rating categories. 2        Comparisons between NAIC and Moody’s designations are published by the NAIC. If no Moody’s rating is available, the Company assigns internal ratings corresponding to public ratings.

Recent conditions in the securities markets, including changes in investment quality ratings, liquidity, credit spreads and interest rates, have resulted in declines in the values of investment securities, including corporate debt securities, MBSs and ABSs. When evaluating whether these securities are other-than-temporarily impaired, the Company considers characteristics of the underlying collateral, such as delinquency and default rates, the quality of the underlying borrower, the type of collateral in the pool, the vintage year of the collateral, subordination levels within the structure of the collateral pool, expected future cash flows, and the Company’s ability and intent to hold the security to recovery. These and other factors also affect the estimated fair value of these securities.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

The Company’s investments in MBSs and ABSs include securities that are supported by Alt-A and Sub-prime collateral. The Company considers Alt-A collateral to be mortgages whose underwriting standards do not qualify the mortgage for regular conforming or jumbo loan programs. Typical underwriting characteristics that cause a mortgage to fall into the Alt-A classification may include, but are not limited to, inadequate loan documentation of a borrower’s financial information, debt-to-income ratios above normal lending limits, loan-to-value ratios above normal lending limits that do not have primary mortgage insurance, a borrower who is a temporary resident, and loans securing non-conforming types of real estate. Alt-A mortgages are generally issued to borrowers having higher Fair Isaac Credit Organization (FICO) scores, and the lender typically issues a slightly higher interest rate for such mortgages. The Company considers Sub-prime collateral to be mortgages that are first-lien mortgage loans issued to Sub-prime borrowers, as demonstrated by recent delinquent rent or housing payments or substandard FICO scores. Second-lien mortgage loans are also considered Sub-prime. The amortized cost and estimated fair value of the Company’s investments in securities containing Alt-A collateral totaled $1,718.7 million and $1,335.8 million, respectively, and the amortized cost and estimated fair value of the Company’s investments in securities containing Sub-prime collateral totaled $612.7 million and $480.2 million, respectively. As of December 31, 2008, 75% and 84% of securities containing Alt-A and Sub-prime collateral, respectively, were rated AA or better. In addition, 68% and 76% of Alt-A and Sub-prime collateral, respectively, was originated in 2005 or earlier.

In addition, recent market activity has negatively impacted the Company’s investments in commercial mortgage-backed securities (CMBS). These investments in CMBS are generally characterized by securities that are collateralized by static, heterogeneous pools of mortgages on commercial real estate properties. Deals are generally diversified across property types, geography, borrowers, tenants, loan size, coupon and vintages. As of December 31, 2008, the amortized cost and estimated fair value of the Company’s investments in CMBS totaled $1.26 billion and $853.0 million, respectively, while the December 31, 2007 amortized cost was $1.10 billion and estimated fair value was $1.08 billion.

Proceeds from the sale of securities available-for-sale during 2008, 2007 and 2006 were $4.19 billion, $4.65 billion and $2.27 billion, respectively. During 2008, gross gains of $32.9 million ($70.0 million and $61.6 million in 2007 and 2006, respectively) and gross losses of $23.9 million ($70.2 million and $64.1 million in 2007 and 2006, respectively) were realized on those sales.

Real estate held for use was $9.8 million and $17.8 million as of December 31, 2008 and 2007, respectively. These assets are carried at cost less accumulated depreciation, which was $2.1 million and $3.6 million as of December 31, 2008 and 2007, respectively. The carrying value of real estate held for sale was $6.8 million as of December 31, 2008 (compared to no real estate held for sale as of December 31, 2007.)

The Company grants mainly commercial mortgage loans on real estate to customers throughout the U.S. As of December 31, 2008, the Company’s largest exposure to any single borrower, region and property type was 2%, 23% and 34%, respectively, of the Company’s general account mortgage loan portfolio, compared to 2%, 24% and 33%, respectively, as of December 31, 2007.

As of December 31, 2008 and 2007, the carrying value of commercial mortgage loans on real estate considered specifically impaired was $35.4 million and $7.4 million, respectively, for which a $13.6 million and $3.0 million valuation allowance had been established, respectively. No valuation allowance exists for collateral dependent commercial mortgage loans for which the fair value of the collateral is estimated to be greater than the carrying value.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

The following table summarizes activity in the valuation allowance account for mortgage loans on real estate for the years ended December 31:

(in millions)	2008		2007			2006
Allowance, beginning of period	$	23.1	$	34.3		$	31.1
Net change in allowance		16.4		(11.2	)		3.2
Allowance, end of period	$	39.5	$	23.1		$	34.3

The Company has securitized commercial mortgage loans on real estate to third parties. The Company, as the transferor, has continuing involvement in these loans which consists of receiving servicing fees on loans which the Company has transferred.

The Company did not participate in any securitization arrangements during 2008. During 2008, the Company received $0.6 million in servicing fees related to financial assets where there is a continuing involvement from the securitization of commercial mortgage loans on real estate. During 2007, the Company received proceeds of $928.0 million from the securitization of commercial mortgage loans on real estate to third parties, experienced realized losses of $7.3 million on these loans, and received $0.7 million in servicing fees related to loans securitized in 2007 and before. During 2006, the Company received proceeds of $545.0 million from the securitization of commercial mortgage loans on real estate to third parties, experienced realized gains of $5.3 million on these loans, and received $0.4 million in servicing fees related to loans securitized in 2006 and before.

The Company provides a representations and warranties letter to the transferee for each securitization arrangement. If it is found that the Company has made a misrepresentation, it could be required to provide financial support to the transferee or its beneficial interest holders. In 2008 and 2007, the Company was not required to provide any financial or other support that it was not previously contractually required to provide to the transferee or its beneficial interest holders.

The following table summarizes net realized investment (losses) gains from continuing operations by source for the years ended December 31:

(in millions)	2008			2007			2006
Total realized gains on sales, net of hedging losses	$	1.9		$	65.4		$	88.8
Total realized losses on sales, net of hedging gains		(93.1	)		(79.9	)		(64.8	)
Total other-than-temporary and other investment impairments		(1,051.4	)		(116.4	)		(17.1	)
Credit default swaps		(9.8	)		(7.5	)		(1.1	)
Derivatives and embedded derivatives associated with living benefit contracts		(500.7	)		(26.7	)		—
Derivatives associated with death benefits contracts		109.4			—			—
Other derivatives		104.4			(1.1	)		1.3
Net realized investment (losses) gains	$	(1,439.3	)	$	(166.2	)	$	7.1

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

The following table summarizes other-than-temporary and other investment impairments by asset type for the years ended December 31:

(in millions)	2008		2007		2006
Fixed maturity securities:
Corporate securities
Public	$	191.1	$	10.5	$	4.6
Private		77.0		62.7		0.5
Mortgage-backed securities		313.5		—		—
Asset-backed securities		392.4		35.1		2.1
Total fixed maturity securities		974.0		108.3		7.2
Equity securities		60.2		—		—
Other		17.2		8.1		9.9
Total other-than-temporary and other investment impairments	$	1,051.4	$	116.4	$	17.1

The following table summarizes net investment income from continuing operations by investment type for the years ended December 31:

(in millions)	2008			2007		2006
Securities available-for-sale:
Fixed maturity securities	$	1,334.5		$	1,370.5	$	1,419.2
Equity securities		4.9			4.0		2.6
Mortgage loans on real estate		459.3			512.6		535.4
Short-term investments		16.1			28.7		47.3
Other		(74.3	)		124.3		120.9
Gross investment income		1,740.5			2,040.1		2,125.4
Less investment expenses		53.5			64.3		66.9
Net investment income	$	1,687.0		$	1,975.8	$	2,058.5

Fixed maturity securities with an amortized cost of $15.0 million and $8.3 million as of December 31, 2008 and 2007, respectively, were on deposit with various regulatory agencies as required by law.

The Company, through an agent, lends certain portfolio holdings and in turn receives cash collateral with the objective of increasing the yield on its investments. The cash collateral is invested in high-quality, short-term and long-term investments. The Company’s policy requires the maintenance of collateral of a minimum of 102% of the fair value of the securities loaned. Net returns on the investments, after payment of a rebate to the borrower, are shared between the Company and its agent. Both the borrower and the Company can request or return the loaned securities at any time. The Company maintains ownership of the loaned securities at all times and is entitled to receive from the borrower any payments for interest or dividends received on such securities during the loan term. In 2008, the Company recognized loaned securities as part of its investments available-for-sale. The Company also recognizes the short-term and other long-term investments acquired with the cash collateral and its obligation to return such collateral to the borrower in short-term and other long-term investments and other liabilities, respectively.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

As of December 31, 2008 and 2007, the Company had received $378.3 million and $551.9 million, respectively, of cash collateral on securities lending. The Company had not received any non-cash collateral on securities lending as of December 31, 2008 and 2007. As of December 31, 2008 and 2007, the Company had loaned securities with a fair value of $367.2 million and $541.2 million, respectively.

As of December 31, 2008 and 2007, the Company had received $1,022.5 million and $245.4 million, respectively, of cash for derivative collateral, which is in turn invested in short-term investments. The Company also held $35.4 million and $18.5 million of securities as off-balance sheet collateral on derivative transactions as of December 31, 2008 and 2007, respectively. As of December 31, 2008, the Company had pledged fixed maturity securities with a fair value of $24.5 million as collateral to various derivative counterparties compared to $18.8 million as of December 31, 2007.

(7) Deferred Policy Acquisition Costs  

The following table presents a reconciliation of DAC for the years ended December 31:

(in millions)	2008			2007
Balance at beginning of period	$	3,997.4		$	3,758.0
Capitalization of DAC		572.2			612.5
Amortization of DAC		(674.5	)		(368.5	)
Adjustments to unrealized gains and losses on securities available-for-sale and other		528.8			4.4
Cumulative effect of adoption of accounting principle		—			(9.0	)
Balance at end of period	$	4,423.9		$	3,997.4

See Note 2(f) for information on the Company’s DAC policies.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

(8) Variable Annuity Contracts  

The Company issues traditional variable annuity contracts through its separate accounts, for which investment income and gains and losses on investments accrue directly to, and investment risk is borne by, the contractholder. The Company also issues non-traditional variable annuity contracts in which the Company provides various forms of guarantees to benefit the related contractholders. The Company provides five primary guarantee types under non-traditional variable annuity contracts: (1) GMDB; (2) GMAB; (3) guaranteed minimum income benefits (GMIB); (4) GLWB; and (5) a hybrid guarantee with GMAB and GLWB.

The GMDB provides a specified minimum return upon death. Many of these death benefits are spousal, whereby a death benefit will be paid upon death of the first spouse. The survivor has the option to terminate the contract or continue it and have the death benefit paid into the contract and a second death benefit paid upon the survivor’s death. The Company has offered six primary GMDB types:

• Return of premium – provides the greater of account value or total deposits made to the contract less any partial withdrawals and assessments, which is referred to as “net premiums.” There are two variations of this benefit. In general, there is no lock in age for this benefit. However, for some contracts the GMDB reverts to the account value at a specified age, typically age 75.  

• Reset – provides the greater of a return of premium death benefit or the most recent five-year anniversary (prior to lock-in age) account value adjusted for withdrawals. For most contracts, this GMDB locks in at age 86 or 90, and for others the GMDB reverts to the account value at age 75, 85, 86 or 90.  

• Ratchet – provides the greater of a return of premium death benefit or the highest specified “anniversary” account value (prior to age 86) adjusted for withdrawals. Currently, there are three versions of ratchet, with the difference based on the definition of anniversary: monthaversary – evaluated monthly; annual – evaluated annually; and five-year – evaluated every fifth year.  

• Rollup – provides the greater of a return of premium death benefit or premiums adjusted for withdrawals accumulated at generally 5% simple interest up to the earlier of age 86 or 200% of adjusted premiums. There are two variations of this benefit. For certain contracts, this GMDB locks in at age 86, and for others the GMDB reverts to the account value at age 75.  

• Combo – provides the greater of annual ratchet death benefit or rollup death benefit. This benefit locks in at either age 81 or 86.  

• Earnings enhancement – provides an enhancement to the death benefit that is a specified percentage of the adjusted earnings accumulated on the contract at the date of death. There are two versions of this benefit: (1) the benefit expires at age 86, and a credit of 4% of account value is deposited into the contract; and (2) the benefit does not have an end age, but has a cap on the payout and is paid upon the first death in a spousal situation. Both benefits have age limitations. This benefit is paid in addition to any other death benefits paid under the contract.  

The GMAB, offered in the Company’s Capital Preservation Plus contract rider, is a living benefit that provides the contractholder with a guaranteed return of premium, adjusted proportionately for withdrawals, after a specified time period (5, 7 or 10 years) selected by the contractholder at the issuance of the variable annuity contract. In some cases, the contractholder also has the option, after a specified time period, to drop the rider and continue the variable annuity contract without the GMAB. In general, the GMAB requires a minimum allocation to guaranteed term options or adherence to limitations required by an approved asset allocation strategy.

The GMIB is a living benefit that provides the contractholder with a guaranteed annuitization value. The GMIB types are:

• Ratchet – provides an annuitization value equal to the greater of account value, net premiums or the highest one-year anniversary account value (prior to age 86) adjusted for withdrawals.  

• Rollup – provides an annuitization value equal to the greater of account value and premiums adjusted for withdrawals accumulated at 5% compound interest up to the earlier of age 86 or 200% of adjusted premiums.  

• Combo – provides an annuitization value equal to the greater of account value, ratchet GMIB benefit or rollup GMIB benefit.  

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

See Note 5 for a complete description of the Company’s hybrid GMAB/GLWB offered through its CPPLI contract rider. All GMAB contracts with the hybrid GMAB/GLWB rider are included with GMAB contracts in the following tables.

The following table summarizes the account values and net amount at risk, net of reinsurance, for variable annuity contracts with guarantees invested in both general and separate accounts as of December 31:

	2008					2007
(in millions)	Account value		Net amount at risk1		Wtd. avg. attained age	Account value		Net amount at risk1		Wtd. avg. attained age
GMDB:
Return of premium	$	5,991.9	$	440.6	60	$	9,082.6	$	18.7	59
Reset		12,468.7		2,468.0	64		17,915.0		61.1	63
Ratchet		12,352.3		3,767.2	67		15,789.2		132.2	66
Rollup		277.1		25.7	72		467.0		8.4	71
Combo		1,704.1		621.2	69		2,555.5		47.0	68
Subtotal		32,794.1		7,322.7	65		45,809.3		267.4	64
Earnings enhancement		333.5		7.2	63		519.2		49.8	62
Total - GMDB	$	33,127.6	$	7,329.9	65	$	46,328.5	$	317.2	64
GMAB2 :
5 Year	$	2,867.6	$	499.0	N/A	$	2,985.6	$	4.6	N/A
7 Year		2,265.9		482.9	N/A		2,644.1		6.2	N/A
10 Year		677.9		132.2	N/A		927.3		1.3	N/A
Total - GMAB	$	5,811.4	$	1,114.1	N/A	$	6,557.0	$	12.1	N/A
GMIB3 :
Ratchet	$	244.7	$	5.6	N/A	$	425.2	$	—	N/A
Rollup		659.5		1.3	N/A		1,119.9		—	N/A
Combo		0.1		—	N/A		0.3		—	N/A
Total - GMIB	$	904.3	$	6.9	N/A	$	1,545.4	$	—	N/A
GLWB:
L.inc	$	3,320.8	$	571.5	N/A	$	2,865.8	$	—	N/A

1   Net amount at risk is calculated on a seriatum basis and equals the respective guaranteed benefit less the account value (or zero if the account value exceeds the guaranteed benefit). As it relates to GMIB, net amount at risk is calculated as if all policies were eligible to annuitize immediately, although all GMIB options have a waiting period of at least 7 years from issuance.  

2   GMAB contracts with the hybrid GMAB/GLWB rider had account values of $4.59 billion and $4.77 billion as of December 31, 2008 and 2007, respectively.  

3   The weighted average period remaining until expected annuitization is not meaningful and has not been presented because there is currently no material GMIB exposure.  

Net amount at risk is highly sensitive to changes in financial market movements. The increase in net amount at risk during 2008 is primarily due to declines in the financial markets. See Note 5 – Equity Market Risk Management for a discussion of the Company’s risk management practices with respect to declining financial market exposure and related reserve balances.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

The following table summarizes account balances of variable annuity contracts that were invested in separate accounts as of December 31:

(in millions)	2008		2007
Mutual funds:
Bond	$	4,350.2	$	5,143.6
Domestic equity		18,572.8		31,217.7
International equity		2,412.7		3,987.3
Total mutual funds		25,335.7		40,348.6
Money market funds		2,132.6		1,728.2
Total	$	27,468.3	$	42,076.8

The Company’s GMDB claim reserves are determined by estimating the expected value of death benefits on contracts that trigger a policy benefit and recognizing the excess ratably over the accumulation period based on total expected assessments. GMIB claim reserves are determined each period by estimating the expected value of annuitization benefits in excess of the projected account balance at the date of annuitization and recognizing the excess ratably over the accumulation period based on total assessments. The Company regularly evaluates its GMDB and GMIB claim reserve estimates and adjusts the additional liability balances as appropriate, with a related charge or credit to other benefits and claims in the period of evaluation if actual experience or other evidence suggests that earlier assumptions should be revised. The assumptions used in calculating GMIB claim reserves are consistent with those used for calculating GMDB claim reserves. In addition, the calculation of GMIB claim reserves assumes benefit utilization ranges from a low of 3% when the contractholder’s annuitization value is at least 10% in the money to 100% utilization when the contractholder is 90% or more in the money.

The Company’s living benefit riders represent an embedded derivative in a variable annuity contract that is required to be separated from, and valued apart from, the host variable annuity contract. The embedded derivatives are carried at fair value. Subsequent changes in the fair value of the embedded derivatives are recognized in earnings as a component of net realized investment gains and losses. The fair value of the embedded derivatives is calculated based on a combination of capital market and actuarial assumptions.

The following assumptions and methodology were used to determine the GMDB claim reserves as of December 31, 2008 and 2007:

• Data used was based on a combination of historical numbers and future projections generally involving 50 probabilistically generated economic scenarios  

• Mean gross equity performance – 8.1%  

• Equity volatility – 18.7%  

• Mortality – 100% of Annuity 2000 table  

• Asset fees – equivalent to mutual fund and product loads  

• Discount rate – approximately 7.0%  

Lapse rate assumptions vary by duration as shown below:

Duration (years)	1	2	3	4	5	6	7	8	9	10+
Minimum	1.00%	2.00%	2.00%	3.00%	4.50%	6.00%	7.00%	7.00%	11.50%	11.50%
Maximum	1.50%	2.50%	4.00%	4.50%	40.00%	41.50%	21.50%	35.00%	35.00%	18.50%

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

(9) Short-Term Debt  

The following table summarizes short-term debt as of December 31:

(in millions)	2008		2007
$800.0 million commercial paper program	$	149.9	$	199.7
$350.0 million securities lending program facility		99.8		85.6
Total short-term debt	$	249.7	$	285.3

The Company has available as a source of funds a $1.00 billion revolving variable rate credit facility entered into by NFS, NLIC and NMIC 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 the Company’s debt not exceed 40% of tangible net worth, as defined, and that NLIC maintain statutory surplus, as defined, in excess of $1.67 billion. As of December 31, 2008, the Company and NLIC were in compliance with all covenants. NLIC and NMIC had no amounts outstanding under this agreement as of December 31, 2008 and 2007. NLIC also has an $800.0 million commercial paper program and is required to maintain an available credit facility equal to 50% of any amounts outstanding under the commercial paper program. Therefore, borrowing capacity under the aggregate $1.00 billion revolving credit facility is reduced by 50% of any amounts outstanding under the commercial paper program. NLIC had $149.9 million of commercial paper outstanding at December 31, 2008 at a weighted average interest rate of 2.07% and $199.7 million at a weighted average interest rate of 4.39% at December 31, 2007.

NLIC has entered into an agreement with its custodial bank to borrow against the cash collateral that is posted in connection with its securities lending program. This is an uncommitted facility contingent on the liquidity of the securities lending program. The borrowing facility was established to fund commercial mortgage loans that were originated with the intent of sale through securitization. The maximum amount available under the agreement is $350.0 million. The borrowing rate on this program is equal to one-month U.S. LIBOR (0.44% and 4.60% as of December 31, 2008 and 2007, respectively). NLIC had $99.8 million and $85.6 million outstanding under this agreement as of December 31, 2008 and 2007, respectively. As of December 31, 2008, the Company had not provided any guarantees on such borrowings, either directly or indirectly.

The Company paid interest on short-term debt totaling $8.3 million, $15.0 million and $11.7 million in 2008, 2007 and 2006, respectively.

(10) Long-Term Debt  

The following table summarizes surplus notes payable to NFS as of December 31:

(in millions)	2008		2007
8.15% surplus note, due June 27, 2032	$	300.0	$	300.0
7.50% surplus note, due December 17, 2031		300.0		300.0
6.75% surplus note, due December 23, 2033		100.0		100.0
Total long-term debt	$	700.0	$	700.0

The Company made interest payments to NFS on surplus notes totaling $53.7 million in 2008, 2007 and 2006. Payments of interest and principal under the notes require the prior approval of the Ohio Department of Insurance (ODI).

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

(11) Federal Income Taxes  

In 2008, NFS will file a life/non-life federal income tax return with all of its eligible downstream subsidiaries. Effective January 1, 2009, pursuant to the merger agreement dated August 6, 2008 whereby NMIC and its affiliates purchased all of the NFS common stock they did not already own, Nationwide Corp. will own more than 80% of the value of NFS, meeting the requirements for NFS to join the NMIC consolidated federal income tax return. However, the life insurance company subsidiaries will not be eligible to join the NMIC consolidated federal income tax return until 2014. The members of the NFS consolidated federal income tax return group participate in a tax sharing arrangement, which uses a consolidated approach in allocating the amount of current and deferred expense to the separate financial statements of a subsidiary. This approach provides for a current tax benefit to the subsidary for losses that are utilized in the consoldiated tax return.

The following table summarizes the tax effects of temporary differences that give rise to significant components of the net deferred tax (asset) liability as of December 31:

(in millions)	2008			2007
Deferred tax assets:
Future policy benefits and claims	$	881.0		$	622.0
Securities available-for-sale		737.4			83.8
Derivatives		229.7			—
Other		238.3			129.4
Gross deferred tax assets		2,086.4			835.2
Less valuation allowance		(7.0	)		(7.0	)
Deferred tax assets, net of valuation allowance		2,079.4			828.2
Deferred tax liabilities:
Deferred policy acquisition costs		1,249.4			1,112.6
Derivatives		—			15.6
Other		188.4			115.2
Gross deferred tax liabilities		1,437.8			1,243.4
Net deferred tax (asset) liability	$	(641.6	)	$	415.2

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 taxes paid within the statutory carryback period can offset nearly all future deductible amounts. The valuation allowance was unchanged during 2008, 2007 and 2006. No additional valuation allowances are required to be recognized as the Company has prudent and feasible tax planning strategies that would, if necessary, be implemented to utilize deferred tax assets.

The Company’s current federal income tax asset was $127.2 million and $12.7 million as of December 31, 2008 and 2007, respectively.

Total federal income taxes (refunded) paid were $(46.1) million, $99.1 million and $(4.3) million during the years ended December 31, 2008, 2007 and 2006, respectively.

As of December 31, 2008, the Company has $38.9 million of capital loss carryforwards that can carry forward for five tax years and are expected to be fully utilized. In addition, the Company has $41.9 million in low income housing credit carryforwards which can be carried forward for twenty years. The Company expects that they will be fully utilized. The Company has $56.5 million in Alternative Minimum Tax (AMT) credit carryforwards, which can be carried forward until utilized. The Company expects to fully realize the AMT credits in the future.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

During the third quarter of 2008, the Company refined its separate account dividends received deduction (DRD) calculation and estimation process. As a result, the Company reduced its third quarter separate account DRD projection from a federal income tax benefit of $14.3 million to a $4.4 million benefit. This reduction in estimate primarily was driven by the assumptions used in the estimation process regarding future dividend income within the separate accounts. The assumptions used in the separate account DRD calculation are based on the Company’s best estimate of future events.

In addition, during 2008, the Company recorded $12.7 million of net federal income tax expense adjustments primarily related to differences between the 2007 estimated tax liability and the amounts expected to be reported on the Company’s 2007 tax returns when filed. These changes in estimates primarily were driven by the Company’s separate account DRD.

During the second quarter of 2007, the Company recorded $6.8 million of net federal income tax expense adjustments primarily related to differences between the 2006 estimated tax liability and the amounts the Company reported on its 2006 tax returns. The Company recorded an additional $1.5 million and $0.2 million of such adjustments during the third and fourth quarters of 2007, respectively.

Through June 2006, the Company’s federal income tax returns for tax years 2000-2002 were under IRS examination pursuant to a routine audit. In accordance with its regular practice, management established tax reserves based on the current facts and circumstances regarding each tax exposure item for which the ultimate deductibility is open to interpretation. These reserves are reviewed regularly and are adjusted as events occur that management believes impacts the Company’s liability for additional taxes, such as lapsing of applicable statutes of limitations; conclusion of tax audits or substantial agreement on the deductibility/non-deductibility of uncertain items; additional exposure based on current calculations; identification of new issues; release of administrative guidance; or rendering of a court decision affecting a particular tax issue. A significant component of the Company’s tax reserve as of December 31, 2005 was related to the separate account dividends received deduction (DRD). See “Tax Matters” in Note 15 for more information regarding DRD.

In July 2006, the Company reached substantial agreement with the IRS on all open issues for tax years 2000-2002, including issues related to the DRD. Accordingly, the Company revised its estimate of amounts that may be due in connection with certain tax positions, including the DRD, for all open tax years. As a result of the revised estimate, $110.9 million of tax reserves were released into earnings during the second quarter of 2006.

During the third quarter of 2006, the Company recorded $7.8 million of net federal income tax expense adjustments primarily related to differences between the 2005 estimated tax liability and the amounts reported on the Company’s 2005 tax returns.

The following table summarizes federal income tax (benefit) expense attributable to (loss) income from continuing operations for the years ended December 31:

(in millions)	2008			2007		2006
Current	$	(135.5	)	$	106.5	$	(61.8	)
Deferred		(398.8	)		22.0		90.5
Federal income tax (benefit) expense	$	(534.3	)	$	128.5	$	28.7

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

Total federal income tax (benefit) expense differs from the amount computed by applying the U.S. federal income tax rate to (loss) income from continuing operations before federal income tax (benefit) expense as follows for the years ended December 31:

	2008				2007					2006
(dollars in millions)	Amount			%	Amount			%		Amount			%
Computed tax (benefit) expense	$	(477.4	)	35.0	$	204.0		35.0		$	226.8		35.0
DRD		(36.7	)	2.7		(61.0	)	(10.5	)		(67.5	)	(10.4	)
Reserve release		—		—		—		—			(110.9	)	(17.1	)
Other, net		(20.2	)	1.5		(14.5	)	(2.4	)		(19.7	)	(3.1	)
Total	$	(534.3	)	39.2	$	128.5		22.1		$	28.7		4.4

As noted previously, the Company adopted the provisions of FIN 48 on January 1, 2007. There was no impact to the Company’s retained earnings on adoption of FIN 48. A rollforward of the beginning and ending uncertain tax positions, including permanent and temporary differences, but excluding interest and penalties, is as follows:

(in millions)	2008			2007
Balance at beginning of period	$	8.6		$	4.6
Additions for current year tax positions		37.4			4.0
Additions for prior years tax positions		0.3			—
Reductions for prior years tax positions		(2.6	)		—
Balance at end of period	$	43.7		$	8.6

The total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate on December 31, 2008, is $37.4 million.

The Company has included tax on permanent uncertain tax positions and interest and penalties on all uncertain tax positions in determining the potential impact on the effective tax rate above. An uncertain tax timing position may result in the acceleration of cash payments to the IRS, but will not impact the effective tax rate.

During the years ended December 31, 2008, and 2007, the Company incurred $1.0 million and $0.8 million in interest and penalties, respectively. The Company accrued $2.2 million and $1.2 million for the payment of interest and penalties at December 31, 2008 and 2007, respectively. Interest expense and any associated penalties are shown as income tax expense.

Management is not aware of any reasonable possibility of a significant increase or decrease to the total of the uncertain tax positions within the next 12 months.

The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state or local income tax examinations by tax authorities for years through 2002. The IRS commenced an examination of the Company’s U.S. income tax returns for 2003 through 2005 in the first quarter of 2007. As of December 31, 2008, the IRS has proposed adjustments which would not result in a material change to the Company’s financial position.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

(12) Shareholders’ Equity, Regulatory Risk-Based Capital, Statutory Results and Dividend Restrictions  

Regulatory Risk-Based Capital

The State of Ohio, where NLIC and NLAIC are domiciled, 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 total adjusted capital, as defined by the NAIC, to 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 exceeded the minimum risk-based capital requirements for all periods presented herein.

Statutory Results

The Company and its subsidiary are required to prepare statutory financial statements in conformity with the NAIC’s Accounting Practices and Procedures Manual, subject to any deviations prescribed or permitted by the applicable state department of insurance. Statutory accounting practices focus on insurer solvency and differ from GAAP materially. The principal differences include charging policy acquisition and certain sales inducement costs to expense as incurred, establishing future policy benefits and claims reserves using different actuarial assumptions, excluding certain assets from statutory admitted assets, and valuing investments and establishing deferred taxes on a different basis. The following tables summarize the statutory net (loss) income and statutory capital and surplus for the Company and its insurance subsidiary for the years ended December 31:

(in millions)	20081			2007			2006
Statutory net (loss) income
NLIC	$	(898.3	)	$	309.0		$	537.5
NLAIC		(87.9	)		(13.4	)		(45.6	)
Statutory capital and surplus
NLIC	$	2,261.5		$	2,501.1		$	2,682.3
NLAIC		81.7			173.3			158.6

1   Unaudited as of the date of this report.  

The Company has received approval from the Ohio Department of Insurance (ODI) regarding the use of a permitted practice related to the statutory accounting provision for the admissibility of deferred tax assets as of December 31, 2008. The permitted practice modifies the practice prescribed by the NAIC by increasing the threshold for admissibility of deferred tax assets from 10% to 15% of statutory capital and surplus. The permitted practice resulted in an increase of the Company’s estimated statutory surplus of $68.9 million (unaudited) as of December 31, 2008. The permitted practice had no impact on the Company’s statutory net income. The benefits of this permitted practice may not be considered by the Company when determining capital and surplus available for dividends. NLAIC did not qualify for the permitted practice.

Dividend Restrictions

The payment of dividends by NLIC is subject to restrictions set forth in the insurance laws and regulations of the State of Ohio, its domiciliary state. The State of Ohio insurance laws require Ohio-domiciled life insurance companies to seek prior regulatory approval to pay a dividend or distribution of cash or other property if the fair market value thereof, together with that of other dividends or distributions made in the preceding 12 months, exceeds the greater of (1) 10% of statutory-basis policyholders’ surplus as of the prior December 31 or (2) the statutory-basis net income of the insurer for the prior year. During the year ended December 31, 2008, NLIC paid dividends of $246.5 million to NFS after providing prior notice to the ODI. The dividend included $181.9 million in cash and $64.6 million in securities. As of January 1, 2009, NLIC could not pay dividends to NFS without obtaining prior approval.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

The State of Ohio insurance laws also require insurers to seek prior regulatory approval for any dividend paid from other than earned surplus. Earned surplus is defined under the State of Ohio insurance laws as the amount equal to the Company’s unassigned funds as set forth in its most recent statutory financial statements, including net unrealized capital gains and losses or revaluation of assets. Additionally, following any dividend, an insurer’s policyholder surplus must be reasonable in relation to the insurer’s outstanding liabilities and adequate for its financial needs. The payment of dividends by NLIC may also be subject to restrictions set forth in the insurance laws of the State of New York that limit the amount of statutory profits on NLIC’s participating policies (measured before dividends to policyholders) available for the benefit of the Company and its shareholder.

The Company currently does not expect such regulatory requirements to impair its ability to pay future operating expenses, interest and shareholder dividends.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

Comprehensive Loss

The Company’s comprehensive loss includes net income and certain items that are reported directly within separate components of shareholder’s equity that are not recorded in net income (other comprehensive income or loss).

The following table summarizes the Company’s other comprehensive loss, before and after federal income tax benefit, for the years ended December 31:

(in millions)	2008			2007			2006
Net unrealized losses on securities available-for-sale arising during the period:
Net unrealized losses before adjustments	$	(3,576.6	)	$	(276.3	)	$	(171.3	)
Net adjustment to deferred policy acquisition costs		528.8			3.8			40.9
Net adjustment to future policy benefits and claims		121.5			5.4			21.5
Related federal income tax benefit		1,024.4			93.3			38.1
Net unrealized losses		(1,901.9	)		(173.8	)		(70.8	)
Reclassification adjustment for net realized losses on securities available-for-sale realized during the period:
Net unrealized losses		1,025.2			107.7			9.2
Related federal income tax benefit		(358.8	)		(37.7	)		(3.2	)
Net reclassification adjustment		666.4			70.0			6.0
Other comprehensive loss on securities available-for-sale		(1,235.5	)		(103.8	)		(64.8	)
Accumulated net holding gains (losses) on cash flow hedges:
Unrealized holding gains (losses)		16.5			(17.2	)		(0.2	)
Related federal income tax (expense) benefit		(5.8	)		6.0			0.1
Other comprehensive income (loss) on cash flow hedges		10.7			(11.2	)		(0.1	)
Other unrealized gains (losses):
Net unrealized gains (losses)		6.4			(6.4	)		—
Related federal income tax (expense) benefit		(2.3	)		2.2			—
Other net unrealized gains (losses)		4.1			(4.2	)		—
Total other comprehensive loss	$	(1,220.7	)	$	(119.2	)	$	(64.9	)

Adjustments for net realized gains and losses on the ineffective portion of cash flow hedges were immaterial during the years ended December 31, 2008, 2007 and 2006.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

(13) Employee Benefit Plans  

Defined Benefit Plans

The Company and certain affiliated companies participate in a qualified defined benefit pension plan sponsored by NMIC. This plan covers all employees of participating companies who have completed at least one year of service. Plan contributions are invested in a group annuity contract issued by NLIC, and a trust with Bank of New York as the custodian and trustee. All participants are eligible for benefits based on an account balance feature. Participants last hired before 2002 are eligible for benefits based on the highest average annual salary of a specified number of consecutive years of the last ten years of service, if such benefits are of greater value than the account balance feature. The Company funds pension costs accrued for direct employees plus an allocation of pension costs accrued for employees of affiliates whose work benefits the Company. A separate non-qualified defined benefit pension plan sponsored by NMIC covers certain executives with at least one year of service. The Company’s portion of expense relating to these plans was $12.0 million, $13.5 million and $19.9 million for the years ended December 31, 2008, 2007 and 2006, respectively.

In addition to the NMIC pension plan, the Company and certain affiliated companies participate in life and health care defined benefit plans sponsored by NMIC for qualifying retirees. Postretirement life and health care benefits are contributory. The level of contribution required by a qualified retiree depends on the retiree’s years of service and date of hire. In general, postretirement benefits are available to full-time employees who are credited with 120 months of retiree life and health service. 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. 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 a group annuity contract issued by NLIC, and a trust with Bank of New York as the custodian and trustee. All participants are eligible for benefits based on an account balance feature. The Company’s portion of expense relating to these plans was immaterial for the years ended December 31, 2008, 2007 and 2006.

Defined Contribution Plans

NMIC sponsors a defined contribution retirement savings plan covering substantially all employees of the Company. Employees may make salary deferral contributions of up to 80%. Salary deferrals of up to 6% are subject to a 50% Company match. The Company’s expense for contributions to these plans was $5.6 million, $7.3 million and $6.6 million for the years ended December 31, 2008, 2007 and 2006, respectively.

(14) Related Party Transactions  

The Company has entered into significant, recurring transactions and agreements with NMIC, other affiliates and subsidiaries as a part of its ongoing operations. These include annuity and life insurance contracts, office space leases, and agreements related to reinsurance, cost sharing, administrative services, marketing, intercompany loans, intercompany repurchases, cash management services and software licensing. Measures used to allocate expenses among companies include individual employee estimates of time spent, special cost studies, the number of full-time employees, commission expense and other methods agreed to by the participating companies.

In addition, Nationwide Services Company, LLC (NSC), a subsidiary of NMIC, provides data processing, systems development, hardware and software support, telephone, mail and other services to the Company, based on specified rates for units of service consumed.. For the years ended December 31, 2008, 2007 and 2006, the Company made payments to NMIC and NSC totaling $280.8 million, $285.6 million and $261.7 million, respectively.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

The Company has issued group annuity and life insurance contracts and performs administrative services for various employee benefit plans sponsored by NMIC or its affiliates. Total account values of these contracts were $2.85 billion and $2.90 billion as of December 31, 2008 and 2007, respectively. Total revenues from these contracts were $137.7 million, $130.8 million and $133.4 million for the years ended December 31, 2008, 2007 and 2006, respectively, and include policy charges, net investment income from investments backing the contracts and administrative fees. Total interest credited to the account balances was $115.4 million, $109.7 million and $110.7 million for the years ended December 31, 2008, 2007 and 2006, respectively. The terms of these contracts are consistent in all material respects with what the Company offers to unaffiliated parties.

The Company leases office space from NMIC. For the years ended December 31, 2008, 2007 and 2006, the Company made lease payments to NMIC of $22.9 million, $23.0 million and $19.3 million, respectively.

NLIC has a reinsurance agreement with NMIC whereby all of NLIC’s accident and health business not ceded to unaffiliated reinsurers is ceded to NMIC on a modified coinsurance basis. Either party may terminate the agreement on January 1 of any year with prior notice. Under a modified coinsurance agreement, the ceding company retains invested assets, and investment earnings are paid to the reinsurer. Under the terms of NLIC’s agreements, the investment risk associated with changes in interest rates is borne by the reinsurer. 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 for the years ended December 31, 2008, 2007 and 2006 were $202.3 million, $317.6 million and $430.8 million, respectively, while benefits, claims and expenses ceded during these years were $218.9 million, $348.1 million and $470.4 million, respectively.

Funds of Nationwide Funds Group (NFG), an affiliate, are offered to the Company’s customers as investment options in certain of the Company’s products. As of December 31, 2008 and 2007, customer allocations to NFG funds totaled $17.48 billion and $21.41 billion, respectively. For the years ended December 31, 2008, 2007 and 2006, NFG paid the Company $74.4 million, $76.9 million and $64.4 million, respectively, for the distribution and servicing of these funds.

Under a marketing agreement with NMIC, NLIC makes payments to cover a portion of the agent marketing allowance that is paid to Nationwide agents. These costs cover product development and promotion, sales literature, rent and similar items. Payments under this agreement totaled $8.3 million, $20.1 million and $28.3 million for the years ended December 31, 2008, 2007 and 2006, respectively. The last payment under this agreement was made in 2008.

The Company also participates in intercompany repurchase agreements with affiliates whereby the seller transfers securities to the buyer at a stated value. Upon demand or after a stated period, the seller repurchases the securities at the original sales price plus interest. As of December 31, 2008 and 2007, the Company had no outstanding borrowings from affiliated entities under such agreements. During 2008, 2007 and 2006, the most the Company had outstanding at any given time was $151.6 million, $178.2 million and $191.5 million, respectively, and the amounts the Company incurred for interest expense on intercompany repurchase agreements during these years were immaterial.

The Company and various affiliates have 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 for the benefit of the Company were $2.57 billion and $368.2 million as of December 31, 2008 and 2007, respectively, and are included in short-term investments on the 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 years ended December 31, 2008, 2007 and 2006 were $52.7 million, $59.5 million and $58.1 million, respectively.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

An affiliate of the Company is currently developing a browser-based policy administration and online brokerage software application for defined benefit plans. In connection with the development of this application, the Company made net payments, which were expensed, to that affiliate related to development totaling $11.0 million, $9.4 million and $6.9 million for the years ended December 31, 2008, 2007 and 2006, respectively.

The Company entered into a note purchase agreement with an affiliate on November 17, 2006 to purchase $25.0 million of the affiliate’s 5.6% senior notes due November 16, 2016. The notes are secured by certain pledged mortgage servicing rights. The note is payable in seven equal principal installments of $3.8 million, which begin November 6, 2010. Interest is payable semi-annually on each May 16 and November 16.

Through September 30, 2002, the Company filed a consolidated federal income tax return with NMIC, as discussed in more detail in Note 11. Effective October 1, 2002, NLIC began filing a consolidated federal income tax return with NLAIC. Total payments from NMIC were $22.5 million and $15.3 million during the years ended December 31, 2008 and 2006, respectively. These payments related to tax years prior to deconsolidation. There were no payments during 2007.

During 2008, NLIC received a $338.8 million capital contribution from NFS. The capital contribution included $157.1 million in securities, $153.4 million in cash and $28.3 million in mortgage loans.

In 2008, 2007 and 2006, NLIC paid dividends to NFS totaling $246.5 million, $537.5 million and $375.0 million, respectively.

(15) Contingencies  

Legal Matters

The Company is a party to litigation and arbitration proceedings in the ordinary course of its business. It is often not possible to determine the ultimate outcome of the pending investigations and legal proceedings or to provide reasonable ranges of potential losses with any degree of certainty. Some matters, including certain of those referred to below, are in very preliminary stages, and the Company does not have sufficient information to make an assessment of the plaintiffs’ claims for liability or damages. In some of the cases seeking to be certified as class actions, the court has not yet decided whether a class will be certified or (in the event of certification) the size of the class and class period. In many of the cases, the plaintiffs are seeking undefined amounts of damages or other relief, including punitive damages and equitable remedies, which are difficult to quantify and cannot be defined based on the information currently available. The Company does not believe, based on information currently known by management, that the outcomes of such pending investigations and legal proceedings are likely to have a material adverse effect on the Company’s consolidated financial position. However, given the large and/or indeterminate amounts sought in certain of these matters and inherent unpredictability of litigation, it is possible that an adverse outcome in certain matters could have a material adverse effect on the Company’s consolidated financial results in a particular quarterly or annual period.

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 against life insurers other than the Company.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

The financial services industry, including mutual fund, variable annuity, retirement plan, life insurance and distribution companies, has also been the subject of increasing scrutiny by regulators, legislators and the media over the past few years. Numerous regulatory agencies, including the SEC, the Financial Industry Regulatory Authority and the New York State Attorney General, have commenced industry-wide investigations regarding late trading and market timing in connection with mutual funds and variable insurance contracts, and have commenced enforcement actions against some mutual fund and life insurance companies on those issues. The Company has been contacted by or received subpoenas from the SEC and the New York State Attorney General, who are investigating market timing in certain mutual funds offered in insurance products sponsored by the Company. The Company has cooperated with these investigations. Information requests from the New York State Attorney General and the SEC with respect to investigations into late trading and market timing were last responded to by the Company and its affiliates in December 2003 and June 2005, respectively, and no further information requests have been received with respect to these matters.

In addition, state and federal regulators and other governmental bodies have commenced investigations, proceedings or inquiries relating to compensation and bidding arrangements and possible anti-competitive activities between insurance producers and brokers and issuers of insurance products, and unsuitable sales and replacements by producers on behalf of the issuer. Also under investigation are compensation and revenue sharing arrangements between the issuers of variable insurance contracts and mutual funds or their affiliates, fee arrangements in retirement plans, the use of side agreements and finite reinsurance agreements, funding agreements issued to back MTN programs, recordkeeping and retention compliance by broker/dealers, and supervision of former registered representatives. Related investigations, proceedings or inquiries may be commenced in the future. The Company and/or its affiliates have been contacted by or received subpoenas from state and federal regulatory agencies and other governmental bodies, state securities law regulators and state attorneys general for information relating to certain of these investigations, including those relating to compensation, revenue sharing and bidding arrangements, anti-competitive activities, unsuitable sales or replacement practices, fee arrangements in retirement plans, the use of side agreements and finite reinsurance agreements, and funding agreements backing the NLIC MTN program. The Company is cooperating with regulators in connection with these inquiries and will cooperate with NMIC in responding to these inquiries to the extent that any inquiries encompass NMIC’s operations.

A promotional and marketing arrangement associated with the Company’s offering of a retirement plan product and related services in Alabama is under investigation by the Alabama Securities Commission. The Company currently expects that any damages paid to settle this matter will not have a material adverse impact on its consolidated financial position. It is not possible to predict what effect, if any, the outcome of this investigation may have on the Company’s retirement plan operations with respect to promotional and marketing arrangements in general in the future.

These proceedings are expected to continue in the future and could result in legal precedents and new industry-wide legislation, rules and regulations that could significantly affect the financial services industry, including mutual fund, retirement plan, life insurance and annuity companies. These proceedings also could affect the outcome of one or more of the Company’s litigation matters. There can be no assurance that any litigation or regulatory actions will not have a material adverse effect on the Company in the future.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

On November 20, 2007, NRS and NLIC were named in a lawsuit filed in the Circuit Court of Jefferson County, Alabama entitled Ruth A. Gwin and Sandra H. Turner, and a class of similarly situated individuals v Nationwide Life Insurance Company, Nationwide Retirement Solutions, Inc., Alabama State Employees Association, PEBCO, Inc. and Fictitious Defendants A to Z. On December 2, 2008, the plaintiffs filed an amended complaint. The plaintiffs claim to represent a class of all participants in the Alabama State Employees Association (ASEA) Plan, excluding members of the Deferred Compensation Committee, members of the Board of Control, ASEA’s directors, officers and board members, and PEBCO’s directors, officers and board members. The class period is from November 20, 2001, to the date of trial. In the amended class action complaint, the plaintiffs allege breach of fiduciary duty, wantonness and breach of contract. The amended class action complaint seeks a declaratory judgment, an injunction, an appointment of an independent fiduciary to protect Plan participants, disgorgement of amounts paid, reformation of Plan documents, compensatory damages and punitive damages, plus interest, attorneys’ fees and costs and such other equitable and legal relief to which plaintiffs and class members may be entitled. Also, on December 2, 2008, the plaintiffs filed a motion for preliminary injunction seeking an order requiring periodic payments made by NRS and/or NLIC to ASEA or PEBCO to be held in a trust account for the benefit of Plan participants. On December 4, 2008, the Alabama State Personnel Board and the State of Alabama by, and through the State Personnel Board, filed a motion to intervene and a complaint in intervention. On December 16, 2008, the Companies filed their Answer. On February 4, 2009, the court provisionally agreed to add the State of Alabama, by and through the State Personnel Board as a party. NRS and NLIC continue to defend this case vigorously.

On July 11, 2007, NLIC was named in a lawsuit filed in the United States District Court for the Western District of Washington at Tacoma entitled Jerre Daniels-Hall and David Hamblen, Individually and on behalf of All Others Similarly Situated v. National Education Association, NEA Member Benefits Corporation, Nationwide Life Insurance Company, Security Benefit Life Insurance Company, Security Benefit Group, Inc., Security Distributors, Inc., et. al. The plaintiffs seek to represent a class of all current or former National Education Association (NEA) members who participated in the NEA Valuebuilder 403(b) program at any time between January 1, 1991 and the present (and their heirs and/or beneficiaries). The plaintiffs allege that the defendants violated the Employee Retirement Income Security Act of 1974, as amended (ERISA) by failing to prudently and loyally manage plan assets, by failing to provide complete and accurate information, by engaging in prohibited transactions, and by breaching their fiduciary duties when they failed to prevent other fiduciaries from breaching their fiduciary duties. The complaint seeks to have the defendants restore all losses to the plan, restoration of plan assets and profits to participants, disgorgement of endorsement fees, disgorgement of service fee payments, disgorgement of excessive fees charged to plan participants, other unspecified relief for restitution, declaratory and injunctive relief, and attorneys’ fees. On May 23, 2008, the Court granted the defendants’ motion to dismiss. On June 19, 2008, the plaintiffs filed a notice of appeal. On October 17, 2008, the plaintiffs filed their opening brief. On December 19, 2008, the defendants filed their briefs. On January 26, 2009, the plaintiffs filed Appellants’ Reply Brief. NLIC continues to defend this lawsuit vigorously.

On November 15, 2006, NFS, NLIC and NRS were named in a lawsuit filed in the United States District Court for the Southern District of Ohio entitled Kevin Beary, Sheriff of Orange County, Florida, In His Official Capacity, Individually and On Behalf of All Others Similarly Situated v. Nationwide Life Insurance Co., Nationwide Retirement Solutions, Inc. and Nationwide Financial Services, Inc. The plaintiff seeks to represent a class of all sponsors of 457(b) deferred compensation plans in the United States that had variable annuity contracts with the defendants at any time during the class period, or in the alternative, all sponsors of 457(b) deferred compensation plans in Florida that had variable annuity contracts with the defendants during the class period. The class period is from January 1, 1996 until the class notice is provided. The plaintiff alleges that the defendants breached their fiduciary duties by arranging for and retaining service payments from certain mutual funds. The complaint seeks an accounting, a declaratory judgment, a permanent injunction and disgorgement or restitution of the service fee payments allegedly received by the defendants, including interest. On January 25, 2007, NFS, NLIC and NRS filed a motion to dismiss. On September 17, 2007, the Court granted the motion to dismiss. On October 1, 2007, the plaintiff filed a motion to vacate judgment and for leave to file an amended complaint. On September 15, 2008, the Court denied the plaintiffs’ motion to vacate judgment and for leave to file an amended complaint. On October 15, 2008, the plaintiffs filed a notice of appeal. NFS, NLIC and NRS continue to defend this lawsuit vigorously.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

On February 11, 2005, NLIC was named in a class action lawsuit filed in Common Pleas Court, Franklin County, Ohio entitled Michael Carr v. Nationwide Life Insurance Company. The complaint seeks recovery for breach of contract, fraud by omission, violation of the Ohio Deceptive Trade Practices Act and unjust enrichment. The complaint also seeks unspecified compensatory damages, disgorgement of all amounts in excess of the guaranteed maximum premium and attorneys’ fees. On February 2, 2006, the court granted the plaintiff’s motion for class certification on the breach of contract and unjust enrichment claims. The court certified a class consisting of all residents of the United States and the Virgin Islands who, during the class period, paid premiums on a modal basis to NLIC for term life insurance policies issued by NLIC during the class period that provide for guaranteed maximum premiums, excluding certain specified products. Excluded from the class are NLIC; any parent, subsidiary or affiliate of NLIC; all employees, officers and directors of NLIC; and any justice, judge or magistrate judge of the State of Ohio who may hear the case. The class period is from February 10, 1990 through February 2, 2006, the date the class was certified. On January 26, 2007, the plaintiff filed a motion for summary judgment. On April 30, 2007, NLIC filed a motion for summary judgment. On February 4, 2008, the Court granted the class’s motion for summary judgment on the breach of contract claims arising from the term policies in 43 of 51 jurisdictions. The Court granted NLIC’s motion for summary judgment on the breach of contract claims on all decreasing term policies. On November 7, 2008, the case was settled.

On April 13, 2004, NLIC was named in a class action lawsuit filed in Circuit Court, Third Judicial Circuit, Madison County, Illinois, entitled Woodbury v. Nationwide Life Insurance Company. NLIC removed this case to the United States District Court for the Southern District of Illinois on June 1, 2004. On December 27, 2004, the case was transferred to the United States District Court for the District of Maryland and included in the multi-district proceeding entitled In Re Mutual Funds Investment Litigation. In response, on May 13, 2005, the plaintiff filed the first amended complaint purporting to represent, with certain exceptions, a class of all persons who held (through their ownership of an NLIC annuity or insurance product) units of any NLIC sub-account invested in mutual funds that included foreign securities in their portfolios and that experienced market timing or stale price trading activity. The first amended complaint purports to disclaim, with respect to market timing or stale price trading in NLIC’s annuities sub-accounts, any allegation based on NLIC’s untrue statement, failure to disclose any material fact, or usage of any manipulative or deceptive device or contrivance in connection with any class member’s purchases or sales of NLIC annuities or units in annuities sub-accounts. The plaintiff claims, in the alternative, that if NLIC is found with respect to market timing or stale price trading in its annuities sub-accounts, to have made any untrue statement, to have failed to disclose any material fact or to have used or employed any manipulative or deceptive device or contrivance, then the plaintiff purports to represent a class, with certain exceptions, of all persons who, prior to NLIC’s untrue statement, omission of material fact, use or employment of any manipulative or deceptive device or contrivance, held (through their ownership of an NLIC annuity or insurance product) units of any NLIC sub-account invested in mutual funds that included foreign securities in their portfolios and that experienced market timing activity. The first amended complaint alleges common law negligence and seeks to recover damages not to exceed $75,000 per plaintiff or class member, including all compensatory damages and costs. On June 1, 2006, the District Court granted NLIC’s motion to dismiss the plaintiff’s complaint. On January 30, 2009, the United States Court of Appeals for the Fourth Circuit affirmed that dismissal. NLIC continues to defend this lawsuit vigorously.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

On August 15, 2001, NFS and NLIC were named in a lawsuit filed in the United States District Court for the District of Connecticut entitled Lou Haddock, as trustee of the Flyte Tool & Die, Incorporated Deferred Compensation Plan, et al v. Nationwide Financial Services, Inc. and Nationwide Life Insurance Company. Currently, the plaintiffs’ fifth amended complaint, filed March 21, 2006, purports to represent a class of qualified retirement plans under ERISA that purchased variable annuities from NLIC. The plaintiffs allege that they invested ERISA plan assets in their variable annuity contracts and that NLIC and NFS breached ERISA fiduciary duties by allegedly accepting service payments from certain mutual funds. The complaint seeks disgorgement of some or all of the payments allegedly received by NFS and NLIC, other unspecified relief for restitution, declaratory and injunctive relief, and attorneys’ fees. To date, the District Court has rejected the plaintiffs’ request for certification of the alleged class. On September 25, 2007, NFS’ and NLIC’s motion to dismiss the plaintiffs’ fifth amended complaint was denied. On October 12, 2007, NFS and NLIC filed their answer to the plaintiffs’ fifth amended complaint and amended counterclaims. On November 1, 2007, the plaintiffs filed a motion to dismiss NFS’ and NLIC’s amended counterclaims. On November 15, 2007, the plaintiffs filed a motion for class certification. On February 8, 2008, the Court denied the plaintiffs’ motion to dismiss the amended counterclaim, with the exception that it was tentatively granting the plaintiffs’ motion to dismiss with respect to NFS’ and NLIC’s claim that it could recover any “disgorgement remedy” from plan sponsors. On April 25, 2008, NFS and NLIC filed their opposition to the plaintiffs’ motion for class certification. On September 29, 2008, the plaintiffs filed their reply to NFS’ and NLIC’s opposition to class certification. The Court has set a hearing on the class certification motion for February 27, 2009. NFS and NLIC continue to defend this lawsuit vigorously.

Tax Matters

Management has established tax reserves in accordance with current accounting guidance, which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. These reserves are reviewed regularly and are adjusted as events occur that management believes impact its liability for additional taxes, such as lapsing of applicable statutes of limitations; conclusion of tax audits or substantial agreement on the deductibility/nondeductibility of uncertain items; additional exposure based on current calculations; identification of new issues; release of administrative guidance; or rendering of a court decision affecting a particular tax issue. Management believes its tax reserves reasonably provide for potential assessments that may result from IRS examinations and other tax-related matters for all open tax years.

The separate account DRD is a significant component of the Company’s federal income tax provision. On August 16, 2007, the IRS issued Revenue Ruling 2007-54. This ruling took a position with respect to the DRD that could have significantly reduced the Company’s DRD. The Company believes that the position taken by the IRS in the ruling was contrary to existing law and the relevant legislative history.

In Revenue Ruling 2007-61, released September 25, 2007, the IRS and the U.S. Department of the Treasury suspended Revenue Ruling 2007-54 and informed taxpayers of their intention to address certain issues in connection with the DRD in future tax regulations. Final tax regulations could impact the Company’s DRD in periods subsequent to their effective date.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

(16) Guarantees  

Since 2002, the Company has sold $677.4 million of credit enhanced equity interests in Low-Income-Housing Tax Credit Funds (LIHTC Funds) to unrelated third parties. The Company has guaranteed cumulative after-tax yields to the third party investors ranging from 3.75% to 5.25% over periods ending between 2002 and 2022. As of December 31, 2008 and 2007, the Company held guarantee reserves totaling $5.1 million and $6.0 million, respectively, on these transactions. These guarantees are in effect for periods of approximately 15 years each. The LIHTC Funds provide a stream of tax benefits to the investors that will generate a yield and return of capital. If the tax benefits are not sufficient to provide these cumulative after-tax yields, then the Company must fund any shortfall, which is mitigated by stabilization collateral set aside by the Company at the inception of the transactions. The maximum amount of undiscounted future payments that the Company could be required to pay the investors under the terms of the guarantees is $1.10 billion. The Company does not anticipate making any material payments related to these guarantees.

As of December 31, 2008, the Company held stabilization reserves of $0.8 million as collateral for certain properties owned by the LIHTC Funds that had not met all of the criteria necessary to generate tax credits. Such criteria include completion of construction and the leasing of each unit to a qualified tenant, among others. Properties meeting the necessary criteria are considered to have “stabilized.” The properties are evaluated regularly, and the collateral is released when stabilized. In 2008, $0.8 million of the stabilization reserve was released into income. In 2007, the stabilization reserve was increased by $2.4 million and $3.1 million was released into income.

To the extent there are cash deficits in any specific property owned by the LIHTC Funds, property reserves, property operating guarantees and reserves held by the LIHTC Funds are exhausted before the Company is required to perform under its guarantees. To the extent the Company is ever required to perform under its guarantees, it may recover any such funding out of the cash flow distributed from the sale of the underlying properties of the LIHTC Funds. This cash flow distribution would be paid to the Company prior to any cash flow distributions to unrelated third party investors.

(17) Variable Interest Entities  

In the normal course of business, the Company has relationships with variable interest entities (VIEs). The Company’s VIEs are conduits that assist the Company in structured products transactions involving the sale of low-income-housing tax credit funds (LIHTC Funds) to third party investors, other structured product issuances, and private equity investments.

The Company considers many factors when determining whether it is (or is not) the primary beneficiary of a VIE. There is a review of the entity’s contract and other deal related information, such as 1) the entity’s equity investment at risk, decision-making abilities, obligations to absorb economic risks and right to receive economic rewards of the entity, 2) whether the contractual or ownership interest in the entity changes with the change in fair value of the entity, and 3) through the variable interest, if the Company shares in the entity’s expected losses and residual returns.

The Company was not required to provide financial or other support outside previous contractual requirements to any VIE.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

LIHTC Funds

The Company provides guarantees to limited partners related to the amount of tax credits that will be generated by the funds (see Note 16). The results of operations and financial position of each VIE of which the Company is the primary beneficiary are consolidated along with corresponding minority interest liabilities in the accompanying consolidated financial statements.

The Company had relationships with 19 LIHTC Funds that are considered VIEs as of December 31, 2008 and December 31, 2007, where the company was the primary beneficiary. Net assets of these consolidated VIEs were $416.1 million and $465.7 million as of December 31, 2008 and December 31, 2007, respectively. The following table summarizes the components of net assets as of December 31:

(in millions)	2008			2007
Other long-term investments	$	371.1		$	434.1
Short-term investments		20.9			31.9
Other assets		41.6			38.1
Other liabilities		(17.5	)		(38.4	)

The Company’s total loss exposure from consolidated VIEs was immaterial as of December 31, 2008 and December 31, 2007 (except for the impact of guarantees disclosed in Note 16). Creditors (or beneficial interest holders) of the consolidated VIEs have no recourse to the general credit of the Company.

These LIHTC Funds are financed through the sale of these funds into the secondary market. The proceeds from these sales are used to participate in low-income housing projects that provide tax benefits to the investors.

In addition to the consolidated VIEs described above, the Company holds variable interests, in the form of LIHTC Funds that qualify as VIEs but of which the Company is not the primary beneficiary. The carrying amount on these unconsolidated VIEs was $78.9 million and $79.3 million as of December 31, 2008 and December 31, 2007, respectively. The total exposure to loss on these unconsolidated VIEs was $93.4 million and $108.5 million as of December 31, 2008 and December 31, 2007, respectively. The total exposure to loss is determined by adding any unfunded commitments to the carrying amount of the VIEs.

Structured Products

The Company had relationships with one structured product investment that is considered a VIE as of December 31, 2008 and December 31, 2007, where the Company was the primary beneficiary. Net assets of this consolidated VIE were $8.9 million and $20.1 million as of December 31, 2008 and December 31, 2007, respectively. Creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the Company. There are no arrangements that would require the Company to provide financial support to the VIE.

As of both December 31, 2008 and December 31, 2007, the Company was invested in 11 structured product investments that are considered VIEs but that the Company is not the primary beneficiary. These structured products are in the form of synthetic collateralized debt obligations and collateralized lease obligations. The carrying amount on these unconsolidated VIEs was $13.7 million and $84.0 million as of December 31, 2008 and December 31, 2007, respectively. The total exposure to loss on these unconsolidated VIEs is determined to be the carrying amount of the VIEs.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

Private Equity Investments

The Company had relationships with one private equity investment that is considered a VIE as of December 31, 2008 and December 31, 2007, where the Company was the primary beneficiary. Net assets of this consolidated VIE were $18.6 million and $5.0 million as of December 31, 2008 and December 31, 2007, respectively. Creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the Company. There are no arrangements that would require the Company to provide financial support to the VIE.

As of December 31, 2008 and December 31, 2007, the Company does not have any private equity investments considered to be a VIE where the Company is not the primary beneficiary.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

(18) Segment Information  

Management views the Company’s business primarily based on its underlying products and uses this basis to define its four reportable segments: Individual Investments, Retirement Plans, Individual Protection, and Corporate and Other.

The primary segment profitability measure that management uses is pre-tax operating earnings, which is calculated by adjusting income from continuing operations before federal income taxes to exclude (1) net realized investment gains and losses, except for periodic net amounts paid or received on interest rate swaps that do not qualify for hedge accounting treatment, net realized gains and losses related to hedges on GMDB contracts and net realized gains and losses related to securitizations and (2) the adjustment to amortization of DAC related to net realized investment gains and losses.

Individual Investments

The Individual Investments segment consists of individual The BEST of AMERICA® and private label deferred variable annuity products, deferred fixed annuity products, income products and advisory services. Individual deferred 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, individual variable annuity contracts provide the customer with access to a wide range of investment options and asset protection features, while individual fixed annuity contracts generate a return for the customer at a specified interest rate fixed for prescribed periods.

Retirement Plans

The Retirement Plans segment is comprised of the Company’s private and public sector retirement plans business. The private sector primarily includes IRC Section 401 business, and the public sector primarily includes IRC Section 457 and Section 401(a) business, both in the form of full-service arrangements that provide plan administration and fixed and variable group annuities as well as administration-only business.

Individual Protection

The Individual Protection segment consists of investment life insurance products, including individual variable, COLI and BOLI products; traditional life insurance products; and universal life insurance products. Life insurance products provide a death benefit and generally allow the customer to build cash value on a tax-advantaged basis.

Corporate and Other

The Corporate and Other segment includes the MTN program; structured products business; non-operating realized gains and losses, including mark-to-market adjustments on embedded derivatives, net of economic hedges, related to products with living benefits included in the Individual Investments segment; and other revenues and expenses not allocated to other segments.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

The following tables summarize the Company’s business segment operating results for the years ended December 31:

(in millions)	Individual Investments			Retirement Plans		Individual Protection		Corporate and Other			Total
2008
Revenues:
Policy charges	$	599.0		$	115.6	$	453.4	$	—		$	1,168.0
Premiums		119.5			—		164.0		—			283.5
Net investment income		506.3			638.2		343.9		198.6			1,687.0
Non-operating net realized investment losses1		—			—		—		(1,478.2	)		(1,478.2	)
Other income		109.5			0.9		—		(65.1	)		45.3
Total revenues		1,334.3			754.7		961.3		(1,344.7	)		1,705.6
Benefits and expenses:
Interest credited to policyholder accounts		361.8			425.9		181.5		161.4			1,130.6
Benefits and claims		377.0			—		295.0		(11.7	)		660.3
Policyholder dividends		—			—		26.4		—			26.4
Amortization of DAC		647.7			39.7		113.5		(126.4	)		674.5
Interest expense		—			—		—		61.8			61.8
Other operating expenses		188.1			147.0		138.0		43.0			516.1
Total benefits and expenses		1,574.6			612.6		754.4		128.1			3,069.7
Income (loss) from continuing operations before federal income tax expense		(240.3	)		142.1		206.9		(1,472.8	)	$	(1,364.1	)
Less: non-operating net realized investment losses1		—			—		—		1,478.2
Less: adjustment to amortization related to net realized investment gains and losses		—			—		—		(138.5	)
Pre-tax operating (loss) earnings	$	(240.3	)	$	142.1	$	206.9	$	(133.1	)
Assets as of year end	$	41,902.1		$	21,671.1	$	16,563.2	$	4,676.0		$	84,812.4

1   Excluding periodic net amounts paid or received on interest rate swaps that do not qualify for hedge accounting treatment and net realized gains and losses related to hedges on GMDB contracts and securitizations.  

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

(in millions)	Individual Investments		Retirement Plans		Individual Protection		Corporate and Other			Total
2007
Revenues:
Policy charges	$	656.9	$	139.5	$	411.9	$	—		$	1,208.3
Premiums		133.1		—		158.6		—			291.7
Net investment income		609.1		639.4		330.2		397.1			1,975.8
Non-operating net realized investment losses1		—		—		—		(156.0	)		(156.0	)
Other income		3.1		—		—		(5.8	)		(2.7	)
Total revenues		1,402.2		778.9		900.7		235.3			3,317.1
Benefits and expenses:
Interest credited to policyholder accounts		419.7		433.7		178.0		231.2			1,262.6
Benefits and claims		234.2		—		245.1		—			479.3
Policyholder dividends		—		—		24.5		—			24.5
Amortization of DAC		287.1		26.7		80.2		(25.5	)		368.5
Interest expense		—		—		—		70.0			70.0
Other operating expenses		191.6		173.6		147.1		17.2			529.5
Total benefits and expenses		1,132.6		634.0		674.9		292.9			2,734.4
Income (loss) from continuing operations before federal income tax expense		269.6		144.9		225.8		(57.6	)	$	582.7
Less: non-operating net realized investment losses1		—		—		—		156.0
Less: adjustment to amortization related to net realized investment gains and losses		—		—		—		(25.5	)
Pre-tax operating earnings	$	269.6	$	144.9	$	225.8	$	72.9
Assets as of year end	$	55,692.9	$	26,912.6	$	18,251.1	$	8,683.4		$	109,540.0

1   Excluding periodic net amounts paid or received on interest rate swaps that do not qualify for hedge accounting treatment and net realized gains and losses related to securitizations.  

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2008, 2007 and 2006

(in millions)	Individual Investments		Retirement Plans		Individual Protection		Corporate and Other			Total
2006
Revenues:
Policy charges	$	581.7	$	160.2	$	390.7	$	—		$	1,132.6
Premiums		142.5		—		165.8		—			308.3
Net investment income		739.5		636.0		328.2		354.8			2,058.5
Non-operating net realized investment gains 1		—		—		—		1.0			1.0
Other income		2.6		—		0.3		3.4			6.3
Total revenues		1,466.3		796.2		885.0		359.2			3,506.7
Benefits and expenses:
Interest credited to policyholder accounts		501.7		440.5		179.2		208.7			1,330.1
Benefits and claims		202.8		—		247.5		—			450.3
Policyholder dividends		—		—		25.6		—			25.6
Amortization of DAC		352.7		37.9		69.6		(9.9	)		450.3
Interest expense		—		—		—		65.5			65.5
Other operating expenses		206.3		179.1		142.4		9.0			536.8
Total benefits and expenses		1,263.5		657.5		664.3		273.3			2,858.6
Income from continuing operations before federal income tax expense		202.8		138.7		220.7		85.9		$	648.1
Less: non-operating net realized investment gains 1		—		—		—		(1.0	)
Less: adjustment to amortization related to net realized investment gains and losses		—		—		—		(9.9	)
Pre-tax operating earnings	$	202.8	$	138.7	$	220.7	$	75.0
Assets as of year end	$	55,404.6	$	28,817.2	$	16,948.8	$	8,791.8		$	109,962.4

1   Excluding periodic net amounts paid or received on interest rate swaps that do not qualify for hedge accounting treatment and net realized gains and losses related to securitizations.  

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Schedule I         Consolidated Summary of Investments – Other Than Investments in Related Parties

As of December 31, 2008 (in millions)

Column A	Column B		Column C		Column D
Type of investment	Cost		Market value		Amount at which shown in the consolidated balance sheet
Fixed maturity securities available-for-sale:
Bonds:
U.S. Treasury securities and obligations of U.S. Government corporations	$	77.3	$	97.4	$	97.4
Agencies not backed by the full faith and credit of the U.S. Government		384.6		473.9		473.9
Obligations of states and political subdivisions		223.0		217.1		217.1
Foreign governments		33.9		38.9		38.9
Public utilities		1,667.7		1,578.5		1,578.5
All other corporate		19,434.4		16,841.4		16,841.4
Total fixed maturity securities available-for-sale		21,820.9		19,247.2		19,247.2
Equity securities available-for-sale:
Common stocks:
Banks, trusts and insurance companies		14.3		9.5		9.5
Industrial, miscellaneous and all other		—		0.1		0.1
Nonredeemable preferred stocks		16.6		16.9		16.9
Total equity securities available-for-sale		30.9		26.5		26.5
Mortgage loans on real estate, net		7,249.7				7,189.9	1
Real estate, net:
Investment properties		11.0				8.5	2
Acquired in satisfaction of debt		9.8				8.0	2
Total real estate, net		20.8				16.5
Policy loans		767.4				767.4
Other long-term investments		521.6				521.6
Short-term investments, including amounts managed by a related party		2,780.9				2,780.9
Total investments	$	33,192.2			$	30,550.0

1   Difference from Column B primarily is attributable to valuation allowances due to impairments on mortgage loans on real estate (see Note 6 to the audited consolidated financial statements), hedges and commitment hedges on mortgage loans on real estate.  

2   Difference from Column B primarily results from adjustments for accumulated depreciation.  

See accompanying notes to consolidated financial statements and report of independent registered public accounting firm.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Schedule III        Supplementary Insurance Information

As of December 31, 2008, 2007 and 2006 and for each of the years then ended (in millions)

Column A	Column B		Column C		Column D			Column E		Column F
Year: Segment	Deferred policy acquisition costs		Future policy benefits, losses, claims and loss expenses		Unearned premiums 1			Other policy claims and benefits payable1		Premium revenue
2008
Individual Investments	$	1,883.0	$	12,026.3						$	119.5
Retirement Plans		284.3		11,244.8							—
Individual Protection		1,640.7		5,941.2							164.0
Corporate and Other		615.9		3,324.0							—
Total	$	4,423.9	$	32,536.3						$	283.5
2007
Individual Investments	$	2,078.1	$	10,748.6						$	133.1
Retirement Plans		289.7		10,693.7							—
Individual Protection		1,542.5		5,635.9							158.6
Corporate and Other		87.1		4,920.2							—
Total	$	3,997.4	$	31,998.4						$	291.7
2006
Individual Investments	$	1,945.0	$	13,004.4						$	142.5
Retirement Plans		288.6		10,839.0							—
Individual Protection		1,441.0		5,574.1							165.8
Corporate and Other		83.4		4,991.9							—
Total	$	3,758.0	$	34,409.4						$	308.3
Column A	Column G		Column H		Column I			Column J		ColumnK
Year: Segment	Net investment income2		Benefits, claims, losses and settlement expenses		Amortization of deferred policy acquisition costs			Other operating expenses 2		Premiums written
2008
Individual Investments	$	506.3	$	738.8	$	647.7		$	188.1
Retirement Plans		638.2		425.9		39.7			147.0
Individual Protection		343.9		502.9		113.5			138.0
Corporate and Other		198.6		149.7		(126.4	)		104.8
Total	$	1,687.0	$	1,817.3	$	674.5		$	577.9
2007
Individual Investments	$	609.1	$	653.9	$	287.1		$	191.6
Retirement Plans		639.4		433.7		26.7			173.6
Individual Protection		330.2		447.6		80.2			147.1
Corporate and Other		397.1		231.2		(25.5	)		87.1
Total	$	1,975.8	$	1,766.4	$	368.5		$	599.4
2006
Individual Investments	$	739.5	$	704.5	$	352.7		$	206.3
Retirement Plans		636.0		440.5		37.9			179.1
Individual Protection		328.2		452.3		69.6			142.4
Corporate and Other		354.8		208.7		(9.9	)		74.5
Total	$	2,058.5	$	1,806.0	$	450.3		$	602.3

1   Unearned premiums and other policy claims and benefits payable are included in Column C amounts.  

2   Allocations of net investment income and certain operating expenses are based on numerous assumptions and estimates, and reported segment operating results would change if different methods were applied.  

See accompanying notes to consolidated financial statements and report of independent registered public accounting firm.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Schedule IV        Reinsurance

As of December 31, 2008, 2007 and 2006 and for each of the years then ended (dollars in millions)

Column A	Column B		Column C		Column D		Column E		Column F
	Gross amount		Ceded to other companies		Assumed from other companies		Net amount		Percentage of amount assumed to net
2008
Life insurance in force	$	167,715.4	$	58,850.8	$	3.8	$	108,868.4	0.0%
Premiums:
Life insurance1	$	348.2	$	64.8	$	0.1	$	283.5	0.0%
Accident and health insurance		182.9		209.3		26.4		—	NM
Total	$	531.1	$	274.1	$	26.5	$	283.5	9.3%
2007
Life insurance in force	$	156,899.3	$	58,529.0	$	4.4	$	98,374.7	0.0%
Premiums:
Life insurance1	$	364.2	$	72.7	$	0.2	$	291.7	0.0%
Accident and health insurance		289.2		316.8		27.6		—	NM
Total	$	653.4	$	389.5	$	27.8	$	291.7	9.5%
2006
Life insurance in force	$	151,109.9	$	58,189.8	$	7.9	$	92,928.0	0.0%
Premiums:
Life insurance1	$	336.4	$	28.4	$	0.3	$	308.3	0.1%
Accident and health insurance		388.9		417.4		28.5		—	NM
Total	$	725.3	$	445.8	$	28.8	$	308.3	9.3%

1   Primarily represents premiums from traditional life insurance and life-contingent immediate annuities and excludes deposits on investment and universal life insurance products.  

See accompanying notes to consolidated financial statements and report of independent registered public accounting firm.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Schedule V        Valuation and Qualifying Accounts

Years ended December 31, 2008, 2007 and 2006 (in millions)

Column A	Column B		Column C				Column D		Column E
Description	Balance at beginning of period		Charged (credited) to costs and expenses		Charged to other accounts		Deductions1		Balance at end of period
2008
Valuation allowances - mortgage loans on real estate	$	23.1	$	19.6	$	—	$	3.2	$	39.5
2007
Valuation allowances - mortgage loans on real estate	$	34.3	$	1.1	$	—	$	12.3	$	23.1
2006
Valuation allowances - mortgage loans on real estate	$	31.1	$	6.0	$	—	$	2.8	$	34.3

1   Amounts represent transfers to real estate owned and recoveries.  

See accompanying notes to consolidated financial statements and report of independent registered public accounting firm.

PART C. OTHER INFORMATION

Item 26.                   Exhibits

(a) Resolution of the Depositor’s Board of Directors authorizing the establishment of the Registrant – Filed previously with registration statement (333-31725) on July 21, 1997 and hereby incorporated by reference.

(b) Custodian Agreements - Not Applicable.

(c) Underwriting or Distribution of contracts between the Depositor and Principal Underwriter – Previously filed with pre-effective amendment number 3 on September 27, 2007 and hereby incorporated by reference.

(d) The form of the contract –Previously filed with pre-effective amendment number 3 on September 27, 2007 and hereby incorporated by reference.

(e) The form of the contract application – Previously filed with pre-effective amendment number 3 on September 27, 2007 and hereby incorporated by reference.

(f) Articles of Incorporation of Depositor – Previously filed with pre-effective amendment number 3 on September 27, 2007 and hereby incorporated by reference.

(g) Form of Reinsurance Contracts - Filed previously with Post-Effective Amendment No. 3 to registration statement (333-46338) and hereby incorporated by reference.

(h) Form of Participation Agreements –

The following Fund Participation Agreements were previously filed on July 17, 2007 with pre-effective amendment number 1 of registration statement (333-140608) under Exhibit 26(h), and are hereby incorporated by reference.

(1) Fund Participation Agreement with AIM Variable Insurance Funds, AIM Advisors, Inc., and AIM Distributors dated January 6, 2003, under document “aimfpa99h1.htm”

(2) Amended and Restated Fund Participation and Shareholder Services Agreement with American Century Investment Services, Inc. dated September 15, 2004, as amended, under document “amcentfpa99h2”

(3) Restated and Amended Fund Participation Agreement with The Dreyfus Corporation dated January 27, 2000, as amended, under document “dreyfusfpa99h3.htm”

(4) Fund Participation Agreement with Federated Insurance Series and Federated Securities Corp. dated April 1, 2006, as amended, under document “fedfpa99h4.htm”

(5) Fund Participation Agreement with Fidelity Variable Insurance Products Fund dated May 1, 1988, as amended, including Fidelity Variable Insurance Products Fund IV and Fidelity Variable Insurance Products Fund V, under document “fidifpa99h5.htm”

(6) Fund Participation Agreement with Fidelity Variable Insurance Products Fund II dated July 15, 1989, as amended, including Fidelity Variable Insurance Products Fund IV and Fidelity Variable Insurance Products Fund V, under document “fidiifpa99h6.htm”

(7) Amended and Restated Fund Participation Agreement with Franklin Templeton Variable Insurance Products Trust and Franklin/Templeton Distributors, Inc. dated May 1, 2003; as amended, under document “frankfpa99h8.htm”

(8) Fund Participation Agreement, Service and Institutional Shares, with Janus Aspen Series, dated December 31, 1999, under document “janusfpa99h9a.htm”

(9) Amended and Restated Fund Participation Agreement with MFS Variable Insurance Trust and Massachusetts Financial Services Company dated February 1, 2003, as amended, under document “mfsfpa99h11.htm”

(12) Fund Participation Agreement with Nationwide Variable Insurance Trust (formerly, Gartmore Variable Insurance Trust) dated February 1,2003, as amended, under document “nwfpa99h12a.htm”

(13) Fund Participation Agreement with Neuberger Berman Advisers Management Trust / Lehman Brothers Advisers Management Trust (formerly, Neuberger Berman Advisers Management Trust) dated January 1, 2006, under document “neuberfpa99h13.htm”

(14) Fund Participation Agreement with Oppenheimer Variable Account Funds and Oppenheimer Funds, Inc. dated April 13, 2007, under document “oppenfpa99h14.htm”

(15) Fund Participation Agreement with T. Rowe Price Equity Series, Inc., T. Rowe Price International Series, Inc., T. Rowe Price Fixed Income Series, Inc., and T. Rowe Price Investment Services, Inc. dated October 1, 2002, as amended, under document “trowefpa99h15.htm”

(16) Fund Participation Agreement with The Universal Institutional Funds, Inc., Morgan Stanley Distribution, Inc., and Morgan Stanley Investment Management, Inc. dated February 1, 2002, as amended, under document “univfpa99h16.htm”

The following Fund Participation Agreements were previously filed on September 27, 2007 with pre-effective amendment number 3 of registration statement (333-137202) under Exhibit 26(h), and are hereby incorporated by reference.  For information regarding payments Nationwide receives from underlying mutual funds, please see the "Information on Underlying Mutual Fund Payments" section of the prospectus and/or the underlying mutual fund prospectuses.

(17) Fund Participation Agreement (Amended and Restated) with Alliance Capital Management L.P. and Alliance-Bernstein Investment Research and Management, Inc. dated June 1, 2003, as document “alliancebernsteinfpa.htm”.

(18) Fund Participation Agreement with BlackRock (formerly FAM Distributors, Inc. and FAM Variable Series Funds, Inc.) dated April 13, 2004, as amended, as document “blackrockfpa.htm”.

(19) Fund Participation Agreement with Davis Variable Account Fund and Davis Distributors, LLC dated August 7, 2007, as document “davisfpa.htm”.

(20) Fund Participation Agreement with DWS Variable Series II (formerly Scudder Variable Series I, Scudder Variable Series II, Scudder Distributors, Inc. and Deutsche Investment Management Americas, Inc.) dated July 1, 2004, as document “dwsfpa.htm”.

(21) Fund Participation with Legg Mason Partners Variable Portfolio I, Inc. (formerly Salomon Brothers Variable Series Funds Inc. and Salomon Brothers Asset Management Inc. dated September, 1999, as amended, as document “leggmasonfpa.htm”.

(22) Fund Participation Agreement with Lincoln Variable Insurance Products Trust, Lincoln Financial Distributors, Inc., and Lincoln Investment Advisors Corporation dated June 5, 2007, as document “lincolnfpa.htm”.

(23) Fund Participation Agreement with Lord Abbett Series Fund, Inc. and Lord Abbett Distributor LLC dated December 31, 2002, as amended, as document “lordabbettfpa.htm”.

(24) Fund Participation Agreement with PIMCO Variable Insurance Trust and PIMCO Fund Distributors, LLC dated March 28, 2002, as amended, as document “pimcofpa.htm”.

(25) Fund Participation Agreement with Pioneer Variable Contracts Trust, Pioneer Investment Management, Inc. and Pioneer Fund Distributor, Inc., dated September 27, 2002, as amended, as document “pioneerfpa.htm”.

(26) Fund Participation Agreement with Royce & Associates dated February 14, 2002, as amended, as document “roycefpa.htm”.

(27) Fund Participation Agreement Van Eck Investment Trust, Van Eck Associates Corporation, Van Eck Securities Corporation dated September 1, 1989, as amended, as document “vaneckfpa.htm”.

(28) Fund Participation Agreement with Waddell & Reed Services Company, Waddell & Reed, Inc., and W&R Target Funds, Inc. dated December 1, 2000, as amended, as document “waddellreedfpa.htm”.

(29) Fund Participation Agreement with Wells Fargo Management, LLC, Stephens, Inc. dated November 15, 2004, as amended, as document “wellsfargofpa.htm”.

(i) Administrative Contracts

The following Administrative Agreements were previously filed on July 17, 2007 with pre-effective amendment number 1 of registration statement (333-140608) under Exhibit (i), and are hereby incorporated by reference.

(1)(a) Administrative Services Agreement with AIM Advisors, Inc. dated July 1, 2005, as amended, under document “aimasa99i1a.htm”

(1)(b) Financial Support Agreement with AIM Variable Insurance Funds dated July 1, 2005, under document “aimasa99i1b.htm”

(2) Amended and Restated Fund Participation and Shareholder Services Agreement with American Century Investment Services, Inc. dated September 15, 2004, as amended.  See Exhibit B for information related to administrative services, under document "amcentasa99i2.htm”

(3) Restated Administrative Services Agreement with The Dreyfus Corporation dated June 1, 2003, as amended, and 12b-1 letter agreement dated June 1, 2003, as amended, under document “dreyfusasa99i3.htm”

(4)(a) Dealer Agreement with Federated Securities Corp dated October 26, 2006, under document “fedasa99i4a.htm”

(4)(b) Fund Participation Agreement with Federated Insurance Series and Federated Securities Corp. dated April 1, 2006, as amended.  See Exhibit B of Fund Participation Agreement for information related to administrative services, under document “fedasa99i4b.htm”

(5)(a) Administrative Service Agreement with Fidelity Investments Institutional Operations Company, Inc. dated April 1, 2002, as amended, HTML file name “fidiiiasa99i5a.htm”

(5)(b) Service Contract, with Fidelity Distributors Corporation dated June 18, 2002, as amended, under document “fidiiiasa99i5b.htm” as part of Exhibit 99.

(6) Administrative Services Agreement with Franklin Templeton Services, LLC dated May 1, 2003, as amended, under document “frankasa99i6.htm”

(7) Distribution and Shareholder Services Agreement with Janus Distributors, Inc. dated December 31, 1999, under document “janusasa99i7.htm”

(8) Amended and Restated Fund Participation and Shareholder Services Agreement with MFS Variable Insurance Trust and Massachusetts Financial Service Company dated February 1, 2003, as amended, under document “mfsasa99i9.htm”

(9) Fund Participation Agreement with Nationwide Variable Insurance Trust (formerly, Gartmore Variable Insurance Trust) dated May 2, 2005, as amended.  See Exhibit B and Exhibit E for information related to administrative services, under document “nwasa99i10.htm”

(10) Fund Participation Agreement with Neuberger Berman Advisers Management Trust / Lehman Brothers Advisers Management Trust (formerly, Neuberger Berman Advisers Management Trust) dated January 1, 2006.  See Exhibit D for information related to administrative services, under document “neuberasa99i11.htm”

(11) Revenue Sharing Agreement with Oppenheimer Variable Account Funds dated April 13, 2006, under document “oppenasa99i12.htm”

(12) Administrative Services Letter Agreement with T. Rowe Price Associates, Inc. and T. Rowe Price International, Inc. dated October 1, 2002, as amended, under document “troweasa99i13.htm”

(13) Administrative Services Agreement with Morgan Stanley Distribution, Inc. (The Universal Institutional Funds, Inc.) dated May 5, 2005, as amended, under document “univasa99i14.htm”

The following Administrative Agreements were previously filed on September 27, 2007 with pre-effective amendment number 3 of registration statement (333-137202) under Exhibit (i), and are hereby incorporated by reference.  For information regarding payments Nationwide receives from underlying mutual funds, please see the "Information on Underlying Mutual Fund Payments" section of the prospectus and/or the underlying mutual fund prospectuses.

(1) Administrative Services Agreement with Alliance Fund Distributors, Inc. dated June 3, 2003,as document “alliancebernsteinasa.htm”.

(2) Administrative Services Agreement with American Funds Distributors, Inc. and Capital Research and Management Company dated July 20, 2005,as document “americanfundasa.htm”.

(3) Administrative Services Agreement with BlackRock (formerly FAM Variable Series Funds, Inc. and FAM Distributors, Inc.) dated April 13, 2004, as amended, as document “blackrockasa.htm”.

(4) Administrative Service Agreement with Davis Distributors, LLC dated August 7, 2007, as document “davisasa.htm”.

(5) Fund Participation Agreement with DWS Variable Series II (formerly Scudder Variable Series I, Scudder Variable Series II, Scudder Distributors, Inc. and Deutsche Investment Management Americas, Inc.) dated July 1, 2004, as document “dwsfpa.htm”.  See Article 2.3 for information on administrative services.

(6) Administrative Services Agreement with Legg Mason Partners Variable Portfolios I, Inc. (formerly Salomon Brothers Asset Management Inc.) dated September 1999, as amended, as document “leggmasonasa.htm”.

(7)(a) Administrative Services Agreement with Lincoln Investment Advisors Corporation dated June 5, 2007, as document “lincolnasaa.htm”.

(7)(b) Distribution Services Agreement between Nationwide Investment Services Corporation (general distributor) and Lincoln Financial Distributors, Inc. dated June 5, 2007, as document “lincolnasab.htm”.

(8) Administrative Services Agreement with Lord Abbett Series Fund, Inc. dated December 31, 2002, as amended, as document “lordabbettasa.htm”.

(9)(a) Administrative Services Agreement with Pacific Investment Management Company LLC dated March 28, 2002, as amended, as document “pimcoasaa.htm”.

(9)(b) Administrative Services Agreement with PIMCO Variable Insurance Trust dated March 28, 2002, as amended, as document “pimcoasab.htm”.

(10) Fund Participation Agreement with Pioneer Variable Contracts Trust, Pioneer Investment Management, Inc. and Pioneer Fund Distributor, Inc., dated September 27, 2002, as amended, as document “pioneerfpa.htm”.  See Schedule B for information on administrative services.

(11) Administrative Services Agreement with Putnam Retail Management Limited Partnership dated August 1, 2006, as amended, as document “putnamasa.htm”.

(12) Fund Participation Agreement with Royce & Associates dated February 14, 2002, as amended, as document “roycefpa.htm”.  See Exhibits C and D for information on administrative services.

(13) Administrative Services Agreement with Van Eck Securities Corporation dated November 3, 1997, as amended, as document “vaneckasa.htm”.

(14) Administrative Services Agreement with Waddell & Reed, Inc. dated December 1, 2000, as amended, as document “waddellreedasa.htm”.

(15) Administrative Services Agreement with Wells Fargo Funds Management, LLC and Stephens, Inc. dated November 15, 2004, as amended, as document “wellsfargoasa.htm”.

(j) Other Material Contracts - Not Applicable.

(k) Opinion of Counsel – Filed previously with registration statement (333-137202) on September 8, 2006 under document “legalopinion.htm” and hereby incorporated by reference.

(l) Actuarial Opinion - Not Applicable.

(m)  Calculation - Not Applicable.

(n)  Consent of Independent Registered Public Accounting Firm – Attached hereto.

(o) Omitted Financial Statements - Not Applicable.

(p) Initial Capital Agreements - Not Applicable.

(q)  Redeemability Exemption– Filed previously with registration statement (333-140608) on July 17, 2007 under document “redeemexempt.htm” and hereby incorporated by reference.

(99) Power of Attorney – Attached hereto.

Item 27. Directors and Officers of the Depositor

President and Chief Operating Officer	Mark R. Thresher
Executive Vice President and Chief Legal and Governance Officer	Patricia R. Hatler
Executive Vice President-Chief Administrative Officer	Terri L. Hill
Executive Vice President-Chief Information Officer	Michael C. Keller
Executive Vice President-Chief Marketing Officer	James R. Lyski
Executive Vice President-Finance	Lawrence A. Hilsheimer
Senior Vice President and Treasurer	Harry H. Hallowell
Senior Vice President-Associate Services	Robert J. Puccio
Senior Vice President-Chief Compliance Officer	Carol Baldwin Moody
Senior Vice President-Chief Financial Officer	Timothy G. Frommeyer
Senior Vice President-Chief Investment Officer	Gail G. Snyder
Senior Vice President-Chief Litigation Counsel	Randolph C. Wiseman
Senior Vice President-Chief Risk Officer	Michael W. Mahaffey
Senior Vice President-CIO NSC	Robert J. Dickson
Senior Vice President-CIO Strategic Investments	Gary I. Siroko
Senior Vice President-Customer Insight/Analytic	Paul D. Ballew
Senior Vice President-Customer Relationships	David R. Jahn
Senior Vice President-Division General Counsel	Roger A. Craig
Senior Vice President-Division General Counsel	Thomas W. Dietrich
Senior Vice President-Division General Counsel	Sandra L. Neely
Senior Vice President-Government Relations	Jeffrey D. Rouch
Senior Vice President-Head of Taxation	Pamela A. Biesecker
Senior Vice President-Health and Productivity	Holly R. Snyder
Senior Vice President-Human Resources	Kim R. Geyer
Senior Vice President-Individual Investments Business Head	Eric S. Henderson
Senior Vice President-Individual Protection Business Head	Peter A. Golato
Senior Vice President-PCIO Information Technology	Srinivas Koushik
Senior Vice President-NF Marketing	Gordon E. Hecker
Senior Vice President-NF Systems	Susan Gueli
Senior Vice President-NFN Retail Distribution	Michael A. Hamilton
Senior Vice President-Non-Affiliated Sales	John L. Carter
Senior Vice President-NW Retirement Plans	William S. Jackson
Senior Vice President-President – Nationwide Bank	Anne L. Arvia
Senior Vice President-President-Nationwide Funds Group	Michael S. Spangler
Senior Vice President-Property and Casualty Commercial/Farm Product Pricing	W. Kim Austen
Senior Vice President-PCIO Human Resources	Gale V. King
Senior Vice President-Property and Casualty Personal Lines Product Pricing	J. Lynn Greenstein
Senior Vice President	Kai V. Monahan
Associate Vice President – NF Human Resources	Lydia P. Migitz
Associate Vice President-Assistant Secretary	Kathy R. Richards
Director	Timothy Frommeyer
Director	Peter Golato
Director	Lawrence Hilsheimer
Director	Mark R. Thresher
Director	Stephen S. Rasmussen

The business address of the Directors and Officers of the Depositor is:

One Nationwide Plaza, Columbus, Ohio 43215

Item 28.                 Persons Controlled by or Under Common Control with the Depositor or Registrant.

*	Subsidiaries for which separate financial statements are filed
**	Subsidiaries included in the respective consolidated financial statements
***	Subsidiaries included in the respective group financial statements filed for unconsolidated subsidiaries
****	Other subsidiaries

COMPANY	STATE/COUNTRY OF ORGANIZATION	NO. VOTING SECURITIES (see attached chart unless otherwise indicated)	PRINCIPAL BUSINESS
1492 Capital, LLC	Ohio		The company acts as an investment holding company.
1717 Brokerage Services, Inc.	Pennsylvania		The company is a multi-state licensed insurance agency.
AGMC Reinsurance, Ltd.	Turks & Caicos Islands		The company is in the business of reinsurance of mortgage guaranty risks.
ALLIED General Agency Company	Iowa		The company acts as a managing general agent and surplus lines broker for property and casualty insurance products.
ALLIED Group, Inc.	Iowa		The company is a property and casualty insurance holding company.
ALLIED Property and Casualty Insurance Company	Iowa		The company underwrites general property and casualty insurance.
ALLIED Texas Agency, Inc.	Texas		The company acts as a managing general agent to place personal and commercial automobile insurance with Colonial County Mutual Insurance Company for the independent agency companies.
AMCO Insurance Company	Iowa		The company underwrites general property and casualty insurance.
American Marine Underwriters, Inc.	Florida		The company is an underwriting manager for ocean cargo and hull insurance.
Atlantic Floridian Insurance Company	Ohio		The company writes personal lines residential property insurance in the State of Florida.
Atlantic Insurance Company	Texas		The company operates as a multi-line insurance company.
Audenstar Limited	England		The company is an investment holding company.
Champions of the Community, Inc.	Ohio		The company raises money to enable it to make gifts and grants to charitable organizations.
Colonial County Mutual Insurance Company*	Texas		The company underwrites non-standard automobile and motorcycle insurance and various other commercial liability coverages in Texas.
Crestbrook Insurance Company*	Ohio		The company is an Ohio-based multi-line insurance corporation that is authorized to write personal, automobile, homeowners and commercial insurance.
Depositors Insurance Company	Iowa		The company underwrites general property and casualty insurance.

COMPANY	STATE/COUNTRY OF ORGANIZATION	NO. VOTING SECURITIES (see attached chart unless otherwise indicated)	PRINCIPAL BUSINESS
DVM Insurance Agency, Inc.	California		The company places pet insurance business not written by Veterinary Pet Insurance Company outside of California with National Casualty Company.
Farmland Mutual Insurance Company	Iowa		The company provides property and casualty insurance primarily to agricultural businesses.
Nationwide Better Health, Inc.  (fka Future Health Holding Company)	Maryland		The company provides population health management.
Gates, McDonald & Company*	Ohio		The company provides services to employers for managing workers’ and unemployment compensation matters and employee leave administration.
Gates, McDonald & Company of New York, Inc.	New York		The company provides workers’ compensation and self-insured claims administration services to employers with exposure in New York.
GatesMcDonald Health Plus Inc.	Ohio		The company provides medical management and cost containment services to employers.
Insurance Intermediaries, Inc.	Ohio		The company is an insurance agency and provides commercial property and casualty brokerage services.
Life REO Holdings, LLC	Ohio		The company is an investment company.
Lone Star General Agency, Inc.	Texas		The company acts as general agent to market nonstandard automobile and motorcycle insurance for Colonial County Mutual Insurance Company.
National Casualty Company	Wisconsin		The company underwrites various property and casualty coverage, as well as some individual and group accident and health insurance.
National Casualty Company of America, Ltd.	England		This is a limited liability company organized for the purpose of carrying on the business of insurance, reinsurance, indemnity, and guarantee of various kinds.  The company is currently inactive.
Nationwide Advantage Mortgage Company*	Iowa		The company makes residential mortgage loans.
Nationwide Affinity Insurance Company of America*	Ohio		The company is a property and casualty insurer that writes personal lines business.
Nationwide Agribusiness Insurance Company	Iowa		The company provides property and casualty insurance primarily to agricultural businesses.
Nationwide Arena, LLC*	Ohio		The purpose of the company is to develop Nationwide Arena and to engage in related development activity.
Nationwide Asset Management Holdings	England and Wales		The company operates as an investment holding company.
Nationwide Asset Management, LLC	Ohio		The company provides investment advisory services as a registered investment advisor to affiliated and non-affiliated clients.

COMPANY	STATE/COUNTRY OF ORGANIZATION	NO. VOTING SECURITIES (see attached chart unless otherwise indicated)	PRINCIPAL BUSINESS
Nationwide Assurance Company	Wisconsin		The company underwrites non-standard automobile and motorcycle insurance.
Nationwide Bank*	United States		This is a federal savings bank chartered by the Office of Thrift Supervision in the United States Department of Treasury to exercise deposit, lending, agency, custody and fiduciary powers and to engage in activities permissible for federal savings banks under the Home Owners’ Loan Act of 1933.
Nationwide Better Health Holding Company (fka Nationwide Better Health, Inc.)	Ohio		The company provides health management services.
Nationwide Cash Management Company	Ohio		The company buys and sells investment securities of a short-term nature as the agent for other corporations, foundations and insurance company separate accounts.
Nationwide Community Development Corporation, LLC	Ohio		The company holds investments in low-income housing funds.
Nationwide Corporation	Ohio		The company acts primarily as a holding company for entities affiliated with Nationwide Mutual Insurance.
Nationwide Document Solutions, Inc.	Iowa		The company provides general printing services to its affiliated companies as well as to certain unaffiliated companies.
Nationwide Emerging Managers, LLC	Delaware		The company acquires and holds interests in registered investment advisors and provides investment management services.
Nationwide Exclusive Agent Risk Purchasing Group, LLC	Ohio		The company’s purpose is to provide a mechanism for the purchase of group liability insurance for insurance agents operating nationwide.
Nationwide Financial Assignment Company	Ohio		The company is an administrator of structured settlements.
Nationwide Financial Institution Distributors Agency, Inc.	Delaware		The company is an insurance agency.
Nationwide Financial Services Capital Trust	Delaware		The trust’s sole purpose is to issue and sell certain securities representing individual beneficial interests in the assets of the trust.
Nationwide Financial Services, Inc.*	Delaware		The company acts primarily as a holding company for companies within the Nationwide organization that offer or distribute long-term savings and retirement products.
Nationwide Financial Structured Products, LLC	Ohio		The company captures and reports the results of the structured products business unit.
Nationwide Foundation*	Ohio		The company contributes to non-profit activities and projects.
Nationwide Fund Advisors (fka Gartmore Mutual Fund Capital Trust)	Delaware		The trust acts as a registered investment advisor.

COMPANY	STATE/COUNTRY OF ORGANIZATION	NO. VOTING SECURITIES (see attached chart unless otherwise indicated)	PRINCIPAL BUSINESS
Nationwide Fund Distributors LLC (successor to Gartmore Distribution Services, Inc.)	Delaware		The company is a limited purpose broker-dealer.
Nationwide Fund Management LLC (successor to Gartmore Investors Services, Inc.)	Delaware		The company provides administration, transfer and dividend disbursing agent services to various mutual fund entities.
Nationwide General Insurance Company	Ohio		The company transacts a general insurance business, except life insurance, and primarily provides automobile and fire insurance to select customers.
Nationwide Global Funds	Luxembourg		The exclusive purpose of the Company is to invest the funds available to it in transferable securities and other assets permitted by law with the aim of spreading investment risks and affording its shareholders the results of the management of its assets.
Nationwide Global Holdings, Inc.	Ohio		The company is a holding company for the international operations of Nationwide.
Nationwide Global Ventures, Inc.	Delaware		The company acts as a holding company.
Nationwide Indemnity Company*	Ohio		The company is involved in the reinsurance business by assuming business from Nationwide Mutual Insurance Company and other insurers within the Nationwide insurance organization.
Nationwide Insurance Company of America	Wisconsin		The company is an independent agency personal lines underwriter of property and casualty insurance.
Nationwide Insurance Company of Florida*	Ohio		The company transacts general insurance business, except life insurance.
Nationwide International Underwriters	California		The company is a special risks, excess and surplus lines under­writing manager.
Nationwide Investment Advisors, LLC	Ohio		The company provides investment advisory services.
Nationwide Investment Services Corporation**	Oklahoma		This is a limited purpose broker-dealer and distributor of variable annuities and variable life products for Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company. The company also provides educational services to retirement plan sponsors and its participants.
Nationwide Life and Annuity Company of America**	Delaware		The company provides individual variable and traditional life insurance and other investment products. The company also maintains blocks of individual variable and fixed annuities products.
Nationwide Life and Annuity Insurance Company**	Ohio		The company engages in underwriting life insurance and granting, purchasing and disposing of annuities.
Nationwide Life Insurance Company*	Ohio		The company pro­vides individual life insurance, group life and health insurance, fixed and variable annuity products and other life insurance products.

COMPANY	STATE/COUNTRY OF ORGANIZATION	NO. VOTING SECURITIES (see attached chart unless otherwise indicated)	PRINCIPAL BUSINESS
Nationwide Life Insurance Company of America*	Pennsylvania		The company is a financial services provider that sells individual traditional and variable life insurance products, group annuity products and other investment products. The Company also maintains blocks of individual variable and fixed annuities and a block of direct response-marketed life and health insurance products.
Nationwide Lloyds	Texas		The company markets commercial and property insurance in Texas.
Nationwide Mutual Capital, LLC	Ohio		The company acts as a private equity fund investing in companies for investment purposes and to create strategic opportunities for Nationwide.
Nationwide Mutual Capital I, LLC*	Delaware		The business of the company is to achieve long term capital appreciation through a portfolio of primarily domestic equity investments in financial service and related companies.
Nationwide Mutual Fire Insurance Company	Ohio		The company engages in a general insurance and reinsurance business, except life insurance.
Nationwide Mutual Insurance Company*	Ohio		The company engages in a general insurance and reinsurance business, except life insurance.
Nationwide Private Equity Fund, LLC	Ohio		The company invests in private equity funds.
Nationwide Property and Casualty Insurance Company	Ohio		The company engages in a general insurance business, except life insurance.
Nationwide Property Protection Services, LLC	Ohio		The company provides alarm systems and security guard services.
Nationwide Provident Holding Company*	Pennsylvania		The company is a holding company for non-insurance subsidiaries.
Nationwide Realty Investors, Ltd.*	Ohio		The company is engaged in the business of developing, owning and operating real estate and real estate investment.
Nationwide Retirement Solutions, Inc.*	Delaware		The company markets and administers deferred compensation plans for public employees.
Nationwide Retirement Solutions, Inc. of Arizona	Arizona		The company markets and administers deferred compensation plans for public employees.
Nationwide Retirement Solutions, Inc. of Ohio	Ohio		The company provides retirement products, marketing and education and administration to public employees.
Nationwide Retirement Solutions, Inc. of Texas	Texas		The company markets and administers deferred compensation plans for public employees.
Nationwide Retirement Solutions, Insurance Agency, Inc.	Massachusetts		The company markets and administers deferred compensation plans for public employees.
Nationwide SA Capital Trust	Delaware		The trust acts as a registered investment advisor.
Nationwide Sales Solutions, Inc.	Iowa		The company engages in the direct marketing of property and casualty insurance products.
Nationwide Securities, LLC	Delaware		The company is a registered broker-dealer and provides investment management and administrative services.

COMPANY	STATE/COUNTRY OF ORGANIZATION	NO. VOTING SECURITIES (see attached chart unless otherwise indicated)	PRINCIPAL BUSINESS
Nationwide Separate Accounts, LLC	Delaware		The company has deregistered as an investment advisor and acts as a holding company.
Nationwide Services Company, LLC	Ohio		The company performs shared services functions for the Nationwide organization.
Nationwide Services For You, LLC	Ohio		The Company provides consumer services that are related to the business of insurance, including services that help consumers prevent losses and mitigate risks.
Newhouse Capital Partners, LLC	Delaware		The company is an investment holding company.
Newhouse Capital Partners II, LLC	Delaware		The company is an investment holding company.
Newhouse Special Situations Fund I, LLC	Delaware		The company is currently inactive.
NF Reinsurance Ltd.*	Bermuda		The company serves as a captive reinsurer for Nationwide Life Insurance Company’s universal life, term life and annuity business.
NFS Distributors, Inc.	Delaware		The company acts primarily as a holding company for Nationwide Financial Services, Inc.’s distribution companies.
NMC CPC WT Investment, LLC	Delaware		The business of the company is to hold and exercise rights in a specific private equity investment.
NWD Asset Management Holdings, Inc.	Delaware		The company is an investment holding company.
NWD Investment Management, Inc.	Delaware		The company acts as a holding company and provides other business services for the NWD Investments group of companies.
NWD Management & Research Trust	Delaware		The company acts as a holding company for the NWD Investments group of companies and as a registered investment advisor.
NWD MGT, LLC	Delaware		The company is a passive investment holder in Newhouse Special Situations Fund I, LLC for the purpose of allocation of earnings to the NWD Investments management team as it relates to the ownership and management of Newhouse Special Situations Fund I, LLC.
NWM Merger, Sub Inc.	Delaware		This company was merged with and into Nationwide Financial Services, Inc. on January 1, 2009 as part of the acquisition of the publicly held shares of Nationwide Financial Services, Inc.
Pension Associates, Inc.	Wisconsin		The company provides pension plan administration and record keeping services, and pension plan and compensation consulting.
Premier Agency, Inc.	Iowa		The company is an insurance agency.
Privilege Underwriters, Inc.	Florida		The company acts as a holding company for the PURE Group of insurance companies.
Privilege Underwriters, Reciprocal Exchange	Florida		The company acts as a reciprocal insurance company.

COMPANY	STATE/COUNTRY OF ORGANIZATION	NO. VOTING SECURITIES (see attached chart unless otherwise indicated)	PRINCIPAL BUSINESS
Pure Insurance Company	Florida		The company acts as a captive reinsurance company.
Pure Risk Management, LLC	Florida		The company acts as an attorney-in-fact for Privilege Underwriters Reciprocal Exchange.
Registered Investment Advisors Services, Inc.	Texas		The company is a technology company that facilitates third-party money management services for registered investment advisors.
Retention Alternatives, Ltd.*	Bermuda		The company is a captive insurer and writes first dollar insurance policies in workers’ compensation, general liability and automobile liability for its affiliates in the United States.
Riverview International Group, Inc.	Delaware		The company is an insurance company.
RP&C International, Inc.	Ohio		The company is an investment-banking firm that provides specialist advisory services and innovative financial solutions to public and private companies internationally.
Scottsdale Indemnity Company	Ohio		The company is engaged in a general insurance business, except life insurance.
Scottsdale Insurance Company	Ohio		The company primarily provides excess and surplus lines of property and casualty insurance.
Scottsdale Surplus Lines Insurance Company	Arizona		The company provides excess and surplus lines coverage on a non-admitted basis.
TBG Danco Insurance Services Corporation	California		The corporation provides life insurance and individual executive estate planning.
THI Holdings (Delaware), Inc.*	Delaware		The company acts as a holding company for subsidiaries of the Nationwide group of companies.
Titan Auto Insurance of New Mexico, Inc.	New Mexico		The company is an insurance agency that operates employee agent storefronts.
Titan Indemnity Company	Texas		The company is a multi-line insurance company and is operating primarily as a property and casualty insurance company.
Titan Insurance Company	Michigan		The company is a property and casualty insurance company.
Titan Insurance Services, Inc.	Texas		The company is a Texas grandfathered managing general agency.
Veterinary Pet Insurance Company*	California		The company provides pet insurance.
Victoria Automobile Insurance Company	Indiana		The company is a property and casualty insurance company.
Victoria Fire & Casualty Company	Ohio		The company is a property and casualty insurance company.
Victoria National Insurance Company	Ohio		The company is a property and casualty insurance company.
Victoria Select Insurance Company	Ohio		The company is a property and casualty insurance company.
Victoria Specialty Insurance Company	Ohio		The company is a property and casualty insurance company.

COMPANY	STATE/COUNTRY OF ORGANIZATION	NO. VOTING SECURITIES (see attached chart unless otherwise indicated)	PRINCIPAL BUSINESS
VPI Services, Inc.	California		The company operates as a nationwide pet registry service for holders of Veterinary Pet Insurance Company policies, including pet indemnification and a lost pet recovery program.
Washington Square Administrative Services, Inc.	Pennsylvania		The company provides administrative services to Nationwide Life and Annuity Company of America.
Western Heritage Insurance Company	Arizona		The company underwrites excess and surplus lines of property and casualty insurance.
Whitehall Holdings, Inc.	Texas		The company acts as a holding company for the Titan group of agencies.
W.I. of Florida (d.b.a. Titan Auto Insurance)	Florida		The company is an insurance agency and operates as an employee agent storefront for Titan Indemnity Company in Florida.

	COMPANY	STATE/COUNTRY OF ORGANIZATION	NO. VOTING SECURITIES (see attached chart  unless otherwise indicated)	PRINCIPAL BUSINESS
*	MFS Variable Account	Ohio		Issuer of Annuity Contracts
*	Nationwide Multi-Flex Variable Account	Ohio		Issuer of Annuity Contracts
*	Nationwide VA Separate Account-A	Ohio		Issuer of Annuity Contracts
*	Nationwide VA Separate Account-B	Ohio		Issuer of Annuity Contracts
*	Nationwide VA Separate Account-C	Ohio		Issuer of Annuity Contracts
*	Nationwide VA Separate Account-D	Ohio		Issuer of Annuity Contracts
*	Nationwide Variable Account	Ohio		Issuer of Annuity Contracts
*	Nationwide Variable Account-II	Ohio		Issuer of Annuity Contracts
*	Nationwide Variable Account-3	Ohio		Issuer of Annuity Contracts
*	Nationwide Variable Account-4	Ohio		Issuer of Annuity Contracts
*	Nationwide Variable Account-5	Ohio		Issuer of Annuity Contracts
*	Nationwide Variable Account-6	Ohio		Issuer of Annuity Contracts
*	Nationwide Variable Account-7	Ohio		Issuer of Annuity Contracts
*	Nationwide Variable Account-8	Ohio		Issuer of Annuity Contracts
*	Nationwide Variable Account-9	Ohio		Issuer of Annuity Contracts
*	Nationwide Variable Account-10	Ohio		Issuer of Annuity Contracts
*	Nationwide Variable Account-11	Ohio		Issuer of Annuity Contracts
*	Nationwide Variable Account-12	Ohio		Issuer of Annuity Contracts
*	Nationwide Variable Account-13	Ohio		Issuer of Annuity Contracts
*	Nationwide Variable Account-14	Ohio		Issuer of Annuity Contracts
	Nationwide Variable Account-15	Ohio		Issuer of Annuity Contracts
	Nationwide Variable Account-16	Ohio		Issuer of Annuity Contracts
	Nationwide Variable Account-17	Ohio		Issuer of Annuity Contracts
*	Nationwide Provident VA Separate Account 1	Pennsylvania		Issuer of Annuity Contracts
*	Nationwide Provident VA Separate Account A	Delaware		Issuer of Annuity Contracts
	Nationwide VL Separate Account-A	Ohio		Issuer of Life Insurance Policies
	Nationwide VL Separate Account-B	Ohio		Issuer of Life Insurance Policies
*	Nationwide VL Separate Account-C	Ohio		Issuer of Life Insurance Policies
*	Nationwide VL Separate Account-D	Ohio		Issuer of Life Insurance Policies
*	Nationwide VL Separate Account-G	Ohio		Issuer of Life Insurance Policies
*	Nationwide VLI Separate Account	Ohio		Issuer of Life Insurance Policies
*	Nationwide VLI Separate Account-2	Ohio		Issuer of Life Insurance Policies
*	Nationwide VLI Separate Account-3	Ohio		Issuer of Life Insurance Policies
*	Nationwide VLI Separate Account-4	Ohio		Issuer of Life Insurance Policies
*	Nationwide VLI Separate Account-5	Ohio		Issuer of Life Insurance Policies
*	Nationwide VLI Separate Account-6	Ohio		Issuer of Life Insurance Policies
*	Nationwide VLI Separate Account-7	Ohio		Issuer of Life Insurance Policies
*	Nationwide Provident VLI Separate Account 1	Pennsylvania		Issuer of Life Insurance Policies
*	Nationwide Provident VLI Separate Account A	Delaware		Issuer of Life Insurance Policies

Item 29. Indemnification

Ohio's General Corporation Law expressly authorizes and Nationwide’s Amended and Restated Code of Regulations provides for indemnification by Nationwide of any person who, because such person is or was a director, officer or employee of Nationwide was or is a party; or is threatened to be made a party to:

o   any threatened, pending or completed civil action, suit or proceeding;

o   any threatened, pending or completed criminal action, suit or proceeding;

o   any threatened, pending or completed administrative action or proceeding;

o   any threatened, pending or completed investigative action or proceeding.

The indemnification will be for actual and reasonable expenses, including attorney's fees, judgments, fines and amounts paid in settlement by such person in connection with such action, suit or proceeding, to the extent and under the circumstances permitted by the Ohio's General Corporation Law.

Although Nationwide is of the opinion that the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding is permitted, Nationwide has been informed that in the opinion of the Securities and Exchange Commission the indemnification of directors, officers or persons controlling Nationwide for liabilities arising under the Securities Act of 1933 (“Act”) is against public policy as expressed in the Act and is, therefore, unenforceable.  In the event that a claim for indemnification against such liabilities is asserted by a director, officer or controlling person in connection with the securities being registered, the registrant will submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act. Nationwide and the directors, officers and/or controlling persons will be governed by the final adjudication of such issue.  Nationwide will not be required to seek the court’s determination if, in the opinion of Nationwide’s counsel, the matter has been settled by controlling precedent.

Item 30.           Principal Underwriter

(a)   Nationwide Investment Services Corporation ("NISC") serves as principal underwriter and general distributor for the following separate investment accounts of Nationwide or its affiliates:

MFS Variable Account	Nationwide VA Separate Account-D
Multi-Flex Variable Account	Nationwide VLI Separate Account
Nationwide Variable Account	Nationwide VLI Separate Account-2
Nationwide Variable Account-II	Nationwide VLI Separate Account-3
Nationwide Variable Account-3	Nationwide VLI Separate Account-4
Nationwide Variable Account-4	Nationwide VLI Separate Account-5
Nationwide Variable Account-5	Nationwide VLI Separate Account-6
Nationwide Variable Account-6	Nationwide VLI Separate Account-7
Nationwide Variable Account-7	Nationwide VL Separate Account-C
Nationwide Variable Account-8	Nationwide VL Separate Account-D
Nationwide Variable Account-9	Nationwide VL Separate Account-G
Nationwide Variable Account-10	Nationwide Provident VA Separate Account 1
Nationwide Variable Account-11	Nationwide Provident VA Separate Account A
Nationwide Variable Account-12	Nationwide Provident VLI Separate Account 1
Nationwide Variable Account-13	Nationwide Provident VLI Separate Account A
Nationwide Variable Account-14
Nationwide VA Separate Account-A
Nationwide VA Separate Account-B
Nationwide VA Separate Account-C

(b) Directors and Officers of NISC:

President	Robert O. Cline
Senior Vice President, Treasurer and Director	James D. Benson
Vice President	Charles E. Riley
Vice President-Chief Compliance Officer	James J. Rabenstine
Associate Vice President and Secretary	Kathy R. Richards
Associate Vice President-Financial Systems & Treasury Services and Assistant Treasurer	Terry C. Smetzer
Associate Vice President	John J. Humphries, Jr.
Assistant Secretary	Mark E. Hartman
Director	John L. Carter
Director	Eric S. Henderson

The business address of the Directors and Officers of Nationwide Investment Services Corporation is:

One Nationwide Plaza, Columbus, Ohio 43215

(c)

Name of Principal Underwriter	Net Underwriting Discounts and Commissions	Compensation on Redemption or Annuitization	Brokerage Commissions	Compensation
Nationwide Investment Services Corporation	N/A	N/A	N/A	N/A

Item 31.          Location of Accounts and Records

Timothy G. Frommeyer

Nationwide Life Insurance Company

One Nationwide Plaza

Columbus, OH  43215

Item 32.          Management Services

Not Applicable.

Item 33. Fee Representation

Nationwide Life Insurance Company represents that the fees and charges deducted under the contract in the aggregate are reasonable in relation to the services rendered, the expenses expected to be incurred and risks assumed by Nationwide Life Insurance Company.

SIGNATURES

As required by the Securities Act of 1933, and the Investment Company Act of 1940, the Registrant, NATIONWIDE VLI SEPARATE ACCOUNT-4, certifies that it meets the requirements of the Securities Act Rule 485(b) for effectiveness of this Registration Statement and has caused this Registration Statement to be signed on its behalf in the City of Columbus, and State of Ohio, on this 12 th   day of August , 2009.

NATIONWIDE VLI SEPARATE ACCOUNT-4

(Registrant)

NATIONWIDE LIFE INSURANCE COMPANY

(Depositor)

By: /s/ TIMOTHY D. CRAWFORD

Timothy D. Crawford

As required by the Securities Act of 1933, the Registration Statement has been signed by the following persons in the capacities indicated on this 12 th   day of August , 2009.

MARK R. THRESHER
Mark R. Thresher, President, Chief Operating Officer and Director
LAWRENCE A. HILSHEIMER
Lawrence A. Hilsheimer, Executive Vice President-Finance and Director
TIMOTHY G. FROMMEYER
Timothy G. Frommeyer, Senior Vice President-Chief Financial Officer and Director
PETER A. GOLATO
Peter A. Golato, Senior Vice President-Individual Protection Business Head and Director
STEPHEN S. RASMUSSEN
Stephen S. Rasmussen, Director
	By /s/   Timothy D. Crawford
	Timothy D. Crawford
	Attorney-in-Fact

EX-99.N OTH OPINIONS

Consent of Independent Registered Public Accounting Firm

The Board of Directors

Nationwide Life Insurance Company:

We consent to the use of our reports with respect to Nationwide VLI Separate Account-4 dated March 13, 2009 and Nationwide Life Insurance Company and subsidiaries dated March 2, 2009 included herein, and to the reference to our firm under the heading “Independent Registered Public Accounting Firm” in the Statement of Additional Information (File No. 333-137202, Post-Effective Amendment No. 7).  Our report for Nationwide Life Insurance Company and subsidiaries refers to the adoption of the American Institute of Certified Public Accountants’ Statement of Position 05-1, Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection with Modifications or Exchanges of Insurance Contracts, in 2007.

/s/ KPMG LLP

Columbus, Ohio

August 10, 2009

EX-99

POWER OF ATTORNEY

Each of the undersigned as directors and/or officers of NATIONWIDE LIFE INSURANCE COMPANY and NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY, both Ohio corporations, which have filed or will file with the U.S. Securities and Exchange Commission under the provisions of the Securities Act of 1933, as amended; the Investment Company Act of 1940, as amended; and, if applicable, the Securities Exchange Act of 1934, various registration statements and amendments thereto for the registration of current, as well as any future, separate accounts established by said corporations for the purpose of registering under said Act(s) immediate or deferred variable annuity contracts, fixed interest rate options subject to a market value adjustment, group flexible fund retirement annuity contracts and variable life insurance policies in connection with the separate accounts and contracts listed below:

Variable Annuities and Variable Life Insurance Policies

Separate Account (1940 Act File No.)	1933 Act File Nos.
MFS Variable Account (811-2662)	002-73432
Multi-Flex Variable Account (811-3338)	033-23905, 002-75174
Nationwide Variable Account (811-2716)	002-58043, 333-80481, 033-60239
Nationwide Variable Account-II (811-3330)	002-75059, 033-67636, 033-60063, 333-103093, 333-103094, 333-103095, 333-104513, 333-104511, 333-104512, 333-104510, 333-105992, 333-147273, 333-140621, 333-144053, 333-147198, 333-151990, 333-160635, Bonus Individual Flexible Deferred Variable Annuity Contract (1933 Act No. TBD)
Nationwide Variable Account-3 (811-5405)	033-18422, 033-24434
Nationwide Variable Account-4 (811-5701)	033-25734, 033-26454, 333-62692, 333-135650, 333-140812
Nationwide Variable Account-5 (811-8142)	033-71440
Nationwide Variable Account-6 (811-8684)	033-82370, 333-21909
Nationwide Variable Account-7 (811-8666)	033-82190, 033-82174, 033-89560
Nationwide Variable Account-8 (811-7357)	033-62637, 033-62659
Nationwide Variable Account-9 (811-08241)	333-28995, 333-52579, 333-56073, 333-53023, 333-79327, 333-69014, 333-75360
Nationwide Variable Account-10 (811-09407)	333-81701
Nationwide Variable Account-11 (811-10591)	333-74904, 333-74908
Nationwide Variable Account-12 (811-21099)	333-88612, 333-108894
Nationwide Variable Account-13 (811-21139)	333-91890
Nationwide Variable Account-14 (811-21205)	333-104339
Nationwide VA Separate Account-A (811-5606)	033-85164, 033-22940
Nationwide VA Separate Account-B (811-06399)	033-86408, 033-93482, 333-11415
Nationwide VA Separate Account-C (811-7908)	033-66496, 333-44485
Nationwide VA Separate Account-D (811-10139)	333-45976
Nationwide VLI Separate Account (811-4399)	033-00145, 033-44290, 033-35698
Nationwide VLI Separate Account-2 (811-5311)	033-16999, 033-62795, 033-42180, 033-35783, 033-63179, 333-27133
Nationwide VLI Separate Account-3 (811-6140)	033-44789, 033-44296
Nationwide VLI Separate Account-4 (811-8301)	333-31725, 333-43671, 333-52617, 333-94037, 333-52615, 333-53728, 333-69160, 333-83010, 333-137202, 333-153343, Future Corporate Flexible Premium Variable Universal Life Insurance (1933 Act File No. TBD)
Nationwide VLI Separate Account-5 (811-10143)	333-46338, 333-46412, 333-66572, 333-121881, 333-125481, 333-125482
Nationwide VLI Separate Account-6 (811-21398)	333-106908
Nationwide VLI Separate Account-7 (811-21610)	333-117998, 333-121879, 333-146649, 333-140606, 333-149295, 333-156020

Nationwide VL Separate Account-A (811-6137)	033-44792, 033-44300, 033-35775, 333-27123, 333-22677
Nationwide VL Separate Account-B (811-07819)	333-12333
Nationwide VL Separate Account-C (811-8351)	333-43639, 333-36869
Nationwide VL Separate Account-D (811-08891)	333-59517
Nationwide VL Separate Account-G (811-21697)	333-121878, 333-140608, 333-146073, 333-146650, 333-149213, 333-155153, 333-156020

General Account Products

Insurance Company	1933 Act File Nos.
Nationwide Life Insurance Company	333-133163, 333-49112, 333-149613, 333-155368, 333-160418
Nationwide Life and Annuity Insurance Company	333-47640, Individual Supplemental Immediate Fixed Income Annuity Contract (1933 Act File No. TBD), Individual Supplemental Immediate Fixed Income Annuity Contract (1933 Act File No. TBD)

Unregistered Private Placement Accounts

Account Name	CIK Number
Nationwide BOLI Private Placement Variable Account	0001343394
Nationwide Private Placement Variable Account – E	No CIK Number
Nationwide Private Placement Variable Account	0001135856
Nationwide Private Placement Variable Account – II	No CIK Number

hereby constitute and appoint Stephen S. Rasmussen, Mark R. Thresher, Peter A. Golato, John L. Carter, Eric S. Henderson, Jamie Ruff Casto, Timothy D. Crawford, Stephen M. Jackson, Jeanny V. Simaitis and W. Michael Stobart, and each of them with power to act without the others, as his/her attorney, with full power of substitution for and in his/her name, place and stead, in any and all capacities, to approve, and sign such Registration Statements, and any and all amendments thereto, with power to affix the corporate seal of said corporation thereto and to attest said seal and to file the same, with all exhibits thereto and other documents in connection therewith, with the U.S. Securities and Exchange Commission, hereby granting unto said attorneys, and each of them, full power and authority to do and perform all and every act and thing requisite to all intents and purposes as he/she might or could do in person, hereby ratifying and confirming that which said attorneys, or any of them, may lawfully do or cause to be done by virtue hereof.  This instrument may be executed in one or more counterparts.

IN WITNESS WHEREOF, the undersigned have herewith set their names as of this 23rd day of July, 2009.

/s/TIMOTHY G. FROMMEYER	/s/PETER A. GOLATO
TIMOTHY G. FROMMEYER, Director	PETER A. GOLATO, Director
/s/LAWRENCE A. HILSHEIMER	/s/MARK R. THRESHER
LAWRENCE A. HILSHEIMER, Director	MARK R. THRESHER, Director
/s/STEPHEN S. RASMUSSEN
STEPHEN S. RASMUSSEN, Director