485BPOS

'33 Act File No. 333-153343

'40 Act File No. 811-8301

UNITED STATES

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. 1	þ

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 165	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 and Secretary

One Nationwide Plaza

Columbus, Ohio 43215

(Name and Address of Agent for Service)

Approximate Date of Proposed Public Offering:   May 1, 2010

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

o        immediately upon filing pursuant to paragraph (b)

þ        on May 1, 2010 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 Marathon ®   CVUL

Corporate Flexible Premium Adjustable Variable Universal Life Insurance

issued by

Nationwide Life Insurance Company

through

Nationwide VLI Separate Account-4

The date of this prospectus is May 1, 2010 .

PLEASE KEEP THIS PROSPECTUS FOR FUTURE REFERENCE.

Variable life insurance is complex, and this prospectus is designed to help prospective Policy Owners become as fully informed as possible in making a decision to purchase or not to purchase this variable life insurance policy.  We encourage prospective Policy Owners to take the time to understand the Policy, its potential benefits and risks, and how it might or might not benefit them.  In consultation with their financial adviser, prospective Policy Owners 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 Policy Owners, or prospective Policy Owners, 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: Internet	1-800-238-3035 www.nationwide.com
U.S. Mail:	Nationwide Life Insurance Company
	Corporate Insurance Markets
	One Nationwide Plaza (1-11- 401 )
	Columbus, OH  43215-2220

Policy Owners and prospective Policy Owners should carefully read the 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 the Policy is to provide corporate entities a vehicle to informally finance certain employee benefit plans.  If a prospective Policy Owner's primary need is not life insurance protection, then purchasing the Policy may not be in their 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.

The 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 the Policy to replace existing life insurance, please carefully consider its advantages versus those of the policy to be replaced, as well as any replacement costs.  As always, consult a 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.

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Table of Contents

	Page
In Summary: Policy Benefits	4
In Summary: Policy Risks	6
In Summary: Fee Tables	8
Policy Investment Options	14
Fixed Account
Variable Investment Options
Valuation of Accumulation Units
How Sub-Account Investment Experience is Determined
Transfers Among and Between the Policy Investment Options	16
Sub-Account Transfers
Fixed Account Transfers
Submitting a Transfer Request
The Policy	18
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
Right of Conversion
Exchanging the Policy
Terminating the Policy
Assigning the Policy
Reports and Illustrations
Policy Riders	25
Change of Insured Rider
Supplemental Insurance Rider
Policy and Rider Charges	26
Banded Policy Charges and How We Assign a Band to the Policy
Premium Load
Base Policy Cost of Insurance
Base Variable 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 Loans	35
Loan Amount and Interest Charged
Collateral and Interest Earned
Net Effect of Policy Loans
Repayment
Lapse	36
Grace Period
Reinstatement
Surrenders	37
Full Surrender
Partial Surrender

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Table of Contents (continued)
The Death Benefit	38
Calculation of the Death Benefit
Death Benefit Options
Maximum Death Benefit
Changes in the Death Benefit Option
Incontestability
Suicide
Policy Maturity	40
Extending Coverage Beyond the Maturity Date
Payment of Policy Proceeds	41
Taxes	41
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 the 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	47
Nationwide VLI Separate Account-4	47
Organization, Registration, and Operation
Addition, Deletion, or Substitution of Mutual Funds
Voting Rights
Compensation Paid to Insurance Agents Selling this Product	48
Direct Compensation
Indirect Compensation
Legal Proceedings	49
Nationwide Life Insurance Company
Nationwide Investment Services Corporation
Financial Statements	52
Appendix A: Sub-Account Information	53
Appendix B: Definitions	62
Appendix C: Blending Examples of Policy Charges	65
Appendix D: Factors Used in Calculating the Enhancement Benefit	67
Appendix E: State Variations	68

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

In Summary: Policy Benefits

Death Benefit

The primary benefit of the Policy is life insurance coverage.  While the Policy is In Force, we will pay the Death Benefit to the Beneficiary when the Insured dies.  The purpose of the Policy is to provide corporate entities a vehicle for informally financing certain employee benefit plans (such as executive deferred compensation plans), not to provide individuals with a Death Benefit.  To fulfill this purpose, the Policy Owner designates the Beneficiary, not the Insured.

Choice of Death Benefit Options

The Policy Owner may choose one of three (3) available Death Benefit options.

Payout

The Policy Owner or the Beneficiary may choose to receive the Policy Proceeds, in a lump sum, or the Proceeds can be left on deposit with us in an interest-bearing account.

Riders

The Policy Owner 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 (automatically issued at no charge); and

· Supplemental Insurance Rider.

Consolidated Purchase and Banded Policy Charges

In most cases, a corporation purchasing this corporate owned variable life insurance will acquire multiple policies at the same time and may make additional multiple policy purchases from time to time.  We call each of these multiple policy purchases a Block Purchase.  We provide price breaks through a banded charge structure to pass on to the Policy Owner the benefit of the economies of scale associated with making Block Purchases.  Charges from band to band do not always decrease every single policy charge, but in the aggregate overall charges do decline in each higher band.  The "Policy and Rider Charges" section of this prospectus provides a detailed explanation of how banded charges operate.

The Policy is designed to provide certain price reductions as the size of the Consolidated Purchase grows through multiple Block Purchases made by a Policy Owner.  The charges are divided into tiers or "bands" based on first-year premium for that Block Purchase.  Banded charges assessed on policies within a Block Purchase will be the same and will never change.  Band 1 is applied where aggregate first-year Premium on the Block Purchase is between $100,000 and $249,999 with Band 2 applied where the aggregate first-year Premium is between $250,000 and under $500,000.  We will apply Band 3 on aggregate first-year Premium between $500,000 and under $1,000,000, with Band 4 applied to first-year Premium equal to or exceeding $1,000,000.

When the Policy Owner makes the initial Block Purchase, it is impossible to determine the amount of first-year Premium that actually will be paid so the band assigned is determined by assuming the first-year Premium on the Block Purchase will be the Code Section 7702A 7-pay test limit.  The 7-pay test assigns a maximum level Premium for each of the first seven policy years.  The 7-pay limit will vary with each policy based on a number of factors, including the Total Specified Amount, the age of the Insured at issue, any Substandard Ratings, and is also adjusted by any Premium exchanged into the Policy under Section 1035 of the Code.  For all subsequent Block Purchases the charge band is assigned based on the actual first-year Premium received up to the 7-pay limit for all previous Block Purchases plus the Code Section 7702A first-year Premium limit on the new Block Purchase.  We only count Premium up to the 7-pay limit in assigning charge bands because the majority of policies we issue as non-MECs and we priced this product on that basis.

Prospective purchasers may ask their representative for illustrations showing how Premium is applied for banding purposes based on each individual policy issued in conjunction with a Consolidated Purchase.

For details on how we determine the band applied to each Block Purchase and the amount of first-year Premium we consider in each Block Purchase, please see "Banded Charges and How We Assign a Band to the Policy" sub-section of the "Policy and Rider Charges" section of this prospectus.  Charges that utilize a banded charge structure include:

·      Premium Load

·      Base Policy Cost of Insurance

·      Supplemental Insurance Rider Cost of Insurance

·      Base Variable Account Asset Charge

·      Supplemental Insurance Rider Asset Charge

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·      Base Policy Specified Amount Charge

·      Supplemental Insurance Rider Specified Amount Charge

Charges that do not utilize a banded charge structure include:

·      Illustration Charge

·      Per Policy Charge

A registered representative can provide illustrations demonstrating the differences in policy charges assuming varying Consolidated Purchase scenarios. Policy Owner's should consider the amount of their Consolidated Purchases carefully, as this will impact the charges assessed on the Policy and other policies issued to the same Policy Owner.  Specifically, a larger purchase may place the Policy into band with more favorable charges.  Once a Policy has been issued with its assigned band, it will apply for the life of the Policy.   Policy Owner's should also consider how to allocate any amounts to the Supplemental Insurance Rider, as that will affect the total compensation paid and charges assessed on the Policy.

Coverage Flexibility

Subject to conditions, the Policy Owner may choose to:

· change the Death Benefit option;

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

· change the Beneficiary; and

· change who owns the Policy.

Access to Cash Value

Subject to conditions, the Policy Owner 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

The Policy Owner will select a Premium payment schedule (monthly, quarterly, semi-annual, or annual) for the Policy at the time of application.  In general it is expected that Premium payments will be made according to the elected schedule. However, within limits, the Policy Owner may vary the frequency and amount of Premium payments, and might even be able to skip making a Premium payment.  The Policy will continue to remain In Force as long as the Cash Value is sufficient to pay the policy charges, including any Rider charges.  If the Cash Value is not sufficient to pay the policy charges, the payment of additional Premium will be required to prevent the Policy from lapsing.

Investment Options

The Policy Owner may choose to allocate Net Premiums to the fixed account, subject to certain conditions, or to one or more Sub-Accounts.

The fixed account will earn interest daily at an annual effective rate of at least 2%.

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 the Cash Value invested in the Sub-Accounts will depend on the Investment Experience of the Sub-Accounts choose.

Transfers Between and Among Investment Options

The Policy Owner may transfer Cash Value between the fixed account and the variable investment options, subject to certain conditions.  Policy Owner 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.

Taxes

Unless the Policy Owner makes a withdrawal, generally, they 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.

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Assignment

The Policy Owner may assign the Policy as collateral for a loan or another obligation while the Insured is alive.

Examination Right

For a limited time, the Policy Owner may cancel the Policy and receive a refund.  When the Policy Owner cancels the Policy during the 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.  Cancelling policies during the examination right period may lower the Premium band for a particular Block Purchase and result in increased charges for the remaining policies within that Block Purchase.  Refer to the "Right to Cancel (Examination Right)" sub-section of "The Policy" section of this prospectus for more information.

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.  Policy Owners will incur fees at the time of purchase that may more than offset any favorable Investment Experience.  If it is expected that access to the Policy's Cash Value will be needed in the near future, the Policy should not be purchased.

Unfavorable Investment Experience

The Sub-Accounts to which the Policy Owner chooses 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 the Policy to decrease, which could result in a Lapse of insurance coverage.

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 chosen Sub-Accounts and the fixed account, too, if there is insufficient cash value in the Sub-Accounts.  Thus, the remainder of the 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 the Policy Owner repays the policy loan or makes 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 the Policy.

Fixed Account Transfer Restrictions and Limitations

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

Transfers to the fixed account.  Policy Owners may transfer amounts between the fixed account and the Sub-Accounts, subject to limits, without penalty or adjustment.  Except as outlined in the "Right of Conversion" section of "The Policy" provision, 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 Policy Owners 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 a Policy Owner may transfer

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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.  Free copies of each mutual fund's prospectus may be obtained by contacting us at the address or phone number stated on page 1 of this prospectus.

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In Summary: Fee Tables

The following tables describe the fees and expenses that the Policy Owner will pay when buying, owning, and surrendering from the Policy.  The fees will be deducted from each Policy.  The fees may vary based on the Band assigned to the Policy.  Fees in this table may be rounded up to the nearest one-hundredth decimal place.  The first table describes the fees and expenses that will be assessed at the time that Premium is applied to the Policy.

Transaction Fees
Charge	When Charge is Deducted	Charge Deducted from the Policy Based on Assigned Band(1)
		Band 1 $100,000 - $249,999	Band 2 $250,000 - $499,999	Band 3 $500,000 - $999,999	Band 4 ≥ $1,000,000
Premium Load(2) Target Premium Load	Upon making a Premium payment (applied to all Premiums received)
Maximum		10% of Premium received up to the Target Premium	10% of Premium received up to the Target Premium	10% of Premium received up to the Target Premium	10% of Premium received up to the Target Premium
Current Excess Premium Load		9% of Premium received up to the Target Premium	5% of Premium received up to the Target Premium	5% of Premium received up to the Target Premium	5% of Premium received up to the Target Premium
Maximum		10% of Premium received that exceeds Target Premium	10% of Premium received that exceeds Target Premium	10% of Premium received that Exceeds Target Premium	10% of Premium received that exceeds Target Premium
Current		5% of Premium received that exceeds Target Premium	3% of Premium received that exceeds Target Premium	3% of Premium received that exceeds Target Premium	3% of Premium received that exceeds Target Premium
Illustration Charge(3)	Upon requesting an illustration
Maximum		$25	$25	$25	$25

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The next table describes the fees and expenses that the Policy Owner will pay periodically during the time they 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	Charge Deducted from the Policy Based on Assigned Band
		Band 1 $100,000 – $249,999	Band 2 $250,000 - $499,999	Band 3 $500,000 – $999,999	Band 4 ≥ $1,000,000
Base Policy Cost of Insurance(4)	Monthly
Maximum		$83.34 per $1,000 of Net Amount At Risk	$83.34 per $1,000 of Net Amount At Risk	$83.34 per $1,000 of Net Amount At Risk	$83.34 per $1,000 of Net Amount At Risk
Minimum		$0.03 per $1,000 of Net Amount At Risk	$0.03 per $1,000 of Net Amount At Risk	$0.03 per $1,000 of Net Amount At  Risk	$0.03 per $1,000 of Net Amount At Risk
Representative: an individual Issue Age 45, non-tobacco, in the tenth policy year, Death Benefit option 1, issued on a short-form, non-medical basis. (5)		$0.37 per $1,000 of Net Amount At Risk	$0.30 per $1,000 of Net Amount At Risk	$0.28 per $1,000 of Net Amount At Risk	$0.32 per $1,000 of Net Amount At Risk

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Periodic Charges Other Than Mutual Fund Operating Expenses (Continued)
Charge	When Charge is Deducted	Charge Deducted from the Policy Based on Assigned Band
		Band 1 $100,000 – $249,999	Band 2 $250,000 - $499,999	Band 3 $500,000 – $999,999	Band 4 ≥ $1,000,000
Supplemental Insurance Rider Cost of Insurance(6)	Monthly
Maximum		$83.34 per $1,000 of Rider Net Amount at Risk	$83.34 per $1,000 of Rider Net Amount at Risk	$83.34 per $1,000 of Rider Net Amount at Risk	$83.34 per $1,000 of Rider Net Amount at Risk
Minimum		$0.02 per $1,000 of Rider Net Amount at Risk	$0.02 per $1,000 of Rider Net Amount at Risk	$0.02 per $1,000 of Rider Net Amount at Risk	$0.02 per $1,000 of Rider Net Amount at Risk
Representative: an individual Issue Age 45, non-tobacco, in the tenth policy year, Death Benefit Option 1, issued on a short-form, non-medical basis. (5)		$0.34 per $1,000 of Rider Net Amount At Risk	$0.18 per $1,000 of Rider Net Amount At Risk	$0.19 per $1,000 of Rider Net Amount At Risk	$0.22 per $1,000 of Rider Net Amount At Risk
Flat Extra(7) Maximum	Monthly	$2.08 per $1,000 of Net Amount At Risk for each Flat Extra assessed	$2.08 per $1,000 of Net Amount At Risk for each Flat Extra assessed	$2.08 per $1,000 of Net Amount At Risk for each Flat Extra assessed	$2.08 per $1,000 of Net Amount At Risk for each Flat Extra assessed
Base Variable Account Asset Charge(8)	Monthly
Maximum		0.08% of Variable Sub-Account Value	0.08% of Variable Sub-Account Value	0.08% of Variable Sub-Account Value	0.08% of Variable Sub-Account Value
Current		0.05% of Variable Sub-Account Value	0.03% of Variable Sub-Account Value	0.03% of Variable Sub-Account Value	0.03% of Variable Sub-Account Value

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Periodic Charges Other Than Mutual Fund Operating Expenses (Continued)
Charge	When Charge is Deducted	Charge Deducted from the Policy Based on Assigned Band
		Band 1 $100,000 – $249,999	Band 2 $250,000 - $499,999	Band 3 $500,000 – $999,999	Band 4 ≥ $1,000,000

Supplemental Insurance Rider Variable Account Asset Charge(8)	Monthly
Maximum		0.08% of Variable Sub-Account Value	0.08% of Variable Sub-Account Value	0.08% of Variable Sub-Account Value	0.08% of Variable Sub-Account Value
Current		0.05% of Variable Sub-Account Value	0.03% of Variable Sub-Account Value	0.03% of Variable Sub-Account Value	0.03% of Variable Sub-Account Value

Base Specified Amount Charge(9)	Monthly
Maximum		$0.40 per $1,000 of Base Specified Amount	$0.40 per $1,000 of Base Specified Amount	$0.40 per $1,000 of Base Specified Amount	$0.40 per $1,000 of Base Specified Amount
Current		$0.08 per $1,000 of Base Specified Amount	$0.07 per $1,000 of Base Specified Amount	$0.07 per $1,000 of Base Specified Amount	$0.07 per $1,000 of Base Specified Amount

Supplemental Insurance Rider Specified Amount Charge(10)	Monthly
Maximum		$0. 40 per $1,000 of Rider Specified Amount	$0. 40 per $1,000 of Rider Specified Amount	$0. 40 per $1,000 of Rider Specified Amount	$0. 40 per $1,000 of Rider Specified Amount
Current		$0.04 per $1,000 of Rider Specified Amount	$0.03 per $1,000 of Rider Specified Amount	$0.03 per $1,000 of Rider Specified Amount	$0.03 per $1,000 of Rider Specified Amount

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Periodic Charges Other Than Mutual Fund Operating Expenses (Continued)
Administrative Charge	Monthly
Maximum		$10 per Policy
Current		$5 per Policy
Policy Loan Interest Charge (11)	Annually, or on an increase or repayment of the loan
Maximum		3.50% of Indebtedness
Current		2.80% of Indebtedness

Representative costs may vary from the cost a particular Policy Owner would incur.  Ask for an illustration for information on the costs applicable to a particular Policy.

The next item shows the minimum and maximum total operating expenses, as of December 31, 2009 , charged by the underlying mutual funds that Policy Owners may pay periodically during the time that they 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 0.54 %	Maximum 1.57 %

 (1) The Policy will be assigned a charge band based on aggregate first-year Premium for the Policy and any other policies purchased by the same Policy Owner.  For details on how the charge band is assigned and how we calculate aggregate first-year Premium, see the "Banded Charges and How We Assign a Band to the Policy" sub-section of the "Policy and Rider Charges" section of this prospectus.

(2) Premium Load is assessed each time a Premium is received.  The Premium Load charged will depend on whether the Target Premium for the year in which the Premium is received has been reached and the band assigned to the policy.  The amount of the Target Premium will differ for each policy issued because the Target Premium is dependent on the characteristics of the Insured and the amount of insurance coverage purchased under each policy.   The band assigned to the policy will determine the percentages applied to Target Premium and Premium paid in excess of Target Premium.  For additional explanation, including an example of how the band assigned to the Policy impacts the Premium Load, please see the Premium Load subsection of the Policy and Rider Charges section of this prospectus.

(3) The Illustration Charge is only charged for illustration of In Force policies where the number of requested illustrations exceeds ten in any twelve month period.  The Policy Owner 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.

(4) The Base Policy Cost of Insurance Charge varies according to the Insured's age, sex classification (male/female or unisex), tobacco use, Substandard Ratings, underwriting class, the number of years from the Policy Date, or effective date of a Base Specified Amount increase, the Base Specified Amount, and the applicable band.  The Cost of Insurance Charge for coverage under the Supplemental Insurance Rider is different. The maximum charge assumes: the Policy is issued on a unisex basis; Issue Age 79; policy year 35; non-tobacco; and non-medical underwriting.  Other sets of assumptions may also produce the maximum charge.  The minimum charge assumes: For $100,000 to $249,999 premium band, the Policy is issued on a unisex basis; Issue Age 27; policy year 1; non-tobacco; and non-medical underwriting. For $250,000 to $499,999 premium band, the Policy is issued on a unisex basis; Issue Age 26; policy year 1; non-tobacco; and non-medical underwriting. For $500,000 to $999,999 premium band, the Policy is issued on a unisex basis; Issue Age 24; policy year 1; non-tobacco; and non-medical underwriting. For ≥ $1,000,000 premium band, the Policy is issued on a unisex basis; Issue Age 22; policy year 1; non-tobacco; and non-medical underwriting. Other sets of assumptions may also produce the minimum charge. The charges shown may not be representative of the charges that a particular Policy Owner may pay.  For a detailed description of the Cost of Insurance Charge see the "Base Policy Cost of Insurance" section of this prospectus.

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(5) The representative number shows a higher charge in band 4, which is the charge assessed in policy year 10.  There are other policy years where the charge in band 4 is lower.  While generally overall charges over multiple policy years in band 4 will be lower, whether band 4 will yield lower overall charges depends on the amount of the Net Amount At Risk during each policy year and the duration the Policy is held.  A Policy Owner may request illustrations of various scenarios showing the impact of charges on policy values over time.  A charge may be assessed for requested illustrations.  See the "Illustration Charge" subsection of the "Policy and Rider Charges" section of this prospectus.

(6) The Supplemental Insurance Rider Cost of Insurance Charge will only be assessed if the Policy Owner purchases this optional rider. The Rider  Cost of Insurance Charge varies according to the Insured's age, sex classification (male/female or unisex), tobacco use, Substandard Ratings, underwriting class, the number of years from the Rider effective date, (or effective date of a Rider Specified Amount increase), the Rider Specified Amount, and the applicable band.  The maximum charge assumes: the Policy is issued on a unisex basis Issue Age 79; policy year 35; non-tobacco; and non-medical underwriting.  Other sets of assumptions may also produce the maximum charge.  The minimum charge assumes: For $100,000 to $249,999 premium band, the Policy is issued on a unisex basis; Issue Age 27; policy year 1; non-tobacco; and non-medical underwriting. For $250,000 to $499,999 premium band, the Policy is issued on a unisex basis; Issue Age 26; policy year 1; non-tobacco; and non-medical underwriting. For $500,000 to $999,999 premium band, the Policy is issued on a unisex basis; Issue Age 24; policy year 1; non-tobacco; and non-medical underwriting. For ≥ $1,000,000 premium band, the Policy is issued on a unisex basis; Issue Age 22; policy year 1; non-tobacco; and non-medical underwriting. Other sets of assumptions may also produce the minimum charge. The charges shown may not be representative of the charges that a particular Policy Owner may pay.  For a detailed description of the Supplemental Insurance Rider Cost of Insurance see the "Policy Rider Charges" sub-section of the "Policy and Rider Charges" section of this prospectus.

(7) The Flat Extra is an added component to the calculation of the Base Policy Cost of Insurance and Rider Cost of Insurance.  It is only applied if certain factors result in the Insured having a Substandard Rating.  For details, see the "Base Policy Cost of Insurance" sub-section of the "Policy and Rider Charges" section of this prospectus.

(8) The Base Variable Account Asset Charge and the Supplemental Insurance Rider Variable Account Asset Charge are assessed by us based on assets allocated to the Variable Account (not from the Fixed Account), and the applicable band.  These charges are in addition to any charges assessed by the mutual funds underlying the Sub-Accounts.  The maximum and minimum charges are the same in all years and in all bands for the Base Variable Account Asset Charge and the Supplemental Insurance Rider Variable Account Asset Charge. The maximum guaranteed annual rate for each charge is 0.90% and the maximum guaranteed un-rounded monthly charge is 0.076126%. Values in the table are listed at the monthly rate. Maximum guaranteed annual and monthly rates are also shown on the Policy Data Pages. The Variable Account Asset Charges currently decline by policy duration.  The current charges shown here are the highest amounts we currently apply.  For more information, see the "Base Variable Account Asset Charge" and "Rider Variable Account Asset Charge" sub-sections of the "Policy and Rider Charges" section of this prospectus.

(9) The Base Specified Amount 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. The current and maximum charges vary by premium band only. For a more detailed description of the charge, including a complete schedule of charges, see the "Base Specified Amount Charge" sub-section of the "Policy and Rider Charges" section of this prospectus.

(10) The Supplemental Insurance Rider Specified Amount Charge is only assessed on the Rider Specified Amount. A different charge will be applied for any Base Specified Amount under the Policy. The current and maximum charges vary by premium band only. For a more detailed description of the charge, including a complete schedule of charges and an example of how the Rider Specified Amount Charge is blended with the Base Specified Amount Charge, see the "Rider Specified Amount Charge" sub-section of the "Policy and Rider Charges" section of this prospectus.

(11) For more information, see the "Net Effect of Policy Loans" sub-section of the "Policy Loans" section of this prospectus.

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Policy Investment Options

The Policy Owner designates how 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 is allocated to the fixed investment option is held in the fixed account, which is part of our general account.  Except as provided in the "Right of Conversion" section of "The Policy" provision, 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 allocated to the fixed account will not share in the investment performance of our general account.  Rather, the investment income earned on allocations to the fixed account will be based on varying interest crediting rates that we set.

We guarantee that the amounts allocated to the fixed account will be credited interest daily at a net effective annual interest rate of no less than the guaranteed minimum interest crediting rate of 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.  Premiums applied to the Policy at different times may receive different interest crediting rates.  We will credit any interest in excess of the guaranteed minimum interest crediting rate at our sole discretion.  The Policy Owner assumes the risk that the actual interest crediting rate may not exceed the guaranteed minimum interest crediting rate.  Interest that we credit to the fixed account may be insufficient to pay the Policy's charges.

It is important to remember any guaranteed benefits or interest crediting associated with the fixed account is subject to our claims paying ability.

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 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.

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The Sub-Accounts available through this Policy invest in underlying mutual funds of the companies listed below.  For a complete list of the available Sub-Accounts see "Appendix A: Sub-Account Information".  Appendix A also contains additional information about the underlying mutual fund a Sub-Account invests in , including its investment objective, adviser , and sub-adviser if applicable.  For more information on the underlying mutual funds, please refer to the prospectuses for the mutual funds.

· AllianceBernstein Variable Products Series Fund, Inc.

· American Century Variable Portfolios, Inc.

· American Funds Insurance Series

· BlackRock Variable Series Funds, 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

· Invesco

· Ivy Funds Variable Insurance Portfolios, Inc.

· Janus Aspen Series

· Lazard Retirement Series, Inc.

· Legg Mason Partners Variable Equity Trust

· Lincoln Variable Insurance Products Trust

· Lord Abbett Series Fund, Inc.

· M Fund, Inc.

· MFS® Variable Insurance Trust

· 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 Variable Insurance Products Trust

· Van Kampen Life Investment Trust

· Wells Fargo Advantage Funds

Valuation of Accumulation Units

We account for the value of a Policy Owner ' s interest in the Sub-Accounts by using Accumulation Units.  The value of each Accumulation Unit varies daily based on the Investment Experience of the underlying mutual fund in which the Sub-Account invests.  We use each underlying mutual fund ' s Net Asset Value ( " NAV " ) per share to calculate the daily Accumulation Unit value for the corresponding Sub-Account.  Note, however, that the Accumulation Unit value will not equal the underlying mutual fund ' s NAV.  This daily Accumulation Unit valuation process is referred to as " pricing " the Accumulation Units.  See, the " How Sub-Account Investment Experience is Determined " section below for a description of how the number of Accumulation Units representing a policy owner ' s interest is determined and how they are priced.

Accumulation Unit s are priced as of the New York Stock Exchange ' s ( " NYSE " ) close of business, normally 4:00 p.m. Eastern Time, on each day that it is open.  We will price Accumulation Units on any day that the NYSE is open for business.  Any transaction submitted on a day when the NYSE is closed or after it has closed for the day, will not be priced until the close of business on the next day that the NYSE is open for business.  Accordingly, we will not price Accumulation Unit s 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 priced as of the next Valuation Period that the NYSE is open.

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How Sub-Account Investment Experience is Determined

A Policy Owner ' s variable account value is based on their allocations to the Sub-Accounts. Sub-Account allocations are accounted for in Accumulation Units.  A Policy Owner ' s interest in the Sub-Accounts is represented by the number of Accumulation Units they own.  The number of Accumulation Unit s associated with a given Sub-Account allocation is determined by dividing the dollar amount allocated to the Sub-Account by the Accumulation Unit value for the Sub-Account.   The number of Accumulation Units you own in a Sub-Account will not change except when Accumulation Units are redeemed to process a requested surrender, transfer, loan, or to take policy charges, or when additional Accumulation Units are purchased with new Premium and loan repayments.

Initially, we set the Accumulation Unit value at $10 for each Sub-Account.  Thereafter, the daily value of Accumulation Units in a Sub-Account will vary depending on the Investment Experience of the underlying 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.

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 described in this prospectus and the prospectus of the underlying mutual funds. Transfers will be implemented by redeeming Accumulation Units from the Sub-Account(s) indicated by the Policy Owner and using the redemption proceeds to purchase Accumulation Units in other Sub-Account(s) as directed by the Policy Owner.  The net result is that the Policy Owner ' s Cash Value will not change (except due to standard market fluctuations), but the number and allocation of Accumulation Units within the Policy will change.

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 a Policy Owner intends to use an active trading strategy, they should consult their 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.

U.S. Mail Restrictions.  For policies owned by a corporation or another legal entity, we monitor transfer activity for potentially harmful investment practices.  Our procedures include the review of individual policies and aggregate entity-level transfers.  It is our intention to protect the interests of all Policy Owners.  It is possible, however, for some harmful trading to

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go on undetected by us.  We monitor aggregate trades among the Sub-Accounts for all policies within a Consolidated Purchase for frequency, pattern, and size.  If two or more transfer events are submitted within a 30-day period, we may impose conditions on a Policy Owner's ability to submit trades.  These restrictions include revoking the 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, a Policy Owner's subsequent allocations may be limited to that new share class.  Short-term trading fees are a charge assessed by an underlying mutual fund when a Policy Owner transfers 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 the Policy Owner that their transfer request has been rejected.  If a short-term trading fee is assessed on a transfer, we will provide the Policy Owner 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

(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, the Policy Owner 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 the Policy Owner 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.

Any restrictions that we implement will be applied consistently and uniformly.

Submitting a Transfer Request

Policy Owners can submit transfer requests in writing to our Home Office via first class U.S. Mail.  We may also allow them to use other methods of communication that we deem acceptable, such as fax, or computer data feed.  Our contact information is on the first page of this prospectus.  We will use reasonable procedures to confirm that transfer instructions are

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genuine and will not be liable for following instructions that we reasonably determine to be genuine.

When we receive a 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.  For more information regarding valuation of Accumulation Units, see the "Valuation of Accumulation Units" section under the "Policy Investment Options" provision.

In addition, any computer system can experience slowdowns or outages that could delay or prevent our ability to process transfer requests.  Although we have taken precautions to help our systems handle heavy usage, we cannot promise complete reliability under all circumstances.  If a Policy Owner is experiencing problems, please make transfer requests in writing.

In instances of disruptive trading that we may determine, or may have already determined to be harmful to other Policy Owners, we will, through the use of appropriate means available to us, attempt to curtail or limit the disruptive trading.  If a Policy Owner's trading activities, or those of a third party acting on their behalf, constitute disruptive trading, we will not limit that Policy Owner's ability to initiate the trades as provided in the Policy; however, we may limit their 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.

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.  This prospectus discloses all material provisions of the Policy.  In addition to the terms and conditions of the Policy, Policy Owner rights are governed by this prospectus and protected by federal securities laws and regulations.  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 made 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 an error or misstatement is made by the prospective Policy Owner 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 E: 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 Policy Owners of all modifications and we will make appropriate endorsements to the Policy.

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).

It is important to remember the portion of any amounts allocated to our general account and any guaranteed benefits we may provide under the policy exceeding the value of amounts held in the separate account are subject to our claims paying ability.

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.

Policy Owner and Beneficiaries

Policy Owner.  The Policy belongs to the Policy Owner named in the application or as a result of a valid assignment.  The purchaser and initial Policy 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 Policy 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.  Policy Owners 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 the Policy Owner maintains a sufficient insurable interest.

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Subject to our approval, the Policy Owner may exercise all policy rights in accordance with Policy terms while the Policy is In Force.  These rights include, but are not limited to, the following:

· changing the Policy Owner, contingent owner, and beneficiary;

· assigning, exchanging and/or converting the policy;

· requesting transfers, policy loans, and partial surrenders or a complete surrender; and

· changing insurance coverage such as death benefit option changes, adding or removing riders, and/or increasing or decreasing the Total Specified Amount.

These rights are explained in greater detail throughout this prospectus.

Subject to our approval, the Policy Owner may name a different Policy Owner (while the Policy is In Force) 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.

Beneficiaries.  The principal right of a Beneficiary is to receive the Death Benefit upon the Insured's death.  The Policy Owner designates the Beneficiary(ies) in the application for the Policy.  As long as the Insured is alive, the Policy Owner 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 a Policy Owner specifies 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.  The Policy Owner may name more than one contingent Beneficiary.  Unless a Policy Owner specifies 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 the Policy Owner.

To change or add Beneficiaries, the Policy Owner 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 a Policy Owner send us their Policy for endorsement before we record the change.

Purchasing a Policy

The Policy is issued to corporate purchasers where the Insured is between the ages of 18 and 79 (ages may vary in your state).  The initial Block Purchase of a Consolidated Purchase must have a minimum first year Premium of at least $100,000.  However individual Policies with Premiums less than $100,000 may be issued if the Policies are part of a Block Purchase having total first year Premium of at least $100,000.  To purchase the Policy, a prospective Policy Owner must submit to us a completed application and the minimum initial Premium payment as stated on the Policy Data Page.

How A Block Purchase Is Determined.  To be part of a Block Purchase, the Policy must be part of a simultaneous purchase of life insurance by the same Policy Owner.  A simultaneous purchase of life insurance is where the Policy Owner presents to us a list of multiple individuals to be insured at the same time.  Each insured is covered by one policy, but all of the policies purchased in this fashion are considered a Block Purchase.  If the Policy Owner subsequently presents us with any new insureds to be covered by additional policies, those policies will be considered part of a new Block Purchase.  The total life insurance purchased by the same Policy Owner that comprises one or more Block Purchases is the Consolidated Purchase.

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 are appropriate for us to assume in placing the Policy.  We can provide the details of our underwriting standards upon request.  Our contact information is on page 1 of the prospectus.  We reserve the right to reject an application for any reason permitted by law.  Specifically, if we have previously issued policies included as part of the same Consolidated Purchase that have an aggregate Premium in excess of $5 million, we reserve the right to refuse to issue an additional Policy as part of that Consolidated Purchase.  Additionally, we reserve the right to modify our underwriting standards on a prospective basis to newly issued policies and increases to Total Specified Amount at any time.  Underwriting standards relate to factors we use to evaluate the risks we are willing to assume in issuing the Policy.  Any modifications to our underwriting standards will not result in maximum charges greater than those shown in the Fee Table.

We underwrite the corporate purchaser and we may reject applications based on:  (i) the amount of overall expenses under the Policy and the timing of the allocation of those expenses over the life of the Policy; (ii) the anticipated amount and timing of Premium payments; (iii) the expected asset persistency based on the purpose for which the corporation/entity is purchasing the Policy; and (iv) the location of the Policy Owner and the industry in which the Policy Owner is engaged.  Any rejection

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of an application 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.

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.  The initial Premium may be paid 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.

The amount of the required minimum initial Premium payment for a particular Policy will depend on the following factors: the initial Total Specified Amount, Death Benefit option elected, any Riders elected, the Insured's age, health, and activities.

Depending on the right to examine law of the state in which a Policy is issued, 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 a Policy is issued in a state that requires us to refund the initial Premium, 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 Cash Value to the Sub-Accounts based on the allocation instructions in effect at the time of the transfer.  If a Policy is issued 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, based on the allocation instructions in effect at that time, to the designated Sub-Accounts at the price next determined.

Insurance Coverage Effective Date:  Unless a 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 Policy 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 a 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 the associated Premium within 2 business days of the date we make the decision to reject an 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 the Policy Owner requests, 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 the Policy Owner's request.

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

Right to Cancel (Examination Right)

For a limited time, commonly referred to as the "free look period," the Policy Owner may cancel a Policy and receive a refund.  The free look period expires on the latest of: (i) ten (10) days after the Policy Owner receives the Policy (or longer if required by state law); (ii) forty-five (45) days after the application for a Policy is signed; or (iii) ten (10) days after we deliver to the Policy Owner a "Notice of Withdrawal Right."  If the Policy Owner decides 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 the Policy Owner's written cancellation request.  The Policy Owner's written request must be received or post-marked by the last day of the free look period.  When the Policy is cancelled 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 the Policy is not cancelled during the free

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look period, then the Policy Owner will forfeit any right to cancel the 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.

Impact of Cancellation on Other Policies Within a Block Purchase

Because the applicable Premium band is determined assuming first-year Premium equal to the aggregate Code Section 7702A 7-pay test limit for all policies within a Block Purchase, cancellation of one or more policies that are part of a Block Purchase during the free look period will result in a lower aggregate 7-pay Premium for the remaining policies within that Block Purchase.  If the aggregate 7-pay Premium limit of the remaining policies no longer qualifies for the Premium band originally assigned to the Block Purchase, the remaining policies will be reassigned to the appropriate band based on the reduced aggregate 7-pay Premium limit at the end of the free look period.  This will result in higher aggregate charges for the remaining policies.  Refer to the "Banded Policy Charges and How we assign a Band to the Policy" sub-section of "The Policy and Rider Charges" section of this prospectus for more information.

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 Policy's Cash Value is sufficient to pay the monthly policy charges, including any Rider charges.  If the Cash Value is not sufficient to pay the monthly charges, the Policy Owner must pay additional Premium to keep the Policy In Force and prevent it from Lapsing.  Before the Policy Lapses, the Policy Owner will be afforded a sixty-one day Grace Period to make a Premium payment.  At the beginning of the Grace Period, we will send a notice to the Policy Owner that will indicate the amount of Premium required to keep the Policy In Force.  All Premium payments must be sent to our Home Office.  Each Premium payment must be at least $25.  We will furnish Premium payment receipts.

Additional Premium payments may be made 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.

· 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 the Policy Owner 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 the Policy Owner allocates 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 a Policy's Cash Value is part of the Death Benefit option chosen by the Policy Owner, then that Policy's Death Benefit will fluctuate.

We compute the Cash Value of a Policy by adding the following values:

1. Accumulation Unit values resulting from the Net Premium allocated to the fixed investment option;

2. amounts held in the Policy Loan Account; and

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

In the event a Policy is surrendered, 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 a Policy's Cash Value at least monthly. To determine the number of Accumulation Units credited to each Sub-Account for a particular Policy, we divide the net amount allocated 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 the Policy Owner surrenders 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, the 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 the Policy Owner directs otherwise, we make these deductions in the same proportion that as their interests in the Sub-Accounts and the fixed account bear to the Policy's Cash Value.

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While they are both part of our General Account, the Cash Value in the fixed account and the Policy Loan Account are credited interest at different rates.  We may decide to credit interest in excess of the guaranteed minimum annual effective rate.  See the "Fixed Account" section of the "Policy Investment Options" provision and the "Loan Amount and Interest Charged" section of the "Policy Loans" provision for information regarding the respective rates.  Upon request, we will inform the Policy Owner 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 which are deducted proportionally from the Policy's Sub-Account allocations and the fixed account.  For each month, beginning on the Policy Date, the monthly deductions shall be calculated as:

1.           Base Variable Account Asset Charge; plus

2.           Administrative Charge; plus

3.           Base Specified Amount Charge, plus

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

5.           Base Policy Cost of Insurance.

Enhancement Benefit

An Enhancement Benefit is included in the Policy.  The benefit is a dollar amount that is added to the Cash Value when there is a complete surrender of the Policy, unless the surrender is being made pursuant to a 1035 exchange.  The Enhancement Benefit is not credited on amounts attributable to policy loans or 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 Enhancement Benefit is designed to, in the event of a full surrender in early years of the Policy, decrease or eliminate the gap between the value of the Policy and the liability on the Policy Owner's books (typically a liability associated with an employer sponsored plan).  This gap is larger in the early policy years due to the upfront costs associated with purchasing the Policy and the lack of time that the Policy's Cash Value has had to grow.  For policies assigned to Band 1, the Enhancement Benefit lasts for the first six policy years.  For policies assigned to Band 2, Band 3, and Band 4 the Enhancement Benefit is available for the first ten policy years.  Band 1 has a shorter duration because in our opinion the off-set needed is less in early policy years and this coupled with the Band 1 charge structure permits us to redirect these savings to the long-term performance of the Policy.

The Enhancement Benefit is calculated monthly and is equal to the sum of A and B, where:

A= the percentage of current policy year year-to-date total policy charges; and

B= a percentage of the prior policy year's end of year Enhancement Benefit.

The percentages used in the Enhancement Benefit calculation decline over time.  The benefit decreases to zero at the end of the sixth or tenth policy year based on the band assigned to the Policy.  See Appendix D of this prospectus for a list of beginning and ending factors for each policy year the Enhancement Benefit is in effect.

Since the Policy charges partially determine the amount of the Enhancement Benefit, factors impacting Policy charges (including the Policy's Cash Value), also impact the Enhancement Benefit.  If the Supplemental Insurance Rider is in effect, the Enhancement Benefit is reduced 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.  As a general account obligation, the Enhancement Benefit is not part of the variable account and is an obligation of Nationwide.  This means the Enhancement Benefit including a Policy Owner's right to receive payment is subject to our claims paying ability and any claim to payment of the Enhancement Benefit may be subordinate to other claims on our general account in the event we are insolvent.  We reserve the right to postpone payment of the Enhancement Benefit for up to six (6) months from the date of a surrender request.

Changing the Amount of Base Policy Insurance Coverage

A Policy Owner may request to change the Base Specified Amount of a Policy.  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 30. 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.

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Increases.  To increase the Base Specified Amount, the Policy Owner must submit a written request to our Home Office and they 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 a Policy has the Supplemental Insurance Rider, all increases will be done proportionally between the Policy's Base Specified Amount and Rider Specified Amount.   The Policy Owner 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 the Policy Owner to make larger or additional Premium payments in order to avoid Lapsing the Policy.  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 the Policy Owner requests, and we approve, a different date.

Decreases.  The Policy Owner 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.  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, the Policy Owner 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, the Policy Owner irrevocably elects one of the following tests to qualify the Policy as life insurance under Section 7702 of the Code:

· the cash value accumulation test; or

· 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 the Policy Owner is paying three or fewer Premiums.  If the Policy Owner pays 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 the Policy Owner does not elect a test, we will assume that election of the cash value accumulation test is intended.

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 the Policy Owner elects, 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 the Policy Owner so that the Policy continues to meet the Code's definition of life insurance.

Right of Conversion

Within twenty-four months of the Policy Date, the Policy Owner may elect by written request to transfer 100% of a Policy's Cash Value allocated to the variable Sub-Accounts into the fixed account without regard to any restrictions otherwise

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applicable to such transfers. For more information see the "Fixed Account Transfers" section under the "Transfers Among and Between the Policy Investment Options" provision.  To invoke this right, the Policy Owner must submit a request to our Home Office on our specified forms.  This election is irrevocable.

Once a request for conversion has been processed, subsequent transfers out of the fixed account will be prohibited and that Policy will no longer participate in the Investment Experience of the Sub-Accounts.  In effect, the Policy will be come a fixed life insurance policy, and the Policy's Cash Value will be credited with the fixed account's interest rate.  In addition, the following will apply:

· Variable Account Asset Charges will no longer be deducted after conversion because they are only deducted from Cash Value allocated to the Variable Account.

· All other benefits, services, Riders, and charges, including loans and full and partial surrenders, will continue and/or continue to be available after the Policy Owner's request for conversion, subject to the same terms applicable prior to the request for conversion.

Exchanging the Policy

The Policy Owner may request to exchange the Policy for another policy offered by us that is a plan of permanent fixed life insurance.  This is not a contractual right of the Policy and we may refuse such a request.  To make an exchange with us the Policy Owner will surrender a Policy and use its Cash Surrender Value to purchase the new policy we underwrite on the Insured's life, subject to: (i) our approval; and (ii) the Insured (a) satisfies our underwriting standards of insurability and (b) the Policy Owner pays all costs associated with the exchange.  The Policy Owner may transfer Indebtedness to the new policy.

Policy Owner's must submit their exchange requests to our Home Office on our specified forms.  The Policy must be In Force and not in a Grace Period.  The exchange may have adverse 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 the Policy will terminate when any one of the following events occurs:

· we receive the Policy Owner written request to our Home Office to terminate coverage;

· the Insured dies;

· the Insured is alive on the Maturity Date (and the Policy Owner elects not to extend coverage beyond the Maturity Date);

· the Policy Lapses; or

· the Policy Owner surrenders the Policy for its Cash Surrender Value (which may result in adverse tax consequences).

Assigning the Policy

The Policy Owner may assign any or all rights under the Policy while the Insured is alive, subject to our approval.  If they do, the Beneficiary's interest will be subject to the person(s)/entity(ies) to whom the Policy Owner has assigned such rights.  An assignment must be in a form satisfactory to us and must be recorded at our Home Office before it will become effective.  An 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 the Policy Owner transaction confirmations.  We will also send the Policy Owner an annual report that shows:

· the Total Specified Amount;

· Premiums paid;

· 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 the Policy Owner provides on the application unless directed otherwise.  At any time the Policy Owner may ask for an illustration of future benefits and values under the Policy.  We reserve the right to assess a charge for illustrations.

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Policy Riders

You may elect/purchase one or more Riders, listed below, subject to availability in the state where the Policy is issued.  There may be additional charges assessed for elected Riders.  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 E: State Variations."

Riders may not be elected/purchased independently of the Policy.  Upon termination of this Policy, all Riders will also terminate.

Change of Insured Rider

This Rider is automatically issued with the Policy with no associated charge.  The benefit associated with the Change of Insured Rider is that the Policy Owner may designate a new Insured at any time after the Policy Date, subject to insurability and the conditions below.

If this Rider is invoked, the costs under the Policy after the change will be based on the underwriting classification and characteristics of the new Insured.  However, it will have no impact on the Policy's Total Specified Amount, except as described below.  The band assigned to the Policy will not change if this Rider is invoked.

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.  Coverage on the new Insured will become effective on the "Change Date."  The Change Date is the first monthly anniversary on or next following the date the change of insured conditions are met.  Coverage on the previous Insured will terminate on the day before the Change Date.  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 Policy 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 Policy Owner must make written application to change the Insured.

There is a potential federal income tax consequence that could result from a change in insured. For federal income tax purposes the substitution of a new insured is treated as an exchange of the Policy for another life insurance policy.  Since the new insured is not the same as the insured that was substituted, the tax free treatment for policy exchanges under Section 1035 may not be available because the requirement that the insured under the policies relate to the same individual is not met.   The foregoing is not comprehensive and cannot replace personalized advice provided by a competent tax professional.  Please seek competent tax advice regarding the tax treatment of the Policy when contemplating a change in 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 modifies 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.  The charges for the Rider are calculated in the same manner as those applicable to the base policy.  Currently, if the Policy Owner chooses to purchase coverage under this Rider and concurrently reduce the Base Specified Amount by an off-setting amount, some of the charges associated with the Policy will be reduced because charges under the Rider may be lower than the corresponding charges under the base policy.  Rider policy charges are lower in most cases because the Rider is term insurance.  The greater the allocation is to Rider, the lower the overall charges will be under the Policy.  See Appendix C to this prospectus for examples showing how charges are "blended" when the Policy Owner elects the Supplemental Insurance Rider.

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 Attained Ages, the cost of insurance charge for the Rider is more expensive than the cost of insurance for the base policy; and

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o Since the Rider terminates when the Insured reaches Attained Age 100, Rider Specified Amount coverage will end prior to the Maturity Date.

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

The Policy Owner 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 Policy Date.  (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 the Policy Owner's written request, unless they 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 partial surrender, are done proportionally between the amounts the Policy Owner has allocated to Base Specified Amount and Rider Specified Amount.

Terminating the Rider.  The Policy Owner may terminate this Rider by submitting a written request to us at our Home Office.  We may require that the Policy be submitted for endorsement.  Terminating this Rider will likely result in increased policy charges because of the difference in the pattern of policy charges 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 the 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 the Policy Owner upon termination of this Rider.

In most instances, terminating the Rider will not be to the Policy Owner's advantage.  If the Policy Owner decides to terminate the Rider, they should carefully discuss this decision with a registered representative or a qualified financial advisor.

Supplemental Insurance Rider Charges.  Refer to the "Policy Rider Charges" section of this prospectus for a description of charges associated with this Rider.

Policy and Rider 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 and certain expenses may be recovered utilizing more than one charge.  We begin to deduct monthly charges from the Policy's Cash Value on the Policy Date.  These charges are assessed by redeeming Accumulation Units.  The number of Accumulation Units redeemed is determined by using the amount of the charge and the value of the Accumulation Units on the date the charge is assessed.  We do not deduct Policy charges or rider charges from the Cash Value attributable to the Policy Loan Account.  If there is a policy loan, a complete description of how interest credited and charged results in costs to the Policy Owner is described in the Policy Loans section of this prospectus.

The charges reflect the costs and risks associated with the 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.

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The charges assessed under the Policy will depend upon the band assigned to that Policy.  Charges will also differ if the Policy Owner elects coverage under the Supplemental Insurance Rider.  Generally, if the Policy Owner chooses 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 the 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). See Appendix C to this prospectus for examples showing how charges are "blended" when the Policy Owner elects the Supplemental Insurance Rider.  (For more information about the benefits and operation of the Supplemental Insurance Rider, see the Policy Rider Charges sub-section of this prospectus.)  The levels of charges associated with each policy charge 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.

Banded Policy Charges and How We Assign a Band to the Policy

A single Policy Owner will often purchase multiple corporate owned variable universal life insurance policies as part of a single life insurance purchase.  We call this bulk purchase of multiple life insurance policies a Consolidated Purchase.  As part of a Consolidated Purchase, a Policy Owner will normally purchase multiple policies at different times as part of a single transaction.  We refer to each simultaneous purchase of more than one life insurance policy by the same Policy Owner as a Block Purchase.  The Consolidated Purchase can consist of one or more Block Purchases.  We consider a simultaneous purchase of life insurance to be where the Policy Owner presents a list of multiple individuals to be insured by us at the same time.  Each individual will be an insured of a single policy issued, but all of the insureds presented to us simultaneously will be part of the same Block Purchase.  If the Policy Owner subsequently presents us with one or more new insureds simultaneously, these insureds and the policies issued on them will be considered a new Block Purchase.

We have banded our policy charges to pass on the reduction of costs associated with the economies of scale associated with one or more Block Purchases comprising a Consolidated Purchase.  As the amount of aggregate first-year Premium associated with multiple Block Purchases increases, the band assigned to a new Block Purchase will generally result in lower overall charges on that block.

How Aggregate Premium is Determined on the Initial Block Purchase and Each Subsequent Block Purchase

Regardless of whether a policy is issued as a MEC or non-MEC, we count aggregate Premium on each policy up to its 7-pay limit defined in Code Section 7702A, plus any Premium received as part of a Section 1035 exchange, for purposes of assigning charge bands to policies that are part of a larger Consolidated Purchase.   This means Premium in excess of the 7-pay limit is not included for purposes of assigning policies a charge band.  The 7-pay limit is unique to each policy issued because the limit includes numerous factors unique to each policy like the age of the Insured, Base Specified Amount, Substandard Ratings, and any Code Section 1035 exchanges.  We only include aggregate Premium up to the 7-pay limit because the majority of policies we issue do not exceed that limit and we priced the Policy on that basis.  A Consolidated Purchase begins with an initial Block Purchase.

When we receive a request for an initial Block Purchase of policies we cannot determine the amount of Premium we will receive in the first year, so for purposes of assigning a charge band we assume the aggregate first year Premium on each policy in the initial Block Purchase will be its Code Section 7702A 7-pay limit, plus any Premium that is part of a Section 1035 exchange.  If we receive less than the 7-pay limit in aggregate first year Premium, it will not impact the charge band already assigned, but it will be used for calculating aggregate first year Premium on each subsequent Block Purchase.

For each subsequent Block Purchase, the charge band assigned is based on the actual amount of first-year Premium received on policies in previous Block Purchases plus the Code Section 7702A limit on first-year premium of all of the policies that are part of the new Block Purchase.  For example, if a previous Block Purchase has a Code Section 7702A limit of $150,000 on first-year Premium, but the total actual first-year Premium received with the initial Block Purchase is only $100,000, then on the new Block Purchase we use $100,000 actually received as the amount added to the new Block Purchase to determine total first-year Premium and the band assigned.  If we use the same example where Premium actually received is in excess of the 7-pay limit, the aggregate Premium used in determining the band applicable to the new Block Purchases remains $150,000, because Premium in excess of the Code Section 7702A 7-pay limit is not included in calculating aggregate first year Premium.

We offer four bands of charges.  The table below shows where each band's break-point exists with regard to the amount of aggregate first-year Premium applied.

	Band 1	Band 2	Band 3	Band 4
Aggregate First-Year Premium	$100,000 - $249,999	$250,000 - $499,999	$500,000 - $999,999	≥$1,000,000

The band assigned to a Block Purchase will be adjusted, if necessary, for any policies cancelled during the right to examine period.  Once the right to examine period has ended, the band assigned to a Block Purchase will not change for any reason.

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Premium Load

We deduct a Premium Load from each Premium payment to partially reimburse us for sales expense and Premium taxes, and certain actual expenses, including acquisition costs.  The Variable Account Asset Charge is also designed to partially reimburse us for these expenses.  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.  The Premium Load is assessed as a percentage of the Premium received and is only assessed once at the time the Premium is received.

The first factor used in determining the Premium Load is the band that is assigned to the Policy.  A Block Purchase assigned to a higher charge band will result in a lower Premium Load.  Different Block Purchases may be assigned to different charge bands based on the aggregate first-year Premium of the Consolidated Purchase when a Block Purchase is made.  So the percentage charge assigned to a Policy in a particular Block Purchase may differ from policies in other Block Purchases.  The other factors determining Premium Load are specific to each policy purchased and when Premium in each policy is received.  These other factors include the policy year in which the Premium is applied, the amount of Premium received in a policy year, and how the Premium is allocated between Target Premium and Excess Premium.  If the Policy Owner purchases term insurance coverage via the Supplemental Insurance Rider, Target Premium is generally reduced and, in turn, results in a lower Premium Load.

We divide Premium payments 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.  For example, if a policy has a Target Premium of $100,000, Premium of $10,000 is paid each month the first policy year, and the policy is part of a Block Purchase assigned to Band 2, then each of the first ten Premiums will be assessed a Premium Load of 5% or $500 on each $10,000 of Premium paid.  The last two Premiums in this example would be in excess of Target Premium and will be assessed a Premium Load of 3% or $300 on each of the last two $10,000 Premiums paid in the first policy year.  This example assumes current charges under the fee table are being assessed.

If the Supplemental Insurance Rider is elected, Premium attributable to the Rider Specified Amount is treated as Excess Premium.   The amount of a Premium payment applied as Target Premium and Excess Premium is determined by dividing the Premium payment based on the percentages of Total Specified Amount allocated between Base Specified Amount and Rider Specified Amount.  For example, if your Total Specified Amount is allocated 80% to Base Specified Amount and 20% to Rider Specified Amount and you make a $10,000 Premium payment, then $8,000 would be treated as Target Premium and the remaining $2,000 as Excess Premium.

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.  See Appendix C to this prospectus for examples showing how Premium Loads are assessed.

Currently, the Premium Load assessed on each Premium payment declines in accordance with the table listed below.  The ultimate Premium Load purchase pays depends whether Premium paid is Target Premium or Excess Premium.

Premium Loads on Target Premium

Policy Year	Per Policy Charge Based on the Band Assigned to the Policy
	Band 1 $100,000 -$249,999	Band 2 $250,000 - $499,999	Band 3 $500,000 - $999,999	Band 4 ≥ $1,000,000
1-5	9%	5%	5%	5%
6-10	4%	5%	5%	5%
11 and thereafter	4%	3%	3%	3%

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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	Per Policy Charge Based on the Band Assigned to the Policy
	Band 1 $100,000 -$249,999	Band 2 $250,000 - $499,999	Band 3 $500,000 - $999,999	Band 4 ≥ $1,000,000
1-5	5%	3%	3%	3%
6 – 10	4%	3%	3%	3%
11 and thereafter	4%	2%	2%	2%

For purposes of determining the Premium Load applicable to an increase in the Base Specified Amount the effective date of the increase will be used.  An increase in the Base Specified Amount will not impact (i.e. change) the Premium band assigned to the policy at issue.

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 applicable band, and the number of years from the Policy Date.  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 the Policy Owner pays is determined by multiplying the Base Policy Net Amount At Risk by the cost of insurance rate.  There may be a separate cost of insurance rate for the initial Base Specified Amount and any Base Specified Amount increase.  In the event that there is a decrease in the Base Specified Amount, then there will be a proportional decrease in the monthly Cost of Insurance Charge for the Base Specified Amount. The cost of insurance rates will never be greater than those shown on the Policy Data Page plus any monthly flat extra charge assessed for Substandard Ratings.

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

We may underwrite the 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 insurance rates being applied to fully underwritten policies.   If the Policy Owner was to purchase one of our policies that is medically underwritten and the Insured is healthy, the cost of insurance rates for that Policy would be lower.

The Cost of Insurance Charge, including any Flat Extra we assess due to a Substandard Rating, will be deducted proportionally from the Policy's Sub-Account allocations and the fixed account.

Flat Extras and Substandard Ratings.  As part of our underwriting process, we may inquire about the occupation and activities of the Insured.  If the activities or occupation of the Insured cause an increase health or accident risk, it may result in the Insured receiving a Substandard Rating.  If this is the case, we may add an additional component to the Cost of Insurance Charge called a "Flat Extra."  The Flat Extra accounts for the increased risk of providing life insurance when one or more of these factors apply to the Insured.  The Flat Extra is a component of the total Cost of Insurance Charge, so if applied it will be deducted from the Policy's Cash Value on the Policy Date and the monthly anniversary of the Policy Date.  The monthly Flat Extra is between $0.00 and $2.08 per $1,000 of the Net Amount At Risk.  If a Flat Extra is applied, it is shown on the Policy Data Pages.  In no event will the Flat Extra result in the Cost of Insurance Charge exceeding the maximum charge listed in the Fee Table of this prospectus.  If a Flat Extra is applied and the Policy Owner has elected the Supplemental Insurance Rider, it will also be applied to the Rider Specified Amount.

Base Variable Account Asset Charge

We deduct a Variable Account Asset Charge from the Policy's Cash Value allocated to the Variable Account on each monthly anniversary of the Policy Date to compensate us for certain actual expenses, including a partial reimbursement of acquisitions costs and premium taxes not covered by the Premium Load.  This charge also is designed to provide us revenue

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to off-set expense risks associated with the Policy, the risk that the costs of issuing and administering the policy will be more than expected, the risk that lapse and surrender rates will be higher than expected, and revenue that may be profit to us.  In the Policy, this charge is referred to as the "Sub-Account Asset Charge."

The Variable Account Asset Charge will be deducted proportionally from the Policy Owner's Variable Account allocations on each monthly anniversary of the Policy Date.  The Variable Account Asset Charge applicable to a particular Policy depends on the amount of your Cash Value allocated to the Variable Account, the applicable band, and whether there is any specified amount attributable to the Supplemental Insurance Rider. (Different Variable Account Asset Charges apply to the Rider.  Information on Variable 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 of the Variable Account. The table below shows the current Base Variable Account Asset Charges.

Current Base Variable Account Asset Charges (shown as an annual rate)1

Policy Years	Per Policy Charge Based on the Band Assigned to the Policy (as a percentage of assets allocated to the Variable Account)
	Band 1 $100,000 - $249,999	Band 2 $250,000 - $499,999	Band 3 $500,000 - $999,999	Band 4 ≥ $1,000,000
1-10	0.50%	0.35%	0.30%	0.25%
11-20	0.30%	0.20%	0.15%	0.15%
21-30	0.20%	0.15%	0.15%	0.10%
31 and Afterwards	0.10%	0.05%	0.05%	0.05%

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

The guaranteed maximum annual and monthly charges are shown on the Policy Data Pages.  The maximum Base Variable Account Asset Charge is 0.90% (annual rate) regardless of the band assigned to the Policy.

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 a particular Policy depends on the Total Specified Amount and the applicable band. The maximum guaranteed monthly 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 a Policy's Sub-Account allocations and the fixed account.

Base Specified Amount Charges

Per Policy Charge Based on the Band Assigned to the Policy
Band 1 $100,000 - $249,999	Band 2 $250,000 - $499,999	Band 3 $500,000 - $999,999	Band 4 ≥ $1,000,000
$0.08 per $1,000 of Base Specified Amount	$0.07 per $1,000 of Base Specified Amount	$0.07 per $1,000 of Base Specified Amount	$0.07 per $1,000 of Base Specified Amount

A distinct Rider Specified Amount charge applies to the Supplemental Insurance Rider.  If the Policy Owner elects that Rider, the Total Specified Amount charges the Policy Owner pays will depend upon the allocation of Total Specified Amount between the base policy and the Supplemental Insurance Rider.  To determine Total Specified Amount charges, the Policy Owner 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 "Charges Associated with the Supplemental Insurance Rider" sub-section of the "Policy Rider Charges" section below.

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.

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

Illustration Charge

Currently, we only assess an Illustration Charge for excessive requests for illustrations of In Force policies.  We consider excessive requests to be more than ten in any twelve month period.  This charge compensates us for the administrative costs of generating the illustration.  This charge 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.

We reserve the right to begin charging the Illustration Charge for all requests for illustration of In Force policies in the future.  If we begin charging for all requests for illustration of In Force Policies, we will provide written notice at least thirty days in advance.

The Illustration Charge is not applicable to requests for illustration of prospective policies during the sales process.

Policy Rider Charges

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 the 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.  There is no charge associated with this Rider.

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 the Policy Owner pays on coverage under the base policy.

· Supplemental Insurance Rider Variable Account Asset Charge;

· Supplemental Insurance Rider Specified Amount Charge; and

· Supplemental Insurance Rider Cost of Insurance Charge.

When the Supplemental Insurance Rider is elected, the Rider's charges are blended with the base Policy's charges.  By blending we mean that the charge associated with base and Rider are multiplied by their respective percentage allocation and then added.  For example, if you allocate 80% to base coverage and 20% to Rider coverage to determine total charges the Policy Owner would multiple the base charge by 80%, independently multiply the Rider charge by 20% and then add the result of these two calculations to determine total charges.  An example of blending is provided in Appendix C of this prospectus.

If  the Policy Owner purchases this Rider and increases the Total Specified Amount (i.e., by the Rider Specified Amount attributable to the Supplemental Insurance Rider), then  the overall monthly charges associated with the Policy will increase, even if the Base Specified Amount is not changed.  If, however, the Policy Owner purchases the Rider and does not increase the Total Specified Amount and instead reduces 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.

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

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Current Supplemental Insurance Rider Variable Account Asset Charges (shown as an annual rate)1

Policy Years	Per Policy Charge Based on the Band Assigned to the Policy (as a percentage of assets allocated to the Variable Account)
	Band 1 $100,000 - $249,999	Band 2 $250,000 - $499,999	Band 3 $500,000 - $999,999	Band 4 ≥ $1,000,000
1-10	0.50%	0.35%	0.30%	0.25%
11-20	0.30%	0.20%	0.15%	0.15%
21-30	0.20%	0.15%	0.15%	0.10%
31 and Beyond	0.10%	0.05%	0.05%	0.05%

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

The maximum Rider Variable Account Asset Charge is 0.90% (annual rate).

We determine the Variable Account Asset Charge by multiplying a Policy's Cash Value allocated to the Variable Account by the weighted average (i.e., a blend that uses the relative proportions of the Base and Rider Specified Amounts) of the Variable Account Asset Charges for the Base Policy and the Supplemental Insurance Rider.  Currently, the Variable Account Asset Charge is no more than (and is guaranteed never to exceed) 0.076126% on a monthly basis (and ranges between 0.05% and 0.90% on an annual basis), of a Policy's net assets allocated to the Variable Account.  The guaranteed maximum annual and monthly charges applicable to a particular Policy are shown on the Policy Data Pages.

Rider Specified Amount Charge.  If the Policy Owner purchases 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 a particular Policy depends on the Total Specified Amount and the allocation of the Total Specified Amount between Base Specified Amount and Rider Specified Amount. The charge 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 a Policy's Sub-Account allocations and the fixed account. The table below shows the current Rider Specified Amount Charges.

Rider Specified Amount Charges

Per Policy Charge Based on the Band Assigned to the Policy
Band 1 $100,000 - $249,999	Band 2 $250,000 - $499,999	Band 3 $500,000 –  $999,999	Band 4 ≥ $1,000,000
$0.04 per $1,000 of Rider Specified Amount	$0.03 per $1,000 of Base Specified Amount	$0.03 per $1,000 of Base Specified Amount	$0.03 per $1,000 of Base Specified Amount

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

To determine total specified amount charges, the Policy Owner 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 Policy Owner elected.  The end result is a charge blending.

Here is an example of how charges are blended if the Policy Owner elects Base Specified Amount and Rider Specified Amount.  For this example, assume the following:

Total Specified Amount = $19,650,000.

Base Specified Amount = 50% or $9,825,000.

Rider Specified Amount = 50% or $9,825,000.

The amount of first year Premium = $900,000.

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The charges are calculated using the following formula.

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

Total Per $1,000 Specified Amount Charge = [(BA x BSAC) + (RA x RSAC)] x [Total Specified Amount / $1,000]

Using this formula and the assumptions described above, here is how the calculation would work.

Total Specified Amount = $19,650,000

BA = 50%

BSAC = $0.065

RA = 50%

RSAC = $0.03

Total Per $1,000 Specified Amount Charge	= [(50% x $0.065) + (50% x $0.03)] x [$19,650,000 / $1,000]
	= [($0.0325) + ($0.015)] x [19,650]
	= [$0.0475] x [19650]
	= $933.38 per month

Supplemental Insurance Rider Cost of Insurance Charge.  If the Policy Owner elects 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 on our expectations as to future experience for factors such as mortality, persistency, expenses, and taxes.  The supplemental insurance rider cost of insurance rate will vary by the Insured's Attained Age, sex (if not unisex classified), tobacco use, Substandard Ratings, underwriting class, the applicable band, and the number of years from the Policy Date.  The Rider Cost of Insurance Charge may include a Flat Extra for certain Substandard Ratings.  For a detailed description of how Flat Extras operate, see the "Base Policy Cost of Insurance" subsection of the "Policy and Rider Charges" section of this prospectus.

The Supplemental Insurance Rider Cost of Insurance Charge will be deducted proportionally from a Policy's 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 the Policy Owner 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).

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In most instances, Policy charges end up being lower if the Policy Owner applies as much coverage as possible to the Rider.

Total Specified Amount remains the same unless the Policy Owner specifically requests an increase or decrease.  All increases or decreases are done proportionally based on a Policy's 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.

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 the Policy Owner will not pay these charges directly, they will affect the value of the assets they 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.

Copies of any of the underlying mutual funds' prospectuses available under the Policy may be requested FREE OF CHARGE.  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.

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 37.00% of first year premiums and 17.00% 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 (37.00% of first year premiums and 17.00% 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 1.25% 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.

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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, 2009 , 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.  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 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.

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The interest rate on the amount of outstanding Indebtedness will always be a rate between 2.10% and 3.50% per annum.  The maximum guaranteed rate is 3.50% per annum. Policy loan interest charge may provide revenue for risk charges and profit.  The current effective annual interest rate charged on the outstanding balance of your loan is 2.80% for policy years 1 through 15, 2.55% for policy 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.

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.  The minimum repayment amount is $25.  We will apply all loan repayments to the Sub-Accounts according to the allocation instructions in effect at the time the payment is received, 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 four times the current month's policy charges.  If you do not pay the indicated amount within sixty-one 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 three 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.

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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.

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 six 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 three months of policy charges.  Any applicable Enhancement Benefit is not available to be taken as a partial surrender.  Monthly policy charges are calculated for each month, beginning on the Policy Date, as follows:

1. Base Variable Account Asset Charge; plus

2. Administrative Charges; plus

3. Base Specified Amount Charge; plus

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

5. the Base Policy Cost of Insurance.

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 six 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:

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· 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.

A partial surrender will be processed within seven days of the date we receive your written partial surrender request on a form acceptable to us 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, 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 three 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, as specified in the Policy Data Pages, 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 Cash Value as of the date of the Insured's death, or

· the applicable percentage, as specified in the Policy Data Pages, 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, as specified in the Policy Data Pages, 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 Total Specified Amount on the Policy Date and (ii) $8,000,000.  For Option 3, the maximum Death Benefit is equal to the

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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 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., 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 Policy 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 Policy 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 change from Option 1 to Option 2, we will reduce the Total Specified Amount so that the Net Amount At Risk remains the same.  Also, upon effecting a change from Option 3 to Option 2, we will adjust the Total Specified Amount so that the Net Amount at Risk remains the same.

However, upon effecting a change from Option 2 to Option 1, the Total Specified Amount will remain unchanged, resulting in a reduction of the Net Amount At Risk.

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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 two 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 two 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 two 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 two years from the Change Date.

Suicide

If the Insured dies by suicide, while sane or insane, within two 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 two 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 two 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 two 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 two 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 Policy Owner is also the Beneficiary, and if the exchanged Policy was originally issued more than two years prior to the Policy Date of this Policy.  If the Policy 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, the Policy will automatically be extended to the Insured's date of death, unless you elect otherwise.  Refer to the "Extending Coverage Beyond the Maturity Date" section below for additional information.

If you elect not to extend the Policy beyond the Maturity Date and the Policy is In Force, we will pay the Maturity Proceeds to you, generally, within seven days after we receive your written request at our Home Office.  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 Maturity 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.

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 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.

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Extending Coverage Beyond the Maturity Date

After the Maturity Date, the Policy will operate the same as it did prior to the Maturity Date, 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) 100% of the Policy's Cash Value will be transferred to the fixed account;

(5) no additional Premium payments will be allowed; and

(6) no additional periodic charges will be deducted.

This Policy may not qualify as life insurance under federal tax law after the Maturity Date.  Extending the Policy beyond the Maturity Date may not provide more favorable tax treatment than otherwise applicable to the Maturity Proceeds.  If you do not elect to receive the Maturity Proceeds on the Maturity Date, the Policy will automatically be extended.  You should consult with a qualified tax advisor before the Policy is extended beyond the Maturity Date.

Payment of Policy Proceeds

When Proceeds are due under the policy you may elect to leave the Proceeds on deposit with us (or an affiliate) in an interest-bearing account or have them paid to you.

If you make an election to receive Proceeds from us we require you to make such an election in writing to us at our Home Office.  When we receive your request in good order to be paid Proceeds, we may make payment in two lump sums.

The first lump sum will be the portion of the Cash Surrender Value in the separate account.  This first lump sum will be paid within seven days of the date we receive your good order request in writing at our Home Office.  We may delay payment of the first lump sum only in cases where the SEC permits us by emergency order to do so.

The second lump sum will be paid if there are any remaining Proceeds attributable to the general account.  These amounts normally will be paid by us in a second lump sum within thirty of the date we receive your good order request in writing at our Home Office.  However, we reserve the right to delay payment of any portion of Proceeds attributable to the general account for up to six months, or as permitted under state law.

Taxes

The tax treatment of life insurance policies under the Internal Revenue Code ( " 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.

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 and 2010, 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.

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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.  Pursuant to the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 ("EGTRRA"), the federal estate (but not federal gift) tax was repealed for decedents who die after December 31, 2009 and before January 1, 2011, and will be reinstated with respect to decedents who die after December 31, 2010.  If Congress has not acted further, the size of estates that will not incur an estate tax will revert to $1 million.  However, it is possible that new tax legislation will be introduced and passed that (a) may impose an estate tax on decedents who die during 2010, whether before or after the date that the legislation is passed, and/or (b) may make further changes to the estate tax for 2011 and beyond.  Those changes could include changing the threshold at which an estate would pay a federal estate tax and changing the tax rates applicable to such estates.

Under prior law, which is expected to continue if an estate tax is reimposed, 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).  As with the estate tax, the GSTT tax has been repealed for 2010; 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 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.

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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.

Depending on your circumstances, the use of the cash value of the policy to pay for the cost of any Rider added to the base policy, could be treated as a distribution, and would be subject to the rules described below.  You should seek competent tax advice regarding the tax treatment of the addition of any Rider to your policy, based on your individual facts and circumstances.

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 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.

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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 adviser 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 advisers 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 advisers 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 added Sections 101(j) and 6039I to the Code, 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 provisions, 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.

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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 two exceptions to this general rule of taxability, provided that statutory notice, consent, and information requirements are satisfied.  These requirements are that, prior to the issuance of the policy to a 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 two 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 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 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 Unit s.  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

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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.

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.  For purposes of federal securities laws, the separate account is, and will remain, fully funded at all times.  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.  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 the Policy Owner places in this separate account.  The value of each Sub-Account will increase or decrease, depending on the Investment Experience of the corresponding mutual fund.  The Policy Owner could lose some or all of their 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;

· substitute shares of another mutual fund, which may have different fees and expenses, for shares of an existing mutual fund;

· 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;

· deregister the separate account under the 1940 Act, or operate the separate account as a management investment company under the 1940 Act or as any other form permitted by law; 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.

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We will notify the Policy Owner 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).

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.

In April 2009, Nationwide filed an application with the SEC for an order permitting it to substitute assets allocated to certain underlying mutual funds into other underlying mutual funds available under the policy that have similar investment objectives and strategies.  If and when Nationwide receives SEC approval for these substitutions, affected policy owners will be notified in advance of the specific details relating to the substitutions and will be given an opportunity to make alternate investment allocations.

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 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 Separate Account-4.

Voting Rights

Although the separate account owns the mutual fund shares, the Policy Owner is 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 the Policy Owner instructs.

When a shareholder vote occurs, the Policy Owners will have the right to instruct us how to vote.  The weight of a Policy Owner's vote is based on the number of mutual fund shares that corresponds to the amount of Cash Value they 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 a Policy Owner 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.

Compensation Paid to Insurance Agents Selling this Product

Direct Compensation

The agent who sold this Policy represents us in the placement of the Policy and is providing services on the Policy Owner's behalf.  We provide compensation to the agent for arranging the sale of the Policy.  This compensation may include commissions and other cash and non-cash compensation (sales incentives).  Agents also may receive renewal commissions for servicing policies and keeping them in force.

We pay this compensation out of our own resources.  The amount of compensation we pay varies, depending upon, among other factors, the product type and the features and/or riders that are attached to the Policy.  Compensation paid in respect of one product or carrier may exceed compensation payable in respect of a comparable product or carrier.

Moreover, certain Policy features or riders may involve commissions or compensation that differ from compensation payable in respect of "base" or standard contractual features.

Indirect Compensation

Agents who sell this Policy are members of firms that are stockholders of M Financial Group.  As a stockholder, the agent's firm (a "Member Firm") shares in the profits of M Financial Group via periodic stock dividends.

M Financial Group also maintains an incentive compensation plan pursuant to which it annually distributes to plan participants (e.g. member Firms or their agents) most of M Financial Group's consolidated profits.  Although distributions

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under the plan are, to some extent, averaged among the various member firms, lines of business, and cost centers of M Financial Group, a significant portion of plan distributions are made in proportion to the revenue a Member Firm generates.

Distributions of dividends and incentive compensation to Member Firms or their selling agents are in addition to compensation paid directly to agents by us and other unaffiliated carriers.  Many Member Firms remit these distributions to their owners or individual agents (in some cases in proportion to business generated).

M Financial Group derives its revenues from both commissions and asset-based fees that arise from a variety of sources, including:

Override Compensation paid to M Financial Group by us and by some other insurance carriers and financial service providers.  Override compensation may be based upon such factors as aggregate policy premiums paid to the carrier from sales by all Member Firms, aggregate assets placed under financial management from sales by all Member Firms, and profits earned and/or services utilized from sales by all Member Firms.  The amount of compensation varies among products and carriers.  Products or services which involve override commissions for M Financial Group could indirectly provide incentives to agents to recommend such products or similar products or services that do not produce override commissions to M Financial Group.

Reinsurance profits (or, potentially losses) from the mortality, investment, and persistency risks assumed by M Financial Re, including risks related to the Policy.  Policy performance, charges, and fees are identical regardless of whether or not a Policy is reinsured by M Financial Re.  Products or services that involve potential reinsurance profits for M Financial Group could indirectly provide incentives to agents to recommend such products over similar products or services that do not result in reinsurance profits to M Financial Group.

Fee payable in respect of underlying investment options.  M Financial Group or its subsidiaries receive fees from some of the funds that are investment options under this Policy (or from a fund's investment advisor or portfolio manager) to the extent the Policy Owner allocates Cash Value to that fund.  In addition, M Financial Investment Advisers, Inc., an affiliate of M Financial Group, is the investment adviser to certain funds and receives investment advisory fees with respect to assets invested in those funds.  Fees payable to M Financial Group in respect of assets allocated to one fund may exceed fees payable in respect of assets placed in another fund.

Brokerage fees or commissions for securities transactions (including the sale of this Policy) executed by M Holdings Securities, the registered broker-dealer subsidiary of M Financial Group.  M Holdings Securities retains a portion of these fees to cover its costs and remits the balance to the Member Firm or its selling agent.

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), an affiliated distribution network that markets directly to its customer base. 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.

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The financial services industry, including mutual fund, variable annuity, retirement plan, life insurance and distribution companies, has also been the subject of increasing scrutiny on a broad range of issues 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 on such issues as 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 responded to information requests and/or subpoenas from the SEC in 2003 and the New York State Attorney General in 2005 in connection with investigations regarding market timing in certain mutual funds offered in insurance products sponsored by the Company.  The Company is not aware of any further action on 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, self reported 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 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 Attorney General, which assumed the investigation from 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’s consolidated financial position or results of operations in the future.

On September 10, 2009, NRS was named in a lawsuit filed in the Circuit Court for Montgomery County, Alabama entitled Twanna Brown, Individually and on behalf of all other persons in Alabama who are similarly situated, v. Nationwide Retirement Solutions, Inc., Alabama State Employees Association, PEBCO, Inc., Edwin “Mac” McArthur, Steve Walkley, Glenn Parker, Ulysses Lavender, Diana McLain, Randy Hebson, and Robert Wagstaff; and Unknown Defendants A-Z .  On January 22, 2010, Brown filed an Amended Complaint alleging in Count One, that all the defendants were involved in a civil conspiracy and seeks to recover actual damages, forfeiture of all other payments and/or salaries to be the fruit of such other payments, punitive damages and costs and attorneys fees. In Count Two, although NRS is not named, it is alleged that the remaining defendants breached their fiduciary duties and seeks actual damages, forfeiture of all other payments and/or salaries to be the fruit of such other payments, punitive damages and costs and attorneys fees. In Count Three, although NRS is not named, the plaintiff seeks declaratory relief that the individual defendants breached their fiduciary duties, seeks injunctive relief permanently removing said defendants from their respective offices in the Alabama State Employees Association (ASEA) and PEBCO and costs and attorneys fees. In Count Four, it alleges that any money Nationwide paid belonged exclusively to ASEA for the use and benefit of its membership at large and not for the personal benefit of the individual defendants.  Plaintiff seeks to recover actual damages from the individual defendants, forfeiture of all other payments and/or salaries to be the fruit of such other payments, punitive damages and costs and attorneys fees. On February 5, 2010, the Company filed a motion to dismiss, or in the alternative, a motion to stay the amended complaint.  On February 9, 2010, the individual defendants filed a motion to dismiss the amended complaint.  On December 13, 2009, the plaintiff filed a motion to consolidate this case with Nationwide Retirement Solutions, Inc. v. Alabama State Personnel Board, PEBCO, Inc. and Alabama State Employees Association . The Company continues to defend this case vigorously.

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

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Company, Nationwide Retirement Solutions, Inc., Alabama State Employees Association, PEBCO, Inc. and Fictitious Defendants A to Z . On December 2, 2008, NRS and NLIC were named in an Amended Class Action Complaint filed in the Circuit Court of Jefferson County, Alabama entitled Ruth A. Gwin, Steven E. Coker, Sandra H. Turner, and a class of similarly situated individuals v. Nationwide Life Insurance Company, Nationwide Retirement Solutions, Inc, Alabama State Employees Association, Inc., PEBCO, Inc. and Fictitious Defendants A to Z claiming to represent a class of all participants in the ASEA Plan, excluding members of the Deferred Compensation Committee, members of the Board of Control, ASEA's directors, officers and board members, and PEBCO 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 16, 2008, the Companies filed their Answer. On April 28, 2009, the court entered an order denying the plaintiffs’ motion for preliminary injunction.  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 July 10, 2009, the Court of Appeals heard oral argument.  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 sought 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 alleged that the defendants breached their fiduciary duties by arranging for and retaining service payments from certain mutual funds.  The complaint sought 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 February 3, 2010, the Sixth Circuit Court of Appeals affirmed the District Court’s dismissal of this case.   NFS, NLIC and NRS continue 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 .  In the plaintiffs' sixth amended complaint, filed November 18, 2009, they amended the list of named plaintiffs and claim to represent a class of qualified retirement plan trustees 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.  On November 6, 2009, the Court granted the plaintiff’s motion for class certification and certified a class of “All trustees of all employee pension benefit plans covered by ERISA which had variable annuity contracts with NFS and NLIC or whose participant's had individual variable annuity contracts with NFS and NLIC at any time from January 1, 1996, or the first date NFS and NLIC began receiving payments from mutual funds based on a percentage of assets invested in the funds by NFS

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and NLIC, whichever came first, to the date of November 6, 2009”.  Also on November 6, 2009, the Court denied plaintiffs' motion to strike NFS and NLIC’s counterclaim for breach of fiduciary duty against the Trustees, in the event NFS and NLIC are held to be a fiduciary at trial, and granted H. Grady Chandler’s motion to intervene.  On November 23, 2009, NFS and NLIC filed a rule 23(f) petition asking the Second Circuit Court of Appeals to hear an appeal of the District Court's order granting class certification. On December 2, 2009, NFS and NLIC filed an answer to the 6th Amended Complaint.  On January 29, 2010, the Companies filed a motion for class certification against the four named plaintiffs, as trustees of their respective retirement plans and against the trustees of other ERISA retirement plans who become members of the class certified in this lawsuit, for breach of fiduciary duty to the plans because the trustees approved and accepted the advantages of the allegedly unlawful “revenue sharing” payments.  NFS and NLIC continue to defend this lawsuit vigorously.

Nationwide Investment Services Corporation

The general distributor, NISC, is not engaged in any litigation of any 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

Below is a list of the available Sub-Accounts and information about the corresponding underlying mutual funds in which they invest.  The underlying mutual funds in which the Sub-Accounts invest 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.

Designations Key:

STTF:             The underlying mutual fund corresponding to this Sub-Account assesses (or reserves the right to assess) a short-term trading fee (see "Short-Term Trading Fees" earlier in the prospectus).

FF:             The underlying mutual fund corresponding to this Sub-Account primarily invests in other mutual funds.  Therefore, a proportionate share of the fees and expenses of any acquired funds are indirectly borne by investors.  As a result, investors in this Sub-Account may incur higher charges than if the assets were invested in an underlying mutual fund that does not invest in other mutual funds.  Please refer to the prospectus for this underlying mutual fund for more information.

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

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

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

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 B

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 II

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

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

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

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

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

American Funds Insurance Series - Global Small Capitalization Fund: Class 2

Investment Adviser:	Capital Research and Management Company
Investment Objective:	Seeks long-term growth of capital by investing primarily in stocks of smaller
	companies located around the world.

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).

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.: Service 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: Service Shares

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

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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.

DWS Variable Series II - Strategic Value VIP: Class B

This sub-account is only available in policies issued before December 31, 2010

Investment Adviser:	Deutsche Investment Management Americas Inc.
Investment Objective:	High rate of total return.

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

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

Fidelity Variable Insurance Products Fund - Fidelity VIP Freedom Fund 2015 Portfolio: Service Class 2

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

Designation: FF

Fidelity Variable Insurance Products Fund - Fidelity VIP Freedom Fund 2020 Portfolio: Service Class 2

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

Designation: FF

Fidelity Variable Insurance Products Fund - Fidelity VIP Freedom Fund 2025 Portfolio: Service Class 2

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

Designation: FF

Fidelity Variable Insurance Products Fund - Fidelity VIP Freedom Fund 2030 Portfolio: Service Class 2

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

Designation: FF

Fidelity Variable Insurance Products Fund - Fidelity VIP Freedom Fund 2040 Portfolio: Service Class 2

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

Designation: FF

Fidelity Variable Insurance Products Fund - VIP Equity-Income Portfolio: Service Class 2

Investment Adviser:	Fidelity Management & Research Company Boston, MA
Sub-adviser:	FMR Co., Inc., Fidelity Management & Research (U.K.) Inc., Fidelity Research
	& Analysis Company, Fidelity Investments Japan Limited, Fidelity
	International Investment Advisors, Fidelity International Investment Advisors
	(U.K.) Limited
Investment Objective:	Reasonable income.

Fidelity Variable Insurance Products Fund - VIP Growth Portfolio: Service Class 2

Investment Adviser:	Fidelity Management & Research Company Boston, MA
Sub-adviser:	FMR Co., Inc., Fidelity Management & Research (U.K.) Inc., Fidelity Research
	& Analysis Company, Fidelity International Investment Advisors, Fidelity
	International Investment Advisors (U.K.) Limited, Fidelity Investments Japan
	Limited
Investment Objective:	Capital appreciation.

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Fidelity Variable Insurance Products Fund - VIP Investment Grade Bond Portfolio: Service Class 2

Investment Adviser:	Fidelity Management & Research Company Boston, MA
Sub-adviser:	Fidelity Investments Money Management, Inc., Fidelity Research & Analysis
	Company, Fidelity International Investment Advisors, Fidelity International
	Investment Advisors (U.K.) Limited
Investment Objective:	High level of current income.

Fidelity Variable Insurance Products Fund - VIP Mid Cap Portfolio: Service Class 2

Investment Adviser:	Fidelity Management & Research Company Boston, MA
Sub-adviser:	FMR Co., Inc., Fidelity Management & Research (U.K.) Inc., Fidelity Research
	& Analysis Company, Fidelity Investments Japan Limited, Fidelity
	International Investment Advisors, Fidelity International Investment Advisors
	(U.K.) Limited
Investment Objective:	Long-term growth of capital.

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.

Franklin Templeton Variable Insurance Products Trust - Templeton Global Bond 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.

Invesco - Invesco V.I. Capital Development Fund: Series I (formerly, AIM Variable Insurance Funds - AIM V.I. Capital Development Fund: Series I Shares)

Investment Adviser:	Invesco Advisors, Inc.
Investment Objective:	Long-term growth of capital.

Invesco - Invesco V.I. High Yield Fund: Series I (formerly, AIM Variable Insurance Funds - AIM V.I. High Yield Fund: Series I Shares)

Investment Adviser:	Invesco Advisors, Inc.
Investment Objective:	Total return, comprised of current income and capital appreciation.

Invesco - Invesco V.I. International Growth Fund: Series I (formerly, AIM Variable Insurance Funds - AIM V.I. International Growth Fund: Series I Shares)

Investment Adviser:	Invesco Advisors, Inc.
Investment Objective:	Long-term growth of capital.

Invesco - Invesco V.I. Mid Cap Core Equity Fund: Series I (formerly, AIM Variable Insurance Funds - AIM V.I. Mid Cap Core Equity Fund: Series I Shares)

Investment Adviser:	Invesco Advisors, Inc.
Investment Objective:	Long-term growth of capital.

Ivy Funds Variable Insurance Portfolios, Inc. - Asset Strategy

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

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 capital growth, consistent with preservation of capital and balanced
	by current income.

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Janus Aspen Series - Forty Portfolio: Service Shares

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

Janus Aspen Series - Global Technology Portfolio: Service Shares

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

Janus Aspen Series - Overseas Portfolio: Service Shares

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

Janus Aspen Series - Perkins Mid Cap Value Portfolio: Service Shares

Investment Adviser:	Janus Capital Management LLC
Sub-adviser:	Perkins Investment Management LLC ("Perkins")
Investment Objective:	Capital appreciation.

Lazard Retirement Series, Inc. - Lazard Retirement Emerging Markets Equity Portfolio: Service Shares

Investment Adviser:	Lazard Asset Management LLC
Investment Objective:	Long-term capital appreciation.

Legg Mason Partners Variable Equity Trust - Legg Mason ClearBridge 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.

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

This sub-account is only available in policies issued before December 31, 2010

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.

M Fund, Inc. - M Business Opportunity Value Fund

Investment Adviser:	M. Financial Investment Advisers, Inc.
Sub-adviser:	Iridian Asset Management LLC
Investment Objective:	Long term capital appreciation.

M Fund, Inc. - M Capital Appreciation Fund

Investment Adviser:	M. Financial Investment Advisers, Inc.
Sub-adviser:	Frontier Capital Management Company, LLC
Investment Objective:	Maximum capital appreciation.

M Fund, Inc. - M International Equity Fund

Investment Adviser:	M. Financial Investment Advisers, Inc.
Sub-adviser:	Brandes Investment Partners, L.P.
Investment Objective:	Long term capital appreciation.

M Fund, Inc. - M Large Cap Growth Fund

Investment Adviser:	M. Financial Investment Advisers, Inc.
Sub-adviser:	DSM Capital Partners LLC
Investment Objective:	Long term capital appreciation.

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

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

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

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

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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:	The Fund seeks to provide high current income.

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

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

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

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Gartmore Global Partners
Investment Objective:	The fund seeks long-term capital growth.

Nationwide Variable Insurance Trust - NVIT Emerging Markets Fund: Class I (formerly, Nationwide Variable Insurance Trust - Gartmore NVIT Emerging Markets Fund: Class I)

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Baring International Investment Limited
Investment Objective:	The Fund seeks long-term capital growth by investing primarily in equity
	securities of companies located in emerging market countries.

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

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Nationwide Asset Management, LLC
Investment Objective:	The fund seeks as high level of income as is consistent with the preserving 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:	The Fund seeks 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.

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

Investment Adviser:	Nationwide Fund Advisors
Investment Objective:	The NVIT Investor Destinations Aggressive Fund (“Aggressive Fund” or the
	“Fund”) seeks maximum growth of capital consistent with a more aggressive
	level of risk as compared to other Investor Destinations Funds.

Designation: STTF, FF

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

Investment Adviser:	Nationwide Fund Advisors
Investment Objective:	The NVIT Investor Destinations Conservative Fund (“Conservative Fund” or
	the “Fund”) seeks a high level of total return consistent with a conservative
	level of risk as compared to other Investor Destinations Funds.

Designation: STTF, FF

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

Investment Adviser:	Nationwide Fund Advisors
Investment Objective:	The NVIT Investor Destinations Moderate Fund (“Moderate Fund” or the
	“Fund”) seeks a high level of total return
	consistent with a moderate level of risk as compared to other Investor
	Destinations Funds.

Designation: STTF, FF

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

Investment Adviser:	Nationwide Fund Advisors
Investment Objective:	The NVIT Investor Destinations Moderately Aggressive Fund (“Moderately
	Aggressive Fund” or the “Fund”) seeks
	growth of capital, but also seeks income consistent with a moderately
	aggressive level of risk as compared to other
	Investor Destinations Funds.

Designation: STTF, FF

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

Investment Adviser:	Nationwide Fund Advisors
Investment Objective:	The NVIT Investor Destinations Moderately Conservative Fund (“Moderately
	Conservative Fund” or the “Fund”)
	seeks a high level of total return consistent with a moderately conservative level
	of risk.

Designation: STTF, FF

Nationwide Variable Insurance Trust - NVIT Mid Cap Index Fund: Class II

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	BlackRock Investment Management, LLC
Investment Objective:	The Fund seeks capital appreciation.

Designation: STTF

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.

Designation: STTF

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:	The Fund seeks to provide above average total return over a market cycle of
	three to five years.

Designation: STTF

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.

Designation: STTF

Nationwide Variable Insurance Trust - NVIT Multi-Manager Large Cap Value 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.

Designation: STTF

Nationwide Variable Insurance Trust - NVIT Multi-Manager Mid Cap Growth Fund: Class I

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	American Century Investment Management, Inc.
Investment Objective:	The fund seeks long-term capital growth.

Designation: STTF

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.
Investment Objective:	The fund seeks long-term capital appreciation.

Designation: STTF

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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:	The Fund seeks capital growth.

Designation: STTF

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:	The Fund seeks capital appreciation.

Designation: STTF

Nationwide Variable Insurance Trust - NVIT Multi-Manager Small Company Fund: Class I

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Aberdeen Asset Management, Inc.; Gartmore Global Partners; Morgan Stanley
	Investment Management; Neuberger Berman Management, Inc.; Putnam
	Investment Management, LLC; Waddell & Reed Investment Management
	Company
Investment Objective:	The Fund seeks capital appreciation.

Designation: STTF

Nationwide Variable Insurance Trust - NVIT Nationwide Fund: Class I

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Aberdeen Asset Management, Inc.
Investment Objective:	The Fund seeks total return through a flexible combination of capital
	appreciation and current income.

Designation: STTF

Nationwide Variable Insurance Trust - NVIT Real Estate Fund: Class I (formerly, Nationwide Variable Insurance Trust - Van Kampen NVIT Real Estate Fund: Class I)

Investment Adviser:	Nationwide Fund Advisors
Sub-adviser:	Morgan Stanley Investment Management, Inc.
Investment Objective:	The Fund seeks current income and long-term capital appreciation.

Designation: STTF

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.

Designation: STTF

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.

Neuberger Berman Advisers Management Trust - AMT Regency Portfolio: S Class

Investment Adviser:	Neuberger Berman Management LLC
Sub-adviser:	Neuberger Berman, LLC
Investment Objective:	Growth of capital.

Oppenheimer Variable Account Funds - Oppenheimer Capital Appreciation Fund/VA: 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: 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.

59

PIMCO Variable Insurance Trust - All Asset Portfolio: Administrative Class

Investment Adviser:	Pacific Investment Management Company LLC
Sub-adviser:	Research Affiliates
Investment Objective:	Seeks maximum real return consistent with preservation of capital and prudent
	investment management. The portfolio seeks to achieve its investment objective
	by investing under normal circumstances substantially all of its assets in
	Institutional Class Shares of the Underlying PIMCO Funds

Designation: FF

PIMCO Variable Insurance Trust - Foreign Bond Portfolio (Unhedged): Administrative Class

Investment Adviser:	Pacific Investment Management Company LLC
Investment Objective:	Seeks maximum total return consistent with preservation of capital and prudent
	investment management. The Portfolio seeks to achieve its investment
	objective by investing under normal circumstances at least 80% of its assets in
	Fixed Income Instruments that are economically tied to foreign (non-U.S.)
	countries, representing at least three foreign countries, which may be
	represented by forwards or derivatives such as options, futures contracts or
	swap agreements.

PIMCO Variable Insurance Trust - Long-Term U.S. Government Portfolio: Administrative Class

Investment Adviser:	Pacific Investment Management Company LLC
Investment Objective:	Seeks maximum total return, consistent with preservation of capital and
	prudent investment management.  The Portfolio seeks to achieve its investment
	objective by investing under normal circumstances at least 80% of its assets in a
	diversified portfolio of fixed income securities that are issued or guaranteed by
	the U.S. Government, its agencies or government-sponsored enterprises (“U.S.
	Government Securities”), which may be represented by forwards or derivatives
	such as options, futures contracts, or swap agreements.

PIMCO Variable Insurance Trust - Low Duration Portfolio: Administrative Class

Investment Adviser:	Pacific Investment Management Company LLC
Investment Objective:	Seeks maximum total return, consistent with preservation of capital and
	prudent investment management. The Portfolio seeks to achieve its investment
	objective by investing under normal circumstances at least 65% of its assets in a
	diversified portfolio of Fixed Income Instruments of varying maturities, which
	may be represented by forwards or derivatives such as options, futures
	contracts or swap agreements.

PIMCO Variable Insurance Trust - Real Return Portfolio: Administrative Class

Investment Adviser:	Pacific Investment Management Company LLC
Investment Objective:	Seeks maximum real return consistent with preservation of capital and prudent
	investment management. The Portfolio seeks to achieve its investment objective
	by investing under normal circumstances at least 80% of its net assets in
	inflation-indexed bonds of varying maturities issued by the U.S. and non-U.S.
	governments, their agencies or instrumentalities and corporations, which may be
	represented by forwards or derivatives such as options, futures contracts or
	swap agreements.

PIMCO Variable Insurance Trust - Total Return Portfolio: Administrative Class

Investment Adviser:	Pacific Investment Management Company LLC
Investment Objective:	Seeks maximum total return consistent with preservation of capital and prudent
	investment management. The Portfolio seeks to achieve its investment
	objectives by investing under normal circumstances at least 65% of its total
	assets in a diversified portfolio of Fixed Income Instruments of varying
	maturities, which may be represented by forwards or derivatives such as
	option, futures contracts or swap agreements.

Pioneer Variable Contracts Trust - Pioneer Emerging Markets VCT Portfolio: Class I

Investment Adviser:	Pioneer Investment Management, Inc.
Investment Objective:	Long-term growth of capital.

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Pioneer Variable Contracts Trust - Pioneer High Yield VCT Portfolio: Class II

Investment Adviser:	Pioneer Investment Management, Inc.
Investment Objective:	Maximize total return through a combination of income and capital
	appreciation.  Normally, the portfolio invests at least 80% of its total assets in
	below investment grade (high yield) debt securities and preferred stocks.

Putnam Variable Trust - Putnam VT Small Cap Value Fund: Class IB

Investment Adviser:	Putnam Investment Management, LLC
Investment Objective:	Capital appreciation.

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: 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.

The Universal Institutional Funds, Inc. - Capital Growth Portfolio: Class II

Investment Adviser:	Morgan Stanley Investment Management, Inc., which does business in certain
Investment Objective:	Long-term capital appreciation by investing primarily in growth-oriented equity
	securities of large capitalization companies.

The Universal Institutional Funds, Inc. - Emerging Markets Debt Portfolio: Class II

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.

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.

The Universal Institutional Funds, Inc. - Mid Cap Growth Portfolio: Class II

Investment Adviser:	Morgan Stanley Investment Management, Inc., which does business in certain
Investment Objective:	Long-term capital growth by investing primarily in common stocks and other
	equity securities.

Van Eck Variable Insurance Products Trust - Van Eck VIP Global Hard Assets Fund: Initial Class (formerly, 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.

Van Kampen Life Investment Trust - Growth and Income Portfolio: Class II

Investment Adviser:	Van Kampen Asset Management
Investment Objective:	To seek long-term growth of capital and income.

Wells Fargo Advantage Funds - Wells Fargo Advantage VT Discovery Fund (formerly, 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 - Wells Fargo Advantage VT Small Cap Growth Fund (formerly, 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.

61

Appendix B: Definitions

Accumulation Unit(s) – A unit of measure representing a Policy Owner's investment in, or shares of, a Sub-Account.

Attained Age – A person's Issue 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 the Policy Owner requests 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.

Block Purchase – One or more policies identified by a Policy Owner (or prospective Policy Owner) as being part of the same transaction (e.g. a list of individuals to be insured).  Only actually issued policies, each also a part of the same Consolidated Purchase, and not cancelled during the right to examine period, will be considered part of the same Block Purchase.

Cash Surrender Value – The amount payable to the Policy Owner 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 of a Policy's allocations to the Sub-Accounts, the fixed account, and the Policy Loan Account.

Code – The Internal Revenue Code of 1986, as amended.

Consolidated Purchase – One or more Block Purchases by the same Policy Owner as part of a single life insurance purchase.  We consider a single life insurance purchase to be where a Policy Owner is using one or more Block Purchases to informally fund a corporate liability, such as a non-qualified deferred compensation plan or a similar arrangement.

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.  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 during the first six or ten policy years (depending on the Policy's charge band), provided the qualifying conditions have been satisfied.

Excess Premium – Any Premium applied to Base Specified Amount that exceeds the Target Premium.  If the Supplemental Insurance Rider is added, a higher proportion of the paid Premium will be Excess Premium.

FDIC – Federal Deposit Insurance Corporation.

Grace Period – A sixty-one day period after which the Policy will Lapse if the Policy Owner does not remit sufficient Premium to keep the Policy In Force.

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Home Office – Our Home Office is located at One Nationwide Plaza, Columbus, Ohio 43215.

In Force – Any time during which the benefits are payable under the policy and any elected Rider(s) .

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.

Issue Age – A person's age based on their last birthday on or before the Policy Date.

Lapse – The Policy terminates without value.

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 the Policy Owner elects otherwise. The Maturity Date is the anniversary of the Policy Date on or next following the Insured's 120th birthday.

Maturity Proceeds – The amount of money payable to the Policy Owner on the Maturity Date if your Policy is In Force.  The Maturity Proceeds are equal to the Cash Value minus any Indebtedness.

Minimum Required Death Benefit – The lowest Death Benefit that will qualify the Policy as life insurance under the Code.

Nationwide, us, we, our or the Company – Nationwide Life Insurance Company.

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.

Net Premium – The amount of Premium applied to the Policy after the deduction of the Premium Load.

Policy – The terms, conditions, benefits, and rights of the life insurance contract between the Policy Owner and the company.  The life insurance contract includes any attached written supplemental applications, together with any amendments, endorsements, or Riders.

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 actually be charged.  Please request an illustration for specific information about charges applicable to particular Policies.

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 the Policy Owner requests 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 a Policy's Sub-Account allocations, unless the Policy Owner instructs 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 the Policy Data Pages.

Policy Owner– The corporation or legal entity, such as a trust, 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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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 paid into the Policy, including amounts, if any, attributable to Section 1035 exchanges.

Rider – An optional benefit the Policy Owner may purchase/elect under the Policy.

Rider Specified Amount – The amount of Death Benefit coverage under the Supplemental Insurance Rider.

SEC – The Securities and Exchange Commission.

Section 1035 – The Code section describing an exchange between a life insurance Policy and/or annuity contract.

Sub-Accounts – The mechanisms we use to account for the Policy Owner's allocations of Net Premium and Cash Value among the Policy's variable investment options.

Substandard Rating – A risk 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 the smoking habits of the Insured.  Substandard Ratings are shown on 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 the cost of coverage .

Target Premium – The maximum amount of Premium the Policy Owner may pay to purchase Base Specified Amount under Section 7702A of the Code and still have the Policy treated as a life insurance contract for federal tax purposes.  This is the maximum Premium the Policy Owner may put into the Policy based on the "7-Pay" method, which determines the limits on Premium payments in each of the first seven policy years.  The actual amount is based on numerous factors which include the Issue Age of the Insured, Substandard Ratings (if any), and an adjustment for any Premium exchanged into the Policy under Section 1035 of the Code.

Total Specified Amount – The sum of the Base Specified Amount and the Rider Specified Amount, if any.

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.

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Appendix C: Blending Examples of Policy Charges

Blending Examples of Policy Charges

Case with First Year Premium of $900,000

Guaranteed Issue Policy with a Total Specified Amount of $19,650,000

(Assuming No Premiums from Section 1035 Exchange)

The tables  and calculations below show examples of how actual charges would be determined using a sample policy assuming: the Policy is assigned to Band 3; the Total Specified Amount is $19,650,000; the first-year Premium received is $900,000; and the Total Specified Amount is allocated 80% to Base Specified Amount and 20% to Rider Specified Amount.  The "blending" calculates charges based on a weighted average of the Base Specified Amount and Rider Specified Amount.  To determine the weighted average, the charge amount attributed to base and rider charges are independently multiplied by their respective allocations and the result of each is added together to achieve the total charge assessed.  For example, in the table below the Premium Load charges would be determined as follows.

The tables and calculation examples below assume a blend of 80% Base Specified Amount and 20% Rider Specified Amount.  All of the tables and calculation examples use the current charges as disclosed in the "In Summary: Fee Tables" section of the prospectus.  If maximum charges were used in these examples, the charges would be higher.

Premium Load: Deducted from Each Premium Paid*
Target Premium (Base)	Excess Premium (Rider)	80%/20% Charge Blend
5.00%	3.00%	4.60%

* Based on $900,000 of Premium paid, the total dollar value of the Premium Load is (0.046) x ($900,000) which equals $41,400.

Using the charges in the table above, and the assumptions in the example listed above, here is how the total Premium Load is calculated:

Total Premium Load Charges =                                                      [Target Premium (Base) Percentage x Target Premium Charge] +

[Excess Premium (Rider) Percentage x Excess Premium Charge]

=      [(0.80) x (0.05)] + [(0.20) x (0.03)]

=      [(0.04)] + [0.006]

=      0.046 or 4.6% of Premium received during the policy year

Policy Year	Variable Account Asset Charge: Deducted Monthly from Cash Value
	Base Variable Account Asset Charge Rate	Rider Variable Account Asset Charge Rate	80%/20% Charge Blend
1-10	0.30%	0.30%	0.30%
11-30	0.15%	0.15%	0.15%
31 and thereafter	0.05%	0.05%	0.05%

Using the charges in the table above, and the assumptions in the example listed above, here is how the total Variable Account Charges are calculated in policy years 1-10:

Total Variable Account Charges                                                      =           [Target Premium (Base) Percentage x Base Variable Account Asset Charge] +

[Excess Premium (Rider) Percentage x Rider Variable Account Asset Charge]

=   [(0.80) x (0.0030)] + [(0.20) x (0.0030)]

=   [(0.00240)] + [(0.0006)]

=   0.0030 or 0.30% of Cash Value allocated to the Sub-Accounts

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Specified Amount Charge: Deducted Monthly from Cash Value*
Base Specified Amount	Rider Specified Amount	80%/20% Charge Blend
$1,277.25	$589.50	$1,139.70

* The dollar amounts in the table are based on per $1,000 of Specified Amount Charge rates of $0.065 (Base),

$0.03 (Rider), and $0.058 (blended) and the assumed Total Specified Amount of $19,650,000.

Using the charges in the table above, and the assumptions in the example listed above, here is how the total Specified Amount Charges are calculated:

Total Specified Amount Charges                                                      =           [Target Premium (Base) Percentage x Base Specified Amount Charge] +

[Excess Premium (Rider) Percentage x Rider Specified Amount Charge]

=   [(0.80) x ($1,277.25)] + [(0.20) x ($589.50)]

=   [(1,021.90)] + [($117.90)]

=   $1,139.70

Policy Year	Cost of Insurance Charge Per $1,000  of Net Amount At Risk based on Issue Age of 45: Deducted Monthly from Cash Value*
	Base Cost of Insurance	Rider Cost of Insurance	80%/20% Charge Blend
1	$1.597	$1.374	$1.552
2	$1.736	$1.450	$1.679
3	$1.887	$1.537	$1.817
4	$2.052	$1.646	$1.971
5	$2.230	$1.796	$2.143

* The dollar amounts in the table are based on per $1,000 of the Net Amount At Risk Cost of Insurance Charge rates for Base Specified Amount and Rider Specified Amount.  Charges change each year based on the increasing age of the Insured.

Using the charges in the table above, and the assumptions in the example listed above, here is how the total Cost of Insurance Charges are calculated:

Total Cost of Insurance Charges                                                      =           [Target Premium (Base) Percentage x Base Cost of Insurance Charges] +

[Excess Premium (Rider) Percentage x Rider Specified Amount Charge]

=   [(0.80) x ($1.597)] + [(0.20) x ($1.374)]

=   [($1.278)] + [(0.274)]

=   $1.552 per $1,000 of Net Amount At Risk

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Appendix D: Factors Used in Calculating the Enhancement Benefit

The table below shows the factors used to calculate the Enhancement Benefit for the first and last month of each policy year.  The actual calculation will depend on the month the Policy is surrendered.  Policy Owners may request a calculation of their current Enhancement Benefit by contacting our Home Office.

Enhancement Benefit Factors
	Factors for A: Applied to Current Policy Year Year-to-date Total Policy Charge				Factors for B: Applied to End of Prior Year Enhancement Benefit
	6 Year Monthly Enhancement (Band 1)		10 Year Monthly Enhancement (Bands 2, 3, and 4)		6 Year Monthly Enhancement (Band 1)		10 Year Monthly Enhancement (Bands 2, 3 and 4 )
Policy Year	Month 1	Month 12	Month 1	Month 12	Month 1	Month 12	Month 1	Month 12
1	95%	72%	90%	84%	N/A	N/A	N/A	N/A
2	95%	72%	90%	84%	96.75%	61%	98.50%	82%
3	95%	72%	90%	84%	95.92%	51%	98.25%	79%
4	95%	72%	90%	84%	94.50%	34%	97.92%	75%
5	95%	72%	90%	84%	91.67%	0%	97.50%	70%
6	95%	0%	90%	84%	91.67%	0%	96.83%	62%
7	None	None	90%	84%	None	None	95.83%	50%
8	None	None	90%	84%	None	None	94.92%	39%
9	None	None	90%	84%	None	None	91.92%	3%
10	None	None	90%	0%	None	None	91.67%	0%
11+	None	None	None	None	None	None	None	None

Using the factors available in the table above, here is an example of how an Enhancement Benefit would be calculated.

In this example, we will assume the following:

A surrender in the last month of policy year 3.

The Policy is assigned to Band 1.

Current year total charges are $5,000.

The prior year's Enhancement Benefit was $3,000.

Using these assumptions, the Enhancement Benefit is calculated as follows:

A (Current Year to Date Total Policy Charges) + B (The Amount of Last Year's Enhancement Benefit)

Where:                      A = the Factor Applied to Current Year to Date Total Policy Charges; and

B = the Factor Applied to the Prior Year's Enhancement Benefit.

= 72% ($5,000) + 51% ($3,000)

= ($3,600) + ($1,530)

= $5,130

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Appendix E: State Variations

Described below are the state specific variations to certain disclosures in the prospectus 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 Nationwide currently offers this policy in that jurisdiction.   These variations are subject to change without notice and additional variations may be imposed as required by specific states.  Please contact Nationwide or your registered representative for the most up to date information regarding state variations.

California – 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, " the Policy Owner 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 the Policy Owner of their 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.

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," the Policy Owner 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 the Policy Owner of their 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 this prospectus.

Connecticut– In addition to the right to exchange the policy for a different policy provided under "Exchanging the Policy," the Policy Owner may within eighteen 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.

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," the Policy Owner 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 the Policy Owner of their 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 this prospectus.

Additionally, under the "Grace Period" sub-section of the "Lapse" section, the amount the Policy Owner 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.

In the "Reinstatement" sub-section of the "Lapse" section of the prospectus, the three year reinstatement period is extended to five years.  See the "Reinstatement" sub-section of the "Lapse" section of this prospectus.

Nebraska – Under the "Grace Period" sub-section of the "Lapse" section, the amount the Policy Owner 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 Jersey – Whenever in the policy and/or any Rider, reference is made to " marriage, "   " spouse, "   " step-child, "   " divorce, "   " dissolution " or another word which in a specific context denotes or depends on the existence of a marital or spousal relationship, the same shall include a civil union pursuant to the provisions of the New Jersey Civil Union Act.

New York – This policy is not available for issuance in the state of New York.

North Carolina – In the "Reinstatement" sub-section of the "Lapse" section of the prospectus, the three year reinstatement period is extended to five years.  See the "Reinstatement" sub-section of the "Lapse" section of this prospectus.

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 this prospectus.

68

Oregon – 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 "Right of Conversion," the Policy Owner 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 the Policy Owner of their option to make such transfer.  See the "Right of Conversion" sub-section of "The Policy" section and the "Nationwide VLI Separate Account – 4" section of this prospectus.

In addition to the right to exchange the policy for a different policy provided under "Exchanging the Policy," the Policy Owner may within eighteen 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.  The policy also provides the Policy Owner a right to use the Policy's Cash Surrender Value as a single premium payment to purchase a paid-up insurance policy on the life of the Insured.  See the "Exchanging the Policy" sub-section of "The Policy" section of this prospectus.

Utah – Under the "Reinstatement" sub-section of the "Lapse" section, all premium requirements must be met except for the requirement that the Policy Owner must pay sufficient Premium to keep the policy In Force for three months from the date of reinstatement.  See the "Grace Period" sub-section of the "Lapse" section of this prospectus.

West Virginia – Under the "Reinstatement" sub-section of the "Lapse" section, the Policy Owner 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.

69

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.  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. 811-8301

Securities Act of 1933 Registration File No. 333-153343

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 Adjustable Variable Universal Life Insurance Policies

This Statement of Additional Information ("SAI'') contains additional information regarding the corporate flexible premium adjustable 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, 2010 and the prospectuses for the mutual funds.  The prospectus is incorporated by reference in this SAI.  A copy of these prospectuses may be obtained 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, 2010 .

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 1981 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.  Nationwide Corporation owns all of NFS ' s common stock and is a holding company, as well.  All of Nationwide Corporation ' s common stock is held by Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%), the ultimate controlling persons of the Nationwide group of companies.  The Nationwide group of companies is one of America ' s largest insurance and financial services family of companies, with combined assets of over $140 billion as of December 31, 2009.

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.

1

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 2009 , 2008 or 2007 .

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, 2009 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 changed its method of evaluating other-than-temporary impairments of debt securities due to the adoption of new accounting requirements issued by the FASB, as of January 1, 2009 .  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, and the length of time the Policy has been In Force.  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.

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) Attained Age, (iii) Substandard Ratings,, and (iv) 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) Attained Age, (iii) Substandard Ratings, and (iv) 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 purchase of 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 and Riders requested.  An illustration will also demonstrate how the current charges associated with a particular Policy may be reduced if the Supplemental Insurance Rider is elected.

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 current 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 2001 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 of applicable percentages for the Cash Value Accumulation Test.  This example is for a male non-tobacco age 45 non-medical underwriting.

Policy Year	Percentage of Cash Value	Policy Year	Percentage of Cash Value	Policy Year	Percentage of Cash Value	Policy Year	Percentage of Cash Value
1	347%	16	215%	31	147%	46	116%
2	335%	17	209%	32	145%	47	115%
3	324%	18	203%	33	144%	48	114%
4	314%	19	197%	34	142%	49	112%
5	304%	20	192%	35	141%	50	111%
6	294%	21	187%	36	140%	51	110%
7	284%	22	182%	37	139%	52	109%
8	275%	23	177%	38	138%	53	107%
9	266%	24	173%	39	134%	54	105%
10	258%	25	169%	40	131%	55	103%
11	250%	26	165%	41	128%	56	101%
12	242%	27	161%	42	125%
13	235%	28	157%	43	122%
14	228%	29	153%	44	120%
15	221%	30	150%	45	117%

4

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, 2009, 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, 2009, 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, 2009, and the results of their operations, changes in contract owners’ equity, and financial highlights for each of the periods indicated herein, in conformity with U.S. generally accepted accounting principles.

/s/    KPMG LLP

Columbus, Ohio

March 10, 2010

Nationwide VLI Separate Account-4

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY

December 31, 2009

Assets:
Investments at fair value:
Asset Allocation Fund - Class 2 (AMVAA2)
90,257 shares (cost $1,275,701)	$	1,322,259
Bond Fund - Class 2 (AMVBD2)
84,441 shares (cost $821,078)		863,833
Global Small Capitalization Fund - Class 2 (AMVGS2)
51,878 shares (cost $686,497)		920,826
Growth Fund - Class 2 (AMVGR2)
38,451 shares (cost $1,457,489)		1,772,578
Large Cap Core V.I. Fund - Class II (MLVLC2)
70,035 shares (cost $1,250,296)		1,474,233
Variable Series Funds, Inc. - Global Allocation V.I. Fund - Class II (MLVGA2)
199,635 shares (cost $2,915,129)		2,976,557
Variable Series, Inc. - Social Equity Portfolio (CVSSE)
12,487 shares (cost $205,696)		206,163
Credit Suisse Trust - International Equity Flex III Portfolio (CSIEF3)
80,511 shares (cost $472,821)		471,797
U.S. Equity Flex I Portfolio (WSCP)
145,640 shares (cost $1,691,373)		1,816,132
Variable Account Fund, Inc. - Value Portfolio (DAVVL)
194,655 shares (cost $1,549,858)		2,092,536
Insurance Trust - Insurance Trust Diversified Mid Cap Growth Portfolio 1 (OGGO)
218,265 shares (cost $2,030,976)		2,937,853
Insurance Trust - Insurance Trust Mid Cap Value Portfolio 1 (JPMMV1)
30,469 shares (cost $128,576)		169,713
Janus Aspen Series - Balanced Portfolio - Service Shares (JABS)
420,636 shares (cost $10,876,956)		11,748,357
Janus Aspen Series - Forty Portfolio - Service Shares (JACAS)
1,710,292 shares (cost $54,499,898)		56,730,384
Janus Aspen Series - Global Technology Portfolio - Service Shares (JAGTS)
2,603,124 shares (cost $10,567,185)		11,844,213
Janus Aspen Series - Overseas Portfolio - Service II Shares (JAIGS2)
525,471 shares (cost $25,742,405)		23,819,592
Janus Aspen Series - Overseas Portfolio - Service Shares (JAIGS)
1,359,606 shares (cost $58,009,417)		61,291,056

(Continued)

Nationwide VLI Separate Account-4

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY, continued

Series Fund - Mid Cap Value Portfolio - Class VC (LOVMCV)
98,375 shares (cost $1,036,003)	$	1,303,464
Investors Growth Stock Series - Initial Class (MIGIC)
337,754 shares (cost $3,303,918)		3,320,121
Research International Series - Service Class (MVRISC)
58,576 shares (cost $591,234)		663,667
Value Series - Initial Class (MVFIC)
609,479 shares (cost $7,800,584)		7,191,851
Value Series - Service Class (MVFSC)
322,366 shares (cost $3,162,213)		3,765,238
Variable Insurance Trust II - International Value Portfolio - Service Class (MVIVSC)
211,252 shares (cost $3,067,361)		3,037,808
Core Plus Fixed Income Portfolio - Class I (MSVFI)
251,930 shares (cost $2,729,476)		2,501,669
Emerging Markets Debt Portfolio - Class I (MSEM)
1,225,063 shares (cost $8,702,485)		9,494,242
Mid Cap Growth Portfolio- class I (MSVMG)
1,034,620 shares (cost $8,299,711)		9,477,123
The Universal Institutional Funds, Inc. - Capital Growth Portfolio - Class I (MSVEG)
22,472 shares (cost $348,839)		379,106
U.S. Real Estate Portfolio - Class I (MSVRE)
2,056,474 shares (cost $18,342,506)		20,873,210
AllianceBernstein NVIT Global Fixed Income Fund - Class III (NVAGF3)
23,982 shares (cost $272,752)		264,277
American Century NVIT Multi Cap Value Fund - Class I (NVAMV1)
2,180 shares (cost $28,531)		27,771
American Funds NVIT Asset Allocation Fund - Class II (GVAAA2)
250,844 shares (cost $4,458,780)		3,933,230
American Funds NVIT Bond Fund - Class II (GVABD2)
255,781 shares (cost $2,664,541)		2,724,066
American Funds NVIT Global Growth Fund - Class II (GVAGG2)
292,510 shares (cost $6,562,386)		5,782,917
American Funds NVIT Growth Fund - Class II (GVAGR2)
154,030 shares (cost $8,843,748)		7,086,930
American Funds NVIT Growth-Income Fund - Class II (GVAGI2)
69,317 shares (cost $2,304,168)		2,324,195
Federated NVIT High Income Bond Fund - Class I (HIBF)
3,208,832 shares (cost $21,301,535)		21,178,288

(Continued)

Nationwide VLI Separate Account-4

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY, continued

Federated NVIT High Income Bond Fund - Class III (HIBF3)
1,819,483 shares (cost $10,198,627)	$	11,990,391
Gartmore NVIT Emerging Markets Fund - Class I (GEM)
2,509,715 shares (cost $29,517,831)		28,510,360
Gartmore NVIT Emerging Markets Fund - Class III (GEM3)
1,319,327 shares (cost $19,044,111)		14,961,165
Gartmore NVIT Global Utilities Fund - Class I (GVGU1)
345,222 shares (cost $3,548,961)		2,789,396
Gartmore NVIT International Equity Fund - Class I (GIG)
682,662 shares (cost $4,841,355)		5,468,126
Gartmore NVIT International Equity Fund - Class III (GIG3)
460,549 shares (cost $3,299,529)		3,693,604
Gartmore NVIT International Equity Fund - Class VI (NVIE6)
62,988 shares (cost $450,888)		503,904
Gartmore NVIT Worldwide Leaders Fund - Class I (GEF)
383,470 shares (cost $4,982,938)		3,919,064
Gartmore NVIT Worldwide Leaders Fund - Class III (GEF3)
1,426 shares (cost $14,149)		14,573
Neuberger Berman NVIT Multi Cap Opportunities Fund - Class I (NVNMO1)
1,788,575 shares (cost $13,613,265)		15,113,461
Neuberger Berman NVIT Socially Responsible Fund - Class I (NVNSR1)
21,154 shares (cost $159,379)		178,324
NVIT Cardinal Aggressive Fund - Class I (NVCRA1)
42,309 shares (cost $283,010)		355,820
NVIT Cardinal Balanced Fund - Class I (NVCRB1)
90,832 shares (cost $751,535)		867,448
NVIT Cardinal Capital Appreciation Fund - Class I (NVCCA1)
171,312 shares (cost $1,437,008)		1,557,228
NVIT Cardinal Conservative Fund - Class I (NVCCN1)
91,731 shares (cost $835,822)		922,817
NVIT Cardinal Moderate Fund - Class I (NVCMD1)
240,942 shares (cost $1,982,041)		2,247,987
NVIT Cardinal Moderately Aggressive Fund - Class I (NVCMA1)
341,687 shares (cost $2,575,077)		3,020,509
NVIT Cardinal Moderately Conservative Fund - Class I (NVCMC1)
67,028 shares (cost $574,356)		653,523
NVIT Core Bond Fund - Class I (NVCBD1)
59,505 shares (cost $601,137)		607,551

(Continued)

Nationwide VLI Separate Account-4

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY, continued

NVIT Core Plus Bond Fund - Class I (NVLCP1)
23,479 shares (cost $240,086)	$	253,339
NVIT Fund - Class I (TRF)
38,338,927 shares (cost $395,794,435)		310,928,696
NVIT Global Financial Services Fund - Class I (GVGF1)
292,654 shares (cost $1,593,714)		2,183,201
NVIT Government Bond Fund - Class I (GBF)
9,815,120 shares (cost $114,551,757)		115,229,514
NVIT Growth Fund - Class I (CAF)
1,289,097 shares (cost $12,640,984)		15,159,786
NVIT Health Sciences Fund - Class I (GVGH1)
300,925 shares (cost $2,950,444)		2,888,885
NVIT Health Sciences Fund - Class III (GVGHS)
257,823 shares (cost $2,492,012)		2,480,260
NVIT International Index Fund - Class II (GVIX2)
452,896 shares (cost $3,392,493)		3,672,988
NVIT International Index Fund - Class VI (GVIX6)
70,881 shares (cost $604,098)		574,139
NVIT Investor Destinations Aggressive Fund - Class II (GVIDA)
3,347,655 shares (cost $36,834,910)		27,551,197
NVIT Investor Destinations Balanced Fund - Class II (NVDBL2)
1,822 shares (cost $21,805)		21,918
NVIT Investor Destinations Capital Appreciation Fund - Class II (NVDCA2)
9,666 shares (cost $122,391)		124,792
NVIT Investor Destinations Conservative Fund - Class II (GVIDC)
1,513,667 shares (cost $14,554,491)		14,939,889
NVIT Investor Destinations Moderate Fund - Class II (GVIDM)
8,315,373 shares (cost $87,212,664)		80,742,275
NVIT Investor Destinations Moderately Aggressive Fund - Class II (GVDMA)
7,772,778 shares (cost $88,328,089)		72,986,388
NVIT Investor Destinations Moderately Conservative Fund - Class II (GVDMC)
1,875,374 shares (cost $19,499,420)		18,397,421
NVIT Leaders Fund - Class I (GVUS1)
121,669 shares (cost $1,052,466)		1,043,924
NVIT Mid Cap Index Fund - Class I (MCIF)
3,406,740 shares (cost $56,603,027)		50,487,894
NVIT Money Market Fund - Class I (SAM)
111,488,338 shares (cost $111,488,338)		111,488,338

(Continued)

Nationwide VLI Separate Account-4

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY, continued

NVIT Money Market Fund - Class V (SAM5)
298,221,923 shares (cost $298,221,923)	$	298,221,923
NVIT Multi-Manager International Growth Fund - Class III (NVMIG3)
2,080,171 shares (cost $15,838,861)		17,972,679
NVIT Multi-Manager International Value Fund - Class I (GVDIVI)
109,791 shares (cost $1,610,362)		1,079,247
NVIT Multi-Manager International Value Fund - Class III (GVDIV3)
573,297 shares (cost $8,476,116)		5,612,577
NVIT Multi-Manager Large Cap Growth Fund - Class I (NVMLG1)
271,763 shares (cost $2,108,359)		2,361,624
NVIT Multi-Manager Large Cap Value Fund - Class I (NVMLV1)
444,558 shares (cost $3,373,204)		3,712,059
NVIT Multi-Manager Mid Cap Growth Fund - Class I (NVMMG1)
3,789,771 shares (cost $27,602,609)		31,796,180
NVIT Multi-Manager Mid Cap Value Fund - Class II (NVMMV2)
1,259,081 shares (cost $10,317,947)		11,495,409
NVIT Multi-Manager Small Cap Growth Fund - Class I (SCGF)
950,029 shares (cost $13,776,404)		11,685,353
NVIT Multi-Manager Small Cap Value Fund - Class I (SCVF)
4,392,677 shares (cost $49,151,153)		36,459,218
NVIT Multi-Manager Small Company Fund - Class I (SCF)
4,654,761 shares (cost $88,421,734)		67,261,295
NVIT Multi-Sector Bond Fund - Class I (MSBF)
1,602,489 shares (cost $13,516,298)		13,252,584
NVIT Short Term Bond Fund - Class I (NVSTB1)
54,706 shares (cost $555,447)		562,925
NVIT Short Term Bond Fund - Class II (NVSTB2)
280,815 shares (cost $2,892,996)		2,878,357
NVIT Technology & Communications Fund - Class I (GGTC)
1,267,032 shares (cost $4,452,372)		4,307,907
NVIT Technology & Communications Fund - Class III (GGTC3)
752,714 shares (cost $2,385,494)		2,581,809
NVIT U.S. Growth Leaders Fund - Class I (GVUG1)
361,680 shares (cost $3,375,083)		2,712,597
Oppenheimer NVIT Large Cap Growth Fund - Class I (NVOLG1)
30,064 shares (cost $413,215)		423,294
Templeton NVIT International Value Fund - Class III (NVTIV3)
7,936 shares (cost $110,741)		110,304

(Continued)

Nationwide VLI Separate Account-4

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY, continued

Van Kampen NVIT Comstock Value Fund - Class I (EIF)
1,001,442 shares (cost $11,284,430)	$	8,892,805
Van Kampen NVIT Real Estate Fund - Class I (NVRE1)
3,154,389 shares (cost $19,874,480)		23,027,042
Advisers Management Trust - Short Duration Bond Portfolio - I Class Shares (AMTB)
390,158 shares (cost $4,642,201)		4,377,570
V.I. Basic Value Fund - Series I (AVBVI)
126,415 shares (cost $614,431)		755,960
V.I. Capital Appreciation Fund - Series I (AVCA)
45,537 shares (cost $1,044,598)		925,771
V.I. Capital Development Fund - Series I (AVCDI)
779,693 shares (cost $8,883,169)		8,802,730
V.I. International Growth Fund - Series I (AVIE)
1,272,829 shares (cost $33,839,836)		33,106,289
VPS Growth and Income Portfolio - Class A (ALVGIA)
704,089 shares (cost $14,459,428)		10,702,152
VPS International Value Portfolio - Class A (ALVIVA)
2,146,233 shares (cost $28,462,544)		31,549,621
VPS Small/Mid Cap Value Portfolio: Class A (ALVSVA)
575,607 shares (cost $6,922,688)		7,718,887
VP Income & Growth Fund - Class I (ACVIG)
2,914,195 shares (cost $19,972,655)		15,678,368
VP Inflation Protection Fund - Class II (ACVIP2)
2,635,781 shares (cost $27,744,548)		28,281,932
VP International Fund - Class I (ACVI)
2,153,754 shares (cost $16,797,095)		16,648,518
VP International Fund - Class III (ACVI3)
1 share (cost $2)		3
VP Mid Cap Value Fund - Class I (ACVMV1)
230,644 shares (cost $2,460,721)		2,795,410
VP Ultra(R) Fund - Class I (ACVU1)
101,210 shares (cost $722,812)		821,824
VP Value Fund - Class I (ACVV)
10,005,707 shares (cost $66,459,313)		52,830,132
VP Vista(SM) Fund - Class I (ACVVS1)
147,241 shares (cost $1,571,374)		1,942,115
MidCap Stock Portfolio - Initial Shares (DVMCS)
84,403 shares (cost $899,976)		882,854
Small Cap Stock Index Portfolio - Service Shares (DVSCS)
2,898,104 shares (cost $32,313,760)		28,256,513

(Continued)

Nationwide VLI Separate Account-4

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY, continued

Stock Index Fund, Inc. - Initial Shares (DSIF)
10,066,649 shares (cost $295,561,579)	$	264,853,529
The Dreyfus Socially Responsible Growth Fund, Inc. - Initial Shares (DSRG)
405,293 shares (cost $9,244,849)		10,643,001
Appreciation Portfolio - Initial Shares (DCAP)
757,627 shares (cost $26,714,297)		23,789,476
Developing Leaders Portfolio - Initial Shares (DSC)
27,482 shares (cost $675,517)		645,548
International Value Portfolio - Initial Shares (DVIV)
2,168,606 shares (cost $26,749,368)		23,681,177
Variable Series II - Dreman Small Mid Cap Value VIP - Class B (SVSSVB)
152,343 shares (cost $1,293,764)		1,528,001
Variable Series II - Strategic Value VIP - Class B (SVSHEB)
68,543 shares (cost $429,168)		505,851
Capital Appreciation Fund II - Primary Shares (FVCA2P)
109,824 shares (cost $653,561)		628,194
Clover Value Fund II - Primary Shares (FALF)
20,500 shares (cost $258,117)		185,734
Market Opportunity Fund II - Service Shares (FVMOS)
74,584 shares (cost $748,947)		734,657
Quality Bond Fund II - Primary Shares (FQB)
3,188,010 shares (cost $34,814,761)		35,705,717
VIP Fund - Contrafund Portfolio - Service Class (FCS)
7,131,988 shares (cost $178,297,367)		146,562,349
VIP Fund - Energy Portfolio - Service Class 2 (FNRS2)
579,605 shares (cost $10,232,374)		9,731,563
VIP Fund - Equity-Income Portfolio - Service Class (FEIS)
3,776,552 shares (cost $86,583,526)		63,257,251
VIP Fund - Freedom Fund 2010 Portfolio - Service Class (FF10S)
193,358 shares (cost $1,897,910)		1,889,107
VIP Fund - Freedom Fund 2020 Portfolio - Service Class (FF20S)
631,167 shares (cost $5,745,762)		5,996,082
VIP Fund - Freedom Fund 2030 Portfolio - Service Class (FF30S)
337,883 shares (cost $3,359,407)		3,047,703
VIP Fund - Growth & Income Portfolio - Service Class (FGIS)
6,278 shares (cost $55,060)		69,062
VIP Fund - Growth Opportunities Portfolio - Service Class (FGOS)
543,266 shares (cost $9,024,640)		7,866,493

(Continued)

Nationwide VLI Separate Account-4

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY, continued

VIP Fund - Growth Portfolio - Service Class (FGS)
2,160,927 shares (cost $71,866,971)	$	64,741,380
VIP Fund - High Income Portfolio - Service Class (FHIS)
2,590,238 shares (cost $13,556,283)		13,624,653
VIP Fund - High Income Portfolio - Service Class R (FHISR)
713,583 shares (cost $3,261,099)		3,746,310
VIP Fund - Index 500 Portfolio - Initial Class (FIP)
38,297 shares (cost $4,375,973)		4,581,059
VIP Fund - Investment Grade Bond Portfolio - Service Class (FIGBS)
1,343,008 shares (cost $16,160,262)		16,639,864
VIP Fund - Mid Cap Portfolio - Service Class (FMCS)
1,464,742 shares (cost $39,098,532)		37,219,083
VIP Fund - Overseas Portfolio - Service Class (FOS)
1,905,752 shares (cost $37,796,493)		28,567,225
VIP Fund - Overseas Portfolio - Service Class R (FOSR)
813,533 shares (cost $16,239,942)		12,178,596
VIP Fund - Value Strategies Portfolio - Service Class (FVSS)
476,308 shares (cost $4,036,318)		3,672,333
VIP Fund - VIP Freedom Fund 2015 Portfolio - Service Class (FF15S)
120,718 shares (cost $1,048,176)		1,179,413
VIP Fund - VIP Freedom Fund 2025 Portfolio - Service Class (FF25S)
67,308 shares (cost $590,957)		625,964
Franklin Income Securities Fund - Class 2 (FTVIS2)
300,969 shares (cost $4,665,254)		4,249,689
Franklin Rising Dividends Securities Fund - Class 1 (FTVRDI)
627,781 shares (cost $11,445,528)		10,126,109
Franklin Small Cap Value Securities Fund - Class 1 (FTVSVI)
730,242 shares (cost $12,017,707)		9,493,140
Franklin Small Cap Value Securities Fund - Class 2 (FTVSV2)
361,468 shares (cost $4,238,269)		4,615,952
Mutual Discovery Global Securities Fund - Class 2 (FTVMD2)
11,015 shares (cost $180,218)		207,188
Templeton Developing Markets Securities Fund - Class 3 (FTVDM3)
583,767 shares (cost $6,379,094)		5,680,050
Templeton Foreign Securities Fund - Class 1 (TIF)
124,152 shares (cost $1,841,157)		1,698,397
Templeton Foreign Securities Fund - Class 2 (TIF2)
954,249 shares (cost $13,298,781)		12,834,651

(Continued)

Nationwide VLI Separate Account-4

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY, continued

Templeton Foreign Securities Fund - Class 3 (TIF3)
414,728 shares (cost $6,490,023)	$	5,544,913
Templeton Global Bond Securities Fund - Class 2 (FTVGI2)
146,415 shares (cost $2,488,827)		2,537,364
Templeton Global Bond Securities Fund - Class 3 (FTVGI3)
369,423 shares (cost $6,118,191)		6,402,097
VIP Founding Funds Allocation Fund - Class 2 (FTVFA2)
41,551 shares (cost $255,055)		296,677
Goldman Sachs VIT - Goldman Sachs Mid Cap Value Fund - Institutional Shares (GVMCE)
4,099,791 shares (cost $53,272,957)		46,532,631
ClearBridge Variable Small Cap Growth Portfolio - Class I (SBVSG)
22,047 shares (cost $212,488)		272,278
Lincoln VIP Trust - Baron Growth Opportunities Funds - Service Class (BNCAI)
444,182 shares (cost $10,697,810)		10,638,595
Guardian Portfolio - I Class Shares (AMGP)
98,108 shares (cost $1,376,798)		1,567,758
Mid-Cap Growth Portfolio - I Class Shares (AMCG)
262,768 shares (cost $6,497,235)		5,581,202
Partners Portfolio - I Class Shares (AMTP)
320,507 shares (cost $2,795,325)		3,144,179
Regency Portfolio - I Class Shares (AMRI)
242,190 shares (cost $2,516,248)		2,969,250
Small-Cap Growth Portfolio - S Class Shares (AMFAS)
155,004 shares (cost $1,532,304)		1,588,789
Socially Responsive Portfolio - I Class Shares (AMSRS)
189,241 shares (cost $2,835,123)		2,289,818
Capital Appreciation Fund/VA - Non-Service Shares (OVGR)
2,361,729 shares (cost $84,847,754)		87,242,271
Global Securities Fund/VA - Class 3 (OVGS3)
583,291 shares (cost $17,976,484)		15,556,361
Global Securities Fund/VA - Non-Service Shares (OVGS)
1,834,999 shares (cost $54,017,894)		48,627,482
High Income Fund/VA - Class 3 (OVHI3)
494,305 shares (cost $1,027,361)		983,667
High Income Fund/VA - Non-Service Shares (OVHI)
205,788 shares (cost $1,665,978)		407,461
Main Street Fund(R)/VA - Non-Service Shares (OVGI)
1,466,856 shares (cost $29,914,649)		26,667,443

(Continued)

Nationwide VLI Separate Account-4

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY, continued

Main Street Small Cap Fund(R)/VA - Non-Service Shares (OVSC)
302,787 shares (cost $4,762,850)	$	4,360,135
MidCap Fund/VA - Non-Service Shares (OVAG)
630,831 shares (cost $26,696,682)		23,037,962
Strategic Bond Fund/VA - Non-Service Shares (OVSB)
330,104 shares (cost $1,568,860)		1,749,553
All Asset Portfolio - Administrative Class (PMVAAA)
82,641 shares (cost $801,654)		863,598
Foreign Bond Portfolio (Unhedged) - Administrative Class (PMVFBA)
59,947 shares (cost $657,402)		637,839
Low Duration Portfolio - Administrative Class (PMVLDA)
5,676,436 shares (cost $57,596,032)		57,388,768
Real Return Portfolio - Administrative Class (PMVRRA)
6,065,318 shares (cost $74,485,102)		75,452,552
Total Return Portfolio - Administrative Class (PMVTRA)
21,073,492 shares (cost $220,489,717)		228,015,188
Variable Contracts Trust - Emerging Markets VCT Portfolio - Class I Shares (PIVEMI)
48,137 shares (cost $953,045)		1,316,074
Variable Contracts Trust - High Yield VCT Portfolio - Class I Shares (PIHYB1)
1,937,365 shares (cost $16,127,081)		18,463,089
Putnam VT Growth and Income Fund - IB Shares (PVGIB)
51,867 shares (cost $976,850)		746,880
Putnam VT International Equity Fund - IB Shares (PVTIGB)
113,397 shares (cost $1,751,995)		1,256,443
Putnam VT Small Cap Value Fund - IB Shares (PVTSCB)
343 shares (cost $3,191)		3,761
Putnam VT Vista Fund - IB Shares (PVVIB)
8,124 shares (cost $63,452)		93,671
Putnam VT Voyager Fund - IB Shares (PVTVB)
41,646 shares (cost $1,025,796)		1,349,346
Global Real Estate Portfolio - Class II (VKVGR2)
96,908 shares (cost $538,503)		748,132
Micro-Cap Portfolio - Investment Class (ROCMC)
4,128,057 shares (cost $38,846,038)		39,340,379
Small-Cap Portfolio - Investment Class (ROCSC)
31,826 shares (cost $201,290)		276,251
Blue Chip Growth Portfolio - II (TRBCG2)
338,560 shares (cost $3,086,608)		3,216,317

(Continued)

Nationwide VLI Separate Account-4

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY, continued

Equity Income Portfolio - II (TREI2)
4,047,578 shares (cost $75,843,298)	$	71,277,849
Health Sciences Portfolio - II (TRHS2)
124,138 shares (cost $1,396,430)		1,565,385
Mid-Cap Growth Portfolio - II (TRMCG2)
1,047,355 shares (cost $20,358,595)		20,821,424
New America Growth Portfolio (TRNAG1)
706,430 shares (cost $10,161,822)		13,499,877
Personal Strategy Balanced Portfolio (TRPSB1)
27,652 shares (cost $381,879)		454,043
Worldwide Insurance Trust - Worldwide Emerging Markets Fund - Initial Class (VWEM)
1,693,117 shares (cost $18,030,851)		18,996,775
Worldwide Insurance Trust - Worldwide Hard Assets Fund - Initial Class (VWHA)
1,037,902 shares (cost $29,611,724)		30,369,020
Vanguard(R) Variable Insurance Funds - Balanced Portfolio (VVB)
79,610 shares (cost $1,143,553)		1,381,227
Vanguard(R) Variable Insurance Funds - Diversified Value Portfolio (VVDV)
141,511 shares (cost $1,542,328)		1,634,452
Vanguard(R) Variable Insurance Funds - International Portfolio (VVI)
229,344 shares (cost $3,403,659)		3,683,261
Vanguard(R) Variable Insurance Funds - Mid-Cap Index Portfolio (VVMCI)
268,124 shares (cost $2,785,495)		3,222,851
Vanguard(R) Variable Insurance Funds - Short-Term Investment-Grade Portfolio (VVSTC)
321,514 shares (cost $3,280,735)		3,453,062
Ivy Fund Variable Insurance Portfolios, Inc. - Asset Strategy (WRASP)
493,407 shares (cost $4,310,848)		4,551,824
Ivy Fund Variable Insurance Portfolios, Inc. - Growth (WRGP)
102,264 shares (cost $798,502)		948,820
Ivy Fund Variable Insurance Portfolios, Inc. - Real Estate Securities (WRRESP)
170,834 shares (cost $708,505)		877,712
Ivy Fund Variable Insurance Portfolios, Inc. - Science and Technology (WRSTP)
68,087 shares (cost $926,620)		1,041,489
Advantage Funds Variable Trust - VT Discovery Fund (SVDF)
119,004 shares (cost $1,576,784)		1,868,363
Advantage Funds Variable Trust - VT Opportunity Fund (SVOF)
554,169 shares (cost $8,004,319)		8,318,072

(Continued)

Nationwide VLI Separate Account-4

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY, continued

Advantage Funds Variable Trust - VT Small Cap Growth Fund (WFVSCG)
584,869 shares (cost $2,940,396)	$	3,713,921
Total Investments		3,764,648,339
Accounts Receivable - International Equity Flex I Portfolio (obsolete) (WIEP)		1,240
Accounts Receivable - International Equity Flex II Portfolio (obsolete) (WVCP)		203
Total Assets		3,764,649,782
Accounts Payable - VP International Fund - Class III (ACVI3)		3
Accounts Payable - U.S. Equity Flex I Portfolio (WSCP)		726,444
Other Accounts Payable		101,957
Total Accounts Payable		828,404
	$	3,763,821,378
Contract Owners’ Equity:
Accumulation units		3,763,821,378
Total Contract Owners’ Equity (note 8)	$	3,763,821,378

See accompanying notes to financial statements.

Nationwide VLI Separate Account-4

STATEMENTS OF OPERATIONS

Year Ended December 31, 2009

Investment Activity:	Total			AMVAA2		AMVBD2		AMVGS2		AMVGR2		MLVLC2		MLVGA2		CVSSE
Reinvested dividends	$	65,424,850		26,748		25,045		2,091		9,519		16,666		33,614		742
Asset Charges (note 3)		(4,368,321	)	(1,969	)	(1,493	)	(1,125	)	(2,700	)	(2,867	)	-		(214	)
Net investment income (loss)		61,056,529		24,779		23,552		966		6,819		13,799		33,614		528
Realized gain (loss) on investments		(358,177,114	)	(65,240	)	(15,359	)	(186,340	)	(308,612	)	(325,237	)	9,083		(22,950	)
Change in unrealized gain (loss) on investments		1,008,719,318		289,232		72,580		452,147		783,659		604,305		61,427		49,279
Net gain (loss) on investments		650,542,204		223,992		57,221		265,807		475,047		279,068		70,510		26,329
Reinvested capital gains		50,615,249		-		-		-		-		-		-		9,784
Net increase (decrease) in contract owners’ equity resulting from operations	$	762,213,982		248,771		80,773		266,773		481,866		292,867		104,124		36,641
Investment Activity:	CSIEF3			WSCP		DAVVL		OGGO		JPMMV1		JABS		JACAS		JAGTS
Reinvested dividends	$	-		-		16,161		-		-		260,816		6,579		-
Asset Charges (note 3)		(15	)	(30	)	(3,076	)	(5,642	)	(163	)	(14,045	)	(51,876	)	(4,489	)
Net investment income (loss)		(15	)	(30	)	13,085		(5,642	)	(163	)	246,771		(45,297	)	(4,489	)
Realized gain (loss) on investments		2,566		10,414		(143,939	)	(102,721	)	180		(795,610	)	1,745,282		236,968
Change in unrealized gain (loss) on investments		(1,024	)	124,758		715,824		1,006,472		41,137		2,248,632		16,558,142		4,251,296
Net gain (loss) on investments		1,542		135,172		571,885		903,751		41,317		1,453,022		18,303,424		4,488,264
Reinvested capital gains		-		-		-		-		-		320,012		-		-
Net increase (decrease) in contract owners’ equity resulting from operations	$	1,527		135,142		584,970		898,109		41,154		2,019,805		18,258,127		4,483,775

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2009

Investment Activity:	JARLCS			JAIGS2		JAIGS		LOVMCV		MIGIC		MVRISC		MVFIC		MVFSC
Reinvested dividends	$	2,199		75,197		214,063		5,654		20,378		4,742		77,213		36,162
Asset Charges (note 3)		-		-		(73,244	)	(2,071	)	-		(984	)	-		(6,861	)
Net investment income (loss)		2,199		75,197		140,819		3,583		20,378		3,758		77,213		29,301
Realized gain (loss) on investments		(193,632	)	(1,003,544	)	2,092,288		(470,487	)	(119,540	)	(9,041	)	(563,326	)	(105,731	)
Change in unrealized gain (loss) on investments		231,479		10,228,555		26,292,193		733,471		1,031,933		106,342		1,787,278		839,404
Net gain (loss) on investments		37,847		9,225,011		28,384,481		262,984		912,393		97,301		1,223,952		733,673
Reinvested capital gains		(67	)	507,630		1,524,193		-		-		-		-		-
Net increase (decrease) in contract owners’ equity resulting from operations	$	39,979		9,807,838		30,049,493		266,567		932,771		101,059		1,301,165		762,974
Investment Activity:	MVIVSC			MSVFI		MSEM		MSVMG		MSVEG		MSVRE		NVAGF3		NVAMV1
Reinvested dividends	$	-		240,723		748,969		-		-		1,105,676		8,672		457
Asset Charges (note 3)		(677	)	-		(11,571	)	(16,993	)	(694	)	(37,281	)	-		-
Net investment income (loss)		(677	)	240,723		737,398		(16,993	)	(694	)	1,068,395		8,672		457
Realized gain (loss) on investments		28,429		(123,741	)	(1,492,240	)	(3,580,005	)	(2,036	)	(39,285,801	)	1,344		3,912
Change in unrealized gain (loss) on investments		(29,554	)	136,733		3,233,667		7,296,271		139,072		43,914,953		(8,475	)	(760	)
Net gain (loss) on investments		(1,125	)	12,992		1,741,427		3,716,266		137,036		4,629,152		(7,131	)	3,152
Reinvested capital gains		-		-		-		-		-		-		1,173		2,439
Net increase (decrease) in contract owners’ equity resulting from operations	$	(1,802	)	253,715		2,478,825		3,699,273		136,342		5,697,547		2,714		6,048

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2009

Investment Activity:	GVAAA2			GVABD2		GVAGG2		GVAGR2		GVAGI2		HIBF		HIBF3		GEM
Reinvested dividends	$	2,621		8,601		-		-		-		1,809,259		981,264		308,393
Asset Charges (note 3)		-		-		-		-		-		(35,075	)	-		(47,059	)
Net investment income (loss)		2,621		8,601		-		-		-		1,774,184		981,264		261,334
Realized gain (loss) on investments		(177,856	)	(184,344	)	(356,606	)	(992,070	)	(294,455	)	(2,015,466	)	(1,275,133	)	(10,300,909	)
Change in unrealized gain (loss) on investments		826,043		472,238		1,635,045		2,098,032		744,397		7,106,133		3,979,738		21,638,633
Net gain (loss) on investments		648,187		287,894		1,278,439		1,105,962		449,942		5,090,667		2,704,605		11,337,724
Reinvested capital gains		83,925		822		339,649		642,236		47,807		-		-		-
Net increase (decrease) in contract owners’ equity resulting from operations	$	734,733		297,317		1,618,088		1,748,198		497,749		6,864,851		3,685,869		11,599,058
Investment Activity:	GEM3			GVGU1		GIG		GIG3		NVIE6		GEF		GEF3		NVNMO1
Reinvested dividends	$	148,491		108,269		58,583		3,333		498		37,027		64		10,318
Asset Charges (note 3)		-		(1,861	)	(3,363	)	-		-		(865	)	-		-
Net investment income (loss)		148,491		106,408		55,220		3,333		498		36,162		64		10,318
Realized gain (loss) on investments		(1,938,071	)	(932,336	)	(4,204,394	)	(8,426	)	(24,066	)	(329,610	)	63		104,269
Change in unrealized gain (loss) on investments		7,575,496		1,013,356		5,470,605		469,935		83,896		1,154,975		424		1,500,363
Net gain (loss) on investments		5,637,425		81,020		1,266,211		461,509		59,830		825,365		487		1,604,632
Reinvested capital gains		-		-		-		-		-		-		-		32,649
Net increase (decrease) in contract owners’ equity resulting from operations	$	5,785,916		187,428		1,321,431		464,842		60,328		861,527		551		1,647,599

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2009

Investment Activity:	NVNSR1			NVCRA1		NVCRB1		NVCCA1		NVCCN1		NVCMD1		NVCMA1		NVCMC1
Reinvested dividends	$	300		3,137		14,685		18,627		23,300		32,429		36,889		12,101
Asset Charges (note 3)		-		-		-		-		(14	)	-		-		-
Net investment income (loss)		300		3,137		14,685		18,627		23,286		32,429		36,889		12,101
Realized gain (loss) on investments		(9,127	)	(89,222	)	(15,424	)	(14,153	)	11,717		(17,203	)	(228,372	)	(454	)
Change in unrealized gain (loss) on investments		31,839		177,395		138,862		246,582		102,299		350,508		786,425		75,372
Net gain (loss) on investments		22,712		88,173		123,438		232,429		114,016		333,305		558,053		74,918
Reinvested capital gains		-		79		-		-		1,717		118		1,157		387
Net increase (decrease) in contract owners’ equity resulting from operations	$	23,012		91,389		138,123		251,056		139,019		365,852		596,099		87,406
Investment Activity:	NVCBD1			NVLCP1		TRF		GVGF1		GBF		CAF		GVGH1		GVGHS
Reinvested dividends	$	16,101		10,487		3,587,190		22,473		4,158,936		70,330		7,650		6,852
Asset Charges (note 3)		-		-		(241,748	)	(1,433	)	(180,779	)	(2,827	)	(2,848	)	-
Net investment income (loss)		16,101		10,487		3,345,442		21,040		3,978,157		67,503		4,802		6,852
Realized gain (loss) on investments		24,773		21,401		(1,042,850	)	(1,389,231	)	947,871		258,366		(266,588	)	(339,358	)
Change in unrealized gain (loss) on investments		3,669		9,164		61,992,768		1,963,916		(3,501,589	)	3,518,953		738,864		735,726
Net gain (loss) on investments		28,442		30,565		60,949,918		574,685		(2,553,718	)	3,777,319		472,276		396,368
Reinvested capital gains		3,009		4,977		-		-		1,702,702		-		-		-
Net increase (decrease) in contract owners’ equity resulting from operations	$	47,552		46,029		64,295,360		595,725		3,127,141		3,844,822		477,078		403,220

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2009

Investment Activity:	GVIX2			GVIX6		GVIDA		NVDBL2		NVDCA2		GVIDC		GVIDM		GVDMA
Reinvested dividends	$	30,818		11,544		252,719		135		814		308,736		1,052,225		821,640
Asset Charges (note 3)		(2,598	)	-		(16,169	)	-		-		(21,853	)	(37,248	)	(16,466	)
Net investment income (loss)		28,220		11,544		236,550		135		814		286,883		1,014,977		805,174
Realized gain (loss) on investments		(315,049	)	(260,909	)	(2,064,061	)	19		(97	)	(1,906,856	)	(2,373,635	)	(2,858,759	)
Change in unrealized gain (loss) on investments		632,696		311,663		6,579,751		113		2,401		2,658,897		12,852,063		13,647,980
Net gain (loss) on investments		317,647		50,754		4,515,690		132		2,304		752,041		10,478,428		10,789,221
Reinvested capital gains		-		-		1,352,345		155		650		94,127		1,648,516		2,700,488
Net increase (decrease) in contract owners’ equity resulting from operations	$	345,867		62,298		6,104,585		422		3,768		1,133,051		13,141,921		14,294,883
Investment Activity:	GVDMC			GVUS1		MCIF		SAM		SAM5		NVMIG3		GVDIVI		GVDIV3
Reinvested dividends	$	303,244		8,016		408,760		55,128		208,248		54,487		20,448		107,135
Asset Charges (note 3)		(7,625	)	(409	)	(45,944	)	(19,575	)	(751,286	)	-		-		-
Net investment income (loss)		295,619		7,607		362,816		35,553		(543,038	)	54,487		20,448		107,135
Realized gain (loss) on investments		(1,269,197	)	(754,822	)	(5,522,677	)	-		-		69,102		(168,939	)	(1,214,689	)
Change in unrealized gain (loss) on investments		3,097,306		1,037,888		17,238,205		-		-		2,136,753		402,617		2,465,427
Net gain (loss) on investments		1,828,109		283,066		11,715,528		-		-		2,205,855		233,678		1,250,738
Reinvested capital gains		274,021		-		1,328,431		-		-		-		-		-
Net increase (decrease) in contract owners’ equity resulting from operations	$	2,397,749		290,673		13,406,775		35,553		(543,038	)	2,260,342		254,126		1,357,873

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2009

Investment Activity:	NVMLG1			NVMLV1		NVMMG1		NVMMV1		NVMMV2		SCGF		SCVF		SCF
Reinvested dividends	$	7,951		20,167		-		-		51,381		-		183,259		154,628
Asset Charges (note 3)		-		-		(491	)	(3	)	-		(7,445	)	(21,366	)	(72,788	)
Net investment income (loss)		7,951		20,167		(491	)	(3	)	51,381		(7,445	)	161,893		81,840
Realized gain (loss) on investments		31,265		(6,313	)	302,640		(1,298	)	79,482		(1,258,724	)	(4,761,068	)	(13,079,026	)
Change in unrealized gain (loss) on investments		260,488		348,841		4,194,989		(81	)	1,177,622		3,866,242		12,393,594		30,488,109
Net gain (loss) on investments		291,753		342,528		4,497,629		(1,379	)	1,257,104		2,607,518		7,632,526		17,409,083
Reinvested capital gains		-		-		-		-		-		-		-		-
Net increase (decrease) in contract owners’ equity resulting from operations	$	299,704		362,695		4,497,138		(1,382	)	1,308,485		2,600,073		7,794,419		17,490,923
Investment Activity:	MSBF			NVSTB1		NVSTB2		GGTC		GGTC3		GVUG1		NVOLG1		NVTIV3
Reinvested dividends	$	1,209,874		12,449		38,007		-		-		-		457		368
Asset Charges (note 3)		(6,454	)	(1,390	)	-		(5,207	)	-		(919	)	-		-
Net investment income (loss)		1,203,420		11,059		38,007		(5,207	)	-		(919	)	457		368
Realized gain (loss) on investments		(1,276,189	)	17,656		30,565		(949,836	)	(638,693	)	(1,653,326	)	1,424		4,120
Change in unrealized gain (loss) on investments		2,935,874		7,478		(13,643	)	2,357,643		1,482,600		2,371,469		10,079		(436	)
Net gain (loss) on investments		1,659,685		25,134		16,922		1,407,807		843,907		718,143		11,503		3,684
Reinvested capital gains		-		2,224		10,128		-		-		-		7,009		195
Net increase (decrease) in contract owners’ equity resulting from operations	$	2,863,105		38,417		65,057		1,402,600		843,907		717,224		18,969		4,247

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2009

Investment Activity:	EIF			NVRE1		AMTB		AVBVI		AVCA		AVCDI		AVIE		ALVGIA
Reinvested dividends	$	88,317		179,460		290,441		8,837		4,684		-		436,280		407,760
Asset Charges (note 3)		(703	)	(83	)	-		(1,191	)	-		(12,329	)	(58,831	)	(17,089	)
Net investment income (loss)		87,614		179,377		290,441		7,646		4,684		(12,329	)	377,449		390,671
Realized gain (loss) on investments		(906,434	)	137,380		(300,148	)	(3,531,453	)	(74,322	)	(3,608,941	)	(3,733,536	)	(2,433,244	)
Change in unrealized gain (loss) on investments		2,824,759		3,191,020		492,764		4,600,082		213,629		6,335,247		11,299,759		3,892,452
Net gain (loss) on investments		1,918,325		3,328,400		192,616		1,068,629		139,307		2,726,306		7,566,223		1,459,208
Reinvested capital gains		-		71,568		-		-		-		-		-		-
Net increase (decrease) in contract owners’ equity resulting from operations	$	2,005,939		3,579,345		483,057		1,076,275		143,991		2,713,977		7,943,672		1,849,879
Investment Activity:	ALVIVA			ALVSVA		ACVIG		ACVIP2		ACVI		ACVI3		ACVMV1		ACVU1
Reinvested dividends	$	380,972		62,246		681,534		408,663		530,451		149,185		79,577		7,737
Asset Charges (note 3)		(71,725	)	(5,393	)	(4,685	)	-		(30,460	)	-		(424	)	(979	)
Net investment income (loss)		309,247		56,853		676,849		408,663		499,991		149,185		79,153		6,758
Realized gain (loss) on investments		(14,852,340	)	(1,362,274	)	(916,664	)	(17,598	)	(1,817,728	)	(2,457,774	)	(337,105	)	(1,249,197	)
Change in unrealized gain (loss) on investments		23,712,549		3,299,033		2,634,136		1,696,211		7,646,953		3,577,208		837,183		1,752,880
Net gain (loss) on investments		8,860,209		1,936,759		1,717,472		1,678,613		5,829,225		1,119,434		500,078		503,683
Reinvested capital gains		-		242,912		-		-		-		-		-		-
Net increase (decrease) in contract owners’ equity resulting from operations	$	9,169,456		2,236,524		2,394,321		2,087,276		6,329,216		1,268,619		579,231		510,441

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2009

Investment Activity:	ACVV			ACVVS1		DVMCS		DVSCS		DSIF		DSRG		DCAP		DSC
Reinvested dividends	$	2,603,542		-		8,798		544,476		4,966,610		90,729		546,742		8,771
Asset Charges (note 3)		(36,000	)	(3,136	)	(1,044	)	(31,067	)	(355,191	)	(1,212	)	(16,860	)	-
Net investment income (loss)		2,567,542		(3,136	)	7,754		513,409		4,611,419		89,517		529,882		8,771
Realized gain (loss) on investments		(5,673,840	)	(2,157,073	)	(194,997	)	(5,382,740	)	(15,363,916	)	(339,716	)	(1,158,330	)	(237,303	)
Change in unrealized gain (loss) on investments		11,996,736		2,667,921		397,732		6,521,628		53,256,000		3,016,835		3,343,161		339,478
Net gain (loss) on investments		6,322,896		510,848		202,735		1,138,888		37,892,084		2,677,119		2,184,831		102,175
Reinvested capital gains		-		-		-		3,690,903		15,610,923		-		1,595,366		-
Net increase (decrease) in contract owners’ equity resulting from operations	$	8,890,438		507,712		210,489		5,343,200		58,114,426		2,766,636		4,310,079		110,946
Investment Activity:	DVIV			SVSSVB		SVSHEB		FVCA2P		FALF		FVMOS		FQB		FCS
Reinvested dividends	$	848,252		71,681		21,991		5,549		4,980		11,339		2,062,872		1,691,978
Asset Charges (note 3)		(46,172	)	(5,433	)	(1,265	)	-		-		-		(30,980	)	(141,346	)
Net investment income (loss)		802,080		66,248		20,726		5,549		4,980		11,339		2,031,892		1,550,632
Realized gain (loss) on investments		(5,642,350	)	(991,504	)	(365,065	)	(15,641	)	(90,243	)	(17,471	)	(284,840	)	(38,137,604	)
Change in unrealized gain (loss) on investments		10,533,052		1,926,210		449,631		85,511		112,514		2,498		4,238,316		74,183,384
Net gain (loss) on investments		4,890,702		934,706		84,566		69,870		22,271		(14,973	)	3,953,476		36,045,780
Reinvested capital gains		-		-		-		-		-		11,510		-		36,005
Net increase (decrease) in contract owners’ equity resulting from operations	$	5,692,782		1,000,954		105,292		75,419		27,251		7,876		5,985,368		37,632,417

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2009

Investment Activity:	FNRS2			FEIS		FF10S		FF20S		FF30S		FGIS		FGOS		FGS
Reinvested dividends	$	19,097		1,226,042		66,915		173,253		57,146		637		25,552		194,596
Asset Charges (note 3)		-		(45,772	)	(124	)	(4,287	)	(899	)	(113	)	(1,251	)	(54,240	)
Net investment income (loss)		19,097		1,180,270		66,791		168,966		56,247		524		24,301		140,356
Realized gain (loss) on investments		(3,503,742	)	(8,802,232	)	(158,183	)	(690,784	)	(258,601	)	(3,209	)	(205,046	)	(170,254	)
Change in unrealized gain (loss) on investments		7,057,894		22,562,984		488,742		1,954,092		870,053		14,001		2,704,979		15,472,365
Net gain (loss) on investments		3,554,152		13,760,752		330,559		1,263,308		611,452		10,792		2,499,933		15,302,111
Reinvested capital gains		-		-		14,154		63,886		31,524		-		-		51,075
Net increase (decrease) in contract owners’ equity resulting from operations	$	3,573,249		14,941,022		411,504		1,496,160		699,223		11,316		2,524,234		15,493,542
Investment Activity:	FHIS			FHISR		FIP		FIGBS		FMCS		FOS		FOSR		FVSS
Reinvested dividends	$	1,029,739		265,552		97,176		1,455,800		190,009		542,722		221,481		15,351
Asset Charges (note 3)		(15,632	)	-		(7,736	)	(4,490	)	(32,169	)	(43,815	)	-		(705	)
Net investment income (loss)		1,014,107		265,552		89,440		1,451,310		157,840		498,907		221,481		14,646
Realized gain (loss) on investments		(2,346,308	)	(368,107	)	(905,611	)	(218,707	)	(4,816,852	)	(2,964,630	)	(1,450,487	)	(1,474,268	)
Change in unrealized gain (loss) on investments		7,293,431		1,117,802		1,620,518		1,108,825		15,544,782		8,680,677		3,796,623		2,868,659
Net gain (loss) on investments		4,947,123		749,695		714,907		890,118		10,727,930		5,716,047		2,346,136		1,394,391
Reinvested capital gains		-		-		79,994		66,026		167,621		86,971		34,875		-
Net increase (decrease) in contract owners' equity resulting from operations	$	5,961,230		1,015,247		884,341		2,407,454		11,053,391		6,301,925		2,602,492		1,409,037

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2009

Investment Activity:	FF15S			FF25S		FTVIS2		FTVRDI		FTVSVI		FTVSV2		FTVMD2		FTVDM3
Reinvested dividends	$	37,962		17,773		313,612		163,842		150,962		60,184		2,371		145,606
Asset Charges (note 3)		(2,117	)	(1,126	)	-		-		-		(8,381	)	(421	)	-
Net investment income (loss)		35,845		16,647		313,612		163,842		150,962		51,803		1,950		145,606
Realized gain (loss) on investments		(236,332	)	(28,032	)	(499,666	)	(577,159	)	(917,805	)	(1,390,336	)	(10,390	)	(805,887	)
Change in unrealized gain (loss) on investments		406,105		139,482		1,348,478		1,903,727		2,461,641		2,181,594		44,892		2,635,761
Net gain (loss) on investments		169,773		111,450		848,812		1,326,568		1,543,836		791,258		34,502		1,829,874
Reinvested capital gains		13,329		5,650		-		-		350,550		165,739		5,595		13,648
Net increase (decrease) in contract owners’ equity resulting from operations	$	218,947		133,747		1,162,424		1,490,410		2,045,348		1,008,800		42,047		1,989,128
Investment Activity:	TIF			TIF2		TIF3		FTVGI2		FTVGI3		FTVFA2		GVMCE		SBVSG
Reinvested dividends	$	55,755		365,815		175,850		293,710		1,010,310		6,436		740,402		-
Asset Charges (note 3)		-		(24,549	)	-		(4,219	)	-		-		(91,665	)	(506	)
Net investment income (loss)		55,755		341,266		175,850		289,491		1,010,310		6,436		648,737		(506	)
Realized gain (loss) on investments		(81,845	)	(3,399,112	)	(726,575	)	(32,038	)	(194,950	)	(33,732	)	(7,867,883	)	(18,609	)
Change in unrealized gain (loss) on investments		438,313		6,489,010		1,930,983		52,782		312,003		83,885		18,839,243		104,712
Net gain (loss) on investments		356,468		3,089,898		1,204,408		20,744		117,053		50,153		10,971,360		86,103
Reinvested capital gains		62,378		451,291		212,562		-		-		-		-		-
Net increase (decrease) in contract owners’ equity resulting from operations	$	474,601		3,882,455		1,592,820		310,235		1,127,363		56,589		11,620,097		85,597

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2009

Investment Activity:	BNCAI			AMGP		AMINS		AMCG		AMTP		AMRI		AMRS		AMFAS
Reinvested dividends	$	-		16,262		-		-		41,120		44,473		-		-
Asset Charges (note 3)		(21,202	)	(2,446	)	-		(14,212	)	(1,856	)	(5,621	)	-		(1,318	)
Net investment income (loss)		(21,202	)	13,816		-		(14,212	)	39,264		38,852		-		(1,318	)
Realized gain (loss) on investments		(1,758,205	)	(1,542,769	)	(1,466,302	)	3,341,833		(8,477,055	)	(406,048	)	(397,742	)	(528,882	)
Change in unrealized gain (loss) on investments		4,837,859		2,680,187		1,820,124		1,225,579		11,536,812		1,298,460		561,579		842,176
Net gain (loss) on investments		3,079,654		1,137,418		353,822		4,567,412		3,059,757		892,412		163,837		313,294
Reinvested capital gains		-		-		-		-		182,659		37,516		-		-
Net increase (decrease) in contract owners’ equity resulting from operations	$	3,058,452		1,151,234		353,822		4,553,200		3,281,680		968,780		163,837		311,976
Investment Activity:	AMSRS			OVGR		OVGS3		OVGS		OVHI3		OVHI		OVGI		OVSC
Reinvested dividends	$	49,340		248,633		288,133		883,484		-		-		466,930		30,280
Asset Charges (note 3)		-		(102,588	)	-		(69,723	)	-		-		(7,659	)	-
Net investment income (loss)		49,340		146,045		288,133		813,761		-		-		459,271		30,280
Realized gain (loss) on investments		(593,019	)	(2,935,835	)	(1,112,664	)	(5,381,641	)	(754,547	)	(470,256	)	(799,855	)	(494,419	)
Change in unrealized gain (loss) on investments		1,138,345		31,182,105		5,057,893		17,448,044		976,180		557,363		6,382,896		1,681,672
Net gain (loss) on investments		545,326		28,246,270		3,945,229		12,066,403		221,633		87,107		5,583,041		1,187,253
Reinvested capital gains		-		-		275,295		842,392		-		-		-		-
Net increase (decrease) in contract owners’ equity resulting from operations	$	594,666		28,392,315		4,508,657		13,722,556		221,633		87,107		6,042,312		1,217,533

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2009

Investment Activity:	OVAG			OVSB		PMVAAA		PMVFBA		PMVLDA		PMVRRA		PMVTRA		PIVEMI
Reinvested dividends	$	-		4,129		54,808		9,979		1,496,467		2,108,509		10,615,888		9,628
Asset Charges (note 3)		(12,026	)	(2,564	)	(1,454	)	(280	)	(94,486	)	(168,515	)	(455,374	)	(1,804	)
Net investment income (loss)		(12,026	)	1,565		53,354		9,699		1,401,981		1,939,994		10,160,514		7,824
Realized gain (loss) on investments		(1,129,222	)	(81,767	)	47,363		81,133		(157,572	)	(68,919	)	2,719,493		85,798
Change in unrealized gain (loss) on investments		6,737,017		313,267		73,226		(19,563	)	1,291,678		6,383,343		6,413,613		380,336
Net gain (loss) on investments		5,607,795		231,500		120,589		61,570		1,134,106		6,314,424		9,133,106		466,134
Reinvested capital gains		-		622		-		9,479		2,576,351		2,826,272		6,877,332		-
Net increase (decrease) in contract owners’ equity resulting from operations	$	5,595,769		233,687		173,943		80,748		5,112,438		11,080,690		26,170,952		473,958
Investment Activity:	PIHYB1			PVGIB		PVTIGB		PVTSCB		PVVIB		PVTVB		VKVGR2		ROCMC
Reinvested dividends	$	1,190,023		17,919		-		45		-		5,777		110		-
Asset Charges (note 3)		(31,606	)	-		-		(6	)	(142	)	-		(1,389	)	(73,599	)
Net investment income (loss)		1,158,417		17,919		-		39		(142	)	5,777		(1,279	)	(73,599	)
Realized gain (loss) on investments		(2,909,377	)	(138,463	)	(426,118	)	452		3,470		7,386		(61,518	)	(8,656,246	)
Change in unrealized gain (loss) on investments		8,661,414		299,375		715,663		756		30,219		398,764		306,866		24,040,908
Net gain (loss) on investments		5,752,037		160,912		289,545		1,208		33,689		406,150		245,348		15,384,662
Reinvested capital gains		-		-		-		-		-		-		-		-
Net increase (decrease) in contract owners’ equity resulting from operations	$	6,910,454		178,831		289,545		1,247		33,547		411,927		244,069		15,311,063

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2009

Investment Activity:	ROCSC			TRBCG2		TREI2		TRHS2		TRLT2		TRMCG2		TRNAG1		TRPSB1
Reinvested dividends	$	-		-		1,070,001		-		55,596		-		-		8,943
Asset Charges (note 3)		(456	)	(752	)	(129,338	)	(2,633	)	-		(39,987	)	(26,319	)	(969	)
Net investment income (loss)		(456	)	(752	)	940,663		(2,633	)	55,596		(39,987	)	(26,319	)	7,974
Realized gain (loss) on investments		(26,692	)	(358,102	)	(12,130,552	)	(185,395	)	67,765		(4,004,691	)	(1,964,836	)	(95,706	)
Change in unrealized gain (loss) on investments		102,125		1,319,164		25,683,362		545,834		35,191		10,715,898		6,203,128		185,158
Net gain (loss) on investments		75,433		961,062		13,552,810		360,439		102,956		6,711,207		4,238,292		89,452
Reinvested capital gains		-		-		-		-		-		20,964		-		-
Net increase (decrease) in contract owners’ equity resulting from operations	$	74,977		960,310		14,493,473		357,806		158,552		6,692,184		4,211,973		97,426
Investment Activity:	VWEM			VWHA		VVB		VVDV		VVI		VVMCI		VVSTC		WRASP
Reinvested dividends	$	20,567		55,048		56,897		47,382		97,125		40,752		106,713		2,305
Asset Charges (note 3)		(9,718	)	(27,164	)	(2,437	)	(2,516	)	(5,796	)	(5,165	)	(5,876	)	(2,184	)
Net investment income (loss)		10,849		27,884		54,460		44,866		91,329		35,587		100,837		121
Realized gain (loss) on investments		(8,929,462	)	(5,731,591	)	(179,323	)	(201,304	)	(570,258	)	(588,270	)	(4,977	)	(24,263	)
Change in unrealized gain (loss) on investments		17,730,793		15,745,952		373,050		479,742		1,513,119		1,336,235		246,123		330,887
Net gain (loss) on investments		8,801,331		10,014,361		193,727		278,438		942,861		747,965		241,146		306,624
Reinvested capital gains		831,487		109,163		-		-		-		101,879		12,942		62,302
Net increase (decrease) in contract owners’ equity resulting from operations	$	9,643,667		10,151,408		248,187		323,304		1,034,190		885,431		354,925		369,047

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF OPERATIONS, Continued

Year Ended December 31, 2009

Investment Activity:	WRGP			WRRESP		WRSTP		SVDF		SVOF		WFVSCG		OGMVP		WIEP
Reinvested dividends	$	3,076		14,802		-		-		-		-		3,345		4,209
Asset Charges (note 3)		(1,388	)	(976	)	(1,918	)	(807	)	(13,388	)	(4,336	)	(62	)	(89	)
Net investment income (loss)		1,688		13,826		(1,918	)	(807	)	(13,388	)	(4,336	)	3,283		4,120
Realized gain (loss) on investments		(133,903	)	(16,435	)	(56,620	)	(104,336	)	(8,660,730	)	(191,163	)	(193,176	)	93,379
Change in unrealized gain (loss) on investments		323,926		261,570		302,917		487,368		13,914,162		1,103,171		185,593		52,379
Net gain (loss) on investments		190,023		245,135		246,297		383,032		5,253,432		912,008		(7,583	)	145,758
Reinvested capital gains		22,732		-		45,120		-		-		-		-		-
Net increase (decrease) in contract owners’ equity resulting from operations	$	214,443		258,961		289,499		382,225		5,240,044		907,672		(4,300	)	149,878
Investment Activity:	WVCP			BF		SGRF		PVOEGB		WGIP
Reinvested dividends	$	6,776		97,245		-		-		67,087
Asset Charges (note 3)		(30	)	(2,637	)	(406	)	(16	)	(85	)
Net investment income (loss)		6,746		94,608		(406	)	(16	)	67,002
Realized gain (loss) on investments		(125,903	)	(4,616,970	)	(3,918,506	)	(6,492	)	(525,886	)
Change in unrealized gain (loss) on investments		196,067		4,327,370		4,212,112		7,288		664,850
Net gain (loss) on investments		70,164		(289,600	)	293,606		796		138,964
Reinvested capital gains		-		-		-		-		-
Net increase (decrease) in contract owners’ equity resulting from operations	$	76,910		(194,992	)	293,200		780		205,966

See accompanying notes to financial statements.

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2009 and 2008

	Total					AMVAA2				AMVBD2				AMVGS2
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	61,056,529		79,188,839		24,779		22,724		23,552		32,914		966		(549	)
Realized gain (loss) on investments		(358,177,114	)	(64,441,051	)	(65,240	)	(11,900	)	(15,359	)	(76,830	)	(186,340	)	(71,342	)
Change in unrealized gain (loss) on investments		1,008,719,318		(1,787,300,699	)	289,232		(242,674	)	72,580		(29,824	)	452,147		(217,818	)
Reinvested capital gains		50,615,249		265,246,757		-		29,648		-		1,410		-		50,646
Net increase (decrease) in contract owners’ equity resulting from operations		762,213,982		(1,507,306,154	)	248,771		(202,202	)	80,773		(72,330	)	266,773		(239,063	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		272,284,700		354,312,622		121,519		40,861		60,167		10,249		63,208		9,318
Transfers between funds		-		-		233,650		984,907		172,236		634,364		348,701		480,877
Surrenders (note 6)		(355,058,443	)	(249,501,663	)	(9,371	)	(7,923	)	(3,527	)	-		-		-
Death benefits (note 4)		(11,445,523	)	(9,350,811	)	(1,226	)	-		(3,035	)	-		(1,736	)	-
Net policy repayments (loans) (note 5)		(3,094,048	)	(32,613,869	)	(20,918	)	-		-		-		-		-
Deductions for surrender charges (note 2d)		(4,834,935	)	(5,918,247	)	-		-		-		-		-		-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(123,944,193	)	(126,435,392	)	(44,645	)	(20,574	)	(9,281	)	(5,739	)	(4,710	)	(2,542	)
Asset charges (note 3):
FPVUL & VEL contracts		(4,763,557	)	(5,877,081	)	(584	)	-		(30	)	-		-		-
MSP contracts		(257,792	)	(304,548	)	-		-		-		-		-		-
SL contracts or LSFP contracts		(865,995	)	(1,120,126	)	-		-		-		-		-		-
Adjustments to maintain reserves		(316,113	)	(110,891	)	15		(20	)	17		(27	)	3		(11	)
Net equity transactions		(232,295,899	)	(76,920,006	)	278,440		997,251		216,547		638,847		405,466		487,642
Net change in contract owners’ equity		529,918,083		(1,584,226,160	)	527,211		795,049		297,320		566,517		672,239		248,579
Contract owners’ equity beginning of period		3,233,903,295		4,818,129,455		795,049		-		566,517		-		248,579		-
Contract owners’ equity end of period	$	3,763,821,378		3,233,903,295		1,322,260		795,049		863,837		566,517		920,818		248,579
CHANGES IN UNITS:
Beginning units		307,038,686		307,056,666		116,841		-		62,336		-		49,331		-
Units purchased		64,050,669		69,158,972		51,072		120,686		23,944		62,941		68,718		49,656
Units redeemed		(77,331,694	)	(69,176,952	)	(10,936	)	(3,845	)	(1,695	)	(605	)	(4,519	)	(325	)
Ending units		293,757,661		307,038,686		156,977		116,841		84,585		62,336		113,530		49,331

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	AMVGR2					MLVLC2				MLVGA2			CVSSE
	2009			2008		2009		2008		2009		2008	2009		2008
Investment activity:
Net investment income (loss)	$	6,819		8,362		13,799		6,543		33,614		-	528		(306	)
Realized gain (loss) on investments		(308,612	)	(189,583	)	(325,237	)	(1,007,485	)	9,083		-	(22,950	)	(22,036	)
Change in unrealized gain (loss) on investments		783,659		(468,570	)	604,305		11,025		61,427		-	49,279		(50,892	)
Reinvested capital gains		-		120,744		-		26,100		-		-	9,784		1,159
Net increase (decrease) in contract owners’ equity resulting from operations		481,866		(529,047	)	292,867		(963,817	)	104,124		-	36,641		(72,075	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		66,140		(742	)	144,241		125,565		206,933		-	1,239		6,049
Transfers between funds		393,875		1,386,022		204,761		(1,831,055	)	2,696,159		-	56,921		57,071
Surrenders (note 6)		-		-		(39,389	)	(5,793	)	(3,828	)	-	(2	)	(10,675	)
Death benefits (note 4)		(5,180	)	-		(1,174	)	-		-		-	(873	)	(19	)
Net policy repayments (loans) (note 5)		-		-		(2,560	)	(120,170	)	(991	)	-	-		-
Deductions for surrender charges (note 2d)		-		-		-		-		-		-	-		-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(11,775	)	(8,558	)	(30,948	)	(34,365	)	(23,364	)	-	(1,464	)	(1,253	)
Asset charges (note 3):
FPVUL & VEL contracts		-		-		(62	)	-		(1,608	)	-	-		-
MSP contracts		-		-		-		-		(132	)	-	-		-
SL contracts or LSFP contracts		-		-		-		-		(736	)	-	-		-
Adjustments to maintain reserves		13		(35	)	37		(163	)	3		-	16		(47	)
Net equity transactions		443,073		1,376,687		274,906		(1,865,981	)	2,872,437		-	55,837		51,126
Net change in contract owners’ equity		924,939		847,640		567,773		(2,829,798	)	2,976,561		-	92,478		(20,949	)
Contract owners’ equity beginning of period		847,640		-		906,472		3,736,270		-		-	113,687		134,636
Contract owners’ equity end of period	$	1,772,579		847,640		1,474,245		906,472		2,976,561		-	206,165		113,687
CHANGES IN UNITS:
Beginning units		150,751		-		103,948		261,702		-		-	10,503		7,972
Units purchased		78,538		151,812		67,765		27,156		247,162		-	5,351		3,624
Units redeemed		(2,690	)	(1,061	)	(33,125	)	(184,910	)	(2,833	)	-	(1,681	)	(1,093	)
Ending units		226,599		150,751		138,588		103,948		244,329		-	14,173		10,503

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	CSIEF3				WSCP			DAVVL				OGGO
	2009			2008	2009		2008	2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	(15	)	-	(30	)	-	13,085		5,946		(5,642	)	(12,040	)
Realized gain (loss) on investments		2,566		-	10,414		-	(143,939	)	(14,339	)	(102,721	)	(2,966,786	)
Change in unrealized gain (loss) on investments		(1,024	)	-	124,758		-	715,824		(173,146	)	1,006,472		(148,137	)
Reinvested capital gains		-		-	-		-	-		10,250		-		853,551
Net increase (decrease) in contract owners’ equity resulting from operations		1,527		-	135,142		-	584,970		(171,289	)	898,109		(2,273,412	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		4,816		-	36,205		-	148,479		78,937		24,312		103,324
Transfers between funds		462,115		-	998,589		-	991,950		559,615		(358,578	)	(1,562,266	)
Surrenders (note 6)		-		-	(13,685	)	-	(18,571	)	-		(384,949	)	(73,614	)
Death benefits (note 4)		-		-	-		-	(12,457	)	-		-		(23,060	)
Net policy repayments (loans) (note 5)		-		-	828		-	(18,200	)	(9,443	)	66,622		(104,328	)
Deductions for surrender charges (note 2d)		-		-	-		-	-		-		-		-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(668	)	-	(13,927	)	-	(30,638	)	(9,996	)	(53,929	)	(83,433	)
Asset charges (note 3):
FPVUL & VEL contracts		(46	)	-	(862	)	-	(842	)	-		-		-
MSP contracts		(1	)	-	(25	)	-	-		-		-		-
SL contracts or LSFP contracts		-		-	(171	)	-	-		-		-		-
Adjustments to maintain reserves		(3,176	)	-	(52,406	)	-	9		20		15		2,687
Net equity transactions		463,041		-	954,546		-	1,059,730		619,133		(706,507	)	(1,740,690	)
Net change in contract owners’ equity		464,568		-	1,089,688		-	1,644,700		447,844		191,602		(4,014,102	)
Contract owners’ equity beginning of period		-		-	-		-	447,844		-		2,746,253		6,760,355
Contract owners’ equity end of period	$	464,568		-	1,089,688		-	2,092,544		447,844		2,937,855		2,746,253
CHANGES IN UNITS:
Beginning units		-		-	-		-	76,781		-		237,302		327,330
Units purchased		46,164		-	103,318		-	211,685		79,367		17,698		76,989
Units redeemed		(206	)	-	(3,127	)	-	(14,638	)	(2,586	)	(77,729	)	(167,017	)
Ending units		45,958		-	100,191		-	273,828		76,781		177,271		237,302

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	JPMMV1				JABS				JACAS				JAGTS
	2009			2008	2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	(163	)	-	246,771		183,683		(45,297	)	(56,322	)	(4,489	)	6,537
Realized gain (loss) on investments		180		-	(795,610	)	(311,920	)	1,745,282		4,368,600		236,968		537,116
Change in unrealized gain (loss) on investments		41,137		-	2,248,632		(1,914,827	)	16,558,142		(37,016,154	)	4,251,296		(7,484,264	)
Reinvested capital gains		-		-	320,012		603,351		-		-		-		-
Net increase (decrease) in contract owners’ equity resulting from operations		41,154		-	2,019,805		(1,439,713	)	18,258,127		(32,703,876	)	4,483,775		(6,940,611	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		-		-	301,338		693,224		4,174,879		3,889,289		852,053		1,209,005
Transfers between funds		129,774		-	3,968,776		(999,771	)	(308,597	)	7,464,889		9,727		(1,097,436	)
Surrenders (note 6)		-		-	(508,732	)	(1,000,338	)	(2,929,548	)	(2,661,445	)	(927,179	)	(573,286	)
Death benefits (note 4)		-		-	(2,997	)	(18,617	)	(39,874	)	(117,974	)	(8,625	)	(26,452	)
Net policy repayments (loans) (note 5)		-		-	(28,182	)	47,892		(372,161	)	(256,623	)	5,616		(275,180	)
Deductions for surrender charges (note 2d)		-		-	(9,173	)	(15,890	)	(77,596	)	(100,155	)	(36,357	)	(23,265	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(1,212	)	-	(228,396	)	(177,585	)	(1,994,792	)	(2,071,717	)	(613,362	)	(603,740	)
Asset charges (note 3):
FPVUL & VEL contracts		-		-	(6,083	)	(5,573	)	(94,454	)	(118,875	)	(30,890	)	(37,035	)
MSP contracts		-		-	(46	)	(17	)	(2,003	)	(2,644	)	(518	)	(715	)
SL contracts or LSFP contracts		-		-	(2,326	)	(1,899	)	(15,179	)	(18,885	)	(3,465	)	(5,854	)
Adjustments to maintain reserves		6		-	127		(503	)	856		2,783		(116	)	(163	)
Net equity transactions		128,568		-	3,484,306		(1,479,077	)	(1,658,469	)	6,008,643		(753,115	)	(1,434,121	)
Net change in contract owners’ equity		169,722		-	5,504,111		(2,918,790	)	16,599,658		(26,695,233	)	3,730,660		(8,374,732	)
Contract owners’ equity beginning of period		-		-	6,244,238		9,163,028		40,131,578		66,826,811		8,113,405		16,488,137
Contract owners’ equity end of period	$	169,722		-	11,748,349		6,244,238		56,731,236		40,131,578		11,844,065		8,113,405
CHANGES IN UNITS:
Beginning units		-		-	463,743		571,358		5,646,789		5,227,208		2,764,915		3,145,552
Units purchased		13,589		-	296,842		184,145		654,414		1,023,547		392,025		335,026
Units redeemed		(110	)	-	(65,412	)	(291,760	)	(828,304	)	(603,966	)	(580,341	)	(715,663	)
Ending units		13,479		-	695,173		463,743		5,472,899		5,646,789		2,576,599		2,764,915

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	JARLCS					JAIGS2				JAIGS				LOVMCV
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	2,199		3,703		75,197		553,994		140,819		1,468,999		3,583		15,755
Realized gain (loss) on investments		(193,632	)	(14,935	)	(1,003,544	)	395,033		2,092,288		5,684,405		(470,487	)	(718,866	)
Change in unrealized gain (loss) on investments		231,479		(242,489	)	10,228,555		(17,126,656	)	26,292,193		(56,149,301	)	733,471		(98,152	)
Reinvested capital gains		(67	)	31,638		507,630		2,970,977		1,524,193		8,232,296		-		63,687
Net increase (decrease) in contract owners’ equity resulting from operations		39,979		(222,083	)	9,807,838		(13,206,652	)	30,049,493		(40,763,601	)	266,567		(737,576	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		13,396		25,019		2,863,554		3,035,699		1,683,512		1,672,411		52,322		146,016
Transfers between funds		(431,701	)	136,801		1,596,794		86,450		(8,108,119	)	14,281,939		93,047		(219,861	)
Surrenders (note 6)		(12,461	)	(22,488	)	(1,171,640	)	(1,331,076	)	(1,902,180	)	(2,829,197	)	(81,151	)	(19,539	)
Death benefits (note 4)		-		-		(9,652	)	(61,395	)	(566,649	)	(115,692	)	(246	)	-
Net policy repayments (loans) (note 5)		(2,767	)	(1,095	)	(113,704	)	4,009		(463,301	)	(544,504	)	(35,760	)	-
Deductions for surrender charges (note 2d)		(59	)	(2,850	)	(65,642	)	(45,204	)	(39,431	)	(62,246	)	-		-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(9,469	)	(15,790	)	(1,062,455	)	(973,497	)	(1,444,266	)	(1,618,549	)	(23,317	)	(26,092	)
Asset charges (note 3):
FPVUL & VEL contracts		(739	)	(1,414	)	(60,863	)	(64,270	)	(65,159	)	(94,060	)	(9	)	-
MSP contracts		(112	)	(293	)	(1,596	)	(1,741	)	(2,355	)	(3,114	)	-		-
SL contracts or LSFP contracts		(58	)	(212	)	(12,063	)	(14,059	)	(11,255	)	(15,065	)	-		-
Adjustments to maintain reserves		68		(185	)	(412	)	(906	)	4,185		5,005		26		179
Net equity transactions		(443,902	)	117,493		1,962,320		634,010		(10,915,019	)	10,676,928		4,912		(119,297	)
Net change in contract owners’ equity		(403,923	)	(104,590	)	11,770,158		(12,572,642	)	19,134,474		(30,086,673	)	271,479		(856,873	)
Contract owners’ equity beginning of period		403,923		508,513		12,048,956		24,621,598		42,160,511		72,247,184		1,032,004		1,888,877
Contract owners’ equity end of period	$	-		403,923		23,819,114		12,048,956		61,294,985		42,160,511		1,303,483		1,032,004
CHANGES IN UNITS:
Beginning units		33,622		26,988		1,692,770		1,653,148		4,806,329		3,915,734		134,578		149,088
Units purchased		1,187		10,038		440,345		331,920		273,003		1,582,325		21,529		25,994
Units redeemed		(34,809	)	(3,404	)	(264,384	)	(292,298	)	(1,175,579	)	(691,730	)	(21,761	)	(40,504	)
Ending units		-		33,622		1,868,731		1,692,770		3,903,753		4,806,329		134,346		134,578

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	MIGIC					MVRISC				MVFIC				MVFSC
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	20,378		22,201		3,758		(146	)	77,213		77,102		29,301		12,641
Realized gain (loss) on investments		(119,540	)	142,842		(9,041	)	(3,739	)	(563,326	)	(23,632	)	(105,731	)	(162,697	)
Change in unrealized gain (loss) on investments		1,031,933		(1,810,696	)	106,342		(34,172	)	1,787,278		(2,829,368	)	839,404		(236,380	)
Reinvested capital gains		-		181,434		-		333		-		260,163		-		58,650
Net increase (decrease) in contract owners’ equity resulting from operations		932,771		(1,464,219	)	101,059		(37,724	)	1,301,165		(2,515,735	)	762,974		(327,786	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		308,957		439,224		84,935		61,855		696,007		689,723		181,598		210,588
Transfers between funds		(177,095	)	(479,285	)	243,655		211,054		449,084		1,208,415		877,781		2,179,192
Surrenders (note 6)		(144,174	)	(168,808	)	-		-		(246,925	)	(516,130	)	(9,776	)	(779	)
Death benefits (note 4)		(6,809	)	-		-		-		(14,795	)	(13,567	)	(2,279	)	-
Net policy repayments (loans) (note 5)		(4,778	)	(16,203	)	-		-		(50,255	)	21,875		-		-
Deductions for surrender charges (note 2d)		(18,020	)	(25,849	)	-		-		(9,796	)	(14,309	)	-		-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(195,706	)	(217,020	)	(9,423	)	(1,229	)	(334,244	)	(312,111	)	(84,084	)	(21,193	)
Asset charges (note 3):
FPVUL & VEL contracts		(12,500	)	(15,544	)	(5	)	-		(17,955	)	(19,144	)	(871	)	-
MSP contracts		(147	)	(177	)	-		-		(476	)	(446	)	-		-
SL contracts or LSFP contracts		(792	)	(922	)	-		-		(5,204	)	(5,238	)	-		-
Adjustments to maintain reserves		75		(201	)	8		(16	)	134		(364	)	11		(139	)
Net equity transactions		(250,989	)	(484,785	)	319,170		271,664		465,575		1,038,704		962,380		2,367,669
Net change in contract owners’ equity		681,782		(1,949,004	)	420,229		233,940		1,766,740		(1,477,031	)	1,725,354		2,039,883
Contract owners’ equity beginning of period		2,638,336		4,587,340		243,439		9,499		5,425,106		6,902,137		2,039,883		-
Contract owners’ equity end of period	$	3,320,118		2,638,336		663,668		243,439		7,191,846		5,425,106		3,765,237		2,039,883
CHANGES IN UNITS:
Beginning units		263,673		289,412		40,234		900		406,164		348,380		309,365		-
Units purchased		28,331		34,762		45,527		39,606		82,247		115,578		173,178		313,653
Units redeemed		(54,239	)	(60,501	)	(1,633	)	(272	)	(49,641	)	(57,794	)	(15,134	)	(4,288	)
Ending units		237,765		263,673		84,128		40,234		438,770		406,164		467,409		309,365

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	MVIVSC				MSVFI				MSEM				MSVMG
	2009			2008	2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	(677	)	-	240,723		154,326		737,398		819,894		(16,993	)	56,620
Realized gain (loss) on investments		28,429		-	(123,741	)	(107,670	)	(1,492,240	)	(841,995	)	(3,580,005	)	(981,795	)
Change in unrealized gain (loss) on investments		(29,554	)	-	136,733		(413,202	)	3,233,667		(2,401,089	)	7,296,271		(7,029,521	)
Reinvested capital gains		-		-	-		-		-		481,742		-		2,360,835
Net increase (decrease) in contract owners’ equity resulting from operations		(1,802	)	-	253,715		(366,546	)	2,478,825		(1,941,448	)	3,699,273		(5,593,861	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		3,065		-	206,165		305,945		445,174		613,187		315,242		389,908
Transfers between funds		3,039,919		-	(460,391	)	(24,028	)	(2,259,258	)	324,466		(906,840	)	3,845,128
Surrenders (note 6)		-		-	(84,373	)	(244,066	)	(949,108	)	(461,545	)	(510,236	)	(434,570	)
Death benefits (note 4)		-		-	-		(1,494	)	(16,177	)	(68,046	)	(2,888	)	(7,483	)
Net policy repayments (loans) (note 5)		-		-	(109,745	)	(21,270	)	42,354		(145,616	)	(15,991	)	(25,264	)
Deductions for surrender charges (note 2d)		-		-	(4,794	)	(8,979	)	(21,584	)	(22,328	)	(8,360	)	(8,625	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(3,374	)	-	(178,900	)	(162,370	)	(361,633	)	(340,928	)	(207,596	)	(225,557	)
Asset charges (note 3):
FPVUL & VEL contracts		-		-	(9,679	)	(10,290	)	(18,167	)	(20,654	)	(3,866	)	(9,007	)
MSP contracts		-		-	(474	)	(760	)	(371	)	(784	)	(54	)	(127	)
SL contracts or LSFP contracts		-		-	(2,637	)	(3,085	)	(2,646	)	(3,204	)	(509	)	(1,208	)
Adjustments to maintain reserves		1		-	(122	)	(189	)	350		(1,977	)	63		(307	)
Net equity transactions		3,039,611		-	(644,950	)	(170,586	)	(3,141,066	)	(127,429	)	(1,341,035	)	3,522,888
Net change in contract owners’ equity		3,037,809		-	(391,235	)	(537,132	)	(662,241	)	(2,068,877	)	2,358,238		(2,070,973	)
Contract owners’ equity beginning of period		-		-	2,892,689		3,429,821		10,156,613		12,225,490		7,118,914		9,189,887
Contract owners’ equity end of period	$	3,037,809		-	2,501,454		2,892,689		9,494,372		10,156,613		9,477,152		7,118,914
CHANGES IN UNITS:
Beginning units		-		-	264,578		281,694		515,980		520,660		1,183,540		809,774
Units purchased		231,182		-	18,987		29,162		30,123		71,545		168,550		520,416
Units redeemed		(321	)	-	(74,896	)	(46,278	)	(179,535	)	(76,225	)	(346,614	)	(146,650	)
Ending units		230,861		-	208,669		264,578		366,568		515,980		1,005,476		1,183,540

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	MSVEG					MSVRE				NVAGF3			NVAMV1
	2009			2008		2009		2008		2009		2008	2009		2008
Investment activity:
Net investment income (loss)	$	(694	)	(181	)	1,068,395		1,931,947		8,672		-	457		-
Realized gain (loss) on investments		(2,036	)	(13,359	)	(39,285,801	)	(8,799,452	)	1,344		-	3,912		-
Change in unrealized gain (loss) on investments		139,072		(108,805	)	43,914,953		(37,903,882	)	(8,475	)	-	(760	)	-
Reinvested capital gains		-		-		-		21,917,133		1,173		-	2,439		-
Net increase (decrease) in contract owners’ equity resulting from operations		136,342		(122,345	)	5,697,547		(22,854,254	)	2,714		-	6,048		-
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		25,782		28,868		2,103,699		4,104,448		859		-	73		-
Transfers between funds		34,423		295,330		(21,008,864	)	(8,546,259	)	261,374		-	22,416		-
Surrenders (note 6)		(11,500	)	-		(1,869,963	)	(3,097,720	)	(3	)	-	-		-
Death benefits (note 4)		-		-		(162,578	)	(128,638	)	-		-	-		-
Net policy repayments (loans) (note 5)		(1,811	)	-		445,953		(140,232	)	-		-	-		-
Deductions for surrender charges (note 2d)		-		-		(61,632	)	(102,435	)	-		-	-		-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(4,750	)	(1,231	)	(1,032,429	)	(1,952,954	)	(591	)	-	(709	)	-
Asset charges (note 3):
FPVUL & VEL contracts		-		-		(37,922	)	(105,281	)	(61	)	-	(58	)	-
MSP contracts		-		-		(1,255	)	(4,536	)	-		-	-		-
SL contracts or LSFP contracts		-		-		(5,875	)	(16,171	)	(17	)	-	-		-
Adjustments to maintain reserves		8		(7	)	2,057		11,950		(3	)	-	(3	)	-
Net equity transactions		42,152		322,960		(21,628,809	)	(9,977,828	)	261,558		-	21,719		-
Net change in contract owners’ equity		178,494		200,615		(15,931,262	)	(32,832,082	)	264,272		-	27,767		-
Contract owners’ equity beginning of period		200,615		-		36,804,427		69,636,509		-		-	-		-
Contract owners’ equity end of period	$	379,109		200,615		20,873,165		36,804,427		264,272		-	27,767		-
CHANGES IN UNITS:
Beginning units		39,408		-		1,994,137		2,337,392		-		-	-		-
Units purchased		9,844		39,612		155,566		288,801		23,202		-	2,275		-
Units redeemed		(4,157	)	(204	)	(1,254,384	)	(632,056	)	(59	)	-	(65	)	-
Ending units		45,095		39,408		895,319		1,994,137		23,143		-	2,210		-

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	GVAAA2					GVABD2				GVAGG2				GVAGR2
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	2,621		95,090		8,601		145,928		-		146,319		-		148,113
Realized gain (loss) on investments		(177,856	)	(60,537	)	(184,344	)	(116,576	)	(356,606	)	(55,179	)	(992,070	)	(148,187	)
Change in unrealized gain (loss) on investments		826,043		(1,338,937	)	472,238		(324,421	)	1,635,045		(2,766,102	)	2,098,032		(4,212,956	)
Reinvested capital gains		83,925		44,225		822		2,005		339,649		177,920		642,236		425,788
Net increase (decrease) in contract owners’ equity resulting from operations		734,733		(1,260,159	)	297,317		(293,064	)	1,618,088		(2,497,042	)	1,748,198		(3,787,242	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		417,287		427,926		223,586		170,409		504,914		462,002		658,595		673,379
Transfers between funds		174,388		442,407		237,659		683,675		373,988		1,024,717		172,806		2,070,284
Surrenders (note 6)		(211,363	)	(30,944	)	(287,364	)	(337,813	)	(392,917	)	(294,613	)	(329,491	)	(471,019	)
Death benefits (note 4)		-		(1,471	)	(45,571	)	(1,457	)	(296	)	(43,825	)	(5,016	)	-
Net policy repayments (loans) (note 5)		(15,389	)	(17,227	)	(7,708	)	(24,892	)	(402	)	(34,640	)	(14,180	)	(53,226	)
Deductions for surrender charges (note 2d)		(3,158	)	(2,456	)	(10,873	)	(12,238	)	(11,024	)	(7,365	)	(11,601	)	(12,627	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(254,828	)	(241,638	)	(151,037	)	(115,271	)	(238,358	)	(235,827	)	(292,525	)	(291,463	)
Asset charges (note 3):
FPVUL & VEL contracts		(11,424	)	(11,821	)	(8,608	)	(7,895	)	(14,749	)	(16,120	)	(17,865	)	(21,059	)
MSP contracts		(3,575	)	(4,167	)	(915	)	(988	)	(1,100	)	(993	)	(1,260	)	(1,050	)
SL contracts or LSFP contracts		(2,443	)	(2,579	)	(2,247	)	(1,949	)	(3,145	)	(4,233	)	(5,533	)	(6,612	)
Adjustments to maintain reserves		49		(334	)	78		(192	)	40		(374	)	(76	)	(387	)
Net equity transactions		89,544		557,696		(53,000	)	351,389		216,951		848,729		153,854		1,886,220
Net change in contract owners’ equity		824,277		(702,463	)	244,317		58,325		1,835,039		(1,648,313	)	1,902,052		(1,901,022	)
Contract owners’ equity beginning of period		3,108,938		3,811,401		2,479,742		2,421,417		3,947,846		5,596,159		5,184,740		7,085,762
Contract owners’ equity end of period	$	3,933,215		3,108,938		2,724,059		2,479,742		5,782,885		3,947,846		7,086,792		5,184,740
CHANGES IN UNITS:
Beginning units		395,090		340,142		253,508		223,108		518,855		451,322		801,346		610,966
Units purchased		64,077		95,603		55,238		84,892		105,029		129,180		99,059		280,096
Units redeemed		(54,156	)	(40,655	)	(60,429	)	(54,492	)	(87,152	)	(61,647	)	(111,163	)	(89,716	)
Ending units		405,011		395,090		248,317		253,508		536,732		518,855		789,242		801,346

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	GVAGI2					HIBF				HIBF3				GEM
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	-		39,487		1,774,184		1,742,986		981,264		681,184		261,334		357,336
Realized gain (loss) on investments		(294,455	)	(77,592	)	(2,015,466	)	(1,523,883	)	(1,275,133	)	(1,172,106	)	(10,300,909	)	(251,665	)
Change in unrealized gain (loss) on investments		744,397		(689,449	)	7,106,133		(6,224,368	)	3,979,738		(1,576,546	)	21,638,633		(36,615,968	)
Reinvested capital gains		47,807		529		-		-		-		-		-		8,032,732
Net increase (decrease) in contract owners’ equity resulting from operations		497,749		(727,025	)	6,864,851		(6,005,265	)	3,685,869		(2,067,468	)	11,599,058		(28,477,565	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		286,427		115,482		1,211,131		1,542,758		1,100,053		843,452		1,016,503		1,399,023
Transfers between funds		339,677		1,223,549		(619,286	)	(2,315,421	)	2,117,915		(7,516,602	)	(1,066,354	)	(3,786,944	)
Surrenders (note 6)		(103,274	)	(17,353	)	(958,302	)	(605,538	)	(373,588	)	(458,680	)	(1,299,231	)	(2,068,596	)
Death benefits (note 4)		(28,910	)	(714	)	(16,042	)	(103,419	)	(11,357	)	(10,342	)	(74,865	)	(79,242	)
Net policy repayments (loans) (note 5)		(3,760	)	(33,442	)	(44,517	)	(80,984	)	(39,857	)	(50,003	)	359,012		(187,449	)
Deductions for surrender charges (note 2d)		(2,545	)	(1,922	)	(17,868	)	(13,132	)	(14,439	)	(15,507	)	(9,022	)	(20,263	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(81,550	)	(62,322	)	(466,772	)	(442,939	)	(559,369	)	(407,747	)	(502,866	)	(636,295	)
Asset charges (note 3):
FPVUL & VEL contracts		(5,428	)	(4,699	)	(14,717	)	(18,152	)	(32,343	)	(27,425	)	(10,319	)	(17,800	)
MSP contracts		(723	)	(677	)	(836	)	(1,111	)	(490	)	(416	)	(569	)	(995	)
SL contracts or LSFP contracts		(989	)	(744	)	(1,770	)	(2,817	)	(4,373	)	(4,334	)	(631	)	(1,582	)
Adjustments to maintain reserves		50		(136	)	305		(1,005	)	60		(212	)	10		15,550
Net equity transactions		398,974		1,217,022		(928,674	)	(2,041,760	)	2,182,212		(7,647,816	)	(1,588,333	)	(5,384,593	)
Net change in contract owners’ equity		896,723		489,997		5,936,177		(8,047,025	)	5,868,081		(9,715,284	)	10,010,725		(33,862,158	)
Contract owners’ equity beginning of period		1,427,472		937,475		15,242,239		23,289,264		6,122,292		15,837,576		18,499,477		52,361,635
Contract owners’ equity end of period	$	2,324,195		1,427,472		21,178,416		15,242,239		11,990,373		6,122,292		28,510,202		18,499,477
CHANGES IN UNITS:
Beginning units		232,982		94,768		1,266,632		1,391,470		707,956		1,316,814		1,209,140		1,441,496
Units purchased		95,171		158,192		127,682		413,149		344,819		132,968		220,942		165,155
Units redeemed		(37,895	)	(19,978	)	(203,052	)	(537,987	)	(103,614	)	(741,826	)	(290,352	)	(397,511	)
Ending units		290,258		232,982		1,191,262		1,266,632		949,161		707,956		1,139,730		1,209,140

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	GEM3					GVGU1				GIG				GIG3
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	148,491		199,623		106,408		134,523		55,220		125,409		3,333		1,697
Realized gain (loss) on investments		(1,938,071	)	871,367		(932,336	)	(471,670	)	(4,204,394	)	351,355		(8,426	)	(25,923	)
Change in unrealized gain (loss) on investments		7,575,496		(17,624,735	)	1,013,356		(1,543,783	)	5,470,605		(6,955,844	)	469,935		(75,860	)
Reinvested capital gains		-		3,501,526		-		56,626		-		1,330,793		-		24,894
Net increase (decrease) in contract owners’ equity resulting from operations		5,785,916		(13,052,219	)	187,428		(1,824,304	)	1,321,431		(5,148,287	)	464,842		(75,192	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		1,295,101		1,603,349		126,300		281,860		329,073		591,618		84,849		44,198
Transfers between funds		122,614		(2,562,510	)	(237,147	)	(1,063,064	)	(1,575,185	)	(1,235,463	)	3,291,333		214,521
Surrenders (note 6)		(544,992	)	(869,785	)	(192,221	)	(245,241	)	(353,341	)	(422,321	)	(161,849	)	(44,286	)
Death benefits (note 4)		(3,736	)	(21,966	)	(26,184	)	(2,180	)	(337	)	(43,904	)	(2,468	)	-
Net policy repayments (loans) (note 5)		(87,448	)	(83,652	)	(62,636	)	(23,769	)	(101,201	)	(50,011	)	(37,112	)	-
Deductions for surrender charges (note 2d)		(49,407	)	(45,052	)	(4,338	)	(9,136	)	(4,438	)	(7,581	)	(8,466	)	-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(588,338	)	(713,914	)	(115,873	)	(140,191	)	(159,684	)	(217,650	)	(68,246	)	(2,037	)
Asset charges (note 3):
FPVUL & VEL contracts		(34,293	)	(48,926	)	(6,010	)	(9,331	)	(9,992	)	(16,478	)	(5,340	)	(146	)
MSP contracts		(3,601	)	(2,123	)	(398	)	(613	)	(309	)	(428	)	(288	)	(1	)
SL contracts or LSFP contracts		(8,157	)	(10,895	)	(370	)	(968	)	(1,770	)	(5,545	)	(502	)	(205	)
Adjustments to maintain reserves		(1,631	)	(471	)	167		(321	)	131		(233	)	(493	)	(17	)
Net equity transactions		96,113		(2,755,945	)	(518,710	)	(1,212,954	)	(1,877,053	)	(1,407,996	)	3,091,418		212,027
Net change in contract owners’ equity		5,882,029		(15,808,164	)	(331,282	)	(3,037,258	)	(555,622	)	(6,556,283	)	3,556,260		136,835
Contract owners’ equity beginning of period		9,077,351		24,885,515		3,120,697		6,157,955		6,023,795		12,580,078		136,835		-
Contract owners’ equity end of period	$	14,959,380		9,077,351		2,789,415		3,120,697		5,468,173		6,023,795		3,693,095		136,835
CHANGES IN UNITS:
Beginning units		811,502		938,196		189,353		250,190		656,884		738,650		24,803		-
Units purchased		110,151		120,082		17,300		20,578		62,657		113,143		533,829		25,218
Units redeemed		(103,624	)	(246,776	)	(49,686	)	(81,415	)	(258,890	)	(194,909	)	(42,392	)	(415	)
Ending units		818,029		811,502		156,967		189,353		460,651		656,884		516,240		24,803

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	NVIE6					GEF				GEF3			NVNMO1
	2009			2008		2009		2008		2009		2008	2009		2008
Investment activity:
Net investment income (loss)	$	498		566		36,162		38,350		64		-	10,318		-
Realized gain (loss) on investments		(24,066	)	(3,304	)	(329,610	)	410,146		63		-	104,269		(7,738	)
Change in unrealized gain (loss) on investments		83,896		(30,880	)	1,154,975		(4,484,104	)	424		-	1,500,363		(168	)
Reinvested capital gains		-		7,996		-		1,004,518		-		-	32,649		-
Net increase (decrease) in contract owners’ equity resulting from operations		60,328		(25,622	)	861,527		(3,031,090	)	551		-	1,647,599		(7,906	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		38,549		24		269,031		279,793		-		-	433,356		140
Transfers between funds		381,123		63,441		(125,089	)	(1,083,159	)	14,487		-	13,880,272		8,983
Surrenders (note 6)		(631	)	(80	)	(206,567	)	(222,560	)	-		-	(442,410	)	-
Death benefits (note 4)		-		-		(11,151	)	(27,808	)	-		-	(2,899	)	-
Net policy repayments (loans) (note 5)		(380	)	-		8,254		(33,823	)	-		-	(58,007	)	-
Deductions for surrender charges (note 2d)		(753	)	-		(4,117	)	(8,857	)	-		-	(6,069	)	-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(10,371	)	(639	)	(193,558	)	(239,569	)	(449	)	-	(314,834	)	(251	)
Asset charges (note 3):
FPVUL & VEL contracts		(420	)	(10	)	(11,278	)	(15,963	)	(16	)	-	(21,615	)	(23	)
MSP contracts		-		-		(338	)	(488	)	-		-	(574	)	-
SL contracts or LSFP contracts		(561	)	(94	)	(1,175	)	(1,874	)	-		-	(2,301	)	-
Adjustments to maintain reserves		11		(12	)	117		(286	)	5		-	(323	)	(10	)
Net equity transactions		406,568		62,630		(275,871	)	(1,354,594	)	14,027		-	13,464,597		8,839
Net change in contract owners’ equity		466,896		37,008		585,656		(4,385,684	)	14,578		-	15,112,196		933
Contract owners’ equity beginning of period		37,008		-		3,333,416		7,719,100		-		-	933		-
Contract owners’ equity end of period	$	503,904		37,008		3,919,072		3,333,416		14,578		-	15,113,129		933
CHANGES IN UNITS:
Beginning units		6,719		-		285,138		374,384		-		-	180		-
Units purchased		65,951		6,830		44,545		18,123		1,124		-	2,012,080		216
Units redeemed		(1,998	)	(111	)	(62,044	)	(107,369	)	(37	)	-	(105,726	)	(36	)
Ending units		70,672		6,719		267,639		285,138		1,087		-	1,906,534		180

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	NVNSR1					NVCRA1				NVCRB1				NVCCA1
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	300		108		3,137		8,583		14,685		4,809		18,627		5,387
Realized gain (loss) on investments		(9,127	)	(212	)	(89,222	)	(149,177	)	(15,424	)	(6,945	)	(14,153	)	(11,855	)
Change in unrealized gain (loss) on investments		31,839		(12,894	)	177,395		(104,586	)	138,862		(22,948	)	246,582		(126,362	)
Reinvested capital gains		-		-		79		6,286		-		2,502		-		4,934
Net increase (decrease) in contract owners’ equity resulting from operations		23,012		(12,998	)	91,389		(238,894	)	138,123		(22,582	)	251,056		(127,896	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		77,711		2,268		70,724		15,734		54,743		11,963		216,138		33,781
Transfers between funds		52,118		42,336		(58,588	)	525,197		206,940		553,058		639,089		629,911
Surrenders (note 6)		-		-		(5,318	)	-		(12,629	)	(5,957	)	(10,056	)	(5,398	)
Death benefits (note 4)		-		-		-		-		-		-		-		-
Net policy repayments (loans) (note 5)		(2,642	)	-		(1,351	)	(6,995	)	144		(7,500	)	(79	)	979
Deductions for surrender charges (note 2d)		-		-		-		-		(1,564	)	-		-		-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(2,766	)	(449	)	(21,276	)	(12,287	)	(35,947	)	(7,426	)	(51,183	)	(14,737	)
Asset charges (note 3):
FPVUL & VEL contracts		(60	)	(23	)	(1,232	)	(693	)	(2,166	)	(394	)	(2,877	)	(705	)
MSP contracts		-		-		(10	)	(4	)	(622	)	(136	)	(173	)	-
SL contracts or LSFP contracts		(182	)	(1	)	(236	)	(338	)	(546	)	(52	)	(526	)	(98	)
Adjustments to maintain reserves		15		(12	)	30		(31	)	29		(29	)	25		(22	)
Net equity transactions		124,194		44,119		(17,257	)	520,583		208,383		543,527		790,358		643,711
Net change in contract owners’ equity		147,206		31,121		74,132		281,689		346,506		520,945		1,041,414		515,815
Contract owners’ equity beginning of period		31,121		-		281,689		-		520,945		-		515,815		-
Contract owners’ equity end of period	$	178,327		31,121		355,821		281,689		867,451		520,945		1,557,229		515,815
CHANGES IN UNITS:
Beginning units		5,037		-		43,904		-		65,101		-		71,014		-
Units purchased		21,928		5,105		18,966		46,904		31,784		67,066		108,865		73,124
Units redeemed		(5,022	)	(68	)	(20,052	)	(3,000	)	(6,462	)	(1,965	)	(7,333	)	(2,110	)
Ending units		21,943		5,037		42,818		43,904		90,423		65,101		172,546		71,014

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	NVCCN1					NVCMD1				NVCMA1				NVCMC1
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	23,286		3,653		32,429		7,925		36,889		16,044		12,101		2,407
Realized gain (loss) on investments		11,717		(26,718	)	(17,203	)	(38,022	)	(228,372	)	(63,212	)	(454	)	(1,558	)
Change in unrealized gain (loss) on investments		102,299		(15,304	)	350,508		(84,562	)	786,425		(340,993	)	75,372		3,794
Reinvested capital gains		1,717		516		118		4,218		1,157		17,352		387		840
Net increase (decrease) in contract owners’ equity resulting from operations		139,019		(37,853	)	365,852		(110,441	)	596,099		(370,809	)	87,406		5,483
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		37,034		10,172		213,261		188,465		473,349		49,267		36,982		4,548
Transfers between funds		559,841		314,970		1,142,296		700,762		811,650		1,894,471		287,927		284,050
Surrenders (note 6)		(634	)	-		(45,459	)	(134,828	)	(70,716	)	-		(3,829	)	-
Death benefits (note 4)		-		-		-		-		-		-		-		-
Net policy repayments (loans) (note 5)		(54,901	)	23,093		770		100		(205,572	)	(2,370	)	3,018		(3,747	)
Deductions for surrender charges (note 2d)		-		-		(1,317	)	-		(2,110	)	-		(1,315	)	(4,593	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(53,581	)	(9,396	)	(55,287	)	(8,638	)	(113,766	)	(24,253	)	(37,482	)	(2,141	)
Asset charges (note 3):
FPVUL & VEL contracts		(3,277	)	(731	)	(4,140	)	(826	)	(7,889	)	(2,393	)	(1,072	)	(140	)
MSP contracts		(891	)	-		(414	)	(68	)	(2,175	)	(861	)	(1,279	)	(140	)
SL contracts or LSFP contracts		(43	)	-		(2,047	)	(52	)	(1,267	)	(144	)	(169	)	(8	)
Adjustments to maintain reserves		20		(21	)	34		(35	)	34		(33	)	30		(4	)
Net equity transactions		483,568		338,087		1,247,696		744,880		881,539		1,913,684		282,811		277,825
Net change in contract owners’ equity		622,587		300,234		1,613,548		634,439		1,477,638		1,542,875		370,217		283,308
Contract owners’ equity beginning of period		300,234		-		634,439		-		1,542,875		-		283,308		-
Contract owners’ equity end of period	$	922,821		300,234		2,247,987		634,439		3,020,513		1,542,875		653,525		283,308
CHANGES IN UNITS:
Beginning units		32,838		-		83,184		-		223,705		-		33,824		-
Units purchased		68,059		33,956		171,060		84,626		178,283		227,730		37,144		35,201
Units redeemed		(11,749	)	(1,118	)	(12,661	)	(1,442	)	(56,301	)	(4,025	)	(4,641	)	(1,377	)
Ending units		89,148		32,838		241,583		83,184		345,687		223,705		66,327		33,824

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	NVCBD1					NVLCP1				TRF				GVGF1
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	16,101		3,407		10,487		1,613		3,345,442		4,803,593		21,040		57,795
Realized gain (loss) on investments		24,773		(1,752	)	21,401		(234	)	(1,042,850	)	1,356,893		(1,389,231	)	(1,471,698	)
Change in unrealized gain (loss) on investments		3,669		2,744		9,164		4,089		61,992,768		(245,372,431	)	1,963,916		(463,964	)
Reinvested capital gains		3,009		-		4,977		-		-		59,388,629		-		-
Net increase (decrease) in contract owners’ equity resulting from operations		47,552		4,399		46,029		5,468		64,295,360		(179,823,316	)	595,725		(1,877,867	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		88,571		1,178		126		230		3,727,417		4,070,480		92,356		142,360
Transfers between funds		377,679		208,321		99,386		130,414		523,446		(743,427	)	(137,563	)	(830,954	)
Surrenders (note 6)		(58,737	)	-		(27,433	)	-		(2,189,741	)	(2,688,496	)	(50,148	)	(117,660	)
Death benefits (note 4)		-		-		-		-		(420,554	)	(778,607	)	(20,078	)	(26,781	)
Net policy repayments (loans) (note 5)		(23,576	)	(570	)	11,084		-		(117,156	)	(345,571	)	(16,452	)	(2,571	)
Deductions for surrender charges (note 2d)		(1,858	)	-		(495	)	-		(48,979	)	(102,267	)	(2,234	)	(8,479	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(30,317	)	(2,552	)	(9,267	)	(1,297	)	(5,027,515	)	(4,997,680	)	(77,810	)	(113,837	)
Asset charges (note 3):
FPVUL & VEL contracts		(1,765	)	(148	)	(793	)	(70	)	(119,935	)	(165,533	)	(3,434	)	(4,681	)
MSP contracts		(92	)	-		-		-		(7,094	)	(11,079	)	-		-
SL contracts or LSFP contracts		(523	)	(11	)	(44	)	-		(10,207	)	(13,636	)	(775	)	(1,186	)
Adjustments to maintain reserves		16		(18	)	10		(12	)	(78	)	(4,482	)	83		(129	)
Net equity transactions		349,398		206,200		72,574		129,265		(3,690,396	)	(5,780,298	)	(216,055	)	(963,918	)
Net change in contract owners’ equity		396,950		210,599		118,603		134,733		60,604,964		(185,603,614	)	379,670		(2,841,785	)
Contract owners’ equity beginning of period		210,599		-		134,733		-		250,323,819		435,927,433		1,803,575		4,645,360
Contract owners’ equity end of period	$	607,549		210,599		253,336		134,733		310,928,783		250,323,819		2,183,245		1,803,575
CHANGES IN UNITS:
Beginning units		21,176		-		13,545		-		30,738,481		31,215,436		171,955		237,888
Units purchased		48,659		21,515		13,349		13,689		503,102		357,645		20,168		25,052
Units redeemed		(13,678	)	(339	)	(5,056	)	(144	)	(905,915	)	(834,600	)	(34,052	)	(90,985	)
Ending units		56,157		21,176		21,838		13,545		30,335,668		30,738,481		158,071		171,955

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	GBF					CAF				GVGH1				GVGHS
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	3,978,157		4,891,347		67,503		41,011		4,802		4,641		6,852		7,181
Realized gain (loss) on investments		947,871		(390,883	)	258,366		126,935		(266,588	)	(30,467	)	(339,358	)	(133,555	)
Change in unrealized gain (loss) on investments		(3,501,589	)	4,017,269		3,518,953		(7,585,727	)	738,864		(1,118,755	)	735,726		(952,956	)
Reinvested capital gains		1,702,702		-		-		-		-		230,802		-		250,351
Net increase (decrease) in contract owners’ equity resulting from operations		3,127,141		8,517,733		3,844,822		(7,417,781	)	477,078		(913,779	)	403,220		(828,979	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		5,672,055		7,697,431		1,487,344		1,714,602		30,016		35,192		252,753		330,123
Transfers between funds		(9,936,785	)	24,527,320		631,555		(261,433	)	19,335		(1,029,342	)	(110,789	)	610,583
Surrenders (note 6)		(7,206,573	)	(8,332,389	)	(829,196	)	(902,395	)	(93,144	)	(72,454	)	(230,113	)	(289,350	)
Death benefits (note 4)		(278,522	)	(295,169	)	(44,790	)	(39,801	)	(2,710	)	(5,587	)	(29,050	)	-
Net policy repayments (loans) (note 5)		(1,340,648	)	(865,916	)	(53,927	)	(156,340	)	(34,844	)	(25,011	)	(101,611	)	111,163
Deductions for surrender charges (note 2d)		(102,837	)	(112,385	)	(6,668	)	(24,712	)	(2,027	)	(3,649	)	(7,864	)	(6,977	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(3,962,145	)	(3,220,456	)	(1,126,311	)	(1,111,786	)	(91,239	)	(74,760	)	(124,256	)	(111,452	)
Asset charges (note 3):
FPVUL & VEL contracts		(132,950	)	(126,343	)	(50,637	)	(62,541	)	(2,951	)	(4,036	)	(8,145	)	(8,538	)
MSP contracts		(10,008	)	(10,744	)	(1,462	)	(1,813	)	(150	)	(187	)	(99	)	(65	)
SL contracts or LSFP contracts		(44,660	)	(54,621	)	(4,184	)	(6,353	)	(666	)	(1,039	)	(1,401	)	(1,426	)
Adjustments to maintain reserves		600		19,268		57		(338	)	(321	)	(1,418	)	85		(193	)
Net equity transactions		(17,342,473	)	19,225,996		1,782		(852,910	)	(178,701	)	(1,182,291	)	(360,490	)	633,868
Net change in contract owners’ equity		(14,215,332	)	27,743,729		3,846,604		(8,270,691	)	298,377		(2,096,070	)	42,730		(195,111	)
Contract owners’ equity beginning of period		129,444,984		101,701,255		11,313,189		19,583,880		2,590,081		4,686,151		2,437,529		2,632,640
Contract owners’ equity end of period	$	115,229,652		129,444,984		15,159,793		11,313,189		2,888,458		2,590,081		2,480,259		2,437,529
CHANGES IN UNITS:
Beginning units		7,781,878		6,570,388		1,919,769		2,036,724		225,000		304,564		260,983		210,752
Units purchased		518,251		2,122,142		426,516		255,721		17,451		57,269		30,079		80,217
Units redeemed		(1,465,237	)	(910,652	)	(375,084	)	(372,676	)	(31,517	)	(136,833	)	(68,114	)	(29,986	)
Ending units		6,834,892		7,781,878		1,971,201		1,919,769		210,934		225,000		222,948		260,983

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	GVIX2					GVIX6				GVIDA				NVDBL2
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	28,220		18,928		11,544		13,096		236,550		599,619		135		-
Realized gain (loss) on investments		(315,049	)	(203,996	)	(260,909	)	(34,287	)	(2,064,061	)	(697,871	)	19		-
Change in unrealized gain (loss) on investments		632,696		(339,766	)	311,663		(362,215	)	6,579,751		(18,129,999	)	113		-
Reinvested capital gains		-		1,405		-		1,033		1,352,345		5,187,862		155		-
Net increase (decrease) in contract owners’ equity resulting from operations		345,867		(523,429	)	62,298		(382,373	)	6,104,585		(13,040,389	)	422		-
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		646,085		103,003		54,056		94,436		3,421,525		4,061,628		15,052		-
Transfers between funds		2,062,529		(55,449	)	53,829		211,758		(813,824	)	(935,195	)	6,878		-
Surrenders (note 6)		(15,763	)	(1,061,320	)	(47,359	)	(11,568	)	(1,229,667	)	(1,269,009	)	-		-
Death benefits (note 4)		(384	)	-		-		-		(30,110	)	(14,150	)	-		-
Net policy repayments (loans) (note 5)		-		-		(7,093	)	(17,200	)	(171,112	)	(252,946	)	-		-
Deductions for surrender charges (note 2d)		-		-		(222	)	(53	)	(130,322	)	(190,612	)	-		-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(20,798	)	(29,625	)	(30,805	)	(42,428	)	(1,376,485	)	(1,503,074	)	(403	)	-
Asset charges (note 3):
FPVUL & VEL contracts		(259	)	-		(1,127	)	(1,453	)	(63,464	)	(79,423	)	(31	)	-
MSP contracts		-		-		(123	)	(389	)	(6,332	)	(6,184	)	-		-
SL contracts or LSFP contracts		-		-		(586	)	(724	)	(5,513	)	(5,776	)	-		-
Adjustments to maintain reserves		12		(75	)	59		(152	)	410		(818	)	1		-
Net equity transactions		2,671,422		(1,043,466	)	20,629		232,227		(404,895	)	(195,559	)	21,497		-
Net change in contract owners’ equity		3,017,289		(1,566,895	)	82,927		(150,146	)	5,699,690		(13,235,948	)	21,919		-
Contract owners’ equity beginning of period		655,696		2,222,591		491,213		641,359		21,851,772		35,087,720		-		-
Contract owners’ equity end of period	$	3,672,985		655,696		574,140		491,213		27,551,462		21,851,772		21,919		-
CHANGES IN UNITS:
Beginning units		114,389		219,734		71,845		53,368		2,076,728		2,105,240		-		-
Units purchased		405,170		29,148		8,895		34,188		364,953		406,529		1,921		-
Units redeemed		(21,010	)	(134,493	)	(15,450	)	(15,711	)	(382,564	)	(435,041	)	(38	)	-
Ending units		498,549		114,389		65,290		71,845		2,059,117		2,076,728		1,883		-

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	NVDCA2				GVIDC				GVIDM				GVDMA
	2009			2008	2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	814		-	286,883		668,295		1,014,977		1,853,394		805,174		1,899,537
Realized gain (loss) on investments		(97	)	-	(1,906,856	)	(179,388	)	(2,373,635	)	98,527		(2,858,759	)	(605,320	)
Change in unrealized gain (loss) on investments		2,401		-	2,658,897		(2,270,607	)	12,852,063		(24,869,374	)	13,647,980		(37,181,566	)
Reinvested capital gains		650		-	94,127		451,853		1,648,516		5,784,847		2,700,488		8,097,876
Net increase (decrease) in contract owners’ equity resulting from operations		3,768		-	1,133,051		(1,329,847	)	13,141,921		(17,132,606	)	14,294,883		(27,789,473	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		6,132		-	1,200,182		845,699		7,127,276		7,885,090		9,615,571		11,441,272
Transfers between funds		116,102		-	(11,116,062	)	12,150,512		12,787,935		2,033,029		(1,802,843	)	166,766
Surrenders (note 6)		-		-	(604,928	)	(317,058	)	(4,408,689	)	(4,171,435	)	(4,307,477	)	(2,748,548	)
Death benefits (note 4)		-		-	(89,265	)	(10,704	)	(689,935	)	(176,294	)	(58,020	)	(18,757	)
Net policy repayments (loans) (note 5)		-		-	(15,355	)	(50,732	)	(179,572	)	(767,488	)	(743,018	)	(800,048	)
Deductions for surrender charges (note 2d)		-		-	(17,463	)	(18,675	)	(18,289	)	(388,688	)	(382,509	)	(322,644	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(1,073	)	-	(745,672	)	(642,562	)	(3,752,452	)	(3,420,054	)	(3,967,017	)	(4,201,771	)
Asset charges (note 3):
FPVUL & VEL contracts		(136	)	-	(27,669	)	(23,066	)	(177,399	)	(176,935	)	(217,788	)	(262,265	)
MSP contracts		-		-	(6,503	)	(7,647	)	(32,958	)	(36,103	)	(17,170	)	(19,906	)
SL contracts or LSFP contracts		-		-	(5,269	)	(5,054	)	(28,834	)	(25,901	)	(29,869	)	(36,153	)
Adjustments to maintain reserves		(2	)	-	226		(639	)	194		(561	)	2,841		(441	)
Net equity transactions		121,023		-	(11,427,777	)	11,920,074		10,627,277		754,660		(1,907,299	)	3,197,505
Net change in contract owners’ equity		124,791		-	(10,294,726	)	10,590,227		23,769,198		(16,377,946	)	12,387,584		(24,591,968	)
Contract owners’ equity beginning of period		-		-	25,234,721		14,644,494		56,973,628		73,351,574		60,599,022		85,190,990
Contract owners’ equity end of period	$	124,791		-	14,939,995		25,234,721		80,742,826		56,973,628		72,986,606		60,599,022
CHANGES IN UNITS:
Beginning units		-		-	2,076,535		1,124,346		4,997,828		4,941,260		5,511,580		5,315,958
Units purchased		10,328		-	253,841		1,089,358		1,791,447		1,134,396		889,744		1,145,968
Units redeemed		(103	)	-	(1,213,716	)	(137,169	)	(840,060	)	(1,077,828	)	(1,063,008	)	(950,346	)
Ending units		10,225		-	1,116,660		2,076,535		5,949,215		4,997,828		5,338,316		5,511,580

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	GVDMC					GVUS1				MCIF				SAM
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	295,619		792,538		7,607		12,832		362,816		694,248		35,553		2,574,603
Realized gain (loss) on investments		(1,269,197	)	(1,143,453	)	(754,822	)	(249,100	)	(5,522,677	)	143,798		-		-
Change in unrealized gain (loss) on investments		3,097,306		(4,816,383	)	1,037,888		(895,663	)	17,238,205		(29,419,372	)	-		-
Reinvested capital gains		274,021		959,038		-		-		1,328,431		3,794,309		-		-
Net increase (decrease) in contract owners’ equity resulting from operations		2,397,749		(4,208,260	)	290,673		(1,131,931	)	13,406,775		(24,787,017	)	35,553		2,574,603
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		1,548,291		4,900,897		40,422		57,554		3,385,036		4,733,840		13,320,686		29,939,833
Transfers between funds		(472,912	)	(17,121,796	)	(180,682	)	(221,220	)	(3,024,145	)	(6,359,556	)	15,786,585		19,728,779
Surrenders (note 6)		(1,164,612	)	(603,425	)	(54,298	)	(147,365	)	(3,404,487	)	(6,808,352	)	(41,246,434	)	(28,701,969	)
Death benefits (note 4)		(73,371	)	(13,524	)	(72	)	(165	)	(91,735	)	(101,899	)	(684,404	)	(783,164	)
Net policy repayments (loans) (note 5)		(38,536	)	(215,508	)	1,563		12,696		1,362,415		(276,542	)	(37,415	)	(2,357,126	)
Deductions for surrender charges (note 2d)		(24,310	)	(25,774	)	(5,830	)	(3,198	)	(49,758	)	(90,842	)	(983,194	)	(707,143	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(864,754	)	(1,049,986	)	(35,932	)	(43,175	)	(1,592,471	)	(1,757,256	)	(8,035,920	)	(7,543,989	)
Asset charges (note 3):
FPVUL & VEL contracts		(39,664	)	(43,260	)	(1,853	)	(3,105	)	(74,465	)	(96,141	)	(399,187	)	(399,813	)
MSP contracts		(16,950	)	(17,084	)	-		-		(1,784	)	(1,958	)	(28,447	)	(31,654	)
SL contracts or LSFP contracts		(9,733	)	(9,954	)	(422	)	(779	)	(13,234	)	(20,299	)	(90,812	)	(105,490	)
Adjustments to maintain reserves		178		(959	)	39		(167	)	2,492		2,900		2,324		(887	)
Net equity transactions		(1,156,373	)	(14,200,373	)	(237,064	)	(348,924	)	(3,502,136	)	(10,776,105	)	(22,396,218	)	9,037,377
Net change in contract owners’ equity		1,241,376		(18,408,633	)	53,609		(1,480,855	)	9,904,639		(35,563,122	)	(22,360,665	)	11,611,980
Contract owners’ equity beginning of period		17,156,045		35,564,678		990,303		2,471,158		40,584,184		76,147,306		133,848,991		122,237,011
Contract owners’ equity end of period	$	18,397,421		17,156,045		1,043,912		990,303		50,488,823		40,584,184		111,488,326		133,848,991
CHANGES IN UNITS:
Beginning units		1,437,268		2,554,760		110,239		137,750		2,837,215		3,397,782		9,487,421		8,863,336
Units purchased		225,095		620,805		5,672		17,190		349,791		483,944		2,036,219		4,725,029
Units redeemed		(315,678	)	(1,738,297	)	(28,967	)	(44,701	)	(559,827	)	(1,044,511	)	(3,622,618	)	(4,100,944	)
Ending units		1,346,685		1,437,268		86,944		110,239		2,627,179		2,837,215		7,901,022		9,487,421

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	SAM5					NVMIG3				GVDIVI				GVDIV3
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	(543,038	)	6,819,754		54,487		7		20,448		28,833		107,135		128,039
Realized gain (loss) on investments		-		-		69,102		(3,454	)	(168,939	)	(76,550	)	(1,214,689	)	(157,651	)
Change in unrealized gain (loss) on investments		-		-		2,136,753		(2,935	)	402,617		(1,132,458	)	2,465,427		(5,223,038	)
Reinvested capital gains		-		-		-		-		-		240,731		-		1,087,474
Net increase (decrease) in contract owners’ equity resulting from operations		(543,038	)	6,819,754		2,260,342		(6,382	)	254,126		(939,444	)	1,357,873		(4,165,176	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		60,789,909		77,654,445		507,330		10,640		75		216		548,080		780,491
Transfers between funds		(10,495,762	)	(14,992,644	)	16,234,491		3,578		(38,052	)	(111,859	)	(440,786	)	(399,069	)
Surrenders (note 6)		(110,603,433	)	(25,597,209	)	(509,590	)	-		(41,249	)	(89,054	)	(392,314	)	(461,394	)
Death benefits (note 4)		(982,442	)	(351,728	)	(3,733	)	-		(698	)	-		(37,159	)	-
Net policy repayments (loans) (note 5)		(5,626,865	)	(11,219,758	)	(86,166	)	(209	)	(29,156	)	(18,779	)	(30,929	)	(66,631	)
Deductions for surrender charges (note 2d)		-		-		(6,962	)	-		(4,206	)	(6,815	)	(19,706	)	(22,189	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(6,939,336	)	(5,616,989	)	(399,291	)	(780	)	(45,322	)	(65,626	)	(284,564	)	(329,351	)
Asset charges (note 3):
FPVUL & VEL contracts		(10,198	)	-		(26,192	)	(12	)	(3,187	)	(5,356	)	(18,574	)	(24,696	)
MSP contracts		-		-		(833	)	(4	)	(134	)	(221	)	(186	)	(308	)
SL contracts or LSFP contracts		-		-		(3,533	)	(14	)	(508	)	(993	)	(2,985	)	(4,175	)
Adjustments to maintain reserves		714		(12,128	)	19		(20	)	87		(221	)	(317	)	(228	)
Net equity transactions		(73,867,413	)	19,863,989		15,705,541		13,179		(162,350	)	(298,708	)	(679,441	)	(527,550	)
Net change in contract owners’ equity		(74,410,451	)	26,683,743		17,965,883		6,797		91,776		(1,238,152	)	678,432		(4,692,726	)
Contract owners’ equity beginning of period		372,633,606		345,949,863		6,797		-		987,477		2,225,629		4,933,753		9,626,479
Contract owners’ equity end of period	$	298,223,155		372,633,606		17,972,680		6,797		1,079,253		987,477		5,612,185		4,933,753
CHANGES IN UNITS:
Beginning units		32,217,849		30,492,136		1,107		-		77,496		93,770		635,373		665,320
Units purchased		9,639,717		10,305,999		2,274,283		2,222		7		-		70,443		91,296
Units redeemed		(16,074,999	)	(8,580,286	)	(130,450	)	(1,115	)	(12,278	)	(16,274	)	(149,171	)	(121,243	)
Ending units		25,782,567		32,217,849		2,144,940		1,107		65,225		77,496		556,645		635,373

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	NVMLG1					NVMLV1				NVMMG1				NVMMV1
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	7,951		51		20,167		1,065		(491	)	(58	)	(3	)	11
Realized gain (loss) on investments		31,265		(2,528	)	(6,313	)	(2,654	)	302,640		(32,124	)	(1,298	)	-
Change in unrealized gain (loss) on investments		260,488		(7,223	)	348,841		(9,985	)	4,194,989		(1,417	)	(81	)	81
Reinvested capital gains		-		-		-		-		-		-		-		-
Net increase (decrease) in contract owners’ equity resulting from operations		299,704		(9,700	)	362,695		(11,574	)	4,497,138		(33,599	)	(1,382	)	92
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		130,936		19,876		146,552		12,274		1,305,582		63,943		8,306		1,219
Transfers between funds		2,042,576		6,749		3,293,501		241,887		28,236,353		711		(9,194	)	1,115
Surrenders (note 6)		(47,225	)	-		(235,851	)	-		(1,192,048	)	(27,035	)	-		-
Death benefits (note 4)		-		-		(10,425	)	-		(9,723	)	-		-		-
Net policy repayments (loans) (note 5)		(11,125	)	(709	)	31,830		(484	)	(60,331	)	-		-		-
Deductions for surrender charges (note 2d)		(3,342	)	-		(23,322	)	-		(54,604	)	-		-		-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(61,197	)	(790	)	(86,407	)	(1,816	)	(869,041	)	(982	)	(156	)	-
Asset charges (note 3):
FPVUL & VEL contracts		(3,488	)	(31	)	(5,902	)	(43	)	(52,065	)	(20	)	-		-
MSP contracts		(91	)	-		(105	)	-		(1,028	)	-		-		-
SL contracts or LSFP contracts		(513	)	(8	)	(663	)	(82	)	(7,128	)	(8	)	-		-
Adjustments to maintain reserves		5		(4	)	15		(17	)	(1,175	)	(8	)	5		(5	)
Net equity transactions		2,046,536		25,083		3,109,223		251,719		27,294,792		36,601		(1,039	)	2,329
Net change in contract owners’ equity		2,346,240		15,383		3,471,918		240,145		31,791,930		3,002		(2,421	)	2,421
Contract owners’ equity beginning of period		15,383		-		240,145		-		3,002		-		2,421		-
Contract owners’ equity end of period	$	2,361,623		15,383		3,712,063		240,145		31,794,932		3,002		-		2,421
CHANGES IN UNITS:
Beginning units		2,417		-		37,776		-		478		-		358		-
Units purchased		300,423		4,652		472,587		39,465		4,320,422		1,035		1,366		359
Units redeemed		(16,921	)	(2,235	)	(52,714	)	(1,689	)	(337,838	)	(557	)	(1,724	)	(1	)
Ending units		285,919		2,417		457,649		37,776		3,983,062		478		-		358

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	NVMMV2					SCGF				SCVF				SCF
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	51,381		49		(7,445	)	(13,425	)	161,893		488,505		81,840		554,177
Realized gain (loss) on investments		79,482		(856	)	(1,258,724	)	(1,140,207	)	(4,761,068	)	(6,624,860	)	(13,079,026	)	(5,426,956	)
Change in unrealized gain (loss) on investments		1,177,622		(160	)	3,866,242		(9,003,247	)	12,393,594		(10,935,610	)	30,488,109		(45,734,209	)
Reinvested capital gains		-		-		-		-		-		-		-		15,926,545
Net increase (decrease) in contract owners’ equity resulting from operations		1,308,485		(967	)	2,600,073		(10,156,879	)	7,794,419		(17,071,965	)	17,490,923		(34,680,443	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		289,239		3,440		1,212,314		1,553,738		2,584,925		3,305,026		3,863,358		5,521,541
Transfers between funds		10,449,995		3,967		(1,054,901	)	(2,396,104	)	(2,566,414	)	(12,110,612	)	(4,407,046	)	(5,569,853	)
Surrenders (note 6)		(187,446	)	(743	)	(927,758	)	(658,214	)	(2,633,904	)	(2,993,883	)	(2,465,530	)	(4,451,955	)
Death benefits (note 4)		(4,506	)	-		(16,523	)	(30,157	)	(31,905	)	(164,811	)	(107,042	)	(163,695	)
Net policy repayments (loans) (note 5)		(117,765	)	-		44,836		(170,596	)	(52,053	)	(304,393	)	(410,010	)	(686,477	)
Deductions for surrender charges (note 2d)		(4,479	)	-		(26,320	)	(46,082	)	(73,495	)	(106,801	)	(64,032	)	(92,000	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(224,981	)	(168	)	(545,165	)	(634,278	)	(1,610,014	)	(1,847,814	)	(2,147,096	)	(2,417,473	)
Asset charges (note 3):
FPVUL & VEL contracts		(15,697	)	(6	)	(27,664	)	(36,367	)	(88,063	)	(117,889	)	(95,110	)	(124,091	)
MSP contracts		(375	)	-		(632	)	(859	)	(2,405	)	(3,811	)	(2,713	)	(3,723	)
SL contracts or LSFP contracts		(2,583	)	(3	)	(2,601	)	(3,848	)	(9,818	)	(14,864	)	(14,206	)	(20,380	)
Adjustments to maintain reserves		9		(12	)	146		(86	)	242		1,021		612		7,177
Net equity transactions		10,181,410		6,475		(1,344,268	)	(2,422,853	)	(4,482,905	)	(14,358,831	)	(5,848,815	)	(8,000,929	)
Net change in contract owners’ equity		11,489,895		5,508		1,255,805		(12,579,732	)	3,311,514		(31,430,796	)	11,642,108		(42,681,372	)
Contract owners’ equity beginning of period		5,508		-		10,429,682		23,009,414		33,147,882		64,578,678		55,620,392		98,301,764
Contract owners’ equity end of period	$	11,495,403		5,508		11,685,487		10,429,682		36,459,396		33,147,882		67,262,500		55,620,392
CHANGES IN UNITS:
Beginning units		815		-		1,029,066		1,216,658		1,967,130		2,607,354		4,212,566		4,590,160
Units purchased		1,372,216		1,159		120,387		131,847		157,655		169,366		327,867		617,632
Units redeemed		(69,254	)	(344	)	(245,665	)	(319,439	)	(419,329	)	(809,590	)	(705,020	)	(995,226	)
Ending units		1,303,777		815		903,788		1,029,066		1,705,456		1,967,130		3,835,413		4,212,566

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	MSBF					NVSTB1			NVSTB2				GGTC
	2009			2008		2009		2008	2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	1,203,420		1,056,589		11,059		-	38,007		10,320		(5,207	)	(8,064	)
Realized gain (loss) on investments		(1,276,189	)	(1,455,039	)	17,656		-	30,565		1,106		(949,836	)	(141,574	)
Change in unrealized gain (loss) on investments		2,935,874		(3,180,202	)	7,478		-	(13,643	)	(996	)	2,357,643		(3,735,503	)
Reinvested capital gains		-		358,044		2,224		-	10,128		-		-		730,340
Net increase (decrease) in contract owners’ equity resulting from operations		2,863,105		(3,220,608	)	38,417		-	65,057		10,430		1,402,600		(3,154,801	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		693,574		1,625,205		7,932		-	54,528		1,296		59,465		131,001
Transfers between funds		186,213		(8,948,419	)	571,571		-	2,954,483		1,073,433		208,568		(748,104	)
Surrenders (note 6)		(853,573	)	(2,198,324	)	-		-	(1,122,812	)	(114,817	)	(88,980	)	(95,819	)
Death benefits (note 4)		(15,100	)	(15,711	)	-		-	-		-		(4,694	)	(16,970	)
Net policy repayments (loans) (note 5)		(68,065	)	22,327		(31,205	)	-	38,512		-		(1,179	)	(33,638	)
Deductions for surrender charges (note 2d)		(18,095	)	(43,255	)	-		-	(5,629	)	(1,963	)	(1,955	)	(8,081	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(588,350	)	(615,128	)	(23,790	)	-	(63,004	)	(7,470	)	(88,089	)	(113,020	)
Asset charges (note 3):
FPVUL & VEL contracts		(31,020	)	(32,283	)	-		-	(5,236	)	(383	)	(2,807	)	(4,485	)
MSP contracts		(1,551	)	(1,774	)	-		-	(250	)	-		(34	)	(44	)
SL contracts or LSFP contracts		(6,792	)	(6,937	)	-		-	(1,075	)	(107	)	(151	)	(450	)
Adjustments to maintain reserves		229		(633	)	(1	)	-	189		3,267		43		403
Net equity transactions		(702,529	)	(10,214,932	)	524,507		-	1,849,706		953,256		80,187		(889,207	)
Net change in contract owners’ equity		2,160,576		(13,435,540	)	562,924		-	1,914,763		963,686		1,482,787		(4,044,008	)
Contract owners’ equity beginning of period		11,091,993		24,527,533		-		-	963,686		-		2,825,144		6,869,152
Contract owners’ equity end of period	$	13,252,569		11,091,993		562,924		-	2,878,449		963,686		4,307,931		2,825,144
CHANGES IN UNITS:
Beginning units		829,979		1,551,246		-		-	96,918		-		1,311,533		1,638,454
Units purchased		122,530		132,794		58,017		-	291,724		108,708		104,270		258,620
Units redeemed		(158,969	)	(854,061	)	(5,255	)	-	(118,370	)	(11,790	)	(100,642	)	(585,541	)
Ending units		793,540		829,979		52,762		-	270,272		96,918		1,315,161		1,311,533

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	GGTC3					GVUG1				NVOLG1			NVTIV3
	2009			2008		2009		2008		2009		2008	2009		2008
Investment activity:
Net investment income (loss)	$	-		-		(919	)	(4,341	)	457		-	368		-
Realized gain (loss) on investments		(638,693	)	(249,205	)	(1,653,326	)	(318,794	)	1,424		-	4,120		-
Change in unrealized gain (loss) on investments		1,482,600		(1,724,987	)	2,371,469		(3,986,197	)	10,079		-	(436	)	-
Reinvested capital gains		-		343,893		-		1,191,538		7,009		-	195		-
Net increase (decrease) in contract owners’ equity resulting from operations		843,907		(1,630,299	)	717,224		(3,117,794	)	18,969		-	4,247		-
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		293,443		381,098		210,814		377,441		1,701		-	1,738		-
Transfers between funds		231,817		(1,027,268	)	(1,134,855	)	(1,455,147	)	405,120		-	110,336		-
Surrenders (note 6)		(171,080	)	(183,023	)	(815,352	)	(276,736	)	-		-	(1	)	-
Death benefits (note 4)		(2,608	)	(3,895	)	(19,119	)	(4,272	)	-		-	-		-
Net policy repayments (loans) (note 5)		32,383		6,564		29,135		(26,965	)	-		-	(4,268	)	-
Deductions for surrender charges (note 2d)		(14,538	)	(11,101	)	(20,151	)	(8,842	)	-		-	-		-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(126,032	)	(122,865	)	(154,679	)	(201,354	)	(2,296	)	-	(1,621	)	-
Asset charges (note 3):
FPVUL & VEL contracts		(6,948	)	(7,878	)	(8,422	)	(11,618	)	(82	)	-	(127	)	-
MSP contracts		(220	)	(266	)	(363	)	(488	)	-		-	-		-
SL contracts or LSFP contracts		(1,256	)	(1,680	)	(841	)	(1,500	)	(119	)	-	-		-
Adjustments to maintain reserves		91		(244	)	127		(495	)	4		-	6		-
Net equity transactions		235,053		(970,558	)	(1,913,706	)	(1,609,976	)	404,328		-	106,063		-
Net change in contract owners’ equity		1,078,960		(2,600,857	)	(1,196,482	)	(4,727,770	)	423,297		-	110,310		-
Contract owners’ equity beginning of period		1,502,853		4,103,710		3,909,070		8,636,840		-		-	-		-
Contract owners’ equity end of period	$	2,581,813		1,502,853		2,712,588		3,909,070		423,297		-	110,310		-
CHANGES IN UNITS:
Beginning units		177,753		249,550		347,750		450,804		-		-	-		-
Units purchased		58,779		35,785		19,096		26,945		32,613		-	8,948		-
Units redeemed		(36,217	)	(107,582	)	(175,549	)	(129,999	)	(201	)	-	(485	)	-
Ending units		200,315		177,753		191,297		347,750		32,412		-	8,463		-

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	EIF					NVRE1				AMTB				AVBVI
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	87,614		229,855		179,377		2,895		290,441		226,384		7,646		47,343
Realized gain (loss) on investments		(906,434	)	(189,392	)	137,380		(7,493	)	(300,148	)	(202,300	)	(3,531,453	)	(307,233	)
Change in unrealized gain (loss) on investments		2,824,759		(5,113,403	)	3,191,020		(38,458	)	492,764		(861,945	)	4,600,082		(4,575,481	)
Reinvested capital gains		-		166,922		71,568		-		-		-		-		1,102,495
Net increase (decrease) in contract owners’ equity resulting from operations		2,005,939		(4,906,018	)	3,579,345		(43,056	)	483,057		(837,861	)	1,076,275		(3,732,876	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		672,491		995,272		826,975		8,943		309,832		425,247		261,637		678,683
Transfers between funds		(688,791	)	(1,095,713	)	19,807,032		149,247		538,842		(2,716,615	)	(3,528,959	)	(904,300	)
Surrenders (note 6)		(480,476	)	(343,352	)	(587,474	)	-		(757,328	)	(994,617	)	(286,219	)	(213,281	)
Death benefits (note 4)		(7,146	)	(48,102	)	(375	)	-		(3,196	)	(946	)	(3,881	)	(1,384	)
Net policy repayments (loans) (note 5)		(104,177	)	(85,839	)	(174,499	)	(16	)	19,344		(58,672	)	(130,587	)	(12,791	)
Deductions for surrender charges (note 2d)		(24,760	)	(35,973	)	(20,423	)	-		(18,581	)	(20,517	)	(12,997	)	(31,670	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(471,664	)	(549,379	)	(480,637	)	(2,038	)	(248,978	)	(245,227	)	(150,764	)	(285,368	)
Asset charges (note 3):
FPVUL & VEL contracts		(28,174	)	(38,735	)	(30,510	)	(119	)	(15,168	)	(19,149	)	(7,543	)	(17,045	)
MSP contracts		(865	)	(1,487	)	(1,021	)	(23	)	(625	)	(1,153	)	(131	)	(345	)
SL contracts or LSFP contracts		(4,589	)	(6,031	)	(4,250	)	(54	)	(2,031	)	(2,542	)	(730	)	(2,028	)
Adjustments to maintain reserves		135		(284	)	41		(21	)	(75	)	(191	)	385		531
Net equity transactions		(1,138,017	)	(1,209,623	)	19,334,859		155,919		(177,964	)	(3,634,382	)	(3,859,789	)	(788,998	)
Net change in contract owners’ equity		867,922		(6,115,641	)	22,914,204		112,863		305,093		(4,472,243	)	(2,783,514	)	(4,521,874	)
Contract owners’ equity beginning of period		8,024,894		14,140,535		112,863		-		4,072,316		8,544,559		3,539,890		8,061,764
Contract owners’ equity end of period	$	8,892,816		8,024,894		23,027,067		112,863		4,377,409		4,072,316		756,376		3,539,890
CHANGES IN UNITS:
Beginning units		886,702		983,392		19,987		-		417,277		757,962		414,366		455,382
Units purchased		73,045		114,968		3,283,529		20,331		105,650		44,660		43,794		61,865
Units redeemed		(199,938	)	(211,658	)	(194,121	)	(344	)	(127,133	)	(385,345	)	(397,659	)	(102,881	)
Ending units		759,809		886,702		3,109,395		19,987		395,794		417,277		60,501		414,366

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	AVCA					AVCDI				AVIE				ALVGIA
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	4,684		-		(12,329	)	(19,941	)	377,449		88,527		390,671		272,842
Realized gain (loss) on investments		(74,322	)	(24,952	)	(3,608,941	)	(938,058	)	(3,733,536	)	818,863		(2,433,244	)	(941,878	)
Change in unrealized gain (loss) on investments		213,629		(635,043	)	6,335,247		(6,874,273	)	11,299,759		(16,773,325	)	3,892,452		(9,189,587	)
Reinvested capital gains		-		-		-		1,332,482		-		411,886		-		2,544,323
Net increase (decrease) in contract owners’ equity resulting from operations		143,991		(659,995	)	2,713,977		(6,499,790	)	7,943,672		(15,454,049	)	1,849,879		(7,314,300	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		143,524		193,096		523,418		754,828		1,911,585		2,504,764		494,754		993,170
Transfers between funds		14,288		(389,819	)	(551,590	)	(2,885,546	)	1,882,564		2,442,403		(1,630,709	)	(980,081	)
Surrenders (note 6)		(34,964	)	(55,110	)	(126,744	)	(228,022	)	(1,077,166	)	(1,640,799	)	(461,687	)	(3,492,018	)
Death benefits (note 4)		-		-		(11,878	)	(11,234	)	(50,998	)	(15,227	)	(70,052	)	(42,645	)
Net policy repayments (loans) (note 5)		9,181		(5,773	)	(37,566	)	(27,582	)	495,580		(674,107	)	757,452		(190,144	)
Deductions for surrender charges (note 2d)		(3,151	)	(11,388	)	(10,104	)	(13,506	)	-		-		(4,936	)	(10,141	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(64,911	)	(78,422	)	(240,838	)	(310,462	)	(520,217	)	(527,462	)	(249,295	)	(273,538	)
Asset charges (note 3):
FPVUL & VEL contracts		(3,463	)	(4,498	)	(8,603	)	(11,480	)	(635	)	-		(8,959	)	(11,522	)
MSP contracts		(130	)	(182	)	(236	)	(323	)	-		-		(66	)	(85	)
SL contracts or LSFP contracts		(251	)	(1,818	)	(910	)	(1,096	)	-		-		(1,023	)	(1,611	)
Adjustments to maintain reserves		69		(199	)	92		(2,240	)	(243	)	(3,999	)	129		(954	)
Net equity transactions		60,192		(354,113	)	(464,960	)	(2,736,663	)	2,640,470		2,085,573		(1,174,392	)	(4,009,569	)
Net change in contract owners’ equity		204,183		(1,014,108	)	2,249,017		(9,236,453	)	10,584,142		(13,368,476	)	675,487		(11,323,869	)
Contract owners’ equity beginning of period		721,582		1,735,690		6,553,657		15,790,110		22,521,877		35,890,353		10,026,675		21,350,544
Contract owners’ equity end of period	$	925,765		721,582		8,802,674		6,553,657		33,106,019		22,521,877		10,702,162		10,026,675
CHANGES IN UNITS:
Beginning units		73,269		101,352		575,421		733,388		1,844,850		1,750,012		891,856		1,127,146
Units purchased		15,211		16,781		45,237		116,206		372,280		716,633		110,336		124,500
Units redeemed		(10,843	)	(44,864	)	(77,233	)	(274,173	)	(209,521	)	(621,795	)	(213,418	)	(359,790	)
Ending units		77,637		73,269		543,425		575,421		2,007,609		1,844,850		788,774		891,856

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	ALVIVA					ALVSVA				ACVIG				ACVIP2
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	309,247		281,424		56,853		32,086		676,849		413,752		408,663		666,076
Realized gain (loss) on investments		(14,852,340	)	(6,091,926	)	(1,362,274	)	(233,100	)	(916,664	)	322,741		(17,598	)	35,056
Change in unrealized gain (loss) on investments		23,712,549		(21,079,201	)	3,299,033		(2,153,893	)	2,634,136		(11,498,018	)	1,696,211		(1,411,755	)
Reinvested capital gains		-		2,037,831		242,912		495,807		-		2,527,186		-		-
Net increase (decrease) in contract owners’ equity resulting from operations		9,169,456		(24,851,872	)	2,236,524		(1,859,100	)	2,394,321		(8,234,339	)	2,087,276		(710,623	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		1,580,472		2,954,187		802,782		660,079		1,153,511		1,416,534		1,797,228		1,932,422
Transfers between funds		(4,169,695	)	16,470,977		840,526		414,837		(786,783	)	(1,104,166	)	8,694,431		10,918,151
Surrenders (note 6)		(517,122	)	(415,232	)	(218,390	)	(378,852	)	(1,010,586	)	(1,530,492	)	(1,193,898	)	(438,886	)
Death benefits (note 4)		(56,372	)	(23,915	)	(4,386	)	(2,356	)	(16,535	)	(190,033	)	(4,883	)	(388	)
Net policy repayments (loans) (note 5)		(14,340	)	(16,455	)	(9,557	)	14,542		(23,681	)	(43,973	)	(330,435	)	(202,460	)
Deductions for surrender charges (note 2d)		-		-		(15,875	)	(10,346	)	(33,102	)	(66,767	)	(21,774	)	(26,158	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(573,202	)	(546,479	)	(210,880	)	(166,604	)	(878,340	)	(968,369	)	(541,350	)	(413,495	)
Asset charges (note 3):
FPVUL & VEL contracts		(1,637	)	-		(11,734	)	(11,978	)	(45,062	)	(59,962	)	(27,490	)	(25,806	)
MSP contracts		-		-		(236	)	(273	)	(1,625	)	(2,178	)	(767	)	(966	)
SL contracts or LSFP contracts		-		-		(1,522	)	(1,991	)	(6,495	)	(11,070	)	(43,327	)	(23,222	)
Adjustments to maintain reserves		94		(1,802	)	121		(402	)	143		(502	)	(5,571	)	338
Net equity transactions		(3,751,802	)	18,421,281		1,170,849		516,656		(1,648,555	)	(2,560,978	)	8,322,164		11,719,530
Net change in contract owners’ equity		5,417,654		(6,430,591	)	3,407,373		(1,342,444	)	745,766		(10,795,317	)	10,409,440		11,008,907
Contract owners’ equity beginning of period		26,132,105		32,562,696		4,311,520		5,653,964		14,932,610		25,727,927		17,866,676		6,857,769
Contract owners’ equity end of period	$	31,549,759		26,132,105		7,718,893		4,311,520		15,678,376		14,932,610		28,276,116		17,866,676
CHANGES IN UNITS:
Beginning units		4,683,123		2,725,346		328,168		276,826		1,377,996		1,557,702		1,471,121		555,690
Units purchased		534,493		2,478,645		156,315		98,801		118,060		122,432		842,838		1,008,618
Units redeemed		(1,014,160	)	(520,868	)	(72,300	)	(47,459	)	(280,491	)	(302,138	)	(201,519	)	(93,187	)
Ending units		4,203,456		4,683,123		412,183		328,168		1,215,565		1,377,996		2,112,440		1,471,121

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	ACVI					ACVI3				ACVMV1				ACVU1
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	499,991		257,481		149,185		81,052		79,153		1,720		6,758		(1,778	)
Realized gain (loss) on investments		(1,817,728	)	2,469,282		(2,457,774	)	77,204		(337,105	)	(214,958	)	(1,249,197	)	(190,995	)
Change in unrealized gain (loss) on investments		7,646,953		(25,813,579	)	3,577,208		(6,681,859	)	837,183		(282,036	)	1,752,880		(2,431,983	)
Reinvested capital gains		-		3,477,537		-		952,078		-		-		-		624,097
Net increase (decrease) in contract owners’ equity resulting from operations		6,329,216		(19,609,279	)	1,268,619		(5,571,525	)	579,231		(495,274	)	510,441		(2,000,659	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		256,325		618,884		875,837		1,731,418		376,909		324,352		203,832		448,760
Transfers between funds		(7,162,032	)	(1,613,073	)	(7,901,795	)	(418,966	)	344,013		(6,246	)	(2,176,059	)	(1,306,825	)
Surrenders (note 6)		(5,747,050	)	(2,316,247	)	(610,700	)	(700,271	)	(113,286	)	(194,757	)	(93,738	)	(145,283	)
Death benefits (note 4)		(109,866	)	(95,546	)	(8,423	)	(64,410	)	(169	)	-		(2,797	)	(7,417	)
Net policy repayments (loans) (note 5)		(37,869	)	(255,864	)	242,748		85,585		(38,948	)	(9,526	)	(3,536	)	(31,965	)
Deductions for surrender charges (note 2d)		(13,460	)	(34,952	)	(17,064	)	(30,035	)	(5,642	)	(6,118	)	(4,410	)	(10,461	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(909,646	)	(1,288,114	)	(346,939	)	(577,322	)	(124,627	)	(109,028	)	(113,956	)	(194,006	)
Asset charges (note 3):
FPVUL & VEL contracts		(18,693	)	(50,189	)	(17,029	)	(37,215	)	(6,935	)	(6,661	)	(4,676	)	(9,889	)
MSP contracts		(882	)	(2,236	)	(204	)	(455	)	(437	)	(415	)	(114	)	(266	)
SL contracts or LSFP contracts		(3,341	)	(9,635	)	(1,885	)	(5,044	)	(1,137	)	(1,109	)	(558	)	(1,283	)
Adjustments to maintain reserves		137		1,053		5,460		(305	)	116		(271	)	443		6,318
Net equity transactions		(13,746,377	)	(5,045,919	)	(7,779,994	)	(17,020	)	429,858		(9,779	)	(2,195,569	)	(1,252,317	)
Net change in contract owners’ equity		(7,417,161	)	(24,655,198	)	(6,511,375	)	(5,588,545	)	1,009,089		(505,053	)	(1,685,128	)	(3,252,976	)
Contract owners’ equity beginning of period		24,065,738		48,720,936		6,511,375		12,099,920		1,786,321		2,291,374		2,507,444		5,760,420
Contract owners’ equity end of period	$	16,648,577		24,065,738		-		6,511,375		2,795,410		1,786,321		822,316		2,507,444
CHANGES IN UNITS:
Beginning units		2,563,444		2,830,064		684,882		702,238		177,588		172,200		323,265		435,218
Units purchased		413,697		161,571		102,209		141,038		60,679		47,130		34,869		45,560
Units redeemed		(1,398,704	)	(428,191	)	(787,091	)	(158,394	)	(24,342	)	(41,742	)	(278,701	)	(157,513	)
Ending units		1,578,437		2,563,444		-		684,882		213,925		177,588		79,433		323,265

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	ACVV					ACVVS1				DVMCS				DVSCS
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	2,567,542		1,345,712		(3,136	)	(2,028	)	7,754		6,201		513,409		156,917
Realized gain (loss) on investments		(5,673,840	)	(4,697,399	)	(2,157,073	)	(435,741	)	(194,997	)	(253,658	)	(5,382,740	)	(1,325,785	)
Change in unrealized gain (loss) on investments		11,996,736		(21,487,997	)	2,667,921		(2,649,965	)	397,732		(322,041	)	6,521,628		(10,876,821	)
Reinvested capital gains		-		7,372,247		-		198,639		-		125,095		3,690,903		3,338,301
Net increase (decrease) in contract owners’ equity resulting from operations		8,890,438		(17,467,437	)	507,712		(2,889,095	)	210,489		(444,403	)	5,343,200		(8,707,388	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		3,462,119		4,823,008		350,419		516,181		18,235		45,518		1,549,773		1,708,490
Transfers between funds		939,781		(3,231,628	)	(1,970,914	)	747,552		131,562		(328,793	)	3,331,538		3,465,034
Surrenders (note 6)		(2,992,993	)	(4,571,675	)	(46,524	)	(399,396	)	(42,213	)	(10,341	)	(1,105,804	)	(813,933	)
Death benefits (note 4)		(101,903	)	(147,725	)	(901	)	(745	)	(14	)	(6,063	)	(16,453	)	(18,274	)
Net policy repayments (loans) (note 5)		(7,525	)	(235,198	)	1,586		(19,896	)	7,444		(9,720	)	(280,899	)	(48,295	)
Deductions for surrender charges (note 2d)		(95,117	)	(151,004	)	(3,962	)	(6,505	)	-		-		(36,027	)	(48,324	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(2,164,400	)	(2,224,770	)	(125,689	)	(168,664	)	(13,153	)	(12,866	)	(670,203	)	(635,055	)
Asset charges (note 3):
FPVUL & VEL contracts		(113,332	)	(140,594	)	(4,191	)	(10,567	)	-		-		(23,118	)	(27,993	)
MSP contracts		(3,331	)	(4,101	)	(88	)	(234	)	-		-		(692	)	(428	)
SL contracts or LSFP contracts		(17,838	)	(22,819	)	(425	)	(1,613	)	-		-		(4,057	)	(6,019	)
Adjustments to maintain reserves		(174	)	1,214		106		(251	)	12		(107	)	190		11,814
Net equity transactions		(1,094,713	)	(5,905,292	)	(1,800,584	)	655,862		101,873		(322,372	)	2,744,248		3,587,017
Net change in contract owners’ equity		7,795,725		(23,372,729	)	(1,292,872	)	(2,233,233	)	312,362		(766,775	)	8,087,448		(5,120,371	)
Contract owners’ equity beginning of period		45,034,090		68,406,819		3,234,976		5,468,209		570,492		1,337,267		20,169,119		25,289,490
Contract owners’ equity end of period	$	52,829,815		45,034,090		1,942,104		3,234,976		882,854		570,492		28,256,567		20,169,119
CHANGES IN UNITS:
Beginning units		3,065,576		3,401,962		361,695		313,570		53,835		75,190		1,877,655		1,623,344
Units purchased		414,934		463,575		40,041		156,951		11,544		11,865		440,945		487,411
Units redeemed		(464,062	)	(799,961	)	(223,457	)	(108,826	)	(3,755	)	(33,220	)	(211,555	)	(233,100	)
Ending units		3,016,448		3,065,576		178,279		361,695		61,624		53,835		2,107,045		1,877,655

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	DSIF					DSRG				DCAP				DSC
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	4,611,419		6,319,860		89,517		91,532		529,882		574,356		8,771		4,928
Realized gain (loss) on investments		(15,363,916	)	15,818,799		(339,716	)	(37,843	)	(1,158,330	)	1,543,140		(237,303	)	(80,882	)
Change in unrealized gain (loss) on investments		53,256,000		(163,666,840	)	3,016,835		(4,914,476	)	3,343,161		(13,273,742	)	339,478		(205,053	)
Reinvested capital gains		15,610,923		-		-		-		1,595,366		2,238,570		-		29,526
Net increase (decrease) in contract owners’ equity resulting from operations		58,114,426		(141,528,181	)	2,766,636		(4,860,787	)	4,310,079		(8,917,676	)	110,946		(251,481	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		14,993,791		19,761,732		1,253,433		1,404,443		1,600,282		2,992,016		52,230		117,657
Transfers between funds		(20,202,465	)	12,743,215		(485,857	)	(436,901	)	165,445		(6,507,327	)	16,007		50,080
Surrenders (note 6)		(19,024,632	)	(22,570,115	)	(822,907	)	(928,362	)	(1,518,374	)	(1,322,133	)	(26,557	)	(65,557	)
Death benefits (note 4)		(957,808	)	(676,774	)	(30,191	)	(30,015	)	(20,573	)	(129,710	)	-		-
Net policy repayments (loans) (note 5)		1,723,359		(1,079,838	)	(34,091	)	(117,066	)	16,087		(31,928	)	(3,692	)	57,724
Deductions for surrender charges (note 2d)		(327,301	)	(450,561	)	(18,147	)	(34,630	)	(41,880	)	(52,971	)	(3,254	)	(5,085	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(9,939,235	)	(10,510,403	)	(873,104	)	(907,724	)	(995,180	)	(1,092,938	)	(26,762	)	(29,350	)
Asset charges (note 3):
FPVUL & VEL contracts		(327,458	)	(441,190	)	(40,921	)	(50,478	)	(51,781	)	(62,716	)	(1,785	)	(2,165	)
MSP contracts		(11,033	)	(15,136	)	(1,196	)	(1,555	)	(1,105	)	(1,343	)	-		-
SL contracts or LSFP contracts		(83,213	)	(131,293	)	(2,503	)	(3,926	)	(6,737	)	(10,042	)	(264	)	(225	)
Adjustments to maintain reserves		375		910		75		(349	)	155		(978	)	63		(185	)
Net equity transactions		(34,155,620	)	(3,369,453	)	(1,055,409	)	(1,106,563	)	(853,661	)	(6,220,070	)	5,986		122,894
Net change in contract owners’ equity		23,958,806		(144,897,634	)	1,711,227		(5,967,350	)	3,456,418		(15,137,746	)	116,932		(128,587	)
Contract owners’ equity beginning of period		240,896,002		385,793,636		8,931,784		14,899,134		20,333,092		35,470,838		528,618		657,205
Contract owners’ equity end of period	$	264,854,808		240,896,002		10,643,011		8,931,784		23,789,510		20,333,092		645,550		528,618
CHANGES IN UNITS:
Beginning units		27,480,971		27,146,494		1,059,639		1,157,932		1,847,383		2,352,372		60,390		46,856
Units purchased		2,190,468		5,271,091		142,236		139,091		189,168		282,871		14,002		18,551
Units redeemed		(5,426,801	)	(4,936,614	)	(263,854	)	(237,384	)	(248,082	)	(787,860	)	(15,879	)	(5,017	)
Ending units		24,244,638		27,480,971		938,021		1,059,639		1,788,469		1,847,383		58,513		60,390

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	DVIV					SVSSVB				SVSHEB				FVCA2P
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	802,080		609,939		66,248		20,636		20,726		14,686		5,549		1,756
Realized gain (loss) on investments		(5,642,350	)	(4,701,583	)	(991,504	)	(1,158,549	)	(365,065	)	(225,420	)	(15,641	)	2,000
Change in unrealized gain (loss) on investments		10,533,052		(13,304,437	)	1,926,210		(1,691,972	)	449,631		(340,683	)	85,511		(185,047	)
Reinvested capital gains		-		5,147,830		-		843,807		-		119,020		-		10,715
Net increase (decrease) in contract owners’ equity resulting from operations		5,692,782		(12,248,251	)	1,000,954		(1,986,078	)	105,292		(432,397	)	75,419		(170,576	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		969,516		1,726,807		56,728		2,522		42,298		38,562		53,556		58,118
Transfers between funds		(2,201,698	)	(4,503,936	)	(100,655	)	6,624,162		(157,787	)	222,436		131,145		95,605
Surrenders (note 6)		(338,852	)	(330,732	)	(3,360,663	)	(235,438	)	(26,594	)	(105	)	(48,967	)	(23,553	)
Death benefits (note 4)		(36,099	)	(26,287	)	(38,126	)	-		-		-		-		-
Net policy repayments (loans) (note 5)		143		(309,795	)	(10,085	)	-		-		-		1,694		(13,483	)
Deductions for surrender charges (note 2d)		-		-		-		-		-		-		(656	)	(487	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(321,217	)	(326,358	)	(257,513	)	(167,687	)	(13,802	)	(15,906	)	(20,933	)	(18,910	)
Asset charges (note 3):
FPVUL & VEL contracts		(112	)	-		(30	)	-		-		-		(1,556	)	(1,528	)
MSP contracts		-		-		-		-		-		-		(31	)	(35	)
SL contracts or LSFP contracts		-		-		-		-		-		-		(399	)	(420	)
Adjustments to maintain reserves		33		(1,657	)	2		(90	)	4		(163	)	42		(111	)
Net equity transactions		(1,928,286	)	(3,771,958	)	(3,710,342	)	6,223,469		(155,881	)	244,824		113,895		95,196
Net change in contract owners’ equity		3,764,496		(16,020,209	)	(2,709,388	)	4,237,391		(50,589	)	(187,573	)	189,314		(75,380	)
Contract owners’ equity beginning of period		19,916,735		35,936,944		4,237,391		-		556,432		744,005		438,882		514,262
Contract owners’ equity end of period	$	23,681,231		19,916,735		1,528,003		4,237,391		505,843		556,432		628,196		438,882
CHANGES IN UNITS:
Beginning units		1,460,923		1,649,104		672,760		-		94,357		67,742		36,885		30,528
Units purchased		82,908		186,855		45,475		753,052		6,594		28,497		14,544		10,291
Units redeemed		(215,371	)	(375,036	)	(529,998	)	(80,292	)	(32,141	)	(1,882	)	(4,905	)	(3,934	)
Ending units		1,328,460		1,460,923		188,237		672,760		68,810		94,357		46,524		36,885

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	FALF					FVMOS				FQB				FCS
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	4,980		4,437		11,339		6,586		2,031,892		2,039,576		1,550,632		1,567,013
Realized gain (loss) on investments		(90,243	)	(26,490	)	(17,471	)	(84,026	)	(284,840	)	(595,132	)	(38,137,604	)	(3,002,018	)
Change in unrealized gain (loss) on investments		112,514		(140,537	)	2,498		(16,844	)	4,238,316		(3,824,604	)	74,183,384		(106,447,811	)
Reinvested capital gains		-		68,651		11,510		-		-		-		36,005		5,516,799
Net increase (decrease) in contract owners’ equity resulting from operations		27,251		(93,939	)	7,876		(94,284	)	5,985,368		(2,380,160	)	37,632,417		(102,366,017	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		7,318		23,058		56,736		61,741		1,841,214		2,289,439		9,007,187		13,173,081
Transfers between funds		16,561		(11,035	)	51,298		881,580		1,722,487		(7,238,739	)	(24,042,556	)	8,374,973
Surrenders (note 6)		(29,556	)	(11,851	)	(93,659	)	(71,987	)	(1,305,814	)	(4,274,629	)	(9,034,785	)	(10,812,520	)
Death benefits (note 4)		-		-		-		-		(73,632	)	(214,209	)	(336,831	)	(639,622	)
Net policy repayments (loans) (note 5)		(7,062	)	4,050		(22,495	)	(17,796	)	(212,033	)	(33,306	)	1,183,619		(546,140	)
Deductions for surrender charges (note 2d)		(1,594	)	(737	)	(2,103	)	(1,339	)	(49,747	)	(65,824	)	(192,255	)	(272,763	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(9,054	)	(11,184	)	(37,061	)	(24,923	)	(1,336,261	)	(1,380,424	)	(5,367,108	)	(6,160,319	)
Asset charges (note 3):
FPVUL & VEL contracts		(734	)	(958	)	(2,628	)	(2,111	)	(71,710	)	(75,175	)	(254,511	)	(341,997	)
MSP contracts		-		-		(133	)	(36	)	(3,138	)	(3,442	)	(8,338	)	(11,685	)
SL contracts or LSFP contracts		(120	)	(173	)	(48	)	(17	)	(11,782	)	(13,206	)	(37,941	)	(60,093	)
Adjustments to maintain reserves		(35	)	(116	)	33		(201	)	339		(1,454	)	484		(7,996	)
Net equity transactions		(24,276	)	(8,946	)	(50,060	)	824,911		499,924		(11,010,969	)	(29,083,035	)	2,694,919
Net change in contract owners’ equity		2,975		(102,885	)	(42,184	)	730,627		6,485,292		(13,391,129	)	8,549,382		(99,671,098	)
Contract owners’ equity beginning of period		182,692		285,577		776,834		46,207		29,220,443		42,611,572		138,013,329		237,684,427
Contract owners’ equity end of period	$	185,667		182,692		734,650		776,834		35,705,735		29,220,443		146,562,711		138,013,329
CHANGES IN UNITS:
Beginning units		18,003		18,632		76,516		4,512		2,049,199		2,769,010		11,013,774		10,608,174
Units purchased		3,434		1,861		11,355		80,667		259,877		180,046		840,475		2,481,947
Units redeemed		(5,488	)	(2,490	)	(16,428	)	(8,663	)	(225,694	)	(899,857	)	(3,346,068	)	(2,076,347	)
Ending units		15,949		18,003		71,443		76,516		2,083,382		2,049,199		8,508,181		11,013,774

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	FNRS2					FEIS				FF10S				FF20S
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	19,097		-		1,180,270		1,965,146		66,791		44,281		168,966		120,839
Realized gain (loss) on investments		(3,503,742	)	255,259		(8,802,232	)	(1,339,636	)	(158,183	)	(53,432	)	(690,784	)	(159,092	)
Change in unrealized gain (loss) on investments		7,057,894		(9,827,149	)	22,562,984		(45,577,309	)	488,742		(505,036	)	1,954,092		(1,785,136	)
Reinvested capital gains		-		470,633		-		90,581		14,154		66,308		63,886		210,061
Net increase (decrease) in contract owners’ equity resulting from operations		3,573,249		(9,101,257	)	14,941,022		(44,861,218	)	411,504		(447,879	)	1,496,160		(1,613,328	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		921,259		1,058,931		4,899,671		6,381,226		60,646		43,955		732,783		778,261
Transfers between funds		(1,393,880	)	3,529,605		(6,014,274	)	(4,012,784	)	265,977		298,272		899,650		2,166,797
Surrenders (note 6)		(682,814	)	(2,227,420	)	(4,389,242	)	(4,511,875	)	(28,995	)	(54,598	)	(613,436	)	(443,408	)
Death benefits (note 4)		(9,801	)	(9,548	)	(163,982	)	(231,324	)	(37,311	)	(33,852	)	(48,314	)	-
Net policy repayments (loans) (note 5)		26,475		1,031,690		(251,250	)	116,709		(616	)	(2,234	)	(1,977	)	(7,371	)
Deductions for surrender charges (note 2d)		(23,203	)	(46,203	)	(98,170	)	(145,202	)	(347	)	(996	)	(7,949	)	(5,843	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(462,382	)	(616,991	)	(2,927,280	)	(3,408,744	)	(79,301	)	(62,548	)	(201,066	)	(151,659	)
Asset charges (note 3):
FPVUL & VEL contracts		(28,455	)	(43,503	)	(138,715	)	(190,746	)	(5,184	)	(5,557	)	(7,671	)	(7,390	)
MSP contracts		(2,561	)	(2,895	)	(5,248	)	(7,457	)	(2,518	)	(664	)	(4,106	)	(3,799	)
SL contracts or LSFP contracts		(5,285	)	(8,529	)	(23,702	)	(36,863	)	(183	)	(130	)	(3,983	)	(3,981	)
Adjustments to maintain reserves		127		(456	)	264		(2,214	)	35		(84	)	78		(174	)
Net equity transactions		(1,660,519	)	2,664,681		(9,111,927	)	(6,049,274	)	172,203		181,564		744,008		2,321,433
Net change in contract owners’ equity		1,912,730		(6,436,576	)	5,829,095		(50,910,492	)	583,707		(266,315	)	2,240,168		708,105
Contract owners’ equity beginning of period		7,818,837		14,255,413		57,428,367		108,338,859		1,305,396		1,571,711		3,755,922		3,047,817
Contract owners’ equity end of period	$	9,731,567		7,818,837		63,257,462		57,428,367		1,889,103		1,305,396		5,996,090		3,755,922
CHANGES IN UNITS:
Beginning units		747,087		621,068		5,797,882		6,259,548		135,192		121,944		408,386		222,540
Units purchased		96,254		222,629		520,004		725,390		36,923		24,022		183,284		227,186
Units redeemed		(213,252	)	(96,610	)	(1,435,167	)	(1,187,056	)	(14,492	)	(10,774	)	(84,386	)	(41,340	)
Ending units		630,089		747,087		4,882,719		5,797,882		157,623		135,192		507,284		408,386

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	FF30S					FGIS				FGOS				FGS
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	56,247		56,352		524		(24	)	24,301		32,689		140,356		613,870
Realized gain (loss) on investments		(258,601	)	(26,453	)	(3,209	)	(7,749	)	(205,046	)	628,913		(170,254	)	5,181,843
Change in unrealized gain (loss) on investments		870,053		(1,220,170	)	14,001		-		2,704,979		(8,114,515	)	15,472,365		(59,635,200	)
Reinvested capital gains		31,524		163,010		-		-		-		-		51,075		-
Net increase (decrease) in contract owners’ equity resulting from operations		699,223		(1,027,261	)	11,316		(7,773	)	2,524,234		(7,452,913	)	15,493,542		(53,839,487	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		366,393		381,816		3		(1,085	)	673,114		792,028		6,031,817		7,046,371
Transfers between funds		411,897		873,657		58,366		8,964		(201,169	)	(290,519	)	(2,738,938	)	(136,368	)
Surrenders (note 6)		(135,211	)	(59,154	)	-		-		(373,231	)	(905,202	)	(10,901,774	)	(5,407,244	)
Death benefits (note 4)		(1,507	)	-		(108	)	-		(11,187	)	(16,992	)	(167,800	)	(215,391	)
Net policy repayments (loans) (note 5)		(15,113	)	(33,677	)	-		-		51,325		149,683		411,525		(987,857	)
Deductions for surrender charges (note 2d)		(22,995	)	(7,172	)	-		-		(12,957	)	(26,134	)	(122,063	)	(163,052	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(154,222	)	(152,296	)	(515	)	(108	)	(496,575	)	(578,450	)	(3,922,229	)	(4,490,214	)
Asset charges (note 3):
FPVUL & VEL contracts		(8,972	)	(8,423	)	-		-		(23,675	)	(34,630	)	(153,897	)	(224,291	)
MSP contracts		(1,192	)	(1,456	)	-		-		(901	)	(1,373	)	(4,267	)	(6,818	)
SL contracts or LSFP contracts		(760	)	(751	)	-		-		(4,164	)	(7,293	)	(18,176	)	(29,683	)
Adjustments to maintain reserves		315		1,699		(1	)	2		40		(129	)	215		(1,061	)
Net equity transactions		438,634		994,243		57,745		7,773		(399,381	)	(919,011	)	(11,585,588	)	(4,615,608	)
Net change in contract owners’ equity		1,137,857		(33,018	)	69,061		-		2,124,853		(8,371,924	)	3,907,954		(58,455,095	)
Contract owners’ equity beginning of period		1,910,236		1,943,254		-		-		5,741,636		14,113,560		60,833,619		119,288,714
Contract owners’ equity end of period	$	3,048,093		1,910,236		69,061		-		7,866,489		5,741,636		64,741,573		60,833,619
CHANGES IN UNITS:
Beginning units		216,667		136,304		-		-		928,680		1,026,154		7,700,401		7,780,228
Units purchased		79,628		106,946		9,348		12		99,337		105,532		787,812		1,467,717
Units redeemed		(33,104	)	(26,583	)	(104	)	(12	)	(155,742	)	(203,006	)	(2,156,095	)	(1,547,544	)
Ending units		263,191		216,667		9,244		-		872,275		928,680		6,332,118		7,700,401

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	FHIS					FHISR				FIP				FIGBS
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	1,014,107		1,567,014		265,552		181,702		89,440		97,318		1,451,310		577,502
Realized gain (loss) on investments		(2,346,308	)	(1,663,434	)	(368,107	)	(388,500	)	(905,611	)	(439,647	)	(218,707	)	(224,056	)
Change in unrealized gain (loss) on investments		7,293,431		(5,012,716	)	1,117,802		(443,840	)	1,620,518		(1,415,432	)	1,108,825		(878,509	)
Reinvested capital gains		-		-		-		-		79,994		-		66,026		11,500
Net increase (decrease) in contract owners’ equity resulting from operations		5,961,230		(5,109,136	)	1,015,247		(650,638	)	884,341		(1,757,761	)	2,407,454		(513,563	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		528,515		1,027,626		582,129		633,647		112,714		(11,553	)	1,112,309		1,077,108
Transfers between funds		800,914		(4,639,572	)	860,493		(263,516	)	118,874		5,323,184		1,469,190		876,503
Surrenders (note 6)		(6,607,266	)	(1,029,366	)	(514,675	)	(217,629	)	-		-		(1,800,765	)	(846,344	)
Death benefits (note 4)		(76,510	)	(158,716	)	(5,348	)	(11,673	)	(15,004	)	-		(10,094	)	(13,793	)
Net policy repayments (loans) (note 5)		(175,701	)	(191,243	)	315,065		71,429		-		-		(91,945	)	(100,225	)
Deductions for surrender charges (note 2d)		(26,124	)	(12,074	)	(8,883	)	(5,323	)	-		-		(39,692	)	(42,234	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(871,020	)	(826,341	)	(195,153	)	(126,364	)	(36,158	)	(37,441	)	(701,838	)	(556,665	)
Asset charges (note 3):
FPVUL & VEL contracts		(23,491	)	(29,429	)	(9,941	)	(7,521	)	-		-		(40,726	)	(36,049	)
MSP contracts		(1,408	)	(1,554	)	(102	)	(63	)	-		-		(2,934	)	(2,793	)
SL contracts or LSFP contracts		(2,630	)	(4,833	)	(2,552	)	(1,520	)	-		-		(17,601	)	(12,012	)
Adjustments to maintain reserves		436		909		24		(109	)	6		(132	)	16		(387	)
Net equity transactions		(6,454,286	)	(5,864,593	)	1,021,056		71,358		180,432		5,274,058		(124,080	)	343,109
Net change in contract owners’ equity		(493,056	)	(10,973,729	)	2,036,303		(579,280	)	1,064,773		3,516,297		2,283,374		(170,454	)
Contract owners’ equity beginning of period		14,117,956		25,091,685		1,709,984		2,289,264		3,516,297		-		14,356,232		14,526,686
Contract owners’ equity end of period	$	13,624,900		14,117,956		3,746,287		1,709,984		4,581,070		3,516,297		16,639,606		14,356,232
CHANGES IN UNITS:
Beginning units		1,538,011		2,023,784		230,571		231,578		551,311		-		1,257,854		1,230,686
Units purchased		131,771		71,249		196,276		77,010		25,026		555,792		209,579		249,793
Units redeemed		(672,044	)	(557,022	)	(75,882	)	(78,017	)	(7,842	)	(4,481	)	(206,567	)	(222,625	)
Ending units		997,738		1,538,011		350,965		230,571		568,495		551,311		1,260,866		1,257,854

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	FMCS					FOS				FOSR				FVSS
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	157,840		107,251		498,907		964,026		221,481		398,857		14,646		29,057
Realized gain (loss) on investments		(4,816,852	)	(2,320,974	)	(2,964,630	)	1,897,452		(1,450,487	)	(84,440	)	(1,474,268	)	(2,031,968	)
Change in unrealized gain (loss) on investments		15,544,782		(20,681,917	)	8,680,677		(30,619,099	)	3,796,623		(10,589,282	)	2,868,659		(2,944,133	)
Reinvested capital gains		167,621		5,673,851		86,971		5,319,862		34,875		1,841,509		-		1,635,580
Net increase (decrease) in contract owners’ equity resulting from operations		11,053,391		(17,221,789	)	6,301,925		(22,437,759	)	2,602,492		(8,433,356	)	1,409,037		(3,311,464	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		2,796,586		2,941,912		1,118,093		1,220,793		1,667,323		2,343,181		320,330		503,372
Transfers between funds		(197,748	)	4,315,996		(2,522,542	)	(2,974,098	)	(667,393	)	(336,009	)	(175,406	)	(2,915,680	)
Surrenders (note 6)		(2,271,179	)	(1,267,097	)	(2,520,492	)	(1,837,054	)	(1,393,473	)	(734,218	)	(295,655	)	(366,990	)
Death benefits (note 4)		(522,334	)	(16,839	)	(8,121	)	(43,879	)	(9,594	)	(10,456	)	(20,978	)	(3,790	)
Net policy repayments (loans) (note 5)		(96,386	)	(594,321	)	(280,378	)	(201,285	)	95,249		(9,704	)	(55,097	)	(223,440	)
Deductions for surrender charges (note 2d)		(67,437	)	(76,297	)	(52,416	)	(31,395	)	(36,249	)	(42,099	)	(9,979	)	(21,043	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(1,422,500	)	(1,371,833	)	(870,779	)	(1,085,797	)	(670,427	)	(753,965	)	(170,429	)	(211,568	)
Asset charges (note 3):
FPVUL & VEL contracts		(67,635	)	(80,400	)	(25,245	)	(40,454	)	(40,697	)	(53,803	)	(9,693	)	(14,825	)
MSP contracts		(2,463	)	(2,958	)	(594	)	(1,046	)	(525	)	(710	)	(140	)	(248	)
SL contracts or LSFP contracts		(13,513	)	(18,178	)	(6,290	)	(11,790	)	(6,753	)	(9,676	)	(607	)	(1,011	)
Adjustments to maintain reserves		(997	)	(1,358	)	84		(1,827	)	102		(297	)	94		(275	)
Net equity transactions		(1,865,606	)	3,828,627		(5,168,680	)	(5,007,832	)	(1,062,437	)	392,244		(417,560	)	(3,255,498	)
Net change in contract owners’ equity		9,187,785		(13,393,162	)	1,133,245		(27,445,591	)	1,540,055		(8,041,112	)	991,477		(6,566,962	)
Contract owners’ equity beginning of period		28,030,054		41,423,216		27,433,963		54,879,554		10,638,536		18,679,648		2,680,870		9,247,832
Contract owners’ equity end of period	$	37,217,839		28,030,054		28,567,208		27,433,963		12,178,591		10,638,536		3,672,347		2,680,870
CHANGES IN UNITS:
Beginning units		1,725,728		1,538,812		2,724,548		3,039,326		1,096,774		1,080,792		323,896		544,410
Units purchased		256,639		429,420		152,172		323,334		173,704		204,196		38,702		79,391
Units redeemed		(346,441	)	(242,504	)	(630,964	)	(638,112	)	(277,882	)	(188,214	)	(81,014	)	(299,905	)
Ending units		1,635,926		1,725,728		2,245,756		2,724,548		992,596		1,096,774		281,584		323,896

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	FF15S					FF25S				FTVIS2				FTVRDI
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	35,845		27,762		16,647		7,341		313,612		247,666		163,842		246,107
Realized gain (loss) on investments		(236,332	)	(18,251	)	(28,032	)	(7,254	)	(499,666	)	(199,597	)	(577,159	)	39,108
Change in unrealized gain (loss) on investments		406,105		(274,869	)	139,482		(104,475	)	1,348,478		(1,655,102	)	1,903,727		(3,991,162	)
Reinvested capital gains		13,329		28,462		5,650		10,967		-		103,703		-		91,080
Net increase (decrease) in contract owners’ equity resulting from operations		218,947		(236,896	)	133,747		(93,421	)	1,162,424		(1,503,330	)	1,490,410		(3,614,867	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		111,700		51,117		38,096		6,501		367,692		340,125		1,022,781		1,080,065
Transfers between funds		(305	)	1,074,503		228,073		330,456		(173,558	)	110,349		62,494		(1,454,085	)
Surrenders (note 6)		(2,216	)	-		(3,332	)	-		(327,889	)	(124,660	)	(1,000,863	)	(608,305	)
Death benefits (note 4)		(10,042	)	-		(4,436	)	-		(331	)	(9,041	)	(33,527	)	(48,605	)
Net policy repayments (loans) (note 5)		-		-		-		-		(2,213	)	16,642		(154,524	)	(83,502	)
Deductions for surrender charges (note 2d)		-		-		-		-		(4,378	)	(2,074	)	(54,334	)	(86,276	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(19,622	)	(7,580	)	(7,584	)	(2,128	)	(207,936	)	(201,583	)	(527,726	)	(583,283	)
Asset charges (note 3):
FPVUL & VEL contracts		(181	)	-		(2	)	-		(8,686	)	(10,220	)	(35,569	)	(43,888	)
MSP contracts		-		-		-		-		(1,639	)	(1,946	)	(1,022	)	(1,255	)
SL contracts or LSFP contracts		-		-		-		-		(5,174	)	(5,748	)	(4,487	)	(6,266	)
Adjustments to maintain reserves		24		(27	)	18		(20	)	13		(684	)	110		(271	)
Net equity transactions		79,358		1,118,013		250,833		334,809		(364,098	)	111,160		(726,667	)	(1,835,671	)
Net change in contract owners’ equity		298,305		881,117		384,580		241,388		798,326		(1,392,170	)	763,743		(5,450,538	)
Contract owners’ equity beginning of period		881,117		-		241,388		-		3,451,283		4,843,453		9,362,356		14,812,894
Contract owners’ equity end of period	$	1,179,422		881,117		625,968		241,388		4,249,609		3,451,283		10,126,099		9,362,356
CHANGES IN UNITS:
Beginning units		118,752		-		35,716		-		421,586		416,188		787,806		910,630
Units purchased		34,618		123,230		37,806		36,206		50,921		55,768		77,928		86,336
Units redeemed		(26,057	)	(4,478	)	(2,143	)	(490	)	(89,671	)	(50,370	)	(141,637	)	(209,160	)
Ending units		127,313		118,752		71,379		35,716		382,836		421,586		724,097		787,806

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	FTVSVI					FTVSV2				FTVMD2				FTVDM3
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	150,962		147,861		51,803		39,612		1,950		1,380		145,606		151,739
Realized gain (loss) on investments		(917,805	)	(160,397	)	(1,390,336	)	(582,936	)	(10,390	)	(3,430	)	(805,887	)	(269,331	)
Change in unrealized gain (loss) on investments		2,461,641		(4,661,084	)	2,181,594		(1,378,961	)	44,892		(17,922	)	2,635,761		(4,596,789	)
Reinvested capital gains		350,550		799,863		165,739		350,132		5,595		2,827		13,648		1,100,871
Net increase (decrease) in contract owners’ equity resulting from operations		2,045,348		(3,873,757	)	1,008,800		(1,572,153	)	42,047		(17,145	)	1,989,128		(3,613,510	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		863,669		1,041,503		248,450		254,804		19		(45	)	543,048		417,586
Transfers between funds		(224,665	)	244,305		518,265		(317,724	)	99,663		85,962		909,392		(1,200,348	)
Surrenders (note 6)		(389,024	)	(293,697	)	(352,465	)	(87,532	)	-		-		(215,313	)	(243,005	)
Death benefits (note 4)		(1,166	)	(63,349	)	(2,924	)	-		(636	)	-		(5,865	)	-
Net policy repayments (loans) (note 5)		(112,640	)	(56,607	)	(11,580	)	-		-		-		(68,935	)	(29,337	)
Deductions for surrender charges (note 2d)		(39,693	)	(34,396	)	-		-		-		-		(5,637	)	(13,881	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(412,959	)	(430,515	)	(78,972	)	(70,001	)	(2,034	)	(641	)	(208,344	)	(232,057	)
Asset charges (note 3):
FPVUL & VEL contracts		(27,852	)	(32,483	)	(363	)	-		-		-		(12,685	)	(17,056	)
MSP contracts		(963	)	(1,242	)	-		-		-		-		(626	)	(854	)
SL contracts or LSFP contracts		(3,961	)	(8,155	)	-		-		-		-		(3,100	)	(4,523	)
Adjustments to maintain reserves		(1,417	)	(363	)	32		356		5		(14	)	105		(359	)
Net equity transactions		(350,671	)	365,001		320,443		(220,097	)	97,017		85,262		932,040		(1,323,834	)
Net change in contract owners’ equity		1,694,677		(3,508,756	)	1,329,243		(1,792,250	)	139,064		68,117		2,921,168		(4,937,344	)
Contract owners’ equity beginning of period		7,796,888		11,305,644		3,286,714		5,078,964		68,117		-		2,758,868		7,696,212
Contract owners’ equity end of period	$	9,491,565		7,796,888		4,615,957		3,286,714		207,181		68,117		5,680,036		2,758,868
CHANGES IN UNITS:
Beginning units		560,057		545,164		381,137		393,948		9,508		-		275,997		364,400
Units purchased		69,493		73,627		86,958		106,273		14,344		9,583		94,539		39,126
Units redeemed		(103,255	)	(58,734	)	(53,020	)	(119,084	)	(352	)	(75	)	(41,380	)	(127,529	)
Ending units		526,295		560,057		415,075		381,137		23,500		9,508		329,156		275,997

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	TIF					TIF2				TIF3				FTVGI2
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	55,755		66,199		341,266		320,223		175,850		164,729		289,491		20,598
Realized gain (loss) on investments		(81,845	)	(31,498	)	(3,399,112	)	26,260		(726,575	)	(71,704	)	(32,038	)	(1	)
Change in unrealized gain (loss) on investments		438,313		(1,488,551	)	6,489,010		(9,427,721	)	1,930,983		(3,947,571	)	52,782		(4,244	)
Reinvested capital gains		62,378		239,532		451,291		1,441,783		212,562		635,903		-		-
Net increase (decrease) in contract owners’ equity resulting from operations		474,601		(1,214,318	)	3,882,455		(7,639,455	)	1,592,820		(3,218,643	)	310,235		16,353
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		41		-		806,566		848,633		522,616		719,233		164,993		553,199
Transfers between funds		(87,521	)	(351,962	)	(1,161,518	)	(2,730,461	)	(570,054	)	454,678		1,083,600		466,055
Surrenders (note 6)		(60,255	)	(79,037	)	(1,201,312	)	(2,772,588	)	(439,480	)	(197,681	)	(2,269	)	(252	)
Death benefits (note 4)		-		-		(58,838	)	(37,130	)	(584	)	(608	)	(2,761	)	-
Net policy repayments (loans) (note 5)		(16,520	)	(41,203	)	731,642		(6,035	)	(19,199	)	(16,792	)	126		214
Deductions for surrender charges (note 2d)		(3,956	)	(5,221	)	-		-		(21,871	)	(18,517	)	-		-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(58,983	)	(76,321	)	(166,754	)	(155,830	)	(239,699	)	(273,111	)	(40,404	)	(11,492	)
Asset charges (note 3):
FPVUL & VEL contracts		(5,002	)	(7,701	)	-		-		(14,566	)	(18,536	)	(207	)	-
MSP contracts		(382	)	(462	)	-		-		(262	)	(614	)	-		-
SL contracts or LSFP contracts		(1,084	)	(1,821	)	-		-		(6,844	)	(5,795	)	-		-
Adjustments to maintain reserves		132		(348	)	15		(3,716	)	(308	)	(295	)	25		(44	)
Net equity transactions		(233,529	)	(564,076	)	(1,050,199	)	(4,857,127	)	(790,251	)	641,962		1,203,103		1,007,680
Net change in contract owners’ equity		241,072		(1,778,394	)	2,832,256		(12,496,582	)	802,569		(2,576,681	)	1,513,338		1,024,033
Contract owners’ equity beginning of period		1,457,331		3,235,725		10,002,357		22,498,939		4,741,936		7,318,617		1,024,033		-
Contract owners’ equity end of period	$	1,698,403		1,457,331		12,834,613		10,002,357		5,544,505		4,741,936		2,537,371		1,024,033
CHANGES IN UNITS:
Beginning units		99,305		131,776		740,460		991,386		502,570		462,356		94,925		-
Units purchased		9		-		106,764		90,226		49,905		86,001		108,351		96,058
Units redeemed		(15,048	)	(32,471	)	(152,623	)	(341,152	)	(124,164	)	(45,787	)	(4,640	)	(1,133	)
Ending units		84,266		99,305		694,601		740,460		428,311		502,570		198,636		94,925

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	FTVGI3					FTVFA2				GVMCE				SBVSG
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	1,010,310		233,513		6,436		3,349		648,737		425,924		(506	)	(165	)
Realized gain (loss) on investments		(194,950	)	178,655		(33,732	)	(1,684	)	(7,867,883	)	(10,481,013	)	(18,609	)	(10,891	)
Change in unrealized gain (loss) on investments		312,003		(225,501	)	83,885		(42,263	)	18,839,243		(14,754,743	)	104,712		(44,922	)
Reinvested capital gains		-		-		-		3,322		-		103,156		-		724
Net increase (decrease) in contract owners’ equity resulting from operations		1,127,363		186,667		56,589		(37,276	)	11,620,097		(24,706,676	)	85,597		(55,254	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		590,036		486,537		36,283		5,786		1,476,811		2,501,850		1,939		628
Transfers between funds		(678,613	)	2,901,911		118,482		151,723		(1,551,525	)	(14,131,346	)	100,339		162,834
Surrenders (note 6)		(703,025	)	(241,708	)	(18,028	)	-		(2,223,541	)	(2,264,344	)	(7,889	)	-
Death benefits (note 4)		(226	)	(6,220	)	-		-		(76,838	)	(98,115	)	-		-
Net policy repayments (loans) (note 5)		1,895		(73,593	)	(783	)	(778	)	(5,807	)	(533,852	)	(6,076	)	-
Deductions for surrender charges (note 2d)		(8,038	)	(6,389	)	(140	)	-		-		-		-		-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(347,645	)	(257,301	)	(10,828	)	(3,084	)	(664,105	)	(807,319	)	(8,102	)	(1,728	)
Asset charges (note 3):
FPVUL & VEL contracts		(21,288	)	(16,181	)	(851	)	(265	)	-		-		(3	)	-
MSP contracts		(685	)	(600	)	(29	)	(16	)	-		-		-		-
SL contracts or LSFP contracts		(4,316	)	(3,196	)	(109	)	-		-		-		-		-
Adjustments to maintain reserves		139		(253	)	8		(7	)	211		296		5		(16	)
Net equity transactions		(1,171,766	)	2,783,007		124,005		153,359		(3,044,794	)	(15,332,830	)	80,213		161,718
Net change in contract owners’ equity		(44,403	)	2,969,674		180,594		116,083		8,575,303		(40,039,506	)	165,810		106,464
Contract owners’ equity beginning of period		6,446,506		3,476,832		116,083		-		37,957,648		77,997,154		106,464		-
Contract owners’ equity end of period	$	6,402,103		6,446,506		296,677		116,083		46,532,951		37,957,648		272,274		106,464
CHANGES IN UNITS:
Beginning units		490,278		280,836		17,440		-		2,832,966		3,657,366		18,197		-
Units purchased		60,991		255,186		19,878		18,023		150,600		400,664		18,130		18,423
Units redeemed		(141,026	)	(45,744	)	(3,098	)	(583	)	(372,337	)	(1,225,064	)	(3,650	)	(226	)
Ending units		410,243		490,278		34,220		17,440		2,611,229		2,832,966		32,677		18,197

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	BNCAI					AMGP				AMINS				AMCG
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	(21,202	)	(31,367	)	13,816		52,323		-		-		(14,212	)	(20,752	)
Realized gain (loss) on investments		(1,758,205	)	(1,077,710	)	(1,542,769	)	607,105		(1,466,302	)	(131,792	)	3,341,833		2,433,292
Change in unrealized gain (loss) on investments		4,837,859		(4,879,350	)	2,680,187		(5,426,146	)	1,820,124		(1,655,919	)	1,225,579		(23,546,784	)
Reinvested capital gains		-		623,887		-		386,741		-		(47	)	-		-
Net increase (decrease) in contract owners’ equity resulting from operations		3,058,452		(5,364,540	)	1,151,234		(4,379,977	)	353,822		(1,787,758	)	4,553,200		(21,134,244	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		656,234		630,425		244,183		533,544		65,299		240,129		1,056,999		2,145,143
Transfers between funds		347,031		(3,146,668	)	(5,838,657	)	(828,918	)	(2,205,412	)	(330,601	)	(19,239,794	)	702,907
Surrenders (note 6)		(662,978	)	(85,809	)	(819,973	)	(580,792	)	(116,343	)	(109,755	)	(5,616,544	)	(2,500,205	)
Death benefits (note 4)		(14,320	)	(17,260	)	(4,578	)	(1,810	)	-		-		(84,081	)	(94,449	)
Net policy repayments (loans) (note 5)		(148,984	)	(48,609	)	77,234		(11,762	)	(7,532	)	(76,321	)	(50,813	)	(149,167	)
Deductions for surrender charges (note 2d)		-		-		(13,343	)	(16,272	)	(3,413	)	(3,815	)	(51,831	)	(78,775	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(194,251	)	(218,704	)	(245,140	)	(425,209	)	(70,693	)	(128,360	)	(1,177,096	)	(1,780,702	)
Asset charges (note 3):
FPVUL & VEL contracts		(379	)	-		(12,303	)	(28,304	)	(3,768	)	(9,210	)	(38,528	)	(91,519	)
MSP contracts		-		-		(233	)	(677	)	(171	)	(622	)	(701	)	(1,799	)
SL contracts or LSFP contracts		-		-		(1,082	)	(2,722	)	(801	)	(2,035	)	(5,686	)	(14,571	)
Adjustments to maintain reserves		114		(819	)	113		(406	)	66		(18	)	174		(905	)
Net equity transactions		(17,533	)	(2,887,444	)	(6,613,779	)	(1,363,328	)	(2,342,769	)	(420,608	)	(25,207,900	)	(1,864,042	)
Net change in contract owners’ equity		3,040,919		(8,251,984	)	(5,462,545	)	(5,743,305	)	(1,988,947	)	(2,208,366	)	(20,654,700	)	(22,998,286	)
Contract owners’ equity beginning of period		7,597,766		15,849,750		7,030,294		12,773,599		1,988,947		4,197,313		26,235,936		49,234,222
Contract owners’ equity end of period	$	10,638,685		7,597,766		1,567,749		7,030,294		-		1,988,947		5,581,236		26,235,936
CHANGES IN UNITS:
Beginning units		647,462		819,894		551,770		633,674		248,009		280,340		2,207,124		2,319,260
Units purchased		117,245		120,270		21,595		59,167		9,142		33,317		82,822		273,625
Units redeemed		(108,802	)	(292,702	)	(448,451	)	(141,071	)	(257,151	)	(65,648	)	(1,752,689	)	(385,761	)
Ending units		655,905		647,462		124,914		551,770		-		248,009		537,257		2,207,124

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	AMTP					AMRI				AMRS				AMFAS
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	39,264		73,355		38,852		37,123		-		9,627		(1,318	)	(1,252	)
Realized gain (loss) on investments		(8,477,055	)	(421,355	)	(406,048	)	(505,252	)	(397,742	)	(21,349	)	(528,882	)	(90,339	)
Change in unrealized gain (loss) on investments		11,536,812		(11,677,741	)	1,298,460		(828,907	)	561,579		(533,333	)	842,176		(721,945	)
Reinvested capital gains		182,659		2,415,975		37,516		7,577		-		2,094		-		57,762
Net increase (decrease) in contract owners’ equity resulting from operations		3,281,680		(9,609,766	)	968,780		(1,289,459	)	163,837		(542,961	)	311,976		(755,774	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		480,946		837,423		48,189		56,676		38,424		138,819		128,971		101,816
Transfers between funds		(8,041,260	)	(1,868,595	)	23,956		2,466,371		(867,123	)	(65,723	)	169,724		(109,239	)
Surrenders (note 6)		(398,408	)	(1,781,243	)	(43,936	)	(35,429	)	(3,652	)	(24,804	)	(113,078	)	(31,777	)
Death benefits (note 4)		(21,709	)	(8,738	)	-		-		(2,977	)	(11,532	)	(663	)	(1,645	)
Net policy repayments (loans) (note 5)		42,842		(12,816	)	-		(21	)	(5,884	)	1,302		(7,919	)	(3,328	)
Deductions for surrender charges (note 2d)		(32,388	)	(42,668	)	-		-		(474	)	(2,907	)	(11,367	)	(3,025	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(352,221	)	(665,429	)	(45,605	)	(30,345	)	(21,295	)	(41,760	)	(47,203	)	(42,162	)
Asset charges (note 3):
FPVUL & VEL contracts		(17,253	)	(42,886	)	(311	)	-		(1,633	)	(3,872	)	(2,829	)	(2,992	)
MSP contracts		(454	)	(1,254	)	-		-		(34	)	(94	)	-		(1	)
SL contracts or LSFP contracts		(2,441	)	(7,616	)	-		-		(210	)	(531	)	(194	)	(488	)
Adjustments to maintain reserves		58		(450	)	25		134		47		(180	)	81		(233	)
Net equity transactions		(8,342,287	)	(3,594,272	)	(17,682	)	2,457,386		(864,811	)	(11,282	)	115,523		(93,074	)
Net change in contract owners’ equity		(5,060,607	)	(13,204,038	)	951,098		1,167,927		(700,974	)	(554,243	)	427,499		(848,848	)
Contract owners’ equity beginning of period		8,204,756		21,408,794		2,018,176		850,249		700,974		1,255,217		1,161,285		2,010,133
Contract owners’ equity end of period	$	3,144,149		8,204,756		2,969,274		2,018,176		-		700,974		1,588,784		1,161,285
CHANGES IN UNITS:
Beginning units		900,619		1,122,738		353,171		80,562		97,268		94,148		125,689		131,640
Units purchased		167,718		82,274		28,237		315,418		5,889		16,313		39,463		20,799
Units redeemed		(832,396	)	(304,393	)	(25,989	)	(42,809	)	(103,157	)	(13,193	)	(24,683	)	(26,750	)
Ending units		235,941		900,619		355,419		353,171		-		97,268		140,469		125,689

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	AMSRS					OVGR				OVGS3				OVGS
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	49,340		78,334		146,045		8,313		288,133		261,264		813,761		845,558
Realized gain (loss) on investments		(593,019	)	98,903		(2,935,835	)	4,568,473		(1,112,664	)	(289,295	)	(5,381,641	)	(965,153	)
Change in unrealized gain (loss) on investments		1,138,345		(2,095,483	)	31,182,105		(62,205,433	)	5,057,893		(9,114,516	)	17,448,044		(34,242,609	)
Reinvested capital gains		-		267,832		-		-		275,295		1,150,196		842,392		4,220,261
Net increase (decrease) in contract owners’ equity resulting from operations		594,666		(1,650,414	)	28,392,315		(57,628,647	)	4,508,657		(7,992,351	)	13,722,556		(30,141,943	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		207,791		309,947		5,012,399		7,344,776		2,218,664		2,684,561		1,219,956		2,401,717
Transfers between funds		(267,869	)	(435,771	)	(6,327,099	)	(310,762	)	(902,235	)	(2,059,065	)	(1,788,353	)	(5,865,197	)
Surrenders (note 6)		(493,708	)	(85,548	)	(6,494,378	)	(7,454,657	)	(1,036,224	)	(829,253	)	(1,726,010	)	(1,776,719	)
Death benefits (note 4)		-		(1,658	)	(233,092	)	(191,646	)	(47,241	)	(20,918	)	(35,757	)	(148,172	)
Net policy repayments (loans) (note 5)		(92,047	)	(81,048	)	958,751		(1,111,356	)	81,516		3,287		(273,864	)	(262,820	)
Deductions for surrender charges (note 2d)		(19,244	)	(7,506	)	(99,081	)	(162,619	)	(56,919	)	(55,150	)	(19,207	)	(35,786	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(144,198	)	(174,838	)	(3,201,673	)	(3,654,611	)	(801,297	)	(817,887	)	(1,100,453	)	(1,332,970	)
Asset charges (note 3):
FPVUL & VEL contracts		(7,779	)	(11,164	)	(125,697	)	(167,420	)	(48,340	)	(56,150	)	(34,173	)	(50,045	)
MSP contracts		(739	)	(1,448	)	(3,289	)	(4,585	)	(1,051	)	(1,449	)	(1,169	)	(1,529	)
SL contracts or LSFP contracts		(1,681	)	(2,360	)	(15,394	)	(22,589	)	(8,804	)	(10,451	)	(5,913	)	(9,177	)
Adjustments to maintain reserves		(631	)	(334	)	(485	)	5,396		114		(351	)	765		468
Net equity transactions		(820,106	)	(491,728	)	(10,529,039	)	(5,730,073	)	(601,817	)	(1,162,826	)	(3,764,178	)	(7,080,230	)
Net change in contract owners’ equity		(225,440	)	(2,142,142	)	17,863,276		(63,358,720	)	3,906,840		(9,155,177	)	9,958,378		(37,222,173	)
Contract owners’ equity beginning 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
Contract owners’ equity end of period	$	2,289,073		2,514,513		87,241,809		69,378,533		15,556,341		11,649,501		48,628,512		38,670,134
CHANGES IN UNITS:
Beginning units		226,546		254,068		8,886,911		9,062,720		1,290,636		1,378,496		4,095,071		4,806,202
Units purchased		18,302		26,402		655,964		1,590,721		229,006		252,195		269,410		500,377
Units redeemed		(87,928	)	(53,924	)	(1,765,488	)	(1,766,530	)	(285,924	)	(340,055	)	(673,767	)	(1,211,508	)
Ending units		156,920		226,546		7,777,387		8,886,911		1,233,718		1,290,636		3,690,714		4,095,071

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	OVHI3					OVHI				OVGI				OVSC
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	-		58,804		-		149,441		459,271		504,633		30,280		23,275
Realized gain (loss) on investments		(754,547	)	(159,257	)	(470,256	)	(166,191	)	(799,855	)	1,138,150		(494,419	)	(97,250	)
Change in unrealized gain (loss) on investments		976,180		(1,000,576	)	557,363		(1,660,237	)	6,382,896		(19,355,708	)	1,681,672		(2,212,248	)
Reinvested capital gains		-		-		-		-		-		2,237,977		-		258,437
Net increase (decrease) in contract owners’ equity resulting from operations		221,633		(1,101,029	)	87,107		(1,676,987	)	6,042,312		(15,474,948	)	1,217,533		(2,027,786	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		303,261		419,209		72		(387	)	2,179,467		3,363,400		454,245		450,600
Transfers between funds		100,991		341,131		(43,550	)	(379,904	)	(1,262,166	)	(4,055,339	)	142,242		(264,671	)
Surrenders (note 6)		(69,967	)	(49,336	)	(17,592	)	(66,422	)	(1,636,677	)	(1,730,646	)	(209,982	)	(307,661	)
Death benefits (note 4)		(3,770	)	(226	)	(409	)	(373	)	(63,001	)	(343,056	)	(311	)	(2,511	)
Net policy repayments (loans) (note 5)		22,959		10,055		(16,487	)	(26,706	)	(91,065	)	(378,172	)	(83,858	)	(1,699	)
Deductions for surrender charges (note 2d)		(4,267	)	(3,652	)	(2,244	)	(5,718	)	(85,697	)	(92,080	)	(8,407	)	(14,692	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(67,632	)	(64,943	)	(27,177	)	(94,620	)	(1,571,971	)	(1,757,515	)	(209,269	)	(213,561	)
Asset charges (note 3):
FPVUL & VEL contracts		(3,090	)	(4,006	)	(1,513	)	(7,083	)	(82,622	)	(109,256	)	(13,134	)	(15,918	)
MSP contracts		(61	)	(160	)	(68	)	(240	)	(2,675	)	(4,122	)	(240	)	(199	)
SL contracts or LSFP contracts		(628	)	(1,233	)	(218	)	(907	)	(10,206	)	(13,912	)	(2,664	)	(2,812	)
Adjustments to maintain reserves		28		(99	)	19		(245	)	151		159		(58	)	(374	)
Net equity transactions		277,824		646,740		(109,167	)	(582,605	)	(2,626,461	)	(5,120,539	)	68,564		(373,498	)
Net change in contract owners’ equity		499,457		(454,289	)	(22,060	)	(2,259,592	)	3,415,851		(20,595,487	)	1,286,097		(2,401,284	)
Contract owners’ equity beginning of period		484,221		938,510		429,509		2,689,101		23,251,715		43,847,202		3,073,867		5,475,151
Contract owners’ equity end of period	$	983,678		484,221		407,449		429,509		26,667,566		23,251,715		4,359,964		3,073,867
CHANGES IN UNITS:
Beginning units		237,435		97,144		147,777		197,334		2,576,774		3,011,778		239,034		264,706
Units purchased		226,067		162,432		8		5		292,365		310,596		44,998		33,710
Units redeemed		(82,963	)	(22,141	)	(35,918	)	(49,562	)	(556,886	)	(745,600	)	(36,908	)	(59,382	)
Ending units		380,539		237,435		111,867		147,777		2,312,253		2,576,774		247,124		239,034

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	OVAG					OVSB				PMVAAA				PMVFBA
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	(12,026	)	(23,328	)	1,565		36,548		53,354		74,642		9,699		-
Realized gain (loss) on investments		(1,129,222	)	1,727,853		(81,767	)	(121,954	)	47,363		(563,102	)	81,133		-
Change in unrealized gain (loss) on investments		6,737,017		(21,121,810	)	313,267		(132,574	)	73,226		11,957		(19,563	)	-
Reinvested capital gains		-		-		622		8,893		-		1,935		9,479		-
Net increase (decrease) in contract owners’ equity resulting from operations		5,595,769		(19,417,285	)	233,687		(209,087	)	173,943		(474,568	)	80,748		-
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		2,281,640		3,038,005		60,260		(623	)	54,772		70,000		30,965		-
Transfers between funds		(998,486	)	(5,705,434	)	498,766		1,191,878		86,878		(972,523	)	569,719		-
Surrenders (note 6)		(1,698,953	)	(2,170,737	)	-		-		(30,321	)	(22,724	)	(1,511	)	-
Death benefits (note 4)		(27,597	)	(102,026	)	(4,655	)	-		(1,831	)	(204	)	(6,469	)	-
Net policy repayments (loans) (note 5)		89,593		(106,937	)	-		-		2,567		(3,240	)	(11,451	)	-
Deductions for surrender charges (note 2d)		(44,870	)	(77,260	)	-		-		-		-		-		-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(1,343,048	)	(1,671,852	)	(11,502	)	(9,149	)	(18,658	)	(29,399	)	(22,331	)	-
Asset charges (note 3):
FPVUL & VEL contracts		(62,798	)	(91,808	)	-		-		(39	)	-		(1,688	)	-
MSP contracts		(1,009	)	(1,693	)	-		-		-		-		(6	)	-
SL contracts or LSFP contracts		(5,411	)	(9,105	)	-		-		-		-		(138	)	-
Adjustments to maintain reserves		171		581		13		(30	)	43		(400	)	(118	)	-
Net equity transactions		(1,810,767	)	(6,898,266	)	542,882		1,182,076		93,411		(958,490	)	556,973		-
Net change in contract owners’ equity		3,785,002		(26,315,551	)	776,569		972,989		267,354		(1,433,058	)	637,721		-
Contract owners’ equity beginning of period		19,253,109		45,568,660		972,989		-		596,235		2,029,293		-		-
Contract owners’ equity end of period	$	23,038,111		19,253,109		1,749,558		972,989		863,589		596,235		637,721		-
CHANGES IN UNITS:
Beginning units		2,739,147		3,363,248		114,461		-		52,891		151,384		-		-
Units purchased		298,331		291,129		60,896		115,419		16,170		11,263		61,891		-
Units redeemed		(577,089	)	(915,230	)	(1,794	)	(958	)	(5,989	)	(109,756	)	(4,096	)	-
Ending units		2,460,389		2,739,147		173,563		114,461		63,072		52,891		57,795		-

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	PMVLDA					PMVRRA				PMVTRA				PIVEMI
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	1,401,981		1,728,311		1,939,994		2,059,317		10,160,514		7,218,261		7,824		148
Realized gain (loss) on investments		(157,572	)	(419,197	)	(68,919	)	(2,023,389	)	2,719,493		354,992		85,798		(56,494	)
Change in unrealized gain (loss) on investments		1,291,678		(2,328,192	)	6,383,343		(5,605,641	)	6,413,613		(3,481,322	)	380,336		(17,307	)
Reinvested capital gains		2,576,351		711,450		2,826,272		93,651		6,877,332		3,186,763		-		11,846
Net increase (decrease) in contract owners’ equity resulting from operations		5,112,438		(307,628	)	11,080,690		(5,476,062	)	26,170,952		7,278,694		473,958		(61,807	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		2,234,772		1,692,096		3,726,517		3,887,102		10,285,511		8,598,401		114,246		74,918
Transfers between funds		16,938,777		(9,059,553	)	4,070,896		11,568,776		42,752,222		7,194,947		618,567		136,504
Surrenders (note 6)		(2,689,673	)	(1,479,864	)	(2,559,305	)	(2,661,467	)	(16,959,592	)	(7,588,144	)	(6,359	)	-
Death benefits (note 4)		(95,366	)	(49,806	)	(91,743	)	(104,005	)	(1,576,032	)	(105,782	)	-		-
Net policy repayments (loans) (note 5)		(145,433	)	(1,047,811	)	467,799		(166,404	)	1,083,860		(98,628	)	(906	)	-
Deductions for surrender charges (note 2d)		-		-		-		-		-		-		-		-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(744,922	)	(633,058	)	(1,116,672	)	(835,606	)	(3,915,290	)	(2,703,684	)	(29,556	)	(3,279	)
Asset charges (note 3):
FPVUL & VEL contracts		(4,014	)	-		(119	)	-		(3,877	)	-		(199	)	-
MSP contracts		(168	)	-		-		-		-		-		-		-
SL contracts or LSFP contracts		(771	)	-		-		-		-		-		-		-
Adjustments to maintain reserves		(4,228	)	(12,472	)	(8,485	)	1,190		(31,128	)	(77,076	)	(1	)	(15	)
Net equity transactions		15,488,974		(10,590,468	)	4,488,888		11,689,586		31,635,674		5,220,034		695,792		208,128
Net change in contract owners’ equity		20,601,412		(10,898,096	)	15,569,578		6,213,524		57,806,626		12,498,728		1,169,750		146,321
Contract owners’ equity beginning of period		36,778,910		47,677,006		59,874,205		53,660,681		170,153,203		157,654,475		146,321		-
Contract owners’ equity end of period	$	57,380,322		36,778,910		75,443,783		59,874,205		227,959,829		170,153,203		1,316,071		146,321
CHANGES IN UNITS:
Beginning units		3,127,979		4,028,120		4,682,086		3,896,610		12,508,618		12,123,210		33,546		-
Units purchased		1,606,797		233,784		1,216,812		1,726,978		3,688,960		3,703,813		146,604		34,037
Units redeemed		(423,277	)	(1,133,925	)	(912,644	)	(941,502	)	(1,474,597	)	(3,318,405	)	(7,146	)	(491	)
Ending units		4,311,499		3,127,979		4,986,254		4,682,086		14,722,981		12,508,618		173,004		33,546

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	PIHYB1					PVGIB				PVTIGB				PVTSCB
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	1,158,417		1,197,941		17,919		16,107		-		47,275		39		-
Realized gain (loss) on investments		(2,909,377	)	(963,927	)	(138,463	)	(108,274	)	(426,118	)	(277,605	)	452		(5	)
Change in unrealized gain (loss) on investments		8,661,414		(6,240,402	)	299,375		(415,966	)	715,663		(1,264,839	)	756		(185	)
Reinvested capital gains		-		144,329		-		138,494		-		363,224		-		-
Net increase (decrease) in contract owners’ equity resulting from operations		6,910,454		(5,862,059	)	178,831		(369,639	)	289,545		(1,131,945	)	1,247		(190	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		440,744		343,967		93,820		152,107		101,596		826,228		120		978
Transfers between funds		(360,962	)	1,587,756		(38,269	)	(96,968	)	(109,102	)	(427,634	)	2,180		(307	)
Surrenders (note 6)		(598,060	)	(400,493	)	(74,009	)	(27,526	)	(194,029	)	(955,027	)	-		-
Death benefits (note 4)		(58,486	)	(21,596	)	-		-		(1,238	)	(963	)	-		-
Net policy repayments (loans) (note 5)		19,307		(24,303	)	23,772		(2,247	)	(21,438	)	(2,074	)	-		-
Deductions for surrender charges (note 2d)		-		-		(4,235	)	(6,914	)	(8,810	)	(6,331	)	-		-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(244,445	)	(191,582	)	(49,122	)	(57,215	)	(68,256	)	(85,874	)	(137	)	(128	)
Asset charges (note 3):
FPVUL & VEL contracts		(135	)	-		(2,773	)	(3,453	)	(4,147	)	(6,457	)	-		-
MSP contracts		-		-		(23	)	(29	)	(134	)	(208	)	-		-
SL contracts or LSFP contracts		-		-		(244	)	(282	)	(423	)	(710	)	-		-
Adjustments to maintain reserves		969		805		41		(161	)	62		(231	)	2		(3	)
Net equity transactions		(801,068	)	1,294,554		(51,041	)	(42,688	)	(305,919	)	(659,281	)	2,165		540
Net change in contract owners’ equity		6,109,386		(4,567,505	)	127,790		(412,327	)	(16,374	)	(1,791,226	)	3,412		350
Contract owners’ equity beginning of period		12,354,601		16,922,106		619,088		1,031,415		1,272,815		3,064,041		350		-
Contract owners’ equity end of period	$	18,463,987		12,354,601		746,878		619,088		1,256,441		1,272,815		3,762		350
CHANGES IN UNITS:
Beginning units		1,112,104		982,886		63,826		65,188		98,334		132,680		65		-
Units purchased		221,563		310,809		9,538		9,737		6,093		8,842		495		126
Units redeemed		(295,533	)	(181,591	)	(14,047	)	(11,099	)	(26,544	)	(43,188	)	(28	)	(61	)
Ending units		1,038,134		1,112,104		59,317		63,826		77,883		98,334		532		65

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	PVVIB				PVTVB				VKVGR2				ROCMC
	2009			2008	2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	(142	)	-	5,777		-		(1,279	)	16,204		(73,599	)	947,726
Realized gain (loss) on investments		3,470		-	7,386		(1,958	)	(61,518	)	(245,402	)	(8,656,246	)	(4,937,527	)
Change in unrealized gain (loss) on investments		30,219		-	398,764		(127,926	)	306,866		(97,237	)	24,040,908		(22,022,108	)
Reinvested capital gains		-		-	-		-		-		40,355		-		4,399,048
Net increase (decrease) in contract owners’ equity resulting from operations		33,547		-	411,927		(129,884	)	244,069		(286,080	)	15,311,063		(21,612,861	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		(2,876	)	-	78,972		59,978		116,161		72,581		1,561,059		2,812,562
Transfers between funds		63,395		-	438,777		186,570		(29,428	)	784,940		(1,815,279	)	(4,277,856	)
Surrenders (note 6)		-		-	(39,574	)	(6,633	)	(34,126	)	(72,650	)	(1,752,898	)	(4,724,452	)
Death benefits (note 4)		(226	)	-	-		-		(3,820	)	-		(544,550	)	(71,800	)
Net policy repayments (loans) (note 5)		-		-	7,212		(6,164	)	(7,402	)	-		759,368		(73,410	)
Deductions for surrender charges (note 2d)		-		-	(3,660	)	(2,842	)	-		-		-		-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(646	)	-	(45,182	)	(29,124	)	(22,515	)	(13,354	)	(539,587	)	(630,156	)
Asset charges (note 3):
FPVUL & VEL contracts		-		-	(2,343	)	(1,707	)	(149	)	-		(283	)	-
MSP contracts		-		-	(65	)	(6	)	-		-		-		-
SL contracts or LSFP contracts		-		-	(1,924	)	(327	)	-		-		-		-
Adjustments to maintain reserves		(1,102	)	-	54		(108	)	11		(115	)	(318	)	(3,199	)
Net equity transactions		58,545		-	432,266		199,637		18,732		771,402		(2,332,488	)	(6,968,311	)
Net change in contract owners’ equity		92,092		-	844,193		69,753		262,801		485,322		12,978,575		(28,581,172	)
Contract owners’ equity beginning of period		-		-	505,158		435,405		485,322		-		26,361,455		54,942,627
Contract owners’ equity end of period	$	92,092		-	1,349,351		505,158		748,123		485,322		39,340,030		26,361,455
CHANGES IN UNITS:
Beginning units		-		-	54,796		29,740		99,311		-		1,954,973		2,306,592
Units purchased		7,139		-	42,015		32,166		35,801		114,455		181,540		315,681
Units redeemed		(472	)	-	(7,505	)	(7,110	)	(26,622	)	(15,144	)	(288,653	)	(667,300	)
Ending units		6,667		-	89,306		54,796		108,490		99,311		1,847,860		1,954,973

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	ROCSC					TRBCG2				TREI2				TRHS2
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	(456	)	436		(752	)	3,046		940,663		1,539,466		(2,633	)	(2,656	)
Realized gain (loss) on investments		(26,692	)	(27,914	)	(358,102	)	(59,502	)	(12,130,552	)	(6,172,572	)	(185,395	)	(144,836	)
Change in unrealized gain (loss) on investments		102,125		(27,164	)	1,319,164		(1,474,808	)	25,683,362		(31,210,378	)	545,834		(376,879	)
Reinvested capital gains		-		9,209		-		-		-		2,480,253		-		15,673
Net increase (decrease) in contract owners’ equity resulting from operations		74,977		(45,433	)	960,310		(1,531,264	)	14,493,473		(33,363,231	)	357,806		(508,698	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		67		(438	)	198,132		299,965		2,952,172		4,232,449		101,670		5,594
Transfers between funds		115,780		135,434		(7,519	)	1,147,780		242,104		(6,218,723	)	(146,376	)	1,786,033
Surrenders (note 6)		-		-		(144,897	)	(344,940	)	(3,799,863	)	(2,795,104	)	-		-
Death benefits (note 4)		(758	)	-		(16,169	)	(1,351	)	(118,457	)	(167,243	)	(5,293	)	-
Net policy repayments (loans) (note 5)		-		-		(23,045	)	(12,096	)	50,167		(658,239	)	-		-
Deductions for surrender charges (note 2d)		-		-		(4,703	)	(5,842	)	(7,785	)	(7,186	)	-		-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(2,018	)	(1,358	)	(120,428	)	(119,958	)	(1,287,230	)	(1,347,179	)	(12,381	)	(12,928	)
Asset charges (note 3):
FPVUL & VEL contracts		-		-		(6,579	)	(7,845	)	(13,758	)	(14,872	)	-		-
MSP contracts		-		-		(368	)	(532	)	(771	)	(983	)	-		-
SL contracts or LSFP contracts		-		-		(2,911	)	(1,777	)	(2,135	)	(2,366	)	-		-
Adjustments to maintain reserves		3		(13	)	(103	)	(220	)	(3,059	)	(70,718	)	13		(44	)
Net equity transactions		113,074		133,625		(128,590	)	953,184		(1,988,616	)	(7,050,164	)	(62,367	)	1,778,655
Net change in contract owners’ equity		188,051		88,192		831,720		(578,080	)	12,504,857		(40,413,395	)	295,439		1,269,957
Contract owners’ equity beginning of period		88,192		-		2,384,405		2,962,485		58,759,665		99,173,060		1,269,957		-
Contract owners’ equity end of period	$	276,243		88,192		3,216,125		2,384,405		71,264,522		58,759,665		1,565,396		1,269,957
CHANGES IN UNITS:
Beginning units		12,038		-		298,969		212,892		5,076,907		5,451,242		178,625		-
Units purchased		16,265		12,179		35,680		128,729		515,424		626,301		14,108		180,138
Units redeemed		(356	)	(141	)	(50,077	)	(42,652	)	(670,718	)	(1,000,636	)	(24,761	)	(1,513	)
Ending units		27,947		12,038		284,572		298,969		4,921,613		5,076,907		167,972		178,625

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	TRLT2					TRMCG2				TRNAG1				TRPSB1
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	55,596		59,606		(39,987	)	(51,496	)	(26,319	)	(35,943	)	7,974		11,390
Realized gain (loss) on investments		67,765		2,698		(4,004,691	)	(2,479,227	)	(1,964,836	)	(1,376,218	)	(95,706	)	(66,200	)
Change in unrealized gain (loss) on investments		35,191		(49,239	)	10,715,898		(9,104,416	)	6,203,128		(3,452,913	)	185,158		(106,121	)
Reinvested capital gains		-		-		20,964		1,211,901		-		491,458		-		2,733
Net increase (decrease) in contract owners’ equity resulting from operations		158,552		13,065		6,692,184		(10,423,238	)	4,211,973		(4,373,616	)	97,426		(158,198	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		148,224		112,013		677,001		925,312		829,411		1,106,652		81,170		73,353
Transfers between funds		(2,106,612	)	919,477		(969,185	)	(1,414,889	)	1,877,527		(2,709,368	)	(67,394	)	606,784
Surrenders (note 6)		(107,960	)	(11,282	)	(583,311	)	(361,231	)	(982,155	)	(347,867	)	(61,621	)	(144,521	)
Death benefits (note 4)		-		(777	)	(32,255	)	(35,088	)	(9,030	)	(645	)	(1,971	)	-
Net policy repayments (loans) (note 5)		(16,473	)	(48,259	)	15,601		(566,879	)	30,857		(121,973	)	-		-
Deductions for surrender charges (note 2d)		(793	)	(255	)	-		-		-		-		-		-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(66,353	)	(60,809	)	(260,321	)	(273,589	)	(233,956	)	(190,490	)	(14,220	)	(20,264	)
Asset charges (note 3):
FPVUL & VEL contracts		(4,778	)	(3,616	)	-		-		(305	)	-		(70	)	-
MSP contracts		(480	)	(651	)	-		-		-		-		-		-
SL contracts or LSFP contracts		(1,306	)	(1,485	)	-		-		-		-		-		-
Adjustments to maintain reserves		270		(177	)	64		(241	)	31		12,991		(261	)	(2,376	)
Net equity transactions		(2,156,260	)	904,179		(1,152,406	)	(1,726,605	)	1,512,380		(2,250,700	)	(64,367	)	512,976
Net change in contract owners’ equity		(1,997,708	)	917,244		5,539,778		(12,149,843	)	5,724,353		(6,624,316	)	33,059		354,778
Contract owners’ equity beginning of period		1,997,708		1,080,464		15,281,728		27,431,571		7,775,544		14,399,860		420,618		65,840
Contract owners’ equity end of period	$	-		1,997,708		20,821,506		15,281,728		13,499,897		7,775,544		453,677		420,618
CHANGES IN UNITS:
Beginning units		177,875		97,460		1,081,279		1,163,522		925,249		1,054,646		55,304		6,060
Units purchased		8,132		92,195		51,631		106,871		302,701		215,604		20,259		66,190
Units redeemed		(186,007	)	(11,780	)	(117,016	)	(189,114	)	(157,018	)	(345,001	)	(30,288	)	(16,946	)
Ending units		-		177,875		1,015,894		1,081,279		1,070,932		925,249		45,275		55,304

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	VWEM					VWHA				VVB				VVDV
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	10,849		(14,781	)	27,884		54,218		54,460		(1,229	)	44,866		(1,565	)
Realized gain (loss) on investments		(8,929,462	)	(4,526,521	)	(5,731,591	)	(622,236	)	(179,323	)	(109,374	)	(201,304	)	(89,099	)
Change in unrealized gain (loss) on investments		17,730,793		(23,938,240	)	15,745,952		(21,816,757	)	373,050		(135,377	)	479,742		(387,618	)
Reinvested capital gains		831,487		10,596,053		109,163		4,885,678		-		-		-		-
Net increase (decrease) in contract owners’ equity resulting from operations		9,643,667		(17,883,489	)	10,151,408		(17,499,097	)	248,187		(245,980	)	323,304		(478,282	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		1,448,691		2,007,668		1,953,824		1,902,431		133,418		(4,174	)	73,249		(4,204	)
Transfers between funds		791,663		(4,372,528	)	3,007,379		2,478,714		91,677		1,179,310		241,922		1,501,460
Surrenders (note 6)		(1,024,271	)	(768,579	)	(1,391,062	)	(2,488,620	)	-		-		-		-
Death benefits (note 4)		(19,839	)	(92,205	)	(92,143	)	(38,385	)	(4,406	)	-		(4,664	)	-
Net policy repayments (loans) (note 5)		(2,966	)	(447,465	)	(265,454	)	(214,120	)	-		-		-		-
Deductions for surrender charges (note 2d)		(12,153	)	(18,433	)	(12,404	)	(21,877	)	-		-		-		-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(519,527	)	(598,991	)	(639,955	)	(749,021	)	(11,497	)	(5,305	)	(11,431	)	(6,894	)
Asset charges (note 3):
FPVUL & VEL contracts		(28,613	)	(41,362	)	(27,663	)	(42,083	)	-		-		-		-
MSP contracts		(498	)	(669	)	(759	)	(1,151	)	-		-		-		-
SL contracts or LSFP contracts		(3,977	)	(4,921	)	(4,360	)	(7,456	)	-		-		-		-
Adjustments to maintain reserves		(7,307	)	7,501		2,162		4,091		17		(18	)	14		(19	)
Net equity transactions		621,202		(4,329,984	)	2,529,565		822,523		209,209		1,169,813		299,090		1,490,343
Net change in contract owners’ equity		10,264,869		(22,213,473	)	12,680,973		(16,676,574	)	457,396		923,833		622,394		1,012,061
Contract owners’ equity beginning of period		8,724,410		30,937,883		17,689,833		34,366,407		923,833		-		1,012,061		-
Contract owners’ equity end of period	$	18,989,279		8,724,410		30,370,806		17,689,833		1,381,229		923,833		1,634,455		1,012,061
CHANGES IN UNITS:
Beginning units		618,949		783,472		741,155		774,780		119,040		-		156,479		-
Units purchased		152,569		90,758		181,584		138,968		38,459		119,655		45,488		157,366
Units redeemed		(146,659	)	(255,281	)	(133,422	)	(172,593	)	(12,385	)	(615	)	(2,450	)	(887	)
Ending units		624,859		618,949		789,317		741,155		145,114		119,040		199,517		156,479

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	VVI					VVMCI				VVSTC				WRASP
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	91,329		(3,937	)	35,587		(3,403	)	100,837		(2,912	)	121		1,774
Realized gain (loss) on investments		(570,258	)	(532,712	)	(588,270	)	(360,620	)	(4,977	)	(52,078	)	(24,263	)	(14,830	)
Change in unrealized gain (loss) on investments		1,513,119		(1,233,518	)	1,336,235		(898,879	)	246,123		(73,797	)	330,887		(89,911	)
Reinvested capital gains		-		-		101,879		-		12,942		-		62,302		33,568
Net increase (decrease) in contract owners’ equity resulting from operations		1,034,190		(1,770,167	)	885,431		(1,262,902	)	354,925		(128,787	)	369,047		(69,399	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		158,175		(23,058	)	84,263		(10,909	)	50,280		1,416		339,871		25,757
Transfers between funds		375,772		3,961,815		342,626		3,232,018		751,457		2,474,769		3,589,076		441,048
Surrenders (note 6)		-		-		-		-		-		-		(31,207	)	(133	)
Death benefits (note 4)		(10,563	)	-		(9,499	)	-		(10,339	)	-		(4,323	)	-
Net policy repayments (loans) (note 5)		-		-		-		-		-		-		(15,738	)	(2,079	)
Deductions for surrender charges (note 2d)		-		-		-		-		-		-		-		-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(25,633	)	(17,240	)	(23,326	)	(14,818	)	(27,225	)	(13,426	)	(81,751	)	(5,092	)
Asset charges (note 3):
FPVUL & VEL contracts		-		-		-		-		-		-		(2,577	)	-
MSP contracts		-		-		-		-		-		-		(94	)	-
SL contracts or LSFP contracts		-		-		-		-		-		-		(441	)	-
Adjustments to maintain reserves		23		(36	)	4		(28	)	(7	)	(6	)	10		(149	)
Net equity transactions		497,774		3,921,481		394,068		3,206,263		764,166		2,462,753		3,792,826		459,352
Net change in contract owners’ equity		1,531,964		2,151,314		1,279,499		1,943,361		1,119,091		2,333,966		4,161,873		389,953
Contract owners’ equity beginning of period		2,151,314		-		1,943,361		-		2,333,966		-		389,953		-
Contract owners’ equity end of period	$	3,683,278		2,151,314		3,222,860		1,943,361		3,453,057		2,333,966		4,551,826		389,953
CHANGES IN UNITS:
Beginning units		388,890		-		329,815		-		243,364		-		46,516		-
Units purchased		91,459		391,257		65,829		331,699		77,198		244,739		400,426		47,251
Units redeemed		(13,067	)	(2,367	)	(5,182	)	(1,884	)	(3,677	)	(1,375	)	(13,012	)	(735	)
Ending units		467,282		388,890		390,462		329,815		316,885		243,364		433,930		46,516

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	WRGP					WRRESP				WRSTP				SVDF
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	1,688		(626	)	13,826		1,837		(1,918	)	(837	)	(807	)	(266	)
Realized gain (loss) on investments		(133,903	)	(36,095	)	(16,435	)	(81,141	)	(56,620	)	(46,103	)	(104,336	)	(30,313	)
Change in unrealized gain (loss) on investments		323,926		(167,825	)	261,570		(66,352	)	302,917		(187,296	)	487,368		(195,789	)
Reinvested capital gains		22,732		8,776		-		6,363		45,120		24,938		-		-
Net increase (decrease) in contract owners’ equity resulting from operations		214,443		(195,770	)	258,961		(139,293	)	289,499		(209,298	)	382,225		(226,368	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		56,691		5,435		25,094		7,209		39,226		72,014		616,594		615,569
Transfers between funds		77,182		587,958		373,198		249,341		81,080		806,472		(48,986	)	581,802
Surrenders (note 6)		(14,299	)	(196	)	(10,285	)	(8,175	)	(10,983	)	(53	)	-		-
Death benefits (note 4)		(4,802	)	-		(440	)	-		(1,273	)	-		-		-
Net policy repayments (loans) (note 5)		(879	)	-		(7,017	)	-		(2,344	)	(527	)	-		-
Deductions for surrender charges (note 2d)		-		-		-		-		-		-		-		-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(13,598	)	(5,434	)	(17,149	)	(4,992	)	(18,408	)	(8,362	)	(38,767	)	(11,578	)
Asset charges (note 3):
FPVUL & VEL contracts		(107	)	-		(51	)	-		(62	)	-		(1,758	)	-
MSP contracts		-		-		-		-		-		-		-		-
SL contracts or LSFP contracts		-		-		-		-		-		-		-		-
Adjustments to maintain reserves		27		5,695		20		(152	)	19		(79	)	20		(385	)
Net equity transactions		100,215		593,458		363,370		243,231		87,255		869,465		527,103		1,185,408
Net change in contract owners’ equity		314,658		397,688		622,331		103,938		376,754		660,167		909,328		959,040
Contract owners’ equity beginning of period		634,171		236,483		255,376		151,438		664,731		4,564		959,040		-
Contract owners’ equity end of period	$	948,829		634,171		877,707		255,376		1,041,485		664,731		1,868,368		959,040
CHANGES IN UNITS:
Beginning units		64,648		15,662		31,929		12,120		98,930		448		175,360		-
Units purchased		29,205		49,475		70,388		22,910		14,731		99,627		83,123		177,334
Units redeemed		(17,786	)	(489	)	(13,272	)	(3,101	)	(5,647	)	(1,145	)	(14,924	)	(1,974	)
Ending units		76,067		64,648		89,045		31,929		108,014		98,930		243,559		175,360

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	SVOF					WFVSCG				OGMVP				WIEP
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	(13,388	)	388,022		(4,336	)	(1,482	)	3,283		2,450		4,120		31,916
Realized gain (loss) on investments		(8,660,730	)	(955,001	)	(191,163	)	(236,374	)	(193,176	)	(3,630	)	93,379		103,019
Change in unrealized gain (loss) on investments		13,914,162		(13,787,129	)	1,103,171		(329,646	)	185,593		(115,404	)	52,379		(1,064,586	)
Reinvested capital gains		-		4,767,838		-		195,059		-		41,787		-		-
Net increase (decrease) in contract owners’ equity resulting from operations		5,240,044		(9,586,270	)	907,672		(372,443	)	(4,300	)	(74,797	)	149,878		(929,651	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		564,750		1,218,192		146,510		28,552		4		(7	)	60,794		93,414
Transfers between funds		(10,519,279	)	(2,983,915	)	2,020,761		1,088,648		(129,708	)	67		(1,259,905	)	(139,771	)
Surrenders (note 6)		(285,874	)	(873,707	)	(35,852	)	-		-		-		(48,578	)	(94,130	)
Death benefits (note 4)		(11,958	)	(22,889	)	(1,254	)	-		(70	)	(127	)	(3,223	)	(33,988	)
Net policy repayments (loans) (note 5)		(11,707	)	(48,236	)	48		-		-		-		9,172		(6,551	)
Deductions for surrender charges (note 2d)		(19,294	)	(56,570	)	-		-		-		-		-		(212	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(473,961	)	(745,101	)	(56,397	)	(11,689	)	(637	)	(1,727	)	(38,406	)	(73,440	)
Asset charges (note 3):
FPVUL & VEL contracts		(20,486	)	(45,030	)	(1,097	)	-		-		-		(2,429	)	(5,754	)
MSP contracts		(466	)	(1,029	)	(60	)	-		-		-		(218	)	(542	)
SL contracts or LSFP contracts		(3,725	)	(8,489	)	(243	)	-		-		-		(232	)	(1,646	)
Adjustments to maintain reserves		92		(450	)	9		751		14		(28	)	36		(302	)
Net equity transactions		(10,781,909	)	(3,567,224	)	2,072,425		1,106,262		(130,397	)	(1,822	)	(1,282,989	)	(262,922	)
Net change in contract owners’ equity		(5,541,865	)	(13,153,494	)	2,980,097		733,819		(134,697	)	(76,619	)	(1,133,111	)	(1,192,573	)
Contract owners’ equity beginning of period		13,859,973		27,013,467		733,819		-		134,697		211,316		1,134,351		2,326,924
Contract owners’ equity end of period	$	8,318,108		13,859,973		3,713,916		733,819		-		134,697		1,240		1,134,351
CHANGES IN UNITS:
Beginning units		1,600,488		1,866,960		130,587		-		10,719		10,832		105,435		127,440
Units purchased		113,035		108,819		313,709		138,794		6		1		4,315		5,441
Units redeemed		(1,055,324	)	(375,291	)	(10,971	)	(8,207	)	(10,725	)	(114	)	(109,657	)	(27,446	)
Ending units		658,199		1,600,488		433,325		130,587		-		10,719		93		105,435

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	WVCP					BF				SGRF				PVOEGB
	2009			2008		2009		2008		2009		2008		2009		2008
Investment activity:
Net investment income (loss)	$	6,746		8,140		94,608		383,052		(406	)	(2,953	)	(16	)	(101	)
Realized gain (loss) on investments		(125,903	)	15,559		(4,616,970	)	(61,898	)	(3,918,506	)	413,441		(6,492	)	(17,966	)
Change in unrealized gain (loss) on investments		196,067		(292,705	)	4,327,370		(6,090,269	)	4,212,112		(7,610,626	)	7,288		(7,288	)
Reinvested capital gains		-		-		-		1,615,670		-		-		-		-
Net increase (decrease) in contract owners’ equity resulting from operations		76,910		(269,006	)	(194,992	)	(4,153,445	)	293,200		(7,200,138	)	780		(25,355	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		27,857		32,466		336,393		1,052,975		331,413		1,115,813		158		8
Transfers between funds		(353,737	)	(51,855	)	(10,323,170	)	(1,782,086	)	(8,103,398	)	(1,251,125	)	(35,513	)	60,750
Surrenders (note 6)		(36,911	)	(21,312	)	(207,622	)	(1,076,197	)	(265,724	)	(1,098,547	)	-		-
Death benefits (note 4)		-		(1,092	)	(19,918	)	(205,108	)	(21,835	)	(72,248	)	(48	)	-
Net policy repayments (loans) (note 5)		16,372		(405	)	87,760		(19,186	)	39,812		(269,843	)	-		-
Deductions for surrender charges (note 2d)		-		(373	)	(6,951	)	(16,932	)	(12,947	)	(35,685	)	-		-
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(17,632	)	(21,975	)	(233,203	)	(669,162	)	(203,602	)	(724,726	)	(293	)	(496	)
Asset charges (note 3):
FPVUL & VEL contracts		(1,171	)	(1,809	)	(8,864	)	(35,434	)	(8,583	)	(41,647	)	-		-
MSP contracts		(8	)	(11	)	(312	)	(1,427	)	(216	)	(1,178	)	-		-
SL contracts or LSFP contracts		(10	)	(34	)	(1,832	)	(8,243	)	(1,184	)	(6,027	)	-		-
Adjustments to maintain reserves		(3,937	)	(115	)	45,482		535		7,252		(361	)	16		(7	)
Net equity transactions		(369,176	)	(66,515	)	(10,332,238	)	(2,760,265	)	(8,239,012	)	(2,385,574	)	(35,680	)	60,255
Net change in contract owners’ equity		(292,266	)	(335,521	)	(10,527,230	)	(6,913,710	)	(7,945,812	)	(9,585,712	)	(34,900	)	34,900
Contract owners’ equity beginning of period		292,469		627,990		10,527,230		17,440,940		7,945,812		17,531,524		34,900		-
Contract owners’ equity end of period	$	203		292,469		-		10,527,230		-		7,945,812		-		34,900
CHANGES IN UNITS:
Beginning units		39,119		44,824		1,018,519		1,263,008		930,055		1,115,074		6,380		-
Units purchased		3,509		3,054		293,304		100,580		36,753		130,643		6,302		6,441
Units redeemed		(42,608	)	(8,759	)	(1,311,823	)	(345,069	)	(966,808	)	(315,662	)	(12,682	)	(61	)
Ending units		20		39,119		-		1,018,519		-		930,055		-		6,380

(Continued)

Nationwide VLI Separate Account-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2009 and 2008

	WGIP
	2009			2008
Investment activity:
Net investment income (loss)	$	67,002		39,235
Realized gain (loss) on investments		(525,886	)	(69,942	)
Change in unrealized gain (loss) on investments		664,850		(661,518	)
Reinvested capital gains		-		125,539
Net increase (decrease) in contract owners’ equity resulting from operations		205,966		(566,686	)
Equity transactions:
Purchase payments received from contract owners (notes 2a and 6)		326,528		89,615
Transfers between funds		(1,151,660	)	(29,496	)
Surrenders (note 6)		(11,879	)	(72,339	)
Death benefits (note 4)		(657	)	(22,535	)
Net policy repayments (loans) (note 5)		(8,264	)	(30,028	)
Deductions for surrender charges (note 2d)		(1,052	)	(696	)
Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)		(46,279	)	(55,773	)
Asset charges (note 3):
FPVUL & VEL contracts		(2,382	)	(3,899	)
MSP contracts		(64	)	(131	)
SL contracts or LSFP contracts		(740	)	(1,343	)
Adjustments to maintain reserves		(277,596	)	(115	)
Net equity transactions		(1,174,045	)	(126,740	)
Net change in contract owners’ equity		(968,079	)	(693,426	)
Contract owners’ equity beginning of period		968,079		1,661,505
Contract owners’ equity end of period	$	-		968,079
CHANGES IN UNITS:
Beginning units		83,554		90,762
Units purchased		5,160		18,196
Units redeemed		(88,714	)	(25,404	)
Ending units		-		83,554

See accompanying notes to financial statements.

NATIONWIDE VLI SEPARATE ACCOUNT-4

NOTES TO FINANCIAL STATEMENTS

December 31, 2009 and 2008

(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:

AMERICAN FUNDS GROUP (THE)

Asset Allocation Fund - Class 2 (AMVAA2)

Bond Fund - Class 2 (AMVBD2)

Global Small Capitalization Fund - Class 2 (AMVGS2)

Growth Fund - Class 2 (AMVGR2)

BLACKROCK FUNDS

Large Cap Core V.I. Fund - Class II (MLVLC2)

Variable Series Funds, Inc. - Global Allocation V.I. Fund - Class II (MLVGA2)

CALVERT FUNDS

Variable Series, Inc. - Social Equity Portfolio (CVSSE)

CREDIT SUISSE ASSET MANAGEMENT

Credit Suisse Trust - International Equity Flex III Portfolio (CSIEF3)

U.S. Equity Flex I Portfolio (WSCP)

DAVIS FUNDS

Variable Account Fund, Inc. - Value Portfolio (DAVVL)

FIDELITY INVESTMENTS

VIP Fund - VIP Freedom Fund 2015 Portfolio - Service Class 2 (FF15S2)*

VIP Fund - VIP Freedom Fund 2025 Portfolio - Service Class 2 (FF25S2)*

J.P. MORGAN INVESTMENT MANAGEMENT INC.

Insurance Trust - Insurance Trust Diversified Mid Cap Growth Portfolio 1 (OGGO)

Insurance Trust - Insurance Trust Mid Cap Value Portfolio 1 (JPMMV1)

JPMorgan Insurance Trust Balanced Portfolio 1 (OGAA)*

JPMorgan Insurance Trust Core Bond Portfolio 1 (OGBDP)*

JPMorgan Insurance Trust Equity Index Portfolio 1 (OGEI)*

JPMorgan Insurance Trust Intrepid Growth Portfolio - Class 1 (OGLG)*

JPMorgan Insurance Trust Intrepid Mid Cap Portfolio 1 (OGDMP)*

JPMorgan Insurance Trust U.S. Equity Portfolio 1 (OGDEP)*

JANUS FUNDS

Janus Aspen Series - Balanced Portfolio - Service Shares (JABS)

Janus Aspen Series - Forty Portfolio - Service Shares (JACAS)

Janus Aspen Series - Global Technology Portfolio - Service Shares (JAGTS)

Janus Aspen Series - INTECH Risk-Managed Core Portfolio - Service Shares (JARLCS)*

Janus Aspen Series - Overseas Portfolio - Service II Shares (JAIGS2)

Janus Aspen Series - Overseas Portfolio - Service Shares (JAIGS)

LORD ABBETT FUNDS

Series Fund - Mid Cap Value Portfolio - Class VC (LOVMCV)

MASSACHUSETTS FINANCIAL SERVICES CO.

Investors Growth Stock Series - Initial Class (MIGIC)

Research International Series - Service Class (MVRISC)

Value Series - Initial Class (MVFIC)

Value Series - Service Class (MVFSC)

Variable Insurance Trust II - International Value Portfolio - Service Class (MVIVSC)

MORGAN STANLEY

Core Plus Fixed Income Portfolio - Class I (MSVFI)

Emerging Markets Debt Portfolio - Class I (MSEM)

Emerging Markets Debt Portfolio - Class II (MSEMB)*

Mid Cap Growth Portfolio - Class II (MSVMG2)*

Mid Cap Growth Portfolio - class I (MSVMG)

The Universal Institutional Funds, Inc. - Capital Growth Portfolio - Class I (MSVEG)

U.S. Mid Cap Value Portfolio - Class I (MSVMV)*

U.S. Real Estate Portfolio - Class I (MSVRE)

NATIONWIDE FUNDS GROUP

AllianceBernstein NVIT Global Fixed Income Fund - Class III (NVAGF3)

American Century NVIT Multi Cap Value Fund - Class I (NVAMV1)

American Funds NVIT Asset Allocation Fund - Class II (GVAAA2)

American Funds NVIT Bond Fund - Class II (GVABD2)

American Funds NVIT Global Growth Fund - Class II (GVAGG2)

American Funds NVIT Growth Fund - Class II (GVAGR2)

American Funds NVIT Growth-Income Fund - Class II (GVAGI2)

Federated NVIT High Income Bond Fund - Class I (HIBF)

Federated NVIT High Income Bond Fund - Class III (HIBF3)

Gartmore NVIT Emerging Markets Fund - Class I (GEM)

Gartmore NVIT Emerging Markets Fund - Class III (GEM3)

Gartmore NVIT Global Utilities Fund - Class I (GVGU1)

Gartmore NVIT International Equity Fund - Class I (GIG)

Gartmore NVIT International Equity Fund - Class III (GIG3)

Gartmore NVIT International Equity Fund - Class VI (NVIE6)

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

Gartmore NVIT Worldwide Leaders Fund - Class I (GEF)

Gartmore NVIT Worldwide Leaders Fund - Class III (GEF3)

Neuberger Berman NVIT Multi Cap Opportunities Fund - Class I (NVNMO1)

Neuberger Berman NVIT Socially Responsible Fund - Class I (NVNSR1)

Neuberger Berman NVIT Socially Responsible Fund - Class II (NVNSR2)*

NVIT Cardinal Aggressive Fund - Class I (NVCRA1)

NVIT Cardinal Balanced Fund - Class I (NVCRB1)

NVIT Cardinal Capital Appreciation Fund - Class I (NVCCA1)

NVIT Cardinal Conservative Fund - Class I (NVCCN1)

NVIT Cardinal Moderate Fund - Class I (NVCMD1)

NVIT Cardinal Moderately Aggressive Fund - Class I (NVCMA1)

NVIT Cardinal Moderately Conservative Fund - Class I (NVCMC1)

NVIT Core Bond Fund - Class I (NVCBD1)

NVIT Core Plus Bond Fund - Class I (NVLCP1)

NVIT Fund - Class I (TRF)

NVIT Global Financial Services Fund - Class I (GVGF1)

NVIT Government Bond Fund - Class I (GBF)

NVIT Growth Fund - Class I (CAF)

NVIT Health Sciences Fund - Class I (GVGH1)

NVIT Health Sciences Fund - Class III (GVGHS)

NVIT International Index Fund - Class II (GVIX2)

NVIT International Index Fund - Class VI (GVIX6)

NVIT Investor Destinations Aggressive Fund - Class II (GVIDA)

NVIT Investor Destinations Balanced Fund - Class II (NVDBL2)

NVIT Investor Destinations Capital Appreciation Fund - Class II (NVDCA2)

NVIT Investor Destinations Conservative Fund - Class II (GVIDC)

NVIT Investor Destinations Moderate Fund - Class II (GVIDM)

NVIT Investor Destinations Moderately Aggressive Fund - Class II (GVDMA)

NVIT Investor Destinations Moderately Conservative Fund - Class II (GVDMC)

NVIT Leaders Fund - Class I (GVUS1)

NVIT Mid Cap Index Fund - Class I (MCIF)

NVIT Mid Cap Index Fund - Class II (MCIF2)*

NVIT Money Market Fund - Class I (SAM)

NVIT Money Market Fund - Class V (SAM5)

NVIT Multi-Manager International Growth Fund - Class III (NVMIG3)

NVIT Multi-Manager International Value Fund - Class I (GVDIVI)

NVIT Multi-Manager International Value Fund - Class III (GVDIV3)

NVIT Multi-Manager Large Cap Growth Fund - Class I (NVMLG1)

NVIT Multi-Manager Large Cap Value Fund - Class I (NVMLV1)

NVIT Multi-Manager Mid Cap Growth Fund - Class I (NVMMG1)

NVIT Multi-Manager Mid Cap Value Fund - Class I (NVMMV1)*

NVIT Multi-Manager Mid Cap Value Fund - Class II (NVMMV2)

NVIT Multi-Manager Small Cap Growth Fund - Class I (SCGF)

NVIT Multi-Manager Small Cap Value Fund - Class I (SCVF)

NVIT Multi-Manager Small Company Fund - Class I (SCF)

NVIT Multi-Sector Bond Fund - Class I (MSBF)

NVIT Short Term Bond Fund - Class I (NVSTB1)

NVIT Short Term Bond Fund - Class II (NVSTB2)

NVIT Technology & Communications Fund - Class I (GGTC)

NVIT Technology & Communications Fund - Class III (GGTC3)

NVIT U.S. Growth Leaders Fund - Class I (GVUG1)

Oppenheimer NVIT Large Cap Growth Fund - Class I (NVOLG1)

Templeton NVIT International Value Fund - Class III (NVTIV3)

Van Kampen NVIT Comstock Value Fund - Class I (EIF)

Van Kampen NVIT Real Estate Fund - Class I (NVRE1)

NEUBERGER & BERMAN MANAGEMENT, INC.

Advisers Management Trust - Short Duration Bond Portfolio - I Class Shares (AMTB)

PIONEER INVESTMENTS

Variable Contracts Trust - High Yield VCT Portfolio - Class II Shares (PIHYB2)*

Portfolios of the AIM Variable Insurance Funds

V.I. Basic Value Fund - Series I (AVBVI)

V.I. Capital Appreciation Fund - Series I (AVCA)

V.I. Capital Development Fund - Series I (AVCDI)

V.I. International Growth Fund - Series I (AVIE)

V.I. Mid Cap Core Equity Fund - Series I (AVMCCI)*

Portfolios of the AllianceBernstein Variable Products Series Fund, Inc.

VPS Growth and Income Portfolio - Class A (ALVGIA)

VPS Growth and Income Portfolio - Class B (ALVGIB)*

VPS International Value Portfolio - Class A (ALVIVA)

VPS International Value Portfolio - Class B (ALVIVB)*

VPS Small/Mid Cap Value Portfolio: Class A (ALVSVA)

VPS Small/Mid Cap Value Portfolio: Class B (ALVSVB)*

Portfolios of the American Century Variable Portfolios, Inc.

VP Income & Growth Fund - Class I (ACVIG)

VP Inflation Protection Fund - Class II (ACVIP2)

VP International Fund - Class I (ACVI)

VP International Fund - Class III (ACVI3)*

VP Mid Cap Value Fund - Class I (ACVMV1)

VP Mid Cap Value Fund - Class II (ACVMV2)*

VP Ultra(R) Fund - Class I (ACVU1)

VP Value Fund - Class I (ACVV)

VP Value Fund - Class II (ACVV2)*

VP Vista(SM) Fund - Class I (ACVVS1)

VP Vista(SM) Fund - Class II (ACVVS2)*

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

Portfolios of the Dreyfus Investment Portfolios

MidCap Stock Portfolio - Initial Shares (DVMCS)

Small Cap Stock Index Portfolio - Service Shares (DVSCS)

Stock Index Fund, Inc. - Initial Shares (DSIF)

Stock Index Fund, Inc. - Service Shares (DSIFS)*

The Dreyfus Socially Responsible Growth Fund, Inc. - Initial Shares (DSRG)

Portfolios of the Dreyfus Variable Investment Fund

Appreciation Portfolio - Initial Shares (DCAP)

Appreciation Portfolio - Service Shares (DCAPS)*

Developing Leaders Portfolio - Initial Shares (DSC)

International Value Portfolio - Initial Shares (DVIV)

Portfolios of the DWS Investments Variable Insurance Trust

Small Cap Index VIP - Class A (BISCI)*

Variable Series II - Dreman Small Mid Cap Value VIP - Class B (SVSSVB)

Variable Series II - Strategic Value VIP - Class B (SVSHEB)

Portfolios of the Federated Insurance Series

Capital Appreciation Fund II - Primary Shares (FVCA2P)

Clover Value Fund II - Primary Shares (FALF)

Market Opportunity Fund II - Service Shares (FVMOS)

Quality Bond Fund II - Primary Shares (FQB)

Quality Bond Fund II - Service Shares (FQBS)*

Portfolios of the Fidelity (R Variable Insurance Products Fund FidelityR)

VIP Fund - Contrafund Portfolio - Service Class (FCS)

VIP Fund - Energy Portfolio - Service Class 2 (FNRS2)

VIP Fund - Equity-Income Portfolio - Service Class (FEIS)

VIP Fund - Equity-Income Portfolio - Service Class 2 (FEI2)*

VIP Fund - Freedom Fund 2010 Portfolio - Service Class (FF10S)

VIP Fund - Freedom Fund 2020 Portfolio - Service Class (FF20S)

VIP Fund - Freedom Fund 2020 Portfolio - Service Class 2 (FF20S2)*

VIP Fund - Freedom Fund 2030 Portfolio - Service Class (FF30S)

VIP Fund - Freedom Fund 2030 Portfolio - Service Class 2 (FF30S2)*

VIP Fund - Growth & Income Portfolio - Service Class (FGIS)

VIP Fund - Growth Opportunities Portfolio - Service Class (FGOS)

VIP Fund - Growth Portfolio - Service Class (FGS)

VIP Fund - Growth Portfolio - Service Class 2 (FG2)*

VIP Fund - High Income Portfolio - Service Class (FHIS)

VIP Fund - High Income Portfolio - Service Class R (FHISR)

VIP Fund - Index 500 Portfolio - Initial Class (FIP)

VIP Fund - Investment Grade Bond Portfolio - Service Class (FIGBS)

VIP Fund - Investment Grade Bond Portfolio - Service Class 2 (FIGBP2)*

VIP Fund - Mid Cap Portfolio - Service Class (FMCS)

VIP Fund - Mid Cap Portfolio - Service Class 2 (FMC2)*

VIP Fund - Overseas Portfolio - Service Class (FOS)

VIP Fund - Overseas Portfolio - Service Class R (FOSR)

VIP Fund - Value Strategies Portfolio - Service Class (FVSS)

VIP Fund - VIP Freedom Fund 2015 Portfolio - Service Class (FF15S)

VIP Fund - VIP Freedom Fund 2025 Portfolio - Service Class (FF25S)

Portfolios of the Franklin Templeton Variable Insurance Products Trust

Franklin Income Securities Fund - Class 2 (FTVIS2)

Franklin Rising Dividends Securities Fund - Class 1 (FTVRDI)

Franklin Small Cap Value Securities Fund - Class 1 (FTVSVI)

Franklin Small Cap Value Securities Fund - Class 2 (FTVSV2)

Mutual Discovery Global Securities Fund - Class 2 (FTVMD2)

Templeton Developing Markets Securities Fund - Class 3 (FTVDM3)

Templeton Foreign Securities Fund - Class 1 (TIF)

Templeton Foreign Securities Fund - Class 2 (TIF2)

Templeton Foreign Securities Fund - Class 3 (TIF3)

Templeton Global Bond Securities Fund - Class 2 (FTVGI2)

Templeton Global Bond Securities Fund - Class 3 (FTVGI3)

VIP Founding Funds Allocation Fund - Class 2 (FTVFA2)

Portfolios of the Goldman Sachs Variable Insurance Trust

Goldman Sachs VIT - Goldman Sachs Mid Cap Value Fund - Institutional Shares (GVMCE)

Portfolios of the Legg Mason Partners Variable Equity Trust

ClearBridge Variable Small Cap Growth Portfolio - Class I (SBVSG)

Portfolios of the Lincoln Variable Insurance Products Trust

Brandes International Equity Fund (MFBIE)*

Business Opportunity Value Fund (MFBOV)*

Frontier Capital Appreciation Fund (MFFCA)*

Lincoln VIP Trust - Baron Growth Opportunities Funds - Service Class (BNCAI)

M Large Cap Growth Fund (MFTCG)*

Portfolios of the Neuberger Berman Advisers Management Trust

Guardian Portfolio - I Class Shares (AMGP)

International Portfolio - S Class Shares (AMINS)*

Mid-Cap Growth Portfolio - I Class Shares (AMCG)

Partners Portfolio- I Class Shares (AMTP)

Regency Portfolio - I Class Shares (AMRI)

Regency Portfolio - S Class Shares (AMRS)*

Small-Cap Growth Portfolio - S Class Shares (AMFAS)

Socially Responsive Portfolio - I Class Shares (AMSRS)

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

Portfolios of the Oppenheimer Variable Account Funds

Capital Appreciation Fund/VA - Service Class (OVCAFS)*

Capital Appreciation Fund/VA - Non-Service Shares (OVGR)

Global Securities Fund/VA - Class 3 (OVGS3)

Global Securities Fund/VA - Non-Service Shares (OVGS)

Global Securities Fund/VA - Service Class (OVGSS)*

High Income Fund/VA - Class 3 (OVHI3)

High Income Fund/VA - Non-Service Shares (OVHI)

Main Street Fund(R)/VA - Non-Service Shares (OVGI)

Main Street Small Cap Fund(R)/VA - Non-Service Shares (OVSC)

MidCap Fund/VA - Non-Service Shares (OVAG)

Strategic Bond Fund/VA - Non-Service Shares (OVSB)

Portfolios of the PIMCO Variable Insurance Trust

All Asset Portfolio - Administrative Class (PMVAAA)

Foreign Bond Portfolio (Unhedged) - Administrative Class (PMVFBA)

Low Duration Portfolio - Administrative Class (PMVLDA)

Real Return Portfolio - Administrative Class (PMVRRA)

Total Return Portfolio - Administrative Class (PMVTRA)

Portfolios of the Pioneer Variable Contracts Trust

Variable Contracts Trust - Emerging Markets VCT Portfolio - Class I Shares (PIVEMI)

Variable Contracts Trust - High Yield VCT Portfolio - Class I Shares (PIHYB1)

Portfolios of the Putnam Variable Trust

Putnam VT Growth and Income Fund - IB Shares (PVGIB)

Putnam VT International Equity Fund - IB Shares (PVTIGB)

Putnam VT Small Cap Value Fund - IB Shares (PVTSCB)

Putnam VT Vista Fund - IB Shares (PVVIB)

Putnam VT Voyager Fund - IB Shares (PVTVB)

Portfolios of the Van Kampen - The Universal Institutional Funds, Inc.

Global Real Estate Portfolio - Class II (VKVGR2)

Portfolios of the Van Kampen Life Investment Trust

Capital Growth Portfolio - Class II (ACEG2)*

ROYCE CAPITAL FUNDS

Micro-Cap Portfolio - Investment Class (ROCMC)

Small-Cap Portfolio - Investment Class (ROCSC)

T. ROWE PRICE

Blue Chip Growth Portfolio - II (TRBCG2)

Equity Income Portfolio - II (TREI2)

Health Sciences Portfolio - II (TRHS2)

Limited-Term Bond Portfolio - II (TRLT2)*

Mid-Cap Growth Portfolio - II (TRMCG2)

New America Growth Portfolio (TRNAG1)

Personal Strategy Balanced Portfolio (TRPSB1)

VAN ECK ASSOCIATES CORPORATION

Worldwide Insurance Trust - Worldwide Emerging Markets Fund - Initial Class (VWEM)

Worldwide Insurance Trust - Worldwide Hard Assets Fund - Initial Class (VWHA)

VANGUARD GROUP OF INVESTMENT COMPANIES

Vanguard(R) Variable Insurance Funds - Balanced Portfolio (VVB)

Vanguard(R) Variable Insurance Funds - Diversified Value Portfolio (VVDV)

Vanguard(R) Variable Insurance Funds - International Portfolio (VVI)

Vanguard(R) Variable Insurance Funds - Mid-Cap Index Portfolio (VVMCI)

Vanguard(R) Variable Insurance Funds - Short-Term Investment-Grade Portfolio (VVSTC)

WADDELL & REED, INC.

Ivy Fund Variable Insurance Portfolios, Inc. - Asset Strategy (WRASP)

Ivy Fund Variable Insurance Portfolios, Inc. - Growth (WRGP)

Ivy Fund Variable Insurance Portfolios, Inc. - Real Estate Securities (WRRESP)

Ivy Fund Variable Insurance Portfolios, Inc. - Science and Technology (WRSTP)

WELLS FARGO FUNDS

Advantage Funds Variable Trust - VT Discovery Fund (SVDF)

Advantage Funds Variable Trust - VT Opportunity Fund (SVOF)

Advantage Funds Variable Trust - VT Small Cap Growth Fund (WFVSCG)

Z CLOSED FUNDS

International Equity Flex I Portfolio (obsolete) (WIEP)*

International Equity Flex II Portfolio (obsolete) (WVCP)*

Insurance Trust - Insurance Trust Diversified Mid Cap Value Portfolio 1 (obsolete) (OGMVP)*

J.P. Morgan NVIT Balanced Fund - Class I (obsolete) (BF)*

NVIT Mid Cap Growth Fund - Class I (obsolete) (SGRF)*

Putnam VT OTC & Emerging Growth Fund - IB Shares (obsolete) (PVOEGB)*

U.S. Equity Flex II Portfolio (obsolete) (WGIP)*

* At December 31, 2009, 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.

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.

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

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 at the closing net asset value per share at December 31, 2009 of such funds, which represents 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 Standards

In September 2006, the FASB issued FASB ASC 820, Fair Value Measurements and Disclosures (SFAS No. 157, Fair Value Measurements). FASB ASC 820 provides enhanced guidance for using fair value to measure assets and liabilities and requires new disclosures about fair value measurements and 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. FASB ASC 820 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.

FASB ASC 820 was effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years, with early adoption permitted. The Account adopted FASB ASC 820 effective January 1, 2008. The adoption of FASB ASC 820 did not have a material impact on the Account’s financial position or results of operations.

In September 2009 the FASB issued ASU 2009-12, which amends FASB ASC 820, Fair Value Measurements and Disclosures. This guidance applies to reporting entities that hold an investment that is required or permitted to be measured or disclosed at fair value on a recurring or nonrecurring basis if the investment does not have a readily determinable fair value and the investee has attributes of an investment company. For these investments, this update allows, as a practical expedient, the use of net asset value (NAV) as the basis to estimate fair value as long as it is not probable, as of the measurement date that the investment will be sold and NAV is not the value that will be used in the sale. The NAVs must be calculated consistent with the American Institute of Certified Public Accountants Audit and Accounting Guide, Investment Companies, which generally requires these investments to be measured at fair value. Additionally, the guidance provided updated disclosures for investments within its scope and noted that if the investor can redeem the investment with the investee on the measurement date at NAV, the investment should likely be classified as Level 2 in the fair value hierarchy. Investments that cannot be redeemed with the investee at NAV would generally be classified as Level 3 in the fair value hierarchy. If the investment is not redeemable with the investee on the measurement date, but will be at a future date, the length of time until the investment is redeemable should be considered in determining classification as Level 2 or 3. This guidance is effective for interim and annual periods ending after December 15, 2009 with early adoption permitted. The Account adopted this guidance effective the period ending December 31, 2009. The adoption of this guidance did not have a material impact on the financial statements of the Account.

(g) Subsequent Events

The Company evaluated subsequent events through the date the financial statements were issued with the SEC.

(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 from each premium payment received to compensate us for our sales expenses and premium taxes, and certain actual expenses, including acquisition costs. 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.

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 and Nationwide MarathonSM 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, 2009 and 2008, total front-end sales charge deductions were $12,945,103 and $18,211,128, 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).

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

(c) Administrative Charges

For The Best of America® Next Generation, Choice LifeSM and all flexible premium survivorship contracts, 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 The Best of America® Last Survivorship II and The Best of America® ChoiceLife Survivorship Life contracts, an administrative (per Specified Amount) charge is assessed to reimburse us for sales, underwriting, distribution and issuance costs. This charge is deducted from the policy’s Cash Value. During the first ten years from the Policy Date, the current monthly charge is $0.04 per $1,000 of Specified Amount, subject to a minimum charge of $20 and a maximum charge of $80 per month. These rates represent the maximum guaranteed charge for all years. After the tenth year from the Policy Date, the current monthly charge is $0.04 per $1,000 of Specified Amount, subject to a minimum charge of $20 and a maximum charge of $80 per month. These rates represent the maximum guaranteed charge for all years. After the tenth year from the Policy Date, the current monthly charge is $0.02 per $1,000 of Specified Amount with a $10 minimum and $40 maximum charge.

For The Best of America® ChoiceLifeSM Survivorship II and Next GenerationSM Survivorship Life 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 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). We also deduct a per $1,000 of Specified Amount charge to compensate us for sales, underwriting, distribution and issuance of the policy. This charge is assessed monthly against each contract by liquidating units. This charge varies depending on the total Specified Amount. For Future Corporate Flexible Premium Variable Universal Life, the Company deducts a per $1,000 of Specified Amount that will not exceed $0.40 per $1,000 of Specified Amount, unless the policy is issued in the state of New York with an application signed on or after January 2, 2010, where the maximum guaranteed charge is $0.085 of Specified Amount. For Next Generation and Nationwide MarathonSM Corporate Owned Flexible Premium Variable Universal Life, the Company deducts a per $1,000 of Specified Amount charge that will not exceed $0.40 per $1,000 of Specified Amount.

(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. In policy years 1- 10, the Company also deducts a charge equal to the annualized rate of 0.5% of the cash surrender value of the sub-accounts to remiburse us for taxes imposed by federal, state and local governments. These charges are assessed monthly against each contract by liquidating units.

(b) Flexible Premium and Variable Executive Life Contracts (FPVUL and VEL)

For Best of America® The Next Generation and 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 The Best of America® Last Survivorship II and The Best of America® ChoiceLife Survivorship contracts, during the first ten policy years, the Company deducts a charge of $0.46 per $1,000 on the 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 The Best of America® 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 The Best of America® 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 policies issued on or after January 1, 2009. This charge is guaranteed not to exceed an annualized rate of 0.75% of the daily net assets of the Account for policies issued prior to January 1, 2009. 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.

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

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. For Nationwide MarathonSM Corporate Owned Flexible Premium Variable Universal Life, the Company deducts a charge guaranteed not to exceed an annualized rate of 0.90% of the daily net asset value of the Account. Currently, this rate will not exceed 0.50%. 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 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 contract owners, as applicable, on the accompanying Statements of Change in Contract Owner’s 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, 2009 and 2008, total transfers into the Account from the fixed account were $57,576,680 and $37,793,952, respectively, and total transfers from the Account to the fixed account were $123,242,143 and $78,945,707, respectively.

(7) Fair Value Measurement

FASB ASC 820 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 FASB ASC 820, 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 Account 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. These funds have no unfunded commitments or restrictions and the Account always has the ability to redeem its interest in the funds with the investee at NAV daily. The investment objectives of these mutual funds are described by the fund name in note 1(b) and in more detail in the applicable product prospectus.  

• 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, 2009:

	Level 1	Level 2		Level 3	Total
Separate Account Investments	0	$	3,764,648,339	0	$	3,764,648,339

Net Accounts Payable of $826,961 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 FASB ASC 820.

The cost of purchases and sales of Investments for the year ended December 31, 2009 are as follows:

	Purchases of Investments		Sales of Investments
Asset Allocation Fund - Class 2 (AMVAA2)	$	472,104	$	234,137
Bond Fund - Class 2 (AMVBD2)		506,626		281,904
Global Small Capitalization Fund - Class 2 (AMVGS2)		659,551		439,461
Growth Fund - Class 2 (AMVGR2)		900,727		759,460
Large Cap Core V.I. Fund - Class II (MLVLC2)		875,607		912,177
Variable Series Funds, Inc. - Global Allocation V.I. Fund - Class II (MLVGA2)		2,987,397		72,268
Variable Series, Inc. - Social Equity Portfolio (CVSSE)		109,252		66,069
Credit Suisse Trust - International Equity Flex III Portfolio (CSIEF3)		798,973		326,152
U.S. Equity Flex I Portfolio (WSCP)		1,858,082		166,709
Variable Account Fund, Inc. - Value Portfolio (DAVVL)		1,854,283		925,399
Insurance Trust - Insurance Trust Diversified Mid Cap Growth Portfolio 1 (OGGO)		930,973		1,745,876

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

Insurance Trust - Insurance Trust Mid Cap Value Portfolio 1 (JPMMV1)	129,776	1,200
Janus Aspen Series - Balanced Portfolio - Service Shares (JABS)	7,044,932	3,789,794
Janus Aspen Series - Forty Portfolio - Service Shares (JACAS)	7,375,276	7,330,075
Janus Aspen Series - Global Technology Portfolio - Service Shares (JAGTS)	2,328,389	2,848,910
Janus Aspen Series - INTECH Risk-Managed Core Portfolio - Service Shares (JARLCS)	18,308	653,777
Janus Aspen Series - Overseas Portfolio - Service II Shares (JAIGS2)	5,003,753	3,462,432
Janus Aspen Series - Overseas Portfolio - Service Shares (JAIGS)	6,271,776	13,426,434
Series Fund - Mid Cap Value Portfolio - Class VC (LOVMCV)	740,718	1,202,684
Investors Growth Stock Series - Initial Class (MIGIC)	441,934	792,160
Research International Series - Service Class (MVRISC)	355,307	41,429
Value Series - Initial Class (MVFIC)	1,689,836	1,710,509
Value Series - Service Class (MVFSC)	3,111,659	2,225,721
Variable Insurance Trust II - International Value Portfolio - Service Class (MVIVSC)	3,681,930	614,569
Core Plus Fixed Income Portfolio - Class I (MSVFI)	458,191	986,038
Emerging Markets Debt Portfolio - Class I (MSEM)	4,405,830	8,303,333
Mid Cap Growth Portfolio - class I (MSVMG)	3,381,106	8,319,235
The Universal Institutional Funds, Inc. - Capital Growth Portfolio - Class I (MSVEG)	58,044	18,630
U.S. Real Estate Portfolio - Class I (MSVRE)	7,623,123	67,470,109
AllianceBernstein NVIT Global Fixed Income Fund - Class III (NVAGF3)	288,499	15,747
American Century NVIT Multi Cap Value Fund - Class I (NVAMV1)	69,393	40,862
American Funds NVIT Asset Allocation Fund - Class II (GVAAA2)	620,020	621,925
American Funds NVIT Bond Fund - Class II (GVABD2)	1,109,257	1,337,254
American Funds NVIT Global Growth Fund - Class II (GVAGG2)	1,390,897	1,191,074
American Funds NVIT Growth Fund - Class II (GVAGR2)	1,966,090	2,162,092
American Funds NVIT Growth-Income Fund - Class II (GVAGI2)	894,341	742,065
Federated NVIT High Income Bond Fund - Class I (HIBF)	6,671,925	7,842,168
Federated NVIT High Income Bond Fund - Class III (HIBF3)	8,831,918	6,943,636
Gartmore NVIT Emerging Markets Fund - Class I (GEM)	8,092,041	19,720,686
Gartmore NVIT Emerging Markets Fund - Class III (GEM3)	2,796,410	4,488,280
Gartmore NVIT Global Utilities Fund - Class I (GVGU1)	637,422	1,982,167
Gartmore NVIT International Equity Fund - Class I (GIG)	3,254,153	9,280,378
Gartmore NVIT International Equity Fund - Class III (GIG3)	3,430,678	343,860
Gartmore NVIT International Equity Fund - Class VI (NVIE6)	453,082	70,094
Gartmore NVIT Worldwide Leaders Fund - Class I (GEF)	605,023	1,174,436
Gartmore NVIT Worldwide Leaders Fund - Class III (GEF3)	14,514	365
Neuberger Berman NVIT Multi Cap Opportunities Fund - Class I (NVNMO1)	14,832,465	1,220,310
Neuberger Berman NVIT Socially Responsible Fund - Class I (NVNSR1)	204,702	89,350
NVIT Cardinal Aggressive Fund - Class I (NVCRA1)	265,652	368,946
NVIT Cardinal Balanced Fund - Class I (NVCRB1)	383,819	176,204
NVIT Cardinal Capital Appreciation Fund - Class I (NVCCA1)	858,430	63,623
NVIT Cardinal Conservative Fund - Class I (NVCCN1)	862,013	341,746
NVIT Cardinal Moderate Fund - Class I (NVCMD1)	1,849,206	586,200
NVIT Cardinal Moderately Aggressive Fund - Class I (NVCMA1)	2,075,219	1,384,040
NVIT Cardinal Moderately Conservative Fund - Class I (NVCMC1)	325,135	30,319
NVIT Core Bond Fund - Class I (NVCBD1)	934,912	541,647
NVIT Core Plus Bond Fund - Class I (NVLCP1)	318,336	208,907
NVIT Fund - Class I (TRF)	5,568,522	6,956,965
NVIT Global Financial Services Fund - Class I (GVGF1)	1,532,186	3,116,396
NVIT Government Bond Fund - Class I (GBF)	21,287,928	31,995,363
NVIT Growth Fund - Class I (CAF)	1,366,328	1,038,796
NVIT Health Sciences Fund - Class I (GVGH1)	641,477	1,081,642
NVIT Health Sciences Fund - Class III (GVGHS)	564,554	1,257,635
NVIT International Index Fund - Class II (GVIX2)	3,404,821	1,020,239
NVIT International Index Fund - Class VI (GVIX6)	291,799	520,594
NVIT Investor Destinations Aggressive Fund - Class II (GVIDA)	4,444,495	5,325,172
NVIT Investor Destinations Balanced Fund - Class II (NVDBL2)	22,270	465
NVIT Investor Destinations Capital Appreciation Fund - Class II (NVDCA2)	165,252	42,861
NVIT Investor Destinations Conservative Fund - Class II (GVIDC)	5,831,132	18,784,982
NVIT Investor Destinations Moderate Fund - Class II (GVIDM)	23,032,766	12,116,289
NVIT Investor Destinations Moderately Aggressive Fund - Class II (GVDMA)	10,697,405	11,958,204
NVIT Investor Destinations Moderately Conservative Fund - Class II (GVDMC)	3,809,289	5,665,340
NVIT Leaders Fund - Class I (GVUS1)	403,031	1,387,350
NVIT Mid Cap Index Fund - Class I (MCIF)	8,958,841	16,291,212
NVIT Money Market Fund - Class I (SAM)	43,012,760	65,373,637
NVIT Money Market Fund - Class V (SAM5)	150,034,976	224,446,081
NVIT Multi-Manager International Growth Fund - Class III (NVMIG3)	16,786,639	957,528
NVIT Multi-Manager International Value Fund - Class I (GVDIVI)	25,352	336,260
NVIT Multi-Manager International Value Fund - Class III (GVDIV3)	507,028	2,293,707
NVIT Multi-Manager Large Cap Growth Fund - Class I (NVMLG1)	2,484,991	399,243
NVIT Multi-Manager Large Cap Value Fund - Class I (NVMLV1)	3,663,990	540,928
NVIT Multi-Manager Mid Cap Growth Fund - Class I (NVMMG1)	29,813,384	2,215,203
NVIT Multi-Manager Mid Cap Value Fund - Class I (NVMMV1)	8,306	10,651
NVIT Multi-Manager Mid Cap Value Fund - Class II (NVMMV2)	11,639,512	1,327,248
NVIT Multi-Manager Small Cap Growth Fund - Class I (SCGF)	1,226,218	3,836,095
NVIT Multi-Manager Small Cap Value Fund - Class I (SCVF)	1,985,830	11,067,422
NVIT Multi-Manager Small Company Fund - Class I (SCF)	6,474,009	25,315,914
NVIT Multi-Sector Bond Fund - Class I (MSBF)	6,039,469	6,814,969
NVIT Short Term Bond Fund - Class I (NVSTB1)	921,430	365,983
NVIT Short Term Bond Fund - Class II (NVSTB2)	4,166,563	2,234,982
NVIT Technology & Communications Fund - Class I (GGTC)	1,137,782	2,012,620
NVIT Technology & Communications Fund - Class III (GGTC3)	1,025,451	1,429,171
NVIT U.S. Growth Leaders Fund - Class I (GVUG1)	285,314	3,853,393
Oppenheimer NVIT Large Cap Growth Fund - Class I (NVOLG1)	440,833	27,618
Templeton NVIT International Value Fund - Class III (NVTIV3)	150,785	40,044

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

Van Kampen NVIT Comstock Value Fund - Class I (EIF)	523,563	2,480,464
Van Kampen NVIT Real Estate Fund - Class I (NVRE1)	21,463,163	1,740,020
Advisers Management Trust - Short Duration Bond Portfolio - I Class Shares (AMTB)	2,062,227	2,249,823
V.I. Basic Value Fund - Series I (AVBVI)	752,690	8,135,514
V.I. Capital Appreciation Fund - Series I (AVCA)	240,309	249,823
V.I. Capital Development Fund - Series I (AVCDI)	2,625,855	6,712,588
V.I. International Growth Fund - Series I (AVIE)	9,797,692	10,513,577
VPS Growth and Income Portfolio - Class A (ALVGIA)	2,169,235	5,386,450
VPS International Value Portfolio - Class A (ALVIVA)	11,871,742	30,167,057
VPS Small/Mid Cap Value Portfolio: Class A (ALVSVA)	3,092,176	2,983,968
VP Income & Growth Fund - Class I (ACVIG)	1,246,301	3,134,812
VP Inflation Protection Fund - Class II (ACVIP2)	12,662,305	3,943,186
VP International Fund - Class I (ACVI)	5,273,396	20,337,669
VP International Fund - Class III (ACVI3)	772,460	10,861,122
VP Mid Cap Value Fund - Class I (ACVMV1)	1,175,458	1,003,668
VP Ultra(R) Fund - Class I (ACVU1)	305,422	3,741,090
VP Value Fund - Class I (ACVV)	8,714,015	12,914,753
VP Vista(SM) Fund - Class I (ACVVS1)	1,311,317	5,272,214
MidCap Stock Portfolio - Initial Shares (DVMCS)	320,622	405,984
Small Cap Stock Index Portfolio - Service Shares (DVSCS)	11,801,145	10,235,584
Stock Index Fund, Inc. - Initial Shares (DSIF)	52,759,517	82,053,106
The Dreyfus Socially Responsible Growth Fund, Inc. - Initial Shares (DSRG)	475,622	1,781,306
Appreciation Portfolio - Initial Shares (DCAP)	5,008,885	4,895,797
Developing Leaders Portfolio - Initial Shares (DSC)	196,285	418,894
International Value Portfolio - Initial Shares (DVIV)	4,047,697	10,816,406
Variable Series II - Dreman Small Mid Cap Value VIP - Class B (SVSSVB)	596,958	5,232,579
Variable Series II - Strategic Value VIP - Class B (SVSHEB)	290,731	790,955
Capital Appreciation Fund II - Primary Shares (FVCA2P)	193,946	90,186
Clover Value Fund II - Primary Shares (FALF)	39,218	148,722
Market Opportunity Fund II - Service Shares (FVMOS)	339,375	384,091
Quality Bond Fund II - Primary Shares (FQB)	6,892,984	4,646,254
VIP Fund - Contrafund Portfolio - Service Class (FCS)	16,153,073	81,788,534
VIP Fund - Energy Portfolio - Service Class 2 (FNRS2)	3,035,604	8,180,896
VIP Fund - Equity-Income Portfolio - Service Class (FEIS)	5,084,502	21,818,310
VIP Fund - Freedom Fund 2010 Portfolio - Service Class (FF10S)	677,875	582,946
VIP Fund - Freedom Fund 2020 Portfolio - Service Class (FF20S)	2,460,500	2,174,502
VIP Fund - Freedom Fund 2030 Portfolio - Service Class (FF30S)	941,225	671,986
VIP Fund - Growth & Income Portfolio - Service Class (FGIS)	111,916	56,856
VIP Fund - Growth Opportunities Portfolio - Service Class (FGOS)	467,056	1,047,192
VIP Fund - Growth Portfolio - Service Class (FGS)	4,011,283	15,575,521
VIP Fund - High Income Portfolio - Service Class (FHIS)	4,517,430	12,302,913
VIP Fund - High Income Portfolio - Service Class R (FHISR)	2,900,233	1,981,756
VIP Fund - Index 500 Portfolio - Initial Class (FIP)	1,870,532	2,426,308
VIP Fund - Investment Grade Bond Portfolio - Service Class (FIGBS)	8,529,996	7,355,352
VIP Fund - Mid Cap Portfolio - Service Class (FMCS)	7,355,460	13,711,485
VIP Fund - Overseas Portfolio - Service Class (FOS)	3,821,262	11,369,151
VIP Fund - Overseas Portfolio - Service Class R (FOSR)	1,434,132	3,690,821
VIP Fund - Value Strategies Portfolio - Service Class (FVSS)	842,348	2,719,609
VIP Fund - VIP Freedom Fund 2015 Portfolio - Service Class (FF15S)	1,326,483	1,434,306
VIP Fund - VIP Freedom Fund 2025 Portfolio - Service Class (FF25S)	402,030	156,949
Franklin Income Securities Fund - Class 2 (FTVIS2)	963,484	1,514,128
Franklin Rising Dividends Securities Fund - Class 1 (FTVRDI)	1,700,843	2,840,938
Franklin Small Cap Value Securities Fund - Class 1 (FTVSVI)	1,756,611	2,522,151
Franklin Small Cap Value Securities Fund - Class 2 (FTVSV2)	2,316,792	3,169,202
Mutual Discovery Global Securities Fund - Class 2 (FTVMD2)	293,592	199,425
Templeton Developing Markets Securities Fund - Class 3 (FTVDM3)	2,051,764	1,766,463
Templeton Foreign Securities Fund - Class 1 (TIF)	118,134	315,506
Templeton Foreign Securities Fund - Class 2 (TIF2)	5,018,586	8,675,619
Templeton Foreign Securities Fund - Class 3 (TIF3)	1,037,317	2,165,423
Templeton Global Bond Securities Fund - Class 2 (FTVGI2)	2,301,822	841,292
Templeton Global Bond Securities Fund - Class 3 (FTVGI3)	3,276,870	3,633,415
VIP Founding Funds Allocation Fund - Class 2 (FTVFA2)	218,123	121,421
Goldman Sachs VIT - Goldman Sachs Mid Cap Value Fund - Institutional Shares (GVMCE)	7,821,443	18,085,593
ClearBridge Variable Small Cap Growth Portfolio - Class I (SBVSG)	122,758	61,665
Lincoln VIP Trust - Baron Growth Opportunities Funds - Service Class (BNCAI)	2,813,633	4,610,644
Guardian Portfolio - I Class Shares (AMGP)	346,428	8,489,301
International Portfolio - S Class Shares (AMINS)	71,921	3,881,216
Mid-Cap Growth Portfolio - I Class Shares (AMCG)	618,137	22,498,639
Partners Portfolio - I Class Shares (AMTP)	2,126,471	18,724,017
Regency Portfolio - I Class Shares (AMRI)	975,322	1,322,678
Regency Portfolio - S Class Shares (AMRS)	98,228	1,360,827
Small-Cap Growth Portfolio - S Class Shares (AMFAS)	739,644	1,154,404
Socially Responsive Portfolio - I Class Shares (AMSRS)	251,035	1,614,212
Capital Appreciation Fund/VA - Non-Service Shares (OVGR)	6,942,566	20,261,408
Global Securities Fund/VA - Class 3 (OVGS3)	1,988,608	3,139,805
Global Securities Fund/VA - Non-Service Shares (OVGS)	8,040,245	15,527,711
High Income Fund/VA - Class 3 (OVHI3)	543,425	1,020,173
High Income Fund/VA - Non-Service Shares (OVHI)	1,075	580,559
Main Street Fund(R)/VA - Non-Service Shares (OVGI)	2,144,826	5,111,523
Main Street Small Cap Fund(R)/VA - Non-Service Shares (OVSC)	1,221,033	1,616,550
MidCap Fund/VA - Non-Service Shares (OVAG)	1,585,933	4,537,076
Strategic Bond Fund/VA - Non-Service Shares (OVSB)	950,220	486,930
All Asset Portfolio - Administrative Class (PMVAAA)	803,952	610,071
Foreign Bond Portfolio (Unhedged) - Administrative Class (PMVFBA)	1,780,520	1,123,118

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

Low Duration Portfolio - Administrative Class (PMVLDA)			31,878,205		12,578,522
Real Return Portfolio - Administrative Class (PMVRRA)			31,053,627		21,860,868
Total Return Portfolio - Administrative Class (PMVTRA)			94,259,579		42,916,288
Variable Contracts Trust - Emerging Markets VCT Portfolio - Class I Shares (PIVEMI)			1,020,067		230,653
Variable Contracts Trust - High Yield VCT Portfolio - Class I Shares (PIHYB1)			6,703,539		9,254,826
Putnam VT Growth and Income Fund - IB Shares (PVGIB)			81,249		252,874
Putnam VT International Equity Fund - IB Shares (PVTIGB)			149,476		881,575
Putnam VT Small Cap Value Fund - IB Shares (PVTSCB)			5,247		2,593
Putnam VT Vista Fund - IB Shares (PVVIB)			170,935		107,483
Putnam VT Voyager Fund - IB Shares (PVTVB)			599,423		154,049
Global Real Estate Portfolio - Class II (VKVGR2)			752,378		796,454
Micro-Cap Portfolio - Investment Class (ROCMC)			7,308,630		18,371,322
Small-Cap Portfolio - Investment Class (ROCSC)			219,577		133,653
Blue Chip Growth Portfolio - II (TRBCG2)			604,310		1,091,650
Equity Income Portfolio - II (TREI2)			17,757,721		30,989,277
Health Sciences Portfolio - II (TRHS2)			526,261		776,680
Limited-Term Bond Portfolio - II (TRLT2)			1,874,605		3,907,776
Mid-Cap Growth Portfolio - II (TRMCG2)			4,862,638		10,039,035
New America Growth Portfolio (TRNAG1)			5,847,925		6,326,822
Personal Strategy Balanced Portfolio (TRPSB1)			417,240		570,975
Worldwide Insurance Trust - Worldwide Emerging Markets Fund - Initial Class (VWEM)			6,356,190		13,807,075
Worldwide Insurance Trust - Worldwide Hard Assets Fund - Initial Class (VWHA)			12,213,709		15,275,157
Vanguard(R) Variable Insurance Funds - Balanced Portfolio (VVB)			827,509		743,179
Vanguard(R) Variable Insurance Funds - Diversified Value Portfolio (VVDV)			644,958		502,321
Vanguard(R) Variable Insurance Funds - International Portfolio (VVI)			1,337,598		1,318,788
Vanguard(R) Variable Insurance Funds - Mid-Cap Index Portfolio (VVMCI)			1,322,877		1,379,635
Vanguard(R) Variable Insurance Funds - Short-Term Investment-Grade Portfolio (VVSTC)			1,870,110		997,125
Ivy Fund Variable Insurance Portfolios, Inc. - Asset Strategy (WRASP)			4,970,939		1,139,962
Ivy Fund Variable Insurance Portfolios, Inc. - Growth (WRGP)			575,224		584,519
Ivy Fund Variable Insurance Portfolios, Inc. - Real Estate Securities (WRRESP)			937,629		576,889
Ivy Fund Variable Insurance Portfolios, Inc. - Science and Technology (WRSTP)			333,862		260,043
Advantage Funds Variable Trust - VT Discovery Fund (SVDF)			756,287		334,347
Advantage Funds Variable Trust - VT Opportunity Fund (SVOF)			1,100,847		20,556,922
Advantage Funds Variable Trust - VT Small Cap Growth Fund (WFVSCG)			2,700,571		823,653
OGMVP (OGMVP)			3,345		323,648
International Equity Flex I Portfolio (obsolete) (WIEP)			48,917		1,235,897
International Equity Flex II Portfolio (obsolete) (WVCP)			22,648		511,238
J.P. Morgan NVIT Balanced Fund - Class I (obsolete) (BF)			2,945,891		17,799,672
NVIT Mid Cap Growth Fund - Class I (obsolete) (SGRF)			193,673		12,351,705
Putnam VT OTC & Emerging Growth Fund - IB Shares (obsolete) (PVOEGB)			101,464		143,659
U.S. Equity Flex II Portfolio (obsolete) (WGIP)			187,920		1,820,899
	Total	$	1,047,513,145	$	1,525,639,100

(8) Financial Highlights

The following tabular presentation is a summary of units, unit fair values and contract owners’ equity outstanding for variable life contract 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, 2009.

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Asset Allocation Fund - Class 2 (AMVAA2)
2009	0.00	%	42,984	$	8.457915	$	363,555	2.53	%	23.98	%
2009	0.25	%	113,993		8.410207		958,705	2.53	%	23.67	%
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	%
Bond Fund - Class 2 (AMVBD2)
2009	0.00	%	1,580		10.260471		16,212	3.45	%	12.61	%
2009	0.20	%	65,270		10.214198		666,681	3.45	%	12.38	%
2009	0.25	%	17,735		10.202662		180,944	3.45	%	12.32	%
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	%
Global Small Capitalization Fund - Class 2 (AMVGS2)
2009	0.20	%	99,620		8.111767		808,094	0.37	%	60.97	%
2009	0.25	%	13,910		8.103815		112,724	0.37	%	60.89	%
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
Growth Fund - Class 2 (AMVGR2)
2009	0.20	%	198,835		7.823490		1,555,584	0.73	%	39.13	%
2009	0.25	%	27,764		7.815684		216,995	0.73	%	39.06	%
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
Large Cap Core V.I. Fund - Class II (MLVLC2)
2009	0.00	%	3,193		10.756180		34,344	1.38	%	22.35	%
2009	0.10	%	6,164		10.706109		65,992	1.38	%	22.23	%
2009	0.25	%	129,231		10.631422		1,373,909	1.38	%	22.05	%
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
Variable Series Funds, Inc. - Global Allocation V.I. Fund - Class II (MLVGA2)
2009	0.00	%	244,329		12.182592		2,976,561	3.16	%	21.83	%	5/1/2009

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Variable Series, Inc. - Social Equity Portfolio (CVSSE)
2009	0.10	%	9,826	$	14.595276	$	143,413	0.57	%	34.13	%
2009	0.25	%	4,347		14.435757		62,752	0.57	%	33.92	%
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	%
Credit Suisse Trust - International Equity Flex III Portfolio (CSIEF3)
2009	0.00	%	28,749		10.108851		290,619	0.00	%	1.09	%	12/11/2009
2009	0.10	%	11,666		10.108299		117,923	0.00	%	1.08	%	12/11/2009
2009	0.25	%	5,543		10.107469		56,026	0.00	%	1.07	%	12/11/2009
U.S. Equity Flex I Portfolio (WSCP)
2009	0.00	%	100,191		10.876108		1,089,688	0.00	%	8.76	%	10/2/2009
Variable Account Fund, Inc. - Value Portfolio (DAVVL)
2009	0.00	%	69,243		7.674178		531,383	1.04	%	31.16	%
2009	0.25	%	204,585		7.630866		1,561,161	1.04	%	30.83	%
2008	0.25	%	76,781		5.832746		447,844	1.92	%	-40.47	%
Insurance Trust - Insurance Trust Diversified Mid Cap Growth Portfolio 1 (OGGO)
2009	0.10	%	34,974		16.718525		584,714	0.00	%	42.90	%
2009	0.25	%	142,297		16.536826		2,353,141	0.00	%	42.68	%
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	%
Insurance Trust - Insurance Trust Mid Cap Value Portfolio 1 (JPMMV1)
2009	0.10	%	5,523		12.633626		69,776	0.00	%	26.57	%
2009	0.20	%	7,956		12.562325		99,946	0.00	%	26.44	%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Janus Aspen Series - Balanced Portfolio - Service Shares (JABS)
2009	0.00	%	150,726	$	17.099722	$	2,577,373	3.12	%	25.58	%
2009	0.10	%	148,713		16.974945		2,524,395	3.12	%	25.46	%
2009	0.20	%	39,203		16.851105		660,614	3.12	%	25.33	%
2009	0.25	%	356,531		16.789471		5,985,967	3.12	%	25.27	%
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	%
Janus Aspen Series - Forty Portfolio - Service Shares (JACAS)
2009	0.00	%	2,848,502		10.476528		29,842,411	0.01	%	46.01	%
2009	0.10	%	332,343		10.372987		3,447,390	0.01	%	45.87	%
2009	0.20	%	384,661		10.270489		3,950,657	0.01	%	45.72	%
2009	0.25	%	1,893,904		10.219612		19,354,964	0.01	%	45.65	%
2009	0.40	%	13,489		10.068481		135,814	0.01	%	45.43	%
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	%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Janus Aspen Series - Global Technology Portfolio - Service Shares (JAGTS)
2009	0.00	%	1,850,637	$	4.619855	$	8,549,675	0.00	%	56.90	%
2009	0.10	%	337,606		4.574181		1,544,271	0.00	%	56.74	%
2009	0.25	%	388,356		4.506481		1,750,119	0.00	%	56.51	%
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	%
Janus Aspen Series - INTECH Risk-Managed Core Portfolio - Service Shares (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	%
Janus Aspen Series - Overseas Portfolio - Service II Shares (JAIGS2)
2009	0.00	%	1,868,731		12.746144		23,819,114	0.43	%	79.07	%
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
Janus Aspen Series - Overseas Portfolio - Service Shares (JAIGS)
2009	0.00	%	1,339,119		15.910990		21,306,709	0.41	%	79.07	%
2009	0.10	%	374,105		15.753839		5,893,590	0.41	%	78.89	%
2009	0.20	%	1,239,451		15.598133		19,333,122	0.41	%	78.71	%
2009	0.25	%	951,078		15.520876		14,761,564	0.41	%	78.62	%
2008	0.00	%	1,658,237		8.885289		14,733,915	1.05	%	-52.23	%
2008	0.10	%	391,460		8.806322		3,447,323	1.05	%	-52.28	%
2008	0.20	%	1,506,012		8.728004		13,144,479	1.05	%	-52.32	%
2008	0.25	%	973,967		8.689119		8,462,915	1.05	%	-52.35	%
2008	0.40	%	276,653		8.573479		2,371,879	1.05	%	-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	%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Series Fund - Mid Cap Value Portfolio - Class VC (LOVMCV)
2009	0.00	%	2,510	$	9.785090	$	24,561	0.52	%	26.62	%
2009	0.10	%	56,829		9.739518		553,487	0.52	%	26.49	%
2009	0.25	%	75,007		9.671569		725,435	0.52	%	26.30	%
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
Investors Growth Stock Series - Initial Class (MIGIC)
2009	0.00	%	237,765		13.963862		3,320,118	0.73	%	39.55	%
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	%
Research International Series - Service Class (MVRISC)
2009	0.00	%	1,144		7.940931		9,084	1.26	%	30.57	%
2009	0.25	%	82,984		7.888076		654,584	1.26	%	30.24	%
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
Value Series - Initial Class (MVFIC)
2009	0.00	%	438,770		16.390924		7,191,846	1.29	%	22.71	%
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	%
Value Series - Service Class (MVFSC)
2009	0.00	%	46,902		8.096650		379,749	1.17	%	22.45	%
2009	0.25	%	420,507		8.050967		3,385,488	1.17	%	22.15	%
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	%
Variable Insurance Trust II - International Value Portfolio - Service Class (MVIVSC)
2009	0.25	%	230,861		13.158607		3,037,809	0.00	%	31.59	%	5/1/2009
Core Plus Fixed Income Portfolio - Class I (MSVFI)
2009	0.00	%	208,669		11.987667		2,501,454	8.83	%	9.64	%
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	%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Emerging Markets Debt Portfolio - Class I (MSEM)
2009	0.00	%	190,919	$	25.622719	$	4,891,864	7.90	%	30.21	%
2009	0.10	%	23,721		33.112830		785,469	7.90	%	30.08	%
2009	0.20	%	68,982		25.186305		1,737,402	7.90	%	29.95	%
2009	0.25	%	82,946		25.072181		2,079,637	7.90	%	29.88	%
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	%
Mid Cap Growth Portfolio - class I (MSVMG)
2009	0.00	%	2,129		9.640943		20,526	0.00	%	57.66	%
2009	0.10	%	76,530		9.548100		730,716	0.00	%	57.50	%
2009	0.20	%	87,692		9.456210		829,234	0.00	%	57.34	%
2009	0.25	%	839,125		9.410608		7,896,676	0.00	%	57.27	%
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	%
The Universal Institutional Funds, Inc. - Capital Growth Portfolio - Class I (MSVEG)
2009	0.25	%	45,095		8.406886		379,109	0.00	%	65.14	%
2008	0.25	%	39,408		5.090726		200,615	0.00	%	-49.31	%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
U.S. Real Estate Portfolio - Class I (MSVRE)
2009	0.10	%	111,151	$	28.046079	$	3,117,350	4.14	%	28.23	%
2009	0.20	%	142,875		22.726829		3,247,096	4.14	%	28.10	%
2009	0.25	%	640,708		22.623746		14,495,215	4.14	%	28.03	%
2009	0.40	%	585		23.083528		13,504	4.14	%	27.84	%
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	%
AllianceBernstein NVIT Global Fixed Income Fund - Class III (NVAGF3)
2009	0.00	%	23,143		11.419071		264,272	5.26	%	14.19	%	5/1/2009
American Century NVIT Multi Cap Value Fund - Class I (NVAMV1)
2009	0.00	%	2,210		12.564442		27,767	1.25	%	25.64	%	5/1/2009
American Funds NVIT Asset Allocation Fund - Class II (GVAAA2)
2009	0.00	%	405,011		9.711378		3,933,215	0.08	%	23.41	%
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
American Funds NVIT Bond Fund - Class II (GVABD2)
2009	0.00	%	248,317		10.970085		2,724,059	0.32	%	12.15	%
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
American Funds NVIT Global Growth Fund - Class II (GVAGG2)
2009	0.00	%	536,732		10.774250		5,782,885	0.00	%	41.60	%
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
American Funds NVIT Growth Fund - Class II (GVAGR2)
2009	0.00	%	789,242		8.979238		7,086,792	0.00	%	38.78	%
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
American Funds NVIT Growth-Income Fund - Class II (GVAGI2)
2009	0.00	%	290,258		8.007342		2,324,195	0.00	%	30.69	%
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

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Federated NVIT High Income Bond Fund - Class I (HIBF)
2009	0.00	%	248,681	$	17.804842	$	4,427,726	9.89	%	46.00	%
2009	0.10	%	62,774		16.070122		1,008,786	9.89	%	45.85	%
2009	0.20	%	79,750		17.985742		1,434,363	9.89	%	45.71	%
2009	0.25	%	790,244		17.904242		14,148,720	9.89	%	45.63	%
2009	0.40	%	9,813		16.184733		158,821	9.89	%	45.41	%
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	%
Federated NVIT High Income Bond Fund - Class III (HIBF3)
2009	0.00	%	949,161		12.632602		11,990,373	10.36	%	46.08	%
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
Gartmore NVIT Emerging Markets Fund - Class I (GEM)
2009	0.00	%	129,828		25.446836		3,303,712	1.36	%	63.31	%
2009	0.10	%	153,669		25.212581		3,874,392	1.36	%	63.15	%
2009	0.20	%	362,310		24.980405		9,050,651	1.36	%	62.99	%
2009	0.25	%	493,823		24.865174		12,278,995	1.36	%	62.91	%
2009	0.40	%	100		24.522567		2,452	1.36	%	62.66	%
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	%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Gartmore NVIT Emerging Markets Fund - Class III (GEM3)
2009	0.00	%	818,029	$	18.287102	$	14,959,380	1.28	%	63.48	%
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
Gartmore NVIT Global Utilities Fund - Class I (GVGU1)
2009	0.00	%	91,226		17.873386		1,630,518	3.96	%	8.01	%
2009	0.10	%	30,519		17.736871		541,312	3.96	%	7.90	%
2009	0.25	%	35,222		17.534069		617,585	3.96	%	7.74	%
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	%
Gartmore NVIT International Equity Fund - Class I (GIG)
2009	0.00	%	275,076		11.949736		3,287,086	1.09	%	29.72	%
2009	0.10	%	87,077		11.839714		1,030,967	1.09	%	29.59	%
2009	0.25	%	98,498		11.676578		1,150,120	1.09	%	29.40	%
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	%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Gartmore NVIT International Equity Fund - Class III (GIG3)
2009	0.00	%	516,240	$	7.153834	$	3,693,095	0.22	%	29.67	%
2008	0.00	%	24,803		5.516874		136,835	1.55	%	-44.83	%	5/1/2008
Gartmore NVIT International Equity Fund - Class VI (NVIE6)
2009	0.00	%	70,672		7.130177		503,904	0.24	%	29.45	%
2008	0.00	%	6,719		5.508000		37,008	1.45	%	-44.92	%	5/1/2008
Gartmore NVIT Worldwide Leaders Fund - Class I (GEF)
2009	0.00	%	206,712		15.340444		3,171,054	1.06	%	25.00	%
2009	0.10	%	47,322		12.341792		584,038	1.06	%	24.88	%
2009	0.25	%	13,605		12.052893		163,980	1.06	%	24.69	%
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	%
Gartmore NVIT Worldwide Leaders Fund - Class III (GEF3)
2009	0.00	%	1,087		13.411529		14,578	1.12	%	34.12	%	5/1/2009
Neuberger Berman NVIT Multi Cap Opportunities Fund - Class I (NVNMO1)
2009	0.00	%	1,906,534		7.927018		15,113,129	0.18	%	52.96	%
2008	0.00	%	180		5.182412		933	0.00	%	-48.18	%	5/1/2008
Neuberger Berman NVIT Socially Responsible Fund - Class I (NVNSR1)
2009	0.00	%	21,943		8.126831		178,327	0.37	%	31.53	%
2008	0.00	%	5,037		6.178465		31,121	0.45	%	-38.22	%	5/1/2008
NVIT Cardinal Aggressive Fund - Class I (NVCRA1)
2009	0.00	%	42,686		8.295819		354,115	1.03	%	29.30	%
2009	0.25	%	132		12.924011		1,706	1.03	%	29.24	%	5/1/2009
2008	0.00	%	43,904		6.416027		281,689	2.01	%	-35.84	%	5/1/2008
NVIT Cardinal Balanced Fund - Class I (NVCRB1)
2009	0.00	%	90,417		9.593104		867,380	2.22	%	19.88	%
2009	0.25	%	6		11.777952		71	2.22	%	17.78	%	5/1/2009
2008	0.00	%	65,101		8.002099		520,945	2.15	%	-19.98	%	5/1/2008
NVIT Cardinal Capital Appreciation Fund - Class I (NVCCA1)
2009	0.00	%	172,546		9.025006		1,557,229	1.99	%	24.25	%
2008	0.00	%	71,014		7.263571		515,815	1.50	%	-27.36	%	5/1/2008
NVIT Cardinal Conservative Fund - Class I (NVCCN1)
2009	0.00	%	89,148		10.351566		922,821	2.79	%	13.22	%
2008	0.00	%	32,838		9.142885		300,234	1.40	%	-8.57	%	5/1/2008
NVIT Cardinal Moderate Fund - Class I (NVCMD1)
2009	0.00	%	241,583		9.305236		2,247,987	2.29	%	22.00	%
2008	0.00	%	83,184		7.626933		634,439	2.04	%	-23.73	%	5/1/2008
NVIT Cardinal Moderately Aggressive Fund - Class I (NVCMA1)
2009	0.00	%	345,676		8.737590		3,020,375	1.60	%	26.69	%
2009	0.25	%	11		12.566486		138	1.60	%	25.66	%	5/1/2009
2008	0.00	%	223,705		6.896919		1,542,875	1.52	%	-31.03	%	5/1/2008
NVIT Cardinal Moderately Conservative Fund - Class I (NVCMC1)
2009	0.00	%	66,327		9.853071		653,525	2.50	%	17.64	%
2008	0.00	%	33,824		8.375935		283,308	2.14	%	-16.24	%	5/1/2008
NVIT Core Bond Fund - Class I (NVCBD1)
2009	0.00	%	56,157		10.818752		607,549	2.99	%	8.78	%
2008	0.00	%	21,176		9.945181		210,599	4.53	%	-0.55	%	5/1/2008

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
NVIT Core Plus Bond Fund - Class I (NVLCP1)
2009	0.00	%	21,838	$	11.600708	$	253,336	4.05	%	16.62	%
2008	0.00	%	13,545		9.947099		134,733	3.73	%	-0.53	%	5/1/2008
NVIT Fund - Class I (TRF)
2009	0.00	%	2,358,784		12.269388		28,940,836	1.35	%	26.10	%
2009	0.10	%	27,862,777		10.080498		280,870,668	1.35	%	25.97	%
2009	0.20	%	72,093		9.807872		707,079	1.35	%	25.84	%
2009	0.25	%	42,014		9.763407		410,200	1.35	%	25.78	%
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	%
NVIT Global Financial Services Fund - Class I (GVGF1)
2009	0.00	%	81,891		13.889643		1,137,437	1.15	%	31.75	%
2009	0.10	%	49,431		13.783502		681,332	1.15	%	31.62	%
2009	0.25	%	26,749		13.625762		364,476	1.15	%	31.42	%
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	%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
NVIT Government Bond Fund - Class I (GBF)
2009	0.00	%	2,155,474	$	18.980932	$	40,912,905	3.40	%	2.69	%
2009	0.10	%	172,188		17.477068		3,009,341	3.40	%	2.59	%
2009	0.20	%	1,080,876		15.868375		17,151,746	3.40	%	2.48	%
2009	0.25	%	3,410,676		15.796520		53,876,812	3.40	%	2.43	%
2009	0.40	%	15,678		17.785926		278,848	3.40	%	2.28	%
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	%
NVIT Growth Fund - Class I (CAF)
2009	0.00	%	1,493,205		8.097149		12,090,703	0.55	%	33.47	%
2009	0.10	%	389,073		6.104552		2,375,116	0.55	%	33.34	%
2009	0.20	%	83,427		7.806410		651,265	0.55	%	33.20	%
2009	0.25	%	5,496		7.771001		42,709	0.55	%	33.14	%
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	%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
NVIT Health Sciences Fund - Class I (GVGH1)
2009	0.00	%	62,420	$	13.810897	$	862,076	0.29	%	19.16	%
2009	0.10	%	90,762		13.705345		1,243,925	0.29	%	19.04	%
2009	0.25	%	57,752		13.548576		782,457	0.29	%	18.87	%
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	%
NVIT Health Sciences Fund - Class III (GVGHS)
2009	0.00	%	222,948		11.124833		2,480,259	0.28	%	19.11	%
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
NVIT International Index Fund - Class II (GVIX2)
2009	0.00	%	30,419		7.413670		225,516	2.43	%	28.58	%
2009	0.25	%	468,130		7.364341		3,447,469	2.43	%	28.26	%
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	0.25	%	164,488		10.117465		1,664,202	3.21	%	1.17	%	5/1/2007
2007	0.40	%	55,246		10.107323		558,389	3.21	%	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	%
NVIT International Index Fund - Class VI (GVIX6)
2009	0.00	%	65,290		8.793694		574,140	2.61	%	28.62	%
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

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
NVIT Investor Destinations Aggressive Fund - Class II (GVIDA)
2009	0.00	%	1,378,139	$	13.451838	$	18,538,503	1.09	%	27.21	%
2009	0.10	%	141,202		13.345564		1,884,420	1.09	%	27.08	%
2009	0.20	%	196,053		13.240124		2,595,766	1.09	%	26.95	%
2009	0.25	%	342,826		13.187693		4,521,084	1.09	%	26.89	%
2009	0.40	%	897		13.031705		11,689	1.09	%	26.70	%
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	%
NVIT Investor Destinations Balanced Fund - Class II (NVDBL2)
2009	0.00	%	1,883		11.640280		21,919	0.87	%	16.40	%	5/1/2009
NVIT Investor Destinations Capital Appreciation Fund - Class II (NVDCA2)
2009	0.00	%	10,225		12.204484		124,791	0.71	%	22.04	%	5/1/2009

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
NVIT Investor Destinations Conservative Fund - Class II (GVIDC)
2009	0.00	%	787,357	$	13.447193	$	10,587,742	1.73	%	9.08	%
2009	0.10	%	35,939		13.340983		479,462	1.73	%	8.98	%
2009	0.20	%	103,310		13.235577		1,367,367	1.73	%	8.87	%
2009	0.25	%	189,396		13.183237		2,496,852	1.73	%	8.81	%
2009	0.40	%	658		13.027295		8,572	1.73	%	8.65	%
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	%
NVIT Investor Destinations Moderate Fund - Class II (GVIDM)
2009	0.00	%	4,458,884		13.630962		60,778,878	1.56	%	19.14	%
2009	0.10	%	144,450		13.523280		1,953,438	1.56	%	19.02	%
2009	0.20	%	480,252		13.416419		6,443,262	1.56	%	18.90	%
2009	0.25	%	863,030		13.363298		11,532,927	1.56	%	18.84	%
2009	0.40	%	2,599		13.205276		34,321	1.56	%	18.66	%
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	%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
NVIT Investor Destinations Moderately Aggressive Fund - Class II (GVDMA)
2009	0.00	%	4,600,411	$	13.702388	$	63,036,616	1.31	%	24.39	%
2009	0.10	%	218,272		13.594088		2,967,209	1.31	%	24.27	%
2009	0.20	%	44,938		13.486671		606,064	1.31	%	24.14	%
2009	0.25	%	474,675		13.433301		6,376,452	1.31	%	24.08	%
2009	0.40	%	20		13.274448		265	1.31	%	23.90	%
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	%
NVIT Investor Destinations Moderately Conservative Fund - Class II (GVDMC)
2009	0.00	%	1,042,745		13.712188		14,298,315	1.77	%	14.56	%
2009	0.10	%	67,425		13.603867		917,241	1.77	%	14.45	%
2009	0.20	%	44,906		13.496401		606,069	1.77	%	14.33	%
2009	0.25	%	191,581		13.443003		2,575,424	1.77	%	14.28	%
2009	0.40	%	28		13.284003		372	1.77	%	14.10	%
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	%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
NVIT Leaders Fund - Class I (GVUS1)
2009	0.00	%	46,260	$	12.049802	$	557,424	0.84	%	33.79	%
2009	0.10	%	40,684		11.957718		486,488	0.84	%	33.65	%
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	%
NVIT Mid Cap Index Fund - Class I (MCIF)
2009	0.00	%	1,091,787		23.150606		25,275,531	0.98	%	36.76	%
2009	0.10	%	194,480		20.989089		4,081,958	0.98	%	36.62	%
2009	0.20	%	174,671		15.811153		2,761,750	0.98	%	36.48	%
2009	0.25	%	1,162,757		15.739465		18,301,173	0.98	%	36.41	%
2009	0.40	%	3,484		19.635632		68,411	0.98	%	36.21	%
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	%
NVIT Money Market Fund - Class I (SAM)
2009	0.00	%	7,271,586		14.293206		103,934,277	0.05	%	0.04	%
2009	0.20	%	3,780		12.055725		45,571	0.05	%	-0.16	%
2009	0.25	%	625,656		12.000968		7,508,478	0.05	%	-0.21	%
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	%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
NVIT Money Market Fund - Class V (SAM5)
2009	0.00	%	454,540	$	11.731114	$	5,332,261	0.06	%	0.06	%
2009	0.10	%	6,087,351		11.646971		70,899,201	0.06	%	-0.04	%
2009	0.20	%	7,395,065		11.563359		85,511,791	0.06	%	-0.14	%
2009	0.25	%	11,828,679		11.521736		136,286,917	0.06	%	-0.19	%
2009	0.40	%	16,932		11.397666		192,985	0.06	%	-0.34	%
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	%
NVIT Multi-Manager International Growth Fund - Class III (NVMIG3)
2009	0.00	%	2,144,940		8.379106		17,972,680	0.81	%	36.46	%
2008	0.00	%	1,107		6.140389		6,797	0.06	%	-38.60	%	5/1/2008
NVIT Multi-Manager International Value Fund - Class I (GVDIVI)
2009	0.00	%	65,225		16.546611		1,079,253	2.12	%	29.86	%
2008	0.00	%	77,496		12.742294		987,477	1.73	%	-46.31	%
2007	0.00	%	93,770					0.00	%
NVIT Multi-Manager International Value Fund - Class III (GVDIV3)
2009	0.00	%	556,645		10.082162		5,612,185	2.13	%	29.84	%
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
NVIT Multi-Manager Large Cap Growth Fund - Class I (NVMLG1)
2009	0.00	%	285,919		8.259762		2,361,623	0.86	%	29.78	%
2008	0.00	%	2,417		6.364575		15,383	0.26	%	-36.35	%	5/1/2008
NVIT Multi-Manager Large Cap Value Fund - Class I (NVMLV1)
2009	0.00	%	457,649		8.111157		3,712,063	1.39	%	27.59	%
2008	0.00	%	37,776		6.357067		240,145	0.95	%	-36.43	%	5/1/2008
NVIT Multi-Manager Mid Cap Growth Fund - Class I (NVMMG1)
2009	0.00	%	3,889,090		7.982859		31,046,057	0.00	%	27.12	%
2009	0.10	%	91,898		7.969566		732,387	0.00	%	26.99	%
2009	0.25	%	2,074		7.949631		16,488	0.00	%	26.80	%
2008	0.00	%	478		6.279727		3,002	0.00	%	-37.20	%	5/1/2008
NVIT Multi-Manager Mid Cap Value Fund - Class I (NVMMV1)
2008	0.25	%	358		6.761352		2,421	0.46	%	-32.39	%	5/1/2008
NVIT Multi-Manager Mid Cap Value Fund - Class II (NVMMV2)
2009	0.00	%	1,303,777		8.817001		11,495,403	1.19	%	30.47	%
2008	0.00	%	815		6.757903		5,508	1.51	%	-32.42	%	5/1/2008

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
NVIT Multi-Manager Small Cap Growth Fund - Class I (SCGF)
2009	0.00	%	627,172	$	13.016693	$	8,163,705	0.00	%	27.46	%
2009	0.10	%	70,402		12.878613		906,680	0.00	%	27.33	%
2009	0.20	%	22,417		12.741894		285,635	0.00	%	27.21	%
2009	0.25	%	183,789		12.674135		2,329,367	0.00	%	27.14	%
2009	0.40	%	8		12.472919		100	0.00	%	26.95	%
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	%
NVIT Multi-Manager Small Cap Value Fund - Class I (SCVF)
2009	0.00	%	1,113,781		22.834198		25,432,296	0.57	%	26.22	%
2009	0.10	%	99,716		24.471259		2,440,176	0.57	%	26.09	%
2009	0.20	%	125,186		17.497487		2,190,440	0.57	%	25.96	%
2009	0.25	%	362,635		17.418185		6,316,444	0.57	%	25.90	%
2009	0.40	%	4,138		19.342658		80,040	0.57	%	25.71	%
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	%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
NVIT Multi-Manager Small Company Fund - Class I (SCF)
2009	0.00	%	1,279,276	$	21.944622	$	28,073,228	0.27	%	34.70	%
2009	0.10	%	181,456		22.128719		4,015,389	0.27	%	34.57	%
2009	0.20	%	858,139		14.844285		12,738,460	0.27	%	34.43	%
2009	0.25	%	1,510,254		14.777001		22,317,025	0.27	%	34.37	%
2009	0.40	%	6,288		18.829123		118,398	0.27	%	34.16	%
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	%
NVIT Multi-Sector Bond Fund - Class I (MSBF)
2009	0.00	%	620,658		16.933793		10,510,094	9.43	%	24.38	%
2009	0.10	%	65,180		16.361665		1,066,453	9.43	%	24.25	%
2009	0.20	%	18,311		15.620376		286,025	9.43	%	24.13	%
2009	0.25	%	89,391		15.549631		1,389,997	9.43	%	24.07	%
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	%
NVIT Short Term Bond Fund - Class I (NVSTB1)
2009	0.25	%	52,762		10.669125		562,924	2.15	%	7.12	%
NVIT Short Term Bond Fund - Class II (NVSTB2)
2009	0.00	%	270,272		10.650192		2,878,449	2.32	%	7.11	%
2008	0.00	%	96,918		9.943310		963,686	3.46	%	-0.57	%	5/1/2008

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
NVIT Technology & Communications Fund - Class I (GGTC)
2009	0.00	%	235,876	$	3.325931	$	784,507	0.00	%	52.47	%
2009	0.10	%	226,699		3.295310		747,043	0.00	%	52.31	%
2009	0.20	%	371,260		3.264934		1,212,139	0.00	%	52.16	%
2009	0.25	%	481,326		3.249860		1,564,242	0.00	%	52.09	%
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	%
NVIT Technology & Communications Fund - Class III (GGTC3)
2009	0.00	%	200,315		12.888766		2,581,813	0.00	%	52.44	%
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
NVIT U.S. Growth Leaders Fund - Class I (GVUG1)
2009	0.00	%	134,485		14.212216		1,911,330	0.00	%	25.84	%
2009	0.10	%	56,812		14.103668		801,258	0.00	%	25.71	%
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	%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Oppenheimer NVIT Large Cap Growth Fund - Class I (NVOLG1)
2009	0.00	%	32,412	$	13.059893	$	423,297	0.24	%	30.60	%	5/1/2009
Templeton NVIT International Value Fund - Class III (NVTIV3)
2009	0.00	%	8,463		13.034354		110,310	0.64	%	30.34	%	5/1/2009
Van Kampen NVIT Comstock Value Fund - Class I (EIF)
2009	0.00	%	702,809		11.850163		8,328,401	1.12	%	28.55	%
2009	0.10	%	56,839		9.902521		562,849	1.12	%	28.42	%
2009	0.25	%	161		9.726461		1,566	1.12	%	28.23	%
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	%
Van Kampen NVIT Real Estate Fund - Class I (NVRE1)
2009	0.00	%	3,102,055		7.388147		22,918,438	2.16	%	30.84	%
2009	0.25	%	7,340		14.799525		108,629	2.16	%	48.00	%	5/1/2009
2008	0.00	%	19,987		5.646840		112,863	4.37	%	-43.53	%	5/1/2008
Advisers Management Trust - Short Duration Bond Portfolio - I Class Shares (AMTB)
2009	0.00	%	395,794		11.059816		4,377,409	7.00	%	13.33	%
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	%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
V.I. Basic Value Fund - Series I (AVBVI)
2009	0.10	%	19,823	$	12.594459	$	249,660	0.41	%	47.85	%
2009	0.25	%	40,678		12.456759		506,716	0.41	%	47.63	%
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	%
V.I. Capital Appreciation Fund - Series I (AVCA)
2009	0.00	%	77,637		11.924271		925,765	0.59	%	21.08	%
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	%
V.I. Capital Development Fund - Series I (AVCDI)
2009	0.00	%	164,731		16.394648		2,700,707	0.00	%	42.37	%
2009	0.10	%	15,032		16.274948		244,645	0.00	%	42.23	%
2009	0.20	%	59,711		16.156149		964,700	0.00	%	42.09	%
2009	0.25	%	303,416		16.097055		4,884,104	0.00	%	42.02	%
2009	0.40	%	535		15.921111		8,518	0.00	%	41.80	%
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	%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
V.I. International Growth Fund - Series I (AVIE)
2009	0.00	%	34,545	$	16.700382	$	576,915	1.69	%	35.24	%
2009	0.10	%	219,927		16.606084		3,652,126	1.69	%	35.11	%
2009	0.20	%	229,555		16.512357		3,790,494	1.69	%	34.97	%
2009	0.25	%	1,521,302		16.465672		25,049,260	1.69	%	34.90	%
2009	0.40	%	2,280		16.326447		37,224	1.69	%	34.70	%
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	%
VPS Growth and Income Portfolio - Class A (ALVGIA)
2009	0.00	%	220,764		13.736397		3,032,502	4.18	%	20.82	%
2009	0.10	%	62,989		13.636111		858,925	4.18	%	20.70	%
2009	0.25	%	501,456		13.487083		6,763,179	4.18	%	20.52	%
2009	0.40	%	3,565		13.339666		47,556	4.18	%	20.34	%
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	%
VPS International Value Portfolio - Class A (ALVIVA)
2009	0.00	%	154,940		7.568873		1,172,721	1.32	%	34.68	%
2009	0.20	%	1,046,990		7.513480		7,866,538	1.32	%	34.41	%
2009	0.25	%	3,001,526		7.499685		22,510,500	1.32	%	34.34	%
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

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
VPS Small/Mid Cap Value Portfolio: Class A (ALVSVA)
2009	0.00	%	253,341	$	18.846934	$	4,774,701	1.10	%	42.86	%
2009	0.25	%	158,842		18.535349		2,944,192	1.10	%	42.50	%
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	%
VP Income & Growth Fund - Class I (ACVIG)
2009	0.00	%	943,045		13.670467		12,891,866	4.69	%	18.10	%
2009	0.10	%	88,247		10.412325		918,856	4.69	%	17.98	%
2009	0.20	%	87,958		10.159333		893,595	4.69	%	17.86	%
2009	0.25	%	96,315		10.113262		974,059	4.69	%	17.80	%
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	%
VP Inflation Protection Fund - Class II (ACVIP2)
2009	0.00	%	2,112,440		13.385524		28,276,116	1.87	%	10.21	%
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	%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
VP International Fund - Class I (ACVI)
2009	0.00	%	478	$	16.133486	$	7,712	2.11	%	33.76	%
2009	0.10	%	162,692		13.112836		2,133,354	2.11	%	33.63	%
2009	0.20	%	529,597		10.279855		5,444,180	2.11	%	33.50	%
2009	0.25	%	885,670		10.233305		9,063,331	2.11	%	33.43	%
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	%
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
VP Mid Cap Value Fund - Class I (ACVMV1)
2009	0.00	%	194,218		13.081223		2,540,609	3.88	%	29.94	%
2009	0.25	%	19,707		12.929491		254,801	3.88	%	29.62	%
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)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
VP Ultra(R) Fund - Class I (ACVU1)
2009	0.10	%	62,621	$	10.377444	$	649,846	0.42	%	34.34	%
2009	0.25	%	16,812		10.258719		172,470	0.42	%	34.14	%
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	%
VP Value Fund - Class I (ACVV)
2009	0.00	%	1,823,545		18.517102		33,766,769	4.43	%	19.86	%
2009	0.10	%	181,074		18.146348		3,285,832	4.43	%	19.74	%
2009	0.20	%	109,685		15.655677		1,717,193	4.43	%	19.62	%
2009	0.25	%	900,703		15.584697		14,037,183	4.43	%	19.56	%
2009	0.40	%	1,441		15.848647		22,838	4.43	%	19.39	%
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	%
VP Vista(SM) Fund - Class I (ACVVS1)
2009	0.00	%	10,424		10.990064		114,560	0.00	%	22.47	%
2009	0.10	%	55,152		10.938887		603,301	0.00	%	22.35	%
2009	0.25	%	112,703		10.862560		1,224,243	0.00	%	22.16	%
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

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
MidCap Stock Portfolio - Initial Shares (DVMCS)
2009	0.10	%	32,827	$	14.400019	$	472,709	1.40	%	35.37	%
2009	0.25	%	28,797		14.242624		410,145	1.40	%	35.17	%
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	%
Small Cap Stock Index Portfolio - Service Shares (DVSCS)
2009	0.00	%	622,763		13.569574		8,450,629	2.54	%	25.03	%
2009	0.10	%	232,174		13.465899		3,126,432	2.54	%	24.90	%
2009	0.20	%	230,031		13.363002		3,073,905	2.54	%	24.78	%
2009	0.25	%	1,021,175		13.311853		13,593,731	2.54	%	24.71	%
2009	0.40	%	902		13.159552		11,870	2.54	%	24.53	%
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	%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Stock Index Fund, Inc. - Initial Shares (DSIF)
2009	0.00	%	7,609,790	$	13.728464	$	104,470,728	2.09	%	26.33	%
2009	0.10	%	697,601		10.045645		7,007,852	2.09	%	26.21	%
2009	0.20	%	3,048,450		9.657668		29,440,918	2.09	%	26.08	%
2009	0.25	%	12,874,664		9.613888		123,775,578	2.09	%	26.02	%
2009	0.40	%	14,133		11.302075		159,732	2.09	%	25.83	%
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	%
The Dreyfus Socially Responsible Growth Fund, Inc. - Initial Shares (DSRG)
2009	0.00	%	819,703		11.792335		9,666,212	0.98	%	33.76	%
2009	0.10	%	81,262		8.505196		691,149	0.98	%	33.62	%
2009	0.25	%	37,056		7.708595		285,650	0.98	%	33.42	%
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	%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Appreciation Portfolio - Initial Shares (DCAP)
2009	0.00	%	954,621	$	15.589221	$	14,881,798	2.64	%	22.56	%
2009	0.10	%	86,738		11.407200		989,438	2.64	%	22.44	%
2009	0.20	%	111,948		10.616570		1,188,504	2.64	%	22.31	%
2009	0.25	%	626,873		10.568440		6,625,070	2.64	%	22.25	%
2009	0.40	%	8,289		12.631233		104,700	2.64	%	22.07	%
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	%
Developing Leaders Portfolio - Initial Shares (DSC)
2009	0.00	%	58,513		11.032594		645,550	1.70	%	26.04	%
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	%
International Value Portfolio - Initial Shares (DVIV)
2009	0.00	%	6,852		18.119573		124,155	4.09	%	30.97	%
2009	0.10	%	99,191		17.987291		1,784,177	4.09	%	30.84	%
2009	0.20	%	412,421		17.856007		7,364,192	4.09	%	30.71	%
2009	0.25	%	801,300		17.790702		14,255,690	4.09	%	30.65	%
2009	0.40	%	8,696		17.596305		153,017	4.09	%	30.45	%
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	%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Variable Series II - Dreman Small Mid Cap Value VIP - Class B (SVSSVB)
2009	0.00	%	3,735	$	8.156371	$	30,464	1.81	%	29.28	%
2009	0.20	%	126,894		8.119519		1,030,318	1.81	%	29.02	%
2009	0.25	%	57,608		8.110345		467,221	1.81	%	28.96	%
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	%
Variable Series II - Strategic Value VIP - Class B (SVSHEB)
2009	0.25	%	68,810		7.351304		505,843	4.46	%	24.63	%
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
Capital Appreciation Fund II - Primary Shares (FVCA2P)
2009	0.00	%	46,524		13.502613		628,196	1.05	%	13.48	%
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	%
Clover Value Fund II - Primary Shares (FALF)
2009	0.00	%	15,949		11.641309		185,667	2.79	%	14.72	%
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	%
Market Opportunity Fund II - Service Shares (FVMOS)
2009	0.00	%	71,443		10.283025		734,650	1.47	%	1.28	%
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

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Quality Bond Fund II - Primary Shares (FQB)
2009	0.00	%	1,207,203	$	17.324766	$	20,914,509	6.41	%	20.43	%
2009	0.10	%	43,709		17.141028		749,217	6.41	%	20.31	%
2009	0.25	%	828,781		16.869071		13,980,766	6.41	%	20.13	%
2009	0.40	%	3,689		16.601438		61,243	6.41	%	19.95	%
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	%
VIP Fund - Contrafund Portfolio - Service Class (FCS)
2009	0.00	%	3,669,623		21.093947		77,406,833	1.29	%	35.66	%
2009	0.10	%	488,468		15.161297		7,405,808	1.29	%	35.53	%
2009	0.20	%	1,321,851		14.228141		18,807,482	1.29	%	35.39	%
2009	0.25	%	3,013,281		14.163669		42,679,115	1.29	%	35.33	%
2009	0.40	%	14,958		17.614183		263,473	1.29	%	35.12	%
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	%
VIP Fund - Energy Portfolio - Service Class 2 (FNRS2)
2009	0.00	%	630,089		15.444750		9,731,567	0.22	%	47.57	%
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

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
VIP Fund - Equity-Income Portfolio - Service Class (FEIS)
2009	0.00	%	2,900,543	$	14.073509	$	40,820,818	2.16	%	30.03	%
2009	0.10	%	249,158		12.214029		3,043,223	2.16	%	29.90	%
2009	0.20	%	420,614		11.225322		4,721,528	2.16	%	29.77	%
2009	0.25	%	1,304,182		11.174471		14,573,544	2.16	%	29.71	%
2009	0.40	%	8,222		11.961703		98,349	2.16	%	29.51	%
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	%
VIP Fund - Freedom Fund 2010 Portfolio - Service Class (FF10S)
2009	0.00	%	151,807		11.989176		1,820,041	3.90	%	24.15	%
2009	0.20	%	5,103		11.877840		60,613	3.90	%	23.90	%
2009	0.25	%	713		11.850165		8,449	3.90	%	23.84	%
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
VIP Fund - Freedom Fund 2020 Portfolio - Service Class (FF20S)
2009	0.00	%	331,447		11.867504		3,933,449	3.37	%	28.78	%
2009	0.20	%	3,437		11.757279		40,410	3.37	%	28.52	%
2009	0.25	%	172,400		11.729876		2,022,231	3.37	%	28.45	%
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
VIP Fund - Freedom Fund 2030 Portfolio - Service Class (FF30S)
2009	0.00	%	223,653		11.600974		2,594,593	2.39	%	31.40	%
2009	0.20	%	5,273		11.493181		60,604	2.39	%	31.14	%
2009	0.25	%	34,265		11.466383		392,896	2.39	%	31.08	%
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
VIP Fund - Growth & Income Portfolio - Service Class (FGIS)
2009	0.20	%	8,111		7.471827		60,604	0.11	%	26.91	%
2009	0.25	%	1,133		7.464354		8,457	0.11	%	26.84	%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
VIP Fund - Growth Opportunities Portfolio - Service Class (FGOS)
2009	0.00	%	756,757	$	9.203011	$	6,964,443	0.38	%	45.72	%
2009	0.10	%	70,834		7.410032		524,882	0.38	%	45.57	%
2009	0.25	%	44,684		8.440703		377,164	0.38	%	45.36	%
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	%
VIP Fund - Growth Portfolio - Service Class (FGS)
2009	0.00	%	3,107,304		12.965334		40,287,234	0.32	%	28.15	%
2009	0.10	%	292,689		8.419589		2,464,321	0.32	%	28.02	%
2009	0.20	%	596,741		7.499084		4,475,011	0.32	%	27.89	%
2009	0.25	%	2,310,471		7.465060		17,247,805	0.32	%	27.83	%
2009	0.40	%	24,913		10.725399		267,202	0.32	%	27.64	%
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	%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
VIP Fund - High Income Portfolio - Service Class (FHIS)
2009	0.00	%	522,350	$	12.786757	$	6,679,163	6.43	%	43.77	%
2009	0.10	%	194,653		12.604336		2,453,472	6.43	%	43.63	%
2009	0.20	%	122,251		16.042868		1,961,257	6.43	%	43.49	%
2009	0.25	%	158,484		15.970114		2,531,008	6.43	%	43.41	%
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	%
VIP Fund - High Income Portfolio - Service Class R (FHISR)
2009	0.00	%	350,965		10.674246		3,746,287	8.96	%	43.93	%
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
VIP Fund - Index 500 Portfolio - Initial Class (FIP)
2009	0.20	%	498,840		8.059227		4,020,265	2.45	%	26.35	%
2009	0.25	%	69,655		8.051179		560,805	2.45	%	26.29	%
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
VIP Fund - Investment Grade Bond Portfolio - Service Class (FIGBS)
2009	0.00	%	1,066,040		13.222437		14,095,647	8.80	%	15.67	%
2009	0.10	%	75,947		13.134577		997,532	8.80	%	15.56	%
2009	0.20	%	12,441		13.047289		162,321	8.80	%	15.44	%
2009	0.25	%	106,438		13.003875		1,384,106	8.80	%	15.38	%
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	%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
VIP Fund - Mid Cap Portfolio - Service Class (FMCS)
2009	0.00	%	1,033,209	$	22.878053	$	23,637,810	0.58	%	40.01	%
2009	0.10	%	66,502		22.726025		1,511,326	0.58	%	39.87	%
2009	0.20	%	52,799		22.575019		1,191,938	0.58	%	39.73	%
2009	0.25	%	483,255		22.499878		10,873,179	0.58	%	39.66	%
2009	0.40	%	161		22.275993		3,586	0.58	%	39.46	%
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	%
VIP Fund - Overseas Portfolio - Service Class (FOS)
2009	0.00	%	520,924		15.435366		8,040,653	2.05	%	26.44	%
2009	0.10	%	280,028		13.119571		3,673,847	2.05	%	26.31	%
2009	0.20	%	97,757		11.712682		1,144,997	2.05	%	26.19	%
2009	0.25	%	1,344,902		11.659560		15,680,966	2.05	%	26.12	%
2009	0.40	%	2,145		12.468464		26,745	2.05	%	25.93	%
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	%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
VIP Fund - Overseas Portfolio - Service Class R (FOSR)
2009	0.00	%	992,596	$	12.269434	$	12,178,591	2.07	%	26.49	%
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
VIP Fund - Value Strategies Portfolio - Service Class (FVSS)
2009	0.00	%	226,619		13.061648		2,960,018	0.51	%	57.40	%
2009	0.10	%	54,167		12.961834		702,104	0.51	%	57.24	%
2009	0.25	%	798		12.813506		10,225	0.51	%	57.00	%
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	%
VIP Fund - VIP Freedom Fund 2015 Portfolio - Service Class (FF15S)
2009	0.00	%	5,406		9.301002		50,281	4.01	%	25.06	%
2009	0.25	%	121,907		9.262314		1,129,141	4.01	%	24.75	%
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
VIP Fund - VIP Freedom Fund 2025 Portfolio - Service Class (FF25S)
2009	0.00	%	94		8.806233		828	4.01	%	29.96	%
2009	0.25	%	71,285		8.769590		625,140	4.01	%	29.63	%
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
Franklin Income Securities Fund - Class 2 (FTVIS2)
2009	0.00	%	382,836		11.100337		4,249,609	8.31	%	35.59	%
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 Rising Dividends Securities Fund - Class 1 (FTVRDI)
2009	0.00	%	724,097		13.984451		10,126,099	1.80	%	17.67	%
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	%
Franklin Small Cap Value Securities Fund - Class 1 (FTVSVI)
2009	0.00	%	526,295		18.034685		9,491,565	1.92	%	29.54	%
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	%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Franklin Small Cap Value Securities Fund - Class 2 (FTVSV2)
2009	0.00	%	24,186	$	11.233980	$	271,705	1.61	%	29.16	%
2009	0.10	%	45,532		11.181660		509,123	1.61	%	29.03	%
2009	0.20	%	16,337		11.129584		181,824	1.61	%	28.90	%
2009	0.25	%	329,020		11.103596		3,653,305	1.61	%	28.83	%
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
Mutual Discovery Global Securities Fund - Class 2 (FTVMD2)
2009	0.20	%	20,621		8.817252		181,821	1.18	%	23.07	%
2009	0.25	%	2,879		8.808466		25,360	1.18	%	23.01	%
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
Templeton Developing Markets Securities Fund - Class 3 (FTVDM3)
2009	0.00	%	329,156		17.256364		5,680,036	3.87	%	72.63	%
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
Templeton Foreign Securities Fund - Class 1 (TIF)
2009	0.00	%	84,266		20.155256		1,698,403	3.77	%	37.34	%
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	%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Templeton Foreign Securities Fund - Class 2 (TIF2)
2009	0.10	%	184,222	$	18.626590	$	3,431,428	3.25	%	36.91	%
2009	0.20	%	36,928		18.490649		682,823	3.25	%	36.77	%
2009	0.25	%	463,306		18.423035		8,535,503	3.25	%	36.70	%
2009	0.40	%	10,145		18.221708		184,859	3.25	%	36.50	%
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	%
Templeton Foreign Securities Fund - Class 3 (TIF3)
2009	0.00	%	428,311		12.945045		5,544,505	3.55	%	37.20	%
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
Templeton Global Bond Securities Fund - Class 2 (FTVGI2)
2009	0.00	%	9,362		12.842917		120,235	16.61	%	18.68	%
2009	0.25	%	189,274		12.770565		2,417,136	16.61	%	18.39	%
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	%
Templeton Global Bond Securities Fund - Class 3 (FTVGI3)
2009	0.00	%	410,243		15.605635		6,402,103	15.12	%	18.69	%
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
VIP Founding Funds Allocation Fund - Class 2 (FTVFA2)
2009	0.00	%	34,220		8.669683		296,677	3.31	%	30.25	%
2008	0.00	%	17,440		6.656135		116,083	3.75	%	-33.44	%	5/1/2008
Goldman Sachs VIT - Goldman Sachs Mid Cap Value Fund - Institutional Shares (GVMCE)
2009	0.10	%	117,092		17.989872		2,106,470	1.90	%	33.02	%
2009	0.20	%	732,755		17.858604		13,085,981	1.90	%	32.89	%
2009	0.25	%	1,759,781		17.793307		31,312,324	1.90	%	32.82	%
2009	0.40	%	1,601		17.598827		28,176	1.90	%	32.62	%
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	%
ClearBridge Variable Small Cap Growth Portfolio - Class I (SBVSG)
2009	0.00	%	92		8.379457		771	0.00	%	42.77	%
2009	0.25	%	32,585		8.332144		271,503	0.00	%	42.42	%
2008	0.00	%	166		5.869001		974	0.00	%	-40.71	%
2008	0.25	%	18,031		5.850489		105,490	0.00	%	-40.86	%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Lincoln VIP Trust - Baron Growth Opportunities Funds - Service Class (BNCAI)
2009	0.00	%	19,056	$	16.485275	$	314,143	0.00	%	38.32	%
2009	0.10	%	46,598		16.364975		762,575	0.00	%	38.19	%
2009	0.20	%	138,033		16.245528		2,242,419	0.00	%	38.05	%
2009	0.25	%	451,652		16.186105		7,310,487	0.00	%	37.98	%
2009	0.40	%	566		16.009192		9,061	0.00	%	37.77	%
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	%
Guardian Portfolio - I Class Shares (AMGP)
2009	0.00	%	2		18.170858		36	0.35	%	29.69	%
2009	0.10	%	68,145		13.030029		887,931	0.35	%	29.56	%
2009	0.25	%	56,767		11.974954		679,782	0.35	%	29.36	%
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	%
International Portfolio - S Class Shares (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)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Mid-Cap Growth Portfolio - I Class Shares (AMCG)
2009	0.10	%	74,748	$	13.613710	$	1,017,598	0.00	%	31.47	%
2009	0.20	%	37,091		9.908467		367,515	0.00	%	31.34	%
2009	0.25	%	425,418		9.863529		4,196,123	0.00	%	31.27	%
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	%
Partners Portfolio - I Class Shares (AMTP)
2009	0.00	%	13,263		14.368560		190,570	0.68	%	56.07	%
2009	0.10	%	109,951		13.335919		1,466,298	0.68	%	55.92	%
2009	0.25	%	111,841		13.200579		1,476,366	0.68	%	55.68	%
2009	0.40	%	886		12.319713		10,915	0.68	%	55.45	%
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	%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Regency Portfolio - I Class Shares (AMRI)
2009	0.00	%	13,249	$	8.428473	$	111,669	1.90	%	46.56	%
2009	0.25	%	342,170		8.351420		2,857,605	1.90	%	46.19	%
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
Regency Portfolio - S Class Shares (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
Small-Cap Growth Portfolio - S Class Shares (AMFAS)
2009	0.00	%	70,054		11.397179		798,418	0.00	%	22.75	%
2009	0.10	%	19,428		11.313940		219,807	0.00	%	22.63	%
2009	0.25	%	50,987		11.190284		570,559	0.00	%	22.45	%
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	%
Socially Responsive Portfolio - I Class Shares (AMSRS)
2009	0.00	%	156,920		14.587514		2,289,073	2.13	%	31.43	%
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	%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Capital Appreciation Fund/VA - Non-Service Shares (OVGR)
2009	0.00	%	2,150,050	$	15.999951	$	34,400,695	0.33	%	44.52	%
2009	0.10	%	315,282		11.932216		3,762,013	0.33	%	44.37	%
2009	0.20	%	1,910,067		9.257266		17,681,998	0.33	%	44.23	%
2009	0.25	%	3,390,134		9.215295		31,241,085	0.33	%	44.16	%
2009	0.40	%	11,854		13.161667		156,018	0.33	%	43.94	%
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	%
Global Securities Fund/VA - Class 3 (OVGS3)
2009	0.00	%	1,233,718		12.609317		15,556,341	2.21	%	39.70	%
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

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Global Securities Fund/VA - Non-Service Shares (OVGS)
2009	0.00	%	848,172	$	13.397168	$	11,363,103	2.21	%	39.77	%
2009	0.10	%	263,715		13.268257		3,499,038	2.21	%	39.63	%
2009	0.20	%	671,992		13.140568		8,830,357	2.21	%	39.49	%
2009	0.25	%	1,906,475		13.077210		24,931,374	2.21	%	39.42	%
2009	0.40	%	360		12.888902		4,640	2.21	%	39.21	%
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	%
High Income Fund/VA - Class 3 (OVHI3)
2009	0.00	%	380,539		2.584961		983,678	0.00	%	26.75	%
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
High Income Fund/VA - Non-Service Shares (OVHI)
2009	0.00	%	111,867		3.642267		407,449	0.00	%	25.32	%
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	%
Main Street Fund(R)/VA - Non-Service Shares (OVGI)
2009	0.00	%	1,878,416		11.819203		22,201,380	1.96	%	28.29	%
2009	0.10	%	84,972		10.772223		915,337	1.96	%	28.16	%
2009	0.20	%	184,538		10.200084		1,882,303	1.96	%	28.03	%
2009	0.25	%	164,327		10.153815		1,668,546	1.96	%	27.97	%
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	%
Main Street Small Cap Fund(R)/VA - Non-Service Shares (OVSC)
2009	0.00	%	247,124		17.642817		4,359,964	0.83	%	37.20	%
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	%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
MidCap Fund/VA - Non-Service Shares (OVAG)
2009	0.00	%	1,391,901	$	11.354891	$	15,804,884	0.00	%	32.61	%
2009	0.10	%	205,460		9.048967		1,859,201	0.00	%	32.47	%
2009	0.20	%	105,065		6.251839		656,849	0.00	%	32.34	%
2009	0.25	%	757,963		6.223493		4,717,177	0.00	%	32.28	%
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	%
Strategic Bond Fund/VA - Non-Service Shares (OVSB)
2009	0.20	%	152,297		10.081478		1,535,379	0.32	%	18.59	%
2009	0.25	%	21,266		10.071445		214,179	0.32	%	18.53	%
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
All Asset Portfolio - Administrative Class (PMVAAA)
2009	0.00	%	1,575		13.834339		21,789	6.32	%	21.57	%
2009	0.10	%	25,654		13.756266		352,903	6.32	%	21.45	%
2009	0.25	%	35,843		13.639951		488,897	6.32	%	21.27	%
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	%
Foreign Bond Portfolio (Unhedged) - Administrative Class (PMVFBA)
2009	0.00	%	41,010		11.047544		453,060	1.82	%	4.07	%
2009	0.25	%	16,785		11.001548		184,661	1.82	%	3.81	%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Low Duration Portfolio - Administrative Class (PMVLDA)
2009	0.00	%	298,516	$	13.516257	$	4,034,819	3.53	%	13.32	%
2009	0.10	%	109,511		13.417547		1,469,369	3.53	%	13.20	%
2009	0.20	%	1,554,752		13.319459		20,708,456	3.53	%	13.09	%
2009	0.25	%	2,339,252		13.270656		31,043,409	3.53	%	13.03	%
2009	0.40	%	9,468		13.125160		124,269	3.53	%	12.86	%
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	%
Real Return Portfolio - Administrative Class (PMVRRA)
2009	0.00	%	17,619		15.392452		271,200	3.17	%	18.35	%
2009	0.10	%	171,544		15.279874		2,621,171	3.17	%	18.23	%
2009	0.20	%	1,055,715		15.168007		16,013,093	3.17	%	18.11	%
2009	0.25	%	3,725,567		15.112339		56,302,031	3.17	%	18.05	%
2009	0.40	%	15,809		14.946401		236,288	3.17	%	17.87	%
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	%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Total Return Portfolio - Administrative Class (PMVTRA)
2009	0.00	%	176,178	$	15.739138	$	2,772,890	5.33	%	14.03	%
2009	0.10	%	1,021,669		15.624030		15,962,587	5.33	%	13.91	%
2009	0.20	%	4,005,633		15.509642		62,125,934	5.33	%	13.80	%
2009	0.25	%	9,496,915		15.452727		146,753,235	5.33	%	13.74	%
2009	0.40	%	22,586		15.283042		345,183	5.33	%	13.57	%
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	%
Variable Contracts Trust - Emerging Markets VCT Portfolio - Class I Shares (PIVEMI)
2009	0.00	%	38,365		7.640745		293,137	1.20	%	74.64	%
2009	0.25	%	134,639		7.597606		1,022,934	1.20	%	74.21	%
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	%
Variable Contracts Trust - High Yield VCT Portfolio - Class I Shares (PIHYB1)
2009	0.00	%	6,000		18.069028		108,414	8.34	%	60.49	%
2009	0.10	%	56,238		17.937073		1,008,745	8.34	%	60.33	%
2009	0.20	%	517,292		17.805947		9,210,874	8.34	%	60.17	%
2009	0.25	%	458,604		17.740695		8,135,954	8.34	%	60.09	%
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	%
Putnam VT Growth and Income Fund - IB Shares (PVGIB)
2009	0.00	%	59,317		12.591298		746,878	2.76	%	29.81	%
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	%
Putnam VT International Equity Fund - IB Shares (PVTIGB)
2009	0.00%		77,883		16.132414		1,256,441	0.00%		24.63%
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%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Putnam VT Small Cap Value Fund - IB Shares (PVTSCB)
2009	0.25	%	532	$	7.071223	$	3,762	1.78	%	31.20	%
2008	0.25	%	65		5.389467		350	0.00	%	-39.51	%
Putnam VT Vista Fund - IB Shares (PVVIB)
2009	0.20	%	5,870		13.767109		80,813	0.00	%	37.67	%	2/6/2009
2009	0.25	%	797		14.151257		11,279	0.00	%	41.51	%	2/13/2009
Putnam VT Voyager Fund - IB Shares (PVTVB)
2009	0.00	%	89,306		15.109296		1,349,351	0.69	%	63.90	%
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	%
Global Real Estate Portfolio - Class II (VKVGR2)
2009	0.00	%	10,415		6.931156		72,188	0.02	%	41.42	%
2009	0.25	%	98,075		6.892024		675,935	0.02	%	41.06	%
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	%
Micro-Cap Portfolio - Investment Class (ROCMC)
2009	0.00	%	16,000		21.643845		346,302	0.00	%	58.04	%
2009	0.10	%	126,584		21.485855		2,719,765	0.00	%	57.89	%
2009	0.20	%	478,012		21.329008		10,195,522	0.00	%	57.73	%
2009	0.25	%	1,217,957		21.251012		25,882,819	0.00	%	57.65	%
2009	0.40	%	9,307		21.018795		195,622	0.00	%	57.41	%
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	%
Small-Cap Portfolio - Investment Class (ROCSC)
2009	0.20	%	24,523		9.885736		242,428	0.00	%	34.93	%
2009	0.25	%	3,424		9.875865		33,815	0.00	%	34.86	%
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

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Blue Chip Growth Portfolio - II (TRBCG2)
2009	0.00	%	247,600	$	11.315697	$	2,801,767	0.00	%	41.79	%
2009	0.20	%	32,437		11.210550		363,637	0.00	%	41.51	%
2009	0.25	%	4,535		11.184427		50,721	0.00	%	41.44	%
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
Equity Income Portfolio - II (TREI2)
2009	0.00	%	348,107		14.706264		5,119,353	1.81	%	25.25	%
2009	0.10	%	153,172		14.598914		2,236,145	1.81	%	25.13	%
2009	0.20	%	1,596,462		14.492354		23,136,492	1.81	%	25.00	%
2009	0.25	%	2,808,807		14.439362		40,557,381	1.81	%	24.94	%
2009	0.40	%	15,065		14.281536		215,151	1.81	%	24.75	%
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	%
Health Sciences Portfolio - II (TRHS2)
2009	0.20	%	147,391		9.320531		1,373,762	0.00	%	31.09	%
2009	0.25	%	20,581		9.311233		191,634	0.00	%	31.03	%
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
Limited-Term Bond Portfolio - 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)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Mid-Cap Growth Portfolio - II (TRMCG2)
2009	0.10	%	83,827	$	20.683485	$	1,733,834	0.00	%	45.22	%
2009	0.20	%	266,361		20.532481		5,469,052	0.00	%	45.07	%
2009	0.25	%	665,706		20.457409		13,618,620	0.00	%	45.00	%
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	%
New America Growth Portfolio (TRNAG1)
2009	0.00	%	19,557		12.771923		249,780	0.00	%	49.76	%
2009	0.10	%	67,015		12.699803		851,077	0.00	%	49.62	%
2009	0.20	%	107,004		12.628086		1,351,256	0.00	%	49.47	%
2009	0.25	%	875,288		12.592384		11,021,963	0.00	%	49.39	%
2009	0.40	%	2,068		12.485874		25,821	0.00	%	49.17	%
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	%
Personal Strategy Balanced Portfolio (TRPSB1)
2009	0.00	%	2,569		10.094281		25,932	2.19	%	32.12	%
2009	0.25	%	42,706		10.016034		427,745	2.19	%	31.79	%
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	%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Worldwide Insurance Trust - Worldwide Emerging Markets Fund - Initial Class (VWEM)
2009	0.00	%	363,631	$	27.002169	$	9,818,826	0.16	%	113.17	%
2009	0.10	%	130,675		36.550513		4,776,238	0.16	%	112.96	%
2009	0.20	%	78,529		33.719407		2,647,951	0.16	%	112.75	%
2009	0.25	%	52,024		33.566508		1,746,264	0.16	%	112.64	%
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	%
Worldwide Insurance Trust - Worldwide Hard Assets Fund - Initial Class (VWHA)
2009	0.00	%	317,923		33.926069		10,785,878	0.25	%	57.54	%
2009	0.10	%	104,417		47.150241		4,923,287	0.25	%	57.38	%
2009	0.20	%	189,232		40.086483		7,585,645	0.25	%	57.22	%
2009	0.25	%	175,560		39.904798		7,005,686	0.25	%	57.14	%
2009	0.40	%	2,185		32.178659		70,310	0.25	%	56.91	%
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	%
Vanguard(R) Variable Insurance Funds - Balanced Portfolio (VVB)
2009	0.20	%	127,334		9.519394		1,212,143	4.83	%	22.66	%
2009	0.25	%	17,780		9.509907		169,086	4.83	%	22.60	%
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) Variable Insurance Funds - Diversified Value Portfolio (VVDV)
2009	0.20	%	175,071		8.193060		1,434,367	3.85	%	26.67	%
2009	0.25	%	24,446		8.184883		200,088	3.85	%	26.61	%
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

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Vanguard(R) Variable Insurance Funds - International Portfolio (VVI)
2009	0.20	%	410,028	$	7.883310	$	3,232,378	3.47	%	42.50	%
2009	0.25	%	57,254		7.875437		450,900	3.47	%	42.43	%
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) Variable Insurance Funds - Mid-Cap Index Portfolio (VVMCI)
2009	0.20	%	342,621		8.254974		2,828,327	1.64	%	40.09	%
2009	0.25	%	47,841		8.246745		394,533	1.64	%	40.02	%
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) Variable Insurance Funds - Short-Term Investment-Grade Portfolio (VVSTC)
2009	0.20	%	278,059		10.898210		3,030,345	3.71	%	13.63	%
2009	0.25	%	38,826		10.887347		422,712	3.71	%	13.57	%
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
Ivy Fund Variable Insurance Portfolios, Inc. - Asset Strategy (WRASP)
2009	0.00	%	287,483		10.509760		3,021,377	0.13	%	25.05	%
2009	0.25	%	146,447		10.450534		1,530,449	0.13	%	24.73	%
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 Variable Insurance Portfolios, Inc. - Growth (WRGP)
2009	0.00	%	9,754		12.557495		122,486	0.37	%	27.07	%
2009	0.10	%	37,585		12.499017		469,776	0.37	%	26.95	%
2009	0.25	%	28,728		12.411842		356,567	0.37	%	26.76	%
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 Variable Insurance Portfolios, Inc. - Real Estate Securities (WRRESP)
2009	0.00	%	10,737		9.935185		106,674	2.78	%	23.62	%
2009	0.10	%	29,857		9.888874		295,252	2.78	%	23.50	%
2009	0.25	%	48,451		9.819846		475,781	2.78	%	23.31	%
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 Variable Insurance Portfolios, Inc. - Science and Technology (WRSTP)
2009	0.00	%	4,290		9.694632		41,590	0.00	%	43.84	%
2009	0.25	%	103,724		9.639961		999,895	0.00	%	43.48	%
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

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
Advantage Funds Variable Trust - VT Discovery Fund (SVDF)
2009	0.00	%	169,734	$	7.681010	$	1,303,729	0.00	%	40.30	%
2009	0.10	%	30,327		7.663653		232,416	0.00	%	40.16	%
2009	0.25	%	43,498		7.637661		332,223	0.00	%	39.95	%
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	%
Advantage Funds Variable Trust - VT Opportunity Fund (SVOF)
2009	0.00	%	4		12.880035		52	0.00	%	47.74	%
2009	0.10	%	180,073		12.756058		2,297,022	0.00	%	47.59	%
2009	0.20	%	162,688		12.633308		2,055,288	0.00	%	47.44	%
2009	0.25	%	315,434		12.572347		3,965,746	0.00	%	47.37	%
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	%
Advantage Funds Variable Trust - VT Small Cap Growth Fund (WFVSCG)
2009	0.00	%	135,128		8.604153		1,162,662	0.00	%	52.64	%
2009	0.25	%	298,197		8.555599		2,551,254	0.00	%	52.26	%
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	%
Insurance Trust - Insurance Trust Diversified Mid Cap Value Portfolio 1 (obsolete) (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	%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***		Inception Date****
International Equity Flex I Portfolio (obsolete) (WIEP)
2009	0.00	%	93	$	13.330928	$	1,240	0.60	%	22.20	%
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	%
International Equity Flex II Portfolio (obsolete) (WVCP)
2009	0.00	%	20		10.138334		203	2.62	%	30.47	%
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	%
International Index Portfolio - Class II (obsolete) (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
J.P. Morgan NVIT Balanced Fund - Class I (obsolete) (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	%

(Continued)

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

	Contract Expense Rate*		Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**		Total Return***			Inception Date****
NVIT Mid Cap Growth Fund - Class I (obsolete) (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	%
Putnam VT OTC & Emerging Growth Fund - IB Shares (obsolete) (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
U.S. Equity Flex II Portfolio (obsolete) (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	%
2009	Contract owners equity:									$	3,763,821,378
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

* 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.

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, 2009 and 2008, and the related consolidated statements of income (loss), changes in equity and cash flows for each of the years in the three-year period ended December 31, 2009. 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, 2009 and 2008, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2009, 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 2 to the consolidated financial statements, the Company changed its method of evaluating other-than-temporary impairments of debt securities due to the adoption of new accounting requirements issued by the FASB, as of January 1, 2009.

/s/ KPMG LLP

Columbus, Ohio

March 1, 2010

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Consolidated Statements of Income (Loss)

(in millions)

	Years ended December 31,
	2009			2008			2007
Revenues:
Policy charges	$	1,245.1		$	1,340.5		$	1,383.9
Premiums		469.7			394.1			407.0
Net investment income		1,879.1			1,864.7			2,192.2
Net realized investment gains (losses)		453.8			(347.8	)		(47.2	)
Other-than-temporary impairment losses (consisting of $992.1 of total other-than-temporary impairment losses, net of $417.5 recognized in other comprehensive income, for the year ended December 31, 2009)		(574.6	)		(1,130.7	)		(117.7	)
Other income		(3.9	)		(4.2	)		8.9
Total revenues		3,469.2			2,116.6			3,827.1
Benefits and expenses:
Interest credited to policyholder accounts		1,100.1			1,172.6			1,311.0
Benefits and claims		812.1			856.1			672.5
Policyholder dividends		87.0			93.1			83.1
Amortization of deferred policy acquisition costs		465.6			691.6			382.1
Amortization of value of business acquired and other intangible assets		62.8			30.9			48.5
Interest expense, primarily with Nationwide Financial Services, Inc. (NFS)		55.3			61.8			70.0
Other operating expenses		579.8			631.6			630.8
Total benefits and expenses		3,162.7			3,537.7			3,198.0
Income (loss) from continuing operations before federal income tax expense (benefit)		306.5			(1,421.1	)		629.1
Federal income tax expense (benefit)		47.9			(533.8	)		147.3
Income (loss) from continuing operations		258.6			(887.3	)		481.8
Cumulative effect of adoption of accounting principle, net of taxes		—			—			(6.0	)
Net income (loss)		258.6			(887.3	)		475.8
Less: Net loss attributable to noncontrolling interest		52.3			72.3			50.9
Net income (loss) attributable to NLIC	$	310.9		$	(815.0	)	$	526.7

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 for share and per share amounts)

	December 31,
	2009			2008
Assets
Investments:
Securities available-for-sale, at fair value:
Fixed maturity securities (amortized cost $25,103.1 and $24,122.6)	$	24,749.7		$	21,387.5
Equity securities (amortized cost $48.8 and $62.2)		52.6			54.1
Mortgage loans on real estate, net		6,829.0			7,770.1
Short-term investments, including amounts managed by a related party		1,003.4			2,913.0
Other investments		1,516.8			1,733.2
Total investments		34,151.5			33,857.9
Cash and cash equivalents		49.1			42.0
Accrued investment income		401.9			342.9
Deferred policy acquisition costs		3,983.1			4,523.8
Value of business acquired		276.9			334.0
Goodwill		199.8			199.8
Other assets		2,085.2			3,662.2
Separate account assets		57,846.2			48,841.0
Total assets	$	98,993.7		$	91,803.6
Liabilities and Shareholder’s Equity
Liabilities:
Future policy benefits and claims	$	33,149.4		$	35,714.5
Short-term debt		150.0			249.7
Long-term debt, payable to NFS		700.0			700.0
Other liabilities		1,826.4			2,589.6
Separate account liabilities		57,846.2			48,841.0
Total liabilities		93,672.0			88,094.8
Shareholder’s equity:
Common stock ($1 par value; authorized - 5,000,000 shares; issued and outstanding - 3,814,779 shares)		3.8			3.8
Additional paid-in capital		1,717.7			1,697.7
Retained earnings		3,515.2			2,952.6
Accumulated other comprehensive loss		(265.6	)		(1,361.3	)
Total shareholder’s equity		4,971.1			3,292.8
Noncontrolling interest		350.6			416.0
Total equity		5,321.7			3,708.8
Total liabilities and equity	$	98,993.7		$	91,803.6

See accompanying notes to consolidated financial statements.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Condensed Consolidated Statements of Changes in Equity

(in millions)

	Common stock		Additional paid-in capital		Retained earnings			Accumulated other comprehensive income (loss)			Total shareholder’s equity			Non- controlling interest			Total equity
Balance as of December 31, 2006	$	3.8	$	1,358.8	$	4,311.3		$	24.6		$	5,698.5		$	445.5		$	6,144.0
Dividends to NFS		—		—		(612.5	)		—			(612.5	)		—			(612.5	)
Member contributions to noncontrolling interest		—		—		—			—			—			70.7			70.7
Other, net		—		—		2.6			—			2.6			0.4			3.0
Comprehensive income (loss):
Net income (loss)		—		—		526.7			—			526.7			(50.9	)		475.8
Other comprehensive loss, net of taxes		—		—		—			(111.7	)		(111.7	)		—			(111.7	)
Total comprehensive income (loss)												415.0			(50.9	)		364.1
Balance as of December 31, 2007	$	3.8	$	1,358.8	$	4,228.1		$	(87.1	)	$	5,503.6		$	465.7		$	5,969.3
Dividends to NFS		—		—		(460.5	)		—			(460.5	)		—			(460.5	)
Capital contributed by NFS		—		338.9		—			—			338.9			—			338.9
Member contributions to noncontrolling interest		—		—		—			—			—			23.0			23.0
Other, net		—		—		—			—			—			(0.4	)		(0.4	)
Comprehensive loss:
Net loss		—		—		(815.0	)		—			(815.0	)		(72.3	)		(887.3	)
Other comprehensive loss, net of taxes		—		—		—			(1,274.2	)		(1,274.2	)		—			(1,274.2	)
Total comprehensive loss												(2,089.2	)		(72.3	)		(2,161.5	)
Balance as of December 31, 2008	$	3.8	$	1,697.7	$	2,952.6		$	(1,361.3	)	$	3,292.8		$	416.0		$	3,708.8
Cumulative effect of change in accounting principle, net of taxes		—		—		249.7			(249.7	)		—			—			—
Capital contributed by NFS		—		20.0		—			—			20.0			—			20.0
Other, net		—		—		2.0			—			2.0			(13.1	)		(11.1	)
Comprehensive income (loss):
Net income (loss)		—		—		310.9			—			310.9			(52.3	)		258.6
Other comprehensive income, net of taxes		—		—		—			1,345.4			1,345.4			—			1,345.4
Total comprehensive income (loss)												1,656.3			(52.3	)		1,604.0
Balance as of December 31, 2009	$	3.8	$	1,717.7	$	3,515.2		$	(265.6	)	$	4,971.1		$	350.6		$	5,321.7

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,
	2009			2008			2007
Cash flows from operating activities:
Net income (loss)	$	258.6		$	(887.3	)	$	475.8
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Net realized investment (gains) losses		(453.8	)		347.8			47.2
Other-than-temporary impairment losses		574.6			1,130.7			117.7
Interest credited to policyholder accounts		1,100.1			1,172.6			1,311.0
Capitalization of deferred policy acquisition costs		(513.0	)		(587.6	)		(631.3	)
Amortization of deferred policy acquisition costs		465.6			691.6			382.1
Amortization and depreciation		51.1			48.1			81.7
Decrease (increase) in other assets		291.6			(727.2	)		552.7
(Decrease) increase in policy and other liabilities		(1,859.9	)		583.0			(50.6	)
Decrease (increase) in derivative assets		582.3			(1,030.7	)		(146.9	)
Increase in derivative liabilities		57.0			153.9			96.4
Other, net		57.4			51.0			10.0
Net cash provided by operating activities		611.6			945.9			2,245.8
Cash flows from investing activities:
Proceeds from maturity of securities available-for-sale		3,889.2			4,271.5			4,582.7
Proceeds from sale of securities available-for-sale		4,210.5			4,308.8			4,977.9
Proceeds from repayments or sales of mortgage loans on real estate		773.1			869.1			2,653.7
Cost of securities available-for-sale acquired		(9,205.7	)		(7,255.5	)		(8,400.2	)
Cost of mortgage loans on real estate originated or acquired		(35.7	)		(371.8	)		(1,944.0	)
Net decrease (increase) in short-term investments		1,909.6			(1,856.8	)		831.5
Collateral (paid) received, net		(868.6	)		592.2			(207.3	)
Other, net		207.7			15.3			(156.2	)
Net cash provided by investing activities		880.1			572.8			2,338.1
Cash flows from financing activities:
Net (decrease) increase in short-term debt		(99.7	)		(35.6	)		210.1
Capital contributed by NFS		20.0			—			—
Cash dividends paid to NFS		—			(280.7	)		(612.5	)
Investment and universal life insurance product deposits and other additions		3,877.1			3,862.3			3,913.8
Investment and universal life insurance product withdrawals and other deductions		(5,301.4	)		(5,305.9	)		(8,101.8	)
Other, net		19.4			281.9			0.3
Net cash used in financing activities		(1,484.6	)		(1,478.0	)		(4,590.1	)
Net increase (decrease) in cash and cash equivalents		7.1			40.7			(6.2	)
Cash and cash equivalents, beginning of period		42.0			1.3			7.5
Cash and cash equivalents, end of period	$	49.1		$	42.0		$	1.3

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, 2009, 2008 and 2007

(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, 2009 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, 2009 and 2008, 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.

On December 31, 2009, NLIC merged with its affiliate, Nationwide Life Insurance Company of America and subsidiaries (NLICA), with NLIC as the surviving entity. In addition, NLIC’s subsidiary, Nationwide Life and Annuity Insurance Company (NLAIC), merged with a subsidiary of NLICA, Nationwide Life and Annuity Company of America (NLACA), effective as of December 31, 2009, with NLAIC as the surviving entity. The mergers were completed to streamline the enterprise’s capital structure and create operational efficiencies. See Note 2 (p) for further information.

(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.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

The Company’s most critical 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 derivatives resulting from living benefit contracts; and the 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.

Certain items in the 2008 and 2007 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. All significant intercompany balances and transactions were eliminated in consolidation.

(b) Subsequent events

The Company evaluated subsequent events through the date the consolidated financial statements were filed with the SEC.

(c) Valuation of Investments, Investment Income, Related Gains and Losses and Other-Than-Temporary Impairment Evaluations

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, value of business acquired (VOBA), future policy benefits and claims, policyholder dividend obligation and deferred federal income taxes reported as a separate component of accumulated other comprehensive income (loss) (AOCI) in shareholder’s equity. The adjustment to DAC and VOBA represents the changes in amortization of DAC and VOBA 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. Net realized gains and losses on the sale of investments are determined using the specific identification method.

For fixed maturity and marketable equity securities for which market quotations 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 investment grade 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. See Note 4 for further information regarding these alternative pricing processes.

For mortgage-backed securities, 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.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

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.

As a result of the Company’s adoption of guidance impacting Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 320-10, Investments – Debt and Equity Securities, in the first quarter of 2009, for all debt securities evaluated for other-than-temporary impairment (for which the Company does not have the intent to sell and it is not more likely than not that it will be required to sell the security before the recovery of its amortized cost basis), the Company considers the timing and amount of the cash flows. The Company evaluates its intent to sell on an individual security basis.

Additionally, debt securities that become other-than-temporarily impaired (where the Company does not intend to sell the security and it is not more likely than not that it will be required to sell the security prior to recovery of the security’s amortized cost) are bifurcated with the credit portion of the impairment loss being recognized in earnings and the non-credit loss portion of the impairment being recognized in a separate component of other comprehensive income, net of applicable taxes and other offsets.

The Company’s practice is to disclose as part of the separate component of accumulated other comprehensive income both the non-credit portion of the other-than-temporary impairment recognized in other comprehensive income and any subsequent changes in the fair value of those debt securities.

Prior to 2009, an other-than-temporary impairment charge was taken when the Company did not have the ability and intent to hold the security until the forecasted recovery or if it was probable that the Company would not recover all contractual amounts when due. Many criteria were 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 equal to the difference between the estimated fair value of the security and its amortized cost.

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 loan-specific reserves, 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 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, while loan-specific reserves are included in other-than-temporary impairment losses. Loans in default or in the process of 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. Interest income on mortgage loans is recognized over the life of the loan using the effective-yield method.

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.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

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.

Impairment losses for other-than-temporary declines in the fair values of applicable investments are included in other-than-temporary impairment losses in the consolidated statements of income (loss).

(d) Derivative Instruments

The Company uses derivative instruments in efforts to manage exposures and mitigate risks associated with interest rates, equities, foreign currency and credit. These derivative instruments primarily include interest rate swaps, futures contracts, credit default swaps, cross-currency swaps and other traditional swap agreements. Certain features embedded in the Company’s investment portfolio, equity-indexed life and annuity contracts and certain variable life and annuity contracts are derivatives requiring separate accounting under the provisions of FASB ASC 815-15 Embedded Derivatives. All derivative instruments are carried at fair value and are reflected as an asset or liability. See Note 5 for a discussion on the Company’s use of derivative instruments.

(e) 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.

(f) 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.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

(g) 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(c).

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.

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.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

See Note 7 for a discussion of assumption changes that impacted DAC amortization and related balances for 2007, 2008 and 2009.

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.

(h) Value of Business Acquired

As a result of the acquisition of NFN in 2002 and the application of purchase accounting, the Company reports an intangible asset representing the estimated fair value of the business in force and the portion of the purchase price that was allocated to the value of the right to receive future cash flows from the life insurance and annuity contracts existing as of the closing date of the NFN acquisition. The value assigned to VOBA was supported by an independent valuation study commissioned by the Company and executed by a team of qualified valuation experts, including actuarial consultants. The expected future cash flows used in determining such value were based on actuarially determined projections by major lines of business of future policy and contract charges, premiums, mortality and morbidity, separate account performance, surrenders, changes in reserves, operating expenses, investment income and other factors. These projections considered all known or expected factors at the valuation date based on the judgment of management. The actual experience on purchased business, to some extent, has and may continue to vary from projections due to differences in renewal premiums, investment spreads, investment gains and losses, mortality and morbidity costs, or other factors.

Amortization of VOBA occurs with interest over the anticipated lives of the major lines of business to which it relates (initially ranging from 13 to 30 years) in relation to estimated gross profits, gross margins or premiums, as appropriate. If estimated gross profits, gross margins or premiums differ from expectations, the amortization of VOBA is adjusted on a retrospective or prospective basis, as appropriate. The VOBA asset related to investment products and universal life insurance products is adjusted annually for the impact of net unrealized gains and losses on securities available-for-sale had such gains and losses been realized and allocated to the product lines, as described in Note 2(c). The recoverability of VOBA is evaluated annually. If the evaluation indicates that the existing insurance liabilities, together with the present value of future net cash flows from the blocks of business acquired, is insufficient to recover VOBA, the difference, if any, is charged to expense as accelerated amortization of VOBA.

For those products amortized in relation to estimated gross profits, the most significant assumptions involved in the estimation of future gross profits include future net separate account performance, surrender/lapse rates, interest margins and mortality. The Company’s long-term assumption for net separate account performance is currently 7%. If actual net separate account performance varies from the 7% assumption, the Company assumes different performance levels over the next three years such that the mean return equals the long-term assumption. The assumed net separate account return assumptions used in the VOBA models are intended to reflect what is anticipated. However, based on historical returns of the S&P 500 Index, the Company’s reversion to the mean process generally limits returns to 0-15% during the three-year reversion period.

Changes in assumptions can have a significant impact on the amount of VOBA reported for all products and their related amortization patterns. In the event actual experience differs from assumptions or assumptions are revised, the Company is required to record an increase or decrease in VOBA amortization expense (VOBA unlocking), 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 VOBA 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 VOBA amortization.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

The use of discount rates was necessary to establish fair values of VOBA acquired in the NFN transaction. In selecting the appropriate discount rates, management considered its weighted average cost of capital as well as the weighted average cost of capital required by market participants. In addition, consideration was given to the perceived risk of the assets acquired, which includes the expected growth and competitive profile of the life insurance market and the nature of the assumptions used in the valuation process. An after-tax discount rate of 11.0% was used to value VOBA, while after-tax discount rates ranging from 11.0% to 12.5% were used to value the other intangible assets acquired in the NFN transaction, as well as for net realized gains and losses, net of taxes, allocated to the closed block.

(i) Goodwill

In connection with acquisitions of operating entities, the Company recognizes the excess of the purchase price over the fair value of net assets acquired as goodwill. Goodwill is not amortized, but is evaluated for impairment at the reporting unit level annually in the third quarter. Goodwill of a reporting unit also is tested for impairment on an interim basis in addition to the annual evaluation if an event occurs or circumstances change which would more likely than not reduce the fair value of a reporting unit below its carrying amount.

The process of evaluating goodwill for impairment requires several judgments and assumptions to be made to determine the fair value of the reporting units, including the method used to determine fair value; discount rates; expected levels of cash flows, revenues and earnings; and the selection of comparable companies used to develop market-based assumptions. The Company performed its annual impairment test as of June 30, 2009.

(j) Closed Block

In connection with the sponsored demutualization of Provident Mutual Life Insurance Company (Provident) prior to its acquisition, Provident established a closed block for the benefit of certain classes of individual participating policies that had a dividend scale payable in 2001. Assets were allocated to the closed block in an amount that produces cash flows which, together with anticipated revenues from closed block business, is reasonably expected to be sufficient to provide for (1) payment of policy benefits, specified expenses and taxes, and (2) the continuation of dividends throughout the life of the Provident policies included in the closed block based upon the dividend scales payable for 2001, if the experience underlying such dividend scales continues.

Assets allocated to the closed block benefit only the holders of the policies included in the closed block and will not revert to the benefit of the Company. No reallocation, transfer, borrowing or lending of assets can be made between the closed block and other portions of the Company’s general account, any of its separate accounts, or any affiliate of the Company without the approval of the Pennsylvania Insurance Department (PID). The closed block will remain in effect as long as any policy in the closed block is in force.

If, over time, the aggregate performance of the closed block assets and policies is better than was assumed in funding the closed block, dividends to policyholders will increase. If, over time, the aggregate performance of the closed block assets and policies is less favorable than was assumed in the funding, dividends to policyholders could be reduced. If the closed block has insufficient funds to make guaranteed policy benefit payments, such payments will be made from the Company’s assets outside of the closed block, which are general account assets.

The assets and liabilities allocated to the closed block are recorded in the Company’s consolidated financial statements on the same basis as other similar assets and liabilities. The carrying amount of closed block liabilities in excess of the carrying amount of closed block assets at the date Provident was acquired by the Company represents the maximum future earnings from the assets and liabilities designated to the closed block that can be recognized in income, for the benefit of stockholders, over the period the policies in the closed block remain in force.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

If actual cumulative earnings exceed expected cumulative earnings, the expected earnings are recognized in income. This is because the excess cumulative earnings over expected cumulative earnings, which represents undistributed accumulated earnings attributable to policyholders, is recorded as a policyholder dividend obligation. Therefore, the excess will be paid to closed block policyholders as an additional policyholder dividend expense in the future unless it is otherwise offset by future performance of the closed block that is less favorable than originally expected. If actual cumulative performance is less favorable than expected, actual earnings will be recognized in income.

The principal cash flow items that affect the amount of closed block assets and liabilities are premiums, net investment income, purchases and sales of investments, policyholder benefits, policyholder dividends, premium taxes and income taxes. The principal income and expense items excluded from the closed block are management and maintenance expenses, commissions, net investment income, and realized gains and losses on investments held outside of the closed block that support the closed block business, all of which enter into the determination of total gross margins of closed block policies for the purpose of the amortization of VOBA.

(k) 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 and the Company primarily uses net asset value (NAV) to estimate the underlying fair value for certain mutual funds that do not have readily determinable fair values. The Company also uses market quotations to determine the underlying fair value of mutual funds when available. 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 income (loss) 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.

(l) 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 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.

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%.

(m) Participating Business

Participating business, which refers to policies that participate in profits through policyholder dividends, represented approximately 4% of the Company’s life insurance in force in 2009 (5% in 2008 and 6% in 2007), 51% of the number of life insurance policies in force in 2009 (54% in 2008 and 56% in 2007) and 12% of life insurance statutory premiums in 2009 (12% in 2008 and 12% in 2007). 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.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

(n) 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 income (loss).

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.

(o) 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.

(p) NLICA Merger

On December 31, 2009, NLIC merged with its affiliate, NLICA, with NLIC as the surviving entity. In addition, NLIC’s subsidiary, NLAIC, merged with a subsidiary of NLICA, NLACA, effective as of December 31, 2009, with NLAIC as the surviving entity. The merger was accounted for at historical cost in a manner similar to a pooling of interests because the involved entities are under common control. NLICA and subsidiaries are reflected in the Company’s current and prior year consolidated financial statements at the historical cost of the transferred net assets to provide comparative information as though the companies were combined for all periods presented. This presentation is consistent for both GAAP and Statutory reporting. Since NLICA and NLACA are wholly-owned subsidiaries, there is no noncontrolling interest impact.

The Company has presented its consolidated financial statements and accompanying notes as applicable for all years presented to reflect the NLICA merger.

The following tables summarize the impact of the items described above for the years ended December 31 (in millions):

	2009
Total revenues	$	375.5
Total benefits and expenses		357.3
Federal income tax benefit		(4.9	)
Net income	$	23.1
	2008
Total revenues	$	411.0
Total benefits and expenses		395.7
Federal income tax expense		0.5
Net income	$	14.8
	2007
Total revenues	$	510.0
Total benefits and expenses		412.7
Federal income tax expense		(18.8	)
Net income	$	78.5

(q) Change in Accounting Principle

In April 2009, the FASB issued guidance under FASB ASC 320, Investments – Debt and Equity Securities (FASB Staff Position (FSP), FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments). The Company adopted this guidance as of January 1, 2009. The adoption of this guidance resulted in a cumulative-effect adjustment of $249.7 million, net of taxes, as an adjustment to the opening balance of retained earnings with a corresponding adjustment to the opening balance of AOCI.

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, which lowered net income by $1.9 million in 2007.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

(3) Recently Issued Accounting Standards  

In January 2010, the FASB issued Accounting Standards Update (ASU) 2010-02, which amends FASB ASC 810, Consolidation. This guidance clarifies the scope of the decrease in the ownership provisions and applies to a subsidiary or group of assets that is a business or nonprofit activity, a subsidiary that is a business or nonprofit activity that is transferred to an equity method investee or joint venture, and an exchange of a group of assets that constitutes a business or nonprofit activity for a noncontrolling interest in an entity. This guidance would not be applied to sales of in-substance real estate. If a decrease in ownership occurs in a subsidiary that is not a business or nonprofit activity, an entity first needs to consider whether the substance of the transaction causing the decrease in ownership is addressed in other GAAP, such as transfers of financial assets, revenue recognition, exchanges of nonmonetary assets, or sales of in substance real estate, and apply that guidance as applicable. If no other guidance exists, an entity should apply the guidance in FASB ASC 810-10. This guidance also expands the disclosures about the deconsolidation of a subsidiary or derecognition of a group of assets within the scope of FASB ASC 810-10. In addition to existing disclosures, this guidance requires for such a deconsolidation or derecognition additional disclosures regarding valuation techniques, the nature of continuing involvement with the subsidiary or entity acquiring the group of assets, and whether the transaction was with a related party or whether the former subsidiary or entity acquiring the group of assets will be a related party. The Company adopted this guidance effective December 31, 2009. The adoption of this guidance did not have a material impact on the consolidated financial statements of the Company. The guidance will be applied to prospective transactions, as is required.

In January 2010, the FASB issued ASU 2010-06, which amends FASB ASC 820, Fair Value Measurement and Disclosures. This guidance requires new disclosures and provides amendments to clarify existing disclosures. The new requirements include disclosing transfers in and out of Levels 1 and 2 fair value measurements and the reasons for the transfers and further disaggregating activity in Level 3 fair value measurements. The clarification of existing disclosure guidance includes further disaggregation of fair value measurement disclosures for each class of assets and liabilities and providing disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements. The guidance also includes conforming amendments to the guidance on employers’ disclosures about the postretirement benefit plan assets. This guidance is effective for interim and annual reporting periods beginning after December 15, 2009, except for the new disclosures regarding the activity in Level 3 measurements, which shall be effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. The Company will adopt this guidance for the fiscal period beginning January 1, 2010, except for the new disclosure regarding the activity in level 3 measurements, which the Company will adopt for the fiscal period beginning January 1, 2011.

In September 2009 the FASB issued ASU 2009-12, which amends FASB ASC 820, Fair Value Measurements and Disclosures. This guidance applies to reporting entities that hold an investment that is required or permitted to be measured or disclosed at fair value on a recurring or nonrecurring basis but does not have a readily determinable fair value and has attributes of a investment company. For these investments, this update allows, as a practical expedient, the use of NAV as the basis to estimate fair value as long as it is not probable, as of the measurement date, that the investment will be sold and NAV is not the value that will be used in the sale. The NAV must be calculated consistent with the American Institute of Certified Public Accountants Audit and Accounting Guide, Investment Companies, which generally requires these investments to be measured at fair value. Additionally, the guidance provides updated disclosures for investments within its scope and notes that if the investor can redeem the investment with the investee on the measurement date at NAV, the investment should likely be classified as Level 2 in the fair value hierarchy. Investments that cannot be redeemed with the investee at NAV would generally be classified as Level 3 in the fair value hierarchy. If the investment is not redeemable with the investee on the measurement date, but will be at a future date, the length of time until the investment is redeemable should be considered in determining classification as Level 2 or 3. This guidance is effective for interim and annual periods ending after December 15, 2009 with early adoption permitted. The Company adopted this guidance effective December 31, 2009. The adoption of this guidance did not have a material impact on the consolidated financial statements of the Company. See the required disclosures and updated fair value hierarchy disclosed within Note 4.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

In August 2009 the FASB issued ASU 2009-05, which amends FASB ASC 820-10, Fair Value Measurements and Disclosures. This guidance clarifies how the fair value of a liability should be determined. It reiterates that fair value is the price that would be paid to transfer the liability in an orderly transaction between market participants at the measurement date. It notes that the liability should reflect the company’s nonperformance risk and should not reflect restrictions on the transfer of the liability. To determine the exit price, the guidance permits companies to look to the identical liability traded as an asset, similar liabilities traded as assets, or another valuation technique to measure the price the company would pay to transfer the liability. The Company adopted this guidance effective the reporting period ending December 31, 2009. The adoption of this guidance did not have a material impact on the consolidated financial statements of the company.

In June 2009, the FASB issued guidance under FASB ASC 105, Generally Accepted Accounting Principles (Statement of Financial Accounting Standard (SFAS) No. 168, The FASB Accounting Standards CodificationTM and the Hierarchy of Generally Accepted Accounting Principles – a replacement of FASB Statement No. 162 (SFAS 168)). This guidance establishes the FASB ASC as the single source of authoritative GAAP recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. SFAS 168 and the ASC are effective for financial statements issued for interim and annual periods ending after September 15, 2009. The ASC supersedes all existing non-SEC accounting and reporting standards. All other non-grandfathered, non-SEC accounting literature not included in the ASC have become non-authoritative. Following SFAS 168, the FASB will no longer issue new standards in the form of Statements, FSPs, or EITF Abstracts. Instead, the FASB will issue Accounting Standards Updates, which will serve only to update the ASC, provide background information about the guidance, and provide the bases for conclusions on the change(s) in the ASC. The Company adopted SFAS 168 effective September 30, 2009. The adoption of this guidance did not have an impact on the Company’s consolidated financial statements but will alter the references to accounting literature within the consolidated financial statements.

In June 2009, the FASB issued guidance under FASB ASC 810 Consolidation (SFAS No. 167, Amendments to FASB Interpretation No. 46(R)). In February 2010, this guidance was amended by ASU 2010-10, which defers the application of SFAS No. 167 for certain interests in an entity that has all of the attributes of an investment company, or for which it is industry practice to apply measurement principles for financial reporting that are consistent with those investment companies apply, or the entity is a registered money market fund. An entity that qualifies for the deferral will continue to be assessed under the overall guidance on the consolidation of variable interest entities before the SFAS No. 167 amendments. ASU 2010-10 also clarifies other aspects of the SFAS No. 167 amendments. FASB ASC 810, Consolidation changes the consolidation guidance applicable to a variable interest entity (VIE). It also amends the guidance governing the determination of whether an entity is the VIE’s primary beneficiary (the reporting entity that must consolidate the VIE) by requiring a qualitative analysis rather than a quantitative analysis. The qualitative analysis will include consideration of who has the power to direct the activities of the entity that most significantly impacts the entity’s economic performance and who has the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. This guidance also requires continuous reassessment of whether an enterprise is the primary beneficiary of a VIE. Before this guidance, FASB Interpretation No. 46(R) required reconsideration of whether an enterprise was the primary beneficiary of a VIE only when specific events had occurred. This guidance also requires enhanced disclosures about an entity’s involvement with a VIE. This guidance is effective for fiscal and interim reporting periods beginning after November 15, 2009. The Company is in the process of determining the impact of adopting this guidance.

In June 2009, the FASB issued guidance under FASB ASC 860, Transfers and Servicing (SFAS No. 166, Accounting for Transfers of Financial Assets – an amendment of FASB Statement No. 140). This guidance eliminates the concept of a qualifying special-purpose entity (QSPE) and clarifies and amends the derecognition criteria for a transfer to be accounted for as a sale and the unit of account eligible for sale accounting. Additionally, this guidance requires a transferor to initially measure and recognize all assets obtained (including a transferor’s beneficial interest) and liabilities incurred as a result of a transfer of financial assets accounted for as a sale at fair value. Additionally, on and after the effective date, existing QSPEs (as defined under previous accounting standards) must be evaluated for consolidation in accordance with the applicable consolidation guidance. This guidance also establishes new requirements for reporting a transfer of a portion of a financial asset as a sale. This guidance requires enhanced disclosures about, among other things, a transferor’s continuing involvement with transfers of financial assets accounted for as sales, the risks inherent in the transferred financial assets that have been retained, and the nature and financial effect of restrictions on the transferor’s assets that continue to be reported in the consolidated balance sheets. This guidance is effective for fiscal and interim reporting periods beginning after November 15, 2009. The Company adopted this guidance effective January 1, 2010. The guidance will be applied to prospective transactions, as is required.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

In May 2009, the FASB issued guidance under FASB ASC 855, Subsequent Events (SFAS No. 165, Subsequent Events). This guidance establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued. In particular, this guidance sets forth the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure, the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements, and the disclosures an entity should make about events or transactions that occurred after the balance sheet date. This guidance is effective for fiscal years and interim periods ending after June 15, 2009. The Company adopted this guidance effective June 30, 2009. The adoption of this guidance did not have a material impact on the consolidated financial statements of the Company. See Note 2 (b) for the required disclosure.

In April 2009, the FASB issued guidance under FASB ASC 320, Investments – Debt and Equity Securities FSP FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments). This guidance is designed to create greater clarity and consistency in accounting for and presentation of impairment losses on debt securities. This guidance is effective for interim and annual periods ending after June 15, 2009 with early adoption permitted. As of the beginning of the interim period of adoption, this guidance requires a cumulative-effect adjustment to reclassify the non-credit component of previously recognized other-than-temporary impairment losses on debt securities from retained earnings to the beginning balance of AOCI. The Company adopted this guidance as of January 1, 2009. The adoption of this guidance resulted in a cumulative-effect adjustment of $249.7 million, net of taxes, as an adjustment to the opening balance of retained earnings with a corresponding adjustment to the opening balance of AOCI.

In April 2009, the FASB issued guidance under FASB ASC 820-10, Fair Value Measurements and Disclosures (FSP FAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly). This guidance provides guidelines for making fair value measurements more consistent with the principles presented in the previous standard SFAS No. 157, Fair Value Measurements. This guidance is effective for interim and annual periods ending after June 15, 2009 with early adoption permitted. The Company elected to early adopt this guidance as of January 1, 2009.

In December 2008, the FASB issued guidance under FASB ASC 715, Compensation – Retirement Benefits (FSP FAS 132R-1). This guidance amends previous SFAS No. 132 (revised 2003), Employers’ Disclosures about Pensions and Other Postretirement Benefit, to provide guidance on an employer’s disclosures about plan assets of a defined benefit pension or other postretirement plan. The portion of this guidance related to the disclosures about plan assets is effective for fiscal years ending after December 15, 2009. This guidance will have no impact on the Company’s disclosures.

In November 2008, the FASB issued guidance under FASB ASC 350-30, Intangibles – Goodwill and Other, General Intangibles Other than Goodwill (EITF 08-7, Accounting for Defensive Intangible Assets). This guidance 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. This guidance is effective for intangible assets acquired on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. The Company adopted this guidance effective January 1, 2009. On the date of adoption, there was no impact to the Company’s financial position or results of operations. The Company will apply this guidance prospectively for intangible assets acquired on or after January 1, 2009.

In November 2008, the FASB issued guidance under FASB ASC 323-10, Investments – Equity Method and Joint Ventures (EITF 08-6, Equity Method Investment Accounting Considerations). This guidance clarifies how to account for certain transactions and impairment considerations involving equity method investments. Specifically, this guidance 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 35-32A and an equity method investor shall not separately test an investee’s underlying indefinite-lived intangible asset(s) for impairment; and 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 guidance 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 adopted this guidance prospectively beginning January 1, 2009. 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, 2009, 2008 and 2007

In April 2008, the FASB issued guidance under FASB ASC 350-30, General Intangibles other than Goodwill (FSP FAS 142-3, Determination of the Useful Life of Intangible Assets). This guidance amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under previous SFAS No. 142, Goodwill and Other Intangible Assets (SFAS 142). This guidance is effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2008. The amended factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS 142 are to be applied prospectively to intangible assets acquired after the effective date. The Company adopted this guidance effective January 1, 2009. On the date of adoption, there was no impact to the Company’s financial position or results of operations. The Company will apply this guidance prospectively to intangible assets acquired after January 1, 2009.

In March 2008, the FASB issued guidance under FASB ASC 815, Derivatives and Hedging (SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133). This guidance amends and expands the disclosure requirements of previous SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities (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 and how derivative instruments and related hedged items affect an entity’s financial position, financial performance and cash flows. This guidance 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. This guidance is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. The Company adopted this guidance effective January 1, 2009. See Note 5 for required disclosures.

In February 2008, the FASB issued guidance under FASB ASC 820, Fair Value Measurements and Disclosures (FSP FAS 157-2, Effective Date of FASB Statement No. 157). This guidance delayed the effective date of SFAS 157 for nonfinancial assets and liabilities until fiscal years and interim periods beginning after November 15, 2008. FASB ASC 820 applies to nonfinancial assets and liabilities, except for items 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 adopted this guidance effective January 1, 2009. On the date of adoption, there was no impact to the Company’s financial position or results of operations.

In December 2007, the FASB issued guidance under FASB ASC 805, Business Combination, (SFAS No. 141 (revised 2007), Business Combinations (SFAS 141R), which replaced SFAS No. 141, Business Combinations). The objective of this guidance is to improve the relevance, representational faithfulness, and comparability of the information a reporting entity provides in its financial reports about a business combination and its effects. Accordingly, this guidance establishes principles and requirements for how the acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree; recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase; and determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. This guidance applies to all transactions or other events in which an entity obtains control of one or more businesses and retains the fundamental requirements in the previous standard that the acquisition method of accounting be used for all business combinations and for an acquirer to be identified for each business combination. This guidance 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 the acquirer achieves control. This guidance 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 adopted this guidance effective January 1, 2009. The Company applied this guidance prospectively to business combination on or after January 1, 2009.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

In April 2009, the FASB issued guidance under FASB ASC 805-20, Business Combinations – Identifiable Assets and Liabilities, and Any Noncontrolling Interest (FSP FAS 141R-1, Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies). This guidance amends previous business combination guidance related to contingencies. First, this guidance requires the acquirer to recognize the contingency at fair value, at the acquisition date, if the acquisition-date fair value of that asset or liability can be determined during the measurement period. Second, if the first criteria is not applicable as the fair value of the asset or liability cannot be determined during the measurement period, then the contingency shall be recognized if both (a) information available before the end of the measurement period indicates it is probable an asset existed or a liability had been incurred at the acquisition date and (b) the amount of the asset or liability can be reasonably estimated. If neither of these acquisition date recognition criterion apply, the acquirer shall not recognize an asset or liability as of the acquisition date. In periods after the acquisition date, the acquirer shall account for an asset or a liability arising from a contingency that does not meet the recognition criteria at the acquisition date in accordance with other applicable GAAP, including FASB ASC 450, Contingencies, as appropriate. The Company will apply this guidance prospectively to any business combination on or after January 1, 2009.

In December 2007, the FASB issued guidance under FASB ASC 810, Consolidation (SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements, an Amendment of ARB No. 51). The objective of this guidance 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. This guidance also amends certain consolidation procedures prescribed by previous Accounting Research Bulletin No. 51, Consolidated Financial Statements. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. The Company adopted this guidance effective January 1, 2009. The required presentation of noncontrolling interests is reflected in the consolidated financial statements. As a result of adoption, the Company reclassified $416.0 million from other liabilities to equity as of December 31, 2008, representing the noncontrolling interest of low-income-housing tax credit funds (LIHTC Funds). See Note 20 for further discussion on the LIHTC Funds. The accounting requirements of this guidance will be applied to any transactions involving noncontrolling interests on or after January 1, 2009.

In September 2005, the FASB issued guidance under FASB ASC 944-30, Financial Services – Insurance – Acquisition Costs, (Statement of Position No. 05-1). This guidance 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 FASB ASC 944, Financial Services – Insurance. This guidance 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. This guidance was effective for internal replacements occurring in fiscal years beginning after December 15, 2006. Retrospective application of this guidance to previously issued financial statements was not permitted. Initial application was required as of the beginning of an entity’s fiscal year. The Company adopted this guidance 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.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

(4) Fair Value Measurements  

Fair Value Option

Effective January 1, 2008, the Company elected 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 are 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 newly acquired financial assets or liabilities on a prospective basis. The fair value election is an irreversible election.

Fair Value Hierarchy

Fair value is defined 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.

The Company categorizes 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.  

• 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.  

• 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.  

For certain residential mortgage-backed securities backed by Prime, sub-prime and Alt-A collateral, which are included in Level 3 financial assets, the Company utilizes internal pricing models to assist in determining the estimated fair values. As of December 31, 2008, these investments were priced solely with the assistance of independent pricing services. As a result of continued low levels of activity in these markets during 2009, management believes that prices are no longer representative of the investments’ fair value, which is the price that would be received upon the sale of the investment in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date. The Company believes that a weighting of internal pricing models and independent pricing services represents a better estimate of the investments’ fair value and complies with FASB ASC 820, Fair Value Measurements and Disclosures.

Therefore, management determined that the use of multiple valuation techniques, considering both an income approach that maximizes the use of relevant observable inputs and minimizes the use of unobservable inputs and a market approach that observes quotes provided by independent pricing services produces a result more representative of an investment’s fair value.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

The income approach incorporates cash flows for each investment adjusted for expected losses in different interest rate and housing scenarios. The adjusted cash flows are then discounted using a risk premium that market participants would demand because of the risk in the cash flows. The risk premium is reflective of an orderly transaction between market participants at the measurement date under current market conditions and includes items such as liquidity and structure risk. The income approach also includes a weighting of external third party values. As sufficient information is often not available to conclude whether such prices are based on orderly transactions, this weighting methodology is designed to incorporate external prices into the Company’s internal valuation process.

In addition to weighting external prices in developing the internal values, the Company further calibrates those values to market indications through obtaining pricing from two independent pricing services (the market approach). The Company calibrates the prices obtained from the independent pricing services and the price developed internally by utilizing the median value to determine the estimated fair value.

In addition, certain of the Company’s investments in corporate debt securities, mortgage-backed securities and other asset-backed securities were valued with the assistance of independent pricing services and non-binding broker quotes. The Company’s policy is to use the pricing obtained from our primary independent pricing service even in cases where a price is obtained from both an independent pricing service and a broker. In the event that pricing information is not available from an independent pricing service, non-binding broker quotes are used to assist in the valuation of the investments. In many cases, only one broker quote is available. The Company’s policy is generally not to adjust the values obtained from brokers.

Broker quotes are considered unobservable inputs as only one broker quote is ordinarily obtained, the investment is not traded on an exchange, the pricing is not available to other entities and the transaction volume in the same or similar investments has decreased such that generally only one quotation is available. As the brokers often do not provide the necessary transparency into their quotes and methodologies, the Company periodically performs reviews and tests to ensure that quotes are a reasonable estimate of the investments’ fair value.

For investments valued with the assistance of independent pricing services, the Company obtained the pricing services’ methodologies and classified these investments accordingly in the fair value hierarchy. The Company periodically reviews and tests the pricing and related methodologies obtained from these independent pricing services against secondary sources to ensure that management can validate the investment’s fair value and related categorization. If large variances are observed between the price obtained from the independent pricing services and secondary sources, the Company analyzes the causes driving the variance and resolves any differences.

As of December 31, 2009, 68% of the prices of fixed maturity securities were valued with the assistance of independent pricing services, 13% were valued with the assistance of the Company’s internal pricing processes, 11% were valued with the assistance of the Company’s pricing matrices, 6% were valued with the assistance of broker quotes and 2% were valued from other sources compared to 78%, 4%, 12%, 5% and 1%, respectively, as of December 31, 2008.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent)

The Company uses NAV to estimate the underlying fair value for certain mutual funds that do not have readily determinable fair values included in separate account assets.

All but one of these mutual funds are included in Level 2 and had fair values totaling $44.00 billion as of December 31, 2009. See the following paragraph for discussion of the mutual fund considered Level 3. These funds have no unfunded commitments or restrictions and the Company always has the ability to redeem the separate account investment in these funds with the investee at NAV daily. These mutual funds are primarily invested in domestic and international equity funds.

The Company’s separate account assets include an investment in a mutual fund that may not be redeemed until a seven year guarantee period expires in 2016; however, NAV has been used to estimate the fair value of this investment as a practical expedient. This fund has no unfunded commitments or other restrictions. The investment strategy of this fund is to build a portfolio where the assets shall be sufficient to achieve a target portfolio value by the end of the seven year guarantee period. The Company’s portion of the net asset value of this fund reported in separate account assets was $975.9 million as of December 31, 2009 and is included in Level 3.

Since separate account assets include mutual fund investments not directed by the Company, the contractholders have the ability to select and change investment categories, which may result in the underlying mutual funds being purchased and sold 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, 2009, 2008 and 2007

The following table summarizes assets and liabilities measured at fair value on a recurring basis as of December 31, 2009:

(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	$	747.9		$	4.4		$	1.6		$	753.9
Obligations of states and political subdivisions		—			548.9			—			548.9
Debt securities issued by foreign governments		—			75.1			—			75.1
Corporate securities		1.8			14,557.0			1,402.2			15,961.0
Residential mortgage-backed securities		229.3			3,245.9			2,033.7			5,508.9
Commercial mortgage-backed securities		—			678.8			405.3			1,084.1
Collateralized debt obligations		—			131.5			240.5			372.0
Other asset-backed securities		—			278.6			167.2			445.8
Total fixed maturity securities		979.0			19,520.2			4,250.5			24,749.7
Equity securities		12.6			32.4			7.6			52.6
Total securities available-for-sale		991.6			19,552.6			4,258.1			24,802.3
Mortgage loans held for sale1		—			—			47.9			47.9
Short-term investments		56.1			947.3			—			1,003.4
Total investments		1,047.7			20,499.9			4,306.0			25,853.6
Cash and cash equivalents		49.1			—			—			49.1
Derivative assets2		—			497.5			331.2			828.7
Separate account assets3,5		11,607.8			44,610.9			1,627.5			57,846.2
Total assets	$	12,704.6		$	65,608.3		$	6,264.7		$	84,577.6
Liabilities
Future policy benefits and claims4	$	—		$	—		$	(310.9	)	$	(310.9	)
Derivative liabilities2		(10.3	)		(404.0	)		(1.5	)		(415.8	)
Total liabilities	$	(10.3	)	$	(404.0	)	$	(312.4	)	$	(726.7	)

1 Elected to be carried at fair value.  

2 Comprised of interest rate swaps, cross-currency swaps, credit default swaps, other non-hedging derivative 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 requiring the related liabilities to be 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) of $45.0 million that provide for interest earnings that are linked to the performance of specified equity market indices.  

5 The fair 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, 2009, 2008 and 2007

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	$	609.2		$	4.3		$	1.9		$	615.4
Obligations of states and political subdivisions		—			224.7			—			224.7
Debt securities issued by foreign governments		—			55.5			—			55.5
Corporate securities		2.0			11,263.8			1,327.3			12,593.1
Residential mortgage-backed securities		600.7			2,398.1			3,035.9			6,034.7
Commercial mortgage-backed securities		—			700.0			263.4			963.4
Collateralized debt obligations		—			73.0			250.4			323.4
Other asset-backed securities		—			465.5			111.8			577.3
Total fixed maturity securities		1,211.9			15,184.9			4,990.7			21,387.5
Equity securities		1.4			34.8			17.9			54.1
Total securities available-for-sale		1,213.3			15,219.7			5,008.6			21,441.6
Mortgage loans held for sale1		—			—			124.5			124.5
Short-term investments		158.7			2,754.3			—			2,913.0
Total investments		1,372.0			17,974.0			5,133.1			24,479.1
Cash and cash equivalents		42.0			—			—			42.0
Derivative assets2		—			708.5			597.6			1,306.1
Separate account assets3,5		9,975.7			36,723.5			2,141.8			48,841.0
Total assets	$	11,389.7		$	55,406.0		$	7,872.5		$	74,668.2
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 Elected to be carried at fair value.  

2 Comprised of interest rate swaps, cross-currency swaps, credit default swaps, other non-hedging derivative 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 GMABs, GLWBs and hybrid GMABs/GMWBs are considered embedded derivatives requiring the related liabilities to be 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 EIAs of $41.7 million that provide for interest earnings that are linked to the performance of specified equity market indices.  

5 The fair 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, 2009, 2008 and 2007

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, 2009:

				Net investment gains (losses)																	Change in unrealized gains (losses) in earnings due to assets still held
(in millions)	Balance as of December 31, 2008			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, 2009
Assets
Investments:
Securities available-for-sale3:
Fixed maturity securities
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	1.9		$	—		$	(0.2	)	$	(0.1	)	$	—	$	—		$	1.6		$	—
Corporate securities		1,327.3			(80.3	)		260.3			(400.8	)		487.1		(191.4	)		1,402.2		$	—
Residential mortgage-backed securities		3,035.9			(111.0	)		388.7			(431.2	)		0.9		(849.6	)		2,033.7			—
Commercial mortgage-backed securities		263.4			(20.3	)		139.1			(7.1	)		94.1		(63.9	)		405.3			—
Collateralized debt obligations		250.4			(53.0	)		77.1			(18.2	)		—		(15.8	)		240.5			—
Other asset-backed securities		111.8			(16.5	)		43.5			(12.0	)		48.6		(8.2	)		167.2			—
Total fixed maturity securities		4,990.7			(281.1	)		908.5			(869.4	)		630.7		(1,128.9	)		4,250.5			—
Equity securities		17.9			1.4			0.7			3.9			—		(16.3	)		7.6			—
Total securities available-for-sale		5,008.6			(279.7	)		909.2			(865.5	)		630.7		(1,145.2	)		4,258.1			—
Mortgage loans held for sale		124.5			(7.6	)		—			(69.0	)		—		—			47.9			(2.8	)
Total investments		5,133.1			(287.3	)		909.2			(934.5	)		630.7		(1,145.2	)		4,306.0			(2.8	)
Derivative assets		597.6			(311.5	)		(12.0	)		57.1			—		—			331.2			(309.5	)
Separate account assets4,6		2,141.8			(646.7	)		—			400.0			14.7		(282.3	)		1,627.5			217.7
Total assets	$	7,872.5		$	(1,245.5	)	$	897.2		$	(477.4	)	$	645.4	$	(1,427.5	)	$	6,264.7		$	(94.6	)
Liabilities
Future policy benefits and claims5	$	(1,739.7	)	$	1,437.7		$	—		$	(8.9	)	$	—	$	—		$	(310.9	)	$	1,437.7
Derivative liabilities		(4.2	)		2.7			—			—			—		—			(1.5	)		2.7
Total liabilities	$	(1,743.9	)	$	1,440.4		$	—		$	(8.9	)	$	—	$	—		$	(312.4	)	$	1,440.4

1 Includes gains and losses on sales of financial instruments, changes in market value of certain instruments and other-than-temporary impairments. The net unrealized loss on separate account assets is attributable to contractholders and, therefore, is not included in the Company’s earnings.  

2 Includes changes in market value of certain instruments.  

3 Includes certain collateralized mortgage obligations, residential mortgage-backed securities, commercial mortgage-backed securities, other ABSs, certain broker or internally priced securities and securities that are at or near default based on ratings assigned by the National Association of Insurance Commissioners (NAIC) (see Note 6 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.  

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

5 Relates to GMAB, GLWB and hybrid GMAB/GLWB embedded derivatives associated with contracts with living benefit riders. This balance also includes embedded derivatives associated with EIAs. Related derivatives are internally valued. The valuation of guaranteed minimum benefit embedded derivatives is based on capital market and actuarial assumptions, including risk margin considerations reflecting policyholder behavior. The Company uses both observable and unobservable inputs, such as published swap rates and historical volatilities as well as implied volatilities, in its capital market assumptions. Actuarial assumptions, including lapse behavior and mortality rates, are either based on annuity experience or pricing assumptions if experience has not yet developed.  

6 The value of separate account liabilities is set to equal the fair value of separate account assets.  

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:
U.S Treasury securities and obligations of U.S. government corporations and agencies	$	1.6		$	—		$	0.4		$	(0.1	)	$	—	$	—		$	1.9		$	—
Fixed maturity securities Corporate securities		1,515.7			(189.4	)		(250.3	)		(384.1	)		901.2		(265.8	)		1,327.3			—
Residential mortgage-backed securities		193.3			(402.8	)		(711.6	)		(290.5	)		4,290.4		(42.9	)		3,035.9			—
Commercial mortgage-backed securities		87.6			(12.8	)		(306.7	)		187.1			371.6		(63.4	)		263.4			—
Collateralized debt obligations		532.6			(281.1	)		(97.4	)		23.4			78.0		(5.1	)		250.4			—
Other asset-backed securities		122.3			(13.4	)		(39.9	)		(37.2	)		127.8		(47.8	)		111.8			—
Total fixed maturity securities		2,453.1			(899.5	)		(1,405.5	)		(501.4	)		5,769.0		(425.0	)		4,990.7			—
Equity securities		1.4			(54.9	)		(9.4	)		40.3			40.5		—			17.9			—
Total securities available-for-sale		2,454.5			(954.4	)		(1,414.9	)		(461.1	)		5,809.5		(425.0	)		5,008.6			—
Mortgage loans held for sale		86.1			(49.3	)		—			87.7			—		—			124.5			(49.3	)
Short-term investments		382.7			(0.2	)		—			(1.3	)		—		(381.2	)		—			—
Total investments		2,923.3			(1,003.9	)		(1,414.9	)		(374.7	)		5,809.5		(806.2	)		5,133.1			(49.3	)
Derivative assets		166.6			405.4			4.4			21.2			—		—		$	597.6			394.0
Separate account assets4,6		2,258.6			305.9			—			511.4			23.9		(958.0	)	$	2,141.8			329.7
Total assets	$	5,348.5		$	(292.6	)	$	(1,410.5	)	$	157.9		$	5,833.4	$	(1,764.2	)	$	7,872.5		$	674.4
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. The net unrealized loss on separate account assets is attributable to contractholders and, therefore, is not included in the Company’s earnings.  

2 Includes changes in market value of certain instruments.  

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

3 Includes certain collateralized mortgage obligations, residential mortgage-backed securities, commercial mortgage-backed securities, other ABSs, certain broker or internally priced securities and securities that are at or near default based on ratings assigned by the NAIC (see Note 6 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, GLWB and hybrid GMAB/GLWB embedded derivatives associated with contracts with living benefit riders. This balance also includes embedded derivatives associated with EIAs. Related derivatives are internally valued. The valuation of guaranteed minimum benefit embedded derivatives is based on capital market and actuarial assumptions, including risk margin considerations reflecting policyholder behavior. The Company uses both observable and unobservable inputs, such as published swap rates and historical volatilities as well as implied volatilities, in its capital market assumptions. Actuarial assumptions, including lapse behavior and mortality rates, are either based on annuity experience or pricing assumptions if experience has not yet developed.  

6 The value of separate account liabilities is set to equal the fair value of separate account assets.  

Transfers

The Company reviews 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. Reclassifications in/out of Level 3 are reported as transfers at the beginning of the period in which the change occurs. During 2008, the Company’s investments in residential mortgage-backed securities backed by prime collateral were classified as Level 3 financial assets because of their inactive markets and resulting illiquidity. As of December 31, 2009, these securities are no longer considered inactive due to increased trading volume and market activity and as a result were transferred out of Level 3. In addition, the Company was able to gain additional observable valuation inputs in the pricing of certain corporate securities, residential mortgage-backed securities and commercial mortgage-backed securities, which led to transferring these securities out of Level 3.

Additionally, certain corporate securities and commercial mortgage-backed securities had significant changes in key valuation inputs, which led to transfers into Level 3, primarily related to ratings downgrades and changes in pricing sources.

Fair Value on a Nonrecurring Basis

In 2009, certain mortgage loans on real estate held for investment were measured at the estimated fair value of the collateral on a non-recurring basis in periods subsequent to initial recognition due to these loans having specific reserves applied to them during the period. The application of these specific reserves adjusts the amortized cost basis of the loan to the estimated fair value of the collateral. The estimated fair value of the collateral supporting these loans was $154.8 million when the specific reserves were recorded.

Financial Instruments Not Carried at Fair Value

In estimating fair value for its disclosures for financial instruments not carried at fair value (and not included in the fair value disclosures above), the Company used the following methods and assumptions:

Mortgage loans on real estate held for investment, net: The fair values of mortgage loans held for investment 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. As commercial mortgage loans held for sale are included in the above fair value disclosure, they are excluded from financial instruments not carried at fair value in the table below.

Policy loans: The carrying amount reported in the consolidated balance sheets approximates fair value.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

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, payable to Nationwide Financial Services, Inc. (NFS): The fair values for long-term debt are based on estimated market prices.

The following table summarizes the carrying values and estimated fair values of financial instruments subject to disclosure requirements as of December 31:

	2009						2008
(in millions)	Carrying value			Estimated fair value			Carrying value			Estimated fair value
Assets
Investments:
Mortgage loans on real estate, net	$	6,781.1		$	5,946.3		$	7,645.6		$	6,845.6
Policy loans		1,050.4			1,050.4			1,095.6			1,095.6
Liabilities
Investment contracts		(18,723.8	)		(18,315.5	)		(20,093.2	)		(19,621.5	)
Short-term debt		(150.0	)		(150.0	)		(249.7	)		(249.7	)
Long-term debt, payable to NFS		(700.0	)		(716.6	)		(700.0	)		(568.7	)

(5) Derivative Financial Instruments  

Qualitative Disclosures

The Company recognizes all of its derivative instruments as either assets or liabilities at fair value. The accounting for changes in the fair value (e.g., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship, and further, on the type of hedging relationship.

For derivative instruments that are designated and qualify as a cash flow hedge (e.g., hedging the exposure to variability in expected future cash flows that is attributable to interest rate risk), the effective portion of the gain or loss on the derivative instrument is reported as a component of AOCI and reclassified into earnings in the same line item associated with the forecasted transaction and in the same period or periods during which the hedged transaction impacts earnings (e.g., interest income on a floating rate asset). The remaining gain or loss on the derivative instrument in excess of the cumulative change in the present value of future cash flows of the hedged item, if any (ineffectiveness), or components of fair value that are excluded from the assessment of effectiveness, are recognized in the consolidated statements of income (loss) during the period.

For derivative instruments that are designated and qualify as a fair value hedge (e.g., hedging the exposure to changes in the fair value of an asset or a liability or an identified portion thereof that is attributable to a particular risk), the gain or loss on the derivative instrument as well as the hedged item are both recognized 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, 2009, 2008 and 2007

For derivative instruments that are not designated as a hedging instrument, the gain or loss on the derivative instrument is recognized in net realized investment gains and losses.

The Company’s derivative activities primarily are with financial institutions and corporations. In order to minimize credit risk, the Company enters into master netting agreements, which reduce risk by permitting the closeout and netting of transactions with the same counterparty upon occurrence of certain events. In addition, the Company attempts to reduce credit risk by obtaining collateral from counterparties. The determination of the need for and the levels of collateral vary based on an assessment of the credit risk of the counterparty. Generally, the Company accepts collateral in the form of cash, U.S. Treasury securities and other marketable securities.

As of December 31, 2009 and 2008, the Company had received $532.4 million and $1.02 billion, respectively, of cash for derivative collateral, which is in turn invested in short-term investments. The Company also held $32.3 million and $35.4 million of securities as off-balance sheet collateral on derivative transactions as of December 31, 2009 and 2008, respectively. As of December 31, 2009 and 2008, the Company had pledged fixed maturity securities with a fair value of $55.6 million and $24.5 million, respectively, as collateral to various derivative counterparties. There are no contingent features associated with the Company’s derivative instruments which would require additional collateral to be pledged to counterparties.

The Company periodically evaluates the risks within the derivative portfolios due to credit exposure. When evaluating this risk, the Company considers several factors which include, but are not limited to, the counterparty risk associated with derivative receivables, the Company’s own credit as it relates to derivative payables, the collateral thresholds associated with each counterparty, and changes in relevant market data in order to gain insight into the probability of default by the counterparty. In addition, the effect that the Company’s exposure to credit risk could have on the effectiveness of the Company’s hedging relationships is considered. As of December 31, 2009, the impact of the exposure to credit risk on both the fair value measurement of derivative assets and liabilities and the effectiveness of the Company’s hedging relationships was immaterial.

The Company is exposed to certain other risks relating to its ongoing business operations. The primary risks managed by using derivative instruments are interest rate risk, foreign currency exchange risk, equity risk and credit risk.

Derivatives Qualifying for Hedge Accounting – Interest Rate Risk Management

The Company periodically purchases variable rate investments (e.g., commercial mortgage loans and corporate bonds). As a result, the Company is exposed to variability in cash flows and investment income due to changes in interest rates. Such variability poses risks to the Company when the investments 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 is intended to match the variable interest received on the investment, resulting in the Company receiving the fixed interest payments on the swap. The net receipt of a fixed rate will offset the fixed rate paid on the liability. These interest rate swaps are designated as hedging instruments in cash flow hedging relationships.

The Company periodically participates in a medium-term note (MTN) program. Under this program, NLIC issues funding agreements to an unconsolidated third party trust to secure notes issued to investors by the trust. The proceeds from these funding agreements are generally used to purchase fixed rate assets (generally available-for-sale corporate bonds, available-for-sale private placement bonds or held for investment commercial mortgage loans). In a rising interest rate environment, the Company is exposed to narrowing margins as interest expense will increase while interest income remains constant. To manage this risk, the Company has entered into pay fixed/receive variable interest rate swaps. The interest rate swap agreement utilized by the Company effectively modifies its exposure to interest rate risk by converting the Company’s floating rate funding agreements associated with the MTN program to a fixed rate, thus reducing the impact of interest rate changes on future interest expense. These interest rate swaps are designated as hedging instruments in cash flow hedging relationships.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

Derivatives Qualifying for Hedge Accounting – Foreign Currency Risk Management

The Company purchases foreign-denominated fixed rate assets and the associated investment income is exposed to changes in the exchange rates of the foreign currencies. To manage this risk, the Company has entered into pay fixed foreign currency/receive fixed U.S. dollar cross-currency swaps. As foreign exchange rates change, the increase or decrease in the cash flows of the derivative instrument will offset the changes in the functional-currency equivalent cash flows of the asset. These cross-currency swaps are designated as hedging instruments in cash flow hedging relationships.

The Company also purchases foreign-denominated fixed rate assets, funded with proceeds from funding agreements under a variable rate MTNs. The value of these investments is exposed to both changes in the exchange rates of the foreign currencies and changes in interest rates. To manage this risk, the Company has entered into pay fixed foreign currency/receive variable U.S. cross-currency interest rate swaps. As foreign exchange rates and interest rates change, the increase or decrease in the value of the derivative instrument will offset the changes in the asset’s value (relative to foreign currency and interest rate changes). These cross-currency interest rate swaps are designated as hedging instruments in fair value hedging relationships.

In addition, the Company periodically participates in a fixed rate foreign denominated MTN program. Under this program, NLIC issues funding agreements to an unconsolidated third party trust to secure notes issued to investors by the trust, and the value of these liabilities is exposed to both changes in the exchange rates of the foreign currencies and changes in interest rates. To manage this risk, the Company has entered into receive fixed foreign currency/pay variable U.S. cross-currency interest rate swaps. As foreign exchange rates and interest rates change, the increase or decrease in the value of the derivative instrument will offset the changes in the liability’s value (relative to foreign currency and interest rate changes). These cross-currency interest rate swaps are designated as hedging instruments in fair value hedging relationships.

Derivatives Not Qualifying for Hedge Accounting – Interest Rate Risk Management

The Company enters into commercial mortgage loan commitments that are held for sale, which exposes the Company to changes in the fair value of such commitments due to changes in interest rates during the commitment period prior to the loans being funded. 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. If interest rates rise or fall, the gains or losses on short U.S. Treasury futures will offset the change in fair value of the commitment attributable to the change in interest rates.

The Company may use pay fixed, receive variable interest rate swaps to hedge the value of a portfolio of fixed-rate assets, relative to changes in interest rates. The interest rate swaps mitigate the risk of a loss of value due to increasing interest rates, with the fluctuations in the fair values of the derivatives offsetting changes in the fair values of the portfolios resulting from changes in interest rates.

The Company offers a variety of variable annuity programs with a guaranteed minimum balance or guaranteed withdrawal benefits, and options are utilized to economically hedge a portion of these products. See Derivatives Not Qualifying for Hedge Accounting – Equity Market Risk Management below for further explanation. As interest rates are a component of the option’s value, the effectiveness of economically hedging the annuity products may be adversely affected by changes in interest rates. The Company enters into interest rate swaps to mitigate this risk. The fluctuation in the fair values of the derivatives offsets the changes in the fair values of the options resulting from changes in interest rates.

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.

In addition, the Company may use pay fixed/receive variable interest rate swaps as hedges against the negative effects of adverse interest rate movements.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

Derivatives Not Qualifying for Hedge Accounting – Foreign Currency Risk Management

The Company periodically participates in a variable rate foreign denominated MTN program. Under this program, NLIC issues funding agreements to an unconsolidated third party trust to secure notes issued to investors by the trust. As such, the cash flows related to these MTNs are exposed to changes in the exchange rates of the foreign currencies. Because the Company desires to retain the variable interest rate, it has entered into receive variable foreign currency/pay variable U.S. dollar cross-currency swaps. The basis swap converts the debt instrument to a U.S. dollar variable rate, thereby eliminating foreign exchange risk. While the receive-side terms of the basis swap will be consistent with the terms of the liability, the Company is not able to match the pay-side terms of the derivative to a specific asset. Therefore, these basis swaps do not receive hedge accounting treatment. The Company also uses currency contracts, primarily futures, to hedge foreign currency denominated investments in certain alternative investments.

Derivatives Not Qualifying for Hedge Accounting – Equity Market Risk Management

The Company offers a variety of variable annuity programs with a guaranteed minimum balance or guaranteed withdrawal benefits. The contractholders may elect to invest in equity funds. Adverse changes in the equity markets expose the Company to losses if the changes result in contractholder’s account balances falling below the guaranteed minimum. To mitigate a portion of the risk associated with these liabilities, the Company enters into equity index futures and options. The changes in value of the futures and options will offset a portion of the changes in the annuity accounts relative to changes in the equity market.

The Company offers a variety of variable annuity programs with a guaranteed minimum balance or guaranteed withdrawal benefits, where the contractholder elects to invest in funds with a foreign equity index. Adverse changes in the foreign equity index expose the Company to losses if the change results in contractholder’s account balances falling below the guaranteed minimum. To mitigate this risk, the Company enters into total return swaps, where the Company pays the total return on the foreign index and receives one-month U.S. London Interbank Offered Rate (LIBOR). The changes in cash flows of the total return swap will offset a portion of the changes in the annuity accounts relative to changes in the foreign index.

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. The Company does not expect any meaningful level of claims under the living benefit features for several years and believes the impact of claims is expected to be mitigated by its economic hedging program.

Derivatives Not Qualifying for Hedge Accounting – Credit Risk

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.

The Company sells credit default protection to counterparties on selected debt instruments with specific creditor or credit index exposure and combines the credit default swap with selected assets the Company owns to enhance spreads. These selected assets may have sufficient duration for the related liability, but do not earn a sufficient credit spread. When the Company sells these instruments, 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 is not limited to, creditor bankruptcy or restructuring. The combined credit default swap and investments provide cash flows with the duration and credit spread targeted by 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, 2009, 2008 and 2007

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.

Quantitative Disclosure

The following table presents the fair value of derivative instruments, location of the related instruments in the consolidated balance sheets and the related notional amounts of the derivative instruments as of December 31, 2009:

	Derivative assets					Derivative liabilities
(in millions)	Balance sheet location	Fair value		Notional		Balance sheet location	Fair value		Notional
Derivatives designated as hedging instruments:
Interest rate contracts	Other assets	$	3.8	$	86.4	Other liabilities	$	69.0	$	1,216.1
Cross-currency swaps	Other assets		33.8		93.1	Other liabilities		35.9		215.9
Total derivatives designated as hedging instruments			37.6		179.5			104.9		1,432.0
Derivatives not designated as hedging instruments:
Interest rate contracts	Other assets		410.0		7,456.7	Other liabilities		239.1		5,162.0
Cross-currency swaps	Other assets		48.6		210.8	Other liabilities		48.5		209.6
Credit default swaps	Other assets		0.5		28.5	Other liabilities		3.2		81.5
Total return swaps	Other assets		0.8		85.4	Other liabilities		8.3		555.8
Equity contracts	Other assets		331.2		2,504.6	Other liabilities		10.3		995.7
Embedded derivatives on guaranteed benefit annuity programs	N/A		—		—	Future policy benefits and claims		310.9		N/A
Other embedded derivatives	N/A		—		—	Other liabilities		1.5		N/A
Total derivatives not designated as hedging instruments			791.1		10,286.0			621.8		7,004.6
Total derivatives		$	828.7	$	10,465.5		$	726.7	$	8,436.6

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

The following table presents the gains (losses) for derivative instruments designated and qualifying as hedging instruments in fair value hedges and the location of these instruments in the consolidated financial statements for the year ended December 31, 2009:

(in millions)	Location of gain (loss) recognized on derivatives	Amount of gain (loss) recognized on derivatives1,2
Derivatives in fair value hedging relationships:
Interest rate contracts	Net realized investment gains (losses)	$	24.9
Cross-currency swaps	Net realized investment gains (losses)		(2.4	)
Total		$	22.5
Underlying fair value hedge relationships:
Interest rate contracts	Net realized investment gains (losses)	$	(35.3	)
Cross-currency swaps	Net realized investment gains (losses)		2.5
Total		$	(32.8	)
1         Excludes ($36.9) million of periodic settlements in interest rate contracts which are recorded in net investment income. 2        Includes $7.5 million of cash received in the termination of cash flow hedging instruments.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

The following tables present the gains (losses) for derivative instruments designated and qualifying as hedging instruments in cash flow hedges and the location of these instruments in the consolidated financial statements for the year ended December 31, 2009:

(in millions)	Amount of gain (loss) recognized in OCI on derivatives
Derivatives in cash flow hedging relationships:
Interest rate contracts	$	12.6
Cross-currency swaps		(4.4	)
Currency contracts		(18.8	)
Other embedded derivatives		(12.0	)
Total	$	(22.6	)

(in millions)	Location of realized gain (loss) reclassified from AOCI into income1	Amount of realized gain (loss) reclassified from AOCI into income
Derivatives in cash flow hedging relationships:
Interest rate contracts	Interest credited to policyholder accounts	$	(3.8	)
Cross-currency swaps	Net realized investment gains (losses)		(10.9	)
Currency contracts	Net realized investment gains (losses)		(3.8	)
Other embedded derivatives	N/A		—
Total		$	(18.5	)

1 Effective portion.  

(in millions)	Location of realized gain (loss) recognized in income on derivatives1	Amount of realized gain (loss) recognized in income on derivatives1,2,3
Derivatives in cash flow hedging relationships:
Interest rate contracts	Net realized investment gains (losses)	$	0.1
Cross-currency swaps	Net realized investment gains (losses)		(1.3	)
Currency contracts	Net realized investment gains (losses)		(2.8	)
Other embedded derivatives	N/A		—
Total		$	(4.0	)

1 Ineffective portion and amounts excluded from the measurement of ineffectiveness.  

2 Excludes 0.2 million of periodic settlements in interest rate contracts.  

3 Includes $16.5 million of cash received in termination of cash flow hedging instrument.  

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

The following table presents the gains (losses) for derivative instruments not designated and qualifying as hedging instruments and the location of these instruments in the consolidated financial statements for the year ended December 31, 2009:

(in millions)	Location of realized gain (loss) in income on derivatives	Amount of realized gain (loss) recognized in income on derivatives1
Derivatives not designated as hedging instruments:
Interest rate contracts	Net realized investment gains (losses)	$	(197.2	)
Cross-currency swaps	Net realized investment gains (losses)		3.3
Credit default swaps	Net realized investment gains (losses)		7.9
Equity total return swaps	Net realized investment gains (losses)		7.0
Equity contracts	Net realized investment gains (losses)		(738.7	)
Embedded derivatives on guaranteed benefit annuity programs	Net realized investment gains (losses)		1,432.0
Other embedded derivatives	Net realized investment gains (losses)		2.6
Total		$	516.9
1         Excludes net interest settlements and other revenue on embedded derivatives on guaranteed benefit annuity programs that are also recorded in net realized investment gains (losses).

In addition to the net realized investment gains (losses) listed in the previous tables, $(151.3) million of net interest settlements on all derivative instruments and $63.2 million of other revenue on embedded derivatives on guaranteed benefit annuity programs are also recorded in net realized investment gains (losses) for the year ended December 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, 2009, 2008 and 2007

Credit Derivatives

The Company had exposure to credit protection contracts for the years ended December 31, 2009, 2008, and 2007 and had experienced no credit event losses in 2009, credit event losses of $18.8 million in 2008 and no credit event losses in 2007 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 the dates indicated, 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
December 31, 2009:
Single sector exposure:
Consumer goods	$	—	$	—		$	—	$	—		$	—	$	—		$	—	$	—
Financial		35.0		(2.5	)		9.0		0.2			—		—			44.0		(2.3	)
Oil & gas pipelines		15.0		—			—		—			—		—			15.0		—
Services		—		—			—		—			10.0		0.2			10.0		0.2
Utilities		—		—			—		—			—		—			—		—
Total single sector exposure		50.0		(2.5	)		9.0		0.2			10.0		0.2			69.0		(2.1	)
Index exposure:
Corporate bonds		—		—			—		—			—		—			—		—
Total index exposure		—		—			—		—			—		—			—		—
Total	$	50.0	$	(2.5	)	$	9.0	$	0.2		$	10.0	$	0.2		$	69.0	$	(2.1	)
December 31, 2008:
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, 2009, 2008 and 2007

(6) Investments  

Fixed Maturity Securities and Equity Securities Available-for-Sale

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, 2009:
Fixed maturity securities:
U.S. Treasury securities and obligations of U.S. Government corporations	$	136.7	$	15.4	$	1.0	$	151.1
U. S. Government agencies		551.3		57.2		5.7		602.8
Obligations of states and political subdivisions		567.6		4.4		23.1		548.9
Debt securities issued by foreign governments		69.9		5.3		0.1		75.1
Corporate securities
Public		10,929.8		597.2		175.2		11,351.8
Private		4,499.5		193.1		83.4		4,609.2
Residential mortgage-backed securities		6,078.9		95.2		665.2		5,508.9
Commercial mortgage-backed securities		1,284.9		6.5		207.3		1,084.1
Collateralized debt obligations		531.1		11.8		170.9		372.0
Other asset-backed securities		453.4		20.4		28.0		445.8
Total fixed maturity securities		25,103.1		1,006.5		1,359.9		24,749.7
Equity securities		48.8		4.6		0.8		52.6
Total securities available-for-sale	$	25,151.9	$	1,011.1	$	1,360.7	$	24,802.3
December 31, 2008:
Fixed maturity securities:
U.S. Treasury securities and obligations of U.S. Government corporations	$	79.1	$	22.6	$	—	$	101.7
U. S. Government agencies		420.4		93.3		—		513.7
Obligations of states and political subdivisions		230.5		1.6		7.4		224.7
Debt securities issued by foreign governments		50.1		5.4		—		55.5
Corporate securities
Public		8,881.9		109.9		1,040.7		7,951.1
Private		4,997.8		45.2		401.0		4,642.0
Residential mortgage-backed securities		6,807.8		90.5		863.6		6,034.7
Commercial mortgage-backed securities		1,418.1		0.6		455.3		963.4
Collateralized debt obligations		557.8		6.3		240.7		323.4
Other asset-backed securities		679.1		3.6		105.4		577.3
Total fixed maturity securities		24,122.6		379.0		3,114.1		21,387.5
Equity securities		62.2		0.7		8.8		54.1
Total securities available-for-sale	$	24,184.8	$	379.7	$	3,122.9	$	21,441.6

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

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. The Company does not have the intent to sell, nor is it more likely than not that the Company will be required to sell debt securities in unrealized loss positions. The Company may realize 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.

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, except number of securities)	Estimated fair value		Gross unrealized losses		Number of securities	Estimated fair value		Gross unrealized losses		Number of securities	Estimated fair value		Gross unrealized losses		Number of securities
December 31, 2009:
Fixed maturity securities:
U.S. Treasury securities and obligations of U.S. Government corporations	$	50.9	$	1.0	2	$	—	$	—	—	$	50.9	$	1.0	2
U.S. Government agencies		154.6		5.7	8		—		—	—		154.6		5.7	8
Obligations of states and political subdivisions		318.2		11.5	35		79.1		11.6	13		397.3		23.1	48
Debt securities issued by foreign governments		1.6		0.1	2		—		—	—		1.6		0.1	2
Corporate securities
Public		1,197.9		32.0	160		1,117.5		143.2	201		2,315.4		175.2	361
Private		278.8		19.0	47		972.6		64.4	73		1,251.4		83.4	120
Residential mortgage-backed securities		936.7		104.2	117		2,375.1		561.0	341		3,311.8		665.2	458
Commercial mortgage-backed securities		42.7		5.2	11		699.3		202.1	101		742.0		207.3	112
Collateralized debt obligations		29.9		28.9	13		277.2		142.0	45		307.1		170.9	58
Other asset-backed securities		5.4		0.2	12		247.5		27.8	33		252.9		28.0	45
Total fixed maturity securities		3,016.7		207.8	407		5,768.3		1,152.1	807		8,785.0		1,359.9	1,214
Equity securities		16.7		0.1	13		2.4		0.7	75		19.1		0.8	88
Total	$	3,033.4	$	207.9	420	$	5,770.7	$	1,152.8	882	$	8,804.1	$	1,360.7	1,302
December 31, 2008:
Fixed maturity securities:
Obligations of states and political subdivisions	$	94.9	$	3.5	16	$	29.3	$	3.9	9	$	124.2	$	7.4	25
Corporate securities
Public		4,109.4		676.9	692		1,350.3		363.8	289		5,459.7		1,040.7	981
Private		2,259.4		282.1	231		996.5		118.9	105		3,255.9		401.0	336
Residential mortgage-backed securities		820.3		187.8	138		2,281.4		675.8	323		3,101.7		863.6	461
Commercial mortgage-backed securities		539.9		190.4	96		410.9		264.9	96		950.8		455.3	192
Collateralized debt obligations		151.0		100.8	24		122.6		139.9	36		273.6		240.7	60
Other asset-backed securities		325.5		41.7	38		228.7		63.7	26		554.2		105.4	64
Total fixed maturity securities		8,300.4		1,483.2	1,235		5,419.7		1,630.9	884	$	13,720.1	$	3,114.1	2,119
Equity securities		19.2		8.6	81		3.4		0.2	6		22.6		8.8	87
Total	$	8,319.6	$	1,491.8	1,316	$	5,423.1	$	1,631.1	890	$	13,742.7	$	3,122.9	2,206

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

The weighted estimated fair value to amortized cost for non-investment grade fixed maturity securities that have an estimated fair value of less than 80% and have been in an unrealized loss position for more than one year was 65% and 64% as of December 31, 2009 and December 31, 2008, respectively.

The table below summarizes the amortized cost and estimated fair values of fixed maturity securities available-for-sale, by maturity, as of December 31, 2009. 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	$	1,002.3	$	1,024.5
Due after one year through five years		7,213.2		7,507.1
Due after five years through ten years		5,265.4		5,516.8
Due after ten years		3,273.9		3,290.5
Subtotal		16,754.8		17,338.9
Residential mortgage-backed securities		6,078.9		5,508.9
Commercial mortgage-backed securities		1,284.9		1,084.1
Collateralized debt obligations		531.1		372.0
Other asset-backed securities		453.4		445.8
Total	$	25,103.1	$	24,749.7

The NAIC assigns credit quality ratings (NAIC designations) to securities for the purpose of statutory reporting. These NAIC designations are generally based on the credit ratings assigned by nationally recognized statistical rating agencies organizations (NRSRO) unless a security is not rated by an NRSRO, in which case the NAIC rates it using an alternative approach. For 2009 statutory reporting, the NAIC modified its ratings approach for residential mortgage-backed securities, which are not backed by U.S. government agencies. Under the modified approach, the NAIC designation for this type of security is based on an insurer’s reported carrying value for the security relative to a NAIC-prescribed ratings matrix for the security, with a higher NAIC designation afforded securities with lower carrying values. In effect, this process rates the credit quality of a security based on an independent market view of the expected discounted future cash flows from the security versus its statutory carrying value. Under this process, NAIC designations for these residential mortgage-backed securities could be higher or lower than the related NRSRO ratings. NAIC designations range from class 1 (highest quality) to class 6 (lowest quality). Of the Company’s general account fixed maturity securities, 91% and 93% were in the two highest NAIC designations categories as of December 31, 2009 and 2008, respectively.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

The following table shows the equivalent designation between the NAIC and NRSRO and summarizes the credit quality, as determined by NAIC designations, of the Company’s fixed maturity securities portfolio as of the dates indicated:

(in millions)		December 31, 2009				December 31, 2008
NAIC Desingations1,2	NRSRO equivalent designation	Amortized cost		Estimated fair value		Amortized cost		Estimated fair value
1	AAA/AA/A	$	15,322.9	$	15,195.7	$	15,423.0	$	13,960.4
2	BBB		7,139.5		7,275.0		6,610.4		5,802.2
3	BB		1,551.1		1,404.3		1,233.3		990.0
4	B		724.1		616.7		556.0		386.2
5	CCC and lower		253.5		187.6		190.5		148.2
6	In or near default		112.0		70.4		109.4		100.5
	Total	$	25,103.1	$	24,749.7	$	24,122.6	$	21,387.5

1 NAIC designations are assigned at least annually. Some ratings for securities shown have been assigned to securities not yet assigned an NAIC designation in a manner approximating equivalent NRSRO categories.  

2 Class 1 and class 2 NAIC designations are generally considered to represent investment grade ratings and are considered as such by the Company in reporting its credit quality information.  

Other-Than-Temporary Impairment Evaluations

When evaluating whether a residential mortgage-backed security, commercial mortgage-backed security, collateralized debt obligation and other asset-backed securities are other-than-temporarily impaired, the Company examines characteristics of the underlying collateral, such as delinquency prepayment 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, the quality of any credit guarantors, the Company’s intent to sell the security and whether it is more likely than not it will be required to sell the security before the recovery of its amortized cost basis.

In assessing corporate debt securities for other-than-temporary impairment, the Company evaluates the ability of the issuer to meet its debt obligations, the value of the company or specific collateral securing the debt position, the Company’s intent to sell the security and whether it is more likely than not it will be required to sell the security before the recovery of its amortized cost basis. A similar analysis is performed to evaluate U.S. Treasury securities and obligations of U.S. Government corporations, U.S. Government agencies, obligations of states and political subdivisions, and debt securities issued by foreign governments.

For all debt securities evaluated for other-than-temporary impairment (for which the Company does not have the intent to sell and it is not more likely than not that it will be required to sell the security before the recovery of its amortized cost basis), the Company considers the timing and amount of the cash flows. The Company evaluates its intent to sell on an individual security basis.

To the extent that the present value of the cash flows generated by a security is less than the amortized cost, an other-than-temporary impairment is recognized through earnings. 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.

Equity securities may experience other-than-temporary impairment in the future based on the prospects for full recovery in value in a reasonable period of time and the Company’s ability and intent to hold the security to recovery.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

Under the current other-than temporary impairment model, which was amended by the FASB and adopted by the Company in the first quarter of 2009, debt securities that become other-than-temporarily impaired (where the Company does not intend to sell the security and it is not more likely than not that it will be required to sell the security prior to recovery of the security’s amortized cost) are bifurcated with the credit portion of the impairment loss being recognized in earnings and the non-credit loss portion of the impairment being recognized in a separate component of other comprehensive income, net of applicable taxes and other offsets. For securities that are other-than-temporarily impaired, a discussion of the estimate of the credit loss portion that is recognized in earnings is provided, as applicable in the respective section of this footnote.

Corporate Securities

Corporate securities include conventional bonds, private placement fixed maturity securities, syndicated corporate bank loans and hybrid securities with both debt and equity-like features. For these corporate securities, the following table summarizes, as of the dates indicated, the Company’s gross unrealized loss position categorized as investment grade vs. non-investment grade, 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
	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
December 31, 2009:
99.9% - 80.0%	$	27.1	$	104.1	$	131.2	$	13.1	$	45.5	$	58.6	$	40.2	$	149.6	$	189.8
79.9% - 50.0%		8.5		45.6		54.1		2.3		12.4		14.7		10.8		58.0		68.8
Below 50.0%		—		—		—		—		—		—		—		—		—
Total	$	35.6	$	149.7	$	185.3	$	15.4	$	57.9	$	73.3	$	51.0	$	207.6	$	258.6
December 31, 2008:
99.9% - 80.0%	$	355.7	$	116.8	$	472.5	$	31.0	$	23.4	$	54.4	$	386.7	$	140.2	$	526.9
79.9% - 50.0%		327.5		121.9		449.4		118.4		126.0		244.4		445.9		247.9		693.8
Below 50.0%		79.3		41.5		120.8		47.1		53.1		100.2		126.4		94.6		221.0
Total	$	762.5	$	280.2	$	1,042.7	$	196.5	$	202.5	$	399.0	$	959.0	$	482.7	$	1,441.7

Judgments regarding whether a corporate debt security is other-than-temporarily impaired include analyzing the issuer’s financial condition. An analysis of the issuer’s financial condition includes whether there has been a decline in the overall value of the issuer or its ability to service the specific security. The total enterprise value of the company issuing the security is determined through asset coverage, cash flow multiples, or other industry standards. Several factors assessed when determining the enterprise value include, but are not limited to, credit quality ratings, cash flow sustainability, liquidity, strength, industry, and market position. Sources of information include, but are not limited to, management projections, independent consultants, street research, peer analysis, and internal analysis.

If the company has concerns regarding the viability of the issuer or its ability to service the specific security after this analysis, a recovery value analysis is prepared to determine if the recovery value has declined below the amortized cost of the security. The recovery value is combined with the estimated timing to recovery, any other applicable cash flows that are expected and the security’s effective yield to arrive at the expected present value of cash flows. If a recovery estimate is not feasible, then the market’s view of cash flows implied by the current fair value, market discount rates, and effective yield are the primary factors used to estimate recovery.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

The Company held hybrid securities issued by institutions in the financial sector with both debt and equity-like features, classified as corporate fixed maturity securities, with estimated fair values of $608.9 million and $661.2 million, and gross unrealized losses of $101.3 million and $379.9 million, as of December 31, 2009 and 2008, respectively. Of these unrealized losses as of December 31, 2009, $98.8 million, or 98%, were in an unrealized loss position for more than one year, evaluated under the debt model, compared to $106.3 million, or 18%, 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 and security.

The Company invests in private placement fixed maturity securities because of the generally higher nominal yield available compared to comparably rated public fixed maturity securities, more restrictive financial and business covenants available in private fixed maturity security loan agreements, and stronger prepayment protection. Although private placement fixed maturity securities are not registered with the SEC and generally are less liquid than public fixed maturity securities, restrictive financial and business covenants included in private placement fixed maturity security loan agreements generally are designed to compensate for the impact of increased liquidity risk. A significant portion of the private placement fixed maturity securities that the Company holds are participations in issues that are also owned by other investors. In addition, some of these securities are rated by NRSROs, and substantially all have been assigned a rating by the NAIC, as shown in a previous table in this footnote summarizing the credit quality of the Company’s fixed maturity securities portfolio.

Residential Mortgage-Backed Securities

Residential mortgage-backed securities are a type of fixed income security backed by residential mortgage loans, which have been are sold into a trust or special purpose entity, formed for the purpose of securitizing and tranching the cash flows of the mortgage loans. The following tables summarize the distribution by collateral classification of the Company’s residential mortgage-backed securities as of dates indicated:

	As of December 31, 2009					As of December 31, 2008
in millions	Amortized cost		Estimated fair value		% of estimated fair value total	Amortized cost		Estimated fair value		% of estimated fair value total
Government agency	$	2,546.9	$	2,620.9	48%	$	2,928.5	$	3,002.4	50%
Prime		1,120.3		959.7	17%		1,341.6		1,041.4	17%
Alt-A		1,830.6		1,451.7	26%		1,850.7		1,451.6	24%
Sub-prime		577.3		473.7	9%		675.8		528.7	9%
Other residential mortgage collateral		3.8		2.9	—		11.2		10.6	—
Total	$	6,078.9	$	5,508.9	100%	$	6,807.8	$	6,034.7	100%

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 charges a slightly higher interest rate for such mortgages.

The Company considers sub-prime collateral to be mortgages that are first or second 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 Company considers prime collateral to be mortgages whose underwriting standards qualify the mortgage for regular conforming or jumbo loan programs. In addition, government agency collateral is considered to be mortgages securitized by government agencies both implicitly and explicitly backed by the full faith and credit of the U.S. Government.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

For residential mortgage-backed securities, the following table summarizes as of the dates indicated the Company’s gross unrealized loss position categorized as investment grade vs. non-investment grade, 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
	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
December 31, 2009:
99.9% - 80.0%	$	29.0	$	134.1	$	163.1	$	11.5	$	41.5	$	53.0	$	40.5	$	175.6	$	216.1
79.9% - 50.0%		17.4		197.6		215.0		19.5		140.4		159.9		36.9		338.0		374.9
Below 50.0%		10.3		33.8		44.1		16.5		13.6		30.1		26.8		47.4		74.2
Total	$	56.7	$	365.5	$	422.2	$	47.5	$	195.5	$	243.0	$	104.2	$	561.0	$	665.2
December 31, 2008:
99.9% - 80.0%	$	47.7	$	124.5	$	172.2	$	6.0	$	10.3	$	16.3	$	53.7	$	134.8	$	188.5
79.9% - 50.0%		91.7		441.6		533.3		17.1		22.2		39.3		108.8		463.8		572.6
Below 50.0%		13.0		74.4		87.4		12.3		2.8		15.1		25.3		77.2		102.5
Total	$	152.4	$	640.5	$	792.9	$	35.4	$	35.3	$	70.7	$	187.8	$	675.8	$	863.6

The Company evaluates its residential mortgage-backed securities for other-than-temporary impairment using multiple inputs. Loan level defaults are estimated using an option pricing approach in which the probability of borrower default increases as home equity declines. Other factors which influence the probability of default are debt-servicing, missed refinancing opportunities and geography. Loan level characteristics such as issuer, FICO score, payment terms, level of documentation, residency type, dwelling type and loan purpose are also utilized in the model along with historical performance, to estimate or measure the loan’s propensity to default. Additionally, the model takes into account loan age, seasonality, payment changes and exposure to refinancing as additional drivers of default. For transactions where loan level data is not available, the model uses a proxy based on the collateral characteristics. Loss severity in the model is a function of multiple factors, including but not limited to, the unpaid balance, interest rate, mortgage insurance ratios, assessed property value at origination, change in property valuation and loan-to-value ratio at origination. Prepayment speeds, both actual and estimated, are also considered. The cash flows generated by the collateral securing these securities are then determined based on these default, loss severity and prepayment assumptions. These collateral cash flows are then utilized, along with consideration for the issue’s position in the overall structure, to determine the cash flows associated with the residential mortgage-backed security held by 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, 2009, 2008 and 2007

Commercial Mortgage-Backed Securities

The Company owns and manages commercial mortgage-backed securities, which are trust certificates or bonds offered to investors that are collateralized by a pool of commercial mortgage loans from which the principal and interest paid on those mortgages flows to investors. These investments in commercial mortgage-backed securities 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. For commercial mortgage-backed securities, the following tables summarize, as of the dates indicated, the Company’s gross unrealized loss position categorized as investment grade vs. non-investment grade, 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
	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
December 31, 2009:
99.9% - 80.0%	$	4.2	$	54.0	$	58.2	$	—	$	—	$	—	$	4.2	$	54.0	$	58.2
79.9% - 50.0%		—		85.2		85.2		—		—		—		—		85.2		85.2
Below 50.0%		1.0		62.9		63.9		—		—		—		1.0		62.9		63.9
Total	$	5.2	$	202.1	$	207.3	$	—	$	—	$	—	$	5.2	$	202.1	$	207.3
December 31, 2008:
99.9% - 80.0%	$	19.8	$	36.7	$	56.5	$	—	$	—	$	—	$	19.8	$	36.7	$	56.5
79.9% - 50.0%		129.6		40.9		170.5		—		—		—		129.6		40.9		170.5
Below 50.0%		41.0		187.3		228.3		—		—		—		41.0		187.3		228.3
Total	$	190.4	$	264.9	$	455.3	$	—	$	—	$	—	$	190.4	$	264.9	$	455.3

Commercial mortgage-backed securities’ cash flows are generated by an industry standard fixed income analytics system designed for asset backed securities. In addition, a third party default model is generally utilized within this service to apply loan specific probability of default, refinance risk and loss severity ratios to generate estimated cash flows. Default and prepayment assumptions are deal specific and include, but are not limited to, delinquency, property type, loan size, debt service coverage ratio, loan to value ratios and loan age.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

Collateralized Debt Obligations

Collateralized debt obligations are asset-backed securities whose value is derived from the credit quality of the underlying corporate obligations. For collateralized debt obligations, the following tables summarize, as of the dates indicated, the Company’s gross unrealized loss position categorized as investment grade versus non-investment grade, 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
	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
December 31, 2009:
99.9% - 80.0%	$	0.4	$	3.6	$	4.0	$	0.3	$	15.8	$	16.1	$	0.7	$	19.4	$	20.1
79.9% - 50.0%		—		29.0		29.0		4.2		31.4		35.6		4.2		60.4		64.6
Below 50.0%		—		9.6		9.6		24.0		52.6		76.6		24.0		62.2		86.2
Total	$	0.4	$	42.2	$	42.6	$	28.5	$	99.8	$	128.3	$	28.9	$	142.0	$	170.9
December 31, 2008:
99.9% - 80.0%	$	7.0	$	0.2	$	7.2	$	0.1	$	0.6	$	0.7	$	7.1	$	0.8	$	7.9
79.9% - 50.0%		25.8		37.2		63.0		—		—		—		25.8		37.2		63.0
Below 50.0%		66.5		99.8		166.3		1.4		2.1		3.5		67.9		101.9		169.8
Total	$	99.3	$	137.2	$	236.5	$	1.5	$	2.7	$	4.2	$	100.8	$	139.9	$	240.7

To generate the expected cash flows, agency NRSRO of the underlying corporate securities were used to develop default probabilities. Historical and forecasted loss severities were then applied to develop the expected losses within the security’s collateral pool. An independent data provider is then used to model each security’s structure and waterfall to determine cash flows at the security level. If a recovery estimate is not feasible, then the market’s view of cash flows implied by the current fair value, market discount rates, and effective yield are the primary factors used to estimate recovery.

Within the collateralized debt obligations security type are Pooled Trust Preferreds. Pooled Trust Preferreds are collateralized debt obligations where the collateral is regional bank and insurance company trust preferred securities. All banks in the pools were screened using data provided by U.S. Bank Rating service. The rating service score is a combination of the bank’s liquidity, asset quality, capital adequacy and profitability. The results of the analysis, as well as management’s evaluation of the results and broker research, are used to generate default rates which are modeled to create cash flows from the entire collateral pool underlying each pooled trust preferred security. An independent data provider is then used to model each security’s structure and payment waterfall to determine cash flows at the security level.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

Unrealized Gains and Losses

The following table presents the components of net unrealized losses on securities available-for-sale, as of December 31:

(in millions)	2009			2008
Net unrealized losses, before adjustments and taxes	$	(349.6	)	$	(2,743.2	)
Change in fair value attributable to fixed maturity securities designated in fair value hedging relationships		(35.1	)		(57.7	)
Total net unrealized losses, before adjustments and taxes		(384.7	)		(2,800.9	)
Adjustment to deferred policy acquisition costs		31.0			615.9
Adjustment to value of business acquired		0.2			9.6
Adjustment to future policy benefits and claims		19.5			46.9
Adjustment to policyholder dividend obligation		(16.4	)		74.9
Deferred federal income tax benefit		122.6			718.8
Net unrealized losses	$	(227.8	)	$	(1,334.8	)

The following table presents an analysis of the net change in net unrealized gains (losses) on securities available-for-sale before adjustments and taxes for the years ended December 31:

(in millions)	20091		2008			2007
Fixed maturity securities	$	2,381.7	$	(2,682.2	)	$	(132.1	)
Equity securities		11.9		(14.2	)		(4.5	)
Net increase (decrease)	$	2,393.6	$	(2,696.4	)	$	(136.6	)

1 Includes the $384.2 million cumulative effect of adoption of accounting principle as of January 1, 2009 for the adoption of guidance impacting FASB ASC 320-10, Investments – Debt and Equity Securities.  

The following table summarizes the Company’s accumulated other comprehensive losses recognized on debt securities which have credit losses in earnings, based on the adoption of guidance impacting FASB ASC 320-10, Investments – Debt and Equity Securities before federal income tax benefit, for the years ended December 31:

(in millions)	2009
Cumulative adoption of accounting principle as of January 1	$	(384.2	)
Net unrealized gains in the period		38.3
Total1	$	(345.9	)

1 Includes $417.5 million of other-than-temporary impairment losses recognized in other comprehensive income for the year ended December 31, 2009.  

The Company’s practice is to disclose in the table above both the non-credit portion of the other-than-temporary impairment losses recognized in other comprehensive income and any subsequent changes in the fair value of those debt securities, which could result in a net unrealized gain.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

Mortgage Loans on Real Estate, Securitization and Real Estate

As of December 31, 2009 and 2008, the carrying value, net of specific reserves, of commercial mortgage loans on real estate considered specifically reserved was $154.8 million and $39.9 million, respectively, for which a $36.4 million and $14.4 million specific reserve had been established, respectively. No specific reserve exists for collateral dependent commercial mortgage loans for which the fair value of the collateral is estimated to be greater than the carrying value.

The following table summarizes activity in the valuation allowance account for mortgage loans on real estate for the years ended December 31:

(in millions)	2009		2008		2007
Allowance, beginning of period	$	42.4	$	24.8	$	36.0
Net change in allowance		35.0		17.6		(11.2	)
Allowance, end of period	$	77.4	$	42.4	$	24.8

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 the years ended December 31, 2009 and 2008. The Company received $0.6 million, during the years ended December 31, 2009 and 2008, 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.

The Company provided 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. For the years ended December 31, 2009, 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.

Real estate held for use was $1.8 million and $9.8 million as of December 31, 2009 and 2008, respectively. These assets are carried at cost less accumulated depreciation, which was $0.4 million and $2.1 million as of December 31, 2009 and 2008, respectively. The carrying value of real estate held for sale was $7.1 million and $6.8 million as of December 31, 2009 and 2008, respectively.

Securities Lending

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. The Company recognizes 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 investments and fixed maturity securities 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, 2009, 2008 and 2007

As of December 31, 2009 and December 31, 2008, the Company had received $41.4 million and $419.9 million, respectively, of cash collateral on securities lending. The Company had not received any non-cash collateral on securities lending as of December 31, 2009 and December 31, 2008. As of December 31, 2009 and December 31, 2008, the Company had loaned securities with a fair value of $40.0 million and $407.1 million, respectively.

Assets on Deposit, Held in Trust and Pledged as Collateral

Fixed maturity securities with an amortized cost of $19.2 million and $28.0 million were on deposit with various regulatory agencies as required by law as of December 31, 2009 and 2008, respectively,. These securities continue to be included in fixed maturity securities on the consolidated balance sheets.

Net Investment Income

The following table summarizes net investment income from continuing operations by investment type for the years ended December 31:

(in millions)	2009		2008			2007
Securities available-for-sale:
Fixed maturity securities	$	1,465.1	$	1,477.3		$	1,518.5
Equity securities		1.9		5.3			5.0
Mortgage loans on real estate		445.4		497.1			554.1
Short-term investments		6.4		16.8			31.2
Other		17.0		(75.1	)		152.0
Gross investment income		1,935.8		1,921.4			2,260.8
Less investment expenses		56.7		56.7			68.6
Net investment income	$	1,879.1	$	1,864.7		$	2,192.2

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

Net Realized Investment Gains and Losses

The following table summarizes net realized investment gains (losses) from continuing operations by source for the years ended December 31:

(in millions)	2009			2008			2007
Total net derivatives gains (losses)1,2		399.8			(330.3	)		(55.9	)
Total realized gains on sales		191.7			40.2			93.3
Total realized losses on sales		(112.8	)		(40.7	)		(85.2	)
Valuation (losses) gains3		(20.7	)		(55.8	)		1.9
Other		(4.2	)		38.8			(1.3	)
Net realized investment gains (losses)	$	453.8		$	(347.8	)	$	(47.2	)

1 Includes gains of $413.6 million and losses of $500.7 million, and $26.7 million on derivatives and embedded derivatives associated with living benefit contracts for the years ended December 31, 2009, 2008, and 2007, respectively.  

2 Includes losses of $171.8 million and gains of $109.4 million on derivatives associated with death benefit contracts for the years ended December 31, 2009 and 2008, respectively. There were no material gains or losses on derivatives associated with death benefit contracts during 2007.  

3 Includes valuation of trading securities, mark-to-market valuation of mortgage loans held for sale, and changes in the valuation allowance not related to specific mortgage loans on real estate.  

Proceeds from the sale of securities available-for-sale during 2009, 2008 and 2007 were $4.21 billion, $4.31 billion and $4.98 billion, respectively. During 2009 and 2008, gross gains of $189.0 million and $35.7 million, respectively, and gross losses of $70.3 million and $25.3 million, respectively, were realized on those sales.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

Other-Than-Temporary and Other Investment Impairment Losses

The following table summarizes other-than-temporary impairments for the years ended December 31:

(in millions)	Gross		Included in OCI			Net
2009:
Fixed maturity securities1	$	906.8	$	(417.5	)	$	489.3
Equity securities		7.1		—			7.1
Mortgage loans		71.8		—			71.8
Other		6.4		—			6.4
Total other-than-temporary impairment losses	$	992.1	$	(417.5	)	$	574.6
			2008			2007
Total Impairments:
Fixed maturity securities1			$	1,052.2		$	108.5
Equity securities				60.2			—
Mortgage loans				14.6			4.1
Other				3.7			5.1
Total other-than-temporary impairment losses			$	1,130.7		$	117.7

1 Declines in the creditworthiness of the issuer of hybrid securities with both debt and equity-like features requires the use of the equity model in analyzing the security for other-than-temporary impairment. For the year ended December 31, 2009, the Company recognized $167.6 million in other-than-temporary impairments related to these securities compared to $89.5 million and none for the years ended December 31, 2008 and 2007, respectively.  

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

The following table summarizes the cumulative amounts related to the Company’s credit loss portion of the other-than-temporary-impairment losses on debt securities held as of December 31, 2009 that the Company does not intend to sell and it is not more likely than not that the Company will be required to sell the security prior to recovery of the amortized cost basis and for which the non-credit portion of the loss is included in other comprehensive income:

(in millions)
Cumulative credit loss as of January 1, 20091	$	507.5
New credit losses		168.4
Incremental credit losses2		71.9
Subtotal		747.8
Less:
Losses related to securities included in the beginning balance sold or paid down during the period		(267.3	)
Losses related to securities included in the beginning balance for which there was a change in intent3		(63.1	)
Increases in cash flows expected to be collected for securities included in the beginning balance		—
Cumulative credit loss as of December 31, 20091	$	417.4

1 The cumulative credit loss amount excludes other-than-temporary-impairment losses on securities held as of the periods indicated that the Company intends to sell or it is more likely than not that the Company will be required to sell the security before the recovery of the amortized cost basis.  

2 On securities included in the beginning balance.  

3 Securities for which a credit-related other-than-temporary impairment loss was previously recorded that the Company now intends to sell or is more likely than not it will be required to sell before recovery of the amortized cost basis and has transferred the non-credit portion of loss previously recorded in other comprehensive income to earnings during the period. Also includes hybrid securities that had previously been evaluated for other-than-temporary impairment based on the criteria as a debt security, but in the current period are evaluated as an equity security due to declines in the creditworthiness of the issuer.  

(7) Deferred Policy Acquisition Costs  

During the fourth quarter of 2009, 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 the continued market recovery and favorable market performance compared to assumed net separate account returns. Accordingly, the Company recalculated DAC using revised best estimate assumptions, which resulted in a increase in DAC and other related balances, including sales inducement assets, and an decrease in DAC amortization and other related balances of $218.5 million pre-tax in the Individual Investments segment. The Company used the reversion to the mean process with the anchor date that was reset during the second quarter 2007 unlocking as described below. 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.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

During the second quarter of 2009, the Company conducted its annual comprehensive review of model assumptions used to project DAC and other related balances, including sales inducement assets, VOBA and unearned revenue reserves. The review covered all assumptions including mortality, lapses, expenses and general and separate account returns. As a result of this review, certain assumptions were unlocked (DAC unlock). The unlocked assumptions primarily related to lower expected investment spreads and separate account returns across all segments.

The pre-tax positive (negative) impact on the Company’s assets and liabilities as a result of the unlocking of assumptions during 2009 was as follows:

(in millions)	DAC			VOBA			Unearned Revenue Reserves		Sales Inducement Assets		Total
Segment:
Individual Investments	$	191.9		$	—		$	—	$	10.9	$	202.8
Retirement Plans		(8.2	)		—			—		—		(8.2	)
Individual Protection		(43.9	)		(13.2	)		10.9		—		(46.2	)
Total	$	139.8		$	(13.2	)	$	10.9	$	10.9	$	148.4

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 used the reversion to the mean process with the anchor date that was reset during the second quarter 2007 unlocking as described below. 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.

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.

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.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

The pre-tax positive (negative) impact on the Company’s assets and liabilities as a result of the unlocking of assumptions during the year ended December 31, 2008 was as follows:

(in millions)	DAC			VOBA			Unearned Revenue Reserves		Sales Inducement Assets			Total
Segment:
Individual Investments	$	(429.1	)	$	(2.6	)	$	—	$	(0.6	)	$	(432.3	)
Retirement Plans		(2.3	)		—			—		—			(2.3	)
Individual Protection		(2.8	)		7.5			3.2		—			7.9
Total	$	(434.2	)	$	4.9		$	3.2	$	(0.6	)	$	(426.7	)

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, VOBA, 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.

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 $216.5 million pre-tax. 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 $161.9 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 GLWB 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’ Statement of Position 05-1, Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection with Modifications or Exchanges of Insurance Contracts. As a result, the Company eliminated existing DAC and other related balances resulting in a $135.0 million pre-tax charge.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

The pre-tax positive (negative) impact on the Company’s assets and liabilities as a result of the unlocking of these assumptions during the second quarter of 2007 was as follows:

(in millions)	DAC			VOBA		Unearned Revenue Reserves		Sales Inducement Assets		Total
Segment:
Individual Investments	$	(208.9	)	$	—	$	—	$	12.5	$	(196.4	)
Retirement Plans		(10.5	)		—		—		—		(10.5	)
Individual Protection		(16.4	)		5.1		1.7		—		(9.6	)
Total	$	(235.8	)	$	5.1	$	1.7	$	12.5	$	(216.5	)

The following table presents a reconciliation of DAC for the years ended December 31:

(in millions)	2009			2008
Balance at beginning of period	$	4,523.8		$	4,095.6
Capitalization of DAC		513.0			587.6
Amortization of DAC, excluding unlocks		(605.4	)		(257.4	)
Amortization of DAC, related to unlocks		139.8			(434.2	)
Adjustments to DAC related to unrealized gains and losses on securities available-for-sale and other		(588.1	)		532.2
Balance at end of period	$	3,983.1		$	4,523.8

(8) Value of Business Acquired and Other Intangible Assets  

The following table presents a reconciliation of VOBA for the years ended December 31:

(in millions)	2009			2008
Balance at beginning of period	$	334.0		$	354.8
Amortization of VOBA		(49.4	)		(31.4	)
Net realized losses on investments		1.7			1.9
Other		—			0.5
Subtotal		286.3			325.8
Change in unrealized (loss) gain on available-for-sale securities		(9.4	)		8.2
Balance at end of period	$	276.9		$	334.0

Interest on the unamortized VOBA balance (at interest rates ranging from 4.50% to 7.56%) is included in amortization and was $20.1 million, $22.4 million and $24.8 million during the years ended December 31, 2009, 2008 and 2007, respectively.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

The following table summarizes intangible assets as of December 31:

(in millions)	Initial useful life1	2009				2008
		Gross carrying amount		Accumulated amortization		Gross carrying amount		Accumulated amortization
Amortizing:
VOBA	28 years	$	594.9	$	318.0	$	594.9	$	270.5
Distribution forces	20 years		7.0		7.0		7.0		1.3
Total intangible assets		$	601.9	$	325.0	$	601.9	$	271.8

1 The initial useful life was based on applicable assumptions. Actual periods are subject to revision based on variances from assumptions and other relevant factors.  

During the fourth quarter of 2009, the Company recorded a $5.4 million pre-tax impairment charge on intangible assets associated with the NFN retirement services distribution channel.

During 2009, the Company fully amortized intangible assets related to NLICA and NLACA state insurance licenses, which resulted in a $7.8 million pre-tax charge. The state insurance licenses had indefinite useful lives and were not previously amortized. Due to the merger with NLIC and NLAIC, respectively, on December 31, 2009, the NLICA and NLACA state insurance licenses are no longer required as the surviving entities have the required state insurance licenses to conduct business on existing NLICA and NLACA products. The Company will surrender the state insurance licenses back to each state. See Note 1 for a description of the merger transaction between these entities.

During 2008, the Company recorded a $19.7 million pre-tax impairment charge on career agency force and independent agency force intangible assets associated with its plan to exit the NFN professional consulting group sales channel and selling arrangement changes for the independent agency force.

The Company’s annual impairment testing performed as of June 30, did not result in material impairment losses on intangible assets during 2009, 2008 and 2007.

Based on current assumptions, which are subject to change, the following table summarizes estimated amortization for the next five years ended December 31:

(in millions)	VOBA
2010	$	28.8
2011		24.2
2012		21.9
2013		19.4
2014		16.0

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

(9) Goodwill  

The following table summarizes changes in the carrying value of goodwill by segment for the years indicated:

(in millions)	Retirement Plans		Individual Protection		Total
Balance as of December 31, 2007	$	25.4	$	174.4	$	199.8
Adjustments		—		—		—
Balance as of December 31, 2008		25.4		174.4		199.8
Adjustments		—		—		—
Balance as of December 31, 2009	$	25.4	$	174.4	$	199.8

The Company’s 2009 annual impairment testing did not result in any impairments on existing goodwill. As of the 2009 annual impairment testing, the fair value of the reporting units with goodwill was in excess of the carrying value. The goodwill balances as of 12/31/09 have not been previously impaired.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

(10) Closed Block  

The amounts shown in the following tables for assets, liabilities, revenues and expenses of the closed block are those that enter into the determination of amounts that are to be paid to policyholders.

The following table summarizes financial information for the closed block as of December 31:

(in millions)	2009			2008
Liabilities:
Future policyholder benefits	$	1,818.0		$	1,844.2
Policyholder funds and accumulated dividends		142.9			142.7
Policyholder dividends payable		28.7			31.7
Policyholder dividend obligation		48.7			(62.2	)
Other policy obligations and liabilities		13.8			9.2
Total liabilities		2,052.1			1,965.6
Assets:
Fixed maturity securities available-for-sale, at estimated fair value		1,236.2			1,082.1
Mortgage loans on real estate		263.2			294.8
Policy loans		190.5			197.9
Other assets		135.4			152.3
Total assets		1,825.3			1,727.1
Excess of reported liabilities over assets		226.8			238.5
Portion of above representing other comprehensive income:
Increase (decrease) in unrealized gain on fixed maturity securities available-for-sale		90.8			(88.6	)
Adjustment to policyholder dividend obligation		(90.8	)		88.6
Total		—			—
Maximum future earnings to be recognized from assets and liabilities	$	226.8		$	238.5
Other comprehensive income:
Fixed maturity securities available-for-sale:
Fair value	$	1,236.2		$	1,082.1
Amortized cost		1,252.6			1,157.0
Shadow policyholder dividend obligation		(16.4	)		74.9
Net unrealized appreciation	$	—		$	—

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

The following table summarizes closed block operations for the years ended December 31:

(in millions)	2009			2008			2007
Revenues:
Premiums	$	89.6		$	92.9		$	95.7
Net investment income		105.6			108.9			102.5
Realized investment gains (losses)		1.8			(40.9	)		(1.5	)
Realized (losses) gains credited to to policyholder benefit obligation		(5.8	)		36.9			(2.5	)
Total revenues		191.2			197.8			194.2
Benefits and expenses:
Policy and contract benefits		132.9			131.1			136.4
Change in future policyholder benefits and interest credited to policyholder accounts		(24.4	)		(17.4	)		(19.3	)
Policyholder dividends		59.2			62.9			61.1
Change in policyholder dividend obligation		4.4			2.6			(3.6	)
Other expenses		1.1			1.2			1.2
Total benefits and expenses		173.2			180.4			175.8
Total revenues, net of benefits and expenses, before federal income tax expense		18.0			17.4			18.4
Federal income tax expense		6.3			6.1			6.4
Revenues, net of benefits and expenses and federal income tax expense	$	11.7		$	11.3		$	12.0
Maximum future earnings from assets and liabilities:
Beginning of period	$	238.5		$	249.8		$	261.8
Change during period		(11.7	)		(11.3	)		(12.0	)
End of period	$	226.8		$	238.5		$	249.8

Cumulative closed block earnings from inception through December 31, 2009 and 2008 were higher than expected as determined in the actuarial calculation. Therefore, policyholder dividend obligations (excluding the adjustment for unrealized gains on available-for-sale securities) were $32.3 million and $12.7 million as of December 31, 2009 and 2008, respectively.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

(11) Variable 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) guaranteed minimum death benefits (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 GLWB, offered in the Company’s L.inc, is a living benefit that provides for enhanced retirement income security without the liquidity loss associated with annuitization. The withdrawal rates vary based on the age when withdrawals begin and 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.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

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.  

In January 2009, the Company decided to simplify its living benefit guarantees and only offer L.inc on new sales.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

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 (a contract may contain multiple guarantees):

	2009									2008
(in millions)	General account value		Separate account value		Total account value		Net amount at risk1		Wtd. avg. attained age	General account value		Separate account value		Total account value		Net amount at risk1		Wtd. avg. attained age
GMDB:
Return of premium	$	728.8	$	5,859.6	$	6,588.4	$	99.5	61	$	912.1	$	5,082.2	$	5,994.3	$	440.6	60
Reset		1,622.4		12,406.1		14,028.5		899.5	64		2,282.3		10,259.8		12,542.1		2,477.7	64
Ratchet		1,181.3		13,835.5		15,016.8		1,772.4	67		1,877.7		10,545.7		12,423.4		3,775.3	67
Rollup		41.8		258.7		300.5		17.7	73		48.5		241.9		290.4		25.9	72
Combo		229.1		1,577.3		1,806.4		325.6	69		306.0		1,398.1		1,704.1		621.2	69
Subtotal		3,803.4		33,937.2		37,740.6		3,114.7	65		5,426.6		27,527.7		32,954.3		7,340.7	65
Earnings enhancement		16.5		373.4		389.9		19.6	64		28.1		305.4		333.5		7.2	63
Total - GMDB	$	3,819.9	$	34,310.6	$	38,130.5	$	3,134.3	65	$	5,454.7	$	27,833.1	$	33,287.8	$	7,347.9	65
GMAB2:
5 Year	$	383.0	$	2,639.8	$	3,022.8	$	171.5	N/A	$	607.0	$	2,260.6	$	2,867.6	$	499.0	N/A
7 Year		393.6		2,151.9		2,545.5		180.4	N/A		451.6		1,814.3		2,265.9		482.9	N/A
10 Year		70.2		684.6		754.8		39.5	N/A		80.2		597.7		677.9		132.2	N/A
Total - GMAB	$	846.8	$	5,476.3	$	6,323.1	$	391.4	N/A	$	1,138.8	$	4,672.6	$	5,811.4	$	1,114.1	N/A
GMIB3:
Ratchet	$	16.3	$	242.0	$	258.3	$	0.3	N/A	$	16.2	$	228.5	$	244.7	$	5.6	N/A
Rollup		46.6		625.6		672.2		0.4	N/A		47.1		612.4		659.5		1.3	N/A
Combo		—		0.2		0.2		—	N/A		—		0.1		0.1		—	N/A
Total - GMIB	$	62.9	$	867.8	$	930.7	$	0.7	N/A	$	63.3	$	841.0	$	904.3	$	6.9	N/A
GLWB:
L.inc	$	229.7	$	7,056.7	$	7,286.4	$	67.3	N/A	$	72.4	$	3,248.4	$	3,320.8	$	571.5	N/A
Porfolio income insurance		—		20.7		20.7		—	N/A		—		—		—		—	N/A
Total - GLWB	$	229.7	$	7,077.4	$	7,307.1	$	67.3	N/A	$	72.4	$	3,248.4	$	3,320.8	$	571.5	N/A

1 Net amount at risk is calculated on a seriatim 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 $5.32 billion and $4.59 billion as of December 31, 2009 and 2008, 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. See Note 5, Derivatives Not Qualifying for Hedge Accounting – Equity Market Risk Management, for a discussion of the Company’s risk management practices with respect to financial market exposure.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

The following table summarizes account balances of variable annuity contracts that were invested in separate accounts as of December 31:

(in millions)	2009		2008
Mutual funds:
Bond	$	4,920.2	$	4,370.3
Domestic equity		24,598.8		18,676.2
International equity		3,046.9		2,421.4
Total mutual funds		32,565.9		25,467.9
Money market funds		1,473.4		2,146.4
Total	$	34,039.3	$	27,614.3

The following table summarizes the reserve balances, net of reinsurance, for variable annuity contracts with guarantees as of December 31:

(in millions)	2009		2008
Living benefit riders	$	265.9	$	1,698.0
GMDB		67.0		193.4
GMIB		3.1		5.5

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, 2009 and 2008, the net balance of the embedded derivatives for living benefits was a liability of $265.9 million and a liability of $1.70 billion, respectively. The GLWB component of living benefit riders was immaterial in 2009 and $699.9 million in 2008, respectively.

The Company’s incurred and paid amounts for living benefit features were immaterial for the years ended December 31, 2009 and 2008. The incurred and paid amounts were immaterial for 2008. The Company does not expect any meaningful level of claims under the living benefit features for several years and believes the impact of claims is expected to be mitigated by its economic hedging program.

During the year ended December 31, 2009, the Company recorded net realized investment gains on living benefit embedded derivatives and related economic hedging gains of $413.6 million. These gains were comprised of $1.50 billion of net realized investment gains on living benefit embedded derivatives and $1.08 billion of related economic hedging losses. The net realized investment gains on living benefit embedded derivatives primarily resulted from higher interest rates, lower volatility assumptions and an increase to the nonperformance component of the discount rate. The increase in net realized investment gains on embedded derivatives increased amortization of DAC by $389.6 million in 2009 compared to 2008, which is included in the Corporate and Other segment.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

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 incurred and paid amounts for GMDBs were $132.4 million for the year ended December 31, 2009 compared to $67.1 million for the year ended December 31, 2008.

The following assumptions and methodology were used to determine the GMDB claim reserves as of December 31, 2009 and 2008:

• Data used was based on a combination of historical numbers and future projections generally involving 250 and 50 probabilistically generated economic scenarios as of December 31, 2009 and 2008, respectively  

• Mean gross equity performance – 10.4% and 8.1% as of December 31, 2009 and 2008, respectively  

• Equity volatility – 18.0% and 18.7% as of December 31, 2009 and 2008, respectively  

• Mortality – 91% of Annuity 2000 Basic table for males, 101% for females as of December 31, 2009; and 100% of Annuity 2000 tables as of December 31, 2008  

• Asset fees – equivalent to mutual fund and product loads  

• Discount rate – approximately 7.0%  

Lapse rate assumptions vary by duration as shown below:

December 31, 2009 Duration (years)	1	2	3	4	5	6	7	8	9	10+
Minimum	1.0%	2.0%	2.5%	3.0%	5.0%	6.0%	7.0%	7.0%	10.0%	10.0%
Maximum	3.5%	2.0%	4.0%	4.5%	35.0%	40.0%	18.5%	32.5%	32.5%	18.5%
December 31, 2008 Duration (years)	1	2	3	4	5	6	7	8	9	10+
Minimum	1.0%	2.0%	2.0%	3.0%	4.5%	6.0%	7.0%	7.0%	11.5%	11.5%
Maximum	1.5%	2.5%	4.0%	4.5%	40.0%	41.5%	21.5%	35.0%	35.0%	18.5%

The Company’s incurred and paid amounts for GMIBs were $7.2 million for the years ended December 31, 2009. The incurred and paid amounts were immaterial for 2008.

The Company did not transfer assets from the general account to the separate account for any of its variable annuity contracts during the years ended December 31, 2009 and 2008.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

The following table summarizes account balances of variable universal life insurance contracts that were invested in separate accounts as of December 31:

(in millions)	2009		2008
Mutual funds:
Bond	$	452.8	$	412.7
Domestic equity		2,996.3		2,459.5
International equity		416.9		334.6
Total mutual funds		3,866.0		3,206.8
Money market funds		257.0		295.0
Total	$	4,123.0	$	3,501.8

(12) Short-Term Debt  

The following table summarizes short-term debt as of December 31:

(in millions)	2009		2008
$800.0 million commercial paper program	$	150.0	$	149.9
$350.0 million securities lending program facility		—		99.8
Total short-term debt	$	150.0	$	249.7

The Company 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. London Interbank Offered Rate (LIBOR). On July 31, 2009, the Company paid down the $99.7 million principal balance on the securities lending program facility. The Company had no amounts outstanding under this agreement as of December 31, 2009 compared to $99.8 million as of December 31, 2008.

The Company has available as a source of funds a $1.00 billion revolving credit facility entered into by NFS, NLIC and NMIC with a maturity of May 13, 2010. The facility provides for several and not joint liability with respect to any amount drawn by any party. The facility contains covenants, including, but not limited to, requirements that NMIC maintain statutory surplus in excess of $5.30 billion, the Company’s debt not exceed 40% of tangible net worth, as defined, and that NLIC maintain statutory surplus in excess of $1.67 billion. A breach by any borrower of the financial covenants will impact the availability of the line for the other borrowers and may accelerate payment. NMIC had no amounts outstanding under this agreement as of December 31, 2009. NLIC also has an $800.0 million commercial paper program and rating agency guidelines recommend that NLIC maintain minimum liquidity backup, which includes cash and liquid assets as well as committed bank lines, equal to 50% of any amounts outstanding under the commercial paper program. Therefore, availability under the aggregate $1.00 billion credit facility is reduced by the amount outstanding in excess of available cash and liquid assets. NLIC had $150.0 million of commercial paper outstanding at December 31, 2009 at a weighted average interest rate of 0.29% and $149.9 million outstanding at December 31, 2008 at a weighted average interest rate of 2.07%.

The Company paid interest on short-term debt totaling $1.3 million, $8.3 million, and $15.0 million in 2009, 2008 and 2007, respectively.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

(13) Long-Term Debt  

The following table summarizes surplus notes payable to NFS as of December 31:

(in millions)	2009		2008
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 2009, 2008 and 2007. Payments of interest and principal under the notes require the prior approval of the Ohio Department of Insurance (ODI).

On September 30, 2009, the Company sold NLICA, a 5.75%, $200.0 million surplus note maturing on September 30, 2010. Due to the merger of NLICA with and into the Company on December 31, 2009, the note was redeemed, in whole, by the Company at a redemption price equal to 100% of the aggregate principal amount outstanding plus accrued interest.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

(14) Federal Income Taxes  

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 Corporation 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. NFS will file a one day life/non-life, federal income tax return (January 1, 2009) with all of its downstream subsidiaries.

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)	2009			2008
Deferred tax assets:
Future policy benefits and claims	$	1,108.5		$	955.6
Securities available-for-sale		—			809.2
Derivatives		62.6			229.7
Capital loss carryforward		102.8			—
Other		267.1			258.0
Gross deferred tax assets		1,541.0			2,252.5
Less valuation allowance		(23.7	)		(23.7	)
Deferred tax assets, net of valuation allowance		1,517.3			2,228.8
Deferred tax liabilities:
Deferred policy acquisition costs		(1,083.7	)		(1,293.6	)
Securities available-for-sale		(215.9	)		—
Value of business acquired		(95.6	)		(112.9	)
Other		(96.9	)		(168.3	)
Gross deferred tax liabilities		(1,492.1	)		(1,574.8	)
Net deferred tax asset (liability)	$	25.2		$	654.0

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. Because it is more likely than not that certain deferred tax assets will not be realized, the Company established a valuation allowance of $23.7 million, $23.7 million and $23.7 million as of December 31, 2009, 2008 and 2007, respectively. 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 (liability) asset was $(108.5) million and $132.1 million as of December 31, 2009 and 2008, respectively.

Total federal income taxes (refunded) paid were $(59.0) million, $(40.9) million, and $117.9 million during the years ended December 31, 2009, 2008 and 2007, respectively.

As of December 31, 2009, the Company has $293.7 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 $6.7 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 $22.7 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, 2009, 2008 and 2007

The following table summarizes the federal income tax expense (benefit) attributable to income (loss) from continuing operations for the years ended December 31:

(in millions)	2009			2008			2007
Current	$	165.0		$	(130.8	)	$	108.0
Deferred		(117.1	)		(403.0	)		39.3
Federal income tax expense (benefit)	$	47.9		$	(533.8	)	$	147.3

Total federal income tax expense (benefit) differs from the amount computed by applying the U.S. federal income tax rate to income (loss) from continuing operations before federal income tax expense (benefit) as follows for the years ended December 31:

	2009					2008					2007
(dollars in millions)	Amount			%		Amount			%		Amount			%
Computed tax expense (benefit)	$	107.3		35.0		$	(497.4	)	35.0		$	220.2		35.0
DRD		(56.1	)	(18.3	)		(42.1	)	3.0			(67.5	)	(10.7	)
Impact of noncontrolling interest		18.3		6.0			25.3		(1.8	)		17.8		2.8
Tax credits		(21.4	)	(7.0	)		(25.8	)	1.8			(22.3	)	(3.6	)
Other, net		(0.2	)	(0.1	)		6.2		(0.4	)		(0.9	)	(0.1	)
Total	$	47.9		15.6		$	(533.8	)	37.6		$	147.3		23.4

During 2009, the Company recorded $8.7 million of net federal income tax expense adjustments primarily related to differences between the 2008 estimated tax liability and the amounts reported on the Company’s 2008 tax returns. These changes in estimates primarily were driven by the Company’s separate account dividends received deduction (DRD) and foreign tax credit.

During the third quarter of 2008, the Company refined its separate account 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 $11.9 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 2007, the Company recorded $7.6 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.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

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)	2009			2008
Balance at beginning of period	$	44.0		$	8.8
Additions for current year tax positions		36.8			37.7
Additions for prior years tax positions		14.9			0.3
Reductions for prior years tax positions		(1.1	)		(2.8	)
Balance at end of period	$	94.6		$	44.0

The total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate on December 31, 2009, is $43.0 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, 2009, and 2008, the Company incurred $0.2 million and $1.0 million in interest and penalties, respectively. The Company accrued $3.8 million and $2.2 million for the payment of interest and penalties at December 31, 2009 and 2008, 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 recently completed an audit of the Company’s tax years 2003 through 2005. The statute remains open for these years as the Company completes the appeals process. See “Tax Matters” in Note 18 for more information on the Company’s tax years 2003 through 2005 audit and the related appeals process.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

(15) Shareholder’s 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 income (loss) and statutory capital and surplus for the Company and its insurance subsidiary for the years ended December 31:

(in millions)	20091			2008			2007
Statutory net income (loss)
NLIC	$	397.3		$	(919.4	)	$	410.8
NLAIC		(61.1	)		(90.3	)		(4.0	)
Statutory capital and surplus
NLIC	$	3,129.6		$	2,749.9		$	2,599.9
NLAIC		213.5			122.6			256.6

1 Unaudited as of the date of this report.  

On December 31, 2009, NLIC merged with its affiliate, NLICA, with NLIC as the surviving entity. In addition, NLIC’s subsidiary, NLAIC, merged with a subsidiary of NLICA, NLACA, effective as of December 31, 2009, with NLAIC as the surviving entity. See Note 2 (p) for details on the accounting treatment of this transaction.

NLIC 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 NLIC’s estimated statutory surplus of $68.9 million as of December 31, 2008. The permitted practice had no impact on NLIC’s statutory net income. The benefits of this permitted practice was not considered by the Company when determining capital and surplus available for dividends during 2009.

In 2009, the NAIC adopted Statement of Statutory Accounting Principles No. 10R, Income Tax Revised – a temporary replacement of SSAP 10, which is similar to the ODI permitted practice adopted in 2008 with the exception of limiting capital and surplus available for dividends.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

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. NLIC’s statutory capital and surplus as of December 31, 2009 was $3.13 billion, and statutory net income for the year ended December 31, 2009 was $397.3 million. During the year ended December 31, 2009, NLIC did not pay any dividends to NFS during 2009. As of January 1, 2010, NLIC has the ability to pay dividends to NFS totaling $397.3 million upon providing prior notice to the ODI.

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, 2009, 2008 and 2007

Comprehensive Gain (Loss)

The Company’s other comprehensive income and loss includes net income (loss) and certain items that are reported directly within separate components of shareholder’s equity that are not recorded in net income.

The following table summarizes the Company’s other comprehensive gain (loss), before and after federal income tax expense (benefit), for the years ended December 31:

(in millions)	2009			2008			2007
Net unrealized losses on securities available-for-sale arising during the period:
Net unrealized gains (losses) before adjustments	$	2,373.9		$	(3,827.8	)	$	(273.1	)
Net non-credit gains		38.4			—			—
Net adjustment to DAC		(584.9	)		528.8			3.8
Net adjustment to VOBA		(9.4	)		8.2			8.0
Net adjustment to future policy benefits and claims		(27.4	)		127.8			5.9
Net adjustment to policyholder dividend obligation		(91.3	)		88.7			2.2
Related federal income tax (expense) benefit		(594.8	)		1,076.1			88.6
Net unrealized gains (losses)		1,104.5			(1,998.2	)		(164.6	)
Reclassification adjustment for net realized losses on securities available-for-sale realized during the period:
Net realized losses		388.2			1,102.1			105.0
Related federal income tax benefit		(135.9	)		(385.7	)		(36.8	)
Net reclassification adjustment		252.3			716.4			68.2
Other comprehensive gain (loss) on securities available-for-sale		1,356.8			(1,281.8	)		(96.4	)
Accumulated net holding (losses) gains on cash flow hedges:
Unrealized holding (losses) gains		(4.1	)		16.5			(17.2	)
Related federal income tax benefit (expense)		1.5			(5.8	)		6.0
Other comprehensive (loss) income on cash flow hedges		(2.6	)		10.7			(11.2	)
Other unrealized (losses) gains:
Net unrealized (losses) gains		(13.5	)		7.4			(7.4	)
Related federal income tax benefit (expense)		4.7			(2.5	)		2.7
Other net unrealized (losses) gains		(8.8	)		4.9			(4.7	)
Unrecognized amounts on pension plans:
Net unrecognized amounts		—			(12.3	)		1.0
Related federal income tax benefit (expense)		—			4.3			(0.4	)
Other comprehensive (loss) income on unrecognized pension amounts		—			(8.0	)		0.6
Total other comprehensive income (loss)	$	1,345.4		$	(1,274.2	)	$	(111.7	)

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

The adjustments to DAC and VOBA represent the changes in amortization of DAC and VOBA 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.

The adoption of guidance impacting FASB ASC 320-10, Investments – Debt and Equity Securities resulted in a cumulative-effect adjustment of $235.0 million, net of taxes, to reclassify the non-credit component of previously recognized other-than-temporary impairment losses from the beginning balance of retained earnings to AOCI.

Adjustments for net realized gains and losses on the ineffective portion of cash flow hedges were immaterial during the years ended December 31, 2009, 2008 and 2007.

(16) Employee Benefit Plans  

The Company, excluding certain affiliated companies, participates in a qualified defined benefit pension plan (the Nationwide Retirement Plan or the NRP), several non-qualified defined benefit supplemental executive retirement plans, postretirement benefit plans (life and health care), and the Nationwide Savings Plan 401(k), all sponsored by NMIC. Effective January 30, 2008, NMIC merged the Nationwide Life Insurance Company of America (NLICA) Retirement Plan into the NRP.

The NRP covers all employees of participating employers who have completed at least one year of service and who are at least 21 years of age. Plan assets are invested in a third-party trust and group annuity contracts issued by NLIC. All participants are eligible for benefits based on an account balance formula. However, participants hired prior to 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.

Effective January 1, 2010, NMIC amended the NRP to eliminate the company-paid early retirement enhancement (an additional benefit for associates retiring between ages 55 and 65), which is part of the FAP formula and to stop pay credits under the account balance formula for participants eligible for the account balance formula. An affected associate’s benefits, however, will not be less than the NRP benefit he or she accrued as of December 31, 2009, under the greater of the FAP formula or the account balance formula.

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. In addition, separate non-qualified defined benefit pension plans sponsored by NMIC cover certain executives with at least one year of service. The Company’s portion of expense relating to these plans was $11.0 million, $4.6 million, and $11.8 million for the years ended December 31, 2009, 2008 and 2007, respectively. The 2008 expense includes a gain of $5.4 million due to the merger of the NLICA Retirement Plan into the NRP.

See Note 17 for more information on group annuity contracts issued by the Company for various employee benefit plans sponsored by NMIC or its affiliates.

In addition to the NRP, the Company and certain affiliated companies participate in life and health care benefit plans sponsored by NMIC for qualifying retirees. Contributory post-retirement life and health care benefits are generally available to associates, hired prior to and continuously employed since June 1, 2000, for health care benefits, and prior to December 31, 1994, for life benefits, who have attained age 55, and have accumulated 15 years of service with the Company. The associate subsidy for the post-retirement death benefit was capped beginning in 2007. Employer subsidies for retiree life insurance ended as of December 31, 2008. No future employer contributions are anticipated for retiree life insurance and settlement accounting was applied during 2008. Post-retirement health care benefit contributions are adjusted annually and contain cost-sharing features such as deductibles and co-insurance. In addition, there are caps on the Company’s contribution to the cost of the post-retirement health care benefits. The Company does not receive a Medicare Part D subsidy from the government. 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 in a group annuity contract issued by NLIC and a third-party trust.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

On September 3, 2009, NMIC announced changes to the post-retirement health care benefits available under the health care defined benefit plans. On December 31, 2009, each eligible associate’s current cost-sharing percentage was fixed and, following this date, Company contributions towards the cost of post-retirement health care coverage for eligible associates will be based only on service through December 31, 2009. This modification does not impact former associates receiving Nationwide-sponsored retiree health care benefits prior to January 1, 2010. Additionally, effective January 1, 2010, all associates not considered to be highly compensated employees, as defined by IRC 414, became eligible to receive an annual retiree health care credit up to a maximum of $1,000 per year, not to exceed a maximum lifetime benefit amount of $25,000, which includes any years of cost-sharing service earned by December 31, 2009. The credit is equal to one-third of otherwise unmatched Health Savings Account contributions and/or Nationwide Savings Plan (NSP) 401(a) contributions. No contributions will be made by NMIC if the associate does not make eligible contributions.

The Company’s portion of expense relating to these plans was immaterial for the years ended December 31, 2009, 2008 and 2007.

Defined Contribution Plans

NMIC sponsors the NSP, a defined contribution retirement savings plan (a 401(k) plan) covering substantially all of the Company’s associates. Associates may make salary deferral contributions of up to 80%. Salary deferrals of up to 6% are subject to a 50% Company match. In addition, NMIC sponsors the NLICA Producer’s Pension Plan, a defined contribution money purchase plan, covering statutory employees of NLICA. However, this plan has no active participants, and is in the process of being terminated. The Company’s expense for contributions to these plans was $8.7 million, $6.1 million, and $8.0 million for the years ended December 31, 2009, 2008 and 2007, respectively.

(17) 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, 2009, 2008 and 2007, the Company made payments to NMIC and NSC totaling $233.1 million, $285.2 million, and $287.1 million, respectively.

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 $3.10 billion and $2.96 billion as of December 31, 2009 and 2008, respectively. Total revenues from these contracts were $143.1 million, $137.9 million and $132.3 million for the years ended December 31, 2009, 2008 and 2007, respectively, and include policy charges, net investment income from investments backing the contracts and administrative fees. Total interest credited to the account balances was $115.7 million, $115.6 million, and $110.1 million for the years ended December 31, 2009, 2008 and 2007, 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, 2009, 2008 and 2007, the Company made lease payments to NMIC of $23.8 million, $21.5 million, and $23.0 million, respectively. In addition, the Company leases office space to an affiliate of NMIC.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

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, 2009, 2008 and 2007 were $176.8 million, $202.3 million, and $317.6 million, respectively, while benefits, claims and expenses ceded during these years were $196.2 million, $218.9 million, and $348.1 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, 2009 and 2008, customer allocations to NFG funds totaled $23.73 billion and $18.08 billion, respectively. For the years ended December 31, 2009, 2008, and 2007, NFG paid the Company $78.8 million, $76.7 million, and $79.6 million, respectively, for the distribution and servicing of these funds.

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, 2009 and 2008, the Company had no outstanding borrowings from affiliated entities under such agreements. During 2009, the Company had no outstanding borrowings at any given time. During 2008 and 2007, the most the Company had outstanding at any given time was $151.6 million and $178.2 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 $918.7 million and $2.58 billion as of December 31, 2009 and 2008, 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, 2009, 2008 and 2007 were $48.3 million, $52.7 million, and $59.5 million, respectively.

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 $11.2 million, $11.0 million, and $9.4 million for the years ended December 31, 2009, 2008 and 2007, 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 14. Effective October 1, 2002, NLIC began filing a consolidated federal income tax return with NLAIC. Total payments to (from) NMIC were $4.0 million and ($22.5) million during the years ended December 31, 2009 and 2008, respectively. These payments related to tax years prior to deconsolidation. There were no payments during 2007.

During 2009, NLIC received a $20.0 million capital contribution from NFS.

During 2009, NLIC did not pay dividends to NFS. In 2008 and 2007, NLIC paid dividends to NFS totaling $460.5 million, and $612.5 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, 2009, 2008 and 2007

During 2009, the Company sold, at fair value, commercial mortgage loans with a carrying value of $273.2 million to Nationwide Mutual Insurance Company (NMIC). The sale resulted in a net realized loss of $33.5 million to the Company.

During 2009, the Company sold private equity investments to NMIC for $61.0 million, including the one private equity investment that is considered a VIE (See Note 20). The private equity investments were carried and sold at fair value. No gain or loss was recognized on the sale.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

(18) 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 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 on a broad range of issues 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 on such issues as 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 responded to information requests and/or subpoenas from the SEC in 2003 and the New York State Attorney General in 2005 in connection with investigations regarding market timing in certain mutual funds offered in insurance products sponsored by the Company. The Company is not aware of any further action on 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, self reported 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 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 Attorney General, which assumed the investigation from 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.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

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’s consolidated financial position or results of operations in the future.

On September 10, 2009, NRS was named in a lawsuit filed in the Circuit Court for Montgomery County, Alabama entitled Twanna Brown, Individually and on behalf of all other persons in Alabama who are similarly situated, v Nationwide Retirement Solutions, Inc., Alabama State Employees Association, PEBCO, Inc., Edwin “Mac” McArthur, Steve Walkley, Glenn Parker, Ulysses Lavender, Diana McLain, Randy Hebson, and Robert Wagstaff; and Unknown Defendants A-Z. On January 22, 2010, Brown filed an Amended Complaint alleging in Count One, that all the defendants were involved in a civil conspiracy and seeks to recover actual damages, forfeiture of all other payments and/or salaries to be the fruit of such other payments, punitive damages and costs and attorneys fees. In Count Two, although NRS is not named, it is alleged that the remaining defendants breached their fiduciary duties and seeks actual damages, forfeiture of all other payments and/or salaries to be the fruit of such other payments, punitive damages and costs and attorneys fees. In Count Three, although NRS is not named, the plaintiff seeks declaratory relief that the individual defendants breached their fiduciary duties, seeks injunctive relief permanently removing said defendants from their respective offices in the Alabama State Employees Association (ASEA) and PEBCO and costs and attorneys fees. In Count Four, it alleges that any money Nationwide paid belonged exclusively to ASEA for the use and benefit of its membership at large and not for the personal benefit of the individual defendants. Plaintiff seeks to recover actual damages from the individual defendants, forfeiture of all other payments and/or salaries to be the fruit of such other payments, punitive damages and costs and attorneys fees. On February 5, 2010, the Company filed a motion to dismiss, or in the alternative, a motion to stay the amended complaint. On February 9, 2010, the individual defendants filed a motion to dismiss the amended complaint. On December 13, 2009, the plaintiff filed a motion to consolidate this case with Nationwide Retirement Solutions, Inc. v. Alabama State Personnel Board, PEBCO, Inc. and Alabama State Employees Association. The Company continues to defend this case vigorously.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

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, NRS and NLIC were named in an Amended Class Action Complaint filed in the Circuit Court of Jefferson County, Alabama entitled Ruth A. Gwin, Steven E. Coker, Sandra H. Turner, and a class of similarly situated individuals v. Nationwide Life Insurance Company, Nationwide Retirement Solutions, Inc, Alabama State Employees Association, Inc., PEBCO, Inc. and Fictitious Defendants A to Z claiming to represent a class of all participants in the ASEA Plan, excluding members of the Deferred Compensation Committee, members of the Board of Control, ASEA’s directors, officers and board members, and PEBCO 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 16, 2008, the Companies filed their Answer. On April 28, 2009, the court entered an order denying the plaintiffs’ motion for preliminary injunction. 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 July 10, 2009, the Court of Appeals heard oral argument. 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 sought 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 alleged that the defendants breached their fiduciary duties by arranging for and retaining service payments from certain mutual funds. The complaint sought 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 February 3, 2010, the Sixth Circuit Court of Appeals affirmed the District Court’s dismissal of this case. 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, 2009, 2008 and 2007

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. In the plaintiffs’ sixth amended complaint, filed November 18, 2009, they amended the list of named plaintiffs and claim to represent a class of qualified retirement plan trustees 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. On November 6, 2009, the Court granted the plaintiff’s motion for class certification and certified a class of “All trustees of all employee pension benefit plans covered by ERISA which had variable annuity contracts with NFS and NLIC or whose participant’s had individual variable annuity contracts with NFS and NLIC at any time from January 1, 1996, or the first date NFS and NLIC began receiving payments from mutual funds based on a percentage of assets invested in the funds by NFS and NLIC, whichever came first, to the date of November 6, 2009”. Also on November 6, 2009, the Court denied plaintiffs’ motion to strike NFS and NLIC’s counterclaim for breach of fiduciary duty against the Trustees, in the event NFS and NLIC are held to be a fiduciary at trial, and granted H. Grady Chandler’s motion to intervene. On November 23, 2009, NFS and NLIC filed a rule 23(f) petition asking the Second Circuit Court of Appeals to hear an appeal of the District Court’s order granting class certification. On December 2, 2009, NFS and NLIC filed an answer to the 6th Amended Complaint. On January 29, 2010, the Companies filed a motion for class certification against the four named plaintiffs, as trustees of their respective retirement plans and against the trustees of other ERISA retirement plans who become members of the class certified in this lawsuit, for breach of fiduciary duty to the plans because the trustees approved and accepted the advantages of the allegedly unlawful “revenue sharing” payments. 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 dividends received deduction (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.

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

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.

The IRS recently completed an audit of the Company’s tax years 2003 through 2005. As a result of this audit, the Company received a Revenue Agent’s Report (RAR) and 30-Day Letter (requiring payment of additional tax due or the preparation of protest to start the appeals process) from the IRS in July 2009. The RAR includes an adjustment to reduce the Company’s DRD for the above tax years resulting in additional tax due of $151.0 million. The Company is currently at appeals on this issue and believes that it will ultimately prevail based on technical merits.

(19) Guarantees  

Since 2002, the Company has sold $696.1 million of credit enhanced equity interests in LIHTC Funds to unrelated third parties. The Company has guaranteed cumulative after-tax yields to the third party investors ranging from 3.75% to 7.75% over periods ending between 2002 and 2025. As of December 31, 2009 and 2008, the Company held guarantee reserves totaling $5.5 million and $5.1 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 $985.9 million. The Company does not anticipate making any material payments related to these guarantees.

As of December 31, 2009, the Company did not hold any stabilization reserves as collateral for certain properties owned by the LIHTC Funds, as the LIHTC Funds have 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. During 2009, the stabilization reserve was not increased and the remainder of the stabilization reserve, $0.8 million, was released into income. In 2008, $0.8 million of the stabilization reserve 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.

(20) 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 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) the extent to which, through the variable interest, 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, 2009, 2008 and 2007

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 19). The results of operations and financial position of each VIE of which the Company is the primary beneficiary are consolidated along with corresponding noncontrolling interest in the accompanying consolidated financial statements.

The Company had relationships with 19 LIHTC Funds that are considered VIEs as of December 31, 2009 and December 31, 2008, where the Company was the primary beneficiary. Net assets of these consolidated VIEs were $350.6 million and $416.0 million as of December 31, 2009 and December 31, 2008, respectively. The following table summarizes the components of net assets as of December 31:

(in millions)	2009			2008
Other long-term investments	$	314.3		$	371.1
Short-term investments		16.4			20.9
Other assets		33.8			41.6
Other liabilities		(13.9	)		(17.6	)

The Company’s total loss exposure from consolidated VIEs was immaterial as of December 31, 2009 and December 31, 2008 (except for the impact of guarantees disclosed in Note 19). 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 other LIHTC Funds that qualify as VIEs where the Company is not the primary beneficiary. The carrying amount of these unconsolidated VIEs was $110.0 million and $156.3 million as of December 31, 2009 and 2008, respectively. The total exposure to loss on these unconsolidated VIEs was $122.9 million and $179.6 million as of December 31, 2009 and 2008, 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 a relationship with one structured product investment that is considered a VIE as of December 31, 2009 and December 31, 2008, where the Company was the primary beneficiary. Net assets of this consolidated VIE were $9.2 million and $8.9 million as of December 31, 2009 and December 31, 2008, 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.

The Company was invested in 7 and 12 structured product investments that are considered VIEs as of December 31, 2009 and 2008, respectively, where 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 $31.8 million and $17.8 million as of December 31, 2009 and 2008, 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, 2009, 2008 and 2007

Private Equity Investments

The Company had a relationship with one private equity investment that is considered a VIE as of December 31, 2008, where the Company was the primary beneficiary. On September 30, 2009, NLIC sold this private equity investment, which had net assets of $14.1 million, to NMIC.

(21) 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 (loss), which is calculated by adjusting income from continuing operations before federal income taxes and discontinued operations to exclude: (1) net realized investment gains and losses, except for operating items (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 securitizations); (2) other-than-temporary impairment losses; (3) the adjustment to amortization of DAC and VOBA related to net realized investment gains and losses; and (4) net loss attributable to noncontrolling interest.

Individual Investments

The Individual Investments segment consists of individual annuity products marketed under the The BEST of AMERICA®, Nationwide DestinationSM, and other Nationwide-specific or private label brands. 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, deferred variable annuity contracts provide the customer with access to a wide range of investment options and asset protection features, while deferred fixed annuity contracts generate a return for the customer at a specified interest rate fixed for prescribed periods. Immediate annuities differ from deferred annuities in that the initial premium is exchanged for a stream of income for a certain period or for the owner’s lifetime without future access to the original investment. Portfolio income insurance is a form of deferred annuity that provides the income protection features common to today’s variable annuities to owners of specific managed account investments whose assets are outside of the annuity product. The majority of assets and recent sales for the Individual Investments segment consist of deferred variable annuities.

Retirement Plans

The Retirement Plans segment is comprised of the Company’s private and public sector retirement plans business. The private sector primarily includes Internal Revenue Code (IRC) Section 401 fixed and variable group annuity business, and the public sector primarily includes IRC Section 457 and Section 401(a) business 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 and related amortization, including mark-to-market adjustments on embedded derivatives, net of economic hedges, related to products with living benefits; 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, 2009, 2008 and 2007

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
2009
Revenues:
Policy charges	$	521.9		$	93.2	$	633.7	$	(3.7	)	$	1,245.1
Premiums		191.2			—		278.5		—			469.7
Net investment income		562.0			679.0		491.8		146.3			1,879.1
Non-operating net realized investment gains1		—			—		—		619.1			619.1
Other-than-temporary impairments losses		—			—		—		(574.6	)		(574.6	)
Other income2		(168.1	)		0.1		0.2		(1.4	)		(169.2	)
Total revenues		1,107.0			772.3		1,404.2		185.7			3,469.2
Benefits and expenses:
Interest credited to policyholder accounts		393.6			432.5		200.8		73.2			1,100.1
Benefits and claims		247.3			—		537.8		27.0			812.1
Policyholder dividends		—			—		87.0		—			87.0
Amortization of DAC		(1.4	)		44.5		158.1		264.4			465.6
Amortization of VOBA and other intangible assets		0.9			8.9		45.0		8.0			62.8
Interest expense		—			—		—		55.3			55.3
Other operating expenses		178.8			150.8		183.9		66.3			579.8
Total benefits and expenses		819.2			636.7		1,212.6		494.2			3,162.7
Income (loss) from continuing operations before federal income tax expense (benefit)		287.8			135.6		191.6		(308.5	)	$	306.5
Less: non-operating net realized investment gains1		—			—		—		(619.1	)
Less: non-operating other-than-temporary impairment losses		—			—		—		574.6
Less: adjustment to amortization related to net realized investment gains and losses		—			—		—		296.5
Less: net loss attributable to noncontrolling interest		—			—		—		52.3
Pre-tax operating earnings (loss)	$	287.8		$	135.6	$	191.6	$	(4.2	)
Assets as of year end	$	48,890.6		$	25,034.7	$	22,115.1	$	2,953.3		$	98,993.7

1 Excluding operating items (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).  

2 Includes operating items discussed above.  

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

(in millions)	Individual Investments			Retirement Plans		Individual Protection		Corporate and Other			Total
2008
Revenues:
Policy charges	$	602.9		$	119.9	$	617.7	$	—		$	1,340.5
Premiums		120.2			—		273.9		—			394.1
Net investment income		530.4			650.7		485.8		197.8			1,864.7
Non-operating net realized investment losses1		—			—		—		(386.8	)		(386.8	)
Other-than-temporary impairments losses		—			—		—		(1,130.7	)		(1,130.7	)
Other income2		109.5			0.9		—		(75.6	)		34.8
Total revenues		1,363.0			771.5		1,377.4		(1,395.3	)		2,116.6
Benefits and expenses:
Interest credited to policyholder accounts		379.1			435.9		196.2		161.4			1,172.6
Benefits and claims		378.5			—		489.4		(11.8	)		856.1
Policyholder dividends		—			—		93.1		—			93.1
Amortization of DAC		647.7			40.6		129.9		(126.6	)		691.6
Amortization of VOBA and other intangible assets		7.8			1.3		22.1		(0.3	)		30.9
Interest expense		—			—		—		61.8			61.8
Other operating expenses		189.9			152.3		191.7		97.7			631.6
Total benefits and expenses		1,603.0			630.1		1,122.4		182.2			3,537.7
(Loss) income from continuing operations before federal income tax expense		(240.0	)		141.4		255.0		(1,577.5	)	$	(1,421.1	)
Less: non-operating net realized investment losses1		—			—		—		386.8
Less: non-operating other-than-temporary impairment losses		—			—		—		1,130.7
Less: adjustment to amortization related to net realized investment gains and losses		—			—		—		(139.2	)
Less: net loss attributable to noncontrolling interest		—			—		—		72.3
Pre-tax operating (loss) earnings	$	(240.0	)	$	141.4	$	255.0	$	(126.9	)
Assets as of year end	$	42,508.1		$	22,497.8	$	20,360.3	$	6,437.4		$	91,803.6

1 Excluding operating items (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).  

2 Includes operating items discussed above.  

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

(a wholly-owned subsidiary of Nationwide Financial Services, Inc.)

Notes to Consolidated Financial Statements, Continued

December 31, 2009, 2008 and 2007

(in millions)	Individual Investments		Retirement Plans		Individual Protection		Corporate and Other			Total
2007
Revenues:
Policy charges	$	662.6	$	147.3	$	574.0	$	—		$	1,383.9
Premiums		133.3		—		273.7		—			407.0
Net investment income		642.9		655.0		471.2		423.1			2,192.2
Non-operating net realized investment losses1		—		—		—		(36.9	)		(36.9	)
Other-than-temporary impairments losses		—		—		—		(117.7	)		(117.7	)
Other income2		3.1		—		—		(4.5	)		(1.4	)
Total revenues		1,441.9		802.3		1,318.9		264.0			3,827.1
Benefits and expenses:
Interest credited to policyholder accounts		444.3		443.3		192.0		231.4			1,311.0
Benefits and claims		233.5		—		439.0		—			672.5
Policyholder dividends		—		—		83.1		—			83.1
Amortization of DAC		287.1		27.4		93.1		(25.5	)		382.1
Amortization of VOBA and other intangible assets		5.3		2.5		40.5		0.2			48.5
Interest expense		—		—		—		70.0			70.0
Other operating expenses		194.8		179.9		187.2		68.9			630.8
Total benefits and expenses		1,165.0		653.1		1,034.9		345.0			3,198.0
Income (loss) from continuing operations before federal income tax expense		276.9		149.2		284.0		(81.0	)	$	629.1
Less: non-operating net realized investment losses1		—		—		—		36.9
Less: non-operating other-than-temporary impairment losses		—		—		—		117.7
Less: adjustment to amortization related to net realized investment gains and losses		—		—		—		(25.5	)
Less: net loss attributable to noncontrolling interest		—		—		—		50.9
Pre-tax operating earnings	$	276.9	$	149.2	$	284.0	$	99.0
Assets as of year end	$	56,564.4	$	27,963.2	$	22,874.1	$	10,222.0		$	117,623.7

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.  

2 Includes operating items discussed above.  

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, 2009 (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	$	136.7	$	151.1	$	151.1
U.S. Government agencies		551.3		602.8		602.8
Obligations of states and political subdivisions		567.6		548.9		548.9
Foreign governments		69.9		75.1		75.1
Public utilities		2,487.3		2,598.6		2,598.6
All other corporate		21,290.3		20,773.2		20,773.2
Total fixed maturity securities available-for-sale		25,103.1		24,749.7		24,749.7
Equity securities available-for-sale:
Common stocks:
Banks, trusts and insurance companies		28.2		31.5		31.5
Industrial, miscellaneous and all other		1.1		1.9		1.9
Nonredeemable preferred stocks		19.5		19.2		19.2
Total equity securities available-for-sale		48.8		52.6		52.6
Mortgage loans on real estate, net		6,916.4				6,829.0	1
Real estate, net:
Investment properties		11.4				8.9	2
Total real estate, net		11.4				8.9
Policy loans		1,050.4				1,050.4
Other long-term investments		457.5				457.5
Short-term investments, including amounts managed by a related party		1,003.4				1,003.4
Total investments	$	34,591.0			$	34,151.5

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, 2009, 2008 and 2007 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 premiums1			Other policy claims and benefits payable1		Premium revenue
2009
Individual Investments	$	1,911.5	$	10,870.4						$	191.2
Retirement Plans		270.6		11,702.4							—
Individual Protection		1,770.0		8,745.3							278.5
Corporate and Other		31.0		1,831.3
Total	$	3,983.1	$	33,149.4						$	469.7
2008
Individual Investments	$	1,883.0	$	12,476.8						$	120.2
Retirement Plans		290.1		11,497.5							—
Individual Protection		1,734.8		8,350.6							273.9
Corporate and Other		615.9		3,389.6							—
Total	$	4,523.8	$	35,714.5						$	394.1
2007
Individual Investments	$	2,078.1	$	11,316.4						$	133.3
Retirement Plans		292.9		10,973.1							—
Individual Protection		1,637.6		8,191.7							273.7
Corporate and Other		87.0		4,973.4							—
Total	$	4,095.6	$	35,454.6						$	407.0
Column A	Column G		Column H		Column I			Column J		Column K
Year: Segment	Net investment income2		Benefits, claims, losses and settlement expenses		Amortization of deferred policy acquisition costs			Other operating expenses2		Premiums written
2009
Individual Investments	$	562.0	$	640.9	$	(1.4	)	$	179.7
Retirement Plans		679.0		432.5		44.5			159.7
Individual Protection		491.8		825.6		158.1			228.9
Corporate and Other		146.3		100.2		264.4			129.6
Total	$	1,879.1	$	1,999.2	$	465.6		$	697.9
2008
Individual Investments	$	530.4	$	757.6	$	647.7		$	197.7
Retirement Plans		650.7		435.9		40.6			153.6
Individual Protection		485.8		778.7		129.9			213.8
Corporate and Other		197.8		149.6		(126.6	)		159.2
Total	$	1,864.7	$	2,121.8	$	691.6		$	724.3
2007
Individual Investments	$	642.9	$	677.8	$	287.1		$	200.1
Retirement Plans		655.0		443.3		27.4			182.4
Individual Protection		471.2		714.1		93.1			227.7
Corporate and Other		423.1		231.4		(25.5	)		139.1
Total	$	2,192.2	$	2,066.6	$	382.1		$	749.3

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, 2009, 2008 and 2007 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
2009
Life insurance in force	$	208,484.5	$	76,136.2	$	8.2	$	132,356.5	0.0%
Premiums:
Life insurance1	$	549.9	$	80.5	$	0.3	$	469.7	0.1%
Accident and health insurance		212.0		222.7		11.7		1.0	NM
Total	$	761.9	$	303.2	$	12.0	$	470.7	2.5%
2008
Life insurance in force	$	208,071.0	$	75,091.7	$	12.3	$	132,991.6	0.0%
Premiums:
Life insurance1	$	476.8	$	83.7	$	1.0	$	394.1	0.3%
Accident and health insurance		182.9		209.3		26.4		—	NM
Total	$	659.7	$	293.0	$	27.4	$	394.1	7.0%
2007
Life insurance in force	$	200,600.5	$	76,178.6	$	14.0	$	124,435.9	0.0%
Premiums:
Life insurance1	$	497.5	$	92.5	$	2.0	$	407.0	0.5%
Accident and health insurance		289.2		316.8		27.6		—	NM
Total	$	786.7	$	409.3	$	29.6	$	407.0	7.3%

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, 2009, 2008 and 2007 (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
2009
Valuation allowances - mortgage loans on real estate	$	42.4	$	84.8	$	—	$	49.8	$	77.4
2008
Valuation allowances - mortgage loans on real estate	$	24.8	$	20.8	$	—	$	3.2	$	42.4
2007
Valuation allowances - mortgage loans on real estate	$	36.0	$	1.1	$	—	$	12.3	$	24.8

1 Amounts represent transfers to real estate owned, recoveries and sales to NMIC.  

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 to registration statement (333-137202) on September 27, 2007, under document "underwriting.htm" and hereby incorporated by reference.

(d) The form of the contract – Filed previously with the initial registration statement (333-153343) on September 5, 2008, under document "formofcontract.htm" and hereby incorporated by reference.

(e) The form of the contract application – Previously filed with pre-effective amendment number 3 to registration statement (333-137202)on September 27, 2007, under document "application.htm" and hereby incorporated by reference.

(f) Depositor’s Certificate of Incorporation and By-Laws.

(1) Amended Articles of Incorporation for Nationwide Life Insurance Company.  Filed previously with initial registration statement (333-164119) on January 4, 2010 as document " exhibitf1.htm " and hereby incorporated by reference.

(2) Amended and Restated Code of Regulations of Nationwide Life Insurance Company.  Filed previously with initial registration statement (333-164119) on January 4, 2010 as document " exhibitf2.htm " and hereby incorporated by reference.

(3) Articles of Merger of Nationwide Life Insurance Company of America with and into Nationwide Life Insurance Company, effective December 31, 2009. Filed previously with initial registration statement (333-164119) on January 4, 2010 as document " exhibitf3.htm " 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 Agreement – Filed previously with registration statement (333-31725) and hereby incorporated by reference.

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 (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 "aimfpa991.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) Fund Participation Agreement with Fidelity Variable Insurance Products Fund III dated November 22, 1994, as amended, including Fidelity Variable Insurance Products Fund IV and Fidelity Variable Insurance Products Fund V, under document "fidiiifpa99h7.htm"

(8) 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"

(9) Fund Participation Agreement, Service and Institutional Shares, with Janus Aspen Series, dated December 31, 1999, under document "janusfpa99h9a.htm"

(10) 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"

(11) Fund Participation Agreement with Nationwide Variable Insurance Trust (formerly, Gartmore Variable Insurance Trust) dated May 2, 2005, as amended, under document "nwfpa99h11.htm"

(12) 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"

(13) Fund Participation Agreement with Oppenheimer Variable Account Funds and Oppenheimer Funds, Inc. dated April 13, 2007, under document "oppenfpa99h14.htm"

(14) 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"

(15) 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"

(16) Fund Participation Agreement with M Fund, Inc. and M Financial Investment Advisers, Inc. dated May 1, 2007, as document "mfundfpa99h10.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 (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.

(1) 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".

(2) Fund Participation Agreement with American Funds Insurance Series and Capital Research and Management Company dated July 20, 2005, as document "americanfundsfpa.htm".

(3) 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".

(4) Fund Participation Agreement with Davis Variable Account Fund and Davis Distributors, LLC dated August 7, 2007, as document "davisfpa.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".

(6) 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".

(7) 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".

(8) Fund Participation Agreement with Lord Abbett Series Fund, Inc. and Lord Abbett Distributor LLC dated December 31, 2002, as amended, as document "lordabbettfpa.htm".

(9) Fund Participation Agreement with PIMCO Variable Insurance Trust and PIMCO Fund Distributors, LLC dated March 28, 2002, as amended, as document "pimcofpa.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".

(11) Fund Participation Agreement with Putnam Variable Trust and Putnam Retail Management, L.P., dated February 1, 2002, as document "putnamfpa.htm".

(12) Fund Participation Agreement with Royce & Associates dated February 14, 2002, as amended, as document "roycefpa.htm".

(13) 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".

(14) 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".

(15) 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"

(14) Administrative Service Agreement with M Fund, Inc. dated May 1, 2005, as document "mfundasa99i10.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 pre-effective amendment to registration statement (333-153343) on May 15, 2009, under document "opinionofcounsel.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– Attached hereto as document "Item 26q.htm."

(99) Power of Attorney – Attached hereto.

Item 27. Directors and Officers of the Depositor

President and Chief Operating Officer and Director	Kirt A. Walker
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 Human Resources Officer	Gale V. King
Executive Vice President-Chief Information Officer	Michael C. Keller
Executive Vice President-Chief Marketing Officer	James R. Lyski
Executive Vice President-Chief Investment Officer	Gail G. Snyder
Executive Vice President-Finance	Lawrence A. Hilsheimer
Executive Vice President	Mark A. Pizzi
Executive Vice President and Director	Mark R. Thresher
Senior Vice President and Treasurer	Harry H. Hallowell
Senior Vice President-Associate Services	Robert J. Puccio
Senior Vice President-Business Transformation Office	Gregory S. Moran
Senior Vice President-Chief Compliance Officer	Carol Baldwin Moody
Senior Vice President-Chief Financial Officer and Director	Timothy G. Frommeyer
Senior Vice President-Chief Litigation Counsel	Randolph C. Wiseman
Senior Vice President-Chief Risk Officer	Michael W. Mahaffey
Senior Vice President-CIO IT Infrastructure	Robert J. Dickson
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-Human Resources	Kim R. Geyer
Senior Vice President-Individual Investments Business Head	Eric S. Henderson
Senior Vice President-Individual Protection Business Head and Director	Peter A. Golato
Senior Vice President-PCIO Information Technology	Srinivas Koushik
Senior Vice President-NF Marketing	Gordon E. Hecker
Senior Vice President-CIO NF Systems	Susan Gueli
Senior Vice President, Chief Financial Officer – Property and Casualty	Michael P. Leach
Senior Vice President-Distribution and Sales	John L. Carter
Senior Vice President-President – NW Retirement Plans	Anne L. Arvia
Senior Vice President-President-Investment Management Group	Michael S. Spangler
Senior Vice President-Property and Casualty Commercial/Farm Product Pricing	W. Kim Austen
Senior Vice President-Human Resources	Kim R. Geyer
Senior Vice President-Marketing Services	Jennifer M. Hanley
Senior Vice President-Property and Casualty Personal Lines Product Pricing	J. Lynn Greenstein
Senior Vice President-Property and Casualty/Farm Product Pricing	James R. Burke
Senior Vice President – Internal Audit	Kai V. Monahan
Senior Vice President	Matthew Jauchius
Vice President – Corporate Governance and Secretary	Robert W. Horner, III
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.
Freedom Specialty Insurance Company	Ohio		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 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 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 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 Realty Services, Ltd.	Ohio		The company provides relocation services for associates.
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, 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.
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.
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.
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.
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.
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 VLI Separate Account
Multi-Flex Variable Account	Nationwide VLI Separate Account-2
Nationwide Variable Account	Nationwide VLI Separate Account-3
Nationwide Variable Account-II	Nationwide VLI Separate Account-4
Nationwide Variable Account-3	Nationwide VLI Separate Account-5
Nationwide Variable Account-4	Nationwide VLI Separate Account-6
Nationwide Variable Account-5	Nationwide VLI Separate Account-7
Nationwide Variable Account-6	Nationwide VL Separate Account-C
Nationwide Variable Account-7	Nationwide VL Separate Account-D
Nationwide Variable Account-8	Nationwide VL Separate Account-G
Nationwide Variable Account-9	Nationwide Provident VA Separate Account 1
Nationwide Variable Account-10	Nationwide Provident VA Separate Account A
Nationwide Variable Account-11	Nationwide Provident VLI Separate Account 1
Nationwide Variable Account-12	Nationwide Provident VLI Separate Account A
Nationwide Variable Account-13
Nationwide Variable Account-14
Nationwide VA Separate Account-A
Nationwide VA Separate Account-B
Nationwide VA Separate Account-C
Nationwide VA Separate Account-D

(b) Directors and Officers of NISC:

President	Robert O. Cline
Senior Vice President, Treasurer and Director	James D. Benson
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 requirement 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 15th day of April , 2010 .

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 15th day of April , 2010 .

KIRT A. WALKER
Kirt A. Walker, President and Chief Operating Officer, and Director
MARK R. THRESHER
Mark R. Thresher, Executive Vice President and Director
TIMOTHY G. FROMMEYER
Timothy G. Frommeyer, Senior Vice President-Chief Financial Officer and Director
PETER GOLATO
Peter 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 10, 2010 and Nationwide Life Insurance Company and subsidiaries dated March 1, 2010, 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. 333-153343, Post-Effective Amendment No. 1) on Form N-6.  Our report for Nationwide Life Insurance Company and subsidiaries refers to the Company’s change in its method of evaluating other-than-temporary impairments of debt securities due to the adoption of new accounting requirements issued by the FASB, as of January 1, 2009.

/s/ KPMG LLP

Columbus, Ohio

April 12, 2010

EX-99.Q REDEEM EXEMP

NATIONWIDE LIFE INSURANCE COMPANY AND

NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY

DESCRIPTION OF ISSUANCE, TRANSFER AND REDEMPTION

PROCEDURES FOR VARIABLE LIFE INSURANCE POLICIES PURSUANT TO

RULE 6e-2(b)(12)(ii) and 6e-3(T)(b)(12)(iii)

This document sets forth the administrative procedures that will be followed by Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company, hereinafter individually and collectively referred to as "Nationwide," in connection with the issuance of its Flexible Premium Universal Life Insurance Policies (“Policy”), the transfer of assets held under the Policies, and the redemption by Policy owners of their interests in said Policies.

Unless otherwise indicated, defined terms have the same meaning given them in the prospectus.

I. PURCHASE AND RELATED TRANSACTIONS

     A. Premium and Underwriting Standards

     The Policy is a flexible premium variable life insurance policy. The Policy provides lifetime insurance protection for the insured named in the Policy, with a death benefit payable when the insured dies while the Policy is In Force and prior to the Maturity Date. A Policy owner may elect one of two Internal Revenue Code life insurance qualification tests and one of three options to calculate the amount of death benefit payable under the Policy. The Policy will be offered and sold pursuant to an established mortality structure and underwriting standards in accordance with state insurance laws which prohibit unfair discrimination among Policy owners, but allow cost of insurance rates to be based upon risk classification factors including, but not limited to, age, sex, health, occupation, and activities.

The amount of your required initial Premium payment will depend on the following factors: the initial Specified Amount, Death Benefit option elected, any Riders elected, and the Insured's risk classification.  You may pay the initial Premium to our Home Office address stated in the prospectus or to our authorized representative.  The initial Premium payment must be at least $50.  The initial Premium payment will not be applied to the policy until the underwriting process is complete.

      B. Application and Initial Premium

     Purchasers of policies must submit an application through an authorized registered representative of a broker-dealer with a selling agreement with Nationwide who is also an authorized insurance agent.  Upon receipt of a completed application for a Policy in good order, Nationwide will follow certain insurance underwriting (i.e., evaluation of risk) procedures designed to determine whether the proposed insured is insurable.

Life insurance is based on the principle of pooling and distribution of mortality risks, which assumes that each Policy owner pays policy charges commensurate with the Insured's mortality risks as actuarially determined using factors such as age, sex, method of underwriting and rate class of the Insured. Uniform policy charges for all Insureds would discriminate unfairly in favor of those Insureds representing greater risk. Although there are no uniform policy charges for all Insureds, there are uniform policy charges for all Insureds of the same rate class, age, sex , issue date and Specified Amount. The underwriting process may involve verification procedures and may require that further information be provided by the applicant before a determination can be made. Nationwide will first become obligated under a Policy when the total initial premium is received or on the date the application is accepted by Nationwide, whichever is later.  Administrative procedures are in place, including random audits, to ensure that Nationwide's

 underwriting guidelines are being accurately applied.  Underwriting criteria and procedures also apply in the pricing and approval of increases to the Specified Amount.

The initial Net Premium allocation is made by the Policy owner along with the application.  Net Premium allocations must be in whole percentages and must add up to 100%.  Premium is applied net of applicable charges.

If Premium is submitted with the application (or otherwise prior to issuance of a Policy), it will be held in a no interest suspense account until the underwriting process is complete.  Administrative procedures are in place to provide notice and timely follow up to resolve incomplete and/or additional information required to complete processing.  If timely resolution of any good order requirements for incomplete and/or additional information cannot be obtained, amounts held in suspense will be refunded according to established procedures.

     After the Policy is issued, insurance coverage under the Policy will be deemed to have begun as of the Policy Date. The Policy Date is usually the date that the Policy is issued. In some instances the Policy Date is administratively backdated to save age as permitted under state insurance law.  In such cases, the initial Premium will be applied to the Policy using current day pricing net of all applicable charges from the Policy Date to the current day.  The Policy Date is the date used to determine Policy years, Policy months, and Policy monthly, quarterly, semi-annual and annual anniversaries.

Right to Examine and Cancel the Policy

Pursuant to state insurance law, the Policy owner may cancel the Policy during the right to examine period ("free-look").  The free-look period expires 10 days after the Policy owner receives the Policy (or longer if required by state law). The applicable free look period is stated on the face page of your Policy.

To exercise the right to cancel the Policy during the free-look period, return the Policy to the sales representative who sold it to you or return it to us at our Home Office, stated in the prospectus, along with your written cancellation request on a form we provide.  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.  Within 7 days, we will refund the amount prescribed by the law of the state in which we issued the policy.  This amount will be either the initial Premium payment (plus any additional Premium submitted during the free look period) or the Policy's Cash Value (see section III.A for information on surrender processing).  If the Policy is canceled, we will treat the Policy as if it was never issued.

Depending on the right to examine law of the state in which you live, initial Net Premium designated to be allocated to the variable investment options ("Sub-Accounts") may not be so allocated immediately upon issuance of the Policy.  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 elected fixed account until the free-look period expires.  Within two days after expiration of the free-look period, we will transfer the Cash Value allocated 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 or elected fixed account.  Within two days, we will allocate all of the Cash Value to the designated Sub-Accounts based on the allocation instructions in effect at that time.  Any initial Net Premium designated to be allocated to fixed investment options will be so allocated immediately upon issue of the Policy.

U.S. Patriot Act / Anti-Money Laundering

Before Nationwide will issue a Policy, it must take certain steps to comply with federal laws intended to combat terrorism and money laundering.

Nationwide will conduct a screen of each Policy owner name against the list maintained by the U.S. Department of Treasury's Office of Foreign Asset Control (OFAC). If a positive identification is made, Nationwide may be required to (i) reject and report the transaction, or (ii) block the transaction, place the funds or assets in a separate blocked transaction account, and report the matter to OFAC. These procedures will also be followed in connection with, loan transactions, Policy owner changes, and payment of any surrender or Death Benefit proceeds.

Nationwide will comply with all applicable requirements of the Bank Secrecy Act. Nationwide will monitor Policy transactions as outlined in our anti-money laundering program for suspicious activity and other violations of anti-money laundering laws, rules, and regulations. Nationwide will not accept cash.

C. Additional Premium Payments

     The Policy is a flexible premium policy, and it provides flexibility to pay Premiums at the Policy owner’s discretion. When applying for a Policy, a Policy owner will determine a planned periodic premium that provides for the payment of level Premiums of fixed intervals over a specified period of time. Each Policy owner will receive a Premium reminder notice on either an annual, semi-annual, or quarterly or monthly basis, at the option of the Policy owner; however, the Policy owner is not required to pay planned periodic premiums.

     Payment of the planned periodic premium will not guarantee that a Policy will remain In Force. Instead, continuation of the Policy depends upon the Policy’s Cash Surrender Value.  Except to the extent the conditions of the Guaranteed Policy Continuation Provision detailed in the prospectus are met, even if planned periodic premiums are paid, the Policy will lapse any time the Cash Surrender Value less Indebtedness is insufficient to pay the current monthly deduction and a grace period expires without sufficient payment.

Additional Premium payments will be allocated according to the most recent instructions submitted in good order.  Allocations must be in whole percentages and add up to 100%.

D. Premium Payment Processing

Subject to the underwriting, application, and initial Premium payment processing requirements described above, Premium payments received in good order (with instructions sufficient to permit processing) before close of the New York Stock Exchange on any day it is open for business1 will generally be processed and valued as described in the prospectus the same day.  Premium payments received in good order after close of the New York Stock Exchange or on a non-business day will generally be processed and valued the next business day.  Processing and valuation of the Premium payment attributable to the variable Sub-Accounts may 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.

Processing of Premium payments is subject to the following additional administrative requirements:

1.   Premium payments received with missing or incomplete allocation instructions will be held in a no interest suspense account until complete instructions are received or refunded.

2.   Nationwide may reject or limit any Premium payment that would result in an immediate increase in the Net Amount at Risk under the Policy, although such Premium may be accepted with satisfactory evidence of insurability.

3.   Nationwide may reject or limit any Premium payment that would cause the Policy not to qualify as life insurance under Section 7702 of the Internal Revenue Code based on the Internal Revenue Code Life Insurance Qualification test elected by the Policy owner on the application.

4.   Nationwide may reject or limit any Premium payment that would cause the Policy to be or become a Modified Endowment Contract ("MEC") under Section 7702A of the Internal Revenue Code unless the Policy owner authorizes otherwise in writing.

5.   Monitoring pursuant to the U.S. Patriot Act / Anti-Money Laundering procedures described above.

Administrative procedures are in place to ensure issues under items 1-4 that prevent application of Premium are resolved or Premium is refunded in a timely fashion.  Such procedures include, notifying the Policy owner, and when appropriate the registered representative, of steps necessary to resolve the issue and permit application of the Premium payment, and monitoring of Nationwide's suspense accounts to refund amounts that cannot be applied within established timelines.

Allocation instructions may be changed at any time while the Policy is In Force.  All Premium payments and written correspondence are date and time stamped upon receipt to identify the appropriate processing date.  Allocation instructions through Nationwide's web site or voice response system (automated telephone system) are automatically identified to the date the change is made.

E. Grace Period / Policy Lapsation

     If the Cash Value less Policy Indebtedness is insufficient to cover deductions and charges on a monthly payment date, Nationwide will give written notice to the Policy owner that if the amount shown in the notice (which will be sufficient to cover the deduction amount(s) due) is not paid within 61 days (the “grace period”), the Policy will lapse. The Policy will remain In Force through the grace period, but if no payment is received, it will terminate at the end of the grace period. In order to avoid termination, the Policy owner must pay an amount equal to the lesser of three times the charges and deductions due or the amount required to satisfy the guaranteed Policy continuation provision described in the prospectus, if applicable.

     If the required payment is made during the grace period, for administrative purposes and deduction of unpaid charges, the Premium payment will be treated as if received the day prior to the date the Policy entered the grace period.  For allocation purposes, such payment will be allocated among the variable accounts and the fixed investment options as described in Section I.D.

If the Insured dies during the grace period, the death benefit proceeds will equal the amount of the death benefit immediately prior to the commencement of the grace period, reduced by any unpaid monthly deductions and charges due and any Policy Indebtedness.

     A lapsed Policy may be reinstated at any time within three years after the end of the grace period but before the Maturity Date.

  F. Reinstatement

You may reinstate a Lapsed Policy by: (1) submitting a written request to reinstate the policy, on a form we provide, at any time within 3 years after the end of the Grace Period and before the Maturity Date; (2) providing any evidence of insurability that we may require; (3) paying Premium (a) sufficient to cover all policy charges that were due and unpaid during the Grace Period, plus (b) the lesser of (i) Premium sufficient to keep the policy In Force for 3 months from the date of reinstatement, or (ii) the amount required to satisfy the Guaranteed Policy Continuation Provision described in the prospectus, if applicable; and (4) repaying or reinstating any Indebtedness that existed at the end of the Grace Period.

If the required payment is made and the other good order requirements for reinstatement above are met, the Premium payment will be treated as if received the day prior to the date the Policy entered the grace period for administrative purposes and deduction of unpaid charges through the date of reinsatement.  For allocation purposes, Net Premium will then be allocated among the variable Sub-Accounts and the fixed investment options as described in Section I.D.  If the Policy is reinstated, the Cash Value on the date of reinstatement will be set equal to the lesser of (1) the Cash Value at the end of the Grace Period; or (2) the surrender charge corresponding to the Policy year in which the Policy is reinstated, as described in the prospectus.

The Premium allocation instructions that were in effect at the start of the grace period will be reinstated, unless you request otherwise in the application for reinstatement.

II. TRANSFER AMONG INVESTMENT OPTIONS

     After the Right to Examine period, a Policy owner may request a transfer between investment options subject to limitations described in the prospectus to the Policy.

Transfer requests received in good order (with instructions sufficient to permit processing) before close of the New York Stock Exchange on any day it is open for business will generally be processed and valued as described in the prospectus the same day.  Transfer requests received in good order after close of the New York Stock Exchange or on a non-business day will generally be processed and valued the next business day.  The processing and valuation of transfers attributable to the variable Sub-Accounts may 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.2

Good order requirements for transfers include restrictions imposed by the Wealth Guard Rider, if applicable, and/or the Nationwide Allocation Architect service and described in the prospectus. Transfers to and from the fixed investment options may be limited as described in the prospectus.

In addition, transfers may be subject to restrictions designed to curtail harmful trading practices, known as "short-term trading" as described in the prospectus and in the prospectuses of the mutual funds underlying the Sub-Accounts.  As disclosed in the prospectus, Nationwide has entered into agreements as required by Rule 22c-2 of the Investment Company Act of 1940 to provide information to the underlying mutual funds regarding Policy owner transfer activities and to impose restrictions requested by the fund.

The Policy owner may elect an automated dollar cost averaging or asset rebalancing program as described in the prospectus.  Transfers under these programs are not counted when determining the number of transfers for purposes of short-term trading restrictions.

Administrative procedures are in place to ensure transfer requests are appropriately dated. All written correspondence and faxes are date and time stamped upon receipt to identify the appropriate processing date.  Live calls to service representatives are automatically recorded with date and time and periodically monitored. Transfer instructions through Nationwide's web site or voice response system (automated telephone system) are automatically identified to the date the change is entered.

Requests are monitored for good order requirements, rider and service restrictions, and short-term trading restrictions.  Such procedures include, notifying the Policy owner, and when appropriate the registered representative, of applicable restrictions and/or steps necessary to resolve the issue and permit completion or correction of the transfer instructions.

Transfer requests made through Nationwide's internet website and voice response system (automated telephone system) automatically restrict transfer selections to permitted parameters, including blocking transfers in accounts subject to short-term trading restrictions.

In accordance with industry practice, Nationwide has established procedures to address processing errors for which it is responsible, when an error is discovered it will be corrected and Nationwide will bear any loss resulting from its error.

III. REDEMPTION PROCEDURES: SURRENDER AND RELATED TRANSACTIONS

The Policy provides for the payment of moneys to a Policy owner or beneficiary upon written request and presentation of the Policy. Generally, except for the payment of death benefits  and the imposition of monthly deductions described in the prospectus, the Policy owner will receive a pro rata or proportionate share of the separate account's assets, within the meaning of the Investment Company Act of 1940, in any transaction involving "redemption procedures." The amount received by the Policy owner will depend upon the particular benefit for which the Policy is presented, including, for example, the Cash Surrender Value or death benefit. There are also certain Policy provisions (e.g. withdrawals or loans) under which the Policy will not be presented, but which will affect the Policy owner's benefits and may involve a transfer of the assets supporting the Policy reserve out of the separate account.

A. Full and Partial Surrenders

Requests for full and partial surrenders must be made in writing as described in the prospectus.  Full surrenders must be submitted on a form we provide.

A surrender charge may apply as described in the described in the prospectus.  Surrender charges for a particular Policy are based on the characteristics of the Insured as permitted by state insurance law.  Applicable Surrender charges will be deducted from the Policy's Cash Value at the time a surrender is processed.

Surrender requests received in good order (with instructions sufficient to permit processing) before close of the New York Stock Exchange on any day it is open for business will generally be processed and valued as described in the prospectus the same day.  Surrender requests received in good order after close of the New York Stock Exchange or on a non-business day will generally be processed and valued the next business day.  The processing and valuation of surrenders attributable to the variable Sub-Accounts may 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.

Surrender requests received during the Right to Examine and Cancel period will receive either the Cash Value or Premium paid in accordance with the law of the state where the Policy was issued.

Pursuant to state insurance law, payment of surrenders from the fixed investment options may be delayed for the period permitted by law up to six months from the date a request is received in good order.

Administrative procedures are in place to ensure surrender requests are appropriately dated. All written correspondence is date and time stamped upon receipt to identify the appropriate processing date.  Requests are monitored for good order requirements.  Such procedures include, notifying the Policy owner, and when appropriate the registered representative, of applicable steps necessary to resolve any issue and permit completion or correction of the surrender  instructions.

B.  Maturity Proceeds

If the Policy is In Force and the Policy owner and the Maturity Date has not been extended as described in the prospectus, Nationwide will calculate and pay the proceeds or apply them to the elected settlement option(s), Proceeds at maturity will generally be valued at the close of the New York Stock Exchange on

 any day it is open for business.  If the Maturity Date falls on a day when the New York Stock Exchange is closed or trading is suspended or restricted such that the Sub-Accounts cannot be valued on that day, proceeds at maturity attributable to the variable Sub-Accounts will be valued as of the previous business day.  The processing and valuation of the payment attributable to the variable Sub-Accounts may 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.

Pursuant to state insurance law, payment of the maturity proceeds from the fixed investment options may be delayed for the period permitted by law up to six months from the date a request is received in good order.

C. Death Claims

     Upon the death of the insured, Nationwide will pay the death benefit proceeds, either in a lump sum or under a settlement option(s) offered under the Policy. The proceeds will be the death benefit under the Policy, plus any insurance proceeds provided by rider, reduced by adjustments for any outstanding Indebtedness and, if in the grace period, any overdue charges.  Any monthly Policy deductions taken after the date of death will be added to the Cash Value for purposes of valuing the death benefit.

     The death benefit will be valued according to the death benefit option elected and applicable life insurance test for determining the minimum death benefit under Section 7702 of the Internal Revenue Code.  Pursuant to state insurance law, the death benefit is valued as of the date of the Insured's death, regardless of the actual time of death.  Proceeds upon the death of the insured will generally be valued at the close of the New York Stock Exchange on any day it is open for business.  If the date of death falls on a day when the New York Stock Exchange is closed or trading is suspended or restricted such that the Sub-Accounts cannot be valued on that day, proceeds at death attributable to the variable Sub-Accounts will be valued as of the previous business day.

If required by state law, interest will be credited to the death benefit proceeds from the date of the Insured's death to the date of payment or application to a settlement option(s).  

Administrative procedures are in place to ensure death benefits are appropriately dated and the appropriate claimant identified. Requests are monitored for good order requirements which include proof of the Insured's death and when it occurred and written instructions for payment.  Such procedures include, identifying the appropriate claimant and notifying the claimant of applicable steps necessary to resolve any issue and permit completion or correction of the surrender instructions.

Other Factors That May Affect Calculation Or The Timing of Death Benefit Payment

State insurance law provides for certain instances when an insurer may delay payment of the Death Benefit or adjust the amount of such payment based on particular circumstances.  The circumstances and Nationwide's procedures for administering the Death Benefit are as follows.

Misstatement of Age or Sex

If the age or sex of the Insured has been misstated, the death benefit and Cash Value will be adjusted.  The adjusted death benefit will be (1) multiplied by (2) and then the result added to (3) where:

1.   is the Net Amount at Risk at the time of the Insured's death;

2.   is the ratio of the monthly cost of insurance applied in the policy month of death and the monthly cost of insurance that should have been applied at the true age and sex in the policy month of death; and

3.   is the Cash Value at the time of the Insured's death.

The Cash Value will be adjusted from the Policy Date to the current date to reflect the cost of insurance charges based on the correct age and sex.

Incontestability

Nationwide will not contest the payment of the Death Benefit after the Policy has been In Force during the Insured's lifetime for two years from the Issue Date. If the Policy is reinstated, the two-year period will be measured from the date of reinstatement. For any increase in Specified Amount requiring evidence of insurability, the Company will not contest payment of the Death Benefit based on such increase after it has been In Force during the Insured's lifetime for two years from its effective date.

If payment of the Death Benefit is contested, payment will be delayed until a resolution is reached.

Suicide

If the Insured commits suicide, while sane or insane, within two years from the Policy Date, we will not pay the Proceeds normally payable on the Insured's death.  Instead, we will pay the Beneficiary an amount equal to all premiums paid prior to the Insured's death, less any Indebtedness, and less any partial surrenders.  For any increase in Specified Amount requiring evidence of insurability, if the Insured commits suicide, while sane or insane, within two years from the effective date of any such increase, we will not pay the Proceeds associated with such an increase.  Instead, the amount we will pay with respect to such an increase will be limited to its cost of insurance charges.

IV. POLICY LOANS

At various points in time Policy loans will involve a form of redemption and transfers, and may involve application of loan repayments.

     Pursuant to state insurance law, after the expiration of the free-look period and while the Policy is In Force, the Policy owner may take a loan against the Policy's Cash Value.  Loan requests must be submitted in writing to our Home Office stated in the prospectus.  A Policy owner may borrow an amount of no more than 90% of the Cash Value allocated to the Sub-Accounts plus 100% of the Cash Value allocated to the fixed investment options less any Surrender Charge.  The minimum loan amount is $200.

The amount equal to any outstanding Indebtedness is held in the Policy loan account and is credited and charged with interest at rates as stated in the Policy.  The Policy owner may repay all or a part of the loan at any time while the Policy is In Force.  Any payment intended as a loan repayment must be identified as such in writing otherwise it will be treated as a Premium payment.

     When a Policy owner takes a loan, Nationwide will transfer Cash Value equal to the policy loan amount to the Policy loan account as collateral for the policy loan.  Amounts transferred from the Sub-Accounts will be in the same proportion as the Sub-Account allocations, unless the Policy owner instructs 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.  Finally, if applicable, we will only transfer amounts from the long term fixed account if the fixed account allocations are depleted.

Loan requests and loan repayments received in good order (with instructions sufficient to permit processing) before close of the New York Stock Exchange on any day it is open for business will generally be processed and valued as described in the prospectus the same day.  Loan requests received in good order after close of the New York Stock Exchange or on a non-business day will generally be processed

and valued the next business day.  Interest credited is automatically applied to Sub-accounts according to the allocation instructions in effect at the time it becomes payable.  The processing and valuation of loan amounts, repayments, and interest credited attributable to the variable Sub-Accounts may 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.

If any part of a loan was taken from the fixed investment option(s), any loan repayments received will first be applied to the applicable fixed investment option(s) until the portion of the loan attributable to the fixed investment option is repaid.  Then loan repayments will be applied to variable Sub-Accounts from which the loan was taken.

Pursuant to state insurance law, Nationwide may delay payment of any loan attributable to the fixed investment options for the period permitted by law up to six months from the date the loan request is received.

Administrative procedures are in place to ensure loan requests and repayments are appropriately dated. All written correspondence is date and time stamped upon receipt to identify the appropriate processing date.  Requests are monitored for good order requirements.  Such procedures include, notifying the Policy owner, and when appropriate the registered representative, of applicable steps necessary to resolve any issue and permit completion or correction of the surrender  instructions.

If not repaid, the Policy debt will reduce the amount of death proceeds paid upon the death of the insured, the amount of proceeds paid on the Maturity Date, or the Cash Surrender Value paid upon surrender.

A loan may affect the length of time the Policy remains In Force. The Policy will enter a grace period when the Cash Surrender Value minus Indebtedness is insufficient to cover the monthly deduction against the Policy’s Cash Value on any monthly anniversary date.  The Policy will lapse if the minimum payment required is not made during the grace period. Moreover, the Policy may enter the grace period more quickly when a loan is outstanding, because the loaned amount is not available to cover monthly deductions.

1 Close of business for the New York Stock Exchange (NYSE) is generally 4:00 p.m. Eastern Standard Time.  The NYSE may close earlier than 4:00 p.m. on days before holidays or pursuant to rules and regulations of the Securities and Exchange Commission.  Such earlier time shall serve as the cutoff time for purposes of determining the premium payment processing cutoff time.

2 Transfers pursuant to the Right of Conversion will become effective on the monthly anniversary date (each the same day as the Policy Date in each succeeding month) on or next following the date the request is received in good order.  For variable Sub-Account valuation purposes, the request will be treated as if received on that monthly anniversary date.

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, 333-164886, Individual Flexible Premium 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
Nationwide Provident VA Separate Account 1 (811-7708)	333-164127; 333-164125; 333-164126; 333-164124
Nationwide Provident VLI Separate Account 1 (811-4460)	333-164180; 333-164117; 333-164178; 333-164179; 333-164119; 333-164120; 333-164115; 333-164118; 333-164116
Nationwide Provident VA Separate Account A (811-6484)	333-164131; 333-164130; 333-164132; 333-164129; 333-164128
Nationwide Provident VLI Separate Account A (811-8722)	333-164188; 333-164123; 333-164185; 333-164122; 333-164121

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, Kirt A. Walker, Peter A. Golato, John L. Carter, Eric S. Henderson, Jamie Ruff Casto, Timothy D. Crawford, Stephen M. Jackson, Keith W. Hinze and Paige L. Ryan, 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 10th day of March, 2010.

/s/TIMOTHY G. FROMMEYER	/s/PETER A. GOLATO
TIMOTHY G. FROMMEYER, Director	PETER A. GOLATO, Director
/s/KIRT A. WALKER	/s/MARK R. THRESHER
KIRT A. WALKER, Director	MARK R. THRESHER, Director
/s/STEPHEN S. RASMUSSEN
STEPHEN S. RASMUSSEN, Director