485BPOS 1 d470076d485bpos.htm BOA TNG BOA TNG
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-6
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933File No. 333-31725
Pre-Effective Amendment No.□
Post-Effective Amendment No. 33☑
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940File No. 811-08301
Amendment No. 192☑
(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)
(614) 249-7111
Depositor's Telephone Number, including Area Code
Robert W. Horner III, Vice President Corporate Governance and Secretary,
One Nationwide Plaza, Columbus, Ohio 43215
(Name and Address of Agent for Service)
May 1, 2013
Approximate Date of Proposed Public Offering
It is proposed that this filing will become effective (check appropriate box)
□ immediately upon filing pursuant to paragraph (b)
☑ on May 1, 2013 pursuant to paragraph (b)
□ 60 days after filing pursuant to paragraph (a)(1)
□ on (date) pursuant to paragraph (a)(1)
If appropriate, check the following box:
□ this post-effective amendment designates a new effective date for a previously filed post-effective amendment.

Table of Contents
The Best of America Next Generation® FPVUL
Individual Flexible Premium Variable Universal Life Insurance Policies
Issued by
Nationwide Life Insurance Company
through its
Nationwide VLI Separate Account-4
The date of this prospectus is May 1, 2013.
This prospectus contains basic information about the policies that should be understood before investing. Read this prospectus carefully and keep it for future reference.
Variable life insurance policies are complex products with unique benefits and advantages. There are costs and charges associated with these benefits and advantages - costs and charges that are different, or do not exist at all within other life insurance products. With help from financial consultants and advisors, purchasers are encouraged to compare and contrast the costs and benefits of the policy described in this prospectus against those of other life insurance products, especially other variable life insurance products offered by Nationwide and its affiliates. Nationwide offers a wide array of products, many with different charges, benefit features, and underlying investment options. This process of comparison and analysis should aid in determining whether the purchase of the policy described in this prospectus is consistent with the purchaser's life insurance objectives, risk tolerance, investment time horizon, marital status, tax situation, and other personal characteristics and needs.
To obtain additional information, including free copies of prospectuses for the underlying mutual funds or a copy of the Statement of Additional Information, or to make service or transaction requests, contact Nationwide using any of the methods described in Contacting the Service Center.
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 prospectus is not an offering in any jurisdiction where such offering may not lawfully be made. Not all Riders, terms, conditions, benefits, programs, features, and investment options are available or approved for use in every state. Contact Nationwide to review a copy of the policy and any Riders or endorsements. This prospectus contains all material rights and features of the policy, including any material variations in the policy, such as availability of certain Riders.
The policy is NOT: insured by the Federal Deposit Insurance Corporation; a bank deposit; available in every state; or insured or endorsed by a bank or any federal government agency.
The policy may decrease in value to the point of being valueless because of poor Investment Experience.
The purpose of this policy is to provide life insurance protection for the beneficiary named by the policy owner. If the purchaser's primary need is not life insurance protection, then purchasing this policy may not be in the best interest of the purchaser. Nationwide makes no claim that the policy is in any way similar or comparable to a systematic investment plan of a mutual fund.
If this policy is being purchased to replace existing life insurance, the purchaser should carefully consider the benefits, features, and costs of this policy versus those of the policy being replaced.
Nationwide offers 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 the policy described herein. These differences in charges may be attributable to differences in sales and related expenses incurred in one distribution channel versus another.
1
Table of Contents
  Page
4
5
7
11
11
12
13
14
14
14
16
16
17
17
18
18
18
19
19
19
19
19
20
20
21
21
21
22
22
23
23
24
24
24
25
25
26
26
26
26
27
28
28
29
30
31
32
32
33
33
34
34
35
35
36
37
2
Table of Contents (continued)
  Page
38
38
38
38
39
39
39
39
40
40
40
40
41
41
41
41
42
42
43
43
43
43
43
44
44
44
45
45
45
46
46
53
53
53
53
54
54
55
55
56
56
57
70
3
In Summary: Policy Benefits
Death Benefit
The primary benefit of this policy is life insurance coverage. Nationwide will pay the Death Benefit Proceeds upon the Insured's death if the Insured dies while the policy is In Force. The policy is In Force when: the policy has been issued; the Insured is living; the policy has not been surrendered for its Cash Surrender Value; and the policy has not Lapsed.
Death Benefit Options
Note: The Death Benefit will be the greater of the amount produced by the death benefit option in effect on the date of the Insured's death or the Minimum Required Death Benefit, see The Minimum Required Death Benefit.
Death Benefit Option 1: The Death Benefit will be the Total Specified Amount as of the Insured's date of death.
Death Benefit Option 2: The Death Benefit will be the Total Specified Amount plus the Cash Value as of the Insured's date of death.
Death Benefit Option 3: The Death Benefit will be the Total Specified Amount plus the accumulated premium account (which consists of all Premium payments plus interest), less any partial surrenders, as of the Insured's date of death.
Choice of Policy Proceeds
The Policy Proceeds may be paid in a lump sum, or a variety of options that will pay out over time.
Coverage Flexibility
Subject to conditions, the policy owner may choose to:
• change the death benefit option;
• increase or decrease the Base Policy Specified Amount and/or Rider Specified Amount;
• change beneficiaries; and
• change ownership of the policy.
Continuation of Coverage is Guaranteed
The policy will remain In Force during the policy continuation period as long as sufficient Premium is paid to meet the requirements set forth in Guaranteed Policy Continuation Provision.
Access to Cash Value
Subject to conditions, the policy owner may:
• take a policy loan, see Policy Loans.
• take a partial surrender, see Partial Surrender.
• surrender the policy for its Cash Surrender Value at any time while the policy is In Force, see Full Surrender.
Premium Flexibility
The policy owner will select a Premium payment plan for the policy at the time of application. Within limits, the policy owner may vary the frequency and amount of Premium payments, see Premium Payments.
Investment Options
Net Premium may be allocated among fixed and/or variable investment options available in the policy.
The policy currently offers a fixed investment option which will earn interest daily, see Fixed Account.
The variable investment options offered under the policy correspond to 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 underlying mutual funds offered in the policy.
4
Transfer Requests
Policy owners may request to transfer allocations between available investment options of the policy (i.e., the Fixed Account and Sub-Accounts). Requests to transfer allocations between policy investment options will be processed in the Valuation Period they are received at the Service Center as long as the request is in good order. Requests that are not in good order may be delayed or returned, see Contacting the Service Center. Transfer requests may be subject to policies and procedures intended to reduce the potentially detrimental impact that disruptive trading has on Sub-Account Investment Experience, see Transfers Among and Between Policy Investment Options.
Taxes
Earnings on the policy are generally not taxable to the policy owner, unless withdrawn from the policy. This is known as tax deferral. In addition, beneficiaries generally will not have to include Death Benefit Proceeds as taxable income, see Taxes.
Unlike other variable insurance products Nationwide offers, these Individual Flexible Premium Variable Universal Life Insurance Policies do not require distributions to be made before Insured's death, see Taxes.
Assignment
Policy owners may assign the policy as collateral for a loan or another obligation while the policy is In Force, see Assigning the Policy.
Examination Right
For a limited time, the policy owner may cancel the policy and receive a refund, see To Cancel (Examination Right).
Riders
The policy owner may purchase one or more of the Riders listed below, subject to availability in the state where the policy is issued. There may be additional charges assessed for elected Riders and Rider charges may vary based upon the individual characteristics of the Insured. Operation and benefits of the Riders described in this prospectus may vary by the state where the policy is issued.
• Adjusted Sales Load Life Insurance Rider
• Children's Insurance Rider
• Long-term Care Rider
• Spouse Life Insurance Rider
• Accidental Death Benefit Rider
• Premium Waiver Rider
• Change of Insured Rider (no charge)
• Additional (insurance) Protection Rider
• Deduction (of Fees and Expenses) Waiver Rider
• Policy Guard Rider
In Summary: Policy Risks
State Variations
Due to variations in state law, many features of the policy described in this prospectus may be different or may not be available at all depending on the state in which the policy is issued.
Possible variations include, but are not limited to, Rider terms and availability, availability of certain investment options, free look rights, policy exchange rights, policy Lapse and/or reinstatement requirements, and the duration of suicide and incontestability periods. Variations due to state law are subject to change without notice at any time. To review a copy of the policy and any Riders or endorsements for the state in which the policy will be issued, the policy owner can contact the Service Center, see Contacting the Service Center.
5
Risk of Increase in Current Fees and Charges
Nationwide may change policy and/or Rider charges and rates under the policy at any time. Changes in policy and/or Rider charges and rates will vary based upon changes in Nationwide's future expectations related to items such as company investment earnings, mortality experience, persistency experience, expenses, including reinsurance expenses, and taxes. Nationwide will provide advance notice of any increase in policy and/or Rider charges.
If a change in the charges or rates causes an increase to the policy and/or Rider charges, the policy's Cash Value could decrease. If a change in the charges or rates causes a decrease to the policy and/or Rider charges, the policy's Cash Value could increase. Policy and Rider charges will not exceed the maximum charges shown in the fee tables, see In Summary: Fee Tables and Standard Policy Charges.
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 accessing the Cash Value in the early policy years could incur potentially substantial surrender charges.
Unfavorable Investment Experience
The Sub-Accounts may generate unfavorable Investment Experience. Poor Investment Experience and the deduction of policy and Sub-Account charges may lower the policy's Cash Value potentially resulting in a Lapse of insurance coverage.
Risk of Policy Lapse
Cash Value can be reduced by Investment Experience, policy loans, partial surrenders and the deduction of policy charges. Whenever Cash Value is insufficient to cover the policy's charges, the policy is at risk of Lapse; the policy could terminate without value and insurance coverage would cease.
Limitation of Access To Cash Value
A policy owner can access Cash Value through loans and partial surrenders, subject to limitations. Limitations include the amount and frequency of the loan or partial surrender, see Policy Loans and Surrenders. Once a loan or surrender is taken, Cash Value will be reduced by the amount of the policy loan and/or the partial surrender and any associated charges.
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 of the Death Benefit Proceeds from the taxable income of 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 is less favorable when compared to a life insurance policy that is not a modified endowment contract. For example, distributions and loans from modified endowment contracts may currently be taxed as ordinary income and not a return of investment, see Taxes.
The proceeds of a life insurance policy are includible in the gross estate of the Insured for federal income tax purposes if either (a) the proceeds are payable to the executor of the estate of the Insured, or (b) the Insured, at any time within three years prior to his or her death, possessed any incident of ownership in the policy. For this purpose, the Treasury Regulations provide that the term "incident of ownership" is to be construed very broadly, and includes any right that the Insured may have with respect to the economic benefits in the policy. Consult a qualified tax advisor on all tax matters involving the policy described herein.
Fixed Account Transfer Restrictions and Limitations
In addition to the Sub-Accounts available under the policy, Net Premium can be allocated to the Fixed Account. Prior to the policy's Maturity Date, the policy owner may make transfers involving the Fixed Account subject to transfer restrictions, without penalty or adjustment. These transfers will be in dollars and Nationwide may limit the frequency and dollar amount of transfers involving the Fixed Account. See Fixed Account Transfers for details about restrictions that apply to transfers to and from the Fixed Account.
6
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 less favorable Investment Experience and a lower Cash Value. Nationwide has instituted procedures to minimize disruptive transfers. While Nationwide expects these procedures to reduce the adverse effect of disruptive transfers, it cannot ensure that it has eliminated these risks.
Sub-Account Investment Risk
A comprehensive discussion of the risks of each underlying mutual fund may be found in the 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 the Service Center.
In Summary: Fee Tables
The following tables describe the fees and expenses assessed under the policy. The rates in these tables may be rounded up to the nearest one-hundredth decimal. These tables should be read in conjunction with the corresponding section of this prospectus that describes the fee or expense in more detail. All charges deducted from the policy's Cash Value are taken proportionally from the Sub-Accounts and the Fixed Account except where noted.
The first table describes the fees and expenses that a policy owner will pay at the time the policy owner buys the policy, surrenders the policy, or transfers Cash Value between investment options.
Transaction Fees
Charge When Charge Is Deducted Amount Deducted
Sales Load Charge(1) Upon making a Premium payment Maximum:
$25 from each $1,000 of Premium 		Current:
$5 from each $1,000 of Premium
Premium Taxes Charge(1) Upon making a Premium payment $35 per $1,000 of Premium payment
Surrender Charge2 Upon full surrender; Upon policy Lapse; Upon a decrease to the Base Policy Specified Amount Maximum:
$25,590 		Minimum:
$2,337 		Representative:
$3,408
Representative - For an age 35 male non-tobacco preferred with a Base Policy Specified Amount and a Total Specified Amount of $500,000 and Death Benefit Option 1 From the policy's available Cash Value
Illustration Charge3 Upon requesting an illustration Maximum:
$25 		Current:
$0
Partial Surrender Fee Upon a partial surrender Maximum:
the lesser of $25 or 2% of amount surrendered 		Current:
$0
7
Transaction Fees
Charge When Charge Is Deducted Amount Deducted
Short-Term Trading Fee4 Upon transfer of Sub-Account value out of a Sub-Account within 60 days after allocation to that Sub-Account 1% of the amount transferred from the Sub-Account within 60 days of allocation to that Sub-Account
† This charge will vary based upon the individual characteristics of the Insured. Representative charges shown in the table may not be representative of the charge that a particular policy owner will pay. Policy owners can request an illustration of specific costs and/or see the Policy's Data Pages for information about specific charges of the policy.
1 The maximum Sales Load Charge and the Premium Taxes Charge (collectively "Premium Load") represent the maximums that may be charged in any policy year, see Premium Load.
2 For purposes of this table, for a full surrender occurring in the first year from the Policy Date, the charge calculations assume an aggregate first year Premium in excess of the surrender target premium. The surrender target premium is an assumed Premium payment amount used in calculating the Surrender Charge. The Surrender Charge is based on the lesser of the surrender target premium and the Premiums paid in the first year from the Policy Date. The surrender target premium varies by: the Insured's sex; issue age; underwriting class; and the Base Policy Specified Amount (including any increases). The maximum Surrender Charge calculation assumes: a male; age 85 or older; tobacco; a Base Policy Specified Amount and Total Specified Amount of $500,000, Death Benefit Option 1; and policy year one. The minimum charge calculation assumes: a female; issue age 0; a Base Policy Specified Amount and Total Specified Amount of $500,000; Death Benefit Option 1 and policy year one.
3 The policy owner will be expected to pay the Illustration Charge at the time of the request. This charge will not be deducted from Cash Value.
4 Short-term trading fees are only assessed in connection with Sub-Accounts that correspond to underlying mutual funds that assess a short-term trading fee, see Short-Term Trading Fees.
The next table describes the fees and expenses that a policy owner will pay periodically while the policy is In Force, not including mutual fund operating expenses.
Periodic Charges
Charge When Charge Is Deducted Amount Deducted From Cash Value
Cost Of Insurance Charge1† Monthly Minimum:
$0.04 		Maximum:
$83.33 		Representative:
$0.14
Representative – An age 35 male; non-tobacco preferred; Base Policy Specified Amount and Total Specified Amount $500,000; Death Benefit Option 1 Per $1,000 Of Net Amount At Risk –
From the policy's available Cash Value
Flat Extra Charge2 Monthly Maximum:
$2.08 per $1,000 of Net Amount
At Risk for each Flat Extra assessed
Mortality and Expense Risk Charge3 Monthly Maximum :
A monthly rate of $0.50 Per $1,000 of Cash Value
Proportionately from the Sub-Accounts only
8
Periodic Charges
Charge When Charge Is Deducted Amount Deducted From Cash Value
Administrative Charge4 Monthly Maximum:
$10 		Current:
$10
From the policy's available Cash Value
Policy Loan Interest Charge5 Annually Maximum:
$39 		Current:
$39
Per $1,000 of an outstanding policy loan
† This charge will vary based upon the individual characteristics of the Insured. Representative charges shown in the table may not be representative of the charge that a particular policy owner will pay. Policy owners can request an illustration of specific costs and/or see the Policy's Data Pages for information about specific charges of the policy.
1 The Cost of Insurance Charge varies by: the Insured's sex; age; underwriting class; any Substandard Ratings; the year from the Policy Date; and the Base Policy Specified Amount. Cost of Insurance charges are taken from the policy's Cash Value at the beginning of the month starting with the Policy Date. The charge is not pro rated should the policy terminate before the beginning of the next month.
2 The Flat Extra is a component in the calculation of the base policy Cost of Insurance Charge and any Rider Cost of Insurance Charge. It is only applicable if certain factors result in an Insured having a Substandard Rating. Under no circumstance will the assessment of a Flat Extra Charge result in the Cost of Insurance Charge exceeding the maximum Cost of Insurance Charge, see Cost of Insurance.
3 On a current basis, during policy years one through 15, the Mortality and Expense Risk Charge is $0.50 per $1,000 on the first $25,000 of Cash Value, and $0.25 per $1,000 on Cash Values of $25,001 up to $250,000. For Cash Values above $250,000, the charge is $0.08 per $1,000. Beginning in the policy year 16, the charge is $0.50 per $1,000 on the first $25,000 of Cash Value, and $0.08 per $1,000 of Cash Value over $25,000. The charge is only assessed against Cash Value allocated to Sub-Accounts.
4 After the first policy year, the monthly maximum amount is $7.50, and the monthly current amount is $5.
5 The Policy Loan Interest Charge is described in more detail in Policy Loans.
9
The next table describes the fees and expenses associated with Riders that a policy owner will pay periodically while the policy is In Force, not including mutual fund operating expenses.
Periodic Charges For Riders
Charge When Charge Is Deducted Amount Deducted From Cash Value
Adjusted Sales Load Life Insurance Rider Charge Monthly $0.14
Per $1,000 of aggregate monthly Premiums
and 1% of Premium Load replaced – Waived from the policy's available Cash Value
Children's Insurance Rider Charge Monthly $0.43 Per $1,000 of Rider Specified Amount –
From the policy's available Cash Value
Long-Term Care Rider Charge† Monthly Minimum:
$0.02 		Maximum:
$28.65 		Representative:
$0.02
Representative - An age 35 male; non-tobacco preferred;Long-Term Care Rider Specified Amount $500,000; Death Benefit Option 1 Per $1,000 of Rider Net Amount At Risk -
From the policy's available Cash Value
Spouse Life Insurance Rider Charge† Monthly Minimum:
$0.10 		Maximum:
$10.23 		Representative:
$0.11
Representative Spouse - An age 35 female; non-tobacco; and Spouse Life Insurance Rider Specified Amount $100,000 Per $1,000 of Spouse Death Benefit -
From the policy's available Cash Value
Accidental Death Benefit Rider Charge† Monthly Minimum:
$0.05 		Maximum:
$0.75 		Representative:
$0.06
Representative - An age 35 male; non-tobacco preferred; and Accidental Death Benefit $100,000 Per $1,000 of Accidental Death Benefit -
From the policy's available Cash Value
Premium Waiver Rider Charge1† Monthly Minimum:
$42 		Maximum:
$315 		Representative:
$42
Representative - An age 35 male; non-tobacco preferred Per $1,000 of Premium Waiver Benefit -
From the policy's available Cash Value
Additional (Insurance) Protection Rider Charge2† Monthly Minimum:
$0.01 		Maximum:
$83.33 		Representative:
$0.04
Representative - An age 35 male; non-tobacco preferred; Additional Death Benefit $250,000 Per $1,000 of Rider Net Amount at Risk –
From the policy's available Cash Value
10
Periodic Charges For Riders
Charge When Charge Is Deducted Amount Deducted From Cash Value
Deduction (of Fees and Expenses) Waiver Rider Charge3† Monthly Minimum:
$90 		Maximum:
$860 		Representative:
$90
Representative - An age 35 male; non-tobacco preferred; Total Specified Amount of $500,000; Death Benefit Option 1 Per $1,000 of Deduction Waiver Benefit –
From the policy's available Cash Value
Policy Guard Rider Charge4† Upon Invoking The Rider Minimum:
$6.50 		Maximum:
$46.00 		Representative:
$37.00
Representative – Attained Age 85; Cash Value $500,000; Indebtedness of $480,000 Deducted from each $1,000 of the policy's Cash Value
† This charge will vary based upon the individual characteristics of the Insured. Representative charges shown in the table may not be representative of the charge that a particular policy owner will pay. Policy owners can request an illustration of specific costs and/or see the Policy's Data Pages for information about specific charges of the policy.
1 The charge calculations assume monthly Premium payments of $1,000, the waiver of which would occur in the event of the Insured's total disability for six consecutive months. For policies issued before July 13, 2006, the maximum charge for this Rider is $105.
2 The monthly charge is a product of the Rider's monthly cost of insurance charge and the Rider Death Benefit, see Additional (Insurance) Protection Rider.
3 The charge calculation assumes total monthly periodic charges of $1,000 (not including this Rider's cost, and any loan amount interest [which are meant to be excluded]). These charges would be waived in the event of the Insured's total disability for six consecutive months.
4 The level of Indebtedness as a percentage of Cash Value that will allow the policy owner to invoke the Rider will vary with the attained age of the Insured. Generally, the higher the Insured's attained age, the higher the level of Indebtedness must be to invoke the Rider, see Policy Guard Rider.
The next table shows the minimum and maximum total operating expenses, as of December 31, 2012, charged by the underlying mutual funds that a policy owner may periodically pay while the policy is In Force. More detail concerning each mutual fund's fees and expenses is contained in the mutual fund's prospectus.
Total Annual Mutual Fund Operating Expenses
  Minimum   Maximum
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) 		0.28%   4.21%
Policy Investment Options
Policy owners designate how Net Premium payments are allocated among the Sub-Accounts and/or the Fixed Account. Allocation instructions must be in whole percentages and the sum of the allocations must equal 100%.
Fixed Account
Nationwide's obligations under the Fixed Account are backed by assets of its general account. The general account contains all of Nationwide's assets other than those in this and other Nationwide separate accounts and is used to support Nationwide's annuity and insurance obligations.
Subject to applicable law, Nationwide has sole discretion over the investment of assets of the general account and policy owners do not share in the investment experience of, or have any preferential claim on, those assets. Nationwide bears the full investment risk for all amounts allocated to the Fixed Account.
11
Because of exemptive and exclusionary provisions, interests in the Fixed Account have not been and will not be registered under the Securities Act of 1933 and the general account has not been registered as an investment company under the Investment Company Act of 1940. Accordingly, neither the general account nor any interests therein are subject to the provisions of these acts. Nationwide has been advised that the staff of the SEC has not reviewed the disclosure in this prospectus relating to the Fixed Account. Disclosure regarding the Fixed Account, however, is subject to certain generally-applicable provisions of the federal securities laws relating to accuracy and completeness of statements made in prospectuses.
Minimum Guaranteed Interest Rate
Nationwide guarantees that Cash Value allocated to the Fixed Account will accrue interest daily at an effective annual rate that Nationwide determines without regard to the actual investment experience of the general account. Interest crediting rates are set at the beginning of each calendar quarter but are subject to change at any time. Nationwide will credit any interest in excess of the guaranteed interest crediting rate at its sole discretion. Nationwide may not credit any interest in excess of the guaranteed interest crediting rate and different rates may apply to different Premium allocations or exchanges.
Currently, the Fixed Account is the only fixed investment option available under the policy. In the future, Nationwide may offer one or more additional fixed accounts with characteristics that differ from those of the current option, but is under no obligation to do so. The effective annual rate Nationwide declares for the Fixed Account will never be less than 3%.
Interest Crediting Risks and Lapse
The policy owner assumes the risk that the actual credited interest rate may not exceed the guaranteed interest crediting rate. Premiums applied to the policy at different times may receive different interest crediting rates. The interest crediting rate may also vary for new Premium versus Sub-Account transfers. Interest credited to the Fixed Account may be insufficient to pay the policy's charges. Additional Premium payments may be required over the life of the policy to prevent it from Lapsing.
Nationwide Claims-Paying Ability
Guaranteed benefits or interest crediting associated with the Fixed Account is a general account obligation of Nationwide. Therefore, any guaranteed benefit, interest crediting, and the policy owner's right to receive payment, is subject to Nationwide's claims-paying ability and may be subordinate to other claims on the general account in the event Nationwide becomes insolvent.
Restrictions on Transfers to and from the Fixed Account
Prior to the policy's Maturity Date, the policy owner may make transfers involving the Fixed Account. These transfers will be in dollars. Nationwide may impose limits on the dollar amount, percentage of Cash Value, number, and/or frequency of transfers involving the Fixed Account, see Fixed Account Transfers for details about restrictions that apply to transfers to and from the Fixed Account.
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 are designed primarily as investments for variable annuity contracts and variable life insurance policies issued by insurance companies.
Each Sub-Account's assets are held separately from the assets 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.
Underlying mutual funds in the separate 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 advisors 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.
12
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. In the case of new share class additions, future allocations may be limited to the new share classes. The policy owner will receive notice of any such changes that effect the policy. Not all underlying mutual funds may be available in every state.
Some underlying mutual funds may assess short-term trading fees. The separate account will collect the short-term trading fee at the time of the transfer by reducing the amount transferred. All short-term trading fees collected are remitted to the underlying mutual fund, see Short-Term Trading Fees and Appendix A: Sub-Account Information.
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.
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. For more information on the underlying mutual funds, refer to the prospectus for the mutual fund. To obtain free copies of prospectuses for the underlying mutual funds, policy owners can contact Nationwide using any of the methods described in Contacting the Service Center.
• AllianceBernstein Variable Products Series Fund, Inc.
• American Century Variable Portfolios II, Inc.
• American Century Variable Portfolios, Inc.
• BlackRock Variable Series Funds, Inc.
• Delaware VIP Trust
• Dreyfus
• Dreyfus Investment Portfolios
• Dreyfus Variable Investment Fund
• Federated Insurance Series
• Fidelity Variable Insurance Products Fund
• Franklin Templeton Variable Insurance Products Trust
• Goldman Sachs Variable Insurance Trust
• Guggenheim Variable Fund
• Invesco
• Ivy Funds Variable Insurance Portfolios
• Janus Aspen Series
• MFS® Variable Insurance Trust
• Nationwide Variable Insurance Trust
• Neuberger Berman Advisers Management Trust
• Northern Lights Variable Trust
• Oppenheimer Variable Account Funds
• PIMCO Variable Insurance Trust
• Putnam Variable Trust
• T. Rowe Price Equity Series, Inc.
• The Universal Institutional Funds, Inc.
• Van Eck VIP Trust
• Wells Fargo Advantage Variable Trust
Valuation of Accumulation Units
Nationwide accounts 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. Nationwide uses each underlying mutual fund's Net Asset Value (NAV) 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 How Sub-Account Investment Experience is Determined.
Accumulation Units are priced as of the New York Stock Exchange's (NYSE) close of business, normally 4:00 p.m. EST, on each day that it is open. Nationwide will price Accumulation Units on each day that the NYSE is open for business. Any transactions received after the close of the NYSE will be priced as of the next Valuation Period. Nationwide will not price Accumulation Units on these recognized holidays:
• New Year's Day
• Martin Luther King, Jr. Day
• Presidents' Day
• Good Friday
• Memorial Day
• Independence Day
• Labor Day
• Thanksgiving
• Christmas
In addition, Nationwide will not price Accumulation Units if:
13
(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 in items (1) and (2) exist.
How Sub-Account Investment Experience is Determined
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 owned by the policy owner. The number of Accumulation Units 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 Sub-Account Accumulation Units owned by a policy owner 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 Premium and loan repayments.
Initially, Nationwide sets 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. Nationwide accounts for these performance fluctuations by using a "net investment factor," as described below, in the 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.
Nationwide determines 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 held in the Sub-Account (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 held in the Sub-Account determined as of the end of the immediately preceding Valuation Period.
Nationwide determines the Sub-Account's Accumulation Unit value at the end of each Valuation Period. 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 Period, subject to the terms and conditions described in this prospectus and the prospectuses 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 another 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"). A policy owner who intends to use an active trading strategy should consult his/her registered representative and request information on other Nationwide policies that offer mutual funds that are designed specifically to support active trading strategies.
Nationwide discourages (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.
14
To protect investors in this policy from the negative impact of these practices, Nationwide has implemented, or reserves the right to implement, several processes and/or restrictions aimed at eliminating the negative impact of active trading strategies. Nationwide cannot guarantee that attempts to deter active trading strategies will be successful.
If Nationwide is unable to deter active trading strategies, the performance of the Sub-Accounts that are actively traded may be adversely impacted. Policy owners remaining in the affected Sub-Account will bear any resulting increased costs.
Short-Term Trading Fees
Some underlying mutual funds assess a short-term trading fee in connection with transfers from a Sub-Account that occur within 60 days after the date of the allocation to the Sub-Account. The fee is assessed against the amount transferred and is paid to the underlying mutual fund. These fees compensate the mutual fund for any negative impact on fund performance resulting from short-term trading. Some underlying mutual funds may refer to short-term trading fees as "redemption fees." See Appendix A: Sub-Account Information for a complete list of available underlying mutual funds, including those that assess short-term trading fees.
U.S. Mail Restrictions
Nationwide monitors transfer activity in order to identify those who may be engaged in harmful trading practices. Transaction reports are produced and examined. Generally, a policy may appear on these reports if the policy owner (or a third party acting on their behalf) engages in a certain number of "transfer events" in a given period. A "transfer event" is any transfer, or combination of transfers, occurring in a given Valuation Period. For example, if a policy owner executes multiple transfers involving 10 Sub-Accounts in one Valuation Period, this counts as one transfer event. A single transfer occurring in a given Valuation Period that involves only two Sub-Accounts (or one Sub-Account if the transfer is made to or from a fixed investment option) will also count as one transfer event.
As a result of this monitoring process, Nationwide may restrict the form in which transfer requests will be accepted. In general, Nationwide will adhere to the following guidelines:
Trading Behavior Nationwide's Response
Six or more transfer events in one calendar quarter Nationwide will mail a letter to the policy owner notifying them that:
(1) they have been identified as engaging in harmful trading practices; and
(2) if their transfer events exceed 11 in two consecutive calendar quarters or 20 in one calendar year, the policy owner will be limited to submitting transfer requests via U.S. mail.
More than 11 transfer events in two consecutive calendar quarters
OR
More than 20 transfer events in one calendar year 		Nationwide will automatically limit the policy owner to submitting transfer requests via U.S. mail.
For purposes of Nationwide's transfer policy, U.S. mail includes standard U.S. mail, expedited U.S. mail, and expedited delivery via private carrier.
Each January 1st, Nationwide will start the monitoring anew, so that each policy starts with zero transfer events each January 1. See, however, the Other Restrictions provision below.
Managers of Multiple Policies
Some investment advisors/representatives manage the assets of multiple Nationwide policies pursuant to trading authority granted or conveyed by multiple policy owners. These multi-policy advisors will be required by Nationwide to submit all transfer requests via U.S. mail.
Other Restrictions
Nationwide reserves the right to refuse or limit transfer requests, or take any other action it deems 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 Nationwide to constitute harmful trading practices, may be restricted.
Any restrictions that Nationwide implements will be applied consistently and uniformly. The policy owner will be notified if a transfer request is rejected. If a short-term trading fee is assessed, the policy owner will receive a confirmation notice.
15
Underlying Mutual Fund Restrictions and Prohibitions
Pursuant to regulations adopted by the SEC, Nationwide is 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 policy owner;
(2) request the amounts and dates of any purchase, redemption, transfer, or exchange request ("transaction information"); and
(3) instruct Nationwide 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 Nationwide's policies).
Nationwide is required to provide such transaction information to the underlying mutual funds upon their request. In addition, Nationwide is required to restrict or prohibit further purchases or requests to exchange into an underlying mutual fund upon instruction from the underlying mutual fund. Nationwide 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 requests to exchange into an underlying mutual fund. If an underlying mutual fund refuses to accept a purchase or request to exchange into the underlying mutual fund, Nationwide 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. These transfers will be in dollars. Nationwide may impose limits on the dollar amount, percentage of Cash Value, number, and/or frequency of transfers involving the Fixed Account.
Transfers to and/or from the Fixed Account may be restricted as follows:
• Transfers to and/or from may be prohibited during the first policy year
• Only one transfer to and/or from may be permitted every 12 months
Transfers to the Fixed Account may be restricted as follows:
• Transfers to that exceed 20% of the value allocated to the Sub-Accounts (as of the end of the prior Valuation Period) may not be permitted
• Transfers to that would result in the Fixed Account value exceeding 30% of the total Cash Value may not be permitted.
Transfers from the Fixed Account may be restricted as follows:
• Transfers from, of more than 20% of the Fixed Account value in any policy year (as of the end of the previous policy year), may not be permitted.
Amounts transferred to the Fixed Account may be credited interest at different rates, see Fixed Account. Transfers from the Fixed Account will be on a last-in, first-out basis (LIFO). Any restrictions that Nationwide implements will be applied consistently and uniformly.
Contacting the Service Center
All inquiries, paperwork, information requests, service requests, and transaction requests should be made to the Service Center:
• by telephone at 1-800-848-6331 (TDD 1-800-238-3035)
• by mail to Nationwide Life Insurance Company, P.O. Box 182835, Columbus, Ohio 43218-2835
• by fax at 1-888-634-4472
• by Internet at www.nationwide.com.
Nationwide reserves the right to restrict or remove the ability to submit service requests via Internet, phone, or fax upon written notice.
Not all methods of communication are available for all types of requests. To determine which methods are permitted for a particular request, refer to the specific transaction provision in this prospectus, or call the Service Center. Requests submitted by means other than described in this prospectus could be returned or delayed.
Service and transaction requests will generally be processed in the Valuation Period they are received at the Service Center as long as the request is in good order, see Valuation of Accumulation Units. Good order generally means that all necessary information to process the request is complete and in a form acceptable to Nationwide. If a request is not in
16
good order, Nationwide will take reasonable actions to obtain the information necessary to process the request. Requests that are not in good order may be delayed or returned. Nationwide reserves the right to process any transaction request sent to a location other than the Service Center in the Valuation Period it is received at the Service Center.
Nationwide may be required to provide information about a specific policy to government regulators. If mandated under applicable law, Nationwide may be required to reject a Premium payment and to refuse to process transaction requests for transfers, surrenders, loans, and/or Death Benefit Proceeds until instructed otherwise by the appropriate regulator.
Nationwide will use reasonable procedures to confirm that instructions are genuine and Nationwide will not be liable for following instructions that it reasonably determined to be genuine. Nationwide may record telephone requests. Telephone and computer systems may not always be available. Any telephone system or computer can experience outages or slowdowns for a variety of reasons. The outages or slowdowns could prevent or delay processing. Although Nationwide has taken precautions to support heavy use, it is still possible to incur an outage or delay. To avoid technical difficulties, submit transaction requests by mail.
The Policy
General Information
The policy is a legal contract. It will comprise and be evidenced by: a written contract; any Riders; any endorsements; the Policy Data Pages; and the application, including any supplemental application. The benefits described in the policy and this prospectus, including any optional Riders or modifications in coverage, may be subject to Nationwide's underwriting and approval. 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. Nationwide will consider the statements made in the application as representations, and will rely on them as being true and complete. However, Nationwide will not void the policy or deny a claim unless a statement is a material misrepresentation. If a policy owner makes an error or misstatement on the application, Nationwide will adjust the Death Benefit and Cash Value accordingly.
Due to state law variations, the terms, benefits, programs and Riders described in this prospectus may vary or may not be available depending on the state in which the policy is issued. Possible state law variations include, but are not limited to, Rider terms, availability of certain investment options, free look rights, policy exchange rights, policy Lapse and/or reinstatement requirements, and surrender charge, suicide, and incontestability durations. This prospectus describes all the material features of the policy. State variations are subject to change without notice at any time. To review a copy of the policy and any Riders or endorsements for the state in which the policy will be issued, contact the Service Center.
Any modification or waiver of Nationwide's rights or requirements under the policy must be in writing and signed by Nationwide's president or corporate secretary. No agent may bind Nationwide by making any promise not contained in the policy.
Nationwide may modify the policy, its 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, Nationwide, or the separate account is subject. Nationwide may modify the policy to assure that it continues to qualify as a life insurance policy under federal tax laws. Nationwide will notify policy owners of all modifications and will make appropriate endorsements to the policy.
The policy is nonparticipating, meaning that Nationwide 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 that the portion of any amounts allocated to Nationwide's general account and any guaranteed benefits Nationwide may provide under the policy exceeding the value of amounts held in the separate account are subject to Nationwide's 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.
17
Policy Owner and Beneficiaries
Policy Owner
The policy belongs to the owner named in the application or as a result of a valid assignment. The policy owner may name a contingent owner who will become the policy owner if the policy owner dies before Proceeds become payable. Otherwise, ownership will pass to the policy owner's estate, if the policy owner is not the Insured.
Policy Owner Rights
The policy owner may exercise all policy rights in accordance with policy terms while the policy is In Force, subject to Nationwide's approval. 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 Nationwide's approval, the policy owner may name a different policy owner or contingent owner while the policy is In Force by submitting a written request to the Service Center. Any such change request will become effective as of the date signed, however, it will not affect any payment made or action taken before the change is received and recorded by Nationwide. 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 Proceeds if the Insured dies while the policy is In Force. While the policy is In Force, a policy owner may name more than one beneficiary, designate primary and contingent beneficiaries, change or add beneficiaries, and/or direct Nationwide to distribute the Proceeds other than as described below.
If a primary beneficiary dies before the Insured, Nationwide will pay the Death Benefit Proceeds to the surviving primary beneficiaries. Unless specified otherwise by the policy owner, Nationwide 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. A policy owner may name more than one contingent beneficiary. Unless specified otherwise by the policy owner, Nationwide will also pay multiple contingent beneficiaries in equal shares.
Requests to change or add beneficiaries must be submitted in writing to the Service Center. Nationwide may require that the policy owner send the policy for endorsement before the change is recorded. Any such change request will become effective as of the date signed, however, it will not affect any payment made or action taken before the change is received and recorded by Nationwide.
To Purchase
The policy is available for Insureds between the issue ages of 0 and 85. To purchase the policy, prospective purchasers must submit a completed application and the required initial Premium payment.
Nationwide must receive evidence of insurability that satisfies its underwriting standards (this may require a medical examination) before it will issue a policy. Nationwide can provide prospective purchasers with the details of its underwriting standards upon request. Nationwide reserves the right to reject any application for any reason permitted by law. Additionally, Nationwide reserves the right to modify its underwriting standards on a prospective basis for newly issued policies at any time.
The minimum initial Base Policy Specified Amount in most states is $50,000 for non-preferred policies and $100,000 for preferred policies. The basic distinction between the non-preferred and preferred underwriting classifications is that Nationwide expects the Insured under a preferred policy to live longer. Nationwide reserves the right to modify the minimum Base Policy Specified Amount on a prospective basis for newly issued policies at any time.
Coverage
Nationwide will issue the policy only if the underwriting process has been completed, the application is approved, and the proposed Insured is alive and in the same condition of health as described in the application. However, full insurance coverage will take effect only after the minimum initial Premium is paid. Monthly charges are deducted from the policy's Cash Value beginning on the Policy Date.
18
Coverage Effective Date
Insurance coverage will begin and be In Force on the Policy Date shown on the Policy Data Page. For a change in the Base Policy Specified Amount and/or Rider Specified Amount, the effective date will be on the next monthly anniversary from the Policy Date after Nationwide approves the request. It will end upon the Insured's death, once the Proceeds are paid or when the policy matures. Coverage will also end if the policy Lapses.
Temporary Insurance Coverage
Temporary Insurance Coverage
Temporary insurance coverage (of an amount equal to the Total Specified Amount, up to $1,000,000) may be available for no charge before full insurance coverage takes effect. Prospective purchasers must submit a temporary insurance agreement and make an initial Premium payment. The amount of this initial Premium payment will depend on the initial Total Specified Amount, choice of death benefit option, and any Riders elected. Temporary insurance coverage will remain In Force for no more than 60 days from the date of the temporary insurance agreement. If full coverage is denied, the temporary insurance coverage will terminate five days from the date Nationwide mails a termination notice (accompanied by a refund equal to the Premium payment made). If full coverage is approved, the temporary insurance coverage will terminate on the date that full insurance coverage takes effect. Allocation of the initial Net Premium will be determined by the right to examine law of the state in which the policy is issued.
To Cancel (Examination Right)
Under state law a policy owner may, for a limited time, cancel the policy and receive a refund (commonly referred to as the "free look" period). The length of the free look period depends on state law and may vary depending on whether the policy was purchased to replace another policy. The minimum "free look" period is 10 days.
In order to cancel the policy during the free look period, a policy owner must submit a written cancellation request and return the policy either to the sales representative or to the Service Center. Nationwide will honor free look cancellation requests received by the last day of the free look period (if returned by US mail, the request must be post-marked by the last day of the free look period).
Free look cancellation requests received after the close of business on the date the free look period expires will not be canceled free of charge. If the policy is canceled, Nationwide will treat the policy as if it was never issued.
Within seven days of a free look cancellation request, Nationwide will refund the amount prescribed by state law. The amount Nationwide refunds will be Cash Value or, in certain states, the greater of the initial Premium payment or the policy's Cash Value.
Allocation of Net Premium During Free Look Period
Where state law requires the return of initial Premium for free look cancellations, Nationwide will allocate initial Net Premium to the Fixed Account as instructed. Nationwide will allocate initial Net Premium allocated to the Sub-Accounts to the available money market Sub-Account until the free look period expires. At the expiration of the free look period, Nationwide will transfer the amount held in the money market Sub-Account to the requested Sub-Accounts based on the allocation instructions in effect at the time of the transfer.
Where state law requires the return of Cash Value, Nationwide will allocate all of the initial Net Premium to the designated Sub-Accounts and Fixed Account based upon the allocation instructions in effect at the time, on the next Valuation Period.
Premium Payments
This policy does not require a scheduled payment of Premium to keep it In Force. The policy will remain in effect as long as the conditions that cause the policy to Lapse do not exist. Upon request, we will furnish Premium receipts.
Initial Premium
The amount of initial Premium will depend on the initial Total Specified Amount of insurance, the death benefit option, and any Riders elected. Generally, the higher the required initial Total Specified Amount, the higher the initial Premium will be. Similarly, because Death Benefit Option 2 and Death Benefit Option 3 provide for a potentially greater Death Benefit than Death Benefit Option 1, Death Benefit Option 2 and Death Benefit Option 3 may require a higher amount of initial Premium. Also, the age, health, and activities of the Insured will affect Nationwide's determination of the risk of issuing the policy. In general, the greater this risk, the higher the initial Premium required.
19
Whether Nationwide will issue full insurance coverage depends on the Insured meeting all underwriting requirements, payment of the initial Premium, and delivery of the policy while the Insured is alive. Nationwide will not delay delivery of the policy to increase the likelihood that the Insured is not still living. Depending on the outcome of the underwriting process, more or less Premium may be necessary to issue the policy. If Nationwide does not issue the policy, the Premium payment will be returned within two business days.
The policy owner may pay the initial Premium to the Service Center or to an authorized representative. The initial Premium payment must be at least $50, equal to the minimum monthly Premium. The initial Premium payment will not be applied to the policy until the underwriting process is complete. Allocation of initial Net Premium will be determined by the right to examine law of the state or territory where the policy is issued, see Right to Cancel (Examination Right).
Subsequent Premium payments will be allocated according to the allocation instructions in effect at the time the Premium is received.
Subsequent Premiums
This policy does not require a payment of a scheduled Premium amount to keep it In Force . It will remain In Force as long as the conditions that cause a policy to Lapse do not exist, see Lapse. Premium payment reminder notices will be sent according to the Premium payment schedule selected by the policy owner. Additional Premium payments must be submitted to the Service Center. Each Premium payment must be at least $50. Upon request, Nationwide will furnish Premium payment receipts. Policy owners may make additional Premium payments at any time while the policy is In Force and prior to the Maturity Date, subject to the following:
• Nationwide 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.
• Nationwide will refund Premium payments that exceed the applicable premium limit established by the Code to qualify the policy as a contract for life insurance.
• Nationwide will monitor Premiums paid and will notify policy owners when the policy is in jeopardy of becoming a modified endowment contract, see Taxes.
• Nationwide may require that policy Indebtedness be repaid before accepting any additional Premium payments.
Cash Value
Nationwide will determine the Cash Value at least monthly. Cash Value will fluctuate daily and there is no guaranteed Cash Value. At the end of any given Valuation Period, the Cash Value is equal to the sum of:
• the value of the Accumulation Units allocated to the Sub-Accounts, see Valuation of Accumulation Units;
• amounts allocated to the Fixed Account, including credited interest; and
• amounts allocated to the policy loan account (only if a loan was taken), including credited interest, see Policy Loans.
Surrenders and policy charges and deductions will reduce the Cash Value of the policy. If Cash Value is a factor in calculating a benefit associated with the policy, such as the Death Benefit or a benefit associated with an elected Rider, the value of that benefit will also fluctuate, including being reduced due to surrenders and policy charge deductions. If the policy is surrendered or Lapses, the Cash Value will be reduced by the amount of any Indebtedness.
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 policy charges, plus or minus any investment results, and minus any partial surrenders.
To Change Coverage
After the first policy year, the policy owner may request to change the Total Specified Amount. To change the Total Specified Amount, the policy owner must submit a written request to the Service Center. Changes to the Total Specified Amount will become effective on the next monthly policy anniversary after Nationwide approves the request unless the policy owner requests and Nationwide approves a different date. However, no change will take effect unless the Cash Surrender Value would be sufficient to keep the policy In Force for at least three months. Nationwide may limit the number of Total Specified Amount changes to one increase and one decrease each policy year. Changes to the Total Specified Amount will typically alter the Death Benefit.
Increases
To increase the Total Specified Amount, the policy owner must provide satisfactory evidence of insurability. The Insured must be Attained Age 85 or younger at the time of the request. Any request to increase the Total Specified Amount must be at least $10,000. An increase in the Total Specified Amount may cause an increase in the Net Amount At Risk.
20
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 additional Surrender Charge schedule will also apply whenever the Base Policy Specified Amount is increased. An increase in the Base Policy Specified Amount and/or Rider Specified Amount may cause an increase to the amount of subsequent Premium payments needed to keep the policy from Lapsing, see Lapse.
Decreases
The policy owner may request to decrease the Total Specified Amount. Nationwide applies Total Specified Amount decreases to the most recent Base Policy Specified Amount and/or Rider Specified Amount increase and continues applying the decrease backwards while still maintaining the original Total Specified Amount. Nationwide will deny any request to reduce the Base Policy Specified Amount below the minimum Base Policy Specified Amount shown on the Policy Data Page. Nationwide will also deny any request that would disqualify the policy as a contract for life insurance.
To Exchange
The policy owner has an exchange right under the policy. At any time within the first 24 months of coverage from the Policy Date, the policy owner may surrender the policy and use the Cash Surrender Value to purchase a new policy on the Insured's life without evidence of insurability.
To invoke this right, the policy must be In Force and not in the Grace Period, and the policy owner must submit a written request to the Service Center on approved forms.
The new policy may be one of Nationwide's available fixed benefit individual life insurance policies. The death benefit on the new policy may not be greater than the Death Benefit on this policy immediately prior to the exchange date. The new policy will have the same Total Specified Amount, Policy Date, and issue age. Nationwide will base Premium payments on the rates in effect for the same sex, Attained Age, and underwriting class of the Insured on the exchange date, unless otherwise required by state law. The policy owner may transfer Indebtedness to the new policy.
Exchange requests must be made on Nationwide forms and submitted to the Service Center. The policy must be In Force and not in a Grace Period. The policy owner must pay a Surrender Charge if applicable and surrender the policy to Nationwide. The policy owner must pay any money due on the exchange (any amount needed to ensure that the Cash Surrender Value of the new policy is the same as the Cash Surrender Value of this policy). The policy owner may request that any excess of the Cash Surrender Value of this policy over the Cash Surrender Value of the new policy be paid to the policy owner. 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.
After the first 24 months of coverage, the policy owner may still surrender the policy and use the Cash Surrender Value to purchase a new policy on the Insured's life. However, issuance of the new policy will depend on the Insured providing satisfactory evidence of insurability.
To Terminate or Surrender
There are several ways that the policy can terminate. The policy will automatically terminate when the Insured dies, the policy matures, or the Grace Period ends. The policy will also terminate if it is fully surrendered.
Terminating the policy may result in adverse tax consequences.
Generally, if the policy has a Cash Surrender Value in excess of the Premiums paid, upon surrender the excess will be included in the policy holder's income for federal tax purposes, see Taxes. The Cash Surrender Value will be reduced by outstanding Indebtedness, see Policy Loans.
To Assign
The policy owner may assign any or all rights under the policy while it is In Force, subject to Nationwide's approval. The beneficiary's interest will be subject to the person or entity to which the policy owner assigned rights. Assignments must be in writing on a form satisfactory to Nationwide. Assignments will become effective on the date signed, unless otherwise specified by the policy owner, and are subject to any payments or actions taken by Nationwide before it is received and recorded at the Service Center. Nationwide is not responsible for the sufficiency or validity of any assignment. Assignments will be subject to any Indebtedness, policy liens, garnishments, court orders, and any previous assignments.
21
Reminders, Reports and Illustrations
Nationwide will send scheduled Premium payment reminders and transaction confirmations to policy owners upon request. Nationwide will also send semi-annual and annual statements that show:
• the Total Specified Amount;
• minimum monthly Premiums;
• Premiums paid;
• all charges since the last report;
• the current Cash Value;
• the Cash Surrender Value; and
• Indebtedness.
Confirmations of individual financial transactions, such as transfers, partial Surrenders, and loans are generated and mailed automatically. Copies may be obtained by contacting the Service Center. Alternatively, policy owners may receive information faster and reduce the amount of mail received by signing up for the eDelivery program. Go to www.nationwide.com/login to change document delivery preferences.
Nationwide will send these reminders and reports to the address provided on the application unless directed otherwise. At any time after the first policy year, policy owners may ask for an illustration of future benefits and values under the policy, see Illustration Charge.
IMPORTANT NOTICE REGARDING DELIVERY
OF SECURITY HOLDER DOCUMENTS
When multiple copies of the same disclosure document(s), such as prospectuses, supplements, proxy statements and semi-annual and annual reports are required to be mailed to multiple policy owners in the same household, Nationwide will mail only one copy of each document, unless notified otherwise by the policy owner(s). Household delivery will continue for the life of the policies. A policy owner can revoke their consent to household delivery and reinstitute individual delivery by contacting the Service Center. Individual delivery will resume within 30 days after receiving such notification.
Standard Policy Charges
Deductions for charges are taken from Premium payments and/or the Cash Value, as applicable, to compensate Nationwide for the services and benefits provided, the costs and expenses incurred, and the risks assumed. Certain expenses may be recovered utilizing more than one charge. Nationwide may generate a profit from any of the charges assessed under the policy.
Monthly charges are deducted from Cash Value beginning on the Policy Date. Charges are taken proportionally from the Sub-Accounts and the Fixed Account, except for the Mortality and Expense Risk Charge which is only deducted proportionally from the Sub-Accounts. Charges taken against allocations to the Sub-Accounts are assessed by redeeming Accumulation Units. The number of Accumulation Units redeemed is determined by dividing the dollar amount of the charge by the Accumulation Unit value for the Sub-Account. Nationwide does not deduct policy charges or Rider charges from the Cash Value attributable to the policy loan account. For a complete description of how interest is credited and charged, see Policy Loans.
Policy and Rider charges reflect costs and risks associated with issuing the policy and Rider(s). Certain charges will vary based upon the individual characteristics of the Insured. The 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. The policy owner can request an illustration of specific costs and/or see the Policy's Data Pages for information about specific charges of their policy.
Nationwide may change policy and/or Rider charges and rates under the policy at any time. Changes in policy and/or Rider charges and rates will vary by changes in future expectations for factors including, but not limited to, Nationwide's investment earnings, mortality experience, persistency experience, expenses, including reinsurance expenses, and taxes. Changes to policy and/or Rider charges and rates will be on a uniform basis for Insured's of the same Issue Age, sex, rate class, rate type, any Substandard Rating, Base Policy Specified Amount  and Spouse Life Insurance Rider Specified Amount (if applicable) whose policies have been In Force for the same length of time. If a change in the charges or rates
22
causes an increase to the policy and/or Rider charges, the policy's Cash Value could decrease. If a change in the charges or rates causes a decrease to the policy and/or Rider charges, the policy's Cash Value could increase. Any changes will be determined in accordance with state law. Policy and Rider charges will never exceed the maximum charges shown in the fee tables, see In Summary: Fee Tables.
Premium Load
Premium Load is comprised of the Sales Load and Premium Taxes. It will vary by policy based on the amount of Premium paid. It is deducted from each Premium payment to partially reimburse Nationwide for sales expenses and Premium taxes, and other expenses, including acquisition costs. The Premium Load also provides revenue to compensate Nationwide for assuming risks associated with the policy, and revenue that may be a profit.
Sales Load
Sales Load (as part of the Premium Load) is deducted from each Premium payment to cover sales expenses. The current Sales Load is $5 per $1,000 of Premium. The guarantee maximum Sales Load is $25 per $1,000 of Premium.
Nationwide may waive the Sales Load on the initial Premium paid into this policy as part of a Nationwide sponsored exchange program to another Nationwide policy as permitted under the securities laws and/or rules or by order of the SEC.
Premium Taxes
Premium Taxes (as part of the Premium Load) are deducted from each Premium payment to reimburse Nationwide for state and local premium taxes (at the estimated rate of 2.25%) and for federal premium taxes (at the estimated rate of 1.25%). The current (and guaranteed maximum) Premium Tax is $35 per $1,000 of Premium. This amount is not the actual amount of the tax liability Nationwide incurs. It is an estimated amount. If the actual tax liability is more or less, Nationwide will not adjust the charge retroactively.
Short-Term Trading Fees
Some mutual funds offered under the policy may assess (or reserve the right to assess) a short-term trading fee (sometimes called "redemption fee" by the mutual fund) in connection with transfers from a Sub-Account that occur within 60 days after the date of allocation to the Sub-Account.
Short-Term Trading Fees are intended to compensate the mutual fund (and policy owners with interests allocated in the Sub-Account) for the negative impact on mutual fund performance that may result from frequent, short-term trading strategies. Short-Term Trading Fees are not intended to affect the large majority of policy owners not engaged in such strategies.
Any Short-Term Trading Fee assessed by any mutual fund available in conjunction with the policy will equal 1% of the amount determined to be engaged in short-term trading. Short-Term Trading Fees will only apply to those Sub-Accounts corresponding to mutual funds that charge such fees (see the mutual fund's prospectus). Any Short-Term Trading Fees paid are retained by the mutual fund and are part of the mutual fund's assets. Policy owners are responsible for monitoring the length of time allocations are held in any particular Sub-Account. Nationwide will not provide advance notice of the assessment of any applicable Short-Term Trading Fee.
For a complete list of the Sub-Accounts that assess (or reserve the right to assess) a Short-Term Trading Fee, see Appendix A: Sub-Account Information.
If a Short-Term Trading Fee is assessed, the mutual fund will charge the separate account 1% of the amount determined to be engaged in short-term trading. The separate account will then pass the Short-Term Trading Fee on to the specific policy owner that engaged in short-term trading by deducting an amount equal to the Short-Term Trading Fee from that policy owner's Sub-Account value. All such fees will be remitted to the mutual fund; none of the fee proceeds will be retained by Nationwide or the separate account.
When multiple allocations are made to a Sub-Account that is subject to Short-Term Trading Fees, transfers out of that Sub-Account will be considered to be made on a first in/first out (FIFO) basis for purposes of determining Short-Term Trading Fees. In other words, Accumulation Units held the longest time will be treated as being transferred first, and Accumulation Units held for the shortest time will be treated as being transferred last.
Some transactions are not subject to Short-Term Trading Fees, including:
• scheduled and systematic transfers, such as those associated with dollar cost averaging programs and asset rebalancing programs (if available);
• policy loans;
23
• full or partial surrenders; or
• payment of the Proceeds.
New share classes of certain currently available mutual funds may be added as investment options under the policy. These new share classes may require the assessment of Short-Term Trading Fees. When these new share classes are added, new Premiums and transfers to the Sub-Accounts in question may be limited to the new share class.
Illustration Charge
Illustration Charges are not deducted from Premium payments or Cash Value; rather they are paid at the time of an illustration request. Nationwide currently waives the Illustration Charge. The charge is intended to compensate Nationwide for the administrative costs of generating illustrations. Nationwide may elect in the future to assess an Illustration Charge. It will not exceed $25 per illustration requested.
Partial Surrender Fee
The policy owner may request a partial surrender after the first year from the Policy Date while the policy is In Force. The charge for a partial surrender compensates Nationwide for the administrative costs in calculating and generating the surrender amount. The maximum fee is the lesser of $25 or 2% of the dollar amount of the partial surrender. However, currently, there is no charge for a partial surrender. The Cash Value available for a partial surrender is subject to any Indebtedness.
Surrender Charge
A surrender charge will apply if the policy is surrendered or Lapsed. A surrender charge may apply if the Base Policy Specified Amount is decreased. There are two components of the surrender charge meant to cover policy underwriting, or the underwriting component, and sales expenses, or the sales component, including processing the application, conducting any medical exams, determining insurability and the Insured's underwriting class, and establishing policy records. The surrender charge equals the underwriting component and 26.5% of the sales component. The Surrender Charge is deducted based on the following schedule:
Policy year calculated from the Policy Date or
effective date of Base Policy Specified Amount increase: 		  Percentage of Initial
Surrender Charge
1
   100%
2
   100%
3
   90%
4
   80%
5
   70%
6
   60%
7
   50%
8
   40%
9
   30%
After 9
   0
The underwriting component is the product of the Base Policy Specified Amount, divided by 1,000, and the administrative target premium. The administrative target premium is actuarially derived, and is used to determine how much to charge per Premium payment for underwriting expenses. The administrative target premium varies by the Insured's age when the policy was issued.
The sales expense component is the lesser of the following two amounts: The first amount is the product of the Base Policy Specified Amount, divided by 1,000, and the surrender target premium. The surrender target premium is actuarially derived, and is used to figure out how much to charge per Premium payment for sales expenses. The surrender target premium varies by: the Insured's sex; issue age; and the underwriting class. The second amount is the sum of all Premium payments made during the first year from the Policy Date.
Nationwide will calculate a separate surrender charge based on the initial Base Policy Specified Amount and each increase in the Base Policy Specified Amount, which are referred to as "segments". The surrender charge for each segment, when added together, will equal the total surrender charge. A surrender charge will also apply when the aggregate surrenders exceed 25% of a segment's Base Policy Specified Amount. Nationwide defers and accrues the charge on partial surrenders that do not exceed 25% of the segment's Base Policy Specified Amount. Once partial surrenders exceed 25%, the current and accrued charge will be assessed against the policy's Cash Value. In determining the 25% level, Nationwide uses a last in-first out method, so that the latest segment reaches the 25% level first.
24
Nationwide may change this practice and assess the surrender charge against all partial surrenders. The surrender charge for a decrease in the Base Policy Specified Amount will be calculated as if the policy was surrendered, though only a portion will be deducted from the policy's Cash Value. The amount of surrender charge deducted will be a product of the surrender charge and the decrease in Base Policy Specified Amount divided by the Base Policy Specified Amount before the decrease.
The surrender charge will typically be greater for a policy with: an older Insured; a male insured; a higher Specified Amount; more first year Premium; or a higher-risk Insured. If the Death Benefit option is changed and the change does not result in a different Net Amount At Risk, no surrender charge will be deducted.
The surrender charge may be waived if the policy is surrendered in exchange for a plan of permanent fixed life insurance offered by Nationwide, subject to the following:
• the exchange and waiver may be subject to new evidence of insurability and underwriting approval; and
• the following Riders have not been invoked:
❍ Premium Waiver Rider;
❍ Deduction (of Fees and Expenses Waiver Rider); or
❍ Long-Term Care Rider.
A new surrender charge may apply to the policy received in the exchange.
Cost of Insurance Charge
A Cost of Insurance Charge is deducted proportionally from Sub-Account and Fixed Account allocations on the Policy Date and on each monthly anniversary of the Policy Date. The charge is intended to cover Nationwide's expenses associated with providing expected mortality benefits and assuming certain risks associated with the policy, and to cover other expenses, including acquisition costs, and state and federal taxes. Nationwide may also profit from this charge.
The Cost of Insurance 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, underwriting class, any Substandard Ratings, how long the policy has been In Force, and the Base Policy Specified Amount and Spouse Life Insurance Rider Specified Amount (if applicable). The cost of insurance rate is based on Nationwide's expectations as to future mortality and expense experience, investment earnings, persistency, and taxes.
There will be a separate cost of insurance rate for the initial Base Policy Specified Amount and any Base Policy Specified Amount increase. The cost of insurance rate(s) will never be greater than what is shown on the Policy Data Pages.
Flat Extras and Substandard Ratings
Nationwide may inquire about the occupation and activities of the Insured through the underwriting process. If the activities or occupation of the Insured cause an increased health or accident risk, it may result in the Insured receiving a Substandard Rating. If this is the case, Nationwide may add an additional component to the Cost of Insurance Charge called a "Flat Extra Charge." The Flat Extra Charge accounts for the increased risk of providing life insurance when one or more of these factors apply to the Insured. The Flat Extra Charge is a component of the total Cost of Insurance Charge, so if applied it will be deducted from Cash Value on the Policy Date and the monthly anniversary of the Policy Date. The monthly Flat Extra Charge is between $0.00 and $2.08 per $1,000 of the Net Amount At Risk. If a Flat Extra Charge is applied, it is shown in the Policy Data Pages. In no event will the Flat Extra Charge result in the Cost of Insurance Charge exceeding the maximum charge shown in In Summary: Fee Tables.
Nationwide will uniformly apply a change in any cost of insurance rate for Insureds of the same age, sex, underwriting class, Substandard Ratings, and Base Policy Specified Amount and Spouse Life Insurance Rider Specified Amount (if applicable), if the policies have been In Force for the same length of time. If a change in the cost of insurance rates causes an increase to a policy's Cost of Insurance Charge, the policy's Cash Value could decrease. If a change in the cost of insurance rates causes a decrease to the policy's Cost of Insurance Charge, the policy's Cash Value could increase.
Mortality and Expense Risk Charge
A Mortality and Expense Risk Charge is deducted monthly from the Cash Value allocated to the Sub-Accounts. The charge will vary by policy based on the amount of Cash Value allocated to the Sub-Accounts and the length of time the policy has been In Force. The charge compensates Nationwide for assuming the risk associated with mortality and expense risk costs. The mortality risk is that the Insured will not live as long as expected. The expense risk is that the costs of issuing and administering the policy will be more than expected. This charge is in addition to any charges assessed by the mutual funds underlying the Sub-Accounts.
25
Though the maximum guaranteed mortality and expense risk charge is higher, currently, Nationwide deductes this monthly charge according to the following schedule. During the first through 15 years from the Policy Date, the charge is $0.50 per $1,000 on the first $25,000 of Cash Value allocated to the Sub-Accounts, and $0.25 per $1,000 on $25,001 up to $250,000 of Cash Value allocated to the Sub-Accounts. This charge is $0.08 per $1,000 of Cash Value allocated to the Sub-Accounts over $250,000. Beginning in Policy year 16, this charge is: $0.50 per $1000 on the first $25,000 of the Cash Value allocated to the Sub-Accounts, and $0.08 per $1,000 of the Cash Value allocated to the Sub-Accounts over $25,000.
Administrative Charge
An administrative charge is deducted proportionally from the policy's Sub-Account and Fixed Account allocations on the Policy Date and each monthly anniversary of the Policy Date. The charge reimburses Nationwide for the costs of maintaining the policy, including accounting and record-keeping. The charge is currently $10 per month through the first year from the Policy Date and $5 per month thereafter. The maximum guaranteed charge is $10 per month through the first year from the Policy Date and $7.50 per month thereafter.
Mutual Fund Operating Expenses
In addition to the policy charges, there are also charges associated with the mutual funds in which the Sub-Accounts invest. Policy owners do not pay these charges directly, but these charges do affect the value of the assets allocated to the Sub-Accounts because these charges are reflected in the underlying mutual fund prices that Nationwide subsequently uses to value Sub-Account units. The underlying mutual funds' prospectuses contain additional information about these charges. Policy owners may contact the Service Center to receive, free of charge, copies of the prospectuses for any of the underlying mutual funds available under the policy.
Reduction of Charges
The policy may be purchased by individuals, corporations, and other entities. Nationwide may reduce or eliminate certain charges (Sales Load, Surrender Charge, administrative charges, Cost of Insurance Charge, or other charges) where the size or nature of the group allows Nationwide to realize savings with respect to sales, underwriting, administrative, or other costs. Where prohibited by state law, Nationwide will not reduce charges associated with the policy.
Nationwide determines the eligibility and the amount of any reduction by examining a number of factors, including: the number of policies owned with different insureds; the total premium Nationwide expects to receive; the total cash value of commonly owned policies; the nature of the relationship among individual insureds; the purpose for which the policies are being purchased; the length of time Nationwide expects the individual policies to be in force; and any other circumstances which are rationally related to the expected reduction in expenses.
Nationwide may lower commissions to the selling broker-dealer and/or increase charge back of commissions paid for policies sold with reduced or eliminated charges. Policy owners should consult with a registered representative about reductions available and, where appropriate, obtain an illustration demonstrating the impact of any reduced charges on the policy.
Nationwide may change both the extent and the nature of the charge reductions. Any charge reductions will be applied in a way that is not unfairly discriminatory to policy owners and will reflect the differences in costs of services provided.
Entities considering purchasing the policy should note that in 1983, the U.S. Supreme Court held in Arizona Governing Committee v. Norris that certain annuity benefits provided by employers' retirement and fringe benefit programs may not vary between men and women on the basis of sex. The policies are based upon actuarial tables that distinguish between men and women unless the purchaser is an entity and requests non-sex distinct tables be used for underwriting. The policies generally provide different benefits to men and women of the same age. Accordingly, employers and employee organizations should consider, in consultation with legal counsel, the impact of Norris on any employment related insurance or benefit program before purchasing this policy.
A Note on Charges
During a policy's early years, the expenses Nationwide incurs in distributing and establishing the policy exceed the deductions. Nevertheless, Nationwide expects to make a profit over time because variable life insurance is intended to be a long-term financial investment. Accordingly, Nationwide has designed the policy with features and investment options that it believes support and encourage long-term ownership.
26
Nationwide makes many assumptions and accounts for many economic and financial factors when establishing 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 paid to broker-dealer firms as commissions, expense allowances, and marketing allowances. Nationwide refers to these expenses collectively as "total compensation."
Nationwide has the ability to customize the total compensation package of its broker-dealer firms. Nationwide 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, which is 99% of first year premiums and 3% of renewal premium after the first year. Commission may also be paid on an asset-based amount instead of a premium based amount. If an asset-based commission is paid, it will not exceed 0.25% of the non-loaned cash value per year.
The actual amount and/or forms of total compensation paid depend on factors such as the level of premiums Nationwide receives from respective broker-dealer firms and the scope of services the firms provide. Some broker-dealer firms may not receive maximum total compensation.
Individual registered representatives typically receive a portion of the commissions/total compensation paid, depending on their arrangement with their broker-dealer firm. Policy owners should consult the registered representative to know the exact compensation arrangement associated with this policy.
Information on Underlying Mutual Fund Payments
Nationwide's 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 (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. Nationwide incurs these expenses instead.
Nationwide also incurs 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 advisor or subadvisor of an underlying mutual fund or its affiliates may provide Nationwide or its affiliates with wholesaling services that assist in the distribution of the policy and may pay Nationwide or its affiliates to participate in educational and/or marketing activities. These activities may provide the advisor or subadvisor (or their affiliates) with increased exposure to persons involved in the distribution of the policy.
Types of Payments Nationwide Receives
In light of the above, the underlying mutual funds or their affiliates make certain payments to Nationwide or its affiliates (the "payments"). 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 Nationwide and its affiliates issue, but in some cases may involve a flat fee. These payments may be used by Nationwide for any corporate purpose, which includes reducing the prices of the policies, paying expenses that Nationwide or its affiliates incurs in promoting, marketing, and administering the policies and the underlying mutual funds, and achieving a profit.
Nationwide or its 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 advisor or subadvisor (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 mutual fund charges.
Furthermore, Nationwide benefits from assets invested in affiliated underlying mutual funds (i.e., Nationwide Variable Insurance Trust) because these affiliates receive compensation from the underlying mutual funds for investment advisory, administrative, transfer agency, distribution, and/or other services. Overall, Nationwide may receive more revenue with respect to affiliated underlying mutual funds than unaffiliated underlying mutual funds.
27
Nationwide took into consideration the anticipated payments from the underlying mutual funds when it determined the charges imposed under the policies (apart from fees and expenses imposed by the underlying mutual funds). Without these payments, Nationwide would have imposed higher charges under the policy.
Amount of Payments Nationwide Received
For the year ended December 31, 2012, the underlying mutual fund payments Nationwide and its affiliates received from the underlying mutual funds did not exceed 0.75% (as a percentage of the average daily net assets invested in the underlying mutual funds) offered through this policy or other variable policies that Nationwide and its affiliates issued. Payments from investment advisors or subadvisors 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 Nationwide or its 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 Nationwide or its affiliates receive depends on the assets of the underlying mutual funds attributable to the policy, Nationwide and its 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).
Identification of Underlying Mutual Funds
Nationwide 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. Nationwide also considers whether the underlying mutual fund's advisor or subadvisor is an affiliate or whether the underlying mutual fund, its advisor, its subadvisor(s), or an affiliate will make payments to Nationwide or its affiliates.
There may be underlying mutual funds with lower fees, as well as other variable policies that offer underlying mutual funds with lower fees. Policy owners should consider all of the fees and charges of the policy in relation to its features. Higher policy and underlying mutual fund fees and charges have a direct effect on the policy's investment performance.
Policy Riders and Rider Charges
Riders are available for purchase to design the policy to meet the policy owner's specific needs. The policy owner may purchase any Rider (except for both the Premium Waiver and Deduction of Fees and Expenses Waiver Riders, simultaneously). Once the policy is In Force, to add a Rider, Nationwide may require further evidence of insurability. The policy owner may only elect the Adjusted Sales Load Life Insurance Rider when purchasing the policy.
The availability, operation, and benefits of the Riders may vary by the state where the policy is issued. The policy owner will be charged for a Rider: so long as the policy remains In Force and the Rider's term has not expired; until the benefit has been paid; or the policy owner decides he or she no longer need the benefit and contacts the Service Center in writing.
Adjusted Sales Load Life Insurance Rider
The benefit associated with the Adjusted Sales Load Life Insurance Rider is the replacement of all or a portion of the up-front Premium Load (comprised of the Sales Load and Premium Taxes) with a monthly Rider charge. A policy owner may elect the number of years (from one to seven) that Premium Load would be replaced. A Premium Load would be assessed on any amount that is not replaced by the Rider.
Availability
This Rider is only available to purchase at the time of application.
Adjusted Sales Load Life Insurance Rider Charge
A monthly Adjusted Sales Load Life Insurance Rider Charge is assessed to compensate Nationwide for the sales and premium tax expenses that it will not collect in the form of Premium Load. The aggregate monthly Rider charges will be greater than the amount Nationwide would have deducted as Premium Load. The monthly charge is the product of aggregate Premiums paid since the Policy Date, the portion of Premium Load replaced (expressed as a whole percentage of Premiums paid), and the factor of 0.0001354. The Rider's charge may vary. Each Premium payment made during the selected Rider period will cause the Rider's charge to increase. How long the Rider charge is assessed will also vary. The
28
Rider charge will be assessed for nine policy years, plus the number of years (from one to seven) that Premium Load is replaced (with a maximum Rider charge period of 15 years). However, if a policy owner stops making Premium payments during that one to seven-year period, the Rider charge will only be assessed for nine policy years, plus the number of years that Premium payments were actually made.
For example, upon election, the policy owner anticipated making Premium payments for five years. Therefore, the policy owner could expect to have the Rider charge assessed for 14 years (nine years plus five years). However, the policy owner actually makes the last Premium payment in policy year three, and does not make any additional Premium payments. Since the policy owner did not get full "use" of the Rider (the policy owner only received three years worth of Premium Load replacement), the Rider charge will only be assessed for 12 policy years (nine years plus the three years' worth of benefit received).
If the policy terminates within the first 10 policy years, Nationwide will deduct from the Cash Surrender Value an amount to compensate it for the Premium Load waived, but not recovered, as a Rider charge. The amount deducted from the Cash Surrender Value will equal the product of the actual Premium Load replaced by the Rider (in dollars) and the percentage from the following table that corresponds to the number of years the policy has been In Force.

Policy Year 		  Percentage
1
   100%
2
   90%
3
   80%
4
   70%
5
   60%
6
   50%
7
   40%
8
   30%
9
   20%
10
   10%
11 and later
   0%
For example, the policy owner elected to replace the Premium Load for seven years. During the fifth policy year, the policy owner terminates the policy. During the five years the policy was In Force, $10,000 of Premium was paid. The amount of Premium Load that the Rider replaced is $400 ($40 for each $1,000 of Premium). Therefore, Nationwide will deduct $240 (60% of $400) from the policy's Cash Surrender Value.
The Adjusted Sales Load Life Insurance Rider Charge is deducted proportionally from the Sub-Account and Fixed Account allocations. Because the Adjusted Sales Load Life Insurance Rider Charge is deducted from the policy's Cash Value, purchasing this Rider could reduce the amount of Proceeds payable when the Death Benefit depends on Cash Value.
Children's Term Insurance Rider
Subject to underwriting approval, a policy owner may purchase term life insurance on the Insured's children at any time while the policy is In Force. If an insured child dies while the policy is In Force and before the Maturity Date, the policy pays a benefit to the named beneficiary. The insurance coverage for each insured child will continue (as long as the policy is In Force) until the earlier of: (1) the policy anniversary on or next following the date the Insured's child turns age 22; or (2) the policy anniversary on which the Insured would have reached Attained Age 65. Subject to certain conditions specified in the Rider, the Rider may be converted into a policy on the life of the insured child without evidence of insurability. The Rider will be effective until the Rider's term expires, until the benefit is paid, or until the Rider is terminated by written request to the Service Center.
Children's Term Insurance Rider Charge
A monthly Children's Term Insurance Rider Charge will be deducted if this Rider is elected. The Children's Term Insurance Rider Charge compensates Nationwide for providing term insurance on the lives of each Insured child. The Rider charge is $0.43 per $1,000 of the Children's Term Insurance Rider's Specified Amount and will be assessed as long as the policy is In Force and the Rider is in effect. The Rider charge will be the same, even if the number of children covered under the Rider changes. Nationwide may decline a request to add another child based on underwriting standards.
The Children's Term Insurance Rider Charge will be deducted proportionally from the Sub-Account and Fixed Account allocations. Because the Children's Term Insurance Rider Charge is deducted from the policy's Cash Value, purchasing this Rider could reduce the amount of Proceeds payable when the Death Benefit depends on Cash Value.
29
Long-Term Care Rider
The benefit associated with the Long-Term Care Rider is that, upon the Insured meeting certain eligibility requirements, the policy owner is paid a monthly benefit to assist them with the expenses associated with their nursing home care or home health care. Benefit payments represent an advance of a portion of the Base Policy Specified Amount which will ultimately reduce the Cash Surrender Value and Death Benefit. In addition, if the remaining Death Benefit is less than 10% of the initial Total Specified Amount when the Insured dies and the policy is In Force, a residual Death Benefit of 10% of the initial Total Specified Amount minus any Indebtedness and partial surrenders will be paid.
The maximum monthly benefit, which is determined by Nationwide at the time a request for benefits under the terms of the Rider is submitted, will be the lesser of:
1. 2% of Long-Term Care Specified Amount in effect; or
2. the per diem amount allowed by the Health Insurance Portability and Accountability Act times the number of days in the month.
The maximum lifetime benefit under any combination of Home Health Care benefits and Long-Term Care Facility benefits is equal to the lesser of the Long-Term Care Specified Amount or the initial Total Specified Amount minus Indebtedness and partial surrenders.
A policy owner may request to receive a monthly benefit less than the maximum subject to a minimum monthly benefit. Choosing a lesser amount could extend the length of the benefit period of the Long-Term Care Rider.
The Long-Term Care Specified Amount, elected at issue, represents the maximum accumulation of Long-Term Care Benefits available under the Long-Term Care Rider. This amount must be at least 10% of the Base Policy Specified Amount (including the Additional (insurance) Protection Rider) and no more than the Total Specified Amount.
Decreases in the Base Policy Specified Amount, and/or Additional (insurance) Protection Rider Specified Amount, if elected, will result in a corresponding decrease in Long-Term Care Rider Specified Amount only if the Total Specified Amount is less than the Long-Term Care Rider Specified Amount after the decrease.
State regulation of long-term care benefits will result in differences in this Rider's name, covered services, criteria for eligibility of benefit payment, cost of insurance charge factors, maximum monthly benefit amounts, minimum monthly benefit amounts, and availability of the 10% residual Death Benefit. State variations are subject to change without notice at any time. Contact the Service Center to obtain a copy of the Long-Term Care Rider applicable to the policy.
Availability
Subject to Nationwide's underwriting approval, the Long-Term Care Rider may be purchased at any time while the policy is In Force. If purchased after the Policy Date, Nationwide will require evidence of insurability. There is a free look period associated with this Rider. Within 30 days of receipt of the Rider, the policy owner may return it to the sales representative who sold it, or to the Service Center. The Rider will be void and related charges will be refunded to the policy owner, see To Cancel (Examination Right).
Invoking the Rider
To invoke this Rider, the Insured must be: (1) cognitively impaired or (2) unable to do at least two of the following activities of daily living: bathing, continence, dressing, eating, using the toilet facilities, or transferring (moving into or out of bed, chair, or wheelchair).
In addition, a 90-day waiting period, referred to as an "elimination period," must be satisfied before benefits are paid. Benefits will not be retrospectively paid for the elimination period. The elimination period can be satisfied by any combination of days of Long-Term Care Facility stay or days of Home Health Care, as those terms are defined in the Rider. These days of care or services need not be continuous, but must be accumulated within a continuous period of 730 days. The elimination period has to be satisfied only once while the Rider is in effect. The benefit associated with the Rider may not cover all your prospective long-term care costs. The benefits paid in association with the Rider are intended to be "qualified long-term care insurance" under federal tax law, and generally will not be taxable to the policy owner, see Taxes. See your tax advisor about the use of this Rider.
Terminating the Rider
This Rider will terminate when the maximum lifetime benefit under the Rider has been paid, the policy matures, the Insured dies, the Policy Guard Rider is invoked, the Rider is terminated by written request to the Service Center, or the policy is terminated.
30
Long-Term Care Referral Service
If the Rider is elected, the Insured will have access to a national long-term care services referral network via a toll-free telephone number. Services include free consultation and tailored information to assist in planning and implementing a care plan. These services are currently provided through a third party. There is no separate additional charge for this service. This service is subject to availability and may be modified, suspended, or discontinued at any time upon 30 days written notice.
Long-Term Care Rider Charge
A monthly Long-Term Care Rider Charge is deducted if this Rider is elected. The Long-Term Care Rider Charge compensates Nationwide for providing long-term care benefits upon the Insured meeting certain eligibility requirements. The Rider Charge is the product of the Long-Term Care Rider's Net Amount At Risk and a long-term care cost of insurance rate. Because this Rider has no Cash Value, the Net Amount At Risk is defined as the lesser of the Long-Term Care Rider's Specified Amount and the policy's Net Amount At Risk. The long-term care cost of insurance rate is based on Nationwide's expectations as to the Insured's potential need for long-term care over time and will vary by the Insured's sex, Attained Age (in some states issue age), underwriting class, and any Substandard Ratings.
The Long-Term Care Rider Charge will be deducted proportionally from the Sub-Accounts and Fixed Account allocations. Because the Long-Term Care Rider Charge is deducted from the Cash Value, electing this Rider could reduce the amount of Proceeds payable when the Death Benefit depends on Cash Value. Additionally, any benefits paid pursuant to this Rider will reduce the Cash Surrender Value and Death Benefit.
Note: Upon meeting the requirements for benefits under this Rider, the Long-Term Care Rider Charge will be waived for the duration of the Rider benefit payment period; however, all other monthly deductions will continue to be charged. Additionally, loans or partial surrenders will not be permitted while receiving benefits under the Rider. If the policy's Cash Surrender Value is insufficient to cover all other monthly deductions while benefits are being received under the Rider, the policy will not lapse and monthly deductions will be waived while the Rider benefit is being paid. This includes monthly deductions for other In Force Riders. Premium requirements for any death benefit guarantee feature of the policy or any elected Rider are not waived. Once the Insured is no longer receiving benefits associated with the Long-Term Care Rider, additional Premium may be necessary to prevent the policy from Lapsing.
Spouse Life Insurance Rider
The benefit associated with the Spouse Life Insurance Rider is a death benefit payable upon the death of the spouse named on the application ("Insured Spouse") to the designated beneficiary. If no beneficiary is designated, the benefit is payable to the Insured.
This Rider may be purchased at any time while the policy is In Force, subject to underwriting approval and the following age restrictions:
• the Insured must be between Attained Age 21 and 59 (this Rider is no longer available on or after the policy anniversary on which the Insured reaches Attained Age 59); and
• the Insured Spouse must be between Attained Age 18 and 69 at the time this Rider is elected.
This Rider will terminate on the earliest of: the policy anniversary on which the Insured Spouse reaches Attained Age 70, the date the Policy Guard Rider is invoked, the date the Rider is converted to a new policy, the date the policy matures, or until the Rider or policy is terminated by written request to the Service Center.
This Rider has a conversion right. The Insured Spouse may exchange this Rider's benefit for a level premium, level benefit, permanent plan of whole life insurance, subject to limitations.
Spouse Life Insurance Rider Charge
A monthly Rider charge is deducted if this Rider is elected. The Spouse Life Insurance Rider Charge compensates Nationwide for providing term insurance on the life of the Insured Spouse. The Rider charge is the product of the Spouse Life Insurance Rider's Specified Amount and the Insured Spouse life insurance cost of insurance rate. The Insured Spouse life insurance cost of insurance rate is based on Nationwide's expectations as to the mortality of the Insured Spouse. The Insured Spouse life insurance cost of insurance rate will vary by the Insured Spouse's sex, Attained Age, underwriting class, any Substandard Ratings, and the Spouse Life Insurance Rider's Specified Amount.
The Spouse Life Insurance Rider Charge will be deducted proportionally from the Sub-Account and Fixed Account allocations. Because the Spouse Life Insurance Rider Charge is deducted from Cash Value, purchasing this Rider could reduce the amount of Proceeds payable when the Death Benefit depends on Cash Value. Decreases in the Base Policy Specified Amount may result in a corresponding decrease in the Spouse Life Insurance Rider's Specified Amount.
31
Accidental Death Benefit Rider
Subject to Nationwide's underwriting approval, this Rider may be elected at any time. The Rider pays a benefit, in addition to the Death Benefit, to the named beneficiary upon the Insured's accidental death. The benefit continues until the Insured reaches Attained Age 70. The policy owner will be charged for this Rider: so long as the policy remains In Force and the Rider's term has not expired; until the benefit has been paid or until the policy owner terminates the Rider in writing at the Service Center.
The charge for this benefit is deducted from the policy's Cash Value, therefore this Rider could reduce the amount of Proceeds payable when the Death Benefit depends on Cash Value. Otherwise, the benefit of this Rider and the Death Benefit are independent of one another.
Accidental Death Benefit Rider Charge
The charge for this Rider compensates Nationwide for providing coverage in the event of the Insured's accidental death, meaning the Insured's death as a result of bodily injury caused by external, violent and accidental means from a cause other than a risk not assumed. The charge is the product of the Accidental Death Benefit Rider Specified Amount and the accidental death benefit cost of insurance rate. The accidental death benefit cost of insurance rate is based on Nationwide's expectations as to the likelihood of the Insured's accidental death. The accidental death benefit cost of insurance rate will vary by the Insured's sex, Attained Age, underwriting class and any Substandard Ratings.
Premium Waiver Rider
Subject to Nationwide's underwriting approval, the policy owner may purchase this Rider at any time.
Rider Benefit
The benefit associated with the Premium Waiver Rider is a monthly credit to the policy upon the Insured's total disability for six consecutive months not caused by a risk not assumed. Risks not assumed vary by state. Contact the Service Center to obtain a copy of the Premium Waiver Rider applicable to the policy.
The amount credited to the policy will be the lesser of:
• the Premium specified by the policy owner; or
• the average actual monthly Premiums paid over the last 36 months prior to the disability (or such shorter period of time that the policy has been In Force).
The monthly credit applied pursuant to the Rider may not be sufficient to keep the policy from Lapsing. Purchasing this Rider could help preserve the Death Benefit.
Benefit Duration
If the Insured is younger than age 63 at the time of the total disability, the Rider coverage continues until the Insured turns age 65. If the Insured is age 63 or older at the time of the total disability, the Rider coverage continues for two years. This Rider is effective until the Rider's term expires (unless a benefit is being paid under the Rider) or until the Rider is terminated by written request to the Service Center.
Interaction with the Deduction (of Fees and Expenses) Waiver Rider
This Rider cannot be elected if the Deduction (of Fees and Expenses) Waiver Rider is elected. During the first three years from the Policy Date, the benefit payable under that Rider is sufficient to keep the policy from Lapsing where as the benefit payable under the Premium Waiver Rider is not sufficient to keep the policy from Lapsing, see Deduction (of Fees and Expenses) Waiver Rider.
Premium Waiver Rider Charge
A monthly Premium Waiver Rider Charge will be deducted if this Rider is elected. The Premium Waiver Rider Charge compensates Nationwide for crediting the policy with the amount of scheduled due and payable Premium payments upon the Insured's total disability for six consecutive months.
The Rider Charge is the product of the Rider's benefit (the monthly policy credit) and the premium waiver cost rate. The premium waiver cost rate is based on Nationwide's expectations as to likelihood of the Insured's total disability for six consecutive months. The premium waiver cost rates will vary by policy based on the Insured's sex, Attained Age, underwriting class, and any Substandard Ratings.
The Premium Waiver Rider Charge will be deducted proportionally from the Sub-Account allocations and Fixed Account. Because the Premium Waiver Rider Charge is deducted from Cash Value, purchasing this Rider could reduce the amount of Proceeds payable when the Death Benefit depends on Cash Value.
32
Change of Insured Rider
The benefit associated with the Change of Insured Rider is that the policy owner may designate a new Insured, subject to insurability and other conditions. The costs and benefits 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. This Rider can be elected at any time while the policy is In Force.
Change of Insured Rider Charge
There is no charge associated with the Change of Insured Rider.
Additional (insurance) Protection Rider
The benefit associated with the Additional (insurance) Protection Rider is term life insurance on the Insured, in addition to that under the base policy. The Death Benefit Proceeds attributable to the Additional (insurance) Protection Rider are payable to the beneficiary upon the Insured's death if the Additional (insurance) Protection Rider is still In Force. The Additional (insurance) Protection Rider has no cash value and no loanable value nor does it modify any cash or loan values of the base policy. Policy owners should request illustrations showing the impact of purchasing coverage with and without theAdditional (insurance) Protection Rider.
Subject to Nationwide's underwriting approval, this Rider may be purchased at any time while the policy is In Force and until the Insured reaches Attained Age 85. If purchased after the Policy Date, Nationwide will require evidence of insurability. The death benefit option for the base policy will also be the death benefit option for the Additional (insurance) Protection Rider.
The Additional (insurance) Protection Rider coverage terminates on the earliest of the following dates:
• The date the Insured dies;
• The Maturity Date of the base policy;
• The date the Rider and/or base policy Lapse; or
• The date the policy terminates for any reason.
The policy owner cannot extend the Additional (insurance) Protection Rider coverage beyond the policy's Maturity Date, see Extending Coverage Beyond the Maturity Date.
Additional (insurance) Protection Rider Impact
Cost of Insurance Charges
Electing coverage under the Additional (insurance) Protection Rider, as opposed to electing coverage only under the base policy, should lower the policy owner's overall cost of insurance. This is due in part to the broker-dealer firm receiving less overall compensation for selling a policy with the Additional (insurance) Protection Rider. It is also possible that less Premium may be required to maintain to the Death Benefit over the life of the policy or that increased Premium may be needed if the Additional (insurance) Protection Rider is not purchased.
Guaranteed Policy Continuation Provision
This provision protects the policy from Lapse under certain conditions, see Guaranteed Policy Continuation Provision. However, coverage elected under the Additional (insurance) Protection Rider is not covered by this provision beyond the fifth policy year. In comparison, the base policy may provide longer coverage, see Lapse.
Additional (insurance) Protection Rider Charge
A monthly Additional (insurance) Protection Rider Charge will be deducted if the Rider is elected. The Additional (insurance) Protection Rider Charge compensates Nationwide for providing term life insurance on the Insured.
The monthly cost of insurance charge for this Rider is determined by multiplying the Rider monthly cost of insurance rate by the Rider death benefit. The Rider death benefit will be based on the elected Death Benefit and may vary monthly. The Additional (insurance) Protection Rider cost of insurance rate is based on Nationwide's expectation as to the Insured's mortality and expense experience. The Additional (insurance) Protection Rider cost of insurance rate will vary by the Insured's sex, Attatined Age, underwriting class, any Substandard Ratings, and the Total Specified Amount.
The Additional (insurance) Protection Rider Charge will be deducted proportionally from the Sub-Account and Fixed Account allocations. Because the Additional (insurance) Protection Rider Charge is deducted from Cash Value, purchasing this Rider could reduce the amount of Proceeds payable when the Death Benefit depends on the Cash Value.
33
Deduction (of Fees and Expenses) Waiver Rider
Subject to Nationwide's underwriting approval, this Rider can be elected at any time so long as the policy is In Force and it is before the Policy Date on or following the date the Insured reaches age 59.
Rider Benefit
The benefit associated with this Rider is a waiver of the policy's monthly deductions if the Insured becomes totally disabled, as defined in the Rider, for at least six consecutive months. No benefit is available if total disability results from a risk not assumed; risks not assumed may vary by state. Contact the Service Center to obtain a copy of the Deduction (of Fees and Expenses) Waiver Rider applicable to the policy.
Disability During the First Three Years from the Policy Date
If the Insured becomes totally disabled for six consecutive months within the first three years from the Policy Date, the benefit is a credit to the policy in an amount necessary to keep the policy In Force as opposed to a waiver of the monthly deductions. The Cash Value will increase by the amount in which the minimum monthly premium exceeds the monthly deductions, just as if the minimum monthly premium had been paid.
Disability Following the First Three Years from the Policy Date
If the Insured becomes totally disabled for six consecutive months any time after the first three years from the Policy Date, the benefit is a waiver of the policy's monthly deductions. For example, if the policy owner becomes totally disabled for six consecutive months two years and eight months from the Policy Date, for the first four months, the benefit would be a credit equal to the amount necessary to keep the policy In Force. After that, the Rider's benefit becomes a waiver of the policy's monthly charges.
Following the third year from the Policy Date, the Rider's benefit alone may not be sufficient to keep the policy from Lapsing. The policy owner may need to make additional premium payments to prevent Lapse. However, while the Rider's benefit is being paid, it will cost less on a monthly basis to keep the policy In Force.
Benefit Duration
The benefit duration depends on the Insured's age when total disability begins. Before age 60, the benefit continues for as long as the Insured is totally disabled (even if that disability extends past when the Insured reaches age 65) The benefit will end if you invoke the Policy Guard Rider. Between ages 60 and 63, the benefit continues until the Insured turns age 65. From age 63, the benefit lasts only for two years.
Interaction with Premium Waiver Rider 

This Rider cannot be elected if the Premium Waiver Rider is elected. During the first three years from the Policy Date, the benefit payable under this Rider appears to be the same as the benefit payable under the Premium Waiver Rider, i.e., both Riders credit amounts to the policy. However, the monthly credit under this Rider will be sufficient to keep the policy from Lapsing but only during the first three years from the Policy Date. The benefit under the Premium Waiver Rider is not guaranteed to be sufficient to keep the policy from Lapsing, see Premium Waiver Rider.
Deduction (of Fees and Expenses) Waiver Rider Charge
The charge for this Rider compensates Nationwide for the risks assumed in crediting and/or waiving policy charges during the Insured's total disability. The charge is the product of the amount of periodic charges deducted from the policy on a monthly basis (excluding the cost for this Rider) and the deduction waiver cost rate. The deduction waiver cost rate is based on Nationwide's expectations as to the likelihood of the Insured's total disability for six consecutive months. The deduction waiver cost rate varies by the Insured's sex, Attained Age, underwriting class, and any Substandard Ratings.
The charge for this Rider is deducted proportionately from the Sub-Account and Fixed Account allocations; therefore, purchasing this Rider could reduce the amount of Proceeds payable when the Death Benefit depends on Cash Value.
Policy Guard Rider
The Policy Guard Rider prevents the policy from Lapsing due to Indebtedness by providing a guaranteed paid-up insurance benefit. The Rider is designed to enable the policy owner of a policy with a substantially depleted Cash Value, due to Indebtedness, to potentially avoid the negative tax consequences associated with Lapsing the policy.
Note: Neither the IRS nor the courts have ruled on the tax consequences of invoking the Policy Guard Rider. It is possible that the IRS or a court could assert that the Indebtedness should be treated as a distribution, all or a portion of which could be taxable when the Rider is invoked. Consult with a tax advisor regarding the risks associated with invoking this Rider.
34
Availability
All policies for which the guideline premium/cash value corridor life insurance qualification test is elected will automatically receive the Policy Guard Rider (state law permitting). The Rider is dormant until specifically invoked by the policy owner, at which time a one-time charge is assessed.
This Rider is not available for policies for which the cash value accumulation life insurance qualification test was elected.
Eligibility
The policy owner is eligible to invoke the Rider upon meeting the following conditions:
• Indebtedness reaches a certain percentage of the policy's Cash Value (the percentage will vary based upon the Insured's Attained Age);
• The Insured is Attained Age 75 or older;
• The policy is currently In Force and has been In Force for at least 15 years;
• The policy's Cash Value is at least $100,000; and
• All amounts available to be withdrawn without the imposition of federal income tax have been withdrawn.
The first time the policy's Indebtedness reaches the percentage that makes the policy eligible for the Rider, Nationwide will notify the policy owner of the policy's eligibility to invoke the Rider. The letter will also describe the Rider, its cost, and its guaranteed benefits. The Rider may be invoked at any time, provided that the above conditions are met.
Note: The Long-Term Care Rider, the Spouse Life Insurance Rider, and the Deduction (of Fees and Expenses) Waiver Rider will terminate or will need to be terminated by the policy owner prior to invoking the Policy Guard Rider. An election to invoke the Policy Guard Rider is irrevocable.
After Nationwide receives a request to invoke the Rider, Nationwide will adjust the policy as follows:
1. If not already in effect, the death benefit option will be changed to Death Benefit Option 1.
2. The Total Specified Amount will be adjusted to equal the lesser of: (1) the Total Specified Amount immediately before the Rider was invoked; or (2) the Total Specified Amount that will cause the Death Benefit to equal the Minimum Required Death Benefit immediately after the charge for the Rider is deducted.
3. Any non-loaned Cash Value (after deduction of the Policy Guard Rider charge) will be transferred to the Fixed Account, where it will earn the minimum guaranteed fixed interest rate of the base policy (shown on the Policy Data Page).
After the above adjustments are made, the Indebtedness will continue to grow at the policy's loan charged rate, and the amount in the policy loan account will continue to earn interest at the policy's loan crediting rate. No additional policy charges will be assessed. No further loans may be taken from the policy and no withdrawals may be taken from the policy (except for a full policy surrender). Cash Value may not be transferred out of the Fixed Account. The Death Benefit will be the greater of the Total Specified Amount or the Minimum Required Death Benefit. The policy will remain as described above for the duration of the policy.
Policy Guard Rider Charge
The Policy Guard Rider Charge is a one-time charge deducted at the time the Rider is invoked, and is assessed against the Cash Value allocated to the Sub-Accounts and the Fixed Account. The charge is intended to cover the administrative costs and to compensate Nationwide for the risks associated with the Rider's guaranteed paid-up death benefit. The charge is the product of the policy's Cash Value and an age-based factor shown in the Rider.
If the Cash Value less Indebtedness is insufficient to satisfy the charge, the Rider cannot be invoked without repaying enough Indebtedness to cover the charge.
Invoking the Rider could reduce the amount of Proceeds payable when the Death Benefit depends on Cash Value. Additionally, any benefits paid pursuant to this Rider will reduce the Cash Surrender Value.
Policy Owner Services
Dollar Cost Averaging
Dollar cost averaging is an investment strategy designed to reduce the investment risks associated with market fluctuations and promote a more stable Cash Value and Death Benefit over time. A policy owner may elect to participate in the dollar cost averaging program at the time of application or at a later date by submitting an election form to the Service
35
Center. An election to participate in the program that is submitted after application will be effective at the end of the Valuation Period coinciding with the date requested or, if that date has passed or no date is specified, at the end of the Valuation Period during which the request was received, or the end of the free look period, whichever is later.
There is no charge for dollar cost averaging and dollar cost averaging transfers do not count as transfer events. Dollar cost averaging transfers will continue to be processed until there is no more value left in the originating investment option(s) or until a policy owner instructs Nationwide to terminate the service. Policy owners may direct Nationwide to automatically transfer specific amounts from the Fixed Account and the:
• Federated Insurance Series - Federated Quality Bond Fund II: Primary Shares
• Nationwide Variable Insurance Trust - Federated NVIT High Income Bond Fund: Class III
• Nationwide Variable Insurance Trust - NVIT Government Bond Fund: Class I
• Nationwide Variable Insurance Trust - NVIT Money Market Fund: Class I
to any other Sub-Account. Certain Sub-Accounts may or may not be available depending on when the policy was purchased, see Appendix A: Sub-Account Information for details on Sub-Account availability. Transfers from the Fixed Account must be no more than 1/30th of the Fixed Account value at the time the program is elected.
Nationwide does not assure the success of these strategies and cannot guarantee that dollar cost averaging will result in a profit or protect against a loss. A policy owner should carefully consider his or her financial ability to continue these programs over a long enough period of time to purchase Accumulation Units when their value is low, as well as when their value is high. Nationwide may modify, suspend, or discontinue these programs at any time. Nationwide will notify policy owners in writing 30 days before doing so.
Enhanced Dollar Cost Averaging
Periodically, Nationwide may offer enhanced dollar cost averaging programs. When offered, these programs will be available only at the time of application. All or a portion of the initial Premium may be applied to a program. Subsequent Premium is not eligible for inclusion in the program. Under an enhanced dollar cost averaging program, the interest rate credited to the initial Premium allocated to the Fixed Account will be greater than the interest rate credited to standard Fixed Account allocations. Enhanced dollar cost averaging programs will last for one year and Cash Value attributable to the enhanced dollar cost averaging program will be transferred from the Fixed Account to the selected Sub-Account(s) based on the following schedule:
Beginning of Month   Fraction of Cash
Value Transferred
2
   1/11
3
   1/10
4
   1/9
5
   1/8
6
   1/7
7
   1/6
8
   1/5
9
   1/4
10
   1/3
11
   1/2
12
   Remaining Amount
Asset Rebalancing
A policy owner may elect to participate in an asset rebalancing program. Asset rebalancing involves the automatic rebalancing of the Cash Value in the chosen Sub-Accounts (up to 20) on a periodic basis. Cash Value allocated to the Fixed Account is not eligible for asset rebalancing. A policy owner can schedule asset rebalancing to occur every three, six, or 12 months on days when Nationwide prices Accumulation Units. There is no charge for asset rebalancing and it does not count as a transfer event.
A policy owner may elect to participate in an asset rebalancing program at the time of application or at a later date by submitting an election form to the Service Center. Unless elected otherwise, asset rebalancing will not affect the allocation of Premiums paid after beginning the program. Manual transfers will not automatically terminate the program. Termination of asset rebalancing will only occur as a result of specific instruction by a policy owner to do so. Nationwide may modify, suspend, or discontinue asset rebalancing programs at any time.
36
Automated Income Monitor
Automated Income Monitor is an optional systematic partial surrender and/or policy loan program that may be elected at any time, at no additional cost. This program is only available to policies that are not modified endowment contracts.
Automated Income Monitor programs are intended for policy owners who wish to take an income stream of scheduled payments from the Cash Value of the policy. The income stream is generated via partial surrenders until the policy cost basis is depleted, then through policy loans. Taking partial surrenders and/or policy loans may result in adverse tax consequences, will reduce policy values and therefore limit the ability to accumulate Cash Value, and may increase the likelihood the policy will Lapse. Before requesting the Automated Income Monitor program, policy owners should consult with financial and tax advisors.
At the time of application for a program, Nationwide will provide policy owners with an illustration of the proposed income stream and impacts to the Cash Value, Cash Surrender Value, and Death Benefit. Policy owners must submit this illustration along with an application when electing an Automated Income Monitor program. Programs will commence at the beginning of the next monthly anniversary after Nationwide receives the election form and illustration. On each policy anniversary thereafter Nationwide will provide an updated In Force illustration to assist policy owners in determining whether to continue, modify, or discontinue an elected program. Policy owners may request modification or termination of a program at any time by written request to the Service Center.
A policy owner's program will be based on the policy's Cash Surrender Value at the time of election and each succeeding policy anniversary, and on the following elections:
1. Payment type:
a. Fixed Amount: If a policy owner elected payments of a fixed amount, the amount received will not vary with policy Investment Experience; however, the length of time the elected payment amount can be sustained will vary based on the illustration assumptions below and the policy's Investment Experience; or
b. Fixed Duration: If a policy owner elected payments for a fixed duration, the amount received during the first year will be based on the illustration assumptions below. After the first year, the amount will vary based on the illustration assumptions and policy Investment Experience to maintain the elected duration.
2. Illustration assumptions:
a. an assumed variable rate of return specified by the policy owner from the available options stated in the election form;
b. minimum Cash Surrender Value targeted by the policy owner to have remaining on the policy's Maturity Date, or other date specified by the policy owner. This dollar amount is used to calculate available income. It is not guaranteed to be the Cash Surrender Value on the specified date;
c. a policy owner may also request a change of death benefit option, or a decrease in Base Policy Specified Amount to be effective in conjunction with commencing a program or to occur at a future date; and
d. payment frequency: monthly; quarterly; semi-annually; or annually. Payments on a monthly basis are made by direct deposit (electronic funds transfer) only.
Generally, higher variable rate of return assumptions, a lower target Cash Surrender Value, and Death Benefit Option 1, will result in larger projected payments or longer projected durations. However, larger payments or longer duration may increase the likelihood the policy will Lapse.
Note: Policy owners are responsible for monitoring the policy to prevent Lapse. Nationwide will provide annual In Force illustrations based on current Cash Surrender Values and the elected illustration assumptions to assist policy owners with preventing Lapse. Policy owners may request modification or termination of a program at any time by written request to the Service Center.
Automated Income Monitor programs are subject to the following additional conditions:
1. To prevent adverse tax consequences, a policy owner can authorize Nationwide to make scheduled payments via policy loan when:
a. the policy's cost basis is reduced to zero;
b. a partial surrender within the first 15 policy years would be a taxable event;
c. or to prevent the policy from becoming a MEC, see Taxes.
  Note: Partial surrenders and policy loans taken under the Automated Income Monitor program are subject to the same terms and conditions as other partial surrenders and policy loans, see Partial Surrender and Policy Loans.
37
2. While a program is in effect, no Premium payment reminder notices will be sent; however, Premium payments will be accepted.
3. Programs will terminate on the earliest of the following:
a. Nationwide's receipt at the Service Center of a written request to terminate participation;
b. at the time the policy enters a Grace Period or terminates for any reason;
c. at the time of a requested partial surrender or policy loan outside the program;
d. upon a change of policy owner;
e. for income based on a fixed duration, the end of the period the policy owner specified at the time of election;
f. on any policy anniversary when the current Cash Surrender Value is less than or equal to the target Cash Surrender Value assumption the policy owner specified;
g. at any time the scheduled partial surrender or policy loan would cause the policy to fail to qualify as life insurance under Section 7702 of the Code; or
h. the policy's Maturity Date.
Additionally, the program will terminate when one of the following Riders is invoked or begins providing benefits: the Policy Guard Rider and the Long-Term Care Rider.
Nationwide will notify policy owners upon termination of an Automated Income Monitor program. In addition, Nationwide may modify, suspend, or discontinue Automated Income Monitor programs at any time. Nationwide will notify policy owners in writing 30 days before doing so.
Policy Loans
After the expiration of the free look period and while the policy is In Force, a policy owner may take a policy loan. Loan requests must be submitted in writing to the Service Center.
Taking a policy loan may increase the risk of Lapse and may result in adverse tax consequences. Unpaid loan interest charges accrue daily at a compounded annual interest rate and can cause the policy's Indebtedness to grow significantly. The policy owner should request an illustration demonstrating the impact of a policy loan on the policy's Cash Value, Cash Surrender Value, and Death Benefit Proceeds.
Loan Amount
The minimum loan amount is $200. At the time of a loan request, policy Indebtedness cannot exceed 90% of the Cash Value allocated to the Sub-Accounts plus 100% of the Cash Value allocated to the Fixed Account,  plus 100% of the policy loan account, less any Surrender Charge. Nationwide pays the policy loan to the policy owner with assets from its general account. Nationwide then uses the policy's Cash Value as collateral for the loan as described below.
Collateral and the Policy Loan Account
As collateral for the policy loan, Nationwide deducts an amount equal to the policy loan from the policy's Cash Value. Collateral amounts are transferred from the Cash Value to the policy loan account (which is part of Nationwide's general account). Because the policy loan account does not participate in the Investment Experience of the Sub-Accounts, policy loans can permanently affect the Death Benefit Proceeds and the Cash Value of the policy, even if repaid. The policy loan account may be subject to Nationwide's creditors in the event of insolvency.
Amounts transferred from the policy's Cash Value equal to the policy loan account are deducted from the Sub-Accounts in the same proportion as the Sub-Account allocations, unless the policy owner has instructed otherwise. Nationwide will only transfer amounts from the Fixed Account if the loan amount exceeds 90% of the Cash Value allocated to the Sub-Accounts.
The policy owner will earn interest on the collateral held in the policy loan account. Interest will accrue daily at no less than the guaranteed minimum rate stated on the Policy Data Pages. The interest earned on the policy loan account may be different than the rate earned on Cash Value allocated to the Fixed Account.
Interest Charged
Nationwide charges interest against policy Indebtedness. Indebtedness is the total amount of all outstanding policy loans, including principal and compounded interest due. The maximum interest rate Nationwide may charge against Indebtedness is 3.90% per annum, see In Summary: Fee Tables for current interest charged rates. Rates may change and may vary by policy year. Policy loan interest charges may provide revenue for risk charges and profit.
38
If policy loan interest is not paid when due, policy Indebtedness will continue to compound at the interest rate in effect, see When Interest is Charged and Credited below. If not paid when due, Nationwide will deduct an amount equal to the unpaid interest from the policy's Cash Value and add it to the policy loan account causing the original policy loan amount (now, "Indebtedness") to increase by the amount of the unpaid interest charged. Amounts deducted from the policy's Cash Value as unpaid interest charges will be deducted from the Sub-Accounts and the Fixed Account in the same manner as a new loan.
Note: Over time, unpaid loan interest charges can cause the policy's Indebtedness to be significant. In some cases, policy Indebtedness may be significant enough to cause the policy to Lapse. In general, it is advantageous to repay Indebtedness and at a minimum, the interest charged on Indebtedness, at least annually.
Indebtedness is considered a part of the policy's Cash Value, therefore, upon a full surrender, Lapse, or maturity, the amount received in the original loan request(s), plus unpaid loan interest charged is considered "received" under the Code and may result in adverse tax consequences, see Surrendering the Policy; Maturity in Taxes.
When Interest is Charged and Credited
Interest charged against Indebtedness accrues daily. Interest earned on collateral also accrues daily. Nationwide will deduct interest charged on Indebtedness from the policy's Cash Value, and credit interest earned on collateral to the Cash Value:
• Annually, at the end of a policy year;
• At the time a new loan is requested;
• When a loan repayment is made;
• Upon the Insured's death;
• Upon policy Lapse and/or;
• Upon a full surrender of the policy.
In most cases, the interest earned on collateral and credited to the Cash Value will be less and in some cases, significantly less, than the interest charged against the Cash Value.
Repayment
The policy owner may repay all or part of policy Indebtedness at any time while the policy is In Force. The minimum loan repayment amount, if any, is stated in the policy. The policy owner should contact the Service Center to obtain loan pay-off amounts.
Note: Interest earned on collateral is not deducted from Indebtedness to calculate loan pay off amounts. If a loan repayment is made, the policy owner's Cash Value is credited with interest earned on collateral and the amount of the loan repayment is deducted from the policy's Indebtedness.
Nationwide will treat any payments made as Premium payments, unless the policy owner specifies that the payment should be applied against the policy's Indebtedness. It may be beneficial for the policy owner to repay Indebtedness before making additional Premium payments because Premium Load charges are deducted from Premium payments but not from loan repayments.
If the policy owner makes a loan repayment, it will be applied to the Sub-Accounts and the Fixed Account in accordance with the allocation instructions in effect at the time the payment is received, unless the policy owner indicates otherwise.
Repaying Indebtedness will cause the Death Benefit and net 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, including Rider charges. A policy owner can avoid Lapsing the policy by paying the amount required by the Guaranteed Policy Continuation Provision, or, if elected, by invoking the Policy Guard Rider to prevent the policy from Lapsing due to Indebtedness. Before any Lapse, there is a Grace Period during which a policy owner can take action to prevent the Lapse. Subject to certain conditions, a policy owner may reinstate a policy that has Lapsed.
Guaranteed Policy Continuation Provision
The policy provides for a Guaranteed Policy Continution Period. The policy will not Lapse during the Guaranteed Policy Continution Period if the policy owner pays the Policy Continuation Premium Amount amount shown on the Policy Data Pages.
39
The Policy Continuation Premium Amount required will vary by the Insured's age, sex, underwriting class, any Substandard Ratings, the Total Specified Amount and any Riders elected.
If a policy owner has made any changes to the policy after it is issued, including any policy loans or partial surrenders, increases or decreases to the Total Specified Amount, adding or terminating a Rider, and/or changing the death benefit option, the Policy Continuation Premium Amount may change. A change will result in reissued Policy Data Pages which will show the Policy Continuation Premium Amount. Upon request and for no charge, Nationwide will determine whether Premium payments, minus any Indebtedness and partial surrenders, are sufficient to keep the Guaranteed Policy Continuation Provision in effect.
The Guaranteed Policy Continution Period will begin when Nationwide issues the policy and will continue for the lesser of 30 years, or the number of years until the Insured reaches Attained Age 65, from the Policy Date. For policies issued on Insured's age 55 or older on the Policy Date, the Guaranteed Policy Continution Period is 10 years.
When the Guaranteed Policy Continution Period ends, if the Cash Surrender Value remains insufficient to cover the monthly policy charges, the policy is at risk of Lapsing and a Grace Period will begin. There is no separate additional charge for the Guaranteed Policy Continuation Provision.
Grace Period
If the Cash Surrender Value on any monthly anniversary date is not sufficient to cover the current monthly deductions, then a Grace Period will begin. At the beginning of a Grace Period, the policy owner will receive a notice from Nationwide that will indicate the amount of Premium that must be paid to avoid Lapsing the policy. This amount is equal to the lesser of four times the current monthly deductions, or, the Premium that will bring the guaranteed policy continuation provision back into effect. If not paid within 61 days, the policy and all Riders will Lapse.
The Grace Period will not alter the operation of the policy or the payment of Proceeds.
Reinstatement
A policy owner may reinstate a Lapsed policy by:
(1) submitting, at any time within three years after the end of the Grace Period (or longer if required by state law) and before the Maturity Date, a written request to the Service Center to reinstate the policy;
(2) providing evidence of insurability satisfactory to Nationwide;
(3) paying sufficient Premium to keep the policy In Force for three months (or less if required by state law) from the date of reinstatement, or, if the policy is in the Guaranteed Policy Continution Period, paying the lesser of (a) and (b) where:
(a) is the amount of Premium sufficient to keep the policy In Force for three months from the date of reinstatement; and
(b) is the amount of Premium sufficient to bring the Guaranteed Policy Continuation Provision into effect;
(4) paying sufficient Premium to cover all policy charges that were due and unpaid during the Grace Period; and
(5) repaying or reinstating any Indebtedness that existed at the end of the Grace Period.
The policy owner may also reinstate coverage under certain Riders subject to satisfactory evidence of insurability.
If the policy is reinstated, the Cash Value on the date of reinstatement will be set equal to the lesser of the Surrender Charge corresponding to the policy year in which the policy is reinstated or the Cash Value at the end of the most recent Grace Period. Nationwide will add any Premiums or loan repayments that were made to reinstate the policy to the Cash Value.
The Sub-Account allocations that were in effect at the start of the Grace Period will be reinstated, unless the policy owner indicates otherwise.
Surrenders
Full Surrender
The policy may be surrendered for the Cash Surrender Value at any time while it is In Force. A surrender will be effective as of the date Nationwide receives the policy owner's written surrender request at the Service Center. Nationwide may also require the policy owner to return the policy. Nationwide may postpone payment of that portion of the Cash Surrender Value attributable to the Fixed Account for up to six months.
40
Policy Restoration after a Full Surrender
Prior to the Insured's death, Nationwide will permit restoration of a surrendered policy pursuant to established procedures to meet the requirements of state insurance law regarding the replacement of life insurance (i.e., use of the Proceeds from a surrendered policy to purchase a new policy). Restored policies will be treated as if they were never surrendered for all purposes, including Investment Experience, interest, and deduction of charges, see Policy Restoration Procedure in the Statement of Additional Information.
Partial Surrender
After the policy has been In Force for one year, the policy owner may request a partial surrender of the policy's Cash Surrender Value. During the first 10 policy years, the amount of a partial surrender cannot exceed 10% of the Cash Surrender Value as of the beginning of the policy year. Nationwide may limit partial surrenders to one per year from the Policy Date. The minimum amount of any partial surrender request is $200.
When a partial surrender is taken, Nationwide will reduce the Cash Value by the partial surrender amount. The Base Policy Specified Amount will also be reduced by the amount necessary to prevent an increase in the Net Amount at Risk. However, the reduction to the Base Policy Specified Amount will not be greater than the excess of the partial surrender amount over the preferred partial surrender amount (a preferred partial surrender is a partial surrender that occurs before the 15th policy anniversary and does not exceed 10% of the Cash Surrender Value as of the beginning of the policy year). In any event, a partial surrender will reduce the Cash Value in each Sub-Account the same proportion as the current allocations.
Partial surrenders may be subject to income tax penalties. They could also cause the policy to become a "modified endowment contract" under the Code, which could change the income tax treatment of any distribution from the policy, see Periodic Withdrawals, Non-Periodic Withdrawals, and Loans.
Reduction of Base Policy Specified Amount on a Partial Surrender
Nationwide will reduce the Cash Value of the policy by the amount of any partial surrender in the same proportion as how Cash Value is allocated among the Sub-Accounts. Nationwide will only reduce the Cash Value attributable to the Fixed Account when allocations in the Sub-Accounts are insufficient to cover the amount of the partial surrender.
Nationwide may reduce the Base Policy Specified Amount to ensure that the Net Amount At Risk does not increase due to a partial surrender. Because the policy's Net Amount At Risk is the same before and after the reduction, a partial surrender by itself does not alter the policy's cost of insurance. The policy's charges going forward will be based on a new Base Policy Specified Amount that will change the calculation of those charges. Depending on changes in variables such as the Cash Value, these charges may increase or decrease after the reduction in Base Policy Specified Amount. However, Nationwide will not reduce the Base Policy Specified Amount when a preferred partial surrender is taken. A preferred partial surrender is a surrender taken before the 15th year from the Policy Date, the maximum aggregate annual amount of which is no more than 10% of the policy's Cash Surrender Value as of the beginning of that year.
Any reduction to the Base Policy Specified Amount will be made in the following order:
• against the most recent increase in the Base Policy Specified Amount;
• against the next most recent increases in the Base Policy Specified Amount in succession; and
• against the Base Policy Specified Amount under the original application.
The Death Benefit
Calculation of the Death Benefit
The Death Benefit will be calculated when Nationwide has received (at the Service Center) all information required to process the claim for Death Benefit Proceeds, including, but not limited to, proof that the Insured has died and any other information Nationwide may reasonably require. The Death Benefit may be subject to an adjustment if an error or misstatement was made upon application, or if the Insured dies by suicide.
While the policy is In Force, the Death Benefit will never be less than the Base Policy Specified Amount. The Death Benefit will depend on the death benefit option elected, certain Riders, and the tax test elected as discussed in greater detail below. The Death Benefit may vary with the Cash Value of the policy, which is affected by Investment Experience, Indebtedness, and any due and unpaid monthly deductions that accrued during a Grace Period.
41
Death Benefit Options
Policy owners have a choice of one of three available death benefit options under the policy. If a death benefit option is not selected, Nationwide will issue the policy with Death Benefit Option 1. Not all death benefit options are available in all states.
Note: The Death Benefit will be the greater of the amount produced by the death benefit option in effect on the date of the Insured's death or the Minimum Required Death Benefit, see The Minimum Required Death Benefit.
Death Benefit Option 1: The Death Benefit will be the Total Specified Amount as of the Insured's date of death.
Death Benefit Option 2: The Death Benefit will be the Total Specified Amount plus the Cash Value as of the Insured's date of death.
Death Benefit Option 3: The Death Benefit will be the Total Specified Amount plus the accumulated premium account (which consists of all Premium payments plus interest), less any partial surrenders, as of the Insured's date of death.
The interest rate attributable to the accumulated premium account is referred to as the Death Benefit Option 3 Interest Rate and is stated on the Policy Data Page. The amount of the accumulated premium account will be no less than zero and no greater than twice the Total Specified Amount.
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 the policy is issued, 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.
If a specific test is not elected, Nationwide will issue the policy with the guideline premium/cash value corridor test. If the cash value accumulation test is elected, the Policy Guard Rider is not available.
Cash Value Accumulation Test
The cash value accumulation test determines the Minimum Required Death Benefit by multiplying the Cash Value by a percentage set out in the Code. The percentages depend upon the Insured's age, sex, 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.
Guideline Premium/Cash Value Corridor Test
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.
In deciding which test to elect for the policy, consider the following:
• The cash value accumulation test generally allows flexibility to pay more Premium, subject to Nationwide's approval of any increase in the policy's Net Amount At Risk that would result from higher Premium payments. Premium payments under the guideline premium/cash value corridor test are limited by Section 7702 of the Code.
• Generally, the guideline premium/cash value corridor test produces a higher Death Benefit in the early years of the policy while the cash value accumulation test produces a higher Death Benefit in the policy's later years.
• Monthly cost of insurance charges that vary with the amount of the Death Benefit may be greater during the years when the elected test produces a higher Death Benefit.
Regardless of which test is elected, Nationwide will monitor compliance to ensure that the policy meets the statutory definition of life insurance under the Code. As a result, the Proceeds payable under a policy should be excludable from gross income of the beneficiary for federal income tax purposes. Nationwide may refuse additional Premium payments or return Premium payments so that the policy continues to meet the Code's definition of life insurance. Consult a qualified tax advisor on all tax matters involving the policy.
42
Changes in the Death Benefit Option
After the first year from the Policy Date, the policy owner may elect to change the Death Benefit option under the policy from either Option 1 to Option 2, or from Option 2 to Option 1. The policy owner may not change from or to Option 3. Nationwide will permit only one change of Death Benefit option per policy year. The effective date of a change will be the monthly anniversary date following the date the change is approved.
For any change in the Death Benefit option to become effective, the Cash Surrender Value after the change must be sufficient to keep the policy In Force for at least three months.
Upon effecting a death benefit option change, the Total Specified Amount may be changed (either increased or decreased) so that the Net Amount At Risk is the same before the change and after the change on the date of the change. Because the policy's Net Amount At Risk remains the same before and after the change, changing the death benefit option and preserving the Net Amount At Risk by itself does not alter the policy charges. The policy charges going forward will be based on the adjusted Total Specified Amount. Depending on changes in factors such as fluctuations in the policy's Cash Value, these charges may increase or decrease after the death benefit option change.
The policy owner should request an illustration demonstrating the impact of a change in the policy's death benefit option.
Nationwide will refuse a death benefit option change that would reduce the Total Specified Amount to a level where the Premium already paid would exceed any premium limitations under the Code.
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 Premium paid exceeding any premium limitations under Section 7702 of the Code.
Incontestability
Nationwide will not contest payment of the Death Benefit based on the initial Total Specified Amount after the policy has been In Force during the Insured's lifetime for two years from the Policy Date, and, in some states, within two years from a reinstatement date. For any change in Total Specified Amount requiring evidence of insurability, Nationwide 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, and, in some states, within two years from a subsequent reinstatement date. The incontestability period in some states may be less than two years.
Suicide
If the Insured dies by suicide within two years from the Policy Date, and, in some states, within two years of a reinstatement date, Nationwide will pay no more than the sum of the Premiums paid, less any Indebtedness, and less any partial surrenders. Similarly, if the Insured dies by suicide within two years from the date an application for an increase in the Total Specified Amount was accepted by Nationwide, and, in some states, within two years from a subsequent reinstatement date, Nationwide will pay no more than the Death Benefit Proceeds 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. The suicide period in some states may be less than two years.
Proceeds Upon Maturity
If the policy is In Force on the Maturity Date, Nationwide will pay the Proceeds to the policy owner.
Normally, the Proceeds will be paid within seven days after receipt of the policy owner's written request for payment of Proceeds at the Service Center. Nationwide may postpone payment of the Proceeds on the days that it is unable to price Accumulation Units, see Valuation of Accumulation Units. The Proceeds will equal the policy's Cash Value minus any Indebtedness. The policy is terminated once the Proceeds are paid.
Extending Coverage Beyond the Maturity Date
Nationwide may offer to extend coverage beyond the Maturity Date to coincide with the Insured's death, at which time the Proceeds will be paid to the beneficiary. During this coverage extension, the policy owner will still be able to request partial surrenders, and if elected, the Long-Term Care Rider will remain in effect (though there will be no charge for it). The termination of some policy and/or Rider benefits will coincide with the policy's Maturity Date (unless the policy owner decides otherwise). The extension of coverage will either be for the Cash Value (as defined below) or for the Total Specified Amount (subject to the law of the state in which the policy owner lived at the time the policy was purchased), at the policy owner's choice.
If coverage is extended beyond the policy's Maturity Date, Nationwide will endorse the policy so that:
43
(1) if extended for the Total Specified Amount, the policy's Total Specified Amount will be equal to the Base Policy Specified Amount and will be adjusted to what it was when the Insured reached Attained Age 70, subject to any partial surrenders;
(2) no changes to the Base Policy Specified Amount and/or Total Specified Amount will be permitted (as they are the same);
(3) no changes to the death benefit option will be allowed;
(4) no additional Premium payments will be allowed;
(5) no additional monthly periodic charges will be deducted; however, loan interest will continue to be charged on Indebtedness;
(6) 100% of the policy's Cash Value will be transferred to the Fixed Account;
(7) if coverage is extended for the policy's Cash Value, the policy's Death Benefit will become the Cash Value, regardless of the previous death benefit option choice;
(8) if the Policy Guard Rider is in effect prior to the extension of coverage beyond the Maturity Date, the Total Specified Amount will continue to be defined as the adjusted Total Specified Amount; and
(9) if the Additional (insurance) Protection Rider is in effect, the extension of coverage beyond the Maturity Date will not apply to the Rider Specified Amount.
Note: Partial surrenders will affect the Base Policy Specified Amount (and thus Total Specified Amount) of a policy with Death Benefit Option 1 based on the Insured's Attained Age at the time the partial surrender is requested. While the Insured is between the Attained Age of 71 and 90, a partial surrender will decrease the Base Policy Specified Amount proportionately. If the Insured is Attained Age 91 or older, a partial surrender will reduce the Proceeds by an amount proportionate to the ratio of the partial surrender to the Cash Value prior to the partial surrender.
The coverage beyond the Maturity Date will not occur when the policy would fail the definition of life insurance under the Code.
The primary purpose of coverage extension is to continue the life insurance coverage, and avoid current income taxes on any earnings in excess of the cost basis if the maturity Proceeds are taken, see Surrendering the Policy; Maturity.
Assuming no Indebtedness 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 Indebtedness exists on or after the Maturity Date, Proceeds after the Maturity Date may be less than the Proceeds at maturity.
The Payout Options
Treatment of Unclaimed Property
Every state has unclaimed property laws which generally declare life insurance policies to be abandoned after a period of inactivity of three to five years from the policy Maturity Date or the date Nationwide becomes informed that a Death Benefit is due and payable. For example, if the payment of a Death Benefit has been triggered, but, if after a thorough search, Nationwide is still unable to locate the beneficiary of the Death Benefit, or the beneficiary does not come forward to claim the Death Benefit in a timely manner, Nationwide will escheat the Death Benefit to the abandoned property division or unclaimed property office of the state in which the beneficiary or the policy owner last resided, as shown on Nationwide's books and records, or to Ohio, Nationwide's state of domicile. If a claim is subsequently made, the state is obligated to pay any such amount (without interest) to the designated recipient upon presentation of proper documentation.
To prevent escheatment, it is important to update beneficiary designations - including complete names, complete addresses, phone numbers, and social security numbers - as they change. Such updates should be sent to the Service Center.
Policy Settlement Options
Proceeds (Death Benefit, maturity Proceeds, or Cash Surrender Value) may be paid out in a lump sum, or in another form that is elected at application.
At any time before the Proceeds become payable, a policy owner may request to change the payout option by writing to the Service Center.
44
If more than one payout option is elected, at least $2,000 must be apportioned to each option and each payment (made at the specified interval) must be at least $20. The settlement options below are based on predetermined fixed payments.
If the policy owner does not make an election as to the form of the Proceeds, upon the Insured's death, the beneficiary may make the election. Changing the beneficiary of the policy will revoke the payout option(s) in effect at that time. Proceeds are neither assignable nor subject to claims of creditors or legal process. If the beneficiary does not make an election, Nationwide will pay the Proceeds in a lump sum.
Normally, Nationwide will make a lump sum payment of the Proceeds within seven days after the written request for payment is received at the Service Center. However, Nationwide may postpone payment of the Proceeds from the Fixed Account and/or on the days that it is unable to price Sub-Account Accumulation Units, see Valuation of Accumulation Units. Proceeds are paid from Nationwide's general account. For payout options other than lump sum, Nationwide will issue a settlement contract in exchange for the policy.
Note that for the remainder of Payment of Policy Proceeds provision, "payee" means the person(s) entitled to the Proceeds.
Interest Income Option
If the Interest Income Option is elected, Nationwide retains the Proceeds and credits the Proceeds with interest at an annually determined rate of at least 2.5% per annum, compounded annually. Nationwide will determine annually whether any interest in excess of 2.5% will be credited. The interest can be credited at the end of 12-, six, three, or one month intervals.
At any time, the policy owner can withdraw any remaining Proceeds and accumulated interest by submitting a written request to the Service Center. Upon the payee's death, the remaining Proceeds and accumulated interest will be paid to the payee's estate.
Income for a Fixed Period Option
If the Income for a Fixed Period Option is elected, Nationwide retains the Proceeds and makes payments to the payee at specified intervals over a certain number of years, not to exceed 30. Each payment will consist of a portion of the Proceeds plus interest at an annually determined rate of at least 2.5% per annum, compounded annually. Nationwide will determine annually if any interest in excess of 2.5% will be credited. The payments can be paid at the beginning of 12-, six, three, or one month intervals.
At any time, the payee may withdraw any remaining Proceeds and accumulated interest by submitting a written request to the Service Center. Upon the payee's death, the remaining Proceeds and accumulated interest will be paid to the payee's estate.
Life Income with Payments Guaranteed Option
If the Life Income with Payments Guaranteed Option is elected, Nationwide will retain the Proceeds and make payments to the payee at specified intervals for a guaranteed period (10, 15, or 20 years) and, if the payee is still living at the end of the guaranteed period, the payments will continue for the rest of the payee's life. During the guaranteed period, Nationwide will pay interest on the remaining Proceeds at a rate of at least 2.5% per annum, compounded annually. Nationwide will determine annually if any interest in excess of 2.5% will be paid. The Proceeds can be paid at the beginning of 12-, six, three, or one month intervals.
Once payments begin under this option, withdrawals are not permitted. If a payee dies before the guaranteed period has elapsed, Nationwide will make the remaining payments to the payee's estate. If the payee dies after the guaranteed period has elapsed, no further payments will be made.
Fixed Income for Varying Periods Option
If the Fixed Income for Varying Periods Option is elected, Nationwide will retain the Proceeds and pay a fixed amount at specified intervals until the Proceeds and accumulated interest have been exhausted. The total amount payable each year may not be less than 5% of the original Proceeds. Nationwide will credit interest on the remaining Proceeds at a rate of at least 2.5% per annum, compounded annually. Nationwide will determine annually if any interest in excess of 2.5% will be credited. The Proceeds can be paid at the beginning of 12-, six, three, or one month intervals.
At any time, the payee may withdraw any remaining Proceeds and accumulated interest by submitting a written request to the Service Center. Upon the payee's death, Nationwide will pay the remaining Proceeds and accumulated interest to the payee's estate.
45
Joint and Survivor Life Option
If the Joint and Survivor Life Option was elected, Nationwide will retain the Proceeds and make equal payments to the payees at specified intervals for the life of the last surviving payee. The Proceeds can be paid at the beginning of 12-, six, three, or one month intervals.
Once payments begin under this option, withdrawals are not permitted. Payments will cease upon the death of the last surviving payee. Nationwide will make no payments to the last surviving payee's estate. It is possible that only one payment will be made under this option if both payees die prior to the first payment.
Alternate Life Income Option
If the Alternate Life Income Option is elected, Nationwide will use the Proceeds to purchase an annuity with the payee as annuitant. The amount payable will be 102% of the current individual immediate annuity purchase rate on the date of the individual immediate annuity is elected. The Proceeds can be paid at the end of 12-, six, three, or one month intervals. Since the payments are based on the payee's lifetime, the payee may not withdraw any amount designated to this option once payments begin. Payments will cease upon the payee's death. No payments will be made to the payee's estate.
Taxes
The tax treatment of life insurance policies under the Internal Revenue Code ("Code") is complex and the tax treatment of the policy will depend on the policy owner's particular circumstances. The policy owner should seek competent tax advice regarding the tax treatment of the policy given their situation. The following discussion provides a general overview of the Code's provisions relating to certain common life insurance policy transactions. Some of the items discussed below may not be applicable to the life insurance policy described herein. 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 per recipient from the value of present interest gifts. In addition, each donor is allowed a credit against the tax on five million dollars in lifetime gifts (calculated after taking into account the applicable exclusion amount). An unlimited marital deduction may be available for certain lifetime gifts made by the donor to the donor's spouse.
In general, in 2011 and 2012, an estate of less than $5,000,000 (inclusive of certain pre-death gifts) will not incur a federal estate tax liability. The American Taxpayer Relief Act ("ATRA") enacted on January 1, 2013, permanently provides for a maximum federal estate tax rate of 40% with an annually inflation adjusted $5 million exemption for estates of persons dying after December 31, 2012.
Under current law, an unlimited marital deduction is 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 GSTT is imposed at a flat rate equal to the maximum estate tax rate subject to any applicable exemptions. As with the estate tax, the GSTT tax has been repealed for 2010; however, ATRA permanently provides for a GSTT rate of 40% with an annually inflation adjusted $5 million exemption.
46
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 every policy owner's 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 nondeductible expense for income tax purposes.
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 the policy owner (whether or not they are the insured) transfers 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 the policy owner's taxable income for federal income tax purposes unless it is distributed to the policy owner 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. Nationwide 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.
Nationwide will also monitor compliance with Code Section 817(h) and the regulations applicable to Section 817(h) and, to the extent necessary, take appropriate action to remain in compliance.
Representatives of the IRS have informally suggested, from time to time, that the number of underlying investment options available or the number of transfer opportunities available under a variable insurance 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 investment options available in a variable insurance product does not exceed 20, the number of underlying investment options alone would not cause the policy to not qualify for the desired tax treatment. The IRS has also indicated that exceeding 20 underlying 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 underlying investment 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 investment options, transfers between underlying investment options, exchanges of underlying investment options or changes in the investment objectives of underlying investment options such that the policy would no longer qualify as life insurance under Section 7702 of the Code, Nationwide will take whatever steps are available to remain in compliance.
Based on the above, the policy should be treated as life insurance for federal income tax purposes.
Periodic Withdrawals, Non-Periodic Withdrawals and Loans
The tax treatment described in this section applies to withdrawals and loans, premiums Nationwide accepts but then returns 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.
47
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, Nationwide will monitor it and advise the policy owner if the payment of a premium, or other transaction, may cause the policy to become a modified endowment contract. It is only with the policy owner's written authorization that Nationwide will permit the policy to become a modified endowment policy. Otherwise, Nationwide will reject the requested action or refund any Premium paid in excess of the modified endowment limits.
Depending on the policy owner's 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. Policy owners should seek competent tax advice regarding the tax treatment of the addition of any rider to the policy, based on the policy owner's 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 7 years exceed the amount that would have been paid if the policy provided for paid up benefits after 7 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 contract' (generally, the net 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, Nationwide 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 first from the investment in the contract, and then from the income in the policy. Because premium payments are generally nondeductible, distributions not in excess of investment in the contract are generally not includible in income; instead, they reduce the owner's investment in the contract.
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. The policy owner 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 income tax consequences. If the amount received (or are deemed received upon maturity) plus total policy indebtedness exceeds the investment in the contract, 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 the policy owner at surrender.
The purpose of the maturity date extension feature is to permit the policy to continue to be treated as life insurance for tax purposes. Although Nationwide believes that the extension provision will cause the policy 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. The policy owner should consult with a qualified tax advisor regarding the possible adverse tax consequences that could result from an extension of the scheduled maturity date.
48
Additional Medicare Tax
Effective January 1, 2013, Section 1411 of the Code imposes a surtax of 3.8% on certain net investment income received by individuals and certain trusts and estates. The surtax is imposed on the lesser of (a) net investment income or (b) the excess of the modified adjusted gross income over a threshold amount. For individuals, the threshold amount is $250,000 (married filing jointly, or qualifying widow(er) with dependent child)); $125,000 (married filing separately); or $200,000 (single, or head of household (with qualifying person)). The threshold for an estate or trust that is subject to the surtax is generally equal to the dollar amount at which the highest tax bracket under section 1(e) begins for the taxable year; for 2013, that amount is $11,950.
Modified adjusted gross income is equal to gross income with several modifications; the policy owner should consult with a tax advisor regarding how to determine the policy owner's modified adjusted gross income for purposes of determining the applicability of the surtax.
Net investment income includes, but is not limited to, interest, dividends, capital gains, rent and royalty income, and income from nonqualified annuities; and may include taxable distributions from, and gain from the sale or surrenders of, life insurance policies.
Net investment income does not include, among other things, distributions from certain qualified plans (such as IRAs, Roth IRAs, and plans described in Internal Revenue Code Sections 401(a), 401(k), 403(a), 403(b) or 457(b)); however, such distributions, to the extent that they are includible in income for federal income tax purposes are includible in modified adjusted gross income.
Sale of a Life Insurance Policy
If a life insurance policy is sold for a gain, all or a portion of the gain will be treated as ordinary income. In Revenue Ruling 2009-13, the IRS concluded that the amount of gain realized from the sale of a life insurance policy is equal to the amount received (which can include relief from, or assumption of debt) over the owner's basis in the policy. The portion of the gain that is equal to the excess of the cash surrender value over the investment in the contract would be treated as ordinary income; any additional gain would be short or long-term capital gain, depending on the holding period. The ruling also concluded that the amount of gain resulting from the sale of a life insurance policy is equal to the excess of the amount received over the owner's basis in the policy (the investment in the contract reduced by the cost of insurance previously paid out of the cash value). Consequently, a sale may result in more gain than a surrender for the same amount.
Exchanging the Policy for Another Life Insurance Policy
Generally, policy owners will be taxed on amounts received in excess of premium payments when the policy is surrendered in full. If, however, the policy is exchanged for another life insurance policy, modified endowment contract, or annuity contract, the transaction 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. Policy owners should consult with their personal tax or legal advisors in structuring any policy exchange transaction.
Taxation of Death Benefits
Federal Income Tax
The death benefit is generally excludable from the beneficiary's gross income under Section 101 of the Code. However, if the policy had been transferred to a new policy owner for valuable consideration (e.g., through a sale of the policy), a portion of the death benefit may be includible in the beneficiary's gross income when it is paid.
The payout option selected by the policy's 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. The policy's beneficiaries should consult with their tax advisors to determine the tax consequences of electing a payout option, based on their individual circumstances.
49
Special federal income tax considerations for life insurance policies owned by employers
Sections 101(j) and 6039I of the Code provide special rules regarding the tax treatment of death benefits that are payable under 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.
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 policy owner for the policy. Consequently, under this general rule, the entire death benefit, less the cost to the policy owner, 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. 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, the insured is either a director, a "highly compensated employee" (within the meaning of Section 414(q) of the Code without regard to paragraph (1)(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 policy owner of an employer-owned policy to file an annual return showing (a) the number of employees of the policy owner, (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 policy owner, and (e) that the policy owner 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 the employer's 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 the employer-owner 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 the employer-owner fails to provide the necessary notice and information, or fails to obtain the necessary consent, the death benefit will be taxable when received. If the employer-owner fails to file a properly completed return under Section 6039I, a penalty may apply.
Federal Transfer (Estate, Gift and Generation Skipping 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, Nationwide may be required to withhold a portion of the proceeds and pay them directly to the IRS as the GSTT 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").
Long-Term Care Insurance
A long-term care rider issued with a life policy or one that is subsequently added to the policy is intended to meet the requirements of a qualified long-term care insurance contract under Section 7702B of the Internal Revenue Code. Payments made under the qualified long-term care rider will generally be excluded from income under the Code.
50
Payment of long-term care rider charges will be made through deductions from the cash value of the life policy. These deductions from the cash value are considered to be distributions from the life policy for Federal tax purposes. The Federal tax treatment of such distributions are governed by section 72(e)(11) which provides that the deductions will reduce the investment in the contract and will not be included in income even if the policy owner has have recovered all of their investment in the contract.
The payment of benefits made to the policy owner of the long-term care rider as well as any deductions from the cash value of the life policy to pay for long-term care rider charges during the calendar year will be reported on a Form 1099-LTC.
This discussion of the tax treatment of the long-term care rider is not meant to be all inclusive. Due to the complexity of these rules, and because they are affected by the policy owner's facts and circumstances, the policy owner should consult with legal and tax counsel and other competent advisors regarding these matters.
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.
Due to the complexity of these rules, and because they are affected by the policy owner's facts and circumstances, the policy owner should consult with legal and tax counsel and other competent advisors 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 advisors familiar with these matters, the impact of these decisions on the corporation's intended use of the policy.
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. Therefore, if the policy owner is contemplating using the policy in any arrangement the value of which depends in part on its tax consequences, the policy owner should be sure to consult a tax advisor 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 the policy owner is a non-resident alien, or a resident alien, or if any of the policy's beneficiaries (including the policy owner's spouse) are not citizens of the United States, the policy owner should confer with a competent tax advisor with respect to the tax treatment of this policy.
51
If the policy owner, 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.
Withholding and Tax Reporting
Distribution of taxable income from a life insurance policy, including a life insurance policy that is a modified endowment contract, is subject to federal income tax withholding. Generally, the recipient may elect not to have the withholding taken from the distribution. Nationwide will withhold income tax unless the policy owner advises Nationwide, in writing, of their request not to withhold. If the policy owner requests that taxes not be withheld, or if the taxes withheld are insufficient, the policy owner may be liable for payment of an estimated tax.
A policy owner is not permitted to waive withholding if the payee does not provide Nationwide with a taxpayer identification number; or if Nationwide receives notice from the Internal Revenue Service that the taxpayer identification number furnished by the payee is incorrect. In that instance, a distribution will be subject to withholding rates established by Section 3405 of the Code and will be applied against the amount of income that is distributed.
However, interest earned on a death benefit may be subject to mandatory back-up withholding. Mandatory backup withholding means that Nationwide is required to withhold taxes on income earned at the rate established by Section 3406 of the Code. Mandatory backup withholding may arise if Nationwide has not been provided a taxpayer identification number, or if the IRS notifies Nationwide 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;
• some or all of the amount by which the current value exceeds the employer's interest in the policy; and/or
• interest that is deemed to have been forgiven on a loan that Nationwide deems 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 advisor to determine the tax consequences, if any, of their employer-sponsored life insurance arrangements.
Taxes and the Value of the Policy
For federal income tax purposes, a separate account is not a separate entity from the company. Thus, the tax status of the separate account is not distinct from our status as a life insurance company. Investment income and realized capital gains on the assets of the separate account are reinvested and taken into account in determining the value of Accumulation Units. As a result, such investment income and realized capital gains are automatically applied to increase reserves under the policies.
At present, Nationwide does 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 the policy's Accumulation Units for federal income taxes. If, however, Nationwide determines that taxes may be incurred, Nationwide reserves the right to assess a charge for these taxes.
Nationwide 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 the policy's Accumulation Units.
Tax Changes
The foregoing is a general discussion of various tax matters pertaining to life insurance policies. It 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 policy owner should consult their independent legal, tax and/or financial advisor.
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. For example the "FY 2013, Budget of the United States Government" includes a proposal which, if enacted, would affect the treatment of corporate owned life insurance policies
52
by limiting the availability of certain interest deductions for companies that purchase those policies. No proposed statutory language has been released yet, so the specifics of the proposal cannot be addressed herein. Such a proposal, if enacted, could have an adverse tax impact on the ownership of life insurance by or for the benefit of business entities. It is reasonable to believe that such proposals, and future proposals, may be enacted into law. The U.S. Treasury Department may amend existing regulations, issue new regulations, or adopt new interpretations of existing law that may 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.
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. Nationwide make no representation as to the likelihood of the continuation of these current laws, interpretations, and policies.
Nationwide Life Insurance Company
Nationwide, the depositor, is a stock life insurance company organized under Ohio law in March 1929, with its home office at One Nationwide Plaza, Columbus, Ohio 43215. Nationwide is a provider of life insurance, annuities, and retirement products. It is admitted to do business in all states, the District of Columbia, and Puerto Rico.
Nationwide is a member of the Nationwide group of companies. Nationwide Mutual Insurance Company and Nationwide Mutual Fire Insurance Company (the "Companies") are the ultimate controlling persons of the Nationwide group of companies. The Companies were organized under Ohio law in December 1925 and 1933 respectively. The Companies engage in a general insurance and reinsurance business, except life insurance.
Nationwide VLI Separate Account-4
Organization, Registration, and Operation
Nationwide VLI Separate Account-4 is a separate account established under Ohio law. Nationwide owns the assets in this account and is obligated to pay all benefits under the policies. Nationwide may use the separate account to support other variable life insurance policies that it issues. 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. Nationwide buys and sells the mutual fund 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 to, or charged against, the separate account without regard to Nationwide's other income, gains, or losses. Income, gains, and losses credited to, or charged against, a Sub-Account reflect the Sub-Account's own Investment Experience and not the investment experience of our other assets. The separate account's assets are held separately from Nationwide's other assets and are not part of Nationwide's general account. Nationwide may not use the separate account's assets to pay any of its liabilities other than those arising from the policies. Nationwide will hold assets in the separate account equal to its liabilities. The separate account may include other Sub-Accounts that are not available under the policies, and are not discussed in this prospectus.
Nationwide does not guarantee any money placed in this separate account. The value of each Sub-Account will increase or decrease, depending on the Investment Experience of the corresponding mutual fund. A policy owner could lose some or all of his or her money.
Addition, Deletion, or Substitution of Mutual Funds
Where permitted by applicable law, Nationwide reserves the right to:
• remove, close, 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;
53
• deregister the separate account under the 1940 Act, or operate the separate account or any Sub-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.
Nationwide reserves the right to make other structural and operational changes affecting this separate account.
Nationwide will provide notice of any of the changes above. Also, to the extent required by law, Nationwide will obtain the required orders, approvals, and/or regulatory clearance from the appropriate government agencies (such as the various insurance regulators or the SEC). Also, to the extent required by state law, Nationwide will accept an irrevocable election from the policy owner to transfer 100% of the policy's Cash Value to the Fixed Account if received within 60 days after the date the policy owner received notification of a material change in the investment policy of the separate account.
Substitution of Securities
Nationwide may substitute, eliminate, or combine shares of another underlying mutual fund for shares already purchased or to be purchased in the future if either of the following occurs:
(1) shares of a current underlying mutual fund are no longer available for investment; or
(2) further investment in an underlying mutual fund is inappropriate.
No substitution of shares may take place without the prior approval of the SEC. All affected policy owners will be notified in the event there is a substitution, elimination, or combination of shares.
The substitute mutual fund may have different fees and expenses. Substitution may be made with respect to existing investments or the investment of future Premium, or both. Nationwide may close Sub-Accounts to allocations of Premiums or policy value, or both, at any time in its 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
Nationwide may deregister Nationwide VLI Separate Account-4 under the 1940 Act in the event the separate account meets an exemption from registration under the 1940 Act, if there are no shareholders in the separate account or for any other purpose approved by the SEC.
All policy owners will be notified in the event Nationwide deregisters Nationwide VLI Separate Account-4.
Voting Rights
Although the separate account owns the mutual fund shares, policy owners are the beneficial owner of those shares. When a matter involving a mutual fund is subject to shareholder vote, unless there is a change in existing law, Nationwide will vote the separate account's shares only as instructed by policy owners.
When a shareholder vote occurs, a policy owner will have the right to instruct Nationwide how to vote. The weight of each vote is based on the number of mutual fund shares that corresponds to the amount of Cash Value a policy has allocated to that mutual fund's Sub-Account (as of a date set by the mutual fund). Nationwide will vote shares for which no instructions are received in the same proportion as those that are received. What this means 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.
Material Conflicts
The underlying mutual funds may be offered through separate accounts of other insurance companies, as well as through other separate accounts of Nationwide. Nationwide does not anticipate any disadvantages to this. However, it is possible that a conflict may arise between the interests of the variable account and one or more of the other separate accounts in which these underlying mutual funds participate.
Material conflicts may occur due to a change in law affecting the operations of variable life insurance policies and variable annuity contracts, or differences in the voting instructions of the policy owners and those of other companies. If a material conflict occurs, Nationwide will take whatever steps are necessary to protect policy owners and variable annuity payees, including withdrawal of the variable account from participation in the underlying mutual fund(s) involved in the conflict.
54
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 subject to legal and regulatory proceedings in the ordinary course of its business. The Company's legal and regulatory matters include proceedings specific to the Company and other proceedings generally applicable to business practices in the industries in which the Company operates. The Company's litigation and regulatory matters are subject to many uncertainties, and given their complexity and scope, their outcomes cannot be predicted. Regulatory proceedings also could affect the outcome of one or more of the Company's litigation matters. Furthermore, it is often not possible to determine the ultimate outcomes of the pending regulatory 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 believes, however, that based on currently known information, the ultimate outcome of all pending legal and regulatory matters is not likely to have a material adverse effect on the Company's consolidated financial position. Nonetheless, given the large or indeterminate amounts sought in certain of these matters and the inherent unpredictability of litigation, it is possible that such outcomes could materially affect the Company's consolidated financial position or results of operations in a particular quarter or annual period.
The financial services industry has been the subject of increasing scrutiny on a broad range of issues by regulators and legislators. The Company and/or its affiliates have been contacted by, self reported or received subpoenas from state and federal regulatory agencies, including the Securities and Exchange Commission, and other governmental bodies, state securities law regulators and state attorneys general for information relating to, among other things, sales compensation, the allocation of compensation, unsuitable sales or replacement practices, and claims handling and escheatment practices. The Company is cooperating with and responding to 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.
In October 2012, NLIC and NLAIC entered into a Regulatory Settlement Agreement with the Florida Office of Insurance Regulation and 21 other state Departments of Insurance to resolve a multi-state market conduct exam regarding claim settlement practices. The Regulatory Settlement Agreement applies prospectively and requires NLIC and NLAIC to adopt and implement additional procedures relating to the use of to the Social Security Death Master File and identifying and locating beneficiaries once deaths are identified. In October 2012, NLIC and NLAIC also entered into a Global Resolution Agreement to resolve the related unclaimed property audit.
On November 20, 2007, Nationwide Retirement Solutions, Inc. (NRS) and NLIC were named in a lawsuit filed in the Circuit Court of Jefferson County, Alabama entitled Ruth A. Gwin and Sandra H. Turner, and a class of similarly situated individuals v. Nationwide Life Insurance Company, Nationwide Retirement Solutions, Inc., Alabama State Employees Association, PEBCO, Inc. and Fictitious Defendants A to Z. On March 12, 2010, NRS and NLIC were named in a Second Amended Class Action Complaint filed in the Circuit Court of Jefferson County, Alabama entitled Steven E. Coker, Sandra H. Turner, David N. Lichtenstein 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 Alabama State Employees Association, Inc. (ASEA) Plan, excluding members of the Deferred Compensation Committee, ASEA's directors, officers and board members, and PEBCO's directors, officers and board members. On October 22, 2010, the parties to this action executed a stipulation of settlement that agreed to certify a class for settlement purposes only, that provided for payments to the settlement class, and that provided for releases, certain bar orders, and dismissal of the case. The settlement fund has been paid out. On December 6, 2011 the Court entered an Order that NRS owes indemnification to ASEA and PEBCO for
55
the Coker (Gwin) class action, and dismissed NLIC. The Company has resolved the indemnification claims of ASEA. On February 13, 2013, the Court issued its Order determining the amount of fees due to PEBCO on its indemnification claim. On March 28, 2013, the Company filed a notice of appeal to the Alabama Supreme Court. NRS continues to defend this case 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. On November 18, 2009, the plaintiffs filed a sixth amended complaint amending the list of named plaintiffs and claiming to represent a class of qualified retirement plan trustees under the Employee Retirement Income Security Act of 1974 (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 participants 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." On October 21, 2010, the District Court dismissed NFS from the lawsuit. On February 6, 2012, the Second Circuit Court of Appeals vacated the November 6, 2009, order granting class certification and remanded the class back to the District Court for further consideration. The plaintiffs have renewed their motion for class certification. On December 18, 2012, the District Court heard oral argument on the motion for class certification. NLIC continues to defend this lawsuit vigorously.
On June 8, 2011, NMIC and NLIC were named in a lawsuit filed in Court of Common Pleas, Cuyahoga County, Ohio entitled Stanley Andrews and Donald Clark, on their behalf and on behalf of the class defined herein v. Nationwide Mutual Insurance Company and Nationwide Life Insurance Company. The lower court granted Nationwide's motion to dismiss. Plaintiffs appealed. The Court of Appeals affirmed the dismissal on October 24, 2012. Plaintiffs filed a petition for rehearing en banc on November 5, 2012. The Court of Appeals denied the petition on December 14, 2012. Plaintiff filed a notice of appeal to the Ohio Supreme Court on January 24, 2013. Nationwide has 30 days to file an opposition memorandum. Nationwide filed its memorandum in opposition to plaintiffs' petition for jurisdiction to the Ohio Supreme Court on February 27, 2013.
Lehman Brothers Holdings, Inc. (Debtors) and Giddens, James v NLIC and NMIC, et al. In 2012 the Plaintiff, Debtor in Possession Lehman Brothers Special Financing, Inc., filed a class action in the United States Bankruptcy Court for the Southern District of New York seeking the recovery of nearly $3 billion in assets from all the named defendants including NLIC and NMIC. This litigation arises from two collateralized debt obligation transactions, 801 Grand and Alta, which resulted in payments to NLIC and NMIC. In 2008, the Plaintiff and its parent company, Lehman Brothers Holding, Inc. filed for bankruptcy which triggered an early termination of the above transactions. The Plaintiff seeks to have sums returned to the bankruptcy estate in addition to prejudgment interest and costs. The case is currently stayed and on February 13, 2013, the Court extended the stay. Responsive pleadings are now due September 5, 2013. Lehman recently sent correspondence out to all defendants inviting settlement discussions which is under review.
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 (the Company). Policy owners may obtain a copy of the SAI FREE OF CHARGE by contacting the Service Center. Please consider the consolidated financial statements of the Company only as bearing on Nationwide's ability to meet the obligations under the policy. Policy owners should not consider the consolidated financial statements of the Company as affecting the investment performance of the assets of the separate account.
56
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.
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. Refer to the prospectus for this underlying mutual fund for more information.
AllianceBernstein Variable Products Series Fund, Inc. - AllianceBernstein Growth and Income Portfolio: Class A
This Sub-Account is only available in policies issued before May 1, 2004
Investment Advisor: AllianceBernstein L.P.
Investment Objective: Long-term growth of capital.
AllianceBernstein Variable Products Series Fund, Inc. - AllianceBernstein Small/Mid Cap Value Portfolio: Class A
Investment Advisor: AllianceBernstein L.P.
Investment Objective: Long-term growth of capital.
AllianceBernstein Variable Products Series Fund, Inc. - AllianceBernstein VPS Dynamic Asset Allocation Portfolio: Class A
Investment Advisor: AllianceBernstein L.P.
Investment Objective: To maximize total return consistent with the Adviser's determination of reasonable risk.
American Century Variable Portfolios II, Inc. - American Century VP Inflation Protection Fund: Class II
Investment Advisor: American Century Investment Management, Inc.
Investment Objective: Long-term total return using a strategy that seeks to protect against U.S. inflation.
American Century Variable Portfolios, Inc. - American Century VP Income & Growth Fund: Class I
This Sub-Account is only available in policies issued before May 1, 2004
Investment Advisor: American Century Investment Management, Inc.
Investment Objective: Capital growth by investing in common stocks. Income is a secondary objective.
American Century Variable Portfolios, Inc. - American Century VP Mid Cap Value Fund: Class I
This Sub-Account is only available in policies issued before May 1, 2013
Investment Advisor: American Century Investment Management, Inc.
Investment Objective: Long-term capital growth with income as a secondary objective.
BlackRock Variable Series Funds, Inc. - BlackRock Global Allocation V.I. Fund: Class II
Investment Advisor: BlackRock Advisors, LLC
Sub-advisor: BlackRock Investment Management, LLC; BlackRock International Limited
Investment Objective: Seek high total investment return.
Delaware VIP Trust - Delaware VIP Small Cap Value Series: Service Class
Investment Advisor: Delaware Management Company, Inc.
Investment Objective: The fund seeks capital appreciation.
Dreyfus Investment Portfolios - Small Cap Stock Index Portfolio: Service Shares
This Sub-Account is only available in policies issued before May 1, 2013
Investment Advisor: The Dreyfus Corporation
Investment Objective: To match performance of the S&P SmallCap 600 Index®.
Dreyfus Socially Responsible Growth Fund, Inc. (The): Initial Shares
This Sub-Account is only available in policies issued before May 1, 2003
Investment Advisor: The Dreyfus Corporation
Investment Objective: Capital growth with current income as a secondary goal.
57
Dreyfus Stock Index Fund, Inc.: Initial Shares
This Sub-Account is only available in policies issued before May 1, 2013
Investment Advisor: The Dreyfus Corporation
Investment Objective: To match performance of the S&P 500.
Dreyfus Variable Investment Fund - Appreciation Portfolio: Initial Shares
Investment Advisor: The Dreyfus Corporation
Sub-advisor: Fayez Sarofim & Co.
Investment Objective: Long-term capital growth consistent with the preservation of capital.
Dreyfus Variable Investment Fund - Opportunistic Small Cap Portfolio: Initial Shares
This Sub-Account is only available in policies issued before May 1, 2004
Investment Advisor: The Dreyfus Corporation
Investment Objective: Capital growth.
Federated Insurance Series - Federated Managed Tail Risk Fund II: Primary Shares (formerly, Federated Insurance Series - Federated Capital Appreciation Fund II: Primary Shares)
This Sub-Account is only available in policies issued before May 1, 2004
Investment Advisor: Federated Global Investment Management Corp.
Investment Objective: To create an allocation mix which will maximize return while capturing the benefits of asset class diversification in periods of market volatility.
Federated Insurance Series - Federated Quality Bond Fund II: Primary Shares
Investment Advisor: Federated Investment Management Company
Investment Objective: Current income.
Fidelity Variable Insurance Products Fund - Fidelity VIP Freedom Fund 2010 Portfolio: Service Class
This Sub-Account is only available in policies issued before May 1, 2013
Investment Advisor: Strategic Advisers Inc. Boston MA
Sub-advisor: 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 2020 Portfolio: Service Class
This Sub-Account is only available in policies issued before May 1, 2013
Investment Advisor: Strategic Advisers Inc. Boston MA
Sub-advisor: 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 2030 Portfolio: Service Class
This Sub-Account is only available in policies issued before May 1, 2013
Investment Advisor: Strategic Advisers Inc. Boston MA
Sub-advisor: 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 Energy Portfolio: Service Class 2
Investment Advisor: Fidelity Management & Research Company
Sub-advisor: FMR Co., Inc., Fidelity Research & Analysis Company
Investment Objective: Capital appreciation.
Designation: STTF
Fidelity Variable Insurance Products Fund - VIP Equity-Income Portfolio: Service Class
Investment Advisor: Fidelity Management & Research Company
Sub-advisor: 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.
58
Fidelity Variable Insurance Products Fund - VIP Growth Portfolio: Service Class
Investment Advisor: Fidelity Management & Research Company
Sub-advisor: 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.
Fidelity Variable Insurance Products Fund - VIP High Income Portfolio: Service Class
This Sub-Account is no longer available to receive transfers or new premium payments effective May 1, 2007
Investment Advisor: Fidelity Management & Research Company
Sub-advisor: FMR Co., Inc., Fidelity Research & Analysis Company, Fidelity Investments Japan Limited, Fidelity International Investment Advisors, Fidelity International Investment Advisors (U.K.) Limited
Investment Objective: High level of current income while also considering growth of capital.
Fidelity Variable Insurance Products Fund - VIP High Income Portfolio: Service Class R
This Sub-Account is only available in policies issued before May 1, 2003
Investment Advisor: Fidelity Management & Research Company
Sub-advisor: FMR Co., Inc., Fidelity Research & Analysis Company, Fidelity Investments Japan Limited, Fidelity International Investment Advisors, Fidelity International Investment Advisors (U.K.) Limited
Investment Objective: High level of current income while also considering growth of capital.
Designation: STTF
Fidelity Variable Insurance Products Fund - VIP Investment Grade Bond Portfolio: Service Class
Investment Advisor: Fidelity Management & Research Company
Sub-advisor: 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
Investment Advisor: Fidelity Management & Research Company
Sub-advisor: 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.
Fidelity Variable Insurance Products Fund - VIP Overseas Portfolio: Service Class
This Sub-Account is no longer available to receive transfers or new premium payments effective May 1, 2005
Investment Advisor: Fidelity Management & Research Company
Sub-advisor: 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: Long-term capital growth.
Fidelity Variable Insurance Products Fund - VIP Overseas Portfolio: Service Class R
Investment Advisor: Fidelity Management & Research Company
Sub-advisor: 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: Long-term capital growth.
Designation: STTF
Fidelity Variable Insurance Products Fund - VIP Value Strategies Portfolio: Service Class
This Sub-Account is only available in policies issued before May 1, 2006
Investment Advisor: Fidelity Management & Research Company
Sub-advisor: 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: Capital appreciation.
Franklin Templeton Variable Insurance Products Trust - Franklin Income Securities Fund: Class 2
Investment Advisor: Franklin Advisers, Inc.
Investment Objective: Maximum income while maintaining prospects for capital appreciation.
59
Franklin Templeton Variable Insurance Products Trust - Franklin Rising Dividends Securities Fund: Class 1
This Sub-Account is only available in policies issued before May 1, 2006
Investment Advisor: Franklin Advisory Services, LLC
Investment Objective: Long-term capital appreciation.
Franklin Templeton Variable Insurance Products Trust - Franklin Small Cap Value Securities Fund: Class 1
This Sub-Account is only available in policies issued before May 1, 2013
Investment Advisor: Franklin Advisory Services, LLC
Investment Objective: Long-term total return.
Franklin Templeton Variable Insurance Products Trust - Franklin Templeton VIP Founding Funds Allocation Fund: Class 2
This Sub-Account is only available in policies issued before May 1, 2013
Investment Advisor: Franklin Templeton Services, LLC
Investment Objective: Capital appreciation with income as a secondary goal.
Designation: FF
Franklin Templeton Variable Insurance Products Trust - Templeton Developing Markets Securities Fund: Class 3
This Sub-Account is only available in policies issued before May 1, 2008
Investment Advisor: Templeton Asset Management, Ltd.
Investment Objective: Long-term capital appreciation.
Designation: STTF
Franklin Templeton Variable Insurance Products Trust - Templeton Foreign Securities Fund: Class 1
This Sub-Account is no longer available to receive transfers or new premium payments effective May 1, 2005
Investment Advisor: Templeton Investment Counsel, LLC
Investment Objective: Long-term capital growth.
Franklin Templeton Variable Insurance Products Trust - Templeton Foreign Securities Fund: Class 3
This Sub-Account is only available in policies issued before May 1, 2009
Investment Advisor: Templeton Investment Counsel, LLC
Investment Objective: Long-term capital growth.
Designation: STTF
Franklin Templeton Variable Insurance Products Trust - Templeton Global Bond Securities Fund: Class 3
Investment Advisor: Franklin Advisers, Inc.
Investment Objective: High current income, consistent with preservation of capital, with capital appreciation as a secondary consideration.
Designation: STTF
Goldman Sachs Variable Insurance Trust - Goldman Sachs Global Markets Navigator Fund: Service Shares
Investment Advisor: Goldman Sachs Asset Management, L.P.
Investment Objective: Seeks to achieve investment results that approximate the performance of the GS Global Markets Navigator Index (the "Index").
Guggenheim Variable Fund - Multi-Hedge Strategies
Investment Advisor: Security Investors, LLC
Investment Objective: Capital appreciation consistent with the return and risk characteristics of the hedge fund universe and, secondarily, to achieve these returns with low correlation to and less volatility than equity indices.
Invesco - Invesco V.I. American Franchise Fund: Series I Shares (formerly, Invesco - Invesco Van Kampen V.I. American Franchise Fund: Series I Shares)
This Sub-Account is only available in policies issued before May 1, 2012
Investment Advisor: Van Kampen Asset Management
Investment Objective: Capital appreciation.
Invesco - Invesco V.I. Mid Cap Core Equity Fund: Series I
This Sub-Account is only available in policies issued before May 1, 2013
Investment Advisor: Invesco Advisers, Inc.
Investment Objective: Long-term growth of capital.
Invesco - Invesco V.I. Mid Cap Growth Fund: Series I Shares (formerly, Invesco - Invesco Van Kampen V.I. Mid Cap Growth Fund: Series I)
Investment Advisor: Invesco Advisers, Inc.
Investment Objective: Capital growth.
60
Ivy Funds Variable Insurance Portfolios - Asset Strategy
Investment Advisor: Waddell & Reed Investment Management Company
Investment Objective: Seeks high total return over the long term.
Ivy Funds Variable Insurance Portfolios - High Income
Investment Advisor: Waddell & Reed Investment Management Company
Investment Objective: Seeks a high level of current income and capital when consistent with its primary objective as a secondary objective.
Ivy Funds Variable Insurance Portfolios - Mid Cap Growth
Investment Advisor: Waddell & Reed Investment Management Company
Investment Objective: Seeks to provide growth of investment.
Janus Aspen Series - Balanced Portfolio: Service Shares
This Sub-Account is only available in policies issued before May 1, 2004
Investment Advisor: Janus Capital Management LLC
Investment Objective: Long-term capital growth, consistent with preservation of capital and balanced by current income.
Janus Aspen Series - Forty Portfolio: Service Shares
This Sub-Account is only available in policies issued before May 1, 2013
Investment Advisor: Janus Capital Management LLC
Investment Objective: Long-term growth of capital.
Janus Aspen Series - Global Technology Portfolio: Service Shares
Investment Advisor: Janus Capital Management LLC
Investment Objective: Long-term growth of capital.
Janus Aspen Series - Overseas Portfolio: Service Shares
This Sub-Account is only available in policies issued before May 1, 2013
Investment Advisor: Janus Capital Management LLC
Investment Objective: Long-term growth of capital.
MFS® Variable Insurance Trust - MFS Investors Growth Stock Series: Initial Class
This Sub-Account is only available in policies issued before May 1, 2006
Investment Advisor: Massachusetts Financial Services Company
Investment Objective: To seek capital appreciation.
MFS® Variable Insurance Trust - MFS New Discovery Series: Initial Class
Investment Advisor: Massachusetts Financial Services Company
Investment Objective: To seek capital appreciation.
MFS® Variable Insurance Trust - MFS Value Series: Initial Class
Investment Advisor: Massachusetts Financial Services Company
Investment Objective: To seek capital appreciation.
Nationwide Variable Insurance Trust - American Century NVIT Growth Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: American Century Investment Management, Inc.
Investment Objective: The Fund seeks long-term capital appreciation.
Nationwide Variable Insurance Trust - American Century NVIT Multi Cap Value Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: American Century Investment Management, Inc.
Investment Objective: The Fund seeks capital appreciation, and secondarily current income.
Nationwide Variable Insurance Trust - American Funds NVIT Asset Allocation Fund: Class II
Investment Advisor: Capital Research and Management Company
Investment Objective: The fund seeks to provide high total return (including income and capital gains) consistent with the preservation of capital over the long term.
61
Nationwide Variable Insurance Trust - American Funds NVIT Bond Fund: Class II
This Sub-Account is only available in policies issued before May 1, 2013
Investment Advisor: Capital Research and Management Company
Investment Objective: The Fund seeks to maximize an investors level of current income and preserve the investor's capital.
Nationwide Variable Insurance Trust - American Funds NVIT Global Growth Fund: Class II
Investment Advisor: Capital Research and Management Company
Investment Objective: The Fund is designed for investors seeking capital appreciation through stocks.
Nationwide Variable Insurance Trust - American Funds NVIT Growth Fund: Class II
Investment Advisor: Capital Research and Management Company
Investment Objective: The Fund is designed for investors seeking capital appreciation principally through investment in stocks.
Nationwide Variable Insurance Trust - American Funds NVIT Growth-Income Fund: Class II
This Sub-Account is only available in policies issued before May 1, 2013
Investment Advisor: Capital Research and Management Company
Investment Objective: The fund seeks returns from both capital gains as well as income generated by dividends paid by stock issuers.
Nationwide Variable Insurance Trust - Federated NVIT High Income Bond Fund: Class I
This Sub-Account is no longer available to receive transfers or new premium payments effective May 1, 2005
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: Federated Investment Management Company
Investment Objective: The Fund seeks to provide high current income.
Nationwide Variable Insurance Trust - Federated NVIT High Income Bond Fund: Class III
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: Federated Investment Management Company
Investment Objective: The Fund seeks to provide high current income.
Designation: STTF
Nationwide Variable Insurance Trust - Invesco NVIT Comstock Value Fund: Class I (formerly, Nationwide Variable Insurance Trust - Van Kampen NVIT Comstock Value Fund: Class I)
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: Invesco Advisers, Inc.
Investment Objective: The Fund's investment objective is to seek capital growth and income through investments in equity securities, including common stocks, preferred stocks, and convertible securities.
Nationwide Variable Insurance Trust - Loring Ward NVIT Capital Appreciation Fund: Class P
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: LWI Financial Inc.
Investment Objective: To provide growth of capital, and secondarily current income.
Designation: FF
Nationwide Variable Insurance Trust - Loring Ward NVIT Moderate Fund: Class P
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: LWI Financial Inc.
Investment Objective: Seeks a high level of total return consistent with a moderate level of risk.
Designation: FF
Nationwide Variable Insurance Trust - Neuberger Berman NVIT Multi Cap Opportunities Fund: Class I
This Sub-Account is only available in policies issued before May 1, 2013
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: Neuberger Berman Management LLC
Investment Objective: The fund seeks long-term capital growth.
Nationwide Variable Insurance Trust - Neuberger Berman NVIT Socially Responsible Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: Neuberger Berman Management LLC
Investment Objective: The Fund seeks long-term growth of capital by investing primarily in securities of companies that meet the fund's financial criteria and social policy.
62
Nationwide Variable Insurance Trust - NVIT Cardinal(SM) Aggressive Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Investment Objective: The Aggressive Fund seeks maximum growth of capital consistent with a more aggressive level of risk as compared to other Cardinal Funds.
Designation: FF
Nationwide Variable Insurance Trust - NVIT Cardinal(SM) Balanced Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Investment Objective: The Fund seeks a high level of total return through investment in both equity and fixed income securities.
Designation: FF
Nationwide Variable Insurance Trust - NVIT Cardinal(SM) Capital Appreciation Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Investment Objective: The Fund seeks growth of capital, but also seeks income consistent with a less aggressive level of risk as compared to other Cardinal Funds.
Designation: FF
Nationwide Variable Insurance Trust - NVIT Cardinal(SM) Conservative Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Investment Objective: The Fund seeks a high level of total return consistent with a conservative level of risk as compared to other Cardinal Funds.
Designation: FF
Nationwide Variable Insurance Trust - NVIT Cardinal(SM) Moderate Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Investment Objective: The Fund seeks a high level of total return consistent with a moderate level of risk as compared to other Cardinal Funds.
Designation: FF
Nationwide Variable Insurance Trust - NVIT Cardinal(SM) Moderately Aggressive Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Investment Objective: The Fund seeks growth of capital, but also seeks income consistent with a moderately aggressive level of risk as compared to other Cardinal Funds.
Designation: FF
Nationwide Variable Insurance Trust - NVIT Cardinal(SM) Moderately Conservative Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Investment Objective: The fund seeks a high level of total return consistent with a moderately conservative level of risk.
Designation: FF
Nationwide Variable Insurance Trust - NVIT Core Bond Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: Nationwide Asset Management, LLC
Investment Objective: The Fund seeks a high level of current income consistent with preserving capital.
Nationwide Variable Insurance Trust - NVIT Core Plus Bond Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: Neuberger Berman Fixed Income LLC
Investment Objective: The fund seeks long-term total return consistent with reasonable risk.
Nationwide Variable Insurance Trust - NVIT Emerging Markets Fund: Class I
This Sub-Account is no longer available to receive transfers or new premium payments effective May 1, 2005
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: The Boston Company Asset Management, LLC
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 Emerging Markets Fund: Class III
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: The Boston Company Asset Management, LLC
Investment Objective: The Fund seeks long-term capital growth by investing primarily in equity securities of companies located in emerging market countries.
Designation: STTF
63
Nationwide Variable Insurance Trust - NVIT Government Bond Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: 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 Equity Fund: Class I
This Sub-Account is only available in policies issued before May 1, 2003
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: Invesco Advisers, Inc.
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 - NVIT International Equity Fund: Class III
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: Invesco Advisers, Inc.
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.
Designation: STTF
Nationwide Variable Insurance Trust - NVIT International Index Fund: Class VI
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: 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.
Designation: STTF
Nationwide Variable Insurance Trust - NVIT Investor Destinations Aggressive Fund: Class II
Investment Advisor: Nationwide Fund Advisors
Investment Objective: The NVIT Investor Destinations Aggressive Fund seeks maximum growth of capital consistent with a more aggressive level of risk as compared to other Investor Destinations Funds.
Designation: FF
Nationwide Variable Insurance Trust - NVIT Investor Destinations Balanced Fund: Class II
Investment Advisor: Nationwide Fund Advisors
Investment Objective: The NVIT Investor Destinations Balanced Fund seeks a high level of total return through investment in both equity and fixed-income securities.
Designation: FF
Nationwide Variable Insurance Trust - NVIT Investor Destinations Capital Appreciation Fund: Class II
Investment Advisor: Nationwide Fund Advisors
Investment Objective: The NVIT Investor Destinations Capital Appreciation Fund seeks growth of capital, but also seeks income consistent with a less aggressive level of risk as compared to other NVIT Investor Destinations Funds.
Designation: FF
Nationwide Variable Insurance Trust - NVIT Investor Destinations Conservative Fund: Class II
Investment Advisor: Nationwide Fund Advisors
Investment Objective: The NVIT Investor Destinations Conservative Fund seeks a high level of total return consistent with a conservative level of risk as compared to other Investor Destinations Funds.
Designation: FF
Nationwide Variable Insurance Trust - NVIT Investor Destinations Moderate Fund: Class II
Investment Advisor: Nationwide Fund Advisors
Investment Objective: The NVIT Investor Destinations Moderate Fund seeks a high level of total return consistent with a moderate level of risk as compared to other Investor Destinations Funds.
Designation: FF
64
Nationwide Variable Insurance Trust - NVIT Investor Destinations Moderately Aggressive Fund: Class II
Investment Advisor: Nationwide Fund Advisors
Investment Objective: The NVIT Investor Destinations Moderately Aggressive 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: FF
Nationwide Variable Insurance Trust - NVIT Investor Destinations Moderately Conservative Fund: Class II
Investment Advisor: Nationwide Fund Advisors
Investment Objective: The NVIT Investor Destinations Moderately Conservative Fund seeks a high level of total return consistent with a moderately conservative level of risk.
Designation: FF
Nationwide Variable Insurance Trust - NVIT Large Cap Growth Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: The Boston Company Asset Management, LLC
Investment Objective: The Fund seeks long-term capital growth.
Nationwide Variable Insurance Trust - NVIT Mid Cap Index Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: BlackRock Investment Management, LLC
Investment Objective: The Fund seeks capital appreciation.
Nationwide Variable Insurance Trust - NVIT Money Market Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: Federated Investment Management Company
Investment Objective: The Fund seeks as high a level of current income as is consistent with preserving capital and maintaining liquidity.
Nationwide Variable Insurance Trust - NVIT Multi Sector Bond Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: 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.
Nationwide Variable Insurance Trust - NVIT Multi-Manager International Growth Fund: Class III
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: Invesco Advisers, Inc. and American Century Investment Management, Inc.
Investment Objective: The fund seeks long-term capital growth.
Designation: STTF
Nationwide Variable Insurance Trust - NVIT Multi-Manager International Value Fund: Class I
This Sub-Account is no longer available to receive transfers or new premium payments effective May 1, 2005
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: AllianceBernstein L.P.; JPMorgan Investment Management, Inc.
Investment Objective: The Fund seeks long-term capital appreciation.
Nationwide Variable Insurance Trust - NVIT Multi-Manager International Value Fund: Class III
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: AllianceBernstein L.P.; JPMorgan Investment Management, Inc.
Investment Objective: The Fund seeks long-term capital appreciation.
Designation: STTF
Nationwide Variable Insurance Trust - NVIT Multi-Manager Large Cap Growth Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: Winslow Capital Management, Inc.; Neuberger Berman Management Inc. and Wells Capital Management, Inc.;
Investment Objective: The fund seeks long-term capital growth.
Nationwide Variable Insurance Trust - NVIT Multi-Manager Large Cap Value Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: Goldman Sachs Asset Management, L.P.; Wellington Management Company, LLP; The Boston Company Asset Management, LLC
Investment Objective: The fund seeks long-term capital growth.
65
Nationwide Variable Insurance Trust - NVIT Multi-Manager Mid Cap Growth Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: Neuberger Berman Management LLC; Wells Capital Management, Inc.
Investment Objective: The fund seeks long-term capital growth.
Nationwide Variable Insurance Trust - NVIT Multi-Manager Mid Cap Value Fund: Class II
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: American Century Investment Management, Inc.; Columbia Management Investment Advisers, LLC; Thompson, Siegel & Walmsley LLC
Investment Objective: The fund seeks long-term capital appreciation.
Nationwide Variable Insurance Trust - NVIT Multi-Manager Small Cap Growth Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: OppenheimerFunds, Inc.; Wellington Management Company, LLP
Investment Objective: The Fund seeks capital growth.
Nationwide Variable Insurance Trust - NVIT Multi-Manager Small Cap Value Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: Aberdeen Asset Management, Inc.; Epoch Investment Partners, Inc.; J.P. Morgan Investment Management Inc.
Investment Objective: The Fund seeks capital appreciation.
Nationwide Variable Insurance Trust - NVIT Multi-Manager Small Company Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: Aberdeen Asset Management, Inc.; Morgan Stanley Investment Management; Neuberger Berman Management, Inc.; Putnam Investment Management, LLC; and Waddell & Reed Investment Management Company
Investment Objective: The Fund seeks capital appreciation.
Nationwide Variable Insurance Trust - NVIT Nationwide Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: Aberdeen Asset Management, Inc. and Diamond Hill Capital Management, Inc.
Investment Objective: The Fund seeks total return through a flexible combination of capital appreciation and current income.
Nationwide Variable Insurance Trust - NVIT Real Estate Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: Brookfield Investment Management Inc.
Investment Objective: The Fund seeks current income and long-term capital appreciation.
Nationwide Variable Insurance Trust - NVIT S&P 500 Index Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: BlackRock Investment Management, LLC
Investment Objective: Long-term capital appreciation.
Nationwide Variable Insurance Trust - NVIT Short Term Bond Fund: Class II
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: 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.
Nationwide Variable Insurance Trust - NVIT Small Cap Index Fund: Class II
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: BlackRock Investment Management, LLC
Investment Objective: The Fund seeks to match the performance of the Russell 2000® Index.
Nationwide Variable Insurance Trust - Templeton NVIT International Value Fund: Class III
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: Templeton Investment Counsel, LLC
Investment Objective: The Fund seeks to maximize total return consisting of capital appreciation and/or current income.
Designation: STTF
66
Neuberger Berman Advisers Management Trust - AMT Short Duration Bond Portfolio: I Class Shares
This Sub-Account is only available in policies issued before May 1, 2012
Investment Advisor: Neuberger Berman Management LLC
Sub-advisor: Neuberger Berman Fixed Income LLC
Investment Objective: Highest available current income consistent with liquidity and low risk to principal; total return is a secondary goal.
Neuberger Berman Advisers Management Trust - AMT Small Cap Growth Portfolio: S Class Shares
This Sub-Account is only available in policies issued before May 1, 2008
Investment Advisor: Neuberger Berman Management LLC
Sub-advisor: Neuberger Berman, LLC
Investment Objective: Long-term capital growth.
Neuberger Berman Advisers Management Trust - AMT Socially Responsive Portfolio: I Class Shares
This Sub-Account is only available in policies issued before May 1, 2008
Investment Advisor: Neuberger Berman Management LLC
Sub-advisor: Neuberger Berman, LLC
Investment Objective: Long-term growth by investing primarily in securities of companies that meet financial criteria and social policy.
Northern Lights Variable Trust - TOPS Protected Balanced ETF Portfolio: Class 3
Investment Advisor: ValMark Advisers, Inc.
Sub-advisor: Milliman, Inc.
Investment Objective: Seeks to provide income and capital appreciation with less volatility than the fixed income and equity markets.
Designation: FF, VOL
Northern Lights Variable Trust - TOPS Protected Growth ETF Portfolio: Class 3
Investment Advisor: ValMark Advisers, Inc.
Sub-advisor: Milliman, Inc.
Investment Objective: Seeks capital appreciation with less volatility than the equity markets.
Designation: FF, VOL
Northern Lights Variable Trust - TOPS Protected Moderate Growth ETF Portfolio: Class 3
Investment Advisor: ValMark Advisers, Inc.
Sub-advisor: Milliman, Inc.
Investment Objective: Seeks capital appreciation with less volatility than the equity markets.
Designation: FF, VOL
Oppenheimer Variable Account Funds - Oppenheimer Discovery Mid Cap Growth Fund/VA: Non-Service Shares (formerly, Oppenheimer Variable Account Funds - Oppenheimer Small- & Mid-Cap Growth Fund/VA: Non-Service Shares)
This Sub-Account is only available in policies issued before May 1, 2003
Investment Advisor: OppenheimerFunds, Inc.
Investment Objective: Capital appreciation.
Oppenheimer Variable Account Funds - Oppenheimer Global Fund/VA: Class 3 (formerly, Oppenheimer Variable Account Funds - Oppenheimer Global Securities Fund/VA: Class 3)
Investment Advisor: OFI Global Asset Management, Inc.
Sub-advisor: OppenheimerFunds, Inc.
Investment Objective: The Fund seeks 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.
Designation: STTF
Oppenheimer Variable Account Funds - Oppenheimer Global Fund/VA: Non-Service Shares (formerly, Oppenheimer Variable Account Funds - Oppenheimer Global Securities Fund/VA: Non-Service Shares)
This Sub-Account is no longer available to receive transfers or new premium payments effective May 1, 2005
Investment Advisor: OFI Global Asset Management, Inc.
Sub-advisor: OppenheimerFunds, Inc.
Investment Objective: The Fund seeks 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.
67
Oppenheimer Variable Account Funds - Oppenheimer Global Strategic Income Fund/VA: Non-Service Shares
This Sub-Account is only available in policies issued before May 1, 2013
Investment Advisor: OppenheimerFunds, Inc.
Investment Objective: High level of current income principally derived from interest on debt securities.
Oppenheimer Variable Account Funds - Oppenheimer Main Street Fund®/VA: Non-Service Shares
Investment Advisor: OppenheimerFunds, Inc.
Investment Objective: High total return which includes growth in the value of its shares as well as current income from equity and debt securities.
Oppenheimer Variable Account Funds - Oppenheimer Main Street Small Cap Fund®/VA: Non-Service Shares (formerly, Oppenheimer Variable Account Funds - Oppenheimer Main Street Small- & Mid-Cap Fund®/VA: Non-Service Shares)
This Sub-Account is only available in policies issued before May 1, 2013
Investment Advisor: OppenheimerFunds, Inc.
Investment Objective: Capital appreciation.
PIMCO Variable Insurance Trust - All Asset Portfolio: Administrative Class
Investment Advisor: Pacific Investment Management Company LLC
Sub-advisor: 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 Advisor: 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 - Low Duration Portfolio: Administrative Class
Investment Advisor: 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 - Total Return Portfolio: Administrative Class
Investment Advisor: 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.
Putnam Variable Trust - Putnam VT Growth & Income Fund: Class IB
This Sub-Account is only available in policies issued before May 1, 2005
Investment Advisor: Putnam Investment Management, LLC
Sub-advisor: Putnam Investments Limited
Investment Objective: Capital growth and current income.
Putnam Variable Trust - Putnam VT International Equity Fund: Class IB
This Sub-Account is only available in policies issued before May 1, 2004
Investment Advisor: Putnam Investment Management, LLC
Sub-advisor: Putnam Investments Limited and Putnam Advisory Company, LLC
Investment Objective: Capital appreciation.
68
Putnam Variable Trust - Putnam VT Voyager Fund: Class IB
This Sub-Account is only available in policies issued before May 1, 2005
Investment Advisor: Putnam Investment Management, LLC
Sub-advisor: Putnam Investments Limited
Investment Objective: Capital appreciation.
T. Rowe Price Equity Series, Inc. - T. Rowe Price Health Sciences Portfolio: II
Investment Advisor: T. Rowe Price Associates, Inc.
Investment Objective: Long-term capital appreciation.
The Universal Institutional Funds, Inc. - Core Plus Fixed Income Portfolio: Class I
This Sub-Account is only available in policies issued before May 1, 2009
Investment Advisor: Morgan Stanley Investment Management Inc.
Investment Objective: Above-average total return over a market cycle of three to five years by investing primarily in a diversified portfolio of fixed income securities.
The Universal Institutional Funds, Inc. - Emerging Markets Debt Portfolio: Class I
This Sub-Account is only available in policies issued before May 1, 2004
Investment Advisor: 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.
Van Eck VIP Trust - Van Eck VIP Emerging Markets Fund: Initial Class
This Sub-Account is only available in policies issued before May 1, 2002
Investment Advisor: Van Eck Associates Corporation
Investment Objective: Long-term capital appreciation by investing primarily in equity securities in emerging markets around the world.
Van Eck VIP Trust - Van Eck VIP Global Hard Assets Fund: Initial Class
Investment Advisor: Van Eck Associates Corporation
Investment Objective: Long-term capital appreciation by investing primarily in hard asset securities. Income is a secondary consideration.
Wells Fargo Advantage Variable Trust - Wells Fargo Advantage VT Small Cap Growth Fund: Class 2
This Sub-Account is only available in policies issued before May 1, 2013
Investment Advisor: Wells Fargo Funds Management, LLC
Sub-advisor: Wells Capital Management Inc.
Investment Objective: Long-term capital appreciation.
69
Appendix B: Definitions
Accumulation Unit – The measure of an investment in, or share of, a Sub-Account. Accumulation Unit values are initially set at $10 for each Sub-Account.
Attained Age – The Insured's age upon the issue of full insurance coverage plus the number of full years since the Policy Date.
Base Policy Specified Amount – The amount of insurance coverage selected under the base policy, excluding any Rider Specified Amount.
Cash Surrender Value – The Cash Value minus Indebtedness and any surrender charge.
Cash Value – The total of amounts allocated to the Sub-Accounts, the policy loan account, and the Fixed Account.
Code – The Internal Revenue Code of 1986, as amended.
Death Benefit – The amount paid upon the Insured's death, before the deduction of any Indebtedness or due and unpaid policy charges.
Fixed Account – An investment option that is funded by Nationwide's general account.
Grace Period – A 61-day period after which the Policy will Lapse if sufficient payments are not made to prevent Lapse.
In Force – Any time during which 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 is insured under the policy, and whose death triggers payment of the Death Benefit.
Investment Experience – The market performance of a mutual fund/Sub-Account.
Lapse – The policy terminates without value.
Maturity Date – The policy anniversary on which the Insured reaches age 100.
Minimum Required Death Benefit – The lowest Death Benefit that will qualify the policy as life insurance under the Code.
Nationwide – Nationwide Life Insurance Company, us, we, or our.
Net Amount At Risk – The policy's base Death Benefit minus the policy's Cash Value.
Net Asset Value (NAV) – The price of each share of a mutual fund in which a Sub-Account invests. NAV is calculated by subtracting the mutual fund's liabilities from its total assets, and dividing that figure by the number of shares outstanding. Nationwide uses NAV to calculate the value of Accumulation Units. NAV does not reflect deductions made for charges taken from the Sub-Accounts.
Net Premium – Premium after transaction charges, but before any allocation to an investment option.
Policy Data Page(s) – The Policy Data Page(s) contains more detailed information about the policy, some of which is unique to the policy owner, the beneficiary, and the Insured.
Policy Date – The date the policy takes effect as shown on the Policy Data Page. Policy years, months, and anniversaries are measured from this date.
Policy owner or Owner – The person or entity named as the owner on the application, or the person or entity assigned ownership rights.
Policy Proceeds or Proceeds – Policy Proceeds may constitute the Death Benefit, or the amount payable if the policy matures or is surrendered, adjusted to account for any unpaid charges, Indebtedness and Rider benefits.
Premium – Amount(s) paid to purchase and maintain the policy.
Premium Load – The aggregate of the sales load and premium tax charges.
70
Rider – An optional benefit purchased under the policy. Rider availability and Rider terms may vary depending on the state in which the policy was issued.
Rider Specified Amount – The portion of the Total Specified Amount attributable to the Additional (insurance) Protection Rider.
SEC – The Securities and Exchange Commission.
Service Center – The department of Nationwide responsible for receiving all service and transaction requests relating to the policy. For service and transaction requests submitted other than by telephone (including fax requests), the Service Center is Nationwide's mail and document processing facility. For service and transaction requests communicated by telephone, the Service Center is Nationwide's operations processing facility, see Contacting the Service Center.
Sub-Account(s) – The mechanism used to account for allocations of Net Premium and Cash Value among the policy's variable investment options.
Substandard Rating – An underwriting classification based on medical and/or non-medical factors used to determine what to charge for life insurance based on characteristics of the Insured beyond traditional factors for standard risks, which include age, sex, and smoking habits of the Insured. Substandard Ratings are shown in the Policy Data Pages as rate class multiples (medical factors) and/or monthly flat extras (medical and/or non-medical factors). The higher the rate class multiple or monthly flat extra, the greater the risk assessed and the higher the cost of coverage.
Total Specified Amount – The sum of the Base Policy Specified Amount and the Rider Specified Amount, if applicable.
Valuation Period – The period during which Nationwide determines the change in the value of the Sub-Accounts. One Valuation Period ends and another begins with the close of trading on the NYSE.
71
Outside back cover page
To learn more about the policy, the policy owner 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 Policy Account Values, and to request other information about the policy contact the Service Center:
• by telephone at 1-800-848-6331
• by mail to Nationwide Life Insurance Company
P.O. Box 182835
Columbus, OH 43218-2835
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 Nationwide Life Insurance Company and the policy. Information about Nationwide Life Insurance Company and the policy (including the SAI) may also be reviewed and copied at the SEC's Public Reference Room in Washington, DC, or may be obtained, upon payment of a duplicating fee, by writing the Public Reference Section of the SEC, 100 F Street NE, Washington, DC 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. 811-08301
Securities Act of 1933 Registration File No. 333-31725

Table of Contents
The Best of America® Choice LifeSM FPVUL
Individual Flexible Premium Variable Universal Life Insurance Policies
Issued by
Nationwide Life Insurance Company
through its
Nationwide VLI Separate Account-4
The date of this prospectus is May 1, 2013.
This prospectus contains basic information about the policies that should be understood before investing. Read this prospectus carefully and keep it for future reference.
Variable life insurance policies are complex products with unique benefits and advantages. There are costs and charges associated with these benefits and advantages - costs and charges that are different, or do not exist at all within other life insurance products. With help from financial consultants and advisors, purchasers are encouraged to compare and contrast the costs and benefits of the policy described in this prospectus against those of other life insurance products, especially other variable life insurance products offered by Nationwide and its affiliates. Nationwide offers a wide array of products, many with different charges, benefit features, and underlying investment options. This process of comparison and analysis should aid in determining whether the purchase of the policy described in this prospectus is consistent with the purchaser's life insurance objectives, risk tolerance, investment time horizon, marital status, tax situation, and other personal characteristics and needs.
To obtain additional information, including free copies of prospectuses for the underlying mutual funds or a copy of the Statement of Additional Information, or to make service or transaction requests, contact Nationwide using any of the methods described in Contacting the Service Center.
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 prospectus is not an offering in any jurisdiction where such offering may not lawfully be made. Not all Riders, terms, conditions, benefits, programs, features, and investment options are available or approved for use in every state. Contact Nationwide to review a copy of the policy and any Riders or endorsements. This prospectus contains all material rights and features of the policy, including any material variations in the policy, such as availability of certain Riders.
The policy is NOT: insured by the Federal Deposit Insurance Corporation; a bank deposit; available in every state; or insured or endorsed by a bank or any federal government agency.
The policy may decrease in value to the point of being valueless because of poor Investment Experience.
The purpose of this policy is to provide life insurance protection for the beneficiary named by the policy owner. If the purchaser's primary need is not life insurance protection, then purchasing this policy may not be in the best interest of the purchaser. Nationwide makes no claim that the policy is in any way similar or comparable to a systematic investment plan of a mutual fund.
If this policy is being purchased to replace existing life insurance, the purchaser should carefully consider the benefits, features, and costs of this policy versus those of the policy being replaced.
Nationwide offers 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 the policy described herein. These differences in charges may be attributable to differences in sales and related expenses incurred in one distribution channel versus another.
1
Table of Contents
  Page
4
5
7
11
11
12
13
14
14
14
16
16
17
17
18
18
18
19
19
19
19
19
20
20
21
21
21
22
22
23
23
24
24
24
25
25
26
26
26
26
27
28
28
29
30
31
32
32
33
33
34
34
35
35
36
37
2
Table of Contents (continued)
  Page
38
38
38
38
39
39
39
39
40
40
40
40
41
41
41
41
42
42
43
43
43
43
43
44
44
44
45
45
45
46
46
53
53
53
53
54
54
55
55
56
56
57
70
3
In Summary: Policy Benefits
Death Benefit
The primary benefit of this policy is life insurance coverage. Nationwide will pay the Death Benefit Proceeds upon the Insured's death if the Insured dies while the policy is In Force. The policy is In Force when: the policy has been issued; the Insured is living; the policy has not been surrendered for its Cash Surrender Value; and the policy has not Lapsed.
Death Benefit Options
Note: The Death Benefit will be the greater of the amount produced by the death benefit option in effect on the date of the Insured's death or the Minimum Required Death Benefit, see The Minimum Required Death Benefit.
Death Benefit Option 1: The Death Benefit will be the Total Specified Amount as of the Insured's date of death.
Death Benefit Option 2: The Death Benefit will be the Total Specified Amount plus the Cash Value as of the Insured's date of death.
Death Benefit Option 3: The Death Benefit will be the Total Specified Amount plus the accumulated premium account (which consists of all Premium payments plus interest), less any partial surrenders, as of the Insured's date of death.
Choice of Policy Proceeds
The Policy Proceeds may be paid in a lump sum, or a variety of options that will pay out over time.
Coverage Flexibility
Subject to conditions, the policy owner may choose to:
• change the death benefit option;
• increase or decrease the Base Policy Specified Amount and/or Rider Specified Amount;
• change beneficiaries; and
• change ownership of the policy.
Continuation of Coverage is Guaranteed
The policy will remain In Force during the policy continuation period as long as sufficient Premium is paid to meet the requirements set forth in Guaranteed Policy Continuation Provision.
Access to Cash Value
Subject to conditions, the policy owner may:
• take a policy loan, see Policy Loans.
• take a partial surrender, see Partial Surrender.
• surrender the policy for its Cash Surrender Value at any time while the policy is In Force, see Full Surrender.
Premium Flexibility
The policy owner will select a Premium payment plan for the policy at the time of application. Within limits, the policy owner may vary the frequency and amount of Premium payments, see Premium Payments.
Investment Options
Net Premium may be allocated among fixed and/or variable investment options available in the policy.
The policy currently offers a fixed investment option which will earn interest daily, see Fixed Account.
The variable investment options offered under the policy correspond to 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 underlying mutual funds offered in the policy.
4
Transfer Requests
Policy owners may request to transfer allocations between available investment options of the policy (i.e., the Fixed Account and Sub-Accounts). Requests to transfer allocations between policy investment options will be processed in the Valuation Period they are received at the Service Center as long as the request is in good order. Requests that are not in good order may be delayed or returned, see Contacting the Service Center. Transfer requests may be subject to policies and procedures intended to reduce the potentially detrimental impact that disruptive trading has on Sub-Account Investment Experience, see Transfers Among and Between Policy Investment Options.
Taxes
Earnings on the policy are generally not taxable to the policy owner, unless withdrawn from the policy. This is known as tax deferral. In addition, beneficiaries generally will not have to include Death Benefit Proceeds as taxable income, see Taxes.
Unlike other variable insurance products Nationwide offers, these Individual Flexible Premium Variable Universal Life Insurance Policies do not require distributions to be made before Insured's death, see Taxes.
Assignment
Policy owners may assign the policy as collateral for a loan or another obligation while the policy is In Force, see Assigning the Policy.
Examination Right
For a limited time, the policy owner may cancel the policy and receive a refund, see To Cancel (Examination Right).
Riders
The policy owner may purchase one or more of the Riders listed below, subject to availability in the state where the policy is issued. There may be additional charges assessed for elected Riders and Rider charges may vary based upon the individual characteristics of the Insured. Operation and benefits of the Riders described in this prospectus may vary by the state where the policy is issued.
• Adjusted Sales Load Life Insurance Rider
• Children's Insurance Rider
• Long-term Care Rider
• Spouse Life Insurance Rider
• Accidental Death Benefit Rider
• Premium Waiver Rider
• Change of Insured Rider (no charge)
• Additional (insurance) Protection Rider
• Deduction (of Fees and Expenses) Waiver Rider
• Policy Guard Rider
In Summary: Policy Risks
State Variations
Due to variations in state law, many features of the policy described in this prospectus may be different or may not be available at all depending on the state in which the policy is issued.
Possible variations include, but are not limited to, Rider terms and availability, availability of certain investment options, free look rights, policy exchange rights, policy Lapse and/or reinstatement requirements, and the duration of suicide and incontestability periods. Variations due to state law are subject to change without notice at any time. To review a copy of the policy and any Riders or endorsements for the state in which the policy will be issued, the policy owner can contact the Service Center, see Contacting the Service Center.
5
Risk of Increase in Current Fees and Charges
Nationwide may change policy and/or Rider charges and rates under the policy at any time. Changes in policy and/or Rider charges and rates will vary based upon changes in Nationwide's future expectations related to items such as company investment earnings, mortality experience, persistency experience, expenses, including reinsurance expenses, and taxes. Nationwide will provide advance notice of any increase in policy and/or Rider charges.
If a change in the charges or rates causes an increase to the policy and/or Rider charges, the policy's Cash Value could decrease. If a change in the charges or rates causes a decrease to the policy and/or Rider charges, the policy's Cash Value could increase. Policy and Rider charges will not exceed the maximum charges shown in the fee tables, see In Summary: Fee Tables and Standard Policy Charges.
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 accessing the Cash Value in the early policy years could incur potentially substantial surrender charges.
Unfavorable Investment Experience
The Sub-Accounts may generate unfavorable Investment Experience. Poor Investment Experience and the deduction of policy and Sub-Account charges may lower the policy's Cash Value potentially resulting in a Lapse of insurance coverage.
Risk of Policy Lapse
Cash Value can be reduced by Investment Experience, policy loans, partial surrenders and the deduction of policy charges. Whenever Cash Value is insufficient to cover the policy's charges, the policy is at risk of Lapse; the policy could terminate without value and insurance coverage would cease.
Limitation of Access To Cash Value
A policy owner can access Cash Value through loans and partial surrenders, subject to limitations. Limitations include the amount and frequency of the loan or partial surrender, see Policy Loans and Surrenders. Once a loan or surrender is taken, Cash Value will be reduced by the amount of the policy loan and/or the partial surrender and any associated charges.
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 of the Death Benefit Proceeds from the taxable income of 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 is less favorable when compared to a life insurance policy that is not a modified endowment contract. For example, distributions and loans from modified endowment contracts may currently be taxed as ordinary income and not a return of investment, see Taxes.
The proceeds of a life insurance policy are includible in the gross estate of the Insured for federal income tax purposes if either (a) the proceeds are payable to the executor of the estate of the Insured, or (b) the Insured, at any time within three years prior to his or her death, possessed any incident of ownership in the policy. For this purpose, the Treasury Regulations provide that the term "incident of ownership" is to be construed very broadly, and includes any right that the Insured may have with respect to the economic benefits in the policy. Consult a qualified tax advisor on all tax matters involving the policy described herein.
Fixed Account Transfer Restrictions and Limitations
In addition to the Sub-Accounts available under the policy, Net Premium can be allocated to the Fixed Account. Prior to the policy's Maturity Date, the policy owner may make transfers involving the Fixed Account subject to transfer restrictions, without penalty or adjustment. These transfers will be in dollars and Nationwide may limit the frequency and dollar amount of transfers involving the Fixed Account. See Fixed Account Transfers for details about restrictions that apply to transfers to and from the Fixed Account.
6
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 less favorable Investment Experience and a lower Cash Value. Nationwide has instituted procedures to minimize disruptive transfers. While Nationwide expects these procedures to reduce the adverse effect of disruptive transfers, it cannot ensure that it has eliminated these risks.
Sub-Account Investment Risk
A comprehensive discussion of the risks of each underlying mutual fund may be found in the 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 the Service Center.
In Summary: Fee Tables
The following tables describe the fees and expenses assessed under the policy. The rates in these tables may be rounded up to the nearest one-hundredth decimal. These tables should be read in conjunction with the corresponding section of this prospectus that describes the fee or expense in more detail. All charges deducted from the policy's Cash Value are taken proportionally from the Sub-Accounts and the Fixed Account except where noted.
The first table describes the fees and expenses that a policy owner will pay at the time the policy owner buys the policy, surrenders the policy, or transfers Cash Value between investment options.
Transaction Fees
Charge When Charge Is Deducted Amount Deducted
Sales Load Charge(1) Upon making a Premium payment Maximum:
$25 from each $1,000 of Premium 		Current:
$5 from each $1,000 of Premium
Premium Taxes Charge(1) Upon making a Premium payment $35 per $1,000 of Premium payment
Surrender Charge2 Upon full surrender; Upon policy Lapse; Upon a decrease to the Base Policy Specified Amount Maximum:
$25,590 		Minimum:
$2,337 		Representative:
$3,408
Representative - For an age 35 male non-tobacco preferred with a Base Policy Specified Amount and a Total Specified Amount of $500,000 and Death Benefit Option 1 From the policy's available Cash Value
Illustration Charge3 Upon requesting an illustration Maximum:
$25 		Current:
$0
Partial Surrender Fee Upon a partial surrender Maximum:
the lesser of $25 or 2% of amount surrendered 		Current:
$0
7
Transaction Fees
Charge When Charge Is Deducted Amount Deducted
Short-Term Trading Fee4 Upon transfer of Sub-Account value out of a Sub-Account within 60 days after allocation to that Sub-Account 1% of the amount transferred from the Sub-Account within 60 days of allocation to that Sub-Account
† This charge will vary based upon the individual characteristics of the Insured. Representative charges shown in the table may not be representative of the charge that a particular policy owner will pay. Policy owners can request an illustration of specific costs and/or see the Policy's Data Pages for information about specific charges of the policy.
1 The maximum Sales Load Charge and the Premium Taxes Charge (collectively "Premium Load") represent the maximums that may be charged in any policy year, see Premium Load.
2 For purposes of this table, for a full surrender occurring in the first year from the Policy Date, the charge calculations assume an aggregate first year Premium in excess of the surrender target premium. The surrender target premium is an assumed Premium payment amount used in calculating the Surrender Charge. The Surrender Charge is based on the lesser of the surrender target premium and the Premiums paid in the first year from the Policy Date. The surrender target premium varies by: the Insured's sex; issue age; underwriting class; and the Base Policy Specified Amount (including any increases). The maximum Surrender Charge calculation assumes: a male; age 85 or older; tobacco; a Base Policy Specified Amount and Total Specified Amount of $500,000, Death Benefit Option 1; and policy year one. The minimum charge calculation assumes: a female; issue age 0; a Base Policy Specified Amount and Total Specified Amount of $500,000; Death Benefit Option 1 and policy year one.
3 The policy owner will be expected to pay the Illustration Charge at the time of the request. This charge will not be deducted from Cash Value.
4 Short-term trading fees are only assessed in connection with Sub-Accounts that correspond to underlying mutual funds that assess a short-term trading fee, see Short-Term Trading Fees.
The next table describes the fees and expenses that a policy owner will pay periodically while the policy is In Force, not including mutual fund operating expenses.
Periodic Charges
Charge When Charge Is Deducted Amount Deducted From Cash Value
Cost Of Insurance Charge1† Monthly Minimum:
$0.04 		Maximum:
$83.33 		Representative:
$0.14
Representative – An age 35 male; non-tobacco preferred; Base Policy Specified Amount and Total Specified Amount $500,000; Death Benefit Option 1 Per $1,000 Of Net Amount At Risk –
From the policy's available Cash Value
Flat Extra Charge2 Monthly Maximum:
$2.08 per $1,000 of Net Amount
At Risk for each Flat Extra assessed
Mortality and Expense Risk Charge3 Monthly Maximum :
A monthly rate of $0.50 Per $1,000 of Cash Value
Proportionately from the Sub-Accounts only
8
Periodic Charges
Charge When Charge Is Deducted Amount Deducted From Cash Value
Administrative Charge4 Monthly Maximum:
$10 		Current:
$10
From the policy's available Cash Value
Policy Loan Interest Charge5 Annually Maximum:
$39 		Current:
$39
Per $1,000 of an outstanding policy loan
† This charge will vary based upon the individual characteristics of the Insured. Representative charges shown in the table may not be representative of the charge that a particular policy owner will pay. Policy owners can request an illustration of specific costs and/or see the Policy's Data Pages for information about specific charges of the policy.
1 The Cost of Insurance Charge varies by: the Insured's sex; age; underwriting class; any Substandard Ratings; the year from the Policy Date; and the Base Policy Specified Amount. Cost of Insurance charges are taken from the policy's Cash Value at the beginning of the month starting with the Policy Date. The charge is not pro rated should the policy terminate before the beginning of the next month.
2 The Flat Extra is a component in the calculation of the base policy Cost of Insurance Charge and any Rider Cost of Insurance Charge. It is only applicable if certain factors result in an Insured having a Substandard Rating. Under no circumstance will the assessment of a Flat Extra Charge result in the Cost of Insurance Charge exceeding the maximum Cost of Insurance Charge, see Cost of Insurance.
3 On a current basis, during policy years one through 15, the Mortality and Expense Risk Charge is $0.50 per $1,000 on the first $25,000 of Cash Value, and $0.25 per $1,000 on Cash Values of $25,001 up to $250,000. For Cash Values above $250,000, the charge is $0.08 per $1,000. Beginning in the policy year 16, the charge is $0.50 per $1,000 on the first $25,000 of Cash Value, and $0.08 per $1,000 of Cash Value over $25,000. The charge is only assessed against Cash Value allocated to Sub-Accounts.
4 After the first policy year, the monthly maximum amount is $7.50, and the monthly current amount is $5.
5 The Policy Loan Interest Charge is described in more detail in Policy Loans.
9
The next table describes the fees and expenses associated with Riders that a policy owner will pay periodically while the policy is In Force, not including mutual fund operating expenses.
Periodic Charges For Riders
Charge When Charge Is Deducted Amount Deducted From Cash Value
Adjusted Sales Load Life Insurance Rider Charge Monthly $0.14
Per $1,000 of aggregate monthly Premiums
and 1% of Premium Load replaced – Waived from the policy's available Cash Value
Children's Insurance Rider Charge Monthly $0.43 Per $1,000 of Rider Specified Amount –
From the policy's available Cash Value
Long-Term Care Rider Charge† Monthly Minimum:
$0.02 		Maximum:
$28.65 		Representative:
$0.02
Representative - An age 35 male; non-tobacco preferred;Long-Term Care Rider Specified Amount $500,000; Death Benefit Option 1 Per $1,000 of Rider Net Amount At Risk -
From the policy's available Cash Value
Spouse Life Insurance Rider Charge† Monthly Minimum:
$0.10 		Maximum:
$10.23 		Representative:
$0.11
Representative Spouse - An age 35 female; non-tobacco; and Spouse Life Insurance Rider Specified Amount $100,000 Per $1,000 of Spouse Death Benefit -
From the policy's available Cash Value
Accidental Death Benefit Rider Charge† Monthly Minimum:
$0.05 		Maximum:
$0.75 		Representative:
$0.06
Representative - An age 35 male; non-tobacco preferred; and Accidental Death Benefit $100,000 Per $1,000 of Accidental Death Benefit -
From the policy's available Cash Value
Premium Waiver Rider Charge1† Monthly Minimum:
$42 		Maximum:
$315 		Representative:
$42
Representative - An age 35 male; non-tobacco preferred Per $1,000 of Premium Waiver Benefit -
From the policy's available Cash Value
Additional (Insurance) Protection Rider Charge2† Monthly Minimum:
$0.01 		Maximum:
$83.33 		Representative:
$0.04
Representative - An age 35 male; non-tobacco preferred; Additional Death Benefit $250,000 Per $1,000 of Rider Net Amount at Risk –
From the policy's available Cash Value
10
Periodic Charges For Riders
Charge When Charge Is Deducted Amount Deducted From Cash Value
Deduction (of Fees and Expenses) Waiver Rider Charge3† Monthly Minimum:
$90 		Maximum:
$860 		Representative:
$90
Representative - An age 35 male; non-tobacco preferred; Total Specified Amount of $500,000; Death Benefit Option 1 Per $1,000 of Deduction Waiver Benefit –
From the policy's available Cash Value
Policy Guard Rider Charge4† Upon Invoking The Rider Minimum:
$6.50 		Maximum:
$46.00 		Representative:
$37.00
Representative – Attained Age 85; Cash Value $500,000; Indebtedness of $480,000 Deducted from each $1,000 of the policy's Cash Value
† This charge will vary based upon the individual characteristics of the Insured. Representative charges shown in the table may not be representative of the charge that a particular policy owner will pay. Policy owners can request an illustration of specific costs and/or see the Policy's Data Pages for information about specific charges of the policy.
1 The charge calculations assume monthly Premium payments of $1,000, the waiver of which would occur in the event of the Insured's total disability for six consecutive months. For policies issued before July 13, 2006, the maximum charge for this Rider is $105.
2 The monthly charge is a product of the Rider's monthly cost of insurance charge and the Rider Death Benefit, see Additional (Insurance) Protection Rider.
3 The charge calculation assumes total monthly periodic charges of $1,000 (not including this Rider's cost, and any loan amount interest [which are meant to be excluded]). These charges would be waived in the event of the Insured's total disability for six consecutive months.
4 The level of Indebtedness as a percentage of Cash Value that will allow the policy owner to invoke the Rider will vary with the attained age of the Insured. Generally, the higher the Insured's attained age, the higher the level of Indebtedness must be to invoke the Rider, see Policy Guard Rider.
The next table shows the minimum and maximum total operating expenses, as of December 31, 2012, charged by the underlying mutual funds that a policy owner may periodically pay while the policy is In Force. More detail concerning each mutual fund's fees and expenses is contained in the mutual fund's prospectus.
Total Annual Mutual Fund Operating Expenses
  Minimum   Maximum
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) 		0.28%   4.21%
Policy Investment Options
Policy owners designate how Net Premium payments are allocated among the Sub-Accounts and/or the Fixed Account. Allocation instructions must be in whole percentages and the sum of the allocations must equal 100%.
Fixed Account
Nationwide's obligations under the Fixed Account are backed by assets of its general account. The general account contains all of Nationwide's assets other than those in this and other Nationwide separate accounts and is used to support Nationwide's annuity and insurance obligations.
Subject to applicable law, Nationwide has sole discretion over the investment of assets of the general account and policy owners do not share in the investment experience of, or have any preferential claim on, those assets. Nationwide bears the full investment risk for all amounts allocated to the Fixed Account.
11
Because of exemptive and exclusionary provisions, interests in the Fixed Account have not been and will not be registered under the Securities Act of 1933 and the general account has not been registered as an investment company under the Investment Company Act of 1940. Accordingly, neither the general account nor any interests therein are subject to the provisions of these acts. Nationwide has been advised that the staff of the SEC has not reviewed the disclosure in this prospectus relating to the Fixed Account. Disclosure regarding the Fixed Account, however, is subject to certain generally-applicable provisions of the federal securities laws relating to accuracy and completeness of statements made in prospectuses.
Minimum Guaranteed Interest Rate
Nationwide guarantees that Cash Value allocated to the Fixed Account will accrue interest daily at an effective annual rate that Nationwide determines without regard to the actual investment experience of the general account. Interest crediting rates are set at the beginning of each calendar quarter but are subject to change at any time. Nationwide will credit any interest in excess of the guaranteed interest crediting rate at its sole discretion. Nationwide may not credit any interest in excess of the guaranteed interest crediting rate and different rates may apply to different Premium allocations or exchanges.
Currently, the Fixed Account is the only fixed investment option available under the policy. In the future, Nationwide may offer one or more additional fixed accounts with characteristics that differ from those of the current option, but is under no obligation to do so. The effective annual rate Nationwide declares for the Fixed Account will never be less than 3%.
Interest Crediting Risks and Lapse
The policy owner assumes the risk that the actual credited interest rate may not exceed the guaranteed interest crediting rate. Premiums applied to the policy at different times may receive different interest crediting rates. The interest crediting rate may also vary for new Premium versus Sub-Account transfers. Interest credited to the Fixed Account may be insufficient to pay the policy's charges. Additional Premium payments may be required over the life of the policy to prevent it from Lapsing.
Nationwide Claims-Paying Ability
Guaranteed benefits or interest crediting associated with the Fixed Account is a general account obligation of Nationwide. Therefore, any guaranteed benefit, interest crediting, and the policy owner's right to receive payment, is subject to Nationwide's claims-paying ability and may be subordinate to other claims on the general account in the event Nationwide becomes insolvent.
Restrictions on Transfers to and from the Fixed Account
Prior to the policy's Maturity Date, the policy owner may make transfers involving the Fixed Account. These transfers will be in dollars. Nationwide may impose limits on the dollar amount, percentage of Cash Value, number, and/or frequency of transfers involving the Fixed Account, see Fixed Account Transfers for details about restrictions that apply to transfers to and from the Fixed Account.
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 are designed primarily as investments for variable annuity contracts and variable life insurance policies issued by insurance companies.
Each Sub-Account's assets are held separately from the assets 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.
Underlying mutual funds in the separate 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 advisors 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.
12
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. In the case of new share class additions, future allocations may be limited to the new share classes. The policy owner will receive notice of any such changes that effect the policy. Not all underlying mutual funds may be available in every state.
Some underlying mutual funds may assess short-term trading fees. The separate account will collect the short-term trading fee at the time of the transfer by reducing the amount transferred. All short-term trading fees collected are remitted to the underlying mutual fund, see Short-Term Trading Fees and Appendix A: Sub-Account Information.
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.
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. For more information on the underlying mutual funds, refer to the prospectus for the mutual fund. To obtain free copies of prospectuses for the underlying mutual funds, policy owners can contact Nationwide using any of the methods described in Contacting the Service Center.
• AllianceBernstein Variable Products Series Fund, Inc.
• American Century Variable Portfolios II, Inc.
• American Century Variable Portfolios, Inc.
• BlackRock Variable Series Funds, Inc.
• Delaware VIP Trust
• Dreyfus
• Dreyfus Investment Portfolios
• Dreyfus Variable Investment Fund
• Federated Insurance Series
• Fidelity Variable Insurance Products Fund
• Franklin Templeton Variable Insurance Products Trust
• Goldman Sachs Variable Insurance Trust
• Guggenheim Variable Fund
• Invesco
• Ivy Funds Variable Insurance Portfolios
• Janus Aspen Series
• MFS® Variable Insurance Trust
• Nationwide Variable Insurance Trust
• Neuberger Berman Advisers Management Trust
• Northern Lights Variable Trust
• Oppenheimer Variable Account Funds
• PIMCO Variable Insurance Trust
• Putnam Variable Trust
• T. Rowe Price Equity Series, Inc.
• The Universal Institutional Funds, Inc.
• Van Eck VIP Trust
• Wells Fargo Advantage Variable Trust
Valuation of Accumulation Units
Nationwide accounts 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. Nationwide uses each underlying mutual fund's Net Asset Value (NAV) 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 How Sub-Account Investment Experience is Determined.
Accumulation Units are priced as of the New York Stock Exchange's (NYSE) close of business, normally 4:00 p.m. EST, on each day that it is open. Nationwide will price Accumulation Units on each day that the NYSE is open for business. Any transactions received after the close of the NYSE will be priced as of the next Valuation Period. Nationwide will not price Accumulation Units on these recognized holidays:
• New Year's Day
• Martin Luther King, Jr. Day
• Presidents' Day
• Good Friday
• Memorial Day
• Independence Day
• Labor Day
• Thanksgiving
• Christmas
In addition, Nationwide will not price Accumulation Units if:
13
(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 in items (1) and (2) exist.
How Sub-Account Investment Experience is Determined
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 owned by the policy owner. The number of Accumulation Units 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 Sub-Account Accumulation Units owned by a policy owner 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 Premium and loan repayments.
Initially, Nationwide sets 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. Nationwide accounts for these performance fluctuations by using a "net investment factor," as described below, in the 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.
Nationwide determines 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 held in the Sub-Account (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 held in the Sub-Account determined as of the end of the immediately preceding Valuation Period.
Nationwide determines the Sub-Account's Accumulation Unit value at the end of each Valuation Period. 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 Period, subject to the terms and conditions described in this prospectus and the prospectuses 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 another 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"). A policy owner who intends to use an active trading strategy should consult his/her registered representative and request information on other Nationwide policies that offer mutual funds that are designed specifically to support active trading strategies.
Nationwide discourages (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.
14
To protect investors in this policy from the negative impact of these practices, Nationwide has implemented, or reserves the right to implement, several processes and/or restrictions aimed at eliminating the negative impact of active trading strategies. Nationwide cannot guarantee that attempts to deter active trading strategies will be successful.
If Nationwide is unable to deter active trading strategies, the performance of the Sub-Accounts that are actively traded may be adversely impacted. Policy owners remaining in the affected Sub-Account will bear any resulting increased costs.
Short-Term Trading Fees
Some underlying mutual funds assess a short-term trading fee in connection with transfers from a Sub-Account that occur within 60 days after the date of the allocation to the Sub-Account. The fee is assessed against the amount transferred and is paid to the underlying mutual fund. These fees compensate the mutual fund for any negative impact on fund performance resulting from short-term trading. Some underlying mutual funds may refer to short-term trading fees as "redemption fees." See Appendix A: Sub-Account Information for a complete list of available underlying mutual funds, including those that assess short-term trading fees.
U.S. Mail Restrictions
Nationwide monitors transfer activity in order to identify those who may be engaged in harmful trading practices. Transaction reports are produced and examined. Generally, a policy may appear on these reports if the policy owner (or a third party acting on their behalf) engages in a certain number of "transfer events" in a given period. A "transfer event" is any transfer, or combination of transfers, occurring in a given Valuation Period. For example, if a policy owner executes multiple transfers involving 10 Sub-Accounts in one Valuation Period, this counts as one transfer event. A single transfer occurring in a given Valuation Period that involves only two Sub-Accounts (or one Sub-Account if the transfer is made to or from a fixed investment option) will also count as one transfer event.
As a result of this monitoring process, Nationwide may restrict the form in which transfer requests will be accepted. In general, Nationwide will adhere to the following guidelines:
Trading Behavior Nationwide's Response
Six or more transfer events in one calendar quarter Nationwide will mail a letter to the policy owner notifying them that:
(1) they have been identified as engaging in harmful trading practices; and
(2) if their transfer events exceed 11 in two consecutive calendar quarters or 20 in one calendar year, the policy owner will be limited to submitting transfer requests via U.S. mail.
More than 11 transfer events in two consecutive calendar quarters
OR
More than 20 transfer events in one calendar year 		Nationwide will automatically limit the policy owner to submitting transfer requests via U.S. mail.
For purposes of Nationwide's transfer policy, U.S. mail includes standard U.S. mail, expedited U.S. mail, and expedited delivery via private carrier.
Each January 1st, Nationwide will start the monitoring anew, so that each policy starts with zero transfer events each January 1. See, however, the Other Restrictions provision below.
Managers of Multiple Policies
Some investment advisors/representatives manage the assets of multiple Nationwide policies pursuant to trading authority granted or conveyed by multiple policy owners. These multi-policy advisors will be required by Nationwide to submit all transfer requests via U.S. mail.
Other Restrictions
Nationwide reserves the right to refuse or limit transfer requests, or take any other action it deems 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 Nationwide to constitute harmful trading practices, may be restricted.
Any restrictions that Nationwide implements will be applied consistently and uniformly. The policy owner will be notified if a transfer request is rejected. If a short-term trading fee is assessed, the policy owner will receive a confirmation notice.
15
Underlying Mutual Fund Restrictions and Prohibitions
Pursuant to regulations adopted by the SEC, Nationwide is 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 policy owner;
(2) request the amounts and dates of any purchase, redemption, transfer, or exchange request ("transaction information"); and
(3) instruct Nationwide 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 Nationwide's policies).
Nationwide is required to provide such transaction information to the underlying mutual funds upon their request. In addition, Nationwide is required to restrict or prohibit further purchases or requests to exchange into an underlying mutual fund upon instruction from the underlying mutual fund. Nationwide 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 requests to exchange into an underlying mutual fund. If an underlying mutual fund refuses to accept a purchase or request to exchange into the underlying mutual fund, Nationwide 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. These transfers will be in dollars. Nationwide may impose limits on the dollar amount, percentage of Cash Value, number, and/or frequency of transfers involving the Fixed Account.
Transfers to and/or from the Fixed Account may be restricted as follows:
• Transfers to and/or from may be prohibited during the first policy year
• Only one transfer to and/or from may be permitted every 12 months
Transfers to the Fixed Account may be restricted as follows:
• Transfers to that exceed 20% of the value allocated to the Sub-Accounts (as of the end of the prior Valuation Period) may not be permitted
• Transfers to that would result in the Fixed Account value exceeding 30% of the total Cash Value may not be permitted.
Transfers from the Fixed Account may be restricted as follows:
• Transfers from, of more than 20% of the Fixed Account value in any policy year (as of the end of the previous policy year), may not be permitted.
Amounts transferred to the Fixed Account may be credited interest at different rates, see Fixed Account. Transfers from the Fixed Account will be on a last-in, first-out basis (LIFO). Any restrictions that Nationwide implements will be applied consistently and uniformly.
Contacting the Service Center
All inquiries, paperwork, information requests, service requests, and transaction requests should be made to the Service Center:
• by telephone at 1-800-848-6331 (TDD 1-800-238-3035)
• by mail to Nationwide Life Insurance Company, P.O. Box 182835, Columbus, Ohio 43218-2835
• by fax at 1-888-634-4472
• by Internet at www.nationwide.com.
Nationwide reserves the right to restrict or remove the ability to submit service requests via Internet, phone, or fax upon written notice.
Not all methods of communication are available for all types of requests. To determine which methods are permitted for a particular request, refer to the specific transaction provision in this prospectus, or call the Service Center. Requests submitted by means other than described in this prospectus could be returned or delayed.
Service and transaction requests will generally be processed in the Valuation Period they are received at the Service Center as long as the request is in good order, see Valuation of Accumulation Units. Good order generally means that all necessary information to process the request is complete and in a form acceptable to Nationwide. If a request is not in
16
good order, Nationwide will take reasonable actions to obtain the information necessary to process the request. Requests that are not in good order may be delayed or returned. Nationwide reserves the right to process any transaction request sent to a location other than the Service Center in the Valuation Period it is received at the Service Center.
Nationwide may be required to provide information about a specific policy to government regulators. If mandated under applicable law, Nationwide may be required to reject a Premium payment and to refuse to process transaction requests for transfers, surrenders, loans, and/or Death Benefit Proceeds until instructed otherwise by the appropriate regulator.
Nationwide will use reasonable procedures to confirm that instructions are genuine and Nationwide will not be liable for following instructions that it reasonably determined to be genuine. Nationwide may record telephone requests. Telephone and computer systems may not always be available. Any telephone system or computer can experience outages or slowdowns for a variety of reasons. The outages or slowdowns could prevent or delay processing. Although Nationwide has taken precautions to support heavy use, it is still possible to incur an outage or delay. To avoid technical difficulties, submit transaction requests by mail.
The Policy
General Information
The policy is a legal contract. It will comprise and be evidenced by: a written contract; any Riders; any endorsements; the Policy Data Pages; and the application, including any supplemental application. The benefits described in the policy and this prospectus, including any optional Riders or modifications in coverage, may be subject to Nationwide's underwriting and approval. 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. Nationwide will consider the statements made in the application as representations, and will rely on them as being true and complete. However, Nationwide will not void the policy or deny a claim unless a statement is a material misrepresentation. If a policy owner makes an error or misstatement on the application, Nationwide will adjust the Death Benefit and Cash Value accordingly.
Due to state law variations, the terms, benefits, programs and Riders described in this prospectus may vary or may not be available depending on the state in which the policy is issued. Possible state law variations include, but are not limited to, Rider terms, availability of certain investment options, free look rights, policy exchange rights, policy Lapse and/or reinstatement requirements, and surrender charge, suicide, and incontestability durations. This prospectus describes all the material features of the policy. State variations are subject to change without notice at any time. To review a copy of the policy and any Riders or endorsements for the state in which the policy will be issued, contact the Service Center.
Any modification or waiver of Nationwide's rights or requirements under the policy must be in writing and signed by Nationwide's president or corporate secretary. No agent may bind Nationwide by making any promise not contained in the policy.
Nationwide may modify the policy, its 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, Nationwide, or the separate account is subject. Nationwide may modify the policy to assure that it continues to qualify as a life insurance policy under federal tax laws. Nationwide will notify policy owners of all modifications and will make appropriate endorsements to the policy.
The policy is nonparticipating, meaning that Nationwide 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 that the portion of any amounts allocated to Nationwide's general account and any guaranteed benefits Nationwide may provide under the policy exceeding the value of amounts held in the separate account are subject to Nationwide's 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.
17
Policy Owner and Beneficiaries
Policy Owner
The policy belongs to the owner named in the application or as a result of a valid assignment. The policy owner may name a contingent owner who will become the policy owner if the policy owner dies before Proceeds become payable. Otherwise, ownership will pass to the policy owner's estate, if the policy owner is not the Insured.
Policy Owner Rights
The policy owner may exercise all policy rights in accordance with policy terms while the policy is In Force, subject to Nationwide's approval. 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 Nationwide's approval, the policy owner may name a different policy owner or contingent owner while the policy is In Force by submitting a written request to the Service Center. Any such change request will become effective as of the date signed, however, it will not affect any payment made or action taken before the change is received and recorded by Nationwide. 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 Proceeds if the Insured dies while the policy is In Force. While the policy is In Force, a policy owner may name more than one beneficiary, designate primary and contingent beneficiaries, change or add beneficiaries, and/or direct Nationwide to distribute the Proceeds other than as described below.
If a primary beneficiary dies before the Insured, Nationwide will pay the Death Benefit Proceeds to the surviving primary beneficiaries. Unless specified otherwise by the policy owner, Nationwide 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. A policy owner may name more than one contingent beneficiary. Unless specified otherwise by the policy owner, Nationwide will also pay multiple contingent beneficiaries in equal shares.
Requests to change or add beneficiaries must be submitted in writing to the Service Center. Nationwide may require that the policy owner send the policy for endorsement before the change is recorded. Any such change request will become effective as of the date signed, however, it will not affect any payment made or action taken before the change is received and recorded by Nationwide.
To Purchase
The policy is available for Insureds between the issue ages of 0 and 85. To purchase the policy, prospective purchasers must submit a completed application and the required initial Premium payment.
Nationwide must receive evidence of insurability that satisfies its underwriting standards (this may require a medical examination) before it will issue a policy. Nationwide can provide prospective purchasers with the details of its underwriting standards upon request. Nationwide reserves the right to reject any application for any reason permitted by law. Additionally, Nationwide reserves the right to modify its underwriting standards on a prospective basis for newly issued policies at any time.
The minimum initial Base Policy Specified Amount in most states is $50,000 for non-preferred policies and $100,000 for preferred policies. The basic distinction between the non-preferred and preferred underwriting classifications is that Nationwide expects the Insured under a preferred policy to live longer. Nationwide reserves the right to modify the minimum Base Policy Specified Amount on a prospective basis for newly issued policies at any time.
Coverage
Nationwide will issue the policy only if the underwriting process has been completed, the application is approved, and the proposed Insured is alive and in the same condition of health as described in the application. However, full insurance coverage will take effect only after the minimum initial Premium is paid. Monthly charges are deducted from the policy's Cash Value beginning on the Policy Date.
18
Coverage Effective Date
Insurance coverage will begin and be In Force on the Policy Date shown on the Policy Data Page. For a change in the Base Policy Specified Amount and/or Rider Specified Amount, the effective date will be on the next monthly anniversary from the Policy Date after Nationwide approves the request. It will end upon the Insured's death, once the Proceeds are paid or when the policy matures. Coverage will also end if the policy Lapses.
Temporary Insurance Coverage
Temporary Insurance Coverage
Temporary insurance coverage (of an amount equal to the Total Specified Amount, up to $1,000,000) may be available for no charge before full insurance coverage takes effect. Prospective purchasers must submit a temporary insurance agreement and make an initial Premium payment. The amount of this initial Premium payment will depend on the initial Total Specified Amount, choice of death benefit option, and any Riders elected. Temporary insurance coverage will remain In Force for no more than 60 days from the date of the temporary insurance agreement. If full coverage is denied, the temporary insurance coverage will terminate five days from the date Nationwide mails a termination notice (accompanied by a refund equal to the Premium payment made). If full coverage is approved, the temporary insurance coverage will terminate on the date that full insurance coverage takes effect. Allocation of the initial Net Premium will be determined by the right to examine law of the state in which the policy is issued.
To Cancel (Examination Right)
Under state law a policy owner may, for a limited time, cancel the policy and receive a refund (commonly referred to as the "free look" period). The length of the free look period depends on state law and may vary depending on whether the policy was purchased to replace another policy. The minimum "free look" period is 10 days.
In order to cancel the policy during the free look period, a policy owner must submit a written cancellation request and return the policy either to the sales representative or to the Service Center. Nationwide will honor free look cancellation requests received by the last day of the free look period (if returned by US mail, the request must be post-marked by the last day of the free look period).
Free look cancellation requests received after the close of business on the date the free look period expires will not be canceled free of charge. If the policy is canceled, Nationwide will treat the policy as if it was never issued.
Within seven days of a free look cancellation request, Nationwide will refund the amount prescribed by state law. The amount Nationwide refunds will be Cash Value or, in certain states, the greater of the initial Premium payment or the policy's Cash Value.
Allocation of Net Premium During Free Look Period
Where state law requires the return of initial Premium for free look cancellations, Nationwide will allocate initial Net Premium to the Fixed Account as instructed. Nationwide will allocate initial Net Premium allocated to the Sub-Accounts to the available money market Sub-Account until the free look period expires. At the expiration of the free look period, Nationwide will transfer the amount held in the money market Sub-Account to the requested Sub-Accounts based on the allocation instructions in effect at the time of the transfer.
Where state law requires the return of Cash Value, Nationwide will allocate all of the initial Net Premium to the designated Sub-Accounts and Fixed Account based upon the allocation instructions in effect at the time, on the next Valuation Period.
Premium Payments
This policy does not require a scheduled payment of Premium to keep it In Force. The policy will remain in effect as long as the conditions that cause the policy to Lapse do not exist. Upon request, we will furnish Premium receipts.
Initial Premium
The amount of initial Premium will depend on the initial Total Specified Amount of insurance, the death benefit option, and any Riders elected. Generally, the higher the required initial Total Specified Amount, the higher the initial Premium will be. Similarly, because Death Benefit Option 2 and Death Benefit Option 3 provide for a potentially greater Death Benefit than Death Benefit Option 1, Death Benefit Option 2 and Death Benefit Option 3 may require a higher amount of initial Premium. Also, the age, health, and activities of the Insured will affect Nationwide's determination of the risk of issuing the policy. In general, the greater this risk, the higher the initial Premium required.
19
Whether Nationwide will issue full insurance coverage depends on the Insured meeting all underwriting requirements, payment of the initial Premium, and delivery of the policy while the Insured is alive. Nationwide will not delay delivery of the policy to increase the likelihood that the Insured is not still living. Depending on the outcome of the underwriting process, more or less Premium may be necessary to issue the policy. If Nationwide does not issue the policy, the Premium payment will be returned within two business days.
The policy owner may pay the initial Premium to the Service Center or to an authorized representative. The initial Premium payment must be at least $50, equal to the minimum monthly Premium. The initial Premium payment will not be applied to the policy until the underwriting process is complete. Allocation of initial Net Premium will be determined by the right to examine law of the state or territory where the policy is issued, see Right to Cancel (Examination Right).
Subsequent Premium payments will be allocated according to the allocation instructions in effect at the time the Premium is received.
Subsequent Premiums
This policy does not require a payment of a scheduled Premium amount to keep it In Force . It will remain In Force as long as the conditions that cause a policy to Lapse do not exist, see Lapse. Premium payment reminder notices will be sent according to the Premium payment schedule selected by the policy owner. Additional Premium payments must be submitted to the Service Center. Each Premium payment must be at least $50. Upon request, Nationwide will furnish Premium payment receipts. Policy owners may make additional Premium payments at any time while the policy is In Force and prior to the Maturity Date, subject to the following:
• Nationwide 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.
• Nationwide will refund Premium payments that exceed the applicable premium limit established by the Code to qualify the policy as a contract for life insurance.
• Nationwide will monitor Premiums paid and will notify policy owners when the policy is in jeopardy of becoming a modified endowment contract, see Taxes.
• Nationwide may require that policy Indebtedness be repaid before accepting any additional Premium payments.
Cash Value
Nationwide will determine the Cash Value at least monthly. Cash Value will fluctuate daily and there is no guaranteed Cash Value. At the end of any given Valuation Period, the Cash Value is equal to the sum of:
• the value of the Accumulation Units allocated to the Sub-Accounts, see Valuation of Accumulation Units;
• amounts allocated to the Fixed Account, including credited interest; and
• amounts allocated to the policy loan account (only if a loan was taken), including credited interest, see Policy Loans.
Surrenders and policy charges and deductions will reduce the Cash Value of the policy. If Cash Value is a factor in calculating a benefit associated with the policy, such as the Death Benefit or a benefit associated with an elected Rider, the value of that benefit will also fluctuate, including being reduced due to surrenders and policy charge deductions. If the policy is surrendered or Lapses, the Cash Value will be reduced by the amount of any Indebtedness.
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 policy charges, plus or minus any investment results, and minus any partial surrenders.
To Change Coverage
After the first policy year, the policy owner may request to change the Total Specified Amount. To change the Total Specified Amount, the policy owner must submit a written request to the Service Center. Changes to the Total Specified Amount will become effective on the next monthly policy anniversary after Nationwide approves the request unless the policy owner requests and Nationwide approves a different date. However, no change will take effect unless the Cash Surrender Value would be sufficient to keep the policy In Force for at least three months. Nationwide may limit the number of Total Specified Amount changes to one increase and one decrease each policy year. Changes to the Total Specified Amount will typically alter the Death Benefit.
Increases
To increase the Total Specified Amount, the policy owner must provide satisfactory evidence of insurability. The Insured must be Attained Age 85 or younger at the time of the request. Any request to increase the Total Specified Amount must be at least $10,000. An increase in the Total Specified Amount may cause an increase in the Net Amount At Risk.
20
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 additional Surrender Charge schedule will also apply whenever the Base Policy Specified Amount is increased. An increase in the Base Policy Specified Amount and/or Rider Specified Amount may cause an increase to the amount of subsequent Premium payments needed to keep the policy from Lapsing, see Lapse.
Decreases
The policy owner may request to decrease the Total Specified Amount. Nationwide applies Total Specified Amount decreases to the most recent Base Policy Specified Amount and/or Rider Specified Amount increase and continues applying the decrease backwards while still maintaining the original Total Specified Amount. Nationwide will deny any request to reduce the Base Policy Specified Amount below the minimum Base Policy Specified Amount shown on the Policy Data Page. Nationwide will also deny any request that would disqualify the policy as a contract for life insurance.
To Exchange
The policy owner has an exchange right under the policy. At any time within the first 24 months of coverage from the Policy Date, the policy owner may surrender the policy and use the Cash Surrender Value to purchase a new policy on the Insured's life without evidence of insurability.
To invoke this right, the policy must be In Force and not in the Grace Period, and the policy owner must submit a written request to the Service Center on approved forms.
The new policy may be one of Nationwide's available fixed benefit individual life insurance policies. The death benefit on the new policy may not be greater than the Death Benefit on this policy immediately prior to the exchange date. The new policy will have the same Total Specified Amount, Policy Date, and issue age. Nationwide will base Premium payments on the rates in effect for the same sex, Attained Age, and underwriting class of the Insured on the exchange date, unless otherwise required by state law. The policy owner may transfer Indebtedness to the new policy.
Exchange requests must be made on Nationwide forms and submitted to the Service Center. The policy must be In Force and not in a Grace Period. The policy owner must pay a Surrender Charge if applicable and surrender the policy to Nationwide. The policy owner must pay any money due on the exchange (any amount needed to ensure that the Cash Surrender Value of the new policy is the same as the Cash Surrender Value of this policy). The policy owner may request that any excess of the Cash Surrender Value of this policy over the Cash Surrender Value of the new policy be paid to the policy owner. 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.
After the first 24 months of coverage, the policy owner may still surrender the policy and use the Cash Surrender Value to purchase a new policy on the Insured's life. However, issuance of the new policy will depend on the Insured providing satisfactory evidence of insurability.
To Terminate or Surrender
There are several ways that the policy can terminate. The policy will automatically terminate when the Insured dies, the policy matures, or the Grace Period ends. The policy will also terminate if it is fully surrendered.
Terminating the policy may result in adverse tax consequences.
Generally, if the policy has a Cash Surrender Value in excess of the Premiums paid, upon surrender the excess will be included in the policy holder's income for federal tax purposes, see Taxes. The Cash Surrender Value will be reduced by outstanding Indebtedness, see Policy Loans.
To Assign
The policy owner may assign any or all rights under the policy while it is In Force, subject to Nationwide's approval. The beneficiary's interest will be subject to the person or entity to which the policy owner assigned rights. Assignments must be in writing on a form satisfactory to Nationwide. Assignments will become effective on the date signed, unless otherwise specified by the policy owner, and are subject to any payments or actions taken by Nationwide before it is received and recorded at the Service Center. Nationwide is not responsible for the sufficiency or validity of any assignment. Assignments will be subject to any Indebtedness, policy liens, garnishments, court orders, and any previous assignments.
21
Reminders, Reports and Illustrations
Nationwide will send scheduled Premium payment reminders and transaction confirmations to policy owners upon request. Nationwide will also send semi-annual and annual statements that show:
• the Total Specified Amount;
• minimum monthly Premiums;
• Premiums paid;
• all charges since the last report;
• the current Cash Value;
• the Cash Surrender Value; and
• Indebtedness.
Confirmations of individual financial transactions, such as transfers, partial Surrenders, and loans are generated and mailed automatically. Copies may be obtained by contacting the Service Center. Alternatively, policy owners may receive information faster and reduce the amount of mail received by signing up for the eDelivery program. Go to www.nationwide.com/login to change document delivery preferences.
Nationwide will send these reminders and reports to the address provided on the application unless directed otherwise. At any time after the first policy year, policy owners may ask for an illustration of future benefits and values under the policy, see Illustration Charge.
IMPORTANT NOTICE REGARDING DELIVERY
OF SECURITY HOLDER DOCUMENTS
When multiple copies of the same disclosure document(s), such as prospectuses, supplements, proxy statements and semi-annual and annual reports are required to be mailed to multiple policy owners in the same household, Nationwide will mail only one copy of each document, unless notified otherwise by the policy owner(s). Household delivery will continue for the life of the policies. A policy owner can revoke their consent to household delivery and reinstitute individual delivery by contacting the Service Center. Individual delivery will resume within 30 days after receiving such notification.
Standard Policy Charges
Deductions for charges are taken from Premium payments and/or the Cash Value, as applicable, to compensate Nationwide for the services and benefits provided, the costs and expenses incurred, and the risks assumed. Certain expenses may be recovered utilizing more than one charge. Nationwide may generate a profit from any of the charges assessed under the policy.
Monthly charges are deducted from Cash Value beginning on the Policy Date. Charges are taken proportionally from the Sub-Accounts and the Fixed Account, except for the Mortality and Expense Risk Charge which is only deducted proportionally from the Sub-Accounts. Charges taken against allocations to the Sub-Accounts are assessed by redeeming Accumulation Units. The number of Accumulation Units redeemed is determined by dividing the dollar amount of the charge by the Accumulation Unit value for the Sub-Account. Nationwide does not deduct policy charges or Rider charges from the Cash Value attributable to the policy loan account. For a complete description of how interest is credited and charged, see Policy Loans.
Policy and Rider charges reflect costs and risks associated with issuing the policy and Rider(s). Certain charges will vary based upon the individual characteristics of the Insured. The 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. The policy owner can request an illustration of specific costs and/or see the Policy's Data Pages for information about specific charges of their policy.
Nationwide may change policy and/or Rider charges and rates under the policy at any time. Changes in policy and/or Rider charges and rates will vary by changes in future expectations for factors including, but not limited to, Nationwide's investment earnings, mortality experience, persistency experience, expenses, including reinsurance expenses, and taxes. Changes to policy and/or Rider charges and rates will be on a uniform basis for Insured's of the same Issue Age, sex, rate class, rate type, any Substandard Rating, Base Policy Specified Amount  and Spouse Life Insurance Rider Specified Amount (if applicable) whose policies have been In Force for the same length of time. If a change in the charges or rates
22
causes an increase to the policy and/or Rider charges, the policy's Cash Value could decrease. If a change in the charges or rates causes a decrease to the policy and/or Rider charges, the policy's Cash Value could increase. Any changes will be determined in accordance with state law. Policy and Rider charges will never exceed the maximum charges shown in the fee tables, see In Summary: Fee Tables.
Premium Load
Premium Load is comprised of the Sales Load and Premium Taxes. It will vary by policy based on the amount of Premium paid. It is deducted from each Premium payment to partially reimburse Nationwide for sales expenses and Premium taxes, and other expenses, including acquisition costs. The Premium Load also provides revenue to compensate Nationwide for assuming risks associated with the policy, and revenue that may be a profit.
Sales Load
Sales Load (as part of the Premium Load) is deducted from each Premium payment to cover sales expenses. The current Sales Load is $5 per $1,000 of Premium. The guarantee maximum Sales Load is $25 per $1,000 of Premium.
Nationwide may waive the Sales Load on the initial Premium paid into this policy as part of a Nationwide sponsored exchange program to another Nationwide policy as permitted under the securities laws and/or rules or by order of the SEC.
Premium Taxes
Premium Taxes (as part of the Premium Load) are deducted from each Premium payment to reimburse Nationwide for state and local premium taxes (at the estimated rate of 2.25%) and for federal premium taxes (at the estimated rate of 1.25%). The current (and guaranteed maximum) Premium Tax is $35 per $1,000 of Premium. This amount is not the actual amount of the tax liability Nationwide incurs. It is an estimated amount. If the actual tax liability is more or less, Nationwide will not adjust the charge retroactively.
Short-Term Trading Fees
Some mutual funds offered under the policy may assess (or reserve the right to assess) a short-term trading fee (sometimes called "redemption fee" by the mutual fund) in connection with transfers from a Sub-Account that occur within 60 days after the date of allocation to the Sub-Account.
Short-Term Trading Fees are intended to compensate the mutual fund (and policy owners with interests allocated in the Sub-Account) for the negative impact on mutual fund performance that may result from frequent, short-term trading strategies. Short-Term Trading Fees are not intended to affect the large majority of policy owners not engaged in such strategies.
Any Short-Term Trading Fee assessed by any mutual fund available in conjunction with the policy will equal 1% of the amount determined to be engaged in short-term trading. Short-Term Trading Fees will only apply to those Sub-Accounts corresponding to mutual funds that charge such fees (see the mutual fund's prospectus). Any Short-Term Trading Fees paid are retained by the mutual fund and are part of the mutual fund's assets. Policy owners are responsible for monitoring the length of time allocations are held in any particular Sub-Account. Nationwide will not provide advance notice of the assessment of any applicable Short-Term Trading Fee.
For a complete list of the Sub-Accounts that assess (or reserve the right to assess) a Short-Term Trading Fee, see Appendix A: Sub-Account Information.
If a Short-Term Trading Fee is assessed, the mutual fund will charge the separate account 1% of the amount determined to be engaged in short-term trading. The separate account will then pass the Short-Term Trading Fee on to the specific policy owner that engaged in short-term trading by deducting an amount equal to the Short-Term Trading Fee from that policy owner's Sub-Account value. All such fees will be remitted to the mutual fund; none of the fee proceeds will be retained by Nationwide or the separate account.
When multiple allocations are made to a Sub-Account that is subject to Short-Term Trading Fees, transfers out of that Sub-Account will be considered to be made on a first in/first out (FIFO) basis for purposes of determining Short-Term Trading Fees. In other words, Accumulation Units held the longest time will be treated as being transferred first, and Accumulation Units held for the shortest time will be treated as being transferred last.
Some transactions are not subject to Short-Term Trading Fees, including:
• scheduled and systematic transfers, such as those associated with dollar cost averaging programs and asset rebalancing programs (if available);
• policy loans;
23
• full or partial surrenders; or
• payment of the Proceeds.
New share classes of certain currently available mutual funds may be added as investment options under the policy. These new share classes may require the assessment of Short-Term Trading Fees. When these new share classes are added, new Premiums and transfers to the Sub-Accounts in question may be limited to the new share class.
Illustration Charge
Illustration Charges are not deducted from Premium payments or Cash Value; rather they are paid at the time of an illustration request. Nationwide currently waives the Illustration Charge. The charge is intended to compensate Nationwide for the administrative costs of generating illustrations. Nationwide may elect in the future to assess an Illustration Charge. It will not exceed $25 per illustration requested.
Partial Surrender Fee
The policy owner may request a partial surrender after the first year from the Policy Date while the policy is In Force. The charge for a partial surrender compensates Nationwide for the administrative costs in calculating and generating the surrender amount. The maximum fee is the lesser of $25 or 2% of the dollar amount of the partial surrender. However, currently, there is no charge for a partial surrender. The Cash Value available for a partial surrender is subject to any Indebtedness.
Surrender Charge
A surrender charge will apply if the policy is surrendered or Lapsed. A surrender charge may apply if the Base Policy Specified Amount is decreased. There are two components of the surrender charge meant to cover policy underwriting, or the underwriting component, and sales expenses, or the sales component, including processing the application, conducting any medical exams, determining insurability and the Insured's underwriting class, and establishing policy records. The surrender charge equals the underwriting component and 26.5% of the sales component. The Surrender Charge is deducted based on the following schedule:
Policy year calculated from the Policy Date or
effective date of Base Policy Specified Amount increase: 		  Percentage of Initial
Surrender Charge
1
   100%
2
   100%
3
   90%
4
   80%
5
   70%
6
   60%
7
   50%
8
   40%
9
   30%
After 9
   0
The underwriting component is the product of the Base Policy Specified Amount, divided by 1,000, and the administrative target premium. The administrative target premium is actuarially derived, and is used to determine how much to charge per Premium payment for underwriting expenses. The administrative target premium varies by the Insured's age when the policy was issued.
The sales expense component is the lesser of the following two amounts: The first amount is the product of the Base Policy Specified Amount, divided by 1,000, and the surrender target premium. The surrender target premium is actuarially derived, and is used to figure out how much to charge per Premium payment for sales expenses. The surrender target premium varies by: the Insured's sex; issue age; and the underwriting class. The second amount is the sum of all Premium payments made during the first year from the Policy Date.
Nationwide will calculate a separate surrender charge based on the initial Base Policy Specified Amount and each increase in the Base Policy Specified Amount, which are referred to as "segments". The surrender charge for each segment, when added together, will equal the total surrender charge. A surrender charge will also apply when the aggregate surrenders exceed 25% of a segment's Base Policy Specified Amount. Nationwide defers and accrues the charge on partial surrenders that do not exceed 25% of the segment's Base Policy Specified Amount. Once partial surrenders exceed 25%, the current and accrued charge will be assessed against the policy's Cash Value. In determining the 25% level, Nationwide uses a last in-first out method, so that the latest segment reaches the 25% level first.
24
Nationwide may change this practice and assess the surrender charge against all partial surrenders. The surrender charge for a decrease in the Base Policy Specified Amount will be calculated as if the policy was surrendered, though only a portion will be deducted from the policy's Cash Value. The amount of surrender charge deducted will be a product of the surrender charge and the decrease in Base Policy Specified Amount divided by the Base Policy Specified Amount before the decrease.
The surrender charge will typically be greater for a policy with: an older Insured; a male insured; a higher Specified Amount; more first year Premium; or a higher-risk Insured. If the Death Benefit option is changed and the change does not result in a different Net Amount At Risk, no surrender charge will be deducted.
The surrender charge may be waived if the policy is surrendered in exchange for a plan of permanent fixed life insurance offered by Nationwide, subject to the following:
• the exchange and waiver may be subject to new evidence of insurability and underwriting approval; and
• the following Riders have not been invoked:
❍ Premium Waiver Rider;
❍ Deduction (of Fees and Expenses Waiver Rider); or
❍ Long-Term Care Rider.
A new surrender charge may apply to the policy received in the exchange.
Cost of Insurance Charge
A Cost of Insurance Charge is deducted proportionally from Sub-Account and Fixed Account allocations on the Policy Date and on each monthly anniversary of the Policy Date. The charge is intended to cover Nationwide's expenses associated with providing expected mortality benefits and assuming certain risks associated with the policy, and to cover other expenses, including acquisition costs, and state and federal taxes. Nationwide may also profit from this charge.
The Cost of Insurance 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, underwriting class, any Substandard Ratings, how long the policy has been In Force, and the Base Policy Specified Amount and Spouse Life Insurance Rider Specified Amount (if applicable). The cost of insurance rate is based on Nationwide's expectations as to future mortality and expense experience, investment earnings, persistency, and taxes.
There will be a separate cost of insurance rate for the initial Base Policy Specified Amount and any Base Policy Specified Amount increase. The cost of insurance rate(s) will never be greater than what is shown on the Policy Data Pages.
Flat Extras and Substandard Ratings
Nationwide may inquire about the occupation and activities of the Insured through the underwriting process. If the activities or occupation of the Insured cause an increased health or accident risk, it may result in the Insured receiving a Substandard Rating. If this is the case, Nationwide may add an additional component to the Cost of Insurance Charge called a "Flat Extra Charge." The Flat Extra Charge accounts for the increased risk of providing life insurance when one or more of these factors apply to the Insured. The Flat Extra Charge is a component of the total Cost of Insurance Charge, so if applied it will be deducted from Cash Value on the Policy Date and the monthly anniversary of the Policy Date. The monthly Flat Extra Charge is between $0.00 and $2.08 per $1,000 of the Net Amount At Risk. If a Flat Extra Charge is applied, it is shown in the Policy Data Pages. In no event will the Flat Extra Charge result in the Cost of Insurance Charge exceeding the maximum charge shown in In Summary: Fee Tables.
Nationwide will uniformly apply a change in any cost of insurance rate for Insureds of the same age, sex, underwriting class, Substandard Ratings, and Base Policy Specified Amount and Spouse Life Insurance Rider Specified Amount (if applicable), if the policies have been In Force for the same length of time. If a change in the cost of insurance rates causes an increase to a policy's Cost of Insurance Charge, the policy's Cash Value could decrease. If a change in the cost of insurance rates causes a decrease to the policy's Cost of Insurance Charge, the policy's Cash Value could increase.
Mortality and Expense Risk Charge
A Mortality and Expense Risk Charge is deducted monthly from the Cash Value allocated to the Sub-Accounts. The charge will vary by policy based on the amount of Cash Value allocated to the Sub-Accounts and the length of time the policy has been In Force. The charge compensates Nationwide for assuming the risk associated with mortality and expense risk costs. The mortality risk is that the Insured will not live as long as expected. The expense risk is that the costs of issuing and administering the policy will be more than expected. This charge is in addition to any charges assessed by the mutual funds underlying the Sub-Accounts.
25
Though the maximum guaranteed mortality and expense risk charge is higher, currently, Nationwide deductes this monthly charge according to the following schedule. During the first through 15 years from the Policy Date, the charge is $0.50 per $1,000 on the first $25,000 of Cash Value allocated to the Sub-Accounts, and $0.25 per $1,000 on $25,001 up to $250,000 of Cash Value allocated to the Sub-Accounts. This charge is $0.08 per $1,000 of Cash Value allocated to the Sub-Accounts over $250,000. Beginning in Policy year 16, this charge is: $0.50 per $1000 on the first $25,000 of the Cash Value allocated to the Sub-Accounts, and $0.08 per $1,000 of the Cash Value allocated to the Sub-Accounts over $25,000.
Administrative Charge
An administrative charge is deducted proportionally from the policy's Sub-Account and Fixed Account allocations on the Policy Date and each monthly anniversary of the Policy Date. The charge reimburses Nationwide for the costs of maintaining the policy, including accounting and record-keeping. The charge is currently $10 per month through the first year from the Policy Date and $5 per month thereafter. The maximum guaranteed charge is $10 per month through the first year from the Policy Date and $7.50 per month thereafter.
Mutual Fund Operating Expenses
In addition to the policy charges, there are also charges associated with the mutual funds in which the Sub-Accounts invest. Policy owners do not pay these charges directly, but these charges do affect the value of the assets allocated to the Sub-Accounts because these charges are reflected in the underlying mutual fund prices that Nationwide subsequently uses to value Sub-Account units. The underlying mutual funds' prospectuses contain additional information about these charges. Policy owners may contact the Service Center to receive, free of charge, copies of the prospectuses for any of the underlying mutual funds available under the policy.
Reduction of Charges
The policy may be purchased by individuals, corporations, and other entities. Nationwide may reduce or eliminate certain charges (Sales Load, Surrender Charge, administrative charges, Cost of Insurance Charge, or other charges) where the size or nature of the group allows Nationwide to realize savings with respect to sales, underwriting, administrative, or other costs. Where prohibited by state law, Nationwide will not reduce charges associated with the policy.
Nationwide determines the eligibility and the amount of any reduction by examining a number of factors, including: the number of policies owned with different insureds; the total premium Nationwide expects to receive; the total cash value of commonly owned policies; the nature of the relationship among individual insureds; the purpose for which the policies are being purchased; the length of time Nationwide expects the individual policies to be in force; and any other circumstances which are rationally related to the expected reduction in expenses.
Nationwide may lower commissions to the selling broker-dealer and/or increase charge back of commissions paid for policies sold with reduced or eliminated charges. Policy owners should consult with a registered representative about reductions available and, where appropriate, obtain an illustration demonstrating the impact of any reduced charges on the policy.
Nationwide may change both the extent and the nature of the charge reductions. Any charge reductions will be applied in a way that is not unfairly discriminatory to policy owners and will reflect the differences in costs of services provided.
Entities considering purchasing the policy should note that in 1983, the U.S. Supreme Court held in Arizona Governing Committee v. Norris that certain annuity benefits provided by employers' retirement and fringe benefit programs may not vary between men and women on the basis of sex. The policies are based upon actuarial tables that distinguish between men and women unless the purchaser is an entity and requests non-sex distinct tables be used for underwriting. The policies generally provide different benefits to men and women of the same age. Accordingly, employers and employee organizations should consider, in consultation with legal counsel, the impact of Norris on any employment related insurance or benefit program before purchasing this policy.
A Note on Charges
During a policy's early years, the expenses Nationwide incurs in distributing and establishing the policy exceed the deductions. Nevertheless, Nationwide expects to make a profit over time because variable life insurance is intended to be a long-term financial investment. Accordingly, Nationwide has designed the policy with features and investment options that it believes support and encourage long-term ownership.
26
Nationwide makes many assumptions and accounts for many economic and financial factors when establishing 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 paid to broker-dealer firms as commissions, expense allowances, and marketing allowances. Nationwide refers to these expenses collectively as "total compensation."
Nationwide has the ability to customize the total compensation package of its broker-dealer firms. Nationwide 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, which is 99% of first year premiums and 3% of renewal premium after the first year. Commission may also be paid on an asset-based amount instead of a premium based amount. If an asset-based commission is paid, it will not exceed 0.25% of the non-loaned cash value per year.
The actual amount and/or forms of total compensation paid depend on factors such as the level of premiums Nationwide receives from respective broker-dealer firms and the scope of services the firms provide. Some broker-dealer firms may not receive maximum total compensation.
Individual registered representatives typically receive a portion of the commissions/total compensation paid, depending on their arrangement with their broker-dealer firm. Policy owners should consult the registered representative to know the exact compensation arrangement associated with this policy.
Information on Underlying Mutual Fund Payments
Nationwide's 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 (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. Nationwide incurs these expenses instead.
Nationwide also incurs 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 advisor or subadvisor of an underlying mutual fund or its affiliates may provide Nationwide or its affiliates with wholesaling services that assist in the distribution of the policy and may pay Nationwide or its affiliates to participate in educational and/or marketing activities. These activities may provide the advisor or subadvisor (or their affiliates) with increased exposure to persons involved in the distribution of the policy.
Types of Payments Nationwide Receives
In light of the above, the underlying mutual funds or their affiliates make certain payments to Nationwide or its affiliates (the "payments"). 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 Nationwide and its affiliates issue, but in some cases may involve a flat fee. These payments may be used by Nationwide for any corporate purpose, which includes reducing the prices of the policies, paying expenses that Nationwide or its affiliates incurs in promoting, marketing, and administering the policies and the underlying mutual funds, and achieving a profit.
Nationwide or its 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 advisor or subadvisor (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 mutual fund charges.
Furthermore, Nationwide benefits from assets invested in affiliated underlying mutual funds (i.e., Nationwide Variable Insurance Trust) because these affiliates receive compensation from the underlying mutual funds for investment advisory, administrative, transfer agency, distribution, and/or other services. Overall, Nationwide may receive more revenue with respect to affiliated underlying mutual funds than unaffiliated underlying mutual funds.
27
Nationwide took into consideration the anticipated payments from the underlying mutual funds when it determined the charges imposed under the policies (apart from fees and expenses imposed by the underlying mutual funds). Without these payments, Nationwide would have imposed higher charges under the policy.
Amount of Payments Nationwide Received
For the year ended December 31, 2012, the underlying mutual fund payments Nationwide and its affiliates received from the underlying mutual funds did not exceed 0.75% (as a percentage of the average daily net assets invested in the underlying mutual funds) offered through this policy or other variable policies that Nationwide and its affiliates issued. Payments from investment advisors or subadvisors 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 Nationwide or its 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 Nationwide or its affiliates receive depends on the assets of the underlying mutual funds attributable to the policy, Nationwide and its 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).
Identification of Underlying Mutual Funds
Nationwide 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. Nationwide also considers whether the underlying mutual fund's advisor or subadvisor is an affiliate or whether the underlying mutual fund, its advisor, its subadvisor(s), or an affiliate will make payments to Nationwide or its affiliates.
There may be underlying mutual funds with lower fees, as well as other variable policies that offer underlying mutual funds with lower fees. Policy owners should consider all of the fees and charges of the policy in relation to its features. Higher policy and underlying mutual fund fees and charges have a direct effect on the policy's investment performance.
Policy Riders and Rider Charges
Riders are available for purchase to design the policy to meet the policy owner's specific needs. The policy owner may purchase any Rider (except for both the Premium Waiver and Deduction of Fees and Expenses Waiver Riders, simultaneously). Once the policy is In Force, to add a Rider, Nationwide may require further evidence of insurability. The policy owner may only elect the Adjusted Sales Load Life Insurance Rider when purchasing the policy.
The availability, operation, and benefits of the Riders may vary by the state where the policy is issued. The policy owner will be charged for a Rider: so long as the policy remains In Force and the Rider's term has not expired; until the benefit has been paid; or the policy owner decides he or she no longer need the benefit and contacts the Service Center in writing.
Adjusted Sales Load Life Insurance Rider
The benefit associated with the Adjusted Sales Load Life Insurance Rider is the replacement of all or a portion of the up-front Premium Load (comprised of the Sales Load and Premium Taxes) with a monthly Rider charge. A policy owner may elect the number of years (from one to seven) that Premium Load would be replaced. A Premium Load would be assessed on any amount that is not replaced by the Rider.
Availability
This Rider is only available to purchase at the time of application.
Adjusted Sales Load Life Insurance Rider Charge
A monthly Adjusted Sales Load Life Insurance Rider Charge is assessed to compensate Nationwide for the sales and premium tax expenses that it will not collect in the form of Premium Load. The aggregate monthly Rider charges will be greater than the amount Nationwide would have deducted as Premium Load. The monthly charge is the product of aggregate Premiums paid since the Policy Date, the portion of Premium Load replaced (expressed as a whole percentage of Premiums paid), and the factor of 0.0001354. The Rider's charge may vary. Each Premium payment made during the selected Rider period will cause the Rider's charge to increase. How long the Rider charge is assessed will also vary. The
28
Rider charge will be assessed for nine policy years, plus the number of years (from one to seven) that Premium Load is replaced (with a maximum Rider charge period of 15 years). However, if a policy owner stops making Premium payments during that one to seven-year period, the Rider charge will only be assessed for nine policy years, plus the number of years that Premium payments were actually made.
For example, upon election, the policy owner anticipated making Premium payments for five years. Therefore, the policy owner could expect to have the Rider charge assessed for 14 years (nine years plus five years). However, the policy owner actually makes the last Premium payment in policy year three, and does not make any additional Premium payments. Since the policy owner did not get full "use" of the Rider (the policy owner only received three years worth of Premium Load replacement), the Rider charge will only be assessed for 12 policy years (nine years plus the three years' worth of benefit received).
If the policy terminates within the first 10 policy years, Nationwide will deduct from the Cash Surrender Value an amount to compensate it for the Premium Load waived, but not recovered, as a Rider charge. The amount deducted from the Cash Surrender Value will equal the product of the actual Premium Load replaced by the Rider (in dollars) and the percentage from the following table that corresponds to the number of years the policy has been In Force.

Policy Year 		  Percentage
1
   100%
2
   90%
3
   80%
4
   70%
5
   60%
6
   50%
7
   40%
8
   30%
9
   20%
10
   10%
11 and later
   0%
For example, the policy owner elected to replace the Premium Load for seven years. During the fifth policy year, the policy owner terminates the policy. During the five years the policy was In Force, $10,000 of Premium was paid. The amount of Premium Load that the Rider replaced is $400 ($40 for each $1,000 of Premium). Therefore, Nationwide will deduct $240 (60% of $400) from the policy's Cash Surrender Value.
The Adjusted Sales Load Life Insurance Rider Charge is deducted proportionally from the Sub-Account and Fixed Account allocations. Because the Adjusted Sales Load Life Insurance Rider Charge is deducted from the policy's Cash Value, purchasing this Rider could reduce the amount of Proceeds payable when the Death Benefit depends on Cash Value.
Children's Term Insurance Rider
Subject to underwriting approval, a policy owner may purchase term life insurance on the Insured's children at any time while the policy is In Force. If an insured child dies while the policy is In Force and before the Maturity Date, the policy pays a benefit to the named beneficiary. The insurance coverage for each insured child will continue (as long as the policy is In Force) until the earlier of: (1) the policy anniversary on or next following the date the Insured's child turns age 22; or (2) the policy anniversary on which the Insured would have reached Attained Age 65. Subject to certain conditions specified in the Rider, the Rider may be converted into a policy on the life of the insured child without evidence of insurability. The Rider will be effective until the Rider's term expires, until the benefit is paid, or until the Rider is terminated by written request to the Service Center.
Children's Term Insurance Rider Charge
A monthly Children's Term Insurance Rider Charge will be deducted if this Rider is elected. The Children's Term Insurance Rider Charge compensates Nationwide for providing term insurance on the lives of each Insured child. The Rider charge is $0.43 per $1,000 of the Children's Term Insurance Rider's Specified Amount and will be assessed as long as the policy is In Force and the Rider is in effect. The Rider charge will be the same, even if the number of children covered under the Rider changes. Nationwide may decline a request to add another child based on underwriting standards.
The Children's Term Insurance Rider Charge will be deducted proportionally from the Sub-Account and Fixed Account allocations. Because the Children's Term Insurance Rider Charge is deducted from the policy's Cash Value, purchasing this Rider could reduce the amount of Proceeds payable when the Death Benefit depends on Cash Value.
29
Long-Term Care Rider
The benefit associated with the Long-Term Care Rider is that, upon the Insured meeting certain eligibility requirements, the policy owner is paid a monthly benefit to assist them with the expenses associated with their nursing home care or home health care. Benefit payments represent an advance of a portion of the Base Policy Specified Amount which will ultimately reduce the Cash Surrender Value and Death Benefit. In addition, if the remaining Death Benefit is less than 10% of the initial Total Specified Amount when the Insured dies and the policy is In Force, a residual Death Benefit of 10% of the initial Total Specified Amount minus any Indebtedness and partial surrenders will be paid.
The maximum monthly benefit, which is determined by Nationwide at the time a request for benefits under the terms of the Rider is submitted, will be the lesser of:
1. 2% of Long-Term Care Specified Amount in effect; or
2. the per diem amount allowed by the Health Insurance Portability and Accountability Act times the number of days in the month.
The maximum lifetime benefit under any combination of Home Health Care benefits and Long-Term Care Facility benefits is equal to the lesser of the Long-Term Care Specified Amount or the initial Total Specified Amount minus Indebtedness and partial surrenders.
A policy owner may request to receive a monthly benefit less than the maximum subject to a minimum monthly benefit. Choosing a lesser amount could extend the length of the benefit period of the Long-Term Care Rider.
The Long-Term Care Specified Amount, elected at issue, represents the maximum accumulation of Long-Term Care Benefits available under the Long-Term Care Rider. This amount must be at least 10% of the Base Policy Specified Amount (including the Additional (insurance) Protection Rider) and no more than the Total Specified Amount.
Decreases in the Base Policy Specified Amount, and/or Additional (insurance) Protection Rider Specified Amount, if elected, will result in a corresponding decrease in Long-Term Care Rider Specified Amount only if the Total Specified Amount is less than the Long-Term Care Rider Specified Amount after the decrease.
State regulation of long-term care benefits will result in differences in this Rider's name, covered services, criteria for eligibility of benefit payment, cost of insurance charge factors, maximum monthly benefit amounts, minimum monthly benefit amounts, and availability of the 10% residual Death Benefit. State variations are subject to change without notice at any time. Contact the Service Center to obtain a copy of the Long-Term Care Rider applicable to the policy.
Availability
Subject to Nationwide's underwriting approval, the Long-Term Care Rider may be purchased at any time while the policy is In Force. If purchased after the Policy Date, Nationwide will require evidence of insurability. There is a free look period associated with this Rider. Within 30 days of receipt of the Rider, the policy owner may return it to the sales representative who sold it, or to the Service Center. The Rider will be void and related charges will be refunded to the policy owner, see To Cancel (Examination Right).
Invoking the Rider
To invoke this Rider, the Insured must be: (1) cognitively impaired or (2) unable to do at least two of the following activities of daily living: bathing, continence, dressing, eating, using the toilet facilities, or transferring (moving into or out of bed, chair, or wheelchair).
In addition, a 90-day waiting period, referred to as an "elimination period," must be satisfied before benefits are paid. Benefits will not be retrospectively paid for the elimination period. The elimination period can be satisfied by any combination of days of Long-Term Care Facility stay or days of Home Health Care, as those terms are defined in the Rider. These days of care or services need not be continuous, but must be accumulated within a continuous period of 730 days. The elimination period has to be satisfied only once while the Rider is in effect. The benefit associated with the Rider may not cover all your prospective long-term care costs. The benefits paid in association with the Rider are intended to be "qualified long-term care insurance" under federal tax law, and generally will not be taxable to the policy owner, see Taxes. See your tax advisor about the use of this Rider.
Terminating the Rider
This Rider will terminate when the maximum lifetime benefit under the Rider has been paid, the policy matures, the Insured dies, the Policy Guard Rider is invoked, the Rider is terminated by written request to the Service Center, or the policy is terminated.
30
Long-Term Care Referral Service
If the Rider is elected, the Insured will have access to a national long-term care services referral network via a toll-free telephone number. Services include free consultation and tailored information to assist in planning and implementing a care plan. These services are currently provided through a third party. There is no separate additional charge for this service. This service is subject to availability and may be modified, suspended, or discontinued at any time upon 30 days written notice.
Long-Term Care Rider Charge
A monthly Long-Term Care Rider Charge is deducted if this Rider is elected. The Long-Term Care Rider Charge compensates Nationwide for providing long-term care benefits upon the Insured meeting certain eligibility requirements. The Rider Charge is the product of the Long-Term Care Rider's Net Amount At Risk and a long-term care cost of insurance rate. Because this Rider has no Cash Value, the Net Amount At Risk is defined as the lesser of the Long-Term Care Rider's Specified Amount and the policy's Net Amount At Risk. The long-term care cost of insurance rate is based on Nationwide's expectations as to the Insured's potential need for long-term care over time and will vary by the Insured's sex, Attained Age (in some states issue age), underwriting class, and any Substandard Ratings.
The Long-Term Care Rider Charge will be deducted proportionally from the Sub-Accounts and Fixed Account allocations. Because the Long-Term Care Rider Charge is deducted from the Cash Value, electing this Rider could reduce the amount of Proceeds payable when the Death Benefit depends on Cash Value. Additionally, any benefits paid pursuant to this Rider will reduce the Cash Surrender Value and Death Benefit.
Note: Upon meeting the requirements for benefits under this Rider, the Long-Term Care Rider Charge will be waived for the duration of the Rider benefit payment period; however, all other monthly deductions will continue to be charged. Additionally, loans or partial surrenders will not be permitted while receiving benefits under the Rider. If the policy's Cash Surrender Value is insufficient to cover all other monthly deductions while benefits are being received under the Rider, the policy will not lapse and monthly deductions will be waived while the Rider benefit is being paid. This includes monthly deductions for other In Force Riders. Premium requirements for any death benefit guarantee feature of the policy or any elected Rider are not waived. Once the Insured is no longer receiving benefits associated with the Long-Term Care Rider, additional Premium may be necessary to prevent the policy from Lapsing.
Spouse Life Insurance Rider
The benefit associated with the Spouse Life Insurance Rider is a death benefit payable upon the death of the spouse named on the application ("Insured Spouse") to the designated beneficiary. If no beneficiary is designated, the benefit is payable to the Insured.
This Rider may be purchased at any time while the policy is In Force, subject to underwriting approval and the following age restrictions:
• the Insured must be between Attained Age 21 and 59 (this Rider is no longer available on or after the policy anniversary on which the Insured reaches Attained Age 59); and
• the Insured Spouse must be between Attained Age 18 and 69 at the time this Rider is elected.
This Rider will terminate on the earliest of: the policy anniversary on which the Insured Spouse reaches Attained Age 70, the date the Policy Guard Rider is invoked, the date the Rider is converted to a new policy, the date the policy matures, or until the Rider or policy is terminated by written request to the Service Center.
This Rider has a conversion right. The Insured Spouse may exchange this Rider's benefit for a level premium, level benefit, permanent plan of whole life insurance, subject to limitations.
Spouse Life Insurance Rider Charge
A monthly Rider charge is deducted if this Rider is elected. The Spouse Life Insurance Rider Charge compensates Nationwide for providing term insurance on the life of the Insured Spouse. The Rider charge is the product of the Spouse Life Insurance Rider's Specified Amount and the Insured Spouse life insurance cost of insurance rate. The Insured Spouse life insurance cost of insurance rate is based on Nationwide's expectations as to the mortality of the Insured Spouse. The Insured Spouse life insurance cost of insurance rate will vary by the Insured Spouse's sex, Attained Age, underwriting class, any Substandard Ratings, and the Spouse Life Insurance Rider's Specified Amount.
The Spouse Life Insurance Rider Charge will be deducted proportionally from the Sub-Account and Fixed Account allocations. Because the Spouse Life Insurance Rider Charge is deducted from Cash Value, purchasing this Rider could reduce the amount of Proceeds payable when the Death Benefit depends on Cash Value. Decreases in the Base Policy Specified Amount may result in a corresponding decrease in the Spouse Life Insurance Rider's Specified Amount.
31
Accidental Death Benefit Rider
Subject to Nationwide's underwriting approval, this Rider may be elected at any time. The Rider pays a benefit, in addition to the Death Benefit, to the named beneficiary upon the Insured's accidental death. The benefit continues until the Insured reaches Attained Age 70. The policy owner will be charged for this Rider: so long as the policy remains In Force and the Rider's term has not expired; until the benefit has been paid or until the policy owner terminates the Rider in writing at the Service Center.
The charge for this benefit is deducted from the policy's Cash Value, therefore this Rider could reduce the amount of Proceeds payable when the Death Benefit depends on Cash Value. Otherwise, the benefit of this Rider and the Death Benefit are independent of one another.
Accidental Death Benefit Rider Charge
The charge for this Rider compensates Nationwide for providing coverage in the event of the Insured's accidental death, meaning the Insured's death as a result of bodily injury caused by external, violent and accidental means from a cause other than a risk not assumed. The charge is the product of the Accidental Death Benefit Rider Specified Amount and the accidental death benefit cost of insurance rate. The accidental death benefit cost of insurance rate is based on Nationwide's expectations as to the likelihood of the Insured's accidental death. The accidental death benefit cost of insurance rate will vary by the Insured's sex, Attained Age, underwriting class and any Substandard Ratings.
Premium Waiver Rider
Subject to Nationwide's underwriting approval, the policy owner may purchase this Rider at any time.
Rider Benefit
The benefit associated with the Premium Waiver Rider is a monthly credit to the policy upon the Insured's total disability for six consecutive months not caused by a risk not assumed. Risks not assumed vary by state. Contact the Service Center to obtain a copy of the Premium Waiver Rider applicable to the policy.
The amount credited to the policy will be the lesser of:
• the Premium specified by the policy owner; or
• the average actual monthly Premiums paid over the last 36 months prior to the disability (or such shorter period of time that the policy has been In Force).
The monthly credit applied pursuant to the Rider may not be sufficient to keep the policy from Lapsing. Purchasing this Rider could help preserve the Death Benefit.
Benefit Duration
If the Insured is younger than age 63 at the time of the total disability, the Rider coverage continues until the Insured turns age 65. If the Insured is age 63 or older at the time of the total disability, the Rider coverage continues for two years. This Rider is effective until the Rider's term expires (unless a benefit is being paid under the Rider) or until the Rider is terminated by written request to the Service Center.
Interaction with the Deduction (of Fees and Expenses) Waiver Rider
This Rider cannot be elected if the Deduction (of Fees and Expenses) Waiver Rider is elected. During the first three years from the Policy Date, the benefit payable under that Rider is sufficient to keep the policy from Lapsing where as the benefit payable under the Premium Waiver Rider is not sufficient to keep the policy from Lapsing, see Deduction (of Fees and Expenses) Waiver Rider.
Premium Waiver Rider Charge
A monthly Premium Waiver Rider Charge will be deducted if this Rider is elected. The Premium Waiver Rider Charge compensates Nationwide for crediting the policy with the amount of scheduled due and payable Premium payments upon the Insured's total disability for six consecutive months.
The Rider Charge is the product of the Rider's benefit (the monthly policy credit) and the premium waiver cost rate. The premium waiver cost rate is based on Nationwide's expectations as to likelihood of the Insured's total disability for six consecutive months. The premium waiver cost rates will vary by policy based on the Insured's sex, Attained Age, underwriting class, and any Substandard Ratings.
The Premium Waiver Rider Charge will be deducted proportionally from the Sub-Account allocations and Fixed Account. Because the Premium Waiver Rider Charge is deducted from Cash Value, purchasing this Rider could reduce the amount of Proceeds payable when the Death Benefit depends on Cash Value.
32
Change of Insured Rider
The benefit associated with the Change of Insured Rider is that the policy owner may designate a new Insured, subject to insurability and other conditions. The costs and benefits 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. This Rider can be elected at any time while the policy is In Force.
Change of Insured Rider Charge
There is no charge associated with the Change of Insured Rider.
Additional (insurance) Protection Rider
The benefit associated with the Additional (insurance) Protection Rider is term life insurance on the Insured, in addition to that under the base policy. The Death Benefit Proceeds attributable to the Additional (insurance) Protection Rider are payable to the beneficiary upon the Insured's death if the Additional (insurance) Protection Rider is still In Force. The Additional (insurance) Protection Rider has no cash value and no loanable value nor does it modify any cash or loan values of the base policy. Policy owners should request illustrations showing the impact of purchasing coverage with and without theAdditional (insurance) Protection Rider.
Subject to Nationwide's underwriting approval, this Rider may be purchased at any time while the policy is In Force and until the Insured reaches Attained Age 85. If purchased after the Policy Date, Nationwide will require evidence of insurability. The death benefit option for the base policy will also be the death benefit option for the Additional (insurance) Protection Rider.
The Additional (insurance) Protection Rider coverage terminates on the earliest of the following dates:
• The date the Insured dies;
• The Maturity Date of the base policy;
• The date the Rider and/or base policy Lapse; or
• The date the policy terminates for any reason.
The policy owner cannot extend the Additional (insurance) Protection Rider coverage beyond the policy's Maturity Date, see Extending Coverage Beyond the Maturity Date.
Additional (insurance) Protection Rider Impact
Cost of Insurance Charges
Electing coverage under the Additional (insurance) Protection Rider, as opposed to electing coverage only under the base policy, should lower the policy owner's overall cost of insurance. This is due in part to the broker-dealer firm receiving less overall compensation for selling a policy with the Additional (insurance) Protection Rider. It is also possible that less Premium may be required to maintain to the Death Benefit over the life of the policy or that increased Premium may be needed if the Additional (insurance) Protection Rider is not purchased.
Guaranteed Policy Continuation Provision
This provision protects the policy from Lapse under certain conditions, see Guaranteed Policy Continuation Provision. However, coverage elected under the Additional (insurance) Protection Rider is not covered by this provision beyond the fifth policy year. In comparison, the base policy may provide longer coverage, see Lapse.
Additional (insurance) Protection Rider Charge
A monthly Additional (insurance) Protection Rider Charge will be deducted if the Rider is elected. The Additional (insurance) Protection Rider Charge compensates Nationwide for providing term life insurance on the Insured.
The monthly cost of insurance charge for this Rider is determined by multiplying the Rider monthly cost of insurance rate by the Rider death benefit. The Rider death benefit will be based on the elected Death Benefit and may vary monthly. The Additional (insurance) Protection Rider cost of insurance rate is based on Nationwide's expectation as to the Insured's mortality and expense experience. The Additional (insurance) Protection Rider cost of insurance rate will vary by the Insured's sex, Attatined Age, underwriting class, any Substandard Ratings, and the Total Specified Amount.
The Additional (insurance) Protection Rider Charge will be deducted proportionally from the Sub-Account and Fixed Account allocations. Because the Additional (insurance) Protection Rider Charge is deducted from Cash Value, purchasing this Rider could reduce the amount of Proceeds payable when the Death Benefit depends on the Cash Value.
33
Deduction (of Fees and Expenses) Waiver Rider
Subject to Nationwide's underwriting approval, this Rider can be elected at any time so long as the policy is In Force and it is before the Policy Date on or following the date the Insured reaches age 59.
Rider Benefit
The benefit associated with this Rider is a waiver of the policy's monthly deductions if the Insured becomes totally disabled, as defined in the Rider, for at least six consecutive months. No benefit is available if total disability results from a risk not assumed; risks not assumed may vary by state. Contact the Service Center to obtain a copy of the Deduction (of Fees and Expenses) Waiver Rider applicable to the policy.
Disability During the First Three Years from the Policy Date
If the Insured becomes totally disabled for six consecutive months within the first three years from the Policy Date, the benefit is a credit to the policy in an amount necessary to keep the policy In Force as opposed to a waiver of the monthly deductions. The Cash Value will increase by the amount in which the minimum monthly premium exceeds the monthly deductions, just as if the minimum monthly premium had been paid.
Disability Following the First Three Years from the Policy Date
If the Insured becomes totally disabled for six consecutive months any time after the first three years from the Policy Date, the benefit is a waiver of the policy's monthly deductions. For example, if the policy owner becomes totally disabled for six consecutive months two years and eight months from the Policy Date, for the first four months, the benefit would be a credit equal to the amount necessary to keep the policy In Force. After that, the Rider's benefit becomes a waiver of the policy's monthly charges.
Following the third year from the Policy Date, the Rider's benefit alone may not be sufficient to keep the policy from Lapsing. The policy owner may need to make additional premium payments to prevent Lapse. However, while the Rider's benefit is being paid, it will cost less on a monthly basis to keep the policy In Force.
Benefit Duration
The benefit duration depends on the Insured's age when total disability begins. Before age 60, the benefit continues for as long as the Insured is totally disabled (even if that disability extends past when the Insured reaches age 65) The benefit will end if you invoke the Policy Guard Rider. Between ages 60 and 63, the benefit continues until the Insured turns age 65. From age 63, the benefit lasts only for two years.
Interaction with Premium Waiver Rider 

This Rider cannot be elected if the Premium Waiver Rider is elected. During the first three years from the Policy Date, the benefit payable under this Rider appears to be the same as the benefit payable under the Premium Waiver Rider, i.e., both Riders credit amounts to the policy. However, the monthly credit under this Rider will be sufficient to keep the policy from Lapsing but only during the first three years from the Policy Date. The benefit under the Premium Waiver Rider is not guaranteed to be sufficient to keep the policy from Lapsing, see Premium Waiver Rider.
Deduction (of Fees and Expenses) Waiver Rider Charge
The charge for this Rider compensates Nationwide for the risks assumed in crediting and/or waiving policy charges during the Insured's total disability. The charge is the product of the amount of periodic charges deducted from the policy on a monthly basis (excluding the cost for this Rider) and the deduction waiver cost rate. The deduction waiver cost rate is based on Nationwide's expectations as to the likelihood of the Insured's total disability for six consecutive months. The deduction waiver cost rate varies by the Insured's sex, Attained Age, underwriting class, and any Substandard Ratings.
The charge for this Rider is deducted proportionately from the Sub-Account and Fixed Account allocations; therefore, purchasing this Rider could reduce the amount of Proceeds payable when the Death Benefit depends on Cash Value.
Policy Guard Rider
The Policy Guard Rider prevents the policy from Lapsing due to Indebtedness by providing a guaranteed paid-up insurance benefit. The Rider is designed to enable the policy owner of a policy with a substantially depleted Cash Value, due to Indebtedness, to potentially avoid the negative tax consequences associated with Lapsing the policy.
Note: Neither the IRS nor the courts have ruled on the tax consequences of invoking the Policy Guard Rider. It is possible that the IRS or a court could assert that the Indebtedness should be treated as a distribution, all or a portion of which could be taxable when the Rider is invoked. Consult with a tax advisor regarding the risks associated with invoking this Rider.
34
Availability
All policies for which the guideline premium/cash value corridor life insurance qualification test is elected will automatically receive the Policy Guard Rider (state law permitting). The Rider is dormant until specifically invoked by the policy owner, at which time a one-time charge is assessed.
This Rider is not available for policies for which the cash value accumulation life insurance qualification test was elected.
Eligibility
The policy owner is eligible to invoke the Rider upon meeting the following conditions:
• Indebtedness reaches a certain percentage of the policy's Cash Value (the percentage will vary based upon the Insured's Attained Age);
• The Insured is Attained Age 75 or older;
• The policy is currently In Force and has been In Force for at least 15 years;
• The policy's Cash Value is at least $100,000; and
• All amounts available to be withdrawn without the imposition of federal income tax have been withdrawn.
The first time the policy's Indebtedness reaches the percentage that makes the policy eligible for the Rider, Nationwide will notify the policy owner of the policy's eligibility to invoke the Rider. The letter will also describe the Rider, its cost, and its guaranteed benefits. The Rider may be invoked at any time, provided that the above conditions are met.
Note: The Long-Term Care Rider, the Spouse Life Insurance Rider, and the Deduction (of Fees and Expenses) Waiver Rider will terminate or will need to be terminated by the policy owner prior to invoking the Policy Guard Rider. An election to invoke the Policy Guard Rider is irrevocable.
After Nationwide receives a request to invoke the Rider, Nationwide will adjust the policy as follows:
1. If not already in effect, the death benefit option will be changed to Death Benefit Option 1.
2. The Total Specified Amount will be adjusted to equal the lesser of: (1) the Total Specified Amount immediately before the Rider was invoked; or (2) the Total Specified Amount that will cause the Death Benefit to equal the Minimum Required Death Benefit immediately after the charge for the Rider is deducted.
3. Any non-loaned Cash Value (after deduction of the Policy Guard Rider charge) will be transferred to the Fixed Account, where it will earn the minimum guaranteed fixed interest rate of the base policy (shown on the Policy Data Page).
After the above adjustments are made, the Indebtedness will continue to grow at the policy's loan charged rate, and the amount in the policy loan account will continue to earn interest at the policy's loan crediting rate. No additional policy charges will be assessed. No further loans may be taken from the policy and no withdrawals may be taken from the policy (except for a full policy surrender). Cash Value may not be transferred out of the Fixed Account. The Death Benefit will be the greater of the Total Specified Amount or the Minimum Required Death Benefit. The policy will remain as described above for the duration of the policy.
Policy Guard Rider Charge
The Policy Guard Rider Charge is a one-time charge deducted at the time the Rider is invoked, and is assessed against the Cash Value allocated to the Sub-Accounts and the Fixed Account. The charge is intended to cover the administrative costs and to compensate Nationwide for the risks associated with the Rider's guaranteed paid-up death benefit. The charge is the product of the policy's Cash Value and an age-based factor shown in the Rider.
If the Cash Value less Indebtedness is insufficient to satisfy the charge, the Rider cannot be invoked without repaying enough Indebtedness to cover the charge.
Invoking the Rider could reduce the amount of Proceeds payable when the Death Benefit depends on Cash Value. Additionally, any benefits paid pursuant to this Rider will reduce the Cash Surrender Value.
Policy Owner Services
Dollar Cost Averaging
Dollar cost averaging is an investment strategy designed to reduce the investment risks associated with market fluctuations and promote a more stable Cash Value and Death Benefit over time. A policy owner may elect to participate in the dollar cost averaging program at the time of application or at a later date by submitting an election form to the Service
35
Center. An election to participate in the program that is submitted after application will be effective at the end of the Valuation Period coinciding with the date requested or, if that date has passed or no date is specified, at the end of the Valuation Period during which the request was received, or the end of the free look period, whichever is later.
There is no charge for dollar cost averaging and dollar cost averaging transfers do not count as transfer events. Dollar cost averaging transfers will continue to be processed until there is no more value left in the originating investment option(s) or until a policy owner instructs Nationwide to terminate the service. Policy owners may direct Nationwide to automatically transfer specific amounts from the Fixed Account and the:
• Federated Insurance Series - Federated Quality Bond Fund II: Primary Shares
• Nationwide Variable Insurance Trust - Federated NVIT High Income Bond Fund: Class III
• Nationwide Variable Insurance Trust - NVIT Government Bond Fund: Class I
• Nationwide Variable Insurance Trust - NVIT Money Market Fund: Class I
to any other Sub-Account. Certain Sub-Accounts may or may not be available depending on when the policy was purchased, see Appendix A: Sub-Account Information for details on Sub-Account availability. Transfers from the Fixed Account must be no more than 1/30th of the Fixed Account value at the time the program is elected.
Nationwide does not assure the success of these strategies and cannot guarantee that dollar cost averaging will result in a profit or protect against a loss. A policy owner should carefully consider his or her financial ability to continue these programs over a long enough period of time to purchase Accumulation Units when their value is low, as well as when their value is high. Nationwide may modify, suspend, or discontinue these programs at any time. Nationwide will notify policy owners in writing 30 days before doing so.
Enhanced Dollar Cost Averaging
Periodically, Nationwide may offer enhanced dollar cost averaging programs. When offered, these programs will be available only at the time of application. All or a portion of the initial Premium may be applied to a program. Subsequent Premium is not eligible for inclusion in the program. Under an enhanced dollar cost averaging program, the interest rate credited to the initial Premium allocated to the Fixed Account will be greater than the interest rate credited to standard Fixed Account allocations. Enhanced dollar cost averaging programs will last for one year and Cash Value attributable to the enhanced dollar cost averaging program will be transferred from the Fixed Account to the selected Sub-Account(s) based on the following schedule:
Beginning of Month   Fraction of Cash
Value Transferred
2
   1/11
3
   1/10
4
   1/9
5
   1/8
6
   1/7
7
   1/6
8
   1/5
9
   1/4
10
   1/3
11
   1/2
12
   Remaining Amount
Asset Rebalancing
A policy owner may elect to participate in an asset rebalancing program. Asset rebalancing involves the automatic rebalancing of the Cash Value in the chosen Sub-Accounts (up to 20) on a periodic basis. Cash Value allocated to the Fixed Account is not eligible for asset rebalancing. A policy owner can schedule asset rebalancing to occur every three, six, or 12 months on days when Nationwide prices Accumulation Units. There is no charge for asset rebalancing and it does not count as a transfer event.
A policy owner may elect to participate in an asset rebalancing program at the time of application or at a later date by submitting an election form to the Service Center. Unless elected otherwise, asset rebalancing will not affect the allocation of Premiums paid after beginning the program. Manual transfers will not automatically terminate the program. Termination of asset rebalancing will only occur as a result of specific instruction by a policy owner to do so. Nationwide may modify, suspend, or discontinue asset rebalancing programs at any time.
36
Automated Income Monitor
Automated Income Monitor is an optional systematic partial surrender and/or policy loan program that may be elected at any time, at no additional cost. This program is only available to policies that are not modified endowment contracts.
Automated Income Monitor programs are intended for policy owners who wish to take an income stream of scheduled payments from the Cash Value of the policy. The income stream is generated via partial surrenders until the policy cost basis is depleted, then through policy loans. Taking partial surrenders and/or policy loans may result in adverse tax consequences, will reduce policy values and therefore limit the ability to accumulate Cash Value, and may increase the likelihood the policy will Lapse. Before requesting the Automated Income Monitor program, policy owners should consult with financial and tax advisors.
At the time of application for a program, Nationwide will provide policy owners with an illustration of the proposed income stream and impacts to the Cash Value, Cash Surrender Value, and Death Benefit. Policy owners must submit this illustration along with an application when electing an Automated Income Monitor program. Programs will commence at the beginning of the next monthly anniversary after Nationwide receives the election form and illustration. On each policy anniversary thereafter Nationwide will provide an updated In Force illustration to assist policy owners in determining whether to continue, modify, or discontinue an elected program. Policy owners may request modification or termination of a program at any time by written request to the Service Center.
A policy owner's program will be based on the policy's Cash Surrender Value at the time of election and each succeeding policy anniversary, and on the following elections:
1. Payment type:
a. Fixed Amount: If a policy owner elected payments of a fixed amount, the amount received will not vary with policy Investment Experience; however, the length of time the elected payment amount can be sustained will vary based on the illustration assumptions below and the policy's Investment Experience; or
b. Fixed Duration: If a policy owner elected payments for a fixed duration, the amount received during the first year will be based on the illustration assumptions below. After the first year, the amount will vary based on the illustration assumptions and policy Investment Experience to maintain the elected duration.
2. Illustration assumptions:
a. an assumed variable rate of return specified by the policy owner from the available options stated in the election form;
b. minimum Cash Surrender Value targeted by the policy owner to have remaining on the policy's Maturity Date, or other date specified by the policy owner. This dollar amount is used to calculate available income. It is not guaranteed to be the Cash Surrender Value on the specified date;
c. a policy owner may also request a change of death benefit option, or a decrease in Base Policy Specified Amount to be effective in conjunction with commencing a program or to occur at a future date; and
d. payment frequency: monthly; quarterly; semi-annually; or annually. Payments on a monthly basis are made by direct deposit (electronic funds transfer) only.
Generally, higher variable rate of return assumptions, a lower target Cash Surrender Value, and Death Benefit Option 1, will result in larger projected payments or longer projected durations. However, larger payments or longer duration may increase the likelihood the policy will Lapse.
Note: Policy owners are responsible for monitoring the policy to prevent Lapse. Nationwide will provide annual In Force illustrations based on current Cash Surrender Values and the elected illustration assumptions to assist policy owners with preventing Lapse. Policy owners may request modification or termination of a program at any time by written request to the Service Center.
Automated Income Monitor programs are subject to the following additional conditions:
1. To prevent adverse tax consequences, a policy owner can authorize Nationwide to make scheduled payments via policy loan when:
a. the policy's cost basis is reduced to zero;
b. a partial surrender within the first 15 policy years would be a taxable event;
c. or to prevent the policy from becoming a MEC, see Taxes.
  Note: Partial surrenders and policy loans taken under the Automated Income Monitor program are subject to the same terms and conditions as other partial surrenders and policy loans, see Partial Surrender and Policy Loans.
37
2. While a program is in effect, no Premium payment reminder notices will be sent; however, Premium payments will be accepted.
3. Programs will terminate on the earliest of the following:
a. Nationwide's receipt at the Service Center of a written request to terminate participation;
b. at the time the policy enters a Grace Period or terminates for any reason;
c. at the time of a requested partial surrender or policy loan outside the program;
d. upon a change of policy owner;
e. for income based on a fixed duration, the end of the period the policy owner specified at the time of election;
f. on any policy anniversary when the current Cash Surrender Value is less than or equal to the target Cash Surrender Value assumption the policy owner specified;
g. at any time the scheduled partial surrender or policy loan would cause the policy to fail to qualify as life insurance under Section 7702 of the Code; or
h. the policy's Maturity Date.
Additionally, the program will terminate when one of the following Riders is invoked or begins providing benefits: the Policy Guard Rider and the Long-Term Care Rider.
Nationwide will notify policy owners upon termination of an Automated Income Monitor program. In addition, Nationwide may modify, suspend, or discontinue Automated Income Monitor programs at any time. Nationwide will notify policy owners in writing 30 days before doing so.
Policy Loans
After the expiration of the free look period and while the policy is In Force, a policy owner may take a policy loan. Loan requests must be submitted in writing to the Service Center.
Taking a policy loan may increase the risk of Lapse and may result in adverse tax consequences. Unpaid loan interest charges accrue daily at a compounded annual interest rate and can cause the policy's Indebtedness to grow significantly. The policy owner should request an illustration demonstrating the impact of a policy loan on the policy's Cash Value, Cash Surrender Value, and Death Benefit Proceeds.
Loan Amount
The minimum loan amount is $200. At the time of a loan request, policy Indebtedness cannot exceed 90% of the Cash Value allocated to the Sub-Accounts plus 100% of the Cash Value allocated to the Fixed Account,  plus 100% of the policy loan account, less any Surrender Charge. Nationwide pays the policy loan to the policy owner with assets from its general account. Nationwide then uses the policy's Cash Value as collateral for the loan as described below.
Collateral and the Policy Loan Account
As collateral for the policy loan, Nationwide deducts an amount equal to the policy loan from the policy's Cash Value. Collateral amounts are transferred from the Cash Value to the policy loan account (which is part of Nationwide's general account). Because the policy loan account does not participate in the Investment Experience of the Sub-Accounts, policy loans can permanently affect the Death Benefit Proceeds and the Cash Value of the policy, even if repaid. The policy loan account may be subject to Nationwide's creditors in the event of insolvency.
Amounts transferred from the policy's Cash Value equal to the policy loan account are deducted from the Sub-Accounts in the same proportion as the Sub-Account allocations, unless the policy owner has instructed otherwise. Nationwide will only transfer amounts from the Fixed Account if the loan amount exceeds 90% of the Cash Value allocated to the Sub-Accounts.
The policy owner will earn interest on the collateral held in the policy loan account. Interest will accrue daily at no less than the guaranteed minimum rate stated on the Policy Data Pages. The interest earned on the policy loan account may be different than the rate earned on Cash Value allocated to the Fixed Account.
Interest Charged
Nationwide charges interest against policy Indebtedness. Indebtedness is the total amount of all outstanding policy loans, including principal and compounded interest due. The maximum interest rate Nationwide may charge against Indebtedness is 3.90% per annum, see In Summary: Fee Tables for current interest charged rates. Rates may change and may vary by policy year. Policy loan interest charges may provide revenue for risk charges and profit.
38
If policy loan interest is not paid when due, policy Indebtedness will continue to compound at the interest rate in effect, see When Interest is Charged and Credited below. If not paid when due, Nationwide will deduct an amount equal to the unpaid interest from the policy's Cash Value and add it to the policy loan account causing the original policy loan amount (now, "Indebtedness") to increase by the amount of the unpaid interest charged. Amounts deducted from the policy's Cash Value as unpaid interest charges will be deducted from the Sub-Accounts and the Fixed Account in the same manner as a new loan.
Note: Over time, unpaid loan interest charges can cause the policy's Indebtedness to be significant. In some cases, policy Indebtedness may be significant enough to cause the policy to Lapse. In general, it is advantageous to repay Indebtedness and at a minimum, the interest charged on Indebtedness, at least annually.
Indebtedness is considered a part of the policy's Cash Value, therefore, upon a full surrender, Lapse, or maturity, the amount received in the original loan request(s), plus unpaid loan interest charged is considered "received" under the Code and may result in adverse tax consequences, see Surrendering the Policy; Maturity in Taxes.
When Interest is Charged and Credited
Interest charged against Indebtedness accrues daily. Interest earned on collateral also accrues daily. Nationwide will deduct interest charged on Indebtedness from the policy's Cash Value, and credit interest earned on collateral to the Cash Value:
• Annually, at the end of a policy year;
• At the time a new loan is requested;
• When a loan repayment is made;
• Upon the Insured's death;
• Upon policy Lapse and/or;
• Upon a full surrender of the policy.
In most cases, the interest earned on collateral and credited to the Cash Value will be less and in some cases, significantly less, than the interest charged against the Cash Value.
Repayment
The policy owner may repay all or part of policy Indebtedness at any time while the policy is In Force. The minimum loan repayment amount, if any, is stated in the policy. The policy owner should contact the Service Center to obtain loan pay-off amounts.
Note: Interest earned on collateral is not deducted from Indebtedness to calculate loan pay off amounts. If a loan repayment is made, the policy owner's Cash Value is credited with interest earned on collateral and the amount of the loan repayment is deducted from the policy's Indebtedness.
Nationwide will treat any payments made as Premium payments, unless the policy owner specifies that the payment should be applied against the policy's Indebtedness. It may be beneficial for the policy owner to repay Indebtedness before making additional Premium payments because Premium Load charges are deducted from Premium payments but not from loan repayments.
If the policy owner makes a loan repayment, it will be applied to the Sub-Accounts and the Fixed Account in accordance with the allocation instructions in effect at the time the payment is received, unless the policy owner indicates otherwise.
Repaying Indebtedness will cause the Death Benefit and net 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, including Rider charges. A policy owner can avoid Lapsing the policy by paying the amount required by the Guaranteed Policy Continuation Provision, or, if elected, by invoking the Policy Guard Rider to prevent the policy from Lapsing due to Indebtedness. Before any Lapse, there is a Grace Period during which a policy owner can take action to prevent the Lapse. Subject to certain conditions, a policy owner may reinstate a policy that has Lapsed.
Guaranteed Policy Continuation Provision
The policy provides for a Guaranteed Policy Continution Period. The policy will not Lapse during the Guaranteed Policy Continution Period if the policy owner pays the Policy Continuation Premium Amount amount shown on the Policy Data Pages.
39
The Policy Continuation Premium Amount required will vary by the Insured's age, sex, underwriting class, any Substandard Ratings, the Total Specified Amount and any Riders elected.
If a policy owner has made any changes to the policy after it is issued, including any policy loans or partial surrenders, increases or decreases to the Total Specified Amount, adding or terminating a Rider, and/or changing the death benefit option, the Policy Continuation Premium Amount may change. A change will result in reissued Policy Data Pages which will show the Policy Continuation Premium Amount. Upon request and for no charge, Nationwide will determine whether Premium payments, minus any Indebtedness and partial surrenders, are sufficient to keep the Guaranteed Policy Continuation Provision in effect.
The Guaranteed Policy Continution Period will begin when Nationwide issues the policy and will continue for the lesser of 30 years, or the number of years until the Insured reaches Attained Age 65, from the Policy Date. For policies issued on Insured's age 55 or older on the Policy Date, the Guaranteed Policy Continution Period is 10 years.
When the Guaranteed Policy Continution Period ends, if the Cash Surrender Value remains insufficient to cover the monthly policy charges, the policy is at risk of Lapsing and a Grace Period will begin. There is no separate additional charge for the Guaranteed Policy Continuation Provision.
Grace Period
If the Cash Surrender Value on any monthly anniversary date is not sufficient to cover the current monthly deductions, then a Grace Period will begin. At the beginning of a Grace Period, the policy owner will receive a notice from Nationwide that will indicate the amount of Premium that must be paid to avoid Lapsing the policy. This amount is equal to the lesser of four times the current monthly deductions, or, the Premium that will bring the guaranteed policy continuation provision back into effect. If not paid within 61 days, the policy and all Riders will Lapse.
The Grace Period will not alter the operation of the policy or the payment of Proceeds.
Reinstatement
A policy owner may reinstate a Lapsed policy by:
(1) submitting, at any time within three years after the end of the Grace Period (or longer if required by state law) and before the Maturity Date, a written request to the Service Center to reinstate the policy;
(2) providing evidence of insurability satisfactory to Nationwide;
(3) paying sufficient Premium to keep the policy In Force for three months (or less if required by state law) from the date of reinstatement, or, if the policy is in the Guaranteed Policy Continution Period, paying the lesser of (a) and (b) where:
(a) is the amount of Premium sufficient to keep the policy In Force for three months from the date of reinstatement; and
(b) is the amount of Premium sufficient to bring the Guaranteed Policy Continuation Provision into effect;
(4) paying sufficient Premium to cover all policy charges that were due and unpaid during the Grace Period; and
(5) repaying or reinstating any Indebtedness that existed at the end of the Grace Period.
The policy owner may also reinstate coverage under certain Riders subject to satisfactory evidence of insurability.
If the policy is reinstated, the Cash Value on the date of reinstatement will be set equal to the lesser of the Surrender Charge corresponding to the policy year in which the policy is reinstated or the Cash Value at the end of the most recent Grace Period. Nationwide will add any Premiums or loan repayments that were made to reinstate the policy to the Cash Value.
The Sub-Account allocations that were in effect at the start of the Grace Period will be reinstated, unless the policy owner indicates otherwise.
Surrenders
Full Surrender
The policy may be surrendered for the Cash Surrender Value at any time while it is In Force. A surrender will be effective as of the date Nationwide receives the policy owner's written surrender request at the Service Center. Nationwide may also require the policy owner to return the policy. Nationwide may postpone payment of that portion of the Cash Surrender Value attributable to the Fixed Account for up to six months.
40
Policy Restoration after a Full Surrender
Prior to the Insured's death, Nationwide will permit restoration of a surrendered policy pursuant to established procedures to meet the requirements of state insurance law regarding the replacement of life insurance (i.e., use of the Proceeds from a surrendered policy to purchase a new policy). Restored policies will be treated as if they were never surrendered for all purposes, including Investment Experience, interest, and deduction of charges, see Policy Restoration Procedure in the Statement of Additional Information.
Partial Surrender
After the policy has been In Force for one year, the policy owner may request a partial surrender of the policy's Cash Surrender Value. During the first 10 policy years, the amount of a partial surrender cannot exceed 10% of the Cash Surrender Value as of the beginning of the policy year. Nationwide may limit partial surrenders to one per year from the Policy Date. The minimum amount of any partial surrender request is $200.
When a partial surrender is taken, Nationwide will reduce the Cash Value by the partial surrender amount. The Base Policy Specified Amount will also be reduced by the amount necessary to prevent an increase in the Net Amount at Risk. However, the reduction to the Base Policy Specified Amount will not be greater than the excess of the partial surrender amount over the preferred partial surrender amount (a preferred partial surrender is a partial surrender that occurs before the 15th policy anniversary and does not exceed 10% of the Cash Surrender Value as of the beginning of the policy year). In any event, a partial surrender will reduce the Cash Value in each Sub-Account the same proportion as the current allocations.
Partial surrenders may be subject to income tax penalties. They could also cause the policy to become a "modified endowment contract" under the Code, which could change the income tax treatment of any distribution from the policy, see Periodic Withdrawals, Non-Periodic Withdrawals, and Loans.
Reduction of Base Policy Specified Amount on a Partial Surrender
Nationwide will reduce the Cash Value of the policy by the amount of any partial surrender in the same proportion as how Cash Value is allocated among the Sub-Accounts. Nationwide will only reduce the Cash Value attributable to the Fixed Account when allocations in the Sub-Accounts are insufficient to cover the amount of the partial surrender.
Nationwide may reduce the Base Policy Specified Amount to ensure that the Net Amount At Risk does not increase due to a partial surrender. Because the policy's Net Amount At Risk is the same before and after the reduction, a partial surrender by itself does not alter the policy's cost of insurance. The policy's charges going forward will be based on a new Base Policy Specified Amount that will change the calculation of those charges. Depending on changes in variables such as the Cash Value, these charges may increase or decrease after the reduction in Base Policy Specified Amount. However, Nationwide will not reduce the Base Policy Specified Amount when a preferred partial surrender is taken. A preferred partial surrender is a surrender taken before the 15th year from the Policy Date, the maximum aggregate annual amount of which is no more than 10% of the policy's Cash Surrender Value as of the beginning of that year.
Any reduction to the Base Policy Specified Amount will be made in the following order:
• against the most recent increase in the Base Policy Specified Amount;
• against the next most recent increases in the Base Policy Specified Amount in succession; and
• against the Base Policy Specified Amount under the original application.
The Death Benefit
Calculation of the Death Benefit
The Death Benefit will be calculated when Nationwide has received (at the Service Center) all information required to process the claim for Death Benefit Proceeds, including, but not limited to, proof that the Insured has died and any other information Nationwide may reasonably require. The Death Benefit may be subject to an adjustment if an error or misstatement was made upon application, or if the Insured dies by suicide.
While the policy is In Force, the Death Benefit will never be less than the Base Policy Specified Amount. The Death Benefit will depend on the death benefit option elected, certain Riders, and the tax test elected as discussed in greater detail below. The Death Benefit may vary with the Cash Value of the policy, which is affected by Investment Experience, Indebtedness, and any due and unpaid monthly deductions that accrued during a Grace Period.
41
Death Benefit Options
Policy owners have a choice of one of three available death benefit options under the policy. If a death benefit option is not selected, Nationwide will issue the policy with Death Benefit Option 1. Not all death benefit options are available in all states.
Note: The Death Benefit will be the greater of the amount produced by the death benefit option in effect on the date of the Insured's death or the Minimum Required Death Benefit, see The Minimum Required Death Benefit.
Death Benefit Option 1: The Death Benefit will be the Total Specified Amount as of the Insured's date of death.
Death Benefit Option 2: The Death Benefit will be the Total Specified Amount plus the Cash Value as of the Insured's date of death.
Death Benefit Option 3: The Death Benefit will be the Total Specified Amount plus the accumulated premium account (which consists of all Premium payments plus interest), less any partial surrenders, as of the Insured's date of death.
The interest rate attributable to the accumulated premium account is referred to as the Death Benefit Option 3 Interest Rate and is stated on the Policy Data Page. The amount of the accumulated premium account will be no less than zero and no greater than twice the Total Specified Amount.
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 the policy is issued, 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.
If a specific test is not elected, Nationwide will issue the policy with the guideline premium/cash value corridor test. If the cash value accumulation test is elected, the Policy Guard Rider is not available.
Cash Value Accumulation Test
The cash value accumulation test determines the Minimum Required Death Benefit by multiplying the Cash Value by a percentage set out in the Code. The percentages depend upon the Insured's age, sex, 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.
Guideline Premium/Cash Value Corridor Test
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.
In deciding which test to elect for the policy, consider the following:
• The cash value accumulation test generally allows flexibility to pay more Premium, subject to Nationwide's approval of any increase in the policy's Net Amount At Risk that would result from higher Premium payments. Premium payments under the guideline premium/cash value corridor test are limited by Section 7702 of the Code.
• Generally, the guideline premium/cash value corridor test produces a higher Death Benefit in the early years of the policy while the cash value accumulation test produces a higher Death Benefit in the policy's later years.
• Monthly cost of insurance charges that vary with the amount of the Death Benefit may be greater during the years when the elected test produces a higher Death Benefit.
Regardless of which test is elected, Nationwide will monitor compliance to ensure that the policy meets the statutory definition of life insurance under the Code. As a result, the Proceeds payable under a policy should be excludable from gross income of the beneficiary for federal income tax purposes. Nationwide may refuse additional Premium payments or return Premium payments so that the policy continues to meet the Code's definition of life insurance. Consult a qualified tax advisor on all tax matters involving the policy.
42
Changes in the Death Benefit Option
After the first year from the Policy Date, the policy owner may elect to change the Death Benefit option under the policy from either Option 1 to Option 2, or from Option 2 to Option 1. The policy owner may not change from or to Option 3. Nationwide will permit only one change of Death Benefit option per policy year. The effective date of a change will be the monthly anniversary date following the date the change is approved.
For any change in the Death Benefit option to become effective, the Cash Surrender Value after the change must be sufficient to keep the policy In Force for at least three months.
Upon effecting a death benefit option change, the Total Specified Amount may be changed (either increased or decreased) so that the Net Amount At Risk is the same before the change and after the change on the date of the change. Because the policy's Net Amount At Risk remains the same before and after the change, changing the death benefit option and preserving the Net Amount At Risk by itself does not alter the policy charges. The policy charges going forward will be based on the adjusted Total Specified Amount. Depending on changes in factors such as fluctuations in the policy's Cash Value, these charges may increase or decrease after the death benefit option change.
The policy owner should request an illustration demonstrating the impact of a change in the policy's death benefit option.
Nationwide will refuse a death benefit option change that would reduce the Total Specified Amount to a level where the Premium already paid would exceed any premium limitations under the Code.
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 Premium paid exceeding any premium limitations under Section 7702 of the Code.
Incontestability
Nationwide will not contest payment of the Death Benefit based on the initial Total Specified Amount after the policy has been In Force during the Insured's lifetime for two years from the Policy Date, and, in some states, within two years from a reinstatement date. For any change in Total Specified Amount requiring evidence of insurability, Nationwide 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, and, in some states, within two years from a subsequent reinstatement date. The incontestability period in some states may be less than two years.
Suicide
If the Insured dies by suicide within two years from the Policy Date, and, in some states, within two years of a reinstatement date, Nationwide will pay no more than the sum of the Premiums paid, less any Indebtedness, and less any partial surrenders. Similarly, if the Insured dies by suicide within two years from the date an application for an increase in the Total Specified Amount was accepted by Nationwide, and, in some states, within two years from a subsequent reinstatement date, Nationwide will pay no more than the Death Benefit Proceeds 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. The suicide period in some states may be less than two years.
Proceeds Upon Maturity
If the policy is In Force on the Maturity Date, Nationwide will pay the Proceeds to the policy owner.
Normally, the Proceeds will be paid within seven days after receipt of the policy owner's written request for payment of Proceeds at the Service Center. Nationwide may postpone payment of the Proceeds on the days that it is unable to price Accumulation Units, see Valuation of Accumulation Units. The Proceeds will equal the policy's Cash Value minus any Indebtedness. The policy is terminated once the Proceeds are paid.
Extending Coverage Beyond the Maturity Date
Nationwide may offer to extend coverage beyond the Maturity Date to coincide with the Insured's death, at which time the Proceeds will be paid to the beneficiary. During this coverage extension, the policy owner will still be able to request partial surrenders, and if elected, the Long-Term Care Rider will remain in effect (though there will be no charge for it). The termination of some policy and/or Rider benefits will coincide with the policy's Maturity Date (unless the policy owner decides otherwise). The extension of coverage will either be for the Cash Value (as defined below) or for the Total Specified Amount (subject to the law of the state in which the policy owner lived at the time the policy was purchased), at the policy owner's choice.
If coverage is extended beyond the policy's Maturity Date, Nationwide will endorse the policy so that:
43
(1) if extended for the Total Specified Amount, the policy's Total Specified Amount will be equal to the Base Policy Specified Amount and will be adjusted to what it was when the Insured reached Attained Age 70, subject to any partial surrenders;
(2) no changes to the Base Policy Specified Amount and/or Total Specified Amount will be permitted (as they are the same);
(3) no changes to the death benefit option will be allowed;
(4) no additional Premium payments will be allowed;
(5) no additional monthly periodic charges will be deducted; however, loan interest will continue to be charged on Indebtedness;
(6) 100% of the policy's Cash Value will be transferred to the Fixed Account;
(7) if coverage is extended for the policy's Cash Value, the policy's Death Benefit will become the Cash Value, regardless of the previous death benefit option choice;
(8) if the Policy Guard Rider is in effect prior to the extension of coverage beyond the Maturity Date, the Total Specified Amount will continue to be defined as the adjusted Total Specified Amount; and
(9) if the Additional (insurance) Protection Rider is in effect, the extension of coverage beyond the Maturity Date will not apply to the Rider Specified Amount.
Note: Partial surrenders will affect the Base Policy Specified Amount (and thus Total Specified Amount) of a policy with Death Benefit Option 1 based on the Insured's Attained Age at the time the partial surrender is requested. While the Insured is between the Attained Age of 71 and 90, a partial surrender will decrease the Base Policy Specified Amount proportionately. If the Insured is Attained Age 91 or older, a partial surrender will reduce the Proceeds by an amount proportionate to the ratio of the partial surrender to the Cash Value prior to the partial surrender.
The coverage beyond the Maturity Date will not occur when the policy would fail the definition of life insurance under the Code.
The primary purpose of coverage extension is to continue the life insurance coverage, and avoid current income taxes on any earnings in excess of the cost basis if the maturity Proceeds are taken, see Surrendering the Policy; Maturity.
Assuming no Indebtedness 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 Indebtedness exists on or after the Maturity Date, Proceeds after the Maturity Date may be less than the Proceeds at maturity.
The Payout Options
Treatment of Unclaimed Property
Every state has unclaimed property laws which generally declare life insurance policies to be abandoned after a period of inactivity of three to five years from the policy Maturity Date or the date Nationwide becomes informed that a Death Benefit is due and payable. For example, if the payment of a Death Benefit has been triggered, but, if after a thorough search, Nationwide is still unable to locate the beneficiary of the Death Benefit, or the beneficiary does not come forward to claim the Death Benefit in a timely manner, Nationwide will escheat the Death Benefit to the abandoned property division or unclaimed property office of the state in which the beneficiary or the policy owner last resided, as shown on Nationwide's books and records, or to Ohio, Nationwide's state of domicile. If a claim is subsequently made, the state is obligated to pay any such amount (without interest) to the designated recipient upon presentation of proper documentation.
To prevent escheatment, it is important to update beneficiary designations - including complete names, complete addresses, phone numbers, and social security numbers - as they change. Such updates should be sent to the Service Center.
Policy Settlement Options
Proceeds (Death Benefit, maturity Proceeds, or Cash Surrender Value) may be paid out in a lump sum, or in another form that is elected at application.
At any time before the Proceeds become payable, a policy owner may request to change the payout option by writing to the Service Center.
44
If more than one payout option is elected, at least $2,000 must be apportioned to each option and each payment (made at the specified interval) must be at least $20. The settlement options below are based on predetermined fixed payments.
If the policy owner does not make an election as to the form of the Proceeds, upon the Insured's death, the beneficiary may make the election. Changing the beneficiary of the policy will revoke the payout option(s) in effect at that time. Proceeds are neither assignable nor subject to claims of creditors or legal process. If the beneficiary does not make an election, Nationwide will pay the Proceeds in a lump sum.
Normally, Nationwide will make a lump sum payment of the Proceeds within seven days after the written request for payment is received at the Service Center. However, Nationwide may postpone payment of the Proceeds from the Fixed Account and/or on the days that it is unable to price Sub-Account Accumulation Units, see Valuation of Accumulation Units. Proceeds are paid from Nationwide's general account. For payout options other than lump sum, Nationwide will issue a settlement contract in exchange for the policy.
Note that for the remainder of Payment of Policy Proceeds provision, "payee" means the person(s) entitled to the Proceeds.
Interest Income Option
If the Interest Income Option is elected, Nationwide retains the Proceeds and credits the Proceeds with interest at an annually determined rate of at least 2.5% per annum, compounded annually. Nationwide will determine annually whether any interest in excess of 2.5% will be credited. The interest can be credited at the end of 12-, six, three, or one month intervals.
At any time, the policy owner can withdraw any remaining Proceeds and accumulated interest by submitting a written request to the Service Center. Upon the payee's death, the remaining Proceeds and accumulated interest will be paid to the payee's estate.
Income for a Fixed Period Option
If the Income for a Fixed Period Option is elected, Nationwide retains the Proceeds and makes payments to the payee at specified intervals over a certain number of years, not to exceed 30. Each payment will consist of a portion of the Proceeds plus interest at an annually determined rate of at least 2.5% per annum, compounded annually. Nationwide will determine annually if any interest in excess of 2.5% will be credited. The payments can be paid at the beginning of 12-, six, three, or one month intervals.
At any time, the payee may withdraw any remaining Proceeds and accumulated interest by submitting a written request to the Service Center. Upon the payee's death, the remaining Proceeds and accumulated interest will be paid to the payee's estate.
Life Income with Payments Guaranteed Option
If the Life Income with Payments Guaranteed Option is elected, Nationwide will retain the Proceeds and make payments to the payee at specified intervals for a guaranteed period (10, 15, or 20 years) and, if the payee is still living at the end of the guaranteed period, the payments will continue for the rest of the payee's life. During the guaranteed period, Nationwide will pay interest on the remaining Proceeds at a rate of at least 2.5% per annum, compounded annually. Nationwide will determine annually if any interest in excess of 2.5% will be paid. The Proceeds can be paid at the beginning of 12-, six, three, or one month intervals.
Once payments begin under this option, withdrawals are not permitted. If a payee dies before the guaranteed period has elapsed, Nationwide will make the remaining payments to the payee's estate. If the payee dies after the guaranteed period has elapsed, no further payments will be made.
Fixed Income for Varying Periods Option
If the Fixed Income for Varying Periods Option is elected, Nationwide will retain the Proceeds and pay a fixed amount at specified intervals until the Proceeds and accumulated interest have been exhausted. The total amount payable each year may not be less than 5% of the original Proceeds. Nationwide will credit interest on the remaining Proceeds at a rate of at least 2.5% per annum, compounded annually. Nationwide will determine annually if any interest in excess of 2.5% will be credited. The Proceeds can be paid at the beginning of 12-, six, three, or one month intervals.
At any time, the payee may withdraw any remaining Proceeds and accumulated interest by submitting a written request to the Service Center. Upon the payee's death, Nationwide will pay the remaining Proceeds and accumulated interest to the payee's estate.
45
Joint and Survivor Life Option
If the Joint and Survivor Life Option was elected, Nationwide will retain the Proceeds and make equal payments to the payees at specified intervals for the life of the last surviving payee. The Proceeds can be paid at the beginning of 12-, six, three, or one month intervals.
Once payments begin under this option, withdrawals are not permitted. Payments will cease upon the death of the last surviving payee. Nationwide will make no payments to the last surviving payee's estate. It is possible that only one payment will be made under this option if both payees die prior to the first payment.
Alternate Life Income Option
If the Alternate Life Income Option is elected, Nationwide will use the Proceeds to purchase an annuity with the payee as annuitant. The amount payable will be 102% of the current individual immediate annuity purchase rate on the date of the individual immediate annuity is elected. The Proceeds can be paid at the end of 12-, six, three, or one month intervals. Since the payments are based on the payee's lifetime, the payee may not withdraw any amount designated to this option once payments begin. Payments will cease upon the payee's death. No payments will be made to the payee's estate.
Taxes
The tax treatment of life insurance policies under the Internal Revenue Code ("Code") is complex and the tax treatment of the policy will depend on the policy owner's particular circumstances. The policy owner should seek competent tax advice regarding the tax treatment of the policy given their situation. The following discussion provides a general overview of the Code's provisions relating to certain common life insurance policy transactions. Some of the items discussed below may not be applicable to the life insurance policy described herein. 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 per recipient from the value of present interest gifts. In addition, each donor is allowed a credit against the tax on five million dollars in lifetime gifts (calculated after taking into account the applicable exclusion amount). An unlimited marital deduction may be available for certain lifetime gifts made by the donor to the donor's spouse.
In general, in 2011 and 2012, an estate of less than $5,000,000 (inclusive of certain pre-death gifts) will not incur a federal estate tax liability. The American Taxpayer Relief Act ("ATRA") enacted on January 1, 2013, permanently provides for a maximum federal estate tax rate of 40% with an annually inflation adjusted $5 million exemption for estates of persons dying after December 31, 2012.
Under current law, an unlimited marital deduction is 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 GSTT is imposed at a flat rate equal to the maximum estate tax rate subject to any applicable exemptions. As with the estate tax, the GSTT tax has been repealed for 2010; however, ATRA permanently provides for a GSTT rate of 40% with an annually inflation adjusted $5 million exemption.
46
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 every policy owner's 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 nondeductible expense for income tax purposes.
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 the policy owner (whether or not they are the insured) transfers 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 the policy owner's taxable income for federal income tax purposes unless it is distributed to the policy owner 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. Nationwide 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.
Nationwide will also monitor compliance with Code Section 817(h) and the regulations applicable to Section 817(h) and, to the extent necessary, take appropriate action to remain in compliance.
Representatives of the IRS have informally suggested, from time to time, that the number of underlying investment options available or the number of transfer opportunities available under a variable insurance 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 investment options available in a variable insurance product does not exceed 20, the number of underlying investment options alone would not cause the policy to not qualify for the desired tax treatment. The IRS has also indicated that exceeding 20 underlying 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 underlying investment 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 investment options, transfers between underlying investment options, exchanges of underlying investment options or changes in the investment objectives of underlying investment options such that the policy would no longer qualify as life insurance under Section 7702 of the Code, Nationwide will take whatever steps are available to remain in compliance.
Based on the above, the policy should be treated as life insurance for federal income tax purposes.
Periodic Withdrawals, Non-Periodic Withdrawals and Loans
The tax treatment described in this section applies to withdrawals and loans, premiums Nationwide accepts but then returns 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.
47
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, Nationwide will monitor it and advise the policy owner if the payment of a premium, or other transaction, may cause the policy to become a modified endowment contract. It is only with the policy owner's written authorization that Nationwide will permit the policy to become a modified endowment policy. Otherwise, Nationwide will reject the requested action or refund any Premium paid in excess of the modified endowment limits.
Depending on the policy owner's 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. Policy owners should seek competent tax advice regarding the tax treatment of the addition of any rider to the policy, based on the policy owner's 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 7 years exceed the amount that would have been paid if the policy provided for paid up benefits after 7 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 contract' (generally, the net 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, Nationwide 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 first from the investment in the contract, and then from the income in the policy. Because premium payments are generally nondeductible, distributions not in excess of investment in the contract are generally not includible in income; instead, they reduce the owner's investment in the contract.
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. The policy owner 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 income tax consequences. If the amount received (or are deemed received upon maturity) plus total policy indebtedness exceeds the investment in the contract, 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 the policy owner at surrender.
The purpose of the maturity date extension feature is to permit the policy to continue to be treated as life insurance for tax purposes. Although Nationwide believes that the extension provision will cause the policy 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. The policy owner should consult with a qualified tax advisor regarding the possible adverse tax consequences that could result from an extension of the scheduled maturity date.
48
Additional Medicare Tax
Effective January 1, 2013, Section 1411 of the Code imposes a surtax of 3.8% on certain net investment income received by individuals and certain trusts and estates. The surtax is imposed on the lesser of (a) net investment income or (b) the excess of the modified adjusted gross income over a threshold amount. For individuals, the threshold amount is $250,000 (married filing jointly, or qualifying widow(er) with dependent child)); $125,000 (married filing separately); or $200,000 (single, or head of household (with qualifying person)). The threshold for an estate or trust that is subject to the surtax is generally equal to the dollar amount at which the highest tax bracket under section 1(e) begins for the taxable year; for 2013, that amount is $11,950.
Modified adjusted gross income is equal to gross income with several modifications; the policy owner should consult with a tax advisor regarding how to determine the policy owner's modified adjusted gross income for purposes of determining the applicability of the surtax.
Net investment income includes, but is not limited to, interest, dividends, capital gains, rent and royalty income, and income from nonqualified annuities; and may include taxable distributions from, and gain from the sale or surrenders of, life insurance policies.
Net investment income does not include, among other things, distributions from certain qualified plans (such as IRAs, Roth IRAs, and plans described in Internal Revenue Code Sections 401(a), 401(k), 403(a), 403(b) or 457(b)); however, such distributions, to the extent that they are includible in income for federal income tax purposes are includible in modified adjusted gross income.
Sale of a Life Insurance Policy
If a life insurance policy is sold for a gain, all or a portion of the gain will be treated as ordinary income. In Revenue Ruling 2009-13, the IRS concluded that the amount of gain realized from the sale of a life insurance policy is equal to the amount received (which can include relief from, or assumption of debt) over the owner's basis in the policy. The portion of the gain that is equal to the excess of the cash surrender value over the investment in the contract would be treated as ordinary income; any additional gain would be short or long-term capital gain, depending on the holding period. The ruling also concluded that the amount of gain resulting from the sale of a life insurance policy is equal to the excess of the amount received over the owner's basis in the policy (the investment in the contract reduced by the cost of insurance previously paid out of the cash value). Consequently, a sale may result in more gain than a surrender for the same amount.
Exchanging the Policy for Another Life Insurance Policy
Generally, policy owners will be taxed on amounts received in excess of premium payments when the policy is surrendered in full. If, however, the policy is exchanged for another life insurance policy, modified endowment contract, or annuity contract, the transaction 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. Policy owners should consult with their personal tax or legal advisors in structuring any policy exchange transaction.
Taxation of Death Benefits
Federal Income Tax
The death benefit is generally excludable from the beneficiary's gross income under Section 101 of the Code. However, if the policy had been transferred to a new policy owner for valuable consideration (e.g., through a sale of the policy), a portion of the death benefit may be includible in the beneficiary's gross income when it is paid.
The payout option selected by the policy's 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. The policy's beneficiaries should consult with their tax advisors to determine the tax consequences of electing a payout option, based on their individual circumstances.
49
Special federal income tax considerations for life insurance policies owned by employers
Sections 101(j) and 6039I of the Code provide special rules regarding the tax treatment of death benefits that are payable under 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.
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 policy owner for the policy. Consequently, under this general rule, the entire death benefit, less the cost to the policy owner, 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. 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, the insured is either a director, a "highly compensated employee" (within the meaning of Section 414(q) of the Code without regard to paragraph (1)(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 policy owner of an employer-owned policy to file an annual return showing (a) the number of employees of the policy owner, (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 policy owner, and (e) that the policy owner 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 the employer's 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 the employer-owner 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 the employer-owner fails to provide the necessary notice and information, or fails to obtain the necessary consent, the death benefit will be taxable when received. If the employer-owner fails to file a properly completed return under Section 6039I, a penalty may apply.
Federal Transfer (Estate, Gift and Generation Skipping 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, Nationwide may be required to withhold a portion of the proceeds and pay them directly to the IRS as the GSTT 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").
Long-Term Care Insurance
A long-term care rider issued with a life policy or one that is subsequently added to the policy is intended to meet the requirements of a qualified long-term care insurance contract under Section 7702B of the Internal Revenue Code. Payments made under the qualified long-term care rider will generally be excluded from income under the Code.
50
Payment of long-term care rider charges will be made through deductions from the cash value of the life policy. These deductions from the cash value are considered to be distributions from the life policy for Federal tax purposes. The Federal tax treatment of such distributions are governed by section 72(e)(11) which provides that the deductions will reduce the investment in the contract and will not be included in income even if the policy owner has have recovered all of their investment in the contract.
The payment of benefits made to the policy owner of the long-term care rider as well as any deductions from the cash value of the life policy to pay for long-term care rider charges during the calendar year will be reported on a Form 1099-LTC.
This discussion of the tax treatment of the long-term care rider is not meant to be all inclusive. Due to the complexity of these rules, and because they are affected by the policy owner's facts and circumstances, the policy owner should consult with legal and tax counsel and other competent advisors regarding these matters.
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.
Due to the complexity of these rules, and because they are affected by the policy owner's facts and circumstances, the policy owner should consult with legal and tax counsel and other competent advisors 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 advisors familiar with these matters, the impact of these decisions on the corporation's intended use of the policy.
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. Therefore, if the policy owner is contemplating using the policy in any arrangement the value of which depends in part on its tax consequences, the policy owner should be sure to consult a tax advisor 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 the policy owner is a non-resident alien, or a resident alien, or if any of the policy's beneficiaries (including the policy owner's spouse) are not citizens of the United States, the policy owner should confer with a competent tax advisor with respect to the tax treatment of this policy.
51
If the policy owner, 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.
Withholding and Tax Reporting
Distribution of taxable income from a life insurance policy, including a life insurance policy that is a modified endowment contract, is subject to federal income tax withholding. Generally, the recipient may elect not to have the withholding taken from the distribution. Nationwide will withhold income tax unless the policy owner advises Nationwide, in writing, of their request not to withhold. If the policy owner requests that taxes not be withheld, or if the taxes withheld are insufficient, the policy owner may be liable for payment of an estimated tax.
A policy owner is not permitted to waive withholding if the payee does not provide Nationwide with a taxpayer identification number; or if Nationwide receives notice from the Internal Revenue Service that the taxpayer identification number furnished by the payee is incorrect. In that instance, a distribution will be subject to withholding rates established by Section 3405 of the Code and will be applied against the amount of income that is distributed.
However, interest earned on a death benefit may be subject to mandatory back-up withholding. Mandatory backup withholding means that Nationwide is required to withhold taxes on income earned at the rate established by Section 3406 of the Code. Mandatory backup withholding may arise if Nationwide has not been provided a taxpayer identification number, or if the IRS notifies Nationwide 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;
• some or all of the amount by which the current value exceeds the employer's interest in the policy; and/or
• interest that is deemed to have been forgiven on a loan that Nationwide deems 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 advisor to determine the tax consequences, if any, of their employer-sponsored life insurance arrangements.
Taxes and the Value of the Policy
For federal income tax purposes, a separate account is not a separate entity from the company. Thus, the tax status of the separate account is not distinct from our status as a life insurance company. Investment income and realized capital gains on the assets of the separate account are reinvested and taken into account in determining the value of Accumulation Units. As a result, such investment income and realized capital gains are automatically applied to increase reserves under the policies.
At present, Nationwide does 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 the policy's Accumulation Units for federal income taxes. If, however, Nationwide determines that taxes may be incurred, Nationwide reserves the right to assess a charge for these taxes.
Nationwide 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 the policy's Accumulation Units.
Tax Changes
The foregoing is a general discussion of various tax matters pertaining to life insurance policies. It 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 policy owner should consult their independent legal, tax and/or financial advisor.
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. For example the "FY 2013, Budget of the United States Government" includes a proposal which, if enacted, would affect the treatment of corporate owned life insurance policies
52
by limiting the availability of certain interest deductions for companies that purchase those policies. No proposed statutory language has been released yet, so the specifics of the proposal cannot be addressed herein. Such a proposal, if enacted, could have an adverse tax impact on the ownership of life insurance by or for the benefit of business entities. It is reasonable to believe that such proposals, and future proposals, may be enacted into law. The U.S. Treasury Department may amend existing regulations, issue new regulations, or adopt new interpretations of existing law that may 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.
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. Nationwide make no representation as to the likelihood of the continuation of these current laws, interpretations, and policies.
Nationwide Life Insurance Company
Nationwide, the depositor, is a stock life insurance company organized under Ohio law in March 1929, with its home office at One Nationwide Plaza, Columbus, Ohio 43215. Nationwide is a provider of life insurance, annuities, and retirement products. It is admitted to do business in all states, the District of Columbia, and Puerto Rico.
Nationwide is a member of the Nationwide group of companies. Nationwide Mutual Insurance Company and Nationwide Mutual Fire Insurance Company (the "Companies") are the ultimate controlling persons of the Nationwide group of companies. The Companies were organized under Ohio law in December 1925 and 1933 respectively. The Companies engage in a general insurance and reinsurance business, except life insurance.
Nationwide VLI Separate Account-4
Organization, Registration, and Operation
Nationwide VLI Separate Account-4 is a separate account established under Ohio law. Nationwide owns the assets in this account and is obligated to pay all benefits under the policies. Nationwide may use the separate account to support other variable life insurance policies that it issues. 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. Nationwide buys and sells the mutual fund 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 to, or charged against, the separate account without regard to Nationwide's other income, gains, or losses. Income, gains, and losses credited to, or charged against, a Sub-Account reflect the Sub-Account's own Investment Experience and not the investment experience of our other assets. The separate account's assets are held separately from Nationwide's other assets and are not part of Nationwide's general account. Nationwide may not use the separate account's assets to pay any of its liabilities other than those arising from the policies. Nationwide will hold assets in the separate account equal to its liabilities. The separate account may include other Sub-Accounts that are not available under the policies, and are not discussed in this prospectus.
Nationwide does not guarantee any money placed in this separate account. The value of each Sub-Account will increase or decrease, depending on the Investment Experience of the corresponding mutual fund. A policy owner could lose some or all of his or her money.
Addition, Deletion, or Substitution of Mutual Funds
Where permitted by applicable law, Nationwide reserves the right to:
• remove, close, 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;
53
• deregister the separate account under the 1940 Act, or operate the separate account or any Sub-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.
Nationwide reserves the right to make other structural and operational changes affecting this separate account.
Nationwide will provide notice of any of the changes above. Also, to the extent required by law, Nationwide will obtain the required orders, approvals, and/or regulatory clearance from the appropriate government agencies (such as the various insurance regulators or the SEC). Also, to the extent required by state law, Nationwide will accept an irrevocable election from the policy owner to transfer 100% of the policy's Cash Value to the Fixed Account if received within 60 days after the date the policy owner received notification of a material change in the investment policy of the separate account.
Substitution of Securities
Nationwide may substitute, eliminate, or combine shares of another underlying mutual fund for shares already purchased or to be purchased in the future if either of the following occurs:
(1) shares of a current underlying mutual fund are no longer available for investment; or
(2) further investment in an underlying mutual fund is inappropriate.
No substitution of shares may take place without the prior approval of the SEC. All affected policy owners will be notified in the event there is a substitution, elimination, or combination of shares.
The substitute mutual fund may have different fees and expenses. Substitution may be made with respect to existing investments or the investment of future Premium, or both. Nationwide may close Sub-Accounts to allocations of Premiums or policy value, or both, at any time in its 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
Nationwide may deregister Nationwide VLI Separate Account-4 under the 1940 Act in the event the separate account meets an exemption from registration under the 1940 Act, if there are no shareholders in the separate account or for any other purpose approved by the SEC.
All policy owners will be notified in the event Nationwide deregisters Nationwide VLI Separate Account-4.
Voting Rights
Although the separate account owns the mutual fund shares, policy owners are the beneficial owner of those shares. When a matter involving a mutual fund is subject to shareholder vote, unless there is a change in existing law, Nationwide will vote the separate account's shares only as instructed by policy owners.
When a shareholder vote occurs, a policy owner will have the right to instruct Nationwide how to vote. The weight of each vote is based on the number of mutual fund shares that corresponds to the amount of Cash Value a policy has allocated to that mutual fund's Sub-Account (as of a date set by the mutual fund). Nationwide will vote shares for which no instructions are received in the same proportion as those that are received. What this means 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.
Material Conflicts
The underlying mutual funds may be offered through separate accounts of other insurance companies, as well as through other separate accounts of Nationwide. Nationwide does not anticipate any disadvantages to this. However, it is possible that a conflict may arise between the interests of the variable account and one or more of the other separate accounts in which these underlying mutual funds participate.
Material conflicts may occur due to a change in law affecting the operations of variable life insurance policies and variable annuity contracts, or differences in the voting instructions of the policy owners and those of other companies. If a material conflict occurs, Nationwide will take whatever steps are necessary to protect policy owners and variable annuity payees, including withdrawal of the variable account from participation in the underlying mutual fund(s) involved in the conflict.
54
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 subject to legal and regulatory proceedings in the ordinary course of its business. The Company's legal and regulatory matters include proceedings specific to the Company and other proceedings generally applicable to business practices in the industries in which the Company operates. The Company's litigation and regulatory matters are subject to many uncertainties, and given their complexity and scope, their outcomes cannot be predicted. Regulatory proceedings also could affect the outcome of one or more of the Company's litigation matters. Furthermore, it is often not possible to determine the ultimate outcomes of the pending regulatory 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 believes, however, that based on currently known information, the ultimate outcome of all pending legal and regulatory matters is not likely to have a material adverse effect on the Company's consolidated financial position. Nonetheless, given the large or indeterminate amounts sought in certain of these matters and the inherent unpredictability of litigation, it is possible that such outcomes could materially affect the Company's consolidated financial position or results of operations in a particular quarter or annual period.
The financial services industry has been the subject of increasing scrutiny on a broad range of issues by regulators and legislators. The Company and/or its affiliates have been contacted by, self reported or received subpoenas from state and federal regulatory agencies, including the Securities and Exchange Commission, and other governmental bodies, state securities law regulators and state attorneys general for information relating to, among other things, sales compensation, the allocation of compensation, unsuitable sales or replacement practices, and claims handling and escheatment practices. The Company is cooperating with and responding to 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.
In October 2012, NLIC and NLAIC entered into a Regulatory Settlement Agreement with the Florida Office of Insurance Regulation and 21 other state Departments of Insurance to resolve a multi-state market conduct exam regarding claim settlement practices. The Regulatory Settlement Agreement applies prospectively and requires NLIC and NLAIC to adopt and implement additional procedures relating to the use of to the Social Security Death Master File and identifying and locating beneficiaries once deaths are identified. In October 2012, NLIC and NLAIC also entered into a Global Resolution Agreement to resolve the related unclaimed property audit.
On November 20, 2007, Nationwide Retirement Solutions, Inc. (NRS) and NLIC were named in a lawsuit filed in the Circuit Court of Jefferson County, Alabama entitled Ruth A. Gwin and Sandra H. Turner, and a class of similarly situated individuals v. Nationwide Life Insurance Company, Nationwide Retirement Solutions, Inc., Alabama State Employees Association, PEBCO, Inc. and Fictitious Defendants A to Z. On March 12, 2010, NRS and NLIC were named in a Second Amended Class Action Complaint filed in the Circuit Court of Jefferson County, Alabama entitled Steven E. Coker, Sandra H. Turner, David N. Lichtenstein 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 Alabama State Employees Association, Inc. (ASEA) Plan, excluding members of the Deferred Compensation Committee, ASEA's directors, officers and board members, and PEBCO's directors, officers and board members. On October 22, 2010, the parties to this action executed a stipulation of settlement that agreed to certify a class for settlement purposes only, that provided for payments to the settlement class, and that provided for releases, certain bar orders, and dismissal of the case. The settlement fund has been paid out. On December 6, 2011 the Court entered an Order that NRS owes indemnification to ASEA and PEBCO for
55
the Coker (Gwin) class action, and dismissed NLIC. The Company has resolved the indemnification claims of ASEA. On February 13, 2013, the Court issued its Order determining the amount of fees due to PEBCO on its indemnification claim. On March 28, 2013, the Company filed a notice of appeal to the Alabama Supreme Court. NRS continues to defend this case 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. On November 18, 2009, the plaintiffs filed a sixth amended complaint amending the list of named plaintiffs and claiming to represent a class of qualified retirement plan trustees under the Employee Retirement Income Security Act of 1974 (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 participants 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." On October 21, 2010, the District Court dismissed NFS from the lawsuit. On February 6, 2012, the Second Circuit Court of Appeals vacated the November 6, 2009, order granting class certification and remanded the class back to the District Court for further consideration. The plaintiffs have renewed their motion for class certification. On December 18, 2012, the District Court heard oral argument on the motion for class certification. NLIC continues to defend this lawsuit vigorously.
On June 8, 2011, NMIC and NLIC were named in a lawsuit filed in Court of Common Pleas, Cuyahoga County, Ohio entitled Stanley Andrews and Donald Clark, on their behalf and on behalf of the class defined herein v. Nationwide Mutual Insurance Company and Nationwide Life Insurance Company. The lower court granted Nationwide's motion to dismiss. Plaintiffs appealed. The Court of Appeals affirmed the dismissal on October 24, 2012. Plaintiffs filed a petition for rehearing en banc on November 5, 2012. The Court of Appeals denied the petition on December 14, 2012. Plaintiff filed a notice of appeal to the Ohio Supreme Court on January 24, 2013. Nationwide has 30 days to file an opposition memorandum. Nationwide filed its memorandum in opposition to plaintiffs' petition for jurisdiction to the Ohio Supreme Court on February 27, 2013.
Lehman Brothers Holdings, Inc. (Debtors) and Giddens, James v NLIC and NMIC, et al. In 2012 the Plaintiff, Debtor in Possession Lehman Brothers Special Financing, Inc., filed a class action in the United States Bankruptcy Court for the Southern District of New York seeking the recovery of nearly $3 billion in assets from all the named defendants including NLIC and NMIC. This litigation arises from two collateralized debt obligation transactions, 801 Grand and Alta, which resulted in payments to NLIC and NMIC. In 2008, the Plaintiff and its parent company, Lehman Brothers Holding, Inc. filed for bankruptcy which triggered an early termination of the above transactions. The Plaintiff seeks to have sums returned to the bankruptcy estate in addition to prejudgment interest and costs. The case is currently stayed and on February 13, 2013, the Court extended the stay. Responsive pleadings are now due September 5, 2013. Lehman recently sent correspondence out to all defendants inviting settlement discussions which is under review.
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 (the Company). Policy owners may obtain a copy of the SAI FREE OF CHARGE by contacting the Service Center. Please consider the consolidated financial statements of the Company only as bearing on Nationwide's ability to meet the obligations under the policy. Policy owners should not consider the consolidated financial statements of the Company as affecting the investment performance of the assets of the separate account.
56
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.
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. Refer to the prospectus for this underlying mutual fund for more information.
AllianceBernstein Variable Products Series Fund, Inc. - AllianceBernstein Growth and Income Portfolio: Class A
This Sub-Account is only available in policies issued before May 1, 2004
Investment Advisor: AllianceBernstein L.P.
Investment Objective: Long-term growth of capital.
AllianceBernstein Variable Products Series Fund, Inc. - AllianceBernstein Small/Mid Cap Value Portfolio: Class A
Investment Advisor: AllianceBernstein L.P.
Investment Objective: Long-term growth of capital.
AllianceBernstein Variable Products Series Fund, Inc. - AllianceBernstein VPS Dynamic Asset Allocation Portfolio: Class A
Investment Advisor: AllianceBernstein L.P.
Investment Objective: To maximize total return consistent with the Adviser's determination of reasonable risk.
American Century Variable Portfolios II, Inc. - American Century VP Inflation Protection Fund: Class II
Investment Advisor: American Century Investment Management, Inc.
Investment Objective: Long-term total return using a strategy that seeks to protect against U.S. inflation.
American Century Variable Portfolios, Inc. - American Century VP Income & Growth Fund: Class I
This Sub-Account is only available in policies issued before May 1, 2004
Investment Advisor: American Century Investment Management, Inc.
Investment Objective: Capital growth by investing in common stocks. Income is a secondary objective.
American Century Variable Portfolios, Inc. - American Century VP Mid Cap Value Fund: Class I
This Sub-Account is only available in policies issued before May 1, 2013
Investment Advisor: American Century Investment Management, Inc.
Investment Objective: Long-term capital growth with income as a secondary objective.
BlackRock Variable Series Funds, Inc. - BlackRock Global Allocation V.I. Fund: Class II
Investment Advisor: BlackRock Advisors, LLC
Sub-advisor: BlackRock Investment Management, LLC; BlackRock International Limited
Investment Objective: Seek high total investment return.
Delaware VIP Trust - Delaware VIP Small Cap Value Series: Service Class
Investment Advisor: Delaware Management Company, Inc.
Investment Objective: The fund seeks capital appreciation.
Dreyfus Investment Portfolios - Small Cap Stock Index Portfolio: Service Shares
This Sub-Account is only available in policies issued before May 1, 2013
Investment Advisor: The Dreyfus Corporation
Investment Objective: To match performance of the S&P SmallCap 600 Index®.
Dreyfus Socially Responsible Growth Fund, Inc. (The): Initial Shares
This Sub-Account is only available in policies issued before May 1, 2003
Investment Advisor: The Dreyfus Corporation
Investment Objective: Capital growth with current income as a secondary goal.
57
Dreyfus Stock Index Fund, Inc.: Initial Shares
This Sub-Account is only available in policies issued before May 1, 2013
Investment Advisor: The Dreyfus Corporation
Investment Objective: To match performance of the S&P 500.
Dreyfus Variable Investment Fund - Appreciation Portfolio: Initial Shares
Investment Advisor: The Dreyfus Corporation
Sub-advisor: Fayez Sarofim & Co.
Investment Objective: Long-term capital growth consistent with the preservation of capital.
Dreyfus Variable Investment Fund - Opportunistic Small Cap Portfolio: Initial Shares
This Sub-Account is only available in policies issued before May 1, 2004
Investment Advisor: The Dreyfus Corporation
Investment Objective: Capital growth.
Federated Insurance Series - Federated Managed Tail Risk Fund II: Primary Shares (formerly, Federated Insurance Series - Federated Capital Appreciation Fund II: Primary Shares)
This Sub-Account is only available in policies issued before May 1, 2004
Investment Advisor: Federated Global Investment Management Corp.
Investment Objective: To create an allocation mix which will maximize return while capturing the benefits of asset class diversification in periods of market volatility.
Federated Insurance Series - Federated Quality Bond Fund II: Primary Shares
Investment Advisor: Federated Investment Management Company
Investment Objective: Current income.
Fidelity Variable Insurance Products Fund - Fidelity VIP Freedom Fund 2010 Portfolio: Service Class
This Sub-Account is only available in policies issued before May 1, 2013
Investment Advisor: Strategic Advisers Inc. Boston MA
Sub-advisor: 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 2020 Portfolio: Service Class
This Sub-Account is only available in policies issued before May 1, 2013
Investment Advisor: Strategic Advisers Inc. Boston MA
Sub-advisor: 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 2030 Portfolio: Service Class
This Sub-Account is only available in policies issued before May 1, 2013
Investment Advisor: Strategic Advisers Inc. Boston MA
Sub-advisor: 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 Energy Portfolio: Service Class 2
Investment Advisor: Fidelity Management & Research Company
Sub-advisor: FMR Co., Inc., Fidelity Research & Analysis Company
Investment Objective: Capital appreciation.
Designation: STTF
Fidelity Variable Insurance Products Fund - VIP Equity-Income Portfolio: Service Class
Investment Advisor: Fidelity Management & Research Company
Sub-advisor: 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.
58
Fidelity Variable Insurance Products Fund - VIP Growth Portfolio: Service Class
Investment Advisor: Fidelity Management & Research Company
Sub-advisor: 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.
Fidelity Variable Insurance Products Fund - VIP High Income Portfolio: Service Class
This Sub-Account is no longer available to receive transfers or new premium payments effective May 1, 2007
Investment Advisor: Fidelity Management & Research Company
Sub-advisor: FMR Co., Inc., Fidelity Research & Analysis Company, Fidelity Investments Japan Limited, Fidelity International Investment Advisors, Fidelity International Investment Advisors (U.K.) Limited
Investment Objective: High level of current income while also considering growth of capital.
Fidelity Variable Insurance Products Fund - VIP High Income Portfolio: Service Class R
This Sub-Account is only available in policies issued before May 1, 2003
Investment Advisor: Fidelity Management & Research Company
Sub-advisor: FMR Co., Inc., Fidelity Research & Analysis Company, Fidelity Investments Japan Limited, Fidelity International Investment Advisors, Fidelity International Investment Advisors (U.K.) Limited
Investment Objective: High level of current income while also considering growth of capital.
Designation: STTF
Fidelity Variable Insurance Products Fund - VIP Investment Grade Bond Portfolio: Service Class
Investment Advisor: Fidelity Management & Research Company
Sub-advisor: 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
Investment Advisor: Fidelity Management & Research Company
Sub-advisor: 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.
Fidelity Variable Insurance Products Fund - VIP Overseas Portfolio: Service Class
This Sub-Account is no longer available to receive transfers or new premium payments effective May 1, 2005
Investment Advisor: Fidelity Management & Research Company
Sub-advisor: 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: Long-term capital growth.
Fidelity Variable Insurance Products Fund - VIP Overseas Portfolio: Service Class R
Investment Advisor: Fidelity Management & Research Company
Sub-advisor: 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: Long-term capital growth.
Designation: STTF
Fidelity Variable Insurance Products Fund - VIP Value Strategies Portfolio: Service Class
This Sub-Account is only available in policies issued before May 1, 2006
Investment Advisor: Fidelity Management & Research Company
Sub-advisor: 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: Capital appreciation.
Franklin Templeton Variable Insurance Products Trust - Franklin Income Securities Fund: Class 2
Investment Advisor: Franklin Advisers, Inc.
Investment Objective: Maximum income while maintaining prospects for capital appreciation.
59
Franklin Templeton Variable Insurance Products Trust - Franklin Rising Dividends Securities Fund: Class 1
This Sub-Account is only available in policies issued before May 1, 2006
Investment Advisor: Franklin Advisory Services, LLC
Investment Objective: Long-term capital appreciation.
Franklin Templeton Variable Insurance Products Trust - Franklin Small Cap Value Securities Fund: Class 1
This Sub-Account is only available in policies issued before May 1, 2013
Investment Advisor: Franklin Advisory Services, LLC
Investment Objective: Long-term total return.
Franklin Templeton Variable Insurance Products Trust - Franklin Templeton VIP Founding Funds Allocation Fund: Class 2
This Sub-Account is only available in policies issued before May 1, 2013
Investment Advisor: Franklin Templeton Services, LLC
Investment Objective: Capital appreciation with income as a secondary goal.
Designation: FF
Franklin Templeton Variable Insurance Products Trust - Templeton Developing Markets Securities Fund: Class 3
This Sub-Account is only available in policies issued before May 1, 2008
Investment Advisor: Templeton Asset Management, Ltd.
Investment Objective: Long-term capital appreciation.
Designation: STTF
Franklin Templeton Variable Insurance Products Trust - Templeton Foreign Securities Fund: Class 1
This Sub-Account is no longer available to receive transfers or new premium payments effective May 1, 2005
Investment Advisor: Templeton Investment Counsel, LLC
Investment Objective: Long-term capital growth.
Franklin Templeton Variable Insurance Products Trust - Templeton Foreign Securities Fund: Class 3
This Sub-Account is only available in policies issued before May 1, 2009
Investment Advisor: Templeton Investment Counsel, LLC
Investment Objective: Long-term capital growth.
Designation: STTF
Franklin Templeton Variable Insurance Products Trust - Templeton Global Bond Securities Fund: Class 3
Investment Advisor: Franklin Advisers, Inc.
Investment Objective: High current income, consistent with preservation of capital, with capital appreciation as a secondary consideration.
Designation: STTF
Goldman Sachs Variable Insurance Trust - Goldman Sachs Global Markets Navigator Fund: Service Shares
Investment Advisor: Goldman Sachs Asset Management, L.P.
Investment Objective: Seeks to achieve investment results that approximate the performance of the GS Global Markets Navigator Index (the "Index").
Guggenheim Variable Fund - Multi-Hedge Strategies
Investment Advisor: Security Investors, LLC
Investment Objective: Capital appreciation consistent with the return and risk characteristics of the hedge fund universe and, secondarily, to achieve these returns with low correlation to and less volatility than equity indices.
Invesco - Invesco V.I. American Franchise Fund: Series I Shares (formerly, Invesco - Invesco Van Kampen V.I. American Franchise Fund: Series I Shares)
This Sub-Account is only available in policies issued before May 1, 2012
Investment Advisor: Van Kampen Asset Management
Investment Objective: Capital appreciation.
Invesco - Invesco V.I. Mid Cap Core Equity Fund: Series I
This Sub-Account is only available in policies issued before May 1, 2013
Investment Advisor: Invesco Advisers, Inc.
Investment Objective: Long-term growth of capital.
Invesco - Invesco V.I. Mid Cap Growth Fund: Series I Shares (formerly, Invesco - Invesco Van Kampen V.I. Mid Cap Growth Fund: Series I)
Investment Advisor: Invesco Advisers, Inc.
Investment Objective: Capital growth.
60
Ivy Funds Variable Insurance Portfolios - Asset Strategy
Investment Advisor: Waddell & Reed Investment Management Company
Investment Objective: Seeks high total return over the long term.
Ivy Funds Variable Insurance Portfolios - High Income
Investment Advisor: Waddell & Reed Investment Management Company
Investment Objective: Seeks a high level of current income and capital when consistent with its primary objective as a secondary objective.
Ivy Funds Variable Insurance Portfolios - Mid Cap Growth
Investment Advisor: Waddell & Reed Investment Management Company
Investment Objective: Seeks to provide growth of investment.
Janus Aspen Series - Balanced Portfolio: Service Shares
This Sub-Account is only available in policies issued before May 1, 2004
Investment Advisor: Janus Capital Management LLC
Investment Objective: Long-term capital growth, consistent with preservation of capital and balanced by current income.
Janus Aspen Series - Forty Portfolio: Service Shares
This Sub-Account is only available in policies issued before May 1, 2013
Investment Advisor: Janus Capital Management LLC
Investment Objective: Long-term growth of capital.
Janus Aspen Series - Global Technology Portfolio: Service Shares
Investment Advisor: Janus Capital Management LLC
Investment Objective: Long-term growth of capital.
Janus Aspen Series - Overseas Portfolio: Service Shares
This Sub-Account is only available in policies issued before May 1, 2013
Investment Advisor: Janus Capital Management LLC
Investment Objective: Long-term growth of capital.
MFS® Variable Insurance Trust - MFS Investors Growth Stock Series: Initial Class
This Sub-Account is only available in policies issued before May 1, 2006
Investment Advisor: Massachusetts Financial Services Company
Investment Objective: To seek capital appreciation.
MFS® Variable Insurance Trust - MFS New Discovery Series: Initial Class
Investment Advisor: Massachusetts Financial Services Company
Investment Objective: To seek capital appreciation.
MFS® Variable Insurance Trust - MFS Value Series: Initial Class
Investment Advisor: Massachusetts Financial Services Company
Investment Objective: To seek capital appreciation.
Nationwide Variable Insurance Trust - American Century NVIT Growth Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: American Century Investment Management, Inc.
Investment Objective: The Fund seeks long-term capital appreciation.
Nationwide Variable Insurance Trust - American Century NVIT Multi Cap Value Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: American Century Investment Management, Inc.
Investment Objective: The Fund seeks capital appreciation, and secondarily current income.
Nationwide Variable Insurance Trust - American Funds NVIT Asset Allocation Fund: Class II
Investment Advisor: Capital Research and Management Company
Investment Objective: The fund seeks to provide high total return (including income and capital gains) consistent with the preservation of capital over the long term.
61
Nationwide Variable Insurance Trust - American Funds NVIT Bond Fund: Class II
This Sub-Account is only available in policies issued before May 1, 2013
Investment Advisor: Capital Research and Management Company
Investment Objective: The Fund seeks to maximize an investors level of current income and preserve the investor's capital.
Nationwide Variable Insurance Trust - American Funds NVIT Global Growth Fund: Class II
Investment Advisor: Capital Research and Management Company
Investment Objective: The Fund is designed for investors seeking capital appreciation through stocks.
Nationwide Variable Insurance Trust - American Funds NVIT Growth Fund: Class II
Investment Advisor: Capital Research and Management Company
Investment Objective: The Fund is designed for investors seeking capital appreciation principally through investment in stocks.
Nationwide Variable Insurance Trust - American Funds NVIT Growth-Income Fund: Class II
This Sub-Account is only available in policies issued before May 1, 2013
Investment Advisor: Capital Research and Management Company
Investment Objective: The fund seeks returns from both capital gains as well as income generated by dividends paid by stock issuers.
Nationwide Variable Insurance Trust - Federated NVIT High Income Bond Fund: Class I
This Sub-Account is no longer available to receive transfers or new premium payments effective May 1, 2005
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: Federated Investment Management Company
Investment Objective: The Fund seeks to provide high current income.
Nationwide Variable Insurance Trust - Federated NVIT High Income Bond Fund: Class III
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: Federated Investment Management Company
Investment Objective: The Fund seeks to provide high current income.
Designation: STTF
Nationwide Variable Insurance Trust - Invesco NVIT Comstock Value Fund: Class I (formerly, Nationwide Variable Insurance Trust - Van Kampen NVIT Comstock Value Fund: Class I)
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: Invesco Advisers, Inc.
Investment Objective: The Fund's investment objective is to seek capital growth and income through investments in equity securities, including common stocks, preferred stocks, and convertible securities.
Nationwide Variable Insurance Trust - Loring Ward NVIT Capital Appreciation Fund: Class P
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: LWI Financial Inc.
Investment Objective: To provide growth of capital, and secondarily current income.
Designation: FF
Nationwide Variable Insurance Trust - Loring Ward NVIT Moderate Fund: Class P
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: LWI Financial Inc.
Investment Objective: Seeks a high level of total return consistent with a moderate level of risk.
Designation: FF
Nationwide Variable Insurance Trust - Neuberger Berman NVIT Multi Cap Opportunities Fund: Class I
This Sub-Account is only available in policies issued before May 1, 2013
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: Neuberger Berman Management LLC
Investment Objective: The fund seeks long-term capital growth.
Nationwide Variable Insurance Trust - Neuberger Berman NVIT Socially Responsible Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: Neuberger Berman Management LLC
Investment Objective: The Fund seeks long-term growth of capital by investing primarily in securities of companies that meet the fund's financial criteria and social policy.
62
Nationwide Variable Insurance Trust - NVIT Cardinal(SM) Aggressive Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Investment Objective: The Aggressive Fund seeks maximum growth of capital consistent with a more aggressive level of risk as compared to other Cardinal Funds.
Designation: FF
Nationwide Variable Insurance Trust - NVIT Cardinal(SM) Balanced Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Investment Objective: The Fund seeks a high level of total return through investment in both equity and fixed income securities.
Designation: FF
Nationwide Variable Insurance Trust - NVIT Cardinal(SM) Capital Appreciation Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Investment Objective: The Fund seeks growth of capital, but also seeks income consistent with a less aggressive level of risk as compared to other Cardinal Funds.
Designation: FF
Nationwide Variable Insurance Trust - NVIT Cardinal(SM) Conservative Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Investment Objective: The Fund seeks a high level of total return consistent with a conservative level of risk as compared to other Cardinal Funds.
Designation: FF
Nationwide Variable Insurance Trust - NVIT Cardinal(SM) Moderate Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Investment Objective: The Fund seeks a high level of total return consistent with a moderate level of risk as compared to other Cardinal Funds.
Designation: FF
Nationwide Variable Insurance Trust - NVIT Cardinal(SM) Moderately Aggressive Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Investment Objective: The Fund seeks growth of capital, but also seeks income consistent with a moderately aggressive level of risk as compared to other Cardinal Funds.
Designation: FF
Nationwide Variable Insurance Trust - NVIT Cardinal(SM) Moderately Conservative Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Investment Objective: The fund seeks a high level of total return consistent with a moderately conservative level of risk.
Designation: FF
Nationwide Variable Insurance Trust - NVIT Core Bond Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: Nationwide Asset Management, LLC
Investment Objective: The Fund seeks a high level of current income consistent with preserving capital.
Nationwide Variable Insurance Trust - NVIT Core Plus Bond Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: Neuberger Berman Fixed Income LLC
Investment Objective: The fund seeks long-term total return consistent with reasonable risk.
Nationwide Variable Insurance Trust - NVIT Emerging Markets Fund: Class I
This Sub-Account is no longer available to receive transfers or new premium payments effective May 1, 2005
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: The Boston Company Asset Management, LLC
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 Emerging Markets Fund: Class III
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: The Boston Company Asset Management, LLC
Investment Objective: The Fund seeks long-term capital growth by investing primarily in equity securities of companies located in emerging market countries.
Designation: STTF
63
Nationwide Variable Insurance Trust - NVIT Government Bond Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: 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 Equity Fund: Class I
This Sub-Account is only available in policies issued before May 1, 2003
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: Invesco Advisers, Inc.
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 - NVIT International Equity Fund: Class III
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: Invesco Advisers, Inc.
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.
Designation: STTF
Nationwide Variable Insurance Trust - NVIT International Index Fund: Class VI
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: 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.
Designation: STTF
Nationwide Variable Insurance Trust - NVIT Investor Destinations Aggressive Fund: Class II
Investment Advisor: Nationwide Fund Advisors
Investment Objective: The NVIT Investor Destinations Aggressive Fund seeks maximum growth of capital consistent with a more aggressive level of risk as compared to other Investor Destinations Funds.
Designation: FF
Nationwide Variable Insurance Trust - NVIT Investor Destinations Balanced Fund: Class II
Investment Advisor: Nationwide Fund Advisors
Investment Objective: The NVIT Investor Destinations Balanced Fund seeks a high level of total return through investment in both equity and fixed-income securities.
Designation: FF
Nationwide Variable Insurance Trust - NVIT Investor Destinations Capital Appreciation Fund: Class II
Investment Advisor: Nationwide Fund Advisors
Investment Objective: The NVIT Investor Destinations Capital Appreciation Fund seeks growth of capital, but also seeks income consistent with a less aggressive level of risk as compared to other NVIT Investor Destinations Funds.
Designation: FF
Nationwide Variable Insurance Trust - NVIT Investor Destinations Conservative Fund: Class II
Investment Advisor: Nationwide Fund Advisors
Investment Objective: The NVIT Investor Destinations Conservative Fund seeks a high level of total return consistent with a conservative level of risk as compared to other Investor Destinations Funds.
Designation: FF
Nationwide Variable Insurance Trust - NVIT Investor Destinations Moderate Fund: Class II
Investment Advisor: Nationwide Fund Advisors
Investment Objective: The NVIT Investor Destinations Moderate Fund seeks a high level of total return consistent with a moderate level of risk as compared to other Investor Destinations Funds.
Designation: FF
64
Nationwide Variable Insurance Trust - NVIT Investor Destinations Moderately Aggressive Fund: Class II
Investment Advisor: Nationwide Fund Advisors
Investment Objective: The NVIT Investor Destinations Moderately Aggressive 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: FF
Nationwide Variable Insurance Trust - NVIT Investor Destinations Moderately Conservative Fund: Class II
Investment Advisor: Nationwide Fund Advisors
Investment Objective: The NVIT Investor Destinations Moderately Conservative Fund seeks a high level of total return consistent with a moderately conservative level of risk.
Designation: FF
Nationwide Variable Insurance Trust - NVIT Large Cap Growth Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: The Boston Company Asset Management, LLC
Investment Objective: The Fund seeks long-term capital growth.
Nationwide Variable Insurance Trust - NVIT Mid Cap Index Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: BlackRock Investment Management, LLC
Investment Objective: The Fund seeks capital appreciation.
Nationwide Variable Insurance Trust - NVIT Money Market Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: Federated Investment Management Company
Investment Objective: The Fund seeks as high a level of current income as is consistent with preserving capital and maintaining liquidity.
Nationwide Variable Insurance Trust - NVIT Multi Sector Bond Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: 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.
Nationwide Variable Insurance Trust - NVIT Multi-Manager International Growth Fund: Class III
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: Invesco Advisers, Inc. and American Century Investment Management, Inc.
Investment Objective: The fund seeks long-term capital growth.
Designation: STTF
Nationwide Variable Insurance Trust - NVIT Multi-Manager International Value Fund: Class I
This Sub-Account is no longer available to receive transfers or new premium payments effective May 1, 2005
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: AllianceBernstein L.P.; JPMorgan Investment Management, Inc.
Investment Objective: The Fund seeks long-term capital appreciation.
Nationwide Variable Insurance Trust - NVIT Multi-Manager International Value Fund: Class III
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: AllianceBernstein L.P.; JPMorgan Investment Management, Inc.
Investment Objective: The Fund seeks long-term capital appreciation.
Designation: STTF
Nationwide Variable Insurance Trust - NVIT Multi-Manager Large Cap Growth Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: Winslow Capital Management, Inc.; Neuberger Berman Management Inc. and Wells Capital Management, Inc.;
Investment Objective: The fund seeks long-term capital growth.
Nationwide Variable Insurance Trust - NVIT Multi-Manager Large Cap Value Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: Goldman Sachs Asset Management, L.P.; Wellington Management Company, LLP; The Boston Company Asset Management, LLC
Investment Objective: The fund seeks long-term capital growth.
65
Nationwide Variable Insurance Trust - NVIT Multi-Manager Mid Cap Growth Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: Neuberger Berman Management LLC; Wells Capital Management, Inc.
Investment Objective: The fund seeks long-term capital growth.
Nationwide Variable Insurance Trust - NVIT Multi-Manager Mid Cap Value Fund: Class II
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: American Century Investment Management, Inc.; Columbia Management Investment Advisers, LLC; Thompson, Siegel & Walmsley LLC
Investment Objective: The fund seeks long-term capital appreciation.
Nationwide Variable Insurance Trust - NVIT Multi-Manager Small Cap Growth Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: OppenheimerFunds, Inc.; Wellington Management Company, LLP
Investment Objective: The Fund seeks capital growth.
Nationwide Variable Insurance Trust - NVIT Multi-Manager Small Cap Value Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: Aberdeen Asset Management, Inc.; Epoch Investment Partners, Inc.; J.P. Morgan Investment Management Inc.
Investment Objective: The Fund seeks capital appreciation.
Nationwide Variable Insurance Trust - NVIT Multi-Manager Small Company Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: Aberdeen Asset Management, Inc.; Morgan Stanley Investment Management; Neuberger Berman Management, Inc.; Putnam Investment Management, LLC; and Waddell & Reed Investment Management Company
Investment Objective: The Fund seeks capital appreciation.
Nationwide Variable Insurance Trust - NVIT Nationwide Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: Aberdeen Asset Management, Inc. and Diamond Hill Capital Management, Inc.
Investment Objective: The Fund seeks total return through a flexible combination of capital appreciation and current income.
Nationwide Variable Insurance Trust - NVIT Real Estate Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: Brookfield Investment Management Inc.
Investment Objective: The Fund seeks current income and long-term capital appreciation.
Nationwide Variable Insurance Trust - NVIT S&P 500 Index Fund: Class I
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: BlackRock Investment Management, LLC
Investment Objective: Long-term capital appreciation.
Nationwide Variable Insurance Trust - NVIT Short Term Bond Fund: Class II
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: 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.
Nationwide Variable Insurance Trust - NVIT Small Cap Index Fund: Class II
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: BlackRock Investment Management, LLC
Investment Objective: The Fund seeks to match the performance of the Russell 2000® Index.
Nationwide Variable Insurance Trust - Templeton NVIT International Value Fund: Class III
Investment Advisor: Nationwide Fund Advisors
Sub-advisor: Templeton Investment Counsel, LLC
Investment Objective: The Fund seeks to maximize total return consisting of capital appreciation and/or current income.
Designation: STTF
66
Neuberger Berman Advisers Management Trust - AMT Short Duration Bond Portfolio: I Class Shares
This Sub-Account is only available in policies issued before May 1, 2012
Investment Advisor: Neuberger Berman Management LLC
Sub-advisor: Neuberger Berman Fixed Income LLC
Investment Objective: Highest available current income consistent with liquidity and low risk to principal; total return is a secondary goal.
Neuberger Berman Advisers Management Trust - AMT Small Cap Growth Portfolio: S Class Shares
This Sub-Account is only available in policies issued before May 1, 2008
Investment Advisor: Neuberger Berman Management LLC
Sub-advisor: Neuberger Berman, LLC
Investment Objective: Long-term capital growth.
Neuberger Berman Advisers Management Trust - AMT Socially Responsive Portfolio: I Class Shares
This Sub-Account is only available in policies issued before May 1, 2008
Investment Advisor: Neuberger Berman Management LLC
Sub-advisor: Neuberger Berman, LLC
Investment Objective: Long-term growth by investing primarily in securities of companies that meet financial criteria and social policy.
Northern Lights Variable Trust - TOPS Protected Balanced ETF Portfolio: Class 3
Investment Advisor: ValMark Advisers, Inc.
Sub-advisor: Milliman, Inc.
Investment Objective: Seeks to provide income and capital appreciation with less volatility than the fixed income and equity markets.
Designation: FF, VOL
Northern Lights Variable Trust - TOPS Protected Growth ETF Portfolio: Class 3
Investment Advisor: ValMark Advisers, Inc.
Sub-advisor: Milliman, Inc.
Investment Objective: Seeks capital appreciation with less volatility than the equity markets.
Designation: FF, VOL
Northern Lights Variable Trust - TOPS Protected Moderate Growth ETF Portfolio: Class 3
Investment Advisor: ValMark Advisers, Inc.
Sub-advisor: Milliman, Inc.
Investment Objective: Seeks capital appreciation with less volatility than the equity markets.
Designation: FF, VOL
Oppenheimer Variable Account Funds - Oppenheimer Discovery Mid Cap Growth Fund/VA: Non-Service Shares (formerly, Oppenheimer Variable Account Funds - Oppenheimer Small- & Mid-Cap Growth Fund/VA: Non-Service Shares)
This Sub-Account is only available in policies issued before May 1, 2003
Investment Advisor: OppenheimerFunds, Inc.
Investment Objective: Capital appreciation.
Oppenheimer Variable Account Funds - Oppenheimer Global Fund/VA: Class 3 (formerly, Oppenheimer Variable Account Funds - Oppenheimer Global Securities Fund/VA: Class 3)
Investment Advisor: OFI Global Asset Management, Inc.
Sub-advisor: OppenheimerFunds, Inc.
Investment Objective: The Fund seeks 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.
Designation: STTF
Oppenheimer Variable Account Funds - Oppenheimer Global Fund/VA: Non-Service Shares (formerly, Oppenheimer Variable Account Funds - Oppenheimer Global Securities Fund/VA: Non-Service Shares)
This Sub-Account is no longer available to receive transfers or new premium payments effective May 1, 2005
Investment Advisor: OFI Global Asset Management, Inc.
Sub-advisor: OppenheimerFunds, Inc.
Investment Objective: The Fund seeks 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.
67
Oppenheimer Variable Account Funds - Oppenheimer Global Strategic Income Fund/VA: Non-Service Shares
This Sub-Account is only available in policies issued before May 1, 2013
Investment Advisor: OppenheimerFunds, Inc.
Investment Objective: High level of current income principally derived from interest on debt securities.
Oppenheimer Variable Account Funds - Oppenheimer Main Street Fund®/VA: Non-Service Shares
Investment Advisor: OppenheimerFunds, Inc.
Investment Objective: High total return which includes growth in the value of its shares as well as current income from equity and debt securities.
Oppenheimer Variable Account Funds - Oppenheimer Main Street Small Cap Fund®/VA: Non-Service Shares (formerly, Oppenheimer Variable Account Funds - Oppenheimer Main Street Small- & Mid-Cap Fund®/VA: Non-Service Shares)
This Sub-Account is only available in policies issued before May 1, 2013
Investment Advisor: OppenheimerFunds, Inc.
Investment Objective: Capital appreciation.
PIMCO Variable Insurance Trust - All Asset Portfolio: Administrative Class
Investment Advisor: Pacific Investment Management Company LLC
Sub-advisor: 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 Advisor: 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 - Low Duration Portfolio: Administrative Class
Investment Advisor: 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 - Total Return Portfolio: Administrative Class
Investment Advisor: 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.
Putnam Variable Trust - Putnam VT Growth & Income Fund: Class IB
This Sub-Account is only available in policies issued before May 1, 2005
Investment Advisor: Putnam Investment Management, LLC
Sub-advisor: Putnam Investments Limited
Investment Objective: Capital growth and current income.
Putnam Variable Trust - Putnam VT International Equity Fund: Class IB
This Sub-Account is only available in policies issued before May 1, 2004
Investment Advisor: Putnam Investment Management, LLC
Sub-advisor: Putnam Investments Limited and Putnam Advisory Company, LLC
Investment Objective: Capital appreciation.
68
Putnam Variable Trust - Putnam VT Voyager Fund: Class IB
This Sub-Account is only available in policies issued before May 1, 2005
Investment Advisor: Putnam Investment Management, LLC
Sub-advisor: Putnam Investments Limited
Investment Objective: Capital appreciation.
T. Rowe Price Equity Series, Inc. - T. Rowe Price Health Sciences Portfolio: II
Investment Advisor: T. Rowe Price Associates, Inc.
Investment Objective: Long-term capital appreciation.
The Universal Institutional Funds, Inc. - Core Plus Fixed Income Portfolio: Class I
This Sub-Account is only available in policies issued before May 1, 2009
Investment Advisor: Morgan Stanley Investment Management Inc.
Investment Objective: Above-average total return over a market cycle of three to five years by investing primarily in a diversified portfolio of fixed income securities.
The Universal Institutional Funds, Inc. - Emerging Markets Debt Portfolio: Class I
This Sub-Account is only available in policies issued before May 1, 2004
Investment Advisor: 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.
Van Eck VIP Trust - Van Eck VIP Emerging Markets Fund: Initial Class
This Sub-Account is only available in policies issued before May 1, 2002
Investment Advisor: Van Eck Associates Corporation
Investment Objective: Long-term capital appreciation by investing primarily in equity securities in emerging markets around the world.
Van Eck VIP Trust - Van Eck VIP Global Hard Assets Fund: Initial Class
Investment Advisor: Van Eck Associates Corporation
Investment Objective: Long-term capital appreciation by investing primarily in hard asset securities. Income is a secondary consideration.
Wells Fargo Advantage Variable Trust - Wells Fargo Advantage VT Small Cap Growth Fund: Class 2
This Sub-Account is only available in policies issued before May 1, 2013
Investment Advisor: Wells Fargo Funds Management, LLC
Sub-advisor: Wells Capital Management Inc.
Investment Objective: Long-term capital appreciation.
69
Appendix B: Definitions
Accumulation Unit – The measure of an investment in, or share of, a Sub-Account. Accumulation Unit values are initially set at $10 for each Sub-Account.
Attained Age – The Insured's age upon the issue of full insurance coverage plus the number of full years since the Policy Date.
Base Policy Specified Amount – The amount of insurance coverage selected under the base policy, excluding any Rider Specified Amount.
Cash Surrender Value – The Cash Value minus Indebtedness and any surrender charge.
Cash Value – The total of amounts allocated to the Sub-Accounts, the policy loan account, and the Fixed Account.
Code – The Internal Revenue Code of 1986, as amended.
Death Benefit – The amount paid upon the Insured's death, before the deduction of any Indebtedness or due and unpaid policy charges.
Fixed Account – An investment option that is funded by Nationwide's general account.
Grace Period – A 61-day period after which the Policy will Lapse if sufficient payments are not made to prevent Lapse.
In Force – Any time during which 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 is insured under the policy, and whose death triggers payment of the Death Benefit.
Investment Experience – The market performance of a mutual fund/Sub-Account.
Lapse – The policy terminates without value.
Maturity Date – The policy anniversary on which the Insured reaches age 100.
Minimum Required Death Benefit – The lowest Death Benefit that will qualify the policy as life insurance under the Code.
Nationwide – Nationwide Life Insurance Company, us, we, or our.
Net Amount At Risk – The policy's base Death Benefit minus the policy's Cash Value.
Net Asset Value (NAV) – The price of each share of a mutual fund in which a Sub-Account invests. NAV is calculated by subtracting the mutual fund's liabilities from its total assets, and dividing that figure by the number of shares outstanding. Nationwide uses NAV to calculate the value of Accumulation Units. NAV does not reflect deductions made for charges taken from the Sub-Accounts.
Net Premium – Premium after transaction charges, but before any allocation to an investment option.
Policy Data Page(s) – The Policy Data Page(s) contains more detailed information about the policy, some of which is unique to the policy owner, the beneficiary, and the Insured.
Policy Date – The date the policy takes effect as shown on the Policy Data Page. Policy years, months, and anniversaries are measured from this date.
Policy owner or Owner – The person or entity named as the owner on the application, or the person or entity assigned ownership rights.
Policy Proceeds or Proceeds – Policy Proceeds may constitute the Death Benefit, or the amount payable if the policy matures or is surrendered, adjusted to account for any unpaid charges, Indebtedness and Rider benefits.
Premium – Amount(s) paid to purchase and maintain the policy.
Premium Load – The aggregate of the sales load and premium tax charges.
70
Rider – An optional benefit purchased under the policy. Rider availability and Rider terms may vary depending on the state in which the policy was issued.
Rider Specified Amount – The portion of the Total Specified Amount attributable to the Additional (insurance) Protection Rider.
SEC – The Securities and Exchange Commission.
Service Center – The department of Nationwide responsible for receiving all service and transaction requests relating to the policy. For service and transaction requests submitted other than by telephone (including fax requests), the Service Center is Nationwide's mail and document processing facility. For service and transaction requests communicated by telephone, the Service Center is Nationwide's operations processing facility, see Contacting the Service Center.
Sub-Account(s) – The mechanism used to account for allocations of Net Premium and Cash Value among the policy's variable investment options.
Substandard Rating – An underwriting classification based on medical and/or non-medical factors used to determine what to charge for life insurance based on characteristics of the Insured beyond traditional factors for standard risks, which include age, sex, and smoking habits of the Insured. Substandard Ratings are shown in the Policy Data Pages as rate class multiples (medical factors) and/or monthly flat extras (medical and/or non-medical factors). The higher the rate class multiple or monthly flat extra, the greater the risk assessed and the higher the cost of coverage.
Total Specified Amount – The sum of the Base Policy Specified Amount and the Rider Specified Amount, if applicable.
Valuation Period – The period during which Nationwide determines the change in the value of the Sub-Accounts. One Valuation Period ends and another begins with the close of trading on the NYSE.
71
Outside back cover page
To learn more about the policy, the policy owner 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 Policy Account Values, and to request other information about the policy contact the Service Center:
• by telephone at 1-800-848-6331
• by mail to Nationwide Life Insurance Company
P.O. Box 182835
Columbus, OH 43218-2835
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 Nationwide Life Insurance Company and the policy. Information about Nationwide Life Insurance Company and the policy (including the SAI) may also be reviewed and copied at the SEC's Public Reference Room in Washington, DC, or may be obtained, upon payment of a duplicating fee, by writing the Public Reference Section of the SEC, 100 F Street NE, Washington, DC 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. 811-08301
Securities Act of 1933 Registration File No. 333-31725

Table of Contents
Nationwide VLI Separate Account-4
(Registrant)
Nationwide Life Insurance Company
(Depositor)
Service Center
P.O. Box 182835
Columbus, OH 43218-2835
1-800-848-6331
TDD: 1-800-238-3035
STATEMENT OF ADDITIONAL INFORMATION
Individual Flexible Premium Variable Universal Life Insurance Policies
This Statement of Additional Information ("SAI'') contains additional information regarding Individual Flexible Premium Variable Universal Life Insurance Policies 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, 2013 and the prospectuses for the mutual funds. The prospectus is incorporated by reference in this SAI. Copies may be obtained FREE OF CHARGE by writing or calling the Service Center. Capitalized terms in this SAI correspond to terms defined in the prospectus.
The date of this Statement of Additional Information is May 1, 2013.
TABLE OF CONTENTS

General Information and History
Nationwide VLI Separate Account-4 (the "Variable Account") is a separate investment account of Nationwide Life Insurance Company ("Nationwide"). Nationwide is a stock life insurance company organized the laws of the State of Ohio in March 1929 with its Home Office at One Nationwide Plaza, Columbus, Ohio 43215. Nationwide provides life insurance, annuities and retirement products. Nationwide is 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 its 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 $168.3 billion as of December 31, 2012.
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. Nationwide established the Variable Account on May 21, 1998 pursuant to Ohio law. Although the Variable Account is registered with the SEC as a unit investment trust pursuant to the Investment Company Act of 1940, the SEC does not supervise the management of Nationwide or the management of the Variable Account. Nationwide serves 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 policies issued in Michigan, all references to NISC will mean Nationwide Investment Svcs. Corporation.
The policies will be sold on a continuous basis by licensed insurance agents in those states where the policies may lawfully be sold. Agents are registered representatives of broker dealers registered under the Securities Exchange Act of 1934 who are member firms of the Financial Industry Regulatory Authority (FINRA).
Gross first year commissions plus any expense allowance payments paid by Nationwide on the sale of these policies provided by NISC will not exceed the maximum, which is 99% of first year premiums and 3% of renewal premium after the first year. Commission may also be paid on an asset-based amount instead of a premium based amount. If an asset-based commission is paid, it will not exceed 0.25% of the non-loaned cash value per year.
No underwriting commissions were paid to NISC for each of this Variable Account's last three fiscal years.
Services
Nationwide has responsibility for administration of the policies and the Variable Account. Nationwide also maintains 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.
Nationwide will maintain a record of all purchases and redemption of shares of the mutual funds.
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. KPMG LLP is located at 191 West Nationwide Blvd., Suite 500, Columbus, Ohio 43215.
Underwriting Procedure
Nationwide underwrites the policies issued through Nationwide VLI Separate Account-4. The policy's cost of insurance depends upon the Insured's sex, issue age, risk class and 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 policies issued on Specified Amounts less than $100,000 are based on the 1980 Commissioners' Extended Term Mortality Table, Age Last Birthday ("1980 CET"). Guaranteed cost of insurance
2
rates for policies issued on Specified Amounts $100,000 or more are based on the 1980 Commissioners' Standard Ordinary Mortality Table, Age Last Birthday ("1980 CSO"). Guaranteed cost of insurance rates for policies issued on a substandard basis are based on appropriate percentage multiples of the standard guaranteed cost of insurance rate on a standard basis. That is, standard guaranteed cost of insurance rates for substandard risks are guaranteed cost of insurance rates for standard risks times a percentage greater than 100%. These mortality tables are sex distinct. In addition, separate mortality tables will be used for tobacco and non-tobacco.
Mortality tables are unisex for:
• policies issued in the State of Montana; and
• group or sponsored arrangements (including our employees and their family members).
The rate class of an insured may affect the cost of insurance rate. We currently place insureds into both standard rate classes and substandard rate classes that involve a higher mortality risk. In an otherwise identical policy, an insured in the standard rate class will have a lower cost of insurance than an insured in a rate class with higher mortality risks. Any change in the cost of insurance rates will apply to all insureds of the same age, gender, risk class and whose policies have been in effect for the same length of time. The cost of insurance rates, policy charges, and payment options for policies issued in some states or in connection with certain employee benefit arrangements may be issued on a gender-neutral (unisex) basis. The unisex rates will be higher than those applicable to females and lower than those applicable to males. If the rating class for any increase in the Specified Amount of insurance coverage is not the same as the rating class at issue, the cost of insurance rate used after such increase will be a composite rate based upon a weighted average of the rates of the different rating classes. The actual charges made during the policy year will be shown in the annual report delivered to policy owners.
Policy Restoration Procedure
Requests to restore a surrendered policy must meet the following requirements:
• the request must be in writing and signed by the policy owner (if the surrender was a Code Section 1035 exchange to a new policy with a different insurer, the signature of an officer of the replacing insurer is also required);
• the written request must be received at the Service Center within 30 days of the date the policy was surrendered (periods up to 60 days will be permitted based on the right to examine period applicable to replaced life insurance policies in the state where the policy was issued);
• the surrender Proceeds must be returned in their entirety; and
• the insured must be alive on the date the restoration request is received.
No proof of insurability or additional underwriting will be required for requests to restore a surrendered policy that meet the above requirements.
A restored policy will be treated as if it had never been surrendered for all purposes, including Investment Experience, accrual of interest, and deduction of charges, resulting in the following:
• the returned surrender proceeds and any amount taken as a surrender charge will be used to purchase Accumulation Units according to the allocations currently in effect on, and priced as of, the surrender date;
• any charges that would otherwise have been assessed during the period of surrender will be assessed as of the date(s) they were due resulting in the cancellation of Accumulation Units priced as of the applicable date(s);
• interest will be credited on any allocation to a fixed investment option at the rate(s) in effect during the period of surrender;
• interest charged and credited on any Indebtedness will accrue at the rates in effect for the period of surrender; and
• any transfer of loan interest charged or credited that would have occurred during the period of surrender will be transferred as of the date(s) such transfers would have otherwise occurred.
Policy restoration is not a contract right of the policy; it is an administrative procedure based on requirements of state insurance law and the terms are subject to change without notice at any time.
3
Maximum Surrender Charge Calculation
The maximum surrender charge under the policy is based on the following calculation.
Maximum Surrender Charge equals 26.50% multiplied by the lesser of (a) or (b), where:
(a) = the Specified Amount multiplied by the rate indicated on the chart "Surrender Target Factor" below divided by 1,000; and
(b) = Premiums paid by the policy owner during the first policy year
Plus (c) multiplied by (d) where:
(c) = the Specified Amount divided by 1,000; and
(d) = the applicable rate from the "Administrative Target Factor" chart below.
The Surrender Target Factor allows the company to account for the probability that our costs incurred in the sales process will not be recouped. The Administrative Target Factor allows the company to account for the probability (at various ages) that death will occur and no surrender charge will be recouped.
Surrender Target Factor
Age   Male Non-Tobacco   Male Tobacco   Female Non-Tobacco   Female Tobacco
0   0.00   3.35   0.00   2.54
1   0.00   3.38   0.00   2.57
2   0.00   3.50   0.00   2.66
3   0.00   3.64   0.00   2.75
4   0.00   3.78   0.00   2.86
5   0.00   3.93   0.00   2.96
6   0.00   4.09   0.00   3.08
7   0.00   4.27   0.00   3.20
8   0.00   4.45   0.00   3.34
9   0.00   4.65   0.00   3.47
10   0.00   4.87   0.00   3.62
11   0.00   5.09   0.00   3.78
12   0.00   5.33   0.00   3.94
13   0.00   5.57   0.00   4.12
14   0.00   5.82   0.00   4.30
15   0.00   6.07   0.00   4.48
16   0.00   6.31   0.00   4.67
17   0.00   6.55   0.00   4.87
18   5.11   6.80   4.27   5.08
19   5.30   7.05   4.45   5.29
20   5.50   7.32   4.64   5.52
21   5.71   7.60   4.83   5.76
22   5.93   7.90   5.04   6.01
23   6.17   8.22   5.26   6.28
24   6.42   8.57   5.49   6.56
25   6.69   8.94   5.73   6.86
26   6.99   9.34   5.99   7.17
27   7.30   9.77   6.25   7.50
28   7.63   10.22   6.54   7.85
29   7.98   10.71   6.84   8.22
30   8.36   11.23   7.16   8.61
31   8.76   11.79   7.49   9.02
32   9.19   12.38   7.85   9.45
33   9.64   13.01   8.22   9.91
34   10.12   13.67   8.62   10.39
35   10.63   14.38   9.04   10.90
36   11.16   15.12   9.48   11.44
37   11.73   15.92   9.95   12.01
38   12.34   16.75   10.44   12.60
4
Age   Male Non-Tobacco   Male Tobacco   Female Non-Tobacco   Female Tobacco
39   12.97   17.64   10.96   13.22
40   13.65   18.58   11.50   13.87
41   14.36   19.56   12.07   14.55
42   15.12   20.60   12.67   15.26
43   15.93   21.70   13.30   16.01
44   16.78   22.87   13.97   16.79
45   17.68   24.09   14.68   17.60
46   18.65   25.39   15.42   18.47
47   19.67   26.76   16.21   19.37
48   20.76   28.21   17.05   20.33
49   21.92   29.76   17.93   21.34
50   23.15   31.40   18.87   22.40
51   24.47   33.13   19.87   23.53
52   25.87   34.98   20.93   24.72
53   27.37   36.93   22.05   25.97
54   28.97   38.99   23.25   27.30
55   30.67   41.17   24.51   28.70
56   32.49   43.48   25.86   30.18
57   34.42   45.92   27.31   31.76
58   36.49   48.52   28.86   33.46
59   38.71   51.28   30.52   35.28
60   41.09   54.23   32.32   37.25
61   43.63   57.36   34.26   39.37
62   46.36   60.70   36.35   41.65
63   49.28   64.24   38.59   44.09
64   52.40   67.98   40.99   46.69
65   55.75   71.92   43.56   49.46
66   59.32   76.10   46.32   52.41
67   63.16   80.52   49.30   55.57
68   67.28   85.23   52.52   58.99
69   71.73   90.27   56.04   62.72
70   76.52   95.66   59.88   66.80
71   81.69   101.41   64.08   71.26
72   87.24   107.54   68.67   76.11
73   93.18   114.01   73.64   81.35
74   99.50   120.81   79.03   86.97
75   106.21   127.90   84.84   92.97
76   113.33   135.27   91.10   99.39
77   120.92   142.94   97.88   106.27
78   129.04   150.99   105.24   113.68
79   137.79   159.53   113.28   121.73
80   147.23   168.60   122.07   130.49
81   147.23   168.60   122.07   130.49
82   147.23   168.60   122.07   130.49
83   147.23   168.60   122.07   130.49
84   147.23   168.60   122.07   130.49
85   147.23   168.60   122.07   130.49
Administrative Target Factor
Issue Age   Administrative Target Component
With Specified Amount Less Than $100,000 		  Administrative Target Component
With Specified Amount Of $100,000 And More
0 through 35   6.00   4.00
36 through 55   7.50   5.00
56 through 85   7.50   6.50
5
Illustrations
Nationwide will provide illustrations of future benefits under the policy before the policy is purchased and upon request thereafter. Nationwide may assess a $25 fee for this service to persons who request more than one policy illustration during a policy year.
Advertising
Rating Agencies
Independent financial rating services, including Moody's, Standard & Poor's and A.M. Best Company rank and rate Nationwide. The purpose of these ratings is to reflect the financial strength or claims-paying ability of Nationwide. The ratings are not intended to reflect the Investment Experience or financial strength of the Variable Account. Nationwide may advertise these ratings from time to time. In addition, Nationwide may include in certain advertisements, endorsements in the form of a list of organizations, individuals or other parties which recommend Nationwide or the policies. Furthermore, Nationwide may occasionally include in advertisements comparisons of currently taxable and tax deferred investment programs, based on selected tax brackets, or discussions of alternative investment vehicles and general economic conditions.
Money Market Yields
Nationwide 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
Nationwide will advertise historical performance of the Sub-Accounts in accordance with SEC prescribed calculations. 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
Nationwide may provide information on various topics to owners and prospective purchasers 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 Guideline Premium/Cash Value Corridor Test and the Cash Value Accumulation Test. Both tests are available to flexible premium policies such as this one.
The tables that follow show, numerically, the requirements for each test.
Guideline Premium/Cash Value Corridor Test
Table of Applicable Percentages of Cash Value
Attained Age
of Insured 		  Percentage of
Cash Value
0-40   250%
41   243%
42   236%
43   229%
44   222%
Attained Age
of Insured 		  Percentage of
Cash Value
45   215%
46   209%
47   203%
48   197%
49   191%
Attained Age
of Insured 		  Percentage of
Cash Value
50   185%
51   178%
52   171%
53   164%
54   157%
6
Attained Age
of Insured 		  Percentage of
Cash Value
55   150%
56   146%
57   142%
58   138%
59   134%
60   130%
61   128%
62   126%
63   124%
64   122%
65   120%
66   119%
67   118%
68   117%
69   116%
70   115%
Attained Age
of Insured 		  Percentage of
Cash Value
71   113%
72   111%
73   109%
74   107%
75   105%
76   105%
77   105%
78   105%
79   105%
80   105%
81   105%
82   105%
83   105%
84   105%
85   105%
86   105%
Attained Age
of Insured 		  Percentage of
Cash Value
87   105%
88   105%
89   105%
90   105%
91   104%
92   103%
93   102%
94   101%
95   101%
96   101%
97   101%
98   101%
99   101%
100   100%
Cash Value Accumulation Test
The Cash Value Accumulation Test requires the Death Benefit to exceed an applicable percentage of the Cash Value. These applicable percentages are calculated by determining net single premiums, as defined in Code Section 7702(b), for each policy year given a set of actuarial assumptions. The relevant material assumptions include an interest rate of 4% and 1980 CSO guaranteed mortality as prescribed in 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 preferred non-tobacco issue age 55.
Policy
Year 		  Percentage of
Cash Value
1   302%
2   290%
3   279%
4   269%
5   259%
6   249%
7   240%
8   231%
9   223%
10   215%
11   207%
12   200%
13   193%
14   186%
15   180%
Policy
Year 		  Percentage of
Cash Value
16   174%
17   169%
18   164%
19   159%
20   154%
21   150%
22   146%
23   142%
24   139%
25   136%
26   133%
27   130%
28   127%
29   125%
30   123%
Policy
Year 		  Percentage of
Cash Value
31   121%
32   119%
33   118%
34   116%
35   115%
36   113%
37   112%
38   111%
39   110%
40   108%
41   107%
42   106%
43   104%
44   103%
45   102%
7

Table of Contents

Report of Independent Registered Public Accounting Firm

The Board of Directors of Nationwide Life Insurance Company and Subsidiaries 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, 2012, and the related statements of operations for the period then ended, the statements of changes in contract owners’ equity for each of the periods in the two-year period then ended, and the financial highlights for each of the periods in the five-year period then ended. 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 audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2012, 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, 2012, the results of their operations for the period then ended, the changes in contract owners’ equity for each of the periods in the two-year period then ended, and the financial highlights for each of the periods in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.

/s/ KPMG LLP

Columbus, Ohio

March 13, 2013

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY

December 31, 2012

 

Assets:

     

Investments at fair value:

     

VPS Dynamic Asset Allocation Portfolio - Class A (ALVDAA)

   
 

7 shares (cost $71)

    $ 76   

Asset Allocation Fund - Class 2 (AMVAA2)

   
 

151,350 shares (cost $2,611,027)

      2,771,215   

Bond Fund - Class 2 (AMVBD2)

   
 

20,806 shares (cost $229,241)

      232,400   

Global Small Capitalization Fund - Class 2 (AMVGS2)

   
 

83,737 shares (cost $1,643,918)

      1,663,014   

Growth Fund - Class 2 (AMVGR2)

   
 

296,580 shares (cost $16,816,903)

      17,928,262   

International Fund - Class 2 (AMVI2)

   
 

109,956 shares (cost $1,806,432)

      1,937,433   

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

   
 

95,019 shares (cost $2,296,539)

      2,428,690   

Global Allocation V.I. Fund - Class II (MLVGA2)

   
 

601,376 shares (cost $9,533,578)

      9,664,118   

Calvert VP SRI Equity Portfolio (CVSSE)

   
 

11,537 shares (cost $225,605)

      246,555   

Value Portfolio (DAVVL)

   
 

254,549 shares (cost $2,864,823)

      2,782,215   

VIP Small Cap Value Series: Service Class (DWVSVS)

   
 

120,897 shares (cost $3,849,894)

              3,994,429   

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

   
 

8,647,801 shares (cost $239,328,200)

      275,518,947   

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

   
 

294,951 shares (cost $7,219,815)

      9,804,186   

Floating-Rate Income Fund (ETVFR)

   
 

1,624,450 shares (cost $15,127,859)

      15,367,300   

Goldman Sachs Global Markets Navigator Fund - Service Shares (GVGMNS)

   
 

91 shares (cost $927)

      945   

Van Kampen V.I. Mid Cap Growth Fund - Series I Shares (IVKMG1)

   
 

856,415 shares (cost $3,410,375)

      3,357,145   

Mid Cap Growth Portfolio - Class 1 (OGGO)

   
 

172,752 shares (cost $2,653,655)

      3,145,812   

Mid Cap Value Portfolio: Class 1 (JPMMV1)

   
 

230,842 shares (cost $1,802,680)

      1,885,980   

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

   
 

517,430 shares (cost $14,824,995)

      14,705,366   

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

   
 

1,042,726 shares (cost $33,561,019)

      42,001,017   

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

   
 

1,931,329 shares (cost $9,148,505)

      11,896,986   

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

   
 

1,155,805 shares (cost $47,324,288)

      42,799,447   

Janus Aspen Series - Perkins Mid Cap Value Portfolio - Service Shares (JAMVS)

   
 

136,662 shares (cost $2,119,857)

      2,127,820   

Retirement Emerging Markets Equity Portfolio - Service Shares (LZREMS)

   
 

1,011,956 shares (cost $22,362,361)

      22,485,658   

Series Fund - Mid Cap Stock Fund: Class VC (LOVMCV)

   
 

61,283 shares (cost $1,057,295)

      1,106,161   

Investors Growth Stock Series - Initial Class (MIGIC)

   
 

260,719 shares (cost $2,581,237)

      3,183,373   

Variable Insurance Trust - MFS New Discovery Series - Intital Class (MNDIC)

   
 

5,126 shares (cost $77,945)

      80,583   

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY

December 31, 2012

 

New Discovery Series - Service Class (MNDSC)

   
 

44,682 shares (cost $652,777)

      670,682   

Research International Series - Service Class (MVRISC)

   
 

294,363 shares (cost $3,262,868)

      3,617,722   

Value Series - Initial Class (MVFIC)

   
 

580,321 shares (cost $6,880,984)

      8,356,618   

Value Series - Service Class (MVFSC)

   
 

1,505,344 shares (cost $19,151,126)

      21,405,990   

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

   
 

2,389,462 shares (cost $36,933,235)

      40,955,375   

Core Plus Fixed Income Portfolio - Class I (MSVFI)

   
 

223,280 shares (cost $2,239,198)

      2,375,695   

Emerging Markets Debt Portfolio - Class I (MSEM)

   
 

4,311,119 shares (cost $35,980,674)

      41,041,855   

Global Real Estate Portfolio - Class II (VKVGR2)

   
 

250,596 shares (cost $2,096,527)

      2,370,639   

Universal Institutional Funds, Inc. - Mid Cap Growth Portfolio - Class I (MSVMG)

   
 

1,046,413 shares (cost $12,204,062)

      11,269,865   

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

   
 

70,231 shares (cost $1,584,894)

      1,540,861   

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

   
 

1,566,192 shares (cost $18,606,049)

      24,416,929   

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

   
 

2,135,132 shares (cost $29,957,507)

      32,582,121   

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

   
 

307,743 shares (cost $5,062,120)

      6,062,545   

American Funds NVIT Bond Fund - Class II (GVABD2)

   
 

173,803 shares (cost $1,921,642)

      2,038,710   

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

   
 

209,603 shares (cost $4,550,659)

      4,978,079   

American Funds NVIT Growth Fund - Class II (GVAGR2)

   
 

129,011 shares (cost $6,104,535)

      7,799,994   

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

   
 

60,961 shares (cost $2,023,310)

      2,521,963   

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

   
 

3,056,169 shares (cost $20,757,480)

      21,087,569   

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

   
 

1,590,897 shares (cost $10,865,148)

      10,977,186   

NVIT Emerging Markets Fund - Class I (GEM)

   
 

985,043 shares (cost $11,422,975)

      11,672,757   

NVIT Emerging Markets Fund - Class III (GEM3)

   
 

799,207 shares (cost $8,231,845)

      9,454,617   

NVIT International Equity Fund - Class I (GIG)

   
 

1,153,929 shares (cost $10,196,655)

      10,581,532   

NVIT International Equity Fund - Class III (GIG3)

   
 

391,628 shares (cost $3,119,178)

      3,595,146   

Variable Insurance Trust: NVIT International Equity Fund - Class VI (NVIE6)

   
 

26,926 shares (cost $214,569)

      246,108   

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

   
 

1,559,639 shares (cost $12,325,184)

      13,007,393   

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

   
 

26,587 shares (cost $282,170)

      291,125   

NVIT Cardinal Aggressive Fund - Class I (NVCRA1)

   
 

248,702 shares (cost $2,132,938)

      2,220,905   

NVIT Cardinal Balanced Fund - Class I (NVCRB1)

   
 

13,469,196 shares (cost $136,364,419)

      145,467,312   

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY

December 31, 2012

 

NVIT Cardinal Capital Appreciation Fund - Class I (NVCCA1)

  

  442,699 shares (cost $4,448,054)      4,657,198   

NVIT Cardinal Conservative Fund - Class I (NVCCN1)

  

  424,951 shares (cost $4,481,268)      4,546,979   

NVIT Cardinal Moderate Fund - Class I (NVCMD1)

  

  523,952 shares (cost $5,363,428)      5,580,087   

NVIT Cardinal Moderately Aggressive Fund - Class I (NVCMA1)

  

  509,315 shares (cost $4,698,857)      5,159,363   

NVIT Cardinal Moderately Conservative Fund - Class I (NVCMC1)

  

  187,345 shares (cost $1,975,007)      2,023,327   

NVIT Core Bond Fund - Class I (NVCBD1)

     
  85,268 shares (cost $952,718)      964,379   

NVIT Core Plus Bond Fund - Class I (NVLCP1)

  

  106,897 shares (cost $1,272,878)      1,263,522   

NVIT Nationwide Fund - Class I (TRF)

     
  7,761,153 shares (cost $69,181,497)      79,086,151   

NVIT Government Bond Fund - Class I (GBF)

  

  11,413,500 shares (cost $135,749,777)      132,739,002   

American Century NVIT Growth Fund - Class I (CAF)

  

  894,862 shares (cost $10,281,368)      13,959,845   

NVIT International Index Fund - Class II (GVIX2)

  

  915,837 shares (cost $7,391,664)      7,665,555   

NVIT International Index Fund - Class VI (GVIX6)

  

  118,931 shares (cost $940,295)      993,077   

NVIT Investor Destinations Aggressive Fund - Class II (GVIDA)

  

  2,192,704 shares (cost $18,076,637)      21,905,109   

NVIT Investor Destinations Balanced Fund - Class II (NVDBL2)

  

  104,484 shares (cost $1,400,299)      1,426,211   

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

  

  23,242 shares (cost $332,567)      350,482   

NVIT Investor Destinations Conservative Fund - Class II (GVIDC)

  

  1,112,407 shares (cost $11,377,629)      11,569,028   

NVIT Investor Destinations Moderate Fund - Class II (GVIDM)

  

  6,180,556 shares (cost $58,767,616)      69,593,064   

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

  

  6,568,876 shares (cost $71,201,214)      73,308,652   

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

  

  1,550,438 shares (cost $15,226,904)      17,039,309   

NVIT Mid Cap Index Fund - Class I (MCIF)

     
  3,018,730 shares (cost $47,155,068)      57,446,438   

NVIT Money Market Fund - Class I (SAM)

     
  86,128,503 shares (cost $86,128,503)      86,128,503   

NVIT Money Market Fund - Class V (SAM5)

  

  212,093,512 shares (cost $212,093,512)      212,093,512   

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

  

  1,568,937 shares (cost $12,209,638)      15,783,507   

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

  

  69,775 shares (cost $980,020)      682,404   

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

  

  502,790 shares (cost $5,631,955)      4,897,171   

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

  

  1,004,410 shares (cost $9,300,083)      10,586,485   

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

  

  716,600 shares (cost $6,307,596)      6,714,538   

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

  

  2,674,018 shares (cost $21,423,926)      28,451,550   

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY

December 31, 2012

 

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

  

  6,455 shares (cost $66,020)      66,611   

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

  

  999,414 shares (cost $8,741,549)      10,323,950   

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

  

  714,293 shares (cost $9,819,126)      12,421,553   

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

  

  2,781,096 shares (cost $27,732,555)      32,816,935   

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

  

  2,282,446 shares (cost $32,075,913)      44,667,468   

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

  

  1,429,578 shares (cost $12,414,940)      13,566,699   

NVIT Short Term Bond Fund - Class I (NVSTB1)

  

  2,754,526 shares (cost $28,976,025)      29,087,793   

NVIT Short Term Bond Fund - Class II (NVSTB2)

  

  218,684 shares (cost $2,285,809)      2,302,742   

NVIT Large Cap Growth Fund - Class I (NVOLG1)

  

  6,321,099 shares (cost $95,840,349)      109,418,217   

Templeton NVIT International Value Fund - Class III (NVTIV3)

  

  42,789 shares (cost $525,700)      522,453   

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

  

  733,505 shares (cost $7,649,113)      8,376,624   

NVIT Real Estate Fund - Class I (NVRE1)

  

  3,355,573 shares (cost $26,100,301)      31,777,278   

VPS Growth and Income Portfolio - Class A (ALVGIA)

  

  427,422 shares (cost $7,126,173)      8,924,570   

VPS International Value Portfolio - Class A (ALVIVA)

  

  634,347 shares (cost $8,607,778)      8,221,132   

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

  

  574,796 shares (cost $9,343,106)      10,156,651   

VP Income & Growth Fund - Class I (ACVIG)

  

  2,445,665 shares (cost $16,258,841)      16,875,089   

American Century VP Inflation Protection Fund - Class II (ACVIP2)

  

  3,036,582 shares (cost $33,119,786)      36,530,087   

VP International Fund - Class I (ACVI)

  

  393,531 shares (cost $3,049,701)      3,514,232   

VP Mid Cap Value Fund - Class I (ACVMV1)

  

  488,307 shares (cost $6,630,219)      7,119,521   

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

  

  111,730 shares (cost $1,085,982)      1,206,683   

VP Value Fund - Class I (ACVV)

  

  2,097,455 shares (cost $12,619,424)      13,675,407   

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

  

  102,565 shares (cost $1,380,417)      1,784,633   

MidCap Stock Portfolio - Initial Shares (DVMCS)

  

  78,541 shares (cost $1,070,289)      1,231,523   

Small Cap Stock Index Portfolio - Service Shares (DVSCS)

  

  3,517,892 shares (cost $40,835,760)      47,702,619   

Appreciation Portfolio - Initial Shares (DCAP)

  

  867,948 shares (cost $30,016,370)      35,125,867   

Opportunistic Small Cap Portfolio: Initial Shares (DSC)

  

  29,285 shares (cost $853,041)      927,164   

International Value Portfolio - Initial Shares (DVIV)

  

  953,802 shares (cost $9,820,926)      9,366,331   

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

  

  47,720 shares (cost $550,019)      609,856   

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY

December 31, 2012

 

Variable Series II - DWS Large Cap Value VIP - Class B (SVSLVB)

  

  10,695 shares (cost $129,055)      133,265   

Capital Appreciation Fund II - Primary Shares (FVCA2P)

  

  111,338 shares (cost $657,188)      695,864   

Quality Bond Fund II - Primary Shares (FQB)

  

  2,566,590 shares (cost $27,850,952)      30,285,760   

VIP Contrafund Portfolio - Service Class (FCS)

  

  2,152,957 shares (cost $48,049,302)      56,751,953   

VIP Energy Portfolio - Service Class 2 (FNRS2)

  

  470,140 shares (cost $9,014,211)      9,144,222   

VIP Equity-Income Portfolio - Service Class (FEIS)

  

  2,980,611 shares (cost $60,129,528)      59,224,747   

VIP Freedom Fund 2010 Portfolio - Service Class (FF10S)

  

  201,544 shares (cost $2,067,994)      2,245,201   

VIP Freedom Fund 2020 Portfolio - Service Class (FF20S)

  

  1,156,561 shares (cost $11,765,927)      12,941,920   

VIP Freedom Fund 2030 Portfolio - Service Class (FF30S)

  

  520,906 shares (cost $5,458,365)      5,662,249   

VIP Freedom Income Fund Portfolio - Service Class (FFINS)

  

  156,128 shares (cost $1,631,787)      1,651,830   

VIP Growth Opportunities Portfolio - Service Class (FGOS)

  

  74,484 shares (cost $1,352,927)      1,620,770   

VIP Growth Portfolio - Service Class (FGS)

  

  1,495,667 shares (cost $53,520,655)      62,743,233   

VIP High Income Portfolio - Service Class (FHIS)

  

  2,716,441 shares (cost $14,865,050)      15,701,027   

VIP High Income Portfolio - Service Class R (FHISR)

  

  847,714 shares (cost $4,777,085)      4,874,356   

VIP Index 500 Portfolio - Initial Class (FIP)

  

  194,130 shares (cost $25,988,940)      28,133,321   

VIP Investment Grade Bond Portfolio - Service Class (FIGBS)

  

  2,573,126 shares (cost $33,607,059)      33,296,257   

VIP Mid Cap Portfolio - Service Class (FMCS)

  

  1,362,017 shares (cost $35,877,770)      41,391,691   

VIP Overseas Portfolio - Service Class (FOS)

  

  825,527 shares (cost $11,486,791)      13,224,950   

VIP Overseas Portfolio - Service Class R (FOSR)

  

  667,054 shares (cost $10,769,361)      10,672,870   

VIP Value Strategies Portfolio - Service Class (FVSS)

  

  369,498 shares (cost $2,970,403)      4,094,038   

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

  

  405,551 shares (cost $4,425,358)      4,546,228   

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

  

  601,045 shares (cost $6,447,583)      6,719,679   

VIP Fidelity VIP Freedom Fund 2040 Portfolio - Service Class (FF40S)

  

  207,407 shares (cost $3,037,675)      3,115,253   

Franklin Income Securities Fund - Class 2 (FTVIS2)

  

  380,242 shares (cost $5,389,274)      5,730,246   

Franklin Rising Dividends Securities Fund - Class 1 (FTVRDI)

  

  631,338 shares (cost $11,759,328)      13,908,382   

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

  

  518,856 shares (cost $7,326,853)      9,640,345   

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

  

  358,741 shares (cost $5,637,429)      6,539,851   

Mutual Global Discovery Securities Fund - Class 2 (FTVMD2)

  

  7,347 shares (cost $149,497)      148,273   

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY

December 31, 2012

 

Templeton Developing Markets Securities Fund - Class 3 (FTVDM3)

  

  405,345 shares (cost $4,027,296)      4,227,752   

Templeton Foreign Securities Fund - Class 1 (TIF)

  

  93,059 shares (cost $1,369,576)      1,361,450   

Templeton Foreign Securities Fund - Class 2 (TIF2)

  

  918,535 shares (cost $12,154,621)      13,199,342   

Templeton Foreign Securities Fund - Class 3 (TIF3)

  

  379,266 shares (cost $4,877,216)      5,431,090   

Templeton Global Bond Securities Fund - Class 2 (FTVGI2)

  

  2,021,595 shares (cost $38,624,611)      39,360,451   

Templeton Global Bond Securities Fund - Class 3 (FTVGI3)

  

  633,801 shares (cost $11,746,958)      12,346,448   

VIP Founding Funds Allocation Fund - Class 2 (FTVFA2)

  

  45,120 shares (cost $337,942)      383,973   

Mid Cap Value- Institutional Shares (GVMCE)

  

  2,951,348 shares (cost $34,137,442)      45,244,169   

VIT Growth Opportunities Fund - Service Shares (GVGOPS)

  

  7,204 shares (cost $51,980)      49,926   

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

  

  120,754 shares (cost $2,070,929)      2,120,442   

Growth Opportunities Funds - Service Class (BNCAI)

  

  289,043 shares (cost $8,483,524)      10,140,800   

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

  

  333,597 shares (cost $3,740,035)      3,652,889   

Guardian Portfolio - I Class Shares (AMGP)

     
  39,746 shares (cost $761,431)      810,819   

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

  

  99,231 shares (cost $2,521,379)      3,073,189   

Advisers Management Trust: Large Cap Value Portfolio - Class I (AMTP)

  

  199,711 shares (cost $2,125,972)      2,316,652   

Advisers Management Trust: Mid Cap Intrinsic Value Portfolio - Class I (AMRI)

  

  356,339 shares (cost $4,710,807)      4,308,135   

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

  

  126,404 shares (cost $1,504,765)      1,668,537   

Socially Responsive Portfolio - I Class Shares (AMSRS)

  

  148,334 shares (cost $1,854,164)      2,357,029   

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

  

  396,128 shares (cost $15,316,652)      17,849,541   

Global Securities Fund/VA - Class 3 (OVGS3)

  

  475,134 shares (cost $13,410,795)      15,570,141   

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

  

  1,420,040 shares (cost $36,788,581)      46,222,303   

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

  

  1,091,933 shares (cost $22,804,800)      26,173,627   

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

  

  218,201 shares (cost $3,116,924)      4,394,560   

Mid-Cap Growth Fund/VA - Non-Service Shares (OVAG)

  

  423,095 shares (cost $19,110,593)      23,185,618   

Global Strategic Income Fund/VA: Non-service Shares (OVSB)

  

  329,233 shares (cost $1,833,849)      1,866,749   

All Asset Portfolio - Administrative Class (PMVAAA)

  

  2,249,748 shares (cost $24,827,057)      25,602,131   

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

  

  180,170 shares (cost $2,170,100)      2,127,813   

Long-Term U.S. Government Portfolio - Administrative Class (PMVLGA)

  

  33,369 shares (cost $450,318)      412,110   

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY

December 31, 2012

 

Low Duration Portfolio - Administrative Class (PMVLDA)

   
 

4,745,323 shares (cost $49,973,460)

      51,154,581   

Real Return Portfolio - Administrative Class (PMVRRA)

   
 

8,178,747 shares (cost $112,288,536)

      116,547,143   

Total Return Portfolio - Administrative Class (PMVTRA)

  

 

37,625,916 shares (cost $425,533,934)

      434,579,332   

Pioneer Emerging Markets VCT Portfolio - Class I Shares (PIVEMI)

  

 

60,782 shares (cost $1,558,120)

      1,577,299   

Pioneer High Yield VCT Portfolio - Class I Shares (PIHYB1)

   
 

724,143 shares (cost $7,484,361)

      7,581,776   

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

   
 

42,802 shares (cost $638,285)

      767,438   

Putnam VT International Equity Fund - Class IB (PVTIGB)

   
 

84,237 shares (cost $868,057)

      954,400   

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

  

  194 shares (cost $2,660)      2,961   

Putnam VT Voyager Fund - Class IB (PVTVB)

   
 

31,461 shares (cost $1,141,046)

      1,137,941   

Van Kampen V.I. Growth and Income Fund - Series I Shares (ACGI)

   
 

175,959 shares (cost $3,338,015)

      3,531,494   

Van Kampen V.I. American Franchise Fund: Series I Shares (ACEG)

   
 

22,120 shares (cost $820,437)

      802,505   

Van Kampen V.I. Value Opportunities Fund: Series I Shares (AVBVI)

   
 

97,343 shares (cost $603,656)

      691,133   

V.I. High Yield Fund - Series I (AVHY1)

   
 

1,762,697 shares (cost $9,312,594)

      9,888,731   

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

   
 

1,408,721 shares (cost $39,307,541)

      42,303,905   

Variable Insurance Funds - Invesco V.I. Mid Cap Core Equity - Series I Shares (AVMCCI)

   
 

77,225 shares (cost $925,234)

      981,533   

Micro-Cap Portfolio - Investment Class (ROCMC)

   
 

3,634,400 shares (cost $41,293,010)

      39,796,677   

Small-Cap Portfolio - Investment Class (ROCSC)

   
 

215,655 shares (cost $2,367,074)

      2,378,678   

Equity Income Portfolio - II (TREI2)

   
 

2,389,828 shares (cost $46,883,217)

      53,101,970   

Health Sciences Portfolio - II (TRHS2)

   
 

514,514 shares (cost $9,472,639)

      10,624,720   

Limited-Term Bond Portfolio (TRLT1)

   
 

478,443 shares (cost $2,390,973)

      2,382,647   

Mid-Cap Growth Portfolio - II (TRMCG2)

   
 

1,104,197 shares (cost $25,842,551)

      23,729,188   

New America Growth Portfolio (TRNAG1)

   
 

1,519,146 shares (cost $33,839,471)

      34,439,046   

Personal Strategy Balanced Portfolio (TRPSB1)

   
 

204,032 shares (cost $3,877,368)

      3,988,832   

Blue Chip Growth Portfolio (TRBCGP)

   
 

5,950 shares (cost $80,101)

      80,032   

VIP Trust - Emerging Markets Fund: Initial Class (VWEM)

   
 

1,166,598 shares (cost $13,706,063)

      15,749,073   

VIP Trust - Global Hard Assets Fund: Initial Class (VWHA)

   
 

1,470,214 shares (cost $49,359,536)

      42,827,331   

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

   
 

220,210 shares (cost $4,265,188)

      4,558,350   

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

   
 

948,712 shares (cost $12,580,363)

      13,576,068   

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY

December 31, 2012

 

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

   
 

241,872 shares (cost $4,245,930)

      4,438,343   

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

   
 

580,637 shares (cost $8,604,930)

      9,365,681   

Vanguard(R) Variable Insurance Funds - REIT Index Portfolio (VVREI)

   
 

152,641 shares (cost $1,633,714)

      1,850,006   

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

   
 

547,392 shares (cost $5,890,929)

      5,961,100   

Vanguard(R) Variable Insurance Funds - Total Bond Market Index Portfolio (VVHGB)

   
 

586,591 shares (cost $7,111,419)

      7,308,924   

Variable Insurance Portfolios - Asset Strategy (WRASP)

   
 

1,346,855 shares (cost $13,473,427)

      14,446,236   

Variable Insurance Portfolios - Growth (WRGP)

   
 

196,070 shares (cost $2,058,018)

      2,083,502   

Variable Insurance Portfolios - High Income (WRHIP)

   
 

3,423,683 shares (cost $12,668,024)

      12,993,218   

Variable Insurance Portfolios - Mid Cap Growth (WRMCG)

   
 

64,650 shares (cost $531,698)

      551,947   

Variable Insurance Portfolios - Real Estate Securities (WRRESP)

   
 

330,902 shares (cost $2,329,527)

      2,612,170   

Variable Insurance Portfolios - Science and Technology (WRSTP)

   
 

265,982 shares (cost $4,538,659)

      4,815,260   

Advantage VT Discovery Fund (SVDF)

   
 

380,411 shares (cost $7,899,515)

      9,571,146   

Advantage VT Opportunity Fund - Class 2 (SVOF)

   
 

408,466 shares (cost $7,642,765)

      8,189,751   

Advantage VT Small Cap Growth Fund - Class 2 (WFVSCG)

   
 

1,006,091 shares (cost $8,130,223)

      7,927,998   
    

 

 

  

Total Investments

      $ 4,082,802,095   

Accounts Receivable-Van Kampen V.I. American Franchise Fund: Series I Shares (ACEG)

      1,778   

Accounts Receivable-VP International Fund - Class I (ACVI)

      9,322   

Accounts Receivable-VIP Contrafund Portfolio - Service Class (FCS)

      119,573   

Accounts Receivable-VIP Growth Opportunities Portfolio - Service Class (FGOS)

      77,152   

Accounts Receivable-VIP Growth Portfolio - Service Class (FGS)

      74,836   

Accounts Receivable-Goldman Sachs Global Markets Navigator Fund - Service Shares (GVGMNS)

      4   

Accounts Receivable-Mid-Cap Growth Fund/VA - Non-Service Shares (OVAG)

      53,658   

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

      17,935   

Accounts Receivable-Pioneer High Yield VCT Portfolio - Class I Shares (PIHYB1)

      51,549   

Accounts Receivable-Putnam VT Small Cap Value Fund - Class IB (PVTSCB)

      3   

Other Accounts Payable

      (3,430 ) 

Accounts Payable-VPS Dynamic Asset Allocation Portfolio - Class A (ALVDAA)

      (4 ) 

Accounts Payable-Long-Term U.S. Government Portfolio - Administrative Class (PMVLGA)

      (922 ) 

Accounts Payable-NVIT Money Market Fund - Class I (SAM)

      (161,238 ) 
    

 

 

  
     $ 4,083,042,311   
    

 

 

  

Contract Owners’ Equity:

     

  Accumulation units

      4,083,042,311   
    

 

 

  

  Total Contract Owners’ Equity (note 8)

    $     4,083,042,311   
    

 

 

  

See accompanying notes to financial statements.

 

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENT OF OPERATIONS

Year Ended December 31, 2012

 

Investment Activity:       Total         ALVDAA             AMVAA2             AMVBD2             AMVGS2             AMVGR2             AMVI2             MLVLC2      

Reinvested dividends

  

$

     64,962,114        -            49,052        5,787        20,811        140,136        27,322        31,855   

Asset charges (note 3)

       (5,006,857 )      -            (4,359 )      (164 )      (3,160 )      (38,907 )      (3,155 )      (4,790 ) 
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net investment income (loss)

       59,955,257        -            44,693        5,623        17,651        101,229        24,167        27,065   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Realized gain (loss) on investments

       62,348,520        -            196,438        11,239        30,252        2,757        17,998        107,107   

Change in unrealized gain (loss) on investments

       255,631,786        5        48,537        400        226,845        2,564,170        140,006        125,294   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net gain (loss) on investments

       317,980,306        5        244,975        11,639        257,097        2,566,927        158,004        232,401   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Reinvested capital gains

       79,135,294        -            -            -            -            -            -            -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

   $     457,070,857        5        289,668        17,262        274,748        2,668,156        182,171        259,466   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
Investment Activity:       MLVGA2     CVSSE     DAVVL     DWVSVS     DSIF     DSRG     ETVFR     GVGMNS  

Reinvested dividends

   $     139,257        243        45,586        4,664        5,550,366        80,490        329,051        -       

Asset charges (note 3)

       -            (514 )      (3,088 )      (5,388 )      (379,437 )      (885 )      (7,849 )      -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net investment income (loss)

       139,257        (271 )      42,498        (724 )      5,170,929        79,605        321,202        -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Realized gain (loss) on investments

       94,583        49,203        17,073        5,345        (8,310,492 )      386,520        3,941        -       

Change in unrealized gain (loss) on investments

       599,858        (12,036 )      81,193        144,347        28,300,455        654,218        239,440        18   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net gain (loss) on investments

       694,441        37,167        98,266        149,692        19,989,963        1,040,738        243,381        18   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Reinvested capital gains

       28,359        8,138        167,142        92,551        13,113,026        -            6        1   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

   $     862,057        45,034        307,906        241,519        38,273,918        1,120,343        564,589        19   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENT OF OPERATIONS

Year Ended December 31, 2012

 

Investment Activity:           IVKMG1              OGGO              JPMMV1              JABS              JACAS              JAGTS              JAIGS              JAMVS      

Reinvested dividends

   $     -             -             1,407          351,401          248,240          -             279,631          15,977    

Asset charges (note 3)

       (1,723)         (6,245)         (855)         (19,434)         (42,139)         (6,266)         (41,677)         (4,127)   
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net investment income (loss)

       (1,723)         (6,245)         552          331,967          206,101          (6,266)         237,954          11,850    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Realized gain (loss) on investments

       (43,000)         464,262          10,388          18,628          (425,310)         525,046          1,193,655          (8,679)   

Change in unrealized gain (loss) on investments

       (53,230)         (9,604)         37,721          206,583          9,731,923          1,221,256          (1,994,975)         70,792    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net gain (loss) on investments

       (96,230)         454,658          48,109          225,211          9,306,613          1,746,302          (801,320)         62,113    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Reinvested capital gains

       1,052          34,768          -             923,173          -             -             5,115,505          105,466    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

   $     (96,901)         483,181          48,661          1,480,351          9,512,714          1,740,036          4,552,139          179,429    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
Investment Activity:       LZREMS      LOVMCV      MIGIC      MNDIC      MNDSC      MVRISC      MVFIC      MVFSC  

Reinvested dividends

   $     347,564          7,198          14,769          -             -             61,173          140,781          322,345    

Asset charges (note 3)

       (43,627)         (1,634)         -             -             (310)         (5,589)         -             (50,469)   
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net investment income (loss)

       303,937          5,564          14,769          -             (310)         55,584          140,781          271,876    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Realized gain (loss) on investments

       (253,246)         40,967          50,807          (122)         (191)         44,439          16,085          768,500    

Change in unrealized gain (loss) on investments

       3,528,565          77,680          285,536          2,638          17,905          347,214          1,003,415          1,963,294    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net gain (loss) on investments

       3,275,319          118,647          336,343          2,516          17,714          391,653          1,019,500          2,731,794    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Reinvested capital gains

       252,336          -             153,989          728          -             -             65,262          171,373    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

   $     3,831,592          124,211          505,101          3,244          17,404          447,237          1,225,543          3,175,043    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENT OF OPERATIONS

Year Ended December 31, 2012

 

Investment Activity:           MVIVSC              MSVFI              MSEM              VKVGR2              MSVMG              MSVEG              MSVRE              NVAMV1      

Reinvested dividends

   $     572,004          110,066          1,093,648          8,871          -             -             210,358          318,235    

Asset charges (note 3)

       (80,828)         -             (39,028)         (3,375)         (27,293)         (3,441)         (53,683)         -       
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net investment income (loss)

       491,176          110,066          1,054,620          5,496          (27,293)         (3,441)         156,675          318,235    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Realized gain (loss) on investments

       1,148,239          (52,242)         474,725          20,627          854,664          (8,947)         3,025,611          297,092    

Change in unrealized gain (loss) on investments

       3,607,201          160,775          4,721,664          375,598          (1,344,140)         55,189          417,183          2,526,918    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net gain (loss) on investments

       4,755,440          108,533          5,196,389          396,225          (489,476)         46,242          3,442,794          2,824,010    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Reinvested capital gains

       -             -             -             -             1,466,688          72,022          -             1,313,345    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

   $     5,246,616          218,599          6,251,009          401,721          949,919          114,823          3,599,469          4,455,590    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
Investment Activity:       GVAAA2      GVABD2      GVAGG2      GVAGR2      GVAGI2      HIBF      HIBF3      GEM  

Reinvested dividends

   $     75,662          44,860          43,219          16,709          25,480          1,736,275          871,040          57,426    

Asset charges (note 3)

       -             -             -             -             -             (39,450)         -             (19,101)   
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net investment income (loss)

       75,662          44,860          43,219          16,709          25,480          1,696,825          871,040          38,325    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Realized gain (loss) on investments

       (41,946)         105,267          234,101          (238,967)         160,270          781,252          204,580          417,514    

Change in unrealized gain (loss) on investments

       773,860          (50,724)         697,124          1,503,853          199,394          327,531          337,747          1,303,179    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net gain (loss) on investments

       731,914          54,543          931,225          1,264,886          359,664          1,108,783          542,327          1,720,693    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Reinvested capital gains

       -             -             -             -             -             -             -             -       
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

   $     807,576          99,403          974,444          1,281,595          385,144          2,805,608          1,413,367          1,759,018    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENT OF OPERATIONS

Year Ended December 31, 2012

 

Investment Activity:       GEM3     GIG     GIG3     NVIE6     NVNMO1     NVNSR1     NVCRA1     NVCRB1  

Reinvested dividends

   $     45,610         89,270         29,898         1,461         184,009         3,437         21,713         2,214,645    

Asset charges (note 3)

       -            (10,068)        -            -            -            -            (9)        (137,253)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net investment income (loss)

       45,610         79,202         29,898         1,461         184,009         3,437         21,704         2,077,392    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Realized gain (loss) on investments

       (1,488,062)        (274,050)        203,195         21,853         121,570         (19,163)        8,847         139,460    

Change in unrealized gain (loss) on investments

       3,137,226         1,624,478         297,562         18,427         765,221         66,874         186,533         10,670,271    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net gain (loss) on investments

       1,649,164         1,350,428         500,757         40,280         886,791         47,711         195,380         10,809,731    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Reinvested capital gains

       -            -            -            -            906,240         -            78,619         1,732,498    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

   $     1,694,774         1,429,630         530,655         41,741         1,977,040         51,148         295,703         14,619,621    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
Investment Activity:       NVCCA1     NVCCN1     NVCMD1     NVCMA1     NVCMC1     NVCBD1     NVLCP1     TRF  

Reinvested dividends

   $     61,958         78,886         82,677         64,191         32,640         28,512         29,072         1,112,816    

Asset charges (note 3)

       -            (8)        -            (1)        (354)        -            -            (49,391)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net investment income (loss)

       61,958         78,878         82,677         64,190         32,286         28,512         29,072         1,063,425    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Realized gain (loss) on investments

       45,419         68,960         187,773         160,406         44,254         31,232         30,973         (2,231,546)   

Change in unrealized gain (loss) on investments

       350,506         60,798         263,737         323,576         46,209         6,486         (16,928)        11,979,240    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net gain (loss) on investments

       395,925         129,758         451,510         483,982         90,463         37,718         14,045         9,747,694    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Reinvested capital gains

       58,676         57,577         91,788         126,838         32,698         5,677         23,769         -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

   $     516,559         266,213         625,975         675,010         155,447         71,907         66,886         10,811,119    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENT OF OPERATIONS

Year Ended December 31, 2012

 

Investment Activity:           GBF             CAF             GVIX2             GVIX6             GVIDA             NVDBL2             NVDCA2             GVIDC      

Reinvested dividends

   $     2,980,397         77,725         177,803         23,933         328,218         23,788         5,903         199,881    

Asset charges (note 3)

       (199,326)        (1,687)        (15,737)        -            (9,017)        -            -            (6,911)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net investment income (loss)

       2,781,071         76,038         162,066         23,933         319,201         23,788         5,903         192,970    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Realized gain (loss) on investments

       535,686         578,688         (75,071)        (6,975)        (730,441)        4,955         4,896         328,956    

Change in unrealized gain (loss) on investments

       (3,875,782)        1,108,487         1,084,277         139,722         3,872,789         28,356         22,513         (85,405)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net gain (loss) on investments

       (3,340,096)        1,687,175         1,009,206         132,747         3,142,348         33,311         27,409         243,551    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Reinvested capital gains

       4,319,147         -            -            -            -            15,045         3,931         157,485    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

   $     3,760,122         1,763,213         1,171,272         156,680         3,461,549         72,144         37,243         594,006    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
Investment Activity:       GVIDM     GVDMA     GVDMC     MCIF     SAM     SAM5     NVMIG3     GVDIVI  

Reinvested dividends

   $     1,147,022         1,172,771         289,570         611,573         -            -            91,269         2,556    

Asset charges (note 3)

       (24,505)        (12,136)        (4,200)        (68,480)        (17,194)        (444,932)        -            -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net investment income (loss)

       1,122,517         1,160,635         285,370         543,093         (17,194)        (444,932)        91,269         2,556    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Realized gain (loss) on investments

       (1,819,431)        (1,452,859)        (93,047)        594,311         13,908         -            405,624         (38,887)   

Change in unrealized gain (loss) on investments

       8,118,855         9,550,803         990,611         3,940,213         -            -            1,782,193         139,565    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net gain (loss) on investments

       6,299,424         8,097,944         897,564         4,534,524         13,908         -            2,187,817         100,678    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Reinvested capital gains

       -            -            66,877         3,855,772         -            -            -            -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

   $     7,421,941         9,258,579         1,249,811         8,933,389         (3,286)        (444,932)        2,279,086         103,234    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENT OF OPERATIONS

Year Ended December 31, 2012

 

Investment Activity:       GVDIV3      NVMLG1      NVMLV1      NVMMG1      NVMMV1      NVMMV2      SCGF      SCVF  

Reinvested dividends

   $     18,409          52,129          88,930          -             901          113,964          -             271,407    

Asset charges (note 3)

       -             (3,313)         (1,553)         (223)         (142)         -             (6,615)         (15,958)   
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net investment income (loss)

       18,409          48,816          87,377          (223)         759          113,964          (6,615)         255,449    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Realized gain (loss) on investments

       (700,455)         398,612          872          2,059,130          1,533          237,316          140,615          (1,082,954)   

Change in unrealized gain (loss) on investments

       1,436,460          1,008,694          1,005,770          (479,350)         1,733          199,907          1,458,637          6,911,347    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net gain (loss) on investments

       736,005          1,407,306          1,006,642          1,579,780          3,266          437,223          1,599,252          5,828,393    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Reinvested capital gains

       -             271,688          -             2,673,054          6,180          978,126          -             -       
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

   $     754,414          1,727,810          1,094,019          4,252,611          10,205          1,529,313          1,592,637          6,083,842    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
Investment Activity:       SCF      MSBF      NVSTB1      NVSTB2      NVOLG1      NVTIV3      EIF      NVRE1  

Reinvested dividends

   $     68,919          336,560          476,017          30,942          777,344          11,649          102,685          339,908    

Asset charges (note 3)

       (46,696)         (4,006)         (25,714)         -             -             -             (621)         (12,158)   
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net investment income (loss)

       22,223          332,554          450,303          30,942          777,344          11,649          102,064          327,750    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Realized gain (loss) on investments

       1,862,818          317,400          15,785          20,382          1,256,903          (19,898)         (307,480)         2,183,109    

Change in unrealized gain (loss) on investments

       4,712,844          921,942          124,608          30,852          16,746,416          85,641          1,671,344          (791,271)   
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net gain (loss) on investments

       6,575,662          1,239,342          140,393          51,234          18,003,319          65,743          1,363,864          1,391,838    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Reinvested capital gains

       -             -             -             -             -             7,155          -             3,012,141    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

   $     6,597,885          1,571,896          590,696          82,176          18,780,663          84,547          1,465,928          4,731,729    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENT OF OPERATIONS

Year Ended December 31, 2012

 

Investment Activity:       ALVGIA      ALVIVA      ALVSVA      ACVIG      ACVIP2      ACVI      ACVMV1      ACVU1  

Reinvested dividends

   $     130,739          130,946          59,554          352,389          867,407          36,710          132,368          -       

Asset charges (note 3)

       (11,073)         (17,960)         (10,377)         (6,898)         -             (7,597)         (5,126)         (1,920)   
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net investment income (loss)

       119,666          112,986          49,177          345,491          867,407          29,113          127,242          (1,920)   
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Realized gain (loss) on investments

       506,735          (1,259,367)         1,442,292          (221,743)         479,678          47,633          100,040          242,407    

Change in unrealized gain (loss) on investments

       653,369          2,127,025          (38,853)         2,174,954          352,341          584,636          391,069          (65,952)   
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net gain (loss) on investments

       1,160,104          867,658          1,403,439          1,953,211          832,019          632,269          491,109          176,455    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Reinvested capital gains

       -             -             347,078          -             796,891          -             336,528          -       
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

   $     1,279,770          980,644          1,799,694          2,298,702          2,496,317          661,382          954,879          174,535    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
Investment Activity:       ACVV      ACVVS1      DVMCS      DVSCS      DCAP      DSC      DVIV      SVSSVB  

Reinvested dividends

   $     288,231          -             5,842          195,041          1,306,122          -             447,357          15,208    

Asset charges (note 3)

       (28,640)         (3,097)         (1,775)         (74,469)         (35,179)         -             (25,677)         (2,556)   
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net investment income (loss)

       259,591          (3,097)         4,067          120,572          1,270,943          -             421,680          12,652    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Realized gain (loss) on investments

       1,300,226          176,768          43,980          3,924,504          (249,360)         29,761          49,247          77,184    

Change in unrealized gain (loss) on investments

       339,426          95,028          159,764          643,966          2,297,566          135,199          605,310          7,784    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net gain (loss) on investments

       1,639,652          271,796          203,744          4,568,470          2,048,206          164,960          654,557          84,968    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Reinvested capital gains

       -             -             -             1,513,153          -             -             -             -       
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

   $     1,899,243          268,699          207,811          6,202,195          3,319,149          164,960          1,076,237          97,620    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENT OF OPERATIONS

Year Ended December 31, 2012

 

Investment Activity:           SVSLVB              FVCA2P              FQB              FCS              FNRS2              FEIS              FF10S              FF20S      

Reinvested dividends

   $     2,702          6,732          1,376,434          702,662          71,919          1,756,289          39,851          244,888    

Asset charges (note 3)

       (398)         -             (35,301)         (125,046)         -             (40,979)         (693)         (13,428)   
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net investment income (loss)

       2,304          6,732          1,341,133          577,616          71,919          1,715,310          39,158          231,460    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Realized gain (loss) on investments

       (3,539)         84,222          295,343          6,648,989          881,293          (3,577,949)         173,317          405,896    

Change in unrealized gain (loss) on investments

       13,934          (23,557)         1,366,720          1,240,386          (470,914)         7,321,029          11,554          621,823    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net gain (loss) on investments

       10,395          60,665          1,662,063          7,889,375          410,379          3,743,080          184,871          1,027,719    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Reinvested capital gains

       -             68,556          -             -             -             3,742,101          32,032          143,652    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

   $     12,699          135,953          3,003,196          8,466,991          482,298          9,200,491          256,061          1,402,831    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
Investment Activity:       FF30S      FFINS      FGOS      FGS      FHIS      FHISR      FIP      FIGBS  

Reinvested dividends

   $     109,053          22,986          4,856          315,397          874,294          275,541          578,602          747,554    

Asset charges (note 3)

       (5,149)         (3,281)         (2,422)         (42,607)         (19,814)         -             (55,269)         (42,767)   
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net investment income (loss)

       103,904          19,705          2,434          272,790          854,480          275,541          523,333          704,787    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Realized gain (loss) on investments

       633,107          (10,204)         237,009          1,888,205          987,982          70,464          232,791          73,226    

Change in unrealized gain (loss) on investments

       110,054          68,292          84,066          6,367,370          177,935          240,523          2,610,168          113,308    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net gain (loss) on investments

       743,161          58,088          321,075          8,255,575          1,165,917          310,987          2,842,959          186,534    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Reinvested capital gains

       52,130          21,588          -             -             -             -             321,253          876,314    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

   $     899,195          99,381          323,509          8,528,365          2,020,397          586,528          3,687,545          1,767,635    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENT OF OPERATIONS

Year Ended December 31, 2012

 

Investment Activity:           FMCS             FOS             FOSR             FVSS             FF15S             FF25S             FF40S             FTVIS2      

Reinvested dividends

   $     212,445         235,538         191,182         19,680         84,908         120,457         58,544         327,023    

Asset charges (note 3)

       (36,342)        (20,399)        -            (1,015)        (8,769)        (14,059)        (5,681)        -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net investment income (loss)

       176,103         215,139         191,182         18,665         76,139         106,398         52,863         327,023    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Realized gain (loss) on investments

       1,643,288         (1,878,238)        (1,389,690)        288,498         (8,706)        31,855         (27,148)        78,024    

Change in unrealized gain (loss) on investments

       931,389         4,309,548         3,152,739         644,232         279,252         532,176         175,122         201,842    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net gain (loss) on investments

       2,574,677         2,431,310         1,763,049         932,730         270,546         564,031         147,974         279,866    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Reinvested capital gains

       3,257,727         42,899         34,701         -            69,615         65,970         13,130         -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

   $     6,008,507         2,689,348         1,988,932         951,395         416,300         736,399         213,967         606,889    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
Investment Activity:       FTVRDI     FTVSVI     FTVSV2     FTVMD2     FTVDM3     TIF     TIF2     TIF3  

Reinvested dividends

   $     250,973         99,460         52,189         4,079         61,901         42,229         340,780         153,683    

Asset charges (note 3)

       -            -            (14,055)        (550)        -            -            (24,942)        -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net investment income (loss)

       250,973         99,460         38,134         3,529         61,901         42,229         315,838         153,683    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Realized gain (loss) on investments

       472,913         (277,282)        588,943         (18,029)        410,696         (13,327)        729,191         (479,530)   

Change in unrealized gain (loss) on investments

       859,670         1,824,905         484,569         19,718         47,284         193,695         849,980         1,215,314    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net gain (loss) on investments

       1,332,583         1,547,623         1,073,512         1,689         457,980         180,368         1,579,171         735,784    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Reinvested capital gains

       -            -            -            8,235         -            -            -            -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

   $     1,583,556         1,647,083         1,111,646         13,453         519,881         222,597         1,895,009         889,467    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENT OF OPERATIONS

Year Ended December 31, 2012

 

Investment Activity:           FTVGI2             FTVGI3             FTVFA2             GVMCE             GVGOPS             SBVSG             BNCAI             AMTB      

Reinvested dividends

   $     2,293,841         727,657         9,218         517,859         -            7,493         112,082         108,811    

Asset charges (note 3)

       (48,848)        -            -            (102,294)        (197)        (3,220)        (22,723)        -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net investment income (loss)

       2,244,993         727,657         9,218         415,565         (197)        4,273         89,359         108,811    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Realized gain (loss) on investments

       (95,655)        212,683         10,615         1,142,862         682         35,778         1,555,523         (9,915)   

Change in unrealized gain (loss) on investments

       3,025,733         653,810         30,587         5,787,288         (2,130)        64,183         (452,578)        69,385    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net gain (loss) on investments

       2,930,078         866,493         41,202         6,930,150         (1,448)        99,961         1,102,945         59,470    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Reinvested capital gains

       57,587         18,412         -            -            4,758         72,565         504,733         -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

   $     5,232,658         1,612,562         50,420         7,345,715         3,113         176,799         1,697,037         168,281    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
Investment Activity:       AMGP     AMCG     AMTP     AMRI     AMFAS     AMSRS     OVGR     OVGS3  

Reinvested dividends

   $     2,225         -            11,364         24,917         -            5,455         128,947         329,528    

Asset charges (note 3)

       (2,005)        (9,395)        (3,739)        (9,649)        (2,471)        -            (42,032)        -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net investment income (loss)

       220         (9,395)        7,625         15,268         (2,471)        5,455         86,915         329,528    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Realized gain (loss) on investments

       439,571         764,825         60,470         421,324         356,593         (66,306)        2,508,107         (586,647)   

Change in unrealized gain (loss) on investments

       (299,572)        (235,283)        374,486         (923,280)        (160,603)        324,070         (146,105)        3,186,789    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net gain (loss) on investments

       139,999         529,542         434,956         (501,956)        195,990         257,764         2,362,002         2,600,142    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Reinvested capital gains

       6,370         -            -            1,072,799         -            -            -            -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

   $     146,589         520,147         442,581         586,111         193,519         263,219         2,448,917         2,929,670    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENT OF OPERATIONS

Year Ended December 31, 2012

 

Investment Activity:           OVGS             OVGI             OVSC             OVAG             OVSB             PMVAAA             PMVFBA             PMVLGA      

Reinvested dividends

   $     973,431         247,251         24,833         -            140,638         988,215         135,333         9,012    

Asset charges (note 3)

       (77,051)        (8,962)        -            (11,714)        (2,504)        (29,890)        (1,067)        (1,050)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net investment income (loss)

       896,380         238,289         24,833         (11,714)        138,134         958,325         134,266         7,962    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Realized gain (loss) on investments

       (1,279,033)        343,759         122,438         705,073         10,126         15,255         97,018         52,397    

Change in unrealized gain (loss) on investments

       8,759,545         3,392,518         575,285         2,940,005         9,646         950,375         (168,660)        (82,091)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net gain (loss) on investments

       7,480,512         3,736,277         697,723         3,645,078         19,772         965,630         (71,642)        (29,694)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Reinvested capital gains

       -            -            -            -            25,947         -            47,707         39,644    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

   $     8,376,892         3,974,566         722,556         3,633,364         183,853         1,923,955         110,331         17,912    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
Investment Activity:       PMVLDA     PMVRRA     PMVTRA     PIVEMI     PIHYB1     PVGIB     PVTIGB     PVTSCB  

Reinvested dividends

   $     1,081,613         1,285,089         10,498,397         7,485         685,614         12,418         19,943         19    

Asset charges (note 3)

       (110,486)        (247,796)        (728,509)        (2,229)        (25,623)        -            -            (11)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net investment income (loss)

       971,127         1,037,293         9,769,888         5,256         659,991         12,418         19,943         8    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Realized gain (loss) on investments

       922,417         4,917,466         4,046,556         (237,394)        (10,758)        17,455         (152,133)        848    

Change in unrealized gain (loss) on investments

       1,238,479         (2,418,651)        14,162,170         373,467         423,803         103,096         312,201         517    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net gain (loss) on investments

       2,160,896         2,498,815         18,208,726         136,073         413,045         120,551         160,068         1,365    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Reinvested capital gains

       -            6,195,039         8,219,576         44,847         611,210         -            -            -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

   $     3,132,023         9,731,147         36,198,190         186,176         1,684,246         132,969         180,011         1,373    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENT OF OPERATIONS

Year Ended December 31, 2012

 

Investment Activity:           PVTVB             ACGI             ACEG             AVBVI             AVHY1             AVIE             AVMCCI             ROCMC      

Reinvested dividends

   $     5,665         52,842         -            9,610         431,067         587,779         763         -       

Asset charges (note 3)

       -            (7,265)        -            (1,025)        (16,441)        (87,494)        (1,963)        (98,249)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net investment income (loss)

       5,665         45,577         -            8,585         414,626         500,285         (1,200)        (98,249)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Realized gain (loss) on investments

       20,137         5,733         (10,657)        31,721         52,982         2,291,229         3,235         7,177,406    

Change in unrealized gain (loss) on investments

       191,874         278,485         (17,932)        73,113         755,725         2,695,361         73,852         (4,752,250)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net gain (loss) on investments

       212,011         284,218         (28,589)        104,834         808,707         4,986,590         77,087         2,425,156    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Reinvested capital gains

       -            -            -            -            -            -            9,920         886,619    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

   $     217,676         329,795         (28,589)        113,419         1,223,333         5,486,875         85,807         3,213,526    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
Investment Activity:       ROCSC     TREI2     TRHS2     TRLT1     TRMCG2     TRNAG1     TRPSB1     TRBCGP  

Reinvested dividends

   $     2,545         1,106,305         -            29,218         -            162,817         70,842         103    

Asset charges (note 3)

       (5,074)        (127,435)        (10,898)        (3,503)        (55,913)        (62,997)        (8,213)        (12)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net investment income (loss)

       (2,529)        978,870         (10,898)        25,715         (55,913)        99,820         62,629         91    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Realized gain (loss) on investments

       (32,530)        8,046,398         583,767         (3,184)        1,573,337         827,755         37,760         (2)   

Change in unrealized gain (loss) on investments

       246,246         (469,846)        1,287,372         (3,170)        (506,882)        2,200,732         220,545         (69)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net gain (loss) on investments

       213,716         7,576,552         1,871,139         (6,354)        1,066,455         3,028,487         258,305         (71)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Reinvested capital gains

       58,574         -            181,641         4,780         2,196,415         207,221         107,742         -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

   $     269,761         8,555,422         2,041,882         24,141         3,206,957         3,335,528         428,676         20    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENT OF OPERATIONS

Year Ended December 31, 2012

 

Investment Activity:           VWEM             VWHA             VVB             VVDV             VVI             VVMCI             VVREI             VVSTC      

Reinvested dividends

   $     -            265,807         101,219         62,000         91,689         95,665         37,753         120,567    

Asset charges (note 3)

       (12,534)        (58,765)        (8,715)        (16,337)        (9,087)        (18,441)        (3,772)        (10,217)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net investment income (loss)

       (12,534)        207,042         92,504         45,663         82,602         77,224         33,981         110,350    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Realized gain (loss) on investments

       1,673,137         1,309,554         272,511         363,470         214,008         39,495         46,946         19,714    

Change in unrealized gain (loss) on investments

       2,222,411         (3,652,443)        118,575         769,193         461,961         840,782         138,516         68,358    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net gain (loss) on investments

       3,895,548         (2,342,889)        391,086         1,132,663         675,969         880,277         185,462         88,072    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Reinvested capital gains

       -            4,029,357         -            -            -            246,150         65,623         -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

   $     3,883,014         1,893,510         483,590         1,178,326         758,571         1,203,651         285,066         198,422    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
Investment Activity:       VVHGB     WRASP     WRGP     WRHIP     WRMCG     WRRESP     WRSTP     SVDF  

Reinvested dividends

   $     205,111         143,351         1,238         4,045         -            20,030         -            -       

Asset charges (note 3)

       (15,079)        (7,541)        (3,187)        (4,491)        (203)        (3,024)        (7,191)        (7,302)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net investment income (loss)

       190,032         135,810         (1,949)        (446)        (203)        17,006         (7,191)        (7,302)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Realized gain (loss) on investments

       15,220         310,272         98,325         24,938         1,822         298,072         (51,308)        388,313    

Change in unrealized gain (loss) on investments

       (3,229)        1,753,592         (8,851)        325,194         20,249         120,052         581,158         646,430    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net gain (loss) on investments

       11,991         2,063,864         89,474         350,132         22,071         418,124         529,850         1,034,743    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Reinvested capital gains

       67,969         -            146,644         -            -            -            293,134         -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

   $     269,992         2,199,674         234,169         349,686         21,868         435,130         815,793         1,027,441    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENT OF OPERATIONS

Year Ended December 31, 2012

 

Investment Activity:             SVOF              WFVSCG              JAGTS2              JAIGS2              AVCA              AVCDI              OVHI3              OVHI      

Reinvested dividends

   $          8,089          -             -             -             -             -             255,446          47,188    

Asset charges (note 3)

       (18,731)         (15,671)         -             -             -             (1,114)         -             -       
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net investment income (loss)

       (10,642)         (15,671)         -             -             -             (1,114)         255,446          47,188    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Realized gain (loss) on investments

       1,313,955          237,254          213,090          (1,506,517)         171,999          756,316          (17,110)         (714,793)   

Change in unrealized gain (loss) on investments

       (216,417)         200,685          171,125          3,726,083          (51,877)         (225,462)         (59,580)         702,080    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net gain (loss) on investments

       1,097,538          437,939          384,215          2,219,566          120,122          530,854          (76,690)         (12,713)   
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Reinvested capital gains

       2,967          399,880          -             -             -             -             -             -       
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

   $          1,089,863          822,148          384,215          2,219,566          120,122          529,740          178,756          34,475    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

See accompanying notes to financial statements.

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

          Total     ALVDAA     AMVAA2     AMVBD2  
          2012     2011     2012     2011     2012     2011     2012      2011  

Investment activity:

                   

Net investment income (loss)

   $          59,955,257         60,242,918         -            -            44,693         23,250         5,623          16,193    

Realized gain (loss) on investments

       62,348,520         66,087,136         -            -            196,438         125,196         11,239          51,744    

Change in unrealized gain (loss) on investments

       255,631,786         (226,800,032)        5         -            48,537         (131,015)        400          (27,029)   

Reinvested capital gains

       79,135,294         25,040,572         -            -            -            -            -             -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

       457,070,857         (75,429,406)        5         -            289,668         17,431         17,262          40,908    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Equity transactions:

                   

Purchase payments received from contract owners (notes 2a and 6)

       227,395,906         232,335,620         -            -            220,394         115,811         6,822          166,599    

Transfers between funds

       -            -            84         -            1,404,524         (114,654)        (364,043)         (755,951)   

Surrenders (note 6)

       (263,186,354)        (332,479,745)        -            -            (405,503)        (20,967)        (16,422)         (288)   

Death Benefits (note 4)

       (14,188,056)        (12,131,512)        -            -            -            -            -             -       

Net policy repayments (loans) (note 5)

       (2,325,835)        183,444         -            -            (649)        (20,938)        2,033          23,799    

Deductions for surrender charges (note 2d)

       (1,248,229)        (1,789,006)        -            -            -            -            -             -       

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

       (107,075,191)        (108,579,372)        (13)        -            (53,312)        (52,505)        (20,576)         (21,183)   

Asset charges (note 3):

                   

FPVUL & VEL contracts

       (5,227,185)        (5,317,581)        -            -            (628)        (787)        (574)         (383)   

MSP contracts

       (280,486)        (288,084)        -            -            -            -            -             -       

SL contracts or LSFP contracts

       (693,218)        (736,976)        -            -            -            -            -             -       

Adjustments to maintain reserves

       81,747         (394,811)        (4)        -            (435)        7         39          5    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net equity transactions

       (166,746,901)        (229,198,023)        67         -            1,164,391         (94,033)        (392,721)         (587,402)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net change in contract owners’ equity

       290,323,956         (304,627,429)        72         -            1,454,059         (76,602)        (375,459)         (546,494)   

Contract owners’ equity beginning of period

       3,792,718,355         4,097,345,784         -            -            1,317,162         1,393,764         607,859          1,154,353    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Contract owners’ equity end of period

   $          4,083,042,311         3,792,718,355         72         -            2,771,221         1,317,162         232,400          607,859    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

CHANGES IN UNITS:

                   

Beginning units

       264,138,478         278,969,681         -            -            137,762         147,280         52,811          106,418    

Units purchased

       41,628,904         38,682,925         9         -            165,437         20,108         1,369          18,072    

Units redeemed

       (50,210,203)        (53,514,128)        (2)        -            (52,989)        (29,626)        (35,116)         (71,679)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Ending units

       255,557,179         264,138,478         7         -            250,210         137,762         19,064          52,811    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

           AMVGS2      AMVGR2      AMVI2      MLVLC2  
           2012      2011      2012      2011      2012      2011      2012      2011  

Investment activity:

                          

Net investment income (loss)

   $           17,651          15,333          101,229          60,624          24,167          3,730          27,065          15,944    

Realized gain (loss) on investments

        30,252          186,890          2,757          518,231          17,998          (17,298)         107,107          297,547    

Change in unrealized gain (loss) on investments

        226,845          (519,145)         2,564,170          (2,011,626)         140,006          (9,005)         125,294          (304,104)   

Reinvested capital gains

        -             -             -             -             -             -             -             -       
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

        274,748          (316,922)         2,668,156          (1,432,771)         182,171          (22,573)         259,466          9,387    
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Equity transactions:

                          

Purchase payments received from contract owners (notes 2a and 6)

        73,623          164,113          24,671          12,055          187,673          -             126,762          68,712    

Transfers between funds

        (6,238)         330,021          3,235,923          13,697,353          1,400,155          221,877          115,492          100,254    

Surrenders (note 6)

        (23,755)         (39,900)         (1,622,750)         (514,761)         -             -             (54,895)         (184,516)   

Death Benefits (note 4)

        (3,679)         (172)         (31,524)         -             (10,545)         -             -             -       

Net policy repayments (loans) (note 5)

        -             48,503          (33)         66,631          (382)         -             (29)         131,008    

Deductions for surrender charges (note 2d)

        -             -             -             -             -             -             -             -       

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

        (33,880)         (25,810)         (182,717)         (116,049)         (19,608)         (1,206)         (32,607)         (29,136)   

Asset charges (note 3):

                          

FPVUL & VEL contracts

        (586)         (340)         -             -             (114)         (20)         (200)         (162)   

MSP contracts

        -             -             -             -             -             -             -             -       

SL contracts or LSFP contracts

        -             -             -             -             -             -             -             -       

Adjustments to maintain reserves

        10          (4)         120          (29)         22          (3)         413          14    
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net equity transactions

        5,495          476,411          1,423,690          13,145,200          1,557,201          220,648          154,936          86,174    
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net change in contract owners’ equity

        280,243          159,489          4,091,846          11,712,429          1,739,372          198,075          414,402          95,561    

Contract owners’ equity beginning of period

        1,382,774          1,223,285          13,836,456          2,124,027          198,075          -             2,014,292          1,918,731    
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Contract owners’ equity end of period

   $           1,663,017          1,382,774          17,928,302          13,836,456          1,937,447          198,075          2,428,694          2,014,292    
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

CHANGES IN UNITS:

                          

Beginning units

        172,798          123,466          1,564,847          229,261          25,258          -             170,390          165,806    

Units purchased

        33,238          56,806          378,802          1,418,007          188,515          25,412          35,102          35,344    

Units redeemed

        (29,730)         (7,474)         (220,184)         (82,421)         (3,689)         (154)         (22,498)         (30,760)   
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Ending units

        176,306          172,798          1,723,465          1,564,847          210,084          25,258          182,994          170,390    
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

        MLVGA2      CVSSE      DAVVL      DWVSVS  
        2012      2011      2012      2011      2012      2011      2012      2011  

Investment activity:

                         

Net investment income (loss)

   $     139,257          180,639          (271)         (456)         42,498          16,890          (724)         (2)   

Realized gain (loss) on investments

       94,583          138,503          49,203          5,613          17,073          270,035          5,345          -       

Change in unrealized gain (loss) on investments

       599,858          (861,037)         (12,036)         (10,766)         81,193          (573,394)         144,347          187    

Reinvested capital gains

       28,359          184,619          8,138          -             167,142          177,925          92,551          -       
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

       862,057          (357,276)         45,034          (5,609)         307,906          (108,544)         241,519          185    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Equity transactions:

                         

Purchase payments received from contract owners (notes 2a and 6)

       486,524          465,883          11,507          7,662          209,538          223,994          114,566          15,794    

Transfers between funds

       904,571          3,360,288          (116,774)         53,328          75,881          (142,955)         3,667,056          4,504    

Surrenders (note 6)

       (362,418)         (354,200)         (2,358)         (2,462)         (40,816)         (89,952)         (22,667)         -       

Death Benefits (note 4)

       (83,018)         (167,584)         -             -             -             -             (9,398)         -       

Net policy repayments (loans) (note 5)

       (57,931)         (522,883)         -             -             (14,400)         (17,457)         3,888          (1,282)   

Deductions for surrender charges (note 2d)

       (5,269)         (17,753)         -             -             -             -             -             -       

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

       (332,226)         (273,692)         (2,600)         (2,649)         (29,721)         (33,563)         (19,640)         (88)   

Asset charges (note 3):

                         

FPVUL & VEL contracts

       (25,362)         (21,277)         -             -             (2,500)         (1,872)         (15)         -       

MSP contracts

       (942)         (700)         -             -             -             -             -             -       

SL contracts or LSFP contracts

       (5,360)         (4,549)         -             -             -             -             -             -       

Adjustments to maintain reserves

       2          (138)         17          3          11          (2)         21          1    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net equity transactions

       518,571          2,463,395          (110,208)         55,882          197,993          (61,807)         3,733,811          18,929    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net change in contract owners’ equity

       1,380,628          2,106,119          (65,174)         50,273          505,899          (170,351)         3,975,330          19,114    

Contract owners’ equity beginning of period

       8,283,492          6,177,373          311,745          261,472          2,276,322          2,446,673          19,114          -       
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Contract owners’ equity end of period

   $     9,664,120          8,283,492          246,571          311,745          2,782,221          2,276,322          3,994,444          19,114    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

CHANGES IN UNITS:

                         

Beginning units

       642,091          461,464          18,607          15,365          276,086          284,231          2,125          -       

Units purchased

       140,004          279,594          1,203          3,546          38,495          36,634          394,976          2,277    

Units redeemed

       (101,965)         (98,967)         (7,044)         (304)         (15,999)         (44,779)         (5,429)         (152)   
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Ending units

       680,130          642,091          12,766          18,607          298,582          276,086          391,672          2,125    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

        DSIF      DSRG      ETVFR      GVGMNS  
        2012      2011      2012      2011      2012      2011      2012      2011  

Investment activity:

                         

Net investment income (loss)

   $     5,170,929          4,474,653          79,605          90,420          321,202          -             -             -       

Realized gain (loss) on investments

       (8,310,492)         (3,720,227)         386,520          474,305          3,941          -             -             -       

Change in unrealized gain (loss) on investments

       28,300,455          1,754,050          654,218          (456,747)         239,440          -             18          -       

Reinvested capital gains

       13,113,026          1,755,181          -             -             6          -             1          -       
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

       38,273,918          4,263,657          1,120,343          107,978          564,589          -             19          -       
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Equity transactions:

                         

Purchase payments received from contract owners (notes 2a and 6)

       13,381,438          11,472,115          827,237          951,581          (16)         -             30          -       

Transfers between funds

       (4,233,138)         1,225,816          (107,210)         (123,457)         14,865,860          -             887          -       

Surrenders (note 6)

       (18,533,502)         (22,885,446)         (808,576)         (871,401)         -             -             -             -       

Death Benefits (note 4)

       (802,912)         (1,241,814)         (105,802)         (100,746)         -             -             -             -       

Net policy repayments (loans) (note 5)

       31,716          442,576          149,746          (64,034)         (83)         -             17          -       

Deductions for surrender charges (note 2d)

       (38,480)         (52,794)         (276)         (1,659)         -             -             -             -       

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

       (7,839,002)         (7,832,096)         (686,879)         (742,253)         (63,013)         -             (8)         -       

Asset charges (note 3):

                         

FPVUL & VEL contracts

       (366,387)         (357,661)         (44,351)         (45,175)         -             -             (1)         -       

MSP contracts

       (11,816)         (12,049)         (1,218)         (1,334)         -             -             -             -       

SL contracts or LSFP contracts

       (57,004)         (60,281)         (1,810)         (1,751)         -             -             -             -       

Adjustments to maintain reserves

       2,202          (1,707)         852          (413)         (77)         -             5          -       
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net equity transactions

       (18,466,885)         (19,303,341)         (778,287)         (1,000,642)         14,802,671          -             930          -       
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net change in contract owners’ equity

       19,807,033          (15,039,684)         342,056          (892,664)         15,367,260          -             949          -       

Contract owners’ equity beginning of period

       255,722,159          270,761,843          9,470,036          10,362,700          -             -             -             -       
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Contract owners’ equity end of period

   $     275,529,192          255,722,159          9,812,092          9,470,036          15,367,260          -             949          -       
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

CHANGES IN UNITS:

                         

Beginning units

       20,051,285          21,609,408          711,620          788,385          -             -             -             -       

Units purchased

       1,055,806          1,237,119          66,935          87,383          1,444,098          -             93          -       

Units redeemed

       (2,435,176)         (2,795,242)         (121,089)         (164,148)         (6,011)         -             (1)         -       
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Ending units

       18,671,915          20,051,285          657,466          711,620          1,438,087          -             92          -       
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

        IVKMG1      OGGO      JPMMV1      JABS  
        2012      2011      2012      2011      2012      2011      2012      2011  

Investment activity:

                         

Net investment income (loss)

   $     (1,723)         -             (6,245)         (8,064)         552          1,344          331,967          268,284    

Realized gain (loss) on investments

       (43,000)         -             464,262          608,459          10,388          794          18,628          627,893    

Change in unrealized gain (loss) on investments

       (53,230)         -             (9,604)         (868,740)         37,721          218          206,583          (1,371,187)   

Reinvested capital gains

       1,052          -             34,768          -             -             -             923,173          590,997    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

       (96,901)         -             483,181          (268,345)         48,661          2,356          1,480,351          115,987    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Equity transactions:

                         

Purchase payments received from contract owners (notes 2a and 6)

       121,711          -             17,560          14,174          5,219          -             3,194,045          885,799    

Transfers between funds

       3,707,100          -             (436,954)         (200,095)         1,715,673          -             (33,479)         (1,962,305)   

Surrenders (note 6)

       (263,224)         -             (25,226)         (282,487)         -             -             (437,386)         (759,314)   

Death Benefits (note 4)

       -             -             (5,288)         (5,379)         -             -             (27,197)         (3,551)   

Net policy repayments (loans) (note 5)

       (23,556)         -             11,261          (2,291)         -             -             40,019          (92,036)   

Deductions for surrender charges (note 2d)

       (2,384)         -             -             -             -             -             (325)         (1,243)   

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

       (79,041)         -             (44,241)         (61,389)         (5,433)         (1,845)         (368,822)         (259,642)   

Asset charges (note 3):

                         

FPVUL & VEL contracts

       (5,671)         -             -             -             (8)         -             (11,669)         (11,002)   

MSP contracts

       (194)         -             -             -             -             -             (37)         (35)   

SL contracts or LSFP contracts

       (695)         -             -             -             -             -             (1,353)         (1,197)   

Adjustments to maintain reserves

       243          -             40          (29)         -             2          71          (12)   
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net equity transactions

       3,454,289          -             (482,848)         (537,496)         1,715,451          (1,843)         2,353,867          (2,204,538)   
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net change in contract owners’ equity

       3,357,388          -             333          (805,841)         1,764,112          513          3,834,218          (2,088,551)   

Contract owners’ equity beginning of period

       -             -             3,145,499          3,951,340          121,873          121,360          10,871,173          12,959,724    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Contract owners’ equity end of period

   $     3,357,388          -             3,145,832          3,145,499          1,885,985          121,873          14,705,391          10,871,173    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

CHANGES IN UNITS:

                         

Beginning units

       -             -             161,522          190,112          7,723          7,841          587,594          709,708    

Units purchased

       420,975          -             939          815          92,092          -             235,446          42,503    

Units redeemed

       (79,184)         -             (23,047)         (29,405)         (298)         (118)         (119,815)         (164,617)   
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Ending units

       341,791          -             139,414          161,522          99,517          7,723          703,225          587,594    
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

          JACAS     JAGTS     JAIGS     JAMVS  
          2012     2011     2012     2011     2012     2011     2012      2011  

Investment activity:

                   

Net investment income (loss)

   $          206,101         71,319         (6,266)        (8,060)        237,954         124,408         11,850          6,917    

Realized gain (loss) on investments

       (425,310)        1,366,581         525,046         807,841         1,193,655         (1,944,368)        (8,679)         31,899    

Change in unrealized gain (loss) on investments

       9,731,923         (5,183,176)        1,221,256         (1,768,798)        (1,994,975)        (18,805,387)        70,792          (114,390)   

Reinvested capital gains

       -            -            -            -            5,115,505         535,405         105,466          -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

       9,512,714         (3,745,276)        1,740,036         (969,017)        4,552,139         (20,089,942)        179,429          (75,574)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Equity transactions:

                   

Purchase payments received from contract owners (notes 2a and 6)

       2,433,578         2,878,619         415,466         105,913         2,151,306         885,641         146,142          189,316    

Transfers between funds

       (10,674,136)        (4,179,211)        1,906,310         (221,297)        2,194,348         (4,200,672)        265,832          1,017,929    

Surrenders (note 6)

       (2,123,881)        (8,133,053)        (1,042,171)        (973,800)        (3,186,752)        (2,283,214)        (5,311)         (6,994)   

Death Benefits (note 4)

       (162,218)        (95,303)        (18,867)        (48,030)        (64,263)        (56,497)        (461)         (5,239)   

Net policy repayments (loans) (note 5)

       (228,960)        (297,692)        (169,448)        (174,112)        (269,142)        (361,192)        (173)         -       

Deductions for surrender charges (note 2d)

       (8,241)        (20,535)        (4,046)        (1,765)        (9,368)        (3,132)        -             -       

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

       (1,514,739)        (1,578,033)        (509,096)        (461,813)        (1,268,978)        (1,136,261)        (37,779)         (26,336)   

Asset charges (note 3):

                   

FPVUL & VEL contracts

       (94,461)        (91,690)        (33,002)        (30,196)        (78,780)        (59,252)        (145)         (40)   

MSP contracts

       (2,351)        (2,205)        (875)        (689)        (2,856)        (2,608)        -             -       

SL contracts or LSFP contracts

       (7,946)        (8,664)        (1,985)        (1,480)        (8,398)        (6,611)        -             -       

Adjustments to maintain reserves

       160         10         (30)        (160)        5,919         449         (277)         (10)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net equity transactions

       (12,383,195)        (11,527,757)        542,256         (1,807,429)        (536,964)        (7,223,349)        367,828          1,168,626    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net change in contract owners’ equity

       (2,870,481)        (15,273,033)        2,282,292         (2,776,446)        4,015,175         (27,313,291)        547,257          1,093,052    

Contract owners’ equity beginning of period

       44,871,580         60,144,613         9,614,700         12,391,146         38,790,122         66,103,413         1,580,274          487,222    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Contract owners’ equity end of period

   $          42,001,099         44,871,580         11,896,992         9,614,700         42,805,297         38,790,122         2,127,531          1,580,274    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

CHANGES IN UNITS:

                   

Beginning units

       4,379,176         5,463,910         1,847,506         2,171,152         2,931,730         3,374,504         155,792          46,500    

Units purchased

       227,377         495,745         1,577,050         89,397         2,089,328         221,950         58,822          113,026    

Units redeemed

       (1,303,936)        (1,580,479)        (1,511,377)        (413,043)        (2,185,096)        (664,724)        (24,893)         (3,734)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Ending units

       3,302,617         4,379,176         1,913,179         1,847,506         2,835,962         2,931,730         189,721          155,792    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

          LZREMS     LOVMCV     MIGIC     MNDIC  
          2012     2011     2012     2011     2012     2011     2012      2011  

Investment activity:

                   

Net investment income (loss)

   $          303,937         332,160         5,564         72         14,769         17,714         -             -       

Realized gain (loss) on investments

       (253,246)        (51,006)        40,967         236,391         50,807         72,311         (122)         -       

Change in unrealized gain (loss) on investments

       3,528,565         (3,966,255)        77,680         (281,059)        285,536         (57,102)        2,638         -       

Reinvested capital gains

       252,336         -            -            -            153,989         -            728          -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

       3,831,592         (3,685,101)        124,211         (44,596)        505,101         32,923         3,244          -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Equity transactions:

                   

Purchase payments received from contract owners (notes 2a and 6)

       971,528         768,479         18,226         27,111         207,020         190,992         298          -       

Transfers between funds

       1,677,404         13,384,519         68,007         (318,395)        9,991         75,191         85,431          -       

Surrenders (note 6)

       (346,007)        (1,813,746)        (8,950)        (39,071)        (313,658)        (393,802)        -             -       

Death Benefits (note 4)

       (69,582)        (1,179)        -            -            (5,047)        (44,380)        -             -       

Net policy repayments (loans) (note 5)

       9,996         87,561         (643)        (586)        (67,920)        (28,807)        (7,321)         -       

Deductions for surrender charges (note 2d)

       -            -            -            -            (8,497)        (9,567)        -             -       

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

       (207,733)        (134,893)        (13,771)        (18,615)        (165,992)        (169,169)        (995)         -       

Asset charges (note 3):

                   

FPVUL & VEL contracts

       (1,375)        (728)        (28)        (26)        (14,020)        (14,177)        (72)         -       

MSP contracts

       -            -            -            -            (145)        (196)        -             -       

SL contracts or LSFP contracts

       -            -            -            -            (640)        (598)        -             -       

Adjustments to maintain reserves

       160         (3,087)        12         (20)        189         (7)        (6)         -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net equity transactions

       2,034,391         12,286,926         62,853         (349,602)        (358,719)        (394,520)        77,335          -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net change in contract owners’ equity

       5,865,983         8,601,825         187,064         (394,198)        146,382         (361,597)        80,579          -       

Contract owners’ equity beginning of period

       16,619,721         8,017,896         919,099         1,313,297         3,036,988         3,398,585         -             -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Contract owners’ equity end of period

   $          22,485,704         16,619,721         1,106,163         919,099         3,183,370         3,036,988         80,579          -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

CHANGES IN UNITS:

                   

Beginning units

       1,783,698         704,127         78,912         107,968         192,257         216,391         -             -       

Units purchased

       262,841         1,285,355         16,368         2,452         16,083         17,700         8,638          -       

Units redeemed

       (65,342)        (205,784)        (12,083)        (31,508)        (36,057)        (41,834)        (842)         -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Ending units

       1,981,197         1,783,698         83,197         78,912         172,283         192,257         7,796          -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

          MNDSC     MVRISC     MVFIC     MVFSC  
          2012     2011     2012     2011     2012     2011     2012      2011  

Investment activity:

                   

Net investment income (loss)

   $          (310)        -            55,584         11,231         140,781         113,187         271,876          124,899    

Realized gain (loss) on investments

       (191)        -            44,439         33,300         16,085         (270,301)        768,500          733,257    

Change in unrealized gain (loss) on investments

       17,905         -            347,214         (135,722)        1,003,415         122,922         1,963,294          (677,432)   

Reinvested capital gains

       -            -            -            -            65,262         30,614         171,373          49,162    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

       17,404         -            447,237         (91,191)        1,225,543         (3,578)        3,175,043          229,886    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Equity transactions:

                   

Purchase payments received from contract owners (notes 2a and 6)

       -            -            72,572         72,231         842,540         455,012         1,283,084          1,207,739    

Transfers between funds

       654,561         -            2,278,447         119,555         46,607         (201,205)        869,555          10,645,377    

Surrenders (note 6)

       -            -            (1,734)        (8,013)        (729,374)        (541,675)        (1,568,404)         (682,089)   

Death Benefits (note 4)

       -            -            -            -            (120,797)        (22,318)        (10,708)         (10,591)   

Net policy repayments (loans) (note 5)

       -            -            (27)        (1,092)        31,743         21,688         (49,796)         (4,037)   

Deductions for surrender charges (note 2d)

       -            -            -            -            (2,820)        (2,890)        -             -       

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

       (1,284)        -            (32,173)        (13,612)        (333,138)        (313,359)        (310,085)         (226,994)   

Asset charges (note 3):

                   

FPVUL & VEL contracts

       -            -            (111)        (103)        (23,501)        (22,010)        (2,883)         (1,372)   

MSP contracts

       -            -            -            -            (874)        (677)        -             -       

SL contracts or LSFP contracts

       -            -            -            -            (5,648)        (4,829)        -             -       

Adjustments to maintain reserves

       2         -            137         14         1         17         182          (34)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net equity transactions

       653,279         -            2,317,111         168,980         (295,261)        (632,246)        210,945          10,927,999    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net change in contract owners’ equity

       670,683         -            2,764,348         77,789         930,282         (635,824)        3,385,988          11,157,885    

Contract owners’ equity beginning of period

       -            -            853,383         775,594         7,426,340         8,062,164         18,020,049          6,862,164    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Contract owners’ equity end of period

   $          670,683         -            3,617,731         853,383         8,356,622         7,426,340         21,406,037          18,020,049    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

CHANGES IN UNITS:

                   

Beginning units

       -            -            110,565         89,179         407,456         441,004         2,030,171          767,637    

Units purchased

       65,241         -            297,602         26,076         46,403         36,547         332,527          1,323,625    

Units redeemed

       (129)        -            (4,510)        (4,690)        (59,489)        (70,095)        (277,743)         (61,091)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Ending units

       65,112         -            403,657         110,565         394,370         407,456         2,084,955          2,030,171    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

          MVIVSC     MSVFI     MSEM     VKVGR2  
          2012     2011     2012     2011     2012     2011     2012      2011  

Investment activity:

                   

Net investment income (loss)

   $          491,176         220,265         110,066         95,738         1,054,620         1,190,873         5,496          37,963    

Realized gain (loss) on investments

       1,148,239         320,702         (52,242)        (68,205)        474,725         988,467         20,627          46,050    

Change in unrealized gain (loss) on investments

       3,607,201         (1,134,343)        160,775         112,829         4,721,664         (285,039)        375,598          (219,853)   

Reinvested capital gains

       -            -            -            -            -            381,502         -             -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

       5,246,616         (593,376)        218,599         140,362         6,251,009         2,275,803         401,721          (135,840)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Equity transactions:

                   

Purchase payments received from contract owners (notes 2a and 6)

       647,969         387,722         113,505         139,980         324,380         342,924         247,522          134,159    

Transfers between funds

       13,701,915         5,188,905         (200,129)        83,361         800,882         289,237         696,230          (25,398)   

Surrenders (note 6)

       (2,811,338)        (594,806)        (134,883)        (158,149)        (625,731)        (568,892)        (10,159)         (88,465)   

Death Benefits (note 4)

       (35,941)        -            (6,184)        (414)        (169,601)        (104,553)        (1,811)         (1,420)   

Net policy repayments (loans) (note 5)

       (507)        (8,088)        (20,655)        21,225         6,763         39,409         (18,176)         (9,202)   

Deductions for surrender charges (note 2d)

       -            -            (2,254)        (5,824)        (1,394)        (4,797)        -             -       

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

       (433,463)        (339,421)        (113,837)        (119,240)        (551,629)        (508,136)        (37,467)         (28,989)   

Asset charges (note 3):

                   

FPVUL & VEL contracts

       (1,721)        (632)        (8,724)        (8,987)        (20,148)        (19,040)        (508)         (420)   

MSP contracts

       -            -            (533)        (486)        (371)        (347)        -             -       

SL contracts or LSFP contracts

       -            -            (1,116)        (1,165)        (2,135)        (2,078)        -             -       

Adjustments to maintain reserves

       272         17,920         -            (6)        160         17         17          (4)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net equity transactions

       11,067,186         4,651,600         (374,810)        (49,705)        (238,824)        (536,256)        875,648          (19,739)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net change in contract owners’ equity

       16,313,802         4,058,224         (156,211)        90,657         6,012,185         1,739,547         1,277,369          (155,579)   

Contract owners’ equity beginning of period

       24,641,649         20,583,425         2,531,944         2,441,287         35,029,731         33,290,184         1,093,277          1,248,856    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Contract owners’ equity end of period

   $          40,955,451         24,641,649         2,375,733         2,531,944         41,041,916         35,029,731         2,370,646          1,093,277    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

CHANGES IN UNITS:

                   

Beginning units

       1,760,148         1,441,156         186,591         190,070         980,681         999,333         144,741          148,350    

Units purchased

       991,113         473,135         9,184         24,426         45,412         54,576         106,255          25,039    

Units redeemed

       (222,476)        (154,143)        (35,798)        (27,905)        (48,999)        (73,228)        (8,742)         (28,648)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Ending units

       2,528,785         1,760,148         159,977         186,591         977,094         980,681         242,254          144,741    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

          MSVMG     MSVEG     MSVRE     NVAMV1  
          2012     2011     2012     2011     2012     2011     2012      2011  

Investment activity:

                   

Net investment income (loss)

   $          (27,293)        14,035         (3,441)        (685)        156,675         173,456         318,235          553,784    

Realized gain (loss) on investments

       854,664         2,487,242         (8,947)        31,637         3,025,611         4,189,405         297,092          139,801    

Change in unrealized gain (loss) on investments

       (1,344,140)        (3,286,633)        55,189         (118,836)        417,183         (3,331,112)        2,526,918          (509,497)   

Reinvested capital gains

       1,466,688         5,360         72,022         -            -            -            1,313,345          84,323    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

       949,919         (779,996)        114,823         (87,884)        3,599,469         1,031,749         4,455,590          268,411    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Equity transactions:

                   

Purchase payments received from contract owners (notes 2a and 6)

       350,951         608,714         34,448         5,672         509,569         516,093         1,923,909          2,224,289    

Transfers between funds

       (416,657)        651,278         681,259         713,900         (2,817,002)        (254,253)        (1,228,431)         (2,952,345)   

Surrenders (note 6)

       (762,554)        (394,939)        (7,525)        (3,470)        (924,140)        (1,913,429)        (2,694,809)         (3,180,722)   

Death Benefits (note 4)

       (2,653)        (14,332)        -            -            (55,966)        (40,872)        (77,025)         (168,870)   

Net policy repayments (loans) (note 5)

       7,830         (8,817)        11,367         (963)        755         142,936         (21,514)         (184,453)   

Deductions for surrender charges (note 2d)

       -            -            -            -            -            (38)        (17,952)         (28,414)   

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

       (164,164)        (172,373)        (43,186)        (17,344)        (349,558)        (365,476)        (1,507,121)         (1,595,882)   

Asset charges (note 3):

                   

FPVUL & VEL contracts

       (691)        (504)        (146)        (101)        (15)        (17)        (120,340)         (124,620)   

MSP contracts

       -            -            -            -            -            -            (4,733)         (4,667)   

SL contracts or LSFP contracts

       -            -            -            -            2         (5)        (14,324)         (15,757)   

Adjustments to maintain reserves

       79         (163)        (202)        (3)        228         (13)        2          137    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net equity transactions

       (987,859)        668,864         676,015         697,691         (3,636,127)        (1,915,074)        (3,762,338)         (6,031,304)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net change in contract owners’ equity

       (37,940)        (111,132)        790,838         609,807         (36,658)        (883,325)        693,252          (5,762,893)   

Contract owners’ equity beginning of period

       11,307,835         11,418,967         749,676         139,869         24,453,641         25,336,966         31,888,859          37,651,752    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Contract owners’ equity end of period

   $          11,269,895         11,307,835         1,540,514         749,676         24,416,983         24,453,641         32,582,111          31,888,859    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

CHANGES IN UNITS:

                   

Beginning units

       978,986         917,869         74,986         13,550         763,390         838,673         2,222,487          2,641,103    

Units purchased

       158,777         203,718         70,902         63,622         14,667         27,674         141,490          184,131    

Units redeemed

       (237,371)        (142,601)        (10,760)        (2,186)        (117,547)        (102,957)        (383,555)         (602,747)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Ending units

       900,392         978,986         135,128         74,986         660,510         763,390         1,980,422          2,222,487    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

          GVAAA2     GVABD2     GVAGG2     GVAGR2  
          2012     2011     2012     2011     2012     2011     2012      2011  

Investment activity:

                   

Net investment income (loss)

   $          75,662         69,197         44,860         54,604         43,219         61,967         16,709          22,585    

Realized gain (loss) on investments

       (41,946)        (90,295)        105,267         98,811         234,101         (229,612)        (238,967)         (467,228)   

Change in unrealized gain (loss) on investments

       773,860         81,651         (50,724)        (27,616)        697,124         (347,968)        1,503,853          38,452    

Reinvested capital gains

       -            -            -            -            -            -            -             -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

       807,576         60,553         99,403         125,799         974,444         (515,613)        1,281,595          (406,191)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Equity transactions:

                   

Purchase payments received from contract owners (notes 2a and 6)

       311,402         305,572         109,250         116,427         291,726         364,170         443,128          562,233    

Transfers between funds

       815,628         124,733         34,775         (392,479)        (10,134)        29,483         (747,563)         907,956    

Surrenders (note 6)

       (243,036)        (668,985)        (178,804)        (258,544)        (622,450)        (624,601)        (547,250)         (890,244)   

Death Benefits (note 4)

       (117,133)        (4,324)        (82,668)        -            (26,275)        (2,144)        (48,381)         (81,357)   

Net policy repayments (loans) (note 5)

       (6,911)        (37,912)        34,758         19,194         (40,803)        (35,584)        (203,447)         14,935    

Deductions for surrender charges (note 2d)

       (6,057)        (14,547)        (1,933)        (1,744)        (8,916)        (2,654)        (13,916)         (9,551)   

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

       (225,316)        (243,517)        (115,413)        (114,907)        (196,171)        (230,353)        (289,238)         (314,316)   

Asset charges (note 3):

                   

FPVUL & VEL contracts

       (17,633)        (15,953)        (6,562)        (7,317)        (15,995)        (20,908)        (23,705)         (24,894)   

MSP contracts

       (4,372)        (4,238)        (844)        (984)        (1,121)        (1,249)        (1,560)         (1,851)   

SL contracts or LSFP contracts

       (6,504)        (6,082)        (1,973)        (2,076)        (2,763)        (2,812)        (5,303)         (6,785)   

Adjustments to maintain reserves

       (1)        4         (2)        3         4         (10)        (2)         (126)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net equity transactions

       500,067         (565,249)        (209,416)        (642,427)        (632,898)        (526,662)        (1,437,237)         156,000    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net change in contract owners’ equity

       1,307,643         (504,696)        (110,013)        (516,628)        341,546         (1,042,275)        (155,642)         (250,191)   

Contract owners’ equity beginning of period

       4,754,909         5,259,605         2,148,718         2,665,346         4,636,536         5,678,811         7,955,661          8,205,852    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Contract owners’ equity end of period

   $          6,062,552         4,754,909         2,038,705         2,148,718         4,978,082         4,636,536         7,800,019          7,955,661    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

CHANGES IN UNITS:

                   

Beginning units

       433,074         483,491         174,797         229,234         426,331         473,561         786,500          773,203    

Units purchased

       98,091         39,068         14,293         16,361         32,111         36,939         46,805          140,909    

Units redeemed

       (53,986)        (89,485)        (31,090)        (70,798)        (83,513)        (84,169)        (176,487)         (127,612)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Ending units

       477,179         433,074         158,000         174,797         374,929         426,331         656,818          786,500    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

          GVAGI2     HIBF     HIBF3     GEM  
          2012     2011     2012     2011     2012     2011     2012      2011  

Investment activity:

                   

Net investment income (loss)

   $          25,480         26,141         1,696,825         1,734,231         871,040         791,881         38,325          63,242    

Realized gain (loss) on investments

       160,270         (62,104)        781,252         817,468         204,580         549,071         417,514          5,605,352    

Change in unrealized gain (loss) on investments

       199,394         (28,397)        327,531         (1,728,342)        337,747         (854,694)        1,303,179          (8,744,331)   

Reinvested capital gains

       -            -            -            -            -            -            -             -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

       385,144         (64,360)        2,805,608         823,357         1,413,367         486,258         1,759,018          (3,075,737)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Equity transactions:

                   

Purchase payments received from contract owners (notes 2a and 6)

       107,123         143,122         859,960         729,710         716,546         882,424         271,988          375,967    

Transfers between funds

       103,158         171,533         (208,711)        (2,757,119)        (838,218)        (1,019,783)        (70,424)         (12,261,452)   

Surrenders (note 6)

       (428,384)        (304,329)        (1,291,182)        (1,646,402)        (682,861)        (718,563)        (568,795)         (1,926,363)   

Death Benefits (note 4)

       -            -            (60,980)        (27,965)        (202,738)        (19,850)        (20,186)         (30,706)   

Net policy repayments (loans) (note 5)

       15,684         (19,486)        (53,088)        (39,203)        32,202         21,360         32,265          132,823    

Deductions for surrender charges (note 2d)

       (2,306)        (379)        (1,215)        (621)        (12,482)        (9,771)        (193)         (1,542)   

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

       (79,218)        (93,484)        (376,300)        (368,397)        (486,915)        (488,312)        (276,949)         (390,794)   

Asset charges (note 3):

                   

FPVUL & VEL contracts

       (7,054)        (8,099)        (13,439)        (14,142)        (35,208)        (35,236)        (7,027)         (8,911)   

MSP contracts

       (929)        (899)        (1,026)        (1,002)        (407)        (766)        (319)         (608)   

SL contracts or LSFP contracts

       (1,086)        (1,215)        (1,164)        (1,230)        (6,461)        (5,578)        (343)         (462)   

Adjustments to maintain reserves

       (3)        (17)        (139)        21         16         13         (132)         (131)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net equity transactions

       (293,015)        (113,253)        (1,147,284)        (4,126,350)        (1,516,526)        (1,394,062)        (640,115)         (14,112,179)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net change in contract owners’ equity

       92,129         (177,613)        1,658,324         (3,302,993)        (103,159)        (907,804)        1,118,903          (17,187,916)   

Contract owners’ equity beginning of period

       2,429,832         2,607,445         19,430,080         22,733,073         11,080,348         11,988,152         10,554,149          27,742,065    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Contract owners’ equity end of period

   $          2,521,961         2,429,832         21,088,404         19,430,080         10,977,189         11,080,348         11,673,052          10,554,149    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

CHANGES IN UNITS:

                   

Beginning units

       279,694         293,429         937,774         1,134,842         746,693         838,621         468,043          956,007    

Units purchased

       23,448         29,042         46,555         43,770         118,216         74,534         47,794          21,283    

Units redeemed

       (55,156)        (42,777)        (93,220)        (240,838)        (220,019)        (166,462)        (72,811)         (509,247)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Ending units

       247,986         279,694         891,109         937,774         644,890         746,693         443,026          468,043    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

          GEM3     GIG     GIG3     NVIE6  
          2012     2011     2012     2011     2012     2011     2012      2011  

Investment activity:

                   

Net investment income (loss)

   $          45,610         108,306         79,202         110,527         29,898         52,341         1,461          4,847    

Realized gain (loss) on investments

       (1,488,062)        (1,948,414)        (274,050)        798,541         203,195         124,805         21,853          50,941    

Change in unrealized gain (loss) on investments

       3,137,226         (1,850,266)        1,624,478         (2,340,290)        297,562         (559,594)        18,427          (99,953)   

Reinvested capital gains

       -            -            -            -            -            -            -             -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

       1,694,774         (3,690,374)        1,429,630         (1,431,222)        530,655         (382,448)        41,741          (44,165)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Equity transactions:

                   

Purchase payments received from contract owners (notes 2a and 6)

       718,663         957,702         572,115         566,444         186,510         176,019         -             8,631    

Transfers between funds

       (1,462,692)        (259,938)        75,310         5,744,351         (282,178)        520,993         (129,798)         (179,721)   

Surrenders (note 6)

       (3,205,239)        (731,338)        (582,161)        (775,025)        (435,215)        (273,549)        (2,416)         (56,978)   

Death Benefits (note 4)

       (28,003)        (17,782)        (17,318)        (20,875)        (1,994)        (15,917)        -             -       

Net policy repayments (loans) (note 5)

       (45,796)        (229,179)        (76,703)        3,617         (35,703)        28,607         (9,001)         (1,046)   

Deductions for surrender charges (note 2d)

       (15,562)        (13,566)        (224)        (1,718)        (1,014)        (5,181)        (271)         (153)   

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

       (464,853)        (535,317)        (258,745)        (228,088)        (151,983)        (161,330)        (7,165)         (12,891)   

Asset charges (note 3):

                   

FPVUL & VEL contracts

       (33,493)        (39,940)        (16,876)        (14,024)        (11,441)        (12,259)        (491)         (619)   

MSP contracts

       (6,602)        (7,431)        (493)        (531)        (783)        (810)        -             -       

SL contracts or LSFP contracts

       (6,152)        (9,195)        (1,842)        (1,479)        (1,307)        (986)        (830)         (1,308)   

Adjustments to maintain reserves

       (37)        20         118         -            (7)        5         (1)         3    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net equity transactions

       (4,549,766)        (885,964)        (306,819)        5,272,672         (735,115)        255,592         (149,973)         (244,082)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net change in contract owners’ equity

       (2,854,992)        (4,576,338)        1,122,811         3,841,450         (204,460)        (126,856)        (108,232)         (288,247)   

Contract owners’ equity beginning of period

       12,309,331         16,885,669         9,458,732         5,617,282         3,799,603         3,926,459         354,341          642,588    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Contract owners’ equity end of period

   $          9,454,339         12,309,331         10,581,543         9,458,732         3,595,143         3,799,603         246,109          354,341    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

CHANGES IN UNITS:

                   

Beginning units

       746,323         794,544         782,269         417,590         519,645         484,564         48,864          79,753    

Units purchased

       46,497         65,478         108,029         456,255         26,375         99,647         -             3,160    

Units redeemed

       (303,872)        (113,699)        (132,242)        (91,576)        (120,605)        (64,566)        (19,410)         (34,049)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Ending units

       488,948         746,323         758,056         782,269         425,415         519,645         29,454          48,864    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

          NVNMO1     NVNSR1     NVCRA1     NVCRB1  
          2012     2011     2012     2011     2012     2011     2012      2011  

Investment activity:

                   

Net investment income (loss)

   $          184,009         82,877         3,437         4,918         21,704         23,480         2,077,392          3,311,899    

Realized gain (loss) on investments

       121,570         302,023         (19,163)        15,366         8,847         5,008         139,460          175,111    

Change in unrealized gain (loss) on investments

       765,221         (2,133,159)        66,874         (98,685)        186,533         (129,907)        10,670,271          (6,151,589)   

Reinvested capital gains

       906,240         112,348         -            -            78,619         18,185         1,732,498          842,924    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

       1,977,040         (1,635,911)        51,148         (78,401)        295,703         (83,234)        14,619,621          (1,821,655)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Equity transactions:

                   

Purchase payments received from contract owners (notes 2a and 6)

       749,709         831,892         5,890         60,938         633,868         433,547         1,673,681          1,091,670    

Transfers between funds

       (488,529)        (512,444)        (253,372)        377,389         (15,958)        525,943         (590,257)         245,346    

Surrenders (note 6)

       (931,607)        (1,163,203)        (46,638)        (3,836)        (83,909)        (5,791)        (128,811)         (89,581)   

Death Benefits (note 4)

       (66,858)        (45,796)        (24,169)        -            (6,682)        -            (194,478)         (587,338)   

Net policy repayments (loans) (note 5)

       127,627         21,975         (55)        7         (124,444)        325         (184,058)         (3,799)   

Deductions for surrender charges (note 2d)

       (1,207)        (3,649)        (185)        -            (247)        -            (5)         -       

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

       (641,383)        (725,078)        (18,016)        (31,708)        (98,784)        (58,941)        (1,413,729)         (1,296,852)   

Asset charges (note 3):

                   

FPVUL & VEL contracts

       (46,875)        (53,800)        (600)        (844)        (6,346)        (4,028)        (9,390)         (6,289)   

MSP contracts

       (1,446)        (1,567)        -            -            (191)        (255)        (753)         (921)   

SL contracts or LSFP contracts

       (3,181)        (4,294)        (517)        (904)        (27)        -            (778)         (756)   

Adjustments to maintain reserves

       (7)        (3)        (1)        6         (294)        (14)        433          (42)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net equity transactions

       (1,303,757)        (1,655,967)        (337,663)        401,048         296,986         890,786         (848,145)         (648,562)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net change in contract owners’ equity

       673,283         (3,291,878)        (286,515)        322,647         592,689         807,552         13,771,476          (2,470,217)   

Contract owners’ equity beginning of period

       12,334,102         15,625,980         577,642         254,995         1,627,920         820,368         131,695,993          134,166,210    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Contract owners’ equity end of period

   $          13,007,385         12,334,102         291,127         577,642         2,220,609         1,627,920         145,467,469          131,695,993    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

CHANGES IN UNITS:

                   

Beginning units

       1,522,830         1,705,119         59,405         25,390         181,772         85,746         10,312,801          10,344,415    

Units purchased

       100,661         110,959         564         37,712         89,029         104,993         157,651          118,128    

Units redeemed

       (250,195)        (293,248)        (33,117)        (3,697)        (57,424)        (8,967)        (206,244)         (149,742)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Ending units

       1,373,296         1,522,830         26,852         59,405         213,377         181,772         10,264,208          10,312,801    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

          NVCCA1     NVCCN1     NVCMD1     NVCMA1  
          2012     2011     2012     2011     2012     2011     2012      2011  

Investment activity:

                   

Net investment income (loss)

   $          61,958         88,531         78,878         49,827         82,677         117,415         64,190          125,102    

Realized gain (loss) on investments

       45,419         166,720         68,960         52,405         187,773         182,885         160,406          250,357    

Change in unrealized gain (loss) on investments

       350,506         (462,112)        60,798         (90,770)        263,737         (489,070)        323,576          (693,783)   

Reinvested capital gains

       58,676         23,688         57,577         11,270         91,788         31,784         126,838          47,031    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

       516,559         (183,173)        266,213         22,732         625,975         (156,986)        675,010          (271,293)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Equity transactions:

                   

Purchase payments received from contract owners (notes 2a and 6)

       1,209,973         1,365,202         1,117,649         763,931         308,528         726,905         379,312          709,421    

Transfers between funds

       53,629         595,011         883,869         674,698         (203,267)        1,505,493         (47,771)         78,494    

Surrenders (note 6)

       (144,168)        (1,851,092)        (204,917)        (17,512)        (185,349)        (68,703)        (417,941)         (252,088)   

Death Benefits (note 4)

       (193)        -            (168)        (11,784)        (58,761)        (24,908)        (3,272)         (4,344)   

Net policy repayments (loans) (note 5)

       (232,250)        6,918         (69,446)        (35,799)        (35,785)        57,224         (97,461)         (16,719)   

Deductions for surrender charges (note 2d)

       (1,829)        (2,419)        -            -            (1,289)        (116)        (4,663)         (3,281)   

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

       (195,567)        (167,846)        (184,438)        (111,708)        (268,441)        (199,039)        (166,013)         (183,958)   

Asset charges (note 3):

                   

FPVUL & VEL contracts

       (12,502)        (11,521)        (11,420)        (5,795)        (15,434)        (11,824)        (15,079)         (16,057)   

MSP contracts

       (354)        (345)        (479)        (369)        (923)        (899)        (3,040)         (3,091)   

SL contracts or LSFP contracts

       (1,360)        (2,444)        (248)        (54)        (4,953)        (4,485)        (4,686)         (4,131)   

Adjustments to maintain reserves

       (1)        1         (1,542)        2         (4)        (35)        (1,746)         (4)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net equity transactions

       675,378         (68,535)        1,528,860         1,255,610         (465,678)        1,979,613         (382,360)         304,242    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net change in contract owners’ equity

       1,191,937         (251,708)        1,795,073         1,278,342         160,297         1,822,627         292,650          32,949    

Contract owners’ equity beginning of period

       3,465,261         3,716,969         2,750,365         1,472,023         5,419,791         3,597,164         4,864,965          4,832,016    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Contract owners’ equity end of period

   $          4,657,198         3,465,261         4,545,438         2,750,365         5,580,088         5,419,791         5,157,615          4,864,965    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

CHANGES IN UNITS:

                   

Beginning units

       353,322         366,231         244,943         133,059         534,737         346,937         514,059          487,147    

Units purchased

       138,297         129,258         173,922         141,157         41,918         216,734         41,616          78,376    

Units redeemed

       (74,110)        (142,167)        (42,577)        (29,273)        (87,052)        (28,934)        (80,409)         (51,464)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Ending units

       417,509         353,322         376,288         244,943         489,603         534,737         475,266          514,059    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

          NVCMC1     NVCBD1     NVLCP1     TRF  
          2012     2011     2012     2011     2012     2011     2012      2011  

Investment activity:

                   

Net investment income (loss)

   $          32,286         27,182         28,512         28,621         29,072         8,266         1,063,425          924,499    

Realized gain (loss) on investments

       44,254         96,093         31,232         6,246         30,973         2,649         (2,231,546)         (2,559,712)   

Change in unrealized gain (loss) on investments

       46,209         (136,877)        6,486         17,136         (16,928)        9,719         11,979,240          2,194,782    

Reinvested capital gains

       32,698         6,423         5,677         -            23,769         232         -             -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

       155,447         (7,179)        71,907         52,003         66,886         20,866         10,811,119          559,569    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Equity transactions:

                   

Purchase payments received from contract owners (notes 2a and 6)

       571,494         330,078         52,913         49,428         21,778         16,503         2,786,942          3,004,516    

Transfers between funds

       437,370         57,945         27,162         334,032         824,814         245,619         (10,677,049)         (2,236,340)   

Surrenders (note 6)

       (18,867)        (172,009)        (134,234)        (70,331)        (31,603)        (7,264)        (1,812,568)         (2,220,965)   

Death Benefits (note 4)

       (148,972)        -            -            -            (47,914)        -            (605,376)         (399,452)   

Net policy repayments (loans) (note 5)

       (99,884)        (1,067)        (9,622)        (10,922)        19,722         (1,431)        (200,903)         (192,914)   

Deductions for surrender charges (note 2d)

       -            (3,045)        (1,439)        (4,954)        -            -            (7,156)         (17,552)   

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

       (102,249)        (78,312)        (33,770)        (34,165)        (67,375)        (25,505)        (2,635,150)         (2,728,105)   

Asset charges (note 3):

                   

FPVUL & VEL contracts

       (3,740)        (2,460)        (2,796)        (2,553)        (1,771)        (1,060)        (137,393)         (137,553)   

MSP contracts

       (2,114)        (2,227)        (103)        (83)        -            -            (7,537)         (7,674)   

SL contracts or LSFP contracts

       (145)        (186)        (1,078)        (1,072)        (1,040)        (56)        (6,426)         (6,576)   

Adjustments to maintain reserves

       (2)        4         (3)        1         (2)        (2)        1,369          (497)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net equity transactions

       632,891         128,721         (102,970)        259,381         716,609         226,804         (13,301,247)         (4,943,112)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net change in contract owners’ equity

       788,338         121,542         (31,063)        311,384         783,495         247,670         (2,490,128)         (4,383,543)   

Contract owners’ equity beginning of period

       1,234,991         1,113,449         995,438         684,054         480,024         232,354         81,586,181          85,969,724    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Contract owners’ equity end of period

   $          2,023,329         1,234,991         964,375         995,438         1,263,519         480,024         79,096,053          81,586,181    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

CHANGES IN UNITS:

                   

Beginning units

       114,875         103,299         80,629         59,061         35,901         18,485         6,666,988          7,045,126    

Units purchased

       87,328         43,660         14,746         34,635         68,864         20,454         204,142          239,180    

Units redeemed

       (33,847)        (32,084)        (22,883)        (13,067)        (16,762)        (3,038)        (1,240,422)         (617,318)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Ending units

       168,356         114,875         72,492         80,629         88,003         35,901         5,630,708          6,666,988    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

          GBF     CAF     GVIX2     GVIX6  
          2012     2011     2012     2011     2012     2011     2012      2011  

Investment activity:

                   

Net investment income (loss)

   $          2,781,071         3,234,338         76,038         77,737         162,066         188,406         23,933          21,240    

Realized gain (loss) on investments

       535,686         403,773         578,688         643,810         (75,071)        48,569         (6,975)         12,811    

Change in unrealized gain (loss) on investments

       (3,875,782)        3,883,294         1,108,487         (819,555)        1,084,277         (1,340,495)        139,722          (139,217)   

Reinvested capital gains

       4,319,147         332,705         -            -            -            -            -             -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

       3,760,122         7,854,110         1,763,213         (98,008)        1,171,272         (1,103,520)        156,680          (105,166)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Equity transactions:

                   

Purchase payments received from contract owners (notes 2a and 6)

       3,292,936         4,170,130         1,168,928         1,233,752         651,738         463,606         94,849          95,149    

Transfers between funds

       17,257,166         (1,482,738)        322,777         20,371         (1,086,317)        1,436,470         96,243          145,852    

Surrenders (note 6)

       (5,432,228)        (6,128,592)        (987,798)        (1,040,157)        (19,053)        (58,996)        (87,677)         (5,575)   

Death Benefits (note 4)

       (294,177)        (405,386)        (94,082)        (47,967)        (3,538)        (2,190)        (7,045)         -       

Net policy repayments (loans) (note 5)

       172,894         777,095         71,000         (61,852)        (130,524)        (74)        (6,503)         1,110    

Deductions for surrender charges (note 2d)

       (6,681)        (30,162)        (704)        (1,932)        -            -            (4,278)         (456)   

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

       (3,773,197)        (3,568,165)        (954,534)        (976,590)        (121,970)        (105,043)        (23,980)         (26,594)   

Asset charges (note 3):

                   

FPVUL & VEL contracts

       (104,402)        (110,597)        (60,128)        (59,037)        (2,621)        (1,453)        (1,430)         (1,355)   

MSP contracts

       (8,798)        (9,392)        (1,485)        (1,530)        -            -            (49)         (42)   

SL contracts or LSFP contracts

       (27,223)        (25,962)        (2,464)        (2,552)        -            -            (1,343)         (1,299)   

Adjustments to maintain reserves

       623         38         54         43         78         (6)        (5)         2    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net equity transactions

       11,076,913         (6,813,731)        (538,436)        (937,451)        (712,207)        1,732,314         58,782          206,792    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net change in contract owners’ equity

       14,837,035         1,040,379         1,224,777         (1,035,459)        459,065         628,794         215,462          101,626    

Contract owners’ equity beginning of period

       117,902,212         116,861,833         12,734,936         13,770,395         7,206,513         6,577,719         777,610          675,984    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Contract owners’ equity end of period

   $          132,739,247         117,902,212         13,959,713         12,734,936         7,665,578         7,206,513         993,072          777,610    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

CHANGES IN UNITS:

                   

Beginning units

       6,292,641         6,649,298         1,360,798         1,455,537         1,046,431         832,298         94,205          71,480    

Units purchased

       1,165,075         408,602         171,722         177,222         118,454         262,613         22,812          26,977    

Units redeemed

       (609,065)        (765,259)        (227,618)        (271,961)        (222,981)        (48,480)        (15,314)         (4,252)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Ending units

       6,848,651         6,292,641         1,304,902         1,360,798         941,904         1,046,431         101,703          94,205    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

(Continued)

 

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

          GVIDA     NVDBL2     NVDCA2     GVIDC  
          2012     2011     2012     2011     2012     2011     2012      2011  

Investment activity:

                   

Net investment income (loss)

   $          319,201         464,517         23,788         3,141         5,903         3,952         192,970          322,931    

Realized gain (loss) on investments

       (730,441)        (3,985,702)        4,955         873         4,896         3,940         328,956          589,714    

Change in unrealized gain (loss) on investments

       3,872,789         2,542,414         28,356         (4,970)        22,513         (12,931)        (85,405)         (584,410)   

Reinvested capital gains

       -            -            15,045         184         3,931         233         157,485          46,273    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

       3,461,549         (978,771)        72,144         (772)        37,243         (4,806)        594,006          374,508    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Equity transactions:

                   

Purchase payments received from contract owners (notes 2a and 6)

       1,678,655         3,374,258         18,982         15,813         44,573         43,120         497,748          711,755    

Transfers between funds

       (2,418,771)        (1,493,952)        1,264,264         81,770         7,570         130,599         449,736          (1,221,860)   

Surrenders (note 6)

       (3,269,805)        (3,576,407)        (51,095)        (14,462)        (5,518)        (26)        (974,344)         (869,276)   

Death Benefits (note 4)

       (12,571)        (8,253)        -            -            -            -            (277,261)         (245,865)   

Net policy repayments (loans) (note 5)

       (236,967)        (258,681)        (4,916)        (19)        969         (254)        (51,678)         (24,619)   

Deductions for surrender charges (note 2d)

       (58,545)        (68,120)        -            -            -            -            (1,960)         (15,025)   

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

       (958,129)        (1,057,140)        (35,963)        (8,423)        (15,405)        (11,643)        (478,934)         (517,485)   

Asset charges (note 3):

                   

FPVUL & VEL contracts

       (68,990)        (72,536)        (2,538)        (889)        (1,003)        (748)        (26,033)         (25,917)   

MSP contracts

       (5,060)        (5,165)        (12)        (36)        -            -            (7,922)         (7,837)   

SL contracts or LSFP contracts

       (5,133)        (5,414)        (640)        -            (437)        (172)        (2,271)         (3,366)   

Adjustments to maintain reserves

       132         1,189         4         (8)        -            2         34          (6)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net equity transactions

       (5,355,184)        (3,170,221)        1,188,086         73,746         30,749         160,878         (872,885)         (2,219,501)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net change in contract owners’ equity

       (1,893,635)        (4,148,992)        1,260,230         72,974         67,992         156,072         (278,879)         (1,844,993)   

Contract owners’ equity beginning of period

       23,799,572         27,948,564         165,980         93,006         282,489         126,417         11,847,913          13,692,906    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Contract owners’ equity end of period

   $          21,905,937         23,799,572         1,426,210         165,980         350,481         282,489         11,569,034          11,847,913    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

CHANGES IN UNITS:

                   

Beginning units

       1,613,233         1,822,508         12,871         7,276         20,856         9,246         813,221          968,053    

Units purchased

       109,323         168,137         94,018         10,979         4,025         12,761         98,961          76,781    

Units redeemed

       (440,829)        (377,412)        (5,783)        (5,384)        (1,829)        (1,151)        (156,257)         (231,613)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Ending units

       1,281,727         1,613,233         101,106         12,871         23,052         20,856         755,925          813,221    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

          GVIDM     GVDMA     GVDMC     MCIF  
          2012     2011     2012     2011     2012     2011     2012      2011  

Investment activity:

                   

Net investment income (loss)

   $          1,122,517         1,658,691         1,160,635         1,552,463         285,370         384,722         543,093          388,040    

Realized gain (loss) on investments

       (1,819,431)        (2,265,458)     

 

(1,452,859)

  

     (1,940,557)        (93,047)        (315,394)        594,311          (1,270,826)   

Change in unrealized gain (loss) on investments

       8,118,855         627,883         9,550,803         (1,218,419)        990,611         296,956         3,940,213          (591,806)   

Reinvested capital gains

       -            -            -            -            66,877         -            3,855,772          966,474    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

       7,421,941         21,116         9,258,579         (1,606,513)        1,249,811         366,284         8,933,389          (508,118)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Equity transactions:

                   

Purchase payments received from contract owners (notes 2a and 6)

       3,874,511         5,086,626         6,187,077         6,760,857         884,447         935,459         3,317,787          2,998,002    

Transfers between funds

       (5,884,225)        (6,010,159)        (2,080,904)        (2,969,879)        423,024         (1,083,185)        (1,994,548)         4,992,751    

Surrenders (note 6)

       (4,650,215)        (7,592,262)        (6,057,436)        (6,724,913)        (450,141)        (1,274,729)        (5,885,452)         (8,036,581)   

Death Benefits (note 4)

       (607,056)        (268,569)        (134,786)        (254,899)        (247,132)        (242,085)        (148,586)         (172,368)   

Net policy repayments (loans) (note 5)

       (579,253)        (367,290)        (564,659)        (372,836)        (179,009)        (114,287)        (360,174)         (89,330)   

Deductions for surrender charges (note 2d)

       (52,558)        (107,418)        (123,456)        (256,725)        (8,690)        (16,923)        (52,113)         (17,519)   

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

       (3,009,000)        (3,297,709)        (3,131,192)        (3,321,782)        (692,215)        (730,179)        (1,536,594)         (1,592,203)   

Asset charges (note 3):

                   

FPVUL & VEL contracts

       (187,109)        (193,809)        (236,596)        (246,463)        (40,598)        (39,811)        (88,620)         (91,002)   

MSP contracts

       (34,462)        (35,811)        (18,165)        (18,470)        (18,141)        (18,221)        (1,527)         (1,706)   

SL contracts or LSFP contracts

       (30,144)        (35,365)        (36,080)        (34,489)        (7,466)        (7,662)        (11,276)         (12,860)   

Adjustments to maintain reserves

       (451)        (292)        (17,166)        28         25         (5)        209          482    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net equity transactions

       (11,159,962)        (12,822,058)        (6,213,363)        (7,439,571)        (335,896)        (2,591,628)        (6,760,894)         (2,022,334)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net change in contract owners’ equity

       (3,738,021)        (12,800,942)        3,045,216         (9,046,084)        913,915         (2,225,344)        2,172,495          (2,530,452)   

Contract owners’ equity beginning of period

       73,330,638         86,131,580         70,246,569         79,292,653         16,125,480         18,350,824         55,274,015          57,804,467    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Contract owners’ equity end of period

   $          69,592,617         73,330,638         73,291,785         70,246,569         17,039,395         16,125,480         57,446,510          55,274,015    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

CHANGES IN UNITS:

                   

Beginning units

       4,870,058         5,723,333         4,650,706         5,141,217         1,064,595         1,238,343         2,382,523          2,409,722    

Units purchased

       257,495         422,416         414,673         457,600         112,476         99,784         142,546          469,319    

Units redeemed

       (956,893)        (1,275,691)        (800,489)        (948,111)        (135,289)        (273,532)        (383,315)         (496,518)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Ending units

       4,170,660         4,870,058         4,264,890         4,650,706         1,041,782         1,064,595         2,141,754          2,382,523    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

          SAM     SAM5     NVMIG3     GVDIVI  
          2012     2011     2012     2011     2012     2011     2012      2011  

Investment activity:

                   

Net investment income (loss)

   $          (17,194)        (17,262)        (444,932)        (479,675)        91,269         225,325         2,556          14,038    

Realized gain (loss) on investments

       13,908         -            -            -            405,624         402,933         (38,887)         (61,720)   

Change in unrealized gain (loss) on investments

       -            -            -            -            1,782,193         (2,233,220)        139,565          (76,477)   

Reinvested capital gains

       -            -            -            -            -            -            -             -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

       (3,286)        (17,262)        (444,932)        (479,675)        2,279,086         (1,604,962)        103,234          (124,159)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Equity transactions:

                   

Purchase payments received from contract owners (notes 2a and 6)

       8,357,674         8,417,535         58,138,519         62,025,620         983,049         1,038,000         (1)         (5)   

Transfers between funds

       21,028,982         15,243,416         (27,515,392)        (51,944,074)        (442,576)        (273,910)        (3,267)         (31,310)   

Surrenders (note 6)

       (29,267,209)        (21,958,793)        (30,293,786)        (31,088,665)        (1,077,913)        (1,295,468)        (21,808)         (62,530)   

Death Benefits (note 4)

       (304,978)        (768,130)        (352,092)        (260,075)        (294,314)        (72,985)        (950)         (4,201)   

Net policy repayments (loans) (note 5)

       1,136,142         1,836,300         (3,748,055)        676,561         (5,907)        (22,788)        (3,325)         (2,599)   

Deductions for surrender charges (note 2d)

       (212,087)        (320,994)        -            -            (3,602)        (6,532)        (485)         (584)   

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

       (5,660,248)        (5,760,948)        (5,270,802)        (5,118,453)        (802,691)        (879,697)        (25,015)         (29,018)   

Asset charges (note 3):

                   

FPVUL & VEL contracts

       (294,975)        (326,043)        (24,461)        (18,304)        (58,440)        (64,636)        (2,079)         (2,461)   

MSP contracts

       (18,023)        (19,589)        -            -            (2,093)        (2,179)        (107)         (154)   

SL contracts or LSFP contracts

       (46,025)        (47,054)        -            -            (5,058)        (6,073)        (182)         (263)   

Adjustments to maintain reserves

       790         (2,373)        5,286         4,507         6         74         (14)         15    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net equity transactions

       (5,279,957)        (3,706,673)        (9,060,783)        (25,722,883)        (1,709,539)        (1,586,194)        (57,233)         (133,110)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net change in contract owners’ equity

       (5,283,243)        (3,723,935)        (9,505,715)        (26,202,558)        569,547         (3,191,156)        46,001          (257,269)   

Contract owners’ equity beginning of period

       91,250,508         94,974,443         221,605,553         247,808,111         15,213,965         18,405,121         636,395          893,664    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Contract owners’ equity end of period

   $          85,967,265         91,250,508         212,099,838         221,605,553         15,783,512         15,213,965         682,396          636,395    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

CHANGES IN UNITS:

                   

Beginning units

       6,478,873         6,740,523         19,264,884         21,493,676         1,756,758         1,926,194         43,242          50,861    

Units purchased

       1,749,559         1,531,409         5,253,901         5,652,339         117,337         140,844         -             1    

Units redeemed

       (2,119,855)        (1,793,059)        (6,057,373)        (7,881,131)        (299,957)        (310,280)        (3,711)         (7,620)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Ending units

       6,108,577         6,478,873         18,461,412         19,264,884         1,574,138         1,756,758         39,531         43,242    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

          GVDIV3     NVMLG1     NVMLV1     NVMMG1  
          2012     2011     2012     2011     2012     2011     2012      2011  

Investment activity:

                   

Net investment income (loss)

   $          18,409         100,047         48,816         (3,144)        87,377         76,229         (223)         (203)   

Realized gain (loss) on investments

       (700,455)        (625,243)        398,612         254,252         872         161,782         2,059,130          1,945,976    

Change in unrealized gain (loss) on investments

       1,436,460         (340,538)        1,008,694         (517,881)        1,005,770         (901,778)        (479,350)         (3,192,784)   

Reinvested capital gains

       -            -            271,688         -            -            231,416         2,673,054          -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

       754,414         (865,734)        1,727,810         (266,773)        1,094,019         (432,351)        4,252,611          (1,247,011)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Equity transactions:

                   

Purchase payments received from contract owners (notes 2a and 6)

       296,780         430,805         670,952         1,109,396         390,385         447,395         1,786,976          2,254,131    

Transfers between funds

       (81,405)        92,743         (1,782,727)        (282,079)        (443,155)        (137,091)        (1,030,570)         (1,705,218)   

Surrenders (note 6)

       (359,091)        (323,081)        (649,895)        (1,111,571)        (370,945)        (367,125)        (4,249,978)         (2,997,919)   

Death Benefits (note 4)

       (4,266)        (15,062)        (52,551)        (29,826)        (51,569)        (32,330)        (192,123)         (134,408)   

Net policy repayments (loans) (note 5)

       (14,679)        (31,886)        (5,580)        143,692         (16,832)        (45,449)        (103,767)         (7,213)   

Deductions for surrender charges (note 2d)

       (6,888)        (10,967)        (8,514)        (13,527)        (4,977)        (11,861)        (8,328)         (27,898)   

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

       (190,294)        (212,106)        (515,041)        (570,005)        (303,235)        (317,009)        (1,542,998)         (1,660,105)   

Asset charges (note 3):

                   

FPVUL & VEL contracts

       (16,761)        (18,572)        (36,205)        (38,394)        (22,123)        (22,907)        (115,024)         (119,955)   

MSP contracts

       (184)        (204)        (1,041)        (1,051)        (495)        (565)        (2,593)         (2,597)   

SL contracts or LSFP contracts

       (2,318)        (2,577)        (4,443)        (4,555)        (2,374)        (2,389)        (10,330)         (12,455)   

Adjustments to maintain reserves

       6         (13)        11         (344,897)        (1)        16,924         25          405    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net equity transactions

       (379,100)        (90,920)        (2,385,034)        (1,142,817)        (825,321)        (472,407)        (5,468,710)         (4,413,232)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net change in contract owners’ equity

       375,314         (956,654)        (657,224)        (1,409,590)        268,698         (904,758)        (1,216,099)         (5,660,243)   

Contract owners’ equity beginning of period

       4,521,956         5,478,610         11,243,709         12,653,299         6,445,840         7,350,598         29,667,648          35,327,891    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Contract owners’ equity end of period

   $          4,897,270         4,521,956         10,586,485         11,243,709         6,714,538         6,445,840         28,451,549          29,667,648    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

CHANGES IN UNITS:

                   

Beginning units

       503,863         512,098         1,215,465         1,327,246         734,771         788,068         3,060,013          3,489,689    

Units purchased

       36,326         54,869         71,271         170,364         44,414         57,375         197,474          219,773    

Units redeemed

       (74,729)        (63,104)        (303,493)        (282,145)        (129,177)        (110,672)        (703,522)         (649,449)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Ending units

       465,460         503,863         983,243         1,215,465         650,008         734,771         2,553,965          3,060,013    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

          NVMMV1     NVMMV2     SCGF     SCVF  
          2012     2011     2012     2011     2012     2011     2012      2011  

Investment activity:

                   

Net investment income (loss)

   $          759         649         113,964         87,266         (6,615)        (7,456)        255,449          137,898    

Realized gain (loss) on investments

       1,533         (208)        237,316         521,704         140,615         (248,914)        (1,082,954)         (1,991,935)   

Change in unrealized gain (loss) on investments

       1,733         (5,728)        199,907         (865,842)        1,458,637         234,640         6,911,347          91,650    

Reinvested capital gains

       6,180         409         978,126         44,282         -            -            -             -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

       10,205         (4,878)        1,529,313         (212,590)        1,592,637         (21,730)        6,083,842          (1,762,387)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Equity transactions:

                   

Purchase payments received from contract owners (notes 2a and 6)

       2         (5)        446,791         760,134         637,007         687,394         1,728,708          1,845,424    

Transfers between funds

       (5,379)        1,284         (221,067)        (851,405)        (746,124)        (116,467)        (2,647,475)         (1,140,225)   

Surrenders (note 6)

       -            -            (670,476)        (1,168,528)        (657,001)        (1,186,190)        (1,827,568)         (5,342,407)   

Death Benefits (note 4)

       -            -            (15,218)        (29,063)        (53,913)        (49,546)        (657,285)         (111,501)   

Net policy repayments (loans) (note 5)

       (2,011)        (8)        7,008         (97,730)        (52,028)        19,957         (132,545)         (470,011)   

Deductions for surrender charges (note 2d)

       -            -            (1,392)        (7,706)        (3,879)        (7,187)        (8,817)         (17,894)   

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

       (1,970)        (1,527)        (462,699)        (520,636)        (497,028)        (528,812)        (1,341,936)         (1,416,212)   

Asset charges (note 3):

                   

FPVUL & VEL contracts

       (26)        (14)        (37,815)        (40,831)        (35,649)        (36,902)        (97,981)         (101,325)   

MSP contracts

       -            -            (1,167)        (1,123)        (974)        (923)        (2,988)         (2,961)   

SL contracts or LSFP contracts

       -            -            (4,646)        (4,964)        (2,347)        (2,448)        (6,549)         (7,693)   

Adjustments to maintain reserves

       (3)        -            (3)        (1)        (11)        (853)        55          (2)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net equity transactions

       (9,387)        (270)        (960,684)        (1,961,853)        (1,411,947)        (1,221,977)        (4,994,381)         (6,764,807)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net change in contract owners’ equity

       818         (5,148)        568,629         (2,174,443)        180,690         (1,243,707)        1,089,461          (8,527,194)   

Contract owners’ equity beginning of period

       65,795         70,943         9,755,318         11,929,761         12,240,843         13,484,550         31,727,492          40,254,686    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Contract owners’ equity end of period

   $          66,613         65,795         10,323,947         9,755,318         12,421,533         12,240,843         32,816,953          31,727,492    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

CHANGES IN UNITS:

                   

Beginning units

       6,389         6,739         946,834         1,131,006         759,169         832,004         1,219,999          1,492,045    

Units purchased

       362         1,124         51,313         65,392         49,867         115,150         69,017          70,664    

Units redeemed

       (1,192)        (1,474)        (136,900)        (249,564)        (129,292)        (187,985)        (241,020)         (342,710)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Ending units

       5,559         6,389         861,247         946,834         679,744         759,169         1,047,996          1,219,999    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

           SCF      MSBF      NVSTB1      NVSTB2  
           2012      2011      2012      2011      2012      2011      2012      2011  

Investment activity:

                          

Net investment income (loss)

   $           22,223          226,382          332,554          648,559          450,303          85,154          30,942          41,896    

Realized gain (loss) on investments

        1,862,818          (5,234,397)         317,400          1,045,694          15,785          8,717          20,382          9,277    

Change in unrealized gain (loss) on investments

        4,712,844          2,297,643          921,942          (775,063)         124,608          (28,529)         30,852          (13,938)   

Reinvested capital gains

        -             -             -             -             -             -             -             -       
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

        6,597,885          (2,710,372)         1,571,896          919,190          590,696          65,342          82,176          37,235    
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Equity transactions:

                          

Purchase payments received from contract owners (notes 2a and 6)

        1,988,922          2,125,166          470,905          551,905          9,154          9,198          67,878          94,830    

Transfers between funds

        (3,039,762)         (10,677,241)         (1,311,997)         (3,948,931)         23,312,721          (101,964)         257,184          (987,086)   

Surrenders (note 6)

        (4,131,333)         (5,840,599)         (812,353)         (1,889,854)         (50,000)         -             (421,223)         (682,297)   

Death Benefits (note 4)

        (155,788)         (153,125)         (91,537)         (175,046)         -             -             (7,256)         (31,984)   

Net policy repayments (loans) (note 5)

        348,676          (283,600)         (6,674)         (73,679)         (14,187)         (25,670)         (18,397)         84,753    

Deductions for surrender charges (note 2d)

        (31,523)         (25,642)         (3,617)         (6,405)         -             -             (645)         (15)   

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

        (1,589,263)         (1,748,983)         (467,620)         (496,863)         (183,665)         (79,925)         (64,604)         (75,454)   

Asset charges (note 3):

                          

FPVUL & VEL contracts

        (101,430)         (108,272)         (31,977)         (32,365)         (18)         (19)         (4,669)         (5,692)   

MSP contracts

        (2,963)         (3,236)         (1,949)         (1,860)         -             -             (478)         (488)   

SL contracts or LSFP contracts

        (9,715)         (11,916)         (5,831)         (6,250)         -             -             (3,067)         (3,263)   

Adjustments to maintain reserves

        289          (1,821)         51          10          91          (1)         (6)         7    
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net equity transactions

        (6,723,890)         (16,729,269)         (2,262,599)         (6,079,338)         23,074,096          (198,381)         (195,283)         (1,606,689)   
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net change in contract owners’ equity

        (126,005)         (19,439,641)         (690,703)         (5,160,148)         23,664,792          (133,039)         (113,107)         (1,569,454)   

Contract owners’ equity beginning of period

        44,794,477          64,234,118          14,257,438          19,417,586          5,423,030          5,556,069          2,415,848          3,985,302    
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Contract owners’ equity end of period

   $           44,668,472          44,794,477          13,566,735          14,257,438          29,087,822          5,423,030          2,302,741          2,415,848    
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

CHANGES IN UNITS:

                          

Beginning units

        2,054,385          2,874,465          729,787          1,070,758          490,371          508,406          218,639          365,359    

Units purchased

        88,300          98,102          50,313          91,916          2,058,282          1,876          52,523          20,140    

Units redeemed

        (363,102)         (918,182)         (160,673)         (432,887)         (23,262)         (19,911)         (69,853)         (166,860)   
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Ending units

        1,779,583          2,054,385          619,427          729,787          2,525,391          490,371          201,309          218,639    
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

          NVOLG1     NVTIV3     EIF     NVRE1  
          2012     2011     2012     2011     2012     2011     2012      2011  

Investment activity:

                   

Net investment income (loss)

   $          777,344         776,665         11,649         12,397         102,064         124,977         327,750          258,688    

Realized gain (loss) on investments

       1,256,903         260,324         (19,898)        (7,952)        (307,480)        (215,306)        2,183,109          1,467,534    

Change in unrealized gain (loss) on investments

       16,746,416         (3,572,901)        85,641         (74,518)        1,671,344         (98,112)        (791,271)         259,013    

Reinvested capital gains

       -            403,471         7,155         489         -            -            3,012,141          130,115    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

       18,780,663         (2,132,441)        84,547         (69,584)        1,465,928         (188,441)        4,731,729          2,115,350    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Equity transactions:

                   

Purchase payments received from contract owners (notes 2a and 6)

       6,842,312         7,868,043         27,841         43,827         437,665         512,721         1,674,704          1,703,977    

Transfers between funds

       (4,354,074)        (6,453,769)        43,166         327,224         (1,261,704)        264,474         (703,069)         2,999,218    

Surrenders (note 6)

       (8,571,165)        (10,571,405)        (55,244)        (10,051)        (695,333)        (1,113,724)        (2,162,174)         (3,341,571)   

Death Benefits (note 4)

       (479,420)        (727,340)        -            -            (16,615)        (8,743)        (197,098)         (186,980)   

Net policy repayments (loans) (note 5)

       (392,078)        (912,836)        13,711         (11,651)        25,329         17,001         (138,836)         (115,947)   

Deductions for surrender charges (note 2d)

       (58,054)        (87,062)        (1,546)        (337)        (23,837)        (23,790)        (22,624)         (29,801)   

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

       (5,535,135)        (5,708,891)        (18,315)        (13,928)        (383,625)        (417,284)        (1,332,424)         (1,283,788)   

Asset charges (note 3):

                   

FPVUL & VEL contracts

       (428,324)        (437,040)        (1,341)        (1,033)        (30,901)        (32,078)        (102,745)         (96,579)   

MSP contracts

       (14,426)        (14,230)        -            -            (945)        (1,033)        (3,452)         (3,253)   

SL contracts or LSFP contracts

       (43,003)        (46,297)        (304)        (271)        (3,433)        (4,102)        (10,244)         (10,119)   

Adjustments to maintain reserves

       71         118         2         6         7         55         53          14    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net equity transactions

       (13,033,296)        (17,090,709)        7,970         333,786         (1,953,392)        (806,503)        (2,997,909)         (364,829)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net change in contract owners’ equity

       5,747,367         (19,223,150)        92,517         264,202         (487,464)        (994,944)        1,733,820          1,750,521    

Contract owners’ equity beginning of period

       103,670,822         122,893,972         429,943         165,741         8,864,238         9,859,182         30,043,488          28,292,967    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Contract owners’ equity end of period

   $          109,418,189         103,670,822         522,460         429,943         8,376,774         8,864,238         31,777,308          30,043,488    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

CHANGES IN UNITS:

                   

Beginning units

       7,462,793         8,648,974         35,418         11,957         671,749         728,809         2,715,367          2,841,911    

Units purchased

       499,651         599,916         7,378         26,668         34,484         63,656         173,024          362,193    

Units redeemed

       (1,325,947)        (1,786,097)        (6,799)        (3,207)        (172,006)        (120,716)        (432,534)         (488,737)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Ending units

       6,636,497         7,462,793         35,997         35,418         534,227         671,749         2,455,857          2,715,367    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

          ALVGIA     ALVIVA     ALVSVA     ACVIG  
          2012     2011     2012     2011     2012     2011     2012     2011  

Investment activity:

                  

Net investment income (loss)

   $          119,666         86,344         112,986         503,585         49,177         41,672         345,491         257,023    

Realized gain (loss) on investments

       506,735         (1,820,550)        (1,259,367)        1,668,879         1,442,292         1,297,540         (221,743)        (159,456)   

Change in unrealized gain (loss) on investments

       653,369         2,315,307         2,127,025         (4,885,601)        (38,853)        (2,240,924)        2,174,954         471,234    

Reinvested capital gains

       -            -            -            -            347,078         -            -            -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

       1,279,770         581,101         980,644         (2,713,137)        1,799,694         (901,712)        2,298,702         568,801    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Equity transactions:

                  

Purchase payments received from contract owners (notes 2a and 6)

       355,062         330,344         838,020         885,861         755,094         833,145         906,460         830,607    

Transfers between funds

       366,730         (706,234)        (4,260,029)        (2,717,805)        (1,208,587)        465,701         (1,147,228)        (41,306)   

Surrenders (note 6)

       (179,647)        (3,947,642)        (111,410)        (1,111,613)        (1,356,725)        (936,181)        (742,507)        (907,788)   

Death Benefits (note 4)

       (19,878)        (49,032)        (3,252)        (1,690)        (38,494)        (55,234)        (92,321)        (88,559)   

Net policy repayments (loans) (note 5)

       (22,214)        122,290         (11,393)        9,355         (6,635)        (126,746)        68,692         (143,939)   

Deductions for surrender charges (note 2d)

       (1,188)        (3,011)        -            -            (1,889)        (3,131)        (1,788)        (4,388)   

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

       (190,890)        (174,105)        (144,217)        (220,709)        (219,465)        (254,214)        (755,524)        (779,462)   

Asset charges (note 3):

                  

FPVUL & VEL contracts

       (9,858)        (9,383)        (3,620)        (3,334)        (17,054)        (19,091)        (48,838)        (48,213)   

MSP contracts

       (57)        (85)        -            -            (778)        (374)        (2,041)        (1,885)   

SL contracts or LSFP contracts

       (899)        (823)        -            -            (1,305)        (1,574)        (4,553)        (4,670)   

Adjustments to maintain reserves

       (468)        (13)        (354)        127         (245)        7         29         63    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net equity transactions

       296,693         (4,437,694)        (3,696,255)        (3,159,808)        (2,096,083)        (97,692)        (1,819,619)        (1,189,540)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net change in contract owners’ equity

       1,576,463         (3,856,593)        (2,715,611)        (5,872,945)        (296,389)        (999,404)        479,083         (620,739)   

Contract owners’ equity beginning of period

       7,348,129         11,204,722         10,936,764         16,809,709         10,452,758         11,452,162         16,396,104         17,016,843    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Contract owners’ equity end of period

   $          8,924,592         7,348,129         8,221,153         10,936,764         10,156,369         10,452,758         16,875,187         16,396,104    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

CHANGES IN UNITS:

                  

Beginning units

       450,279         731,299         1,730,518         2,145,374         481,437         482,669         1,098,701         1,172,180    

Units purchased

       52,143         32,921         124,065         172,361         41,534         86,815         62,047         80,185    

Units redeemed

       (36,031)        (313,941)        (718,489)        (587,217)        (129,441)        (88,047)        (176,099)        (153,664)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Ending units

       466,391         450,279         1,136,094         1,730,518         393,530         481,437         984,649         1,098,701    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

          ACVIP2     ACVI     ACVMV1     ACVU1  
          2012     2011     2012     2011     2012     2011     2012      2011  

Investment activity:

                   

Net investment income (loss)

   $          867,407         1,311,944         29,113         119,496         127,242         60,750         (1,920)         (1,444)   

Realized gain (loss) on investments

       479,678         380,351         47,633         1,317,778         100,040         596,113         242,407          77,242    

Change in unrealized gain (loss) on investments

       352,341         1,551,582         584,636         (1,596,890)        391,069         (802,430)        (65,952)         (65,898)   

Reinvested capital gains

       796,891         387,031         -            -            336,528         110,630         -             -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

       2,496,317         3,630,908         661,382         (159,616)        954,879         (34,937)        174,535          9,900    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Equity transactions:

                   

Purchase payments received from contract owners (notes 2a and 6)

       2,277,636         1,122,583         94,294         68,873         729,393         739,381         47,903          16,853    

Transfers between funds

       (503,984)        383,404         (984,803)        (3,818,429)        801,973         621,474         (524,060)         411,997    

Surrenders (note 6)

       (980,938)        (925,304)        (244,055)        (1,600,410)        (252,062)        (190,660)        (42,454)         (4,985)   

Death Benefits (note 4)

       (37,371)        (50,034)        (2,631)        (12,557)        (51,550)        (156)        (1,057)         (1,503)   

Net policy repayments (loans) (note 5)

       303,473         (1,198,070)        1,461         (2,248)        (35,619)        (166,045)        121,014          (324)   

Deductions for surrender charges (note 2d)

       (11,118)        (8,509)        -            -            (4,109)        (2,242)        -             -       

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

       (542,665)        (484,736)        (122,790)        (161,705)        (214,797)        (161,779)        (18,045)         (14,843)   

Asset charges (note 3):

                   

FPVUL & VEL contracts

       (34,292)        (30,653)        (7)        2         (13,909)        (10,454)        -             1    

MSP contracts

       (1,722)        (1,427)        -            -            (582)        (561)        -             -       

SL contracts or LSFP contracts

       (63,305)        (60,497)        -            -            (996)        (1,142)        (3)         -       

Adjustments to maintain reserves

       (15)        370         1,653         (701)        (275)        (61)        9          (16)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net equity transactions

       405,699         (1,252,873)        (1,256,878)        (5,527,175)        957,467         827,755         (416,693)         407,180    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net change in contract owners’ equity

       2,902,016         2,378,035         (595,496)        (5,686,791)        1,912,346         792,818         (242,158)         417,080    

Contract owners’ equity beginning of period

       33,628,071         31,250,036         4,119,050         9,805,841         5,206,884         4,414,066         1,448,839          1,031,759    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Contract owners’ equity end of period

   $          36,530,087         33,628,071         3,523,554         4,119,050         7,119,230         5,206,884         1,206,681          1,448,839    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

CHANGES IN UNITS:

                   

Beginning units

       2,138,750         2,220,925         380,507         823,661         337,657         284,028         119,563          85,998    

Units purchased

       231,868         178,096         11,440         13,972         103,692         100,199         12,359          35,633    

Units redeemed

       (207,091)        (260,271)        (123,359)        (457,126)        (44,002)        (46,570)        (44,204)         (2,068)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Ending units

       2,163,527         2,138,750         268,588         380,507         397,347         337,657         87,718          119,563    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

          ACVV     ACVVS1     DVMCS     DVSCS  
          2012     2011     2012     2011     2012     2011     2012      2011  

Investment activity:

                   

Net investment income (loss)

   $          259,591         282,542         (3,097)        (3,257)        4,067         8,814         120,572          163,784    

Realized gain (loss) on investments

       1,300,226         2,502,767         176,768         103,892         43,980         361,543         3,924,504          2,233,176    

Change in unrealized gain (loss) on investments

       339,426         (2,977,804)        95,028         (256,971)        159,764         (339,265)        643,966          (1,232,864)   

Reinvested capital gains

       -            -            -            -            -            -            1,513,153          91,150    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

       1,899,243         (192,495)        268,699         (156,336)        207,811         31,092         6,202,195          1,255,246    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Equity transactions:

                   

Purchase payments received from contract owners (notes 2a and 6)

       832,566         709,128         66,997         98,762         5,004         5,757         2,431,965          1,902,444    

Transfers between funds

       (2,518,646)        (2,882,803)        (203,694)        30,808         (81,937)        (476,050)        1,355,461          7,590,034    

Surrenders (note 6)

       (946,719)        (1,136,444)        (51,999)        (4,541)        (366)        (89,758)        (1,482,959)         (5,461,521)   

Death Benefits (note 4)

       (9,823)        (12,601)        -            (368)        (1,586)        (8,501)        (119,315)         (157,065)   

Net policy repayments (loans) (note 5)

       (5,081)        164,788         (119)        (1,791)        341         (800)        46,758          369,634    

Deductions for surrender charges (note 2d)

       -            -            -            -            -            -            (7,956)         (11,990)   

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

       (261,957)        (261,127)        (60,073)        (60,555)        (20,181)        (22,606)        (857,552)         (761,536)   

Asset charges (note 3):

                   

FPVUL & VEL contracts

       (3,129)        (1,951)        (162)        (138)        -            -            (33,938)         (32,070)   

MSP contracts

       -            -            (68)        (52)        -            -            (713)         (671)   

SL contracts or LSFP contracts

       (10)        (3)        -            -            -            -            (5,170)         (4,769)   

Adjustments to maintain reserves

       215         5,748         (63)        100         13         (26)        286          (203)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net equity transactions

       (2,912,584)        (3,415,265)        (249,181)        62,225         (98,712)        (591,984)        1,326,867          3,432,287    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net change in contract owners’ equity

       (1,013,341)        (3,607,760)        19,518         (94,111)        109,099         (560,892)        7,529,062          4,687,533    

Contract owners’ equity beginning of period

       14,690,018         18,297,778         1,765,107         1,859,218         1,122,427         1,683,319         40,173,658          35,486,125    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Contract owners’ equity end of period

   $          13,676,677         14,690,018         1,784,625         1,765,107         1,231,526         1,122,427         47,702,720          40,173,658    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

CHANGES IN UNITS:

                   

Beginning units

       791,946         1,008,805         142,403         137,914         61,460         92,624         2,377,614          2,106,955    

Units purchased

       88,419         87,166         5,872         11,281         307         320         265,580          694,867    

Units redeemed

       (239,778)        (304,025)        (23,607)        (6,792)        (5,318)        (31,484)        (199,576)         (424,208)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Ending units

       640,587         791,946         124,668         142,403         56,449         61,460         2,443,618          2,377,614    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

          DCAP     DSC     DVIV     SVSSVB  
          2012     2011     2012     2011     2012     2011     2012      2011  

Investment activity:

                   

Net investment income (loss)

   $          1,270,943         424,150         -            3,802         421,680         337,736         12,652          7,491    

Realized gain (loss) on investments

       (249,360)        (180,824)        29,761         186,543         49,247         (1,634,917)        77,184          371,880    

Change in unrealized gain (loss) on investments

       2,297,566         2,159,104         135,199         (292,528)        605,310         (1,642,358)        7,784          (521,679)   

Reinvested capital gains

       -            -            -            -            -            -            -             -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

       3,319,149         2,402,430         164,960         (102,183)        1,076,237         (2,939,539)        97,620          (142,308)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Equity transactions:

                   

Purchase payments received from contract owners (notes 2a and 6)

       2,333,345         1,535,408         60,807         66,094         459,625         416,092         73,253          57,683    

Transfers between funds

       4,032,424         2,313,575         94,847         (99,523)        (5,904,556)        (1,119,983)        (1,222,629)         136,896    

Surrenders (note 6)

       (1,929,911)        (1,386,404)        (28,792)        (149,229)        (716,385)        (5,176,988)        (131,251)         (51,399)   

Death Benefits (note 4)

       (261,128)        (114,354)        (19,478)        -            (44,508)        (9,102)        (2,137)         -       

Net policy repayments (loans) (note 5)

       (21,220)        (156,249)        (25,158)        (8,455)        272,444         138,481         1,018          (16,134)   

Deductions for surrender charges (note 2d)

       (13,837)        (12,315)        (460)        (419)        -            -            -             -       

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

       (1,115,860)        (913,393)        (33,258)        (36,163)        (165,400)        (204,713)        (22,870)         (29,414)   

Asset charges (note 3):

                   

FPVUL & VEL contracts

       (70,778)        (60,290)        (3,048)        (2,771)        (474)        (421)        (214)         (240)   

MSP contracts

       (1,601)        (1,375)        -            -            -            -            -             -       

SL contracts or LSFP contracts

       (6,284)        (5,026)        (278)        (437)        -            -            -             -       

Adjustments to maintain reserves

       (683)        8         (9)        1,099         78         (8)        (291)         (5)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net equity transactions

       2,944,467         1,199,585         45,173         (229,804)        (6,099,176)        (5,956,642)        (1,305,121)         97,387    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net change in contract owners’ equity

       6,263,616         3,602,015         210,133         (331,987)        (5,022,939)        (8,896,181)        (1,207,501)         (44,921)   

Contract owners’ equity beginning of period

       28,862,094         25,260,079         717,023         1,049,010         14,389,288         23,285,469         1,817,071          1,861,992    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Contract owners’ equity end of period

   $          35,125,710         28,862,094         927,156         717,023         9,366,349         14,389,288         609,570          1,817,071    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

CHANGES IN UNITS:

                   

Beginning units

       1,758,639         1,664,910         57,519         72,500         951,686         1,253,463         195,620          187,340    

Units purchased

       403,216         282,563         11,898         5,622         30,970         34,144         8,462          26,002    

Units redeemed

       (201,303)        (188,834)        (7,727)        (20,603)        (431,426)        (335,921)        (146,145)         (17,722)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Ending units

       1,960,552         1,758,639         61,690         57,519         551,230         951,686         57,937          195,620    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

           SVSLVB      FVCA2P      FQB      FCS  
           2012      2011      2012      2011      2012      2011      2012      2011  

Investment activity:

                          

Net investment income (loss)

   $           2,304          (241)         6,732          5,790          1,341,133          1,779,807          577,616          412,540    

Realized gain (loss) on investments

        (3,539)         (4,261)         84,222          (32,016)         295,343          60,682          6,648,989          7,635,162    

Change in unrealized gain (loss) on investments

        13,934          (9,724)         (23,557)         (808)         1,366,720          (1,070,706)         1,240,386          (9,188,011)   

Reinvested capital gains

        -             -             68,556          -             -             -             -             -       
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

        12,699          (14,226)         135,953          (27,034)         3,003,196          769,783          8,466,991          (1,140,309)   
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Equity transactions:

                          

Purchase payments received from contract owners (notes 2a and 6)

        -             31,120          46,046          51,170          1,336,985          1,726,160          1,561,323          1,640,692    

Transfers between funds

        (48,045)         183,659          (588,311)         367,974          (4,263,835)         (2,628,937)         (6,535,385)         (7,688,986)   

Surrenders (note 6)

        -             -             (31,727)         (14,799)         (1,738,002)         (2,037,669)         (1,929,268)         (3,906,527)   

Death Benefits (note 4)

        -             -             (519)         -             (77,707)         (189,631)         (103,559)         (74,687)   

Net policy repayments (loans) (note 5)

        -             -             (2,213)         (17,753)         (67,205)         (288,741)         87,160          157,584    

Deductions for surrender charges (note 2d)

        -             -             (433)         (427)         (7,030)         (14,081)         -             (99)   

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

        (2,670)         (2,687)         (28,173)         (28,101)         (995,542)         (1,075,544)         (770,493)         (711,675)   

Asset charges (note 3):

                          

FPVUL & VEL contracts

        -             -             (1,947)         (2,365)         (65,386)         (69,354)         (1,098)         5,012    

MSP contracts

        -             -             -             (7)         (3,670)         (3,599)         -             -       

SL contracts or LSFP contracts

        -             -             (1,435)         (988)         (7,001)         (7,922)         (10)         (12)   

Adjustments to maintain reserves

        (10)         (26,580)         (3)         (5)         112          (64)         747          683    
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net equity transactions

        (50,725)         185,512          (608,715)         354,699          (5,888,281)         (4,589,382)         (7,690,583)         (10,578,015)   
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net change in contract owners’ equity

        (38,026)         171,286          (472,762)         327,665          (2,885,085)         (3,819,599)         776,408          (11,718,324)   

Contract owners’ equity beginning of period

        171,286          -             1,168,624          840,959          33,170,868          36,990,467          56,095,118          67,813,442    
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Contract owners’ equity end of period

   $           133,260          171,286          695,862          1,168,624          30,285,783          33,170,868          56,871,526          56,095,118    
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

CHANGES IN UNITS:

                          

Beginning units

        18,550          -             80,819          55,080          1,750,119          1,993,165          3,445,057          4,047,421    

Units purchased

        107          18,834          3,155          39,389          86,849          130,453          122,373          203,897    

Units redeemed

        (5,437)         (284)         (40,294)         (13,650)         (381,482)         (373,499)         (567,397)         (806,261)   
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Ending units

        13,220          18,550          43,680          80,819          1,455,486          1,750,119          3,000,033          3,445,057    
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

            FNRS2      FEIS      FF10S      FF20S  
            2012      2011      2012      2011      2012      2011      2012      2011  

Investment activity:

                           

Net investment income (loss)

    $           71,919          97,744          1,715,310          1,334,028          39,158          50,291          231,460          208,972    

Realized gain (loss) on investments

         881,293          1,551,497          (3,577,949)         (3,347,319)         173,317          (17,497)         405,896          246,023    

Change in unrealized gain (loss) on investments

         (470,914)         (2,436,990)         7,321,029          3,101,487          11,554          (74,254)         621,823          (755,413)   

Reinvested capital gains

         -             -             3,742,101          -             32,032          12,754          143,652          39,753    
     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

         482,298          (787,749)         9,200,491          1,088,196          256,061          (28,706)         1,402,831          (260,665)   
     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Equity transactions:

                           

Purchase payments received from contract owners (notes 2a and 6)

         469,704          832,996          3,139,462          3,179,651          75,645          54,062          433,937          652,574    

Transfers between funds

         (597,712)         2,009,226          (968,516)         (7,664,698)         (179,125)         566,405          1,509,108          2,913,889    

Surrenders (note 6)

         (1,028,369)         (867,571)         (3,868,598)         (4,488,825)         (118,670)         (25,091)         (384,160)         (181,077)   

Death Benefits (note 4)

         (20,916)         (26,438)         (218,538)         (241,261)         (98,234)         -             (107,349)         -       

Net policy repayments (loans) (note 5)

         (64,442)         (245,690)         (161,925)         (264,558)         (12,777)         2,635          5,262          (17,662)   

Deductions for surrender charges (note 2d)

         (17,143)         (14,037)         (20,221)         (31,322)         (1,465)         (132)         (7,066)         (11)   

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

         (412,976)         (468,554)         (2,407,482)         (2,464,257)         (73,035)         (69,499)         (309,573)         (255,050)   

Asset charges (note 3):

                           

FPVUL & VEL contracts

         (32,003)         (37,242)         (151,669)         (153,262)         (4,923)         (5,312)         (20,045)         (14,860)   

MSP contracts

         (2,324)         (2,802)         (6,433)         (6,297)         (3,974)         (4,071)         (3,595)         (4,235)   

SL contracts or LSFP contracts

         (5,229)         (5,828)         (18,325)         (19,423)         (396)         (271)         (3,921)         (4,833)   

Adjustments to maintain reserves

         16          (103)         499          (227)         (11)         19          53          (17)   
     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net equity transactions

         (1,711,394)         1,173,957          (4,681,746)         (12,154,479)         (416,965)         518,745          1,112,651          3,088,718    
     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net change in contract owners’ equity

         (1,229,096)         386,208          4,518,745          (11,066,283)         (160,904)         490,039          2,515,482          2,828,053    

Contract owners’ equity beginning of period

         10,373,322          9,987,114          54,708,600          65,774,883          2,406,104          1,916,065          10,426,605          7,598,552    
     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Contract owners’ equity end of period

    $           9,144,226          10,373,322          59,227,345          54,708,600          2,245,200          2,406,104          12,942,087          10,426,605    
     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

CHANGES IN UNITS:

                           

Beginning units

         594,575          542,677          3,583,649          4,418,669          178,949          141,827          781,548          562,329    

Units purchased

         33,553          136,745          381,050          233,162          10,196          48,716          130,418          257,494    

Units redeemed

         (127,696)         (84,847)         (623,607)         (1,068,182)         (39,710)         (11,594)         (53,479)         (38,275)   
     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Ending units

         500,432          594,575          3,341,092          3,583,649          149,435          178,949          858,487          781,548    
     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

           FF30S      FFINS      FGOS      FGS  
           2012      2011      2012      2011      2012      2011      2012      2011  

Investment activity:

                          

Net investment income (loss)

   $           103,904          126,796          19,705          24,769          2,434          (1,463)         272,790          118,736    

Realized gain (loss) on investments

        633,107          (158,694)         (10,204)         (10,547)         237,009          273,042          1,888,205          3,913,247    

Change in unrealized gain (loss) on investments

        110,054          (241,776)         68,292          (48,249)         84,066          (247,928)         6,367,370          (3,406,084)   

Reinvested capital gains

        52,130          19,510          21,588          5,827          -             -             -             232,328    
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

        899,195          (254,164)         99,381          (28,200)         323,509          23,651          8,528,365          858,227    
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Equity transactions:

                          

Purchase payments received from contract owners (notes 2a and 6)

        416,379          396,715          28          (5)         7,537          38,694          3,751,188          4,451,562    

Transfers between funds

        (1,692,953)         3,119,459          (232,781)         1,944,910          (598,184)         397,221          (1,146,965)         (6,753,768)   

Surrenders (note 6)

        (317,400)         (466,969)         (44,315)         (61,400)         -             -             (4,333,737)         (5,689,317)   

Death Benefits (note 4)

        (8,718)         -             (6,763)         -             -             (1,204)         (518,999)         (257,052)   

Net policy repayments (loans) (note 5)

        (6,739)         (21,852)         -             -             619          52          (29,182)         300,766    

Deductions for surrender charges (note 2d)

        (8,593)         (6,304)         -             -             -             -             (38,833)         (23,228)   

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

        (165,102)         (181,220)         (11,878)         (7,154)         (27,739)         -             (3,021,692)         (3,035,360)   

Asset charges (note 3):

                          

FPVUL & VEL contracts

        (13,512)         (13,122)         -             -             -             -             (186,783)         (184,576)   

MSP contracts

        (1,413)         (1,569)         -             -             -             -             (5,940)         (6,021)   

SL contracts or LSFP contracts

        (913)         (1,226)         -             -             -             -             (14,314)         (14,570)   

Adjustments to maintain reserves

        19          (7)         11          1          (1,997)         (31)         (620)         434    
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net equity transactions

        (1,798,945)         2,823,905          (295,698)         1,876,352          (619,764)         434,732          (5,545,877)         (11,211,130)   
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net change in contract owners’ equity

        (899,750)         2,569,741          (196,317)         1,848,152          (296,255)         458,383          2,982,488          (10,352,903)   

Contract owners’ equity beginning of period

        6,562,007          3,992,266          1,848,152          -             1,994,177          1,535,794          59,835,581          70,188,484    
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Contract owners’ equity end of period

   $           5,662,257          6,562,007          1,651,835          1,848,152          1,697,922          1,994,177          62,818,069          59,835,581    
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

CHANGES IN UNITS:

                          

Beginning units

        504,938          297,508          180,523          -             207,918          162,059          4,499,240          5,473,788    

Units purchased

        77,345          258,646          -             187,205          5,818          48,933          315,319          425,685    

Units redeemed

        (205,512)         (51,216)         (28,597)         (6,682)         (68,042)         (3,074)         (655,914)         (1,400,233)   
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Ending units

        376,771          504,938          151,926          180,523          145,694          207,918          4,158,645          4,499,240    
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

          FHIS     FHISR     FIP     FIGBS  
          2012     2011     2012     2011     2012     2011     2012      2011  

Investment activity:

                   

Net investment income (loss)

   $          854,480         918,890         275,541         274,609         523,333         399,521         704,787          1,210,867    

Realized gain (loss) on investments

       987,982         179,448         70,464         294,619         232,791         1,332,407         73,226          978,007    

Change in unrealized gain (loss) on investments

       177,935         (591,370)        240,523         (407,144)        2,610,168         (1,663,065)        113,308          (560,031)   

Reinvested capital gains

       -            -            -            -            321,253         576,029         876,314          1,061,849    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

       2,020,397         506,968         586,528         162,084         3,687,545         644,892         1,767,635          2,690,692    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Equity transactions:

                   

Purchase payments received from contract owners (notes 2a and 6)

       90,486         60,445         394,584         414,441         276         180         1,837,239          1,847,467    

Transfers between funds

       885,553         (424,360)        660,250         (272,213)        3,483,732         (3,309,495)        1,876,044          (4,012,998)   

Surrenders (note 6)

       (369,460)        (952,149)        (328,518)        (405,808)        (738,798)        (815,100)        (2,083,559)         (9,107,194)   

Death Benefits (note 4)

       (28,129)        (58,879)        (50,653)        (30,883)        (110,177)        -            (81,793)         (72,327)   

Net policy repayments (loans) (note 5)

       (39,223)        (94,238)        74,914         38,061         -            507,797         (72,109)         (16,335)   

Deductions for surrender charges (note 2d)

       (94)        (4,429)        (223)        (1,472)        -            -            (19,223)         (16,562)   

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

       (394,988)        (396,383)        (242,304)        (211,182)        (196,974)        (172,587)        (665,123)         (689,532)   

Asset charges (note 3):

                   

FPVUL & VEL contracts

       (18,611)        (20,631)        (15,735)        (13,874)        -            -            (35,198)         (36,472)   

MSP contracts

       (1,527)        (1,717)        (406)        (178)        -            -            (4,322)         (3,779)   

SL contracts or LSFP contracts

       (1,602)        (1,624)        (2,033)        (1,923)        -            -            (10,489)         (11,843)   

Adjustments to maintain reserves

       61         11         13         1         215         (10)        57          110    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net equity transactions

       122,466         (1,893,954)        489,889         (485,030)        2,438,274         (3,789,215)        741,524          (12,119,465)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net change in contract owners’ equity

       2,142,863         (1,386,986)        1,076,417         (322,946)        6,125,819         (3,144,323)        2,509,159          (9,428,773)   

Contract owners’ equity beginning of period

       13,558,184         14,945,170         3,797,944         4,120,890         22,007,578         25,151,901         30,787,243          40,216,016    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Contract owners’ equity end of period

   $          15,701,047         13,558,184         4,874,361         3,797,944         28,133,397         22,007,578         33,296,402          30,787,243    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

CHANGES IN UNITS:

                   

Beginning units

       822,053         948,153         301,013         339,656         2,336,553         2,719,218         2,038,461          2,857,908    

Units purchased

       67,360         41,706         81,728         40,751         345,822         59,297         303,553          205,707    

Units redeemed

       (63,265)        (167,806)        (44,153)        (79,394)        (100,236)        (441,962)        (251,377)         (1,025,154)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Ending units

       826,148         822,053         338,588         301,013         2,582,139         2,336,553         2,090,637          2,038,461    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

(Continued)

 

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

           FMCS     FOS     FOSR     FVSS  
           2012     2011     2012     2011     2012     2011     2012     2011  

Investment activity:

                   

Net investment income (loss)

    $          176,103         28,211         215,139         212,326         191,182         153,264         18,665         37,172    

Realized gain (loss) on investments

        1,643,288         (361,157)        (1,878,238)        (3,865,163)        (1,389,690)        (828,409)        288,498         15,206    

Change in unrealized gain (loss) on investments

        931,389         (5,161,584)        4,309,548         506,008         3,152,739         (1,448,289)        644,232         (434,202)   

Reinvested capital gains

        3,257,727         81,199         42,899         46,869         34,701         22,380         -            -       
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

        6,008,507         (5,413,331)        2,689,348         (3,099,960)        1,988,932         (2,101,054)        951,395         (381,824)   
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Equity transactions:

                   

Purchase payments received from contract owners (notes 2a and 6)

        2,956,085         2,799,346         75,740         522,518         970,952         1,158,394         179,917         216,127    

Transfers between funds

        (5,117,048)        685,532         (3,640,238)        (5,962,691)        (570,120)        217,405         (401,669)        214,731    

Surrenders (note 6)

        (4,364,566)        (2,637,726)        (910,581)        (1,552,296)        (1,086,759)        (1,234,406)        (187,698)        (173,698)   

Death Benefits (note 4)

        (169,298)        (116,746)        (38,180)        (166,344)        (15,117)        (27,758)        (45,298)        (928)   

Net policy repayments (loans) (note 5)

        444,532         (67,562)        (40,488)        129,032         30,462         19,328         (68,726)        46,603    

Deductions for surrender charges (note 2d)

        (24,452)        (34,202)        (551)        (4,738)        (31,501)        (19,170)        (1,977)        (5,641)   

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

        (1,309,153)        (1,507,044)        (401,605)        (549,675)        (492,780)        (533,648)        (153,923)        (157,842)   

Asset charges (note 3):

                   

FPVUL & VEL contracts

        (82,705)        (92,529)        (16,473)        (20,571)        (40,142)        (43,535)        (11,542)        (12,114)   

MSP contracts

        (3,227)        (3,383)        (495)        (545)        (632)        (655)        (117)        (106)   

SL contracts or LSFP contracts

        (11,835)        (14,084)        (2,743)        (3,618)        (4,170)        (4,765)        (426)        (433)   

Adjustments to maintain reserves

        (119)        1,116         99         (56)        (50)        182         25         (39)   
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net equity transactions

        (7,681,786)        (987,282)        (4,975,515)        (7,608,984)        (1,239,857)        (468,628)        (691,434)        126,660    
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net change in contract owners’ equity

        (1,673,279)        (6,400,613)        (2,286,167)        (10,708,944)        749,075         (2,569,682)        259,961         (255,164)   

Contract owners’ equity beginning of period

        43,064,803         49,465,416         15,511,225         26,220,169         9,923,578         12,493,260         3,834,162         4,089,326    
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Contract owners’ equity end of period

    $          41,391,524         43,064,803         13,225,058         15,511,225         10,672,653         9,923,578         4,094,123         3,834,162    
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

CHANGES IN UNITS:

                   

Beginning units

        1,651,099         1,691,035         1,294,920         1,833,180         865,432         901,030         255,306         248,152    

Units purchased

        115,717         188,651         11,927         64,591         84,637         105,322         13,446         30,069    

Units redeemed

        (383,506)        (228,587)        (407,868)        (602,851)        (178,739)        (140,920)        (54,272)        (22,915)   
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Ending units

        1,383,310         1,651,099         898,979         1,294,920         771,330         865,432         214,480         255,306    
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

          FF15S     FF25S     FF40S     FTVIS2  
          2012     2011     2012     2011     2012     2011     2012      2011  

Investment activity:

                   

Net investment income (loss)

   $          76,139         84,566         106,398         88,385         52,863         14,838         327,023          260,166    

Realized gain (loss) on investments

       (8,706)        187,888         31,855         136,041         (27,148)        (26,150)        78,024          (226,569)   

Change in unrealized gain (loss) on investments

       279,252         (340,393)        532,176         (400,785)        175,122         (97,543)        201,842          52,420    

Reinvested capital gains

       69,615         23,410         65,970         15,575         13,130         1,329         -             -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

       416,300         (44,529)        736,399         (160,784)        213,967         (107,526)        606,889          86,017    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Equity transactions:

                   

Purchase payments received from contract owners (notes 2a and 6)

       123,626         175,244         34,152         211,439         691         (13)        459,299          305,150    

Transfers between funds

       230,791         1,939,779         2,212,640         3,970,287         2,590,897         949,435         824,151          723,774    

Surrenders (note 6)

       (137,752)        (155,664)        (775,667)        (570,930)        (451,947)        (30,101)        (329,560)         (573,818)   

Death Benefits (note 4)

       (1,535)        -            (670)        -            (3,665)        -            (41,381)         (15,408)   

Net policy repayments (loans) (note 5)

       -            -            -            -            -            -            (56,166)         (20,885)   

Deductions for surrender charges (note 2d)

       -            -            -            -            -            -            (9,469)         (2,514)   

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

       (73,758)        (66,450)        (110,973)        (72,506)        (40,853)        (5,502)        (230,685)         (202,230)   

Asset charges (note 3):

                   

FPVUL & VEL contracts

       (587)        (197)        (238)        (120)        (117)        (20)        (12,971)         (11,005)   

MSP contracts

       -            -            -            -            -            -            (2,004)         (1,984)   

SL contracts or LSFP contracts

       -            -            -            -            -            -            (4,462)         (5,940)   

Adjustments to maintain reserves

       31         (8)        42        (11)        20         (7)        7          3    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net equity transactions

       140,816         1,892,704         1,359,286         3,538,159         2,095,026         913,792         596,759          195,143    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net change in contract owners’ equity

       557,116         1,848,175         2,095,685         3,377,375         2,308,993         806,266         1,203,648          281,160    

Contract owners’ equity beginning of period

       3,989,125         2,140,950         4,624,005         1,246,630         806,266         -            4,526,599          4,245,439    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Contract owners’ equity end of period

   $          4,546,241         3,989,125         6,719,690         4,624,005         3,115,259         806,266         5,730,247          4,526,599    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

CHANGES IN UNITS:

                   

Beginning units

       384,414         204,985         468,387         123,140         78,048         -            353,498          339,445    

Units purchased

       77,963         293,225         213,183         411,267         257,696         81,334         83,253          80,070    

Units redeemed

       (71,145)        (113,796)        (88,214)        (66,020)        (77,042)        (3,286)        (39,516)         (66,017)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Ending units

       391,232         384,414         593,356         468,387         258,702         78,048         397,235          353,498    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

           FTVRDI      FTVSVI      FTVSV2      FTVMD2  
           2012      2011      2012      2011      2012      2011      2012      2011  

Investment activity:

                          

Net investment income (loss)

   $           250,973          225,754          99,460          97,169          38,134          29,036          3,529          3,950    

Realized gain (loss) on investments

        472,913          (249,849)         (277,282)         (486,134)         588,943          1,044,417          (18,029)         34,749    

Change in unrealized gain (loss) on investments

        859,670          749,300          1,824,905          (3,934)         484,569          (1,374,739)         19,718          (56,370)   

Reinvested capital gains

        -             -             -             -             -             -             8,235          4,115    
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

        1,583,556          725,205          1,647,083          (392,899)         1,111,646          (301,286)         13,453          (13,556)   
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Equity transactions:

                          

Purchase payments received from contract owners (notes 2a and 6)

        828,544          1,048,077          521,294          639,920          363,346          384,911          31          1,812    

Transfers between funds

        671,811          743,433          (782,261)         (1,119,911)         231,007          774,057          (68,045)         16,902    

Surrenders (note 6)

        (1,087,451)         (1,115,676)         (867,414)         (895,495)         (318,738)         (1,615,800)         -             -       

Death Benefits (note 4)

        (74,753)         (201,159)         (6,045)         (19,592)         (755)         (5,075)         -             -       

Net policy repayments (loans) (note 5)

        (79,064)         (163,344)         (54,078)         777          (10,820)         (11,423)         -             (149)   

Deductions for surrender charges (note 2d)

        (14,629)         (13,690)         (7,479)         (12,441)         -             -             -             -       

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

        (500,271)         (491,021)         (359,469)         (394,194)         (91,306)         (86,257)         (4,063)         (2,097)   

Asset charges (note 3):

                          

FPVUL & VEL contracts

        (48,016)         (44,976)         (32,950)         (34,965)         (984)         (655)         -             -       

MSP contracts

        (1,569)         (1,595)         (1,192)         (1,352)         -             -             -             -       

SL contracts or LSFP contracts

        (5,253)         (5,389)         (3,676)         (4,115)         -             -             -             -       

Adjustments to maintain reserves

        9          (19)         6          (169)         (320)         (88)         10          (7)   
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net equity transactions

        (310,642)         (245,359)         (1,593,264)         (1,841,537)         171,430          (560,330)         (72,067)         16,461    
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net change in contract owners’ equity

        1,272,914          479,846          53,819          (2,234,436)         1,283,076          (861,616)         (58,614)         2,905    

Contract owners’ equity beginning of period

        12,635,473          12,155,627          9,586,544          11,820,980          5,256,791          6,118,407          206,890          203,985    
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Contract owners’ equity end of period

   $           13,908,387          12,635,473          9,640,363          9,586,544          6,539,867          5,256,791          148,276          206,890    
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

CHANGES IN UNITS:

                          

Beginning units

        702,870          718,728          428,826          510,127          384,441          430,037          21,727          20,709    

Units purchased

        98,333          87,464          24,189          33,273          61,252          41,414          13,903          19,359    

Units redeemed

        (111,500)         (103,322)         (89,877)         (114,574)         (40,898)         (87,010)         (21,859)         (18,341)   
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Ending units

        689,703          702,870          363,138          428,826          404,795          384,441          13,771          21,727    
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

           FTVDM3      TIF      TIF2      TIF3  
           2012      2011      2012      2011      2012      2011      2012      2011  

Investment activity:

                          

Net investment income (loss)

   $           61,901          50,916          42,229          29,741          315,838          178,697          153,683          98,941    

Realized gain (loss) on investments

        410,696          (191,613)         (13,327)         (10,413)         729,191          571,376          (479,530)         (370,246)   

Change in unrealized gain (loss) on investments

        47,284          (730,189)         193,695          (175,081)         849,980          (2,061,935)         1,215,314          (381,473)   

Reinvested capital gains

        -             -             -             -             -             -             -             -       
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

        519,881          (870,886)         222,597          (155,753)         1,895,009          (1,311,862)         889,467          (652,778)   
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Equity transactions:

                          

Purchase payments received from contract owners (notes 2a and 6)

        259,990          534,260          (128)         -             206,366          375,355          300,815          367,491    

Transfers between funds

        (366,799)         82,374          (41,453)         (5,848)         55,085          1,021,753          (166,572)         649,945    

Surrenders (note 6)

        (322,293)         (688,717)         (30,931)         (41,441)         (143,415)         (282,498)         (461,187)         (518,169)   

Death Benefits (note 4)

        (6,453)         (33,572)         (2,532)         (24,757)         (23,008)         (5,317)         (118,184)         (1,478)   

Net policy repayments (loans) (note 5)

        (144,076)         38,060          (37,464)         (36,875)         9,350          (1,941)         98,563          (10,249)   

Deductions for surrender charges (note 2d)

        (5,451)         (3,926)         (388)         (461)         -             -             (8,546)         (7,958)   

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

        (171,954)         (197,972)         (36,998)         (44,007)         (133,334)         (139,220)         (175,573)         (189,012)   

Asset charges (note 3):

                          

FPVUL & VEL contracts

        (14,132)         (17,125)         (4,050)         (4,787)         -             -             (15,264)         (15,468)   

MSP contracts

        (850)         (893)         (453)         (472)         -             -             (320)         (448)   

SL contracts or LSFP contracts

        (2,042)         (2,254)         (624)         (717)         -             -             (3,079)         (3,711)   

Adjustments to maintain reserves

        (2)         (63)         (2)         (6)         77          105          10          1    
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net equity transactions

        (774,062)         (289,828)         (155,023)         (159,371)         (28,879)         968,237          (549,337)         270,944    
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net change in contract owners’ equity

        (254,181)         (1,160,714)         67,574          (315,124)         1,866,130          (343,625)         340,130          (381,834)   

Contract owners’ equity beginning of period

        4,481,928          5,642,642          1,293,873          1,608,997          11,333,237          11,676,862          5,091,038          5,472,872    
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Contract owners’ equity end of period

   $           4,227,747          4,481,928          1,361,447          1,293,873          13,199,367          11,333,237          5,431,168          5,091,038    
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

CHANGES IN UNITS:

                          

Beginning units

        262,679          278,260          65,960          73,458          636,281          584,733          406,154          389,994    

Units purchased

        20,011          41,202          -             -             63,920          78,287          34,258          83,352    

Units redeemed

        (63,718)         (56,783)         (7,438)         (7,498)         (71,664)         (26,739)         (74,159)         (67,192)   
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Ending units

        218,972          262,679          58,522          65,960          628,537          636,281          366,253          406,154    
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

          FTVGI2     FTVGI3     FTVFA2     GVMCE  
          2012     2011     2012     2011     2012     2011     2012     2011  

Investment activity:

                  

Net investment income (loss)

   $          2,244,993         2,175,309         727,657         557,854         9,218         54         415,565         248,449    

Realized gain (loss) on investments

       (95,655)        425,676         212,683         244,412         10,615         22,882         1,142,862         (261,531)   

Change in unrealized gain (loss) on investments

       3,025,733         (3,140,734)        653,810         (1,047,207)        30,587         (27,662)        5,787,288         (3,314,390)   

Reinvested capital gains

       57,587         258,976         18,412         64,997         -            -            -            -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

       5,232,658         (280,773)        1,612,562         (179,944)        50,420         (4,726)        7,345,715         (3,327,472)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Equity transactions:

                  

Purchase payments received from contract owners (notes 2a and 6)

       1,068,455         642,430         530,663         785,050         16,812         20,200         720,246         660,078    

Transfers between funds

       (3,842,852)        (954,267)        573,889         2,028,538         44,158         (25,212)        (4,477,696)        (2,582,572)   

Surrenders (note 6)

       (19,132)        (206,970)        (912,367)        (642,956)        (43,389)        (3,689)        (1,516,057)        (1,789,028)   

Death Benefits (note 4)

       (65,085)        (122,318)        (51,721)        (86,545)        -            -            (80,939)        (64,992)   

Net policy repayments (loans) (note 5)

       767         152,809         144,083         (158,532)        2,101         (1,381)        484,133         111,771    

Deductions for surrender charges (note 2d)

       -            -            (13,874)        (4,690)        -            -            -            -       

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

       (417,845)        (391,465)        (383,959)        (389,522)        (16,368)        (14,827)        (514,375)        (590,451)   

Asset charges (note 3):

                  

FPVUL & VEL contracts

       (2,556)        (1,593)        (28,730)        (28,252)        (1,624)        (1,571)        -            -       

MSP contracts

       -            -            (1,038)        (1,096)        (128)        (125)        -            -       

SL contracts or LSFP contracts

       -            -            (5,062)        (4,735)        -            (14)        -            -       

Adjustments to maintain reserves

       161         1,319         (2)        (99)        457         21         356         (52)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net equity transactions

       (3,278,087)        (880,055)        (148,118)        1,497,161        2,019         (26,598)        (5,384,332)        (4,255,246)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net change in contract owners’ equity

       1,954,571         (1,160,828)        1,464,444         1,317,217         52,439         (31,324)        1,961,383         (7,582,718)   

Contract owners’ equity beginning of period

       37,405,909         38,566,737         10,882,007         9,564,790         331,530         362,854         43,282,914         50,865,632    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Contract owners’ equity end of period

   $          39,360,480         37,405,909         12,346,451         10,882,007         383,969         331,530         45,244,297         43,282,914    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

CHANGES IN UNITS:

                  

Beginning units

       2,581,564         2,635,373         614,756         535,857         35,227         37,961         2,084,386         2,288,786    

Units purchased

       155,323         99,342         61,228         167,112         3,571         2,778         32,074         78,930    

Units redeemed

       (373,853)        (153,151)        (69,796)        (88,213)        (3,423)        (5,512)        (272,764)        (283,330)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Ending units

       2,363,034         2,581,564         606,188         614,756         35,375         35,227         1,843,696         2,084,386    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

(Continued)

 

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

          GVGOPS     SBVSG     BNCAI     AMTB  
          2012     2011     2012     2011     2012     2011     2012     2011  

Investment activity:

                  

Net investment income (loss)

   $          (197)        (2)        4,273         (1,417)        89,359         (25,105)        108,811         151,807    

Realized gain (loss) on investments

       682         37         35,778         61,543         1,555,523         1,673,429         (9,915)        (41,260)   

Change in unrealized gain (loss) on investments

       (2,130)        77         64,183         (77,728)        (452,578)        (957,353)        69,385         (99,099)   

Reinvested capital gains

       4,758         67         72,565         12,812         504,733         -            -            -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

       3,113         179         176,799         (4,790)        1,697,037         690,971         168,281         11,448    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Equity transactions:

                  

Purchase payments received from contract owners (notes 2a and 6)

       16,151         -            202,709         84,760         337,498         581,058         226,442         236,756    

Transfers between funds

       31,324         3,719         1,030,811         506,933         (1,534,342)        (2,310,309)        68,134         (42,883)   

Surrenders (note 6)

       -            -            (29,989)        (1,419)        (609,547)        (1,315,151)        (359,708)        (174,087)   

Death Benefits (note 4)

       -            -            (229)        -            (32,121)        (8,187)        (5,097)        (4,360)   

Net policy repayments (loans) (note 5)

       -            -            (7,657)        (7,445)        83,748         9,825         (15,257)        5,935    

Deductions for surrender charges (note 2d)

       -            -            -            -            -            -            (4,337)        (4,464)   

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

       (4,475)        (74)        (29,846)        (18,884)        (158,578)        (190,146)        (241,717)        (238,459)   

Asset charges (note 3):

                  

FPVUL & VEL contracts

       (9)        -            (217)        (397)        (675)        (839)        (13,652)        (15,139)   

MSP contracts

       -            -            -            -            -            -            (602)        (610)   

SL contracts or LSFP contracts

       -            -            -            -            -            -            (1,855)        (1,994)   

Adjustments to maintain reserves

       (3)        (3)        (291)        6         (453)        (275)        3         -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net equity transactions

       42,988         3,642         1,165,291         563,554         (1,914,470)        (3,234,024)        (347,646)        (239,305)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net change in contract owners’ equity

       46,101         3,821         1,342,090         558,764         (217,433)        (2,543,053)        (179,365)        (227,857)   

Contract owners’ equity beginning of period

       3,821         -            778,055         219,291         10,358,244         12,901,297         3,832,257         4,060,114    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Contract owners’ equity end of period

   $          49,922         3,821         2,120,145         778,055         10,140,811         10,358,244         3,652,892         3,832,257    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

CHANGES IN UNITS:

                  

Beginning units

       434         -            73,805         21,047         487,615         630,447         328,162         348,678    

Units purchased

       4,773         443         112,152         55,413         15,027         31,111         27,844         36,196    

Units redeemed

       (449)        (9)        (16,968)        (2,655)        (98,068)        (173,943)        (56,975)        (56,712)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Ending units

       4,758         434         168,989         73,805         404,574         487,615         299,031         328,162    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

(Continued)

 

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

          AMGP     AMINS     AMCG     AMTP  
          2012     2011     2012     2011     2012     2011     2012      2011  

Investment activity:

                   

Net investment income (loss)

   $          220         6,910         -            -            (9,395)        (11,756)        7,625          (5,063)   

Realized gain (loss) on investments

       439,571         116,788         -            -            764,825         183,004         60,470          152,280    

Change in unrealized gain (loss) on investments

       (299,572)        (199,863)        -            -            (235,283)        (90,841)        374,486          (623,657)   

Reinvested capital gains

       6,370         -            -            -            -            -            -             -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

       146,589         (76,165)        -            -            520,147         80,407         442,581          (476,440)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Equity transactions:

                   

Purchase payments received from contract owners (notes 2a and 6)

       411         1,106         -            (112)        205,899         71,320         62,611          97,531    

Transfers between funds

       (1,164,659)        269,171         -            (618)        (1,767,394)        (879,155)        (1,584,531)         109,740    

Surrenders (note 6)

       (88,915)        (85,184)        -            -            (389,312)        (659,642)        (49,472)         (61,038)   

Death Benefits (note 4)

       (7,236)        -            -            -            -            (12,552)        (1,792)         (635)   

Net policy repayments (loans) (note 5)

       -            -            -            91         (176)        (2,505)        (10,918)         (50,215)   

Deductions for surrender charges (note 2d)

       -            -            -            -            -            -            -             -       

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

       (22,101)        (27,793)        -            641         (87,552)        (116,595)        (85,626)         (104,317)   

Asset charges (note 3):

                   

FPVUL & VEL contracts

       -            -            -            -            8         8         (1,705)         (1,751)   

MSP contracts

       -            -            -            (1)        -            -            -             -       

SL contracts or LSFP contracts

       -            (23)        -            (2)        (8)        -            -             -       

Adjustments to maintain reserves

       9         -            -            1         96         (280)        (1,073)         29    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net equity transactions

       (1,282,491)        157,277         -            -            (2,038,439)        (1,599,401)        (1,672,506)         (10,656)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net change in contract owners’ equity

       (1,135,902)        81,112         -            -            (1,518,292)        (1,518,994)        (1,229,925)         (487,096)   

Contract owners’ equity beginning of period

       1,946,766         1,865,654         -            -            4,592,195         6,111,189         3,546,228          4,033,324    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Contract owners’ equity end of period

   $          810,864         1,946,766         -            -            3,073,903         4,592,195         2,316,303          3,546,228    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

CHANGES IN UNITS:

                   

Beginning units

       134,353         124,719         -            -            347,445         469,057         255,553          259,582    

Units purchased

       2,558         17,318         -            9         14,386         12,701         5,268          34,663    

Units redeemed

       (87,578)        (7,684)        -            (9)        (158,386)        (134,313)        (116,374)         (38,692)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Ending units

       49,333         134,353         -            -            203,445         347,445         144,447          255,553    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

            AMRI      AMFAS      AMSRS      OVGR  
            2012      2011      2012      2011      2012      2011      2012      2011  

Investment activity:

                           

Net investment income (loss)

    $           15,268          17,733          (2,471)         (2,441)         5,455          9,322          86,915          58,634    

Realized gain (loss) on investments

         421,324          486,588          356,593          124,477          (66,306)         (106,843)         2,508,107          5,229,717    

Change in unrealized gain (loss) on investments

         (923,280)         (804,481)         (160,603)         (186,211)         324,070          3,373          (146,105)         (4,969,815)   

Reinvested capital gains

         1,072,799          -             -             -             -             -             -             -       
     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

         586,111          (300,160)         193,519          (64,175)         263,219          (94,148)         2,448,917          318,536    
     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Equity transactions:

                           

Purchase payments received from contract owners (notes 2a and 6)

         72,646          104,987          53,554          57,491          132,749          522,511          494,335          514,905    

Transfers between funds

         (378,112)         61,921          (640,144)         380,569          (171,397)         (66,501)         (1,407,114)         (14,027,557)   

Surrenders (note 6)

         (55,534)         (39,642)         (51,415)         (50,583)         (282,506)         (240,026)         (2,522,021)         (2,022,272)   

Death Benefits (note 4)

         -             (4,065)         (6,444)         (147)         (60,529)         (15,459)         (42,516)         (21,511)   

Net policy repayments (loans) (note 5)

         (15)         (435)         5,105          (8,092)         (42)         25,358          576,684          5,332    

Deductions for surrender charges (note 2d)

         -             -             1,464          (2,372)         (7,802)         (11,671)         -             2    

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

         (48,108)         (54,386)         (47,534)         (50,944)         (105,548)         (134,265)         (392,618)         (484,357)   

Asset charges (note 3):

                           

FPVUL & VEL contracts

         (437)         (554)         (3,260)         (3,573)         (8,554)         (9,025)         (116)         (145)   

MSP contracts

         -             -             (99)         (29)         (473)         (797)         -             -       

SL contracts or LSFP contracts

         -             -             (132)         (172)         (988)         (1,474)         (29)         8    

Adjustments to maintain reserves

         (321)         (21)         11          (13)         (8)         (6)         2,377          3,256    
     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net equity transactions

         (409,881)         67,805          (688,894)         322,135          (505,098)         68,645          (3,291,018)         (16,032,339)   
     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net change in contract owners’ equity

         176,230          (232,355)         (495,375)         257,960          (241,879)         (25,503)         (842,101)         (15,713,803)   

Contract owners’ equity beginning of period

         4,131,562          4,363,917          2,163,908          1,905,948          2,599,081          2,624,584          18,709,577          34,423,380    
     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Contract owners’ equity end of period

    $           4,307,792          4,131,562          1,668,533          2,163,908          2,357,202          2,599,081          17,867,476          18,709,577    
     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

CHANGES IN UNITS:

                           

Beginning units

         421,080          414,803          162,045          141,124          149,636          146,450          1,809,119          3,341,882    

Units purchased

         6,630          39,058          3,534          30,464          8,517          35,826          48,654          55,513    

Units redeemed

         (46,797)         (32,781)         (50,524)         (9,543)         (35,869)         (32,640)         (333,577)         (1,588,276)   
     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Ending units

         380,913          421,080          115,055          162,045          122,284          149,636          1,524,196          1,809,119    
     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

           OVGS3      OVGS      OVGI      OVSC  
           2012      2011      2012      2011      2012      2011      2012      2011  

Investment activity:

                          

Net investment income (loss)

   $           329,528          212,921          896,380          556,643          238,289          214,768          24,833          26,287    

Realized gain (loss) on investments

        (586,647)         (260,161)         (1,279,033)         (2,177,236)         343,759          397,458          122,438          (105,746)   

Change in unrealized gain (loss) on investments

        3,186,789          (1,314,095)         8,759,545          (2,442,566)         3,392,518          (585,310)         575,285          (7,305)   

Reinvested capital gains

        -             -             -             -             -             -             -             -       
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

        2,929,670          (1,361,335)         8,376,892          (4,063,159)         3,974,566          26,916          722,556          (86,764)   
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Equity transactions:

                          

Purchase payments received from contract owners (notes 2a and 6)

        1,253,719          1,544,173          1,273,550          1,113,724          1,363,729          1,561,656          273,555          275,125    

Transfers between funds

        (978,167)         79,684          (3,204,546)         483,446          (533,370)         (1,169,665)         (184,273)         (14,075)   

Surrenders (note 6)

        (1,622,743)         (2,152,522)         (1,641,068)         (5,483,530)         (1,484,288)         (2,315,014)         (280,217)         (390,423)   

Death Benefits (note 4)

        (42,995)         (41,405)         (66,888)         (87,983)         (173,933)         (193,748)         (18,355)         (14,500)   

Net policy repayments (loans) (note 5)

        66,277          83,798          (127,616)         (141,924)         (19,809)         (4,546)         (36,630)         (130,368)   

Deductions for surrender charges (note 2d)

        (9,069)         (21,558)         (3,938)         (7,044)         (11,730)         (23,074)         (7,271)         (7,460)   

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

        (676,872)         (762,055)         (846,509)         (980,535)         (1,229,048)         (1,268,726)         (198,802)         (189,795)   

Asset charges (note 3):

                          

FPVUL & VEL contracts

        (55,680)         (59,617)         (30,823)         (33,634)         (88,246)         (86,926)         (15,987)         (15,348)   

MSP contracts

        (3,421)         (3,368)         (1,170)         (1,332)         (3,090)         (2,786)         (363)         (363)   

SL contracts or LSFP contracts

        (7,333)         (8,853)         (3,665)         (4,688)         (6,931)         (7,976)         (2,363)         (2,489)   

Adjustments to maintain reserves

        (69)         42          205          (118)         3          14          (2)         184    
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net equity transactions

        (2,076,353)         (1,341,681)         (4,652,468)         (5,143,618)         (2,186,713)         (3,510,791)         (470,708)         (489,512)   
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net change in contract owners’ equity

        853,317          (2,703,016)         3,724,424          (9,206,777)         1,787,853          (3,483,875)         251,848          (576,276)   

Contract owners’ equity beginning of period

        14,716,454          17,419,470          42,498,448          51,705,225          24,385,769          27,869,644          4,142,765          4,719,041    
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Contract owners’ equity end of period

   $           15,569,771          14,716,454          46,222,872          42,498,448          26,173,622          24,385,769          4,394,613          4,142,765    
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

CHANGES IN UNITS:

                          

Beginning units

        1,097,060          1,191,196          3,043,484          3,390,923          1,822,719          2,084,925          194,582          216,746    

Units purchased

        100,236          123,261          83,269          268,863          110,463          151,046          13,098          18,455    

Units redeemed

        (239,851)         (217,397)         (392,280)         (616,302)         (259,026)         (413,252)         (32,736)         (40,619)   
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Ending units

        957,445          1,097,060          2,734,473          3,043,484          1,674,156          1,822,719          174,944          194,582    
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

          OVAG     OVSB     PMVAAA     PMVFBA  
          2012     2011     2012     2011     2012     2011     2012      2011  

Investment activity:

                   

Net investment income (loss)

   $          (11,714)        (14,635)        138,134         59,526         958,325         218,395         134,266          47,815    

Realized gain (loss) on investments

       705,073         1,401,345         10,126         194,366         15,255         55,638         97,018          114,884    

Change in unrealized gain (loss) on investments

       2,940,005         (871,098)        9,646         (276,246)        950,375         (238,663)        (168,660)         16,445    

Reinvested capital gains

       -            -            25,947         24,713         -            -            47,707          8,754    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

       3,633,364         515,612         183,853         2,359         1,923,955         35,370         110,331          187,898    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Equity transactions:

                   

Purchase payments received from contract owners (notes 2a and 6)

       1,503,020         1,769,330         23,507         6         405,937         343,378         79,348          68,840    

Transfers between funds

       (1,586,853)        (1,600,184)        (474,074)        163,102         20,604,643         920,918         (356,931)         713,352    

Surrenders (note 6)

       (1,775,054)        (2,934,375)        (27,520)        (87,201)        (469,507)        (16,002)        (249,221)         (67,703)   

Death Benefits (note 4)

       (97,014)        (63,421)        (2,935)        -            (39,305)        (1,679)        (20,486)         -       

Net policy repayments (loans) (note 5)

       214,139         (121,896)        4,514         60,861         1,473         69         (29,180)         (40,781)   

Deductions for surrender charges (note 2d)

       (4,468)        (4,912)        (273)        -            -            -            (655)         (2,069)   

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

       (1,211,232)        (1,205,846)        (28,011)        (16,430)        (158,140)        (55,933)        (97,084)         (83,945)   

Asset charges (note 3):

                   

FPVUL & VEL contracts

       (80,892)        (77,022)        (1,381)        -            (1,660)        (678)        (4,642)         (4,607)   

MSP contracts

       (1,405)        (1,421)        (18)        -            -            -            (28)         (29)   

SL contracts or LSFP contracts

       (3,769)        (4,281)        (122)        -            -            -            (1,359)         (1,449)   

Adjustments to maintain reserves

       (893)        (1,355)        (15)        (3)        100         3         157          (158)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net equity transactions

       (3,044,421)        (4,245,383)        (506,328)        120,335         20,343,541         1,190,076         (680,081)         581,451    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net change in contract owners’ equity

       588,943         (3,729,771)        (322,475)        122,694         22,267,496         1,225,446         (569,750)         769,349    

Contract owners’ equity beginning of period

       22,650,333         26,380,104         2,188,604         2,065,910         3,334,681         2,109,235         2,697,459          1,928,110    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Contract owners’ equity end of period

   $          23,239,276         22,650,333         1,866,129         2,188,604         25,602,177         3,334,681         2,127,709          2,697,459    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

CHANGES IN UNITS:

                   

Beginning units

       1,811,076         2,217,825         188,028         178,634         211,585         136,442         205,816          159,594    

Units purchased

       109,680         235,787         141,928         18,483         1,249,481         83,057         12,288          63,954    

Units redeemed

       (333,576)        (642,536)        (189,901)        (9,089)        (40,731)        (7,914)        (64,083)         (17,732)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Ending units

       1,587,180         1,811,076         140,055         188,028         1,420,335         211,585         154,021          205,816    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

          PMVLGA     PMVLDA     PMVRRA     PMVTRA  
          2012     2011     2012     2011     2012     2011     2012      2011  

Investment activity:

                   

Net investment income (loss)

   $          7,962         5,056         971,127         983,396         1,037,293         1,875,996         9,769,888          8,786,706    

Realized gain (loss) on investments

       52,397         8,394         922,417         1,412,217         4,917,466         4,165,888         4,046,556          3,874,880    

Change in unrealized gain (loss) on investments

       (82,091)        44,365         1,238,479         (1,731,371)        (2,418,651)        1,779,633         14,162,170          (6,242,224)   

Reinvested capital gains

       39,644         7,343         -            -            6,195,039         3,220,342         8,219,576          5,477,890    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

       17,912         65,158         3,132,023         664,242         9,731,147         11,041,859         36,198,190          11,897,252    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Equity transactions:

                   

Purchase payments received from contract owners (notes 2a and 6)

       3,390         10,381         1,864,987         1,552,674         3,835,087         2,238,877         9,334,693          8,278,682    

Transfers between funds

       8,120         337,298         (7,148,402)        (1,173,376)        (6,161,189)        13,485,637         23,284,724          20,717,589    

Surrenders (note 6)

       -            (32,394)        (8,948,394)        (8,714,029)        (2,062,670)        (3,235,952)        (9,448,396)         (13,493,886)   

Death Benefits (note 4)

       -            -            (251,367)        (52,662)        (177,232)        (47,374)        (687,582)         (716,043)   

Net policy repayments (loans) (note 5)

       (17,174)        (629)        937,693         179,822         46,681         381,119         (199,475)         203,992    

Deductions for surrender charges (note 2d)

       -            -            (628)        (4,369)        -            -            (1,989)         -       

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

       (14,455)        (5,573)        (1,050,617)        (1,155,201)        (1,507,508)        (1,217,930)        (4,960,686)         (4,342,690)   

Asset charges (note 3):

                   

FPVUL & VEL contracts

       -            (7)        (22,465)        (20,900)        (6,823)        (3,852)        (33,672)         (17,084)   

MSP contracts

       -            -            (1,026)        (645)        -            -            -             -       

SL contracts or LSFP contracts

       -            -            (3,136)        (2,758)        -            -            -             -       

Adjustments to maintain reserves

       39         (18)        3,741         865         (824)        3,220         28,233          (8,462)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net equity transactions

       (20,080)        309,058         (14,619,614)        (9,390,579)        (6,034,478)        11,603,745         17,315,850          10,622,098    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net change in contract owners’ equity

       (2,168)        374,216         (11,487,591)        (8,726,337)        3,696,669         22,645,604         53,514,040          22,519,350    

Contract owners’ equity beginning of period

       413,356         39,140         62,639,487         71,365,824         112,848,726         90,203,122         381,039,500          358,520,150    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Contract owners’ equity end of period

   $          411,188         413,356         51,151,896         62,639,487         116,545,395         112,848,726         434,553,540          381,039,500    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

CHANGES IN UNITS:

                   

Beginning units

       30,627         3,697         4,435,185         5,100,138         6,190,538         5,524,210         21,977,687          21,388,148    

Units purchased

       11,897         31,216         501,797         320,000         341,040         1,240,647         1,674,373          1,745,340    

Units redeemed

       (13,288)        (4,286)        (1,510,855)        (984,953)        (640,182)        (574,319)        (748,163)         (1,155,801)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Ending units

       29,236         30,627         3,426,127         4,435,185         5,891,396         6,190,538         22,903,897          21,977,687    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

            PIVEMI      PIHYB1      PVGIB      PVTIGB  
            2012      2011      2012      2011      2012      2011      2012      2011  

Investment activity:

                           

Net investment income (loss)

    $           5,256          2,294          659,991          560,129          12,418          9,069          19,943          37,035    

Realized gain (loss) on investments

         (237,394)         92,935          (10,758)         2,000,371          17,455          (88,137)         (152,133)         (155,417)   

Change in unrealized gain (loss) on investments

         373,467          (566,240)         423,803          (2,439,424)         103,096          44,412          312,201          (60,329)   

Reinvested capital gains

         44,847          -             611,210          -             -             -             -             -       
     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

         186,176          (471,011)         1,684,246          121,076          132,969          (34,656)         180,011          (178,711)   
     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Equity transactions:

                           

Purchase payments received from contract owners (notes 2a and 6)

         170,349          207,666          249,346          230,173          53,865          72,149          55,258          45,321    

Transfers between funds

         (305,700)         (39,571)         (3,336,330)         (2,544,783)         (5,747)         (19,662)         1,598          26,929    

Surrenders (note 6)

         (39,577)         (29,572)         (728,870)         (487,390)         (32,940)         (52,017)         (119,461)         (113,295)   

Death Benefits (note 4)

         (1,155)         (10,313)         (45,552)         (35,389)         -             (814)         -             -       

Net policy repayments (loans) (note 5)

         5,666          (490)         48,453          108,820          (30,223)         (3,492)         12,523          (1,449)   

Deductions for surrender charges (note 2d)

         -             -             -             -             (667)         (6,540)         (952)         (2,790)   

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

         (42,688)         (53,188)         (175,006)         (175,268)         (39,161)         (40,078)         (45,617)         (50,756)   

Asset charges (note 3):

                           

FPVUL & VEL contracts

         (1,322)         (1,570)         (589)         (495)         (3,078)         (3,051)         (3,040)         (3,510)   

MSP contracts

         -             -             -             -             (32)         (30)         (84)         (146)   

SL contracts or LSFP contracts

         -             -             -             -             (240)         (228)         (202)         (232)   

Adjustments to maintain reserves

         (2)         (58)         49,810          1,041          9          (4)         1          61    
     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net equity transactions

         (214,429)         72,904          (3,938,738)         (2,903,291)         (58,214)         (53,767)         (99,976)         (99,867)   
     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Net change in contract owners’ equity

         (28,253)         (398,107)         (2,254,492)         (2,782,215)         74,755          (88,423)         80,035          (278,578)   

Contract owners’ equity beginning of period

         1,605,557          2,003,664          9,887,817          12,670,032          692,690          781,113          874,372          1,152,950    
     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Contract owners’ equity end of period

    $           1,577,304          1,605,557          7,633,325          9,887,817          767,445          692,690          954,407          874,372    
     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

CHANGES IN UNITS:

                           

Beginning units

         238,075          227,376          480,450          604,436          50,439          54,238          59,303          64,956    

Units purchased

         24,164          33,209          25,297          68,279          4,168          5,269          3,846          3,121    

Units redeemed

         (53,012)         (22,510)         (185,568)         (192,265)         (7,701)         (9,068)         (10,054)         (8,774)   

Ending units

         209,227          238,075          320,179          480,450          46,906          50,439          53,095          59,303    

(Continued)

 

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

          PVTSCB     PVTVB     ACGI     ACEG  
          2012     2011     2012     2011     2012     2011     2012      2011  

Investment activity:

                   

Net investment income (loss)

   $          8         23         5,665         -            45,577         20,494         -             -       

Realized gain (loss) on investments

       848         278         20,137         181,646         5,733         (17,278)        (10,657)         -       

Change in unrealized gain (loss) on investments

       517         (891)        191,874         (542,364)        278,485         (85,006)        (17,932)         -       

Reinvested capital gains

       -            -            -            -            -            -            -             -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

       1,373         (590)        217,676         (360,718)        329,795         (81,790)        (28,589)         -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Equity transactions:

                   

Purchase payments received from contract owners (notes 2a and 6)

       155         941         114,123         133,531         42,176         28,920         56,385          -       

Transfers between funds

       (7,913)        3,471         (538,770)        435,708         1,410,572         1,851,373         852,239          -       

Surrenders (note 6)

       (1,049)        (281)        (77,991)        (72,586)        -            -            (33,929)         -       

Death Benefits (note 4)

       -            -            (39,863)        (3,782)        -            -            -             -       

Net policy repayments (loans) (note 5)

       -            (380)        (18,480)        (35,323)        (992)        -            (4,664)         -       

Deductions for surrender charges (note 2d)

       -            -            (1,085)        (1,299)        -            -            (1,256)         -       

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

       (184)        (313)        (60,193)        (72,293)        (32,974)        (15,489)        (34,972)         -       

Asset charges (note 3):

                   

FPVUL & VEL contracts

       -            -            (5,017)        (5,617)        (77)        (34)        (2,448)         -       

MSP contracts

       -            -            (427)        (274)        -            -            (111)         -       

SL contracts or LSFP contracts

       -            -            (1,338)        (1,214)        -            -            (153)         -       

Adjustments to maintain reserves

       (2)        4         (13)        3         27         (7)        1,781          -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net equity transactions

       (8,993)        3,442        (629,054)        376,854         1,418,732         1,864,763         832,872          -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net change in contract owners’ equity

       (7,620)        2,852         (411,378)        16,136         1,748,527         1,782,973         804,283          -       

Contract owners’ equity beginning of period

       10,584         7,732         1,549,311         1,533,175         1,782,973         -            -             -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Contract owners’ equity end of period

   $          2,964         10,584         1,137,933         1,549,311         3,531,500         1,782,973         804,283          -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

CHANGES IN UNITS:

                   

Beginning units

       1,253         870         103,328         84,002         176,833         -            -             -       

Units purchased

       18         499         11,327         33,063         132,500         178,371         90,841          -       

Units redeemed

       (972)        (116)        (48,216)        (13,737)        (3,095)        (1,538)        (8,351)         -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Ending units

       299         1,253         66,439         103,328         306,238         176,833         82,490          -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

          AVBVI     AVHY1     AVIE     AVMCCI  
          2012     2011     2012     2011     2012     2011     2012      2011  

Investment activity:

                   

Net investment income (loss)

   $          8,585         4,841         414,626         201,410         500,285         539,239         (1,200)         285    

Realized gain (loss) on investments

       31,721         41,063         52,982         (212,246)        2,291,229         1,456,983         3,235          6,706    

Change in unrealized gain (loss) on investments

       73,113         (60,262)        755,725         (163,934)        2,695,361         (4,854,583)        73,852          (30,564)   

Reinvested capital gains

       -            -            -            -            -            -            9,920          -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

       113,419         (14,358)        1,223,333         (174,770)        5,486,875         (2,858,361)        85,807          (23,573)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Equity transactions:

                   

Purchase payments received from contract owners (notes 2a and 6)

       8,810         13,955         293,870         326,949         1,423,673         1,227,418         52,626          102,917    

Transfers between funds

       5,181         131,425         1,731,252         6,352,826         3,532,290         3,677,027         606,298          72,565    

Surrenders (note 6)

       (115,851)        (61,119)        (180,590)        (169,500)        (3,298,790)        (5,855,981)        (2,087)         -       

Death Benefits (note 4)

       (538)        (1,737)        (29,544)        -            (97,506)        (16,904)        -             -       

Net policy repayments (loans) (note 5)

       (5,123)        (4,455)        (7,012)        (12,040)        542,839         172,376         -             -       

Deductions for surrender charges (note 2d)

       -            -            -            -            -            -            -             -       

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

       (19,803)        (15,689)        (87,378)        (59,034)        (527,292)        (583,789)        (12,785)         (5,515)   

Asset charges (note 3):

                   

FPVUL & VEL contracts

       1         (8)        (1,194)        (790)        (1,590)        (1,575)        (34)         (24)   

MSP contracts

       -            -            -            -            -            -            -             -       

SL contracts or LSFP contracts

       (2)        -            -            -            -            -            -             -       

Adjustments to maintain reserves

       (7)        12         58         4         (111)        363         (12)         10    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net equity transactions

       (127,332)        62,384         1,719,462         6,438,415         1,573,513         (1,381,065)        644,006          169,953    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net change in contract owners’ equity

       (13,913)        48,026         2,942,795         6,263,645         7,060,388         (4,239,426)        729,813          146,380    

Contract owners’ equity beginning of period

       705,047         657,021         6,945,954         682,309         35,243,614         39,483,040         251,715          105,335    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Contract owners’ equity end of period

   $          691,134         705,047         9,888,749         6,945,954         42,304,002         35,243,614         981,528          251,715    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

CHANGES IN UNITS:

                   

Beginning units

       54,159         48,919         649,726         64,325         2,039,047         2,126,295         18,883          7,377    

Units purchased

       6,105         11,332         172,518         613,371         271,688         310,352         48,942          12,111    

Units redeemed

       (15,078)        (6,092)        (31,161)        (27,970)        (187,805)        (397,600)        (1,278)         (605)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Ending units

       45,186         54,159         791,083         649,726         2,122,930         2,039,047         66,547          18,883    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

          ROCMC     ROCSC     TREI2     TRHS2  
          2012     2011     2012     2011     2012     2011     2012      2011  

Investment activity:

                   

Net investment income (loss)

   $          (98,249)        1,156,925         (2,529)        4,869         978,870         808,599         (10,898)         (6,007)   

Realized gain (loss) on investments

       7,177,406         4,063,611         (32,530)        67,759         8,046,398         3,355,631         583,767          749,529    

Change in unrealized gain (loss) on investments

       (4,752,250)        (11,843,706)        246,246         (328,998)        (469,846)        (5,936,383)        1,287,372          (596,039)   

Reinvested capital gains

       886,619         -            58,574         -            -            -            181,641          -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

       3,213,526         (6,623,170)        269,761         (256,370)        8,555,422         (1,772,153)        2,041,882          147,483    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Equity transactions:

                   

Purchase payments received from contract owners (notes 2a and 6)

       1,836,995         1,394,522         97         (32)        1,833,784         1,693,788         228,034          79,862    

Transfers between funds

       (8,294,417)        8,310,866         (158,651)        2,385,217         (9,821,854)        4,465,631         3,125,355          3,354,489    

Surrenders (note 6)

       (3,247,544)        (2,592,594)        (62,984)        (88,000)        (5,090,653)        (5,979,208)        (279,220)         (189,189)   

Death Benefits (note 4)

       (87,184)        (42,172)        (10,136)        -            (101,230)        (24,439)        (32,726)         -       

Net policy repayments (loans) (note 5)

       58,784         139,232         -            (698)        524,581         41,000         (89,226)         71,065    

Deductions for surrender charges (note 2d)

       -            -            -            -            -            -            (2,154)         (815)   

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

       (612,504)        (686,202)        (18,244)        (10,974)        (883,582)        (1,008,263)        (211,384)         (66,505)   

Asset charges (note 3):

                   

FPVUL & VEL contracts

       (3,005)        (2,237)        -            -            (2,933)        (2,732)        (11,180)         (3,292)   

MSP contracts

       -            -            -            -            -            -            (294)         (192)   

SL contracts or LSFP contracts

       -            -            -            -            -            (93)        (1,400)         (558)   

Adjustments to maintain reserves

       272         (396)        8         (11)        (372)        (6,217)        37          17    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net equity transactions

       (10,348,603)        6,521,019         (249,910)        2,285,502         (13,542,259)        (820,533)        2,725,842          3,244,882   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net change in contract owners’ equity

       (7,135,077)        (102,151)        19,851         2,029,132         (4,986,837)        (2,592,686)        4,767,724          3,392,365    

Contract owners’ equity beginning of period

       46,931,822         47,033,973         2,358,822         329,690         58,088,951         60,681,637         5,857,010          2,464,645    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Contract owners’ equity end of period

   $          39,796,745         46,931,822         2,378,673         2,358,822         53,102,114         58,088,951         10,624,734          5,857,010    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

CHANGES IN UNITS:

                   

Beginning units

       1,937,636         1,703,587         205,572         27,732         3,550,013         3,664,323         494,264          229,465    

Units purchased

       87,848         441,749         -            186,172         110,934         394,468         237,769          297,514    

Units redeemed

       (495,708)        (207,700)        (20,923)        (8,332)        (878,586)        (508,778)        (46,980)         (32,715)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Ending units

       1,529,776         1,937,636         184,649         205,572         2,782,361         3,550,013         685,053          494,264    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

          TRLT1     TRMCG2     TRNAG1     TRPSB1  
          2012     2011     2012     2011     2012     2011     2012      2011  

Investment activity:

                   

Net investment income (loss)

   $          25,715         6,924         (55,913)        (59,550)        99,820         (283)        62,629          47,563    

Realized gain (loss) on investments

       (3,184)        (2,510)        1,573,337         3,422,163         827,755         3,721,605         37,760          83,952    

Change in unrealized gain (loss) on investments

       (3,170)        (5,156)        (506,882)        (7,304,348)        2,200,732         (6,179,040)        220,545          (213,016)   

Reinvested capital gains

       4,780         3,684         2,196,415         3,142,076         207,221         1,761,338         107,742          -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

       24,141         2,942         3,206,957         (799,659)        3,335,528         (696,380)        428,676          (81,501)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Equity transactions:

                   

Purchase payments received from contract owners (notes 2a and 6)

       450,810         12,243         323,174         400,828         2,215,774         2,005,372         180,689          130,917    

Transfers between funds

       1,547,000         413,712         (3,749,882)        6,521,675         8,238,783         3,874,384         802,071          1,559,176    

Surrenders (note 6)

       -            (25,800)        (2,327,406)        (2,274,381)        (836,617)        (3,087,498)        (343,882)         (106,811)   

Death Benefits (note 4)

       (8,394)        -            (85,728)        (1,913)        (67,023)        (49,128)        -             (2,229)   

Net policy repayments (loans) (note 5)

       (266)        -            645,764         129,610         (36,605)        81,914         4,171          (109)   

Deductions for surrender charges (note 2d)

       -            -            -            -            -            -            -             -       

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

       (24,745)        (8,950)        (279,660)        (316,069)        (467,662)        (427,802)        (38,954)         (34,404)   

Asset charges (note 3):

                   

FPVUL & VEL contracts

       (38)        (8)        -            -            (4,707)        (2,208)        (672)         (590)   

MSP contracts

       -            -            -            -            -            -            -             -       

SL contracts or LSFP contracts

       -            -            -            -            -            -            -             -       

Adjustments to maintain reserves

       (48)        (45)        215        (163)        228         (77)        24          3    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net equity transactions

       1,964,319         391,152         (5,473,523)        4,459,587         9,042,171         2,394,957         603,447          1,545,953    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net change in contract owners’ equity

       1,988,460         394,094         (2,266,566)        3,659,928         12,377,699         1,698,577         1,032,123          1,464,452    

Contract owners’ equity beginning of period

       394,094         -            25,995,841         22,335,913         22,061,426         20,362,849         2,956,718          1,492,266    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Contract owners’ equity end of period

   $          2,382,554         394,094         23,729,275         25,995,841         34,439,125         22,061,426         3,988,841          2,956,718    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

CHANGES IN UNITS:

                   

Beginning units

       39,025         -            1,012,297         854,608         1,483,224         1,352,960         261,403          131,118    

Units purchased

       195,283         42,495         12,952         226,810         659,250         394,760         87,708          169,577    

Units redeemed

       (3,469)        (3,470)        (210,101)        (69,121)        (91,638)        (264,496)        (42,223)         (39,292)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Ending units

       230,839         39,025         815,148         1,012,297         2,050,836         1,483,224         306,888          261,403    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

           TRBCGP     VWEM     VWHA     VVB  
           2012     2011     2012     2011     2012     2011     2012     2011  

Investment activity:

                   

Net investment income (loss)

    $          91         -            (12,534)        177,094         207,042         596,319         92,504         59,022    

Realized gain (loss) on investments

        (2)        -            1,673,137         2,067,853         1,309,554         4,862,359         272,511         156,675    

Change in unrealized gain (loss) on investments

        (69)        -            2,222,411         (7,310,068)        (3,652,443)        (16,096,879)        118,575         (162,248)   

Reinvested capital gains

        -            -            -            -            4,029,357         719,170         -            -       
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

        20         -            3,883,014         (5,065,121)        1,893,510         (9,919,031)        483,590         53,449    
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Equity transactions:

                   

Purchase payments received from contract owners (notes 2a and 6)

        -            -            391,274         449,431         1,743,405         1,772,789         78         -       

Transfers between funds

        80,133         -            (1,537,915)        82,553         (6,925,010)        2,866,975         763,187         1,509,002    

Surrenders (note 6)

        -            -            (1,247,169)        (1,166,000)        (1,381,536)        (3,754,943)        (117,473)        (113,800)   

Death Benefits (note 4)

        -            -            (81,227)        (44,066)        (107,500)        (206,661)        (17,562)        -       

Net policy repayments (loans) (note 5)

        -            -            262,877         (106,586)        67,525         70,375         -            131,383    

Deductions for surrender charges (note 2d)

        -            -            (744)        (65)        -            (619)        -            -       

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

        (121)        -            (469,991)        (538,663)        (797,193)        (982,086)        (30,933)        (19,899)   

Asset charges (note 3):

                   

FPVUL & VEL contracts

        -            -            (26,800)        (32,214)        (29,316)        (35,396)        -            -       

MSP contracts

        -            -            (462)        (507)        (749)        (1,018)        -            -       

SL contracts or LSFP contracts

        -            -            (2,544)        (3,042)        (2,579)        (3,294)        -            -       

Adjustments to maintain reserves

        (1)        -            98         (543)        (186)        (766)        25         1    
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net equity transactions

        80,011         -            (2,712,603)        (1,359,702)        (7,433,139)        (274,644)        597,322         1,506,687    
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net change in contract owners’ equity

        80,031         -            1,170,411         (6,424,823)        (5,539,629)        (10,193,675)        1,080,912         1,560,136    

Contract owners’ equity beginning of period

        -            -            14,578,958         21,003,781         48,366,916         58,560,591         3,477,440         1,917,304    
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Contract owners’ equity end of period

    $          80,031         -            15,749,369         14,578,958         42,827,287         48,366,916         4,558,352         3,477,440    
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

CHANGES IN UNITS:

                   

Beginning units

        -            -            500,671         542,854         1,097,201         1,108,821         318,666         181,821    

Units purchased

        7,899         -            19,563         42,979         74,100         121,540         67,258         149,504    

Units redeemed

        (12)        -            (99,113)        (85,162)        (214,917)        (133,160)        (14,057)        (12,659)   
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Ending units

        7,887         -            421,121         500,671         956,384         1,097,201         371,867         318,666    
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

 

          VVDV     VVI     VVMCI     VVREI  
          2012     2011     2012     2011     2012     2011     2012      2011  

Investment activity:

                   

Net investment income (loss)

   $          45,663         30,986         82,602         56,151         77,224         75,082         33,981          35,184    

Realized gain (loss) on investments

       363,470         37,060         214,008         544,628         39,495         1,428,704         46,946          144,156    

Change in unrealized gain (loss) on investments

       769,193         (32,736)        461,961         (1,284,447)        840,782         (1,484,498)        138,516          33,221    

Reinvested capital gains

       -            -            -            -            246,150         -            65,623          27,470    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

       1,178,326         35,310         758,571         (683,668)        1,203,651         19,288         285,066          240,031    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Equity transactions:

                   

Purchase payments received from contract owners (notes 2a and 6)

       548         (3)        (280)        1         109         64         100          39    

Transfers between funds

       10,566,488         479,325         (117,121)        350,248         1,117,221         (1,502,043)        79,083          (752,605)   

Surrenders (note 6)

       (284,711)        (74,600)        (115,578)        (177,100)        (245,236)        (281,700)        (49,206)         (57,401)   

Death Benefits (note 4)

       (43,388)        -            (18,424)        -            (36,945)        -            (7,752)         -       

Net policy repayments (loans) (note 5)

       -            82,823         -            114,400         -         

 

201,118 

  

     -             43,716    

Deductions for surrender charges (note 2d)

       -            -            -            -            -            -            -             -       

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

       (54,136)        (13,597)        (32,642)        (32,248)        (65,754)        (60,398)        (13,635)         (13,444)   

Asset charges (note 3):

                   

FPVUL & VEL contracts

       -            -            -            -            -            -            -             -       

MSP contracts

       -            -            -            -            -            -            -             -       

SL contracts or LSFP contracts

       -            -            -            -            -            -            -             -       

Adjustments to maintain reserves

       62         (5)        37         (21)        57         (17)        17          (11)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net equity transactions

       10,184,863         473,943         (284,008)        255,280         769,452         (1,642,976)        8,607          (779,706)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net change in contract owners’ equity

       11,363,189         509,253         474,563         (428,388)        1,973,103         (1,623,688)        293,673          (539,675)   

Contract owners’ equity beginning of period

       2,212,913         1,703,660         3,963,790         4,392,178         7,392,592         9,016,280         1,556,333          2,096,008    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Contract owners’ equity end of period

   $          13,576,102         2,212,913         4,438,353         3,963,790         9,365,695         7,392,592         1,850,006          1,556,333    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

CHANGES IN UNITS:

                   

Beginning units

       238,735         190,605         504,659         482,506         732,274         873,116         138,701          202,142    

Units purchased

       1,057,688         57,993         -            46,615         102,095         20,705         7,511          4,556    

Units redeemed

       (36,636)        (9,863)        (33,329)        (24,462)        (31,688)        (161,547)        (5,556)         (67,997)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Ending units

       1,259,787         238,735         471,330         504,659         802,681         732,274         140,656          138,701    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

(Continued)

 

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

          VVSTC     VVHGB     WRASP     WRGP  
          2012     2011     2012     2011     2012     2011     2012      2011  

Investment activity:

                   

Net investment income (loss)

   $          110,350         117,868         190,032         290,274         135,810         107,992         (1,949)         5,171    

Realized gain (loss) on investments

       19,714         125,043         15,220         (86,941)        310,272         346,527         98,325          180,818    

Change in unrealized gain (loss) on investments

       68,358         (210,980)        (3,229)        234,714         1,753,592         (1,341,774)        (8,851)         (236,218)   

Reinvested capital gains

       -            35,806         67,969         83,030         -            -            146,644          71,426    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

       198,422         67,737         269,992         521,077         2,199,674         (887,255)        234,169          21,197    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Equity transactions:

                   

Purchase payments received from contract owners (notes 2a and 6)

       56         2         192         43         861,333         970,957         107,095          116,465    

Transfers between funds

       1,415,441         1,072,210         1,121,074         (2,419,858)        1,426,787         4,027,721         (300,133)         627,453    

Surrenders (note 6)

       (142,422)        (158,500)        (198,318)        (220,200)        (621,037)        (561,494)        (70,714)         (41,571)   

Death Benefits (note 4)

       (21,259)        -            (30,792)        -            (5,925)        (7,147)        (12,164)         (432)   

Net policy repayments (loans) (note 5)

       -            45,970         -            177,368         (55,088)        (247,120)        4,718          (183)   

Deductions for surrender charges (note 2d)

       -            -            -            -            (3,838)        (13,480)        -             -       

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

       (36,584)        (28,692)        (54,296)        (53,172)        (445,956)        (386,213)        (36,613)         (33,565)   

Asset charges (note 3):

                   

FPVUL & VEL contracts

       -            -            -            -            (32,296)        (26,642)        (518)         (487)   

MSP contracts

       -            -            -            -            (659)        (612)        -             -       

SL contracts or LSFP contracts

       -            -            -            -            (3,191)        (3,058)        -             -       

Adjustments to maintain reserves

       37         (7)        63         (21)        25         11         19          36    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net equity transactions

       1,215,269         930,983         837,923         (2,515,840)        1,120,155         3,752,923         (308,310)         667,716    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net change in contract owners’ equity

       1,413,691         998,720         1,107,915         (1,994,763)        3,319,829         2,865,668         (74,141)         688,913    

Contract owners’ equity beginning of period

       4,547,420         3,548,700         6,201,024         8,195,787         11,126,413         8,260,745         2,157,652          1,468,739    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Contract owners’ equity end of period

   $          5,961,111         4,547,420         7,308,939         6,201,024         14,446,242         11,126,413         2,083,511          2,157,652    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

CHANGES IN UNITS:

                   

Beginning units

       390,379         310,148         579,704         823,116         1,052,778         725,061         150,968          104,806    

Units purchased

       117,372         96,949         104,132         19,447         225,359         430,132         17,778          51,778    

Units redeemed

       (16,649)        (16,718)        (25,634)        (262,859)        (131,185)        (102,415)        (39,065)         (5,616)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Ending units

       491,102         390,379         658,202         579,704         1,146,952         1,052,778         129,681          150,968    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

          WRHIP     WRMCG     WRRESP     WRSTP  
          2012     2011     2012     2011     2012     2011     2012      2011  

Investment activity:

                   

Net investment income (loss)

   $          (446)        -            (203)        -            17,006         14,856         (7,191)         (4,654)   

Realized gain (loss) on investments

       24,938         -            1,822         -            298,072         162,557         (51,308)         93,672    

Change in unrealized gain (loss) on investments

       325,194         -            20,249         -            120,052         (88,891)        581,158          (408,785)   

Reinvested capital gains

       -            -            -            -            -            -            293,134          78,015    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

       349,686         -            21,868         -            435,130         88,522         815,793          (241,752)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Equity transactions:

                   

Purchase payments received from contract owners (notes 2a and 6)

       53,681         -            212,223         -            313,670         173,268         643,655          354,158    

Transfers between funds

       12,761,889         -            322,794         -            (620,180)        1,023,395         1,128,559          1,130,557    

Surrenders (note 6)

       (142,079)        -            (1,202)        -            (176,973)        (13,225)        (82,322)         (107,028)   

Death Benefits (note 4)

       -            -            -            -            (337)        (5,980)        (19,103)         (6,806)   

Net policy repayments (loans) (note 5)

       2,482         -            871         -            (15,263)        (9,079)        (17,189)         (512)   

Deductions for surrender charges (note 2d)

       (650)        -            -            -            -            -            -             -       

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

       (30,809)        -            (4,427)        -            (55,027)        (49,056)        (80,714)         (51,935)   

Asset charges (note 3):

                   

FPVUL & VEL contracts

       (984)        -            (181)        -            (1,901)        (1,194)        (1,902)         (492)   

MSP contracts

       -            -            -            -            -            -            -             -       

SL contracts or LSFP contracts

       -            -            -            -            -            -            -             -       

Adjustments to maintain reserves

       8         -            10         -            45         (8)        (288)         (2)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net equity transactions

       12,643,538         -            530,088         -            (555,966)        1,118,121         1,570,696          1,317,940    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net change in contract owners’ equity

       12,993,224         -            551,956         -            (120,836)        1,206,643         2,386,489          1,076,188    

Contract owners’ equity beginning of period

       -            -            -            -            2,733,015         1,526,372         2,428,472          1,352,284    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Contract owners’ equity end of period

   $          12,993,224         -            551,956         -            2,612,179         2,733,015         4,814,961          2,428,472    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

CHANGES IN UNITS:

                   

Beginning units

       -            -            -            -            205,643         120,636         237,727          124,666    

Units purchased

       1,208,359         -            55,823         -            22,755         90,993         149,748          133,710    

Units redeemed

       (15,888)        -            (1,420)        -            (61,540)        (5,986)        (18,573)         (20,649)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Ending units

       1,192,471         -            54,403         -            166,858         205,643         368,902          237,727    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

          SVDF     SVOF     WFVSCG     JAGTS2  
          2012     2011     2012     2011     2012     2011     2012      2011  

Investment activity:

                   

Net investment income (loss)

   $          (7,302)        (4,779)        (10,642)        (4,273)        (15,671)        (16,642)        -             -       

Realized gain (loss) on investments

       388,313         192,078         1,313,955         498,551         237,254         553,938         213,090          138,798    

Change in unrealized gain (loss) on investments

       646,430         (159,318)        (216,417)        (1,409,759)        200,685         (1,431,474)        171,125          (347,812)   

Reinvested capital gains

       -            -            2,967         -            399,880         -            -             -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

       1,027,441         27,981         1,089,863         (915,481)        822,148         (894,178)        384,215         (209,014)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Equity transactions:

                   

Purchase payments received from contract owners (notes 2a and 6)

       853,396         809,784         35,750         25,196         566,441         789,671         175,667          832,813    

Transfers between funds

       2,630,752         311,525         (746,935)        684,870         (2,720,436)        4,401,382         (2,395,621)         (29,831)   

Surrenders (note 6)

       (80,797)        (82,581)        (161,108)        (457,906)        (485,045)        (809,636)        (80,927)         (707,588)   

Death Benefits (note 4)

       -            (3,215)        (11,870)        -            (62,700)        (20,884)        (32,262)         (5,803)   

Net policy repayments (loans) (note 5)

       6,673         -            -            -            (7,557)        (75,750)        44,324          515,466    

Deductions for surrender charges (note 2d)

       -            -            -            -            (1,398)        (1,699)        (146)         (1,342)   

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

       (91,631)        (71,785)        (125,797)        (121,070)        (168,347)        (202,326)        (56,377)         (142,574)   

Asset charges (note 3):

                   

FPVUL & VEL contracts

       (6,679)        (5,416)        -            -            (6,632)        (6,480)        (3,041)         (7,534)   

MSP contracts

       -            -            -            -            (28)        (27)        (35)         (47)   

SL contracts or LSFP contracts

       -            -            -            -            (1,114)        (1,204)        (333)         (969)   

Adjustments to maintain reserves

       30         (291)        65         (46)        109         7         3          (3)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net equity transactions

       3,311,744         958,021         (1,009,895)        131,044         (2,886,707)        4,073,054         (2,348,748)         452,588    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net change in contract owners’ equity

       4,339,185         986,002         79,968         (784,437)        (2,064,559)        3,178,876         (1,964,533)         243,574    

Contract owners’ equity beginning of period

       5,231,978         4,245,976         8,109,871         8,894,308         9,992,568         6,813,692         1,964,533          1,720,959    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Contract owners’ equity end of period

   $          9,571,163         5,231,978         8,189,839         8,109,871         7,928,009         9,992,568         -             1,964,533    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

CHANGES IN UNITS:

                   

Beginning units

       502,516         409,144         551,488         569,959         967,648         628,074         189,756          151,587    

Units purchased

       295,872         109,982         9,255         55,370         56,695         438,761         18,855          82,897    

Units redeemed

       (15,782)        (16,610)        (77,432)        (73,841)        (311,807)        (99,187)        (208,611)         (44,728)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Ending units

       782,606         502,516         483,311         551,488         712,536         967,648         -             189,756    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

          JAIGS2     AVCA     AVCDI     OVHI3  
          2012     2011     2012     2011     2012     2011     2012      2011  

Investment activity:

                   

Net investment income (loss)

   $          -            92,341         -            1,487         (1,114)        (5,934)        255,446          124,543    

Realized gain (loss) on investments

       (1,506,517)        (1,469,791)        171,999         (45,636)        756,316         2,592,430         (17,110)         37,261    

Change in unrealized gain (loss) on investments

       3,726,083         (7,685,434)        (51,877)        (33,243)        (225,462)        (2,634,573)        (59,580)         (193,074)   

Reinvested capital gains

       -            246,048         -            -            -            -            -             -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

       2,219,566         (8,816,836)        120,122         (77,392)        529,740         (48,077)        178,756          (31,270)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Equity transactions:

                   

Purchase payments received from contract owners (notes 2a and 6)

       610,382         2,198,264         25,843         99,811         109,567         240,861         165,143          218,952    

Transfers between funds

       (18,958,503)        (2,824,710)        (918,875)        56,785         (4,360,071)        (5,005,636)        (1,559,695)         12,334    

Surrenders (note 6)

       (485,853)        (2,678,878)        (28,545)        (169,373)        (75,285)        (501,391)        (94,660)         (66,891)   

Death Benefits (note 4)

       (42,594)        (51,495)        -            (1,492)        (6,153)        (21,677)        (8,418)         -       

Net policy repayments (loans) (note 5)

       32,581         (12,198)        12,830         12,046         (17,669)        (19,893)        10,179          (8,575)   

Deductions for surrender charges (note 2d)

       (4,846)        (30,609)        (1,725)        (4,203)        (1,868)        (5,265)        (1,838)         (3,182)   

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

       (290,546)        (1,077,883)        (17,211)        (58,415)        (43,207)        (157,960)        (72,518)         (85,063)   

Asset charges (note 3):

                   

FPVUL & VEL contracts

       (21,674)        (81,743)        (1,206)        (4,006)        (2,911)        (9,531)        (5,086)         (5,952)   

MSP contracts

       (652)        (2,209)        (55)        (167)        (101)        (332)        -             (19)   

SL contracts or LSFP contracts

       (2,667)        (9,629)        (99)        (375)        (345)        (1,076)        (479)         (563)   

Adjustments to maintain reserves

       (48)        (55)        (4)        -            -            (20)        (25)         2    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net equity transactions

       (19,164,420)        (4,571,145)        (929,047)        (69,389)        (4,398,043)        (5,481,920)        (1,567,397)         61,043    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net change in contract owners’ equity

       (16,944,854)        (13,387,981)        (808,925)        (146,781)        (3,868,303)        (5,529,997)        (1,388,641)         29,773    

Contract owners’ equity beginning of period

       16,944,854         30,332,835         808,925         955,706         3,868,303         9,398,300         1,388,641          1,358,868    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Contract owners’ equity end of period

   $          -            16,944,854         -            808,925         -            3,868,303         -             1,388,641    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

CHANGES IN UNITS:

                   

Beginning units

       1,571,373         1,903,372         63,786         69,399         215,710         489,353         477,390          458,373    

Units purchased

       50,496         181,793         1,999         11,786         5,867         14,467         53,030          88,529    

Units redeemed

       (1,621,869)        (513,792)        (65,785)        (17,399)        (221,577)        (288,110)        (530,420)         (69,512)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Ending units

       -            1,571,373         -            63,786         -            215,710         -             477,390    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

          OVHI     FGIS     NVAGF3     CSIEF3  
          2012     2011     2012     2011     2012     2011     2012      2011  

Investment activity:

                   

Net investment income (loss)

   $          47,188         33,769         -            (55)        -            14,484         -             29,894    

Realized gain (loss) on investments

       (714,793)        (288,662)        -            20,499         -            (35,519)        -             (46,211)   

Change in unrealized gain (loss) on investments

       702,080         248,488         -            (14,316)        -            11,159         -             (137,438)   

Reinvested capital gains

       -            -            -            -            -            19,764         -             -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

       34,475         (6,405)        -            6,128         -            9,888         -             (153,755)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Equity transactions:

                   

Purchase payments received from contract owners (notes 2a and 6)

       -            -            -            1         -            1,632         -             13,213    

Transfers between funds

       (286,292)        (8,035)        -            (82,801)        -            (402,938)        -             (817,290)   

Surrenders (note 6)

       (11,014)        (61,831)        -            -            -            -            -             (27,530)   

Death Benefits (note 4)

       (3,631)        (898)        -            -            -            -            -             -       

Net policy repayments (loans) (note 5)

       (3,527)        (2,196)        -            (161)        -            -            -             13,877    

Deductions for surrender charges (note 2d)

       (165)        (743)        -            -            -            -            -             -       

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

       (10,309)        (15,306)        -            (228)        -            (1,637)        -             (40,394)   

Asset charges (note 3):

                   

FPVUL & VEL contracts

       (916)        (1,251)        -            -            -            (185)        -             (1,047)   

MSP contracts

       (71)        (88)        -            -            -            -            -             (8)   

SL contracts or LSFP contracts

       (74)        (149)        -            -            -            (26)        -             (12)   

Adjustments to maintain reserves

       (6)        -            -            (5)        -            (3)        -             78    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net equity transactions

       (316,005)        (90,497)        -            (83,194)        -            (403,157)        -             (859,113)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net change in contract owners’ equity

       (281,530)        (96,902)        -            (77,066)        -            (393,269)        -             (1,012,868)   

Contract owners’ equity beginning of period

       281,530         378,432         -            77,066         -            393,269         -             1,012,868    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Contract owners’ equity end of period

   $          -            281,530         -            -            -            -            -             -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

CHANGES IN UNITS:

                   

Beginning units

       68,934         90,495         -            9,015         -            31,818         -             89,347    

Units purchased

       -            -            -            -            -            82         -             1,879    

Units redeemed

       (68,934)        (21,561)        -            (9,015)        -            (31,900)        -             (91,226)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Ending units

       -            68,934         -            -            -            -            -             -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

          GEF3     WSCP     SVSHEB     TRBCG2  
          2012     2011     2012     2011     2012     2011     2012      2011  

Investment activity:

                   

Net investment income (loss)

   $          -            99         -            6,099         -            1,401         -             (279)   

Realized gain (loss) on investments

       -            (227)        -            320,543         -            33,748         -             58,093    

Change in unrealized gain (loss) on investments

       -            (255)        -            (340,650)        -            (20,155)        -             (26,550)   

Reinvested capital gains

       -            -            -            -            -            -            -             -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

       -            (383)        -            (14,008)        -            14,994         -             31,264    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Equity transactions:

                   

Purchase payments received from contract owners (notes 2a and 6)

       -            1,010         -            44,010         -            -            -             (127)   

Transfers between funds

       -            (4,174)        -            (1,035,905)        -            (116,683)        -             (481,876)   

Surrenders (note 6)

       -            (1)        -            (47,762)        -            (97,321)        -             -       

Death Benefits (note 4)

       -            -            -            (1,187)        -            -            -             -       

Net policy repayments (loans) (note 5)

       -            (28)        -            17,179         -            9         -             (799)   

Deductions for surrender charges (note 2d)

       -            -            -            (158)        -            -            -             -       

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

       -            (339)        -            (39,173)        -            (1,335)        -             (1,143)   

Asset charges (note 3):

                   

FPVUL & VEL contracts

       -            (29)        -            (2,874)        -            -            -             -       

MSP contracts

       -            -            -            (97)        -            -            -             -       

SL contracts or LSFP contracts

       -            -            -            (509)        -            -            -             -       

Adjustments to maintain reserves

       -            1         -            (52,913)        -            2         -             4    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net equity transactions

       -            (3,560)        -            (1,119,389)        -            (215,328)        -             (483,941)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net change in contract owners’ equity

       -            (3,943)        -            (1,133,397)        -            (200,334)        -             (452,677)   

Contract owners’ equity beginning of period

       -            3,943         -            1,133,397         -            200,334         -             452,677    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Contract owners’ equity end of period

   $          -            -            -            -            -            -            -             -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

CHANGES IN UNITS:

                   

Beginning units

       -            264         -            91,046         -            24,343         -             34,892    

Units purchased

       -            66         -            10,432         -            -            -             -       

Units redeemed

       -            (330)        -            (101,478)        -            (24,343)        -             (34,892)   
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Ending units

       -            -            -            -            -            -            -             -       
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2012 and 2011

 

          FF05S     GEF  
          2012     2011     2012      2011  

Investment activity:

           

Net investment income (loss)

   $          -            425         -             23,600    

Realized gain (loss) on investments

       -            (48)        -             (546,568)   

Change in unrealized gain (loss) on investments

       -            -            -             480,203    

Reinvested capital gains

       -            89         -             -       
   

 

 

    

 

 

    

 

 

     

 

 

  

Net increase (decrease) in contract owners’ equity resulting from operations

       -            466         -             (42,765)   
   

 

 

    

 

 

    

 

 

     

 

 

  

Equity transactions:

           

Purchase payments received from contract owners (notes 2a and 6)

       -            -            -             150,620    

Transfers between funds

       -            (452)        -             (3,993,072)   

Surrenders (note 6)

       -            -            -             (201,683)   

Death Benefits (note 4)

       -            -            -             (8,398)   

Net policy repayments (loans) (note 5)

       -            -            -             (15,463)   

Deductions for surrender charges (note 2d)

       -            -            -             (330)   

Redemptions to pay cost of insurance charges and administration charges (notes 2b and 2c)

       -            (13)        -             (75,579)   

Asset charges (note 3):

           

FPVUL & VEL contracts

       -            -            -             (6,011)   

MSP contracts

       -            -            -             (122)   

SL contracts or LSFP contracts

       -            -            -             (454)   

Adjustments to maintain reserves

       -            (1)        -             (85)   
   

 

 

    

 

 

    

 

 

     

 

 

  

Net equity transactions

       -            (466)        -             (4,150,577)   
   

 

 

    

 

 

    

 

 

     

 

 

  

Net change in contract owners’ equity

       -            -            -             (4,193,342)   

Contract owners’ equity beginning of period

       -            -            -             4,193,342    
   

 

 

    

 

 

    

 

 

     

 

 

  

Contract owners’ equity end of period

   $          -            -            -             -       
   

 

 

    

 

 

    

 

 

     

 

 

  

CHANGES IN UNITS:

           

Beginning units

       -            -            -             257,781    

Units purchased

       -            1         -             12,356    

Units redeemed

       -            (1)        -             (270,137)   
   

 

 

    

 

 

    

 

 

     

 

 

  

Ending units

       -            -            -             -       
   

 

 

    

 

 

    

 

 

     

 

 

  

See accompanying notes to financial statements.

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

(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:

 

ALLIANCE BERNSTEIN FUNDS

VPS Dynamic Asset Allocation Portfolio - Class A (ALVDAA)

AMERICAN CENTURY INVESTORS, INC.

VP Inflation Protection Fund - Class I (ACVIP1)*

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)

International Fund - Class 2 (AMVI2)

BLACKROCK FUNDS

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

Global Allocation V.I. Fund - Class II (MLVGA2)

CALVERT FUNDS

Calvert VP SRI Equity Portfolio (CVSSE)

DAVIS FUNDS

Value Portfolio (DAVVL)

DELAWARE GROUP FUNDS

VIP Emerging Markets Series: Service Class (DWVEMS)*

VIP Small Cap Value Series: Service Class (DWVSVS)

DREYFUS CORPORATION FUNDS

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

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

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

EATON VANCE FUNDS

Floating-Rate Income Fund (ETVFR)

FIDELITY INVESTMENTS

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

GOLDMAN SACHS ASSET MANAGEMENT GROUP

Goldman Sachs Global Markets Navigator Fund - Service Shares (GVGMNS)

INVESCO AIM INVESTMENTS

Van Kampen V.I. Mid Cap Growth Fund - Series I Shares (IVKMG1)

J.P. MORGAN INVESTMENT MANAGEMENT INC.

Mid Cap Growth Portfolio- Class 1 (OGGO)

Mid Cap Value Portfolio: Class 1 (JPMMV1)

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 - Overseas Portfolio - Service Shares (JAIGS)

Janus Aspen Series - Perkins Mid Cap Value Portfolio - Service Shares (JAMVS)

LAZARD FUNDS

Retirement Emerging Markets Equity Portfolio - Service Shares (LZREMS)

LORD ABBETT FUNDS

Series Fund - Mid Cap Stock Fund: Class VC (LOVMCV)

MASSACHUSETTS FINANCIAL SERVICES CO.

Investors Growth Stock Series - Initial Class (MIGIC)

MFS Bond Portfolio - Service Class (MVBDS)*

Variable Insurance Trust - MFS New Discovery Series - Intital Class (MNDIC)

New Discovery Series - Service Class (MNDSC)

Research International Series - Service Class (MVRISC)

Value Series - Initial Class (MVFIC)

Value Series - Service Class (MVFSC)

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

M FUNDS

M Business Opportunity Value Fund (MFBOV)*

M Capital Appreciation Fund (MFFCA)*

M International Equity Fund (MFBIE)*

M Large Cap Growth Fund (MFTCG)*

MORGAN STANLEY

Core Plus Fixed Income Portfolio - Class I (MSVFI)

Emerging Markets Debt Portfolio - Class I (MSEM)

Emerging Markets Debt Portfolio - Class II (MSEMB)*

Global Real Estate Portfolio - Class II (VKVGR2)

Mid Cap Growth Portfolio - Class II (MSVMG2)*

Universal Institutional Funds, Inc. - Mid Cap Growth Portfolio- Class I (MSVMG)

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

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

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

NATIONWIDE FUNDS GROUP

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)

NVIT Emerging Markets Fund - Class I (GEM)

NVIT Emerging Markets Fund - Class III (GEM3)

NVIT International Equity Fund - Class I (GIG)

NVIT International Equity Fund - Class III (GIG3)

Variable Insurance Trust: NVIT International Equity Fund - Class VI (NVIE6)

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 Nationwide Fund - Class I (TRF)

NVIT Government Bond Fund - Class I (GBF)

American Century NVIT Growth Fund - Class I (CAF)

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 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 Large Cap Growth Fund - Class I (NVOLG1)

Templeton NVIT International Value Fund - Class III (NVTIV3)

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

NVIT Real Estate Fund - Class I (NVRE1)

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)

American Century 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)*

PORTFOLIOS OF THE DREYFUS INVESTMENT PORTFOLIOS

MidCap Stock Portfolio - Initial Shares (DVMCS)

Small Cap Stock Index Portfolio - Service Shares (DVSCS)

PORTFOLIOS OF THE DREYFUS VARIABLE INVESTMENT FUND

Appreciation Portfolio - Initial Shares (DCAP)

Appreciation Portfolio - Service Shares (DCAPS)*

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

Opportunistic Small Cap 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 - DWS Dreman Small Mid Cap Value VIP - Class B (SVSSVB)

Variable Series II - DWS Large Cap Value VIP - Class B (SVSLVB)

PORTFOLIOS OF THE FEDERATED INSURANCE SERIES

Capital Appreciation Fund II - Primary Shares (FVCA2P)

Quality Bond Fund II - Primary Shares (FQB)

Quality Bond Fund II - Service Shares (FQBS)*

PORTFOLIOS OF THE FIDELITY(R) VARIABLE INSURANCE PRODUCTS

VIP Contrafund Portfolio - Service Class (FCS)

VIP Energy Portfolio - Service Class 2 (FNRS2)

VIP Equity-Income Portfolio - Service Class (FEIS)

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

VIP Freedom Fund 2010 Portfolio - Service Class (FF10S)

VIP Freedom Fund 2020 Portfolio - Service Class (FF20S)

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

VIP Freedom Fund 2030 Portfolio - Service Class (FF30S)

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

VIP Freedom Income Fund Portfolio - Service Class (FFINS)

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

VIP Growth Opportunities Portfolio - Service Class (FGOS)

VIP Growth Portfolio - Service Class (FGS)

VIP Growth Portfolio - Service Class 2 (FG2)*

VIP High Income Portfolio - Service Class (FHIS)

VIP High Income Portfolio - Service Class R (FHISR)

VIP Index 500 Portfolio - Initial Class (FIP)

VIP Investment Grade Bond Portfolio - Service Class (FIGBS)

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

VIP Mid Cap Portfolio - Service Class (FMCS)

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

VIP Overseas Portfolio - Service Class (FOS)

VIP Overseas Portfolio - Service Class R (FOSR)

VIP Value Strategies Portfolio - Service Class (FVSS)

VIP Fidelity VIP Freedom Fund 2005 Portfolio - Service Class (FF05S)*

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

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

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

VIP Fidelity VIP Freedom Fund 2040 Portfolio - Service Class (FF40S)

VIP Fidelity VIP Freedom Fund 2040 Portfolio - Service Class 2 (FF40S2)*

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 Global Discovery 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

Mid Cap Value- Institutional Shares (GVMCE)

VIT Growth Opportunities Fund - Service Shares (GVGOPS)

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

Growth Opportunities Funds - Service Class (BNCAI)

PORTFOLIOS OF THE NEUBERGER BERMAN ADVISERS MANAGEMENT TRUST

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

Guardian Portfolio - I Class Shares (AMGP)

International Portfolio - S Class Shares (AMINS)

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

Advisers Management Trust: Large Cap Value Portfolio - Class I (AMTP)

Advisers Management Trust: Mid Cap Intrinsic Value Portfolio - Class I (AMRI)

Advisers Management Trust: Mid Cap Intrinsic Value Portfolio - Class S (AMRS)*

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

Socially Responsive Portfolio - I Class Shares (AMSRS)

PORTFOLIOS OF THE OPPENHEIMER VARIABLE ACCOUNT FUNDS

Oppenheimer 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)*

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

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

Mid-Cap Growth Fund/VA - Non-Service Shares (OVAG)

Global Strategic Income 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)

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

Long-Term U.S. Government Portfolio - Administrative Class (PMVLGA)

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

Pioneer Emerging Markets VCT Portfolio - Class I Shares (PIVEMI)

Pioneer High Yield VCT Portfolio - Class I Shares (PIHYB1)

Pioneer High Yield VCT Portfolio - Class II Shares (PIHYB2)*

PORTFOLIOS OF THE PUTNAM VARIABLE TRUST

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

Putnam VT International Equity Fund - Class IB (PVTIGB)

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

Putnam VT Voyager Fund - Class IB (PVTVB)

PORTFOLIOS OF THE VAN KAMPEN LIFE INVESTMENT TRUST

Van Kampen V.I. American Franchise Fund: Series II Shares (ACEG2)*

Van Kampen V.I. Growth and Income Fund - Series I Shares (ACGI)

Van Kampen V.I. Growth and Income Fund - Series II Shares (VKLGI2)*

V.I. American Value Fund - Series I Shares (MSVMV)*

Van Kampen V.I. American Franchise Fund: Series I Shares (ACEG)

Van Kampen V.I. Value Opportunities Fund: Series I Shares (AVBVI)

V.I. High Yield Fund - Series I (AVHY1)

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

Variable Insurance Funds - Invesco V.I. Mid Cap Core Equity - Series I Shares  (AVMCCI)

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 (TRLT1)

Limited-Term Bond Portfolio - II (TRLT2)

Mid-Cap Growth Portfolio - II (TRMCG2)

New America Growth Portfolio (TRNAG1)

Personal Strategy Balanced Portfolio (TRPSB1)

Blue Chip Growth Portfolio (TRBCGP)

VAN ECK ASSOCIATES CORPORATION

VIP Trust - Emerging Markets Fund: Initial Class (VWEM)

VIP Trust - Global 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 - REIT Index Portfolio (VVREI)

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

Vanguard(R) Variable Insurance Funds - Small Company Growth Portfolio (VVSCG)*

Vanguard(R) Variable Insurance Funds - Total Bond Market Index Portfolio (VVHGB)

WADDELL & REED, INC.

Variable Insurance Portfolios - Asset Strategy (WRASP)

Variable Insurance Portfolios - Growth (WRGP)

Variable Insurance Portfolios - High Income (WRHIP)

Variable Insurance Portfolios - Mid Cap Growth (WRMCG)

Variable Insurance Portfolios - Real Estate Securities (WRRESP)

Variable Insurance Portfolios - Science and Technology (WRSTP)

WELLS FARGO FUNDS

Advantage VT Discovery Fund (SVDF)

Advantage VT Opportunity Fund - Class 2 (SVOF)

Advantage VT Small Cap Growth Fund - Class 2 (WFVSCG)

*At December 31, 2012, 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.

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.

The Company allocates purchase payments to sub-accounts and/or the fixed account as instructed by the contract owner. Shares of the sub-accounts are purchased at Net Asset Value, then converted into accumulation units. Certain transactions may be subject to conditions imposed by the underlying mutual funds, as well as those set forth in the contract.

(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, 2012 of such funds. 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.

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

(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

There are no recently issued accounting standards applicable to 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 4.0% to a maximum of 8.5% 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% from each premium payment received.

For Future Executive 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, 2012 and 2011, total front-end sales charge deductions were $ 11,912,501 and $ 12,258,497, respectively and were recognized as a reduction of purchase payments on the Statement of Changes in Contract Owners’ Equity.

(b) Cost of Insurance

A cost of insurance charge is assessed monthly against each contract by liquidating units. The amount of the charge varies widely and is based upon age, sex, rate class and net amount at risk (death benefit less total contract value).

(c) Administrative Charges

For The Best of America® Next Generation, ChoiceLifeSM and all flexible premium survivorship contracts, the Company currently deducts a minimum monthly administration charge (for ProtectionSM flexible premium contracts this is known as the “monthly expense 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, there is an additional administrative (per specified amount) charge 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 $0.02 per $1,000 of Specified Amount with a $10 minimum and $40 maximum charge.

For The Best of America® ChoiceLifeSM Survivorship II, Next GenerationSM Survivorship Life, The Best of America® Protection Survivorship Life and The Best of America® ChoiceLifeSM Protection 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 preimum 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 monthly charge $5 per policy in all policy years (guaranteed not to exceed $10 per policy). 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, Nationwide MarathonSM Corporate Owned Flexible Premium Variable Universal Life and Future Corporate 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.

 

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

(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 (such as Variable Executive Life), the charge is 100% of the initial surrender charge in the first year, and declines a specified amount in subsequent years 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.

For the Corporate Series, 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 0.50% 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 ChoiceLifeSM 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. Beginning in policy year sixteen, 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, 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 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 (LSFP)

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.

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. Currently, this rate is 0.25% during the first through fourth policy years, 0.20% during the fifth through fifteenth policy years, and 0.10% thereafter. This charge is assessed monthly against each contract by liquidating units.

For Next Generation Corporate Owned Flexible Premium Variable Universal Life, the Company deducts a charge guaranteed not to exceed an annualized rate of 1.25% of the daily net assets of the Account. Currently, this rate will not exceed 0.60%. This charge is assessed monthly against each contract by liquidating units. For Nationwide MarathonSM Corporate Owned Flexbile 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.

 

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

(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, 2012 and 2011, total transfers into the Account from the fixed account were $43,126,682 and $49,066,651, respectively, and total transfers from the Account to the fixed account were $85,654,739 and $83,208,051, respectively.

(7) Fair Value Measurement

FASB ASC 820, Fair Value Measurements and Disclosures, 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:

Ÿ Level 1 – Unadjusted quoted prices accessible in active markets and mutual funds where the value per share (unit) is determined and published and is the basis for current transactions for identical assets or liabilities at the measurement date.

Ÿ 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.

Ÿ 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.

The Account recognizes transfers between fair value hierarchy levels at the reporting period end. There were no transfers between Level 1 and 2 as of December 31, 2012.

The following table summarizes assets measured at fair value on a recurring basis as of December 31, 2012:

 

     Level 1    Level 2    Level 3    Total

Separate Account Investments

    $4,082,802,095    $0    $0    $4,082,802,095

The cost of purchases and proceeds from sales of investments for the year ended December 31, 2012 are as follows:

 

     Purchases of
Investments		      Sales of
Investments		  

VPS Dynamic Asset Allocation Portfolio - Class A (ALVDAA)

    $ 84       $ 14   

Asset Allocation Fund - Class 2 (AMVAA2)

      2,026,038         816,964   

Bond Fund - Class 2 (AMVBD2)

      42,671         429,186   

Global Small Capitalization Fund - Class 2 (AMVGS2)

      511,835         488,691   

Growth Fund - Class 2 (AMVGR2)

      7,582,844         6,057,967   

International Fund - Class 2 (AMVI2)

      1,884,821         303,470   

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

      897,559         712,448   

Global Allocation V.I. Fund - Class II (MLVGA2)

      2,312,661         1,626,477   

Calvert VP SRI Equity Portfolio (CVSSE)

      76,967         179,323   

Value Portfolio (DAVVL)

      799,475         391,846   

VIP Small Cap Value Series: Service Class (DWVSVS)

      4,169,872         344,249   

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

      47,994,932         48,179,647   

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

      256,558         956,094   

Floating-Rate Income Fund (ETVFR)

      15,481,159         357,241   

Goldman Sachs Global Markets Navigator Fund - Service Shares (GVGMNS)

      935         8   

Van Kampen V.I. Mid Cap Growth Fund - Series I Shares (IVKMG1)

      4,316,422         863,046   

Mid Cap Growth Portfolio- Class 1 (OGGO)

      553,243         1,007,595   

Mid Cap Value Portfolio: Class 1 (JPMMV1)

      1,738,039         22,035   

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

      7,238,694         3,629,715   

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

      5,973,602         18,150,761   

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

      3,392,413         2,856,394   

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

              26,943,808                 22,133,232   

Janus Aspen Series - Perkins Mid Cap Value Portfolio - Service Shares (JAMVS)

      1,102,599         617,169   

Retirement Emerging Markets Equity Portfolio - Service Shares (LZREMS)

      5,521,950         2,931,360   

Series Fund - Mid Cap Stock Fund: Class VC (LOVMCV)

      351,466         283,058   

Investors Growth Stock Series - Initial Class (MIGIC)

      491,150         681,115   

Variable Insurance Trust - MFS New Discovery Series - Intital Class (MNDIC)

      93,584         15,517   

New Discovery Series - Service Class (MNDSC)

      682,660         29,692   

Research International Series - Service Class (MVRISC)

      2,527,779         153,907   

Value Series - Initial Class (MVFIC)

      1,883,047         1,972,262   

Value Series - Service Class (MVFSC)

      9,365,926         8,711,786   

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

      19,858,582         8,300,320   

Core Plus Fixed Income Portfolio - Class I (MSVFI)

      291,220         556,002   

Emerging Markets Debt Portfolio - Class I (MSEM)

      4,664,129         3,848,392   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

Global Real Estate Portfolio - Class II (VKVGR2)

         1,575,899         694,767   

Universal Institutional Funds, Inc. - Mid Cap Growth Portfolio- Class I (MSVMG)

         6,009,462         5,557,967   

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

         1,228,304         483,366   

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

         2,318,575         5,798,127   

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

         2,131,767         4,262,506   

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

         1,245,977         670,251   

American Funds NVIT Bond Fund - Class II (GVABD2)

         487,484         652,037   

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

         903,224         1,492,905   

American Funds NVIT Growth Fund - Class II (GVAGR2)

         700,866         2,121,425   

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

         358,799         626,329   

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

         5,440,325         4,890,898   

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

         4,731,365         5,376,855   

NVIT Emerging Markets Fund - Class I (GEM)

         2,033,387         2,635,016   

NVIT Emerging Markets Fund - Class III (GEM3)

         655,964         5,160,081   

NVIT International Equity Fund - Class I (GIG)

         2,565,722         2,792,652   

NVIT International Equity Fund - Class III (GIG3)

         529,468         1,234,679   

Variable Insurance Trust: NVIT International Equity Fund - Class VI (NVIE6)

         1,469         149,979   

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

         1,357,054         1,570,551   

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

         7,500         341,724   

NVIT Cardinal Aggressive Fund - Class I (NVCRA1)

         1,282,236         884,634   

NVIT Cardinal Balanced Fund - Class I (NVCRB1)

         5,866,019         2,904,420   

NVIT Cardinal Capital Appreciation Fund - Class I (NVCCA1)

         1,749,657         953,643   

NVIT Cardinal Conservative Fund - Class I (NVCCN1)

         2,736,062         1,069,208   

NVIT Cardinal Moderate Fund - Class I (NVCMD1)

         1,244,399         1,535,608   

NVIT Cardinal Moderately Aggressive Fund - Class I (NVCMA1)

         509,674         699,265   

NVIT Cardinal Moderately Conservative Fund - Class I (NVCMC1)

         1,168,930         471,055   

NVIT Core Bond Fund - Class I (NVCBD1)

         459,584         528,361   

NVIT Core Plus Bond Fund - Class I (NVLCP1)

         1,649,547         880,096   

NVIT Nationwide Fund - Class I (TRF)

         1,651,155         13,890,388   

NVIT Government Bond Fund - Class I (GBF)

         46,852,729         28,675,819   

American Century NVIT Growth Fund - Class I (CAF)

         875,777         1,338,164   

NVIT International Index Fund - Class II (GVIX2)

         3,422,485         3,972,654   

NVIT International Index Fund - Class VI (GVIX6)

         249,480         166,759   

NVIT Investor Destinations Aggressive Fund - Class II (GVIDA)

         1,891,186         6,927,587   

NVIT Investor Destinations Balanced Fund - Class II (NVDBL2)

         1,354,303         127,390   

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

         97,756         57,174   

NVIT Investor Destinations Conservative Fund - Class II (GVIDC)

         3,457,111         3,979,564   

NVIT Investor Destinations Moderate Fund - Class II (GVIDM)

         3,339,748         13,376,686   

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

         4,267,399         9,302,951   

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

         2,131,070         2,114,734   

NVIT Mid Cap Index Fund - Class I (MCIF)

         11,129,210         13,491,315   

NVIT Money Market Fund - Class I (SAM)

         31,713,456         37,011,202   

NVIT Money Market Fund - Class V (SAM5)

         97,521,645         107,033,872   

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

         549,997         2,168,272   

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

         2,915         57,576   

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

         270,905         631,672   

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

         1,125,488         3,190,021   

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

         492,227         1,230,167   

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

         3,318,068         6,113,683   

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

         21,077         23,522   

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

         1,197,965         1,066,551   

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

         864,582         2,283,124   

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

         2,531,684         7,270,636   

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

         3,462,614         10,164,506   

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

         2,021,154         3,951,118   

NVIT Short Term Bond Fund - Class I (NVSTB1)

         24,254,861         730,494   

NVIT Short Term Bond Fund - Class II (NVSTB2)

         748,841         913,176   

NVIT Large Cap Growth Fund - Class I (NVOLG1)

         1,299,644         13,555,575   

Templeton NVIT International Value Fund - Class III (NVTIV3)

         146,367         119,596   

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

         311,270         2,162,740   

NVIT Real Estate Fund - Class I (NVRE1)

         6,513,329         6,171,372   

VPS Growth and Income Portfolio - Class A (ALVGIA)

         1,978,761         1,562,420   

VPS International Value Portfolio - Class A (ALVIVA)

         1,931,774         5,515,070   

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

         3,468,276         5,167,172   

VP Income & Growth Fund - Class I (ACVIG)

         966,472         2,440,607   

American Century VP Inflation Protection Fund - Class II (ACVIP2)

         6,663,231         4,593,231   

VP International Fund - Class I (ACVI)

         455,277         1,684,696   

VP Mid Cap Value Fund - Class I (ACVMV1)

         2,371,969         950,447   

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

         308,405         727,024   

VP Value Fund - Class I (ACVV)

         5,912,299         8,565,578   

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

         180,514         432,778   

MidCap Stock Portfolio - Initial Shares (DVMCS)

         90,425         185,078   

Small Cap Stock Index Portfolio - Service Shares (DVSCS)

         11,888,499         8,928,019   

Appreciation Portfolio - Initial Shares (DCAP)

         10,828,882         6,613,491   

Opportunistic Small Cap Portfolio: Initial Shares (DSC)

         547,007         501,824   

International Value Portfolio - Initial Shares (DVIV)

         2,626,282         8,303,806   

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

         355,572         1,647,746   

Variable Series II - DWS Large Cap Value VIP - Class B (SVSLVB)

         36,369         84,831   

Capital Appreciation Fund II - Primary Shares (FVCA2P)

         132,801         666,224   

Quality Bond Fund II - Primary Shares (FQB)

         3,473,644         8,020,820   

VIP Contrafund Portfolio - Service Class (FCS)

         9,300,103         16,530,025   

VIP Energy Portfolio - Service Class 2 (FNRS2)

         1,141,450         2,780,939   

VIP Equity-Income Portfolio - Service Class (FEIS)

         11,762,620         10,987,352   

VIP Freedom Fund 2010 Portfolio - Service Class (FF10S)

         376,815         722,579   

VIP Freedom Fund 2020 Portfolio - Service Class (FF20S)

         2,692,603         1,204,869   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

VIP Freedom Fund 2030 Portfolio - Service Class (FF30S)

         1,758,286         3,401,202   

VIP Freedom Income Fund Portfolio - Service Class (FFINS)

         498,781         753,190   

VIP Growth Opportunities Portfolio - Service Class (FGOS)

         112,138         806,606   

VIP Growth Portfolio - Service Class (FGS)

         4,767,547         10,107,850   

VIP High Income Portfolio - Service Class (FHIS)

         4,049,960         3,073,024   

VIP High Income Portfolio - Service Class R (FHISR)

         1,795,503         1,030,077   

VIP Index 500 Portfolio - Initial Class (FIP)

         6,738,069         3,455,275   

VIP Investment Grade Bond Portfolio - Service Class (FIGBS)

         6,987,703         4,665,139   

VIP Mid Cap Portfolio - Service Class (FMCS)

         7,107,505         11,355,272   

VIP Overseas Portfolio - Service Class (FOS)

         809,998         5,527,528   

VIP Overseas Portfolio - Service Class R (FOSR)

         1,340,669         2,354,596   

VIP Value Strategies Portfolio - Service Class (FVSS)

         447,876         1,120,665   

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

         2,165,530         1,878,976   

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

         2,634,121         1,102,481   

VIP Fidelity VIP Freedom Fund 2040 Portfolio - Service Class (FF40S)

         2,834,184         673,178   

Franklin Income Securities Fund - Class 2 (FTVIS2)

         1,766,445         842,669   

Franklin Rising Dividends Securities Fund - Class 1 (FTVRDI)

         2,046,402         2,106,082   

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

         476,814         1,970,622   

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

         3,482,802         3,273,268   

Mutual Global Discovery Securities Fund - Class 2 (FTVMD2)

         302,183         362,495   

Templeton Developing Markets Securities Fund - Class 3 (FTVDM3)

         593,334         1,305,494   

Templeton Foreign Securities Fund - Class 1 (TIF)

         42,229         155,021   

Templeton Foreign Securities Fund - Class 2 (TIF2)

         2,779,195         2,492,270   

Templeton Foreign Securities Fund - Class 3 (TIF3)

         770,590         1,166,327   

Templeton Global Bond Securities Fund - Class 2 (FTVGI2)

         7,798,022         8,773,567   

Templeton Global Bond Securities Fund - Class 3 (FTVGI3)

         2,132,345         1,534,390   

VIP Founding Funds Allocation Fund - Class 2 (FTVFA2)

         71,364         54,451   

Mid Cap Value- Institutional Shares (GVMCE)

         6,349,591         11,318,505   

VIT Growth Opportunities Fund - Service Shares (GVGOPS)

         161,930         114,379   

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

         1,831,356         588,931   

Growth Opportunities Funds - Service Class (BNCAI)

         1,918,605         3,239,011   

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

         572,962         811,799   

Guardian Portfolio - I Class Shares (AMGP)

         122,781         1,398,686   

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

         671,784         2,719,693   

Advisers Management Trust: Large Cap Value Portfolio - Class I (AMTP)

         1,550,057         3,214,886   

Advisers Management Trust: Mid Cap Intrinsic Value Portfolio - Class I (AMRI)

         1,707,022         1,028,495   

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

         202,877         894,246   

Socially Responsive Portfolio - I Class Shares (AMSRS)

         77,771         577,582   

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

         3,252,109         6,458,451   

Global Securities Fund/VA - Class 3 (OVGS3)

         1,103,973         2,850,733   

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

         5,678,702         9,434,994   

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

         1,285,733         3,234,312   

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

         257,281         703,208   

Mid-Cap Growth Fund/VA - Non-Service Shares (OVAG)

         619,120         3,727,632   

Global Strategic Income Fund/VA: Non-service Shares (OVSB)

         2,215,888         2,557,510   

All Asset Portfolio - Administrative Class (PMVAAA)

         23,440,221         2,138,397   

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

         874,880         1,373,185   

Long-Term U.S. Government Portfolio - Administrative Class (PMVLGA)

         360,644         332,236   

Low Duration Portfolio - Administrative Class (PMVLDA)

         19,725,400         33,363,626   

Real Return Portfolio - Administrative Class (PMVRRA)

         33,128,738         31,929,609   

Total Return Portfolio - Administrative Class (PMVTRA)

         78,783,222         43,508,777   

Pioneer Emerging Markets VCT Portfolio - Class I Shares (PIVEMI)

         1,076,611         1,240,966   

Pioneer High Yield VCT Portfolio - Class I Shares (PIHYB1)

         10,344,159         13,061,506   

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

         298,937         344,742   

Putnam VT International Equity Fund - Class IB (PVTIGB)

         273,959         353,994   

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

         1,760         10,744   

Putnam VT Voyager Fund - Class IB (PVTVB)

         643,048         1,266,427   

Van Kampen V.I. Growth and Income Fund - Series I Shares (ACGI)

         1,771,364         307,065   

Van Kampen V.I. American Franchise Fund: Series I Shares (ACEG)

         1,083,410         252,317   

Van Kampen V.I. Value Opportunities Fund: Series I Shares (AVBVI)

         121,378         240,118   

V.I. High Yield Fund - Series I (AVHY1)

         4,348,670         2,214,599   

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

         11,515,796         9,442,102   

Variable Insurance Funds - Invesco V.I. Mid Cap Core Equity - Series I Shares (AVMCCI)

         1,000,591         347,850   

Micro-Cap Portfolio - Investment Class (ROCMC)

         9,458,333         19,018,705   

Small-Cap Portfolio - Investment Class (ROCSC)

         464,972         658,834   

Equity Income Portfolio - II (TREI2)

         9,932,458         22,495,946   

Health Sciences Portfolio - II (TRHS2)

         6,617,035         3,720,456   

Limited-Term Bond Portfolio (TRLT1)

         3,642,690         1,647,826   

Limited-Term Bond Portfolio - II (TRLT2)

         21         22   

Mid-Cap Growth Portfolio - II (TRMCG2)

         5,903,920         9,237,041   

New America Growth Portfolio (TRNAG1)

         15,463,886         6,114,772   

Personal Strategy Balanced Portfolio (TRPSB1)

         2,334,356         1,560,544   

Blue Chip Growth Portfolio (TRBCGP)

         80,307         204   

VIP Trust - Emerging Markets Fund: Initial Class (VWEM)

         2,195,731         4,920,929   

VIP Trust - Global Hard Assets Fund: Initial Class (VWHA)

         11,775,477         14,972,191   

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

         2,310,399         1,620,575   

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

         11,428,014         1,197,526   

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

         669,171         870,593   

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

         1,828,535         735,732   

Vanguard(R) Variable Insurance Funds - REIT Index Portfolio (VVREI)

         450,684         342,477   

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

         1,996,400         670,796   

Vanguard(R) Variable Insurance Funds - Total Bond Market Index Portfolio (VVHGB)

         2,097,771         1,001,871   

Variable Insurance Portfolios - Asset Strategy (WRASP)

         3,757,549         2,501,592   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

Variable Insurance Portfolios - Growth (WRGP)

         800,990         964,616   

Variable Insurance Portfolios - High Income (WRHIP)

         13,027,243         384,157   

Variable Insurance Portfolios - Mid Cap Growth (WRMCG)

         716,915         187,039   

Variable Insurance Portfolios - Real Estate Securities (WRRESP)

         1,433,625         1,972,607   

Variable Insurance Portfolios - Science and Technology (WRSTP)

         3,475,867         1,618,931   

Advantage VT Discovery Fund (SVDF)

         4,058,797         754,372   

Advantage VT Opportunity Fund - Class 2 (SVOF)

         2,141,995         3,159,593   

Advantage VT Small Cap Growth Fund - Class 2 (WFVSCG)

         2,059,886         4,561,898   

Janus Aspen Series - Global Technology Portfolio - Service II Shares (obsolete) (JAGTS2)

         441,200         2,789,950   

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

         353,210         19,517,582   

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

         19,593         948,635   

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

         82,342         4,481,501   

High Income Fund/VA - Class 3 (obsolete) (OVHI3)

         469,691         1,781,617   

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

         47,188         316,000   
     

 

 

     

 

 

  
     Total       $         976,773,167       $         1,004,802,231   
     

 

 

     

 

 

  

(8) Financial Highlights

The following tabular presentation is a summary of units, unit fair values, contract owners’ equity outstanding and contract expense rates for variable life contracts as of December 31, 2012, and the investment income ratio and total return for each of the periods in the five year period ended December 31, 2012. Total return and investment income ratio for periods with no ending contract owners’ equity were considered to be irrelevant, and therefore are not presented.

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		      Total
Return***		     Inception
Date****

VPS Dynamic Asset Allocation Portfolio - Class A (ALVDAA)

  

     

2012

      0.00 %      7       $ 10.254428       $ 72         0.15%         2.54 %    5/1/2012

Asset Allocation Fund - Class 2 (AMVAA2)

  

     

2012

      0.00 %      31,141         11.199540         348,765         2.21%         16.19 %   

2012

      0.20 %      35,875         11.082315         397,578         2.21%         15.96 %   

2012

      0.25 %      183,194         11.053188         2,024,878         2.21%         15.90 %   

2011

      0.00 %      28,278         9.638937         272,570         1.73%         1.30 %   

2011

      0.20 %      22,659         9.557165         216,556         1.73%         1.09 %   

2011

      0.25 %      86,825         9.536838         828,036         1.73%         1.04 %   

2010

      0.00 %      42,950         9.515611         408,695         2.01%         12.51 %   

2010

      0.20 %      23,921         9.453733         226,143         2.01%         12.28 %   

2010

      0.25 %      80,409         9.438323         758,926         2.01%         12.22 %   

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)

  

     

2012

      0.00 %      16,295         12.210902         198,977         1.94%         5.37 %   

2012

      0.20 %      1,631         12.083145         19,708         1.94%         5.16 %   

2012

      0.25 %      1,138         12.051410         13,715         1.94%         5.11 %   

2011

      0.00 %      17,168         11.588210         198,946         2.23%         6.10 %   

2011

      0.20 %      10,103         11.489974         116,083         2.23%         5.89 %   

2011

      0.25 %      25,540         11.465538         292,830         2.23%         5.84 %   

2010

      0.00 %      3,571         10.921671         39,001         3.24%         6.44 %   

2010

      0.20 %      68,366         10.850693         741,818         3.24%         6.23 %   

2010

      0.25 %      34,481         10.833025         373,534         3.24%         6.18 %   

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)

  

     

2012

      0.00 %      18,949         9.525679         180,502         1.28%         18.18 %   

2012

      0.20 %      87,959         9.431647         829,598         1.28%         17.94 %   

2012

      0.25 %      69,398         9.408304         652,917         1.28%         17.88 %   

2011

      0.00 %      24,198         8.060463         195,047         1.26%         -19.14 %   

2011

      0.20 %      109,819         7.996904         878,212         1.26%         -19.31 %   

2011

      0.25 %      38,781         7.981109         309,515         1.26%         -19.35 %   

2010

      0.00 %      278         9.968859         2,771         1.76%         22.41 %   

2010

      0.20 %      103,759         9.910046         1,028,256         1.76%         22.17 %   

2010

      0.25 %      19,429         9.895414         192,258         1.76%         22.11 %   

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)

  

     

2012

      0.20 %      875,328         10.415272         9,116,779         0.83%         17.65 %   

2012

      0.25 %      848,137         10.389269         8,811,523         0.83%         17.60 %   

2011

      0.20 %      646,898         8.852415         5,726,610         0.80%         -4.47 %   

2011

      0.25 %      917,949         8.834746         8,109,846         0.80%         -4.52 %   

2010

      0.20 %      200,497         9.266406         1,857,887         0.78%         18.44 %   

2010

      0.25 %      28,764         9.252533         266,140         0.78%         18.38 %   

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

International Fund - Class 2 (AMVI2)

  

     

2012

      0.00 %      7,229         9.258582         66,930         2.11%         17.91 %   

2012

      0.20 %      23,263         9.227767         214,666         2.11%         17.67 %   

2012

      0.25 %      179,592         9.220070         1,655,851         2.11%         17.61 %   

2011

      0.00 %      5,126         7.852467         40,252         2.58%         -21.48 %    5/2/2011

2011

      0.25 %      20,132         7.839419         157,823         2.58%         -21.61 %    5/2/2011

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		      Total
Return***		     Inception
Date****		  

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

  

     

2012

      0.00 %      4,756       $ 13.488801       $ 64,153         1.38%         12.59 %   

2012

      0.10 %      35,076         13.385802         469,520         1.38%         12.47 %   

2012

      0.20 %      11,657         13.283534         154,846         1.38%         12.36 %   

2012

      0.25 %      131,505         13.232769         1,740,175         1.38%         12.30 %   

2011

      0.00 %      7,595         11.980842         90,994         0.97%         2.20 %   

2011

      0.10 %      39,420         11.901270         469,148         0.97%         2.10 %   

2011

      0.20 %      11,014         11.822193         130,210         0.97%         2.00 %   

2011

      0.25 %      112,361         11.782911         1,323,940         0.97%         1.95 %   

2010

      0.00 %      5,769         11.722431         67,627         1.03%         8.98 %   

2010

      0.10 %      12,100         11.656201         141,040         1.03%         8.87 %   

2010

      0.20 %      8,336         11.590313         96,617         1.03%         8.77 %   

2010

      0.25 %      139,601         11.557561         1,613,447         1.03%         8.71 %   

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 %   

Global Allocation V.I. Fund - Class II (MLVGA2)

  

     

2012

      0.00 %      680,130         14.209224         9,664,120         1.57%         10.14 %   

2011

      0.00 %      642,091         12.900807         8,283,492         2.42%         -3.63 %   

2010

      0.00 %      461,464         13.386468         6,177,373         1.39%         9.88 %   

2009

      0.00 %      244,329         12.182592         2,976,561         3.16%         21.83 %      5/1/2009   

Calvert VP SRI Equity Portfolio (CVSSE)

  

     

2012

      0.10 %      4,043         19.519575         78,918         0.09%         15.83 %   

2012

      0.25 %      8,723         19.219603         167,653         0.09%         15.66 %   

2011

      0.10 %      10,885         16.851290         183,426         0.00%         -1.44 %   

2011

      0.25 %      7,722         16.617281         128,319         0.00%         -1.59 %   

2010

      0.10 %      9,539         17.097854         163,096         0.06%         17.15 %   

2010

      0.25 %      5,826         16.885673         98,376         0.06%         16.97 %   

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 %   

Value Portfolio (DAVVL)

  

     

2012

      0.00 %      153,730         9.377109         1,441,543         1.78%         13.08 %   

2012

      0.20 %      5,953         9.278932         55,237         1.78%         12.85 %   

2012

      0.25 %      138,899         9.254504         1,285,441         1.78%         12.80 %   

2011

      0.00 %      125,820         8.292464         1,043,358         0.86%         -4.17 %   

2011

      0.20 %      5,480         8.222110         45,057         0.86%         -4.37 %   

2011

      0.25 %      144,786         8.204572         1,187,907         0.86%         -4.41 %   

2010

      0.00 %      99,340         8.653758         859,664         1.39%         12.76 %   

2010

      0.20 %      560         8.597487         4,815         1.39%         12.54 %   

2010

      0.25 %      184,331         8.583442         1,582,194         1.39%         12.48 %   

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 %   

VIP Small Cap Value Series: Service Class (DWVSVS)

  

     

2012

      0.00 %      980         10.238165         10,033         0.21%         13.63 %   

2012

      0.20 %      125,975         10.204105         1,285,462         0.21%         13.41 %   

2012

      0.25 %      264,717         10.195601         2,698,949         0.21%         13.35 %   

2011

      0.25 %      2,125         8.994847         19,114         0.00%         -10.05 %      5/2/2011   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		      Total
Return***		     Inception
Date****

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

  

     

2012

      0.00 %      5,953,531       $ 18.589099       $ 110,670,777         2.05%         15.74 %   

2012

      0.10 %      503,752         13.561635         6,831,701         2.05%         15.62 %   

2012

      0.20 %      2,648,356         12.998834         34,425,540         2.05%         15.51 %   

2012

      0.25 %      9,566,276         12.920511         123,601,174         2.05%         15.45 %   

2011

      0.00 %      6,328,796         16.061424         101,649,476         1.82%         1.88 %   

2011

      0.10 %      616,800         11.729321         7,234,645         1.82%         1.78 %   

2011

      0.20 %      2,636,742         11.253834         29,673,457         1.82%         1.67 %   

2011

      0.25 %      10,468,947         11.191630         117,164,581         1.82%         1.62 %   

2010

      0.00 %      6,808,183         15.765432         107,333,946         1.82%         14.84 %   

2010

      0.10 %      594,473         11.524660         6,851,099         1.82%         14.72 %   

2010

      0.20 %      2,162,487         11.068506         23,935,500         1.82%         14.61 %   

2010

      0.25 %      12,044,265         11.012818         132,641,298         1.82%         14.55 %   

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 %   

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

  

     

2012

      0.00 %      605,032         15.297331         9,255,375         0.80%         11.97 %   

2012

      0.10 %      33,771         11.000110         371,485         0.80%         11.86 %   

2012

      0.25 %      18,663         9.925081         185,232         0.80%         11.69 %   

2011

      0.00 %      650,578         13.661404         8,887,809         0.89%         0.90 %   

2011

      0.10 %      42,011         9.833598         413,119         0.89%         0.80 %   

2011

      0.25 %      19,031         8.885914         169,108         0.89%         0.65 %   

2010

      0.00 %      715,374         13.539393         9,685,730         0.89%         14.82 %   

2010

      0.10 %      34,941         9.755504         340,867         0.89%         14.70 %   

2010

      0.25 %      38,070         8.828556         336,103         0.89%         14.53 %   

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 %   

Floating-Rate Income Fund (ETVFR)

  

     

2012

      0.10 %      1,433,810         10.685961         15,321,638         3.38%         7.22 %   

2012

      0.20 %      3,643         10.668159         38,864         3.38%         7.11 %   

2012

      0.25 %      634         10.659243         6,758         3.38%         7.06 %   

Goldman Sachs Global Markets Navigator Fund - Service Shares (GVGMNS)

  

     

2012

      0.00 %      92         10.312479         949         0.00%         3.12 %    5/1/2012

Van Kampen V.I. Mid Cap Growth Fund - Series I Shares (IVKMG1)

  

     

2012

      0.00 %      230,709         9.827596         2,267,315         0.00%         -1.72 %    4/27/2012

2012

      0.10 %      17,866         9.820935         175,461         0.00%         -1.79 %    4/27/2012

2012

      0.20 %      22,241         9.814282         218,279         0.00%         -1.86 %    4/27/2012

2012

      0.25 %      70,975         9.810958         696,333         0.00%         -1.89 %    4/27/2012

Mid Cap Growth Portfolio - Class 1 (OGGO)

  

     

2012

      0.10 %      37,959         22.818900         866,183         0.00%         15.99 %   

2012

      0.25 %      101,455         22.469562         2,279,649         0.00%         15.82 %   

2011

      0.10 %      43,643         19.672645         858,573         0.00%         -6.24 %   

2011

      0.25 %      117,879         19.400621         2,286,926         0.00%         -6.38 %   

2010

      0.10 %      44,475         20.982776         933,209         0.00%         25.51 %   

2010

      0.25 %      145,637         20.723653         3,018,131         0.00%         25.32 %   

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 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		      Total
Return***		     Inception
Date****

Mid Cap Value Portfolio: Class 1 (JPMMV1)

  

     

2012

      0.00 %      529       $ 19.289344       $ 10,204         0.28%         20.38 %   

2012

      0.20 %      88,720         18.958083         1,681,961         0.28%         20.14 %   

2012

      0.25 %      10,268         18.876134         193,820         0.28%         20.08 %   

2011

      0.20 %      7,723         15.780575         121,873         1.29%         1.96 %   

2010

      0.20 %      7,841         15.477647         121,360         1.26%         23.21 %   

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 %   

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

  

     

2012

      0.00 %      207,553         21.244764         4,409,415         2.66%         13.37 %   

2012

      0.10 %      70,662         21.026597         1,485,781         2.66%         13.26 %   

2012

      0.20 %      102,630         20.810679         2,135,800         2.66%         13.15 %   

2012

      0.25 %      322,380         20.703503         6,674,395         2.66%         13.09 %   

2011

      0.00 %      194,261         18.738519         3,640,163         2.33%         1.35 %   

2011

      0.10 %      104,385         18.564685         1,937,875         2.33%         1.25 %   

2011

      0.20 %      39,571         18.392478         727,809         2.33%         1.15 %   

2011

      0.25 %      249,377         18.306924         4,565,326         2.33%         1.10 %   

2010

      0.00 %      199,120         18.488077         3,681,346         2.48%         8.12 %   

2010

      0.10 %      120,166         18.334845         2,203,225         2.48%         8.01 %   

2010

      0.20 %      74,749         18.182894         1,359,153         2.48%         7.90 %   

2010

      0.25 %      315,673         18.107344         5,716,000         2.48%         7.85 %   

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 %   

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

  

     

2012

      0.00 %      1,995,286         12.857586         25,654,561         0.55%         23.86 %   

2012

      0.10 %      187,681         12.692401         2,382,123         0.55%         23.73 %   

2012

      0.20 %      326,106         12.529347         4,085,895         0.55%         23.61 %   

2012

      0.25 %      793,544         12.448610         9,878,520         0.55%         23.55 %   

2011

      0.00 %      2,188,403         10.380944         22,717,689         0.25%         -6.94 %   

2011

      0.10 %      278,314         10.257850         2,854,903         0.25%         -7.03 %   

2011

      0.20 %      483,760         10.136220         4,903,498         0.25%         -7.13 %   

2011

      0.25 %      1,428,699         10.075943         14,395,490         0.25%         -7.17 %   

2010

      0.00 %      2,484,331         11.155290         27,713,433         0.23%         6.48 %   

2010

      0.10 %      361,943         11.034023         3,993,687         0.23%         6.37 %   

2010

      0.20 %      405,847         10.914078         4,429,446         0.23%         6.27 %   

2010

      0.25 %      2,211,789         10.854583         24,008,047         0.23%         6.21 %   

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 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     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)

  

     

2012

      0.00 %      1,417,703       $ 6.254578       $ 8,867,134         0.00%         19.15 %   

2012

      0.10 %      243,213         6.174184         1,501,642         0.00%         19.03 %   

2012

      0.20 %      16,163         6.094806         98,510         0.00%         18.91 %   

2012

      0.25 %      236,100         6.055509         1,429,706         0.00%         18.85 %   

2011

      0.00 %      1,121,336         5.249382         5,886,321         0.00%         -8.66 %   

2011

      0.10 %      308,257         5.187105         1,598,961         0.00%         -8.75 %   

2011

      0.20 %      4,342         5.125546         22,255         0.00%         -8.84 %   

2011

      0.25 %      413,571         5.095046         2,107,163         0.00%         -8.88 %   

2010

      0.00 %      1,414,446         5.746904         8,128,685         0.00%         24.40 %   

2010

      0.10 %      331,841         5.684397         1,886,316         0.00%         24.27 %   

2010

      0.20 %      11,445         5.622552         64,350         0.00%         24.15 %   

2010

      0.25 %      413,420         5.591880         2,311,795         0.00%         24.09 %   

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 %   

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

  

     

2012

      0.00 %      1,861,649         15.233105         28,358,695         0.69%         13.18 %   

2012

      0.10 %      185,123         15.037449         2,783,778         0.69%         13.07 %   

2012

      0.20 %      244,857         14.844207         3,634,708         0.69%         12.95 %   

2012

      0.25 %      544,333         14.748538         8,028,116         0.69%         12.90 %   

2011

      0.00 %      928,241         13.459012         12,493,207         0.37%         -32.34 %   

2011

      0.10 %      282,025         13.299473         3,750,784         0.37%         -32.40 %   

2011

      0.20 %      737,438         13.141734         9,691,214         0.37%         -32.47 %   

2011

      0.25 %      984,026         13.063595         12,854,917         0.37%         -32.51 %   

2010

      0.00 %      1,084,854         19.891294         21,579,150         0.53%         25.02 %   

2010

      0.10 %      326,192         19.675174         6,417,884         0.53%         24.89 %   

2010

      0.20 %      973,187         19.461274         18,939,459         0.53%         24.77 %   

2010

      0.25 %      990,271         19.355227         19,166,920         0.53%         24.70 %   

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 %   

Janus Aspen Series - Perkins Mid Cap Value Portfolio - Service Shares (JAMVS)

  

     

2012

      0.00 %      7,263         11.281179         81,935         0.89%         10.79 %   

2012

      0.20 %      61,149         11.221257         686,169         0.89%         10.57 %   

2012

      0.25 %      121,309         11.206313         1,359,427         0.89%         10.51 %   

2011

      0.00 %      3,347         10.182308         34,080         0.73%         -2.98 %   

2011

      0.20 %      45,494         10.148540         461,698         0.73%         -3.18 %   

2011

      0.25 %      106,951         10.140120         1,084,496         0.73%         -3.22 %   

2010

      0.20 %      183         10.481347         1,918         0.42%         4.81 %    5/3/2010

2010

      0.25 %      46,317         10.477878         485,304         0.42%         4.78 %    5/3/2010

Retirement Emerging Markets Equity Portfolio - Service Shares (LZREMS)

  

     

2012

      0.00 %      100,164         11.413075         1,143,179         1.71%         22.05 %   

2012

      0.20 %      1,098,975         11.352455         12,476,064         1.71%         21.81 %   

2012

      0.25 %      782,058         11.337345         8,866,461         1.71%         21.75 %   

2011

      0.00 %      37,548         9.351075         351,114         2.45%         -18.00 %   

2011

      0.20 %      1,020,922         9.320058         9,515,052         2.45%         -18.16 %   

2011

      0.25 %      725,228         9.312320         6,753,555         2.45%         -18.20 %   

2010

      0.00 %      18,770         11.403634         214,046         2.49%         14.04 %    5/3/2010

2010

      0.20 %      322,122         11.388546         3,668,501         2.49%         13.89 %    5/3/2010

2010

      0.25 %      363,235         11.384777         4,135,349         2.49%         13.85 %    5/3/2010

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		      Total
Return***		     Inception
Date****		  

Series Fund - Mid Cap Stock Fund: Class VC (LOVMCV)

  

     

2012

      0.00 %      984       $ 13.494607       $ 13,279         0.77%         14.54 %   

2012

      0.10 %      28,689         13.391551         384,190         0.77%         14.43 %   

2012

      0.20 %      2,376         13.289281         31,575         0.77%         14.32 %   

2012

      0.25 %      51,148         13.238427         677,119         0.77%         14.26 %   

2011

      0.00 %      955         11.781054         11,251         0.18%         -4.01 %   

2011

      0.10 %      39,336         11.702808         460,342         0.18%         -4.11 %   

2011

      0.20 %      709         11.625075         8,242         0.18%         -4.20 %   

2011

      0.25 %      37,912         11.586400         439,264         0.18%         -4.25 %   

2010

      0.00 %      984         12.273411         12,077         0.37%         25.43 %   

2010

      0.10 %      63,727         12.204067         777,729         0.37%         25.30 %   

2010

      0.20 %      1,367         12.135118         16,589         0.37%         25.18 %   

2010

      0.25 %      41,890         12.100786         506,902         0.37%         25.12 %   

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 %   

Investors Growth Stock Series - Initial Class (MIGIC)

  

     

2012

      0.00 %      172,283         18.477561         3,183,370         0.46%         16.97 %   

2011

      0.00 %      192,257         15.796502         3,036,988         0.54%         0.58 %   

2010

      0.00 %      216,391         15.705759         3,398,585         0.45%         12.47 %   

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 %   

Variable Insurance Trust - MFS New Discovery Series - Intital Class (MNDIC)

  

     

2012

      0.00 %      7,796         10.335916         80,579         0.00%         3.36 %      5/1/2012   

New Discovery Series - Service Class (MNDSC)

  

     

2012

      0.25 %      65,112         10.300457         670,683         0.00%         3.00 %      5/1/2012   

Research International Series - Service Class (MVRISC)

  

     

2012

      0.00 %      11,403         9.083269         103,577         2.64%         16.41 %   

2012

      0.20 %      53,472         8.980840         480,223         2.64%         16.18 %   

2012

      0.25 %      338,782         8.955409         3,033,931         2.64%         16.12 %   

2011

      0.00 %      7,541         7.802718         58,840         1.62%         -11.06 %   

2011

      0.20 %      160         7.730217         1,237         1.62%         -11.23 %   

2011

      0.25 %      102,864         7.712183         793,306         1.62%         -11.28 %   

2010

      0.00 %      4,927         8.772736         43,223         1.35%         10.47 %   

2010

      0.25 %      84,252         8.692628         732,371         1.35%         10.20 %   

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 %   

Value Series - Initial Class (MVFIC)

  

     

2012

      0.00 %      394,370         21.189802         8,356,622         1.70%         16.26 %   

2011

      0.00 %      407,456         18.226114         7,426,340         1.45%         -0.30 %   

2010

      0.00 %      441,004         18.281385         8,062,164         1.47%         11.53 %   

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 %   

Value Series - Service Class (MVFSC)

  

     

2012

      0.00 %      195,561         10.386254         2,031,146         1.48%         15.88 %   

2012

      0.20 %      284,062         10.277471         2,919,439         1.48%         15.65 %   

2012

      0.25 %      1,605,332         10.250498         16,455,452         1.48%         15.59 %   

2011

      0.00 %      125,373         8.962764         1,123,689         1.19%         -0.47 %   

2011

      0.20 %      263,888         8.886694         2,345,092         1.19%         -0.66 %   

2011

      0.25 %      1,640,910         8.867804         14,551,268         1.19%         -0.71 %   

2010

      0.00 %      78,860         9.004753         710,115         1.25%         11.22 %   

2010

      0.20 %      10,967         8.946185         98,113         1.25%         10.99 %   

2010

      0.25 %      677,810         8.931612         6,053,936         1.25%         10.94 %   

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 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		     Total
Return***		     Inception
Date****		  

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

  

2012

      0.00 %      63,448       $ 16.326534       $ 1,035,886         1.59 %      15.93 %   

2012

      0.20 %      1,224,573         16.207264         19,846,978         1.59 %      15.70 %   

2012

      0.25 %      1,240,764         16.177603         20,072,587         1.59 %      15.64 %   

2011

      0.00 %      50,951         14.082958         717,541         1.09 %      -1.78 %   

2011

      0.20 %      714,526         14.008123         10,009,168         1.09 %      -1.97 %   

2011

      0.25 %      994,671         13.989490         13,914,940         1.09 %      -2.02 %   

2010

      0.00 %      3,508         14.337712         50,297         1.41 %      8.78 %   

2010

      0.20 %      520,695         14.290030         7,440,747         1.41 %      8.56 %   

2010

      0.25 %      916,953         14.278137         13,092,381         1.41 %      8.51 %   

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)

  

2012

      0.00 %      159,977         14.850467         2,375,733         4.54 %      9.44 %   

2011

      0.00 %      186,591         13.569488         2,531,944         3.79 %      5.65 %   

2010

      0.00 %      190,070         12.844145         2,441,287         6.09 %      7.14 %   

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 %   

Emerging Markets Debt Portfolio - Class I (MSEM)

  

2012

      0.00 %      160,559         35.502855         5,700,303         2.86 %      17.96 %   

2012

      0.10 %      635,996         45.743742         29,092,837         2.86 %      17.84 %   

2012

      0.20 %      113,419         34.689455         3,934,443         2.86 %      17.72 %   

2012

      0.25 %      67,120         34.480526         2,314,333         2.86 %      17.67 %   

2011

      0.00 %      176,124         30.097113         5,300,824         3.60 %      7.03 %   

2011

      0.10 %      644,916         38.817591         25,034,086         3.60 %      6.93 %   

2011

      0.20 %      102,810         29.466572         3,029,458         3.60 %      6.82 %   

2011

      0.25 %      56,831         29.303784         1,665,363         3.60 %      6.77 %   

2010

      0.00 %      212,950         28.119543         5,988,057         3.00 %      9.74 %   

2010

      0.10 %      644,413         36.303218         23,394,266         3.00 %      9.63 %   

2010

      0.20 %      81,138         27.585403         2,238,224         3.00 %      9.53 %   

2010

      0.25 %      60,832         27.446686         1,669,637         3.00 %      9.47 %   

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 %   

Global Real Estate Portfolio - Class II (VKVGR2)

  

2012

      0.00 %      24,795         9.898065         245,423         0.54 %      29.94 %   

2012

      0.20 %      36,580         9.794401         358,279         0.54 %      29.68 %   

2012

      0.25 %      180,879         9.768654         1,766,944         0.54 %      29.62 %   

2011

      0.00 %      26,783         7.617163         204,010         3.29 %      -10.15 %   

2011

      0.20 %      17,677         7.552508         133,506         3.29 %      -10.33 %   

2011

      0.25 %      100,281         7.536433         755,761         3.29 %      -10.38 %   

2010

      0.00 %      17,979         8.477927         152,425         8.26 %      22.32 %   

2010

      0.20 %      9,827         8.422781         82,771         8.26 %      22.07 %   

2010

      0.25 %      120,544         8.409049         1,013,660         8.26 %      22.01 %   

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 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		     Total
Return***		     Inception
Date****		  

Universal Institutional Funds, Inc. - Mid Cap Growth Portfolio - Class I (MSVMG)

  

    

2012

      0.00 %      23,806       $ 12.877689       $ 306,566         0.00 %      8.69 %   

2012

      0.10 %      48,845         12.715499         621,089         0.00 %      8.58 %   

2012

      0.20 %      192,237         12.555398         2,413,612         0.00 %      8.47 %   

2012

      0.25 %      635,504         12.476126         7,928,628         0.00 %      8.42 %   

2011

      0.00 %      25,089         11.847974         297,254         0.33 %      -7.12 %   

2011

      0.10 %      63,621         11.710491         745,033         0.33 %      -7.21 %   

2011

      0.20 %      309,678         11.574643         3,584,412         0.33 %      -7.31 %   

2011

      0.25 %      580,598         11.507335         6,681,136         0.33 %      -7.35 %   

2010

      0.00 %      4,677         12.756351         59,661         0.00 %      32.31 %   

2010

      0.10 %      64,134         12.620906         809,429         0.00 %      32.18 %   

2010

      0.20 %      61,988         12.486960         774,042         0.00 %      32.05 %   

2010

      0.25 %      787,070         12.420541         9,775,835         0.00 %      31.98 %   

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 %   

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

  

    

2012

      0.00 %      1,068         11.548298         12,334         0.00 %      14.38 %   

2012

      0.20 %      8,437         11.427394         96,413         0.00 %      14.15 %   

2012

      0.25 %      125,623         11.397332         1,431,767         0.00 %      14.09 %   

2011

      0.00 %      4,822         10.096697         48,686         0.04 %      -2.80 %   

2011

      0.20 %      3,377         10.011033         33,807         0.04 %      -2.99 %   

2011

      0.25 %      66,787         9.989709         667,183         0.04 %      -3.04 %   

2010

      0.00 %      2,539         10.387395         26,374         0.16 %      22.86 %   

2010

      0.20 %      2,940         10.319840         30,340         0.16 %      22.62 %   

2010

      0.25 %      8,071         10.302995         83,155         0.16 %      22.55 %   

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 %   

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

  

    

2012

      0.10 %      83,283         44.585930         3,713,250         0.84 %      15.72 %   

2012

      0.20 %      167,696         36.021570         6,040,673         0.84 %      15.60 %   

2012

      0.25 %      409,531         35.804517         14,663,060         0.84 %      15.55 %   

2011

      0.10 %      101,526         38.529319         3,911,728         0.88 %      5.81 %   

2011

      0.20 %      189,017         31.159562         5,889,687         0.88 %      5.71 %   

2011

      0.25 %      472,847         30.987316         14,652,259         0.88 %      5.66 %   

2010

      0.10 %      100,621         36.412421         3,663,854         2.31 %      29.83 %   

2010

      0.20 %      182,394         29.476966         5,376,422         2.31 %      29.70 %   

2010

      0.25 %      555,658         29.328633         16,296,690         2.31 %      29.64 %   

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 %   

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

  

    

2012

      0.00 %      1,980,422         16.452105         32,582,111         0.98 %      14.66 %   

2011

      0.00 %      2,222,487         14.348277         31,888,859         1.60 %      0.65 %   

2010

      0.00 %      2,641,103         14.256071         37,651,752         1.97 %      13.46 %   

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)

  

    

2012

      0.00 %      477,179         12.704984         6,062,552         1.36 %      15.72 %   

2011

      0.00 %      433,074         10.979437         4,754,909         1.37 %      0.93 %   

2010

      0.00 %      483,491         10.878393         5,259,605         1.49 %      12.02 %   

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 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		     Total
Return***		     Inception
Date****

American Funds NVIT Bond Fund - Class II (GVABD2)

  

    

2012

      0.00 %      158,000       $ 12.903197       $ 2,038,705         2.20 %      4.97 %   

2011

      0.00 %      174,797         12.292646         2,148,718         2.35 %      5.72 %   

2010

      0.00 %      229,234         11.627184         2,665,346         2.06 %      5.99 %   

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 %   

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

  

    

2012

      0.00 %      374,929         13.277399         4,978,082         0.87 %      22.09 %   

2011

      0.00 %      426,331         10.875437         4,636,536         1.00 %      -9.31 %   

2010

      0.00 %      473,561         11.991721         5,678,811         0.81 %      11.30 %   

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 %   

American Funds NVIT Growth Fund - Class II (GVAGR2)

  

    

2012

      0.00 %      656,818         11.875465         7,800,019         0.21 %      17.40 %   

2011

      0.00 %      786,500         10.115272         7,955,661         0.26 %      -4.69 %   

2010

      0.00 %      773,203         10.612804         8,205,852         0.17 %      18.19 %   

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 %   

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

  

    

2012

      0.00 %      247,986         10.169772         2,521,961         1.05 %      17.06 %   

2011

      0.00 %      279,694         8.687464         2,429,832         0.99 %      -2.24 %   

2010

      0.00 %      293,429         8.886120         2,607,445         0.96 %      10.97 %   

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 %   

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

  

    

2012

      0.00 %      164,273         23.960670         3,936,091         8.24 %      14.56 %   

2012

      0.10 %      100,719         21.561437         2,171,646         8.24 %      14.44 %   

2012

      0.20 %      51,215         24.059374         1,232,201         8.24 %      14.33 %   

2012

      0.25 %      574,902         23.914452         13,748,466         8.24 %      14.27 %   

2011

      0.00 %      192,805         20.916000         4,032,709         8.22 %      3.82 %   

2011

      0.10 %      94,398         18.840517         1,778,507         8.22 %      3.71 %   

2011

      0.20 %      31,722         21.044304         667,567         8.22 %      3.61 %   

2011

      0.25 %      618,849         20.928041         12,951,297         8.22 %      3.56 %   

2010

      0.00 %      217,797         20.146924         4,387,940         8.65 %      13.15 %   

2010

      0.10 %      96,568         18.165863         1,754,241         8.65 %      13.04 %   

2010

      0.20 %      97,797         20.310994         1,986,354         8.65 %      12.93 %   

2010

      0.25 %      722,680         20.208859         14,604,538         8.65 %      12.87 %   

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 %   

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

  

    

2012

      0.00 %      644,890         17.021800         10,977,189         8.23 %      14.71 %   

2011

      0.00 %      746,693         14.839228         11,080,348         7.79 %      3.81 %   

2010

      0.00 %      838,621         14.295077         11,988,152         8.54 %      13.16 %   

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 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		     Total
Return***		     Inception
Date****

NVIT Emerging Markets Fund - Class I (GEM)

  

    

2012

      0.00 %      72,637       $ 26.899413       $ 1,953,893         0.50 %      17.22 %   

2012

      0.10 %      100,722         26.571947         2,676,380         0.50 %      17.10 %   

2012

      0.20 %      47,858         26.248380         1,256,195         0.50 %      16.98 %   

2012

      0.25 %      221,809         26.088139         5,786,584         0.50 %      16.92 %   

2011

      0.00 %      86,175         22.948246         1,977,565         0.51 %      -22.37 %   

2011

      0.10 %      135,864         22.691603         3,082,972         0.51 %      -22.45 %   

2011

      0.20 %      37,968         22.437772         851,917         0.51 %      -22.53 %   

2011

      0.25 %      208,036         22.311980         4,641,695         0.51 %      -22.57 %   

2010

      0.00 %      108,618         29.562687         3,211,040         0.06 %      16.17 %   

2010

      0.10 %      142,172         29.261305         4,160,138         0.06 %      16.06 %   

2010

      0.20 %      338,600         28.962911         9,806,842         0.06 %      15.94 %   

2010

      0.25 %      366,617         28.814934         10,564,045         0.06 %      15.88 %   

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 %   

NVIT Emerging Markets Fund - Class III (GEM3)

  

    

2012

      0.00 %      488,948         19.336082         9,454,339         0.40 %      17.24 %   

2011

      0.00 %      746,323         16.493303         12,309,331         0.71 %      -22.39 %   

2010

      0.00 %      794,544         21.252025         16,885,669         0.07 %      16.21 %   

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 %   

NVIT International Equity Fund - Class I (GIG)

  

    

2012

      0.00 %      399,009         14.122631         5,635,057         0.87 %      15.61 %   

2012

      0.10 %      105,286         13.950678         1,468,811         0.87 %      15.49 %   

2012

      0.20 %      23,573         13.780870         324,856         0.87 %      15.38 %   

2012

      0.25 %      230,188         13.696713         3,152,819         0.87 %      15.32 %   

2011

      0.00 %      402,975         12.216006         4,922,745         1.35 %      -9.76 %   

2011

      0.10 %      146,364         12.079365         1,767,984         1.35 %      -9.85 %   

2011

      0.20 %      21,256         11.944297         253,888         1.35 %      -9.94 %   

2011

      0.25 %      211,674         11.877298         2,514,115         1.35 %      -9.99 %   

2010

      0.00 %      263,475         13.537857         3,566,887         0.95 %      13.29 %   

2010

      0.10 %      80,397         13.399813         1,077,305         0.95 %      13.18 %   

2010

      0.20 %      5,187         13.263217         68,796         0.95 %      13.06 %   

2010

      0.25 %      68,531         13.195400         904,294         0.95 %      13.01 %   

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 %   

NVIT International Equity Fund - Class III (GIG3)

  

    

2012

      0.00 %      425,415         8.450909         3,595,143         0.79 %      15.58 %   

2011

      0.00 %      519,645         7.311920         3,799,603         1.34 %      -9.76 %   

2010

      0.00 %      484,564         8.103077         3,926,459         1.02 %      13.27 %   

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

Variable Insurance Trust: NVIT International Equity Fund - Class VI (NVIE6)

  

    

2012

      0.00 %      29,454         8.355696         246,109         0.52 %      15.23 %   

2011

      0.00 %      48,864         7.251572         354,341         0.92 %      -10.00 %   

2010

      0.00 %      79,753         8.057227         642,588         0.98 %      13.00 %   

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

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

  

    

2012

      0.00 %      1,373,296         9.471654         13,007,385         1.47 %      16.94 %   

2011

      0.00 %      1,522,830         8.099461         12,334,102         0.57 %      -11.62 %   

2010

      0.00 %      1,705,119         9.164158         15,625,980         0.21 %      15.61 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		     Total
Return***		     Inception
Date****

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

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		     Total
Return***		     Inception
Date****

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

  

    

2012

      0.00 %      26,852       $ 10.841924       $ 291,127         0.88 %      11.50 %   

2011

      0.00 %      59,405         9.723793         577,642         0.72 %      -3.18 %   

2010

      0.00 %      25,390         10.043115         254,995         0.89 %      23.58 %   

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)

  

    

2012

      0.00 %      213,197         10.402170         2,217,711         1.16 %      16.22 %   

2012

      0.20 %      76         16.113951         1,225         1.16 %      15.99 %   

2012

      0.25 %      104         16.084433         1,673         1.16 %      15.93 %   

2011

      0.00 %      181,560         8.950086         1,624,978         2.09 %      -6.19 %   

2011

      0.20 %      10         13.892348         139         2.09 %      -6.37 %   

2011

      0.25 %      202         13.873846         2,803         2.09 %      -6.42 %   

2010

      0.00 %      85,305         9.540229         813,829         0.40 %      15.00 %   

2010

      0.20 %      3         14.837971         45         0.40 %      14.77 %   

2010

      0.25 %      438         14.825611         6,494         0.40 %      14.71 %   

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)

  

    

2012

      0.00 %      345,977         11.638522         4,026,661         1.58 %      11.24 %   

2012

      0.10 %      9,918,231         14.260689         141,440,808         1.58 %      11.13 %   

2011

      0.00 %      273,343         10.462826         2,859,940         2.55 %      -1.26 %   

2011

      0.10 %      10,039,458         12.832969         128,836,053         2.55 %      -1.36 %   

2010

      0.00 %      171,673         10.596561         1,819,143         0.04 %      10.46 %   

2010

      0.10 %      10,172,685         13.009970         132,346,327         0.04 %      10.35 %   

2010

      0.20 %      7         12.988326         91         0.04 %      10.24 %   

2010

      0.25 %      50         12.977497         649         0.04 %      10.18 %   

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)

  

    

2012

      0.00 %      417,509         11.154725         4,657,198         1.55 %      13.74 %   

2011

      0.00 %      353,307         9.807509         3,465,062         2.31 %      -3.37 %   

2011

      0.20 %      7         13.310277         93         2.31 %      -3.56 %   

2011

      0.25 %      8         13.292549         106         2.31 %      -3.61 %   

2010

      0.00 %      366,215         10.149086         3,716,748         0.64 %      12.46 %   

2010

      0.20 %      2         13.801379         28         0.64 %      12.23 %   

2010

      0.25 %      14         13.789878         193         0.64 %      12.17 %   

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)

  

    

2012

      0.00 %      375,872         12.078891         4,540,117         2.04 %      7.58 %   

2012

      0.20 %      317         12.796286         4,056         2.04 %      7.36 %   

2012

      0.25 %      99         12.772842         1,265         2.04 %      7.31 %   

2011

      0.00 %      244,720         11.227964         2,747,707         2.65 %      1.50 %   

2011

      0.20 %      223         11.918680         2,658         2.65 %      1.30 %   

2010

      0.00 %      132,942         11.062310         1,470,646         1.26 %      6.87 %   

2010

      0.20 %      107         11.766279         1,259         1.26 %      6.65 %   

2010

      0.25 %      10         11.756479         118         1.26 %      6.60 %   

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)

  

    

2012

      0.00 %      489,603         11.397169         5,580,088         1.47 %      12.45 %   

2011

      0.00 %      534,729         10.135390         5,419,687         2.45 %      -2.25 %   

2011

      0.25 %      8         13.034508         104         2.45 %      -2.49 %   

2010

      0.00 %      346,937         10.368348         3,597,164         0.93 %      11.42 %   

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

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		      Total
Return***		     Inception
Date****		  

NVIT Cardinal Moderately Aggressive Fund - Class I (NVCMA1)

  

     

2012

      0.00 %      475,205       $ 10.851463       $ 5,156,669         1.27%         14.67 %   

2012

      0.20 %      29         15.518526         450         1.27%         14.44 %   

2012

      0.25 %      32         15.490103         496         1.27%         14.38 %   

2011

      0.00 %      513,993         9.463303         4,864,071         2.42%         -4.57 %   

2011

      0.20 %      31         13.560483         420         2.42%         -4.76 %   

2011

      0.25 %      35         13.542423         474         2.42%         -4.81 %   

2010

      0.00 %      486,915         9.916957         4,828,715         0.73%         13.50 %   

2010

      0.20 %      8         14.238938         114         0.73%         13.27 %   

2010

      0.25 %      224         14.227081         3,187         0.73%         13.21 %   

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)

  

     

2012

      0.00 %      151,616         11.828808         1,793,437         1.97%         10.13 %   

2012

      0.20 %      2,766         13.754085         38,044         1.97%         9.91 %   

2012

      0.25 %      13,974         13.728890         191,848         1.97%         9.86 %   

2011

      0.00 %      114,210         10.740467         1,226,669         2.52%         -0.28 %   

2011

      0.20 %      665         12.513661         8,322         2.52%         -0.48 %   

2010

      0.00 %      102,837         10.770841         1,107,641         1.12%         9.31 %   

2010

      0.20 %      424         12.574113         5,331         1.12%         9.10 %   

2010

      0.25 %      38         12.563636         477         1.12%         9.04 %   

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)

  

     

2012

      0.00 %      72,492         13.303193         964,375         3.01%         7.75 %   

2011

      0.00 %      80,629         12.345910         995,438         3.32%         6.59 %   

2010

      0.00 %      59,061         11.582155         684,054         2.81%         7.06 %   

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   

NVIT Core Plus Bond Fund - Class I (NVLCP1)

  

     

2012

      0.00 %      88,003         14.357681         1,263,519         3.10%         7.38 %   

2011

      0.00 %      35,901         13.370773         480,024         2.56%         6.37 %   

2010

      0.00 %      18,485         12.569892         232,354         2.49%         8.35 %   

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 Nationwide Fund - Class I (TRF)

  

     

2012

      0.00 %      1,864,535         15.982186         29,799,345         1.42%         14.21 %   

2012

      0.10 %      3,747,612         13.091593         49,062,211         1.42%         14.10 %   

2012

      0.20 %      2,665         12.699413         33,844         1.42%         13.99 %   

2012

      0.25 %      15,896         12.622880         200,653         1.42%         13.93 %   

2011

      0.00 %      2,024,151         13.993147         28,324,242         1.15%         0.53 %   

2011

      0.10 %      4,619,387         11.473793         53,001,890         1.15%         0.43 %   

2011

      0.20 %      3,750         11.141231         41,780         1.15%         0.33 %   

2011

      0.25 %      19,700         11.079648         218,269         1.15%         0.28 %   

2010

      0.00 %      2,208,854         13.919537         30,746,225         0.79%         13.45 %   

2010

      0.10 %      4,747,522         11.424837         54,239,665         0.79%         13.34 %   

2010

      0.20 %      58,071         11.104765         644,865         0.79%         13.22 %   

2010

      0.25 %      30,679         11.048893         338,969         0.79%         13.17 %   

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 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		     Total
Return***		     Inception
Date****

NVIT Government Bond Fund - Class I (GBF)

2012

      0.00 %      1,674,246       $ 21.983438       $ 36,805,683         2.29 %      3.06 %   

2012

      0.10 %      909,849         20.181071         18,361,727         2.29 %      2.95 %   

2012

      0.20 %      1,212,740         18.268614         22,155,079         2.29 %      2.85 %   

2012

      0.25 %      3,051,816         18.158617         55,416,758         2.29 %      2.80 %   

2011

      0.00 %      1,713,711         21.331346         36,555,762         2.95 %      7.25 %   

2011

      0.10 %      177,033         19.602079         3,470,215         2.95 %      7.15 %   

2011

      0.20 %      1,225,833         17.762299         21,773,612         2.95 %      7.04 %   

2011

      0.25 %      3,176,064         17.664198         56,102,623         2.95 %      6.99 %   

2010

      0.00 %      1,970,073         19.888530         39,181,856         2.91 %      4.78 %   

2010

      0.10 %      179,088         18.294455         3,276,317         2.91 %      4.68 %   

2010

      0.20 %      1,247,423         16.593936         20,699,657         2.91 %      4.57 %   

2010

      0.25 %      3,252,714         16.510521         53,704,003         2.91 %      4.52 %   

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 %   

American Century NVIT Growth Fund - Class I (CAF)

2012

      0.00 %      1,163,480         10.933376         12,720,764         0.56 %      14.02 %   

2012

      0.10 %      107,268         8.218140         881,543         0.56 %      13.91 %   

2012

      0.20 %      27,007         10.477780         282,973         0.56 %      13.79 %   

2012

      0.25 %      7,147         10.414612         74,433         0.56 %      13.74 %   

2011

      0.00 %      1,203,204         9.588872         11,537,369         0.58 %      -0.69 %   

2011

      0.10 %      127,078         7.214766         916,838         0.58 %      -0.79 %   

2011

      0.20 %      25,516         9.207740         234,945         0.58 %      -0.89 %   

2011

      0.25 %      5,000         9.156818         45,784         0.58 %      -0.94 %   

2010

      0.00 %      1,313,922         9.655570         12,686,666         0.62 %      19.25 %   

2010

      0.10 %      114,797         7.272204         834,827         0.62 %      19.13 %   

2010

      0.20 %      21,579         9.290303         200,475         0.62 %      19.01 %   

2010

      0.25 %      5,239         9.243540         48,427         0.62 %      18.95 %   

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 %   

NVIT International Index Fund - Class II (GVIX2)

2012

      0.00 %      194,912         8.229456         1,604,020         2.39 %      18.29 %   

2012

      0.20 %      32,518         8.136631         264,587         2.39 %      18.05 %   

2012

      0.25 %      714,474         8.113620         5,796,971         2.39 %      17.99 %   

2011

      0.00 %      130,671         6.957271         909,114         2.62 %      -12.72 %   

2011

      0.20 %      8,251         6.892598         56,871         2.62 %      -12.89 %   

2011

      0.25 %      907,509         6.876547         6,240,528         2.62 %      -12.94 %   

2010

      0.00 %      52,697         7.971131         420,055         2.29 %      7.52 %   

2010

      0.20 %      7,211         7.912838         57,059         2.29 %      7.30 %   

2010

      0.25 %      772,390         7.898348         6,100,605         2.29 %      7.25 %   

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 %   

NVIT International Index Fund - Class VI (GVIX6)

2012

      0.00 %      101,703         9.764428         993,072         2.68 %      18.29 %   

2011

      0.00 %      94,205         8.254444         777,610         2.74 %      -12.72 %   

2010

      0.00 %      71,480         9.456969         675,984         2.11 %      7.54 %   

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 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     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)

  

    

2012

      0.00 %      970,552       $ 17.169227       $ 16,663,628         1.41 %      15.90 %   

2012

      0.10 %      128,197         16.982548         2,177,112         1.41 %      15.79 %   

2012

      0.20 %      90,669         16.797930         1,523,052         1.41 %      15.67 %   

2012

      0.25 %      92,309         16.706332         1,542,145         1.41 %      15.61 %   

2011

      0.00 %      1,230,015         14.813448         18,220,763         1.80 %      -3.93 %   

2011

      0.10 %      162,340         14.667084         2,381,054         1.80 %      -4.03 %   

2011

      0.20 %      83,626         14.522177         1,214,432         1.80 %      -4.12 %   

2011

      0.25 %      137,252         14.450227         1,983,323         1.80 %      -4.17 %   

2010

      0.00 %      1,251,096         15.419576         19,291,370         1.71 %      14.63 %   

2010

      0.10 %      160,260         15.282480         2,449,170         1.71 %      14.51 %   

2010

      0.20 %      121,836         15.146603         1,845,402         1.71 %      14.40 %   

2010

      0.25 %      289,316         15.079089         4,362,622         1.71 %      14.34 %   

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 %   

NVIT Investor Destinations Balanced Fund - Class II (NVDBL2)

  

    

2012

      0.00 %      101,106         14.106085         1,426,210         2.24 %      9.39 %   

2011

      0.00 %      12,871         12.895684         165,980         2.25 %      0.88 %   

2010

      0.00 %      7,276         12.782641         93,006         1.26 %      9.81 %   

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)

  

    

2012

      0.00 %      23,052         15.203946         350,481         1.85 %      12.25 %   

2011

      0.00 %      20,856         13.544740         282,489         2.08 %      -0.94 %   

2010

      0.00 %      9,246         13.672666         126,417         0.96 %      12.03 %   

2009

      0.00 %      10,225         12.204484         124,791         0.71 %      22.04 %      5/1/2009   

NVIT Investor Destinations Conservative Fund - Class II (GVIDC)

  

    

2012

      0.00 %      535,106         15.415374         8,248,859         1.71 %      5.18 %   

2012

      0.10 %      8,967         15.247831         136,727         1.71 %      5.07 %   

2012

      0.20 %      69,257         15.082043         1,044,537         1.71 %      4.97 %   

2012

      0.25 %      142,595         14.999901         2,138,911         1.71 %      4.91 %   

2011

      0.00 %      589,915         14.656785         8,646,257         2.50 %      2.93 %   

2011

      0.10 %      22,883         14.512020         332,079         2.50 %      2.83 %   

2011

      0.20 %      56,571         14.368627         812,848         2.50 %      2.73 %   

2011

      0.25 %      143,852         14.297532         2,056,729         2.50 %      2.67 %   

2010

      0.00 %      634,498         14.239553         9,034,968         2.23 %      5.89 %   

2010

      0.10 %      25,085         14.112974         354,024         2.23 %      5.79 %   

2010

      0.20 %      135,026         13.987465         1,888,671         2.23 %      5.68 %   

2010

      0.25 %      173,444         13.925202         2,415,243         2.23 %      5.63 %   

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 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		     Total
Return***		     Inception
Date****

NVIT Investor Destinations Moderate Fund - Class II (GVIDM)

  

    

2012

      0.00 %      3,467,574       $ 16.746328       $ 58,069,132         1.61 %      10.81 %   

2012

      0.10 %      164,770         16.564270         2,729,295         1.61 %      10.70 %   

2012

      0.20 %      250,897         16.384181         4,110,742         1.61 %      10.59 %   

2012

      0.25 %      287,419         16.294844         4,683,448         1.61 %      10.53 %   

2011

      0.00 %      3,959,245         15.112388         59,833,118         2.12 %      -0.04 %   

2011

      0.10 %      218,054         14.963083         3,262,760         2.12 %      -0.14 %   

2011

      0.20 %      302,677         14.815234         4,484,231         2.12 %      -0.24 %   

2011

      0.25 %      390,082         14.741846         5,750,529         2.12 %      -0.29 %   

2010

      0.00 %      4,345,889         15.118520         65,703,410         1.99 %      10.91 %   

2010

      0.10 %      189,430         14.984107         2,838,439         1.99 %      10.80 %   

2010

      0.20 %      382,830         14.850857         5,685,354         1.99 %      10.69 %   

2010

      0.25 %      805,184         14.784666         11,904,377         1.99 %      10.64 %   

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 %   

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

  

    

2012

      0.00 %      3,872,046         17.214305         66,654,581         1.63 %      13.76 %   

2012

      0.10 %      197,613         17.027115         3,364,779         1.63 %      13.65 %   

2012

      0.20 %      24,724         16.841984         416,401         1.63 %      13.53 %   

2012

      0.25 %      170,507         16.750188         2,856,024         1.63 %      13.48 %   

2011

      0.00 %      4,147,741         15.132127         62,764,144         2.03 %      -2.13 %   

2011

      0.10 %      250,895         14.982582         3,759,055         2.03 %      -2.22 %   

2011

      0.20 %      34,628         14.834535         513,690         2.03 %      -2.32 %   

2011

      0.25 %      217,442         14.761085         3,209,680         2.03 %      -2.37 %   

2010

      0.00 %      4,382,022         15.460895         67,749,982         1.89 %      12.83 %   

2010

      0.10 %      291,696         15.323384         4,469,770         1.89 %      12.72 %   

2010

      0.20 %      67,465         15.187117         1,024,599         1.89 %      12.61 %   

2010

      0.25 %      400,034         15.119471         6,048,302         1.89 %      12.55 %   

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 %   

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

  

    

2012

      0.00 %      886,098         16.407771         14,538,893         1.75 %      8.04 %   

2012

      0.10 %      51,990         16.229405         843,767         1.75 %      7.93 %   

2012

      0.20 %      13,819         16.052978         221,836         1.75 %      7.82 %   

2012

      0.25 %      89,875         15.965491         1,434,899         1.75 %      7.77 %   

2011

      0.00 %      908,615         15.186765         13,798,922         2.30 %      2.06 %   

2011

      0.10 %      67,795         15.036737         1,019,416         2.30 %      1.96 %   

2011

      0.20 %      9,866         14.888185         146,887         2.30 %      1.86 %   

2011

      0.25 %      78,319         14.814478         1,160,255         2.30 %      1.81 %   

2010

      0.00 %      953,397         14.879939         14,186,489         2.16 %      8.52 %   

2010

      0.10 %      81,279         14.747641         1,198,674         2.16 %      8.41 %   

2010

      0.20 %      30,996         14.616529         453,054         2.16 %      8.30 %   

2010

      0.25 %      172,671         14.551412         2,512,607         2.16 %      8.25 %   

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 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		     Total
Return***		     Inception
Date****

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 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		     Total
Return***		     Inception
Date****

NVIT Mid Cap Index Fund - Class I (MCIF)

  

    

2012

      0.00 %      775,366       $ 33.448036       $ 25,934,470         1.07 %      17.47 %   

2012

      0.10 %      82,892         30.234257         2,506,178         1.07 %      17.36 %   

2012

      0.20 %      268,030         22.707360         6,086,254         1.07 %      17.24 %   

2012

      0.25 %      1,015,466         22.570532         22,919,608         1.07 %      17.18 %   

2011

      0.00 %      937,419         28.472984         26,691,116         0.78 %      -2.54 %   

2011

      0.10 %      110,919         25.763036         2,857,610         0.78 %      -2.64 %   

2011

      0.20 %      249,840         19.368666         4,839,068         0.78 %      -2.74 %   

2011

      0.25 %      1,084,345         19.261601         20,886,221         0.78 %      -2.79 %   

2010

      0.00 %      972,303         29.216232         28,407,030         1.25 %      26.20 %   

2010

      0.10 %      134,857         26.461933         3,568,577         1.25 %      26.07 %   

2010

      0.20 %      201,344         19.913978         4,009,560         1.25 %      25.95 %   

2010

      0.25 %      1,101,218         19.813788         21,819,300         1.25 %      25.89 %   

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 %   

NVIT Money Market Fund - Class I (SAM)

  

    

2012

      0.00 %      5,544,294         14.293235         79,245,902         0.00 %      0.00 %   

2012

      0.20 %      1,247         11.983454         14,943         0.00 %      -0.20 %   

2012

      0.25 %      563,036         11.911174         6,706,420         0.00 %      -0.25 %   

2011

      0.00 %      5,903,369         14.293235         84,378,240         0.00 %      0.00 %   

2011

      0.20 %      1,299         12.007617         15,598         0.00 %      -0.20 %   

2011

      0.25 %      574,205         11.941153         6,856,670         0.00 %      -0.25 %   

2010

      0.00 %      6,150,810         14.293225         87,914,911         0.00 %      0.00 %   

2010

      0.20 %      1,348         12.031632         16,219         0.00 %      -0.20 %   

2010

      0.25 %      588,365         11.970993         7,043,313         0.00 %      -0.25 %   

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 %   

NVIT Money Market Fund - Class V (SAM5)

  

    

2012

      0.00 %      1,186,217         11.731137         13,915,674         0.00 %      0.00 %   

2012

      0.10 %      657,353         11.612007         7,633,188         0.00 %      -0.10 %   

2012

      0.20 %      8,815,071         11.494165         101,321,881         0.00 %      -0.20 %   

2012

      0.25 %      7,802,771         11.435565         89,229,095         0.00 %      -0.25 %   

2011

      0.00 %      756,286         11.731137         8,872,095         0.00 %      0.00 %   

2011

      0.10 %      629,615         11.623696         7,318,453         0.00 %      -0.10 %   

2011

      0.20 %      8,407,521         11.517285         96,831,816         0.00 %      -0.20 %   

2011

      0.25 %      9,471,462         11.464248         108,583,189         0.00 %      -0.25 %   

2010

      0.00 %      528,187         11.731129         6,196,230         0.00 %      0.00 %   

2010

      0.10 %      1,869,173         11.635333         21,748,450         0.00 %      -0.10 %   

2010

      0.20 %      8,254,159         11.540261         95,255,149         0.00 %      -0.20 %   

2010

      0.25 %      10,842,157         11.492942         124,608,282         0.00 %      -0.25 %   

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 %   

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

  

    

2012

      0.00 %      1,574,138         10.026765         15,783,512         0.59 %      15.78 %   

2011

      0.00 %      1,756,758         8.660251         15,213,965         1.29 %      -9.37 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		     Total
Return***		     Inception
Date****

2010

      0.00 %      1,926,194         9.555175         18,405,121         0.78 %      14.04 %   

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

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		      Total
Return***		     Inception
Date****

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

  

        

2012

      0.00 %      39,531       $ 17.262313       $ 682,396         0.39%         17.29 %   

2011

      0.00 %      43,242         14.717057         636,395         1.75%         -16.24 %   

2010

      0.00 %      50,861         17.570720         893,664         2.15%         6.19 %   

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 %   

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

  

        

2012

      0.00 %      465,460         10.521355         4,897,270         0.39%         17.24 %   

2011

      0.00 %      503,863         8.974574         4,521,956         1.89%         -16.11 %   

2010

      0.00 %      512,098         10.698362         5,478,610         2.30%         6.11 %   

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 %   

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

  

        

2012

      0.00 %      864,055         10.778503         9,313,219         0.46%         16.35 %   

2012

      0.10 %      45,035         10.728340         483,151         0.46%         16.24 %   

2012

      0.20 %      5,198         10.678331         55,506         0.46%         16.12 %   

2012

      0.25 %      68,955         10.653460         734,609         0.46%         16.06 %   

2011

      0.00 %      993,419         9.263525         9,202,562         0.01%         -2.91 %   

2011

      0.10 %      47,450         9.229646         437,947         0.01%         -3.00 %   

2011

      0.20 %      35,052         9.195838         322,333         0.01%         -3.10 %   

2011

      0.25 %      139,543         9.179010         1,280,867         0.01%         -3.15 %   

2010

      0.00 %      1,140,603         9.540808         10,882,274         0.06%         15.51 %   

2010

      0.10 %      50,494         9.515403         480,471         0.06%         15.39 %   

2010

      0.20 %      17,386         9.490013         164,993         0.06%         15.28 %   

2010

      0.25 %      118,763         9.477375         1,125,561         0.06%         15.22 %   

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)

  

        

2012

      0.00 %      578,776         10.172659         5,887,691         1.34%         17.81 %   

2012

      0.10 %      27,689         11.635430         322,173         1.34%         17.69 %   

2012

      0.20 %      3,822         11.604387         44,352         1.34%         17.57 %   

2012

      0.25 %      39,721         11.588884         460,322         1.34%         17.52 %   

2011

      0.00 %      652,862         8.634796         5,637,330         1.10%         -5.83 %   

2011

      0.10 %      29,021         9.886324         286,911         1.10%         -5.92 %   

2011

      0.20 %      4,675         9.869840         46,142         1.10%         -6.02 %   

2011

      0.25 %      48,213         9.861595         475,457         1.10%         -6.06 %   

2010

      0.00 %      694,617         9.169345         6,369,183         0.70%         13.05 %   

2010

      0.10 %      31,135         10.508835         327,193         0.70%         5.09 %    4/30/2010

2010

      0.20 %      3,506         10.501786         36,819         0.70%         5.02 %    4/30/2010

2010

      0.25 %      58,810         10.498264         617,403         0.70%         4.98 %    4/30/2010

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)

  

        

2012

      0.00 %      2,541,741         11.140525         28,316,329         0.00%         14.90 %   

2012

      0.10 %      6,819         11.088680         75,614         0.00%         14.79 %   

2012

      0.20 %      3,499         11.037007         38,618         0.00%         14.67 %   

2012

      0.25 %      1,906         11.011282         20,988         0.00%         14.62 %   

2011

      0.00 %      3,047,277         9.695515         29,544,910         0.00%         -4.23 %   

2011

      0.10 %      7,012         9.660066         67,736         0.00%         -4.32 %   

2011

      0.20 %      623         9.624698         5,996         0.00%         -4.42 %   

2011

      0.25 %      5,101         9.607082         49,006         0.00%         -4.47 %   

2010

      0.00 %      3,476,447         10.123676         35,194,423         0.00%         26.82 %   

2010

      0.10 %      7,478         10.096737         75,503         0.00%         26.69 %   

2010

      0.25 %      5,764         10.056395         57,965         0.00%         26.50 %   

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)

  

        

2012

      0.00 %      678         12.104426         8,207         1.34%         16.65 %   

2012

      0.20 %      350         11.991912         4,197         1.34%         16.42 %   

2012

      0.25 %      4,531         11.963973         54,209         1.34%         16.36 %   

2011

      0.00 %      1,079         10.376788         11,197         1.08%         -2.09 %   

2011

      0.25 %      5,310         10.282114         54,598         1.08%         -2.33 %   

2010

      0.25 %      6,739         10.527298         70,943         1.08%         19.37 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		      Total
Return***		     Inception
Date****

2008

      0.25 %      358         6.761352         2,421         0.46%         -32.39 %    5/1/2008

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		     Total
Return***		     Inception
Date****

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

  

    

2012

      0.00 %      861,247       $ 11.987208       $ 10,323,947         1.13 %      16.35 %   

2011

      0.00 %      946,834         10.303092         9,755,318         0.79 %      -2.32 %   

2010

      0.00 %      1,131,006         10.547920         11,929,761         1.33 %      19.63 %   

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

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

  

    

2012

      0.00 %      496,782         18.403264         9,142,410         0.00 %      13.44 %   

2012

      0.10 %      49,739         18.153519         902,938         0.00 %      13.32 %   

2012

      0.20 %      55,773         17.907035         998,729         0.00 %      13.21 %   

2012

      0.25 %      77,450         17.785105         1,377,456         0.00 %      13.15 %   

2011

      0.00 %      563,925         16.223239         9,148,690         0.00 %      -0.65 %   

2011

      0.10 %      61,780         16.019131         989,662         0.00 %      -0.75 %   

2011

      0.20 %      47,600         15.817461         752,911         0.00 %      -0.85 %   

2011

      0.25 %      85,864         15.717643         1,349,580         0.00 %      -0.90 %   

2010

      0.00 %      583,188         16.329069         9,522,917         0.00 %      25.45 %   

2010

      0.10 %      46,291         16.139729         747,124         0.00 %      25.32 %   

2010

      0.20 %      27,210         15.952454         434,066         0.00 %      25.20 %   

2010

      0.25 %      175,315         15.859701         2,780,443         0.00 %      25.13 %   

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 %   

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

  

    

2012

      0.00 %      772,200         33.054014         25,524,310         0.83 %      20.44 %   

2012

      0.10 %      36,881         35.317708         1,302,552         0.83 %      20.32 %   

2012

      0.20 %      73,102         25.177325         1,840,513         0.83 %      20.20 %   

2012

      0.25 %      165,813         25.025649         4,149,578         0.83 %      20.14 %   

2011

      0.00 %      880,940         27.443292         24,175,894         0.43 %      -5.07 %   

2011

      0.10 %      56,153         29.352122         1,648,210         0.43 %      -5.16 %   

2011

      0.20 %      90,826         20.945547         1,902,400         0.43 %      -5.26 %   

2011

      0.25 %      192,080         20.829802         4,000,988         0.43 %      -5.31 %   

2010

      0.00 %      994,468         28.908970         28,749,046         0.59 %      26.60 %   

2010

      0.10 %      61,312         30.950627         1,897,645         0.59 %      26.48 %   

2010

      0.20 %      102,771         22.108296         2,272,092         0.59 %      26.35 %   

2010

      0.25 %      333,494         21.997105         7,335,903         0.59 %      26.29 %   

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 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     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)

  

    

2012

      0.00 %      861,431       $ 29.998380       $ 25,841,534         0.15 %      15.50 %   

2012

      0.10 %      39,733         30.159433         1,198,325         0.15 %      15.39 %   

2012

      0.20 %      139,263         20.170847         2,809,053         0.15 %      15.27 %   

2012

      0.25 %      739,156         20.049299         14,819,560         0.15 %      15.21 %   

2011

      0.00 %      990,245         25.972077         25,718,719         0.53 %      -5.56 %   

2011

      0.10 %      62,029         26.137692         1,621,295         0.53 %      -5.65 %   

2011

      0.20 %      163,780         17.498608         2,865,922         0.53 %      -5.75 %   

2011

      0.25 %      838,331         17.401887         14,588,541         0.53 %      -5.79 %   

2010

      0.00 %      1,145,604         27.500722         31,504,937         0.27 %      25.32 %   

2010

      0.10 %      82,358         27.703734         2,281,624         0.27 %      25.19 %   

2010

      0.20 %      354,127         18.565556         6,574,565         0.27 %      25.07 %   

2010

      0.25 %      1,292,376         18.472172         23,872,992         0.27 %      25.01 %   

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 %   

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

  

    

2012

      0.00 %      502,846         22.186564         11,156,425         2.47 %      12.25 %   

2012

      0.10 %      43,545         21.372809         930,679         2.47 %      12.14 %   

2012

      0.20 %      22,681         20.343390         461,408         2.47 %      12.02 %   

2012

      0.25 %      50,355         20.220894         1,018,223         2.47 %      11.97 %   

2011

      0.00 %      570,373         19.765394         11,273,647         4.21 %      5.55 %   

2011

      0.10 %      102,896         19.059523         1,961,149         4.21 %      5.44 %   

2011

      0.20 %      19,541         18.159702         354,859         4.21 %      5.34 %   

2011

      0.25 %      36,977         18.059416         667,783         4.21 %      5.28 %   

2010

      0.00 %      628,182         18.726591         11,763,707         6.64 %      10.59 %   

2010

      0.10 %      65,852         18.075827         1,190,329         6.64 %      10.48 %   

2010

      0.20 %      18,613         17.239635         320,881         6.64 %      10.37 %   

2010

      0.25 %      358,111         17.152974         6,142,669         6.64 %      10.31 %   

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 %   

NVIT Short Term Bond Fund - Class I (NVSTB1)

  

    

2012

      0.00 %      850         11.587099         9,849         2.62 %      3.83 %   

2012

      0.10 %      2,046,482         11.533202         23,602,490         2.62 %      3.72 %   

2012

      0.20 %      15,166         11.479462         174,098         2.62 %      3.62 %   

2012

      0.25 %      462,893         11.452722         5,301,385         2.62 %      3.57 %   

2011

      0.00 %      746         11.160218         8,326         1.81 %      1.45 %   

2011

      0.20 %      9,972         11.078737         110,477         1.81 %      1.24 %   

2011

      0.25 %      479,653         11.058467         5,304,227         1.81 %      1.19 %   

2010

      0.00 %      1,405         11.001081         15,457         1.63 %      2.68 %   

2010

      0.20 %      7,406         10.942569         81,041         1.63 %      2.48 %   

2010

      0.25 %      499,595         10.927993         5,459,571         1.63 %      2.43 %   

2009

      0.25 %      52,762         10.669125         562,924         2.15 %      7.12 %   

NVIT Short Term Bond Fund - Class II (NVSTB2)

  

    

2012

      0.00 %      201,309         11.438838         2,302,741         1.30 %      3.52 %   

2011

      0.00 %      218,639         11.049485         2,415,848         1.50 %      1.30 %   

2010

      0.00 %      365,359         10.907906         3,985,302         1.37 %      2.42 %   

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)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		     Total
Return***		     Inception
Date****

NVIT Large Cap Growth Fund - Class I (NVOLG1)

  

    

2012

      0.00 %      6,636,497       $ 16.487341       $ 109,418,189         0.70 %      18.68 %   

2011

      0.00 %      7,462,793         13.891692         103,670,822         0.67 %      -2.23 %   

2010

      0.00 %      8,648,974         14.209081         122,893,972         0.06 %      8.80 %   

2009

      0.00 %      32,412         13.059893         423,297         0.24 %      30.60 %    5/1/2009

Templeton NVIT International Value Fund - Class III (NVTIV3)

  

    

2012

      0.00 %      35,997         14.513999         522,460         2.54 %      19.56 %   

2011

      0.00 %      35,418         12.139096         429,943         3.30 %      -12.43 %   

2010

      0.00 %      11,957         13.861453         165,741         2.33 %      6.35 %   

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)

  

    

2012

      0.00 %      495,063         15.874436         7,858,846         1.18 %      18.46 %   

2012

      0.10 %      39,021         13.225670         516,079         1.18 %      18.35 %   

2012

      0.25 %      143         12.932205         1,849         1.18 %      18.17 %   

2011

      0.00 %      610,041         13.400181         8,174,660         1.31 %      -2.32 %   

2011

      0.10 %      61,552         11.175452         687,871         1.31 %      -2.42 %   

2011

      0.25 %      156         10.943926         1,707         1.31 %      -2.57 %   

2010

      0.00 %      667,292         13.719138         9,154,671         1.53 %      15.77 %   

2010

      0.10 %      61,360         11.452871         702,748         1.53 %      15.66 %   

2010

      0.25 %      157         11.232402         1,763         1.53 %      15.48 %   

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 %   

NVIT Real Estate Fund - Class I (NVRE1)

  

    

2012

      0.00 %      2,229,784         11.860098         26,445,457         1.03 %      15.79 %   

2012

      0.20 %      23,596         23.623351         557,417         1.03 %      15.55 %   

2012

      0.25 %      202,477         23.580128         4,774,434         1.03 %      15.50 %   

2011

      0.00 %      2,496,219         10.243095         25,569,008         0.89 %      6.50 %   

2011

      0.20 %      10,686         20.443475         218,459         0.89 %      6.29 %   

2011

      0.25 %      208,462         20.416293         4,256,021         0.89 %      6.23 %   

2010

      0.00 %      2,741,940         9.617905         26,371,718         1.94 %      30.18 %   

2010

      0.20 %      99         19.234046         1,904         1.94 %      29.92 %   

2010

      0.25 %      99,872         19.218051         1,919,345         1.94 %      29.86 %   

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

VPS Growth and Income Portfolio - Class A (ALVGIA)

  

    

2012

      0.00 %      162,645         19.410515         3,157,023         1.56 %      17.52 %   

2012

      0.10 %      72,424         19.211121         1,391,346         1.56 %      17.41 %   

2012

      0.20 %      5,771         19.013781         109,729         1.56 %      17.29 %   

2012

      0.25 %      225,551         18.915871         4,266,494         1.56 %      17.23 %   

2011

      0.00 %      170,800         16.516082         2,820,947         1.24 %      6.32 %   

2011

      0.10 %      76,305         16.362810         1,248,564         1.24 %      6.21 %   

2011

      0.20 %      3,854         16.210964         62,477         1.24 %      6.10 %   

2011

      0.25 %      199,320         16.135567         3,216,141         1.24 %      6.05 %   

2010

      0.00 %      200,244         15.534777         3,110,746         0.00 %      13.09 %   

2010

      0.10 %      70,827         15.405969         1,091,159         0.00 %      12.98 %   

2010

      0.20 %      8,723         15.278240         133,272         0.00 %      12.87 %   

2010

      0.25 %      451,505         15.214771         6,869,545         0.00 %      12.81 %   

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 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		     Total
Return***		     Inception
Date****

VPS International Value Portfolio - Class A (ALVIVA)

2012

      0.00 %      304,664       $ 7.321422       $ 2,230,574         1.40 %      14.53 %   

2012

      0.20 %      168,677         7.224352         1,218,582         1.40 %      14.30 %   

2012

      0.25 %      662,753         7.200265         4,771,997         1.40 %      14.25 %   

2011

      0.00 %      267,669         6.392469         1,711,066         3.98 %      -19.25 %   

2011

      0.20 %      344,180         6.320359         2,175,341         3.98 %      -19.41 %   

2011

      0.25 %      1,118,669         6.302451         7,050,357         3.98 %      -19.45 %   

2010

      0.00 %      200,883         7.916459         1,590,282         2.85 %      4.59 %   

2010

      0.20 %      257,323         7.842837         2,018,142         2.85 %      4.38 %   

2010

      0.25 %      1,687,168         7.824523         13,201,285         2.85 %      4.33 %   

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 %   

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

2012

      0.00 %      246,289         26.019263         6,408,258         0.56 %      18.75 %   

2012

      0.20 %      69,059         25.520947         1,762,451         0.56 %      18.51 %   

2012

      0.25 %      78,182         25.397917         1,985,660         0.56 %      18.45 %   

2011

      0.00 %      255,634         21.911401         5,601,299         0.47 %      -8.39 %   

2011

      0.20 %      105,642         21.534889         2,274,989         0.47 %      -8.57 %   

2011

      0.25 %      120,161         21.441818         2,576,470         0.47 %      -8.62 %   

2010

      0.00 %      276,981         23.918151         6,624,873         0.45 %      26.91 %   

2010

      0.20 %      11,224         23.554154         264,372         0.45 %      26.65 %   

2010

      0.25 %      194,464         23.464072         4,562,917         0.45 %      26.59 %   

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 %   

VP Income & Growth Fund - Class I (ACVIG)

2012

      0.00 %      710,262         18.462191         13,112,993         2.10 %      14.74 %   

2012

      0.10 %      74,411         14.019920         1,043,236         2.10 %      14.63 %   

2012

      0.20 %      98,053         13.638317         1,337,278         2.10 %      14.51 %   

2012

      0.25 %      101,923         13.556114         1,381,680         2.10 %      14.46 %   

2011

      0.00 %      786,408         16.089880         12,653,210         1.56 %      3.11 %   

2011

      0.10 %      93,936         12.230669         1,148,900         1.56 %      3.01 %   

2011

      0.20 %      118,559         11.909699         1,412,002         1.56 %      2.91 %   

2011

      0.25 %      99,798         11.843849         1,181,992         1.56 %      2.86 %   

2010

      0.00 %      850,874         15.604299         13,277,292         1.54 %      14.15 %   

2010

      0.10 %      88,094         11.873399         1,045,975         1.54 %      14.03 %   

2010

      0.20 %      139,375         11.573339         1,613,034         1.54 %      13.92 %   

2010

      0.25 %      93,837         11.515093         1,080,542         1.54 %      13.86 %   

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 %   

American Century VP Inflation Protection Fund - Class II (ACVIP2)

2012

      0.00 %      2,163,527         16.884507         36,530,087         2.45 %      7.39 %   

2011

      0.00 %      2,138,750         15.723236         33,628,071         4.02 %      11.74 %   

2010

      0.00 %      2,220,925         14.070730         31,250,036         1.67 %      5.12 %   

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 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		      Total
Return***		     Inception
Date****

VP International Fund - Class I (ACVI)

  

        

2012

      0.00 %      478       $ 19.479115       $ 9,311         0.95%         21.16 %   

2012

      0.10 %      62,568         15.784654         987,614         0.95%         21.04 %   

2012

      0.20 %      81,406         12.337365         1,004,336         0.95%         20.92 %   

2012

      0.25 %      124,136         12.263107         1,522,293         0.95%         20.86 %   

2011

      0.00 %      478         16.077026         7,685         2.03%         -12.04 %   

2011

      0.10 %      86,616         13.040872         1,129,548         2.03%         -12.13 %   

2011

      0.20 %      82,449         10.203033         841,230         2.03%         -12.22 %   

2011

      0.25 %      210,964         10.146695         2,140,587         2.03%         -12.26 %   

2010

      0.00 %      478         18.277925         8,737         2.46%         13.29 %   

2010

      0.10 %      83,179         14.840952         1,234,456         2.46%         13.18 %   

2010

      0.20 %      82,185         11.623003         955,237         2.46%         13.07 %   

2010

      0.25 %      657,819         11.564596         7,607,411         2.46%         13.01 %   

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 %   

VP International Fund - Class III (ACVI3)

  

        

2008

      0.00 %      684,882         9.507294         6,511,375         0.80%         -44.82 %   

VP Mid Cap Value Fund - Class I (ACVMV1)

  

        

2012

      0.00 %      268,264         18.021035         4,834,395         2.06%         16.33 %   

2012

      0.20 %      40,982         17.746877         727,303         2.06%         16.09 %   

2012

      0.25 %      88,101         17.678937         1,557,532         2.06%         16.04 %   

2011

      0.00 %      243,163         15.491583         3,766,980         1.38%         -0.69 %   

2011

      0.20 %      4,491         15.286517         68,652         1.38%         -0.89 %   

2011

      0.25 %      90,003         15.235631         1,371,252         1.38%         -0.94 %   

2010

      0.00 %      207,868         15.599747         3,242,688         2.38%         19.25 %   

2010

      0.20 %      267         15.424007         4,118         2.38%         19.02 %   

2010

      0.25 %      75,893         15.380339         1,167,260         2.38%         18.96 %   

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 %   

VP Ultra(R) Fund - Class I (ACVU1)

  

        

2012

      0.10 %      58,200         13.828695         804,830         0.00%         13.81 %   

2012

      0.20 %      1,879         13.681924         25,708         0.00%         13.70 %   

2012

      0.25 %      27,639         13.609145         376,143         0.00%         13.64 %   

2011

      0.10 %      96,658         12.150697         1,174,462         0.00%         0.97 %   

2011

      0.20 %      1,235         12.033779         14,862         0.00%         0.86 %   

2011

      0.25 %      21,670         11.975768         259,515         0.00%         0.81 %   

2010

      0.10 %      65,269         12.034525         785,481         0.53%         15.97 %   

2010

      0.20 %      720         11.930621         8,590         0.53%         15.85 %   

2010

      0.25 %      20,009         11.879037         237,688         0.53%         15.79 %   

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 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		      Total
Return***		     Inception
Date****

VP Value Fund - Class I (ACVV)

  

     

2012

      0.00 %      76,100       $ 24.307940       $ 1,849,834         1.93%         14.58 %   

2012

      0.10 %      104,420         23.749898         2,479,964         1.93%         14.46 %   

2012

      0.20 %      39,924         20.428748         815,597         1.93%         14.35 %   

2012

      0.25 %      420,143         20.305662         8,531,282         1.93%         14.29 %   

2011

      0.00 %      58,917         21.215636         1,249,962         1.94%         1.01 %   

2011

      0.10 %      134,565         20.749366         2,792,138         1.94%         0.91 %   

2011

      0.20 %      152,212         17.865705         2,719,375         1.94%         0.81 %   

2011

      0.25 %      446,252         17.766964         7,928,543         1.94%         0.76 %   

2010

      0.00 %      36,231         21.002542         760,943         1.87%         13.42 %   

2010

      0.10 %      128,712         20.561475         2,646,509         1.87%         13.31 %   

2010

      0.20 %      123,078         17.721598         2,181,139         1.87%         13.20 %   

2010

      0.25 %      720,784         17.632449         12,709,187         1.87%         13.14 %   

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 %   

VP Vista(SM) Fund - Class I (ACVVS1)

  

     

2012

      0.00 %      4,093         14.497885         59,340         0.00%         15.61 %   

2012

      0.10 %      51,805         14.387170         745,327         0.00%         15.50 %   

2012

      0.20 %      34,171         14.277287         487,869         0.00%         15.38 %   

2012

      0.25 %      34,599         14.222632         492,089         0.00%         15.33 %   

2011

      0.00 %      6,581         12.539840         82,525         0.00%         -7.89 %   

2011

      0.10 %      57,688         12.456554         718,594         0.00%         -7.99 %   

2011

      0.20 %      9,490         12.373806         117,427         0.00%         -8.08 %   

2011

      0.25 %      68,644         12.332624         846,561         0.00%         -8.12 %   

2010

      0.00 %      4,745         13.614679         64,602         0.00%         23.88 %   

2010

      0.10 %      58,821         13.537768         796,305         0.00%         23.76 %   

2010

      0.20 %      8,529         13.461279         114,811         0.00%         23.63 %   

2010

      0.25 %      65,819         13.423172         883,500         0.00%         23.57 %   

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 %   

MidCap Stock Portfolio - Initial Shares (DVMCS)

  

     

2012

      0.10 %      38,571         21.923330         845,605         0.48%         19.55 %   

2012

      0.25 %      17,878         21.586376         385,921         0.48%         19.38 %   

2011

      0.10 %      43,424         18.337473         796,286         0.73%         0.29 %   

2011

      0.25 %      18,036         18.082797         326,141         0.73%         0.14 %   

2010

      0.10 %      47,760         18.283588         873,224         0.78%         26.97 %   

2010

      0.25 %      44,864         18.056676         810,095         0.78%         26.78 %   

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 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		     Total
Return***		     Inception
Date****

Small Cap Stock Index Portfolio - Service Shares (DVSCS)

  

    

2012

      0.00 %      615,579       $ 19.873008       $ 12,233,406         0.44 %      15.74 %   

2012

      0.10 %      101,734         19.662128         2,000,307         0.44 %      15.63 %   

2012

      0.20 %      628,591         19.453459         12,228,269         0.44 %      15.51 %   

2012

      0.25 %      1,097,714         19.349975         21,240,738         0.44 %      15.45 %   

2011

      0.00 %      616,559         17.170194         10,586,438         0.58 %      0.56 %   

2011

      0.10 %      129,294         17.005028         2,198,648         0.58 %      0.46 %   

2011

      0.20 %      491,347         16.841422         8,274,982         0.58 %      0.36 %   

2011

      0.25 %      1,140,414         16.760220         19,113,590         0.58 %      0.31 %   

2010

      0.00 %      595,639         17.074091         10,169,994         0.58 %      25.83 %   

2010

      0.10 %      136,498         16.926721         2,310,464         0.58 %      25.70 %   

2010

      0.20 %      484,419         16.780615         8,128,849         0.58 %      25.58 %   

2010

      0.25 %      890,399         16.708035         14,876,818         0.58 %      25.51 %   

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 %   

Appreciation Portfolio - Initial Shares (DCAP)

  

    

2012

      0.00 %      906,682         21.640941         19,621,452         3.70 %      10.43 %   

2012

      0.10 %      116,955         15.788040         1,846,490         3.70 %      10.32 %   

2012

      0.20 %      168,235         14.649790         2,464,607         3.70 %      10.21 %   

2012

      0.25 %      768,680         14.561536         11,193,161         3.70 %      10.15 %   

2011

      0.00 %      858,429         19.596966         16,822,604         1.65 %      9.01 %   

2011

      0.10 %      119,200         14.311206         1,705,896         1.65 %      8.90 %   

2011

      0.20 %      125,298         13.292747         1,665,555         1.65 %      8.79 %   

2011

      0.25 %      655,712         13.219278         8,668,039         1.65 %      8.74 %   

2010

      0.00 %      843,704         17.976967         15,167,239         2.23 %      15.32 %   

2010

      0.10 %      103,883         13.141262         1,365,154         2.23 %      15.20 %   

2010

      0.20 %      119,634         12.218237         1,461,717         2.23 %      15.09 %   

2010

      0.25 %      597,689         12.156773         7,265,969         2.23 %      15.03 %   

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 %   

Opportunistic Small Cap Portfolio: Initial Shares (DSC)

  

    

2012

      0.00 %      61,690         15.029274         927,156         0.00 %      20.56 %   

2011

      0.00 %      57,519         12.465849         717,023         0.43 %      -13.85 %   

2010

      0.00 %      72,500         14.469098         1,049,010         0.70 %      31.15 %   

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 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		     Total
Return***		     Inception
Date****		  

International Value Portfolio - Initial Shares (DVIV)

  

    

2012

      0.00 %      20,685       $ 17.383341       $ 359,574         3.81 %      12.67 %   

2012

      0.10 %      38,821         17.204731         667,905         3.81 %      12.55 %   

2012

      0.20 %      101,836         17.028001         1,734,064         3.81 %      12.44 %   

2012

      0.25 %      389,888         16.940266         6,604,806         3.81 %      12.38 %   

2011

      0.00 %      13,744         15.429086         212,057         2.15 %      -18.48 %   

2011

      0.10 %      50,393         15.285871         770,301         2.15 %      -18.56 %   

2011

      0.20 %      403,332         15.144010         6,108,064         2.15 %      -18.64 %   

2011

      0.25 %      484,217         15.073543         7,298,866         2.15 %      -18.68 %   

2010

      0.00 %      10,726         18.926715         203,008         1.87 %      4.45 %   

2010

      0.10 %      56,264         18.769778         1,056,063         1.87 %      4.35 %   

2010

      0.20 %      425,859         18.614188         7,927,019         1.87 %      4.25 %   

2010

      0.25 %      760,614         18.536839         14,099,379         1.87 %      4.19 %   

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 %   

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

  

2012

      0.00 %      11,694         10.625374         124,253         1.21 %      13.38 %   

2012

      0.20 %      14,154         10.514104         148,817         1.21 %      13.15 %   

2012

      0.25 %      32,089         10.486475         336,500         1.21 %      13.10 %   

2011

      0.00 %      9,646         9.371332         90,396         0.59 %      -6.33 %   

2011

      0.20 %      117,245         9.291802         1,089,417         0.59 %      -6.52 %   

2011

      0.25 %      68,729         9.272036         637,258         0.59 %      -6.57 %   

2010

      0.00 %      14,853         10.004800         148,601         0.91 %      22.66 %   

2010

      0.20 %      105,748         9.939712         1,051,105         0.91 %      22.42 %   

2010

      0.25 %      66,739         9.923523         662,286         0.91 %      22.36 %   

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 - DWS Large Cap Value VIP - Class B (SVSLVB)

  

    

2012

      0.20 %      1,318         10.087692         13,296         1.67 %      9.22 %   

2012

      0.25 %      11,902         10.079282         119,964         1.67 %      9.16 %   

2011

      0.20 %      2,801         9.236333         25,871         0.00 %      -7.64 %      5/2/2011   

2011

      0.25 %      15,749         9.233267         145,415         0.00 %      -7.67 %      5/2/2011   

Capital Appreciation Fund II - Primary Shares (FVCA2P)

  

    

2012

      0.00 %      43,680         15.930913         695,862         0.63 %      10.17 %   

2011

      0.00 %      80,819         14.459762         1,168,624         0.58 %      -5.29 %   

2010

      0.00 %      55,080         15.267952         840,959         0.87 %      13.07 %   

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 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		     Total
Return***		     Inception
Date****

Quality Bond Fund II - Primary Shares (FQB)

  

    

2012

      0.00 %      838,044       $ 21.094313       $ 17,677,962         4.22 %      9.72 %   

2012

      0.10 %      43,716         20.808093         909,647         4.22 %      9.61 %   

2012

      0.20 %      15,627         20.525765         320,756         4.22 %      9.50 %   

2012

      0.25 %      558,099         20.386022         11,377,418         4.22 %      9.45 %   

2011

      0.00 %      922,533         19.225225         17,735,904         5.17 %      2.27 %   

2011

      0.10 %      53,578         18.983394         1,017,092         5.17 %      2.17 %   

2011

      0.20 %      8,024         18.744605         150,407         5.17 %      2.07 %   

2011

      0.25 %      765,984         18.626322         14,267,465         5.17 %      2.02 %   

2010

      0.00 %      1,065,571         18.798086         20,030,695         4.78 %      8.50 %   

2010

      0.10 %      73,085         18.580145         1,357,930         4.78 %      8.40 %   

2010

      0.20 %      2,408         18.364732         44,222         4.78 %      8.29 %   

2010

      0.25 %      852,101         18.257953         15,557,620         4.78 %      8.23 %   

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 %   

VIP Contrafund Portfolio - Service Class (FCS)

  

    

2012

      0.00 %      39,228         27.973584         1,097,348         1.22 %      16.31 %   

2012

      0.10 %      350,542         20.045837         7,026,908         1.22 %      16.19 %   

2012

      0.20 %      750,624         18.755703         14,078,481         1.22 %      16.08 %   

2012

      0.25 %      1,859,639         18.642752         34,668,789         1.22 %      16.02 %   

2011

      0.00 %      12,792         24.051295         307,664         0.87 %      -2.64 %   

2011

      0.10 %      472,515         17.252407         8,152,021         0.87 %      -2.73 %   

2011

      0.20 %      843,296         16.158243         13,626,182         0.87 %      -2.83 %   

2011

      0.25 %      2,116,454         16.068977         34,009,251         0.87 %      -2.88 %   

2010

      0.00 %      21,505         24.702642         531,230         0.54 %      17.11 %   

2010

      0.10 %      508,353         17.737330         9,016,825         0.54 %      16.99 %   

2010

      0.20 %      788,579         16.629006         13,113,285         0.54 %      16.87 %   

2010

      0.25 %      2,728,984         16.545389         45,152,102         0.54 %      16.82 %   

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 %   

VIP Energy Portfolio - Service Class 2 (FNRS2)

  

    

2012

      0.00 %      500,432         18.272664         9,144,226         0.74 %      4.73 %   

2011

      0.00 %      594,575         17.446617         10,373,322         0.83 %      -5.20 %   

2010

      0.00 %      542,677         18.403422         9,987,114         0.35 %      19.16 %   

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 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		     Total
Return***		     Inception
Date****

VIP Equity-Income Portfolio - Service Class (FEIS)

  

    

2012

      0.00 %      2,108,689       $ 19.143712       $ 40,368,135         2.97 %      17.19 %   

2012

      0.10 %      164,157         16.564582         2,719,192         2.97 %      17.07 %   

2012

      0.20 %      259,357         15.178109         3,936,549         2.97 %      16.95 %   

2012

      0.25 %      808,889         15.086704         12,203,469         2.97 %      16.89 %   

2011

      0.00 %      2,387,273         16.335975         38,998,432         2.29 %      0.86 %   

2011

      0.10 %      201,437         14.149286         2,850,190         2.29 %      0.76 %   

2011

      0.20 %      265,212         12.977974         3,441,914         2.29 %      0.66 %   

2011

      0.25 %      729,727         12.906284         9,418,064         2.29 %      0.61 %   

2010

      0.00 %      2,608,980         16.196839         42,257,229         1.70 %      15.09 %   

2010

      0.10 %      221,619         14.042784         3,112,148         1.70 %      14.97 %   

2010

      0.20 %      512,456         12.893153         6,607,174         1.70 %      14.86 %   

2010

      0.25 %      1,075,614         12.828331         13,798,332         1.70 %      14.80 %   

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 %   

VIP Freedom Fund 2010 Portfolio - Service Class (FF10S)

  

    

2012

      0.00 %      131,678         15.052634         1,982,101         1.75 %      11.69 %   

2012

      0.20 %      15,546         14.823672         230,449         1.75 %      11.46 %   

2012

      0.25 %      2,211         14.766979         32,650         1.75 %      11.41 %   

2011

      0.00 %      147,851         13.477731         1,992,696         2.20 %      -0.28 %   

2011

      0.20 %      27,132         13.299351         360,838         2.20 %      -0.48 %   

2011

      0.25 %      3,966         13.255123         52,570         2.20 %      -0.53 %   

2010

      0.00 %      136,140         13.516167         1,840,091         2.19 %      12.74 %   

2010

      0.20 %      4,973         13.363919         66,459         2.19 %      12.51 %   

2010

      0.25 %      714         13.326120         9,515         2.19 %      12.46 %   

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 %   

VIP Freedom Fund 2020 Portfolio - Service Class (FF20S)

  

    

2012

      0.00 %      426,569         15.209948         6,488,092         2.06 %      13.19 %   

2012

      0.20 %      161,122         14.978574         2,413,378         2.06 %      12.96 %   

2012

      0.25 %      270,796         14.921259         4,040,617         2.06 %      12.90 %   

2011

      0.00 %      419,318         13.437783         5,634,704         2.27 %      -1.12 %   

2011

      0.20 %      107,464         13.259920         1,424,964         2.27 %      -1.32 %   

2011

      0.25 %      254,766         13.215803         3,366,937         2.27 %      -1.37 %   

2010

      0.00 %      329,369         13.590648         4,476,338         2.28 %      14.52 %   

2010

      0.20 %      17,386         13.437543         233,625         2.28 %      14.29 %   

2010

      0.25 %      215,574         13.399524         2,888,589         2.28 %      14.23 %   

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 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		      Total
Return***		     Inception
Date****

VIP Freedom Fund 2030 Portfolio - Service Class (FF30S)

  

     

2012

      0.00 %      240,346       $ 15.121452       $ 3,634,381         1.99%         15.48 %   

2012

      0.20 %      71,930         14.891344         1,071,134         1.99%         15.25 %   

2012

      0.25 %      64,495         14.834352         956,742         1.99%         15.19 %   

2011

      0.00 %      257,152         13.094199         3,367,199         2.22%         -2.70 %   

2011

      0.20 %      89,919         12.920810         1,161,826         2.22%         -2.89 %   

2011

      0.25 %      157,867         12.877813         2,032,982         2.22%         -2.94 %   

2010

      0.00 %      236,147         13.457007         3,177,832         2.16%         16.00 %   

2010

      0.20 %      8,368         13.305353         111,339         2.16%         15.77 %   

2010

      0.25 %      52,993         13.267698         703,095         2.16%         15.71 %   

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 %   

VIP Freedom Income Fund Portfolio - Service Class (FFINS)

  

     

2012

      0.20 %      133,054         10.874034         1,446,834         1.44%         6.21 %   

2012

      0.25 %      18,872         10.862729         205,001         1.44%         6.15 %   

2011

      0.20 %      157,557         10.238465         1,613,142         1.77%         1.36 %   

2011

      0.25 %      22,966         10.232950         235,010         1.77%         1.31 %   

VIP Growth & Income Portfolio - Service Class (FGIS)

  

     

2010

      0.20 %      7,884         8.550246         67,410         0.70%         14.43 %   

2010

      0.25 %      1,131         8.537429         9,656         0.70%         14.38 %   

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 %   

VIP Growth Opportunities Portfolio - Service Class (FGOS)

  

     

2012

      0.00 %      5,557         13.890993         77,192         0.29%         19.46 %   

2012

      0.10 %      101,294         11.151220         1,129,552         0.29%         19.34 %   

2012

      0.25 %      38,843         12.645225         491,178         0.29%         19.16 %   

2011

      0.00 %      2         11.627899         23         0.06%         2.18 %   

2011

      0.10 %      167,357         9.343842         1,563,757         0.06%         2.08 %   

2011

      0.25 %      40,559         10.611629         430,397         0.06%         1.93 %   

2010

      0.00 %      2         11.379822         23         0.02%         23.65 %   

2010

      0.10 %      120,418         9.153616         1,102,260         0.02%         23.53 %   

2010

      0.25 %      41,639         10.411166         433,511         0.02%         23.34 %   

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 %   

VIP Growth Portfolio - Service Class (FGS)

  

     

2012

      0.00 %      2,363,334         18.449661         43,602,711         0.49%         14.54 %   

2012

      0.10 %      187,801         11.945210         2,243,322         0.49%         14.43 %   

2012

      0.20 %      365,060         10.607405         3,872,339         0.49%         14.32 %   

2012

      0.25 %      1,242,450         10.543440         13,099,697         0.49%         14.26 %   

2011

      0.00 %      2,614,645         16.106923         42,113,886         0.25%         0.14 %   

2011

      0.10 %      259,344         10.438857         2,707,255         0.25%         0.04 %   

2011

      0.20 %      332,626         9.279050         3,086,453         0.25%         -0.06 %   

2011

      0.25 %      1,292,625         9.227724         11,927,987         0.25%         -0.11 %   

2010

      0.00 %      2,828,191         16.084224         45,489,258         0.17%         24.06 %   

2010

      0.10 %      195,448         10.434553         2,039,413         0.17%         23.93 %   

2010

      0.20 %      556,067         9.284476         5,162,791         0.17%         23.81 %   

2010

      0.25 %      1,894,082         9.237732         17,497,022         0.17%         23.75 %   

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 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		      Total
Return***		     Inception
Date****

2008

      0.40 %      113,777         8.403086         956,078         0.74%         -47.44 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		     Total
Return***		     Inception
Date****		  

VIP High Income Portfolio - Service Class (FHIS)

  

2012

      0.00 %      317,308       $ 17.267290       $ 5,479,049         5.66 %      14.20 %   

2012

      0.10 %      154,446         16.970006         2,620,950         5.66 %      14.08 %   

2012

      0.20 %      117,282         21.534843         2,525,649         5.66 %      13.97 %   

2012

      0.25 %      237,112         21.405070         5,075,399         5.66 %      13.91 %   

2011

      0.00 %      369,835         15.120791         5,592,198         6.65 %      3.93 %   

2011

      0.10 %      138,594         14.875369         2,061,637         6.65 %      3.82 %   

2011

      0.20 %      104,993         18.895691         1,983,915         6.65 %      3.72 %   

2011

      0.25 %      208,631         18.791235         3,920,434         6.65 %      3.67 %   

2010

      0.00 %      456,051         14.549690         6,635,401         7.61 %      13.79 %   

2010

      0.10 %      164,151         14.327814         2,351,925         7.61 %      13.67 %   

2010

      0.20 %      143,953         18.218308         2,622,580         7.61 %      13.56 %   

2010

      0.25 %      183,998         18.126634         3,335,264         7.61 %      13.50 %   

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 %   

VIP High Income Portfolio - Service Class R (FHISR)

  

2012

      0.00 %      338,588         14.396142         4,874,361         5.95 %      14.10 %   

2011

      0.00 %      301,013         12.617208         3,797,944         6.95 %      3.99 %   

2010

      0.00 %      339,656         12.132539         4,120,890         7.97 %      13.66 %   

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 %   

VIP Index 500 Portfolio - Initial Class (FIP)

  

2012

      0.20 %      2,260,976         10.898766         24,641,848         2.18 %      15.68 %   

2012

      0.25 %      321,163         10.871578         3,491,549         2.18 %      15.63 %   

2011

      0.20 %      2,038,925         9.421216         19,209,153         1.86 %      1.84 %   

2011

      0.25 %      297,628         9.402424         2,798,425         1.86 %      1.78 %   

2010

      0.20 %      2,378,076         9.251418         22,000,575         6.89 %      14.79 %   

2010

      0.25 %      341,142         9.237578         3,151,326         6.89 %      14.74 %   

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 Investment Grade Bond Portfolio - Service Class (FIGBS)

  

2012

      0.00 %      803,619         16.144635         12,974,135         2.31 %      5.77 %   

2012

      0.10 %      108,259         15.989351         1,730,991         2.31 %      5.66 %   

2012

      0.20 %      196,470         15.835518         3,111,204         2.31 %      5.56 %   

2012

      0.25 %      982,289         15.759183         15,480,072         2.31 %      5.50 %   

2011

      0.00 %      966,381         15.264055         14,750,893         3.27 %      7.21 %   

2011

      0.10 %      89,725         15.132404         1,357,755         3.27 %      7.10 %   

2011

      0.20 %      79,267         15.001845         1,189,151         3.27 %      6.99 %   

2011

      0.25 %      903,088         14.937020         13,489,444         3.27 %      6.94 %   

2010

      0.00 %      1,042,979         14.237787         14,849,713         5.00 %      7.68 %   

2010

      0.10 %      89,213         14.129064         1,260,496         5.00 %      7.57 %   

2010

      0.20 %      34,875         14.021133         488,987         5.00 %      7.46 %   

2010

      0.25 %      1,690,841         13.967499         23,616,820         5.00 %      7.41 %   

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 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		     Total
Return***		     Inception
Date****

VIP Mid Cap Portfolio - Service Class (FMCS)

2012

      0.00 %      839,496       $ 30.166927       $ 25,325,015         0.50 %      14.75 %   

2012

      0.10 %      58,544         29.876704         1,749,102         0.50 %      14.64 %   

2012

      0.20 %      195,159         29.589302         5,774,619         0.50 %      14.52 %   

2012

      0.25 %      290,111         29.446618         8,542,788         0.50 %      14.46 %   

2011

      0.00 %      954,537         26.289170         25,093,985         0.14 %      -10.72 %   

2011

      0.10 %      92,366         26.062360         2,407,276         0.14 %      -10.81 %   

2011

      0.20 %      179,922         25.837533         4,648,741         0.14 %      -10.89 %   

2011

      0.25 %      424,274         25.725831         10,914,801         0.14 %      -10.94 %   

2010

      0.00 %      1,034,040         29.444519         30,446,810         0.28 %      28.70 %   

2010

      0.10 %      81,078         29.219667         2,369,072         0.28 %      28.57 %   

2010

      0.20 %      124,610         28.996539         3,613,259         0.28 %      28.45 %   

2010

      0.25 %      451,307         28.885604         13,036,275         0.28 %      28.38 %   

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 %   

VIP Overseas Portfolio - Service Class (FOS)

2012

      0.00 %      311,831         17.401474         5,426,319         1.63 %      20.54 %   

2012

      0.10 %      75,393         14.746394         1,111,775         1.63 %      20.42 %   

2012

      0.20 %      130,929         13.125608         1,718,523         1.63 %      20.30 %   

2012

      0.25 %      380,826         13.046486         4,968,441         1.63 %      20.24 %   

2011

      0.00 %      358,292         14.436160         5,172,361         1.19 %      -17.23 %   

2011

      0.10 %      120,357         12.245783         1,473,866         1.19 %      -17.31 %   

2011

      0.20 %      134,279         10.910767         1,465,087         1.19 %      -17.39 %   

2011

      0.25 %      681,992         10.850436         7,399,911         1.19 %      -17.43 %   

2010

      0.00 %      444,043         17.440640         7,744,394         1.27 %      12.99 %   

2010

      0.10 %      127,406         14.809197         1,886,781         1.27 %      12.88 %   

2010

      0.20 %      120,641         13.207916         1,593,416         1.27 %      12.77 %   

2010

      0.25 %      1,141,090         13.141451         14,995,578         1.27 %      12.71 %   

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 %   

VIP Overseas Portfolio - Service Class R (FOSR)

2012

      0.00 %      771,330         13.836689         10,672,653         1.81 %      20.67 %   

2011

      0.00 %      865,432         11.466618         9,923,578         1.29 %      -17.30 %   

2010

      0.00 %      901,030         13.865532         12,493,260         1.32 %      13.01 %   

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 %   

VIP Value Strategies Portfolio - Service Class (FVSS)

2012

      0.00 %      164,712         19.135795         3,151,895         0.49 %      27.10 %   

2012

      0.10 %      49,718         18.932701         941,296         0.49 %      26.97 %   

2012

      0.25 %      50         18.632032         932         0.49 %      26.78 %   

2011

      0.00 %      190,137         15.055580         2,862,623         0.91 %      -8.85 %   

2011

      0.10 %      64,340         14.910722         959,356         0.91 %      -8.94 %   

2011

      0.25 %      829         14.695999         12,183         0.91 %      -9.07 %   

2010

      0.00 %      183,598         16.516915         3,032,473         0.41 %      26.45 %   

2010

      0.10 %      63,715         16.374356         1,043,292         0.41 %      26.33 %   

2010

      0.25 %      839         16.162748         13,561         0.41 %      26.14 %   

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 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		     Total
Return***		     Inception
Date****

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 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		      Total
Return***		     Inception
Date****		  

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

  

     

2012

      0.00 %      33,712       $ 11.737104       $ 395,681         2.15%         12.13 %   

2012

      0.20 %      109,872         11.628088         1,277,601         2.15%         11.91 %   

2012

      0.25 %      247,648         11.600978         2,872,959         2.15%         11.85 %   

2011

      0.00 %      10,672         10.467224         111,706         2.38%         -0.41 %   

2011

      0.20 %      55,142         10.390805         572,970         2.38%         -0.61 %   

2011

      0.25 %      318,600         10.371781         3,304,449         2.38%         -0.66 %   

2010

      0.00 %      7,055         10.510490         74,152         2.63%         13.00 %   

2010

      0.20 %      20,002         10.454598         209,113         2.63%         12.78 %   

2010

      0.25 %      177,928         10.440658         1,857,685         2.63%         12.72 %   

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

  

     

2012

      0.00 %      10,423         11.449402         119,337         2.04%         14.97 %   

2012

      0.20 %      133,774         11.343045         1,517,405         2.04%         14.74 %   

2012

      0.25 %      449,159         11.316590         5,082,948         2.04%         14.68 %   

2011

      0.00 %      9,293         9.958561         92,545         2.30%         -2.26 %   

2011

      0.20 %      68,449         9.885849         676,676         2.30%         -2.45 %   

2011

      0.25 %      390,645         9.867741         3,854,784         2.30%         -2.50 %   

2010

      0.00 %      2,126         10.188758         21,661         2.55%         15.70 %   

2010

      0.20 %      13,233         10.134563         134,111         2.55%         15.47 %   

2010

      0.25 %      107,781         10.121060         1,090,858         2.55%         15.41 %   

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   

VIP Fidelity VIP Freedom Fund 2040 Portfolio - Service Class (FF40S)

  

     

2012

      0.00 %      5,672         12.114401         68,713         2.29%         16.88 %   

2012

      0.20 %      98,529         12.050049         1,187,279         2.29%         16.65 %   

2012

      0.25 %      154,501         12.034012         1,859,267         2.29%         16.59 %   

2011

      0.00 %      2,579         10.364685         26,731         2.32%         -4.24 %   

2011

      0.20 %      65,750         10.330313         679,218         2.32%         -4.43 %   

2011

      0.25 %      9,719         10.321735         100,317         2.32%         -4.48 %   

Franklin Income Securities Fund - Class 2 (FTVIS2)

  

     

2012

      0.00 %      397,235         14.425332         5,730,247         6.26%         12.65 %   

2011

      0.00 %      353,498         12.805162         4,526,599         5.79%         2.38 %   

2010

      0.00 %      339,445         12.507001         4,245,439         6.43%         12.67 %   

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 %   

Franklin Rising Dividends Securities Fund - Class 1 (FTVRDI)

  

     

2012

      0.00 %      689,703         20.165763         13,908,387         1.82%         12.18 %   

2011

      0.00 %      702,870         17.976970         12,635,473         1.70%         6.29 %   

2010

      0.00 %      718,728         16.912694         12,155,627         1.78%         20.94 %   

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 %   

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

  

     

2012

      0.00 %      363,138         26.547381         9,640,363         1.03%         18.75 %   

2011

      0.00 %      428,826         22.355324         9,586,544         0.90%         -3.53 %   

2010

      0.00 %      510,127         23.172621         11,820,980         0.94%         28.49 %   

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 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     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)

  

     

2012

      0.00 %      34,591       $ 16.411795       $ 567,700         0.80%         18.39 %   

2012

      0.10 %      51,113         16.286455         832,450         0.80%         18.27 %   

2012

      0.20 %      37,175         16.162056         600,824         0.80%         18.15 %   

2012

      0.25 %      281,916         16.100162         4,538,893         0.80%         18.09 %   

2011

      0.00 %      26,725         13.862767         370,482         0.69%         -3.76 %   

2011

      0.10 %      59,250         13.770689         815,913         0.69%         -3.86 %   

2011

      0.20 %      26,691         13.679206         365,112         0.69%         -3.95 %   

2011

      0.25 %      271,775         13.633645         3,705,284         0.69%         -4.00 %   

2010

      0.00 %      15,995         14.404363         230,398         0.72%         28.22 %   

2010

      0.10 %      54,144         14.322976         775,503         0.72%         28.09 %   

2010

      0.20 %      33,435         14.242025         476,182         0.72%         27.97 %   

2010

      0.25 %      326,463         14.201682         4,636,324         0.72%         27.90 %   

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 %   

Mutual Global Discovery Securities Fund - Class 2 (FTVMD2)

  

     

2012

      0.25 %      13,771         10.767244         148,276         1.98%         13.07 %   

2011

      0.25 %      21,727         9.522271         206,890         2.22%         -3.20 %   

2010

      0.20 %      18,111         9.851892         178,428         1.26%         11.73 %   

2010

      0.25 %      2,598         9.837163         25,557         1.26%         11.68 %   

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)

  

     

2012

      0.00 %      218,972         19.307248         4,227,747         1.42%         13.16 %   

2011

      0.00 %      262,679         17.062376         4,481,928         0.97%         -15.86 %   

2010

      0.00 %      278,260         20.278309         5,642,642         1.64%         17.51 %   

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 %   

Templeton Foreign Securities Fund - Class 1 (TIF)

  

     

2012

      0.00 %      58,522         23.263845         1,361,447         3.25%         18.60 %   

2011

      0.00 %      65,960         19.616024         1,293,873         1.93%         -10.44 %   

2010

      0.00 %      73,458         21.903633         1,608,997         2.06%         8.67 %   

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 %   

Templeton Foreign Securities Fund - Class 2 (TIF2)

  

     

2012

      0.10 %      66,092         21.271368         1,405,867         3.00%         18.11 %   

2012

      0.20 %      123,690         21.052856         2,604,028         3.00%         18.00 %   

2012

      0.25 %      438,755         20.944427         9,189,472         3.00%         17.94 %   

2011

      0.10 %      85,706         18.009125         1,543,490         1.69%         -10.72 %   

2011

      0.20 %      145,538         17.842000         2,596,689         1.69%         -10.81 %   

2011

      0.25 %      405,037         17.759014         7,193,058         1.69%         -10.86 %   

2010

      0.10 %      76,012         20.172194         1,533,329         1.89%         8.30 %   

2010

      0.20 %      106,558         20.004971         2,131,690         1.89%         8.19 %   

2010

      0.25 %      402,163         19.921879         8,011,843         1.89%         8.14 %   

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 %   

Templeton Foreign Securities Fund - Class 3 (TIF3)

  

     

2012

      0.00 %      366,253         14.829007         5,431,168         2.90%         18.30 %   

2011

      0.00 %      406,154         12.534749         5,091,038         1.77%         -10.68 %   

2010

      0.00 %      389,994         14.033220         5,472,872         1.62%         8.41 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		      Total
Return***		     Inception
Date****

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 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		     Total
Return***		     Inception
Date****		  

Templeton Global Bond Securities Fund - Class 2 (FTVGI2)

  

2012

      0.00 %      84,202       $ 16.765591       $ 1,411,696         5.98 %      15.07 %   

2012

      0.10 %      1,793,425         16.677654         29,910,122         5.98 %      14.95 %   

2012

      0.20 %      156,660         16.590177         2,599,017         5.98 %      14.84 %   

2012

      0.25 %      328,747         16.546601         5,439,645         5.98 %      14.78 %   

2011

      0.00 %      60,786         14.570417         885,677         5.70 %      -0.87 %   

2011

      0.10 %      1,815,343         14.508523         26,337,946         5.70 %      -0.97 %   

2011

      0.20 %      410,455         14.446899         5,929,802         5.70 %      -1.07 %   

2011

      0.25 %      294,980         14.416178         4,252,484         5.70 %      -1.12 %   

2010

      0.00 %      25,445         14.698405         374,001         0.61 %      14.45 %   

2010

      0.10 %      1,839,432         14.650582         26,948,749         0.61 %      14.33 %   

2010

      0.20 %      455,180         14.602909         6,646,952         0.61 %      14.22 %   

2010

      0.25 %      315,316         14.579135         4,597,035         0.61 %      14.16 %   

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)

  

2012

      0.00 %      606,188         20.367363         12,346,451         6.28 %      15.06 %   

2011

      0.00 %      614,756         17.701343         10,882,007         5.34 %      -0.83 %   

2010

      0.00 %      535,857         17.849519         9,564,790         1.48 %      14.38 %   

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 %   

VIP Founding Funds Allocation Fund - Class 2 (FTVFA2)

  

2012

      0.00 %      35,375         10.854248         383,969         2.65 %      15.33 %   

2011

      0.00 %      35,227         9.411247         331,530         0.02 %      -1.54 %   

2010

      0.00 %      37,961         9.558606         362,854         2.37 %      10.25 %   

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   

Mid Cap Value - Institutional Shares (GVMCE)

  

2012

      0.10 %      112,359         24.867064         2,794,038         1.16 %      18.35 %   

2012

      0.20 %      461,980         24.611687         11,370,107         1.16 %      18.23 %   

2012

      0.25 %      1,269,357         24.484957         31,080,152         1.16 %      18.17 %   

2011

      0.10 %      153,402         21.011696         3,223,236         0.73 %      -6.47 %   

2011

      0.20 %      514,075         20.816771         10,701,382         0.73 %      -6.56 %   

2011

      0.25 %      1,416,909         20.719959         29,358,296         0.73 %      -6.61 %   

2010

      0.10 %      146,239         22.464900         3,285,245         0.65 %      24.88 %   

2010

      0.20 %      491,175         22.278722         10,942,751         0.65 %      24.75 %   

2010

      0.25 %      1,651,372         22.186180         36,637,636         0.65 %      24.69 %   

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 %   

VIT Growth Opportunities Fund - Service Shares (GVGOPS)

  

2012

      0.00 %      489         10.529016         5,149         0.00 %      19.43 %   

2012

      0.20 %      1,279         10.493978         13,422         0.00 %      19.19 %   

2012

      0.25 %      2,990         10.485241         31,351         0.00 %      19.13 %   

2011

      0.20 %      125         8.804262         1,101         0.00 %      -11.96 %      5/2/2011   

2011

      0.25 %      309         8.801350         2,720         0.00 %      -11.99 %      5/2/2011   

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

  

2012

      0.00 %      10,013         12.701228         127,177         0.55 %      19.43 %   

2012

      0.20 %      5,439         12.568213         68,359         0.55 %      19.19 %   

2012

      0.25 %      153,537         12.535151         1,924,609         0.55 %      19.13 %   

2011

      0.00 %      12,602         10.635081         134,023         0.00 %      1.39 %   

2011

      0.20 %      1,445         10.544821         15,237         0.00 %      1.18 %   

2011

      0.25 %      59,758         10.522359         628,795         0.00 %      1.13 %   

2010

      0.00 %      3,623         10.489595         38,004         0.00 %      25.18 %   

2010

      0.20 %      129         10.421361         1,344         0.00 %      24.93 %   

2010

      0.25 %      17,295         10.404348         179,943         0.00 %      24.87 %   

2009

      0.00 %      92         8.379457         771         0.00 %      42.77 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		     Total
Return***		     Inception
Date****

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)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		      Total
Return***		     Inception
Date****

Growth Opportunities Funds - Service Class (BNCAI)

  

     

2012

      0.00 %      11,944       $ 25.626683       $ 306,085         1.08%         18.24 %   

2012

      0.10 %      50,900         25.363489         1,291,002         1.08%         18.12 %   

2012

      0.20 %      73,243         25.102977         1,838,617         1.08%         18.01 %   

2012

      0.25 %      268,487         24.973675         6,705,107         1.08%         17.95 %   

2011

      0.00 %      20,631         21.672931         447,134         0.00%         4.02 %   

2011

      0.10 %      52,786         21.471853         1,133,413         0.00%         3.92 %   

2011

      0.20 %      76,933         21.272621         1,636,567         0.00%         3.82 %   

2011

      0.25 %      337,265         21.173648         7,141,130         0.00%         3.76 %   

2010

      0.00 %      17,793         20.834594         370,710         0.00%         26.38 %   

2010

      0.10 %      57,988         20.661902         1,198,142         0.00%         26.26 %   

2010

      0.20 %      167,060         20.490617         3,423,162         0.00%         26.13 %   

2010

      0.25 %      387,606         20.405470         7,909,283         0.00%         26.07 %   

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 %   

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

  

     

2012

      0.00 %      299,031         12.215764         3,652,892         2.92%         4.61 %   

2011

      0.00 %      328,162         11.677944         3,832,257         3.71%         0.29 %   

2010

      0.00 %      348,678         11.644307         4,060,114         5.25%         5.28 %   

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 %   

Guardian Portfolio - I Class Shares (AMGP)

  

     

2012

      0.00 %      2         23.661014         47         0.19%         12.73 %   

2012

      0.10 %      32,886         16.916121         556,304         0.19%         12.61 %   

2012

      0.25 %      16,445         15.476592         254,513         0.19%         12.44 %   

2011

      0.00 %      2         20.989829         42         0.48%         -2.94 %   

2011

      0.10 %      77,560         15.021443         1,165,063         0.48%         -3.04 %   

2011

      0.25 %      56,791         13.763826         781,661         0.48%         -3.18 %   

2010

      0.00 %      2         21.625604         43         0.44%         19.01 %   

2010

      0.10 %      72,597         15.491894         1,124,665         0.44%         18.89 %   

2010

      0.25 %      52,120         14.216158         740,946         0.44%         18.72 %   

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 %   

International Portfolio - S Class Shares (AMINS)

  

     

2008

      0.00 %      248,009         8.019658         1,988,947         0.00%         -46.44 %   

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

  

     

2012

      0.00 %      26         27.326502         710         0.00%         12.41 %   

2012

      0.10 %      30,281         19.790674         599,281         0.00%         12.30 %   

2012

      0.20 %      28,206         14.361118         405,070         0.00%         12.19 %   

2012

      0.25 %      144,932         14.274567         2,068,842         0.00%         12.13 %   

2011

      0.00 %      26         24.308851         632         0.00%         0.47 %   

2011

      0.10 %      34,106         17.622859         601,045         0.00%         0.37 %   

2011

      0.20 %      28,457         12.800871         364,274         0.00%         0.27 %   

2011

      0.25 %      284,856         12.730096         3,626,244         0.00%         0.22 %   

2010

      0.10 %      31,209         17.557221         547,943         0.00%         28.97 %   

2010

      0.20 %      28,698         12.765923         366,356         0.00%         28.84 %   

2010

      0.25 %      409,150         12.701675         5,196,890         0.00%         28.77 %   

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 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		      Total
Return***		     Inception
Date****

2008

      0.25 %      464,312         7.513928         3,488,807         0.00%         -43.51 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		     Total
Return***		     Inception
Date****

Advisers Management Trust: Large Cap Value Portfolio - Class I (AMTP)

  

    

2012

      0.00 %      23,801       $ 17.177285       $ 408,837         0.37 %      16.60 %   

2012

      0.10 %      70,527         15.895030         1,121,029         0.37 %      16.48 %   

2012

      0.20 %      14,947         15.758064         235,536         0.37 %      16.37 %   

2012

      0.25 %      35,172         15.663052         550,901         0.37 %      16.31 %   

2011

      0.00 %      67,433         14.731931         993,418         0.00 %      -11.36 %   

2011

      0.10 %      104,043         13.645891         1,419,759         0.00 %      -11.45 %   

2011

      0.20 %      10,523         13.541863         142,501         0.00 %      -11.53 %   

2011

      0.25 %      73,554         13.466974         990,550         0.00 %      -11.58 %   

2010

      0.00 %      41,486         16.619507         689,477         0.72 %      15.67 %   

2010

      0.10 %      120,297         15.409693         1,853,740         0.72 %      15.55 %   

2010

      0.20 %      7,571         15.307500         115,893         0.72 %      15.43 %   

2010

      0.25 %      90,228         15.230457         1,374,214         0.72 %      15.38 %   

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 %   

Advisers Management Trust: Mid Cap Intrinsic Value Portfolio - Class I (AMRI)

  

    

2012

      0.00 %      17,798         11.488526         204,473         0.61 %      15.53 %   

2012

      0.20 %      18,058         11.336243         204,710         0.61 %      15.30 %   

2012

      0.25 %      345,057         11.298448         3,898,609         0.61 %      15.24 %   

2011

      0.00 %      18,864         9.944286         187,589         0.63 %      -6.50 %   

2011

      0.20 %      18,967         9.832161         186,487         0.63 %      -6.68 %   

2011

      0.25 %      383,249         9.804295         3,757,486         0.63 %      -6.73 %   

2010

      0.00 %      26,123         10.635314         277,826         0.77 %      26.18 %   

2010

      0.20 %      14,683         10.536414         154,706         0.77 %      25.93 %   

2010

      0.25 %      373,997         10.511809         3,931,385         0.77 %      25.87 %   

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 %   

Advisers Management Trust: Mid Cap Intrinsic Value Portfolio - Class S (AMRS)

  

    

2008

      0.00 %      97,268         7.206627         700,974         0.95 %      -45.95 %   

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

  

    

2012

      0.00 %      46,332         14.677347         680,031         0.00 %      8.82 %   

2012

      0.10 %      24,811         14.526513         360,417         0.00 %      8.71 %   

2012

      0.25 %      43,912         14.303271         628,085         0.00 %      8.55 %   

2011

      0.00 %      72,045         13.487592         971,714         0.00 %      -1.06 %   

2011

      0.10 %      33,847         13.362369         452,276         0.00 %      -1.16 %   

2011

      0.25 %      56,153         13.176815         739,918         0.00 %      -1.31 %   

2010

      0.00 %      64,200         13.632145         875,184         0.00 %      19.61 %   

2010

      0.10 %      22,218         13.519070         300,367         0.00 %      19.49 %   

2010

      0.25 %      54,706         13.351308         730,397         0.00 %      19.31 %   

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 %   

Socially Responsive Portfolio - I Class Shares (AMSRS)

  

    

2012

      0.00 %      122,284         19.276454         2,357,202         0.22 %      10.98 %   

2011

      0.00 %      149,636         17.369356         2,599,081         0.33 %      -3.08 %   

2010

      0.00 %      146,450         17.921368         2,624,584         0.04 %      22.85 %   

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 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     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)

  

    

2012

      0.00 %      5,166       $ 19.748680       $ 102,022         0.68 %      14.12 %   

2012

      0.10 %      176,975         14.683780         2,598,662         0.68 %      14.00 %   

2012

      0.20 %      230,041         11.357880         2,612,778         0.68 %      13.89 %   

2012

      0.25 %      1,112,014         11.289439         12,554,014         0.68 %      13.83 %   

2011

      0.00 %      4,576         17.305412         79,190         0.45 %      -1.15 %   

2011

      0.10 %      243,193         12.880034         3,132,334         0.45 %      -1.25 %   

2011

      0.20 %      241,095         9.972672         2,404,361         0.45 %      -1.35 %   

2011

      0.25 %      1,320,255         9.917548         13,093,692         0.45 %      -1.40 %   

2010

      0.00 %      5,497         17.506620         96,234         0.19 %      9.42 %   

2010

      0.10 %      251,170         13.042797         3,275,959         0.19 %      9.31 %   

2010

      0.20 %      400,167         10.108773         4,045,197         0.19 %      9.20 %   

2010

      0.25 %      2,685,048         10.057917         27,005,990         0.19 %      9.14 %   

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 %   

Global Securities Fund/VA - Class 3 (OVGS3)

  

    

2012

      0.00 %      957,445         16.261792         15,569,771         2.16 %      21.23 %   

2011

      0.00 %      1,097,060         13.414448         14,716,454         1.25 %      -8.27 %   

2010

      0.00 %      1,191,196         14.623513         17,419,470         1.42 %      15.97 %   

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 %   

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

  

    

2012

      0.00 %      615,521         17.277884         10,634,900         2.20 %      21.26 %   

2012

      0.10 %      182,390         17.060376         3,111,642         2.20 %      21.14 %   

2012

      0.20 %      561,713         16.845594         9,462,389         2.20 %      21.02 %   

2012

      0.25 %      1,374,849         16.739250         23,013,941         2.20 %      20.96 %   

2011

      0.00 %      655,037         14.248076         9,333,017         1.28 %      -8.29 %   

2011

      0.10 %      266,961         14.082821         3,759,564         1.28 %      -8.38 %   

2011

      0.20 %      588,688         13.919457         8,194,217         1.28 %      -8.47 %   

2011

      0.25 %      1,532,798         13.838516         21,211,650         1.28 %      -8.52 %   

2010

      0.00 %      722,666         15.535921         11,227,282         1.44 %      15.96 %   

2010

      0.10 %      261,739         15.371084         4,023,212         1.44 %      15.85 %   

2010

      0.20 %      632,553         15.207955         9,619,838         1.44 %      15.73 %   

2010

      0.25 %      1,773,965         15.127070         26,834,893         1.44 %      15.68 %   

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 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		     Total
Return***		     Inception
Date****		  

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

  

    

2012

      0.00 %      1,360,860       $ 16.035812       $ 21,822,495         0.95 %      16.87 %   

2012

      0.10 %      65,319         14.571543         951,799         0.95 %      16.75 %   

2012

      0.20 %      104,207         13.756324         1,433,505         0.95 %      16.64 %   

2012

      0.25 %      143,770         13.673391         1,965,823         0.95 %      16.58 %   

2011

      0.00 %      1,476,171         13.720956         20,254,477         0.86 %      -0.01 %   

2011

      0.10 %      78,409         12.480566         978,589         0.86 %      -0.11 %   

2011

      0.20 %      118,458         11.794128         1,397,109         0.86 %      -0.21 %   

2011

      0.25 %      149,681         11.728904         1,755,594         0.86 %      -0.26 %   

2010

      0.00 %      1,678,208         13.722935         23,029,939         1.13 %      16.11 %   

2010

      0.10 %      66,086         12.494835         825,734         1.13 %      15.99 %   

2010

      0.20 %      137,581         11.819394         1,626,124         1.13 %      15.88 %   

2010

      0.25 %      203,050         11.759898         2,387,847         1.13 %      15.82 %   

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 %   

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

  

    

2012

      0.00 %      174,944         25.120110         4,394,613         0.57 %      17.99 %   

2011

      0.00 %      194,582         21.290587         4,142,765         0.60 %      -2.21 %   

2010

      0.00 %      216,746         21.772215         4,719,041         0.66 %      23.41 %   

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 %   

Mid-Cap Growth Fund/VA - Non-Service Shares (OVAG)

  

    

2012

      0.00 %      1,048,321         17.038569         17,861,890         0.00 %      16.45 %   

2012

      0.10 %      88,192         13.537746         1,193,921         0.00 %      16.33 %   

2012

      0.20 %      111,690         9.325083         1,041,519         0.00 %      16.21 %   

2012

      0.25 %      338,977         9.268905         3,141,946         0.00 %      16.16 %   

2011

      0.00 %      1,159,802         14.632020         16,970,246         0.00 %      1.10 %   

2011

      0.10 %      129,990         11.637321         1,512,735         0.00 %      0.99 %   

2011

      0.20 %      172,529         8.024067         1,384,384         0.00 %      0.89 %   

2011

      0.25 %      348,755         7.979723         2,782,968         0.00 %      0.84 %   

2010

      0.00 %      1,279,230         14.473451         18,514,873         0.00 %      27.46 %   

2010

      0.10 %      120,175         11.522698         1,384,740         0.00 %      27.34 %   

2010

      0.20 %      109,183         7.952967         868,329         0.00 %      27.21 %   

2010

      0.25 %      709,237         7.912957         5,612,162         0.00 %      27.15 %   

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 %   

Global Strategic Income Fund/VA: Non-service Shares (OVSB)

  

    

2012

      0.00 %      140,055         13.324261         1,866,129         6.52 %      13.53 %   

2011

      0.20 %      164,077         11.642728         1,910,304         2.76 %      0.65 %   

2011

      0.25 %      23,951         11.619547         278,300         2.76 %      0.60 %   

2010

      0.20 %      156,222         11.567209         1,807,053         7.99 %      14.74 %   

2010

      0.25 %      22,412         11.549930         258,857         7.99 %      14.68 %   

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   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		     Total
Return***		     Inception
Date****

All Asset Portfolio - Administrative Class (PMVAAA)

  

    

2012

      0.00 %      69,786       $ 18.335213       $ 1,279,541         6.62 %      14.95 %   

2012

      0.10 %      113,326         18.177131         2,059,942         6.62 %      14.83 %   

2012

      0.20 %      819,406         18.020366         14,765,996         6.62 %      14.72 %   

2012

      0.25 %      417,817         17.942540         7,496,698         6.62 %      14.66 %   

2011

      0.00 %      19,444         15.951200         310,155         7.54 %      1.95 %   

2011

      0.10 %      94,917         15.829529         1,502,491         7.54 %      1.85 %   

2011

      0.20 %      10,041         15.708740         157,731         7.54 %      1.75 %   

2011

      0.25 %      87,183         15.648744         1,364,304         7.54 %      1.70 %   

2010

      0.00 %      11,713         15.645399         183,255         8.29 %      13.09 %   

2010

      0.10 %      41,515         15.541558         645,208         8.29 %      12.98 %   

2010

      0.20 %      6,904         15.438355         106,586         8.29 %      12.87 %   

2010

      0.25 %      76,310         15.387057         1,174,186         8.29 %      12.81 %   

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 %   

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

  

    

2012

      0.00 %      120,480         13.847565         1,668,355         5.68 %      5.50 %   

2012

      0.20 %      8,978         13.718780         123,167         5.68 %      5.29 %   

2012

      0.25 %      24,563         13.686738         336,187         5.68 %      5.24 %   

2011

      0.00 %      171,174         13.125598         2,246,761         2.02 %      8.52 %   

2011

      0.20 %      6,368         13.029662         82,973         2.02 %      8.31 %   

2011

      0.25 %      28,274         13.005756         367,725         2.02 %      8.25 %   

2010

      0.00 %      131,526         12.094751         1,590,774         1.34 %      9.48 %   

2010

      0.20 %      7,458         12.030347         89,722         1.34 %      9.26 %   

2010

      0.25 %      20,610         12.014282         247,614         1.34 %      9.21 %   

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 %   

Long-Term U.S. Government Portfolio - Administrative Class (PMVLGA)

  

    

2012

      0.20 %      7,044         14.078727         99,171         2.14 %      4.23 %   

2012

      0.25 %      22,192         14.059896         312,017         2.14 %      4.18 %   

2011

      0.20 %      83         13.507707         1,121         2.65 %      27.59 %   

2011

      0.25 %      30,544         13.496420         412,235         2.65 %      27.52 %   

2010

      0.00 %      707         10.601417         7,495         0.84 %      6.01 %    4/30/2010

2010

      0.25 %      2,990         10.583624         31,645         0.84 %      5.84 %    4/30/2010

Low Duration Portfolio - Administrative Class (PMVLDA)

  

    

2012

      0.00 %      560,741         15.231801         8,541,095         1.93 %      5.86 %   

2012

      0.10 %      92,267         15.075249         1,390,948         1.93 %      5.75 %   

2012

      0.20 %      753,896         14.920147         11,248,239         1.93 %      5.64 %   

2012

      0.25 %      2,019,223         14.843142         29,971,614         1.93 %      5.59 %   

2011

      0.00 %      543,092         14.389072         7,814,590         1.68 %      1.11 %   

2011

      0.10 %      143,040         14.255473         2,039,103         1.68 %      1.01 %   

2011

      0.20 %      1,287,722         14.122982         18,186,475         1.68 %      0.91 %   

2011

      0.25 %      2,461,331         14.057158         34,599,319         1.68 %      0.86 %   

2010

      0.00 %      593,471         14.231338         8,445,886         1.64 %      5.29 %   

2010

      0.10 %      137,386         14.113277         1,938,967         1.64 %      5.19 %   

2010

      0.20 %      1,420,531         13.996078         19,881,863         1.64 %      5.08 %   

2010

      0.25 %      2,948,750         13.937807         41,099,108         1.64 %      5.03 %   

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 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		     Total
Return***		     Inception
Date****

Real Return Portfolio - Administrative Class (PMVRRA)

2012

      0.00 %      209,319       $ 20.209690       $ 4,230,272         1.08 %      8.75 %   

2012

      0.10 %      815,660         20.001770         16,314,644         1.08 %      8.65 %   

2012

      0.20 %      1,601,513         19.795748         31,703,148         1.08 %      8.54 %   

2012

      0.25 %      3,264,904         19.693483         64,297,331         1.08 %      8.48 %   

2011

      0.00 %      156,159         18.582806         2,901,872         2.08 %      11.67 %   

2011

      0.10 %      960,484         18.410083         17,682,590         2.08 %      11.56 %   

2011

      0.20 %      1,815,470         18.238767         33,111,934         2.08 %      11.45 %   

2011

      0.25 %      3,258,425         18.153657         59,152,330         2.08 %      11.39 %   

2010

      0.00 %      46,129         16.641007         767,633         1.44 %      8.11 %   

2010

      0.10 %      229,063         16.502776         3,780,175         1.44 %      8.00 %   

2010

      0.20 %      1,617,090         16.365561         26,464,585         1.44 %      7.90 %   

2010

      0.25 %      3,631,928         16.297330         59,190,729         1.44 %      7.84 %   

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 %   

Total Return Portfolio - Administrative Class (PMVTRA)

2012

      0.00 %      1,063,702         19.322000         20,552,850         2.57 %      9.60 %   

2012

      0.10 %      7,558,546         19.123203         144,543,610         2.57 %      9.49 %   

2012

      0.20 %      5,681,063         18.926252         107,521,230         2.57 %      9.38 %   

2012

      0.25 %      8,600,586         18.828467         161,935,850         2.57 %      9.33 %   

2011

      0.00 %      607,433         17.629489         10,708,733         2.62 %      3.60 %   

2011

      0.10 %      7,698,175         17.465627         134,453,453         2.62 %      3.50 %   

2011

      0.20 %      5,099,199         17.303112         88,232,011         2.62 %      3.40 %   

2011

      0.25 %      8,572,880         17.222369         147,645,303         2.62 %      3.35 %   

2010

      0.00 %      335,164         17.016112         5,703,188         2.37 %      8.11 %   

2010

      0.10 %      7,893,918         16.874773         133,208,074         2.37 %      8.01 %   

2010

      0.20 %      4,544,093         16.734465         76,042,965         2.37 %      7.90 %   

2010

      0.25 %      8,614,973         16.664698         143,565,923         2.37 %      7.84 %   

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 %   

Pioneer Emerging Markets VCT Portfolio - Class I Shares (PIVEMI)

2012

      0.00 %      86,867         7.594935         659,749         0.49 %      11.97 %   

2012

      0.20 %      19,785         7.515397         148,692         0.49 %      11.74 %   

2012

      0.25 %      102,575         7.495622         768,863         0.49 %      11.69 %   

2011

      0.00 %      107,824         6.783221         731,394         0.27 %      -23.40 %   

2011

      0.20 %      466         6.725660         3,134         0.27 %      -23.55 %   

2011

      0.25 %      129,785         6.711325         871,029         0.27 %      -23.59 %   

2010

      0.00 %      89,814         8.855229         795,324         0.49 %      15.89 %   

2010

      0.20 %      6,533         8.797643         57,475         0.49 %      15.66 %   

2010

      0.25 %      131,029         8.783283         1,150,865         0.49 %      15.61 %   

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 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		     Total
Return***		     Inception
Date****		  

Pioneer High Yield VCT Portfolio - Class I Shares (PIHYB1)

  

2012

      0.00 %      16,595       $ 24.339598       $ 403,916         5.53 %      16.05 %   

2012

      0.10 %      43,266         24.089443         1,042,254         5.53 %      15.93 %   

2012

      0.20 %      103,936         23.841601         2,478,001         5.53 %      15.81 %   

2012

      0.25 %      156,382         23.718546         3,709,154         5.53 %      15.76 %   

2011

      0.00 %      12,611         20.973952         264,503         5.26 %      -1.67 %   

2011

      0.10 %      73,631         20.779227         1,529,995         5.26 %      -1.76 %   

2011

      0.20 %      166,152         20.586095         3,420,421         5.26 %      -1.86 %   

2011

      0.25 %      228,056         20.490135         4,672,898         5.26 %      -1.91 %   

2010

      0.00 %      8,029         21.329223         171,252         5.62 %      18.04 %   

2010

      0.10 %      65,118         21.152286         1,377,395         5.62 %      17.92 %   

2010

      0.20 %      264,897         20.976629         5,556,646         5.62 %      17.81 %   

2010

      0.25 %      266,392         20.889289         5,564,739         5.62 %      17.75 %   

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 %   

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

  

2012

      0.00 %      46,906         16.361335         767,445         1.65 %      19.14 %   

2011

      0.00 %      50,439         13.733218         692,690         1.21 %      -4.64 %   

2010

      0.00 %      54,238         14.401578         781,113         1.61 %      14.38 %   

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 %   

Putnam VT International Equity Fund - Class IB (PVTIGB)

  

2012

      0.00 %      53,095         17.975464         954,407         2.17 %      21.92 %   

2011

      0.00 %      59,303         14.744148         874,372         3.34 %      -16.93 %   

2010

      0.00 %      64,956         17.749703         1,152,950         3.58 %      10.03 %   

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 %   

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

  

2012

      0.20 %      170         9.923349         1,687         0.38 %      17.25 %   

2012

      0.25 %      129         9.897245         1,277         0.38 %      17.19 %   

2011

      0.00 %      2         8.535717         17         0.48 %      -4.73 %   

2011

      0.20 %      112         8.463270         948         0.48 %      -4.92 %   

2011

      0.25 %      1,139         8.445238         9,619         0.48 %      -4.96 %   

2010

      0.20 %      23         8.900840         205         0.25 %      25.73 %   

2010

      0.25 %      847         8.886315         7,527         0.25 %      25.67 %   

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 Voyager Fund - Class IB (PVTVB)

  

2012

      0.00 %      66,439         17.127486         1,137,933         0.33 %      14.23 %   

2011

      0.00 %      103,328         14.994106         1,549,311         0.00 %      -17.85 %   

2010

      0.00 %      84,002         18.251644         1,533,175         1.31 %      20.80 %   

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 %   

Van Kampen V.I. Growth and Income Fund - Series I Shares (ACGI)

  

2012

      0.00 %      3,942         11.605231         45,748         1.77 %      14.63 %   

2012

      0.20 %      53,399         11.543577         616,415         1.77 %      14.40 %   

2012

      0.25 %      248,897         11.528209         2,869,337         1.77 %      14.35 %   

2011

      0.00 %      3,029         10.123727         30,665         1.62 %      -2.01 %   

2011

      0.20 %      6,745         10.090153         68,058         1.62 %      -2.20 %   

2011

      0.25 %      167,059         10.081770         1,684,250         1.62 %      -2.25 %   

Van Kampen V.I. American Franchise Fund: Series I Shares (ACEG)

  

2012

      0.00 %      82,490         9.750071         804,283         0.00 %      -2.50 %      4/27/2012   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		     Total
Return***		     Inception
Date****		  

Van Kampen V.I. Value Opportunities Fund: Series I Shares (AVBVI)

  

2012

      0.10 %      26,222       $ 15.382303       $ 403,355         1.42 %      17.59 %   

2012

      0.20 %      7,061         15.224250         107,498         1.42 %      17.47 %   

2012

      0.25 %      11,903         15.145833         180,281         1.42 %      17.41 %   

2011

      0.10 %      31,813         13.081814         416,172         0.88 %      -3.15 %   

2011

      0.20 %      10,120         12.960374         131,159         0.88 %      -3.24 %   

2011

      0.25 %      12,226         12.900080         157,716         0.88 %      -3.29 %   

2010

      0.10 %      24,967         13.506772         337,224         0.57 %      7.24 %   

2010

      0.20 %      5,367         13.394748         71,890         0.57 %      7.14 %   

2010

      0.25 %      18,585         13.339087         247,907         0.57 %      7.08 %   

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 %   

V.I. High Yield Fund - Series I (AVHY1)

  

2012

      0.00 %      44,319         12.568827         557,038         5.34 %      17.17 %   

2012

      0.20 %      480,979         12.502127         6,013,261         5.34 %      16.94 %   

2012

      0.25 %      265,785         12.485469         3,318,450         5.34 %      16.88 %   

2011

      0.00 %      43,041         10.726705         461,688         4.07 %      0.96 %   

2011

      0.20 %      391,627         10.691182         4,186,956         4.07 %      0.76 %   

2011

      0.25 %      215,058         10.682283         2,297,310         4.07 %      0.71 %   

2010

      0.00 %      885         10.624548         9,403         8.17 %      6.25 %      5/3/2010   

2010

      0.25 %      63,440         10.606962         672,906         8.17 %      6.07 %      5/3/2010   

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

  

2012

      0.00 %      48,490         20.308142         984,742         1.49 %      15.53 %   

2012

      0.10 %      81,123         20.132993         1,633,249         1.49 %      15.42 %   

2012

      0.20 %      840,837         19.959406         16,782,607         1.49 %      15.30 %   

2012

      0.25 %      1,152,480         19.873147         22,903,404         1.49 %      15.24 %   

2011

      0.00 %      43,155         17.577932         758,576         1.56 %      -6.74 %   

2011

      0.10 %      96,833         17.443806         1,689,136         1.56 %      -6.83 %   

2011

      0.20 %      717,058         17.310748         12,412,810         1.56 %      -6.93 %   

2011

      0.25 %      1,182,001         17.244564         20,383,092         1.56 %      -6.97 %   

2010

      0.00 %      39,185         18.848465         738,577         2.26 %      12.86 %   

2010

      0.10 %      95,102         18.723325         1,780,626         2.26 %      12.75 %   

2010

      0.20 %      606,955         18.599074         11,288,801         2.26 %      12.64 %   

2010

      0.25 %      1,385,053         18.537223         25,675,036         2.26 %      12.58 %   

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 %   

Variable Insurance Funds - Invesco V.I. Mid Cap Core Equity - Series I Shares (AVMCCI)

  

2012

      0.00 %      1,022         14.998642         15,329         0.10 %      10.96 %   

2012

      0.20 %      1,119         14.772087         16,530         0.10 %      10.73 %   

2012

      0.25 %      64,406         14.745046         949,669         0.10 %      10.68 %   

2011

      0.00 %      701         13.517743         9,476         0.39 %      -6.38 %   

2011

      0.20 %      493         13.340285         6,577         0.39 %      -6.56 %   

2011

      0.25 %      17,689         13.322532         235,662         0.39 %      -6.61 %   

2010

      0.00 %      547         14.438615         7,898         1.28 %      14.11 %   

2010

      0.20 %      222         14.277548         3,170         1.28 %      13.88 %   

2010

      0.25 %      6,608         14.265646         94,267         1.28 %      13.83 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		     Total
Return***		     Inception
Date****		  

Micro-Cap Portfolio - Investment Class (ROCMC)

  

2012

      0.00 %      67,566       $ 26.604902       $ 1,797,587         0.00 %      7.60 %   

2012

      0.10 %      93,666         26.331578         2,466,374         0.00 %      7.50 %   

2012

      0.20 %      378,057         26.061067         9,852,569         0.00 %      7.39 %   

2012

      0.25 %      990,487         25.926857         25,680,215         0.00 %      7.34 %   

2011

      0.00 %      47,676         24.724626         1,178,771         2.44 %      -12.10 %   

2011

      0.10 %      129,742         24.495169         3,178,052         2.44 %      -12.19 %   

2011

      0.20 %      504,985         24.267837         12,254,894         2.44 %      -12.28 %   

2011

      0.25 %      1,255,233         24.154962         30,320,105         2.44 %      -12.32 %   

2010

      0.00 %      31,852         28.128399         895,946         1.92 %      29.96 %   

2010

      0.10 %      126,687         27.895201         3,533,959         1.92 %      29.83 %   

2010

      0.20 %      343,994         27.663928         9,516,225         1.92 %      29.70 %   

2010

      0.25 %      1,201,054         27.549005         33,087,843         1.92 %      29.64 %   

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 %   

Small-Cap Portfolio - Investment Class (ROCSC)

  

2012

      0.20 %      161,683         12.886131         2,083,468         0.10 %      12.27 %   

2012

      0.25 %      22,966         12.853991         295,205         0.10 %      12.22 %   

2011

      0.20 %      179,386         11.477349         2,058,876         0.51 %      -3.48 %   

2011

      0.25 %      26,186         11.454460         299,946         0.51 %      -3.52 %   

2010

      0.20 %      24,253         11.890655         288,384         0.13 %      20.28 %   

2010

      0.25 %      3,479         11.872859         41,306         0.13 %      20.22 %   

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   

Blue Chip Growth Portfolio - II (TRBCG2)

  

2010

      0.20 %      30,509         12.978284         395,954         0.00 %      15.77 %   

2010

      0.25 %      4,383         12.941568         56,723         0.00 %      15.71 %   

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 %   

Equity Income Portfolio - II (TREI2)

  

2012

      0.00 %      86,712         19.528615         1,693,365         1.93 %      16.92 %   

2012

      0.10 %      120,639         19.328030         2,331,714         1.93 %      16.81 %   

2012

      0.20 %      731,656         19.129466         13,996,189         1.93 %      16.69 %   

2012

      0.25 %      1,843,354         19.030987         35,080,846         1.93 %      16.63 %   

2011

      0.00 %      77,285         16.702169         1,290,827         1.49 %      -1.02 %   

2011

      0.10 %      170,630         16.547192         2,823,447         1.49 %      -1.12 %   

2011

      0.20 %      1,220,543         16.393623         20,009,122         1.49 %      -1.22 %   

2011

      0.25 %      2,081,555         16.317395         33,965,555         1.49 %      -1.27 %   

2010

      0.00 %      78,807         16.874180         1,329,804         1.59 %      14.74 %   

2010

      0.10 %      186,234         16.734289         3,116,494         1.59 %      14.63 %   

2010

      0.20 %      822,711         16.595545         13,653,337         1.59 %      14.51 %   

2010

      0.25 %      2,576,571         16.526617         42,582,002         1.59 %      14.46 %   

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 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		     Total
Return***		     Inception
Date****

2008

      0.40 %      562,661         11.447985         6,441,335         2.12 %      -36.52 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		      Total
Return***		     Inception
Date****		  

Health Sciences Portfolio - II (TRHS2)

  

     

2012

      0.00 %      284,958       $ 15.602728       $ 4,446,122         0.00%         31.00 %   

2012

      0.20 %      350,332         15.447653         5,411,807         0.00%         30.74 %   

2012

      0.25 %      49,763         15.409140         766,805         0.00%         30.67 %   

2011

      0.00 %      187,535         11.910614         2,233,657         0.00%         10.39 %   

2011

      0.20 %      267,658         11.815879         3,162,615         0.00%         10.17 %   

2011

      0.25 %      39,071         11.792318         460,738         0.00%         10.11 %   

2010

      0.00 %      59,497         10.790053         641,976         0.00%         15.31 %   

2010

      0.20 %      148,647         10.725614         1,594,330         0.00%         15.08 %   

2010

      0.25 %      21,321         10.709560         228,339         0.00%         15.02 %   

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 (TRLT1)

  

     

2012

      0.00 %      2,310         10.373567         23,963         2.05%         2.47 %   

2012

      0.20 %      25,459         10.330359         263,001         2.05%         2.27 %   

2012

      0.25 %      203,070         10.319545         2,095,590         2.05%         2.22 %   

2011

      0.00 %      1,539         10.123073         15,579         2.33%         1.60 %   

2011

      0.20 %      12,453         10.101163         125,790         2.33%         1.40 %   

2011

      0.25 %      25,033         10.095672         252,725         2.33%         1.35 %   

Limited-Term Bond Portfolio - II (TRLT2)

  

     

2008

      0.00 %      177,875         11.230967         1,997,708         3.75%         1.31 %   

Mid-Cap Growth Portfolio - II (TRMCG2)

  

     

2012

      0.10 %      89,523         29.482112         2,639,327         0.00%         13.50 %   

2012

      0.20 %      171,631         29.179226         5,008,060         0.00%         13.39 %   

2012

      0.25 %      553,994         29.028993         16,081,888         0.00%         13.33 %   

2011

      0.10 %      117,041         25.974820         3,040,119         0.00%         -1.62 %   

2011

      0.20 %      205,268         25.733750         5,282,315         0.00%         -1.72 %   

2011

      0.25 %      689,988         25.614079         17,673,407         0.00%         -1.77 %   

2010

      0.10 %      106,889         26.402453         2,822,132         0.00%         27.65 %   

2010

      0.20 %      157,925         26.183527         4,135,034         0.00%         27.52 %   

2010

      0.25 %      589,794         26.074777         15,378,747         0.00%         27.46 %   

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 %   

New America Growth Portfolio (TRNAG1)

  

     

2012

      0.00 %      180,354         17.101805         3,084,379         0.56%         13.12 %   

2012

      0.10 %      111,088         16.954305         1,883,420         0.56%         13.01 %   

2012

      0.20 %      373,039         16.808089         6,270,073         0.56%         12.89 %   

2012

      0.25 %      1,386,355         16.735434         23,201,253         0.56%         12.84 %   

2011

      0.00 %      105,394         15.118123         1,593,359         0.22%         -1.07 %   

2011

      0.10 %      110,249         15.002759         1,654,039         0.22%         -1.17 %   

2011

      0.20 %      247,318         14.888293         3,682,143         0.22%         -1.27 %   

2011

      0.25 %      1,020,263         14.831357         15,131,885         0.22%         -1.32 %   

2010

      0.00 %      39,759         15.281652         607,583         0.22%         19.65 %   

2010

      0.10 %      74,949         15.180193         1,137,740         0.22%         19.53 %   

2010

      0.20 %      150,190         15.079403         2,264,776         0.22%         19.41 %   

2010

      0.25 %      1,088,062         15.029245         16,352,750         0.22%         19.35 %   

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 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		     Total
Return***		     Inception
Date****		  

Personal Strategy Balanced Portfolio (TRPSB1)

  

    

2012

      0.00 %      31,059       $ 13.173531       $ 409,157         1.90 %      15.14 %   

2012

      0.20 %      28,866         13.013475         375,647         1.90 %      14.91 %   

2012

      0.25 %      246,963         12.973754         3,204,037         1.90 %      14.86 %   

2011

      0.00 %      26,377         11.440995         301,779         2.23 %      -0.32 %   

2011

      0.20 %      4,926         11.324676         55,785         2.23 %      -0.52 %   

2011

      0.25 %      230,100         11.295758         2,599,154         2.23 %      -0.57 %   

2010

      0.00 %      22,601         11.478195         259,419         2.69 %      13.71 %   

2010

      0.20 %      275         11.384193         3,131         2.69 %      13.48 %   

2010

      0.25 %      108,242         11.360802         1,229,716         2.69 %      13.43 %   

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 %   

Blue Chip Growth Portfolio (TRBCGP)

  

    

2012

      0.20 %      7,713         10.147317         78,266         0.14 %      1.47 %      11/1/2012   

2012

      0.25 %      174         10.146488         1,765         0.14 %      1.46 %      11/1/2012   

VIP Trust - Emerging Markets Fund: Initial Class (VWEM)

  

    

2012

      0.00 %      233,193         33.015883         7,699,073         0.00 %      29.81 %   

2012

      0.10 %      100,026         44.556901         4,456,849         0.00 %      29.68 %   

2012

      0.20 %      51,472         40.982513         2,109,452         0.00 %      29.55 %   

2012

      0.25 %      36,430         40.735521         1,483,995         0.00 %      29.48 %   

2011

      0.00 %      259,894         25.434462         6,610,264         1.02 %      -25.74 %   

2011

      0.10 %      132,103         34.359714         4,539,021         1.02 %      -25.81 %   

2011

      0.20 %      61,605         31.635035         1,948,876         1.02 %      -25.89 %   

2011

      0.25 %      47,069         31.460137         1,480,797         1.02 %      -25.92 %   

2010

      0.00 %      307,064         34.249232         10,516,706         0.62 %      26.84 %   

2010

      0.10 %      119,267         46.313968         5,523,728         0.62 %      26.71 %   

2010

      0.20 %      68,475         42.683992         2,922,786         0.62 %      26.59 %   

2010

      0.25 %      48,048         42.469224         2,040,561         0.62 %      26.52 %   

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 %   

VIP Trust - Global Hard Assets Fund: Initial Class (VWHA)

  

    

2012

      0.00 %      252,881         37.872414         9,577,214         0.60 %      3.39 %   

2012

      0.10 %      250,656         52.477156         13,153,714         0.60 %      3.28 %   

2012

      0.20 %      277,367         44.481659         12,337,744         0.60 %      3.18 %   

2012

      0.25 %      175,480         44.213670         7,758,615         0.60 %      3.13 %   

2011

      0.00 %      273,569         36.631842         10,021,336         1.14 %      -16.45 %   

2011

      0.10 %      374,493         50.809106         19,027,655         1.14 %      -16.53 %   

2011

      0.20 %      260,697         43.110971         11,238,901         1.14 %      -16.62 %   

2011

      0.25 %      188,442         42.872735         8,079,024         1.14 %      -16.66 %   

2010

      0.00 %      273,628         43.844278         11,997,022         0.34 %      29.23 %   

2010

      0.10 %      373,992         60.873685         22,766,271         0.34 %      29.11 %   

2010

      0.20 %      277,177         51.702291         14,330,686         0.34 %      28.98 %   

2010

      0.25 %      184,024         51.442267         9,466,612         0.34 %      28.91 %   

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 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		     Total
Return***		     Inception
Date****		  

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

  

    

2012

      0.20 %      325,615       $ 12.261822       $ 3,992,633         2.42 %      12.34 %   

2012

      0.25 %      46,252         12.231242         565,719         2.42 %      12.28 %   

2011

      0.20 %      278,075         10.915265         3,035,262         2.26 %      3.49 %   

2011

      0.25 %      40,591         10.893500         442,178         2.26 %      3.44 %   

2010

      0.20 %      159,013         10.546985         1,677,108         2.90 %      10.79 %   

2010

      0.25 %      22,808         10.531205         240,196         2.90 %      10.74 %   

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)

  

    

2012

      0.20 %      1,103,096         10.779851         11,891,211         0.80 %      16.27 %   

2012

      0.25 %      156,691         10.752951         1,684,891         0.80 %      16.21 %   

2011

      0.20 %      208,325         9.271686         1,931,524         1.77 %      3.71 %   

2011

      0.25 %      30,410         9.253188         281,389         1.77 %      3.66 %   

2010

      0.20 %      166,695         8.939847         1,490,228         2.69 %      9.11 %   

2010

      0.25 %      23,910         8.926459         213,432         2.69 %      9.06 %   

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   

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

  

    

2012

      0.20 %      412,707         9.419580         3,887,527         2.10 %      19.90 %   

2012

      0.25 %      58,623         9.396076         550,826         2.10 %      19.84 %   

2011

      0.20 %      440,376         7.856392         3,459,766         1.43 %      -13.71 %   

2011

      0.25 %      64,283         7.840712         504,024         1.43 %      -13.75 %   

2010

      0.20 %      421,970         9.104558         3,841,850         1.67 %      15.49 %   

2010

      0.25 %      60,536         9.090922         550,328         1.67 %      15.43 %   

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)

  

    

2012

      0.20 %      702,845         11.671636         8,203,351         1.08 %      15.58 %   

2012

      0.25 %      99,836         11.642534         1,162,344         1.08 %      15.53 %   

2011

      0.20 %      638,998         10.097955         6,452,573         1.09 %      -2.23 %   

2011

      0.25 %      93,276         10.077827         940,019         1.09 %      -2.28 %   

2010

      0.20 %      763,575         10.328493         7,886,579         0.86 %      25.12 %   

2010

      0.25 %      109,541         10.313041         1,129,701         0.86 %      25.06 %   

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 - REIT Index Portfolio (VVREI)

  

    

2012

      0.20 %      123,184         13.154393         1,620,411         2.07 %      17.22 %   

2012

      0.25 %      17,472         13.140722         229,595         2.07 %      17.17 %   

2011

      0.20 %      121,056         11.221552         1,358,436         2.09 %      8.22 %   

2011

      0.25 %      17,645         11.215498         197,897         2.09 %      8.17 %   

2010

      0.20 %      176,817         10.369043         1,833,423         0.00 %      3.69 %      12/1/2010   

2010

      0.25 %      25,325         10.368617         262,585         0.00 %      3.69 %      12/1/2010   

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

  

2012

      0.20 %      430,019         12.142003         5,221,292         2.42 %      4.21 %   

2012

      0.25 %      61,083         12.111704         739,819         2.42 %      4.16 %   

2011

      0.20 %      340,653         11.651689         3,969,183         3.06 %      1.81 %   

2011

      0.25 %      49,726         11.628465         578,237         3.06 %      1.76 %   

2010

      0.20 %      271,236         11.444105         3,104,053         2.88 %      5.01 %   

2010

      0.25 %      38,912         11.426982         444,647         2.88 %      4.96 %   

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   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		     Total
Return***		     Inception
Date****		  

Vanguard(R) Variable Insurance Funds - Total Bond Market Index Portfolio (VVHGB)

  

    

2012

      0.20 %      576,440       $ 11.105835       $ 6,401,848         2.82 %      3.82 %   

2012

      0.25 %      81,762         11.094288         907,091         2.82 %      3.76 %   

2011

      0.20 %      505,956         10.697615         5,412,522         4.18 %      7.44 %   

2011

      0.25 %      73,748         10.691844         788,502         4.18 %      7.38 %   

2010

      0.20 %      719,981         9.957077         7,168,906         0.00 %      -0.43 %      12/1/2010   

2010

      0.25 %      103,135         9.956666         1,026,881         0.00 %      -0.43 %      12/1/2010   

Variable Insurance Portfolios - Asset Strategy (WRASP)

  

    

2012

      0.00 %      877,374         12.630803         11,081,938         1.12 %      19.18 %   

2012

      0.20 %      115,705         12.498640         1,446,155         1.12 %      18.94 %   

2012

      0.25 %      153,873         12.465791         1,918,149         1.12 %      18.88 %   

2011

      0.00 %      748,836         10.598470         7,936,516         1.05 %      -7.21 %   

2011

      0.20 %      120,081         10.508616         1,261,885         1.05 %      -7.39 %   

2011

      0.25 %      183,861         10.486248         1,928,012         1.05 %      -7.44 %   

2010

      0.00 %      503,668         11.421435         5,752,611         1.09 %      8.67 %   

2010

      0.20 %      1,589         11.347238         18,031         1.09 %      8.46 %   

2010

      0.25 %      219,804         11.328745         2,490,103         1.09 %      8.40 %   

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 %   

Variable Insurance Portfolios - Growth (WRGP)

  

    

2012

      0.00 %      13,153         16.277308         214,095         0.06 %      12.74 %   

2012

      0.10 %      42,493         16.152997         686,389         0.06 %      12.63 %   

2012

      0.20 %      13,236         16.029638         212,168         0.06 %      12.52 %   

2012

      0.25 %      60,799         15.968332         970,859         0.06 %      12.46 %   

2011

      0.00 %      14,516         14.437370         209,573         0.43 %      2.12 %   

2011

      0.10 %      70,006         14.341473         1,003,989         0.43 %      2.02 %   

2011

      0.20 %      13,379         14.246224         190,600         0.43 %      1.92 %   

2011

      0.25 %      53,067         14.198847         753,490         0.43 %      1.87 %   

2010

      0.00 %      10,396         14.137204         146,970         0.58 %      12.58 %   

2010

      0.10 %      48,419         14.057322         680,641         0.58 %      12.47 %   

2010

      0.20 %      2,258         13.977904         31,562         0.58 %      12.36 %   

2010

      0.25 %      43,733         13.938364         609,566         0.58 %      12.30 %   

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 %   

Variable Insurance Portfolios - High Income (WRHIP)

  

    

2012

      0.00 %      101,745         10.909915         1,110,029         0.10 %      9.10 %      5/1/2012   

2012

      0.20 %      903,765         10.895380         9,846,863         0.10 %      8.95 %      5/1/2012   

2012

      0.25 %      186,961         10.891747         2,036,332         0.10 %      8.92 %      5/1/2012   

Variable Insurance Portfolios - Mid Cap Growth (WRMCG)

  

    

2012

      0.00 %      20,326         10.156251         206,436         0.00 %      1.56 %      5/1/2012   

2012

      0.20 %      396         10.142723         4,017         0.00 %      1.43 %      5/1/2012   

2012

      0.25 %      33,681         10.139350         341,503         0.00 %      1.39 %      5/1/2012   

Variable Insurance Portfolios - Real Estate Securities (WRRESP)

  

    

2012

      0.00 %      63,739         15.782147         1,005,938         0.74 %      17.72 %   

2012

      0.10 %      48,019         15.661595         752,054         0.74 %      17.60 %   

2012

      0.20 %      18,541         15.541962         288,164         0.74 %      17.48 %   

2012

      0.25 %      36,559         15.482465         566,023         0.74 %      17.42 %   

2011

      0.00 %      57,695         13.406856         773,509         0.77 %      5.01 %   

2011

      0.10 %      63,865         13.317784         850,540         0.77 %      4.90 %   

2011

      0.20 %      7,016         13.229310         92,817         0.77 %      4.80 %   

2011

      0.25 %      77,067         13.185267         1,016,149         0.77 %      4.75 %   

2010

      0.00 %      26,415         12.767438         337,252         2.03 %      28.51 %   

2010

      0.10 %      27,301         12.695262         346,593         2.03 %      28.38 %   

2010

      0.20 %      4,295         12.623516         54,218         2.03 %      28.25 %   

2010

      0.25 %      62,625         12.587772         788,309         2.03 %      28.19 %   

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 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		     Total
Return***		     Inception
Date****

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 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		      Total
Return***		     Inception
Date****

Variable Insurance Portfolios - Science and Technology (WRSTP)

  

     

2012

      0.00 %      98,424       $ 13.167237       $ 1,295,972         0.00%         27.83 %   

2012

      0.20 %      119,331         13.029378         1,554,809         0.00%         27.57 %   

2012

      0.25 %      151,147         12.995166         1,964,180         0.00%         27.51 %   

2011

      0.00 %      36,947         10.300580         380,576         0.00%         -5.77 %   

2011

      0.20 %      76,080         10.213184         777,019         0.00%         -5.96 %   

2011

      0.25 %      124,700         10.191472         1,270,877         0.00%         -6.00 %   

2010

      0.00 %      7,021         10.930985         76,746         0.00%         12.75 %   

2010

      0.20 %      132         10.859919         1,434         0.00%         12.53 %   

2010

      0.25 %      117,513         10.842237         1,274,104         0.00%         12.47 %   

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 %   

Advantage VT Discovery Fund (SVDF)

  

     

2012

      0.00 %      334,846         12.309177         4,121,679         0.00%         17.74 %   

2012

      0.10 %      27,690         12.244588         339,053         0.00%         17.62 %   

2012

      0.20 %      227,629         12.180346         2,772,600         0.00%         17.50 %   

2012

      0.25 %      192,441         12.148301         2,337,831         0.00%         17.44 %   

2011

      0.00 %      287,967         10.454971         3,010,687         0.00%         0.42 %   

2011

      0.10 %      29,156         10.410540         303,530         0.00%         0.32 %   

2011

      0.20 %      755         10.366304         7,827         0.00%         0.22 %   

2011

      0.25 %      184,638         10.344211         1,909,934         0.00%         0.17 %   

2010

      0.00 %      229,478         10.410941         2,389,082         0.00%         35.54 %   

2010

      0.10 %      31,322         10.377053         325,030         0.00%         35.41 %   

2010

      0.20 %      346         10.343273         3,579         0.00%         35.27 %   

2010

      0.25 %      147,998         10.326390         1,528,285         0.00%         35.20 %   

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 VT Opportunity Fund - Class 2 (SVOF)

  

     

2012

      0.00 %      4         17.397601         70         0.09%         15.52 %   

2012

      0.10 %      98,225         17.178537         1,687,362         0.09%         15.41 %   

2012

      0.20 %      110,208         16.962265         1,869,377         0.09%         15.29 %   

2012

      0.25 %      274,874         16.855104         4,633,030         0.09%         15.23 %   

2011

      0.00 %      4         15.059998         60         0.16%         -5.52 %   

2011

      0.10 %      132,129         14.885276         1,966,777         0.16%         -5.61 %   

2011

      0.20 %      106,635         14.712613         1,568,879         0.16%         -5.71 %   

2011

      0.25 %      312,720         14.626997         4,574,155         0.16%         -5.75 %   

2010

      0.00 %      4         15.939710         64         0.78%         23.76 %   

2010

      0.10 %      145,576         15.770532         2,295,811         0.78%         23.63 %   

2010

      0.20 %      144,720         15.603173         2,258,091         0.78%         23.51 %   

2010

      0.25 %      279,659         15.520123         4,340,342         0.78%         23.45 %   

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 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		      Total
Return***		     Inception
Date****		  

Advantage VT Small Cap Growth Fund - Class 2 (WFVSCG)

  

     

2012

      0.00 %      182,930       $ 11.225415       $ 2,053,465         0.00%         7.87 %   

2012

      0.20 %      246,982         11.107878         2,743,446         0.00%         7.66 %   

2012

      0.25 %      282,624         11.078669         3,131,098         0.00%         7.60 %   

2011

      0.00 %      220,980         10.406273         2,299,578         0.00%         -4.60 %   

2011

      0.20 %      240,548         10.317983         2,481,970         0.00%         -4.79 %   

2011

      0.25 %      506,120         10.296017         5,211,020         0.00%         -4.83 %   

2010

      0.00 %      207,689         10.907631         2,265,395         0.00%         26.77 %   

2010

      0.20 %      8,178         10.836693         88,622         0.00%         26.52 %   

2010

      0.25 %      412,207         10.819018         4,459,675         0.00%         26.46 %   

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 %   

Janus Aspen Series - Global Technology Portfolio - Service II Shares (obsolete) (JAGTS2)

  

2011

      0.00 %      189,756         10.352942         1,964,533         0.00%         -8.81 %   

2010

      0.00 %      151,587         11.352948         1,720,959         0.00%         13.53 %      5/3/2010   

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

  

     

2011

      0.00 %      1,571,373         10.783470         16,944,854         0.38%         -32.33 %   

2010

      0.00 %      1,903,372         15.936367         30,332,835         0.54%         25.03 %   

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 %   

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

  

     

2011

      0.00 %      63,786         12.681863         808,925         0.16%         -7.91 %   

2010

      0.00 %      69,399         13.771185         955,706         0.73%         15.49 %   

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 %   

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

  

     

2011

      0.00 %      128,974         18.079131         2,331,738         0.00%         -7.16 %   

2011

      0.10 %      16,279         17.911321         291,578         0.00%         -7.25 %   

2011

      0.20 %      6,516         17.745096         115,627         0.00%         -7.34 %   

2011

      0.25 %      63,941         17.662531         1,129,360         0.00%         -7.39 %   

2010

      0.00 %      137,618         19.473180         2,679,860         0.00%         18.78 %   

2010

      0.10 %      17,428         19.311717         336,565         0.00%         18.66 %   

2010

      0.20 %      74,958         19.151595         1,435,565         0.00%         18.54 %   

2010

      0.25 %      259,349         19.072022         4,946,310         0.00%         18.48 %   

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 %   

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

  

     

2010

      0.00 %      31,818         12.359941         393,269         5.84%         8.24 %   

2009

      0.00 %      23,143         11.419071         264,272         5.26%         14.19 %      5/1/2009   

Clover Value Fund II - Primary Shares (obsolete) (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 %   

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

  

     

2010

      0.00 %      27,195         11.345188         308,532         0.11%         12.23 %   

2010

      0.10 %      59,479         11.333247         674,090         0.11%         12.12 %   

2010

      0.25 %      2,673         11.315359         30,246         0.11%         11.95 %   

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   

Gartmore NVIT Global Utilities Fund - Class I (obsolete) (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 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		      Total
Return***		     Inception
Date****

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 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

     Contract
Expense
Rate*		     Units      Unit
Fair
Value		      Contract
Owners’
Equity		      Investment
Income
Ratio**		     Total
Return***		     Inception
Date****		  

NVIT Worldwide Leaders Fund - Class I (obsolete) (GEF)

  

    

2010

      0.00 %      195,615       $ 17.098317       $ 3,344,687         1.02 %      11.46 %   

2010

      0.10 %      45,228         13.742313         621,537         1.02 %      11.35 %   

2010

      0.20 %      2,064         13.468298         27,799         1.02 %      11.24 %   

2010

      0.25 %      14,874         13.400531         199,319         1.02 %      11.18 %   

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 %   

NVIT Worldwide Leaders Fund - Class III (obsolete) (GEF3)

  

    

2010

      0.00 %      264         14.935320         3,943         0.79 %      11.36 %   

2009

      0.00 %      1,087         13.411529         14,578         1.12 %      34.12 %      5/1/2009   

High Income Fund/VA - Class 3 (obsolete) (OVHI3)

  

    

2011

      0.00 %      477,390         2.908819         1,388,641         8.67 %      -1.88 %   

2010

      0.00 %      458,373         2.964546         1,358,868         5.86 %      14.68 %   

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 %   

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

  

    

2011

      0.00 %      68,934         4.084054         281,530         9.52 %      -2.34 %   

2010

      0.00 %      90,495         4.181802         378,432         6.48 %      14.81 %   

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 %   

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 %   

International Equity Flex I Portfolio (obsolete) (WIEP)

  

    

2009

      0.00 %      93         13.330928         1,240         0.66 %      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 %   

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 %   

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 %   

INTECH Risk-Managed Core Portfolio - Service Shares (obsolete) (JARLCS)

  

    

2008

      0.00 %      33,622         12.013653         403,923         0.75 %      -36.24 %   

Market Opportunity Fund II - Service Shares (obsolete) (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 %   

NVIT Global Financial Services Fund - Class I (obsolete) (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 %   

NVIT Health Sciences Fund - Class I (obsolete) (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 %   

NVIT Health Sciences Fund - Class III (obsolete) (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 %   

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

    Contract
Expense
Rate*		     Units     Unit
Fair
Value		     Contract
Owners’
Equity		     Investment
Income
Ratio**		     Total
Return***		     Inception
Date****		  

NVIT Leaders Fund - Class I (obsolete) (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 %   

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 %   

NVIT Technology & Communications Fund - Class I (obsolete) (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 %   

NVIT Technology & Communications Fund - Class III (obsolete) (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 %   

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

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   

Putnam VT Vista Fund - IB Shares (obsolete) (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   

U.S. Equity Flex I Portfolio (obsolete) (WSCP)

  

    

2010

     0.00 %      91,046        12.448619        1,133,397        0.26%        14.46 %   

2009

     0.00 %      100,191        10.876108        1,089,688        0.00%        8.76 %      10/2/2009   

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 %   

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

  

    

2010

     0.20 %      8,894        8.241888        73,303        1.79%        11.91 %   

2010

     0.25 %      15,449        8.222631        127,031        1.79%        11.85 %   

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 %   

2012

     Contract owners equity:          $ 4,083,042,311         

2011

     Contract owners equity:          $ 3,792,718,355         

2010

     Contract owners equity:          $ 4,097,345,784         

2009

     Contract owners equity:          $ 3,763,821,378         

2008

     Contract owners equity:          $ 3,233,903,295         

 

*

   This represents the annual contract expense rate of the variable account at the period end 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 ratio of 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 monthly average net assets (excluding months where net assets are zero). The investment income ratio for subaccounts initially funded during the period presented has not been annualized. The ratios exclude those expenses that result in direct reductions to the contract owner accounts through reductions in unit values. 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. The total returns do 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.

 

(Continued)

Table of Contents

NATIONWIDE VLI SEPARATE ACCOUNT-4 NOTES TO FINANCIAL STATEMENTS

December 31, 2012

 

 

    

Contract
Expense
Rate*

    Units    Unit
Fair
Value		    Contract
Owners’
Equity		    Investment
Income
Ratio**		    Total
Return***		    Inception
Date****

****

   This represents the date the underlying mutual fund option was initially added and funded.

 

Table of Contents

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, 2012 and 2011, and the related consolidated statements of operations, comprehensive income (loss), changes in equity, and cash flows for each of the years in the three-year period ended December 31, 2012. 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 financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Nationwide Life Insurance Company and subsidiaries as of December 31, 2012 and 2011, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2012, 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, in 2012 the Company changed its method of accounting for insurance contract acquisition costs and applied the new method retrospectively.

/s/ KPMG LLP

Columbus, Ohio

March 1, 2013

 

1

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Consolidated Statements of Operations

(in millions)

 

                                                        
     Year ended December 31,  
     2012     2011     2010  
           (As Adjusted)     (As Adjusted)  

Revenues

       

Policy charges

    $ 1,670      $ 1,506      $ 1,399   

Premiums

      635        531        484   

Net investment income

      1,825        1,844        1,825   

Net realized investment gains (losses)

      350        (1,609 )      (236 ) 

Other-than-temporary impairment losses

       

Total other-than-temporary impairment losses

      (67 )      (162 )      (394 ) 

Non-credit portion of loss recognized in other comprehensive income

      36        95        174   

Net other-than-temporary impairment losses recognized in operations

      (31 )      (67 )      (220 ) 

Other revenues

      7        3        2   
  

 

 

    

 

 

    

 

 

  

Total revenues

    $ 4,456      $ 2,208      $ 3,254   
  

 

 

    

 

 

    

 

 

  

Benefits and expenses

       

Interest credited to policyholder account values

    $ 1,038      $ 1,033      $ 1,056   

Benefits and claims

      1,227        1,062        873   

Policyholder dividends

      54        67        78   

Amortization of deferred policy acquisition costs

      575        65        299   

Interest expense

      68        70        55   

Other expenses, net of deferrals

      795        760        722   
  

 

 

    

 

 

    

 

 

  

Total benefits and expenses

    $ 3,757      $ 3,057      $ 3,083   
  

 

 

    

 

 

    

 

 

  

Income (loss) before federal income taxes and noncontrolling interests

    $ 699      $ (849 )    $ 171   

Federal income tax expense (benefit)

      99        (427 )      12   
  

 

 

    

 

 

    

 

 

  

Net income (loss)

    $ 600      $ (422 )    $ 159   

Less: Loss attributable to noncontrolling interest, net of tax

      (61 )      (56 )      (60 ) 
  

 

 

    

 

 

    

 

 

  

Net income (loss) attributable to Nationwide Life Insurance Company

    $ 661      $ (366 )    $ 219   
  

 

 

    

 

 

    

 

 

  

See accompanying notes to consolidated financial statements and Note 2 for disclosure of the change in accounting principle.

 

2

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Consolidated Statements of Comprehensive Income (Loss)

(in millions)

 

                                                        
     Year ended December 31,  
     2012     2011     2010  
           (As Adjusted)     (As Adjusted)  

Net income (loss)

    $ 600      $ (422 )    $ 159   
  

 

 

    

 

 

    

 

 

  

Other comprehensive income, net of tax

       

Changes in:

       

Net unrealized gains on available-for-sale securities

      571        317        600   

Net unrealized (losses) gains on derivatives used in cash flow hedging relationships

      (5 )      12        18   
  

 

 

    

 

 

    

 

 

  

Total other comprehensive income, net of tax

    $ 566      $ 329      $ 618   
  

 

 

    

 

 

    

 

 

  

Total comprehensive income (loss)

    $ 1,166      $ (93 )    $ 777   
  

 

 

    

 

 

    

 

 

  

Less: Comprehensive loss attributable to noncontrolling interests, net of tax

      (61 )      (56 )      (60 ) 
  

 

 

    

 

 

    

 

 

  

Total comprehensive income (loss) attributable to Nationwide Life Insurance Company

    $ 1,227      $ (37 )    $ 837   
  

 

 

    

 

 

    

 

 

  

See accompanying notes to consolidated financial statements and Note 2 for disclosure of the change in accounting principle.

 

3

Table of Contents

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,  
     2012      2011  
            (As Adjusted)  

Assets

      

Investments

      

Fixed maturity securities, available-for-sale

    $ 31,811       $ 29,201   

Mortgage loans, net of allowance

      5,827         5,748   

Policy loans

      980         1,008   

Short-term investments

      1,034         1,125   

Other investments

      639         586   
  

 

 

     

 

 

  

Total investments

    $ 40,291       $ 37,668   

Cash and cash equivalents

      62         49   

Accrued investment income

      566         560   

Deferred policy acquisition costs

      3,249         3,487   

Value of business acquired

      224         238   

Goodwill

      200         200   

Other assets

      4,138         4,590   

Separate account assets

      71,440         65,194   
  

 

 

     

 

 

  

Total assets

    $ 120,170       $ 111,986   
  

 

 

     

 

 

  

Liabilities and equity

      

Liabilities

      

Future policy benefits and claims

    $ 36,154       $ 35,252   

Short-term debt

      300         777   

Long-term debt

      1,038         991   

Other liabilities

      4,507         4,230   

Separate account liabilities

      71,440         65,194   
  

 

 

     

 

 

  

Total liabilities

    $ 113,439       $ 106,444   
  

 

 

     

 

 

  

Shareholder’s equity

      

Common stock ($1 par value; authorized - 5,000,000 shares, issued and outstanding - 3,814,779 shares)

    $ 4       $ 4   

Additional paid-in capital

      1,718         1,718   

Retained earnings

      3,410         2,789   

Accumulated other comprehensive income

      1,252         686   
  

 

 

     

 

 

  

Total shareholder’s equity

    $ 6,384       $ 5,197   

Noncontrolling interest

      347         345   
  

 

 

     

 

 

  

Total equity

    $ 6,731       $ 5,542   
  

 

 

     

 

 

  

Total liabilities and equity

    $ 120,170       $ 111,986   
  

 

 

     

 

 

  

See accompanying notes to consolidated financial statements and Note 2 for disclosure of the change in accounting principle.

 

4

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

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, 2009

    $ 4       $ 1,718       $ 3,510      $ (266 )    $ 4,966      $ 351      $ 5,317   

Cumulative effect of adoption of accounting principle

    $ —         $ —         $ (565 )    $ (4 )    $ (569 )    $ —        $ (569 ) 
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted balance as of December 31, 2009

    $ 4       $ 1,718       $ 2,945      $ (270 )    $ 4,397      $ 351      $ 4,748   

Cumulative effect of adoption of accounting principle

      —           —           (9 )      9        —          46        46   

Comprehensive income (loss):

                 

Net income (loss)

      —           —           219        —          219        (60 )      159   

Other comprehensive income

      —           —           —          618        618        —          618   
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total comprehensive income (loss)

      —           —           219        618        837        (60 )      777   

Change in noncontrolling interest

      —           —           —          —          —          18        18   
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Balance as of December 31, 2010

    $ 4       $ 1,718       $ 3,155      $ 357      $ 5,234      $ 355      $ 5,589   

Comprehensive (loss) income:

                 

Net loss

      —           —           (366 )      —          (366 )      (56 )      (422 ) 

Other comprehensive income

      —           —           —          329        329        —          329   
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total comprehensive (loss) income

      —           —           (366 )      329        (37 )      (56 )      (93 ) 

Change in noncontrolling interest

      —           —           —          —          —          46        46   
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Balance as of December 31, 2011

    $ 4       $ 1,718       $ 2,789      $ 686      $ 5,197      $ 345      $ 5,542   

Cash dividend paid

      —           —           (40 )      —          (40 )      —          (40 ) 

Comprehensive income (loss):

                 

Net income (loss)

      —           —           661        —          661        (61 )      600   

Other comprehensive income

      —           —           —          566        566        —          566   
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total comprehensive income (loss)

      —           —           661        566        1,227        (61 )      1,166   

Change in noncontrolling interest

      —           —           —          —          —          63        63   
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Balance as of December 31, 2012

    $ 4       $ 1,718       $ 3,410      $ 1,252      $ 6,384      $ 347      $ 6,731   
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

See accompanying notes to consolidated financial statements and Note 2 for disclosure of the change in accounting principle.

 

5

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Consolidated Statements of Cash Flows

(in millions)

 

                                                        
     Year ended December 31,  
     2012     2011     2010  
           (As Adjusted)     (As Adjusted)  

Cash flows from operating activities:

       

Net income (loss)

    $ 600      $ (422 )    $ 159   

Adjustments to net income (loss):

       

Net realized investment (gains) losses

      (350 )      1,609        236   

Net other-than-temporary impairment losses recognized in earnings

      31        67        220   

Interest credited to policyholder account values

      1,038        1,033        1,056   

Capitalization of deferred policy acquisition costs

      (470 )      (604 )      (501 ) 

Amortization of deferred policy acquisition costs

      575        65        299   

Amortization and depreciation

      80        48        (2 ) 

Deferred tax expense (benefit)

      243        (482 )      103   

Changes in:

       

Policy liabilities

      (548 )      (608 )      (579 ) 

Derivatives, net

      (490 )      (364 )      (254 ) 

Other, net

      (84 )      (265 )      (51 ) 
  

 

 

    

 

 

    

 

 

  

Net cash provided by operating activities

    $ 625      $ 77      $ 686   
  

 

 

    

 

 

    

 

 

  

Cash flows from investing activities:

       

Proceeds from maturity of available-for-sale securities

    $ 2,909      $ 2,705      $ 3,251   

Proceeds from sales of available-for-sale securities

      796        1,585        2,168   

Purchases of available-for-sale securities

      (5,167 )      (6,176 )      (5,910 ) 

Proceeds from repayments of mortgage loans

      1,048        1,124        996   

Issuance and purchases of mortgage loans

      (1,114 )      (751 )      (373 ) 

Net decrease (increase) in short-term investments

      98        (61 )      (44 ) 

Collateral (paid) received, net

      (208 )      359        (23 ) 

Other, net

      (12 )      104        (29 ) 
  

 

 

    

 

 

    

 

 

  

Net cash (used in) provided by investing activities

    $ (1,650 )    $ (1,111 )    $ 36   
  

 

 

    

 

 

    

 

 

  

Cash flows from financing activities:

       

Net change in short-term debt

    $ (477 )    $ 477      $ 150   

Proceeds from issuance of long-term debt

      13        13        272   

Cash dividend paid to Nationwide Financial Services, Inc.

      (40 )      —          —     

Investment and universal life insurance product deposits

      5,566        5,314        4,540   

Investment and universal life insurance product withdrawals

      (4,063 )      (5,024 )      (5,405 ) 

Other, net

      39        (34 )      9   
  

 

 

    

 

 

    

 

 

  

Net cash provided by (used in) financing activities

    $ 1,038      $ 746      $ (434 ) 
  

 

 

    

 

 

    

 

 

  

Net increase (decrease) in cash and cash equivalents

    $ 13      $ (288 )    $ 288   

Cash and cash equivalents, beginning of period

      49        337        49   
  

 

 

    

 

 

    

 

 

  

Cash and cash equivalents, end of period

    $ 62      $ 49      $ 337   
  

 

 

    

 

 

    

 

 

  

See accompanying notes to consolidated financial statements and Note 2 for disclosure of the change in accounting principle.

 

6

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements

December 31, 2012, 2011 and 2010

 

(1) Nature of Operations

Nationwide Life Insurance Company (“NLIC”, or collectively with its subsidiaries, “the Company”) was incorporated in 1929 and is an Ohio domiciled stock 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 Nationwide Financial Services, Inc. (“NFS”), a holding company formed by Nationwide Corporation (“Nationwide Corp.”), a majority-owned subsidiary of NMIC.

Wholly-owned subsidiaries of NLIC as of December 31, 2012 include Nationwide Life and Annuity Insurance Company (“NLAIC”) and Nationwide Investment Services Corporation (“NISC”). NLAIC primarily offers universal life insurance, variable universal life insurance, term 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 (“U.S.”). The Company develops and sells a diverse range of products and services including individual annuities, private and public sector group retirement plans, 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, which includes the agency distribution force of the Company’s ultimate parent company, NMIC.

As of December 31, 2012 and 2011, the Company did not have a significant concentration of financial instruments in a single investee, industry or geographic region of the U.S. Also, the Company did not have a concentration of business transactions with a particular customer, lender, distribution source, market or geographic region of the U.S. in which business is conducted that makes it overly vulnerable to a single event which could cause a severe impact to the Company’s financial position.

 

(2) Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements include the accounts of NLIC and companies in which NLIC directly or indirectly has a controlling financial interest. The consolidated financial statements include majority-owned subsidiaries and consolidated variable interest entities (“VIEs”). All significant intercompany accounts and transactions have been eliminated.

Entities in which NLIC does not have a controlling interest, but the Company has significant influence over the operating and financing decisions and also certain other investments, are reported using the equity method.

Use of Estimates

The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”). The preparation of the consolidated financial statements in accordance with GAAP requires the Company to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Significant estimates include the balance and amortization of deferred policy acquisition costs (“DAC”), investment impairment losses, valuation allowances for mortgage loans, certain investment and derivative valuations, future policy benefits and claims including the valuation of embedded derivatives resulting from living benefit guarantees on variable annuity contracts, goodwill, provision for income taxes and valuation of deferred tax assets. Actual results could differ significantly from those estimates.

 

7

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

Revenues and Benefits

Investment and universal life insurance products. Investment products are long duration contracts which are not subject to significant mortality (the relative incidence of death in a given time) or morbidity (the relative incidence of disability resulting from disease or physical impairment) risk. These include individual and group variable and fixed deferred annuities in the accumulation phase and certain annuities without life contingencies. Universal life insurance products include long duration insurance contracts that do not have fixed or guaranteed terms. These include universal life insurance, variable universal 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, surrender charges and other policy charges earned and assessed against policy account balances during the period. Policy charges are assessed on a daily or monthly basis and recognized as revenue when assessed and earned. Assessments for services provided in future periods are recorded as unearned revenue and recognized as revenue over the periods benefited. Surrender charges are recognized as revenue 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 terms, primarily consisting of whole life insurance, term life insurance and certain annuities with life contingencies. Premiums for traditional life insurance products are generally recognized as revenue when due. For certain annuities with life contingencies, any excess of gross premium over the net premium is deferred and recognized with the amount of expected future benefits. 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.

Future Policy Benefits and Claims

Investment and universal life insurance products. The Company calculates its liability for future policy benefits and claims for investment products in the accumulation phase and for universal life insurance policies as the policy accrued account balance, which represents participants’ net deposits plus investment performance and interest credited less applicable contract charges.

The Company offers certain universal life insurance, variable universal life insurance and variable annuity products with secondary guarantees, guaranteed minimum death benefits (“GMDB”), and guaranteed minimum income benefits (“GMIB”). Liabilities for these guarantees are calculated by multiplying the current benefit ratio by the cumulative assessments recorded from contract inception through the balance sheet date less the cumulative secondary guarantee benefit payments plus interest. The Company regularly evaluates its experience and assumptions and adjusts the benefit ratio as appropriate. If experience or assumption changes result in a new benefit ratio, the reserves are adjusted to reflect the changes with a related charge or credit to other benefits and claims in the period of evaluation. Determination of the expected benefit payments and assessments are based on a range of scenarios and assumptions including those related to market rates of return and volatility, contract surrenders and mortality experience. The accounting for these guarantees impacts estimated gross profits used to calculate the balance and amortization of DAC, value of business acquired (“VOBA”) and unearned revenue reserves. Refer to Note 4 for discussion of these guarantees.

Guarantees to variable annuity contractholders can include a return of no less than total deposits made on the contract less any customer withdrawals, total deposits made on the contract less any customer withdrawals plus a minimum return, or the highest contract value on a specified anniversary date minus any customer withdrawals following the contract anniversary. In addition, these guarantees can include benefits payable in the event of death, upon annuitization, upon periodic withdrawal or at specified dates during the accumulation period. Refer to Note 4 for a discussion of these guarantees.

 

8

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

The Company’s guaranteed minimum accumulation benefit (“GMAB”) and guaranteed living withdrawal benefit (“GLWB”) are living benefit guarantees which represent embedded derivatives in variable annuity contracts that are required to be separated from, and valued apart from, the host variable annuity contracts. 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, mortality, lapse rates, index volatility, wait period (the number of years the policyholder is assumed to wait prior to beginning withdrawals once eligible), efficiency of benefit utilization (the percent of the maximum permitted withdrawal that a policyholder takes) and non-performance risk (the risk that the liability will not be fulfilled and affects the value at which the liability is transferred). The assumptions used to calculate the fair value of embedded derivatives are reviewed as part of an annual comprehensive study of assumptions during the second quarter. Quarterly, consideration is given as to whether adjustments to these assumptions are necessary.

Traditional life insurance products. The process of calculating reserve amounts for traditional life insurance products involves the use of a number of assumptions, including those related to persistency, mortality, morbidity, interest rates (the rates expected to be paid or received on financial instruments) and certain other expenses.

The liability for future policy benefits and claims for traditional life insurance policies was determined using the net level premium method with weighted average interest rates of 6.6% and estimates of mortality, morbidity, investment yields and persistency that were used or being experienced at the time the policies were issued with a provision for adverse deviation.

The liability for future policy benefits for certain annuities with life contingencies was calculated using the present value of future benefits and certain expenses discounted using weighted average interest rates of 5.6% with a provision for adverse deviation.

Reinsurance ceded

The Company cedes insurance to other companies in order to limit potential losses and to diversify its exposures. Such agreements do not discharge the original insurer from its primary obligation to the policyholder in the event the reinsurer is unable to meet the obligations it has assumed. 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.

Deferred Policy Acquisition Costs

The Company has deferred certain acquisition costs that are directly related to the successful acquisition of new and renewal insurance and investment contracts. The methods and assumptions used to amortize and assess recoverability of the DAC balance depend on the type of product.

Investment and universal life insurance products. For certain investment and universal life insurance products, DAC is amortized with interest over the lives of the policies in relation to the present value of estimated gross profits, which is determined primarily from projected interest margins, policy charges and net realized investment gains and losses, less policy benefits and other expenses. The DAC asset related to investment and universal life insurance products is adjusted to reflect the impact of unrealized gains and losses on available-for-sale securities with the corresponding adjustment recorded in accumulated other comprehensive income (“AOCI”). This adjustment to DAC represents the change in amortization that would have been required as a charge or credit to operations had such unrealized amounts been realized. DAC for investments and universal life insurance products is subject to recoverability testing in the year of policy issuance and DAC for universal life insurance products is also subject to loss recognition testing at the end of each reporting period.

 

9

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

The assumptions used in the estimation of 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, renewal premiums and mortality. Quarterly, consideration is given as to whether adjustments to these assumptions are necessary. The Company uses a reversion to the mean process to determine the assumption for the future net separate account investment performance. This process 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 Company’s long-term assumption for net separate account investment performance is approximately 7% growth per year.

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.

Traditional life insurance. DAC is amortized with interest over the premium-paying period of the related policies in proportion to premium revenue recognized. These assumptions are consistent with those used in the calculation of liabilities for future policy benefits at issuance. DAC is evaluated for recoverability at the time of policy issuance, and loss recognition testing is conducted each reporting period.

Refer to Note 5 for discussion regarding assumption changes impacting DAC amortization and related balances.

Investments

Purchases and sales of securities are recorded on the trade date. Realized gains and losses on sales of available-for-sale securities are recognized in income based on the specific identification method. Interest and dividend income is recognized when earned.

Available-for-sale securities. Available-for-sale securities are reported at fair value, with unrealized holding gains and losses reported as a separate component of other comprehensive income, net of adjustments for DAC and other, future policy benefits and claims, policyholder dividend obligations and deferred federal income taxes.

To determine the fair value of securities for which market quotations are available, independent pricing services are most often utilized. For these securities, the Company obtains the pricing services’ methodologies, inputs and assumptions and classifies the investments accordingly in the fair value hierarchy. As of December 31, 2012 and 2011, 86% and 84%, respectively, of fixed maturity securities were priced using independent pricing services.

A corporate pricing matrix or an internally developed pricing model is used in valuing certain corporate debt securities. The corporate pricing matrix is developed using private spreads for corporate securities with varying weighted average lives and credit quality ratings. The weighted average life and credit quality rating of a particular fixed maturity security to be priced using the corporate pricing matrix are important inputs into the model and are used to determine a corresponding spread that is added to the appropriate U.S. Treasury yield to create an estimated market yield for that security. The estimated market yield and other relevant factors are then used to estimate the fair value of the particular security.

 

10

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

Non-binding broker quotes are also utilized to determine the fair value of certain corporate debt, mortgage-backed and other asset-backed securities when quotes are not available from independent pricing services, corporate pricing matrix or internal pricing models. These securities are classified with the lowest priority in the fair value hierarchy 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/or the transaction volume in the same or similar investments has decreased. Inputs used in the development of prices are not provided to the Company by the brokers as the brokers often do not provide the necessary transparency into their quotes and methodologies. The Company performs reviews and tests to ensure that quotes are a reasonable estimate of the investments’ fair value at least annually. Price movements of broker quotes are subject to validation and require approval from the Company’s management. Management uses its knowledge of the investment and current market conditions to determine if the price is indicative of the investment’s fair value.

When the collectability of contractual interest payments on fixed maturity securities is considered doubtful, such securities are placed in non-accrual status and any accrued interest is excluded from investment income. These securities are not restored to accrual status until the Company determines that payment of future principal and interest is probable.

For investments in certain residential and commercial mortgage-backed securities, the Company recognizes income and amortizes discounts and premiums using the effective-yield method based on prepayment assumptions and the estimated economic life of the securities. When actual prepayments differ significantly from estimated 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 in the period the estimates are revised. All other investment income is recorded using the effective-yield method without anticipating the impact of prepayments.

The Company periodically reviews its available-for-sale securities to determine if any decline in fair value to below amortized cost is other-than-temporary. Factors considered in determining whether a decline is other-than-temporary include the length of time a security has been in an unrealized loss position, the severity of the unrealized loss, reasons for the decline in value and expectations for the amount and timing of a recovery in fair value.

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, the Company’s intent to sell the security and whether it is more likely than not the Company will be required to sell the security before the recovery of its amortized cost basis. The Company evaluates U.S. Treasury securities and obligations of U.S. Government corporations and agencies, obligations of states and political subdivisions, and debt securities issued by foreign governments for other-than-temporary impairment by examining similar characteristics.

When evaluating whether residential mortgage-backed securities, commercial mortgage-backed securities, collateralized debt obligations and other asset-backed securities are other-than-temporarily impaired, the Company examines characteristics of the underlying collateral, such as delinquency and default rates, the quality of the underlying borrower, the type of collateral in the pool, the vintage year of the collateral, subordination levels within the structure of the collateral pool, 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.

The Company evaluates its intent to sell on an individual security basis. 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 present value of the cash flows. To the extent that the present value of cash flows generated by a debt security is less than the amortized cost, an other-than-temporary impairment is recognized through earnings.

Other-than-temporary impairment losses on securities (where the Company does not intend to sell the security and it is not more likely than not it will be required to sell the security prior to recovery of the security’s amortized cost basis) are bifurcated with the credit portion of the impairment loss being recognized in earnings and the non-credit loss portion of the impairment and any subsequent changes in the fair value of those debt securities being recognized in other comprehensive income, net of applicable taxes and other offsets.

 

11

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

It is reasonably possible that further declines in 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.

Mortgage loans, net of allowance. The Company holds commercial mortgage loans that are collateralized by properties throughout the U.S. These mortgage loans are further segregated into the following classes based on the unique risk profiles of the underlying property types: office, warehouse, retail, apartment and other. Mortgage loans are carried at amortized cost less a valuation allowance.

As part of the underwriting process, specific guidelines are followed to ensure the initial quality of a new mortgage loan. Third-party appraisals are generally obtained to support loaned amounts as the loans are usually collateral dependent.

The collectability and value of a mortgage loan are based on the ability of the borrower to repay and/or the value of the underlying collateral. Many of the Company’s mortgage loans are structured with balloon payment maturities, exposing the Company to risks associated with the borrowers’ ability to make the balloon payment or refinance the property.

The Company actively monitors the credit quality of its mortgage loans to support the development of the valuation allowance. This monitoring process includes quantitative analyses which facilitate the identification of deteriorating loans, and qualitative analyses, which consider other factors relevant to the borrowers’ ability to repay. Loans with deteriorating credit fundamentals are identified through special surveillance procedures and are evaluated based on the severity of their deterioration and management’s judgment as to the likelihood of loss.

Mortgage loans 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 the difference between the carrying value and either the fair value of the collateral or the present value of expected future cash flows discounted at the loan’s market interest rate. Loan-specific impairment reserve charges are recorded in other-than-temporary impairment losses. In the event a loan-specific impairment reserve charge is reversed, the recovery is recorded in other-than-temporary impairment losses.

In addition to the loan-specific reserves, the Company maintains a non-specific reserve based on loan surveillance categories and property type classes, which reflects management’s best estimate of probable credit losses inherent in the portfolio as of the balance sheet date but not yet attributable to specific loans. Management’s periodic evaluation of the adequacy of the non-specific reserve is based on past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect a borrower’s ability to repay, the estimated value of the underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. Non-specific reserve charges are recorded in net realized investment gains and losses.

Interest income on performing mortgage loans is recognized over the life of the loan using the effective-yield method. Loans in default or in the process of foreclosure are placed on non-accrual status. Interest received on non-accrual status mortgage loans is included in net investment income in the period received. Loans are considered delinquent when contractual payments are 90 days past due.

Policy loans. Policy loans, which are collateralized by the related insurance policy, are carried at the outstanding principal balance and do not exceed the net cash surrender value of the policy. As such, no valuation allowance for policy loans is required.

Short-term investments. Short-term investments consist of highly liquid mutual funds and government agency discount notes with maturities of twelve months or less at acquisition. The Company and various affiliates entered into agreements with Nationwide Cash Management Company (“NCMC”), an affiliate, under which NCMC acts as a common agent in handling the purchase and sale of short-term securities for the respective accounts of the participants. Amounts on deposit with NCMC for the benefit of the Company are included in short-term investments on the consolidated balance sheets. The Company carries short-term investments at fair value.

 

12

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

Other investments. Other investments consist primarily of equity method investments in joint ventures and partnerships, customer bank loans, equity securities, capital stock with the Federal Home Loan Bank of Cincinnati (“FHLB”) and trading securities.

Securities lending. The Company has entered into securities lending agreements with a custodial bank whereby eligible securities are loaned to third parties, primarily major brokerage firms. These transactions are used to generate additional income on the securities portfolio. The Company is entitled to receive from the borrower any payments of interest and dividends received on loaned securities during the loan term. The agreements require a minimum of 102% of the fair value of loaned securities to be held as collateral. Cash collateral is invested by the custodial bank in investment-grade securities, which are included in the total investments of the Company. Periodically, the Company may receive non-cash collateral, which would be recorded off-balance sheet. The Company recognizes loaned securities in either available-for-sale or short-term investments. A securities lending payable is recorded in other liabilities for the amount of cash collateral received. Net income received from securities lending activities is included in net investment income.

Variable interest entities. In the normal course of business, the Company has relationships with VIEs. If the Company determines that it has a variable interest and is the primary beneficiary, it consolidates the VIE. This determination is based on a review of the entity’s contract and other deal related information, such as the entity’s equity investment at risk, decision-making abilities, obligations to absorb economic risks and right to receive economic rewards of the entity. The Company is the primary beneficiary if the Company has the power to direct the activities of the VIE that most significantly impact the economic performance of the entity and the obligation to absorb losses or receive benefits from the entity that could be potentially significant to the VIE.

The majority of the VIEs consolidated by the Company are related to guarantees provided to limited partners related to the amount of tax credits that will be generated by the Low-Income-Housing Tax Credit Funds (“Tax Credit Funds”). The results of operations and financial position of each VIE for which the Company is the primary beneficiary as well as the corresponding noncontrolling interests are recorded in the accompanying consolidated financial statements. Ownership interests held by unrelated third parties in the consolidated VIEs are presented as noncontrolling interests in the equity section of the consolidated financial statements. Income (loss) attributable to noncontrolling interests is excluded from the net income (loss) attributable to NLIC on the consolidated statements of operations.

The Company invests in fixed maturity securities that could qualify as VIEs, including corporate securities, mortgage-backed securities and asset-backed securities. The Company is not the primary beneficiary of these securities as the Company does not have the power to direct the activities that most significantly impact the entities’ performance. The Company’s maximum exposure to loss is limited to the carrying values of these securities. There are no liquidity arrangements, guarantees or other commitments by third parties that affect the fair value of the Company’s interest in these assets. Refer to Note 6 for additional disclosures related to these investments.

The Company is not required, and does not intend, to provide financial or other support outside contractual requirements to any VIE.

Derivative Instruments

The Company uses derivative instruments to manage exposures and mitigate risks associated with interest rates, equity markets, foreign currency and credit. These derivative instruments primarily include interest rate swaps, futures contracts and options. Certain features embedded in the Company’s investments, indexed products and certain variable annuity contracts require derivative accounting. Refer to the prior discussion of Future Policy Benefits and Claims for a description of the valuation applicable to these products. All derivative instruments are carried at fair value and are reflected as assets or liabilities in the consolidated balance sheets.

 

13

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

Fair value of derivative instruments is determined using various valuation techniques relying predominately on observable market inputs. These inputs include interest rate swap curves, credit spreads, interest rates, counterparty credit risk, equity volatility and equity index levels. In cases where observable inputs are not available, the Company will utilize non-binding broker quotes to determine fair value. These instruments are classified with the lowest priority in the fair value hierarchy. Price movements of broker quotes are subject to validation and require approval from the Company’s management. Management uses models to internally value the instruments for comparison to the values received through broker quotes.

For derivatives that are not designated for hedge accounting, the gain or loss on the derivative is primarily recognized in net realized investment gains and losses.

For derivative instruments that are designated and qualify for fair value hedge accounting, the gain or loss on the derivative instrument as well as the hedged item, to the extent of the risk being hedged, are recognized in net realized investment gains and losses.

For derivative instruments that are designated and qualify for cash flow hedge accounting, 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 period or periods that the hedged transaction impacts earnings. The ineffective portion of the derivative’s change in value, if any, along with any of the derivative’s change in value that is excluded from the assessment of hedge effectiveness, are recorded in net realized investment gains and losses.

The Company’s derivative transaction counterparties are generally financial institutions. To reduce the credit risk associated with open contracts, the Company enters into master netting agreements which permit the closeout and netting of transactions with the same counterparty upon the 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. The Company accepts collateral in the form of cash and marketable securities.

The Company invests in certain structured securities that contain embedded credit derivatives. These securities are referred to as synthetic collateralized debt obligations and have maturity dates ranging from one to ten years. The credit derivatives embedded in these securities have not been separated from their host contracts for separate fair value reporting; rather, the Company has elected to carry the entire security at fair value with any changes in fair value included in net realized investment gains and losses.

Fair Value Measurements

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. Fair value measurements are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources while unobservable inputs reflect the Company’s view of market assumptions in the absence of observable market information. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. In determining fair value, the Company uses various methods including market, income and cost approaches.

The Company categorizes its fair value measurements 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.

 

14

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

The Company categorizes assets and liabilities carried 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 and mutual funds where the value per share (unit) is determined and published daily and is the basis for current transactions.

 

  •  

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. Primary inputs to this valuation technique may include comparative trades, bid/asks, interest rate movements, U.S. Treasury rates, London Interbank Offered Rate (“LIBOR”), prime rates, cash flows, maturity dates, call ability, estimated prepayments, and/or underlying collateral values.

 

  •  

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. Primary inputs to this valuation technique include broker quotes and comparative trades.

The Company reviews its fair value hierarchy classifications for assets and liabilities quarterly. Changes in observability of significant valuation inputs identified during these reviews may trigger reclassifications. Reclassifications are reported as transfers at the beginning of the period in which the change occurs.

Federal Income Taxes

The Company recognizes deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, net operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income or loss 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 recorded to reduce a deferred tax asset to the amount expected to be realized. Interest expense and any associated penalties which relate to tax years still subject to review by the Internal Revenue Service (“IRS”) are recorded as income tax expense.

The Company provides for federal income taxes based on amounts the Company believes it will ultimately 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 change the provision for federal income taxes recorded in the consolidated financial statements, which could be significant.

Tax 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 with taxing authorities 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.

NLIC files a separate consolidated federal income tax return, with its subsidiaries, and is eligible to join the NMIC consolidated tax return group in 2014.

Cash and Cash Equivalents

Cash and cash equivalents include highly liquid investments with original maturities of less than three months.

 

15

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

Value of Business Acquired

As a result of the acquisition of Provident Mutual Life Insurance Company (“Provident”) in 2002 and the application of purchase accounting, the Company reports an intangible asset representing the 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 Provident 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.

VOBA represents the actuarially-determined value of future cash flows for acquired insurance contracts. Expected future cash flows are determined based on projected future policy and contract charges, premiums, mortality and morbidity, separate account performance, surrenders, changes in reserves, operating expenses, investment income and other factors. Amortization of VOBA occurs with interest over the anticipated lives of the major lines of business to which it relates in relation to estimated gross profits, gross margins or premiums, as appropriate. VOBA is adjusted to reflect the impact of unrealized gains and losses on available-for-sale securities with the corresponding adjustment recorded in AOCI. This adjustment to VOBA represents the change in amortization that would have been required as a charge or credit to operations had such unrealized amounts been realized. In the event actual experience differs or assumptions are revised, an increase or decrease in VOBA amortization expense is recorded, which could be significant.

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. Goodwill of a reporting unit 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. If a reporting unit’s fair value is less than its carrying value, the Company will perform an impairment evaluation. This evaluation utilizes an income approach to develop the implied fair value. An impairment is recognized on a reporting unit for the amount that the carrying value of its goodwill exceeds the implied fair value of its goodwill.

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 2012 annual impairment test and determined that no impairment was required.

Closed Block

In connection with the sponsored demutualization of Provident prior to its acquisition by the Company, 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 and Ohio Department of Insurance (“ODI”). The closed block will remain in effect as long as any policy in the closed block is in force.

 

16

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

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.

If actual cumulative earnings exceed expected cumulative earnings, the expected earnings are recognized in income. This is because the excess actual 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 and 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. See Note 10 for further disclosure.

Separate Accounts

Separate account assets and liabilities represent contractholders’ funds that have been legally segregated into accounts with specific investment objectives. In the separate account, investment income and gains and losses on investments accrue directly to, and investment risk is borne by, the contractholder. Separate account assets are primarily comprised of public, privately registered and non-registered mutual funds. Separate account assets are recorded at fair value based on the methodology that would be applicable to the underlying assets. The value of separate account liabilities is set to equal the fair value for separate account assets.

Participating Business

Participating business, which refers to policies that participate in profits through policyholder dividends, represented approximately 5% of the Company’s life insurance in force in 2012 (5% in 2011 and 2010), 40% of the number of life insurance policies in force in 2012 (42% in 2011 and 45% in 2010). The provision for policyholder dividends was based on then current dividend scales and has been included in future policy benefits and claims in the consolidated balance sheets.

Change in Accounting Principle

In October 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2010-26, which amends FASB Accounting Standards Codification (“ASC”) 944, Financial Services – Insurance. The amended guidance modifies the definition of the types of costs incurred by insurance entities that can be capitalized in the acquisition of new and renewal insurance and investment contracts. Under the amended guidance, acquisition costs are to include only those costs that are directly related to the successful acquisition of new or renewal insurance and investment contracts. The methods and assumptions used to amortize and assess recoverability of DAC were not impacted as a result of adopting this guidance. The Company adopted this guidance retrospectively, effective January 1, 2012, which resulted in a reduction to total equity of $569 million, net of taxes, as of December 31, 2009.

 

17

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

The Company adjusted the presentation of its consolidated financial statements and accompanying notes for all periods presented, to reflect the retrospective adoption of this change in accounting principle.

The following tables summarize the impact of the retrospective change in accounting principle on the consolidated statements of operations for the periods indicated:

 

     Year ended December 31, 2011  

(in millions)

    As Originally Reported     As Adjusted     Effect of Change  

Amortization of deferred policy acquisition costs

    $ 76      $ 65      $ 11   

Other expenses, net of deferrals

    $ 620      $ 760      $ (140 ) 

Federal income tax benefit

    $ (382 )    $ (427 )    $ 45   

Net loss attributable to Nationwide Life Insurance Company

    $ (282 )    $ (366 )    $ (84 ) 

 

     Year ended December 31, 2010  

(in millions)

    As Originally Reported      As Adjusted      Effect of Change  

Amortization of deferred policy acquisition costs

    $ 396       $ 299       $ 97   

Other expenses, net of deferrals

    $ 592       $ 722       $ (130 ) 

Federal income tax expense

    $ 24       $ 12       $ 12   

Net income attributable to Nationwide Life Insurance Company

    $ 240       $ 219       $ (21 ) 

The following table summarizes the impact of the retrospective change in accounting principle on the consolidated balance sheet as of the date indicated:

 

     December 31, 2011  

(in millions)

    As Originally Reported      As Adjusted      Effect of Change  

Deferred policy acquisition costs

    $ 4,425       $ 3,487       $ (938 ) 

Other assets1

    $ 4,348       $ 4,590       $ 242   

Other liabilities1

    $ 4,316       $ 4,230       $ (86 ) 

Retained earnings

    $ 3,459       $ 2,789       $ (670 ) 

Accumulated other comprehensive income2

    $ 626       $ 686       $ 60   

 

1 

Change relates to the Company’s net deferred tax liability position moving to a net deferred tax asset on the consolidated balance sheets.

2 

Represents the adjustments to DAC related to unrealized gains and losses on securities available-for-sale.

Subsequent Events

The Company evaluated subsequent events through March 1, 2013, the date the consolidated financial statements were issued.

 

(3) Recently Issued Accounting Standards

Adopted Accounting Standards

On January 1, 2012, the Company adopted ASU 2011-04, which amends existing guidance in ASC 820, Fair Value Measurements and Disclosures. The guidance in this ASU clarifies existing fair value measurement guidance and expands disclosures primarily related to Level 3 fair value measurements. The adoption of this guidance resulted in increased disclosures only and had no impact on the Company’s consolidated financial statements.

 

18

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

On January 1, 2012, the Company adopted ASU 2011-05, which amends existing guidance in ASC 220, Comprehensive Income. The amended guidance requires reporting entities to present net income and other comprehensive income in either a single continuous statement or in two separate, but consecutive, statements of net income and other comprehensive income. The Company elected two separate but consecutive statements of operations and comprehensive income and adopted ASU 2011-05 retrospectively.

On December 31, 2010, the Company adopted new disclosure requirements regarding the credit quality of its financing receivables (e.g., commercial mortgage loans) and the related allowance for credit losses within ASU 2010-20, which amends FASB ASC 310, Receivables. The adoption of this guidance resulted in increased disclosures only and had no impact on the Company’s consolidated financial statements.

On January 1, 2010, the Company adopted ASU 2010-06, except for the new disclosure providing disaggregated information related to the activity in Level 3 fair value measurements, which the Company adopted effective January 1, 2011.

On July 1, 2010, the Company adopted ASU 2010-11, which clarifies the guidance and application of the scope exception for embedded credit derivatives contained within FASB ASC 815-15, Embedded Derivatives. This scope exception allows for embedded credit derivative features related only to the transfer of credit risk in the form of subordination of one financial instrument to another to not be subject to potential bifurcation and separate accounting. The guidance also allowed companies to irrevocably elect to apply the fair value option to any investment in a beneficial interest in securitized financial assets. The Company recorded an impact of adoption of $9 million, net of taxes, as a decrease to retained earnings with a corresponding increase to accumulated other comprehensive income on the consolidated statements of equity.

On January 1, 2010, the Company adopted guidance under FASB ASC 810, Consolidation, resulting in an increase to noncontrolling interest of $46 million on the consolidated statements of equity. This guidance changes the consolidation guidance applicable to a 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.

Pending Accounting Standards

In December 2011, the FASB issued ASU 2011-11, which expands the disclosure requirements within ASC 210-10, Balance Sheet – Offsetting. The new disclosures require improved information about certain financial instruments and derivatives that are either offset in accordance with GAAP or subject to enforceable master offsetting arrangements irrespective of GAAP. In January 2013, the FASB issued ASU 2013-01, which clarifies the scope of these disclosures. The Company will adopt both ASUs retrospectively for interim and annual periods beginning January 1, 2013. The adoption of this guidance will result in increased disclosures only and will have no impact on the Company’s consolidated financial statements.

In February 2013, the FASB issued ASU 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, which amends FASB ASC 220, Comprehensive Income. The amended guidance requires entities to provide information about the amounts reclassified out of accumulated other comprehensive income by significant component. For significant amounts reclassified into net income in their entirety in the same reporting period, the amended guidance also requires entities to present or disclose the effect of these reclassifications on line items of net income. The amendments are effective prospectively for the Company’s annual and interim periods beginning January 1, 2013. The adoption of this guidance will result in increased disclosure and may impact the presentation of the Company’s consolidated financial statements.

 

19

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

(4) Certain Long-Duration Contracts

Variable Annuity Contracts

The Company issues variable annuity contracts through its separate accounts. Contractholder assets are invested in general and separate account investment options as directed by the contractholder. The Company also provides various forms of guarantees to benefit the related contractholders. The Company provides five primary guarantee types: (1) GMDB; (2) GMIB; (3) GMAB; (4) GLWB; and (5) a hybrid guarantee with GMAB and GLWB.

The GMDB, offered on every variable annuity contract, 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 by having the death benefit paid into the contract and having a second death benefit paid upon the survivor’s death.

The GMAB, which was offered in the Company’s Capital Preservation Plus product, is a living benefit that provides the contractholder with a guaranteed return of deposits, 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 guarantee 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 Lifetime Income product, 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 feature driven by account performance and policy duration. Lifetime Income is the only living benefit guarantee offered on new variable annuity contract sales.

The GMIB, which was offered with several variable annuity contracts, is a living benefit that provides the contractholder with a guaranteed annuitization stream of income.

The following table summarizes information regarding variable annuity contracts with guarantees invested in general and separate accounts, as of the dates indicated (a contract may contain multiple guarantees):

 

     December 31, 2012      December 31, 2011  

(in millions)

    General
account
value		      Separate
account
value		      Net
amount
at risk1		      Average
age2		      General
account
value		      Separate
account
value		      Net
amount
at risk1		      Average
age2		  

GMDB:

                        

Return of net deposits

    $ 836       $ 14,963       $ 24         64       $ 999       $ 11,749       $ 175         63   

Minimum return or anniversary contract value

      2,048         29,787         561         68         2,233         28,754         1,882         67   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total GMDB

    $ 2,884       $ 44,750       $ 585         66       $ 3,232       $ 40,503       $ 2,057         66   

GMAB Return of net deposits

    $ 165       $ 3,230       $ 12         64       $ 342       $ 4,138       $ 149         65   

GLWB Minimum return or anniversary contract value

    $ 128       $ 22,031       $ 613         65       $ 380       $ 17,533       $ 573         65   

GMIB Minimum return or anniversary contract value

    $ 49       $ 514       $ 1         65       $ 50       $ 556       $ 1         65   

 

1 

Net amount at risk is calculated on a policy-level basis and equals the respective guaranteed benefit less the account value (or zero if the account value exceeds the guaranteed benefit).

2 

Represents the weighted average attained age of contractholders.

 

20

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

The following table summarizes the reserve balances for variable annuity contracts with guarantees, as of the dates indicated:

 

(in millions)

    December 31,
2012		      December 31,
2011		  

GLWB

    $ 600       $ 1,624   

GMAB

    $ 57       $ 218   

GMDB

    $ 65       $ 80   

GMIB

    $ 2       $ 3   

Paid claims for GMDBs were $30 million and $40 million for the years ended December 31, 2012 and 2011, respectively.

Paid claims for GLWBs, GMABs and GMIBs were immaterial for the years ended December 31, 2012 and 2011.

The following table summarizes account balances of deferred variable annuity contracts with guarantees invested in separate accounts, as of the dates indicated:

 

(in millions)

    December 31,
2012		      December 31,
2011		  

Mutual funds:

      

Bond

    $ 5,634       $ 5,117   

Domestic equity

      35,277         31,618   

International equity

      2,614         2,447   
  

 

 

     

 

 

  

Total mutual funds

    $ 43,525       $ 39,182   

Money market funds

      1,225         1,321   
  

 

 

     

 

 

  

Total1

    $ 44,750       $ 40,503   
  

 

 

     

 

 

  

 

1 

Excludes $26.7 billion and $24.7 billion as of December 31, 2012 and 2011, respectively, of separate account assets not related to deferred variable annuity contracts with guarantees and are primarily attributable to retirement plan, variable universal life and COLI products.

The Company did not transfer any assets from the general account to the separate account to cover guarantees for any of its variable annuity contracts during the years ended December 31, 2012 and 2011.

Universal and Variable Universal Life Insurance Contracts

The Company offers certain universal life and variable universal life insurance products with secondary guarantees. This no -lapse guarantee provides that a policy will not lapse so long as the policyholder makes minimum premium payments. The reserve balances on these guarantees were $216 million and $162 million as of December 31, 2012 and 2011, respectively. Paid claims on contracts maintained in force by these guarantees were immaterial for the years ended December 31, 2012 and 2011.

 

21

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

The following table summarizes information regarding universal and variable universal life insurance contracts with no-lapse guarantees invested in general and separate accounts, as of the dates indicated:

 

(in millions)

    General account
value		      Separate account
value		      Adjusted insurance
in force1		      Average age2  

December 31, 2012

    $ 992       $ 328       $ 12,321         56   

December 31, 2011

    $ 843       $ 311       $ 9,777         58   

 

1 

The adjusted insurance in force is calculated on a policy-level basis and equals the respective guaranteed death benefit less the account value (or zero if the account value exceeds the guaranteed benefit).

2 

Represents the weighted average attained age of contractholders.

 

(5) Deferred Policy Acquisition Costs and Value of Business Acquired

Deferred Policy Acquisition Costs

The following table summarizes changes in the DAC balance, for the years ended:

 

(in millions)

    December 31,
2012		     December  31,
20111		     December  31,
20101		  

Balance at beginning of year

    $ 3,487      $ 3,125      $ 3,107   

Capitalization of DAC

      470        604        501   

Amortization of DAC, excluding unlocks

      (525 )      (200 )      (290 ) 

Amortization of DAC related to unlocks

      (50 )      135        (9 ) 

Adjustments to DAC related to unrealized gains and losses on securities available-for-sale

      (133 )      (177 )      (184 ) 
  

 

 

    

 

 

    

 

 

  

Balance at end of year

    $ 3,249      $ 3,487      $ 3,125   
  

 

 

    

 

 

    

 

 

  

 

1 

The balances reflect a change in accounting principle, as described in Note 2.

During 2012, the Company incurred additional DAC amortization of $50 million related to the financial services operations as a result of the annual comprehensive review of model assumptions, as well as a deviation from equity market performance as compared to assumed net separate account returns. The updated assumptions were primarily related to actual gross profits and the in force block of business deviating from expectations, renewal premiums, general account margins and lapses.

During 2011, the Company recognized a reduction in DAC amortization of $135 million related to the financial services operations as a result of the annual comprehensive review of model assumptions. The updated assumptions related to interest spread, mortality, maintenance expense and market performance assumptions. The 2011 reduction in DAC amortization reflects the impact of the retrospective change in accounting principle described in Note 2.

 

22

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

Value of Business Acquired

The following table summarizes changes in the VOBA balance for the years ended:

 

(in millions)

    December 31,
2012		     December 31,
2011		     December 31,
2010		  

Balance at beginning of year

    $ 238      $ 259      $ 277   

Amortization of VOBA, excluding unlocks

      (22 )      (29 )      (33 ) 

Amortization of VOBA related to unlocks

      8        16        13   

Net realized gains on investments

      2        2        1   

Adjustments to VOBA related to unrealized gains and losses on securities available-for-sale

      (2 )      (10 )      1   
  

 

 

    

 

 

    

 

 

  

Balance at end of year

    $ 224      $ 238      $ 259   
  

 

 

    

 

 

    

 

 

  

Interest on the unamortized VOBA balance (at interest rates ranging from 4.50% to 7.56%) is included in amortization and was $16 million, $17 million and $18 million during the years ended December 31, 2012, 2011 and 2010, respectively. Additionally, the VOBA gross carrying amount was $583 million and $585 million and accumulated amortization was $359 million and $347 million as of December 31, 2012 and 2011, respectively. The initial useful life related to the VOBA balances is 28 years.

Based on current assumptions, which are subject to change, the following table summarizes estimated amortization of VOBA for the next five years ended December 31:

 

(in millions)

    VOBA  

2013

    $ 20   

2014

    $ 16   

2015

    $ 15   

2016

    $ 14   

2017

    $ 13   

 

23

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

(6) Investments

Available-for-Sale Securities

The following table summarizes amortized cost, gross unrealized gains and losses and fair value of available-for-sale securities, as of the dates indicated:

 

(in millions)

    Amortized
cost		      Gross
unrealized
gains		      Gross
unrealized
losses		      Fair
value		  

December 31, 2012

            

Fixed maturity securities:

            

U.S. Treasury securities and obligations of U.S. Government corporations and agencies

    $ 476       $ 121       $ —         $ 597   

Obligations of states and political subdivisions

      1,722         281         1         2,002   

Debt securities issued by foreign governments

      98         20         —           118   

Corporate public securities

      16,152         1,891         33         18,010   

Corporate private securities

      4,216         392         19         4,589   

Residential mortgage-backed securities

      4,506         267         106         4,667   

Commercial mortgage-backed securities

      1,219         133         15         1,337   

Collateralized debt obligations

      393         28         86         335   

Other asset-backed securities

      140         17         1         156   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total fixed maturity securities

    $ 28,922       $ 3,150       $ 261       $ 31,811   

Equity securities

      15         5         —           20   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total available-for-sale securities

    $ 28,937       $ 3,155       $ 261       $ 31,831   
  

 

 

     

 

 

     

 

 

     

 

 

  

December 31, 2011

            

Fixed maturity securities:

            

U.S. Treasury securities and obligations of U.S. Government corporations and agencies

    $ 506       $ 124       $ —         $ 630   

Obligations of states and political subdivisions

      1,501         177         —           1,678   

Debt securities issued by foreign governments

      102         18         —           120   

Corporate public securities

      14,132         1,336         111         15,357   

Corporate private securities

      3,998         327         27         4,298   

Residential mortgage-backed securities

      5,280         255         311         5,224   

Commercial mortgage-backed securities

      1,347         64         32         1,379   

Collateralized debt obligations

      410         17         125         302   

Other asset-backed securities

      201         16         4         213   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total fixed maturity securities

    $ 27,477       $ 2,334       $ 610       $ 29,201   

Equity securities

      19         2         1         20   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total available-for-sale securities

    $ 27,496       $ 2,336       $ 611       $ 29,221   
  

 

 

     

 

 

     

 

 

     

 

 

  

The fair value of the Company’s investments may fluctuate significantly in response to changes in interest rates, investment quality ratings and credit spreads. The Company has the ability and intent to hold equity securities until recovery. The Company does not have the intent to sell, nor is it more likely than not it will be required to sell debt securities in an unrealized loss position. Investment losses, however, may be realized to the extent liquidity needs require the disposition of securities in unfavorable interest rate, liquidity or credit spread environments.

 

24

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

The following table summarizes the amortized cost and fair value of fixed maturity securities, by maturity, as of December 31, 2012. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without early redemption penalties.

 

(in millions)

    Amortized
cost		      Fair
value		  

Fixed maturity securities:

      

Due in one year or less

    $ 1,394       $ 1,433   

Due after one year through five years

      7,316         7,993   

Due after five years through ten years

      8,295         9,283   

Due after ten years

      5,659         6,607   
  

 

 

     

 

 

  

Subtotal

    $ 22,664       $ 25,316   

Residential mortgage-backed securities

      4,506         4,667   

Commercial mortgage-backed securities

      1,219         1,337   

Collateralized debt obligations

      393         335   

Other asset-backed securities

      140         156   
  

 

 

     

 

 

  

Total fixed maturity securities

    $ 28,922       $ 31,811   
  

 

 

     

 

 

  

The following table summarizes components of net unrealized gains and losses, as of the dates indicated:

 

(in millions)

    December 31,
2012		     December 31,
2011		  

Net unrealized gains on available-for-sale securities, before adjustments, taxes and fair value hedging

    $ 2,894      $ 1,725   

Change in fair value attributable to fixed maturity securities designated in fair value hedging relationships

      (4 )      (8 ) 
  

 

 

    

 

 

  

Net unrealized gains on available-for-sale securities, before adjustments and taxes

    $ 2,890      $ 1,717   

Adjustment to DAC and VOBA1

      (482 )      (347 ) 

Adjustment to future policy benefits and claims

      (295 )      (183 ) 

Adjustment to policyholder dividend obligation

      (177 )      (132 ) 

Deferred federal income tax expense

      (672 )      (362 ) 
  

 

 

    

 

 

  

Net unrealized gains on available-for-sale securities

    $ 1,264      $ 693   
  

 

 

    

 

 

  

 

1 

The 2011 balance reflects a change in accounting principle, as described in Note 2.

 

25

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

The following table summarizes the change in net unrealized gains and losses reported in accumulated other comprehensive income, for the years ended:

 

(in millions)

    December 31,
2012		     December 31,
2011		  

Balance at beginning of year

    $ 693      $ 376   

Unrealized gains and losses arising during the period:

     

Net unrealized gains on available-for-sale securities before adjustments

      990        896   

Non-credit impairments and subsequent changes in fair value of those debt securities1

      178        (11 ) 

Net adjustments to DAC and VOBA2

      (135 )      (187 ) 

Net adjustment to future policy benefits and claims

      (112 )      (210 ) 

Net adjustment to policyholder dividend obligation

      (45 )      (42 ) 

Related federal income tax expense

      (308 )      (147 ) 
  

 

 

    

 

 

  

Change in unrealized gains on available-for-sale securities

    $ 568      $ 299   
  

 

 

    

 

 

  

Reclassification adjustment for net losses realized on available-for-sale securities, net of tax benefit ($2 and $10 as of December 31, 2012 and 2011, respectively)

      (3 )      (18 ) 
  

 

 

    

 

 

  

Change in net unrealized gains on available-for-sale securities

    $ 571      $ 317   
  

 

 

    

 

 

  

Balance at end of year

    $ 1,264      $ 693   
  

 

 

    

 

 

  

 

1 

The non-credit portion of other-than-temporary impairments was $(48) million and $(226) million as of December 31, 2012 and 2011, respectively.

2 

The 2011 balance reflects a change in accounting principle, as described in Note 2.

The following table summarizes available-for-sale securities, by asset class, in a gross unrealized loss position based on the amount of time each type of security has been in an unrealized loss position, as well as the related fair value and number of securities, as of the dates indicated:

 

     Less than or equal
to one year		      More
than one  year		      Total  

(in millions, except number of securities)

    Fair
value		      Gross
unrealized
losses		      Number
of
securities		      Fair
value		      Gross
unrealized
losses		      Number
of
securities		      Fair
value		      Gross
unrealized
losses		      Number
of
securities		  

December 31, 2012

                           

Fixed maturity securities:

                           

Corporate public securities

    $ 710       $ 11         68       $ 150       $ 22         10       $ 860       $ 33         78   

Residential mortgage-backed securities

      89         2         12         1,029         104         190         1,118         106         202   

Collateralized debt obligations

      27         1         5         151         85         36         178         86         41   

Other asset-backed securities

      326         4         23         296         32         46         622         36         69   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ 1,152       $ 18         108       $ 1,626       $ 243         282       $ 2,778       $ 261         390   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

December 31, 2011

                           

Fixed maturity securities:

                           

Corporate public securities

    $ 1,460       $ 62         150       $ 309       $ 49         54       $ 1,769       $ 111         204   

Residential mortgage-backed securities

      278         9         52         1,339         302         240         1,617         311         292   

Collateralized debt obligations

      78         2         10         137         123         39         215         125         49   

Other asset-backed securities

      501         15         54         357         48         53         858         63         107   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total fixed maturity securities

    $ 2,317       $ 88         266       $ 2,142       $ 522         386       $ 4,459       $ 610         652   

Equity securities

      7         1         10         —           —           31         7         1         41   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ 2,324       $ 89         276       $ 2,142       $ 522         417       $ 4,466       $ 611         693   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

 

26

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

The following table summarizes gross unrealized losses based on the ratio of fair value to amortized cost, for available-for-sale securities in an unrealized loss position, as of the dates indicated:

 

                                                                                                                 
     December 31, 2012      December 31, 2011  

(in millions)

    Less
than or
equal to
one year		      More
than
one
year		      Total      Less
than or
equal to
one year		      More
than
one
year		      Total  

99.9% - 80.0%

    $ 18       $ 85       $ 103       $ 83       $ 158       $ 241   

Less than 80.0%

                  

Residential mortgage-backed securities

      —           50         50         —           191         191   

Collateralized debt obligations

      —           72         72         1         121         122   

Other

      —           36         36         5         52         57   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ 18       $ 243       $ 261       $ 89       $ 522       $ 611   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Residential mortgage-backed securities are assessed for impairment using default estimates based on loan level data, where available. Where loan level data is not available, a proxy based on collateral characteristics is used. The impairment assessment considers loss severity as a function of multiple factors, including unpaid balance, interest rate, mortgage insurance ratios, assessed property value at origination, change in property value, loan-to-value (“LTV”) ratio at origination and prepayment speeds. Cash flows generated by the collateral are then utilized, along with consideration for the issue’s position in the overall structure, to determine cash flows associated with the security.

Collateralized debt obligations are assessed for impairment using expected cash flows based on various inputs including default estimates based on the underlying corporate securities, historical and forecasted loss severities or other market inputs when recovery estimates are not feasible. When the collateral is regional bank and insurance company trust preferred securities, default estimates used to estimate cash flows are based on U.S. Bank Rating service data and broker research.

The Company believes the unrealized losses on these available-for-sale securities do not represent other-than-temporary impairments as the Company does not intend to sell the securities, it is not more likely than not that the Company will be required to sell the securities before recovery of their amortized cost basis or the present value of estimated cash flows is equal to or greater than the amortized cost basis of the securities. These unrealized losses represent temporary fluctuations in non-credit factors that are not indicative of other-than-temporary impairment.

 

27

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

Mortgage Loans, Net of Allowance

The following table summarizes the amortized cost of mortgage loans by method of evaluation for credit loss, and the related valuation allowances by type of credit loss, as of the dates indicated:

 

(in millions)

    December 31,
2012		      December 31,
2011		  

Amortized cost:

      

Loans with non-specific reserves

    $ 5,820       $ 5,672   

Loans with specific reserves

      51         136   
  

 

 

     

 

 

  

Total amortized cost

    $ 5,871       $ 5,808   

Valuation allowance:

      

Non-specific reserves

    $ 33       $ 33   

Specific reserves

      11         27   
  

 

 

     

 

 

  

Total valuation allowance

    $ 44       $ 60   
  

 

 

     

 

 

  

Mortgage loans, net of allowance

    $ 5,827       $ 5,748   
  

 

 

     

 

 

  

The following table summarizes activity in the valuation allowance for mortgage loans, for the years ended:

 

(in millions)

    December 31,
2012		     December 31,
2011		  

Balance at beginning of year

    $ 60      $ 96   

Current period provision

      1        25   

Recoveries1

      (15 )      (7 ) 

Charge offs and other

      (2 )      (54 ) 
  

 

 

    

 

 

  

Balance at end of year

    $ 44      $ 60   
  

 

 

    

 

 

  

 

1 

Includes recoveries on sales and increases in the valuations of loans with specific reserves.

The following table summarizes impaired mortgage loans by class, for the years ended:

 

(in millions)

    Office     Warehouse     Retail     Apartment      Other     Total  

December 31, 2012

              

Amortized cost

    $ 13      $ 26      $ 12      $ —         $ —        $ 51   

Specific reserves

      (2 )      (7 )      (2 )      —           —        $ (11 ) 
  

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Carrying value of impaired mortgage loans, net of allowance

    $ 11      $ 19      $ 10      $ —         $ —        $ 40   
  

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

December 31, 2011

              

Amortized cost

    $ 8      $ 31      $ 20      $ —         $ 77      $ 136   

Specific reserves

      (1 )      (9 )      (8 )      —           (9 )      (27 ) 
  

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Carrying value of impaired mortgage loans, net of allowance

    $ 7      $ 22      $ 12      $ —         $ 68      $ 109   
  

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

 

28

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

The following table summarizes average recorded investment and interest income recognized for impaired mortgage loans by class, for the years ended:

 

(in millions)

   Office     Warehouse     Retail     Apartment     Other     Total  

December 31, 2012

            

Average recorded investment

   $ 9      $ 20      $ 11      $ —        $ 34      $ 74   

Interest income recognized

   $ 1      $ 2      $ 1      $ —        $ 6      $ 10   

December 31, 2011

            

Average recorded investment

   $ 7      $ 33      $ 23      $ 10      $ 91      $ 164   

Interest income recognized

   $ 1      $ 5      $ 3      $ —        $ 8      $ 17   

As of December 31, 2012 and 2011, the Company’s mortgage loans classified as delinquent and/or in non-accrual status were immaterial in relation to the total mortgage loan portfolio. The Company had no mortgage loans 90 days or more past due and still accruing interest.

Management evaluates the credit quality of individual mortgage loans and the portfolio as a whole through a number of loan quality measurements, including, but not limited to, LTV and debt service coverage (“DSC”) ratios. The LTV ratio is calculated as a ratio of the amortized cost of a loan to the estimated value of the underlying collateral. DSC is the amount of cash flow generated by the underlying collateral of the mortgage loan available to meet periodic interest and principal payments of the loan. This process identifies mortgage loans representing the lowest risk profile and lowest potential for loss and those representing the highest risk profile and highest potential for loss. These factors are updated and evaluated at least annually.

The following table summarizes the LTV ratio and DSC ratios of the mortgage loan portfolio, as of the dates indicated:

 

    LTV ratio     DSC ratio  

(in millions)

   Less than
80%		     80% -
less than
90%		     90% or
greater		     Total     Greater
than 1.10		     1.00-1.10     Less than
1.00		     Total  

December 31, 2012:

                

Apartment

   $ 1,119      $ 129      $ 62      $ 1,310      $ 1,303      $ 5      $ 2      $ 1,310   

Warehouse

     922        76        162        1,160        951        121        88        1,160   

Office

     776        55        42        873        783        16        74        873   

Retail

     1,940        250        86        2,276        2,139        92        45        2,276   

Other

     189        57        6        252        252        —          —          252   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

   $ 4,946      $ 567      $ 358      $ 5,871      $ 5,428      $ 234      $ 209      $ 5,871   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Weighted-average DSC ratio

     1.74        1.27        1.07        1.65        n/a        n/a        n/a        n/a   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Weighted-average LTV ratio

     n/a        n/a        n/a        n/a        66 %      76 %      96 %      68 % 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

December 31, 2011:

                

Apartment

   $ 805      $ 245      $ 89      $ 1,139      $ 1,112      $ 23      $ 4      $ 1,139   

Warehouse

     1,015        123        149        1,287        1,153        53        81        1,287   

Office

     595        104        76        775        656        69        50        775   

Retail

     1,878        220        147        2,245        2,074        104        67        2,245   

Other

     172        63        127        362        284        11        67        362   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

   $ 4,465      $ 755      $ 588      $ 5,808      $ 5,279      $ 260      $ 269      $ 5,808   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Weighted-average DSC ratio

     1.77        1.29        1.15        1.64        n/a        n/a        n/a        n/a   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Weighted-average LTV ratio

     n/a        n/a        n/a        n/a        68 %      81 %      89 %      69 % 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

While the loan quality measurements contribute to management’s assessment of relative credit risk in the mortgage loan portfolio for the dates indicated based on underwriting criteria and ongoing assessment of the properties’ performance, management believes the amounts, net of valuation allowance, are collectible.

 

29

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

Securities Lending

The fair value of loaned securities was $130 million and $103 million as of December 31, 2012 and 2011, respectively. The Company received $133 million and $105 million of cash collateral on securities lending as of December 31, 2012 and 2011, respectively. The Company did not receive any non-cash collateral on securities lending as of the balance sheet dates.

Assets on Deposit and Pledged as Collateral

Available-for-sale securities with a carrying value of $9 million and $8 million were on deposit with various regulatory agencies as required by law as of December 31, 2012 and 2011, respectively. Additionally, available-for-sale securities with a carrying value of $73 million were pledged as collateral to secure recoveries under reinsurance contracts and other financing agreements as of December 31, 2012. The Company had no amount pledged as collateral as of December 31, 2011. These securities primarily are included in fixed maturity securities in the consolidated balance sheets.

Tax Credit Funds

The Company has sold $859 million and $796 million in Tax Credit Funds to unrelated third parties as of December 31, 2012 and 2011, respectively. The Company has guaranteed cumulative after-tax yields to the third party investors ranging from 1.00% to 7.75% through periods ending in 2027. The Company held immaterial reserves on these transactions as of December 31, 2012 and 2011. These guarantees are in effect for periods of approximately 15 years each. The Tax Credit 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, the Company must fund any shortfall. The maximum amount of undiscounted future payments that the Company could be required to pay the investors under the terms of the guarantees is $288 million. The Company’s risks are mitigated in the following ways: (1) the Company has the right to buyout the equity related to the guarantee under certain circumstances, (2) the Company may replace underperforming properties to mitigate exposure to guarantee payments and (3) the Company oversees the asset management of the deals. The Company does not anticipate making any material payments related to the guarantees.

Consolidated VIEs

The Company has relationships with VIEs where the Company is the primary beneficiary. Net assets of all consolidated VIEs totaled $347 million and $345 million as of December 31, 2012 and 2011, respectively, which was composed primarily of other long-term investments of $348 million and $310 million as of December 31, 2012 and 2011, respectively. The Company’s general credit is not exposed to the creditors or beneficial interest holders of these consolidated VIEs.

During 2010, two Tax Credit Funds were consolidated as a result of the adoption of guidance under FASB ASC 810, Consolidation. Previously, the Company was not deemed the primary beneficiary. As the managing member of the Tax Credit funds, the Company has the power to direct the activities that most significantly impact the economic power of the entities and consolidated the funds. The impact of consolidation was an increase to noncontrolling interest of $46 million.

Unconsolidated VIEs

In addition to the consolidated VIEs described above, the Company holds investments in VIEs where the Company is not the primary beneficiary, which are primarily investments in Tax Credit Funds without guarantees to limited partners. The carrying value of these investments was $222 million and $220 million as of December 31, 2012 and 2011, respectively. In addition, the Company has made commitments for further investments in these VIEs of $66 million and $131 million as of December 31, 2012 and 2011, respectively.

 

30

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

Net Investment Income

The following table summarizes net investment income by investment type, for the years ended:

 

(in millions)

   December 31,
2012		     December 31,
2011		     December 31,
2010		  

Fixed maturity securities, available-for-sale

   $ 1,506      $ 1,502      $ 1,474   

Mortgage loans

     366        370        396   

Policy loans

     53        56        55   

Other

     (45 )      (34 )      (41 ) 
 

 

 

    

 

 

    

 

 

  

Gross investment income

   $ 1,880      $ 1,894      $ 1,884   
 

 

 

    

 

 

    

 

 

  

Investment expenses

     55        50        59   
 

 

 

    

 

 

    

 

 

  

Net investment income

   $ 1,825      $ 1,844      $ 1,825   
 

 

 

    

 

 

    

 

 

  

Net Realized Investment Gains and Losses

The following table summarizes net realized investment gains and losses, by source, for the years ended:

 

(in millions)

   December 31,
2012		     December 31,
2011		     December 31,
2010		  

Net derivative gains (losses)

   $ 314      $ (1,636 )    $ (385 ) 

Realized gains on sales

     48        64        176   

Realized losses on sales

     (23 )      (45 )      (43 ) 

Other

     11        8        16   
 

 

 

    

 

 

    

 

 

  

Net realized investment gains (losses)

   $ 350      $ (1,609 )    $ (236 ) 
 

 

 

    

 

 

    

 

 

  

Proceeds from the sale of available-for-sale securities were $796 million, $1.6 billion and $2.2 billion during the years ended December 31, 2012, 2011 and 2010, respectively. Gross gains of $47 million, $50 million and $172 million and gross losses of $20 million, $39 million and $17 million were realized on sales of available-for-sale securities during the years ended December 31, 2012, 2011 and 2010, respectively.

 

31

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

Other-Than-Temporary Impairment Losses

The following table summarizes other-than-temporary impairments, for the years ended:

 

(in millions)

   Total     Included in
other
comprehensive
income		     Net  

December 31, 2012

      

Fixed maturity securities

   $         68      $ (36 )    $         32   

Mortgage loans

     (14 )      —          (14 ) 

Other

     13        —          13   
 

 

 

    

 

 

    

 

 

  

Other-than-temporary impairment losses

   $ 67      $ (36 )    $ 31   
 

 

 

    

 

 

    

 

 

  

December 31, 2011

      

Fixed maturity securities

   $ 135      $ (95 )    $ 40   

Mortgage loans

     25        —          25   

Other

     2        —          2   
 

 

 

    

 

 

    

 

 

  

Other-than-temporary impairment losses

   $ 162      $ (95 )    $ 67   
 

 

 

    

 

 

    

 

 

  

December 31, 2010

      

Fixed maturity securities

   $ 330      $ (174 )    $ 156   

Equity securities

     5        —          5   

Mortgage loans

     59        —          59   
 

 

 

    

 

 

    

 

 

  

Other-than-temporary impairment losses

   $ 394      $ (174 )    $ 220   
 

 

 

    

 

 

    

 

 

  

The following table summarizes cumulative credit losses, for the years ended:

 

(in millions)

   December 31,
2012		     December 31,
2011		     December 31,
2010		  

Cumulative credit loss at beginning of year1

  $ 328      $ 340      $ 417   

New credit losses

     18        8        31   

Incremental credit losses

     10        29        116   

Losses related to securities included in the beginning balance sold or paid down during the period

     (67 )      (49 )      (202 ) 

Losses related to securities included in the beginning balance for which there was a change in intent

     —          —          (22 ) 
 

 

 

    

 

 

    

 

 

  

Cumulative credit loss at end of year1

   $ 289      $ 328      $ 340   
 

 

 

    

 

 

    

 

 

  

 

1 

Cumulative credit losses are defined as the amounts related to the Company’s credit portion of the other-than-temporary impairment losses on debt securities that the Company does not intend to sell and it is not more likely than not the Company will be required to sell the security prior to recovery of the amortized cost basis.

 

32

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

(7) Derivative Instruments

The Company is exposed to certain risks related to its ongoing business operations which are managed using derivative instruments.

Interest rate risk management. The Company uses interest rate contracts, primarily interest rate swaps, to reduce or alter interest rate exposure arising from mismatches between assets and liabilities. In the case of interest rate swaps, the Company enters into a contractual agreement with a counterparty to exchange, at specified intervals, the difference between fixed and variable rates of interest, calculated on a reference notional amount.

Interest rate swaps are used by the Company in association with fixed and variable rate investments to achieve cash flow streams that support certain financial obligations of the Company and to produce desired investment returns. As such, interest rate swaps are generally used to convert fixed rate cash flow streams to variable rate cash flow streams or vice versa. The Company also enters into interest rate swap transactions which are structured to provide a hedge against the negative impact of higher interest rates on the Company’s capital position.

Equity market and interest rate risk management. The Company has a variety of variable annuity products with guaranteed benefit features. These products and related obligations expose the Company to various market risks, primarily equity and interest rate risk. Adverse changes in the equity markets or interest rate movements expose the Company to significant volatility. To mitigate these risks and hedge the guaranteed benefit obligations, the Company enters into a variety of derivatives including interest rate swaps, equity index futures, options and total return swaps.

Foreign currency risk management. As part of its regular investing activities, the Company may purchase foreign currency denominated investments. These investments and the associated income expose the Company to volatility associated with movements in foreign exchange rates. To mitigate this risk, the Company uses cross-currency swaps and futures. As foreign exchange rates change, the increase or decrease in the cash flows of the derivative instrument generally offsets the changes in the functional-currency equivalent cash flows of the hedged item.

Credit risk management. The Company enters into credit derivative contracts, primarily credit default swaps, under which the Company buys and sells credit default protection on specific corporate creditors. These derivatives allow the Company to manage or modify its credit risk profile in general or its credit exposure to specific creditors.

Derivatives Qualifying for Hedge Accounting

The Company uses derivative instruments that are designated and qualify as fair value hedges in various financial transactions as follows:

 

  •  

interest rate swaps are used to hedge certain fixed rate investments such as mortgage loans and certain fixed maturity securities and

 

  •  

cross-currency swaps are used to hedge foreign currency-denominated fixed maturity securities.

The Company uses derivative instruments that are designated and qualify as cash flow hedges in various financial transactions as follows:

 

  •  

interest rate swaps are used to hedge cash flows from variable rate investments such as mortgage loans and certain fixed maturity securities and to hedge payments of certain liabilities and

 

  •  

cross-currency swaps are used to hedge interest payments and principal payments on foreign currency-denominated financial instruments.

 

33

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

Derivatives Not Qualifying for Hedge Accounting

The Company uses derivatives not qualifying for hedge accounting in various financial transactions as follows:

 

  •  

futures, options, interest rate swaps and total return swaps are used to economically hedge certain guaranteed benefit obligations included in variable annuity products,

 

  •  

interest rate swaps, futures and options are used to economically hedge portfolio duration and other interest rate risks to which the Company is exposed,

 

  •  

cross-currency swaps and futures are used to economically hedge foreign currency-denominated assets and liabilities and

 

  •  

credit default swaps are used to either buy or sell credit protection on a specific creditor.

Credit Risk Associated with Derivatives Transactions

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 credit 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 impact the Company’s exposure to credit risk could have on the effectiveness of the Company’s hedging relationships is considered. As of December 31, 2012 and 2011, the impact of the exposure to credit risk on the fair value measurement of derivatives and the effectiveness of the Company’s hedging relationships was immaterial.

The following table summarizes the fair value and related notional amounts of derivative instruments, as of the dates indicated:

 

    Derivative assets     Derivative liabilities  

(in millions)

   Fair value     Notional     Fair value     Notional  

December 31, 2012

        

Derivatives designated and qualifying as hedging instruments

   $ 4      $ 79      $ 21      $ 192   

Derivatives not designated as hedging instruments:

        

Interest rate contracts

   $ 1,960      $ 21,216      $ 2,065      $ 23,746   

Equity contracts

     822        7,445        —          —     

Total Return Swaps

     4        1,513        32        1,551   

Other derivative contracts

     —          10        5        17   
 

 

 

    

 

 

    

 

 

    

 

 

  

Total derivative positions1

   $ 2,790      $ 30,263      $ 2,123      $ 25,506   
 

 

 

    

 

 

    

 

 

    

 

 

  

December 31, 2011

        

Derivatives designated and qualifying as hedging instruments

   $ 11      $ 145      $ 29      $ 310   

Derivatives not designated as hedging instruments:

        

Interest rate contracts

   $ 2,182      $ 21,732      $ 2,142      $ 20,955   

Equity contracts

     1,004        7,162        —          —     

Total Return Swaps

     10        892        37        2,409   

Other derivative contracts

     1        13        7        17   
 

 

 

    

 

 

    

 

 

    

 

 

  

Total derivative positions1

   $ 3,208      $ 29,944      $ 2,215      $ 23,691   
 

 

 

    

 

 

    

 

 

    

 

 

  

 

1

Derivative assets and liabilities are included in other assets and other liabilities, respectively, in the consolidated balance sheets.

 

34

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

The Company’s derivative positions, primarily offset by master netting agreements and collateral received from or posted with counterparties, resulted in immaterial net uncollateralized derivative asset and liability positions as of December 31, 2012 and 2011. As of December 31, 2012 and 2011, the Company held cash collateral from derivative counterparties of $798 million and $1.0 billion, respectively. The Company did not hold securities as off-balance sheet collateral as of December 31, 2012 and 2011. As of December 31, 2012 and 2011, the Company had posted cash collateral of $228 million and $223 million, respectively, and pledged securities with a fair value of $148 million and $152 million, respectively, with derivative counterparties.

The fair value of embedded derivatives on life and annuity programs was $748 million and $1.9 billion as of December 31, 2012 and 2011, respectively, which is included in future policy benefits and claims in the consolidated balance sheets.

The following table summarizes gains and losses for derivative instruments recognized in net realized investment gains and losses in the consolidated statements of operations, for the years ended:

 

(in millions)

   December 31,
2012		     December 31,
2011		     December 31,
2010		  

Derivatives designated and qualifying as hedging instruments

   $ (1 )    $ (4 )    $ (9 ) 

Derivatives not designated as hedging instruments:

      

Interest rate contracts

   $ (125 )    $ (44 )    $ (39 ) 

Equity contracts

     (665 )      (45 )      (389 ) 

Total return swaps

     (343 )      (17 )      (136 ) 

Other derivative contracts

     (1 )      (6 )      (20 ) 

Net interest settlements

     53        34        16   
 

 

 

    

 

 

    

 

 

  

Total derivative losses1

   $ (1,082 )    $ (82 )    $ (577 ) 
 

 

 

    

 

 

    

 

 

  

Change in embedded derivatives on guaranteed benefit annuity programs2

     1,185        (1,674 )      98   

Other revenue on guaranteed benefit annuity programs

     211        120        94   
 

 

 

    

 

 

    

 

 

  

Change in embedded derivative liabilities and related fees

   $ 1,396      $ (1,554 )    $ 192   
 

 

 

    

 

 

    

 

 

  

Net realized derivative gains (losses)

   $ 314      $ (1,636 )    $ (385 ) 
 

 

 

    

 

 

    

 

 

  

 

1 

Included in total derivative losses are economic hedging losses of $827 million, gains of $1.0 billion, and losses of $347 million related to the guaranteed benefit annuity programs for the years ended December 31, 2012, 2011 and 2010, respectively.

2 

As part of the Company’s annual comprehensive review of DAC model assumptions, all relevant assumptions impacting the fair value of embedded derivatives on guaranteed benefit annuity programs are also reviewed and updated. For the individual variable annuity business, the change in the embedded derivatives on guaranteed benefit annuity programs for the year ended December 31, 2012 includes updated assumptions in lapse, mortality, withdrawal behavior and benefit utilization. The change in embedded derivatives on guaranteed benefit annuity programs for the year ended December 31, 2011 includes updated assumptions in lapse, mortality and withdrawal behavior. Refer to Note 2 for further discussion of the annual review of DAC model assumptions.

 

35

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

(8) Fair Value Measurements

The following table summarizes assets and liabilities measured at fair value on a recurring basis as of December 31, 2012:

 

(in millions)

   Level 1     Level 2     Level 3     Total  

Assets

        

Investments:

        

Fixed maturity securities:

        

U.S. Treasury securities and obligations of U.S. Government corporations and agencies

   $ 592      $ 2      $ 3      $ 597   

Obligations of states and political subdivisions

     —          2,002        —          2,002   

Debt securities issued by foreign governments

     73        45        —          118   

Corporate public securities

     1        17,890        119        18,010   

Corporate private securities

     —          3,817        772        4,589   

Residential mortgage-backed securities

     484        4,173        10        4,667   

Commercial mortgage-backed securities

     —          1,335        2        1,337   

Collateralized debt obligations

     —          53        282        335   

Other asset-backed securities

     —          147        9        156   
 

 

 

    

 

 

    

 

 

    

 

 

  

Total fixed maturity securities at fair value

   $ 1,150      $ 29,464      $ 1,197      $ 31,811   

Equity securities

     —          12        8        20   

Short-term investments

     45        989        —          1,034   

Trading securities

     —          —          54        54   
 

 

 

    

 

 

    

 

 

    

 

 

  

Total other investments at fair value

   $ 45      $ 1,001      $ 62      $ 1,108   
 

 

 

    

 

 

    

 

 

    

 

 

  

Investments at fair value

   $ 1,195      $ 30,465      $ 1,259      $ 32,919   
 

 

 

    

 

 

    

 

 

    

 

 

  

Derivative assets

     —          1,968        822        2,790   

Separate account assets

     68,185        1,230        2,025        71,440   
 

 

 

    

 

 

    

 

 

    

 

 

  

Assets at fair value

   $ 69,380      $ 33,663      $ 4,106      $ 107,149   
 

 

 

    

 

 

    

 

 

    

 

 

  

Liabilities

        

Future policy benefits and claims:

        

Living benefits

   $ —        $ —        $ (657 )    $ (657 ) 

Indexed products

     —          —          (91 )      (91 ) 
 

 

 

    

 

 

    

 

 

    

 

 

  

Total future policy benefits and claims

   $ —        $ —        $ (748 )    $ (748 ) 

Derivative liabilities

     —          (2,118 )      (5 )      (2,123 ) 
 

 

 

    

 

 

    

 

 

    

 

 

  

Liabilities at fair value

   $ —        $ (2,118 )    $ (753 )    $ (2,871 ) 
 

 

 

    

 

 

    

 

 

    

 

 

  

 

36

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

The following table presents the rollforward of Level 3 assets and liabilities held at fair value on a recurring basis during the year ended December 31, 2012:

 

     Balance as of
December 31,
2011		     Net gains (losses)                 Transfers
into
Level 3		     Transfers
out of
Level 3		     Balance as of
December 31,
2012		  

(in millions)

     In  operations1     In OCI     Purchases     Sales        

Assets

                

Investments:

                

Fixed maturity securities:

                

Corporate private securities

   $ 1,209      $ 2      $ 13      $ 69      $ (187 )    $ 40      $ (374 )    $ 772   

Collateralized debt obligations

     247        2        53        36        (56 )      —          —          282   

Other fixed maturity securities

     135        —          11        2        (13 )      11        (3 )      143   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total fixed maturity securities at fair value2

   $ 1,591      $ 4      $ 77      $ 107      $ (256 )    $ 51      $ (377 )    $ 1,197   

Other investments at fair value

     43        16        3        —          —          —          —          62   

Derivative assets3

     1,004        (353 )      —          350        (179 )      —          —          822   

Separate account assets

     1,952        73        —          —          —          —          —          2,025   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Assets at fair value

   $ 4,590      $ (260 )    $ 80      $ 457      $ (435 )    $ 51      $ (377 )    $ 4,106   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Liabilities

                

Future policy benefits and claims:

                

Living benefits

   $ (1,842 )    $ 1,185      $ —        $ —        $ —        $ —        $ —        $ (657 ) 

Indexed products

     (63 )      (28 )      —          —          —          —          —          (91 ) 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total future policy benefits and claims

   $ (1,905 )    $ 1,157      $ —        $ —        $ —        $ —        $ —        $ (748 ) 

Derivative liabilities3

     (6 )      1        —          —          —          —          —          (5 ) 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Liabilities at fair value

   $ (1,911 )    $ 1,158      $ —        $ —        $ —        $ —        $ —        $ (753 ) 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

1 

Net gains and losses included in operations are reported in net realized investment gains and losses, other-than-temporary impairment losses and interest credited to policyholder accounts. The net unrealized gains on separate account assets is attributable to contractholders and therefore is not included in the Company’s earnings. The change in unrealized gains (losses) in operations on assets and liabilities still held as of the end of the year was $16 million for other investments at fair value, $(257) million for derivative assets, $1.2 billion for future policy benefits and claims and $(1) million for derivative liabilities.

2 

Non-binding broker quotes were utilized to determine fair value of $1.1 billion of total fixed maturity securities as of December 31, 2012.

3 

Non-binding broker quotes were utilized to determine fair value of all Level 3 derivative assets and liabilities.

During the year ended December 31, 2012, transfers from Level 1 to Level 2 within the debt securities issued by foreign governments were $42 million. There were no transfers from Level 2 to Level 1 during the year ended December 31, 2012.

Transfers into and out of Level 3 during the year ended December 31, 2012 represent changes in the sources used to price certain securities and the Company’s assumptions related to the observability of certain inputs.

As discussed in Note 2, the valuation of embedded derivatives in living benefit guarantees incorporates many inputs, including significant unobservable inputs for mortality, lapse rates, wait period and benefit utilization. The Company derives these inputs, which vary widely by product, attained age, policy duration, benefits in the money and the existence of surrender charges, from current experience and industry data. The fair value for these benefits is calculated as the mean of discounted cash flows across numerous random scenarios, an approach that is commonly used by the insurance industry for this type of valuation. This process considers a broader range of assumptions than what would be found in a standard deterministic approach.

 

37

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

The following table summarizes significant unobservable inputs used for fair value measurements for living benefits liabilities classified as Level 3 as of December 31, 2012:

 

Unobservable Inputs

   

Range

Mortality

    0.1%-8%2

Lapse

    0%-35%

Wait period

    0 yrs – 30 yrs3

Efficiency of benefit utilization1

    70%-100%

Non-performance risk

    See footnote 4

Index volatility

    15%-25%

 

1 

The unobservable input is not applicable to GMABs.

2 

Represents the mortality for the majority of business with living benefits, with policyholders ranging from 45 to 85.

3 

A portion of the contractholders could never use the benefit, which would extend the range to an indeterminate period.

4 

To reflect non-performance risk, benefits paid to policyholders are assumed to be reduced by 10% within the discounted cash flows projection whenever the S&P index is simulated to go below a certain threshold designed to represent non-performance.

The following changes in any of the significant unobservable inputs presented in the table above may result in a change in the fair value measurements of the living benefits liability:

Higher mortality rates tend to decrease the value of the liability and lower mortality rates tend to increase the value of the liability.

Higher lapse rates tend to decrease the value of the liability and lower lapse rates tend to increase the value of the liability. Factors that impact the predicted lapse rate can include: age, policy duration, policy size, benefit in-the-moneyness and applicable surrender charges. All else being equal, policies that are in-the-money will have lower lapse rates than policies that are out-of-the-money, and policies that have a surrender charge present will have lower lapse rates than policies without a surrender charge.

The assumed wait period and the efficiency of utilization determine the timing and amount of living benefits withdrawals. These assumptions vary by the product type, age of the policyholder and policy duration. Many products have a bonus feature which enhances the guarantee on every policy anniversary for the first ten years so long as withdrawals have not commenced. All else being equal, policies commencing withdrawals at a time around the year ten bonus will have higher liability values than policies commencing withdrawals 20 years after issue or policies commencing withdrawals only one year after issue. In addition, policies that are assumed to withdraw the maximum permitted amount will have a higher liability value than a policy that is assumed to withdraw less than the maximum allowed amount.

Higher non-performance risk tends to decrease the value of the liability and lower non-performance risk tends to increase the value of the liability.

Higher index volatility tends to increase the value of the liability and lower index volatility tends to decrease the value of the liability.

Separate Accounts

The Company’s separate account assets include an investment in a mutual fund with a non-readily determinable fair value. Net asset value has been used to estimate the fair value of this investment as a practical expedient. The investments are included in Level 3 as they may not be redeemed until a seven year guarantee period expires in 2016. 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 net asset value of this fund reported in separate account assets was $1.6 billion and $1.3 billion as of December 31, 2012 and 2011, respectively.

 

38

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

The following table summarizes assets and liabilities measured at fair value on a recurring basis as of December 31, 2011:

 

(in millions)

   Level 1     Level 2     Level 3     Total  

Assets

        

Investments:

        

Fixed maturity securities:

        

U.S. Treasury securities and obligations of U.S. Government corporations and agencies

   $ 620      $ 6      $ 4      $ 630   

Obligations of states and political subdivisions

     —          1,678        —          1,678   

Debt securities issued by foreign governments

     120        —          —          120   

Corporate public securities

     1        15,239        117        15,357   

Corporate private securities

     —          3,089        1,209        4,298   

Residential mortgage-backed securities

     563        4,653        8        5,224   

Commercial mortgage-backed securities

     —          1,377        2        1,379   

Collateralized debt obligations

     —          55        247        302   

Other asset-backed securities

     —          209        4        213   
 

 

 

    

 

 

    

 

 

    

 

 

  

Total fixed maturity securities at fair value

   $ 1,304      $ 26,306      $ 1,591      $ 29,201   

Equity securities

     1        14        5        20   

Short-term investments

     23        1,102        —          1,125   

Trading securities

     —          —          38        38   
 

 

 

    

 

 

    

 

 

    

 

 

  

Total other investments at fair value

   $ 24      $ 1,116      $ 43      $ 1,183   
 

 

 

    

 

 

    

 

 

    

 

 

  

Investments at fair value

   $ 1,328      $ 27,422      $ 1,634      $ 30,384   
 

 

 

    

 

 

    

 

 

    

 

 

  

Derivative assets

     —          2,204        1,004        3,208   

Separate account assets

     62,242        1,000        1,952        65,194   
 

 

 

    

 

 

    

 

 

    

 

 

  

Assets at fair value

   $ 63,570      $ 30,626      $ 4,590      $ 98,786   
 

 

 

    

 

 

    

 

 

    

 

 

  

Liabilities

        

Future policy benefits and claims:

        

Living benefits

   $ —        $ —        $ (1,842 )    $ (1,842 ) 

Indexed products

     —          —          (63 )      (63 ) 
 

 

 

    

 

 

    

 

 

    

 

 

  

Total future policy benefits and claims

   $ —        $ —        $ (1,905 )    $ (1,905 ) 

Derivative liabilities

     —          (2,209 )      (6 )      (2,215 ) 
 

 

 

    

 

 

    

 

 

    

 

 

  

Liabilities at fair value

   $ —        $ (2,209 )    $ (1,911 )    $ (4,120 ) 
 

 

 

    

 

 

    

 

 

    

 

 

  

 

39

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

The following table presents the rollforward of Level 3 assets and liabilities held at fair value on a recurring basis during the year ended December 31, 2011:

 

     Balance as of
December 31,
2010		     Net gains (losses)                 Transfers
into
Level 3		     Transfers
out of
Level 3		     Balance as of
December 31,
2011		  

(in millions)

     In  operations1     In OCI     Purchases     Sales        

Assets

                

Investments:

                

Fixed maturity securities:

                

Corporate private securities

   $ 1,161      $ (10 )    $ 26      $ 161      $ (242 )    $ 163      $ (50 )    $ 1,209   

Collateralized debt obligations

     191        (2 )      5        87        (34 )      —          —          247   

Other fixed maturity securities

     143        5        4        57        (63 )      4        (15 )      135   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total fixed maturity securities at fair value

   $ 1,495      $ (7 )    $ 35      $ 305      $ (339 )    $ 167      $ (65 )    $ 1,591   

Other investments at fair value

     45        (4 )      —          5        (3 )      —          —          43   

Derivative assets

     211        131        —          719        (57 )      —          —          1,004   

Separate account assets

     1,805        147        —          —          —          —          —          1,952   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Assets at fair value

   $ 3,556      $ 267      $ 35      $ 1,029      $ (399 )    $ 167      $ (65 )    $ 4,590   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Liabilities

                

Future policy benefits and claims:

                

Living benefits

   $ (168 )    $ (1,674 )    $ —        $ —        $ —        $ —        $ —        $ (1,842 ) 

Indexed products

     (58 )      (5 )      —          —          —          —          —          (63 ) 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total future policy benefits and claims

   $ (226 )    $ (1,679 )    $ —        $ —        $ —        $ —        $ —        $ (1,905 ) 

Derivative liabilities

     (4 )      (2 )      —          —          —          —          —          (6 ) 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Liabilities at fair value

   $ (230 )    $ (1,681 )    $ —        $ —        $ —        $ —        $ —        $ (1,911 ) 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

1 

Net gains and losses included in operations are reported in net realized investment gains and losses, other-than-temporary impairment losses and interest credited to policyholder account values. The net unrealized gains on separate account assets is attributable to contractholders and therefore is not included in the Company’s earnings. The change in unrealized gains (losses) in operations on assets and liabilities still held at the end of the year was $(6) million for other investments at fair value, $154 million for derivative assets and $(1.7) million for future policy benefits and claims.

Transfers into and out of Level 3 during the year ended December 31, 2011 represent changes in the sources used to price certain securities. There were no significant transfers between Levels 1 and 2 during the year ended December 31, 2011, except certain separate accounts previously included in Level 2.

Fair Value Option

The Company assesses the fair value option election for newly acquired financial assets or liabilities on a prospective basis. Except for synthetic collateralized debt obligations, there are no material assets or liabilities for which the Company elected the fair value option.

Fair Value on a Nonrecurring Basis

The Company measures certain mortgage loans at fair value, or fair value of the collateral, on a non-recurring basis subsequent to their initial recognition, due to impairments or foreclosures recorded during the year. In determining the fair value for these mortgage loans, the Company primarily uses the direct capitalization method based on management’s view of current market capitalization rates. Alternatively, the Company may use a discounted cash flow methodology or an independently provided appraisal of value. Each of these methodologies is considered to represent a Level 3 fair value measurement. Refer to Note 6 for further discussion of the carrying value of impaired mortgage loans.

 

40

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

Financial Instruments Not Carried at Fair Value

The following table summarizes the carrying value and fair value of the Company’s financial instruments not carried at fair value as of the dates indicated. The valuation techniques used to estimate these fair values are described below.

 

     December 31, 2012      December 31, 2011  

(in millions)

    Carrying
value		      Fair
value		      Level 2      Level 3      Carrying
value		      Fair
value		  

Assets

                  

Investments:

                  

Mortgage loans, net of allowance

    $ 5,827       $ 5,988       $ —         $ 5,988       $ 5,748       $ 5,861   

Policy loans

    $ 980       $ 980       $ —         $ 980       $ 1,008       $ 1,008   

Liabilities

                  

Investment contracts

    $ 20,123       $ 19,561       $ —         $ 19,561       $ 18,318       $ 17,992   

Short-term debt

    $ 300       $ 300       $ —         $ 300       $ 777       $ 777   

Long-term debt

    $ 1,038       $ 1,323       $ 1,282       $ 41       $ 991       $ 1,081   

Mortgage loans, net of allowance. The fair values of mortgage loans are estimated using discounted cash flow analyses based on interest rates currently being offered for similar loans to borrowers with similar credit ratings.

Policy loans. The carrying amount reported in the consolidated balance sheets approximates fair value.

Investment contracts. For investment contracts without defined maturities, fair value is the amount payable on demand, net of surrender charges. For investment contracts with known or determined maturities, fair value is estimated using discounted cash flow analysis. Interest rates used in this analysis are similar to currently offered contracts with maturities consistent with those remaining for the contracts being valued.

Short-term debt. The carrying amount reported in the consolidated balance sheets approximates fair value.

Long-term debt. The fair values for long-term debt are based on estimated market prices using observable inputs from similar debt instruments.

 

(9) Goodwill

The following table summarizes changes in the carrying value of goodwill by segment for the years indicated:

 

(in millions)

    Retirement
Plans		      Individual
Products &
Solutions -
Life and
NBSG		      Total  

Balance as of December 31, 2010

    $         25       $         175       $         200   

Adjustments

      —           —           —     
  

 

 

     

 

 

     

 

 

  

Balance as of December 31, 2011

    $ 25       $ 175       $ 200   

Adjustments

      —           —           —     
  

 

 

     

 

 

     

 

 

  

Balance as of December 31, 2012

    $ 25       $ 175       $ 200   
  

 

 

     

 

 

     

 

 

  

The Company’s annual impairment testing did not result in any impairment on existing goodwill during 2012, 2011 and 2010. As of the 2012, 2011 and 2010 annual impairment testing, the fair value of the reporting units with goodwill was in excess of the carrying value. The goodwill balances as of December 31, 2012 and 2011 have not been previously impaired.

 

41

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

(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 the dates indicated:

 

                                     

(in millions)

    December 31,
2012		     December 31,
2011		  

Liabilities:

     

Future policyholder benefits

    $ 1,732      $ 1,761   

Policyholder funds and accumulated dividends

      142        143   

Policyholder dividends payable

      24        27   

Policyholder dividend obligation

      198        156   

Other policy obligations and liabilities

      32        26   
  

 

 

    

 

 

  

Total liabilities

    $ 2,128      $ 2,113   
  

 

 

    

 

 

  

Assets:

     

Fixed maturity securities, available-for-sale

    $ 1,511      $ 1,424   

Mortgage loans, net of allowance

      183        210   

Policy loans

      164        170   

Other assets

      77        105   
  

 

 

    

 

 

  

Total assets

    $ 1,935      $ 1,909   
  

 

 

    

 

 

  

Excess of reported liabilities over assets

      193        204   
  

 

 

    

 

 

  

Portion of above representing other comprehensive income:

     

Increase in unrealized gain on fixed maturity securities available-for-sale

    $ 45      $ 42   

Adjustment to policyholder dividend obligation

      (45 )      (42 ) 
  

 

 

    

 

 

  

Total

    $ —        $ —     
  

 

 

    

 

 

  

Maximum future earnings to be recognized from assets and liabilities

    $ 193      $ 204   
  

 

 

    

 

 

  

Other comprehensive income:

     

Fixed maturity securities available-for-sale:

     

Fair value

    $ 1,511      $ 1,424   

Amortized cost

      1,334        1,292   

Shadow policyholder dividend obligation

      (177 )      (132 ) 
  

 

 

    

 

 

  

Net unrealized appreciation

    $ —        $ —     
  

 

 

    

 

 

  

 

42

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

The following table summarizes closed block operations for the years ended:

 

                                                              

(in millions)

    December 31,
2012		     December 31,
2011		     December 31,
2010		  

Revenues:

       

Premiums

    $ 73      $ 77      $ 83   

Net investment income

      98        102        101   

Realized investment gains (losses)

      1        (3 )      (3 ) 

Realized losses credited to policyholder benefit obligation

      (5 )      (1 )      (1 ) 
  

 

 

    

 

 

    

 

 

  

Total revenues

    $ 167      $ 175      $ 180   
  

 

 

    

 

 

    

 

 

  

Benefits and expenses:

       

Policy and contract benefits

    $ 134      $ 145      $ 131   

Change in future policyholder benefits and interest credited to policyholder accounts

      (27 )      (35 )      (23 ) 

Policyholder dividends

      50        55        56   

Change in policyholder dividend obligation

      (8 )      (8 )      (3 ) 

Other expenses

      1        1        1   
  

 

 

    

 

 

    

 

 

  

Total benefits and expenses

    $ 150      $ 158      $ 162   
  

 

 

    

 

 

    

 

 

  

Total revenues, net of benefits and expenses, before federal income tax expense

    $ 17      $ 17      $ 18   

Federal income tax expense

      6        6        6   
  

 

 

    

 

 

    

 

 

  

Revenues, net of benefits and expenses and federal income tax expense

    $ 11      $ 11      $ 12   
  

 

 

    

 

 

    

 

 

  

Maximum future earnings from assets and liabilities:

       

Beginning of period

    $ 204      $ 215      $ 227   

Change during period

      (11 )      (11 )      (12 ) 
  

 

 

    

 

 

    

 

 

  

End of period

    $ 193      $ 204      $ 215   
  

 

 

    

 

 

    

 

 

  

Cumulative closed block earnings from inception through December 31, 2012, 2011 and 2010 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 $21 million, $23 million and $31 million as of December 31, 2012, 2011 and 2010, respectively.

 

43

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

(11) Short-Term Debt

The Company classifies debt as short-term if the maturity date at inception is less than one year and all other debt instruments as long-term.

The following table summarizes short-term debt and weighted average annual interest rates, as of the dates indicated:

 

(in millions)

    December 31,
2012		      December 31,
2011		  

$600 million commercial paper program (0.29% and 0.30%, respectively)

    $ 300       $ 300   

$600 million promissory note and line of credit (1.90% and 1.73%, respectively)

    $ —         $ 477   
  

 

 

     

 

 

  

Total short-term debt

    $ 300       $ 777   
  

 

 

     

 

 

  

In March 2012, NLIC entered into an agreement with the FHLB that allows the Company access to borrow up to $250 million and expires on March 21, 2013. The Company had $10.2 billion in eligible collateral and no amounts outstanding under the agreement as of December 31, 2012. Additionally, as part of the agreement, NLIC purchased $25 million in capital stock with the FHLB.

In May 2011, NMIC, NFS, and NLIC entered into a $600 million revolving variable rate credit facility upon expiration of its existing facility of the same amount. The new facility matures on May 6, 2015 and is subject to various covenants, as defined in the agreement. NLIC had no amounts outstanding under the facility as of December 31, 2012 and 2011.

In April 2011, the Company entered into a $600 million unsecured revolving promissory note and line of credit agreement with its parent company, NFS. Outstanding principal balances of the line of credit bear interest at the rate of six-month U.S. LIBOR plus 1.25%. Interest is due and payable as of the last day of each interest period, as defined in the agreement, while there are outstanding principal balances. As of December 31, 2012, the agreement was cancelled with no outstanding balance.

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. The maximum amount available under the agreement is $350 million. The borrowing rate on this program is equal to one-month U.S. LIBOR. The Company had no amounts outstanding under this agreement as of December 31, 2012 and 2011.

The terms of each debt instrument contain various restrictive covenants, including, but not limited to, minimum statutory surplus and minimum net worth requirements, and maximum debt to tangible net worth requirements, as defined in the agreements. The Company was in compliance with all covenants as of December 31, 2012 and 2011.

The amount of interest paid on short-term debt was $6 million in 2012, $5 million in 2011 and immaterial in 2010.

 

(12) Long-Term Debt

The following table summarizes long-term debt, as of the dates indicated:

 

(in millions)

    December 31,
2012		      December 31,
2011		  

8.15% surplus note, due June 26, 2032, payable to NFS

    $ 300       $ 300   

7.50% surplus note, due December 17, 2031, payable to NFS

      300         300   

6.75% surplus note, due December 23, 2033, payable to NFS

      100         100   

Variable funding surplus note, due December 31, 2040

      297         285   

Other

      41         6   
  

 

 

     

 

 

  

Total long-term debt

    $ 1,038       $ 991   
  

 

 

     

 

 

  

 

44

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

On December 31, 2010, Olentangy Reinsurance, LLC, a special purpose financial captive insurance subsidiary of NLAIC domiciled in the State of Vermont, issued a variable funding surplus note due on December 31, 2040 to Nationwide Corporation, a majority-owned subsidiary of NMIC. The note is redeemable in full or partial amount at any time subject to proper notice and approval. A redemption premium shall be payable if the note is redeemed on or prior to the third anniversary date of the note’s issuance. The note bears interest at the rate of three-month U.S. LIBOR plus 2.80% payable quarterly. Olentangy Reinsurance, LLC agrees to draw down or reduce principal amounts in accordance with the terms outlined in the purchase agreement. The maximum amount outstanding under the agreement is $313 million in 2016. The Company made interest payments on this surplus note totaling $10 million and $9 million for the years ending December 31, 2012 and 2011, respectively. Any payment of interest or principal on the note requires the prior approval of the State of Vermont.

The Company made interest payments to NFS on surplus notes totaling $54 million for the years ended December 31, 2012, 2011 and 2010. Payments of interest and principal under the notes require the prior approval of the ODI.

 

(13) Federal Income Taxes

The following table summarizes the federal income tax expense (benefit) attributable to income (loss) before loss attributable to noncontrolling interests, for the years ended:

 

(in millions)

    December 31,
2012		     December  31,
20111		     December  31,
20101		  

Current tax (benefit) expense

    $ (144 )    $ 55      $ (91 ) 

Deferred tax expense (benefit)

      243        (482 )      103   
  

 

 

    

 

 

    

 

 

  

Total tax expense (benefit)

    $ 99      $ (427 )    $ 12   
  

 

 

    

 

 

    

 

 

  

 

1 

The balances reflect a change in accounting principle, as described in Note 2.

The following table summarizes how the total federal income tax expense (benefit) differs from the amount computed by applying the U.S. federal income tax rate to income (loss) before loss attributable to noncontrolling interests, for the years ended:

 

                                                                                         
     December 31,
2012		     December  31,
20111		     December  31,
20101		  

(in millions)

    Amount         %         Amount         %         Amount         %      

Rate reconciliation:

             

Computed (expected tax expense (benefit))

    $ 245        35 %    $ (297 )      35 %    $ 59        35 % 

Dividends received deduction

      (75 )      (11 )%      (99 )      12 %      (50 )      (29 )% 

Impact of noncontrolling interest

      21        3 %      20        (3 )%      21        12 % 

Tax credits

      (85 )      (12 )%      (30 )      3 %      (27 )      (16 )% 

Change in tax contingency reserve

      (4 )      (1 )%      (15 )      2 %      (5 )      (3 )% 

Other, net

      (3 )      (1 )%      (6 )      1 %      14        8 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

    $ 99        14 %    $ (427 )      50 %    $ 12        7 % 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

1 

The balances reflect a change in accounting principle, as described in Note 2.

The Company’s current federal income tax receivable was $61 million and $16 million as of December 31, 2012 and 2011, respectively.

Total federal income taxes (refunded) paid were $(95) million, $121 million, and $(35) million for the years ended December 31, 2012, 2011, and 2010, respectively.

 

45

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

No material changes in estimated income tax expense were recorded in 2012 or 2010. During 2011, the Company recorded a tax benefit of $10 million primarily related to differences between the 2010 estimated tax liability and the amounts reported on the Company’s 2010 tax return. These changes in estimates were primarily driven by the Company’s separate account dividends received deduction (“DRD”).

As of December 31, 2012, the Company has $87 million in low-income-housing credit carryforwards, which expire between 2024 and 2032, and $169 million in alternative minimum tax credit carryforwards, which have an unlimited carryforward. In addition, the Company has $32 million in foreign tax credit carryforwards which expire between 2019 and 2022. The Company expects to fully utilize all carryforwards.

The following table summarizes the tax effects of temporary differences that gave rise to significant components of the net deferred tax (liability) asset included in other assets in the consolidated balance sheets, as of the dates indicated:

 

                             

(in millions)

    December 31,
2012		     December  31,
20111		  

Deferred tax assets:

     

Future policy benefits and claims

    $ 1,295      $ 1,193   

Derivatives

      94        574   

Tax credit carryforwards

      288        185   

Other

      478        330   
  

 

 

    

 

 

  

Gross deferred tax assets

    $ 2,155      $ 2,282   

Valuation allowance

      (18 )      (18 ) 
  

 

 

    

 

 

  

Net deferred tax assets

    $ 2,137      $ 2,264   
  

 

 

    

 

 

  

Deferred tax liabilities:

     

Deferred policy acquisition costs

    $ (874 )    $ (963 ) 

Available-for-sale securities

      (1,338 )      (840 ) 

Value of business acquired

      (81 )      (86 ) 

Other

      (158 )      (148 ) 
  

 

 

    

 

 

  

Gross deferred tax liabilities

    $ (2,451 )    $ (2,037 ) 
  

 

 

    

 

 

  

Net deferred tax (liability) asset

    $ (314 )    $ 227   
  

 

 

    

 

 

  

 

1 

The balances reflect a change in accounting principle, as described in Note 2.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion of the total gross deferred tax assets will not be realized. Valuation allowances are established when necessary to reduce the deferred tax assets to amounts expected to be realized. The valuation allowance was $18 million as of December 31, 2012 and 2011. There was no change in valuation allowance for the year ended December 31, 2012 or 2010, while there was a change of $6 million for the year ended December 31, 2011. Based on management’s analysis, it is more likely than not that the results of future operations and the implementation of tax planning strategies will generate sufficient taxable income to enable the Company to realize the deferred tax assets for which the Company has not established valuation allowances.

 

46

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

The following table is a rollforward of the beginning and ending uncertain tax positions, including permanent and temporary differences, but excluding interest and penalties:

 

                                                                 

(in millions)

    2012     2011     2010  

Balance at beginning of period

    $ 76      $ 119      $ 95   

Additions for current year tax positions

      (2 )      9        18   

Additions for prior years tax positions

      25        —          19   

Reductions for prior years tax positions

      (63 )      (52 )      (13 ) 
  

 

 

    

 

 

    

 

 

  

Balance at end of period

    $ 36      $ 76      $ 119   
  

 

 

    

 

 

    

 

 

  

The Company does not anticipate any significant changes to unrecognized tax benefits during the next twelve 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 through the 2008 tax year. The IRS is conducting an examination of the Company’s U.S. income tax returns for the years 2009 through 2010. Any adjustments that may result from IRS examination of tax returns are not expected to have a material effect on the results of operations, cash flows or financial position of the Company.

 

(14) Statutory Financial Information

Statutory Results

The Company’s life insurance subsidiaries are required to prepare statutory financial statements in conformity with the statutory accounting practices prescribed and permitted by insurance regulatory authorities, subject to any deviations prescribed or permitted by the applicable state department of insurance. Statutory accounting practices focus on insurer solvency and materially differ from GAAP primarily due to charging policy acquisition and other 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 table summarizes the statutory net income (loss) and statutory capital and surplus for the Company’s primary life insurance subsidiary for the years ended:

 

                                               

(in millions)

    December 31,
2012		     December 31,
2011		     December 31,
2010		  

Statutory net income (loss)

       

NLIC

    $ 764      $ 18      $ 560   

NLAIC

    $ (65 )    $ (61 )    $ (50 ) 

Statutory capital and surplus

       

NLIC

    $ 3,837      $ 3,591      $ 3,686   

NLAIC

    $ 280      $ 302      $ 287   

 

47

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

Dividend Restrictions

The payment of dividends by NLIC is subject to restrictions set forth in the insurance laws and regulations of the State of Ohio, its domiciliary state. The State of Ohio insurance laws require Ohio-domiciled life insurance companies to seek prior regulatory approval to pay a dividend or distribution of cash or other property if the fair market value thereof, together with that of other dividends or distributions made in the preceding 12 months, exceeds the greater of (1) 10% of statutory-basis policyholders’ surplus as of the prior December 31 or (2) the statutory-basis net income of the insurer for the prior year. During the year ended December 31, 2012, NLIC paid a cash dividend of $40 million to NFS. During the year ended December 31, 2011 and 2010, NLIC did not pay any dividends to NFS. As of January 1, 2013, NLIC has the ability to pay dividends to NFS totaling $724 million without obtaining prior approval.

The State of Ohio insurance laws also require insurers to seek prior regulatory approval for any dividend paid from other than earned surplus. Earned capital and 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 capital and surplus must be reasonable in relation to the insurer’s outstanding liabilities and adequate for its financial needs. The payment of dividends by the Company 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 the Company’s participating policies (measured before dividends to policyholders) available for the benefit of the Company and its stockholders.

The Company currently does not expect such regulatory requirements to impair the ability to pay operating expenses and dividends in the future.

Regulatory Risk-Based Capital

The National Association of Insurance Commissioners’ (“NAIC”) Risk Based Capital (“RBC”) model law requires every insurer to calculate its total adjusted capital and RBC requirement to ensure insurer solvency. Regulatory guidelines provide for an insurance commissioner to intervene if the insurer experiences financial difficulty, as evidenced by a company’s total adjusted capital falling below established relationships to required RBC. The model includes components for asset risk, liability risk, interest rate exposure and other factors. The State of Ohio, where NLIC and NLAIC are domiciled, imposes minimum RBC requirements that are developed by the NAIC. The formulas in the model for determining the amount of RBC 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 RBC, as defined by the NAIC. Companies below specific trigger points or ratios are classified within certain levels, all of which require specified corrective action. NLIC and NLAIC each exceeded the minimum RBC requirements for all periods presented herein.

 

(15) 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, employee benefit plans, 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, 2012, 2011 and 2010, the Company made payments to NMIC and NSC totaling $283 million, $241 million and $250 million, respectively.

 

48

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

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 $3.2 billion and $3.0 billion as of December 31, 2012 and 2011, respectively. Total revenues from these contracts were $140 million, $148 million and $139 million for the years ended December 31, 2012, 2011 and 2010, respectively, and include policy charges, net investment income from investments backing the contracts and administrative fees. Total interest credited to the account balances was $113 million, $122 million and $115 million for the years ended December 31, 2012, 2011 and 2010, respectively. The terms of these contracts are materially consistent with what the Company offers to unaffiliated parties.

The Company leases office space from NMIC. For the years ended December 31, 2012, 2011 and 2010, the Company made lease payments to NMIC of $15 million, $14 million and $20 million, respectively. In addition, the Company leases office space to an affiliate of NMIC.

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, 2012, 2011 and 2010 were $161 million, $203 million and $209 million, respectively, while benefits, claims and expenses ceded during these years were $167 million, $212 million and $241 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, 2012 and 2011, customer allocations to NFG funds totaled $45.0 billion and $39.7 billion, respectively. For the years ended December 31, 2012, 2011 and 2010, NFG paid the Company $144 million, $129 million and $103 million, respectively, for the distribution and servicing of these funds.

Amounts on deposit with NCMC for the benefit of the Company were $854 million and $994 million as of December 31, 2012 and 2011, respectively.

Refer to Note 12 for discussion of variable funding surplus note between Olentangy Reinsurance, LLC and Nationwide Corporation.

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, 2012, 2011 and 2010 were $54 million, $64 million and $61 million, respectively.

During 2012, the Company had no sales of commercial mortgage loans to NMIC. During 2011, the Company sold, at fair value, commercial mortgage loans with a carrying value of $41 million to NMIC. The sale resulted in a net realized loss of $5 million in 2011.

The Company provides financing to Nationwide Realty Investors, LTD, a subsidiary of NMIC. As of December 31, 2012 and 2011, the Company had notes receivable outstanding of $126 million and $148 million, respectively.

 

49

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

(16) Contingencies

Legal and Regulatory Matters

The Company is subject to legal and regulatory proceedings in the ordinary course of its business. The Company’s legal and regulatory matters include proceedings specific to the Company and other proceedings generally applicable to business practices in the industries in which the Company operates. These matters are subject to many uncertainties, and given their complexity and scope, their outcomes cannot be predicted. Regulatory proceedings could also affect the outcome of one or more of the Company’s litigation matters. Furthermore, it is often not possible to determine the ultimate outcomes of the pending regulatory 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 believes, however, that based on currently known information, the ultimate outcome of all pending legal and regulatory matters is not likely to have a material adverse effect on the Company’s consolidated financial position. Nonetheless, given the large or indeterminate amounts sought in certain of these matters and the inherent unpredictability of litigation, it is possible that such outcomes could materially affect the Company’s consolidated financial position or results of operations in a particular quarter or annual period.

The various businesses conducted by the Company are subject to oversight by numerous federal and state regulatory entities, including but not limited to the Securities and Exchange Commission, the Financial Industry Regulatory Authority, the Department of Labor, the IRS and state insurance authorities. Such regulatory entities may, in the normal course, be engaged in general or targeted inquiries, examinations and investigations of the Company and/or its affiliates. The financial services industry has been the subject of increasing scrutiny in connection with a broad spectrum of regulatory issues; with respect to all such scrutiny directed at the Company and/or its affiliates, the Company is cooperating with regulators. The Company will cooperate with NMIC insofar as any inquiry, examination or investigation encompasses NMIC’s operations.

In October 2012, NLIC and NLAIC entered into a Regulatory Settlement Agreement with the Florida Office of Insurance Regulation and twenty-one other state Departments of Insurance to resolve a multi-state market conduct exam regarding claim settlement practices. The Regulatory Settlement Agreement applies prospectively and requires NLIC and NLAIC to adopt and implement additional procedures relating to the use of the Social Security Death Master File and identifying and locating beneficiaries once deaths are identified. In October 2012, NLIC and NLAIC also entered into a Global Resolution Agreement to resolve the related unclaimed property audit.

Other jurisdictions may pursue similar investigations, examinations or inquires. The results of these investigations, examinations or inquiries could result in the payment or escheatment of unclaimed death benefits, and/or changes in the Company’s practices and procedures to its claims handling and escheat processes, all of which could impact claim payments and reserves and/or result in payment of investigation costs, fines or penalties.

 

50

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

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 March 12, 2010, NRS and NLIC were named in a Second Amended Class Action Complaint filed in the Circuit Court of Jefferson County, Alabama entitled Steven E. Coker, Sandra H. Turner, David N. Lichtenstein 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 Alabama State Employees Association, Inc. (“ASEA”) Plan, excluding members of the Deferred Compensation Committee, ASEA’s directors, officers and board members, and PEBCO’s directors, officers and board members. On October 22, 2010, the parties to this action executed a court approved stipulation of settlement that agreed to certify a class for settlement purposes only, that provided for payments to the settlement class, and that provided for releases, certain bar orders, and dismissal of the case. The settlement fund has been paid out. On December 6, 2011, the Court entered an Order that NRS owes indemnification to ASEA and PEBCO for only the Coker (Gwin) class action, and dismissed NLIC. The Company has resolved the indemnification claims of ASEA. On February 15, 2013, the Court issued its Order determining the amount of fees due to PEBCO on its indemnification claim. The Company has until March 29, 2013 to file a notice of appeal. The Court has taken the matter under advisement. NRS continues to defend this case vigorously.

On August 15, 2001, NFS and NLIC were named in a lawsuit filed in the U.S. 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. On November 18, 2009, the plaintiffs filed a sixth amended complaint amending the list of named plaintiffs and claiming to represent a class of qualified retirement plan trustees under Employee Retirement Income Security Act of 1974 (“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 participants 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”. On October 21, 2010, the District Court dismissed NFS from the lawsuit. On February 6, 2012, the Second Circuit Court of Appeals vacated the November 6, 2009 order granting class certification and remanded the case back to the District Court for further consideration. The plaintiffs have renewed their motion for class certification. On December 18, 2012, the District Court heard oral argument on the motion for class certification. NLIC continues to defend this lawsuit vigorously.

On June 8, 2011, NMIC and NLIC were named in a lawsuit filed in Court of Common Pleas, Cuyahoga County, Ohio entitled Stanley Andrews and Donald Clark, on their behalf and on behalf of the class defined herein v. Nationwide Mutual Insurance Company and Nationwide Life Insurance Company. The complaint alleges that NMIC and NLIC have an obligation to review the Social Security Administration Death Master File database for all life insurance policyholders who have at least a 70% probability of being deceased according to actuarial tables. The complaint further alleges that NMIC and NLIC are not conducting such a review. The complaint seeks injunctive relief and declaratory judgment requiring NMIC and NLIC to conduct such a review, and alleges NMIC and NLIC have violated the covenant of good faith and fair dealing and have been unjustly enriched by not having conducted such reviews. The complaint seeks certification as a class action. NMIC and NLIC filed a motion to dismiss. By order dated January 18, 2012, the State Court issued an order dismissing the lawsuit. On January 30, 2012, plaintiffs filed their appeal. On October 24, 2012, the Court of Appeals affirmed the dismissal. On November 9, 2012, plaintiffs filed a petition for rehearing en banc. On December 14, 2012, the Court of Appeals denied the petition for rehearing. Plaintiffs filed a notice of appeal to the Ohio Supreme Court on January 24, 2013. NMIC and NLIC have filed an opposition memorandum.

 

51

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

In 2012 the Plaintiff, Debtor in Possession Lehman Brothers Special Financing, Inc., filed a class action suit in the United States Bankruptcy Court for the Southern District of New York seeking the recovery of nearly $3.0 billion in assets from all the named defendants including NLIC and NMIC. This litigation arises from two collateralized debt obligation transactions, 801 Grand and Alta, which resulted in payments to NLIC and NMIC. In 2008 the Plaintiff and its parent company, Lehman Brothers Holding, Inc. filed for bankruptcy which triggered an early termination of the above transactions. The Plaintiff seeks to have sums returned to the bankruptcy estate in addition to prejudgment interest and costs. The case is currently stayed and answers of defendants are due on March 5, 2013.

Tax Matters

The Company’s federal income tax returns are routinely audited by the IRS. The Company has established tax reserves as described in Note 2. The Company 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.

Indemnifications

In the normal course of business, the Company provides standard indemnifications to contractual counterparties. The types of indemnifications typically provided include breaches of representations and warranties, taxes and certain other liabilities, such as third party lawsuits. The indemnification clauses are often standard contractual terms and are entered into in the normal course of business based on an assessment that the risk of loss would be remote. The terms of the indemnifications vary in duration and nature. In many cases, the maximum obligation is not explicitly stated and the contingencies triggering the obligation to indemnify have not occurred and are not expected to occur. Consequently, the maximum amount of the obligation under such indemnifications is not determinable. Historically, the Company has not made any material payments pursuant to these obligations.

 

(17) Reinsurance

The following table summarizes the effects of reinsurance on life, accident and health insurance in force and premiums for the years ended:

 

                                                                 

(in millions)

    December 31,
2012		     December 31,
2011		     December 31,
2010		  

Premiums

       

Direct

    $ 890      $ 832      $ 808   

Assumed

      —          —          5   

Ceded

      (255 )      (301 )      (329 ) 
  

 

 

    

 

 

    

 

 

  

Net

    $ 635      $ 531      $ 484   
  

 

 

    

 

 

    

 

 

  

Life, accident and health insurance in force

       

Direct

    $ 216,002      $ 209,732      $ 208,920   

Assumed

      5        5        10   

Ceded

      (59,895 )      (60,499 )      (64,755 ) 
  

 

 

    

 

 

    

 

 

  

Net

    $ 156,112      $ 149,238      $ 144,175   
  

 

 

    

 

 

    

 

 

  

Total amounts recoverable under reinsurance contracts totaled $684 million, $704 million and $739 million as of December 31, 2012, 2011 and 2010, respectively.

 

52

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

(18) Segment Information

Management views the Company’s business primarily based on its underlying products and uses this basis to define its four reportable segments: Individual Products and Solutions-Annuity (formerly named Individual Investments), Retirement Plans, Individual Products and Solutions-Life and NBSG (formerly named Individual Protection) and Corporate and Other.

The primary segment profitability measure that management uses is a non-GAAP financial measure called pre-tax operating earnings (loss), which is calculated by adjusting income before federal income taxes to exclude: (1) net realized investment gains and losses, except for operating items (trading portfolio realized gains and losses, trading portfolio valuation changes and net realized gains and losses related to hedges on GMDB contracts); (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 Products and Solutions-Annuity

The Individual Products & Solutions - Annuity segment consists of individual annuity products marketed under the 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. The majority of assets and recent sales for the Individual Products & Solutions - Annuity 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 Products and Solutions-Life and NBSG

The Individual Products & Solutions - Life and NBSG segment consists of life insurance products, including individual variable universal life, COLI and BOLI products; traditional life insurance products; and fixed 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 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 included in the Individual Products & Solutions - Annuity segment; other-than-temporary impairment losses and other revenues and expenses not allocated to other segments.

 

53

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

The following tables summarize the Company’s business segment operating results for the years ended:

 

(in millions)

    Individual
Products and
Solutions-Annuity		     Retirement
Plans		      Individual Products
and Solutions-Life
and NBSG		      Corporate
and Other		     Total  

December 31, 2012

             

Revenues:

             

Policy charges

    $ 899      $ 94       $ 677       $ —        $ 1,670   

Premiums

      334        —           301         —          635   

Net investment income

      551        736         536         2        1,825   

Non-operating net realized investment gains1

      —          —           —           459        459   

Other-than-temporary impairment losses

      —          —           —           (31 )      (31 ) 

Other revenues2

      (124 )      —           —           22        (102 ) 
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

  

Total revenues

    $ 1,660      $ 830       $ 1,514       $ 452      $ 4,456   
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

  

Benefits and expenses:

             

Interest credited to policyholder accounts

    $ 375      $ 457       $ 199       $ 7      $ 1,038   

Benefits and claims

      595        —           615         17        1,227   

Policyholder dividends

      —          —           54         —          54   

Amortization of DAC

      185        14         150         226        575   

Interest expense

      —          —           —           68        68   

Other operating expenses

      285        163         255         92        795   
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

  

Total benefits and expenses

    $ 1,440      $ 634       $ 1,273       $ 410      $ 3,757   
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

  

Income before federal income taxes and noncontrolling interests

    $ 220      $ 196       $ 241       $ 42      $ 699   
            

 

 

  

Less: non-operating net realized investment gains1

      —          —           —           (459 )   

Less: non-operating net other-than-temporary impairment losses

      —          —           —           31     

Less: adjustment to amortization of DAC and other related to net realized investment gains and losses

      —          —           —           243     

Less: net loss attributable to noncontrolling interest

      —          —           —           61     
  

 

 

    

 

 

     

 

 

     

 

 

    

Pre-tax operating earnings (loss)

    $ 220      $ 196       $ 241       $ (82 )   
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

  

Assets as of year end

    $ 58,707      $ 27,842       $ 25,301       $ 8,320      $ 120,170   
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

  

 

1 

Excluding operating items (trading portfolio realized gains and losses, trading portfolio valuation changes and net realized gains and losses related to hedges on GMDB contracts).

2 

Includes operating items discussed above.

 

54

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

(in millions)

    Individual
Products and
Solutions-Annuity		     Retirement
Plans		      Individual Products
and Solutions-Life
and NBSG		      Corporate
and Other		     Total  

December 31, 20113

             

Revenues:

             

Policy charges

    $ 781      $ 96       $ 629       $ —        $ 1,506   

Premiums

      234        —           297         —          531   

Net investment income

      527        715         533         69        1,844   

Non-operating net realized investment losses1

      —          —           —           (1,546 )      (1,546 ) 

Other-than-temporary impairment losses

      —          —           —           (67 )      (67 ) 

Other revenues2

      (59 )      —           —           (1 )      (60 ) 
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

  

Total revenues

    $ 1,483      $ 811       $ 1,459       $ (1,545 )    $ 2,208   
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

  

Benefits and expenses:

             

Interest credited to policyholder accounts

    $ 374      $ 441       $ 198       $ 20      $ 1,033   

Benefits and claims

      476        —           598         (12 )      1,062   

Policyholder dividends

      —          —           67         —          67   

Amortization of DAC

      80        11         75         (101 )      65   

Interest expense

      —          —           —           70        70   

Other operating expenses

      269        166         238         87        760   
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

  

Total benefits and expenses

    $ 1,199      $ 618       $ 1,176       $ 64      $ 3,057   
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

  

Income (loss) before federal income taxes and noncontrolling interests

    $ 284      $ 193       $ 283       $ (1,609 )    $ (849 ) 
            

 

 

  

Less: non-operating net realized investment losses1

      —          —           —           1,546     

Less: non-operating net other-than-temporary impairment losses

      —          —           —           67     

Less: adjustment to amortization of DAC and other related to net realized investment gains and losses

      —          —           —           (115 )   

Less: net loss attributable to noncontrolling interest

      —          —           —           56     
  

 

 

    

 

 

     

 

 

     

 

 

    

Pre-tax operating earnings (loss)

    $ 284      $ 193       $ 283       $ (55 )   
  

 

 

    

 

 

     

 

 

     

 

 

    

Assets as of year end

    $ 57,741      $ 25,114       $ 22,503       $ 6,628      $ 111,986   
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

  

 

1 

Excluding operating items (trading portfolio realized gains and losses, trading portfolio valuation changes and net realized gains and losses related to hedges on GMDB contracts).

2 

Includes operating items discussed above.

3 

The balances reflect a change in accounting principle, as described in Note 2.

 

55

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

Notes to Consolidated Financial Statements, Continued

December 31, 2012, 2011 and 2010

 

(in millions)

    Individual
Products and
Solutions-Annuity		     Retirement
Plans		      Individual Products
and Solutions-Life
and NBSG		      Corporate
and Other		     Total  

December 31, 20103

             

Revenues:

             

Policy charges

    $ 646      $ 98       $ 652       $ 3      $ 1,399   

Premiums

      209        —           275         —          484   

Net investment income

      569        691         510         55        1,825   

Non-operating net realized investment losses1

      —          —           —           (177 )      (177 ) 

Other-than-temporary impairment losses

      —          —           —           (220 )      (220 ) 

Other revenues2

      (82 )      —           —           25        (57 ) 
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

  

Total revenues

    $ 1,342      $ 789       $ 1,437       $ (314 )    $ 3,254   
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

  

Benefits and expenses:

             

Interest credited to policyholder accounts

    $ 391      $ 424       $ 199       $ 42      $ 1,056   

Benefits and claims

      354        —           524         (5 )      873   

Policyholder dividends

      —          —           78         —          78   

Amortization of DAC

      192        9         136         (38 )      299   

Interest expense

      —          —           —           55        55   

Other operating expenses

      244        165         237         76        722   
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

  

Total benefits and expenses

    $ 1,181      $ 598       $ 1,174       $ 130      $ 3,083   
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

  

Income (loss) before federal income taxes and noncontrolling interests

    $ 161      $ 191       $ 263       $ (444 )    $ 171   
            

 

 

  

Less: non-operating net realized investment gains1

      —          —           —           177     

Less: non-operating net other-than-temporary impairment losses

      —          —           —           220     

Less: adjustment to amortization of DAC and other related to net realized investment gains and losses

      —          —           —           (48 )   

Less: net loss attributable to noncontrolling interest

      —          —           —           60     
  

 

 

    

 

 

     

 

 

     

 

 

    

Pre-tax operating earnings (loss)

    $ 161      $ 191       $ 263       $ (35 )   
  

 

 

    

 

 

     

 

 

     

 

 

    

Assets as of year end

    $ 52,786      $ 25,502       $ 22,434       $ 5,828      $ 106,550   
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

  

 

1 

Excluding operating items (trading portfolio realized gains and losses, trading portfolio valuation changes and net realized gains and losses related to hedges on GMDB contracts).

2 

Includes operating items discussed above.

3 

The balances reflect a change in accounting principle, as described in Note 2.

 

56

Table of Contents

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, 2012 (in millions)

 

Column A

    Column B      Column C      Column D  

Type of investment

    Cost      Fair
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 and agencies

    $ 476       $ 597       $ 597   

Obligations of states and political subdivisions

      1,722         2,002         2,002   

Debt securities issued by foreign governments

      98         118         118   

Public utilities

      2,374         2,684         2,684   

All other corporate

      24,252         26,410         26,410   
  

 

 

     

 

 

     

 

 

  

Total fixed maturity securities, available-for-sale

    $ 28,922       $ 31,811       $ 31,811   
  

 

 

     

 

 

     

 

 

  

Equity securities, available-for-sale:

         

Common stocks:

         

Industrial, miscellaneous and all other

    $ 5       $ 8       $ 8   

Nonredeemable preferred stocks

      10         12         12   
  

 

 

     

 

 

     

 

 

  

Total equity securities, available-for-sale

    $ 15       $ 20       $ 20   
  

 

 

     

 

 

     

 

 

  

Trading assets

      49         54         54   

Mortgage loans, net of allowance

      5,871            5,827 1 

Policy loans

      980            980   

Other investments

      565            565   

Short-term investments

      1,034            1,034   
  

 

 

        

 

 

  

Total investments

    $ 37,436          $ 40,291   
  

 

 

        

 

 

  

 

1 

Difference from Column B primarily is attributable to valuation allowances due to impairments on mortgage loans (see Note 6 to the audited consolidated financial statements).

See accompanying notes to consolidated financial statements and report of independent registered public accounting firm.

 

57

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

 

Schedule III Supplementary Insurance Information

As of December 31, 2012, 2011 and 2010 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
costs3 		    Future policy
benefits, losses,
claims and
loss expenses		      Unearned
premiums1		     Other policy
claims and
benefits payable1		      Premium
revenue		  

2012

             

IPS - Annuity

    $ 2,110      $ 12,214            $ 334   

Retirement Plans

      168        13,628              —     

IPS - Life and NBSG

      1,442        9,564              301   

Corporate and Other

      (471 )      748              —     
  

 

 

    

 

 

          

 

 

  

Total

    $ 3,249      $ 36,154            $ 635   
  

 

 

    

 

 

          

 

 

  

2011

             

IPS - Annuity

    $ 2,232      $ 12,550            $ 234   

Retirement Plans

      172        12,638              —     

IPS - Life and NBSG

      1,421        9,338              297   

Corporate and Other

      (338 )      726              —     
  

 

 

    

 

 

          

 

 

  

Total

    $ 3,487      $ 35,252            $ 531   
  

 

 

    

 

 

          

 

 

  

2010

             

IPS - Annuity

    $ 1,761      $ 10,541            $ 209   

Retirement Plans

      172        11,874              —     

IPS - Life and NBSG

      1,354        9,163              275   

Corporate and Other

      (162 )      1,098              —     
  

 

 

    

 

 

          

 

 

  

Total

    $ 3,125      $ 32,676            $ 484   
  

 

 

    

 

 

          

 

 

  

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 costs3		     Other  operating
expenses2,3		      Premiums
written		  

2012

             

IPS - Annuity

    $ 551      $ 970       $ 185      $ 285      

Retirement Plans

      736        457         14        163      

IPS - Life and NBSG

      536        868         150        255      

Corporate and Other

      2        24         226        160      
  

 

 

    

 

 

     

 

 

    

 

 

     

Total

    $ 1,825      $ 2,319       $ 575      $ 863      
  

 

 

    

 

 

     

 

 

    

 

 

     

2011

             

IPS - Annuity

    $ 527      $ 850       $ 80      $ 269      

Retirement Plans

      715        441         11        166      

IPS - Life and NBSG

      533        863         75        238      

Corporate and Other

      69        8         (101 )      157      
  

 

 

    

 

 

     

 

 

    

 

 

     

Total

    $ 1,844      $ 2,162       $ 65      $ 830      
  

 

 

    

 

 

     

 

 

    

 

 

     

2010

             

IPS - Annuity

    $ 569      $ 745       $ 192      $ 244      

Retirement Plans

      691        424         9        165      

IPS - Life and NBSG

      510        801         136        237      

Corporate and Other

      55        37         (38 )      131      
  

 

 

    

 

 

     

 

 

    

 

 

     

Total

    $ 1,825      $ 2,007       $ 299      $ 777      
  

 

 

    

 

 

     

 

 

    

 

 

     

 

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.

3 

The 2011 and 2010 balances reflect a change in accounting principle, as described in Note 2.

See accompanying notes to consolidated financial statements and report of independent registered public accounting firm.

 

58

Table of Contents

NATIONWIDE LIFE INSURANCE COMPANY AND SUBSIDIARIES

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

 

Schedule IV Reinsurance

As of December 31, 2012, 2011 and 2010 and for each of the years then ended (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		  

2012

              

Life, accident and health insurance in force

    $ 216,002       $ (59,895 )    $ 5       $ 156,112                 —     
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Premiums:

              

Life insurance 1

    $ 701       $ (66 )    $     —         $ 635         —     

Accident and health insurance

      189         (189 )      —           —           —     
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Total

    $ 890       $ (255 )    $ —         $ 635         —     
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

2011

              

Life, accident and health insurance in force

    $ 209,732       $ (60,499 )    $ 5       $ 149,238         —     
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Premiums:

              

Life insurance 1

    $ 596       $ (65 )    $ —         $ 531         —     

Accident and health insurance

      236         (236 )      —           —           —     
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Total

    $ 832       $ (301 )    $ —         $ 531         —     
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

2010

              

Life, accident and health insurance in force

    $ 208,920       $ (64,755 )    $ 10       $ 144,175         —     
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Premiums:

              

Life insurance 1

    $ 570       $ (88 )    $ 1       $ 483         0.2 % 

Accident and health insurance

      238         (241 )      4         1         NM   
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

Total

    $ 808       $ (329 )    $ 5       $ 484         1.0 % 
  

 

 

     

 

 

    

 

 

     

 

 

     

 

 

  

 

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.

 

59

Table of Contents

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, 2012, 2011, and 2010 (in millions)

 

Column A

    Column B      Column C      Column D      Column E  

Description

    Balance at
beginning
of period		      Charged to
costs and
expenses		      Charged to
other
accounts		      Deductions1      Balance at
end of
period		  

2012

               

Valuation allowances - mortgage loans

    $ 60       $ 1       $         —         $ 17       $ 44   

2011

               

Valuation allowances - mortgage loans

    $ 96       $ 25       $ —         $ 61       $ 60   

2010

               

Valuation allowances - mortgage loans

    $         77       $         66       $ —         $         47       $         96   

 

1 

Amounts generally represent payoffs, sales and recoveries.

See accompanying notes to consolidated financial statements and report of independent registered public accounting firm.

 

60

Table of Contents
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 initial registration statement (333-31725) and hereby incorporated by reference.
(b) Not Applicable
(c) Underwriting or Distribution of contracts between the Depositor and Principal Underwriter – Filed previously with the registration statement (333-27133) and hereby incorporated by reference.
(d) The form of the contract – Filed previously with initial registration statement (333-31725) and hereby incorporated by reference.
(e) The form of the contract application – Filed previously with initial registration statement (333-31725) 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) Reinsurance Contracts -Filed previously with registration statement (333-31725) and hereby incorporated by reference.
(h) Form of Participation Agreements –
  The following Fund Participation Agreements were previously filed on July 17, 2007 with pre-effective amendment number 1 of registration statement (333-140608) under Exhibit 26(h), and are hereby incorporated by reference.
(1) Fund Participation Agreement with AIM Variable Insurance Funds, AIM Advisors, Inc., and AIM Distributors dated January 6, 2003, under document "aimfpa99h1.htm"
(2) Amended and Restated Fund Participation and Shareholder Services Agreement with American Century Investment Services, Inc. dated September 15, 2004, as amended, under document "amcentfpa99h2"
(3) Restated and Amended Fund Participation Agreement with The Dreyfus Corporation dated January 27, 2000, as amended, under document "dreyfusfpa99h3.htm"
(4) Fund Participation Agreement with Federated Insurance Series and Federated Securities Corp. dated April 1, 2006, as amended, under document "fedfpa99h4.htm"
(5) Fund Participation Agreement with Fidelity Variable Insurance Products Fund dated May 1, 1988, as amended, including Fidelity Variable Insurance Products Fund IV and Fidelity Variable Insurance Products Fund V, under document "fidifpa99h5.htm"
(6) 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"
(7) Fund Participation Agreement, Service and Institutional Shares, with Janus Aspen Series, dated December 31, 1999, under document "janusfpa99h9a.htm"
(8) 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"
(9) Fund Participation Agreement with Nationwide Variable Insurance Trust (formerly, Gartmore Variable Insurance Trust) dated May 2, 2005, as amended, under document "nwfpa99h12a.htm"
(10) Fund Participation Agreement with Nationwide Variable Insurance Trust (formerly, Gartmore Variable Insurance Trust), American Funds Insurance Series, and Capital Research and Management Company dated May 1, 2007, as amended, under document "nwfpa99h12b.htm"
(11) 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"
(12) Fund Participation Agreement with Oppenheimer Variable Account Funds and Oppenheimer Funds, Inc. dated April 13, 2007, under document "oppenfpa99h14.htm"
(13) 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"
(14) Fund Participation Agreement with The Universal Institutional Funds, Inc., Morgan Stanley Distribution, Inc., and Morgan Stanley Investment Management, Inc. dated February 1, 2002, as amended, under document "univfpa99h16.htm"
  The following Fund Participation Agreements were previously filed on September 27, 2007 with pre-effective amendment number 3 of registration statement (333-137202) under Exhibit 26(h), and are hereby incorporated by reference.
(15) 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"
(16) Fund Participation Agreement with BlackRock (formerly FAM Distributors, Inc, and FAM Variable Series Funds, Inc.) dated April 13, 2004, as amended, under document "blackrockfpa.htm"
(17) Fund Participation Agreement with PIMCO Variable Insurance Trust and PIMCO Funds Distributors, LLC, dated March 28, 2002, as amended, under document "pimcofpa.htm"
(18) Fund Participation Agreement with Putnam Variable Trust and Putnam Retail Management, L.P., dated February 1, 2002, as document "putnamfpa.htm"
(19) 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"
(20) Fund Participation Agreement with Waddell & Reed Services Company and Waddell & Reed Inc. dated December 1, 2000, as document "waddellreedfpa.htm"
(21) Fund Participation Agreement with Wells Fargo Management, LLC, Stephens, Inc. dated November 15, 2004, as amended, as document "wellsfargofpa.htm"
  The following fund participation agreements were filed previously on April 12, 2011, with Post-Effective Amendment No. 43 (File No. 333-43671) as exhibit 26(h) and are hereby incorporated by reference:
(22) Fund Participation Agreement with Goldman Sachs Variable Insurance Trust, and Goldman Sachs & Co., dated December 22, 1998, as document "goldmansachsfpa.htm".
  (23) Fund Participation Agreement with Delaware Management Company and Delaware Distributors, L.P., dated February 5, 2008, as amended, as document "delawarefpa.htm".
  The following Fund Participation Agreement was previously filed on June 11, 2012, with post-effective amendment number 28 of registration statement (333-62692) as document "northernlightsfpa.htm".
  (24) Fund Participation Agreement with Northern Lights Variable Trust and Northern Lights Distributors, LLC., dated February 8, 2012.
(i) Not Applicable
(j) Not Applicable
(k) Opinion of Counsel – Filed previously with Pre-Effective Amendment No. 1 to the registration statement (333-31725) and hereby incorporated by reference.
(l) Not Applicable
(m) Not Applicable
(n) Consent of Independent Registered Public Accounting Firm – Attached hereto.
(o) Not Applicable
(p) Not Applicable
(q) Redeemability Exemption – Filed previously with registration statement (333-31725) on December 21, 2009 under document "exhibit_26q.htm" and is hereby incorporated by reference.
(99) Power of Attorney – Attached hereto.
Item 27. Directors and Officers of the Depositor
The business address of the Directors and Officers of the Depositor is:
One Nationwide Plaza, Columbus, Ohio 43215
President and Chief Operating Officer and Director Kirt A. Walker
Executive Vice President-Chief Legal and Governance Officer Patricia R. Hatler
Executive Vice President Terri L. Hill
Executive Vice President-Chief Marketing & Strategy Officer Matthew Jauchius
Executive Vice President-Chief Information Officer Michael C. Keller
Executive Vice President-Chief Human Resources Officer Gale V. King
Executive Vice President Mark A. Pizzi
Executive Vice President and Director Mark R. Thresher
Senior Vice President-Government Relations Steven M. English
Senior Vice President Harry H. Hallowell
Senior Vice President and Treasurer David LaPaul
Senior Vice President-Business Transformation Office Mark A. Gaetano
Senior Vice President-Chief Claims Officer David A. Bano
Senior Vice President-Chief Compliance Officer Sandra L. Rich
Senior Vice President-Chief Economist David W. Berson
Senior Vice President-Chief Financial Officer and Director Timothy G. Frommeyer
Senior Vice President-Chief Financial Officer-Property and Casualty Michael P. Leach
Senior Vice President-Chief Risk Officer Michael W. Mahaffey
Senior Vice President-CIO Allied Group Daniel G. Greteman
Senior Vice President-CIO Enterprise Applications Michael A. Richardson
Senior Vice President-CIO IT Infrastructure Gregory S. Moran
Senior Vice President-CIO NF Systems Susan J. Gueli
Senior Vice President-Controller James D. Benson
Senior Vice President-Corporate Strategy Katherine M. Liebel
Senior Vice President-Deputy General Counsel Thomas W. Dietrich
Senior Vice President-Deputy General Counsel Sandra L. Neely
Senior Vice President-Distribution and Sales and Director John L. Carter
Senior Vice President-Enterprise Chief Technology Officer Guruprasad C. Vasudeva
Senior Vice President-Field Operations EC Amy T. Shore
Senior Vice President-Field Operations IC Jeff M. Rommel
Senior Vice President-Head of Taxation Pamela A. Biesecker
Senior Vice President-Individual Products & Solutions and Director Eric S. Henderson
Senior Vice President-Internal Audit Kai V. Monahan
Senior Vice President-Investment Management Group Michael S. Spangler
Senior Vice President-IT Finance & Head of Sourcing Andrew Walker
Senior Vice President-IT Strategic Initiatives Tammy Craig
Senior Vice President-Nationwide Financial Steven C. Power
Senior Vice President-Nationwide Financial Network Peter A. Golato
Senior Vice President-NF Brand Marketing William J. Burke
Senior Vice President-NFS Legal Rae Ann Dankovic
Senior Vice President-NI Brand Marketing Jennifer M. Hanley
Senior Vice President-NW Retirement Plans Anne L. Arvia
Senior Vice President-PCIO Sales Support Melissa D. Gutierrez
Senior Vice President-President-Nationwide Bank J. Lynn Greenstein
Senior Vice President-Property and Casualty Commercial/Farm Product Pricing W. Kim Austen
Senior Vice President-Talent, Div & Org Effect Terri L Forgy
Senior Vice President-Trial Division Peter J. Hersha
Vice President-Corporate Governance and Secretary Robert W. Horner, III
Director Stephen S. Rasmussen
Item 28. Persons Controlled by or Under Common Control with the Depositor or Registrant.
Following is a list of entities directly or indirectly controlled by or under common control with the depositor or registrant. Ownership is indicated through indentation. Unless otherwise indicated, each subsidiary is either wholly-owned or majority-owned by the parent company immediately preceding it. (For example, Nationwide Fund Distributors, LLC is either wholly-owned or majority owned by NFS Distributors, Inc.) Separate accounts that have been established pursuant to board resolution but are not, and have never been, active are omitted.
Company Jurisdiction of
Domicile 		Brief Description of Business
Nationwide Financial Services, Inc. Delaware The company acts primarily as a holding company for companies within the Nationwide organization that offer or distribute life insurance, long-term savings and retirement products.
NFS Distributors, Inc. Delaware The company acts primarily as a holding company for Nationwide Financial Services, Inc. companies.
Nationwide Financial General Agency, Inc. Pennsylvania The company is a multi-state licensed insurance agency.
Nationwide Financial Institution Distributors Agency, Inc. Delaware The company is an insurance agency.
Nationwide Fund Distributors, LLC Delaware The company is a limited purpose broker-dealer.
Nationwide Fund Management, LLC Delaware The company provides administration, transfer and dividend disbursing agent services to various mutual fund entities.
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 Insurance Agency, Inc. Massachusetts The company markets and administers deferred compensation plans for public employees.
Nationwide Retirement Solutions, Inc. of Ohio, Inc.1 Ohio The company provides retirement products, marketing and education and administration to public employees.
Nationwide Retirement Solutions, Inc. of Texas, Inc.1 Texas The company markets and administers deferred compensation plans for public employees.
Nationwide Securities, LLC Delaware The company is a registered broker-dealer.
Nationwide Bank Federal This is a federally chartered savings bank supervised by the Office of the Office of the Comptroller of the Currency 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 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 Life Insurance Company2 Ohio A stock corporation. The corporation provides individual life insurance, group and health insurance, fixed and variable annuity products and other life insurance products.
MFS Variable Account2,3 Ohio A separate account issuing variable annuity contracts.
Nationwide Multi-Flex Variable Account2,3 Ohio A separate account issuing variable annuity contracts.
Nationwide Variable Account2,3 Ohio A separate account issuing variable annuity contracts.
Nationwide Variable Account-II2,3 Ohio A separate account issuing variable annuity contracts.
Nationwide Variable Account-32,3 Ohio A separate account issuing variable annuity contracts.
Nationwide Variable Account-42,3 Ohio A separate account issuing variable annuity contracts.
Company Jurisdiction of
Domicile 		Brief Description of Business
Nationwide Variable Account-52,3 Ohio A separate account issuing variable annuity contracts.
Nationwide Variable Account-62,3 Ohio A separate account issuing variable annuity contracts.
Nationwide Variable Account-72,3 Ohio A separate account issuing variable annuity contracts.
Nationwide Variable Account-82,3 Ohio A separate account issuing variable annuity contracts.
Nationwide Variable Account-92,3 Ohio A separate account issuing variable annuity contracts.
Nationwide Variable Account-102,3 Ohio A separate account issuing variable annuity contracts.
Nationwide Variable Account-112,3 Ohio A separate account issuing variable annuity contracts.
Nationwide Variable Account-122,3 Ohio A separate account issuing variable annuity contracts.
Nationwide Variable Account-132,3 Ohio A separate account issuing variable annuity contracts.
Nationwide Variable Account-142,3 Ohio A separate account issuing variable annuity contracts.
Nationwide Provident VA Separate Account 12,3 Pennsylvania A separate account issuing variable annuity contracts.
Nationwide VLI Separate Account2,3 Ohio A separate account issuing variable life insurance policies.
Nationwide VLI Separate Account-22,3 Ohio A separate account issuing variable life insurance policies.
Nationwide VLI Separate Account-32,3 Ohio A separate account issuing variable life insurance policies.
Nationwide VLI Separate Account-42,3 Ohio A separate account issuing variable life insurance policies.
Nationwide VLI Separate Account-52,3 Ohio A separate account issuing variable life insurance policies.
Nationwide VLI Separate Account-62,3 Ohio A separate account issuing variable life insurance policies.
Nationwide VLI Separate Account-72,3 Ohio A separate account issuing variable life insurance policies.
Nationwide Provident VLI Separate Account 12,3 Pennsylvania A separate account issuing variable life insurance policies.
Nationwide Investment Services Corporation3 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 Financial Assignment Company3 Ohio The company is an administrator of structured settlements.
Nationwide Investment Advisors, LLC3 Ohio The company provides investment advisory services.
Life Reo Holdings, LLC3 Ohio The company is an investment holding company.
Nationwide Life and Annuity Insurance Company2,3 Ohio The company engages in underwriting life insurance and granting, purchasing and disposing of annuities.
Nationwide VA Separate Account-A2,3 Ohio A separate account issuing variable annuity contracts.
Nationwide VA Separate Account-B2,3 Ohio A separate account issuing variable annuity contracts.
Nationwide VA Separate Account-C2,3 Ohio A separate account issuing variable annuity contracts.
Company Jurisdiction of
Domicile 		Brief Description of Business
Nationwide VA Separate Account-D2,3 Ohio A separate account issuing variable annuity contracts.
Nationwide Provident VA Separate Account A2,3 Delaware A separate account issuing variable annuity contracts.
Nationwide VL Separate Account-A2,3 Ohio A separate account issuing variable life insurance policies.
Nationwide VL Separate Account-B2,3 Ohio A separate account issuing variable life insurance policies.
Nationwide VL Separate Account-C2,3 Ohio A separate account issuing variable life insurance policies.
Nationwide VL Separate Account-D2,3 Ohio A separate account issuing variable life insurance policies.
Nationwide VL Separate Account-G2,3 Ohio A separate account issuing variable life insurance policies.
Nationwide Provident VLI Separate Account A2,3 Delaware A separate account issuing variable life insurance policies.
Olentangy Reinsurance, LLC3 Vermont The company is a captive life reinsurance company.
Registered Investment Advisors Services, Inc.3 Texas The company is a technology company that facilitates third-party money management services for registered investment advisors
Nationwide Community Development Corporation, LLC3 Ohio The company holds investments in low-income housing funds.
Nationwide Fund Advisors3,4 Delaware The trust acts as a registered investment advisor.
1 This subsidiary/entity is controlled by its immediate parent through contractual association.
2 This subsidiary/entity files separate financial statements.
3 Information for this subsidiary/entity is included in the consolidated financial statements of its immediate parent.
4 This subsidiary/entity is a business trust.
Item 29. Indemnification
Provision is made in Nationwide's Amended and Restated Code of Regulations and expressly authorized by the General Corporation Law of the State of Ohio, for indemnification by Nationwide of any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative by reason of the fact that such person is or was a director, officer or employee of Nationwide, against expenses, including attorneys fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, to the extent and under the circumstances permitted by the General Corporation Law of the State of Ohio.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 ("Act") may be permitted to directors, officers or persons controlling Nationwide pursuant to the foregoing provisions, Nationwide has been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than 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 asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
Item 30. Principal Underwriter
Nationwide Investment Services Corporation ("NISC")
(a) NISC serves as principal underwriter and general distributor for the following separate investment accounts of Nationwide or its affiliates:
 
MFS Variable Account Nationwide VA Separate Account-D
Multi-Flex Variable Account Nationwide VLI Separate Account
Nationwide Variable Account Nationwide VLI Separate Account-2
Nationwide Variable Account-II Nationwide VLI Separate Account-3
Nationwide Variable Account-3 Nationwide VLI Separate Account-4
Nationwide Variable Account-4 Nationwide VLI Separate Account-5
Nationwide Variable Account-5 Nationwide VLI Separate Account-6
Nationwide Variable Account-6 Nationwide VLI Separate Account-7
Nationwide Variable Account-7 Nationwide VL Separate Account-A
Nationwide Variable Account-8 Nationwide VL Separate Account-C
Nationwide Variable Account-9 Nationwide VL Separate Account-D
Nationwide Variable Account-10 Nationwide VL Separate Account-G
Nationwide Variable Account-11 Nationwide Provident VA Separate Account 1
Nationwide Variable Account-12 Nationwide Provident VA Separate Account A
Nationwide Variable Account-13 Nationwide Provident VLI Separate Account 1
Nationwide Variable Account-14 Nationwide Provident VLI Separate Account A
Nationwide VA Separate Account-A  
Nationwide VA Separate Account-B  
Nationwide VA Separate Account-C  
(b) Directors and Officers of NISC:
 
President Robert O. Cline
Vice President, Treasurer and Director Keith L. Sheridan
Vice President-Chief Compliance Officer James J. Rabenstine
Associate Vice President and Secretary Kathy R. Richards
Associate Vice President and Assistant Secretary Parag H. Shah
Associate Vice President-Finance Operations and Assistant Treasurer Terry C. Smetzer
Assistant Treasurer J. Morgan Elliott
Assistant Treasurer Jerry L. Greene
Director John L. Carter
Director Eric S. Henderson
The business address of the Directors and Officers of NISC 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.

Table of Contents
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets the requirements of Rule 485(b) under the Securities Act of 1933 for effectiveness of the Registration Statement and has caused this Registration Statement to be signed by the undersigned, duly authorized, in the City of Columbus, and State of Ohio, on April 24, 2013.
Nationwide VLI Separate Account-4
(Registrant)
Nationwide Life Insurance Company
(Depositor)
By: /s/ JAMIE RUFF CASTO
Jamie Ruff Casto
Attorney-in-Fact
As required by the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated, on April 24, 2013.
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  
ERIC S. HENDERSON  
Eric S. Henderson, Senior Vice President - Individual Products & Solutions and Director  
JOHN L. CARTER  
John L. Carter, Senior Vice President - Distribution and Sales and Director  
STEPHEN S. RASMUSSEN  
Stephen S. Rasmussen, Director  
  By /s/ JAMIE RUFF CASTO
  Jamie Ruff Casto
Attorney-in-Fact