correspondence.htm

CORRESP 1 filename1.htm correspondence.htm

VIA EDGAR AND US MAIL

September 9, 2008

The United States Securities and

Exchange Commission

100 F Street, NE

Washington, D.C. 20549-4644

Re: Nationwide Life Insurance Company

Nationwide Variable Account-II

Form N-4 Registration Statement (File No. 333-140621)

Dear Ms. Marquigny:

On behalf of Nationwide Life Insurance Company (“Nationwide”) and its Nationwide Variable Account-II (“Variable Account”), we are filing this correspondence in response to your oral comments on July 31, 2008 in connection with the Rule 485(a) filing on Form N-4.

This filing is being made electronically via EDGAR in accordance with Regulation S-T.

1.Comment

Item1: fee table and the associated footnote number one: Consider rewording the availability language relating to the Capital Preservation Lifetime Income Option into simpler language.

Response:

We have amended the availability language relating to the Capital Preservation Plus Lifetime Income Option as follows:

For contracts issued on or after September 15, 2008 or the date of state approval (whichever is later): the current charge associated with the Capital Preservation Plus Lifetime Income Option is equal to an annualized rate of 0.75% of the daily net assets of the variable account and the Guaranteed Term Options/Target Term Option charge is equal to a reduction in crediting rates of 0.75%.

For contracts issued before September 15, 2008 or the date of state approval (whichever is later): the current variable account charge associated with the Capital Preservation Plus Lifetime Income Option is equal to an annualized rate of 0.60% of the daily net assets of the variable account and the Guaranteed Term Options/Target Term Option charge is equal to a reduction in crediting rates of 0.60%.

2. Comment

Item 7, 10 and 18: the availability of the 7% L.Inc: Please revise these items to clearly identify when the 7% L.Inc option is available and when it can be elected.

Response:

We have amended the disclosure as follows:

Item 7:

Item 10:

For contracts issued on or after September 15, 2008 or the date of state approval (whichever comes last), the Guaranteed Term Option/Target Term Option charge associated with the Capital Preservation Plus Lifetime Income Option is equal to a reduction in crediting rates of 0.75%. For contracts issued before September 15, 2008 or the date of state approval (whichever comes last), the Guaranteed Term Option/Target Term Option charge associated with the Capital Preservation Plus Lifetime Income Option is equal to a reduction in crediting rates of 0.60%.

Item 18 (now Item 17):

The 7% Lifetime Income Option is available under the contract at the time of application. (For contracts issued before May 1, 2007, the 7% Lifetime Income Option is also available for election at any time after application.) However, upon state approval of the 10% Lifetime Income Option, the 7% Lifetime Income Option will no longer be available for election. The 7% Lifetime Income Option is not available in the State of New York. The 7% Lifetime Income Option may not be elected if a loan is outstanding on the contract or if any of the following optional benefits are elected: another Lifetime Income Option, the Capital Preservation Plus Lifetime Income Option, or the No CDSC Option.

3. Comment

Item 8:- the availability of 5% L.Inc in New York: Please confirm whether the 5% L.Inc will be available in NY regardless of the offer dates of 7% and 10% L.Inc.

Response:

Beginning September 15, 2008, the 5% Lifetime Income Option is only available in the State of New York and will continue to be available after approval of the 10% Lifetime Income Option. We have amended our disclosure as follows:

4. Comment

Item 17: use of terms “primary annuitant” and “primary contract owner.”: These terms are used in the disclosure, but there is no definition of these terms. Please add definitions to the glossary or the disclosure, including how the primary annuitant and primary contract owner are interact with other benefits and features of the contract.

Response:

All references to “primary annuitant” and “primary contract owner” have been deleted and replaced with “annuitant” and “contract owner,” respectively.

5. Comment

Item 17: please clarify if Nationwide is reserving the right to refuse any single payment over $50,000 or just the amount over the $50,000: Please better define and describe what constitutes a refusal. Clarify whether this is a reservation of right to refuse big payments to reduce risk, and consider using examples to demonstrate what may be refused. Additionally, please indicate how such purchase payments will be returned.

Response:

Nationwide reserves the right to refuse any subsequent purchase payments which total, in aggregate, $50,000 or more in any calendar year. We have amended our disclosure as follows:

There may be instances where a subsequent purchase payment creates a financial risk that Nationwide is unwilling to bear. If this occurs, Nationwide may exercise its right to refuse any subsequent purchase payments which total, in aggregate, $50,000 or more in any calendar year. If Nationwide exercises this right, the contract owner will be notified via telephone and mail. The entire purchase payment that causes the aggregate amount to exceed $50,000 will be returned to the contract owner unless otherwise instructed. The return of purchase payment may result in negative tax consequences. Please consult a tax advisor.

6. Comment

Item 17: 10% accumulation before the 10^th 10% L.Inc anniversary versus after the anniversary: Please add a plain English statement that explains the practical difference of the calculation before a contract owner’s 10^th anniversary and after the contract owner’s 10^th anniversary.

Response:

We have removed the distinction in the calculation between the first 10 years after the Lifetime Income Option is elected and the time period after the 10^th Lifetime Income Option Anniversary. This update has also been made in the 7% Lifetime Income Option and 5% Lifetime Income Option sections. The updated disclosure is as follows:

Determination of the Income Benefit Base Prior to the First Surrender

Upon contract issuance, the Original Income Benefit Base is equal to the contract value. Each time the benefit base is recalculated, as described below, the resulting benefit base becomes the Current Income Benefit Base. Provided no surrenders are taken from the contract, the Current Income Benefit Base will equal the greater of:

(1)	the highest contract value on any 10% L.Inc Anniversary plus purchase payments submitted and credits applied after that 10% L.Inc Anniversary; or

(2)	the sum of the following calculations:

(a)

Original Income Benefit Base with Roll-up: the Original Income Benefit Base, plus 10% of the Original Income Benefit Base for each 10% L.Inc Anniversary up to and including the 10^th 10% L.Inc Anniversary; plus

(b)

Purchase Payments with Roll-up– any purchase payment submitted after contract issuance and the 10^th 10% L.Inc Anniversary, increased by a simple interest rate of 10% through the 10^th 10% L.Inc Anniversary; plus

(c)

Purchase Payments with No Roll-up: any purchase payments submitted after the 10^th 10% L.Inc Anniversary.

When a purchase payment is made on a date other than a 10% L.Inc Anniversary, simple interest is calculated using a prorated method based upon the number of days from the date of the purchase payment to the next 10% L.Inc Anniversary.

7. Comment

Item 17: Required Minimum Distributions and the impact of withdrawals in excess of the Lifetime Withdrawal Percentage: In the disclosure, please indicate whether Nationwide would notify the contract owners if the RMD program is modified or eliminated by using a cross reference or stating it.

Response:

We have amended our disclosure to reflect that notification would be provided if Nationwide exercises the right to modify or eliminate the RMD privilege. The amended disclosure is as follows:

If Nationwide exercises this right, Nationwide will provide notice to contract owners and any surrender in excess of the benefit amount will reduce the remaining Current Income Benefit Base.

8. Comment

Item 17: Attained Age: please define or explain the term “attained age.”

Response:

The word “attained” has been deleted and replaced with the word “current.”

9. Comment

Item 17 (third paragraph from the bottom): age-based lump sum settlement option: please confirm that the equation is “owner minus” rather than “owner plus.”

Response:

We have verified that the equation is correct as stated. The settlement option is based on the single life actuarial table (versus the joint life actuarial table (for the two spouses)). We subtract three years to adjust for the amount that we will pay until the second spouse’s death.

10. Comment

Item 17 (last paragraph): Termination of Benefit: in the body of the L.Inc disclosure, clearly state when the death benefit is offered and please be consistent with the regular disclosure. Clarify whether the spouse receives the death benefit and increase to the contract value or whether the spouse picks up where the contract was left off. Please distinguish between Spousal Continuation and Spousal Protection.

Response:

We have amended our disclosure to distinguish between spousal protection and spousal continuation. This update has also been made in the 7% Lifetime Income Option and 5% Lifetime Income Option sections. The amended disclosure is as follows:

Death of Determining Life

For contracts with no Spousal Protection Benefit, upon the death of the determining life, the benefits associated with the option terminate. If the contract owner is also the annuitant, the death benefit will be paid in accordance with the “Death Benefits” provision. If the contract owner is not the annuitant, the contract value will be distributed in accordance with the “Required Distributions” section of “Appendix C: Contract Types and Tax Information.”

For contracts with the Spousal Protection Benefit, upon the death of the determining life, the surviving spouse continues to receive the benefit associated with the Lifetime Income Option for the remainder of his or her lifetime. The contract value will reflect the death benefit and Spousal Protection Feature.

11. Comment

Item 20: Income Benefit Base: in item b, “determination of the income benefit base,” what is the difference between the value calculated under the old “b” and the new “b”? If this is an attempt to clarify the disclosure, please state what the difference is.

Response:

There is no difference in the actual calculation. The change in disclosure is an attempt to simplify and increase readability.

12. Comment

Item 22: Dollar Cost Averaging for Living Benefits: please clarify the availability of the Dollar Cost Averaging and other programs. The old disclosure had a reference to Enhanced DCA please clarify the availability of Enhanced DCA.

Response:

The old disclosure did include the following sentence…. “The contract owner may also not participate in any of the dollar cost averaging programs otherwise available under the contract.” This is no longer a correct sentence since dollar cost averaging for living benefits is now available. Therefore, the sentence was removed. A new reference to the availability of Dollar Cost Averaging for Living Benefits has been added in paragraph 14, as follows: “The contract owner may also elect Dollar Cost Averaging for Living Benefits (see “Contract Owner Services” later in this prospectus).”

13. Comment

Item 28: Dollar Cost Averaging for Living Benefits: clarify the term “program period” in the 3^rd and 4^th paragraphs. Please either introduce it here or cross reference it in the prospectus.

Response:

The Dollar Cost Averaging for Living Benefits program cannot be terminated once it is elected. Therefore; the term “program period” was unnecessary and has been deleted.

The following comments relate to the Custom Portfolio Asset Rebalancing Service, which were given in connection with the Rule 485(a) filing filed with Registration Statement No. 333-XXXXX. We have requested to add the Custom Portfolio Asset Rebalancing Service to this filing per Rule 485(b)(1)(vii).

14. Comment

Disclaimer: the disclaimer “asset allocation models do not constitute advice” is a legal conclusion and should be removed from the disclosure.

Response:

This language has been removed.

15. Comment

Available funds: please describe the relationship the investor has with the independent third party advisor that selects the funds that are in each asset allocation models.

Response:

The contract owner has no relationship with a third party advisor. Nationwide utilizes the asset categories created by the independent party (widely recognized and used by the mutual fund industry as a whole) to create the allocation percentages that comprise each model. Thus, all references to an independent third party advisor have been removed. The amended disclosure is as follows:

Nationwide makes available the Custom Portfolio Asset Rebalancing Service (“Custom Portfolio”) at no extra charge. Custom Portfolio is an asset allocation program that contract owners can use to build their own customized portfolio of investments, subject to certain limitations.

Custom Portfolio offers seven asset allocation models. Each model is comprised of different percentages of standardized asset categories designed to meet different investment goals, risk tolerances, and investment time horizons. The contract owner selects their model, then selects the specific underlying mutual funds (also classified according to standardized asset categories) and investment percentages within the model’s parameters, enabling the contract owner to create their own unique “Custom Portfolio.” Only one “Custom Portfolio” may be created and in effect at a time and the entire variable account contract value must participate in the model.

Note: Contract owners should consult with a qualified investment advisor regarding the use of Custom Portfolio and to determine which model is appropriate for them.

16. Comment

Quarterly rebalancing: please clarify what value the account receives when quarterly rebalancing is done.

Response:

We have amended our disclosure by stating “rebalancing will be priced using the unit value determined on the last valuation date of the calendar quarter.”

17. Comment

Changing models: it is not clear what happens when the contract owner wants to change underlying funds and allocation percentages, but doesn’t want to change models. The existing disclosure says either or, but not both. Consider specifically stating if any change within a model is considered a transfer and describe what a transfer event is. State whether all changes within a model are transfer events.

Response:

We have amended our disclosure as follows:

Contract owners who have elected a Lifetime Income Option may change the underlying mutual fund allocations or percentages within their elected model or may change models and create a new “Custom Portfolio” within that new model. Contract owners who have elected the CPP Lifetime Income Option are not permitted to change models but can change the underlying mutual fund allocations or percentages within their elected model. To implement one of these changes, contract owners must submit new allocation instructions to Nationwide’s home office in writing on Nationwide’s administrative form. Any model and percentage changes will be subject to Short-Term Trading Fees and will count as a transfer event, as described in the “Transfer Restrictions” provision.

18. Comment

Termination of participation: assuming that the person follows the instruction about what they have to do to terminate, when is termination considered effective? Is it the date they sign or the date Nationwide processes the termination?

Response:

We have amended our disclosure language to clarify that termination is effective on the date the termination request is received at Nationwide’s home office in good order.

The following comments are general comments given in connection with Registration Statement No. 333-147198 but also apply to this filing.

19. Comment

Reservation of right to rescind. Nationwide indicates that it reserves the right to rescind the contract in the event multiple contracts are issued. Please state the basis of this right and how long Nationwide has to rescind.

Response:

The purpose of this general reservation of right is to minimize Nationwide’s concentration of risk in the event the contracts are used in ways in which they are not intended. The disclosure indicates what uses are not permissible. Thus, if the contract owner purchases one or more contracts in contravention of these permissible uses, Nationwide has the ability to rescind the contracts at any time upon such discovery. We have amended our disclosure as follows:

By providing these annuity benefits, Nationwide assumes certain risks. If Nationwide determines that the risks it intended to assume in issuing the contract have been altered by misusing the contract as described above, Nationwide reserves the right to take any action it deems necessary to reduce or eliminate the altered risk, including, but not limited to, rescinding the contract and returning the contract value (less any applicable Contingent Deferred Sales Charge and/or market value adjustment) at any time. Nationwide also reserves the right to take any action it deems necessary to reduce or eliminate altered risk resulting from materially false, misleading, incomplete or otherwise deficient information provided by the contract owner. These actions include implementing new procedures and restrictions as well as not accepting future purchase payments. Nationwide will provide the contract owner written notice of any actions taken to reduce risk or eliminate risk.

20. Comment

Purchase payments in excess of $1,000,000. Current disclosure indicates that purchase payments in excess of $1,000,000 are permitted only upon Nationwide’s consent, which may be contingent upon a medical exam. Please indicate the specifics as to this exam. Specifically, when does it have to be done, who bears the cost, what type of medical exam, etc.

Response:

We have amended our disclosure to remove any reference to medical underwriting exams. The revised disclosure is as follows:

The cumulative total of all purchase payments under contracts issued by Nationwide on the life of any one annuitant cannot exceed $1,000,000 without Nationwide’s prior consent. Any references in this prospectus to purchase payment amounts in excess of $1,000,000 are assumed to have been approved by Nationwide.

21. Comment

References of purchase payments in excess of $1,000,000. In several places in your disclosure (e.g. death benefits and living benefits), you refer to situations where purchase payments are in excess of $1,000,000. Please reconcile these references with the requirement that any purchase payments in excess of $1,000,000 must have Nationwide’s consent.

Response:

We have amended the disclosure, in those provisions where purchase payments in excess of $1,000,000 are discussed, to remind contract owners that purchase payments in excess of $1,000,000 are subject to Nationwide’s consent. Specifically, we indicate:

Any references in this prospectus to purchase payment amounts in excess of $1,000,000 are assumed to have been approved by Nationwide. See the “Operation of the Contract” section for additional information.

* * * * *

Nationwide acknowledges all of the following:

·	that the Variable Account is responsible for the adequacy and accuracy of the disclosure in the Pre-Effective Amendment;

·	that comments by the staff of the Securities and Exchange Commission ("SEC"), or changes to the disclosure in response to SEC staff comments in the filings reviewed by the SEC staff, do not foreclose the SEC from taking any action with respect to the filing; and

·	that the Variable Account may not assert SEC staff comments or any related changes in disclosure as a defense in any proceeding initiated by the SEC or any person under the federal securities laws of the United States.

Should you have any questions regarding this filing, please contact me directly at (614) 677-5456.

Sincerely,

/s/ CATHERINE L. VENARD

Catherine L. Venard

Assistant General Counsel

Nationwide Life Insurance Company

cc: Ms. Rebecca Marquigny

Office of Insurance Product sand Leal Compliance

Enclosure: Exhibit A (Red-line Supplement)

Nationwide Life Insurance Company:

· Nationwide Variable Account –II

Prospectus supplement dated September 15, 2008 to

Prospectus dated May 1, 2008

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

1.	The “Capital Preservation Plus Lifetime Income Option” and the “Optional Riders” section within the “Recurring Contract Expenses” table are replaced with the following:

Recurring Contract Expenses
Capital Preservation Plus Lifetime Income Option	1.00%¹
Total Variable Account Charges (including this option only)	2.00%
In addition to the charge assessed to variable account allocations, allocations made to the Guaranteed Term Options or Target Term Options will be assessed a fee of no more than 1.00% by decreasing the interest credited to amounts allocated to the Guaranteed Term Options/Target Term Options.¹
Additional Optional Riders with charges assessed annually as a percentage of Current Income Benefit Base:²
Lifetime Income Options (an applicant may purchase one):
5% Lifetime Income Option(only available in NY)	1.00%³
7% Lifetime Income Option (not available in NY)	1.00%⁴
10% Lifetime Income Option	1.20%⁵
Spousal Continuation Options (an application may purchase one only if the corresponding Lifetime Income Option is elected):
5% Spousal Continuation Benefit (only available in NY)	0.15%
7% Spousal Continuation Benefit (not available in NY)	0.15%
10% Spousal Continuation Benefit (not available in NY)	0.30%⁶

¹For contracts issued on or after September 15, 2008 or the date of state approval (whichever is later): the current charge associated with the Capital Preservation Plus Lifetime Income Option is equal to an annualized rate of 0.75% of the daily net assets of the variable account and the Guaranteed Term Options/Target Term Option charge is equal to a reduction in crediting rates of 0.75%.

² For information about how the Current Income Benefit Base is calculated see “Determination of the Income Benefit Base Prior to the First Surrender” later in this prospectus.

³ Currently, the charge associated with the 5% Lifetime Income Option is equal to 0.60% of the Current Income Benefit Base.

⁴ Currently, the charge associated with the 7% Lifetime Income Option is equal to 0.70% of the Current Income Benefit Base.

⁵ Currently, the charge associated with the 10% Lifetime Income Option is equal to 0.75% of the Current Income Benefit Base.

⁶Currently, the charge associated with the 10% Spousal Continuation Benefit is 0.20% of the Current Income Benefit Base.

2.	The “Summary of Maximum Contract Expenses” table is replaced with the following:

Summary of Maximum Contract Expenses (annualized rate, as a percentage of the daily net assets)
Mortality and Expense Risk Charge (applicable to all contracts)	0.80%
Administrative Charge (applicable to all contracts)	0.20%
Combination Enhanced Death Benefit Option	0.45%
10% Lifetime Income Option	1.20%⁷
10% Spousal Continuation Benefit	0.30%¹
Maximum Possible Total Variable Account Charges	2.95%²

3.	The “Example” section is replaced with the following:

Example

This Example is intended to help contract owners compare the cost of investing in the contract with the cost of investing in other variable annuity contracts. These costs include contract owner transaction expenses, contract fees, variable account annual expenses, and underlying mutual fund fees and expenses. The Example does not reflect premium taxes or Short-Term Trading Fees, which if reflected, would result in higher expenses.

The Example assumes:

· a $10,000 investment in the contract for the time periods indicated;

· a 5% return each year;

· the maximum and the minimum fees and expenses of any of the underlying mutual funds;

· the maximum Contingent Deferred Sales Charge;

· a $30 Contract Maintenance Charge expressed as a percentage of the average contract account size; and

· the total variable account charges associated with the most expensive allowable combination of optional benefits that contains a CDSC (2.95%).³

For those contracts that do not elect the most expensive combination of optional benefits, the expenses would be lower.

	If you surrender your contract at the end of the applicable time period		If you do not surrender your contract		If you annuitize your contract at the end of the applicable time period
	1 Yr.	3 Yrs.	1 Yr.	3 Yrs.	1 Yr.	3 Yrs.
Maximum Total Underlying Mutual Fund Operating Expenses (1.47%)	$1,126	$1,937	$496	$1,487	*	$1,487
Minimum Total Underlying Mutual Fund Operating Expenses (0.46%)	$1,020	$1,632	$390	$1,182	*	$1,182

*The contracts sold under this prospectus do not permit annuitization during the first two contract years.

4.	The second paragraph of the “Purpose of the Contract” subsection of the “Synopsis of the Contracts” section is replaced with the following:

______________________________________________________

¹ This charge is a percentage of the Current Income Benefit Base. For purposes of this table, Nationwide assumes the Current Income Benefit Base is equal to the daily net assets.

²The Maximum Possible Total Variable Account Charges associated with a particular contract may be higher or lower than 2.95% depending on whether the Current Income Benefit Base is higher or lower than the daily net assets. For purposes of this table, Nationwide assumes the Current Income Benefit Base is equal to the daily net assets.

³ The total variable account charges associated with the most expensive combination of optional benefits may be higher or lower than 2.95% depending on whether the Current Income Benefit Base is higher or lower than the daily net assets.

For purposes of this table, Nationwide assumes the Current Income Benefit Base is equal to the daily net assets.

5.	The “Capital Preservation Plus Lifetime Income Option” subsection of the “Charges and Expenses” section is replaced with the following:

Capital Preservation Plus Lifetime Income Option

If the contract owner or applicant elects the Capital Preservation Plus Lifetime Income Option, Nationwide will deduct an additional charge at an annualized rate not to exceed 1.00% of the daily net assets of the variable account. Additionally, the interest rate of return credited to allocations made to the Guaranteed Term Options or Target Term Options will be reduced by not more than 1.00%. For contracts issued on or after September 15, 2008 or the date of state approval (whichever is later): the current charge associated with the Capital Preservation Plus Lifetime Income Option is equal to an annualized rate of 0.75% of the daily net assets of the variable account. And the Guaranteed Term Option/Target Term Option charge is equal to a reduction in crediting rates of 0.75%. For contracts issued before September 15, 2008 or the date of state approval (whichever is later): the current charge associated with the Capital Preservation Plus Lifetime Income Option is equal to an annualized rate of 0.60% of the daily net assets of the variable account and the Guaranteed Term Option/Target Term Option charge is equal to a reduction in crediting rates of 0.60%.

6.	A “10% Lifetime Income Option” subsection of the “Charges and Expenses” section is added immediately after the “Capital Preservation Plus Lifetime Income Option” subsection as follows:

10% Lifetime Income Option

Upon the later of September 15, 2008 or the date of state approval, the 10% Lifetime Income Benefit Option is available under the contract at the time of application. The contract owner (or the annuitant in the case of a non-natural contract owner) must be between 45 and 85 at the time of application. For contracts issued in the State of New York, the contract owner must (or the annuitant in the case of a non-natural contract owner) must be between 57 and 85 at the time of application. The 10% Lifetime Income Option may not be elected if any of the following optional benefits are elected: another Lifetime Income Option, the Capital Preservation Plus Lifetime Income Option, or the No CDSC Option.

If the contract owner elects the 10% Lifetime Income Option, Nationwide will deduct an additional charge not to exceed 1.20% of the Current Income Benefit Base, which is the amount upon which the annual benefit is based. The current charge for the 10% Lifetime Income Option is 0.75% of the Current Income Benefit Base. The charge is deducted on each contract anniversary and is taken from the sub-accounts proportionally based on contract allocations at the time the charge is deducted.

7.	The “7% Lifetime Income Option” subsection of the “Charges and Expenses” section is replaced with the following:

7% Lifetime Income Option

The contract owner (or the annuitant in the case of a non-natural contract owner) must be between age 45 and 85 at the time of application. The 7% Lifetime Income Option may not be elected if any of the following optional benefits are elected: another Lifetime Income Option the Capital Preservation Plus Lifetime Income Option, or the No CDSC Option.

If the contract owner elects the 7% Lifetime Income Option, Nationwide will deduct an additional charge not to exceed 1.00% of the Current Income Benefit Base, which is the amount upon which the annual benefit is based. The current charge for the 7% Lifetime Income Option is 0.70% of the Current Income Benefit Base. The charge is deducted on each contract anniversary and is taken from the sub-accounts proportionally based on contract allocations at the time the charge is deducted.

8.	The “5% Lifetime Income Option” subsection of the “Charges and Expenses” section is replaced with the following:

5% Lifetime Income Option

The 5% Lifetime Income Option is available under the contract at the time of application. Effective September 15, 2008, the 5% Lifetime Income Option is only available for contracts issued in the State of New York. The contract owner (or the annuitant in the case of a non-natural contract owner) must be between age 45 and 85 at the time of application. The 5% Lifetime Income Option may not be elected if any of the following optional benefits are elected: another Lifetime Income Option, the Capital Preservation Plus Lifetime Income Option, or the No CDSC Option.

If the contract owner elects the 5% Lifetime Income Option, Nationwide will deduct an additional charge not to exceed 1.00% of the Current Income Benefit Base, which is the amount upon which the annual benefit is based. The current charge for the 5% Lifetime Income Option is 0.60% of the Current Income Benefit Base. The charge is deducted on each contract anniversary and is taken from the sub-accounts proportionally based on contract allocations at the time the charge is deducted.

9.	The “Spousal Continuation Benefit” subsection of the “Charges and Expenses” section is replaced with the following:

5% or 7% Spousal Continuation Benefit

The 5% or 7% Spousal Continuation Benefit is only available for election if and when the 5% or 7% Lifetime Income Option is elected. The contract owner’s spouse (or the annuitant’s spouse in the case of a non-natural contract owner) must be between age 45 and 85 at the time of application. If the contract owner elects the 5% or 7% Spousal Continuation Benefit, Nationwide will deduct an additional charge of 0.15% of the Current Income Benefit Base. The charge is deducted at the same time and in the same manner as the 5% or 7% Lifetime Income Option charge.

10% Spousal Continuation Benefit

The 10% Spousal Continuation Benefit is only available for election if and when the 10% Lifetime Income Option is elected. The 10% Spousal Continuation Benefit is not available in the State of New York. The contract owner’s spouse (or the annuitant’s spouse in the case of a non-natural contract owner) must be between age 45 and 85 at the time of application. If the contract owner elects the 10% Spousal Continuation Benefit, Nationwide will deduct an additional charge not to exceed 0.30% of the Current Income Benefit Base. Currently, the charge for the 10% Spousal Continuation Benefit is 0.20% of the Current Income Benefit Base. The charge is deducted at the same time and in the same manner as the 10% Lifetime Income Option charge.

10.

The chart in the “GTO Charges Assessed for Certain Optional Benefits” subsection of the “Guaranteed Term Options” section is replaced with the following:

Optional Benefit	GTO Charge
Capital Preservation Plus Lifetime Income Option	up to 1.00%*

* For contracts issued on or after September 15, 2008 or the date of state approval (whichever comes last), the Guaranteed Term Option/Target Term Option charge associated with the Capital Preservation Plus Lifetime Income Option is equal to a reduction in crediting rates of 0.75%. For contracts issued before September 15, 2008 or the date of state approval (whichever comes last), the Guaranteed Term Option/Target Term Option charge associated with the Capital Preservation Plus Lifetime Income Option is equal to a reduction in crediting rates of 0.60%.

11.

The second paragraph of the “No CDSC Option” subsection of the “Optional Contract Benefits, Charges and Deductions” section is replaced with the following:

Additionally, election of the C Schedule Option:

•eliminates any available Lifetime Income Options as optional benefits;

•eliminates the Capital Preservation Plus Lifetime Income Option as an optional benefit;

•eliminates the fixed account as an investment option under the contract; and

•eliminates Enhanced Fixed Account Dollar Cost Averaging as a contract owner service and Dollar Cost Averaging for Living Benefits as a contract owner service.

12.

The “Availability” and “Charges” subsections of the “Capital Preservation Plus Lifetime Income Option” section are replaced with the following:

Availability

The Capital Preservation Plus Lifetime Income Option is available under the contract at the time of application. (For contracts issued before May 1, 2007, the Capital Preservation Plus Lifetime Income Option is also available for election at any time after application). The person's life upon which the benefit depends (the "determining life") must be age 35 or older at the time of election. For most contracts, the determining life is that of the contract owner. For those contracts where the contract owner is a non-natural person, for purposes of this option, the determining life is that of the annuitant, and all references in this option to "contract owner" shall mean annuitant. The CPP Lifetime Income Option is not available if any of the following optional benefits are elected: No CDSC Option or a Lifetime Income Option. Additionally, the CPP Lifetime Income Option may not be revoked or terminated except as described herein.

Charges

The CPP Lifetime Income Option is provided for an additional charge at an annualized rate not to exceed 1.00% of the daily net assets of the variable account. Additionally, the interest rate of return credited to allocations made to the Guaranteed Term Options or Target Term Options will be reduced by not more than 1.00%. For contracts issued on or after September, 15, 2008 or the date of state approval (whichever is later): the current charge associated with the Capital Preservation Plus Lifetime Income Option is equal to an annualized rate of 0.75% of the daily net assets of the variable account and the Guaranteed Term Option/Target Term Option charge is equal to a reduction in crediting rates of 0.75%. For contracts issued before September 15, 2008 or the date of state approval (whichever is later): the current charge associated with the Capital Preservation Plus Lifetime Income Option is equal to an annualized rate of 0.60% of the daily net assets of the variable account and the Guaranteed Term Option/Target Term Option charge is equal to a reduction in crediting rates of 0.60%.

Nationwide may realize a profit from the charge assessed for this option. All charges associated with the CPP Lifetime Income Option will be assessed until annuitization and the charge will remain the same (unless the contract owner elects a new CPP program or invokes the reset opportunity, discussed herein).

13.

Item (b) of the “Investments During the CPP Program Period” subsection of the “Capital Preservation Plus Lifetime Income Option” is replaced with the following:

(b)(i) if the Custom Portfolio Asset Rebalancing Service is available, one of the models available through that service (see (“Contract Owner Services”); or

(b)(ii) any combination of the underlying mutual funds listed under the section “Income Benefit Investment Options” found later in this prospectus.

Nationwide reserves the right to modify the list of available underlying mutual funds upon written notice to contract owners. If an underlying mutual fund is deleted from the list of available underlying mutual funds, such deletion will not affect any CPP Program already in effect.

14.

The “Enhanced Capital Preservation Plus Program” subsection of the “Capital Preservation Plus Lifetime Income Option” section is replaced with the following:

Enhanced Capital Preservation Plus Program. From time to time, Nationwide may offer an enhanced version of the CPP program. An enhanced CPP program will not result in any increase in cost to the contract owner. Enhanced CPP programs operate similarly to the standard CPP program, but provide for a larger non-GTO component than would be available under the standard CPP program. In exchange for this benefit, Nationwide will impose stricter allocation restrictions on the non-GTO component. It is possible, under certain enhanced CPP programs, for a contract owner to have 100% of their investment allocated to the non-GTO component during the preservation phase. Any enhanced CPP program that Nationwide offers will be subject to the rates, conditions, and allocation percentages in effect at that point in time. For the list of underlying mutual funds available under the enhanced CPP program, please see “Income Benefit Investment Options” later in this prospectus. While enhanced CPP programs are offered, contract owners will still have the option to elect the standard CPP program under the CPP Lifetime Income Option. The contract owner may also elect Dollar Cost Averaging for Living Benefits (see “Contract Owner Services” later in this prospectus).

15.

The “Lifetime Income Options - Generally” subsection of the “Optional Contract Benefits, Charges and Deductions” section is replaced with the following:

Unlike the CPP Lifetime Income Option, the 5%, 7% and 10% Lifetime Income Options are designed exclusively for contract withdrawal benefits, with no principal protection period. Nationwide determines a benefit base that it uses to calculate how much the contract owner can withdraw each year. Additionally, if the contract owner delays taking withdrawals, Nationwide will guarantee growth of the original income benefit base at a rate of 5%, 7%, or 10% simple interest annually for up to 10 years.

While the tax treatment for surrenders under withdrawal benefits such as the 5%, 7% or 10% Lifetime Income Options is not defined under federal tax law, Nationwide currently treats these surrenders as taxable to the extent that the cash value of the contract exceeds the contract owner’s investment at the time of the surrender. Please consult a qualified tax advisor.

16.

The “Optional Contract Benefits, Charges and Deductions” section is amended to include the following subsection immediately after the “Lifetime Income Options - Generally” subsection:

10% Lifetime Income Option

The 10% Lifetime Income Option provides for lifetime withdrawals, up to a certain amount each year, even after the contract value is zero. Except in the state of New York, the age of the person upon which the benefit depends (the “determining life”) must be between 45 and 85 years old at the time the time of application. In the State of New York, the age of the determining life must be between 57 and 85 years old at the time the time of application. For most contracts, the determining life is that of the contract owner. For those contracts where the contract owner is a non-natural person, for purposes of this option, the determining life is that of the annuitant, and all references in this option to “contract owner” shall mean annuitant. The determining life may not be changed.

The 10% Lifetime Income Option is available upon the later of September 15, 2008 or the date of state approval. The 10% Lifetime Income Option may not be elected if any of the following optional benefits are elected: another Lifetime Income Option, the Capital Preservation Plus Lifetime Income Option, or the No CDSC Option.

In exchange for this lifetime withdrawal benefit, Nationwide will assess an annual charge not to exceed 1.20% of the Current Income Benefit Base. The current charge for the 10% Lifetime Income Option is 0.75% of the Current Income Benefit Base. The charge associated with the 10% Lifetime Income Option will not change, except, possibly, upon the contract owner’s election to reset the benefit base, as discussed herein. The charge will be assessed on each contract anniversary (the 10% L.Inc Anniversary) and will be deducted via redemption of accumulation units. A prorated charge will also be deducted upon full surrender of the contract. Accumulation units will be redeemed proportionally from each sub-account in which the contract owner is invested at the time the charge is taken. Amounts redeemed as the 10% Lifetime Income Option charge will not reduce the current value of other benefits elected or available under the contract, will not be subject to a CDSC, and will not reduce amounts available under the CDSC-free withdrawal privilege. (See below for an explanation of what happens if application of the CDSC causes the gross surrender (the surrender amount plus the CDSC) to exceed the Lifetime Withdrawal Percentage limit).

Election of the 10% Lifetime Income Option requires that the contract owner, until annuitization, allocate the entire contract value to a limited set of investment options currently available in the contract. For the list of investment options available under this option please see “Income Benefit Investment Options” later in this prospectus. Allocations to investment options other than those listed in the “Income Benefit Investment Options” chart will not be honored; they will be treated as though no allocation request was submitted. Allocation to a GTO and/or the fixed account is not permitted. The contract owner may reallocate the contract value among the limited set of investment options in accordance with the “Transfers Prior to Annuitization” provision. Additionally, the contract owner may elect Dollar Cost Averaging for Living Benefits described in this prospectus.

Currently, subsequent purchase payments are permitted under a 10% Lifetime Income Option as long as the contract value is greater than zero. There may be instances where a subsequent purchase payment creates a financial risk that Nationwide is unwilling to bear. If this occurs, Nationwide may exercise its right to refuse any subsequent purchase payments which total, in aggregate, $50,000 or more in any calendar year. If Nationwide exercises this right, the contract owner will be notified via telephone and mail. The entire purchase payment that causes the aggregate amount to exceed $50,000 will be returned to the contract owner unless otherwise instructed. The return of purchase payment may result in negative tax consequences. Please consult a tax advisor.

Determination of the Income Benefit Base Prior to the First Surrender

(1)	the highest contract value on any 10% L.Inc Anniversary plus purchase payments submitted and credits applied after that 10% L.Inc Anniversary; or
(2)	the sum of the following calculations:
	(a)	Original Income Benefit Base with Roll-up: the Original Income Benefit Base, plus 10% of the Original Income Benefit Base for each 10% L.Inc Anniversary up to and including the 10^th 10% L.Inc Anniversary; plus
	(b)	Purchase Payments with Roll-up– any purchase payment submitted after contract issuance and the 10^th 10% L.IncAnniversary, increased by a simple interest rate of 10% through the 10^th 10% L.Inc Anniversary; plus
	(c)	Purchase Payments with No Roll-up: any purchase payments submitted after the 10^th 10% L.Inc Anniversary.

However, if at any time prior to the first surrender the contract value equals zero, no further income benefit base calculations will be made. The Current Income Benefit Base will be set equal to the income benefit base calculated on the most recent 10% L.Inc Anniversary and the annual benefit amount will be based on that Current Income Benefit Base.

Lifetime Income Surrenders

At any time after the 10% Lifetime Income Option is elected, the contract owner may begin taking the lifetime income benefit by taking a surrender from the contract. Nationwide will surrender accumulation units proportionally from the sub-accounts as of the date of the surrender request. As with any surrender, lifetime income surrenders reduce the contract value and consequently, the amount available for annuitization.

At the time of the first surrender, the Current Income Benefit Base is locked in and will not change unless the contract owner takes excess surrenders, elects a reset opportunity (both discussed later in this provision), or submits additional purchase payments. Additional purchase payments submitted after the first surrender from the contract will increase the Current Income Benefit Base by the amount of the purchase payment.

Simultaneously, the lifetime withdrawal percentage is determined based on the age of the contract owner as indicated in the following table:

Contract Owner’s Age (at time of first surrender)	Lifetime Withdrawal Percentage
45 up to 59½	4%
59½ through 66	5%
67 through 71	5.5%
72 through 80	6%
81 and older	7%

A contract owner will receive the 7% lifetime withdrawal percentage only if he or she does not take a surrender from the contract prior to age 81. Note: The Internal Revenue Code requires that IRAs, SEP IRAs, and Simple IRAs begin distributions no later than April 1 of the calendar year following the calendar year in which the contract owner reaches age 70½. Thus, if the contract is subject to these minimum distribution rules and distributions are taken at the latest date possible under the tax rules, the maximum lifetime withdrawal percentage available to that contract is 5.5%. Contract owners may be eligible to take the minimum required distributions from other IRA, SEP IRA, or Simple IRA contracts or accounts, and thus may be able to receive a lifetime withdrawal percentage greater than 5.5%. Consult a qualified tax advisor.

At the time of the first surrender and on each 10% L.Inc anniversary thereafter, the lifetime withdrawal percentage is multiplied by the Current Income Benefit Base to determine the benefit amount for that year. The benefit amount is the maximum amount that can be surrendered from the contract before the next 10% L.Inc anniversary without reducing the Current Income Benefit Base. The ability to surrender the current benefit amount will continue until the earlier of the contract owner’s death or annuitization.

Although surrenders up to the benefit amount do not reduce the lifetime benefit base, they do reduce the contract value and the death benefit.

If a CDSC does apply, application of the CDSC could cause the gross surrender (the surrender amount plus the CDSC) to exceed the Lifetime Withdrawal Percentage limit. To avoid this, contract owners can request to receive the surrender net of the CDSC amount. The gross amount of the surrender (including the CDSC) is the amount used to determine whether the surrender exceeds the Lifetime Withdrawal Percentage limit.

Impact of Withdrawals in Excess of the Lifetime Withdrawal Percentage Limit

The contract owner is permitted to surrender contract value in excess of that year’s benefit amount provided that the contract value is greater than zero. Surrenders in excess of the benefit amount will reduce the Current Income Benefit Base, and consequently, the benefit amount calculated for subsequent years. In the event of excess surrenders, the Current Income Benefit Base will be reduced by the greater of:

(1)	the dollar amount of the surrender in excess of the benefit amount; or
(2)	the ratio of the dollar amount of the excess surrender to the contract value (which has been reduced by the amount of the benefit amount surrendered), multiplied by the Current Income Benefit Base.

In situations where the contract value exceeds the existing Current Income Benefit Base, excess surrenders will typically result in a dollar amount reduction to the new Current Income Benefit Base. In situations where the contract value is less than the existing Current Income Benefit Base, excess surrenders will typically result in a proportional reduction to the new Current Income Benefit Base.

Currently, Nationwide allows for an “RMD privilege” whereby Nationwide permits a contract owner to surrender contract value in excess of the benefit amount without reducing the Current Income Benefit Base if such excess surrender is for the sole purpose of meeting Internal Revenue Code required minimum distributions for this contract. This RMD privilege does not apply to beneficially owned contracts. In order to qualify for the RMD privilege, the contract owner must:

(1)	be at least 70 ½ years old as of the date of the request;
(2)	own the contract as an IRA, SEP IRA, Simple IRA, or Investment-Only Contract; and
(3)	submit a completed administrative form to Nationwide’s home office.

Nationwide reserves the right to modify or eliminate the RMD privilege if there is any change to the Internal Revenue Code or IRS rules relating required minimum distributions, including the issuance of relevant IRS guidance. If Nationwide exercises this right, Nationwide will provide notice to contract owners and any surrender in excess of the benefit amount will reduce the remaining Current Income Benefit Base.

Once the contract value falls to zero, the contract owner is no longer permitted to submit additional purchase payments or take surrenders in excess of the benefit amount.

Reset Opportunities

Nationwide offers an automatic reset of the income benefit base. If, on any 10% L.Inc Anniversary, the contract value exceeds the existing Current Income Benefit Base, Nationwide will automatically reset the Current Income Benefit Base to equal that contract value. This higher amount will be the new Current Income Benefit Base. This automatic reset will continue until any terms and conditions associated with the 10% Lifetime Income Option change.

In the event one or more terms and conditions of the 10% Lifetime Income Option change, the reset opportunities still exist, but are no longer automatic. An election to reset the Current Income Benefit Base must be made by the contract owner to Nationwide. On or about each 10% L.Inc Anniversary, Nationwide will provide the contract owner with information necessary to make this determination. Specifically, Nationwide will provide: the contract value; the Current Income Benefit Base; the current terms and conditions associated with the 10% Lifetime Income Option; and instructions on how to communicate an election to reset the benefit base.

If the contract owner elects to reset the Current Income Benefit Base, it will be at the then current terms and conditions of the option as described in the most current prospectus. If Nationwide does not receive a contract owner’s election to reset the Current Income Benefit Base within 60 days after the 10% L.Inc Anniversary, Nationwide will assume that the contract owner does not wish to reset the Current Income Benefit Base. If the Current Income Benefit Base is not reset, it will remain the same and the terms and conditions of the 10% Lifetime Income Option will not change (as applicable to that particular contract).

Contract owners may cancel the automatic reset feature of the 10% Lifetime Income Option by notifying Nationwide as to such election. Nationwide reserves the right to modify or terminate the automatic reset feature at any time upon written notice to contract owners.

Settlement Options

If, after beginning the lifetime income surrenders, a contract owner’s contract value falls to zero and there is still a positive Current Income Benefit Base, Nationwide will provide the contract owner with one or more settlement options (in addition to the option of continuing to take or receive annual benefit payments). Specifically, Nationwide will provide a notification to the contract owner describing the following three options, along with instructions on how to submit the election to Nationwide:

(1)	The contract owner can continue to take annual surrenders of no more than the annual benefit amount until the death of the contract owner;
(2)	The contract owner can elect the Age Based Lump Sum Settlement Option, as described below; or
(3)	If the contract owner qualifies after a medical examination, the contract owner can elect the Underwritten Lump Sum Settlement Option, as described below.

The options listed above each result in a different amount ultimately received under the 10% Lifetime Income Benefit Option. The Underwritten Lump Sum Settlement Option will generally pay a larger amount than the Age Based Lump Sum Settlement Option when a contract owner is healthier than the normal population. Regardless of age or health, the Underwritten Lump Sum Settlement Option amount will never be less than the Age Based Lump Sum Settlement Option amount. Election of the Age Based Lump Sum Settlement Option enables the contract owner to receive payment without a medical exam, which could potentially delay payment. Before selecting a settlement option, consult with a qualified financial advisor to determine which option is best for you based on your individual financial situation and needs.

The contract owner will have 60 days from the date of Nationwide’s notification letter to make an election. Once the contract owner makes an election, the election is irrevocable. If the contract owner does not make an election within 60 days of the date of the notification letter, Nationwide will assume that the contract owner intends to continue to take surrenders of the annual benefit amount.

Age Based Lump Sum Settlement Option. Under the Age Based Lump Sum Settlement Option, in lieu of taking surrenders of the annual benefit amount, Nationwide will pay the contract owner a lump sum equal to the contract owner’s most recently calculated annual benefit amount multiplied by the Annual Benefit Multiplier listed below:

Contract Owner’s Age (as of the date the Age Based Lump Sum Option is elected)	Annual Benefit Multiplier
Up to Age 70	5.5
71-75	4.5
76-80	3.5
81-85	2.5
86-90	2.0
91-95	1.5
96+	1.0

For contracts that have elected the 10% Spousal Continuation Benefit, if both spouses are living on the date the Age Based Lump Sum Settlement Option is elected, Nationwide will use the age of the younger contract owner minus three years to determine the Annual Benefit Multiplier. If only one spouse is living on the date the Age Based Lump Sum Settlement Option is elected, Nationwide will use the age of the living spouse to determine the Annual Benefit Multiplier.

Underwritten Lump Sum Settlement Option. Under the Underwritten Lump Sum Settlement Option, in lieu of taking surrenders of the annual benefit amount, for those who qualify based on a medical exam, Nationwide will pay the contract owner a lump sum based upon the current age, sex, and health of the contract owner and joint owner, if applicable. Such information must be submitted by the contract owner to Nationwide on a Nationwide form that is attested to by a certified physician chosen by the contract owner.

Annuitization

If the contract owner elects to annuitize the contract, this option will terminate. Specifically, the charge associated with the option will no longer be assessed and all benefits associated with the 10% Lifetime Income Option will terminate.

Death of Determining Life

17.

The second paragraph of the “7% Lifetime Income Option” subsection of the “Optional Contract Benefits, Charges and Deductions” section is replaced with the following:

18.

The fourth paragraph of the “7% Lifetime Income Option” subsection of the “Optional Contract Benefits, Charges and Deductions” section is replaced with the following:

Election of the 7% Lifetime Income Option requires that the contract owner, until annuitization, allocate the entire contract value to the Custom Portfolio Asset Rebalancing Service (see “Contract Owner Services”) or to a limited set of investment options currently available in the contract (see “Income Benefit Investment Options”). Allocation requests that fall outside of the Custom Portfolio Asset Rebalancing Service or to investment options other than those listed in the “Income Benefit Investment Options” chart will not be honored; they will be treated as though no allocation request was submitted. Allocation to a GTO and/or the fixed account is not permitted. The contract owner may reallocate the contract value among the limited set of investment options in accordance with the “Transfers Prior to Annuitization” provision. The contract owner may reallocate the contract value within the Custom Portfolio Asset Rebalancing Service in accordance with that provision. Additionally, contract owners may change from the Custom Portfolio Asset Rebalancing Service to the permitted investment options, and vice versa. Once this option is elected, contract loans are unavailable. Additionally, the contract owner may elect Dollar Cost Averaging for Living Benefits described in this prospectus.

19.	The “Determination of the Income Benefit Base Prior to the First Surrender” subsection of the “7% Lifetime Income Option” section is replaced with the following:

Determination of the Income Benefit Base Prior to the First Surrender

(1)	the highest contract value on any 7% L.Inc Anniversary plus purchase payments submitted and credits applied after that 7% L.Inc Anniversary; or
(2)	the sum of the following calculations:
	(a)	Original Income Benefit Base with Roll-up: the Original Income Benefit Base, plus 7% of the Original Income Benefit Base for each 7% L.Inc Anniversary up to and including the 10^th 7% L.Inc Anniversary; plus
	(b)	Purchase Payments with Roll-up– any purchase payment submitted after contract issuance and the 10^th 7% L.IncAnniversary, increased by a simple interest rate of 7% through the 10^th 7% L.Inc Anniversary; plus
	(c)	Purchase Payments with No Roll-up: any purchase payments submitted after the 10^th 7% L.Inc Anniversary.

When a purchase payment is made on a date other than a 7% L.Inc Anniversary, simple interest is calculated using a prorated method based upon the number of days from the date of the purchase payment to the next 7% L.Inc Anniversary.

However, if at any time prior to the first surrender the contract value equals zero, no further Income Benefit Base calculations will be made. The Current Income Benefit Base will be set equal to the Income Benefit Base calculated on the most recent 7% L.Inc anniversary, and the annual benefit amount will be based on that Current Income Benefit Base.

20.

The “Termination of Benefit” subsection of the “7% Lifetime Income Option” section is replaced with the following:

Annuitization

Death of Determining Life

21.

The second paragraph of the “5% Lifetime Income Option” subsection of the “Optional Contract Benefits, Charges and Deductions” section is replaced with the following:

The 5% Lifetime Income Option is available under the contract at the time of application. Effective September 15, 2008, the 5% Lifetime Income Option is only available for contracts issued in the State of New York. The 5% Lifetime Income Option may not be elected if a loan is outstanding on the contract or if any of the following optional benefits are elected: another Lifetime Income Option, the Capital Preservation Plus Lifetime Income Option, or the No CDSC Option.

22.

The fourth paragraph of the “5% Lifetime Income Option” subsection of the “Optional Contract Benefits, Charges and Deductions” section is replaced with the following:

Election of the 5% Lifetime Income Option requires that the contract owner, until annuitization, allocate the entire contract value to one of the models available under the Custom Portfolio Asset Rebalancing Service (see “Contract Owner Services”) or to a limited set of investment options currently available in the contract (see “Income Benefit Investment Options”). Allocation requests that fall outside of the Custom Portfolio Asset Rebalancing Service or to investment options other than those listed in the “Income Benefit Investment Options” chart will not be honored; they will be treated as though no allocation request was submitted. Allocation to a GTO and/or the fixed account is not permitted. The contract owner may reallocate the contract value among the limited set of investment options in accordance with the “Transfers Prior to Annuitization” provision. The contract owner may reallocate the contract value within the Custom Portfolio Asset Rebalancing Service in accordance with that provision. Additionally, contract owners may change from the Custom Portfolio Asset Rebalancing Service to the permitted investment options, and vice versa. Once this option is elected, contract loans are unavailable. Additionally, the contract owner may elect Dollar Cost Averaging for Living Benefits described in this prospectus.

23.

The “Determination of the Income Benefit Base Prior to the First Surrender” subsection of the “5% Lifetime Income Option” section is replaced with the following:

Determination of the Income Benefit Base Prior to the First Surrender

(1)	the highest contract value on any 5% L.Inc Anniversary plus purchase payments submitted and credits applied after that 5% L.Inc Anniversary; or
(2)	the sum of the following calculations:
	(a)	Original Income Benefit Base with Roll-up: the Original Income Benefit Base, plus 5% of the Original Income Benefit Base for each 5% L.Inc Anniversary up to and including the 10^th 5% L.Inc Anniversary; plus
	(b)	Purchase Payments with Roll-up– any purchase payment submitted after contract issuance and the 10^th 5% L.IncAnniversary, increased by a simple interest rate of 5% through the 10^th 5% L.Inc Anniversary; plus
	(c)	Purchase Payments with No Roll-up: any purchase payments submitted after the 10^th 5% L.Inc Anniversary.

When a purchase payment is made on a date other than a 5% L.Inc Anniversary, simple interest is calculated using a prorated method based upon the number of days from the date of the purchase payment to the next 5% L.Inc Anniversary.

However, if at any time prior to the first surrender the contract value equals zero, no further Income Benefit Base calculations will be made. The Current Income Benefit Base will be set equal to the Income Benefit Base calculated on the most recent 5% L.Inc anniversary, and the annual benefit amount will be based on that Current Income Benefit Base.

24.

The “Termination of Benefit” subsection of the “5% Lifetime Income Option” section is replaced with the following:

Annuitization

Death of Determining Life

25.

The “Spousal Continuation Benefit” subsection of the “Optional Contract Benefits, Charges and Deductions” section is replaced with the following:

Spousal Continuation Benefit

At the time the 5%, 7% or 10% Lifetime Income Option is elected (at time of application), the contract owner may elect the corresponding Spousal Continuation Benefit (not available for contracts issued as Charitable Remainder Trusts). The charge for the 5% and 7% Spousal Continuation Benefit is 0.15% of the Current Income Benefit Base. The 5% Spousal Continuation Benefit may only be elected in the State of New York. The charge for the 10% Spousal Continuation Benefit will not exceed 0.30% of the Current Income Benefit Base. The current charge for the 10% Spousal Continuation Benefit is 0.20% of the Current Income Benefit Base. The 10% Spousal Continuation Benefit is not available in the State of New York.The Spousal Continuation Benefit allows a surviving spouse to continue to receive, for the duration of his/her lifetime, the benefit associated with the Lifetime Income Option, provided that the following conditions are satisfied:

(1)	The Spousal Continuation Benefit must be elected at the time the Lifetime Income Option is elected, and both spouses must be between 45 and 85 years old at that time.
(2)	Both spouses must be age 45 to begin withdrawals. However, the Internal Revenue Code imposes a penalty tax if a distribution is made before the contract owner reaches age 59½ unless certain exceptions are met. Please refer to “Federal Tax Considerations” within this prospectus for additional information.
(3)	Once the Spousal Continuation Benefit is elected, it may not be removed from the contract, except as provided below.
(4)	The lifetime income percentage will be based on the age of the younger spouse as of the date of the first surrender from the contract.
(5)	One or both spouses (or a revocable trust of which either or both of the spouses is/are grantor(s)) must be named as the contract owner. For contracts issued as IRAs and Roth IRAs, only the person for whom the IRA or Roth IRA was established may be named as the contract owner.
(6)	Both spouses must be named as beneficiaries. For contracts with non-natural owners, both spouses must be named as co-annuitants.

(7)	No person other than the spouse may be named as contract owner, annuitant or beneficiary.

(8)	If both spouses are alive upon annuitization, the contract owner must specify which spouse is the annuitantupon whose continuation of life any annuity payments involving life contingencies depend (for IRA and Roth IRA contracts, this person must be the contract owner).

Note: The Spousal Continuation Benefit is distinct from the Spousal Protection Feature associated with the death benefits. The Spousal Continuation Benefit allows a surviving spouse to continue receiving the lifetime income payments associated with the Lifetime Income Options. In contrast, the Spousal Protection Feature is a death benefit bump-up feature associated with the death benefits.

Marriage Termination

If, prior to taking any surrenders from the contract, the marriage terminates due to divorce, dissolution, or annulment, the contract owner may remove the Spousal Continuation Benefit from the contract. Nationwide will remove the benefit and the associated charge upon the contract owner’s written request and evidence of the marriage termination satisfactory to Nationwide. Once the Spousal Continuation Benefit is removed from the contract, the benefit may not be re-elected or added to cover a subsequent spouse.

If, after taking any surrender from the contract, the marriage terminates due to divorce, dissolution, or annulment, the contract owner may not remove the Spousal Continuation Benefit from the contract.

Risks Associated with Electing the Spousal Continuation Option

There are situations where a contract owner who elects the Spousal Continuation Option will pay for the Spousal Protection Option, but not receive the benefits associated with the option. These situations vary depending on whether or not the contract owner has begun taking surrenders from the contract.

If no surrenders have been taken from the contract, a contract owner who elected the Spousal Continuation Benefit will continue to pay for, but not receive the benefit associated with, the option if any of the following occur:

(1)	The contract owner elects to annuitize the contract; or
(2)	The spouse dies before the contract owner.

If surrenders have been taken from the contract, a contract owner who elected the Spousal Continuation Benefit will continue to pay for, but not receive the benefit associated with, the option if any of the following occur:

(1)	The contract owner elects to annuitize the contract;
(2)	The spouse dies before the contract owner; or
(3)	The marriage terminates due to divorce, dissolution, or annulment.

26.

The “Income Benefit Investment Options” chart of the “Optional Contract Benefits, Charges and Deductions” section is replaced with the following:

Income Benefit Investment Options

Investment Option:	Available in:
	Standard Capital Preservation Plus Program	Enhanced Capital Preservation Plus Program	5%, 7% and 10% Lifetime Income Options
AIM Variable Insurance Funds
AIM V.I. Capital Development Fund: Series II Shares	X
AllianceBernstein Variable Products Series Fund, Inc.
AllianceBernstein Small/Mid Cap Value Portfolio: Class B	X
American Century Variable Portfolios, Inc.
American Century VP Mid Cap Value Fund: Class II	X
American Century VP Value Fund: Class II	X
American Century Variable Portfolios II, Inc.
American Century VP Inflation Protection Fund: Class II	X
Dreyfus
Dreyfus Stock Index Fund, Inc.: Service Shares	X
Dreyfus Variable Investment Fund – Appreciation Portfolio: Service Shares	X
Fidelity Variable Insurance Products Fund
VIP Equity-Income Portfolio: Service Class 2	X
VIP Freedom 2010 Portfolio: Service Class 2	X	X¹	X
VIP Freedom 2020 Portfolio: Service Class 2	X	X²	X
VIP Freedom 2030 Portfolio: Service Class 2	X	X²
VIP Growth Portfolio: Service Class 2	X
VIP Investment Grade Bond Portfolio: Service Class 2	X
VIP Mid Cap Portfolio: Service Class 2	X
Franklin Templeton Variable Insurance Products Trust
Franklin Income Securities Fund: Class 2	X
Janus Aspen Series
Forty Portfolio: Service Shares	X
Lehman Brothers Advisers Management Trust
AMT Short Duration Bond Portfolio: I Class	X
MFS® Variable Insurance Trust
MFS Value Series: Service Class	X
Nationwide Variable Insurance Trust
American Funds NVIT Asset Allocation Fund: Class II	X	X²	X
American Funds NVIT Bond Fund: Class II	X
American Funds NVIT Growth Fund: Class II	X
American Funds NVIT Growth-Income Fund: Class II	X
Lehman Brothers NVIT Core Plus Bond Fund:Class II	X
Neuberger Berman NVIT Multi Cap Opportunities Fund: Class II	X
Neuberger Berman NVIT Socially Responsible Fund: Class II	X
NVIT Cardinal Aggressive Fund: Class II	X
NVIT Cardinal Balanced Fund: Class II	X	X	X
NVIT Cardinal Capital Appreciation Fund: Class II	X	X¹	X
NVIT Cardinal Conservative Fund: Class II	X	X	X
NVIT Cardinal Moderate Fund: Class II	X	X¹	X
NVIT Cardinal Moderately Aggressive Fund: Class II	X	X²	X
NVIT Cardinal Moderately Conservative Fund: Class II	X	X	X

Income Benefit Investment Options (continued)

Investment Option:	Available in:
	Standard Capital Preservation Plus Program	Enhanced Capital Preservation Plus Program	5%, 7% and 10% Lifetime Income Options
NVIT Core Bond Fund: Class II	X
NVIT Government Bond Fund: Class I	X
NVIT Investor Destinations Conservative Fund: Class II	X	X	X
NVIT Investor Destinations. Moderately Conservative Fund: Class II	X	X	X
NVIT Investor Destinations Moderate Fund: Class II	X	X¹	X
NVIT Investor Destinations Moderately Aggressive Fund: Class II	X	X²	X
NVIT Investor Destinations Aggressive Fund: Class II	X	X²
NVIT Mid Cap Growth Fund: Class II	X
NVIT Mid Cap Index Fund: Class I	X
NVIT Money Market Fund: Class I	X
NVIT Multi-Manager Large Cap Growth Fund: Class II	X
NVIT Multi-Manager Large Cap Value Fund: Class II	X
NVIT Multi-Manager Mid Cap Growth Fund: Class II	X
NVIT Multi-Manager Mid Cap Value Fund: Class II	X
NVIT Nationwide Fund: Class II	X
NVIT Short Term Bond Fund: Class II	X
Nationwide NVIT U.S. Growth LeadersFund: Class II	X
Van Kampen NVIT Comstock Value Fund: Class II	X
Oppenheimer Variable Account Funds
Oppenheimer Capital Appreciation Fund/VA: Service Shares	X
Oppenheimer Main Street Fund® /VA: Service Shares	X
T. Rowe Price Equity Series, Inc.
T. Rowe Price Blue Chip Growth Portfolio: Class II	X
T. Rowe Price Equity Income Portfolio: Class II	X
Van Kampen
The Universal Institutional Funds, Inc. – Core Plus Fixed Income Portfolio: Class II	X
Static Asset Allocation Models
American Funds Option (33% American Funds NVIT Asset Allocation Fund, 33% American Funds NVIT Bond Fund and 34% American Funds NVIT Growth-Income Fund)	X	X	X
Balanced Option (50% Nationwide NVIT Investor Dest. Moderate Fund and 50% Nationwide NVIT Investor Dest. Moderately Conservative Fund)	X	X	X
Capital Appreciation Option (50% Nationwide NVIT Investor Dest. Moderate Fund and 50% Nationwide NVIT Investor Dest. Moderately Aggressive Fund)	X	X¹	X
¹ The five year program duration is not available with this investment option. ² The five and seven year program durations are not available with this investment option.

Static Asset Allocation Models

A Static Asset Allocation Model is an allocation strategy comprised of two or more underlying mutual funds that together provide a unique allocation mix not available as a single underlying mutual fund. Contract owners that elect a Static Asset Allocation Model directly own sub-account units of the underlying mutual funds that comprise the particular model. In other words, a Static Asset Allocation Model is not a portfolio of underlying mutual funds with one accumulation/annuity unit value, but rather, direct investment in a certain allocation of sub-accounts. There is no additional charge associated with investing in a Static Asset Allocation Model.

Each of the Static Asset Allocation Models is just that: static. The allocations or “split” between one or more sub-accounts is not monitored and adjusted to reflect changing market conditions. However, a contract owner’s investment in a Static Asset Allocation Model is rebalanced quarterly to ensure that the assets are allocated to the percentages in the same proportion that they were allocated at the time of election.

Only one Static Asset Allocation Model may be elected at any given time. Additionally, the entire contract value must be allocated to the elected model.

With respect to transferring into and out of a Static Asset Allocation Model, the models are treated like an underlying mutual fund and are subject to the “Transfers Prior to Annuitization” provision. You may request to transfer from one model to another, or transfer from a model to a permitted underlying mutual fund. Each transfer into or out of a Static Asset Allocation Model is considered one transfer event.

For additional information about the underlying mutual funds that comprise each Static Asset Allocation Model, see “Appendix A: Underlying Mutual Funds.”

27.

The last paragraph of the “Minimum Initial and Subsequent Purchase Payments” subsection of the “Operation of the Contract” section is replaced with the following:

28.

The “Contract Owner Services” section is amended to include the following subsection immediately after the “Enhanced Fixed Dollar Cost Averaging” subsection:

Dollar Cost Averaging for Living Benefits

Nationwide may periodically offer Dollar Cost Averaging programs with the Enhanced Capital Preservation Plus Lifetime Income Option and the Lifetime Income Options referred to as “Dollar Cost Averaging for Living Benefits.” Only new purchase payments to the contract are eligible for Dollar Cost Averaging for Living Benefits. Nationwide reserves the right to require a minimum balance to establish this program.

Dollar Cost Averaging for Living Benefits involves the automatic transfer of a specific amount from the standard or enhanced fixed account into other sub-accounts. With this service, the contract owner benefits from the ability to invest in the sub-accounts over a period of time, thereby smoothing out the effects of market volatility. The investment options available for the Enhanced Capital Preservation Plus Lifetime Income Option and the Lifetime Income Options are the only investment options available for use in the Dollar Cost Averaging for Living Benefits. Dollar Cost Averaging for Living Benefits transfers may not be directed to the fixed account, Guaranteed Term Options, or to any investment option that is unavailable with the respective living benefit option. Please refer to the “Income Benefits Investment Chart” earlier in this prospectus for the investment options available for these living benefits. The dollar cost averaging rate within this program may vary depending on the benefit elected.

Dollar Cost Averaging for Living Benefits transfers are not considered transfer events. Nationwide will process transfers until amounts allocated to the standard or enhanced fixed account are exhausted. Once the contract owner enters into the Dollar Cost Averaging for Living Benefits program, the contract owner may not terminate the program.

Nationwide reserves the right to stop establishing new Dollar Cost Averaging for Living Benefits programs.

Nationwide is required by state law to reserve the right to postpone transfer of assets from the fixed account for a period of up to 6 months from the date of the transfer request.

29.

A “Custom Portfolio Asset Rebalancing Service” subsection of the “Contract Owner Services” section is added immediately after the “Systematic Withdrawals” subsection as follows:

For contract owners that have elected the CPPLI Option or a Lifetime Income Option, Nationwide makes available the Custom Portfolio Asset Rebalancing Service (“Custom Portfolio”) at no extra charge. Custom Portfolio is an asset allocation program that contract owners can use to build their own customized portfolio of investments, subject to certain limitations. Asset allocation is the process of investing in different asset classes (such as equity funds, fixed income funds, and money market funds) and may reduce the risk and volatility of investing. There are no guarantees that Custom Portfolio will result a profit or protect against loss in a declining market.

Note: Contract owners should consult with a qualified investment advisor regarding the use of Custom Portfolio and to determine which model is appropriate for them.

Once the contract owner creates their “Custom Portfolio,” that contract owner’s model is static. This means that that the percentage allocated to each underlying mutual fund will not change over time, except for quarterly rebalancing, as described below. Note: allocation percentages within a particular model may subsequently change, but any such changes will not apply to existing model participants; the changes will only apply to participants that elect the model after the change implementation date.

To participate in Custom Portfolio, eligible contract owners must submit the proper administrative form to Nationwide’s home office. While Custom Portfolio is elected, contract owners cannot participate in Asset Rebalancing or Dollar Cost Averaging.

Asset Allocation Models available with Custom Portfolio

The following models are available with Custom Portfolio:

Conservative:	Designed for contract owners that are willing to accept very little risk but still want to see a small amount of growth.
Moderately Conservative:	Designed for contract owners that are willing to accept some market volatility in exchange for greater potential income and growth.
Balanced:	Designed for contract owners that are willing to accept some market volatility in exchange for potential long-term returns.
Moderate:	Designed for contract owners that are willing to accept some short-term price fluctuations in exchange for potential long-term returns.
Capital Appreciation:	Designed for contract owners that are willing to accept more short-term price fluctuations in exchange for potential long-term returns.
Moderately Aggressive:	Designed for contract owners willing to accept sharp, short-term price fluctuations in exchange for potential long-term returns.
Aggressive:	Designed for contract owners that are willing to accept more sharp, short-term price fluctuations in exchange for potential higher long-term returns. This model is only available for contracts that elected the CPPLI Option.

The specific underlying mutual funds available to comprise the equity and fixed income components of the models are contained in the election form, which is provided to contract owners at the time Custom Portfolio is elected. At that time, contract owners elect their model and the specific underlying mutual funds and percentages that will comprise their “Custom Portfolio.”

Quarterly Rebalancing

At the end of each calendar quarter, Nationwide will reallocate the variable account contract value so that the percentages allocated to each underlying mutual fund match the most recently provided percentages provided by the contract owner. If the end of a calendar quarter is a Saturday, Sunday, recognized holiday, or any other day that the New York Stock Exchange is closed, the quarterly rebalancing will occur on the next business day. Rebalancing will be priced using the unit value determined on the last valuation date of the calendar quarter. Each quarterly rebalancing is considered a transfer event.

However, quarterly rebalancing transfers within your Custom Portfolio are not subject to Short-Term Trading Fees.Changing Models or Underlying Mutual Fund Allocations

Nationwide reserves the right to limit the number of model changes a contract owner can make each year.

Terminating Participation in Custom Portfolio

Contract owners can terminate participation in Custom Portfolio by submitting a written request to Nationwide’s home office. In order for the termination to be effective, the termination request must contain valid reallocation instructions that are in accordance with the terms and conditions of the CPP Lifetime Income Option or Lifetime Income Option, as applicable. Termination is effective on the date the termination request is received at Nationwide’s home office in good order.

30.

A third paragraph is added in the “Death Benefit Calculations” subsection of the “Death Benefits” section as follows:

31.

A third paragraph is added in the “Annuity Payment Options” section as follows:

32.

The “Legal Proceedings” section is replaced with the following:

Nationwide is a party to litigation and arbitration proceedings in the ordinary course of its business. It is often not possible to determine the ultimate outcome of the pending investigations and legal proceedings or to provide reasonable ranges of potential losses with any degree of certainty. Some matters, including certain of those referred to below, are in very preliminary stages, and Nationwide 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. Nationwide does not believe, based on information currently known by management, that the outcomes of such pending investigations and legal proceedings are likely to have a material adverse effect on Nationwide’s consolidated financial position. However, given the large and/or indeterminate amounts sought in certain of these matters and inherent unpredictability of litigation, it is possible that an adverse outcome in certain matters could have a material adverse effect on Nationwide’s consolidated financial position or results of operations in a particular period.

In recent years, life insurance companies have been named as defendants in lawsuits, including class action lawsuits relating to life insurance and annuity pricing and sales practices. A number of these lawsuits have resulted in substantial jury awards or settlements against life insurers other than Nationwide.

The financial services industry, including mutual fund, variable annuity, retirement plan, life insurance and distribution companies, has also been the subject of increasing scrutiny by regulators, legislators and the media over the past few years. Numerous regulatory agencies, including the SEC, the Financial Industry Regulatory Authority and the New York State Attorney General, have commenced industry-wide investigations regarding late trading and market timing in connection with mutual funds and variable insurance contracts, and have commenced enforcement actions against some mutual fund and life insurance companies on those issues. Nationwide has been contacted by or received subpoenas from the SEC and the New York State Attorney General, who are investigating market timing in certain mutual funds offered in insurance products sponsored by Nationwide. Nationwide has cooperated with these investigations. Information requests from the New York State Attorney General and the SEC with respect to investigations into late trading and market timing were last responded to by Nationwide and its affiliates in December 2003 and June 2005, respectively, and no further information requests have been received with respect to these matters.

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

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

On November 20, 2007, Nationwide and Nationwide Retirement Solutions, Inc. (NRS) 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 NLIC, NRS, Alabama State Employees Association, PEBCO, Inc. and Fictitious Defendants A to Z. The plaintiffs purport to represent a class of all participants in the Alabama State Employees Association (ASEA) plan, excluding members of the Board of Control during the Class Period and excluding ASEA’s directors, officers and board members during the class period. The class period is the date from which Nationwide and/or NRS first made a payment to ASEA or PEBCO arising out of the funding agreement dated March 24, 2004 to the date class notice is provided. The plaintiffs allege that the defendants

breached their fiduciary duties, converted plan participants’ properties, and breached their contract when payments were made and the plan was administered under the funding agreement. The complaint seeks a declaratory judgment, an injunction, disgorgement of amounts paid, compensatory and punitive damages, interest, attorneys’ fees and costs, and such other equitable and legal relief to which the plaintiffs and class members may be entitled. On January 9, 2008, Nationwide and NRS filed a Notice of Removal to the United States District Court Northern District of Alabama, Southern Division. On January 16, 2008, Nationwide and NRS filed a motion to dismiss. On January 24, 2008, the plaintiffs filed a motion to remand. On April 15, 2008, the Court remanded this case back to state court in Jefferson County, Alabama. On May 12, 2008, Nationwide filed a motion to dismiss. Nationwide and NRS continue to defend this lawsuit vigorously.

On July 11, 2007, Nationwide was named in a lawsuit filed in the United States District Court for the Western District of Washington at Tacoma entitled Jerre Daniels-Hall and David Hamblen, Individually and on behalf of All Others Similarly Situated v. National Education Association, NEA Member Benefits Corporation, Nationwide Life Insurance Company, Security Benefit Life Insurance Company, Security Benefit Group, Inc., Security Distributors, Inc., et. al. The plaintiff seeks to represent a class of all current or former National Education Association (NEA) members who participated in the NEA Valuebuilder 403(b) program at any time between January 1, 1991 and the present (and their heirs and/or beneficiaries). The plaintiffs allege that the defendants violated the Employee Retirement Income Security Act of 1974, as amended (ERISA) by failing to prudently and loyally manage plan assets, by failing to provide complete and accurate information, by engaging in prohibited transactions, and by breaching their fiduciary duties when they failed to prevent other fiduciaries from breaching their fiduciary duties. The complaint seeks to have the defendants restore all losses to the plan, restoration of plan assets and profits to participants, disgorgement of endorsement fees, disgorgement of service fee payments, disgorgement of excessive fees charged to plan participants, other unspecified relief for restitution, declaratory and injunctive relief, and attorneys’ fees. On October 12, 2007, Nationwide filed a motion to dismiss. On May 23, 2008, the Court granted the defendants’ motion to dismiss. On June 19, 2008, the plaintiffs filed a notice of appeal. Nationwide continues to defend this lawsuit vigorously.

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

On February 11, 2005, Nationwide was named in a class action lawsuit filed in Common Pleas Court, Franklin County, Ohio entitled Michael Carr v. Nationwide Life Insurance Company. The plaintiff claims that the total of modal payments that policyholders paid per year exceeded the guaranteed maximum premium provided for in the policy. The complaint seeks recovery for breach of contract, fraud by omission, violation of the Ohio Deceptive Trade Practices Act and unjust enrichment. The complaint also seeks unspecified compensatory damages, disgorgement of all amounts in excess of the guaranteed maximum premium and attorneys’ fees. On February 2, 2006, the court granted the plaintiff’s motion for class certification on the breach of contract and unjust enrichment claims. The court certified a class consisting of all residents of the United States and the Virgin Islands who, during the class period, paid premiums on a modal basis to Nationwide for term life insurance policies issued by Nationwide during the class period that provide for guaranteed maximum premiums, excluding certain specified products. Excluded from the class are Nationwide; any parent, subsidiary or affiliate of Nationwide; all employees, officers and directors of Nationwide; and any justice, judge or magistrate judge of the State of Ohio who may hear the case. The class period is from February 10, 1990 through February 2, 2006, the date the class was certified. On January 26, 2007, the plaintiff filed a motion for summary judgment. On April 30, 2007, Nationwide filed a motion for summary judgment. On February 4, 2008, the Court entered its ruling on the parties’ pending motions for summary judgment. The Court granted Nationwide’s motion for summary judgment for some of the plaintiffs’ causes of action, including breach of contract claims on all decreasing term policies, plaintiff Carr’s individual claims for fraud by omission, violation of the Ohio Deceptive Trade Practices Act and all unjust enrichment claims. However, several claims against Nationwide remain, including plaintiff Carr’s individual claim for breach of contract and the plaintiff Class’ claims for breach of contract for the term life policies in 43 of 51 jurisdictions. On May 16, 2008, the parties filed their briefs on Nationwide’s motion for summary judgment on the voluntary payment doctrine or, in the alternative, decertification. Additional briefs were filed on June 20, 2008. Nationwide continues to defend this lawsuit vigorously.

On April 13, 2004, Nationwide was named in a class action lawsuit filed in Circuit Court, Third Judicial Circuit, Madison County, Illinois, entitled Woodbury v. Nationwide Life Insurance Company. Nationwide removed this case to the United States District Court for the Southern District of Illinois on June 1, 2004. On December 27, 2004, the case was transferred to the United States District Court for the District of Maryland and included in the multi-district proceeding entitled In Re Mutual Funds Investment Litigation. In response, on May 13, 2005, the plaintiff filed the first amended complaint purporting to represent, with certain exceptions, a class of all persons who held (through their ownership of an Nationwide annuity or insurance product) units of any Nationwide sub-account invested in mutual funds that included foreign securities in their portfolios and that experienced market timing or stale price trading activity. The first amended complaint purports to disclaim, with respect to market timing or stale price trading in Nationwide’s annuities sub-accounts, any allegation based on Nationwide’s untrue statement, failure to disclose any material fact, or usage of any manipulative or deceptive device or contrivance in connection with any class member’s purchases or sales of Nationwide annuities or units in annuities sub-accounts. The plaintiff claims, in the alternative, that if Nationwide is found with respect to market timing or stale price trading in its annuities sub-accounts, to have made any untrue statement, to have failed to disclose any material fact or to have used or employed any manipulative or deceptive device or contrivance, then the plaintiff purports to represent a class, with certain exceptions, of all persons who, prior to Nationwide’s untrue statement, omission of material fact, use or employment of any manipulative or deceptive device or contrivance, held (through their ownership of a Nationwide annuity or insurance product) units of any Nationwide sub-account invested in mutual funds that included foreign securities in their portfolios and that experienced market timing activity. The first amended complaint alleges common law negligence and seeks to recover damages not to exceed $75,000 per plaintiff or class member, including all compensatory damages and costs. On June 1, 2006, the District Court granted Nationwide’s motion to dismiss the plaintiff’s complaint. The plaintiff appealed the District Court’s decision, and the issues have been fully briefed. Nationwide continues to defend this lawsuit vigorously.

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