NATIONWIDE

VA SEPARATE

ACCOUNT-C

Annual Report

to

Contract Owners

December 31, 2010

NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY

HOME OFFICE: COLUMBUS, OHIO

Report of Independent Registered Public Accounting Firm

The Board of Directors of Nationwide Life and Annuity Insurance Company and

Contract Owners of Nationwide VA Separate Account-C:

We have audited the accompanying statement of assets, liabilities and contract owners’ equity of Nationwide VA Separate Account-C (comprised of the sub-accounts listed in note 1(b) (collectively, “the Accounts”)) as of December 31, 2010, and the related statements of operations for the year then ended, the statements of changes in contract owners’ equity for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Accounts’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2010, by correspondence with the transfer agents of the underlying mutual funds. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Accounts as of December 31, 2010, the results of their operations for the year then ended, the changes in contract owners’ equity for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended, in conformity with accounting principles generally accepted in the United States of America.

/s/ KPMG LLP

Columbus, Ohio

March 9, 2011

2

NATIONWIDE VA SEPARATE ACCOUNT-C

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY

December 31, 2010

Assets:
Investments at fair value:
Insurance Trust - Insurance Trust Diversified Mid Cap Growth Portfolio 1 (OGGO)
2,095,339 shares (cost $34,887,774)	$	35,432,181
Insurance Trust - Insurance Trust Mid Cap Value Portfolio 1 (JPMMV1)
360,165 shares (cost $1,635,104)		2,449,122
JPMorgan Insurance Trust Core Bond Portfolio 1 (OGBDP)
5,634,202 shares (cost $58,643,216)		65,018,689
JPMorgan Insurance Trust Equity Index Portfolio 1 (OGEI)
2,437,963 shares (cost $23,982,934)		26,646,938
JPMorgan Insurance Trust Intrepid Growth Portfolio - Class 1 (OGLG)
1,678,989 shares (cost $22,219,441)		25,369,527
JPMorgan Insurance Trust Intrepid Mid Cap Portfolio 1 (OGDMP)
1,036,217 shares (cost $17,444,948)		16,185,714
JPMorgan Insurance Trust U.S. Equity Portfolio 1 (OGDEP)
1,572,166 shares (cost $22,660,372)		24,667,283
NVIT Fund - Class I (TRF)
717,966 shares (cost $7,183,643)		6,540,669
NVIT Money Market Fund - Class I (SAM)
13,895,584 shares (cost $13,895,584)		13,895,584
Equity-Income Portfolio - Initial Class (FEIP)
687,401 shares (cost $15,978,839)		13,074,358
VIP Fund - Overseas Portfolio - Initial Class (FOP)
236,778 shares (cost $4,687,863)		3,970,760
Total Investments	$	233,250,825
Accounts Receivable		23,927
	$	233,274,752
Contract Owners’ Equity:
Accumulation units		232,853,317
Contracts in payout (annuitization) period (note 1f)		421,435
Total Contract Owners’ Equity (note 5)	$	233,274,752

See accompanying notes to financial statements.

3

NATIONWIDE VA SEPARATE ACCOUNT-C

STATEMENT OF OPERATIONS

Year Ended December 31, 2010

Investment Activity:	Total			OGGO			JPMMV1			OGAA			OGBDP			OGEI			OGLG			OGDMP
Reinvested dividends	$	4,847,975			-			41,361			-			3,010,641			652,905			271,461			262,347
Mortality and expense risk charges (note 2)		(3,390,670	)		(464,003	)		(37,435	)		(120,581	)		(971,876	)		(368,130	)		(347,866	)		(235,543	)
Net investment income (loss)		1,457,305			(464,003	)		3,926			(120,581	)		2,038,765			284,775			(76,405	)		26,804
Realized gain (loss) on investments		634,774			253,437			594,062			(1,937,183	)		1,075,607			2,090,368			(454,727	)		(2,270,377	)
Change in unrealized gain (loss) on investments		28,169,928			7,647,337			(26,926	)		3,636,248			2,741,015			848,244			3,882,172			5,136,021
Net gain (loss) on investments		28,804,702			7,900,774			567,136			1,699,065			3,816,622			2,938,612			3,427,445			2,865,644
Reinvested capital gains		7,061			-			-			-			-			-			-			-
Net increase (decrease) in contract owners’ equity resulting from operations	$	30,269,068			7,436,771			571,062			1,578,484			5,855,387			3,223,387			3,351,040			2,892,448
Investment Activity:	OGDEP			TRF			SAM			FEIP			FOP
Reinvested dividends	$	269,288			64,879			26			223,283			51,784
Mortality and expense risk charges (note 2)		(361,037	)		(85,945	)		(181,143	)		(168,157	)		(48,954	)
Net investment income (loss)		(91,749	)		(21,066	)		(181,117	)		55,126			2,830
Realized gain (loss) on investments		2,316,850			(311,184	)		-			(672,367	)		(49,712	)
Change in unrealized gain (loss) on investments		621,750			1,042,824			-			2,188,270			452,973
Net gain (loss) on investments		2,938,600			731,640			-			1,515,903			403,261
Reinvested capital gains		-			-			-			-			7,061
Net increase (decrease) in contract owners’ equity resulting from operations	$	2,846,851			710,574			(181,117	)		1,571,029			413,152

See accompanying notes to financial statements.

4

NATIONWIDE VA SEPARATE ACCOUNT-C

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2010 and 2009

	Total						OGGO						JPMMV1						OGAA
	2010			2009			2010			2009			2010			2009			2010			2009
Investment activity:
Net investment income (loss)	$	1,457,305			7,531,998			(464,003	)		(468,852	)		3,926			(27,370	)		(120,581	)		779,839
Realized gain (loss) on investments		634,774			(17,305,344	)		253,437			(2,839,334	)		594,062			71,766			(1,937,183	)		(1,719,252	)
Change in unrealized gain (loss) on investments		28,169,928			68,517,242			7,647,337			15,776,133			(26,926	)		840,943			3,636,248			6,902,728
Reinvested capital gains		7,061			950,838			-			-			-			-			-			-
Net increase (decrease) in contract owners’ equity resulting from operations		30,269,068			59,694,734			7,436,771			12,467,947			571,062			885,339			1,578,484			5,963,315
Equity transactions:
Purchase payments received from contract owners (note 3)		1,791,161			2,596,976			175,686			260,264			45,218			5,083			76,493			524,093
Transfers between funds		-			-			(1,002,859	)		1,221,916			175,935			2,949,388			(28,369,436	)		320,786
Redemptions (note 3)		(100,220,119	)		(87,222,381	)		(10,684,240	)		(8,771,087	)		(1,840,215	)		(403,088	)		(4,679,460	)		(7,222,273	)
Annuity benefits		(50,947	)		(38,937	)		(3,368	)		(2,905	)		-			-			(1,527	)		(3,921	)
Contingent deferred sales charges (note 2)		(50,716	)		(89,815	)		(5,730	)		(8,948	)		(776	)		(209	)		(2,378	)		(7,017	)
Adjustments to maintain reserves		47,347			80,707			9,432			10,713			18,754			42,630			(7,952	)		12,561
Net equity transactions		(98,483,274	)		(84,673,450	)		(11,511,079	)		(7,290,047	)		(1,601,084	)		2,593,804			(32,984,260	)		(6,375,771	)
Net change in contract owners’ equity		(68,214,206	)		(24,978,716	)		(4,074,308	)		5,177,900			(1,030,022	)		3,479,143			(31,405,776	)		(412,456	)
Contract owners’ equity beginning of period		301,488,958			326,467,674			39,513,274			34,335,374			3,479,143			-			31,405,776			31,818,232
Contract owners’ equity end of period	$	233,274,752			301,488,958			35,438,966			39,513,274			2,449,121			3,479,143			-			31,405,776
CHANGES IN UNITS:
Beginning units		19,398,871			24,434,503			1,218,063			1,494,033			265,766			-			1,490,471			1,855,296
Units purchased		3,425,488			5,828,795			40,853			114,408			34,518			308,167			19,076			93,843
Units redeemed		(9,183,478	)		(10,864,427	)		(378,108	)		(390,378	)		(146,748	)		(42,401	)		(1,509,547	)		(458,668	)
Ending units		13,640,881			19,398,871			880,808			1,218,063			153,536			265,766			-			1,490,471

(Continued)

5

NATIONWIDE VA SEPARATE ACCOUNT-C

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2010 and 2009

	OGBDP						OGEI						OGLG						OGDMP
	2010			2009			2010			2009			2010			2009			2010			2009
Investment activity:
Net investment income (loss)	$	2,038,765			2,583,010			284,775			395,806			(76,405	)		(140,004	)		26,804			54,930
Realized gain (loss) on investments		1,075,607			(1,817,356	)		2,090,368			237,206			(454,727	)		(1,911,970	)		(2,270,377	)		(2,205,379	)
Change in unrealized gain (loss) on investments		2,741,015			4,999,021			848,244			6,136,637			3,882,172			9,987,305			5,136,021			8,066,684
Reinvested capital gains		-			-			-			-			-			-			-			-
Net increase (decrease) in contract owners’ equity resulting from operations		5,855,387			5,764,675			3,223,387			6,769,649			3,351,040			7,935,331			2,892,448			5,916,235
Equity transactions:
Purchase payments received from contract owners (note 3)		462,184			383,119			223,846			255,200			136,127			252,696			97,946			205,925
Transfers between funds		9,886,242			46,112,860			1,720,059			2,476,908			(468,557	)		540,895			(1,192,945	)		1,212,550
Redemptions (note 3)		(30,766,832	)		(22,229,717	)		(11,153,686	)		(9,047,920	)		(8,147,348	)		(6,527,431	)		(6,944,756	)		(6,180,260	)
Annuity benefits		(426	)		-			(8,389	)		(6,372	)		(1,097	)		(827	)		(176	)		-
Contingent deferred sales charges (note 2)		(18,099	)		(23,436	)		(5,608	)		(10,574	)		(3,358	)		(6,554	)		(3,698	)		(7,745	)
Adjustments to maintain reserves		1,366			213			6,824			1,629			2,194			15,342			9,962			(970	)
Net equity transactions		(20,435,565	)		24,243,039			(9,216,954	)		(6,331,129	)		(8,482,039	)		(5,725,879	)		(8,033,667	)		(4,770,500	)
Net change in contract owners’ equity		(14,580,178	)		30,007,714			(5,993,567	)		438,520			(5,130,999	)		2,209,452			(5,141,219	)		1,145,735
Contract owners’ equity beginning of period		79,599,429			49,591,715			32,642,419			32,203,899			30,500,648			28,291,196			21,327,004			20,181,269
Contract owners’ equity end of period	$	65,019,251			79,599,429			26,648,852			32,642,419			25,369,649			30,500,648			16,185,785			21,327,004
CHANGES IN UNITS:
Beginning units		4,940,336			3,330,953			3,243,540			3,994,505			1,758,741			2,162,700			1,391,178			1,762,714
Units purchased		725,540			3,665,241			337,719			485,051			60,195			131,327			58,701			216,756
Units redeemed		(1,923,561	)		(2,055,858	)		(1,238,303	)		(1,236,016	)		(542,479	)		(535,286	)		(555,222	)		(588,292	)
Ending units		3,742,315			4,940,336			2,342,956			3,243,540			1,276,457			1,758,741			894,657			1,391,178

(Continued)

6

NATIONWIDE VA SEPARATE ACCOUNT-C

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2010 and 2009

	OGDEP						TRF						SAM						FEIP
	2010			2009			2010			2009			2010			2009			2010			2009
Investment activity:
Net investment income (loss)	$	(91,749	)		478,100			(21,066	)		1,962			(181,117	)		(69,973	)		55,126			116,419
Realized gain (loss) on investments		2,316,850			27,267			(311,184	)		(1,048,412	)		-			-			(672,367	)		(1,201,400	)
Change in unrealized gain (loss) on investments		621,750			8,348,632			1,042,824			2,491,698			-			-			2,188,270			4,183,350
Reinvested capital gains		-			-			-			-			-			-			-			-
Net increase (decrease) in contract owners’ equity resulting from operations		2,846,851			8,853,999			710,574			1,445,248			(181,117	)		(69,973	)		1,571,029			3,098,369
Equity transactions:
Purchase payments received from contract owners (note 3)		205,602			277,179			66,575			57,461			202,449			93,734			70,112			95,467
Transfers between funds		(398,575	)		1,582,274			(21,626	)		(81,144	)		19,164,581			2,993,782			350,790			(113,359	)
Redemptions (note 3)		(11,665,207	)		(9,847,112	)		(1,456,199	)		(1,312,856	)		(9,519,471	)		(5,720,204	)		(2,810,409	)		(1,999,741	)
Annuity benefits		(205	)		-			(9,892	)		(7,824	)		(3,145	)		-			(13,524	)		(9,987	)
Contingent deferred sales charges (note 2)		(6,606	)		(12,185	)		(99	)		(344	)		(3,819	)		(3,301	)		(384	)		(1,689	)
Adjustments to maintain reserves		(4,903	)		(666	)		3,077			10,181			2,063			1,479			3,873			19,866
Net equity transactions		(11,869,894	)		(8,000,510	)		(1,418,164	)		(1,334,526	)		9,842,658			(2,634,510	)		(2,399,542	)		(2,009,443	)
Net change in contract owners’ equity		(9,023,043	)		853,489			(707,590	)		110,722			9,661,541			(2,704,483	)		(828,513	)		1,088,926
Contract owners’ equity beginning of period		33,690,512			32,837,023			7,250,196			7,139,474			4,242,102			6,946,585			13,905,374			12,816,448
Contract owners’ equity end of period	$	24,667,469			33,690,512			6,542,606			7,250,196			13,903,643			4,242,102			13,076,861			13,905,374
CHANGES IN UNITS:
Beginning units		3,613,930			4,647,556			357,289			438,466			304,817			492,866			588,109			697,200
Units purchased		159,102			463,458			20,967			18,017			1,928,619			276,136			23,925			13,091
Units redeemed		(1,413,267	)		(1,497,084	)		(90,791	)		(99,194	)		(1,221,708	)		(464,185	)		(125,776	)		(122,182	)
Ending units		2,359,765			3,613,930			287,465			357,289			1,011,728			304,817			486,258			588,109

(Continued)

7

NATIONWIDE VA SEPARATE ACCOUNT-C

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2010 and 2009

	FOP						OGGB						OGMVP
	2010			2009			2010			2009			2010		2009
Investment activity:
Net investment income (loss)	$	2,830			29,373			-			3,733,901			-		64,857
Realized gain (loss) on investments		(49,712	)		(35,167	)		-			(1,516,680	)		-		(3,346,633	)
Change in unrealized gain (loss) on investments		452,973			781,068			-			(3,115,509	)		-		3,118,552
Reinvested capital gains		7,061			11,306			-			939,532			-		-
Net increase (decrease) in contract owners’ equity resulting from operations		413,152			786,580			-			41,244			-		(163,224	)
Equity transactions:
Purchase payments received from contract owners (note 3)		29,499			27,625			(576	)		155,596			-		3,534
Transfers between funds		155,815			(47,566	)		576			(56,024,302	)		-		(3,144,988	)
Redemptions (note 3)		(552,296	)		(421,950	)		-			(7,230,050	)		-		(308,692	)
Annuity benefits		(9,198	)		(7,101	)		-			-			-		-
Contingent deferred sales charges (note 2)		(161	)		(47	)		-			(6,894	)		-		(872	)
Adjustments to maintain reserves		2,657			6,995			-			3,424			-		(42,690	)
Net equity transactions		(373,684	)		(442,044	)		-			(63,102,226	)		-		(3,493,708	)
Net change in contract owners’ equity		39,468			344,536			-			(63,060,982	)		-		(3,656,932	)
Contract owners’ equity beginning of period		3,933,081			3,588,545			-			63,060,982			-		3,656,932
Contract owners’ equity end of period	$	3,972,549			3,933,081			-			-			-		-
CHANGES IN UNITS:
Beginning units		226,631			258,046			-			3,028,799			-		271,369
Units purchased		16,245			3,965			28			38,339			-		996
Units redeemed		(37,940	)		(35,380	)		(28	)		(3,067,138	)		-		(272,365	)
Ending units		204,936			226,631			-			-			-		-

See accompanying notes to financial statements.

8

NATIONWIDE VA SEPARATE ACCOUNT-C NOTES TO FINANCIAL STATEMENTS December 31, 2010

(1) Background and Summary of Significant Accounting Policies

(a) Organization and Nature of Operations

Nationwide VA Separate Account-C (the Account) was established pursuant to a resolution of the Board of Directors of Nationwide Life and Annuity Insurance Company (the Company) on July 24, 1991. The Account is registered as a unit investment trust under the Investment Company Act of 1940.

The Company offers tax qualified and non-tax qualified Individual Deferred Variable Annuity Contracts through the Account. The primary distribution for the contracts is through banks and other financial institutions.

(b) The Contracts

Only contracts without a front-end sales charge, but with a contingent deferred sales charge and certain other fees, are offered for purchase. See note 2 for a discussion of contract expenses.

With certain exceptions, contract owners in either the accumulation or the payout phase may invest in any of the following funds:

J.P. MORGAN INVESTMENT MANAGEMENT INC.

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

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

JPMorgan Insurance Trust Balanced Portfolio 1 (OGAA)*

JPMorgan Insurance Trust Core Bond Portfolio 1 (OGBDP)

JPMorgan Insurance Trust Equity Index Portfolio 1 (OGEI)

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

JPMorgan Insurance Trust Intrepid Mid Cap Portfolio 1 (OGDMP)

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

NATIONWIDE FUNDS GROUP

NVIT Fund - Class I (TRF)

NVIT Money Market Fund - Class I (SAM)

PORTFOLIOS OF THE FIDELITY(R) VARIABLE INSURANCE PRODUCTS

Equity-Income Portfolio - Initial Class (FEIP)

VIP Fund - Overseas Portfolio - Initial Class (FOP)

* At December 31, 2010, contract owners were not invested in this fund.

The contract owners’ equity is affected by the investment results of each fund, equity transactions by contract owners and certain contract expenses (see note 2). The accompanying financial statements include only contract owners’ purchase payments pertaining to the variable portions of their contracts and exclude any purchase payments for fixed dollar benefits, the latter being included in the accounts of the Company.

A contract owner may choose from among a number of different underlying mutual fund options. The underlying mutual fund options are not available to the general public directly. The underlying mutual funds are available as investment options in variable life insurance policies or variable annuity contracts issued by life insurance companies or, in some cases, through participation in certain qualified pension or retirement plans.

Some of the underlying mutual funds have been established by investment advisers which manage publicly traded mutual funds having similar names and investment objectives. While some of the underlying mutual funds may be similar to, and may in fact be modeled after, publicly traded mutual funds, the underlying mutual funds are not otherwise directly related to any publicly traded mutual fund. Consequently, the investment performance of publicly traded mutual funds and any corresponding underlying mutual funds may differ substantially.

A purchase payment could be presented as a negative equity transaction in the Statements of Changes in Contract Owners’ Equity if a prior period purchase payment is refunded to a contract owner due to a contract cancellation during the free look period, and/or if a gain is realized by the contract owner during the free look period.

The Company allocates purchase payments to sub-accounts and/or the fixed account as instructed by the contract owner. Shares of the sub-accounts are purchased at Net Asset Value, then converted into accumulation units. Certain transactions may be subject to conditions imposed by the underlying mutual funds, as well as those set forth in the contract.

(c) Security Valuation, Transactions and Related Investment Income

Investments in underlying mutual funds are valued at the closing net asset value per share at December 31, 2010 of such funds, which represents fair value. The cost of investments sold is determined on a first in - first out basis. Investment transactions are accounted for on the trade date (date the order to buy or sell is executed), and dividends and capital gain distributions are accrued as of the ex-dividend date and are reinvested in the underlying mutual funds.

(d) Federal Income Taxes

Operations of the Account form a part of, and are taxed with, operations of the Company which is taxed as a life insurance company under the Internal Revenue Code. The Company does not provide for income taxes within the Account. Taxes are generally the responsibility of the contract owner upon termination or withdrawal.

(e) Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with U.S. generally accepted accounting principles may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, if any, at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

(f) Calculation of Annuity Reserves

At each financial reporting date, the separate account financial statement includes an aggregate amount of net assets allocated to future contract benefits for the contracts in the payout (annuitization) period. The payout (annuitization) period begins when amounts accumulated under the contract (the contract value) are applied according to payment method selected by the contract holder.

Annuity reserves are computed for contracts in the variable payout stage according to industry standard mortality tables. The assumed investment return is 3.5% unless the annuitant elects otherwise, in which case the rate may vary from 3.5% to 7.0%, as regulated by the laws of the respective states. The mortality risk is fully borne by the Company and may result in additional amounts being transferred into the Account by the Company to cover greater longevity of annuitants than expected. Conversely, if reserves exceed amounts required, transfers may be made to the Company.

(Continued)

9

NATIONWIDE VA SEPARATE ACCOUNT-C NOTES TO FINANCIAL STATEMENTS December 31, 2010

(g) Recently Issued Accounting Standards

In September 2006, the FASB issued FASB ASC 820, Fair Value Measurements and Disclosures (SFAS No. 157, Fair Value Measurements). FASB ASC 820 provides enhanced guidance for using fair value to measure assets and liabilities and requires new disclosures about fair value measurements and also provides guidance regarding the extent to which companies measure assets and liabilities at fair value, the information used to measure fair value, and the effect of fair value measurements on earnings. For assets and liabilities that are measured at fair value on a recurring basis in periods subsequent to initial recognition, the reporting entity shall disclose information that enables financial statement users to assess the inputs used to develop those measurements. FASB ASC 820 applies whenever other standards require (or permit) assets or liabilities to be measured at fair value but does not expand the use of fair value in any new circumstances.

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

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

In January 2010, the FASB issued ASU 2010-06, which amends FASB ASC 820, Fair Value Measurement and Disclosures. This guidance requires new disclosures and provides amendments to clarify existing disclosures. The new requirements include disclosing transfers in and out of Levels 1 and 2 fair value measurements, the reasons for the transfers, and further disaggregating activity in Level 3 fair value measurements. The clarification of existing disclosure guidance includes further disaggregation of fair value measurement disclosures for each class of assets and liabilities and providing disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements. This guidance is effective for interim and annual reporting periods beginning after December 15, 2009, except for the new disclosures regarding the activity in Level 3 measurements, which shall be effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. The Company adopted this guidance effective January 1, 2010, except for the new disclosure regarding the activity in Level 3 measurements, which the Company will adopt for the fiscal period beginning January 1, 2011.

(h) Subsequent Events

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

(2) Expenses

The Company does not deduct a sales charge from purchase payments received from the contract owners. However, if any part of the contract value of such contracts is redeemed, the Company will, with certain exceptions, deduct from a contract owners’ contract value a contingent deferred sales charge not to exceed 7% of the purchase payments redeemed. This charge declines 1% per year. After the purchase payment has been held in the contract for 7 years, the charge is 0%. No sales charges are deducted on redemptions used to purchase units in the fixed investment options of the Company. The Company deducts a mortality and expense risk charge assessed through a reduction of the unit value equal to an annualized rate of 1.30%.

(3) Related Party Transactions

The Company performs various services on behalf of the mutual fund companies in which the Account invests and may receive fees for the services performed. These services include, among other things, shareholder communications, postage, fund transfer agency and various other record keeping and customer service functions. These fees are paid to an affiliate of the Company.

Contract owners may, with certain restrictions, transfer their assets between the Account and a fixed dollar contract (fixed account) maintained in the accounts of the Company. The fixed account assets are not reflected in the accompanying financial statements. In addition, the Account portion of contract owner loans is transferred to the accounts of the Company for administration and collection. Loan repayments are transferred to the Account at the direction of the contract owner. For the years ended December 31, 2010 and 2009, total transfers to the Account from the fixed account were $877,580 and $562,551, respectively, and total transfers from the Account to the fixed account were $7,605,733 and $11,575,606, respectively. Transfers from the Account to the fixed account are included in redemptions, and transfers to the Account from the fixed account are included in purchase payments received from contract owners, as applicable, on the accompanying Statements of Changes in Contract Owners’ Equity.

For guaranteed minimum death benefits, the Company contributed $151,120 and $899,500 to the account in the form of additional premium to contract owner accounts for the years ended December 31, 2010 and 2009, respectively. These amounts are included in purchase payments received from contract owners and are credited at time of annuitant death.

(4) Fair Value Measurement

FASB ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market particip ants at the measurement date. In determining fair value, the Account generally uses the market approach as the valuation technique due to the nature of the mutual fund investments offered in the Account. This technique maximizes the use of observable inputs and minimizes the use of unobservable inputs.

In accordance with FASB ASC 820, the Account categorized its financial instruments into a three level hierarchy based on the priority of the inputs to the valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument in its entirety.

The Account categorizes financial assets recorded at fair value as follows:

• Level 1 - Unadjusted quoted prices accessible in active markets for identical assets at the measurement date. The assets utilizing Level 1 valuations represent investments in publicly-traded registered mutual funds with quoted market prices.

• Level 2 - Unadjusted quoted prices for similar assets in active markets or inputs (other than quoted prices) that are observable or that are derived principally from or corroborated by observable market data through correlation or other means. The assets utilizing Level 2 valuations represent investments in privately-traded registered mutual funds only offered through insurance products. These funds have no unfunded commitments or restrictions and the Account always has the ability to redeem its interest in the funds with the investee at NAV daily. The investment objectives of these mutual funds are described by the fund name in note 1(b) and in more detail in the applicable product prospectus.

• Level 3 - Prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. The Account invests only in funds with fair value measurements in the first two levels of the fair value hierarchy.

(Continued)

10

NATIONWIDE VA SEPARATE ACCOUNT-C NOTES TO FINANCIAL STATEMENTS December 31, 2010

The Account recognizes significant transfers between fair value hierarchy levels at the reporting period end. There were no significant transfers between Level 1 and 2 as of December 31, 2010.

The following table summarizes assets measured at fair value on a recurring basis as of December 31, 2010:

	Level 1		Level 2		Level 3		Total
Separate Account Investments		0	$	233,250,825		0	$	233,250,825

The Account did not have any assets or liabilities reported at fair value on a nonrecurring basis required to be disclosed under FASB ASC 820.

	Purchases of Investments		Sales of Investments
Insurance Trust - Insurance Trust Diversified Mid Cap Growth Portfolio 1 (OGGO)	$	11,849,646	$	12,103,083
Insurance Trust - Insurance Trust Mid Cap Value Portfolio 1 (JPMMV1)		1,390,500		1,984,562
JPMorgan Insurance Trust Balanced Portfolio 1 (OGAA)		35,126,231		33,189,048
JPMorgan Insurance Trust Core Bond Portfolio 1 (OGBDP)		22,740,351		23,815,958
JPMorgan Insurance Trust Equity Index Portfolio 1 (OGEI)		8,941,781		11,032,149
JPMorgan Insurance Trust Intrepid Growth Portfolio - Class 1 (OGLG)		9,345,439		8,890,712
JPMorgan Insurance Trust Intrepid Mid Cap Portfolio 1 (OGDMP)		10,845,888		8,575,511
JPMorgan Insurance Trust U.S. Equity Portfolio 1 (OGDEP)		10,019,380		12,336,230
NVIT Fund - Class I (TRF)		2,076,818		1,765,634
NVIT Money Market Fund - Class I (SAM)		14,527,425		14,527,425
Equity-Income Portfolio - Initial Class (FEIP)		3,581,965		2,909,598
VIP Fund - Overseas Portfolio - Initial Class (FOP)		683,591		633,879
Total	$	131,129,015	$	131,763,789

(5) Financial Highlights

The following tabular presentation is a summary of units, unit fair values and contract owners’ equity outstanding for variable annuity contracts as of the end of the periods indicated, and the contract expense rate, investment income ratio and total return for each of the periods in the five year period ended December 31, 2010.

11

NATIONWIDE VA SEPARATE ACCOUNT-C NOTES TO FINANCIAL  STATEMENTS December 31, 2010

	Contract Expense Rate*		Units		Unit Fair Value		Contract owners’ equity		Investment Income Ratio**		Total Return***		Inception Date****
Insurance Trust - Insurance Trust Diversified Mid Cap Growth Portfolio 1  (OGGO)
2010		1.30%		880,808.00	$	40.225052	$	35,430,547		0.00%		24.00%
2009		1.30%		1,218,063.00		32.439433		39,513,274		0.00%		41.18%
2008		1.30%		1,494,033.00		22.977335		34,328,897		0.00%		-44.52%
2007		1.30%		2,112,415.00		41.414035		87,483,629		0.00%		15.71%
2006		1.30%		2,951,763.00		35.792211		105,650,124		0.00%		9.94%
Insurance Trust -Insurance Trust Mid Cap Value Portfolio 1 (JPMMV1)
2010		1.30%		153,536.00		15.951445		2,449,121		1.44%		21.85%
2009		1.30%		265,766.00		13.091003		3,479,143		0.00%		30.91%	5/15/2009
JPMorgan Insurance Trust Balanced Portfolio 1 (OGAA)
2009		1.30%		1,490,471.00		21.060941		31,390,743		3.92%		22.84%
2008		1.30%		1,855,296.00		17.145561		31,810,091		3.91%		-25.29%
2007		1.30%		2,672,259.00		22.950313		61,329,180		3.30%		4.75%
2006		1.30%		3,812,974.00		21.910158		83,542,863		2.95%		9.54%
JPMorgan Insurance Trust Core Bond Portfolio 1 (OGBDP)
2010		1.30%		3,742,315.00		17.371488		65,009,580		4.05%		7.82%
2009		1.30%		4,940,336.00		16.112149		79,599,429		4.80%		8.22%
2008		1.30%		3,330,953.00		14.888146		49,591,715		5.99%		-0.01%
2007		1.30%		5,087,378.00		14.888981		75,745,874		5.09%		4.92%
2006		1.30%		6,271,930.00		14.191198		89,006,200		3.79%		2.78%
JPMorgan Insurance Trust Equity Index Portfolio 1 (OGEI)
2010		1.30%		2,342,956.00		11.337231		26,562,633		2.33%		12.92%
2009		1.30%		3,243,540.00		10.039975		32,565,071		2.60%		24.79%
2008		1.30%		3,994,505.00		8.045249		32,136,787		2.12%		-38.02%
2007		1.30%		5,455,148.00		12.981223		70,814,493		1.60%		3.72%
2006		1.30%		7,150,115.00		12.515227		89,485,312		1.39%		13.92%
JPMorgan Insurance Trust Intrepid Growth Portfolio - Class 1 (OGLG)
2010		1.30%		1,276,457.00		19.871739		25,365,421		1.03%		14.59%
2009		1.30%		1,758,741.00		17.341196		30,498,672		0.80%		32.57%
2008		1.30%		2,162,700.00		13.080386		28,288,951		1.00%		-40.01%
2007		1.30%		3,005,913.00		21.804355		65,541,994		0.18%		10.09%
2006		1.30%		4,182,395.00		19.805825		82,835,783		0.08%		4.01%
JPMorgan Insurance Trust Intrepid Mid Cap Portfolio 1 (OGDMP)
2010		1.30%		894,657.00		18.085113		16,179,973		1.47%		17.97%
2009		1.30%		1,391,178.00		15.330188		21,327,004		1.59%		33.90%
2008		1.30%		1,762,714.00		11.448975		20,181,269		0.59%		-39.61%
2007		1.30%		2,340,278.00		18.959198		44,369,794		0.71%		1.52%
2006		1.30%		2,688,784.00		18.674855		50,212,651		0.34%		12.64%
JPMorgan Insurance Trust U.S. Equity Portfolio 1 (OGDEP)
2010		1.30%		2,359,765.00		10.450499		24,660,722		0.98%		12.10%
2009		1.30%		3,613,930.00		9.322403		33,690,512		2.82%		31.94%
2008		1.30%		4,647,556.00		7.065439		32,837,023		1.19%		-35.65%
2007		1.30%		6,495,658.00		10.979465		71,318,850		1.14%		9.01%
2006		1.30%		8,661,954.00		10.072336		87,246,111		0.84%		14.64%
NVIT Fund - Class I (TRF)
2010		1.30%		287,465.00		22.449115		6,453,335		0.99%		11.98%
2009		1.30%		357,289.00		20.048181		7,162,995		1.31%		24.46%
2008		1.30%		438,466.00		16.108472		7,063,017		1.34%		-42.32%
2007		1.30%		641,051.00		27.925531		17,901,690		1.03%		6.77%
2006		1.30%		892,632.00		26.155466		23,347,206		1.02%		12.15%
NVIT Money Market Fund - Class I (SAM)
2010		1.30%		1,011,728.00		13.735981		13,897,076		0.00%		-1.30%
2009		1.30%		304,817.00		13.916881		4,242,102		0.04%		-1.26%
2008		1.30%		492,866.00		14.094268		6,946,585		2.05%		0.73%
2007		1.30%		468,551.00		13.992544		6,556,220		4.89%		3.42%
2006		1.30%		381,727.00		13.529429		5,164,548		4.64%		3.18%

(Continued)

12

NATIONWIDE VA SEPARATE ACCOUNT-C NOTES TO FINANCIAL STATEMENTS December 31, 2010

	Contract Expense Rate*			Units		Unit Fair Value		Contract owners’ equity		Investment Income Ratio**			Total Return***			Inception Date****
Equity - Income Portfolio - Initial Class (FEIP)
2010		1.30	%		486,258.00	$	26.659775	$	12,963,529		1.74	%		13.65	%
2009		1.30	%		588,109.00		23.457056		13,795,282		2.21	%		28.52	%
2008		1.30	%		697,200.00		18.252304		12,725,506		2.13	%		-43.40	%
2007		1.30	%		981,193.00		32.248723		31,642,221		1.63	%		0.20	%
2006		1.30	%		1,332,817.00		32.183235		42,894,363		3.25	%		18.64	%
VIP Fund - Overseas Portfolio - Initial Class (FOP)
2010		1.30	%		204,936.00		18.939472		3,881,380		1.37	%		11.65	%
2009		1.30	%		226,631.00		16.963952		3,844,558		2.05	%		24.88	%
2008		1.30	%		258,046.00		13.583708		3,505,222		2.27	%		-44.54	%
2007		1.30	%		346,501.00		24.491473		8,486,320		3.28	%		15.78	%
2006		1.30	%		445,630.00		21.153611		9,426,684		0.97	%		16.55	%
Insurance Trust - Insurance Trust Diversified Mid Cap Value Portfolio 1 (obsolete) (OGMVP)
2008		1.30	%		271,369.00		13.475864		3,656,932		1.65	%		-36.32	%
2007		1.30	%		425,613.00		21.163352		9,007,398		1.54	%		-0.40	%
2006		1.30	%		1,351,558.00		21.248786		28,718,967		1.06	%		15.21	%
Insurance Trust - Insurance Trust Government Bond Portfolio 1 (obsolete) (OGGB)
2008		1.30	%		3,028,799.00		20.820458		63,060,982		5.62	%		8.60	%
2007		1.30	%		4,632,183.00		19.171923		88,807,856		5.49	%		6.08	%
2006		1.30	%		5,908,551.00		18.072328		106,781,272		5.39	%		2.13	%
2010		Reserves for annuity contracts in payout phase:									421,435
2010		Contract owners equity:								$	233,274,752
2009		Reserves for annuity contracts in payout phase:									380,173
2009		Contract owners equity:								$	301,488,958
2008		Reserves for annuity contracts in payout phase:									334,697
2008		Contract owners equity:								$	326,467,674
2007		Reserves for annuity contracts in payout phase:									610,389
2007		Contract owners equity:								$	639,615,908
2006		Reserves for annuity contracts in payout phase:									632,986
2006		Contract owners equity:								$	804,945,070

* This represents the contract expense rate of the variable account for the period indicated and includes only those expenses that are charged through a reduction in the unit values. Excluded are expenses of the underlying mutual funds and charges made directly to contract owners’ accounts through the redemption of units.

** This represents the ratio of dividends for the period indicated, excluding distributions of capital gains, received by the subaccount from the underlying mutual fund, net of management fees assessed by the fund manager, divided by average net assets. The ratios exclude those expenses, such as policy and asset charges, that result in direct reductions to the contract holder accounts through redemption of units. The recognition of investment income by the subaccount is affected by the timing of the declaration of dividends by the underlying fund in which the subaccounts invest.

*** This represents the total return for the period. The total return does not include any expenses assessed through the redemption of units; inclusion of these expenses in the calculation would result in a reduction in the total return presented. Total return is not annualized if the underlying mutual fund option is initially offered, funded, or both, during the period presented.

**** This represents the date the underlying mutual fund option was initially added and funded.

13