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Notice

Nationwide Life Insurance Company, et al.

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Start Preamble June 12, 2009.

AGENCY:

Securities and Exchange Commission.

ACTION:

Notice of application for an order pursuant to Section 26(c) of the Investment Company Act of 1940 (the “1940 Act”) and an order of exemption pursuant to Section 17(b) of the 1940 Act from Section 17(a) of the 1940 Act.

Applicants: Nationwide Life Insurance Company (“NWL”), Nationwide Variable Account—II (“Account II”), Nationwide Variable Account—7 (“Account 7”), Nationwide Variable Account—9 (“Account 9”), Nationwide Variable Account—14 (“Account 14”), Nationwide Multi-Flex Variable Account (“Flex Account”), Nationwide VLI Separate Account—2 (“Account 2”), Nationwide VLI Separate Account—4 (“Account 4”), Nationwide VLI Separate Account—7 (“VLI Account 7”), Nationwide Life and Annuity Insurance Company (“NLAIC”), Nationwide VL Separate Account—G (“Account G”), Nationwide Life Insurance Company of America (“NLICA”), Nationwide Provident VLI Separate Account 1 (“Account 1”), Nationwide Life and Annuity Company of America (“NLACA” and together with NWL, NLAIC and NLICA, “Insurance Company Applicants”), Nationwide Provident VA Separate Account A (“Account A”), and Nationwide Provident VLI Separate Account A (“VLI Account A” and together with Account II, Account 7, Account 9, Account 14, Flex Account, Account 2, VLI Account 7, Account G, Account 1, and Account A, “Separate Accounts” and, together with Insurance Company Applicants, “Section 26 Applicants”), and Nationwide Variable Insurance Trust (“NVIT” and together with Section 26 Applicants, “Section 17 Applicants”).

SUMMARY:

Summary of Application: Section 26 Applicants seek an order pursuant to Section 26(c) of the 1940 Act, approving the substitutions of certain securities (the “Substitutions”) issued by certain management investment companies and held by Separate Accounts to support certain Start Printed Page 28968variable annuity contracts and variable life insurance contracts (the “Contracts”) issued by Insurance Company Applicants. Section 17 Applicants seek an order pursuant to Section 17(b) of the 1940 Act exempting them from Section 17(a) of the 1940 Act to the extent necessary to permit them to effectuate the proposed Substitutions by redeeming a portion of the securities of one or more of the Existing Funds (as defined herein) in-kind and using those securities received to purchase shares of the Replacement Funds (as defined herein) (the “In-Kind Transactions”).

DATES:

Filing Date: The application was originally filed on February 11, 2008 and amended on June 25, 2008, March 9, 2009 and June 12, 2009.

Hearing or Notification of Hearing: An order granting the application will be issued unless the Commission orders a hearing. Interested persons may request a hearing by writing to the Secretary of the Commission and serving Insurance Company Applicants and NVIT with a copy of the request, personally or by mail. Hearing requests must be received by the Commission by 5:30 p.m. on July 7, 2009, and should be accompanied by proof of service on Insurance Company Applicants and NVIT in the form of an affidavit or, for lawyers, a certificate of service. Hearing requests should state the nature of the requester's interest, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Secretary of the Commission.

ADDRESSES:

Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. Insurance Company Applicants and NVIT, c/o Jamie Ruff Casto, Managing Counsel, Nationwide Insurance, One Nationwide Plaza 1-34-201, Columbus, Ohio 43215.

Start Further Info

FOR FURTHER INFORMATION CONTACT:

Craig Ruckman, Attorney-Adviser, at (202) 551-6753 or Harry Eisenstein, Branch Chief, Office of Insurance Products, Division of Investment Management, at (202) 551-6795.

End Further Info End Preamble Start Supplemental Information

SUPPLEMENTARY INFORMATION:

The following is a summary of the application. The complete application may be obtained via the Commission's Web site by searching for the file number, or an applicant using the Company name box, at http://www.sec.gov/​search/​search.htm or by calling (202) 551-8090.

Applicants' Representations

1. NWL is a stock life insurance company organized under the laws of the State of Ohio. NLAIC is a stock life insurance company organized under the laws of the State of Ohio. NLICA is a stock life insurance company organized under the laws of the State of Pennsylvania. NLACA is a stock life insurance company organized under the laws of the State of Pennsylvania.

2. Each of the following separate accounts are registered as unit investment trusts under the 1940 Act and are used to fund certain variable contracts issued by NWL: Account II (File No. 811-3330); Account 7 (File No. 811-8666); Account 9 (File No. 811-08241); Account 14 (File No. 811-21205); Flex Account (File No. 811-3338); Account 2 (File No. 811-5311); Account 4 (File No. 811-8301); and, VLI Account 7 (File No. 811-21610).

Each of the following separate accounts are registered as unit investment trusts under the 1940 Act and are used to fund certain variable contracts issued by NLACA: Account A (File No. 811-6484); and, VLI Account A (File No. 811-8722).

Account G is registered as a unit investment trust under the 1940 Act (File No. 811-21697) and is used to fund certain variable contracts issued by NLAIC.

Account 1 is registered as a unit investment trust under the 1940 Act (File No. 811-4460) and is used to fund certain variable contracts issued by NLICA.

3. For purposes of the 1940 Act, NWL is the depositor and sponsor of Account II, Account 7, Account 9, Account 14, Flex Account, Account 2, Account 4, and VLI Account 7; NLAIC is the depositor and sponsor of Account G; NLICA is the depositor and sponsor of Account 1; and NLACA is the depositor and sponsor of Account A and VLI Account A as those terms have been interpreted by the Commission with respect to variable annuity and variable life insurance separate accounts.

4. The Contracts can be issued as individual or group contracts, with participants of group contracts acquiring certain ownership rights as described in the group contract or the plan documents. Contract owners and participants in group contracts (each a “Contract Owner”) may allocate some or all of their Contract value to one or more sub-accounts available as investment options under the Contract (each an “Investment Option”). Each such Investment Option corresponds to an underlying mutual fund in which the Separate Account invests. Additionally, the Contract Owner may, if provided for under the Contract, allocate some or all Contract value to a fixed account and/or guaranteed term option, both of which are supported by the assets of the depositor's general account.

Each Contract permits the Contract Owner to transfer Contract value from one Investment Option to another Investment Option available under the Contract at any time, subject to certain restrictions and charges described in the prospectuses for the Contracts. To the extent that the Contracts contain restrictions or limitations on a Contract Owner's right to transfer, such restrictions or limitations will not apply in connection with the proposed Substitutions.

5. Each Contract's prospectus contains provisions reserving Insurance Company Applicants' right to substitute shares of one Investment Option for shares of another Investment Option already purchased or to be purchased in the future if either of the following occurs: (i) Shares of a current Investment Option are no longer available for investment by the Separate Account; or (ii) in the judgment of Insurance Company Applicants' management, further investment in such Investment Option is inappropriate in view of the purposes of the Contract. Each Insurance Company Applicant's management has determined that further investment in the Existing Funds is no longer appropriate in view of the purposes of the Contracts.

6. Each Insurance Company Applicant, on its own behalf and on behalf of its Separate Accounts, proposes to exercise its contractual right to substitute a different Investment Option for one of the current Investment Options available under the Contracts. In particular, Section 26 Applicants request an order from the Commission pursuant to Section 26(c) of the 1940 Act approving the proposed Substitutions of shares of the following Funds (as defined herein) of NVIT (the “Replacement Funds”) for shares of the corresponding underlying mutual funds (the “Existing Funds”), as shown in the following Substitution table (“Substitution Table”):

Ref. No.Existing fundsReplacement funds
1AIM Variable Insurance Funds—AIM V.I. Basic Value Fund: Series I SharesNVIT—NVIT Multi-Manager Large Cap Value Fund: Class I.
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2AIM Variable Insurance Funds—AIM V.I. Basic Value Fund: Series II SharesNVIT—NVIT Multi-Manager Large Cap Value Fund: Class II.
3AIM Variable Insurance Funds—AIM V.I. Large Cap Growth Fund: Series I SharesNVIT—NVIT Multi-Manager Large Cap Growth Fund: Class I.
4American Century Variable Portfolios, Inc.—American Century VP Capital Appreciation Fund: Class INVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class I.
5American Century Variable Portfolios, Inc.—American Century VP International Fund: Class INVIT—NVIT Multi-Manager International Growth Fund: Class III.
6American Century Variable Portfolios, Inc.—American Century VP International Fund: Class IINVIT—NVIT Multi-Manager International Growth Fund: Class VI.
7American Century Variable Portfolios, Inc.—American Century VP International Fund: Class IIINVIT—NVIT Multi-Manager International Growth Fund: Class III.
8American Century Variable Portfolios, Inc.—American Century VP International Fund: Class IVNVIT—NVIT Multi-Manager International Growth Fund: Class VI.
9American Century Variable Portfolios, Inc.—American Century VP Ultra Fund: Class INVIT—NVIT Multi-Manager Large Cap Growth Fund: Class I.
10American Century Variable Portfolios, Inc.—American Century VP Ultra Fund: Class IINVIT—NVIT Multi-Manager Large Cap Growth Fund: Class II.
11American Century Variable Portfolios, Inc.—American Century VP Vista Fund: Class INVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class I.
12American Century Variable Portfolios, Inc.—American Century VP Vista Fund: Class IINVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class I.
13American Century Variable Portfolios, Inc.—American Century VP Vista Fund: Class IINVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class II.
14Credit Suisse Trust—International Equity Flex I Portfolio (formerly, International Focus Portfolio)NVIT—Gartmore NVIT International Equity Fund: Class I.
15Credit Suisse Trust—International Equity Flex I Portfolio (formerly, International Focus Portfolio)NVIT—Gartmore NVIT International Equity Fund: Class III.
16Federated Insurance Series—Federated Quality Bond Fund II: Primary SharesNVIT—NVIT Core Bond Fund: Class I.
17Federated Insurance Series—Federated Quality Bond Fund II: Service SharesNVIT—NVIT Core Bond Fund: Class II.
18Franklin Templeton Variable Insurance Products Trust—Templeton Developing Markets Securities Fund: Class 3NVIT—Gartmore NVIT Emerging Markets Fund: Class III.
19Franklin Templeton Variable Insurance Products Trust—Templeton Developing Markets Securities Fund: Class 3NVIT—Gartmore NVIT Emerging Markets Fund: Class VI.
20Janus Aspen Series—INTECH Risk-Managed Core Portfolio: Service SharesNVIT—NVIT Nationwide Fund: Class I.
21Janus Aspen Series—INTECH Risk-Managed Core Portfolio: Service SharesNVIT—NVIT Nationwide Fund: Class II.
22Neuberger Berman Advisers Management Trust—AMT Growth Portfolio: I ClassNVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class I.
23Neuberger Berman Advisers Management Trust—AMT Guardian Portfolio: I ClassNVIT—Neuberger Berman NVIT Multi Cap Opportunities Fund: Class I.
24Neuberger Berman Advisers Management Trust—AMT International Portfolio: S ClassNVIT—Gartmore NVIT International Equity Fund: Class III.
25Neuberger Berman Advisers Management Trust—AMT International Portfolio: S ClassNVIT—Gartmore NVIT International Equity Fund: Class VI.
26Neuberger Berman Advisers Management Trust—AMT Mid-Cap Growth Portfolio: I ClassNVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class I.
27Neuberger Berman Advisers Management Trust—AMT Mid-Cap Growth Portfolio: S ClassNVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class I.
28Neuberger Berman Advisers Management Trust—AMT Mid-Cap Growth Portfolio: S ClassNVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class II.
29Neuberger Berman Advisers Management Trust—AMT Partners Portfolio: I ClassNVIT—Neuberger Berman NVIT Multi Cap Opportunities Fund: Class I.
30Neuberger Berman Advisers Management Trust—AMT Regency Portfolio: S ClassNVIT—NVIT Multi-Manager Mid Cap Value Fund: Class II.
31T. Rowe Price Equity Series, Inc.—T. Rowe Price Limited Term Bond Portfolio: Class IINVIT—NVIT Short Term Bond Fund: Class II.
32The Universal Institutional Funds, Inc.—Mid Cap Growth Portfolio: Class INVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class I.
33The Universal Institutional Funds, Inc.—U.S. Real Estate Portfolio: Class INVIT—Van Kampen NVIT Real Estate Fund: Class I.
34The Universal Institutional Funds, Inc.—U.S. Real Estate Portfolio: Class IINVIT—Van Kampen NVIT Real Estate Fund: Class II.
35Van Eck Worldwide Insurance Trust—Worldwide Emerging Markets Fund: Initial ClassNVIT—Gartmore NVIT Emerging Markets Fund: Class I.
36Van Eck Worldwide Insurance Trust—Worldwide Emerging Markets Fund: Initial ClassNVIT—Gartmore NVIT Emerging Markets Fund: Class III.
37Van Eck Worldwide Insurance Trust—Worldwide Emerging Markets Fund: Class R1NVIT—Gartmore NVIT Emerging Markets Fund: Class III.
38Wells Fargo Advantage Variable Trust—Wells Fargo Advantage VT Discovery FundNVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class I.
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39Wells Fargo Advantage Variable Trust—Wells Fargo Advantage VT Discovery FundNVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class II.
40Wells Fargo Advantage Variable Trust—Wells Fargo Advantage VT Opportunity Fund: Investor ClassNVIT—NVIT Multi-Manager Mid Cap Value Fund: Class II.

7. All of the Replacement Funds that correspond to the Existing Funds are available as Investment Options in the Contracts.

8. Each Replacement Fund is a series of NVIT, a Delaware statutory trust. NVIT is registered as an open-end management investment company under the 1940 Act and its shares are registered under the Securities Act of 1933, as amended, on Form N-1A (1933 Act File No. 02-73024). NVIT is a series investment company and currently offers 58 separate series (each a “Fund” and collectively, the “Funds”). Shares of NVIT are sold exclusively to insurance company separate accounts to fund benefits under variable annuity contracts and variable life insurance policies, and to employer pension and profit-sharing plans.

9. Nationwide Fund Advisors (“NFA”) is a registered investment adviser (Reg. No. 801-56370) and is an affiliate of Section 26 Applicants. NFA currently serves as investment adviser (“Adviser”) to each of the Funds, including the Replacement Funds, pursuant to investment management agreements between NVIT, on behalf of each Fund, and NFA (the “Management Agreements”). NFA employs a sub-advised strategy whereby NFA serves as a “manager of managers” and delegates the fund management responsibilities for each Fund to one or more third party investment advisors (each a “Sub-Adviser”) via investment advisory agreements (“Sub-Advisory Agreements”).

Pursuant to the Management Agreements, NFA's responsibilities include general management of each Fund, including full discretion to (i) select a new sub-adviser or an additional Sub-Adviser for each Fund; (ii) terminate a Sub-Adviser for each Fund; (iii) enter into, modify, and terminate Sub-Advisory Agreements; and (iv) allocate and reallocate a Fund's assets among the Adviser and one or more Sub-Advisers. In addition, the Adviser monitors and reports to NVIT's Board of Trustees on the performance of each Sub-Adviser relative to such Sub-Adviser's responsibilities of complying with the investment objectives, policies, and restrictions of any Fund under the management of such Sub-Adviser.

10. NVIT received an exemptive order from the Commission on April 28, 1998 (Investment Company Act Release No. 23133) (the “Manager of Managers Order”) that permits the Adviser, subject to certain conditions, including approval of the NVIT Board of Trustees, and without the approval of shareholders, to: (i) Select a new Sub-Adviser or additional Sub-Adviser for each Fund; (ii) terminate any existing Sub-Adviser and/or replace the Sub-Adviser; (iii) enter into new Sub-Advisory Agreements [1] and/or materially modify the terms of, or terminate, any existing Sub-Advisory Agreement; and (iv) allocate and reallocate a Fund's assets among the Adviser and one or more Sub-Advisers.

If a new Sub-Adviser is retained for a Fund, Contract Owners would receive all information about the new Sub-Adviser that would be included in a proxy statement, including any change in disclosure caused by the addition of a new Sub-Adviser.

11. Section 26 Applicants represent that, after the Substitution date, the Replacement Funds will not change sub-advisers, retain any new sub-adviser, or otherwise rely on the Manager of Managers Order without first obtaining shareholder approval of: the new sub-adviser, the fund's ability add or to replace a sub-adviser in reliance on the Manager of Managers Order, or otherwise rely on the Manager of Managers Order.

12. The Appendix includes a comparison of the management fees, the total operating expenses (before and after any waivers and reimbursements) expressed as an annual percentage of average daily net assets, and the asset levels of each Existing Fund and its corresponding Replacement Fund. The 12b-1 fees listed in the fee tables provided in the Appendix for each Existing Fund and Replacement Fund represents the maximum 12b-1 fee that could be assessed by the particular fund, except with regard to the Franklin Templeton Variable Insurance Products Trust—Templeton Developing Markets Securities Fund: Class 3, which is disclosed in a footnote.

13. Set forth below is a description of the investment objectives, the advisers, the principal investment strategies and principal risk factors of each Existing Fund and its corresponding Replacement Fund.

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14. As a result of the Substitutions, the number of Investment Options under each Contract will either not be decreased, or, in those cases where the number of Investment Options is being reduced, continue to offer a significant number of alternative Investment Options. Specifically, the number of Investment Options is currently expected to range in number from 21 to 129 after the Substitutions versus 23 to 149 before the Substitutions.

15. Prospectus supplements for the Contracts will be delivered to Contract Owners at least thirty (30) days before the Substitution date. The supplements will: (i) Notify all Contract Owners of the Insurance Company Applicants' intent to implement the Substitutions, and that an application has been filed in order to obtain the necessary orders to do so; (ii) advise Contract Owners that from the date of the supplement until the Substitution date, Contract Owners are permitted to transfer Contract value out of any Existing Fund sub-account to any other sub-account(s) offered under the Contract without the transfer being treated as a transfer for purposes of transfer limitations and short-term trading fees that would otherwise be applicable under the terms of the Contract; (iii) instruct Contract Owners how to submit transfer requests in light of the proposed Substitutions; (iv) advise Contract Owners that any Contract value remaining in an Existing Fund sub-account on the Substitution date will be transferred to the corresponding Replacement Fund sub-account, and that the Substitutions will take place at relative net asset value; (v) inform Contract Owners that for at least thirty (30) days following the Substitution date, the Insurance Company Applicants will permit Contract Owners to make transfers of Contract value out of each Replacement Fund sub-account to any other sub-account(s) offered under the Contract without the transfer being treated as a transfer for purposes of transfer limitations and short-term trading fees that would otherwise be applicable under the terms of the Contract; and (vi) inform Contract Owners that the respective Insurance Company Applicant will not exercise any rights reserved by it under the Contracts to impose additional restrictions on transfers out of a Replacement Fund for at least thirty (30) days after the Substitution date.[2]

16. The Insurance Company Applicants will cause the appropriate prospectus supplements containing this disclosure and the prospectus and/or supplement for the Replacement Funds to be sent to all existing Contract Owners. New purchasers of the Contracts will be provided the prospectus supplement, the Contract prospectus, and the prospectus and/or supplement for the Replacement Funds in accordance with all applicable legal requirements. Prospective purchasers of the Contracts will be provided the prospectus supplement and the Contract prospectus.

17. In addition to the Contract prospectus supplements distributed to Contract Owners, within five (5) business days after the Substitution date, Contract Owners will be sent a confirmation of the Substitutions in accordance with Rule 10b-10 under the Securities Exchange Act of 1934, as amended. The confirmation statement will reiterate that the Insurance Company Applicant will not exercise any right reserved by it under the Contracts to impose any restrictions or fees on transfers from the Replacement Funds until at least thirty (30) days after the Substitution date.

18. The proposed Substitutions will take place at relative net asset value determined on the Substitution date pursuant to Section 22 of the 1940 Act and Rule 22c-1 thereunder with no change in the amount of any Contract Owner's Contract value, cash value, death benefit, or dollar value of his or her investment in the Separate Accounts. Each Substitution will be effected by redeeming shares of the Existing Fund in cash and/or in-kind on the Substitution date at their net asset value and using the proceeds of those redemptions to purchase shares of the Replacement Fund at their net asset value on the same date.[3]

19. Contract Owners will not incur any fees or charges as a result of the proposed Substitutions, nor will their rights or insurance benefits or the Insurance Company Applicants' obligations under the Contracts be altered in any way. All expenses incurred in connection with the proposed Substitutions, including any brokerage, legal, accounting, and other fees and expenses, will be paid by the Insurance Company Applicants. In addition, the proposed Substitutions will not impose any tax liability on Contract Owners. The proposed Start Printed Page 28988Substitutions will not cause the Contract fees and charges currently being paid by Contract Owners to be greater after the proposed Substitution than before the proposed Substitution. No fees will be charged on transfers made on the Substitution date because each Substitution redemption and purchase will not be treated as a transfer for purposes of assessing transfer charges or computing the number of permissible transfers under the Contracts.

20. For all Substitutions other than Janus Aspen Series—INTECH Risk-Managed Core Portfolio: Service Shares to be replaced by NVIT—NVIT Nationwide Fund: Class II (Ref. No. 21) (the “Aspen Substitution”), for a period of two (2) years following the Substitution date and for those Contracts with assets allocated to the Existing Fund on the date of the Substitution, the issuing Insurance Company, as applicable, will reimburse, on the last business day of each fiscal quarter, the sub-accounts investing in the applicable Replacement Fund to the extent that the Replacement Fund's net annual expenses for such period exceeds, on an annualized basis, the net annual expenses of the Existing Fund for fiscal year 2008. In addition, the Insurance Company Applicants will not increase the Contract fees and charges that would otherwise be assessed under the terms of the Contracts for a period of at least two (2) years following the Substitution date.

21. For the Aspen Substitution, where the sum of the management fee and 12b-1 fee of the Replacement Fund is greater than (or could be greater than) that of the Existing Fund, for those Contracts with assets allocated to the Existing Fund on the date of the Substitution, the issuing Insurance Company Applicant, as applicable, will reimburse, on the last business day of each fiscal quarter, the sub-accounts investing in the applicable Replacement Fund to the extent that the Replacement Fund's net annual expenses for such period exceeds, on an annualized basis, the net annual expenses of the Existing Fund for fiscal year 2008. In addition, for those same Contracts, the Insurance Company Applicants will not increase the Contract fees and charges that would otherwise be assessed under the terms of the Contracts for the duration of the Contracts.

Section 26 Applicants' Legal Analysis

1. Section 26 Applicants request that the Commission issue an order pursuant to Section 26(c) of the 1940 Act approving the proposed Substitutions.

2. Section 26 Applicants assert that Section 26(c) of the 1940 Act makes it unlawful for the depositor of a registered unit investment trust that invests in the securities of a single issuer to substitute another security for such security without Commission approval. Section 26(c) further states that the Commission shall issue an order approving such a substitution “if the evidence establishes that it is consistent with the protection of investors and the purposes fairly intended by the policy and provisions of this title.”

3. Section 26 Applicants represent that the Contracts have reserved the right to substitute shares of another underlying mutual fund for one of the current underlying mutual funds offered as an investment option under the Contracts. The Contract prospectuses disclose this right.

4. Section 26 Applicants represent that each Replacement Fund and its corresponding Existing Fund have similar, and in some cases substantially similar or identical, investment objectives and strategies. In addition, Section 26 Applicants maintain that each proposed Substitution retains for Contract Owners the investment flexibility and expertise in asset management, which are core investment features of the Contracts and any impact on the investment programs of affected Contract Owners should be negligible.

Furthermore, Section 26 Applicants assert that the ultimate effect of the Substitutions would be to continue to provide Contract Owners with a wide array of investment options and managers, while at the same time increasing administrative efficiencies of the Contracts. Additionally, Section 26 Applicants claim that information pertaining to the underlying mutual funds available under the Contracts will be more consistent and thus easier for Contract Owners to navigate and understand.

5. Section 26 Applicants represent that after the Substitution date, Contract Owners with Contract value invested in a Replacement Fund will have the same or lower net operating expense ratio(s) as before the Substitution. As indicated previously, certain expense limits have been put in place to ensure that Contract Owners do not incur higher expenses as a result of a Substitution for a period of either two (2) years after the Substitution, or for the lifetime of the Contract.

6. Section 26 Applicants submit that the proposed Substitutions are not of the type that Section 26 was designed to prevent, i.e., overreaching on the part of the depositor by permanently impacting the investment allocations of the entire trust. In the current situation, the Contracts provide Contract Owners with investment discretion to allocate and reallocate their Contract value among the available underlying mutual funds. Section 26 Applicants claim this flexibility provides Contract Owners with the ability to reallocate their assets at any time—either before the Substitution date, or after the Substitution date—if they do not wish to invest in the Replacement Fund. Thus, Section 26 Applicants assert that the likelihood of being invested in an undesired underlying mutual fund is minimized, with the discretion remaining with the Contract Owners, and the Substitutions, therefore, will not result in the type of costly forced redemption that Section 26(c) was designed to prevent.

7. Section 26 Applicants submit that the proposed Substitutions are also unlike the type of substitution that Section 26(c) was designed to prevent in that the Substitutions have no impact on other aspects of the Contracts. Specifically, Section 26 Applicants maintain that the type of insurance coverage offered by the Insurance Company Applicants under the applicable Contract, as well as numerous other rights and privileges associated with the Contract, are not impacted by the proposed Substitution. Section 26 Applicants note that Contract Owners also may have considered the Insurance Company Applicant's size, financial condition, and its reputation for service in selecting their Contract. Section 26 Applicants assert that these factors will not change as a result of the proposed Substitutions, nor will the annuity, life, or tax benefits afforded under the Contracts held by any of the affected Contract Owners.

8. Section 26 Applicants submit that, for all the reasons stated above, the proposed Substitutions are consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the 1940 Act.

Section 17 Applicants' Legal Analysis

1. Section 17 Applicants request that the Commission issue an order pursuant to Section 17(b) of the 1940 Act exempting them from the provisions of Section 17(a) of the 1940 Act to the extent necessary to permit them to carry out the In-Kind Transactions.

2. Section 17(a)(1) of the 1940 Act, in relevant part, generally prohibits any affiliated person of a registered investment company (or any affiliated person of such a person), acting as principal, from knowingly selling any security or other property to that Start Printed Page 28989company. Section 17(a)(2) of the 1940 Act generally prohibits the same persons, acting as principals, from knowingly purchasing any security or other property from the registered investment company. Section 2(a)(3) of the 1940 Act defines the term “affiliated person” of another person, in relevant part, as:

(A) any person directly or indirectly owning, controlling, or holding with power to vote, 5 per centum or more of the outstanding voting securities of such other person; (B) any person 5 per centum or more of whose outstanding voting securities are directly or indirectly owned, controlled, or held with power to vote, by such other person; [or] (C) any person directly or indirectly controlling, controlled by, or under common control with, such other person* * *

3. Section 2(a)(9) of the 1940 Act states that any person who owns beneficially, either directly or through one or more controlled companies, more than 25% of the voting securities of a company shall be presumed to control such company. Shares held by an insurance company separate account are legally owned by the insurance company. Thus, the Insurance Company Applicants collectively own substantially all of the shares of NVIT. Accordingly, NVIT and its respective funds are arguably under the control of the Insurance Company Applicants, as per Section 2(a)(9) of the 1940 Act (notwithstanding the fact that the Contract Owners are the beneficial owners of those Separate Account shares). If NVIT is under the common control of the Insurance Company Applicants, then each of the Insurance Company Applicants is an affiliated person of NVIT and its respective Funds. If NVIT and its respective Funds are under the control of the Insurance Company Applicants, then NVIT and its respective affiliates are affiliated persons of the Insurance Company Applicants. Regardless of whether or not the Insurance Company Applicants can be considered to actually control NVIT and its Funds, because the Insurance Company Applicants and their affiliates own of record more than 5% of the shares of each Fund and are under common control with NFA, the Insurance Company Applicants are affiliated persons of NVIT and its Funds. Likewise, NVIT and its respective Funds are each an affiliated person of the Insurance Company Applicants.

4. Section 17 Applicants represent that the proposed In-Kind Transactions could be seen as the indirect purchase of shares of certain Replacement Funds with portfolio securities of certain Existing Funds and the indirect sale of portfolio securities of certain Existing Funds for shares of certain Replacement Funds. Pursuant to this analysis, the proposed In-Kind Transactions also could be categorized as a purchase of shares of certain Replacement Funds by certain Existing Funds, acting as principal, and a sale of portfolio securities by certain Existing Funds, acting as principal, to certain Replacement Funds. In addition, the proposed In-Kind Transactions could be viewed as a purchase of securities from certain Existing Funds, and a sale of securities to certain Replacement Funds, by the Insurance Company Applicants (or their Separate Accounts), acting as principal. If categorized in this manner, the proposed In-Kind Transactions may be deemed to contravene Section 17(a) due to the affiliated status of these participants.

5. Section 17(b) of the 1940 Act provides that any person may apply to the Commission for an exemption from the provisions of Section 17(a), and the Commission shall issue such exemptive order, if evidence establishes that:

(1) The terms of the proposed transaction, including the consideration to be paid or received, are reasonable and fair and do not involve overreaching on the part of any person concerned;

(2) The proposed transaction is consistent with the policy of each registered investment company concerned, as recited in its registration statement and reports filed under [the 1940 Act]; and

(3) The proposed transaction is consistent with the general purposes of [the 1940 Act].

6. The Section 17 Applicants submit that the In-Kind Transactions meet the conditions set forth in Section 17(b) of the 1940 Act.

7. The Section 17 Applicants submit that the terms of the In-Kind Transactions, including the consideration to be paid and received, are reasonable, fair, and do not involve overreaching because: (1) The Contract Owners' Contract values will not be adversely impacted or diluted; (2) with respect to those securities for which market quotations are readily available, the In-Kind Transactions will comply with the conditions set forth in Rule 17a-7, other than the requirement relating to cash consideration; and (3) with respect to those securities for which market quotations are not readily available, the In-Kind Transactions will be effected in accordance with the relevant Existing Funds' and the relevant corresponding Replacement Funds' normal valuation procedures, as described in the relevant fund's registration statement.

8. Section 17 Applicants represent that Contract Owners' Contract values will not be adversely impacted or diluted because the In-Kind Transactions will be effected at the respective net asset values of the Existing Funds and the Replacement Funds, as described in each fund's registration statement and as required by Rule 22c-1 under the 1940 Act. The In-Kind Transactions will not change the dollar value of any Contract, the accumulation unit value or annuity unit value of any Contract, or the death benefit payable under any Contract. After the In-Kind Transactions, the value of a Separate Account's investment in a Replacement Fund will equal the value of its investments in the corresponding Existing Fund (in addition to any pre-existing investment in the Replacement Fund) before the In-Kind Transactions.

9. The adopting release of Rule 17a-7 states that the purpose of the rule is to set forth “conditions as to the availability of the exemption to those situations where the Commission, upon the basis of its experience, considers that there is no likelihood of overreaching of the investment companies participating in the transaction.” [4] Because the proposed In-Kind Transactions would comply in substance with the conditions of the rule and since the In-Kind Transactions will be effected at the respective net asset values of the relevant funds, as per the registration statement for each fund and as required by Rule 22c-1 under the 1940 Act, the Section 17 Applicants submit that the terms of the In-Kind Transactions do not present a situation where the investment companies participating in the transaction could overreach and potentially harm investors. Section 17 Applicants claim that the purposes intended by implementation of the rule are therefore met by the terms of the In-Kind Transactions.

10. Section 17 Applicants represent that the proposed In-Kind Transactions will be effected based upon the independent current market price of the portfolio securities as specified in Rule 17a-7(b). Section 17 Applicants claim that the proposed In-Kind Transactions will be consistent with the policy of each registered investment company and separate series thereof participating in the In-Kind Transactions, as recited in the relevant registered investment company's registration statement and reports in accordance with Rule 17a-Start Printed Page 289907(c). No brokerage commission, fee (except for any customary transfer fees), or other remuneration will be paid in connection with the proposed In-Kind Transactions as specified in Rule 17a-7(d). NVIT's board of directors has adopted and implemented the fund governance and oversight procedures as required by Rule 17a-7(e) and (f). Finally, a written record of the procedures for the proposed In-Kind Transactions will be maintained and preserved in accordance with Rule 17a-7(g).

11. Although the proposed In-Kind Transactions will not comply with the cash consideration requirement of Rule 17a-7(a), Section 17 Applicants assert that the terms of the proposed In-Kind Transactions will offer to each of the relevant Existing Funds and each of the relevant Replacement Funds the same degree of protection from overreaching that Rule 17a-7 generally provides in connection with the purchase and sale of securities under that Rule in the ordinary course of business. Specifically, Insurance Company Applicants and their affiliates cannot effect the proposed In-Kind Transactions at a price that is disadvantageous to any Replacement Fund and the proposed In-Kind Transactions will not occur absent an exemptive order from the Commission.

12. Section 17 Applicants represent that for those Existing Funds that will redeem their shares in-kind as part of the In-Kind Transactions, such transactions will be consistent with the investment policies of the Existing Fund because: (1) The redemption in-kind policy is stated in the relevant Existing Fund's current registration statement; and (2) the shares will be redeemed at their net asset value in conformity with Rule 22c-1 under the 1940 Act. Likewise, for the Replacement Funds that will sell shares in exchange for portfolio securities as part of the In-Kind Transactions, such transactions will be consistent with the investment policies of the Replacement Fund because: (1) NVIT's policy of selling shares in exchange for investment securities is stated in NVIT's current registration statement; (2) the shares will be sold at their net asset value; and (2) the investment securities will be of the type and quality that a Replacement Fund could have acquired with the proceeds from the sale of its shares had the shares been sold for cash. For each of the proposed In-Kind Transactions, the Adviser and relevant Sub-Adviser(s) will analyze the portfolio securities being offered to each relevant Replacement Fund and will retain only those securities that it would have acquired for each such Fund in a cash transaction.

13. Section 17 Applicants represent that all in-kind redemptions from an Existing Fund of which any Section 17 Applicants is an affiliated person will be effected in accordance with the conditions set forth in the Commission's no-action letter issued to Signature Financial Group, Inc. (available December 28, 1999).

14. Section 17 Applicants assert that the proposed In-Kind Transactions, as described herein, are consistent with the general purposes of the 1940 Act set forth in Section 1 of the 1940 Act. In particular, the proposed In-Kind Transactions do not present any conditions or abuses that the 1940 Act was designed to prevent.

15. Section 17 Applicants request that the Commission issue an order pursuant to Section 17(b) of the 1940 Act to permit them, to the extent necessary, to carry out the proposed In-Kind Transactions. Section 17 Applicants submit that, for all the reasons stated above: (1) The terms of the proposed In-Kind Transactions, including the consideration to be paid and received, are reasonable and fair to each of the relevant Replacement Funds, each of the relevant Existing Funds, and Contract Owners, and that the proposed In-Kind Transactions do not involve overreaching on the part of any person concerned; (2) the proposed In-Kind Transactions are, or will be, consistent with the policies of the relevant Replacement Funds and the relevant Existing Funds as stated in the relevant investment company's registration statement and reports filed under the 1940 Act; and (3) the proposed In-Kind Transactions are, or will be, consistent with the general purposes of the 1940 Act.

Conclusion

Section 26 Applicants submit that for the reasons summarized above the proposed Substitutions meet the standards of Section 26(c) of the 1940 Act and request that the Commission issue an order of approval pursuant to Section 26(c) of the 1940 Act. Section 17 Applicants submit that the proposed In-Kind Transactions meet the standards of Section 17(b) of the 1940 Act and request that the Commission issue an order of exemption pursuant to Section 17(b) of the 1940 Act.

Start Signature

For the Commission, by the Division of Investment Management pursuant to delegated authority.

Florence E. Harmon,

Deputy Secretary.

End Signature

Appendix

1. AIM Variable Insurance Funds—AIM V.I. Basic Value Fund Replaced by the NVIT—NVIT Multi-Manager Large Cap Value Fund (Substitution Table Reference Nos. 1 & 2)

AIM Variable Insurance Funds—AIM V.I. Basic Value Fund: Series I Shares will be replaced by the NVIT—NVIT Multi-Manager Large Cap Value Fund: Class I shares. AIM Variable Insurance Funds—AIM V.I. Basic Value Fund: Series II Shares will be replaced by the NVIT—NVIT Multi-Manager Large Cap Value Fund: Class II shares.

The following chart compares the management fees, the total operating expenses (before and after any waivers and reimbursements) expressed as an annual percentage of average daily net assets, and the asset levels of the AIM Variable Insurance Funds—AIM V.I. Basic Value Fund: Series I Shares, AIM Variable Insurance Funds—AIM V.I. Basic Value Fund: Series II Shares, NVIT—NVIT Multi-Manager Large Cap Value Fund: Class I, and NVIT—NVIT Multi-Manager Large Cap Value Fund: Class II.

Start Printed Page 28991
Existing fundReplacement fund
AIM variable insurance funds—AIM V.I. basic value fund sharesNVIT-NVIT multi-manager large cap value fund
Series ISeries IIClass IClass II
Management Fees5 0.68%5 0.68%0.65%0.65%
12b-1 Fees0.00%0.25%0.00%0.25%
Other Expenses0.35%0.35%6 0.37%6 0.37%
Total Gross Expenses1.03%1.28%1.02%1.27%
Waivers/Reimbursements0.00%0.00%7 0.10%7 0.10%
Total Net Expenses1.03%1.28%0.92%1.17%
Fund/Class 8 Asset Level ($MMs) (5/20/09)9 $170.310 $143.4$0.2$5.9

2. AIM Variable Insurance Funds—AIM V.I. Large Cap Growth Fund: Series I Shares Replaced by the NVIT—NVIT Multi-Manager Large Cap Growth Fund: Class I (Substitution Table Reference No. 3)

The following chart compares the management fees, the total operating expenses (before and after any waivers and reimbursements) expressed as an annual percentage of average daily net assets, and the asset levels of the AIM Variable Insurance Funds—AIM V.I. Large Cap Growth Fund: Series I Shares and the NVIT—NVIT Multi-Manager Large Cap Growth Fund: Class I.

Existing fundReplacement fund
AIM Variable Insurance Funds—AIM V.I. Large Cap Growth Fund: Series I SharesNVIT—NVIT Multi-Manager Large Cap Growth Fund: Class I
Management Fees11 0.70%0.65%
12b-1 Fees0.00%0.00%
Other Expenses0.40%12 0.36%
Start Printed Page 28992
Total Gross Expenses1.10%1.01%
Waivers/Reimbursements13 0.09%14 0.11%
Total Net Expenses1.01%0.90%
Fund/Class 15 Asset Level ($MMs) (5/20/09)16 $63.5$0.6

3. American Century Variable Portfolios, Inc.—American Century VP Capital Appreciation Fund: Class I Replaced by the NVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class I (Substitution Table Reference No. 4)

The following chart compares the management fees, the total operating expenses (before and after any waivers and reimbursements) expressed as an annual percentage of average daily net assets, and the asset levels of the American Century Variable Portfolios, Inc.—American Century VP Capital Appreciation Fund: Class I and the NVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class I.

Existing fundReplacement fund
American Century Variable Portfolios, Inc.—American Century VP Capital Appreciation Fund: Class INVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class I
Management Fees17 1.00%0.75%
12b-1 Fees0.00%0.00%
Other Expenses0.01%18 0.22%
Total Gross Expenses1.01%0.97%
Waivers/Reimbursements0.00%19 0.08%
Total Net Expenses1.01%0.89%
Fund/Class 20 Asset Level ($MMs) (9/30/08)21 $288.0$87.7

4. American Century Variable Portfolios, Inc.—American Century VP International Fund Replaced by the NVIT—NVIT Multi-Manager International Growth Fund (Substitution Table Reference Nos. 5, 6, 7, & 8)

American Century Variable Portfolios, Inc.—American Century VP International Fund: Class I will be replaced by NVIT—NVIT Multi-Manager International Growth Fund: Class III. American Century Variable Portfolios, Inc.—American Century VP International Fund: Class II will be replaced by NVIT—NVIT Multi-Manager International Growth Fund: Class VI. American Century Variable Portfolios, Inc.—American Century VP International Fund: Class III will be replaced by NVIT—NVIT Multi-Manager International Growth Fund: Class III. American Century Variable Portfolios, Inc.—American Century VP International Fund: Class IV will be replaced by NVIT—NVIT Multi-Manager International Growth Fund: Class VI. The following chart compares the management fees, the total operating expenses (before and after any waivers and reimbursements) expressed as an annual percentage of average daily net assets, and the asset levels of the American Century Variable Portfolios, Inc.—American Century VP International Fund: Class I, American Century Variable Portfolios, Inc.—American Century VP International Fund: Class II, American Century Variable Portfolios, Inc.—American Century VP International Fund: Class III, American Century Variable Portfolios, Inc.—American Century VP International Fund: Class IV, NVIT—NVIT Multi-Manager International Growth Fund: Class III and NVIT—NVIT Multi-Manager International Growth Fund: Class VI.

Existing fundReplacement fund
American Century Variable Portfolios, Inc.—American Century VP International FundNVIT—NVIT Multi-Manager International Growth Fund
Class IClass IIClass IIIClass IVClass IIIClass VI
Management Fees22 1.36%23 1.26%22 1.36%23 1.26%0.85%0.85%
12b-1 Fees0.00%0.25%0.00%0.25%0.00%0.25%
Other Expenses0.01%0.01%0.01%0.01%24 0.30%24 0.30%
Total Gross Expenses1.37%1.52%1.37%1.52%1.15%1.40%
Waivers/Reimbursements0.00%0.00%0.00%0.00%25 0.04%25 0.04%
Total Net Expenses1.37%1.52%1.37%1.52%1.11%1.36%
Fund/Class 26 Asset Level ($MMs) (4/30/09)27 $258.228 $105.129 $52.030 $9.8$9.8$90.6
Start Printed Page 28993

5. American Century Variable Portfolios, Inc.—American Century VP Ultra Fund Replaced by NVIT—NVIT Multi-Manager Large Cap Growth Fund (Substitution Table Reference Nos. 9 & 10)

American Century Variable Portfolios, Inc.—American Century VP Ultra Fund: Class I will be replaced by NVIT—NVIT Multi-Manager Large Cap Growth Fund: Class I and American Century Variable Portfolios, Inc.—American Century VP Ultra Fund: Class II will be replaced by NVIT—NVIT Multi-Manager Large Cap Growth Fund: Class II. The following chart compares the management fees, the total operating expenses (before and after any waivers and reimbursements) expressed as an annual percentage of average daily net assets, and the asset levels of the American Century Variable Portfolios, Inc.—American Century VP Ultra Fund: Class I, American Century Variable Portfolios, Inc.—American Century VP Ultra Fund: Class II, NVIT—NVIT Multi-Manager Large Cap Growth Fund: Class I and NVIT—NVIT Multi-Manager Large Cap Growth Fund: Class II.

Existing fundReplacement fund
American Century Variable Portfolios, Inc.—American Century VP Ultra FundNVIT—NVIT Multi-Manager Large Cap Growth Fund
Class IClass IIClass IClass II
Management Fees31 1.00%32 0.90%0.65%0.65%
12b-1 Fees0.00%0.25%0.00%0.25%
Other Expenses0.01%0.01%33 0.36%34 0.36%
Total Gross Expenses1.01%1.16%1.01%1.26%
Waivers/Reimbursements0.00%0.00%35 0.11%35 0.11%
Total Net Expenses1.01%1.16%0.90%1.15%
Fund/Class 36 Asset Level ($MMs) (4/30/09)37 $37.238 $177.6$0.6$1.4

6. American Century Variable Portfolios, Inc.—American Century VP Vista Fund Replaced by NVIT—NVIT Multi-Manager Mid Cap Growth Fund (Substitution Table Reference Nos. 11, 12, & 13)

American Century Variable Portfolios, Inc.—American Century VP Vista Fund: Start Printed Page 28994Class I will be replaced by NVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class I. American Century Variable Portfolios, Inc.—American Century VP Vista Fund: Class II will be replaced by NVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class I or Class II, depending on the contract involved in the Substitution. The following chart compares the management fees, the total operating expenses (before and after any waivers and reimbursements) expressed as an annual percentage of average daily net assets, and the asset levels of American Century Variable Portfolios, Inc.—American Century VP Vista Fund: Class I, American Century Variable Portfolios, Inc.—American Century VP Vista Fund: Class II, NVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class I and NVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class II.

Existing fundReplacement fund
American Century Variable Portfolios, Inc.—American Century VP Vista FundNVIT—NVIT Multi-Manager Mid Cap Growth Fund
Class IClass IIClass IClass II
Management Fees1.00%0.90%0.75%0.75%
12b-1 Fees0.00%0.25%0.00%0.25%
Other Expenses0.01%0.01%39 0.22%39 0.22%
Total Gross Expenses1.01%1.16%0.97%1.22%
Waivers/Reimbursements0.00%0.00%40 0.08%40 0.08%
Total Net Expenses1.01%1.16%0.89%1.14%
Fund/Class 41 Asset Level ($MMs) (4/30/09)42 $37.743 $11.7$87.7$134.2

7. Credit Suisse Trust—International Equity Flex I Portfolio (Formerly, International Focus Portfolio) Replaced by NVIT—Gartmore NVIT International Equity Fund (Substitution Table Reference Nos. 14 & 15)

Credit Suisse Trust—International Equity Flex I Portfolio (formerly, International Focus Portfolio) will be replaced by NVIT—Gartmore NVIT International Equity Fund: Class I or Start Printed Page 28995Class III, depending on the contract involved in the Substitution. The following chart compares the management fees, the total operating expenses (before and after any waivers and reimbursements) expressed as an annual percentage of average daily net assets, and the asset levels of Credit Suisse Trust—International Equity Flex I Portfolio, NVIT—Gartmore NVIT International Equity Fund: Class I and NVIT—Gartmore NVIT International Equity Fund: Class III.

Existing fundReplacement fund
Credit Suisse Trust— International Equity Flex I PortfolioNVIT—Gartmore NVIT International Equity Fund
Class IClass III
Management Fees1.00%44 0.80%44 0.80%
12b-1 Fees0.00%0.00%0.00%
Other Expenses1.14%45 0.31%45 0.31%
Total Gross Expenses2.14%1.11%1.11%
Waivers/Reimbursements0.00%46 0.00%46 0.00%
Total Net Expenses2.14%1.11%1.11%
Fund/Class 47 Asset Level ($MMs) (5/20/09)48 $44.5$8.1$35.4

8. Federated Insurance Series—Federated Quality Bond Fund II Replaced by NVIT—NVIT Core Bond Fund (Substitution Table Reference Nos. 16 & 17)

Federated Insurance Series—Federated Quality Bond Fund II: Primary Shares will be replaced by NVIT—NVIT Core Bond Fund: Class I. Federated Insurance Series—Federated Quality Bond Fund II: Service Shares will be replaced by NVIT—NVIT Core Bond Fund: Class II. The following chart compares the management fees, the total operating expenses (before and after any waivers and reimbursements) expressed as an annual percentage of average daily net assets, and the asset levels of Federate Insurance Series—Federated Quality Bond Fund II: Primary Shares, Federate Insurance Series—Federated Quality Bond Fund II: Service Shares, NVIT—NVIT Core Bond Fund: Class I and NVIT—NVIT Core Bond Fund: Class II.

Existing fundReplacement fund
Federated Insurance Series—Federated Quality Bond Fund IINVIT—NVIT Core Bond Fund
PrimaryServiceClass IClass II
Management Fees49 0.60%49 0.60%0.40%0.40%
12b-1 Fees50 0.25%0.25%0.00%0.25%
Other Expenses51 0.39%51 0.39%52 0.37%52 0.37%
Total Gross Expenses1.24%1.24%0.77%1.02%
Waivers/Reimbursements53 0.00%0.00%54 0.07%54 0.07%
Total Net Expenses1.24%1.24%0.70%0.95%
Fund/Class 55 Asset Level ($MMs) (5/19/09)56 $218.557 $62.7$4.8$7.1

9. Franklin Templeton Variable Insurance Products Trust—Templeton Developing Markets Securities Fund Replaced by NVIT—Gartmore NVIT Emerging Markets Fund (Substitution Table Reference Nos. 18 & 19)

Franklin Templeton Variable Insurance Products Trust—Templeton Developing Markets Securities Fund: Start Printed Page 28996Class 3 will be replaced by NVIT—Gartmore NVIT Emerging Markets Fund: Class III or NVIT—Gartmore NVIT Emerging Markets Fund: Class VI, depending on the contract involved in the Substitution. The following chart compares the management fees, the total operating expenses (before and after any waivers and reimbursements) expressed as an annual percentage of average daily net assets, and the asset levels of Franklin Templeton Variable Insurance Products Trust—Templeton Developing Markets Securities Fund: Class 3, NVIT—Gartmore NVIT Emerging Markets Fund: Class III and NVIT—Gartmore NVIT Emerging Markets Fund: Class VI.

Existing fundReplacement fund
Franklin Templeton Variable Insurance Products Trust—Templeton Developing Markets Securities FundNVIT—Gartmore NVIT Emerging Markets Fund
Class 3Class IIIClass VI
Management Fees1.25%58 0.95%58 0.95%
12b-1 Fees59 0.25%0.00%0.25%
Other Expenses0.29%60 0.29%60 0.28%
Total Gross Expenses1.79%1.24%1.48%
Waivers/Reimbursements61 0.01%62 0.00%62 0.00%
Total Net Expenses1.78%1.24%1.48%
Fund/Class63 Asset Level ($MMs) (5/20/09)64 $42.3$101.6$44.8

10. Janus Aspen Series—INTECH Risk-Managed Core Portfolio Replaced by NVIT—NVIT Nationwide Fund (Substitution Table Reference Nos. 20 & 21)

Janus Aspen Series—INTECH Risk-Managed Core Portfolio: Service Shares will be replaced by NVIT—NVIT Nationwide Fund: Class I or Class II, depending on the contract involved in the Substitution. The following chart compares the management fees, the total operating expenses (before and after any waivers and reimbursements) expressed as an annual percentage of average daily net assets, and the asset levels of Janus Aspen Series—INTECH Risk-Managed Core Portfolio: Service Shares, NVIT—NVIT Nationwide Fund: Class I and NVIT—NVIT Nationwide Fund: Class II.

Start Printed Page 28997
Existing fundReplacement fund
Janus Aspen Series—INTECH Risk-Managed Core PortfolioNVIT—NVIT Nationwide Fund
Service SharesClass IClass II
Management Fees0.40%650.58%0.58%
12b-1 Fees0.25%0.00%0.25%
Other Expenses1.06%66 0.26%66 0.26%
Total Gross Expenses1.71%0.84%1.09%
Waivers/Reimbursements67 0.26%0.00%0.00%
Total Net Expenses1.45%0.84%1.09%
Fund/Class 68 Asset Level ($MMs) (5/30/09)69 $20.5$629.2$316.6

11. Neuberger Berman Advisers Management Trust—AMT Growth Portfolio Replaced by NVIT—NVIT Multi-Manager Mid Cap Growth Fund (Substitution Table Reference No. 22)

Neuberger Berman Advisers Management Trust—AMT Growth Portfolio: I Class will be replaced by NVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class I. The following chart compares the management fees, the total operating expenses (before and after any waivers and reimbursements) expressed as an annual percentage of average daily net assets, and the asset levels of Neuberger Berman Advisers Management Trust—AMT Growth Portfolio: I Class and NVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class I.

Existing fundReplacement fund
Neuberger Berman Advisers Management Trust—AMT Growth Portfolio: I ClassNVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class I
Management Fees0.85%0.75%
12b-1 Fees0.00%0.00%
Other Expenses0.19%70 0.22%
Total Gross Expenses1.04%0.97%
Waivers/Reimbursements71 0.00%72 0.08%
Total Net Expenses1.04%0.89%
Fund/Class 73 Asset Level ($MMs) (5/20/09)74 $78.5$87.7

12. Neuberger Berman Advisers Management Trust—AMT Guardian Portfolio Replaced by NVIT—Neuberger Berman NVIT Multi Cap Opportunities Fund (Substitution Table Reference No. 23)

Neuberger Berman Advisers Management Trust—AMT Guardian Portfolio: I Class will be replaced by NVIT—Neuberger Berman NVIT Multi Cap Opportunities Fund: Class I. The following chart compares the management fees, the total operating expenses (before and after any waivers and reimbursements) expressed as an annual percentage of average daily net assets, and the asset levels of Neuberger Berman Advisers Management Trust—AMT Guardian Portfolio: I Class and NVIT—Neuberger Berman NVIT Multi Cap Opportunities Fund: Class I.

Start Printed Page 28998
Existing fundReplacement fund
Neuberger Berman Advisers Management Trust—AMT Guardian Portfolio: I ClassNVIT—Neuberger Berman NVIT Multi Cap Opportunities Fund: Class I
Management Fees0.85%0.60%
12b-1 Fees0.00%0.00%
Other Expenses0.16%1.50%75
Total Gross Expenses1.01%2.10%
Waivers/Reimbursements0.00% 761.20% 77
Total Net Expenses1.01%0.90%
Fund/Class 78 Asset Level ($MMs) (5/20/09)$62.4 79$2.9

13. Neuberger Berman Advisers Management Trust—AMT International Portfolio Replaced by NVIT—Gartmore NVIT International Equity Fund (Substitution Table Reference Nos. 24 & 25)

Neuberger Berman Advisers Management Trust—AMT International Portfolio: S Class will be replaced by NVIT—Gartmore NVIT International Equity Fund: Class III or Class VI, depending on the contract involved in the Substitution. The following chart compares the management fees, the total operating expenses (before and after any waivers and reimbursements) expressed as an annual percentage of average daily net assets, and the asset levels of Neuberger Berman Advisers Management Trust—AMT International Portfolio: S Class, NVIT—Gartmore NVIT International Equity Fund: Class III and NVIT—Gartmore NVIT International Equity Fund: Class VI.

Existing fundReplacement fund
Neuberger Berman Advisers Management Trust—AMT International PortfolioNVIT—Gartmore NVIT International Equity Fund
S ClassClass IIIClass VI
Management Fees1.15%80 0.80%80 0.80%
12b-1 Fees0.25%0.00%0.25%
Other Expenses0.21%81 0.31%81 0.31%
Total Gross Expenses1.61%1.11%1.36%
Waivers/Reimbursements82 0.00%83 0.00%83 0.00%
Total Net Expenses1.61%1.11%1.36%
Fund/Class 84 Asset Level ($MMs) (5/20/09)85 $284.0$35.5$5.0

14. Neuberger Berman Advisers Management Trust—AMT Mid-Cap Growth Portfolio Replaced by NVIT—NVIT Multi-Manager Mid Cap Growth Fund (Substitution Table Reference Nos. 26, 27, & 28)

Neuberger Berman Advisers Management Trust—AMT Mid-Cap Growth Portfolio: I Class will be replaced by NVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class I. Neuberger Berman Advisers Management Trust—AMT Mid-Cap Growth Portfolio: S Class will be replaced by NVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class I or Class II, depending on the contract involved in the Substitution. The following chart compares the management fees, the total operating expenses (before and after any waivers and reimbursements) expressed as an annual percentage of average daily net assets, and the asset levels of Neuberger Berman Advisers Management Trust—AMT Mid-Cap Growth Portfolio: I Class, Neuberger Berman Advisers Management Trust—AMT Mid-Cap Growth Portfolio: S Class, NVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class I and NVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class II.

Start Printed Page 28999
Existing fundReplacement fund
Neuberger Berman Advisers Management Trust—AMT Mid-Cap Growth PortfolioNVIT—NVIT Multi-Manager Mid Cap Growth Fund
I ClassS ClassClass IClass II
Management Fees0.83%0.83%0.75%0.75%
12b-1 Fees0.00%0.25%0.00%0.25%
Other Expenses0.09%0.10%86 0.22%86 0.22%
Total Gross Expenses0.92%1.18%0.97%1.22%
Waivers/Reimbursements87 0.00%88 0.00%89 0.08%89 0.08%
Total Net Expenses0.92%1.18%0.89%1.14%
Fund/Class 90 Asset Level ($MMs) (5/20/09)91 $331.092 $37.3$87.7$134.2

15. Neuberger Berman Advisers Management Trust—AMT Partners Portfolio Replaced by NVIT—Neuberger Berman NVIT Multi Cap Opportunities Fund (Substitution Table Reference No. 29)

Neuberger Berman Advisers Management Trust—AMT Partners Portfolio: I Class will be replaced by NVIT—Neuberger Berman NVIT Multi Cap Opportunities Fund: Class I. The following chart compares the management fees, the total operating expenses (before and after any waivers and reimbursements) expressed as an annual percentage of average daily net assets, and the asset levels of Neuberger Berman Advisers Management Trust—AMT Partners Portfolio: I Class and NVIT—Neuberger Berman NVIT Multi Cap Opportunities Fund: Class I.

Start Printed Page 29000
Existing fundReplacement fund
Neuberger Berman Advisers Management Trust—AMT Partners Portfolio: I ClassNVIT—Neuberger Berman NVIT Multi Cap Opportunities Fund: Class I
Management Fees0.84%0.60%
12b-1 Fees0.00%0.00%
Other Expenses0.11%93 1.50%
Total Gross Expenses0.95%2.10%
Waivers/Reimbursements94 0.00%95 1.20%
Total Net Expenses0.95%0.90%
Fund/Class 96 Asset Level ($MMs) (5/20/09)97 $236.1 $2.9

16. Neuberger Berman Advisers Management Trust—AMT Regency Portfolio Replaced by NVIT—NVIT Multi-Manager Mid Cap Value Fund (Substitution Table Reference No. 30)

Neuberger Berman Advisers Management Trust—AMT Regency Portfolio: S Class will be replaced by NVIT—NVIT Multi-Manager Mid Cap Value Fund: Class II. The following chart compares the management fees, the total operating expenses (before and after any waivers and reimbursements) expressed as an annual percentage of average daily net assets, and the asset levels of Neuberger Berman Advisers Management Trust—AMT Regency Portfolio: S Class and NVIT—NVIT Multi-Manager Mid Cap Value Fund: Class II.

Existing fundReplacement fund
Neuberger Berman Advisers Management Trust—AMT Regency Portfolio: S ClassNVIT—NVIT Multi-Manager Mid Cap Value Fund: Class II
Management Fees0.85%0.75%
12b-1 Fees0.25%0.25%
Other Expenses0.13%98 0.13%
Total Gross Expenses1.23%1.13%
Waivers/Reimbursements99 0.00%100 0.06%
Total Net Expenses1.23%1.07%
Fund/Class 101 Asset Level ($MMs) (5/20/09)102 $149.7$124.9
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17. T. Rowe Price Equity Series, Inc.—T. Rowe Price Limited Term Bond Portfolio Replaced by NVIT—NVIT Short Term Bond Fund (Substitution Table Reference No. 31)

T. Rowe Price Equity Series, Inc.—T. Rowe Price Limited Term Bond Portfolio: Class II will be replaced by NVIT—NVIT Short Term Bond Fund: Class II. The following chart compares the management fees, the total operating expenses (before and after any waivers and reimbursements) expressed as an annual percentage of average daily net assets, and the asset levels of T. Rowe Price Equity Series, Inc.—T. Rowe Price Limited Term Bond Portfolio: Class II and NVIT—NVIT Short Term Bond Fund: Class II.

Existing fundReplacement fund
T. Rowe Price Equity Series, Inc.—T. Rowe Price Limited Term Bond Portfolio: Class IINVIT—NVIT Short Term Bond Fund: Class II
Management Fees0.70%0.35%
12b-1 Fees0.25%0.25%
Other Expenses0.00%103 0.32%
Total Gross Expenses0.95%0.92%
Waivers/Reimbursements0.00%104 0.02%
Total Net Expenses0.95%0.90%
Fund/Class 105 Asset Level ($MMs) (4/30/09)106 $73.5$34.6

18. The Universal Institutional Funds, Inc.—Mid Cap Growth Portfolio Replaced by NVIT—NVIT Multi-Manager Mid Cap Growth Fund (Substitution Table Reference No. 32)

The Universal Institutional Funds, Inc.—Mid Cap Growth Portfolio: Class I will be replaced by NVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class I. The following chart compares the management fees, the total operating expenses (before and after any waivers and reimbursements) expressed as an annual percentage of average daily net assets, and the asset levels of The Universal Institutional Funds, Inc.—Mid Cap Growth Portfolio: Class I and NVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class I.

Existing fundReplacement fund
The Universal Institutional Funds, Inc.—Mid Cap Growth Portfolio: Class INVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class I
Management Fees107 0.75%0.75%
12b-1 Fees0.00%0.00%
Start Printed Page 29002
Other Expenses0.31%108 0.22%
Total Gross Expenses1.06%0.97%
Waivers/Reimbursements109 0.00%110 0.08%
Total Net Expenses1.06%0.89%
Fund/Class 111 Asset Level ($MMs) (5/20/09)112 $56.4$87.7

19. The Universal Institutional Funds, Inc.—U.S. Real Estate Portfolio Replaced by NVIT—Van Kampen NVIT Real Estate Fund (Substitution Table Reference Nos. 33 & 34)

The Universal Institutional Funds, Inc.—U.S. Real Estate Portfolio: Class I will be replaced by NVIT—Van Kampen NVIT Real Estate Fund: Class I. The Universal Institutional Funds, Inc.—U.S. Real Estate Portfolio: Class II will be replaced by NVIT—Van Kampen NVIT Real Estate Fund: Class II. The following chart compares the management fees, the total operating expenses (before and after any waivers and reimbursements) expressed as an annual percentage of average daily net assets, and the asset levels of The Universal Institutional Funds, Inc.—U.S. Real Estate Portfolio: Class I, The Universal Institutional Funds, Inc.—U.S. Real Estate Portfolio: Class II, NVIT—Van Kampen NVIT Real Estate Fund: Class I and NVIT—Van Kampen NVIT Real Estate Fund: Class II.

Existing fundReplacement fund
The Universal Institutional Funds, Inc.—U.S. Real Estate PortfolioNVIT—Van Kampen NVIT Real Estate Fund
Class IClass IIClass IClass II
Management Fees113 0.77%113 0.77%0.70%0.70%
12b-1 Fees0.00%0.35%0.00%0.25%
Other Expenses0.30%0.30%114 0.74%114 0.74%
Total Gross Expenses1.07%1.42%1.44%1.69%
Waivers/Reimbursements0.00%0.00%115 0.44%115 0.44%
Total Net Expenses1.07%1.42%1.00%1.25%
Fund/Class 116 Asset Level ($MMs) (5/20/09)117 $340.9118 $219.3$3.8$2.8

20. Van Eck Worldwide Insurance Trust—Worldwide Emerging Markets Fund Replaced by NVIT—Gartmore NVIT Emerging Markets Fund (Substitution Table Reference Nos. 35, 36, & 37)

Van Eck Worldwide Insurance Trust—Worldwide Emerging Markets Fund: Initial Class will be replaced by NVIT—Gartmore NVIT Emerging Markets Fund: Class I or Class III, depending on the contract involved in the Substitution. Van Eck Worldwide Insurance Trust—Worldwide Emerging Markets Fund: Class R1 will be replaced by NVIT—Gartmore NVIT Emerging Markets Fund: Class III. The following chart compares the management fees, the total operating expenses (before and after any waivers and reimbursements) expressed as an annual percentage of average daily net assets, and the asset levels of Van Eck Worldwide Insurance Trust—Worldwide Emerging Markets Fund: Initial Class, Van Eck Worldwide Insurance Trust—Worldwide Emerging Markets Fund: Class R1, NVIT—Gartmore NVIT Emerging Markets Fund: Class I and NVIT—Gartmore NVIT Emerging Markets Fund: Class III.Start Printed Page 29003

Existing fundReplacement fund
Van Eck Worldwide Insurance Trust—Worldwide Emerging Markets FundNVIT—Gartmore NVIT Emerging Markets Fund
Initial ClassClass R1Class IClass III
Management Fees1.00%1.00%119 0.95%119 0.95%
12b-1 Fees0.00%0.00%0.00%0.00%
Other Expenses0.29%0.29%120 0.28%121 0.29%
Total Gross Expenses1.29%1.29%1.23%1.24%
Waivers/Reimbursements122 0.00%122 0.00%123 0.00%123 0.00%
Total Net Expenses1.29%1.29%1.23%1.24%
Fund/Class124 Asset Level ($MMs) (5/20/09)125 $118.3126 $37.1$36.0$101.6

21. Wells Fargo Advantage Variable Trust—Wells Fargo Advantage VT Discovery Fund Replaced by NVIT—NVIT Multi-Manager Mid Cap Growth Fund (Substitution Table Reference Nos. 38 & 39)

Wells Fargo Advantage Variable Trust—Wells Fargo Advantage VT Discovery Fund will be replaced by NVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class I or Class II, depending on the contract involved in the Substitution. The following chart compares the management fees, the total operating expenses (before and after any waivers and reimbursements) expressed as an annual percentage of average daily net assets, and the asset levels of Wells Fargo Advantage Variable Trust—Wells Fargo Advantage VT Discovery Fund, NVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class I and NVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class II.

Start Printed Page 29004
Existing fundReplacement fund
Wells Fargo Advantage Variable Trust—Wells Fargo Advantage VT Discovery FundNVIT—NVIT Multi-Manager Mid Cap Growth Fund
Class IClass II
Management Fees127 0.76%0.75%0.75%
12b-1 Fees0.25%0.00%0.25%
Other Expenses0.27%128 0.22%128 0.22%
Total Gross Expenses1.28%0.97%1.22%
Waivers/Reimbursements129 0.12%130 0.08%130 0.08%
Total Net Expenses1.16%0.89%1.14%
Fund/Class131 Asset Level ($MMs) (5/20/09)132 $112.7$87.7$134.2

22. Wells Fargo Advantage Variable Trust—Wells Fargo Advantage VT Opportunity Fund Replaced by NVIT—NVIT Multi-Manager Mid Cap Value Fund (Substitution Table Reference No. 40)

Wells Fargo Advantage Variable Trust—Wells Fargo Advantage VT Opportunity Fund: Investor Class will be replaced by NVIT—NVIT Multi-Manager Mid Cap Value Fund: Class II. The following chart compares the management fees, the total operating expenses (before and after any waivers and reimbursements) expressed as an annual percentage of average daily net assets, and the asset levels of Wells Fargo Advantage Variable Trust—Wells Fargo Advantage VT Opportunity Fund: Investor Class and NVIT—NVIT Multi-Manager Mid Cap Value Fund: Class II.

Existing fundReplacement fund
Wells Fargo Advantage Variable Trust—Wells Fargo Advantage VT Opportunity Fund: Investor ClassNVIT—NVIT Multi-Manager Mid Cap Value Fund: Class II
Management Fees133 0.76%0.75%
12b-1 Fees0.25%0.25%
Other Expenses0.22%134 0.13%
Total Gross Expenses1.23%1.13%
Waivers/Reimbursements135 0.14%136 0.06%
Total Net Expenses1.09%1.07%
Fund/Class 137 Asset Level ($MMs) (5/20/09)138 $404.3$124.9
Start Printed Page 29005 End Supplemental Information

Footnotes

1.  Relating to NVIT, the Adviser will not enter into any Sub-Advisory Agreement with any Sub-Adviser that is an “affiliated person,” as defined in Section 2(a)(3) of the 1940 Act, of NVIT or the Adviser, other than by reason of serving as a Sub-Adviser to a Fund, without such Sub-Advisory Agreement, including the compensation to be paid thereunder, being approved by the unit holders of any separate account for which that Fund serves as a funding medium.

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2.  One exception to this is that the Insurance Companies may impose restrictions on transfers to the extent necessary to prevent or limit disruptive trading activity, as described in the prospectuses for the Contracts and the underlying mutual funds.

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3.  For administrative convenience, the In-Kind Transactions may be effected through a direct transfer of securities and cash between the custodian(s) for the Existing Fund and its corresponding Replacement Fund, followed by the distribution of shares of the Replacement Fund to the applicable Separate Account(s).

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4.  1940 Act Rel. Nos. 4604 (May 20, 1966) (proposing release) and 4697 (Sept. 8, 1966) (adopting release).

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5.  Through April 30, 2010, the fund's advisor has contractually agreed to waive a portion of its advisory fees to the extent necessary so that the advisory fees payable by the fund do not exceed a specified maximum annual advisory fee rate, wherein the fee rate is based upon average net asset levels as follows:

0.695% of the first $250 million,

0.67% of the next $250 million,

0.645% of the next $500 million,

0.62% of the next $1.5 billion,

0.595% of the next $2.5 billion,

0.57% of the next $2.5 billion,

0.545% of the next $2.5 billion,

0.52% of the excess over $10 billion.

6.  “Other Expenses” include administrative services fees which currently are 0.15%, but which are permitted to be as high as 0.25%. The full 0.25% in administrative services fees is not reflected in “Other Expenses” at this time because, until at least May 1, 2010, the Fund does not intend to pay insurance companies a higher amount. If the full amount of administrative services fees were charged, total operating expenses (after fee waivers/expense reimbursements) would be 1.02% and 1.27%, respectively.

7.  NVIT and NFA have entered into a written contract limiting operating expenses to 0.77% until May 1, 2010. This limit excludes certain Fund expenses, including interest, taxes, brokerage commissions, Rule 12b-1 fees, fees paid pursuant to an Administrative Services Plan, short sale dividend expenses, other expenditures which are capitalized in accordance with generally accepted accounting principles and other non-routine expenses not incurred in the ordinary course of the Fund's business. NVIT is authorized to reimburse the NFA for management fees previously waived or reduced and/or for expenses previously paid by NFA, provided, however, that any reimbursements must be paid at a date not more than three years after the fiscal year in which NFA waived the fees or reimbursed the expenses and the reimbursements do not cause the Fund to exceed the expense limitation in the agreement.

8.  Represents assets held by the fund or listed share class, as applicable.

9.  Based on asset levels as of 3/31/09, approximately 2% of AIM V.I. Basic Value Fund Shares: Series I assets will be transferred to NVIT Multi-Manager Large Cap Value Fund: Class I pursuant to the Substitution. This transfer represents approximately 1% of the Existing Fund's total assets.

10.  Based on asset levels as of 3/31/09, approximately 19% of AIM V.I. Basic Value Fund Shares: Series II assets will be transferred to NVIT Multi-Manager Large Cap Value Fund: Class II pursuant to the Substitution. This transfer represents approximately 9% of the Existing Fund's total assets.

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11.  Through April 30, 2010, the fund's advisor has contractually agreed to waive a portion of its advisory fees to the extent necessary so that the advisory fees payable by the fund do not exceed a specified maximum annual advisory fee rate, wherein the fee rate is based upon average levels as follows:

 0.695% of the first $250 million,

 0.67% of the next $250 million,

 0.645% of the next $500 million,

 0.62% of the next $1.5 billion,

 0.595% of the next $2.5 billion,

 0.57% of the next $2.5 billion,

 0.545% of the next $2.5 billion,

 0.52% of the excess over $10 billion.

12.  “Other Expenses” include administrative services fees which currently are 0.15%, but which are permitted to be as high as 0.25%. The full 0.25% in administrative services fees is not reflected in “Other Expenses” at this time because, until at least May 1, 2010, the Fund does not intend to pay insurance companies a higher amount. If the full amount of administrative services fees were charged, total operating expenses (after fee waivers/expense reimbursements) would be 1.00%.

13.  The fund's advisor has contractually agreed to waive advisory fees and/or reimburse expenses to the extent necessary to limit Total Annual Fund Operating Expenses (excluding certain items discussed below) to 1.01% of average daily net assets. In determining the advisor's obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the Total Annual Fund Operating Expenses to exceed the number reflected above: (i) Interest; (ii) taxes; (iii) dividend expense on short sales; (iv) extraordinary items; (v) expenses related to a merger or reorganization, as approved by the fund's Board of Trustees; and (vi) expenses that the fund has incurred but did not actually pay because of an expense offset arrangement. Currently, the expense offset arrangements from which the fund may benefit are in the form of credits that the fund receives from banks where the fund or its transfer agent has deposit accounts in which it holds uninvested cash. These credits are used to pay certain expenses incurred by the fund. This expense limitation agreement is in effect through at least April 30, 2010.

14.  NVIT and NFA have entered into a written contract limiting operating expenses to 0.75% until at least May 1, 2010. This limit excludes certain Fund expenses, including any taxes, interest, brokerage fees, Rule 12b-1 fees, short-sale dividend expenses, administrative services fees, other expenses which are capitalized in accordance with generally accepted accounting principles and may exclude other non-routine expenses not incurred in the ordinary course of the Fund's business. NVIT is authorized to reimburse NFA for management fees previously waived and/or for expenses previously paid by NFA, provided however, that any reimbursements must be paid at a date not more than three years after the fiscal year in which NFA waived the fees or reimbursed the expenses and the reimbursements do not cause the Fund to exceed the expense limitation in the agreement.

15.  Represents assets held by the fund or listed share class, as applicable.

16.  Based on asset levels as of 3/31/09, approximately 0.1% of the Existing Fund's Series I assets will be transferred to the Replacement Fund pursuant to the Substitution. This transfer represents approximately 0.3% of the Existing Fund's total assets.

17.  The fund pays the advisor a single, unified management fee for arranging all services necessary for the fund to operate. The fee shown is based on assets during the fund's most recent fiscal year. The fund has a stepped fee schedule, which is reflected in the following table:

1.00% of first $500 million,

0.95% of the next $500 million, and

0.90% over $1 billion.

18.  “Other Expenses” include administrative services fees which currently are 0.07%, but which are permitted to be as high as 0.25%. The full 0.25% in administrative services fees is not reflected in “Other Expenses” at this time because, until at least May 1, 2010, the Fund does not intend to pay insurance companies a higher amount. If the full amount of administrative services fees were charged, total operating expenses (after fee waivers/expense reimbursements) would be 1.07%.

19.  NVIT and NFA have entered into a written contract limiting operating expenses to 0.82% until at least May 1, 2010. This limit excludes certain Fund expenses, including any interest, taxes, brokerage commissions, Rule 12b-1 fees, fees paid pursuant to an Administrative Services Plan, short-sale dividend expenses, other expenditures which are capitalized in accordance with generally accepted accounting principles and other non-routine expenses not incurred in the ordinary course of the Fund's business. NVIT is authorized to reimburse NFA for management fees previously waived or reduced and/or for expenses previously paid by NFA, provided however, that any reimbursements must be paid at a date not more than three years after the fiscal year in which NFA waived the fees or reimbursed the expenses and the reimbursements do not cause the Fund to exceed the expense limitation in the agreement.

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20.  Represents assets held by the fund or listed share class, as applicable.

21.  Based on asset levels as of 3/31/09, approximately 27% of the Existing Fund's Class I assets will be transferred to the Replacement Fund pursuant to the Substitution. This transfer represents approximately 27% of the Existing Fund's total assets.

22.  The fund pays the advisor a single, unified management fee for arranging all services necessary for the fund to operate. The fund has a stepped fee schedule, which is as follows: 1.50% of first $250 million, 1.20% of the next $250 million, 1.10% of the next $500 million, and 1.00% over $1 billion. The fee shown has been restated based on strategy assets for the period from the most recent fiscal year end through March 31, 2009. As a result, the Total Annual Fund Operating Expenses in this table differ from those shown in the fund's prospectus or statement of additional information. The fee for the fiscal year ended December 31, 2008 was 1.23%.

23.  The fund pays the advisor a single, unified management fee for arranging all services necessary for the fund to operate. The fund has a stepped fee schedule, which is as follows: 1.40% of first $250 million, 1.10% of the next $250 million, 1.00% of the next $500 million, and 0.90% over $1 billion. The fee shown has been restated based on strategy assets for the period from the most recent fiscal year end through March 31, 2009. As a result, the Total Annual Fund Operating Expenses in this table differ from those shown in the fund's prospectus and statement of additional information. The fee for the fiscal year ended December 31, 2008 was 1.13%.

24.  “Other Expenses” include administrative services fees which currently are 0.15%, but which are permitted to be as high as 0.25%. The full 0.25% in administrative services fees is not reflected in “Other Expenses” at this time because, until at least May 1, 2010, the Fund does not intend to pay insurance companies a higher amount. If the full amount of administrative services fees were charged, total operating expenses (after fee waivers/expense reimbursements) would be 1.21% and 1.46%, respectively.

25.  NVIT and NFA have entered into a written contract limiting operating expenses to 0.96% until at least May 1, 2010. This limit excludes certain Fund expenses, including any taxes, interest, brokerage fees, Rule 12b-1 fees, short-sale dividend expenses, administrative services fees, other expenses which are capitalized in accordance with generally accepted accounting principles and may exclude other non-routine expenses not incurred in the ordinary course of the Fund's business. NVIT is authorized to reimburse NFA for management fees previously waived and/or for expenses previously paid by NFA, provided however, that any reimbursements must be paid at a date not more than three years after the fiscal year in which NFA waived the fees or reimbursed the expenses and the reimbursements do not cause the Fund to exceed the expense limitation in the agreement.

26.  Represents assets held by the fund or listed share class, as applicable.

27.  Based on asset levels as of 3/31/09, approximately 23% of the Existing Fund's Class I assets will be transferred to the Replacement Fund's Class III pursuant to the Substitution. This transfer represents approximately 16% of the Existing Fund's total assets.

28.  Based on asset levels as of 3/31/09, approximately 2% of the Existing Fund's Class II assets will be transferred to the Replacement Fund's Class VI pursuant to the Substitution. This transfer represents approximately 0.3% of the Existing Fund's total assets.

29.  Based on asset levels as of 3/31/09, approximately 87% of the Existing Fund's Class III assets will be transferred to the Replacement Fund's Class III pursuant to the Substitution. This transfer represents approximately 12% of the Existing Fund's total assets.

30.  Based on asset levels as of 3/31/09, approximately 90% of the Existing Fund's Class IV assets will be transferred to the Replacement Fund pursuant to the Substitution. This transfer represents approximately 2% of the Existing Fund's total assets.

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31.  The fund pays the advisor a single, unified management fee for arranging all services necessary for the fund to operate. The fee shown is based on assets during the fund's most recent fiscal year. The fund has s stepped fee schedule. As a result, the fund's unified management fee rate generally decreases as strategy assets increase and increases as strategy assets decrease.

32.  The fund pays the advisor a single, unified management fee for arranging all services necessary for the fund to operate. The fee shown is based on assets during the fund's most recent fiscal year. The fund has s stepped fee schedule, which is as follows:

 0.90% of first $500 million,

 0.85% of next $500 million, and

 0.80% over $1 billion.

33.  “Other Expenses” include administrative services fees which currently are 0.15%, but which are permitted to be as high as 0.25%. The full 0.25% in administrative services fees is not reflected in “Other Expenses” at this time because, until at least May 1, 2010, the Fund does not intend to pay insurance companies a higher amount. If the full amount of administrative services fees were charged, total operating expenses (after fee waivers/expense reimbursements) would be 1.00%.

34.  “Other Expenses” include administrative services fees which currently are 0.15%, but which are permitted to be as high as 0.25%. The full 0.25% in administrative services fees is not reflected in “Other Expenses” at this time because, until at least May 1, 2010, the Fund does not intend to pay insurance companies a higher amount. If the full amount of administrative services fees were charged, total operating expenses (after fee waivers/expense reimbursements) would be 1.25%.

35.  NVIT and NFA have entered into a written contract limiting operating expenses to 0.75% until at least May 1, 2010. This limit excludes certain Fund expenses, including any taxes, interest, brokerage fees, Rule 12b-1 fees, short-sale dividend expenses, administrative services fees, other expenses which are capitalized in accordance with generally accepted accounting principles and may exclude other non-routine expenses not incurred in the ordinary course of the Fund's business. NVIT is authorized to reimburse NFA for management fees previously waived and/or for expenses previously paid by NFA, provided however, that any reimbursements must be paid at a date not more than three years after the fiscal year in which NFA waived the fees or reimbursed the expenses and the reimbursements do not cause the Fund to exceed the expense limitation in the agreement.

36.  Represents assets held by the fund or listed share class, as applicable.

37.  Based on asset levels as of 3/31/09, approximately 22% of the Existing Fund's Class I assets will be transferred to the Replacement Fund's Class I pursuant to the Substitution. This transfer represents approximately 4% of the Existing Fund's total assets.

38.  Based on asset levels as of 3/31/09, approximately 4% of the Existing Fund's Class II assets will be transferred to the Replacement Fund's Class II pursuant to the Substitution. This transfer represents approximately 4% of the Existing Fund's total assets.

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39.  “Other Expenses” include administrative services fees which currently are 0.07%, but which are permitted to be as high as 0.25%. The full 0.25% in administrative services fees is not reflected in “Other Expenses” at this time because, until at least May 1, 2010, the Fund does not intend to pay insurance companies a higher amount. If the full amount of administrative services fees were charged, total operating expenses (after fee waivers/expense reimbursements) would be 1.07% and 1.32%, respectively.

40.  NVIT and NFA have entered into a written contract limiting operating expenses to 0.82% for all share classes until at least May 1, 2010. This limit excludes certain Fund expenses, including any interest, taxes, brokerage commissions, Rule 12b-1 fees, fees paid pursuant to an Administrative Services Plan, short-sale dividend expenses, other expenditures which are capitalized in accordance with generally accepted accounting principles and other non-routine expenses not incurred in the ordinary course of the Fund's business. NVIT is authorized to reimburse NFA for management fees previously waived or reduced and/or for expenses previously paid by NFA, provided however, that any reimbursements must be paid at a date not more than three years after the fiscal year in which NFA waived the fees or reimbursed the expenses and the reimbursements do not cause the Fund to exceed the expense limitation in the agreement.

41.  Represents assets held by the fund or listed share class, as applicable.

42.  Based on asset levels as of 3/31/09, approximately 29% of the Existing Fund's Class I assets will be transferred to the Replacement Fund's Class I pursuant to the Substitution. This transfer represents approximately 22% of the Existing Fund's total assets.

43.  Based on asset levels as of 3/31/09, approximately 2% of the Existing Fund's Class II assets will be transferred to the Replacement Fund's Class I pursuant to the Substitution. This transfer represents approximately 0.5% of the Existing Fund's total assets. Based on asset levels as of 3/31/09, approximately 94% of the Existing Fund's Class II assets will be transferred to the Replacement Fund's Class II pursuant to the Substitution. This transfer represents approximately 22% of the Existing Fund's total assets.

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44.  Management fees have been restated to reflect the elimination of a performance-based management fee and implementation of an asset-based management fee equal to the lowest possible management fee under the previous performance-based fee structure, as approved by the Board of Trustees on January 16, 2009. Under no circumstances, during a six-month transition period will the management fee under the new fee structure exceed what the Adviser would have received under the old structure assuming maximum penalty for underperformance.

45.  “Other Expenses” include administrative services fees which currently are 0.15%, but which are permitted to be as high as 0.25%. The full 0.25% in administrative services fees is not reflected in “Other Expenses” at this time because, until at least May 1, 2010, the Fund does not intend to pay insurance companies a higher amount. If the full amount of administrative services fees were charged, total operating expenses would be 1.21%.

46.  NVIT and NFA have entered into a written contract limiting operating expenses to 1.05% for all share classes until at least May 1, 2010. This limit excludes certain Fund expenses, including interest, taxes, brokerage commissions, Rule 12b-1 fees, fees paid pursuant to an Administrative Services Plan, short-sale dividend expenses, other expenditures which are capitalized in accordance with generally accepted accounting principles and other non-routine expenses not incurred in the ordinary course of the Fund's business. NVIT is authorized to reimburse NFA for management fees previously waived or reduced and/or for expenses previously paid by NFA provided, however, that any reimbursements must be paid at a date not more than three years after the fiscal year in which NFA waived the fees or reimbursed the expenses and the reimbursements do not cause the Fund to exceed the expense limitation in the agreement. Currently, all share classes are operating below the expense limit.

47.  Represents assets held by the fund or listed share class, as applicable.

48.  Based on asset levels as of 3/31/09, approximately 0.5% of the Existing Fund's assets will be transferred to the Replacement Fund's Class I pursuant to the Substitution. This transfer represents approximately 0.5% of the Existing Fund's total assets. Based on asset levels as of 3/31/09, approximately 47% of the Existing Fund's assets will be transferred to the Replacement Fund's Class III pursuant to the Substitution. This transfer represents approximately 47% of the Existing Fund's total assets.

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49.  The Adviser voluntarily waived a portion of the management fee. The Adviser can terminate this voluntary waiver at any time. The management fee paid by the Fund (after the voluntary waiver) was 0.56% for the fiscal year ended December 31, 2008.

50.  The Fund's Primary Shares did not pay or accrue the distribution (12b-1) fee during the fiscal year ended December 31, 2008. The Fund's Primary Shares have no present intention of paying or accruing the distribution (12b-1) fee during the fiscal year ending December 31, 2009.

51.  Includes an administrative services fee which is used to compensate insurance companies for shareholder services. The shareholder services provider did not charge, and therefore the Fund's Primary Shares did not accrue, its fee. This reduction can be terminated at any time. Total other expenses paid by the Fund's Primary Shares (after the reduction) were 0.14% for the fiscal year ended December 31, 2008.

52.  “Other Expenses” include administrative services fees which currently are 0.15%, but which are permitted to be as high as 0.25%. The full 0.25% in administrative services fees is not reflected in “Other Expenses” at this time because, until at least May 1, 2010, the Fund does not intend to pay insurance companies a higher amount. If the full amount of administrative services fees were charged, total operating expenses (after fee waivers/expense reimbursements) would be 0.80% and 1.05% respectively.

53.  Although not contractually obligated to do so, the Adviser waived and the distributor and shareholder services provider elected not to charge 0.56% in expenses, resulting in Total Net Expenses (after waiver reductions) of 0.70%.

54.  NVIT and NFA have entered into a written contract limiting operating expenses to 0.55% for all share classes until May 1, 2010. This limit excludes certain Fund expenses, including interest, taxes, brokerage commissions, Rule 12b-1 fees, fees paid pursuant to an Administrative Services Plan, short sale dividend expenses, other expenditures which are capitalized in accordance with generally accepted accounting principles and other non-routine expenses not incurred in the ordinary course of the Fund's business. NVIT is authorized to reimburse NFA for management fees previously waived or reduced and/or for expenses previously paid by NFA, provided, however, that any reimbursements must be paid at a date not more than three years after the fiscal year in which NFA waived the fees or reimbursed the expenses and the reimbursements do not cause the Fund to exceed the expense limitation in the agreement.

55.  Represents assets held by the fund or listed share class, as applicable.

56.  Based on asset levels as of 3/31/09, approximately 84% of the Existing Fund's Primary Share assets will be transferred to the Replacement Fund's Class I pursuant to the Substitution. This transfer represents approximately 65% of the Existing Fund's total assets.

57.  Based on asset levels as of 3/31/09, approximately 97% of the Existing Fund's Service Share assets will be transferred to the Replacement Fund's Class II pursuant to the Substitution. This transfer represents approximately 21.5% of the Existing Fund's total assets.

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58.  Management fees have been restated to reflect the elimination of a performance-based management fee and implementation of an asset-based management fee equal to the lowest possible management fee under the previous performance-based fee structure, as approved by the Board of Trustees on September 18, 2008. Under no circumstances, during a six-month transition period will the management fee under the new fee structure exceed what the Adviser would have received under the old structure assuming maximum penalty for underperformance.

59.  While the maximum amount payable under the Fund's Class 3 rule 12b-1 plan is 0.35% per year of the Fund's average daily net assets, the Fund's board of trustees has set the current rate at 0.25% per year through April 30, 2010.

60.  “Other Expenses” include administrative services fees which currently are 0.16% and 0.15%, respectively, but which are permitted to be as high as 0.25%. The full 0.25% in administrative services fees is not reflected in “Other Expenses” at this time because, until at least May 1, 2010, the Fund does not intend to pay insurance companies a higher amount. If the full amount of administrative services fees were charged, total operating expenses would be 1.33% and 1.58%, respectively.

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61.  The investment manager has agreed in advance to reduce its fee from assets invested by the Fund in a Franklin Templeton money market fund (the Sweep Money Fund which is the “acquired fund” in this case) to the extent of the Fund's fees and expenses of the acquired fund. This reduction is required by the Trust's board of trustees and an exemptive order by the Securities and Exchange Commission; this arrangement will continue as long as the exemptive order is relied upon.

62.  NVIT and NFA have entered into a written contract limiting operating expenses to 1.20% for all share classes until at least May 1, 2010. This limit excludes certain Fund expenses, including interest, taxes, brokerage commissions, Rule 12b-1 fees, fees paid pursuant to an Administrative Services Plan, short sale dividend expenses, other expenditures which are capitalized in accordance with generally accepted accounting principles and other non-routine expenses not incurred in the ordinary course of the Fund's business. NVIT is authorized to reimburse NFA for management fees previously waived or reduced and/or for expenses previously paid by NFA provided, however, that any reimbursements must be paid at a date not more than three years after the fiscal year in which NFA waived the fees or reimbursed the expenses and the reimbursements do not cause the Fund to exceed the expense limitation in the agreement. Currently, all share classes are operating below the expense limit.

63.  Represents assets held by the fund or listed share class, as applicable.

64.  Based on asset levels as of 3/31/09, approximately 30% of the Existing Fund's Class 3 assets will be transferred to the NVIT—Gartmore NVIT Emerging Markets Fund: Class III and approximately 36% of the Existing Fund's Class 3 assets will be transferred to NVIT—Gartmore NVIT Emerging Markets Fund: Class VI pursuant to the Substitution. These transfers represent approximately 5% of the Existing Fund's total assets.

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65.  The “Management Fee” is the investment advisory fee rate paid by each Portfolio to Janus Capital as of the end of the fiscal year. This fee may go up or down monthly based on the Portfolio's performance relative to its benchmark index over the performance measurement period. This fee rate, prior to any performance adjustment, is 0.50% and may go up or down by a variable of up to 0.15% (assuming constant assets) on a monthly basis. Any such adjustment to this fee rate commenced January 2007, and may increase or decrease the Management Fee. The Portfolio has entered into an agreement with Janus Capital to limit certain expenses. Because a fee waiver will have a positive effect upon the Portfolio's performance, a fee waiver that is in place during the period when the performance adjustment applies may affect the performance adjustment in a way that is favorable to Janus Capital. It is possible that the cumulative dollar amount of additional compensation ultimately payable to Janus Capital may, under some circumstances, exceed the cumulative dollar amount of management fees waived by Janus Capital.

66.  “Other Expenses” include administrative services fees which currently are 0.15%, but which are permitted to be as high as 0.25%. The full amounts of administrative services fees are not reflected in “Other Expenses” at this time because, until at least May 1, 2010, the Fund does not intend to pay insurance companies a higher amount. If the full amounts of administrative services fees were charged, total operating expenses would be 0.94% and 1.19%, respectively.

67.  Janus Capital has contractually agreed to waive certain Portfolios' total operating expenses (excluding the distribution and shareholder servicing fee, the administrative services fee applicable to certain Portfolios, brokerage commissions, interest, dividends, taxes, and extraordinary expenses including, but not limited to, acquired fund fees and expenses) to until at least May 1, 2010.

68.  Represents assets held by the fund or listed share class, as applicable.

69.  Based on asset levels as of 3/31/09, approximately 2% of the Existing Fund's Service Shares assets will be transferred to the NVIT—NVIT Nationwide Fund: Class I and approximately 22% of the Existing Fund's Service Shares assets will be transferred to the NVIT—NVIT Nationwide Fund: Class II pursuant to the Substitution. These transfers represent approximately 24% of the Existing Fund's total assets.

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70.  “Other Expenses” include administrative services fees which currently are 0.07%, but which are permitted to be as high as 0.25%. The full 0.25% in administrative services fees is not reflected in “Other Expenses” at this time because, until at least May 1, 2010, the Fund does not intend to pay insurance companies a higher amount. If the full amount of administrative services fees were charged, total operating expenses (after fee waivers/expense reimbursements) would be 1.07%.

71.  Neuberger Berman Management LLC (“NBM”) has contractually undertaken to limit the Fund's expenses through December 31, 2012 by reimbursing the Fund for its total operating expenses (excluding the compensation of NBM, taxes, interest, extraordinary expenses, brokerage commissions and transaction costs) that exceed, in the aggregate, 1.00% per annum of the Fund's average daily net asset value. Because of the exclusion, the Fund's net expenses may exceed the contractual expense limitation. The Fund has contractually undertaken to reimburse NBM for the excess expenses paid by NBM, provided the reimbursements do not cause total operating expenses (exclusive of the compensation of NBM, taxes, interest, brokerage commissions, transaction costs and extraordinary expenses) to exceed an annual rate of 1.00%, and the reimbursements are made within three years after the year in which NBM incurred the expense. The figures in the table are based on last year's expenses.

72.  NVIT and NFA have entered into a written contract limiting operating expenses to 0.82% for all share classes until at least May 1, 2010. This limit excludes certain Fund expenses, including any interest, taxes, brokerage commissions, Rule 12b-1 fees, fees paid pursuant to an Administrative Services Plan, short-sale dividend expenses, other expenditures which are capitalized in accordance with generally accepted accounting principles and other non-routine expenses not incurred in the ordinary course of the Fund's business. NVIT is authorized to reimburse NFA for management fees previously waived or reduced and/or for expenses previously paid by NFA, provided however, that any reimbursements must be paid at a date not more than three years after the fiscal year in which NFA waived the fees or reimbursed the expenses and the reimbursements do not cause the Fund to exceed the expense limitation in the agreement.

73.  Represents assets held by the fund or listed share class, as applicable.

74.  Based on asset levels as of 3/31/09, approximately 88% of the Existing Fund's I Class assets will be transferred to the Replacement Fund's Class I pursuant to the Substitution. This transfer represents approximately 88% of the Existing Fund's total assets.

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75.  “Other Expenses” include administrative services fees which currently are 0.15%, but which are permitted to be as high as 0.25%. The full 0.25% in administrative services fees is not reflected in “Other Expenses” at this time because, until at least May 1, 2010, the Fund does not intend to pay insurance companies a higher amount. If the full amount of administrative services fees were charged, total operating expenses (after fee waivers/expense reimbursements) would be 1.00%.

76.  Neuberger Berman Management LLC (“NBM”) has contractually undertaken to limit the expenses of I Class shares through December 31, 2012 by reimbursing the Fund for its total operating expenses, excluding compensation to NBM, taxes, interest, extraordinary expenses, transaction costs and brokerage commissions, that exceed, in the aggregate, 1.00% per annum of the Class's average daily net asset value. Because of the exclusion, the Fund's net expenses may exceed the contractual expense limitation. The Fund has in turn contractually undertaken to repay NBM from I Class assets for the excess operating expenses borne by NBM, so long as the Class's annual operating expenses during that period (exclusive of compensation to NBM, taxes, interest, extraordinary expenses and brokerage commissions) does not exceed 1.00% per year of the Class's average daily net assets, and further provided that the reimbursements are made within three years after the year in which NBM incurred the expense. The figures in the table are based on last year's expenses.

77.  NVIT and NFA have entered into a written contract limiting operating expenses to 0.75% for all share classes until May 1, 2010. This limit excludes certain Fund expenses, including interest, taxes, brokerage commissions, Rule 12b-1 fees, fees paid pursuant to an Administrative Services Plan, short sale dividend expenses, other expenditures which are capitalized in accordance with generally accepted accounting principles and other non-routine expenses not incurred in the ordinary course of the Fund's business. NVIT is authorized to reimburse NFA for management fees previously waived or reduced and/or for expenses previously paid by NFA, provided, however, that any reimbursements must be paid at a date not more than three years after the fiscal year in which NFA waived the fees or reimbursed the expenses and the reimbursements do not cause the Fund to exceed the expense limitation in the agreement.

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78.  Represents assets held by the fund or listed share class, as applicable.

79.  Based on asset levels as of 3/31/09, approximately 70% of the Existing Fund's I Class assets will be transferred to the Replacement Fund's Class I pursuant to the Substitution. This transfer represents approximately 35% of the Existing Fund's total assets.

80.  Management fees have been restated to reflect the elimination of a performance-based management fee and implementation of an asset-based management fee equal to the lowest possible management fee under the previous performance-based fee structure, as approved by the Board of Trustees on January 16, 2009. Under no circumstances, during a six-month transition period will the management fee under the new fee structure exceed what the Adviser would have received under the old structure assuming maximum penalty for underperformance.

81.  “Other Expenses” include administrative services fees which currently are 0.15%, but which are permitted to be as high as 0.25%. The full 0.25% in administrative services fees is not reflected in “Other Expenses” at this time because, until at least May 1, 2010, the Fund does not intend to pay insurance companies a higher amount. If the full amount of administrative services fees were charged, total operating expenses would be 1.21% and 1.46%, respectively.

82.  Neuberger Berman Management Inc. (NBMI) has undertaken through December 31, 2012 to reimburse certain operating expenses, including the compensation of NBMI and excluding taxes, interest, extraordinary expenses, brokerage commissions and transaction costs, that exceed, in the aggregate, 2.00% of the average daily net asset value of the Fund. The expense limitation agreement is contractual and any excess expenses can be repaid to NBMI within three years of the year incurred, provided such recoupment would not cause the fund to exceed its contractual expense limitation. Moreover, NBMI has voluntarily committed to reimburse certain expenses, as stated above, for an additional 0.50% of the average daily net asset value of fund to maintain the Fund's net operating expense ratio at 1.50%. NBMI may, at its sole discretion, terminate this voluntary additional reimbursement commitment without notice. The figures in the table are based on last year's expenses.

83.  NVIT and NFA have entered into a written contract limiting operating expenses to 1.05% f until at least May 1, 2010. This limit excludes certain Fund expenses, including interest, taxes, brokerage commissions, Rule 12b-1 fees, fees paid pursuant to an Administrative Services Plan, short sale dividend expenses, other expenditures which are capitalized in accordance with generally accepted accounting principles and other non-routine expenses not incurred in the ordinary course of the Fund's business. NVIT is authorized to reimburse NFA for management fees previously waived or reduced and/or for expenses previously paid by NFA provided, however, that any reimbursements must be paid at a date not more than three years after the fiscal year in which NFA waived the fees or reimbursed the expenses and the reimbursements do not cause the Fund to exceed the expense limitation in the agreement. Currently, all share classes are operating below the expense limit.

84.  Represents assets held by the fund or listed share class, as applicable.

85.  Based on asset levels as of 3/31/09, approximately 1% of the Existing Fund's S Class assets will be transferred to the NVIT—Gartmore NVIT International Equity Fund: Class III and approximately 3% of the Existing Fund's S Class assets will be transferred to the NVIT—Gartmore NVIT International Equity Fund: Class VI pursuant to the Substitution. These transfers represent approximately 4% of the Existing Fund's total assets.

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86.  “Other Expenses” include administrative services fees which currently are 0.07%, but which are permitted to be as high as 0.25%. The full 0.25% in administrative services fees is not reflected in “Other Expenses” at this time because, until at least May 1, 2010, the Fund does not intend to pay insurance companies a higher amount. If the full amount of administrative services fees were charged, total operating expenses (after fee waivers/expense reimbursements) would be 1.07% and 1.32%, respectively.

87.  Neuberger Berman Management LLC (“NBM”) has contractually undertaken to limit the expenses of I Class shares through December 31, 2012 by reimbursing the Fund for its total operating expenses, excluding compensation to NBM, taxes, interest, extraordinary expenses, transaction costs and brokerage commissions, that exceed, in the aggregate, 1.00% per annum of the Class's average daily net asset value. Because of the exclusion, the Fund's net expenses may exceed the contractual expense limitation. The Fund has in turn contractually undertaken to repay NBM from I Class assets for the excess operating expenses borne by NBM, so long as the Class's annual operating expenses during that period (exclusive of the compensation to NBM, taxes, interest, extraordinary expenses and brokerage commissions) does not exceed 1.00% per year of the Class's average daily net assets, and further provided that the reimbursements are made within three years after the year in which NBM incurred the expense. The figures in the table are based on last year's expenses.

88.  Neuberger Berman Management Inc. (NBMI) has contractually undertaken to limit the expenses of S Class shares through December 31, 2012 by reimbursing the Fund for its total operating expenses, including compensation to NBMI, but excluding taxes, interest, extraordinary expenses, transaction costs and brokerage commissions, that exceed, in the aggregate, 1.25% per annum of the Class's average daily net asset value. The Fund has in turn contractually undertaken to repay NBMI from S Class assets for the excess operating expenses borne by NBMI, so long as the Class's annual operating expenses during that period (exclusive of taxes, interest, extraordinary expenses and brokerage commissions) does not exceed 1.25% per year of the Class's average daily net assets, and further provided that the reimbursements are made within three years after the year in which NBMI incurred the expense. The figures in the table are based on last year's expenses.

89.  NVIT and NFA have entered into a written contract limiting operating expenses to 0.82% until at least May 1, 2010. This limit excludes certain Fund expenses, including any interest, taxes, brokerage commissions, Rule 12b-1 fees, fees paid pursuant to an Administrative Services Plan, short-sale dividend expenses, other expenditures which are capitalized in accordance with generally accepted accounting principles and other non-routine expenses not incurred in the ordinary course of the Fund's business. NVIT is authorized to reimburse NFA for management fees previously waived or reduced and/or for expenses previously paid by NFA, provided however, that any reimbursements must be paid at a date not more than three years after the fiscal year in which NFA waived the fees or reimbursed the expenses and the reimbursements do not cause the Fund to exceed the expense limitation in the agreement.

90.  Represents assets held by the fund or listed share class, as applicable.

91.  Based on asset levels as of 3/31/09, approximately 22% of the Existing Fund's I Class assets will be transferred to NVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class I pursuant to the Substitution. This transfer represents approximately 20% of the Existing Fund's total assets.

92.  Based on asset levels as of 3/31/09, approximately 0.8% of the Existing Fund's S Class assets will be transferred to NVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class I, representing approximately 0.1% of the Existing Fund's total assets, and approximately 11% of the Existing Fund's S Class assets will be transferred to NVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class II pursuant to the Substitution, representing approximately 1% of the Existing Fund's total assets.

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93.  “Other Expenses” include administrative services fees which currently are 0.15%, but which are permitted to be as high as 0.25%. The full 0.25% in administrative services fees is not reflected in “Other Expenses” at this time because, until at least May 1, 2010, the Fund does not intend to pay insurance companies a higher amount. If the full amount of administrative services fees were charged, total operating expenses (after fee waivers/expense reimbursements) would be 1.00%.

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94.  Neuberger Berman Management LLC (“NBM”) has contractually undertaken to limit the Fund's expenses through December 31, 2012 by reimbursing the Fund for its total operating expenses (excluding the compensation of NBM, taxes, interest, extraordinary expenses, brokerage commissions and transaction costs) that exceed, in the aggregate, 1.00% per annum of the Fund's average daily net asset value. Because of the exclusion, the Fund's net expenses may exceed the contractual expense limitation. The Fund has contractually undertaken to reimburse NBM for the excess expenses paid by NBM, provided the reimbursements do not cause total operating expenses (exclusive of the compensation of NBM, taxes, interest, brokerage commissions, transaction costs and extraordinary expenses) to exceed an annual rate of 1.00%, and the reimbursements are made within three years after the year in which NBM incurred the expense. The figures in the table are based on last year's expenses.

95.  NVIT and NFA have entered into a written contract limiting operating expenses to 0.75% until May 1, 2010. This limit excludes certain Fund expenses, including interest, taxes, brokerage commissions, Rule 12b-1 fees, fees paid pursuant to an Administrative Services Plan, short sale dividend expenses, other expenditures which are capitalized in accordance with generally accepted accounting principles and other non-routine expenses not incurred in the ordinary course of the Fund's business. NVIT is authorized to reimburse NFA for management fees previously waived or reduced and/or for expenses previously paid by NFA, provided, however, that any reimbursements must be paid at a date not more than three years after the fiscal year in which NFA waived the fees or reimbursed the expenses and the reimbursements do not cause the Fund to exceed the expense limitation in the agreement.

96.  Represents assets held by the fund or listed share class, as applicable.

97.  Based on asset levels as of 3/31/09, approximately 50% of the Existing Fund's assets will be transferred to the Replacement Fund pursuant to the Substitution.

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98.  “Other Expenses” include administrative services fees which currently are 0.01%, but which are permitted to be as high as 0.25%. The full 0.25% in administrative services fees is not reflected in “Other Expenses” at this time because, until at least May 1, 2010, the Fund does not intend to pay insurance companies a higher amount. If the full amount of administrative services fees were charged, total operating expenses (after fee waivers/expense reimbursements) would be 1.31%.

99.  Neuberger Berman Management LLC (“NBM”) has contractually agreed to reimburse certain expenses of the Fund through 12/31/2019, so that the total annual operating expenses are limited to 1.25% of the Fund's average daily net asset value. This arrangement does not cover interest, taxes, brokerage commissions, and extraordinary expenses; consequently, net expenses may exceed the contractual expense limitation. The Fund has agreed to repay NBM for expenses reimbursed to the Fund provided that repayment does not cause the Fund's annual operating expenses to exceed its expense limitation. Any such repayment must be made within three years after the year in which NBM incurred the expense. The figures in the table are based on last year's expenses.

100.  NVIT and NFA have entered into a written contract limiting operating expenses to 0.81% until at least May 1, 2010. This limit excludes certain Fund expenses, including interest, taxes, brokerage commissions, Rule 12b-1 fees, short-sale dividend expenses, fees paid pursuant to an Administrative Services Plan, other expenditures which are capitalized in accordance with generally accepted accounting principles and other non-routine expenses not incurred in the ordinary course of the Fund's business. NVIT is authorized to reimburse NFA for management fees previously waived or reduced and/or for expenses previously paid by NFA, provided, however, that any reimbursements must be paid at a date not more than three years after the fiscal year in which NFA waived the fees or reimbursed the expenses and the reimbursements do not cause the Fund to exceed the expense limitation in the agreement.

101.  Represents assets held by the fund or listed share class, as applicable.

102.  Based on asset levels as of 3/31/09, approximately 7% of the Existing Fund's S Class assets will be transferred to the Replacement Fund pursuant to the Substitution. This transfer represents approximately 7% of the Existing Fund's total assets.

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103.  “Other Expenses” include administrative services fees which currently are 0.15%, but which are permitted to be as high as 0.25%. The full 0.25% in administrative services fees is not reflected in “Other Expenses” at this time because, until at least May 1, 2010, the Fund does not intend to pay insurance companies a higher amount. If the full amount of administrative services fees were charged, total operating expenses (after fee waivers/expense reimbursements) would be 1.00%.

104.  NVIT and NFA have entered into a written contract limiting operating expenses to 0.50% for all share classes until May 1, 2010. This limit excludes certain Fund expenses, including interest, taxes, brokerage commissions, Rule 12b-1 fees, fees paid pursuant to an Administrative Services Plan, short sale dividend expenses, other expenditures which are capitalized in accordance with generally accepted accounting principles and other non-routine expenses not incurred in the ordinary course of the Fund's business. NVIT is authorized to reimburse NFA for management fees previously waived or reduced and/or for expenses previously paid by NFA, provided, however, that any reimbursements must be paid at a date not more than three years after the fiscal year in which NFA waived the fees or reimbursed the expenses and the reimbursements do not cause the Fund to exceed the expense limitation in the agreement.

105.  Represents assets held by the fund or listed share class, as applicable.

106.  Based on asset levels as of 3/31/09, approximately 96% of the Existing Fund's Class II assets will be transferred to the Replacement Fund pursuant to the Substitution. This comprised approximately 31% of the Existing Fund's total assets.

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107.  The Adviser is entitled to receive an advisory fee at an annual percentage of the Portfolio's average daily net assets as set forth in the table below:

First $500 million—0.75%

From $500 million to $1 billion—0.70%

More than $1 billion—0.65%

108.  “Other Expenses” include administrative services fees which currently are 0.07%, but which are permitted to be as high as 0.25%. The full 0.25% in administrative services fees is not reflected in “Other Expenses” at this time because, until at least May 1, 2010, the Fund does not intend to pay insurance companies a higher amount. If the full amount of administrative services fees were charged, total operating expenses (after fee waivers/expense reimbursements) would be 1.07%.

109.  The Adviser has voluntarily agreed to reduce its advisory fee and/or reimburse the Portfolio so that Total Annual Portfolio Operating Expenses, excluding certain investment related expenses described below, will not exceed 1.05%. In determining the actual amount of voluntary advisory fee waivers and/or expense reimbursements for the Portfolio, if any, certain investment related expenses, such as foreign country tax expense and interest expense on amounts borrowed, are excluded from Total Annual Portfolio Operating Expenses. If these expenses were included, the Total Annual Portfolio Operating Expenses after voluntary fee waivers and/or expense reimbursements could exceed the expense ratio shown. For the fiscal year ended December 31, 2008, after giving effect to the Adviser's voluntary advisory fee waivers and/or expense reimbursements, the Total Annual Portfolio Operating Expenses incurred by investors were 1.05%. Fee waivers and/or expense reimbursements are voluntary and the Adviser reserves the right to terminate any waivers and/or reimbursements at any time and without notice.

110.  NVIT and NFA have entered into a written contract limiting operating expenses to 0.82% until at least May 1, 2010. This limit excludes certain Fund expenses, including any interest, taxes, brokerage commissions, Rule 12b-1 fees, fees paid pursuant to an Administrative Services Plan, short-sale dividend expenses, other expenditures which are capitalized in accordance with generally accepted accounting principles and other non-routine expenses not incurred in the ordinary course of the Fund's business. NVIT is authorized to reimburse NFA for management fees previously waived or reduced and/or for expenses previously paid by the NFA, provided however, that any reimbursements must be paid at a date not more than three years after the fiscal year in which NFA waived the fees or reimbursed the expenses and the reimbursements do not cause the Fund to exceed the expense limitation in the agreement.

111.  Represents assets held by the fund or listed share class, as applicable.

112.  Based on asset levels as of 3/31/09, approximately 22% of the Existing Fund's Class I assets will be transferred to the Replacement Fund pursuant to the Substitution. This comprises approximately 7% of the Existing Fund's total assets.

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113.  The Adviser is entitled to receive an advisory fee at an annual percentage of the Portfolio's average daily net assets as set forth as follows: First $500 million 0.80%; from $500 million to $1 billion 0.75%; more than $1 billion 0.70%.

114.  “Other Expenses” include administrative services fees which currently are 0.15%, but which are permitted to be as high as 0.25%. The full 0.25% in administrative services fees is not reflected in “Other Expenses” at this time because, until at least May 1, 2010, the Fund does not intend to pay insurance companies a higher amount. If the full amount of administrative services fees were charged, total operating expenses would be 1.10% and 1.35%, respectively.

115.  NVIT and NFA have entered into a written contract limiting operating expenses to 0.85% until May 1, 2010. This limit excludes certain Fund expenses, including interest, taxes, brokerage commissions, Rule 12b-1 fees, fees paid pursuant to an Administrative Services Plan, short sale dividend expenses, other expenditures which are capitalized in accordance with generally accepted accounting principles and other non-routine expenses not incurred in the ordinary course of the Fund's business. NVIT is authorized to reimburse NFA for management fees previously waived or reduced and/or for expenses previously paid by NFA, provided, however, that any reimbursements must be paid at a date not more than three years after the fiscal year in which NFA waived the fees or reimbursed the expenses and the reimbursements do not cause the Fund to exceed the expense limitation in the agreement.

116.  Represents assets held by the fund or listed share class.

117.  Based on asset levels as of 3/31/09, approximately 35% of the Existing Fund's Class I assets will be transferred to NVIT—Van Kampen NVIT Real Estate Fund: Class I pursuant to the Substitution. This comprises approximately 21% of the Existing Fund's total assets.

118.  Based on asset levels as of 3/31/09, approximately 13% of the Existing Fund's Class II assets will be transferred to NVIT—Van Kampen NVIT Real Estate Fund: Class II pursuant to the Substitution. This comprises approximately 5% of the Existing Fund's total assets.

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119.  Management fees have been restated to reflect the elimination of a performance-based management fee and implementation of an asset-based management fee equal to the lowest possible management fee under the previous performance-based fee structure, as approved by the Board of Trustees on September 18, 2008. Under no circumstances, during a six-month transition period will the management fee under the new fee structure exceed what the Adviser would have received under the old structure assuming maximum penalty for underperformance.

120.  “Other Expenses” include administrative services fees which currently are 0.15%, but which are permitted to be as high as 0.25%. The full 0.25% in administrative services fees is not reflected in “Other Expenses” at this time because, until at least May 1, 2010, the Fund does not intend to pay insurance companies a higher amount. If the full amount of administrative services fees were charged, total operating expenses would be 1.33%.

121.  “Other Expenses” include administrative services fees which currently are 0.16%, but which are permitted to be as high as 0.25%. The full 0.25% in administrative services fees is not reflected in “Other Expenses” at this time because, until at least May 1, 2010, the Fund does not intend to pay insurance companies a higher amount. If the full amount of administrative services fees were charged, total operating expenses would be 1.33%.

122.  For the period May 1, 2009 through April 30, 2010, the Adviser contractually agreed to waive fees and reimburse certain operating expenses (excluding interest, dividends paid on securities sold short, trading expenses, taxes and extraordinary expenses) to the extent Total Annual Fund Operating Expenses exceed 1.50% of average daily net assets.

123.  NVIT and NFA have entered into a written contract limiting operating expenses to 1.20% for all share classes until at least May 1, 2010. This limit excludes certain Fund expenses, including interest, taxes, brokerage commissions, Rule 12b-1 fees, fees paid pursuant to an Administrative Services Plan, short sale dividend expenses, other expenditures which are capitalized in accordance with generally accepted accounting principles and other non-routine expenses not incurred in the ordinary course of the Fund's business. NVIT is authorized to reimburse NFA for management fees previously waived or reduced and/or for expenses previously paid by NFA provided, however, that any reimbursements must be paid at a date not more than three years after the fiscal year in which NFA waived the fees or reimbursed the expenses and the reimbursements do not cause the Fund to exceed the expense limitation in the agreement. Currently, all share classes are operating below the expense limit.

124.  Represents assets held by the fund or listed share class, as applicable.

125.  Based on asset levels as of 3/31/09, approximately 0.3% of the Existing Fund's Initial Class assets will be transferred to NVIT—Gartmore NVIT Emerging Markets Fund: Class I, representing approximately 0.3% of the Existing Fund's total assets, and approximately 25% of the Existing Fund's assets will be transferred to NVIT—Gartmore NVIT Emerging Markets Fund: Class III, representing approximately 25% of the Existing Fund's total assets, pursuant to the Substitution.

126.  Based on asset levels as of 3/31/09, approximately 42% of the Existing Fund's Class R1 assets will be transferred to NVIT—Gartmore NVIT Emerging Markets Fund: Class III pursuant to the Substitution. This comprises approximately 10% of the Existing Fund's total assets.

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127.  The following advisory fee schedule is charged to the Fund as a percentage of the Fund's average daily net assets: 0.75% for the first $500 million; 0.70% for the next $500 million; 0.65% for the next $2 billion; 0.625% for the next $2 billion; and 0.60% for assets over $5 billion.

128.  “Other Expenses” include administrative services fees which currently are 0.07%, but which are permitted to be as high as 0.25%. The full 0.25% in administrative services fees is not reflected in “Other Expenses” at this time because, until at least May 1, 2010, the Fund does not intend to pay insurance companies a higher amount. If the full amount of administrative services fees were charged, total operating expenses (after fee waivers/expense reimbursements) would be 1.07% and 1.32%, respectively.

129.  The adviser has committed through April 30, 2010 to waive fees and/or reimburse expenses to the extent necessary to maintain the Fund's net operating expenses, excluding brokerage commissions, interest, taxes, extraordinary expenses and the expenses of any money market fund or other fund held by the Fund, do not exceed the net operating expense ratio of 1.15%.The committed net operating expense ratio may be increased only with approval of the Board of Trustees.

130.  NVIT and NFA have entered into a written contract limiting operating expenses to 0.82% for all share classes until at least May 1, 2010. This limit excludes certain Fund expenses, including any interest, taxes, brokerage commissions, Rule 12b-1 fees, fees paid pursuant to an Administrative Services Plan, short-sale dividend expenses, other expenditures which are capitalized in accordance with generally accepted accounting principles and other non-routine expenses not incurred in the ordinary course of the Fund's business. NVIT is authorized to reimburse NFA for management fees previously waived or reduced and/or for expenses previously paid by NFA, provided however, that any reimbursements must be paid at a date not more than three years after the fiscal year in which NFA waived the fees or reimbursed the expenses and the reimbursements do not cause the Fund to exceed the expense limitation in the agreement.

131.  Represents assets held by the fund or listed share class, as applicable.

132.  Based on asset levels as of 3/31/09, approximately 29% of the Existing Fund's assets will be transferred to NVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class I and approximately 0.02% of the Existing Fund's assets will be transferred to NVIT—NVIT Multi-Manager Mid Cap Growth Fund: Class II pursuant to the Substitution.

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133.  The following advisory fee schedule is charged to the Fund as a percentage of the Fund's average daily net assets:

 0.75% for the first $500 million;

 0.70% for the next $500 million;

 0.65% for the next $2 billion;

 0.625% for the next $2 billion; and

 0.60% for assets over $5 billion.

134.  “Other Expenses” include administrative services fees which currently are 0.01%, but which are permitted to be as high as 0.25%. The full 0.25% in administrative services fees is not reflected in “Other Expenses” at this time because, until at least May 1, 2010, the Fund does not intend to pay insurance companies a higher amount. If the full amount of administrative services fees were charged, total operating expenses (after fee waivers/expense reimbursements) would be 1.31%.

135.  The adviser has committed through April 30, 2010, to waive fees and/or reimburse expenses to the extent necessary to ensure that the Fund's net operating expenses, excluding brokerage commissions, interest, taxes, extraordinary expenses and the expenses of any money market fund or other fund held by the Fund, do not exceed the net operating expense ratio of 1.07%.The committed net operating expense ratio may be increased only with approval of the Board of Trustees.

136.  NVIT and NFA have entered into a written contract limiting operating expenses to 0.81% for all share classes until at least May 1, 2010. This limit excludes certain Fund expenses, including interest, taxes, brokerage commissions, Rule 12b-1 fees, short-sale dividend expenses, fees paid pursuant to an Administrative Services Plan, other expenditures which are capitalized in accordance with generally accepted accounting principles and other non-routine expenses not incurred in the ordinary course of the Fund's business. NVIT is authorized to reimburse NFA for management fees previously waived or reduced and/or for expenses previously paid by NFA, provided, however, that any reimbursements must be paid at a date not more than three years after the fiscal year in which NFA waived the fees or reimbursed the expenses and the reimbursements do not cause the Fund to exceed the expense limitation in the agreement.

137.  Represents assets held by the fund or listed share class, as applicable.

138.  Based on asset levels as of 3/31/09, approximately 53% of the Existing Fund's assets will be transferred to the Replacement Fund pursuant to the Substitution.

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BILLING CODE 8010-01-P

BILLING CODE 8010-01-C

[FR Doc. E9-14288 Filed 6-17-09; 8:45 am]

BILLING CODE 8010-01-P