NATIONWIDE^®

VARIABLE

ACCOUNT-11

Annual Report

to

Contract Owners

December 31, 2006

NATIONWIDE LIFE INSURANCE COMPANY

HOME OFFICE: COLUMBUS, OHIO

APO–5396–12/06

NATIONWIDE VARIABLE ACCOUNT-11

STATEMENT OF ASSETS, LIABILITIES AND CONTRACT OWNERS’ EQUITY

December 31, 2006

Assets:
Investments at fair value:
Federated Insurance Series – Federated American Leaders Fund II – Primary Shares (FedAmLead) 295,878 shares (cost $5,207,851)	$	6,376,161
Federated Insurance Series – Federated Capital Appreciation Fund II – Primary Shares (FedCapAp) 631,829 shares (cost $3,231,332)		4,283,803
Federated Insurance Series – Federated Capital Income Fund II (FedCapInc) 58,218 shares (cost $514,357)		566,461
Federated Insurance Series – Federated Equity Income Fund II (FedEqInc) 279,168 shares (cost $3,341,771)		4,561,602
Federated Insurance Series – Federated Fund for US Government Securities II (FedGvtSec) 66,065 shares (cost $762,015)		749,173
Federated Insurance Series – Federated High Income Bond Fund II –
Primary Shares (FedHiInc) 262,664 shares (cost $2,016,006)		2,061,909
Federated Insurance Series – Federated International Equity Fund II (FedIntEq) 42,646 shares (cost $617,244)		729,676
Federated Insurance Series – Federated Kaufmann Fund II – Primary Shares (FedKaufmann) 270,784 shares (cost $3,091,938)		4,457,096
Federated Insurance Series – Federated Mid Cap Growth Strategies Fund II (FedMidCpGr2) 14,210 shares (cost $303,452)		364,349
Federated Insurance Series – Federated Prime Money Fund II (FedPriMy) 1,357,023 shares (cost $1,357,023)		1,357,023
Federated Insurance Series – Federated Quality Bond Fund II – Primary Shares (FedQualBd) 104,160 shares (cost $1,182,741)		1,175,966
Total investments		26,683,219
Accounts receivable		–
Total assets		26,683,219
Accounts payable		476
Contract owners’ equity (note 4)	$	26,682,743

See accompanying notes to financial statements.

2

NATIONWIDE VARIABLE ACCOUNT-11

STATEMENTS OF OPERATIONS

Year Ended December 31, 2006

Investment activity:	Total			FedAmLead		FedCapAp		FedCapInc		FedEqInc		FedGvtSec		FedHiInc		FedIntEq
Reinvested dividends	$	637,909		98,051		33,486		34,975		95,538		35,809		218,928		1,250
Mortality and expense risk charges (note 2)		(287,528	)	(66,326	)	(43,508	)	(6,396	)	(46,288	)	(9,775	)	(24,826	)	(7,399	)
Net investment income (loss)		350,381		31,725		(10,022	)	28,579		49,250		26,034		194,102		(6,149	)
Proceeds from mutual fund shares sold		6,408,878		1,212,456		665,380		467,590		822,311		197,279		755,799		266,998
Cost of mutual fund shares sold		(5,173,208	)	(935,996	)	(469,013	)	(408,914	)	(540,592	)	(209,399	)	(758,987	)	(204,007	)
Realized gain (loss) on investments		1,235,670		276,460		196,367		58,676		281,719		(12,120	)	(3,188	)	62,991
Change in unrealized gain (loss) on investments		958,196		(218,232	)	397,844		4,111		535,401		11,189		7,195		41,247
Net gain (loss) on investments		2,193,866		58,228		594,211		62,787		817,120		(931	)	4,007		104,238
Reinvested capital gains		872,978		811,340		–		–		–		–		–		–
Net increase (decrease) in contract owners’ equity resulting from operations	$	3,417,225		901,293		584,189		91,366		866,370		25,103		198,109		98,089
Investment activity:	FedKaufmann			FedMidCpGr2		FedPriMy		FedQualBd
Reinvested dividends	$	–		–		63,444		56,428
Mortality and expense risk charges (note 2)		(47,407	)	(4,655	)	(15,817	)	(15,131	)
Net investment income (loss)		(47,407	)	(4,655	)	47,627		41,297
Proceeds from mutual fund shares sold		711,220		172,581		645,516		491,748
Cost of mutual fund shares sold		(363,486	)	(118,072	)	(645,516	)	(519,226	)
Realized gain (loss) on investments		347,734		54,509		–		(27,478	)
Change in unrealized gain (loss) on investments		186,378		(30,984	)	–		24,047
Net gain (loss) on investments		534,112		23,525		–		(3,431	)
Reinvested capital gains		61,638		–		–		–
Net increase (decrease) in contract owners’ equity resulting from operations	$	548,343		18,870		47,627		37,866

See accompanying notes to financial statements.

3

NATIONWIDE VARIABLE ACCOUNT-11

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY

Years Ended December 31, 2006 and 2005

	Total					FedAmLead				FedCapAp				FedCapInc
Investment activity:	2006			2005		2006		2005		2006		2005		2006		2005
Net investment income (loss)	$	350,381		309,466		31,725		29,666		(10,022	)	711		28,579		19,316
Realized gain (loss) on investments		1,235,670		742,960		276,460		171,409		196,367		146,873		58,676		7,553
Change in unrealized gain (loss) on investments		958,196		(123,690	)	(218,232	)	47,557		397,844		(117,486	)	4,111		1,097
Reinvested capital gains		872,978		14,782		811,340		–		–		–		–		–
Net increase (decrease) in contract owners’ equity resulting from operations		3,417,225		943,518		901,293		248,632		584,189		30,098		91,366		27,966
Equity transactions:
Purchase payments received from contract owners (note 3)		130,518		136,760		58,285		43,934		8,279		19,120		5,025		4,131
Transfers between funds		–		–		(179,614	)	97,661		(157,827	)	(117,829	)	171,071		154,769
Redemptions (note 3)		(3,833,975	)	(1,677,799	)	(961,251	)	(368,847	)	(432,001	)	(250,203	)	(361,273	)	(3,779	)
Annual contract maintenance charges (note 2)		(4,546	)	(5,034	)	(1,091	)	(1,234	)	(731	)	(835	)	(69	)	(69	)
Contingent deferred sales charges (note 2)		(15,711	)	(14,328	)	(3,923	)	(2,646	)	(3,278	)	(1,710	)	–		–
Adjustments to maintain reserves		(544	)	(265	)	(4	)	(56	)	(86	)	(18	)	8		(28	)
Net equity transactions		(3,724,258	)	(1,560,666	)	(1,087,598	)	(231,188	)	(585,644	)	(351,475	)	(185,238	)	155,024
Net change in contract owners’ equity		(307,033	)	(617,148	)	(186,305	)	17,444		(1,455	)	(321,377	)	(93,872	)	182,990
Contract owners’ equity beginning of period		26,989,776		27,606,924		6,562,446		6,545,002		4,285,184		4,606,561		660,345		477,355
Contract owners’ equity end of period	$	26,682,743		26,989,776		6,376,141		6,562,446		4,283,729		4,285,184		566,473		660,345
CHANGES IN UNITS:
Beginning units		2,239,206		2,379,221		554,363		574,522		387,188		419,739		57,312		43,589
Units purchased		217,731		227,178		12,460		24,802		9,905		13,642		22,811		19,099
Units redeemed		(511,419	)	(367,193	)	(100,350	)	(44,961	)	(60,375	)	(46,193	)	(37,039	)	(5,376	)
Ending units		1,945,518		2,239,206		466,473		554,363		336,718		387,188		43,084		57,312

(Continued)

4

NATIONWIDE VARIABLE ACCOUNT-11

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2006 and 2005

	FedEqInc					FedGvtSec				FedHiInc				FedIntEq
Investment activity:	2006			2005		2006		2005		2006		2005		2006		2005
Net investment income (loss)	$	49,250		49,258		26,034		25,207		194,102		176,274		(6,149	)	(5,958	)
Realized gain (loss) on investments		281,719		175,334		(12,120	)	(2,393	)	(3,188	)	46,062		62,991		37,422
Change in unrealized gain (loss) on investments		535,401		(133,587	)	11,189		(14,989	)	7,195		(189,027	)	41,247		13,101
Reinvested capital gains		–		–		–		–		–		–		–		–
Net increase (decrease) in contract owners’ equity resulting from operations		866,370		91,005		25,103		7,825		198,109		33,309		98,089		44,565
Equity transactions:
Purchase payments received from contract owners (note 3)		2,779		25,795		344		–		1,746		6,233		5,120		5,350
Transfers between funds		115,584		(21,592	)	(22,872	)	115,617		(199,637	)	(56,511	)	166,152		42,419
Redemptions (note 3)		(594,791	)	(321,277	)	(131,610	)	(38,316	)	(332,773	)	(213,322	)	(94,301	)	(29,332	)
Annual contract maintenance charges (note 2)		(648	)	(718	)	(143	)	(148	)	(427	)	(507	)	(76	)	(60	)
Contingent deferred sales charges (note 2)		(2,235	)	(2,543	)	(130	)	(572	)	(1,051	)	(1,819	)	(91	)	(492	)
Adjustments to maintain reserves		(31	)	(38	)	(15	)	(36	)	(24	)	(32	)	(102	)	4
Net equity transactions		(479,342	)	(320,373	)	(154,426	)	76,545		(532,166	)	(265,958	)	76,702		17,889
Net change in contract owners’ equity		387,028		(229,368	)	(129,323	)	84,370		(334,057	)	(232,649	)	174,791		62,454
Contract owners’ equity beginning of period		4,174,532		4,403,900		878,469		794,099		2,395,934		2,628,583		554,825		492,371
Contract owners’ equity end of period	$	4,561,560		4,174,532		749,146		878,469		2,061,877		2,395,934		729,616		554,825
CHANGES IN UNITS:
Beginning units		340,574		367,233		79,931		72,957		184,752		205,696		45,130		43,192
Units purchased		23,045		22,140		3,255		10,631		15,545		24,661		25,169		17,446
Units redeemed		(57,882	)	(48,799	)	(16,817	)	(3,657	)	(55,023	)	(45,605	)	(19,890	)	(15,508	)
Ending units		305,737		340,574		66,369		79,931		145,274		184,752		50,409		45,130

(Continued)

5

NATIONWIDE VARIABLE ACCOUNT-11

STATEMENTS OF CHANGES IN CONTRACT OWNERS’ EQUITY, Continued

Years Ended December 31, 2006 and 2005

	FedKaufmann					FedMidCpGr2				FedPriMy				FedQualBd
Investment activity:	2006			2005		2006		2005		2006		2005		2006		2005
Net investment income (loss)	$	(47,407	)	(43,471	)	(4,655	)	(4,076	)	47,627		23,054		41,297		39,485
Realized gain (loss) on investments		347,734		168,050		54,509		8,505		–		–		(27,478	)	(15,855	)
Change in unrealized gain (loss) on investments		186,378		265,752		(30,984	)	34,287		–		–		24,047		(30,395	)
Reinvested capital gains		61,638		5,162		–		–		–		–		–		9,620
Net increase (decrease) in contract owners’ equity resulting from operations		548,343		395,493		18,870		38,716		47,627		23,054		37,866		2,855
Equity transactions:
Purchase payments received from contract owners (note 3)		16,672		12,077		5,369		–		25,395		4,934		1,504		15,186
Transfers between funds		37,556		50,275		24,679		4,346		80,339		(404,543	)	(35,431	)	135,388
Redemptions (note 3)		(499,658	)	(160,792	)	(61,492	)	(14,395	)	(131,579	)	(185,680	)	(233,246	)	(91,856	)
Annual contract maintenance charges (note 2)		(778	)	(804	)	(55	)	(32	)	(257	)	(344	)	(271	)	(283	)
Contingent deferred sales charges (note 2)		(3,759	)	(1,755	)	(95	)	(637	)	(757	)	(1,920	)	(392	)	(234	)
Adjustments to maintain reserves		(147	)	(34	)	(63	)	26		(53	)	(25	)	(27	)	(28	)
Net equity transactions		(450,114	)	(101,033	)	(31,657	)	(10,692	)	(26,912	)	(587,578	)	(267,863	)	58,173
Net change in contract owners’ equity		98,229		294,460		(12,787	)	28,024		20,715		(564,524	)	(229,997	)	61,028
Contract owners’ equity beginning of period		4,358,696		4,064,236		377,125		349,101		1,336,281		1,900,805		1,405,939		1,344,911
Contract owners’ equity end of period	$	4,456,925		4,358,696		364,338		377,125		1,356,996		1,336,281		1,175,942		1,405,939
CHANGES IN UNITS:
Beginning units		306,321		314,321		26,358		27,178		132,318		191,079		124,959		119,715
Units purchased		17,964		20,501		8,947		878		59,805		36,411		18,825		36,967
Units redeemed		(48,439	)	(28,501	)	(11,479	)	(1,698	)	(62,093	)	(95,172	)	(42,032	)	(31,723	)
Ending units		275,846		306,321		23,826		26,358		130,030		132,318		101,752		124,959

See accompanying notes to financial statements.

6

NATIONWIDE VARIABLE ACCOUNT-11

NOTES TO FINANCIAL STATEMENTS

December 31, 2006 and 2005

(1) Background and Summary of Significant Accounting Policies

(a) Organization and Nature of Operations

Nationwide Variable Account-11 (the Account) was established pursuant to a resolution of the Board of Directors of Nationwide Life Insurance Company (the Company) on December 15, 1999 and commenced operations on August 2, 2002. The Account is registered as a unit investment trust under the Investment Company Act of 1940.

The Company offers Individual Deferred Variable Annuity Contracts through the Account. The contracts are distributed by the Company and marketed exclusively through Federated Investors.

(b) The Contracts

Contract owners in either the accumulation or payout phase may invest in any of the following:

Portfolios of the Federated Insurance Series;

    Federated Insurance Series – Federated American Leaders Fund II – Primary Shares (FedAmLead)

    Federated Insurance Series – Federated Capital Appreciation Fund II – Primary Shares (FedCapAp)

    Federated Insurance Series – Federated Capital Income Fund II (FedCapInc)

    Federated Insurance Series – Federated Equity Income Fund II (FedEqInc)

    Federated Insurance Series – Federated Fund for US Government Securities II (FedGvtSec)

    Federated Insurance Series – Federated High Income Bond Fund II – Primary Shares (FedHiInc)

    Federated Insurance Series – Federated International Equity Fund II (FedIntEq)

    Federated Insurance Series – Federated International Small Company Fund II (FedIntSmCo)*

    Federated Insurance Series – Federated Kaufmann Fund II – Primary Shares (FedKaufmann)

    Federated Insurance Series – Federated Mid Cap Growth Strategies Fund II (FedMidCpGr2)

    Federated Insurance Series – Federated Prime Money Fund II (FedPriMy)

    Federated Insurance Series – Federated Quality Bond Fund II – Primary Shares (FedQualBd)

    Federated Insurance Series – Federated Total Return Bond Fund II (FedTotRe)*

*At December 31, 2006, contract owners were not invested in this fund.

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

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

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

(Continued)

7

NATIONWIDE VARIABLE ACCOUNT-11 (NOTES TO FINANCIAL STATEMENTS, Continued)

(c) Security Valuation, Transactions and Related Investment Income

Investments in underlying mutual funds are valued based on the closing net asset value per share at December 31, 2006 of such funds, which value their investment securities at fair value. The cost of investments sold is determined on a First in—First out basis. Investment transactions are accounted for on the trade date (date the order to buy or sell is executed) and dividends (which include capital gain distributions) are accrued as of the ex-dividend date and are reinvested in the underlying mutual funds.

(d) Federal Income Taxes

Operations of the Account form a part of, and are taxed with, operations of the Company which is taxed as a life insurance company under the Internal Revenue Code.

The Company does not provide for income taxes within the Account. Taxes are the responsibility of the contract owner upon termination or withdrawal.

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

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

(f) New Accounting Pronouncement

In September 2006, the Financial Accounting Standards Board issued Statement of Financial Accounting Standard (SFAS) 157. SFAS 157 also provides guidance regarding the extent to which companies measure assets and liabilities at fair value, the information used to measure fair value, and the effect of fair value measurements on earnings. SFAS 157 applies whenever other standards require (or permit) assets or liabilities to be measured at fair value but does not expand the use of fair value in any new circumstances. SFAS 157 is effective for fiscal years beginning after November 15, 2007, with early adoption permitted. SFAS 157 is not expected to have a material impact on the Accounts’ financial position or results of their operations upon adoption.

(2) Expenses

For Premium Deferred Variable Annuity contracts, the Company does not deduct a sales charge from purchase payments received from the contract owners. However, if any part of the contract value of such contracts is surrendered, the Company will, with certain exceptions, deduct from a contract owners’ contract value a contingent deferred sales charge not to exceed 7% of the purchase payments surrendered. This charge declines 1% per year. After the purchase payment has been held in the contract for 7 years the charge is 0%. No sales charges are deducted on redemptions used to purchase units in the fixed investment options of the Company.

For the Deferred Variable Annuity contracts, a sales charge of up to 5.5% is deducted from each purchase payment. The sales charge declines based upon the amount of the cumulative qualifying purchase payment, which may include certain deposits made to other qualifying investments in addition to the deposits made to the contract. An additional sales charge of 0.5% is applied against any purchase payments in excess of $1 million that are withdrawn within one year of deposit to the contract. No sales charges are deducted on redemptions used to purchase units in the fixed investment options of the Company.

The Company may deduct an annual contract maintenance charge of $40, depending on the amount of assets in the contract, which is satisfied by surrendering units.

The Company deducts a mortality and expense risk charge assessed through the daily unit value calculation. The Option table below illustrates the annual rate for all contract level charges by product, as well as the maximum variable account charge per product. The table also summarizes the contract level options available to contract holders. The options and related charges are described in more detail in the applicable product prospectus.

(Continued)

8

NATIONWIDE VARIABLE ACCOUNT-11 (NOTES TO FINANCIAL STATEMENTS, Continued)

Nationwide Variable Account-11 Options	Deferred		Premium deferred
Variable Account Charges – Recurring	0.80	%	1.20	%
Death Benefit Option:
Greater of One-Year or 5% Enhanced	0.15	%	0.15	%
If death before annuitization, benefit will be greatest of (i) contract value,
(ii) lessor of purchase payments less surrenders or 2 times the contract value as of the date death benefit is calculated,
(iii) highest contract value before 86th birthday less surrenders or (iv) the 5% interest anniversary value.
Beneficiary Protector Option	0.40	%	0.40	%
Upon annuitant death, in addition to any death benefit payable, an additional amount will be credited to contract.
Maximum Variable Account Charges*:	1.35	%	1.75	%

*When maximum options are elected.

The following table provides mortality and expense risk charges by asset fee rates for the period ended December 31, 2006:

	Total		FedAmLead	FedCapAp	FedCapInc	FedEqInc	FedGvtSec	FedHiInc	FedIntEq
0.80%	$	83,905	21,065	15,604	3,421	13,868	1,780	4,978	2,153
0.95%		12,926	3,558	1,778	253	2,822	106	1,286	424
1.20%		110,387	26,156	15,848	871	14,912	4,573	10,951	1,968
1.35%		67,579	13,767	8,216	1,399	13,453	2,721	6,244	2,194
1.75%		12,731	1,780	2,062	452	1,233	595	1,367	660
Totals	$	287,528	66,326	43,508	6,396	46,288	9,775	24,826	7,399
	FedKaufmann		FedMidCpGr2	FedPriMy	FedQualBd
0.80%	$	13,459	1,054	3,700	2,823
0.95%		1,891	152	362	294
1.20%		18,884	895	7,782	7,547
1.35%		10,023	2,169	3,353	4,040
1.75%		3,150	385	620	427
Totals	$	47,407	4,655	15,817	15,131

(3) Related Party Transactions

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

Contract owners may, with certain restrictions, transfer their assets between the Account and a fixed dollar contract (fixed account) maintained in the accounts of the Company. The fixed account assets are not reflected in the accompanying financial statements. In addition, the Account portion of contract owner loans is transferred to the accounts of the Company for administration and collection. Loan repayments are transferred to the Account at the direction of the contract owner. For the years ended December 31, 2006 and 2005, total transfers to the Account from the fixed account were $90,961 and $86,144, respectively, and total transfers from the Account to the fixed account were $26,807 and $0, respectively. Transfers from the Account to the fixed account are included in redemptions, and transfers to the Account from the fixed account are included in purchase payments received from contract owners, as applicable, on the accompanying Statements of Changes in Contract Owners’ Equity.

For guaranteed minimum death benefits, the Company contributed $0 and $3,436 to the Account in the form of additional premium to contract owner accounts for the years ended December 31, 2006 and 2005, respectively. These amounts are included in purchase payments received from contract owners and are credited at time of annuitant death, when applicable.

(Continued)

9

NATIONWIDE VARIABLE ACCOUNT-11 (NOTES TO FINANCIAL STATEMENTS, Continued)

(4) Financial Highlights

The Company offers several variable annuity products through the Account that have unique combinations of features and fees that are assessed to the contract owner. Differences in fee structures result in a variety of contract expense rates, unit fair values and total returns. The following tabular presentation is a summary of units, unit fair values and contract owners’ equity outstanding for variable annuity contracts as of the end of the periods indicated, and contract expense rate, investment income ratio and total return for each period in the four-year period ended December 31, 2006 and for the period August 2, 2002 (commencement of operations) through December 31, 2002. Beginning in 2003 the information is presented as a range of minimum to maximum values based upon product grouping. The range is determined by identifying the lowest and the highest contract expense rate. The unit fair values and total returns related to these identified contract expense rates are also disclosed as a range below. Accordingly, some individual contract amounts may not be within the ranges presented. For periods prior to 2003 the information is presented as a range of minimum and maximum values, however, such information is exclusive and independent for each column, and there is no intentional relationship among and between the ranges of values presented for contract expense rate, unit fair value and total return.

	Contract Expense Rate*	Units		Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**	Total Return***
Federated Insurance Series – Federated American Leaders Fund II – Primary Shares
2006	0.80% to 1.75%	$	466,473	$	13.84 to 13.24	$	6,376,141	1.52%	15.88% to    14.77%
2005	0.80% to 1.75%		554,363		11.94 to 11.54		6,562,446	1.48%	4.18% to      3.19%
2004	0.80% to 1.75%		574,522		11.46 to 11.18		6,545,002	1.37%	8.90% to      7.86%
2003	0.80% to 1.75%		532,185		10.53 to 10.37		5,581,921	0.92%	26.68% to    25.46%
2002	0.80% to 1.75%		130,404		8.26 to  8.31		1,081,811	0.00%	-17.37%  to    16.91%	(a) (b)
Federated Insurance Series – Federated Capital Appreciation Fund II – Primary Shares
2006	0.80% to 1.75%		336,718		12.87 to 12.32		4,283,729	0.78%	15.29% to    14.19%
2005	0.80% to 1.75%		387,188		11.16 to 10.79		4,285,184	1.02%	1.10% to      0.14%
2004	0.80% to 1.75%		419,739		11.04 to 10.77		4,606,561	0.55%	6.54% to      5.52%
2003	0.80% to 1.75%		383,347		10.36 to 10.21		3,958,698	0.29%	22.93% to    21.75%
2002	0.80% to 1.75%		87,434		8.38 to  8.43		735,888	0.00%	-16.16%  to  -15.69%	(a) (b)
Federated Insurance Series – Federated Capital Income Fund II
2006	0.80% to 1.75%		43,084		13.31 to 12.74		566,473	5.70%	14.72% to    13.62%
2005	0.80% to 1.75%		57,312		11.60 to 11.21		660,345	4.28%	5.44% to      4.43%
2004	0.80% to 1.75%		43,589		11.00 to 10.73		477,355	4.07%	9.04% to      8.00%
2003	0.80% to 1.75%		30,435		10.09 to  9.94		306,272	0.32%	19.71% to    18.56%
2002	1.20%		389		8.41		3,271	0.00%	-15.90%	(a) (b)
Federated Insurance Series – Federated Equity Income Fund II
2006	0.80% to 1.75%		305,737		15.11 to 14.46		4,561,560	2.19%	22.15% to    20.99%
2005	0.80% to 1.75%		340,574		12.37 to 11.95		4,174,532	2.20%	2.51% to      1.53%
2004	0.80% to 1.75%		367,233		12.07 to 11.77		4,403,900	1.82%	11.94% to    10.87%
2003	0.80% to 1.75%		322,353		10.78 to 10.62		3,463,008	1.04%	26.26% to   25.05%
2002	0.80% to 1.35%		61,927		8.51 to   8.54		528,005	0.00%	-14.87%  to  -14.59%	(a) (b)
Federated Insurance Series – Federated Fund for US Government Securities II
2006	0.80% to 1.75%		66,369		11.50 to 11.00		749,146	4.40%	3.31% to    2.32%
2005	0.80% to 1.75%		79,931		11.13 to 10.75		878,469	4.22%	1.21% to    0.25%
2004	0.80% to 1.75%		72,957		11.00 to 10.73		794,099	4.44%	2.78% to    1.80%
2003	0.80% to 1.75%		73,085		10.70 to 10.54		777,002	3.35%	1.55% to    0.57%
2002	0.80% to 1.75%		25,237		10.48 to 10.53		265,283	0.00%	4.76% to    5.34%	(a) (b)
Federated Insurance Series – Federated High Income Bond Fund II – Primary Shares
2006	0.80% to 1.75%		145,274		14.42 to 13.80		2,061,877	9.82%	9.92% to      8.87%
2005	0.80% to 1.75%		184,752		13.12 to 12.67		2,395,934	8.09%	1.84% to      0.86%
2004	0.80% to 1.75%		205,696		12.88 to 12.56		2,628,583	6.88%	9.58% to      8.53%
2003	0.80% to 1.75%		179,584		11.75 to 11.58		2,101,220	3.94%	21.24% to    20.08%
2002	0.80% to 1.75%		29,703		9.64 to   9.69		287,249	0.00%	-3.60% to    -3.06%	(a) (b)
Federated Insurance Series – Federated International Equity Fund II
2006	0.80% to 1.75%		50,409		14.66 to 14.03		729,616	0.19%	17.94% to    16.82%
2005	0.80% to 1.75%		45,130		12.43 to 12.01		554,825	0.00%	8.21% to      7.17%
2004	0.80% to 1.75%		43,192		11.49 to 11.21		492,371	0.00%	13.15% to    12.07%
2003	0.80% to 1.75%		30,778		10.15 to 10.00		311,114	0.00%	30.81% to    29.55%
2002	0.80% to 1.75%		12,310		7.72 to   7.76		95,360	0.00%	-22.80% to   -22.37%	(a) (b)
Federated Insurance Series – Federated International Small Company Fund II
2002	0.80% to 1.20%		1,421		8.02 to   8.04		11,407	0.00%	-19.79%  to  -19.60%	(a) (b)
Federated Insurance Series – Federated International Small Company Fund II
2002	0.80% to 1.20%		1,421		8.02 to   8.04		11,407	0.00%	-19.79%  to  -19.60%	(a) (b)

(Continued)

10

NATIONWIDE VARIABLE ACCOUNT-11 (NOTES TO FINANCIAL STATEMENTS, Continued)

	Contract Expense Rate*	Units	Unit Fair Value		Contract Owners’ Equity		Investment Income Ratio**	Total Return***
Federated Insurance Series – Federated Kaufmann Fund II – Primary Shares
2006	0.80% to 1.75%	275,846	$	16.38 to 15.67	$	4,456,925	0.00%	13.96% to   12.87%
2005	0.80% to 1.75%	306,321		14.37 to 13.89		4,358,696	0.00%	10.36% to     9.30%
2004	0.80% to 1.75%	314,321		13.03 to 12.71		4,064,236	0.00%	13.74% to   12.65%
2003	0.80% to 1.75%	306,045		11.45 to 11.28		3,488,946	0.00%	38.59% to   37.26%
2002	0.80% to 1.75%	78,899		8.22 to   8.26		650,601	0.00%	-17.83% to  -17.37%	(a) (b)
Federated Insurance Series – Federated Mid Cap Growth Strategies Fund II
2006	0.80% to 1.75%	23,826		15.56 to 14.89		364,338	0.00%	7.37% to    6.34%
2005	0.80%to 1.75%	26,358		14.50 to 14.01		377,125	0.00%	11.80% to   10.74%
2004	0.80% to 1.75%	27,178		12.97 to 12.65		349,101	0.00%	14.51% to   13.41%
2003	0.80% to 1.75%	20,498		11.32 to 11.15		230,934	0.00%	38.96% to   37.63%
2002	1.20% to 1.75%	2,917		8.10 to   8.13		23,680	0.00%	-18.97% to -18.71%	(a) (b)
Federated Insurance Series – Federated Prime Money Fund II
2006	0.80% to 1.75%	130,030		10.58 to  10.13		1,356,996	4.71%	3.68% to    2.69%
2005	0.80% to 1.75%	132,318		10.21 to    9.86		1,336,281	2.44%	1.88% to    0.91%
2004	0.80% to 1.75%	191,079		10.02 to    9.77		1,900,805	0.37%	0.01% to   -0.95%
2003	0.80% to 1.75%	33,546		10.02 to    9.87		333,850	0.91%	-0.12% to   -1.08%
2002	0.80% to 1.75%	3,655		9.97 to  10.03		36,577	0.43%	-0.27% to    0.29%	(a) (b)
Federated Insurance Series – Federated Quality Bond Fund II – Primary Shares
2006	0.80% to 1.75%	101,752		11.76 to  11.25		1,175,942	4.37%	3.32% to    2.34%
2005	0.80% to 1.75%	124,959		11.38 to  11.00		1,405,939	4.08%	0.49% to   -0.47%
2004	0.80% to 1.75%	119,715		11.33 to  11.05		1,344,911	3.81%	2.79% to    1.81%
2003	0.80% to 1.75%	89,008		11.02 to  10.85		976,472	2.43%	3.81% to    2.81%
2002	0.80% to 1.75%	18,954		10.56 to  10.62		200,816	0.00%	5.57% to    6.16%	(a) (b)
Federated Insurance Series – Federated Total Return Bond Fund II
2003	0.80% to 1.75%	198,906		10.83 to  10.66		2,144,626	0.01%	2.51% to    1.53%
2002	0.80% to 1.75%	49,241		10.50 to  10.56		519,103	9.40%	5.03% to    5.61%	(a) (b)
2006 Contract owners’ equity					$	26,682,743
2005 Contract owners’ equity					$	26,989,776
2004 Contract owners’ equity					$	27,606,924
2003 Contract owners’ equity					$	23,674,063
2002 Contract owners’ equity					$	4,439,051

*	This represents the range of annual contract expense rates of the variable account for the period indicated and includes only those expenses that are charged through a reduction in the unit values. Excluded are expenses of the underlying mutual funds and charges made directly to contract owner accounts through the redemption of units.
**	This represents the dividends for the period indicated, excluding distributions of capital gains, received by the subaccount from the underlying mutual fund, net of management fees assessed by the fund manager, divided by average net assets. The ratios exclude those expenses, such as mortality and expense charges, that result in direct reductions to the contractholder accounts either through reductions in unit values or redemption of units. The recognition of investment income by the sub-account is affected by the timing of the declaration of dividends by the underlying fund in which the subaccounts invest.
***	This represents the range of minimum and maximum total returns for the period indicated, including changes in the value of the underlying mutual fund, which reflects the reduction of unit value for expenses assessed. It does not include any expenses assessed through the redemption of units, the inclusion of which would result in a reduction of the total return presented.
(a) & (b)	Denote the minimum and maximum of the total return ranges, respectively, for underlying mutual fund options that were added during the reporting period. These returns were not annualized. Minimum and maximum ranges are not shown for underlying mutual fund options for which a single contract expense rate (product option) is representative of all units issued and outstanding at period end. Such options that were added during the reporting period are designated by these symbols.

11

Report of Independent Registered Public Accounting Firm

The Board of Directors of Nationwide Life Insurance Company and

    Contract Owners of Nationwide Variable Account-11:

We have audited the accompanying statement of assets, liabilities and contract owners’ equity of Nationwide Variable Account-11 (comprised of the sub-accounts listed in note 1(b) (collectively, “the Accounts”)) as of December 31, 2006, and the related statements of operations and changes in contract owners’ equity, and the financial highlights for each of the periods indicated herein. These financial statements and financial highlights are the responsibility of the Accounts’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2006, by correspondence with the transfer agents of the underlying mutual funds. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Accounts as of December 31, 2006, and the results of their operations, changes in contract owners’ equity, and financial highlights for each of the periods indicated herein, in conformity with U.S. generally accepted accounting principles.

/s/ KPMG LLP

Columbus, Ohio

March 9, 2007

12

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PAID
NATIONWIDE  

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