# Exhibit 99
to
Form 10-Qof
Protective Life and Annuity Insurance Company
for the nine months
ended September 30, 2001

# Safe Harbor for Forward-Looking Statements

The
Private Securities Litigation Reform Act of 1995 (the Act)
encourages companies to make forward-looking statements by creating
a safe harbor to protect the companies from securities law liability in
connection with forward-looking statements. All statements based on future
expectations rather than on historical facts are forward-looking statements.
Protective Life and Annuity Insurance Company (the Company) intends
to qualify both its written and oral forward-looking statements for protection
under the Act.

To
qualify oral forward-looking statements for protection under the Act, a readily
available written document must identify important factors that could cause
actual results to differ materially from those in the forward-looking
statements. The Company provides the following information to qualify
forward-looking statements for the safe harbor protection of the Act.

The
Company is a stock life insurance company founded in 1978. All outstanding
shares of the Companys common stock are owned by Protective Life Insurance
Company (Protective), which is the principal operating subsidiary of Protective
Life Corporation (PLC), an insurance holding company whose common stock is
traded on the New York Stock Exchange under the symbol PL. All
outstanding shares of the Companys preferred stock are owned by PLC. The
Company is authorized to transact insurance business, as an insurance company or
a reinsurance company, in 49 states, including New York.

PLC,
through its subsidiaries, operates several divisions whose principal strategic
focuses can be grouped into three general categories: life insurance, specialty
insurance products, and retirement savings and investment products. The life
insurance category includes the Acquisitions, Individual Life, and West Coast
Divisions. The specialty insurance products category includes the Dental
Benefits and Financial Institutions Divisions. The retirement savings and
investment products category includes the Stable Value Products and Investment
Products Divisions.

The
Company, since it is licensed in the State of New York, is the entity through
which PLC markets, distributes, and services insurance and annuity products in
New York. As of September 30, 2001, the Company was involved in the operations
of four of PLCs Divisions: the Acquisitions Division, the Dental Benefits
Division, the Financial Institutions Division, and the Investment Products
Division. The Company has an additional business segment which is described
herein as Corporate and Other.

The
operating results of companies in the insurance industry have historically been
subject to significant fluctuations. The factors which could affect the
Companys future results include, but are not limited to, general economic
conditions, and certain known trends and uncertainties which are discussed more
fully below.

There
are many types of risks that all companies are exposed to in their businesses.
For example, companies are exposed to the risks of natural disasters, malicious
acts, computer viruses, and other perils. While the Company has obtained
insurance, implemented risk management and contingency plans, and taken
preventive measures and other precautions, no assurance can be given that there
are not scenarios that could have an adverse effect on the Company.

Life
and health insurance is a mature industry. In recent years, the industry has
experienced little growth in life insurance sales, though the aging population
has increased the demand for retirement savings products. Life and health
insurance is a highly competitive industry. The company encounters significant
competition in all lines of business from other insurance companies, many of
which have greater financial resources than the Company, as well as competition
from other providers of financial services. Competition could result in, among
other things, lower sales or higher lapses of existing products.

The
insurance industry is consolidating, with larger, potentially more efficient
organizations emerging from consolidation. Also, some mutual insurance companies
are converting to stock ownership, which will give them greater access to
capital markets. Additionally, commercial banks, insurance companies, and
investment banks may now combine, provided certain requirements are satisfied.

The
Companys ability to compete is dependent upon, among other things, its
ability to attract and retain distribution channels to market its insurance and
investment products, its ability to develop competitive and profitable products,
its ability to maintain low unit costs, and its maintenance of strong ratings
from rating agencies. However, irrational competition from other insurers could
adversely affect the Companys competitive position.

Ratings
are an important factor in the Companys competitive position. Rating
organizations periodically review the financial performance and condition of
insurers, including the Company and its insurance affiliates. A downgrade in the
ratings of the Company and its insurance affiliates could adversely affect the
Companys ability to sell its products, retain existing business, and
compete for attractive acquisition opportunities.

For
the past several years, rating downgrades in the industry have exceeded
upgrades. Rating organizations assign ratings based upon several factors. While
most of the factors relate to the rated company, some of the factors relate to
general economic conditions and circumstances outside the rated companys
control. The Company cannot predict what actions the rating organizations may
take, or what actions the Company may be required to take in response to the
actions of the rating organizations, which could adversely affect the Company.

The
Companys results may fluctuate from year to year due to fluctuations in
policy claims received by the Company. Certain of the Companys businesses
may experience higher claims if the economy is growing slowly or in recession.

Mortality
and morbidity expectations incorporate assumptions about many factors, including
for example, how a product is distributed, persistency and lapses, and future
progress in the fields of health and medicine. Actual mortality and morbidity
could differ from our expectations if actual results differ from those
assumptions.

Many
of the products offered by the Company and its insurance affiliates allow
policyholders and contract holders to withdraw their funds under defined
circumstances. The Company and its insurance affiliates manage their liabilities
and configure their investment portfolios so as to provide and maintain
sufficient liquidity to support anticipated withdrawal demands and contract
benefits and maturities. While the Company and its life insurance affiliates own
a significant amount of liquid assets, a certain portion of their assets are
relatively illiquid. Unanticipated withdrawals or surrender activity could,
under some circumstances, compel the Company and its insurance affiliates to
dispose of assets on unfavorable terms, which could have an adverse effect on
the Company.

Significant
changes in interest rates expose insurance companies to the risk of not earning
anticipated spreads between the interest rate earned on investments and the
credited interest rates paid on outstanding policies. Both rising and declining
interest rates can negatively affect the Companys spread income. While the
Company develops and maintains asset/liability management programs and
procedures designed to preserve spread income in rising or falling interest rate
environments, no assurance can be given that changes in interest rates will not
affect such spreads.

Changes
in interest rates may also impact our business in other ways. Lower interest
rates may result in lower sales of certain of the Companys insurance and
investment products. In addition, certain of the Companys insurance and
investment products guarantee a minimum credited interest rate.

Higher
interest rates may create a less favorable environment for the origination of
mortgage loans and decrease the investment income the Company receives in the
form of prepayment fees, make-whole payments, and mortgage participation income.
Higher interest rates may also increase the cost of debt and other obligations
having floating rate or rate reset provisions, and may result in lower sales of
variable products. Also, the amount of policy fees received from variable
products is affected by the performance of the equity markets.

Additionally,
the Companys asset/liability management programs and procedures
incorporate assumptions about the relationship between short-term and long-term
interest rates (i.e., the slope of the yield curve), relationships between
risk-adjusted and risk-free interest rates, market liquidity, and other factors.
The effectiveness of the Companys asset/liability management programs and
procedures may be negatively affected whenever actual results differ from these
assumptions.

The
Company and its insurance affiliates are subject to government regulation in
each of the states in which they conduct business. Such regulation is vested in
state agencies having broad administrative power dealing with many aspects of
the insurance business, which may include premium rates, marketing practices,
advertising, policy forms, and capital adequacy, and is concerned primarily with
the protection of policyholders rather than share owners. From time to time
regulators may raise issues on examinations or audits of the Company. However,
such issues are unlikely to result in any material impact on the Company. The
Company cannot predict what regulatory actions may be taken or what initiatives
may be enacted which could adversely affect the Company.

The
Company and its insurance affiliates may be subject to regulation by the United
States Department of Labor when providing a variety of products and services to
employee benefit plans governed by the Employee Retirement Income Security Act
(ERISA). Severe penalties are imposed for breach of duties under ERISA.

Certain
policies, contracts, and annuities offered by the Company and its insurance
affiliates are subject to regulation under the federal securities laws
administered by the Securities and Exchange Commission. The federal securities
laws contain regulatory restrictions and criminal, administrative, and private
remedial provisions.

Under
the Internal Revenue Code of 1986, as amended, income tax payable by
policyholders on investment earnings is deferred during the accumulation period
of certain life insurance and annuity products. This favorable tax treatment may
give certain of the Companys products a competitive advantage over other
non-insurance products. To the extent that the Internal Revenue Code is revised
to reduce the tax-deferred status of life insurance and annuity products, or to
increase the tax-deferred status of competing products, all life insurance
companies, including the Company and its affiliates, would be adversely affected
with respect to their ability to sell such products, and, depending upon
grandfathering provisions, the surrenders of existing annuity contracts and life
insurance policies. In addition, life insurance products are often used to fund
estate tax obligations. Legislation has recently been enacted that would, over
time, reduce and ultimately eliminate the estate tax, subject to subsequent
legislative action. If the estate tax is significantly reduced or eliminated,
the demand for certain life insurance products could be adversely affected. The
Company cannot predict what other tax initiatives may be enacted which could
adversely affect the Company.

A
number of civil jury verdicts have been returned against insurers and other
providers of financial services involving sales practices, alleged agent
misconduct, failure to properly supervise representatives, relationships with
agents or other persons with whom the insurer does business, and other matters.
Increasingly these lawsuits have resulted in the award of substantial judgments
that are disproportionate to the actual damages, including material amounts of
punitive non-economic compensatory damages. In some states, juries, judges and
arbitrators have substantial discretion in awarding punitive and non-economic
compensatory damages, which creates the potential for unpredictable material
adverse judgments in any given lawsuit. In addition, in some class action and
other lawsuits, companies have made material settlement payments. The Company,
like other financial service companies, in the ordinary course of business, is
involved in such litigation or, alternatively, in arbitration. Although the
outcome of any such litigation or arbitration cannot be predicted, the Company
believes that at the present time there are no pending or threatened lawsuits
that are reasonably likely to have a material adverse effect on the financial
position, results of operations, or liquidity of the Company.

The
Companys ability to maintain low unit costs is dependent upon the level of
sales and persistency. A decrease in sales or persistency without a
corresponding reduction in expenses may result in higher unit costs.

Additionally,
a decrease in persistency may result in higher amortization of deferred policy
acquisition costs. Although many of the Companys products contain
surrender charges, the charges decrease over time and may not be sufficient to
cover the unamortized deferred policy acquisition costs with respect to the
insurance policy or annuity contract being surrendered. A decrease in
persistency may also result in higher claims.

Certain
of the Companys invested assets and derivative financial instruments are
subject to customary risks of credit defaults and changes in market values. The
value of the Companys commercial mortgage loan portfolio depends in part
on the financial condition of the tenants occupying the properties which the
Company has financed. Factors that may affect the overall default rate on, and
market value of, the Companys invested assets, derivative financial
instruments, and mortgage loans include interest rate levels, financial market
performance, and general economic conditions as well as particular circumstances
affecting the businesses of individual borrowers and tenants.

The
Companys acquisitions have increased its earnings in part by allowing the
Company to enter new markets and to position itself to realize certain operating
efficiencies. There can be no assurance, however, that the Company will realize
the anticipated financial results from its acquisitions, or that suitable
acquisitions, presenting opportunities for continued growth and operating
efficiencies, or capital to fund acquisitions will continue to be available to
the Company.

The
Companys results may be affected by the performance of others because the
Company has entered into various arrangements involving other parties. Examples
include, but are not limited to, the following: many of the Companys
products are sold through independent distribution channels; the Investment
Products Divisions variable annuity deposits are invested in funds managed
by third parties; and prepaid dental services are performed by a contracted
network of independent dentists. The Company may also use third-party
administrators to collect premiums, pay claims, and/or perform customer service
functions. Additionally, the Companys operations are dependent on various
technologies, some of which are provided and/or maintained by other parties.

As
with all financial services companies, our ability to conduct business is
dependent upon consumer confidence in the industry and its products. Actions of
competitors and financial difficulties of other companies in the industry could
undermine consumer confidence and adversely affect the Company.

The
Company and its insurance affiliates cede insurance to other insurance companies
through reinsurance. However, the Company remains liable with respect to ceded
insurance should any reinsurer fail to meet the obligations assumed by it.

The
cost of reinsurance is, in some cases, reflected in the premium rates charged by
the Company. Under certain reinsurance agreements, the reinsurer may increase
the rate it charges the Company for the reinsurance, though the Company does not
anticipate increases to occur. Therefore, if the cost of reinsurance were to
increase or if reinsurance were to become unavailable, the Company could be
adversely affected.

Additionally,
the Company assumes policies of other insurers. Any regulatory or other adverse
development affecting the ceding insurer could also have an adverse effect on
the Company.

Forward-looking
statements express expectations of future events and/or results. All
forward-looking statements are inherently uncertain as they are based on various
expectations and assumptions concerning future events and they are subject to
numerous known and unknown risks and uncertainties which could cause actual
events or results to differ materially from those projected. Due to these
inherent uncertainties, investors are urged not to place undue reliance on
forward-looking statements. In addition, the Company undertakes no obligation to
update or revise forward-looking statements to reflect changed assumptions, the
occurrence of unanticipated events, or changes to projections over time.