#### FORM 10-Q

#### SECURITIES AND EXCHANGE COMMISSION

##### WASHINGTON, D. C.  20549

# [X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

# For the quarterly period ended March 31, 2000

# OR

# [ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15 (d)OF THE SECURITIES AND EXCHANGE ACT OF 1934

# For the transition period from ___ to ___

# Commission File Number 333-42425

# Protective Life and Annuity Insurance Company

`ALABAMA                                         63-0761690
    (State or other jurisdiction of                            (IRS Employer
     incorporation or organization)                          Identification No.)`

# 2801 HIGHWAY 280 SOUTHBIRMINGHAM, ALABAMA 35223

Indicate by check mark whether the Registrant (1) has filed all
reports  required to be filed by Section 13 or 15(d) of the Securities  Exchange
Act of 1934  during the  preceding  12 months  and (2) has been  subject to such
filing requirements for the past 90 days. Yes [X] No[ ]

Number of shares of Common Stock, $10.00 par value,  outstanding
as of May 5, 2000: 250,000 shares.

## Protective Life and Annuity Insurance Company

### INDEX

`Page Number

Part I.   Financial Information:

   Item 1.   Financial Statements:
        Report of Independent Accountants......................................
        Condensed Statements of Income for the Three Months
          ended March 31, 2000 and 1999 (unaudited)............................
        Condensed Balance Sheets as of March 31, 2000
          (unaudited) and December 31, 1999....................................
        Condensed Statements of Cash Flows for the
          Three Months ended March 31, 2000 and 1999 (unaudited)...............
        Notes to Condensed Financial Statements (unaudited)....................

   Item 2.   Management's Narrative Analysis of the Results of Operations......


   Item 3.   Quantitative and Qualitative Disclosures about Market Risk........

Part II.     Other Information:


   Item 6. Exhibits and Reports on Form 8-K....................................


Signature......................................................................`

### REPORT OF INDEPENDENT ACCOUNTANTS

# To the Directors and Share Owners
Protective Life and Annuity Insurance Company
Birmingham, Alabama

We   have
reviewed the accompanying condensed balance sheet of Protective Life and Annuity
Insurance Company as of March 31, 2000, and the related condensed  statements of
income for the three-month  periods ended March 31, 2000 and 1999, and condensed
statements  of cash flows for the  three-month  periods ended March 31, 2000 and
1999.  These  financial  statements  are  the  responsibility  of the  Company's
management.

We
conducted our review in accordance  with  standards  established by the American
Institute  of  Certified  Public  Accountants.  A review  of  interim  financial
information consists principally of applying analytical  procedures to financial
data and making  inquiries of persons  responsible  for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with auditing  standards  generally accepted in the United States, the objective
of which is the  expression of an opinion  regarding  the  financial  statements
taken as a whole. Accordingly, we do not express such an opinion.

Based  on
our review, we are not aware of any material  modifications  that should be made
to the condensed interim financial  statements  referred to above for them to be
in  conformity  with  accounting  principles  generally  accepted  in the United
States.

We
previously audited in accordance with auditing  standards  generally accepted in
the United  States,  the balance sheet as of December 31, 1999,  and the related
statements of income,  share- owners'  equity,  and cash flows for the year then
ended (not  presented  herein),  and in our report dated  February 23, 2000,  we
expressed an unqualified opinion on those financial statements.  In our opinion,
the  information  set forth in the  accompanying  condensed  balance sheet as of
December 31, 1999, is fairly stated in all material  respects in relation to the
balance sheet from which it has been derived.

## /s/ PricewaterhouseCoopers LLP

## PricewaterhouseCoopers LLP

## Birmingham, Alabama

## April 26, 2000

`PROTECTIVE LIFE AND ANNUITY INSURANCE COMPANY
                         CONDENSED STATEMENTS OF INCOME

                                   (Unaudited)


                                                                       THREE MONTHS ENDED
                                                                             MARCH 31
                                                                -------------------------------
                                                                    2000             1999
                                                                    ----             ----


REVENUES

     Premiums and policy fees                                     $12,776,306    $16,615,108
        Reinsurance ceded                                          (4,678,778)    (5,513,237)
                                                                  -----------   ------------
        Premiums and policy fees, net of reinsurance ceded          8,097,528     11,101,871
     Net investment income                                          7,366,363      6,935,627
     Realized investment gains                                                        11,044
     Other income (loss)                                                3,708         (8,736)
                                                                  ------------  ------------
                                                                   15,467,599     18,039,806
                                                                  ------------  ------------
BENEFITS AND EXPENSES

     Benefits and settlement expenses (net of reinsurance ceded:
        2000 - $3,523,755; 1999 - $4,420,651)                       8,017,391     10,466,587
     Amortization of deferred policy acquisition costs              1,574,851      2,225,730
     Other operating expenses (net of reinsurance ceded:
        2000 - $78,596; 1999 - $70,765)                             3,355,127      2,313,441
                                                                 ------------   ------------
                                                                   12,947,369     15,005,758
                                                                 ------------   ------------
INCOME BEFORE INCOME TAX                                            2,520,230      3,034,048

Income tax expense                                                    869,479        849,533
                                                                 ------------  -------------

NET INCOME                                                        $ 1,650,751   $  2,184,515
                                                                  ===========   ============




See notes to condensed financial statements`

`PROTECTIVE LIFE AND ANNUITY INSURANCE COMPANY
                                             CONDENSED BALANCE SHEETS

                                                                              MARCH 31          DECEMBER 31
                                                                                2000               1999
                                                                              --------          -----------
                                                                             (Unaudited)

ASSETS

  Investments
    Fixed maturities, at market
     (amortized cost: 2000 - $401,182,167; 1999 - $384,291,937)            $383,089,822        $366,838,300
    Mortgage loans on real estate                                             3,577,256           3,683,311
    Investment in real estate, net of accumulated depreciation                1,092,500           1,096,250
    Policy loans                                                             54,668,050          54,824,429
    Short-term investments                                                    3,498,891           7,493,877
                                                                          -------------       -------------
     Total investments                                                      445,926,519         433,936,167
  Cash                                                                        3,506,708           4,021,839
  Accrued investment income                                                   7,705,176           7,718,388
  Accounts and premiums receivable, net of allowance for uncollectible
     amounts (2000 - $7,000; 1999 - $7,000)                                   2,779,475           4,256,931
  Reinsurance receivables                                                    28,207,947          26,779,589
  Deferred policy acquisition costs                                         134,266,161         127,792,025
  Other assets                                                                   28,718              41,731
  Assets related to separate accounts
    Variable annuity                                                          7,328,018           4,951,159
                                                                            -----------         -----------
                                                                           $629,748,722        $609,497,829
                                                                            ===========         ===========
LIABILITIES

  Policy liabilities and accruals:
     Future policy benefits and claims                                     $446,838,854        $445,284,973
     Unearned premiums                                                        7,766,548           7,852,424
                                                                           -------------        ------------
                                                                            454,605,402         453,137,397
  Annuity deposits                                                           17,804,259          12,253,056
  Other policyholders' funds                                                  5,459,331           5,410,510
  Other liabilities                                                          19,362,542          18,338,059
  Deferred income taxes                                                       3,520,454             109,523
  Liabilities related to separate accounts
    Variable annuity                                                          7,328,018           4,951,159
                                                                           -------------        ------------
           Total liabilities                                                508,080,006         494,199,704
                                                                           -------------        ------------

COMMITMENTS AND CONTINGENT LIABILITIES - NOTE B

SHARE-OWNERS' EQUITY

  Preferred Stock, $1.00 par value, shares authorized, issued, and
    outstanding: 2,000                                                            2,000               2,000
  Common Stock, $10 par value
    Shares authorized: 500,000
    Shares issued and outstanding: 2000 and 1999: 250,000                      2,500,000           2,500,000
  Additional paid-in capital                                                 101,386,324         101,386,324
  Retained earnings                                                           24,405,416          22,754,665
  Accumulated other comprehensive income
    Net unrealized gains (losses) on investments (net of income
     tax: 2000 - $(3,567,321); 1999 - $(6,108,773))                           (6,625,024)        (11,344,864)
                                                                            -------------       -------------
           Total share-owners' equity                                        121,668,716         115,298,125
                                                                            -------------       -------------
                                                                            $629,748,722        $609,497,829
                                                                            =============       =============
See notes to condensed financial statements`

`PROTECTIVE LIFE AND ANNUITY INSURANCE COMPANY
                                        CONDENSED STATEMENTS OF CASH FLOWS

                                                    (Unaudited)

                                                                                           THREE MONTHS ENDED
                                                                                                MARCH 31
                                                                                        -----------------------
                                                                                          2000            1999
                                                                                          ----            ----
CASH FLOWS FROM OPERATING ACTIVITIES

    Net income                                                                     $    1,650,751    $   2,184,515
    Adjustments to reconcile net income to net cash used in operating activities:
       Realized investment gains                                                                           (11,044)
       Amortization of deferred policy acquisition costs                                1,574,851        2,225,730
       Capitalization of deferred policy acquisition costs                               (148,987)        (140,406)
       Deferred income tax                                                                869,479          849,533
       Interest credited to universal life and investment products                      4,382,558        2,928,606
       Policy fees assessed on universal life and investment products                  (9,778,675)        (250,505)
       Change in accrued investment income and other receivables                           62,310       (3,556,811)
       Change in policy liabilities and other policyholder
          funds of traditional life and health products                                 5,406,468         (800,200)
       Change in other liabilities                                                      1,024,483          567,779
       Other (net)                                                                         13,013           14,012
                                                                                       ----------        ---------
    Net cash provided by operating activities                                           5,056,251        4,011,209
                                                                                       ----------        ---------

CASH FLOWS FROM INVESTING ACTIVITIES
    Maturities and principal reductions of investments
       Investments available for sale                                                 101,329,695       96,448,241
       Other                                                                              111,127        1,994,242
    Sale of investments

       Investments available for sale                                                                   14,009,410
    Cost of investments acquired
       Investments available for sale                                                (114,069,882)    (116,763,891)
                                                                                     ------------     ------------
    Net cash used in investing activities                                             (12,629,060)      (4,311,998)
                                                                                     ------------     -------------

CASH FLOWS FROM FINANCING ACTIVITIES

    Investment product deposits and change in universal life deposits                  19,756,393       12,990,963
    Investment product withdrawals                                                    (12,698,715)     (11,694,009)
                                                                                       ----------      ------------
    Net cash provided by financing activities                                           7,057,678        1,296,954
                                                                                       ----------      ------------

INCREASE (DECREASE) IN CASH                                                              (515,131)         996,165
CASH AT BEGINNING OF PERIOD                                                             4,021,839                0
                                                                                       ----------       ----------
CASH AT END OF PERIOD                                                                   $3,506,708        $996,165
                                                                                      ===========       ==========



See notes to condensed financial statements`

## PROTECTIVE LIFE AND ANNUITY INSURANCE COMPANY

## NOTES TO CONDENSED FINANCIAL STATEMENTS

                                   (Unaudited)

## NOTE A - BASIS OF PRESENTATION

The
accompanying  unaudited  condensed  financial  statements of Protective Life and
Annuity  Insurance  Company ("the  Company")  have been prepared on the basis of
accounting  principles  generally  accepted  in the United  States  for  interim
financial  information and with the  instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the disclosures required
by generally accepted accounting  principles for complete financial  statements.
In the opinion of management,  all adjustments  (consisting of normal  recurring
accruals)  necessary  for a fair  presentation  have  been  included.  Operating
results for the three month  period ended March 31,  2000,  are not  necessarily
indicative of the results that may be expected for the year ending  December 31,
2000.  The  year-end  condensed  balance  sheet data was  derived  from  audited
financial  statements,   but  does  not  include  all  disclosures  required  by
accounting  principles  generally  accepted  in the United  States.  For further
information, refer to the financial statements and notes thereto included in the
Company's   annual  report  on  Form  10-K  for  the  year  ended  December  31,
1999.

All
outstanding  shares of the Company's  common stock are owned by Protective  Life
Insurance  Company  ("Protective"),   which  is  a  wholly-owned  subsidiary  of
Protective Life  Corporation  ("PLC").  All outstanding  shares of the Company's
preferred stock are owned by PLC.

## NOTE B - COMMITMENTS AND CONTINGENT LIABILITIES

Under
insurance guaranty fund laws, in most states, insurance companies doing business
therein can be assessed up to prescribed limits for policyholder losses incurred
by insolvent  companies.  The Company does not believe such  assessments will be
materially  different  from  amounts  already  provided  for  in  the  financial
statements.  Most of these laws do provide,  however,  that an assessment may be
excused or deferred if it would threaten an insurer's own financial strength.

A number of
civil jury verdicts have been returned against insurers in the  jurisdictions in
which the Company does business involving the insurers' sales practices, alleged
agent  misconduct,  failure to properly  supervise  agents,  and other  matters.
Increasingly these lawsuits have resulted in the award of substantial  judgments
against the insurer that are  disproportionate to the actual damages,  including
material  amounts of punitive  damages.  In  addition,  in some class action and
other lawsuits involving insurers' sales practices,  insurers have made material
settlement payments. In some states (including Alabama), juries have substantial
discretion  in  awarding  punitive  damages  which  creates  the  potential  for
unpredictable  material adverse judgments in any given punitive damage suit. The
Company, like other insurers,  in the ordinary course of business,  are involved
in such litigation or alternatively in arbitration.  Although the outcome of any
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.

## NOTE C - OPERATING SEGMENTS

PLC,
through its  subsidiaries,  operates seven divisions  whose principal  strategic
focus can be grouped into three general  categories:  life insurance,  specialty
insurance products,  and retirement savings and investment products. The Company
is involved in the  businesses of four of PLC's seven  divisions.  The following
table sets forth  operating  segment  income and assets for the  periods  shown.
Adjustments  represent the inclusion of unallocated  realized  investment  gains
(losses)  and  the  recognition  of  income  tax  expense.  There  are no  asset
adjustments.

`Operating Segment Income for the
                                                                   Three Months Ended March 31, 2000
                                                    ----------------------------------------------------------------
                                                                                Dental and
                                                                                 Consumer              Financial
                                                    Acquisitions                 Benefits             Institutions
                                                    ------------                ----------            ------------
Premiums and policy fees                             $11,785,305                 $292,478              $ 677,657
Reinsurance ceded                                     (4,532,540)                (146,238)
                                                     ------------                --------                -------
  Net of reinsurance ceded                             7,252,765                  146,240                677,657
Net investment income                                  7,005,884                    1,616                141,512
Realized investment gains (losses)
Other income
                                                     -----------                 --------              ---------
     Total revenues                                   14,258,649                  147,856                819,169
                                                     -----------                 --------              ---------
Benefits and settlement expenses                       7,010,523                   79,306                720,279
Amortization of deferred policy
 acquisition costs                                     1,411,832                                         163,019
Other operating expenses                               2,826,773                   (1,980)                19,950
                                                     -----------                ---------             ----------
     Total benefits and expenses                      11,249,128                   77,326                903,248
                                                     -----------                 --------              ---------
Income (loss) before income tax                        3,009,521                   70,530                (84,079)


                                                                     Corporate
                                                    Investment         and
                                                     Products         Other           Adjustments        Total
                                                   -----------     -----------        -----------        -----

Premiums and policy fees                            $  20,866                                          $12,776,306
Reinsurance ceded                                                                                       (4,678,778)
                                                      -------                                           ----------
  Net of reinsurance ceded                             20,866                                            8,097,528
Net investment income                                 243,888        $(26,537)                           7,366,363
Realized investment gains (losses)
Other income                                            3,708                                                3,708
                                                      -------        --------                           ----------
     Total revenues                                   268,462         (26,537)                          15,467,599
                                                      -------        --------                           ----------
Benefits and settlement expenses                      207,283                                            8,017,391
Amortization of deferred policy
 acquisition costs                                                                                       1,574,851
Other operating expenses                              376,289         134,095                            3,355,127
                                                      -------        --------                           ----------
     Total benefits and expenses                      583,572         134,095                           12,947,369
                                                      -------        --------                           ----------
Income (loss) before income tax                      (315,110)       (160,632)                           2,520,230

Income tax expense                                                                      869,479            869,479
                                                                                                        ----------
     Net income                                                                                         $1,650,751
                                                                                                        ==========`

`Operating Segment Income for the
                                                                    Three Months Ended March 31, 1999
                                                    --------------------------------------------------------------
                                                                               Dental and
                                                                                Consumer               Financial
                                                    Acquisitions                Benefits              Institutions
                                                    ------------                ---------             ------------
Premiums and policy fees                            $15,658,767                  $605,037              $349,482
Reinsurance ceded                                    (5,336,719)                 (176,518)
                                                     ----------                  --------               -------
  Net of reinsurance ceded                           10,322,048                   428,519               349,482
Net investment income                                 6,657,571                   120,269                59,342
Realized investment gains (losses)
Other Income                                             (8,718)
                                                     ----------                  --------              --------
     Total revenues                                  16,970,901                   548,788               408,824
                                                     ----------                  --------              --------
Benefits and settlement expenses                      9,850,644                   436,081               153,913
Amortization of deferred policy
 acquisition costs                                    2,138,361                                          87,369
Other operating expenses                              2,182,085                     8,554               (57,899)
                                                     ----------                  --------              --------
     Total benefits and expenses                     14,171,090                   444,635               183,383
                                                     ----------                  --------              --------
Income before income tax                              2,799,811                   104,153               225,441


                                                                     Corporate
                                                    Investment         and
                                                     Products         Other            Adjustments        Total
                                                   -----------     -----------         -----------        -----

Premiums and policy fees                           $   1,822                                           $16,615,108
Reinsurance ceded                                                                                       (5,513,237)
                                                       -----                                            ----------
  Net of reinsurance ceded                             1,822                                            11,101,871
Net investment income                                                  $98,445                           6,935,627
Realized investment gains (losses)                                                      $ 11,044            11,044
Other Income                                             (18)                                               (8,736)
                                                       -----            ------           -------        ----------
     Total revenues                                    1,804            98,445            11,044        18,039,806
                                                      ------            ------           -------        ----------
Benefits and settlement expenses                      25,949                                            10,466,587
Amortization of deferred policy
 acquisition costs                                                                                       2,225,730
Other operating expenses                             155,571            25,130                           2,313,441
                                                     -------           -------                          ----------
     Total benefits and expenses                     181,520            25,130                          15,005,758
                                                     -------           -------           -------        ----------
Income (loss) before income tax                     (179,716)           73,315            11,044         3,034,048

Income tax expense                                                                       849,533           849,533
                                                                                                        ----------
     Net income                                                                                        $ 2,184,515
                                                                                                        ==========`

`Operating Segment Assets
                                                                         March 31, 2000

                                                                              Dental and
                                                                               Consumer                Financial
                                                    Acquisitions               Benefits               Institutions
                                                    ------------               ---------              ------------
Investments and other assets                        $432,750,859              $3,728,824               $11,741,402
Deferred policy acquisition costs                    132,736,033                                         1,530,128
                                                    ------------              ----------              ------------
     Total assets                                   $565,486,892              $3,728,824               $13,271,530
                                                    ============              ==========               ===========


                                                                               Corporate
                                                     Investment                   and
                                                      Products                   Other                   Total
                                                    ------------              -----------             ------------
Investments and other assets                        $15,418,535               $31,842,941             $495,482,561
Deferred policy acquisition costs                                                                      134,266,161
                                                    -----------               -----------             ------------
     Total assets                                   $15,418,535               $31,842,941             $629,748,722
                                                    ===========               ===========             ============



                                                                        Operating Segment Assets
                                                                          December 31, 1999

                                                                              Dental and
                                                                               Consumer                 Financial
                                                   Acquisitions                Benefits                Institutions
                                                   ------------               ----------               -----------
Investments and other assets                       $424,265,907               $3,871,844               $11,815,617
Deferred policy acquisition costs                   126,247,865                                          1,544,160
                                                   ------------               ----------               -----------
     Total assets                                  $550,513,772               $3,871,844               $13,359,777
                                                   ============               ==========               ===========


                                                                               Corporate
                                                    Investment                    and
                                                     Products                    Other                    Total
                                                    ----------                -----------             ------------
Investments and other assets                        $9,812,824                $31,939,612             $481,705,804
Deferred policy acquisition costs                                                                      127,792,025
                                                    ----------                -----------             ------------
     Total assets                                   $9,812,824                $31,939,612             $609,497,829
                                                    ==========                ===========             ============`

## NOTE D - STATUTORY REPORTING PRACTICES

Financial
statements prepared in conformity with generally accepted accounting  principles
(i.e.,  GAAP) differ in some respects from the  statutory  accounting  practices
prescribed or permitted by insurance regulatory authorities.  At March 31, 2000,
and for the three months then ended,  the Company had  share-owners'  equity and
net income  prepared in conformity with statutory  reporting  practices of $34.5
million and $3.2 million, respectively.

## NOTE E - INVESTMENTS

As
prescribed  by  Statement of Financial  Accounting  Standards  ("SFAS") No. 115,
certain  investments  are recorded at their market values with the resulting net
unrealized  gains and losses reduced by a related  adjustment to deferred policy
acquisition  costs, net of income tax,  recorded as a component of share-owners'
equity.  The market values of fixed maturities  increase or decrease as interest
rates fall or rise. Therefore, although the application of SFAS No. 115 does not
affect  the  Company's  operations,   its  reported  share-owners'  equity  will
fluctuate significantly as interest rates change.

The
Company's  balance  sheets at March 31, 2000 and December 31, 1999,  prepared on
the basis of  reporting  investments  at  amortized  cost  rather than at market
values, are as follows:

`MARCH 31, 2000              DECEMBER 31, 1999
                                  --------------              -----------------

Total investments                 $464,018,864                  $451,389,804
Deferred policy acquisition costs  126,366,161                   127,792,025
All other assets                    49,556,042                    47,769,637
                                   -----------                   -----------
                                  $639,941,067                  $626,951,466
                                   ===========                   ===========

Deferred income taxes             $  7,087,775                  $  6,218,296
All other liabilities              504,559,552                   494,090,181
                                   -----------                   -----------
                                   511,647,327                   500,308,477
Share-owners' equity               128,293,740                   126,642,989
                                   -----------                   -----------
                                  $639,941,067                  $626,951,466
                                   ===========                   ===========`

## NOTE F - COMPREHENSIVE INCOME (LOSS)

The
following  table sets forth the  Company's  comprehensive  income (loss) for the
three months ended March 31, 2000 and 1999:

`Three Months Ended
                                                             March 31
                                                       ------------------


                                                        2000          1999
                                                        ----          ----


   Net income                                       $1,650,751     $2,184,515
   Increase (decrease) in net unrealized gains
     on investments (net of income tax:
     2000 - $2,541,452; 1999 - $(2,336,724))         4,719,840    (4,339,630)
   Reclassification adjustment for amounts
     included in net income (net of income tax:
     1999 - $(3,865))                                                  (7,179)
                                                     ---------     ----------
   Comprehensive income (loss)                      $6,370,591    $(2,162,294)
                                                     =========     ==========`

## NOTE G - RECLASSIFICATIONS

Certain
reclassifications have been made in the previously reported financial statements
and accompanying notes to make the prior year amounts comparable to those of the
current year. Such  reclassifications  had no effect on previously  reported net
income, total assets, or share-owners' equity.

Protective
Life and Annuity  Insurance  Company  ("the  Company"),  a stock life  insurance
company,  was  founded  in 1978.  Since  1983,  all  outstanding  shares  of the
Company's  common stock have been owned by  Protective  Life  Insurance  Company
("Protective"),   which  is  a  wholly-  owned  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
48 states, including New York.

In
accordance with General Instruction  H(2)(a), the Company includes the following
analysis with the reduced disclosure format.

PLC through
its   subsidiaries   provides   financial   services   through  the  production,
distribution,  and  administration  of insurance and  investment  products.  PLC
through its  subsidiaries  operates seven 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 Individual  Life, West Coast, and Acquisitions
Divisions.  The specialty  insurance  products  category includes the Dental and
Consumer  Benefits  ("Dental")  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 March 31, 2000,  the Company was involved in the  businesses of
four of PLC's seven divisions:  the Acquisition  Division,  the Dental 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.

Protective
has entered into an intercompany guaranty agreement,  enforceable by the Company
or its successors,  whereby  Protective has guaranteed the Company's  payment of
claims made by the holders of Company  policies  according  to the terms of such
policies.  The guarantee  will remain in force until the earlier of (a) when the
Company  achieves a  claims-paying  rating  equal to or better  than  Protective
without the benefit of any intercompany  guaranty agreement or (b) 90 days after
the guaranty agreement is revoked by written instrument; provided, however, even
after any revocation or termination by such notice,  the guarantee  shall remain
effective  as  to  policies   issued   during  the  existence  of  the  guaranty
agreement.

This report
includes  "forward-looking  statements"  which  express  expectations  of future
events and/or results. The words "believe",  "expect",  "anticipate" and similar
expressions  identify  forward-looking  statements  which  are  based on  future
expectations  rather  than on  historical  facts and are  subject to a number of
risks  and  uncertainties,  and the  Company  cannot  give  assurance  that such
statements will prove to be correct.  Please refer to Exhibit 99 herein for more
information about factors which could affect future results.

## Revenues

The
following  table sets forth  revenues  by source for the period  shown,  and the
percentage change from the prior period:

`THREE MONTHS            PERCENTAGE
                                               ENDED                 INCREASE
                                              MARCH 31              (DECREASE)
                                    --------------------------      ----------
                                        2000          1999
                                        ----          ----

         Premiums and policy fees    $8,097,528   $11,101,871       (27.1)%
         Net investment income        7,366,363     6,935,627         6.2
         Realized investment gains       --            11,044          --
         Other                            3,708        (8,736)         --
                                    -----------   -----------
                                    $15,467,599   $18,039,806
                                    ===========   ===========`

Premiums
and policy fees, net of reinsurance  ("premiums and policy fees") decreased $3.0
million or 27.1% in the first three  months of 2000 over the first three  months
of 1999. Premiums and policy fees from the Acquisitions  Division decreased $3.1
million  primarily due to the expected  lapsing of policies  associated with the
nature of the division.  Premiums and policy fees related to the Dental Division
decreased $0.3 million in the first three months of 2000 as compared to the same
period  in 1999,  primarily  due to the  termination  of a group  life  customer
effective December 31, 1999. The Financial Institutions  Division's premiums and
policy fees  increased  $0.3  million in the first three months of 2000 over the
first  three  months  of 1999  due to  increased  marketing  efforts  and  sales
momentum.

Net
investment  income in the first three months of 2000  increased  $0.4 million or
6.2% as compared to the corresponding period of the preceding year primarily due
to  increases  in the average  amount of  invested  assets.

The Company
generally  purchases  its  investments  with the intent to hold to  maturity  by
purchasing  investments that match future cash-flow needs.  However, the Company
may sell any of its investments to maintain  approximate  matching of assets and
liabilities.  Accordingly,  the Company has classified its fixed  maturities and
certain other  securities as "available for sale." The sales of investments that
have occurred generally result from portfolio  management  decisions to maintain
proper matching of assets and liabilities.

The Company
reported an insignificant  amount of realized  investment gains and other income
(loss) in the first three months of 2000 and 1999.

## Income Before Income Tax

The
following  table sets forth  operating  income or loss and income or loss before
income tax by business segment for the periods shown:

`OPERATING INCOME (LOSS) AND INCOME (LOSS) BEFORE INCOME TAX
                           THREE MONTHS ENDED MARCH 31

                                            2000                    1999
                                            ----                    ----
Operating Income (Loss)1
      Acquisitions                       $3,009,521              $2,799,811
      Dental and Consumer Benefits           70,530                 104,153
      Financial Institutions                (84,079)                225,441
      Investment Products                  (315,110)               (179,716)
      Corporate and Other                  (160,632)                 73,315
                                          ---------               ---------
              Total operating income      2,520,230               3,023,004
                                          ---------               ---------

Realized Investment Gains
      Unallocated Investment Gains                                  11,044
                                                                  --------
              Total net                                             11,044
                                                                  --------
Income (Loss) Before Income Tax

      Acquisitions                       3,009,521               2,799,811
      Dental and Consumer Benefits          70,530                 104,153
      Financial Institutions               (84,079)                225,441
      Investment Products                 (315,110)               (179,716)
      Corporate and Other                 (160,632)                 84,359
                                         ---------               ---------
              Total income before tax   $2,520,230              $3,034,048
                                         =========               =========


1   Income (loss) before tax excluding realized investment gains and losses.`

Pretax
operating  income from the  Acquisitions  Division was $3.0 million in the first
three  months of 2000 as  compared  to $2.8  million in the same period of 1999.
Earnings from the  Acquisitions  Division are expected to decline over time (due
to the lapsing of policies  resulting from deaths of insureds or terminations of
coverage)  unless new acquisitions are made. The increase is primarily due to an
increase  in   investment   income  on   invested   assets   allocated   to  the
division.

Dental
Division pretax earnings were $0.1 million in the first three months of 2000 and
$0.1 million in the first three months of 1999.

The
Financial Institutions Division's pretax operating loss was $0.1 million for the
first three months of 2000 as compared to $0.2 million income in the first three
months of 1999. The decrease was primarily due to higher than expected mortality
in the division.

The
Investment  Products  Division began marketing  certain annuity  products in the
state  of New  York in the  latter  part of  1998.  The  Division  had a  pretax
operating  loss of $0.3 million in the first three months of 2000 as compared to
a pretax operating loss of $0.2 million in 1999,  primarily  related to start-up
expenses.

The
Corporate  and Other  segment  consists of net  investment  income and  realized
investment  gains not identified  with the preceding  operating  divisions.  The
pretax  operating  loss from this  segment was $0.2 million in the first three
months of 2000 compared to pretax  operating income of $0.1 million in the first
three months of 1999.

## Income Taxes

The
following   table  sets  forth  the   effective   tax  rates  for  the   periods
shown:

`THREE MONTHS
        ENDED                                    ESTIMATED EFFECTIVE
       MARCH 31                                    INCOME TAX RATES
     ------------                                --------------------

         1999                                          28.0  %
         2000                                          34.5`

The
effective  income  tax  rate for the  full  year of 1999  was 28%.  Management's
estimate of the effective income tax rate for 2000 is 34.5%.

## Net Income

The
following table sets forth net income for the periods shown,  and the percentage
change from the prior period:

`NET INCOME
                                  -----------------------------------
        THREE MONTHS                                      PERCENTAGE
           ENDED                                            INCREASE
          MARCH 31                TOTAL                    (DECREASE)
        ------------              -----                    ----------
            1999               $2,184,515                     112.5   %
            2000                1,650,751                     (24.4)`

Compared to
the same period in 1999,  net income in the first three months of 2000 decreased
$0.5 million, reflecting an increase related to the Acquisitions Division, which
was offset by  decreases  in the  Dental,  Financial  Institutions,  Investment
Products  Divisions and the Corporate and Other  segment,  and by an increase in
the Companys effective tax rate.

There have been
no material change from the disclosure in the Companys 1999 Annual Report
on Form 10-K for the year ended December 31, 1999.

`Item 6.                       Exhibits and Reports on Form 8-K

         (a)        Exhibit 27 - Financial data schedule
                    Exhibit 99 - Safe Harbor for Forward-Looking Statements`

Pursuant
to the  requirements of the Securities  Exchange Act of 1934, the registrant has
caused this report to be signed on its behalf by the undersigned  thereunto duly
authorized.

`Protective Life and Annuity Insurance Company

Date:     May 15, 2000            /s/ Jerry W. DeFoor
                                  -------------------
                                  Jerry W. DeFoor
                                  Vice President and Controller,
                                  and Chief Accounting Officer
                                  (Duly authorized officer)`