**Exhibit 99**
**to**
**Form 10-Q**
**of**
**Protective Life and Annuity Insurance Company**
**for the six months**
**ended June 30, 2000**
**Safe Harbor for Forward-Looking Statements**

        The Private Securities Litigation Reform Act of 1995 (the “Act”) encourages companiesto make “forward-looking statements” by creating a safe harbor to protect the companies fromsecurities law liability in connection with forward-looking statements.  Forward-looking statementscan be identified by use of words such as “expect,” “estimate,” “project,” “budget,” “forecast,”“anticipated,” “plan,” and similar expressions.  Protective Life and Annuity Insurance Company(“the Company”) intends to qualify both its written and oral forward-looking statements forprotection under the Act.
        To qualify oral forward-looking statements for protection under the Act, a readily availablewritten document must identify important factors that could cause actual results to differ materiallyfrom those in the forward-looking statements.  The Company provides the following informationto 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 sharesof 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 insuranceholding company whose common stock is traded on the New York Stock Exchange under thesymbol "PL".  All outstanding shares of Company’s preferred stock are owned by PLC.  TheCompany is authorized to transact insurance business, as an insurance company or reinsurancecompany, in 49 states, including New York, as well as the District of Columbia.
        Protective Life Corporation (“PLC”), through its subsidiaries, operates seven divisionswhose principal strategic focuses can be grouped into three general categories:  life insurance,specialty insurance products, and retirement savings and investment products.  The life insurancecategory includes the Acquisitions, Individual Life, and West Coast Divisions.  The specialtyinsurance products category includes the Dental and Consumer Benefits (“Dental”) and FinancialInstitutions Divisions.  The retirement savings and investment products category includes theStable Value Products and Investment Products Divisions.
        The Company, since it is licensed in the State of New York, is the entity through whichPLC markets, distributes, and services insurance and annuity products in New York.  As of June30, 2000, the Company was involved in the operations of four of PLC's Divisions: theAcquisitions Division, the Dental Division, the Financial Institutions Division, and the InvestmentProducts Division.  The Company has an additional business segment which is described hereinas Corporate and Other.
        The operating results of companies in the life and health insurance industry havehistorically been subject to significant fluctuations due to changing competition, economicconditions, interest rates, investment  performance, insurance ratings, and other factors.  Certainknown trends and  uncertainties which may affect future results of the Company are discussedmore fully below.
***We operate in a mature, highly competitive industry, which could limit our ability to gain ormaintain our position in the industry.***
        Life and health insurance is a mature industry.  In recent years, the industry hasexperienced little growth in life insurance sales, though the aging population has increased thedemand for retirement savings products.  Life and health insurance is a highly competitive industryand the Company encounters significant competition in all lines of business from other insurancecompanies, many of which have greater financial resources than the Company, as well ascompetition from other providers of financial services. Competition could result in, amongst other things, lowersales or higher lapses of existing products.
        The life and health insurance industry is consolidating, with larger, potentially moreefficient organizations emerging from consolidation.  Also, some mutual insurance companies areconverting 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 toattract and retain distribution channels to market its insurance and investment products, its abilityto develop competitive and profitable products, its ability to maintain low unit costs, and itsmaintenance of strong ratings from rating agencies.  Irrational competition from other insurerscould adversely affect the Company's competitive position.
***A ratings downgrade could adversely affect our ability to compete.***
        Ratings are an important factor in the Company's competitive position. Ratingorganizations periodically review the financial performance and condition of insurers, includingthe Company and its insurance affiliates.  A downgrade in the ratings of the Company and its lifeinsurance affiliates could adversely affect its ability to sell its products, retain existing business,and compete for attractive acquisition opportunities.
        Rating organizations assign ratings based upon several factors.  While most of the factorsrelate to the rated company, some of the factors relate to general economic conditions andcircumstances outside the rated company's control.  For the past several years rating downgradesin the industry have exceeded upgrades.
***Our policy claims fluctuate from year to year.***
        The Company's results may fluctuate from year to year due to fluctuations in policy claimsreceived by the Company.
***We could be forced to sell investments at a loss to cover policyholder withdrawals.***
        Many of the products offered by the Company and its life insurance affiliates allowpolicyholders and contract holders to withdraw their funds under defined circumstances.  TheCompany and its insurance affiliates manage their liabilities and configure their investmentportfolios so as to provide and maintain sufficient liquidity to support anticipated withdrawaldemands and contract benefits and maturities.  While the Company and its life insurance affiliatesown a significant amount of liquid assets, a certain portion of their assets are relatively illiquid.Unanticipated withdrawal or surrender activity could, under some circumstances, compel theCompany and its insurance affiliates to dispose of assets on unfavorable terms, which could havean adverse effect on the Company.
***Interest-rate fluctuations could negatively affect our spread income or otherwise impactour business.***
        Significant changes in interest rates expose insurance companies to the risk of not earninganticipated spreads between the interest rate earned on investments and the credited interest ratespaid on outstanding policies. Both rising and declining interest rates can negatively affect theCompany's spread income.  While the Company develops and maintains asset/liabilitymanagement programs and procedures designed to preserve spread income in rising or fallinginterest rate environments, no assurance can be given that changes in interest rates will not affectsuch spreads.
        Changes in interest rates may also impactour business in other ways. Lower interest rates may result in lower sales of the Company's insurance and investmentproducts.  In addition, certain of the Company's insurance and investment products guarantee aminimum credited interest rate.
        Higher interest rates may create a less favorableenvironment for the origination of mortgage loans and decrease the investment income we receive in the form ofprepayment fees, make-whole payments and mortgage participation income.
***Insurance companies are highly regulated.***
        The Company and its insurance affiliates are subject to government regulation in each ofthe states in which they conduct business.  Such regulation is vested in state agencies having broadadministrative power dealing with many aspects of the insurance business, which may includepremium rates, marketing practices, advertising, policy forms, and capital adequacy, and isconcerned primarily with the protection of policyholders rather than share owners.  The Companycannot predict what regulatory initiatives may be enacted which could adversely affect theCompany.
        Certain policies, contracts, and annuities offered by the Company and its insuranceaffiliates are subject to regulation under the federal securities laws administered by the Securitiesand Exchange Commission.  The federal securities laws contain regulatory restrictions andcriminal, administrative, and private remedial provisions.
***A tax law change could adversely affect our ability to compete with non-insurance products.***
        Under the Internal Revenue Code of 1986, as amended, income tax payable bypolicyholders on investment earnings is deferred during the accumulation period of certain lifeinsurance and annuity products.  This favorable tax treatment may give certain of the Company'sproducts a competitive advantage over other non-insurance products.  To the extent that theInternal Revenue Code is revised to reduce the tax-deferred status of life insurance and annuityproducts, or to increase the tax-deferred status of competing products, all life insurancecompanies, including the Company and its affiliates, would be adversely affected with respect totheir ability to sell such products, and, depending on grandfathering provisions, the surrenders ofexisting annuity contracts and life insurance policies.  In addition, life insurance products are oftenused to fund  estate tax obligations.  If the estate tax was eliminated, the demand for certain lifeinsurance products would be adversely affected.  The Company cannot predict what future taxinitiatives may be proposed which could affect the Company.
***Financial Services companies are frequently the targets of litigation, including class actionlitigation, which could result in substantial judgements.***
        A number of civil jury verdicts have been returned against insurers in the jurisdictions inwhich the Company does business involving the insurers' sales practices, alleged agentmisconduct, failure to properly supervise agents, and other matters.  Increasingly these lawsuitshave resulted in the award of substantial judgments against the insurer that are disproportionateto the actual damages, including material amounts of punitive damages. In some states, includingAlabama (where the Company maintains its headquarters), juries have substantial discretion inawarding punitive and non-economic compensatory damages, which creates the potential forunpredictable material adverse judgments in any given lawsuit. In addition, in some class actionand other lawsuits involving insurers' sales practices, insurers have made material settlementpayments. The Company, like other financial services companies, in the ordinary course ofbusiness, is involved in such litigation or, alternatively, in arbitration.  The outcome of any suchlitigation or arbitration cannot be predicted.
***Our investments are subject to risks.***
        Certain of the Company's invested assets (including derivative financial instruments) aresubject to customary risks of defaults and changes in market values.  The value of the Company'scommercial mortgage portfolio depends in part on the financial condition of the tenants occupyingthe properties which the Company has financed.  Factors that may affect the overall default rateon, and market value of, the Company's invested assets include interest rate levels, financialmarket performance, and general economic conditions, as well as particular circumstancesaffecting the businesses of individual borrowers and tenants.
***Our growth from acquisitions involves risks.***
        The Company's acquisitions have increased its earnings in part by allowing the Companyto enter new markets and to position itself to realize certain operating efficiencies associated witheconomies of scale.  There can be no assurance, however, that the Company will realize theanticipated financial results from its acquisitions, or that suitable acquisitions, presentingopportunities for continued growth and operating efficiencies, or capital to fund acquisition willcontinue to be available to the Company.
***We are dependent on the performance of others.***
        The Company's results may be affected by the performance of others because the Companyhas entered into various ventures involving other parties. Examples include, but are not limitedto: many of the Company's products are sold through independent distribution channels; theInvestment Products Division's variable annuity deposits are invested in funds managed by thirdparties; dental services are performed by a contracted panel of independent dentists; and a portionof the sales in the Financial Institutions Division comes from arrangements with unrelatedmarketing organizations.
        As with all financial services companies, our ability to conduct business is dependent uponconsumer confidence in the industry and its products.  Actions of competitors and financialdifficulties of other companies in the industry, could undermine consumer confidence andadversely affect the Company.
***Our reinsurance program involves risks.***
        The Company and its insurance affiliates cede insurance to other insurance companiesthrough reinsurance.  However, the Company remains liable with respect to ceded insuranceshould any reinsurer fail to meet the obligations assumed by it.  The cost of reinsurance is, insome cases, reflected in the premium rates charged by the Company.  Under certain reinsuranceagreements, 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 reinsurancewere to increase or if reinsurance were to become unavailable, the Company could be adverselyaffected.
        Additionally, the Company assumes policies of other insurers. Any regulatory or otheradverse development affecting the ceding insurer could also have an adverse effect on theCompany.        Forward-looking statements express expectations of future events and/or results.  Allforward-looking statements are inherently uncertain as they are based on various expectationsand assumptions concerning future events and they are subject to numerous known andunknown risks and uncertainties which could cause actual events or results to differmaterially from those projected.  Due to these inherent uncertainties, investors are urged notto place undue reliance on forward-looking statements.  In addition, the Company undertakesno obligation to update or revise forward-looking statements to reflect changed assumptions,the occurrence of unanticipated events, or changes to projections over time.