Exhibit 99 to Form 10-Q of Protective Life and
Annuity Insurance Company for the three months ended March 31, 2004 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. Forward-looking statements can be identified by use of words
such as expect, estimate, project, budget,
forecast, anticipated, plan, may, and
similar expressions. 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 reinsurance company, in 49 states, including New York.

Protective
Life Corporation (PLC), through its subsidiaries, operates several business segments. 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, 2004, the Company was involved in the operations of four of PLCs segments: the
Life Marketing segment, the Annuities segment, the Acquisitions segment, and the Asset
Protection segment. 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 the known trends and
uncertainties which are discussed more fully below.

The Company is exposed to
the risks of natural disasters, malicious and terrorist acts that could adversely affect
the Companys operations.

While
the Company has obtained insurance, implemented risk management and contingency plans, and
taken preventive measures and other precautions, no predictions of specific scenarios can
be made nor can assurance be given that there are not scenarios that could have an adverse
effect on the Company. A natural disaster or an outbreak of an easily communicable disease
could adversely affect the mortality or morbidity experience of the Company or its
reinsurers.

The Company operates in a
mature, highly competitive industry, which could limit its ability to gain or maintain its position in the industry.

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. Participants in certain of the Companys independent
distribution channels are also consolidating into larger organizations. 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 ability of banks
to increase their securities-related business or to affiliate with insurance companies may
materially and adversely affect sales of all of the Companys products by
substantially increasing the number and financial strength of potential competitors.

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.

A ratings downgrade could
adversely affect the Companys ability to compete.

Rating
organizations periodically review the financial performance and condition of insurers,
including the Companys subsidiaries. In recent years, downgrades of insurance
companies have occurred with increasing frequency. A downgrade in the rating of the
Companys subsidiaries could adversely affect the Companys ability to sell its
products, retain existing business, and compete for attractive acquisition opportunities.
Specifically, a ratings downgrade would materially harm the Companys ability to sell
certain products, including guaranteed investment products and funding agreements.

Rating
organizations assign ratings based upon several factors. While most of the factors relate
to the rated company, some of the factors relate to the views of the rating organization,
general economic conditions and circumstances outside the rated companys control. In
addition, rating organizations use various models and formulas to assess the strength of a
rated company, and from time to time rating organizations have, in their discretion,
altered the models. Changes to the models could impact the rating organizations
judgment of the rating to be assigned to the rated company. 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 policy
claims fluctuate from period to period, and actual results could differ from its
expectations.

The
Companys results may fluctuate from period to period 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, or equity markets decline.

Mortality,
morbidity, and casualty 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, morbidity, and casualty claims could
differ from expectations if actual results differ from those assumptions.

The Companys
results may be negatively affected should actual experience differ from managements
assumptions and estimates.

In
the conduct of business, the Company makes certain assumptions regarding the mortality,
persistency, expenses and interest rates, or other factors appropriate to the type of
business it expects to experience in future periods. These assumptions are also used to
estimate the amounts of deferred policy acquisition costs, policy liabilities and
accruals, future earnings, and various components of the Companys balance sheet. The
Companys actual experience, as well as changes in estimates, are used to prepare the
Companys statements of income.

The
calculations the Company uses to estimate various components of its balance sheet and
statements of income are necessarily complex and involve analyzing and interpreting large
quantities of data. The Company currently employs various techniques for such calculations
and it from time to time will develop and implement more sophisticated administrative
systems and procedures capable of facilitating the calculation of more precise estimates.

Assumptions
and estimates involve judgment, and by their nature are imprecise and subject to changes
and revision over time. Accordingly, the Companys results may be affected,
positively or negatively, from time to time, by actual results differing from assumptions,
by changes in estimates, and by changes resulting from implementing more sophisticated
administrative systems and procedures that facilitate the calculation of more precise
estimates.

The use of reinsurance
introduces variability in the Companys statements of income.

The
timing of premium payments to, and receipt of expense allowances from, reinsurers may
differ from the Companys receipt of customer premium payments and incurrence of
expenses. These timing differences introduce variability in certain components of the
Companys statements of income, and may also introduce variability in the
Companys quarterly results.

The Company could be
forced to sell investments at a loss to cover policyholder withdrawals.

Many
of the products offered by the Company and its insurance subsidiaries allow policyholders
and contract holders to withdraw their funds under defined circumstances. The Company and
its insurance subsidiaries 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 subsidiaries own a significant amount of liquid assets, a certain portion of
their assets are relatively illiquid. If the Company or its subsidiaries experience
unanticipated withdrawal or surrender activity, the Company or its subsidiaries could
exhaust their liquid assets and be forced to liquidate other assets, perhaps on
unfavorable terms. If the Company or its subsidiaries are forced to dispose of assets on
unfavorable terms, it could have an adverse effect on the Companys financial
condition.

Interest-rate
fluctuations could negatively affect the Companys spread income or otherwise impact
its business.

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 and contracts. 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.

From
time to time, the Company has participated in securities repurchase transactions that have
contributed to the Companys investment income. Such transactions involve some degree
of risk that the counterparty may fail to perform its obligations to pay amounts owed and
the collateral has insufficient value to satisfy the obligation. No assurance can be given
that such transactions will continue to be entered into and contribute to the
Companys investment income in the future.

Changes
in interest rates may also impact its 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, and the Company could become unable to earn its spread
income should interest rates decrease significantly.

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.

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) and 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.

In
general terms, the Companys results are improved when the yield curve is positively
sloped (i.e., when long-term interest rates are higher than short-term interest rates),
and will be adversely affected by a flat or negatively sloped curve.

Equity market volatility
could negatively impact the Companys business.

The
amount of policy fees received from variable products is affected by the performance of
the equity markets, increasing or decreasing as markets rise or fall. Equity market
volatility can also affect the profitability of variable products in other ways.

The
amortization of deferred policy acquisition costs relating to variable products and the
estimated cost of providing guaranteed minimum death benefits incorporate various
assumptions about the overall performance of equity markets over certain time periods. The
rate of amortization of deferred policy acquisition costs and the estimated cost of
providing guaranteed minimum death benefits could increase if equity market performance is
worse than assumed.

A deficiency in the
Companys systems could result in over or underpayments of amounts owed to or by the
Company and/or errors in the Companys critical assumptions or reported financial
results.

The
business of insurance necessarily involves the collection and dissemination of large
amounts of data using systems operated by the Company. Examples of data collected and
analyzed include policy information, policy rates, expenses, mortality and morbidity
experience. To the extent that data input errors, systems errors, or systems failures are
not identified and corrected by the Companys internal controls, the information
generated by the systems and used by the Company and/or supplied to business partners,
policyholders, and others may be incorrect and may result in an overpayment or
underpayment of amounts owed to or by the Company and/or the Company using incorrect
assumptions in its business decisions or financial reporting.

In
the third quarter of 2002, the Company discovered that the rates payable on certain life
insurance policies were incorrectly entered into its reinsurance administrative system in
1991. As a result, the Company overpaid to several reinsurance companies the reinsurance
premiums related to such policies of approximately $94.5 million over a period of 10 years
beginning in 1992. The Company has received payment from substantially all of the affected
reinsurance companies.

Insurance companies are
highly regulated and subject to numerous legal restrictions and regulations.

The
Company and its subsidiaries 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 Companys business, which may
include premium rates, marketing practices, advertising, privacy, policy forms, and
capital adequacy, and is concerned primarily with the protection of policyholders and
other customers rather than share owners. At any given time, a number of financial and/or
market conduct examinations of the Companys subsidiaries is ongoing. The Company is
required to obtain state regulatory approval for rate increases for certain health
insurance products, and the Companys profits may be adversely affected if the
requested rate increases are not approved in full by regulators in a timely fashion. From
time to time, regulators raise issues during examinations or audits of the Companys
subsidiaries that could, if determined adversely, have a material impact on the Company.
The Company cannot predict whether or when regulatory actions may be taken that could
adversely affect the Company or its operations. In addition, the interpretations of
regulations by regulators may change and statutes may be enacted with retroactive impact,
particularly in areas such as health insurance.

The
Company and its insurance subsidiaries 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 subsidiaries 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.

Other
types of regulation that could affect the Company and its subsidiaries include insurance
company investment laws and regulations, state statutory accounting practices, state
anti-trust laws, minimum solvency requirements, state securities laws, federal privacy
laws, federal money laundering and anti-terrorism laws, and because the Company owns and
operates real property state, federal, and local environmental laws. The Company cannot
predict what form any future changes in these or other areas of regulation affecting the
insurance industry might take or what effect, if any, such proposals might have on the
Company if enacted into law.

Changes to tax law or
interpretations of existing tax law could adversely affect the Company and its ability to
compete with non-insurance products or reduce the demand for certain insurance
products.

Under
the Internal Revenue Code of 1986, as amended (the Code), 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 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 subsidiaries, would be adversely
affected with respect to their ability to sell such products, and, depending upon
grandfathering provisions, would be affected by the surrenders of existing annuity
contracts and life insurance policies. For example, changes in laws or regulations could
restrict or eliminate the advantages of certain corporate or bank-owned life insurance
products. Recent changes in tax law, which have reduced the federal income tax rates on
corporate dividends in certain circumstances, could make the tax advantages of investing
in certain life insurance or annuity products less attractive. Additionally, changes in
tax law based on proposals to establish new tax advantaged retirement and life savings
plans, if enacted, could reduce the tax advantage of investing in certain life insurance
or annuity products. In addition, life insurance products are often used to fund estate
tax obligations. Legislation has been enacted that would, over time, reduce and eventually
eliminate the estate tax. If the estate tax is significantly reduced or eliminated, the
demand for certain life insurance products could be adversely affected. Additionally, the
Company is subject to the federal corporation income tax. The Company cannot predict what
changes to tax law or interpretations of existing tax law could adversely affect the
Company.

Financial services
companies are frequently the targets of litigation, including class action litigation,
which could result in substantial judgments.

A
number of civil jury verdicts have been returned against insurers, broker-dealers, 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 or awards in any given lawsuit or arbitration. Arbitration
awards are subject to very limited appellate review. In addition, in some class action and
other lawsuits, companies have made material settlement payments.

Group
health coverage issued through associations has received some negative coverage in the
media as well as increased regulatory consideration and review. The Company has a small
closed block of group health insurance coverage that was issued to members of an
association; a lawsuit is currently pending against the Company in connection with this
business.

The
Company, like other financial services companies, in the ordinary course of business is
involved in such litigation and arbitration. Although the Company cannot predict the
outcome of any such litigation or arbitration, the Company does not believe that any such
outcome will have a material impact on the financial condition or results of operations of
the Company.

The Companys
ability to maintain low unit costs is dependent upon the level of new sales and
persistency of existing business.

The
Companys ability to maintain low unit costs is dependent upon the level of new sales
and persistency (continuation or renewal) of existing business. 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 or more rapid amortization of deferred
policy acquisition costs and thus higher unit costs, and lower reported earnings. 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. Some of the
Companys products do not contain surrender charge features and such products can be
surrendered or exchanged without penalty. A decrease in persistency may also result in
higher claims.

The Companys
investments are subject to market and credit risks.

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 may not
realize its anticipated financial results from its acquisitions strategy.

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 suitable acquisitions, presenting opportunities for
continued growth and operating efficiencies, or capital to fund acquisitions will continue
to be available to the Company, or that the Company will realize the anticipated financial
results from its acquisitions.

Additionally,
in connection with its acquisitions, the Company assumes or otherwise becomes responsible
for the obligations of policies and other liabilities of other insurers. Any regulatory,
legal, financial, or other adverse development affecting the other insurer could also have
an adverse effect on the Company.

The Company is dependent
on the performance of others.

The
Companys results may be affected by the performance of others because the Company
has entered into various arrangements involving other parties. For example, most of the
Companys products are sold through independent distribution channels, and variable
annuity deposits are invested in funds managed by third parties. Additionally, the
Companys operations are dependent on various technologies, some of which are
provided and/or maintained by other parties.

Certain
of these other parties may act on behalf of the Company or represent the Company in
various capacities. Consequently, the Company may be held responsible for obligations that
arise from the acts or omissions of these other parties.

As
with all financial services companies, its 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 retention of existing business and future sales of the Companys
insurance and investment products.

The Companys
reinsurers could fail to meet assumed obligations, increase rates or be subject to
adverse developments that could affect the Company.

The
Company and its insurance subsidiaries cede material amounts of insurance and transfer
related assets to other insurance companies through reinsurance. The Company may enter
into third-party reinsurance arrangements under which the Company will rely on the third
party to collect premiums, pay claims, and/or perform customer service functions. However,
notwithstanding the transfer of related assets or other issues, the Company remains liable
with respect to ceded insurance should any reinsurer fail to meet the obligations assumed
by it.

The
Companys ability to compete is dependent on the availability of reinsurance. Premium
rates charged by the Company are based, in part, on the assumption that reinsurance will
be available at a certain cost. 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 with respect to existing reinsurance contracts. Therefore,
if the cost of reinsurance were to increase or if reinsurance were to become unavailable,
or if a reinsurer should fail to meet its obligations, the Company could be adversely
affected.

Recently,
certain commentators on the insurance industry have speculated that reinsurance might
become more costly or less available in the future, which could have a negative effect on
the Companys ability to compete. In recent years, the number of life reinsurers has
decreased as the reinsurance industry has consolidated. The decreased number of
participants in the life reinsurance market results in increased concentration risk for
insurers, including the Company. In addition, some reinsurers have indicated an
unwillingness to continue to reinsure new sales of long-term guarantee products. If the
reinsurance markets for these products further contracts, the Companys ability to
continue to offer such products would be adversely impacted.

Computer viruses or
network security breaches could affect the data processing systems of the Company or its
business partners.

A
computer virus could affect the data processing systems of the Company or its business
partners, destroying valuable data or making it difficult to conduct business. In
addition, despite our implementation of network security measures, our servers could be
subject to physical and electronic break-ins, and similar disruptions from unauthorized
tampering with our computer systems.

The Companys
ability to grow depends in large part upon the continued availability of capital.

The
Company has recently deployed significant amounts of capital to support its sales and
acquisitions efforts. Capital has also been consumed as the Company increased its reserves
on the residual value product. Although positive performance in the equity markets has
recently allowed the Company to decrease its GMDB related policy liabilities and accruals,
deterioration in these markets could lead to further capital consumption. Although the
Company believes it has sufficient capital to fund its immediate growth and capital needs,
the amount of capital available can vary significantly from period to period due to a
variety of circumstances, some of which are neither predictable nor foreseeable, nor
within the Companys control. A lack of sufficient capital could impair the
Companys ability to grow.

New accounting rules or
changes to existing accounting rules could negatively impact the Companys reported
financial results.

Like
all publicly traded companies, the Company is required to comply with accounting
principles generally accepted in the United States of America (GAAP). A number of
organizations are instrumental in the development of GAAP such as the Securities and
Exchange Commission (SEC), the Financial Accounting Standards Board (FASB), and the
American Institute of Certified Public Accountants (AICPA). GAAP is subject to constant
review by these organizations and others in an effort to address emerging issues and
otherwise improve financial reporting. In this regard, these organizations adopt new
accounting rules and issue interpretive accounting guidance on a continual basis. The
Company can give no assurance that future changes to GAAP will not have a negative impact
on the Companys reported financial results.

The Companys
ability to grow depends in large part upon the continued availability of capital.

The
Company has recently deployed significant amounts of capital to support its sales and
acquisitions efforts. Capital has also been consumed as the Company increased its reserves
on the residual value product. Although positive performance in the equity markets has
recently allowed the Company to decrease its GMDB related policy liabilities and accruals,
deterioration in these markets could lead to further capital consumption. Although the
Company believes it has sufficient capital to fund its immediate growth and capital needs,
the amount of capital available can vary significantly from period to period due to a
variety of circumstances, some of which are neither predictable nor foreseeable, nor
within the Companys control. A lack of sufficient capital could impair the
Companys ability to grow.

New accounting rules or
changes to existing accounting rules could negatively impact the Companys reported
financial results.

The Company is required to comply with accounting principles
generally accepted in the United States of America (GAAP). A number of organizations are
instrumental in the development of GAAP such as the Securities and Exchange Commission
(SEC), the Financial Accounting Standards Board (FASB), and the American Institute of
Certified Public Accountants (AICPA). GAAP is subject to constant review by these
organizations and others in an effort to address emerging issues and otherwise improve
financial reporting. In this regard, these organizations adopt new accounting rules and
issue interpretive accounting guidance on a continual basis. The Company can give no
assurance that future changes to GAAP will not have a negative impact on the
Companys reported financial results.

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.