**Exhibit 99(a)                                                                  to                                                               Form 10-Q                                                                  of                                             Protective Life and Annuity Insurance Company                                                          for the nine months                                                       ended September 30, 2002                                              Safe Harbor for Forward-Looking Statements**

        ThePrivate Securities Litigation Reform Act of 1995 (the “Act”)encourages companies to make “forward-looking statements” by creatinga safe harbor to protect the companies from securities law liability inconnection with forward-looking statements. All statements based on futureexpectations rather than on historical facts are forward-looking statements.Protective Life and Annuity Insurance Company (“the Company”) intendsto qualify both its written and oral forward-looking statements for protectionunder the Act. 

        Toqualify oral forward-looking statements for protection under the Act, a readilyavailable written document must identify important factors that could causeactual results to differ materially from those in the forward-lookingstatements. The Company provides the following information to qualifyforward-looking statements for the safe harbor protection of the Act. 

        TheCompany is a stock life insurance company founded in 1978. All outstandingshares of the Company’s common stock are owned by Protective Life InsuranceCompany (Protective), which is the principal operating subsidiary of ProtectiveLife Corporation (PLC), an insurance holding company whose common stock istraded on the New York Stock Exchange under the symbol “PL”. Alloutstanding shares of the Company’s preferred stock are owned by PLC. TheCompany is authorized to transact insurance business, as an insurance company ora reinsurance company, in 49 states, including New York. 

        PLC,through its subsidiaries, operates several segments whose principal strategicfocuses can be grouped into three general categories: life insurance, retirementsavings and investment products, and specialty insurance products. The lifeinsurance category includes the Acquisitions, and Life Marketing segments. Thespecialty insurance products category includes Asset Protection segment. Theretirement savings and investment products category includes the Stable ValueContracts and Annuity segments. 

        TheCompany, since it is licensed in the State of New York, is the entity throughwhich PLC markets, distributes, and services insurance and annuity products inNew York. As of September 30, 2002, the Company was involved in the operationsof four of PLC’s segments: the Acquisitions segment, the Life Marketingsegment, the Asset Protection segment, and the Annuity segment. The Company hasan additional business segment which is described herein as Corporate and Other. 

        Theoperating results of companies in the insurance industry have historically beensubject to significant fluctuations. The factors which could affect theCompany’s future results include, but are not limited to, general economicconditions, and the known trends and uncertainties which are discussed morefully below. 

        Thereare many types of risks that all companies are exposed to in their businesses.For example, companies are exposed to the risks of natural disasters, maliciousand terrorist acts, computer viruses, and other perils. While the Company hasobtained insurance, implemented risk management and contingency plans, and takenpreventive measures and other precautions, no assurance can be given that thereare not scenarios that could have an adverse effect on the Company.Additionally, there are scenarios that could have an adverse effect on generaleconomic conditions and mortality and morbidity. 

        Lifeand health insurance is a mature industry. In recent years, the industry hasexperienced little growth in life insurance sales, though the aging populationhas increased the demand for retirement savings products. Life and healthinsurance is a highly competitive industry. The Company encounters significantcompetition in all lines of business from other insurance companies, many ofwhich have greater financial resources than the Company, as well as competitionfrom other providers of financial services. Competition could result in, amongother things, lower sales or higher lapses of existing products. 

        Theinsurance industry is consolidating, with larger, potentially more efficientorganizations emerging from consolidation. Participants in certain of theCompany’s independent distribution channels are also consolidating intolarger organizations. Some mutual insurance companies are converting to stockownership, 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. 

        TheCompany’s ability to compete is dependent upon, among other things, itsability to attract and retain distribution channels to market its insurance andinvestment products, its ability to develop competitive and profitable products,its ability to maintain low unit costs, and its maintenance of strong ratingsfrom rating agencies. However, competition from other insurers could adverselyaffect the Company’s competitive position. 

        Ratingorganizations periodically review the financial performance and condition ofinsurers, including the Company and its insurance affiliates. A downgrade in theratings of the Company or its insurance affiliates could adversely affect theCompany’s ability to sell its products, retain existing business, andcompete for attractive acquisition opportunities. 

        Ratingorganizations assign ratings based upon several factors. While most of thefactors relate to the rated company, some of the factors relate to the views ofthe rating organization, general economic conditions, and circumstances outsidethe rated company’s control. The Company cannot predict what actions therating organizations may take, or what actions the Company may be required totake in response to the actions of the rating organizations, which couldadversely affect the Company. 

        TheCompany’s results may fluctuate from period to period due to fluctuationsin policy claims received by the Company. Certain of the Company’sbusinesses may experience higher claims if the economy is growing slowly or inrecession, or equity markets decline. 

        Mortalityand morbidity expectations incorporate assumptions about many factors, includingfor example, how a product is distributed, persistency and lapses, and futureprogress in the fields of health and medicine. Actual mortality and morbiditycould differ from our expectations if actual results differ from thoseassumptions. 

        Inthe conduct of its business, the Company makes certain assumptions regarding themortality, persistency, claims, expenses and interest rates, or other factorsappropriate to the type of business, it expects to experience in future periods,which are also used to estimate the amounts of deferred policy acquisitioncosts, policy liabilities and accruals, and various other components of theCompany’s balance sheet. The Company’s actual experience, as well aschanges in estimates, are used to prepare the Company’s statements ofincome. 

        Thecalculations the Company uses to estimate various components of its balancesheet and statements of income are necessarily complex and involve analyzing andinterpreting large quantities of data. The Company currently employs varioustechniques for such calculations and it from time to time will develop andimplement more sophisticated administrative systems and procedures capable offacilitating the calculation of more precise estimates. 

        Assumptionsand estimates involve judgement, and by their nature are imprecise and subjectto changes and revision over time. Accordingly, the Company’s results maybe affected, positively or negatively, from time to time, by actual resultsdiffering from assumptions, by changes in estimates, and by changes resultingfrom implementing more sophisticated administrative systems and procedures thatfacilitate the calculation of more precise estimates. 

        Thetiming of premium payments to, and receipt of expense allowances from,reinsurers may differ from the Company’s receipt of customer premiumpayments and payment of expenses. These timing differences introduce variabilityinto certain components of the Company’s statements of income, and may alsointroduce variability into the Company’s quarterly results. 

        Manyof the products offered by the Company and its insurance affiliates allowpolicyholders and contract holders to withdraw their funds under definedcircumstances. The subsidiaries manage their liabilities and configure theirinvestment portfolios so as to provide and maintain sufficient liquidity tosupport anticipated withdrawal demands and contract benefits and maturities.While the Company and its insurance affiliates own a significant amount ofliquid assets, a certain portion of their assets are relatively illiquid.Unanticipated withdrawal or surrender activity could, under some circumstances,compel the Company or its insurance affiliates to dispose of assets onunfavorable terms, which could have an adverse effect on the Company. 

        Significantchanges in interest rates expose insurance companies to the risk of not earninganticipated spreads between the interest rate earned on investments and thecredited interest rates paid on outstanding policies and contracts. Both risingand declining interest rates can negatively affect the Company’s spreadincome. While the Company develops and maintains asset/liability managementprograms and procedures designed to preserve spread income in rising or fallinginterest rate environments, no assurance can be given that changes in interestrates will not affect such spreads. 

        Fromtime to time, the Company has participated in securities repurchase transactionsthat have contributed to the Company’s investment income. Such transactionsinvolve some degree of risk, and no assurance can be given that suchtransactions will contribute to the Company’s investment income in thefuture. 

        Changesin interest rates may also impact our business in other ways. Lower interestrates may result in lower sales of certain of the Company’s insurance andinvestment products. In addition, certain of the Company’s insurance andinvestment products guarantee a minimum credited interest rate and the Companycould become unable to earn its spread income should interest rates decreasesignificantly. 

        Higherinterest rates may create a less favorable environment for the origination ofmortgage loans and decrease the investment income we receive in the form ofprepayment fees, make-whole payments, and mortgage participation income. Higherinterest rates may also increase the cost of debt and other obligations havingfloating rate or rate reset provisions, and may result in lower sales ofvariable products. 

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

        Ingeneral terms, the Company’s results are improved when the yield curve ispositively sloped (i.e., when long-term interest rates are higher thanshort-term interest rates), and will be adversely affected by a flat ornegatively sloped curve. 

        Theamount of policy fees received from variable products is affected by theperformance of the equity markets, increasing or decreasing as markets rise orfall. Equity market volatility can also affect the profitability of variableproducts in other ways. 

        Theamortization of deferred policy acquisitions costs relating to variable productsand the estimated cost of providing guaranteed minimum death benefitsincorporate various assumptions about the overall performance of equity marketsover certain time periods. The rate of amortization of deferred policyacquisition costs and the estimated cost of providing guaranteed minimum deathbenefits could increase if equity market performance is worse than assumed. 

        TheCompany and its insurance affiliates are subject to government regulation ineach of the states in which they conduct business. Such regulation is vested instate agencies having broad administrative power dealing with many aspects ofthe insurance business, which may include premium rates, marketing practices,advertising, policy forms, and capital adequacy, and is concerned primarily withthe protection of policyholders rather than share owners. From time to time,regulators raise issues during examinations or audits of the Company and itsinsurance affiliates that could, if determined adversely, have a material impacton the Company, and the Company cannot predict whether or when regulatoryactions may be taken that could adversely affect the Company or its operations. 

        TheCompany and its insurance affiliates may be subject to regulation by the UnitedStates Department of Labor when providing a variety of products and services toemployee benefit plans governed by the Employment Retirement Income Security Act(ERISA). Severe penalties are imposed for breach of duties under ERISA. 

        Certainpolicies, contracts, and annuities offered by the Company and its insuranceaffiliates are subject to regulation under the federal securities lawsadministered by the Securities and Exchange Commission. The federal securitieslaws contain regulatory restrictions and criminal, administrative, and privateremedial provisions. 

        Underthe Internal Revenue Code of 1986, as amended, income tax payable bypolicyholders on investment earnings is deferred during the accumulation periodof certain life insurance and annuity products. This favorable tax treatment maygive certain of the Company’s products a competitive advantage over othernon-insurance products. To the extent that the Internal Revenue Code is revisedto reduce the tax-deferred status of life insurance and annuity products, or toincrease the tax-deferred status of competing products, all life insurancecompanies, including the Company and its insurance affiliates, would beadversely affected with respect to their ability to sell such products, and,depending upon grandfathering provisions, the surrenders of existing annuitycontracts and life insurance policies. In addition, life insurance products areoften used to fund estate tax obligations. Legislation has been enacted thatwould over time, reduce and eventually eliminate the estate tax. If the estatetax is significantly reduced or eliminated, the demand for certain lifeinsurance products could be adversely affected. Additionally, the Company issubject to the Federal corporation income tax. The Company cannot predictchanges to tax law or interpretations of existing tax law that could adverselyaffect the Company. 

        Anumber of civil jury verdicts have been returned against insurers,broker-dealers, and other providers of financial services involving salespractices, alleged agent misconduct, failure to properly superviserepresentatives, relationships with agents or other persons with whom theinsurer does business and other matters. Increasingly these lawsuits haveresulted in the award of substantial judgments that are disproportionate to theactual damages, including material amounts of punitive and non-economiccompensatory damages. In some states, juries, judges, and arbitrators havesubstantial discretion in awarding punitive and non-economic compensatorydamages, which creates the potential for unpredictable material adversejudgments or awards in any given lawsuit or arbitration. Arbitration awards aresubject to very limited appellate review. In addition, in some class action andother lawsuits, companies have made material settlement payments. The Company,like other financial services companies, in the ordinary course of business isinvolved in such litigation or, alternatively, arbitration. The Company cannotpredict the outcome of any such litigation or arbitration. 

        TheCompany’s ability to maintain low unit costs is dependent upon the level ofsales and persistency. A decrease in sales or persistency without acorresponding reduction in expenses may result in higher unit costs. 

        Additionally,a decrease in persistency may result in higher or more rapid amortization of deferred policyacquisition costs and lower reported earnings. Although many of the Company’s products containsurrender charges, the charges decrease over time and may not be sufficient tocover the unamortized deferred policy acquisition costs with respect to theinsurance policy or annuity contract being surrendered. Some of the Company's productsdo not contain surrender charge features and such products can be surrendered orexchanged without penalty. A decrease inpersistency may also result in higher claims. 

        TheCompany’s invested assets and derivative financial instruments are subjectto customary risks of credit defaults and changes in market values. The value ofthe Company’s commercial mortgage loan portfolio depends in part on thefinancial condition of the tenants occupying the properties which the Companyhas financed. Factors that may affect the overall default rate on, and marketvalue 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 affectingthe businesses of individual borrowers and tenants. 

        TheCompany’s acquisitions have increased its earnings in part by allowing theCompany to enter new markets and to position itself to realize certain operatingefficiencies. There can be no assurance, however, that the Company will realizethe anticipated financial results from its acquisitions, or that suitableacquisitions, presenting opportunities for continued growth and operatingefficiencies, or capital to fund acquisitions will continue to be available tothe Company. 

        TheCompany’s results may be affected by the performance of others because theCompany has entered into various arrangements involving other parties. Forexample, most of the Company’s products are sold through independentdistribution channels and variable annuity deposits are invested in fundsmanaged by third parties. Additionally, the Company’s operations aredependent on various technologies some of which are provided and/or maintainedby other parties. 

        Certainof these other parties may act on behalf of the Company or represent the Companyin various capacities. Consequently, the Company may be held responsible forobligations that arise from the acts or omissions of these other parties. 

        Aswith all financial services companies, our ability to conduct business isdependent upon consumer confidence in the industry and its products. Actions ofcompetitors, and financial difficulties of other companies in the industry,could undermine consumer confidence and adversely affect the Company. 

        TheCompany and its insurance affiliates cede material amounts of insurance andtransfer related assets to other insurance companies through reinsurance. TheCompany may enter into third party reinsurance arrangements under which theCompany will rely on the third party to collect premiums, pay claims, and/orperform customer service functions. However, the Company remains liable withrespect to ceded insurance should any reinsurer fail to meet the obligationsassumed by it. 

        Thecost of reinsurance is, in some cases, reflected in the premium rates charged bythe Company. Under certain reinsurance agreements, the reinsurer may increasethe rate it charges the Company for the reinsurance, though the Company does notanticipate increases to occur. Therefore, if the cost of reinsurance were toincrease or if reinsurance were to become unavailable, or if a reinsurer shouldfail to meet its obligations, the Company could be adversely affected. 

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

        **Forward-lookingstatements express expectations of future events and/or results. Allforward-looking statements are inherently uncertain as they are based on variousexpectations and assumptions concerning future events and they are subject tonumerous known and unknown risks and uncertainties which could cause actualevents or results to differ materially from those projected. Due to theseinherent uncertainties, investors are urged not to place undue reliance onforward-looking statements. In addition, the Company undertakes no obligation toupdate or revise forward-looking statements to reflect changed assumptions, theoccurrence of unanticipated events, or changes to projections over time.**