<PAGE> PAGE 1
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000 C000000 0000110230
000 D000000 N
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000 F000000 Y
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001 A000000 PROVIDENT NAT ASSURANCE CO SEPARATE ACCT B
001 B000000 811-1525-3
001 C000000 4237558913
002 A000000 1 FOUNTAIN SQUARE
002 B000000 CHATTANOOGA
002 C000000 TN
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011 A000001 PROVIDENT NATIONAL ASSURANCE COMPANY
011 B000001 8-13496
011 C010001 CHATTANOOGA
011 C020001 TN
011 C030001 37402
013 A000001 ERNST & YOUNG, LLP
013 B010001 CHATTANOOGA
013 B020001 TN
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<PAGE> PAGE 2
015 A000001 THE CHASE MANHATTAN BANK
015 B000001 C
015 C010001 BROOKLYN
015 C020001 NY
015 C030001 11245
015 E010001 X
018 000000 Y
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<PAGE> PAGE 3
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<PAGE> PAGE 4
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<PAGE> PAGE 5
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<PAGE> PAGE 6
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<PAGE> PAGE 7
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<PAGE> PAGE 8
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<PAGE> PAGE 9
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SIGNATURE LINDA DAUGHETEE
TITLE LEGAL ASSISTANT
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 9,922,590
<INVESTMENTS-AT-VALUE> 13,925,939
<RECEIVABLES> 23,887
<ASSETS-OTHER> 902
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 13,950,728
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 33,615
<TOTAL-LIABILITIES> 33,615
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 1,538,926
<SHARES-COMMON-PRIOR> 1,767,394
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 4,003,349
<NET-ASSETS> 13,917,113
<DIVIDEND-INCOME> 193,196
<INTEREST-INCOME> 8,347
<OTHER-INCOME> 0
<EXPENSES-NET> 161,368
<NET-INVESTMENT-INCOME> 40,175
<REALIZED-GAINS-CURRENT> 1,477,966
<APPREC-INCREASE-CURRENT> 1,194,258
<NET-CHANGE-FROM-OPS> 2,672,224
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4,870
<NUMBER-OF-SHARES-REDEEMED> 258,868
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 765,282
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 67,237
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 161,368
<AVERAGE-NET-ASSETS> 13,491,612
<PER-SHARE-NAV-BEGIN> 6.91
<PER-SHARE-NII> .02
<PER-SHARE-GAIN-APPREC> 1.51
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.44
<EXPENSE-RATIO> 1.20
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
EXHIBIT 99.77B
Board of Directors and Contract Owners
Provident National Assurance Company
Separate Account B
In planning and performing our audit of the financial statements of Provident
National Assurance Company Separate Account B for the year ended December 31,
1996, we considered its internal control structure, including procedures for
safeguarding securities, in order to determine our auditing procedures for the
purpose of expressing our opinion on the financial statements and to comply
with the requirements of Form N-SAR, not to provide assurance on the internal
control structure.
The management of Provident National Assurance Company Separate Account B is
responsible for establishing and maintaining an internal control structure. In
fulfilling this responsibility, estimates and judgments by management are
required to assess the expected benefits and related costs of internal control
structure policies and procedures. Two of the objectives of an internal
control structure are to provide management with reasonable, but not absolute,
assurance that assets are safeguarded against loss from unauthorized use or
disposition and that transactions are executed in accordance with management's
authorization and recorded properly to permit preparation of financial
statements in conformity with generally accepted accounting principles.
Because of inherent limitations in any internal control structure, errors or
irregularities may occur and not be detected. Also, projection of any
evaluation of the structure to future periods is subject to the risk that it
may become inadequate because of changes in conditions or that the
effectiveness of the design and operation may deteriorate.
Our consideration of the internal control structure would not necessarily
disclose all matters in the internal control structure that might be material
weaknesses under standards established by the American Institute of Certified
Public Accountants. A material weakness is a condition in which the design or
operation of the specific internal control structure elements does not reduce
to a relatively low level the risk that errors or irregularities in amounts
that would be material in relation to the financial statements being audited
may occur and not be detected within a timely period by employees in the normal
course of performing their assigned functions. However, we noted no matters
involving the internal control structure, including procedures for safeguarding
securities, that we consider to be material weaknesses as defined above as of
December 31, 1996.
This report is intended solely for the information and use of management and
the Securities and Exchange Commission.
ERNST & YOUNG LLP
Chattanooga, Tennessee
January 17, 1997
