PROTECTIVE LIFE CORP, 10-K, 1994-03-25

PROTECTIVE LIFE CORP
10-K, 1994-03-25
LIFE INSURANCE

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549

-----------------------

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 1993 COMMISSION FILE NUMBER 0-9924

[Logo]

PROTECTIVE LIFE CORPORATION
(Exact name of Registrant as specified in its charter)

2801 HIGHWAY 280 SOUTH
BIRMINGHAM, ALABAMA 35223
(Address of principal executive offices, including zip code)

DELAWARE 95-2492236
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)

Registrant's telephone number, including area code (205) 879-9230

Securities registered pursuant to Section 12(b) of the Act:

COMMON STOCK, $0.50 PAR VALUE
(Title of class)

JUNIOR PARTICIPATING CUMULATIVE PREFERRED STOCK, $1.00 PAR VALUE
(Title of class)

Name of each exchange
on which registered
NEW YORK STOCK EXCHANGE

Securities registered pursuant to Section 12(g) of the Act:

PREFERRED STOCK, $1.00 PAR VALUE
(Title of class)

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
--- ---

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in the definitive proxy statement or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. /X/

Aggregate market value of voting stock held by nonaffiliates of the Registrant
as of March 11, 1994: $470,959,808
Number of shares of Common Stock, $0.50 Par Value, outstanding as of March 11,
1994: 13,693,244

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant's 1993 Annual Report To Stockholders (the "1993
Annual Report To Stockholders") are incorporated by reference into Parts I, II,
and IV of this Report.

Portions of the Registrant's Proxy Statement dated March 25, 1994, are
incorporated by reference into Part III of this Report.

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<PAGE>

PROTECTIVE LIFE CORPORATION
ANNUAL REPORT ON FORM 10-K
FOR FISCAL YEAR ENDED DECEMBER 31, 1993

TABLE OF CONTENTS

PART I
PAGE

Item 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Item 2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . 19

Item 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . 19

Item 4. Submission of Matters to a Vote of Security Holders . . . . 19

PART II

Item 5. Market for the Registrant's Common Equity and
Related Stockholder Matters . . . . . . . . . . . . . . . . 20

Item 6. Selected Financial Data . . . . . . . . . . . . . . . . . . 21

Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . 22

Item 8. Financial Statements and Supplementary Data . . . . . . . . 22

Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure . . . . . . . . . . . . 24

PART III

Item 10. Directors and Executive Officers of the Registrant . . . . . 24

Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . 26

Item 12. Security Ownership of Certain Beneficial Owners and
Management . . . . . . . . . . . . . . . . . . . . . . . . . 26

Item 13. Certain Relationships and Related Transactions . . . . . . . 26

PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports
on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . 26

<PAGE>

PART I

ITEM 1. BUSINESS

Protective Life Corporation is an insurance holding company, whose
subsidiaries provide financial services through the production, distribution,
and administration of insurance and investment products. Founded in 1907,
Protective Life Insurance Company ("Protective Life") is the Company's principal
operating subsidiary. Unless the context otherwise requires, the "Company"
refers to the consolidated group of Protective Life Corporation and its
subsidiaries. The Company has five marketing divisions: Agency, Group,
Guaranteed Investment Contracts, Financial Institutions, and Investment
Products. The Company has two additional business segments: Acquisitions and
Corporate and Other.

The following table sets forth revenues, income before income tax, and
identifiable assets for the Company's business segments.

<PAGE>

1993 1992 1991 1990 1989
---- ---- ---- ---- ----
(dollars in thousands)
<S> <C> <C> <C> <C> <C>
TOTAL REVENUES:
Agency . . . . . . . . . . . . . . . $ 111,654 $ 90,690 $ 80,592 $ 73,113 $ 66,960
Group . . . . . . . . . . . . . . . 143,423 129,778 129,576 133,235 121,533
Financial Institutions . . . . . . . 97,511 64,376 36,041 39,341 29,818
Investment Products . . . . . . . . 80,115 55,768 35,742 16,008 7,451
Guaranteed Investment Contracts . . 167,233 138,616 104,803 35,739 259
Acquisitions . . . . . . . . . . . . 123,855 93,634 95,847 79,769 87,061
Corporate and Other . . . . . . . . 33,970 54,613 36,032 15,040 11,432
Unallocated Realized Investment
Gains(Losses) . . . . . . . . . . 1,876 (1,449) (2,685) (1,759) 209
----------- ---------- ---------- ---------- ----------
$ 759,637 $ 626,026 $ 515,948 $ 390,486 $ 324,723
----------- --------- ---------- ---------- ----------
----------- --------- ---------- ---------- ----------

Agency . . . . . . . . . . . . . . . 14.7% 14.5% 15.6% 18.7% 20.6%
Group . . . . . . . . . . . . . . . 18.9 20.7 25.1 34.1 37.4
Financial Institutions . . . . . . . 12.9 10.2 7.0 10.1 9.2
Investment Products . . . . . . . . 10.6 8.9 6.9 4.1 2.3
Guaranteed Investment Contracts . . 22.0 22.2 20.4 9.2 0.1
Acquisitions . . . . . . . . . . . . 16.3 15.0 18.5 20.4 26.8
Corporate and Other . . . . . . . . 4.4 8.7 7.0 3.8 3.5
Unallocated Realized Investment
Gains(Losses) . . . . . . . . . . 0.2 (0.2) (0.5) (0.4) 0.1
----------- ---------- ---------- ---------- ----------
100.0% 100.0% 100.0% 100.0% 100.0%
----------- ---------- ---------- ---------- ----------
----------- ---------- ---------- ---------- ----------

INCOME BEFORE INCOME TAX:

Agency . . . . . . . . . . . . . . . $ 20,064 $ 12,985 $ 12,087 $ 9,877 $ 3,703
Group . . . . . . . . . . . . . . . 10,394 7,731 8,146 6,193 6,059
Financial Institutions . . . . . . . 8,196 5,411 4,447 3,120 2,964
Investment Products . . . . . . . . 2,931 4,601 391 (1,351) (1,423)
Guaranteed Investment Contracts* . . 25,405 14,533 9,933 2,919 (289)
Acquisitions . . . . . . . . . . . . 29,845 20,031 23,494 17,659 17,736
Corporate and Other* . . . . . . . . (13,667) (3,896) (4,110) 3,624 3,327
Unallocated Realized Investment
Gains(Losses) . . . . . . . . . . 1,876 (1,449) (2,685) (1,759) 209
----------- ---------- ---------- ---------- ----------
$ 85,044 $ 59,947 $ 51,703 $ 40,282 $ 32,286
----------- ---------- ---------- ---------- ----------
----------- ---------- ---------- ---------- ----------

Agency . . . . . . . . . . . . . . . 23.6% 21.7% 23.4% 24.5% 11.5%
Group . . . . . . . . . . . . . . . 12.2 12.9 15.8 15.4 18.8
Financial Institutions . . . . . . . 9.6 9.0 8.6 7.8 9.2
Investment Products . . . . . . . . 3.5 7.7 0.8 (3.4) (4.4)
Guaranteed Investment Contracts . . 29.9 24.2 19.1 7.3 (0.9)
Acquisitions . . . . . . . . . . . . 35.1 33.4 45.4 43.8 54.9
Corporate and Other . . . . . . . . (16.1) (6.5) (7.9) 9.0 10.3
Unallocated Realized Investment
Gains(Losses) . . . . . . . . . . 2.2 (2.4) (5.2) (4.4) 0.6
----------- ---------- ---------- ---------- ----------
100.0% 100.0% 100.0% 100.0% 100.0%
----------- ---------- ---------- ---------- ----------
----------- ---------- ---------- ---------- ----------

IDENTIFIABLE ASSETS:

Agency . . . . . . . . . . . . . . . $ 642,325 $ 507,460 $ 412,019 $ 343,414 $ 301,910
Group . . . . . . . . . . . . . . . 208,968 161,744 149,218 140,180 136,963
Financial Institutions . . . . . . . 192,486 146,713 67,404 63,141 45,416
Investment Products . . . . . . . . 879,365 686,503 432,054 233,205 74,277
Guaranteed Investment Contracts . . 2,041,564 1,696,786 1,291,743 740,137 52,510
Acquisitions . . . . . . . . . . . . 1,145,357 599,022 576,549 610,867 461,501
Corporate and Other . . . . . . . . 205,940 208,439 191,303 200,253 159,703
----------- ---------- ---------- ---------- ----------
$5,316,005 $4,006,667 $3,120,290 $2,331,197 $1,232,280
----------- ---------- ---------- ---------- ----------
----------- ---------- ---------- ---------- ----------
Agency . . . . . . . . . . . . . . . 12.1% 12.7% 13.2% 14.7% 24.5%
Group . . . . . . . . . . . . . . . 3.9 4.0 4.8 6.0 11.1
Financial Institutions . . . . . . . 3.6 3.7 2.2 2.7 3.7
Investment Products . . . . . . . . 16.6 17.1 13.8 10.0 6.0
Guaranteed Investment Contracts . . 38.4 42.3 41.4 31.8 4.3
Acquisitions . . . . . . . . . . . . 21.5 15.0 18.5 26.2 37.5
Corporate and Other . . . . . . . . 3.9 5.2 6.1 8.6 12.9
----------- ---------- ---------- ---------- ----------
100.0% 100.0% 100.0% 100.0% 100.0%
----------- ---------- ---------- ---------- ----------
----------- ---------- ---------- ---------- ----------

<FN>

*Income before income tax for the Guaranteed Investment Contracts Division has not been reduced by pretax minority interest of
$1,631 in 1991 and $1,326 in 1990. Income before income tax for the Corporate and Other segment has not been reduced by pretax
minority interest of $19 in 1993 and $90 in 1992 and 1991.

</TABLE>

<PAGE>

The primary components of revenues are premiums and policy fees, net
investment income, and realized investment gains or losses. Premiums and policy
fees are attributable directly to each business segment. Net investment income
is allocated based on directly related assets required for transacting that
segment of business. Realized investment gains or losses and expenses are
allocated to the business segments in a manner that most appropriately reflects
the operations of that segment. Unallocated realized investment gains or losses
are deemed not to be associated with any specific business segment. Assets are
allocated based on policy liabilities and deferred policy acquisition costs
directly attributable to each segment.

AGENCY DIVISION

Since 1983, the Agency Division has utilized a distribution system based on
experienced independent personal producing general agents who are recruited by
regional sales managers. At December 31, 1993, there were 26 regional sales
managers located in Alabama, Arizona, Arkansas, California, Colorado, Florida,
Georgia, Illinois, Indiana, Iowa, Louisiana, Maine, Maryland, Michigan,
Minnesota, Missouri, New Jersey, North Carolina, Ohio, Oregon, Texas, and
Wisconsin. During 1993, the Division had approximately 12,847 independent
personal producing general agents, brokers, and other agents under contract of
whom approximately 517 received first year commissions in excess of $10,000 from
the Company. In 1993, the Division began distributing insurance products
through securities broker-dealers. The Division also distributes insurance
products through the payroll deduction market.

Current marketing efforts in the Agency Division are directed toward the
Company's various universal life products and products designed to compete in
the term marketplace. Universal life products combine traditional life
insurance protection with the ability to tailor a more flexible payment schedule
to the individual's needs, provide an accumulation of cash values on which
income taxes are deferred, and permit the Company to change interest rates
credited on policy cash values as often as monthly to reflect current market
rates. The Company currently emphasizes back-end loaded universal life policies
which reward the continuing policyholder and which should maintain the
persistency of its universal life business. The products designed to compete in
the term marketplace are term-like policies with guaranteed level premiums for
the first 15 years which provide a competitive net cost to the insured.

The Division's total revenues and income before income tax have increased
each year from 1989 through 1993 primarily due to a growing block of business
brought about by sales and improved persistency.

GROUP DIVISION

The Company markets its group insurance products primarily in the
southeastern and southwestern United States using the services of brokers who
specialize in group products. Sales offices in Alabama, Florida, Georgia,
Illinois, Missouri, North Carolina, Ohio, Oklahoma, Tennessee, and Texas are
maintained to serve these brokers.

The Group Division offers substantially all forms of group insurance
customary in the industry, making available complete packages of life and
accident and health insurance to employers. The life and accident and health
insurance packages include hospital and medical coverages as well as dental and
disability coverages. To address rising health care costs, the

<PAGE>

Division provides cost containment services such as utilization review and
catastrophic case management. Group policies are directed primarily at
employers and associations with between 25 and 1,000 employees.

Two new marketing initiatives will permit direct sales to employers (by
full-time Company employees) of cancer, dental, and other supplemental insurance
coverages. The Division hopes to have these initiatives fully operational in
1994.

Group accident and health insurance is generally considered to be cyclical.
Profits rise or fall as competitive forces allow or prevent rate increases to
keep pace with changes in group health medical costs. The Company is placing
marketing emphasis on other health insurance products which are not as subject
to medical cost inflation. These products include dental insurance policies and
hospital indemnity policies which are distributed nationally through the
Division's existing distribution system, as well as through joint marketing
arrangements with independent marketing organizations, and through reinsurance
contracts with other insurers. These products also include an individual cancer
insurance policy marketed through a nationwide network of agents. It is
anticipated that a significant part of the growth in the Company's health
insurance premium income in the next several years will be from products like
dental and individual cancer insurance which have not been as subject to medical
cost inflation as traditional group health products.

The Division's total revenues have increased each year from 1989 through
1993 primarily due to increased sales. Income before income tax has increased
each year except in 1992 which was lower than the preceding year due to less
favorable life and health claims experience.

FINANCIAL INSTITUTIONS DIVISION

The Financial Institutions Division specializes in marketing insurance
products through commercial banks, savings and loan associations, and mortgage
bankers. The Division markets an array of life and health products, the
majority of which are used to secure consumer and mortgage loans made by
financial institutions located primarily in the southeastern United States. The
Division also markets life and health products through the consumer finance
industry and through automobile dealerships. The Division markets through both
employee field representatives and brokers. The Division also offers certain
products through direct mail solicitation to customers of financial
institutions.

In July 1992, in a major expansion of the Division, the Company acquired
the credit insurance business of Durham Life Insurance Company ("Durham") which
more than doubled the reserves the Company then held for its existing credit
insurance activities. The acquisition provided significant market share in the
southeastern states not previously covered by the Company. The larger size of
the Division has allowed it to lower unit costs through economies of scale.

After increases in total revenues in 1989 and 1990, the Division
experienced a reduction in 1991 revenues that was largely recession-related,
reflecting the fact that the demand for credit life and credit health insurance
is related to the level of loan demand. Total revenues significantly increased
in 1992 and 1993 due to the Durham acquisition and increased sales. The

<PAGE>

Division's income before income tax has increased each year since 1989 due to
a related increase in loan demand.

INVESTMENT PRODUCTS DIVISION

The Investment Products Division manufactures, sells, and supports annuity
products. These products are sold through the Agency Division, financial
institutions, and broker-dealer distribution channels. This Division was formed
to respond to an increased consumer demand for savings vehicles.

In April 1990, the Company began sales of modified guaranteed annuity
products ("MGA products") which guarantee a compounded interest rate for a fixed
term. MGA products provide the Company a greater degree of protection from
changes in interest rates, because contract values are "market-value adjusted"
upon surrender prior to maturity.

During 1992, the Company acquired a marketing company that had previously
been under contract with the Company to distribute annuities. This acquisition
improved the Division's ability to distribute the Company's annuity products.

In late 1992, the Division ceased sales of single premium deferred
annuities in an effort to focus marketing efforts on products with less
disintermediation risk such as the MGA. Also, in 1993, the Division initiated
development of variable annuity products, for introduction in early 1994, to
broaden the Division's product line.

The Division also includes Protective Equity Services, Inc. ("PES"), a
securities broker-dealer subsidiary. Through PES, licensed members of the
Company's field force can sell stocks, bonds, mutual funds, and other financial
instruments that may be manufactured or issued by companies other than the
Company. The Company's MGA products are also sold through PES.

The Division's total revenues have increased each year since 1989 as
annuity account balances have increased. Income before income tax has improved
each year since 1989, except for 1993. In 1993, the Division's results reflect
an increase of $3.2 million of amortization of deferred policy acquisition
costs.

GUARANTEED INVESTMENT CONTRACTS DIVISION

In November 1989, the Company began selling guaranteed investment contracts
("GICs"). The Company's GICs are contracts, generally issued to a 401(k) or
other retirement savings plan, which guarantee a fixed return on deposits from
the plan for a specified period and often provide flexibility for withdrawals,
in keeping with the benefits provided by the plan. The Company also offers a
related product which is purchased primarily as a temporary investment vehicle
by the trustees of escrowed municipal bond proceeds. GICs are sold to customers
through a network of specialized GIC managers, consultants, and brokers.

The Company entered the GIC business in 1989 through a joint venture. The
joint venture arrangement was ended in 1991.

<PAGE>

Life insurer credit concerns and a demand shift to non-traditional GIC
alternatives have generally caused the GIC market to contract somewhat.
Management believes that, due to its credit position, Protective Life remains
well positioned in this market. The Company anticipates broadening its GIC
marketing capability by introducing new products in 1994. Management
believes that the introduction of these new products should enhance the
Company's ability to compete in the marketplace by broadening the Division's
product line.

The Division's total revenues and income before income tax have
significantly increased each year since 1989 as GIC account balances have
increased. The rate of growth in GIC account balances will most likely
significantly decrease as the number of maturing contracts increases.

The assets supporting the Company's GIC and annuity businesses are
generally susceptible to interest rate and asset/liability matching risks. See
"MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS - LIQUIDITY AND CAPITAL RESOURCES" in the Company's 1993 Annual
Report to Stockholders.

ACQUISITIONS DIVISION

The Company actively seeks to acquire blocks of insurance policies. These
acquisitions may be accomplished through acquisitions of companies or through
the assumption or reinsurance of policies. Reinsurance transactions may be made
from court-administered insolvent companies or from companies otherwise
divesting themselves of blocks of business. Most acquisitions do not include
the Company's acquisition of an active sales force, but some do. Blocks of
policies acquired through the Acquisitions Division are administered as "closed"
blocks; i.e., no new policies are being sold. Therefore, the amount of
insurance in force for a particular acquisition is expected to decline with time
due to lapses and deaths of the insureds. The experience of the Company has
been that acquired or reinsured business can be administered more efficiently by
the Company than by previous management or court administrators. In addition,
in some instances a supervising court may permit legal modification of the terms
of reinsured policies to increase the profitability of the reinsurance (and thus
encourage such transactions).

More than twenty separate transactions were made between 1970 and 1987.
From 1987 through 1989, the Company encountered more competition concerning
acquisitions; however, it did not change its strategy concerning the margins it
sought from acquisitions. Consequently, no material transactions were entered
into from 1987 to 1989.

The environment for acquisitions has become more favorable since 1989 and
management believes that this favorable environment likely will continue into
the immediate future. Insurance companies are facing heightened regulatory and
market pressure to increase statutory capital and thus may seek to increase
capital by selling blocks of policies. Insurance companies also appear to be
selling blocks of policies in conjunction with programs to narrow strategic
focus. In addition, smaller companies without strong ratings may face
difficulties in marketing and thus may seek to be acquired.

Several states have enacted statutes that allow policyholders to "opt out"
of an assumption reinsurance transaction; this environment appears to have
caused sellers to place more emphasis

<PAGE>

on the financial condition and acquisition experience of the purchaser which
management believes will favorably impact the Company's competitive position.
However, it appears that other companies are entering this market and therefore
the Company may face increased competition in future acquisitions.

Total revenues and income before income tax from the Acquisitions Division
are expected to decline with time unless new acquisitions are made. Therefore,
the Division's revenues and earnings may fluctuate from year-to-year depending
upon the level of acquisition activity. Revenues and earnings declined in 1990
and 1992, but increased in 1991 and 1993 due to new acquisitions.

In the fourth quarter of 1990, Protective Life reinsured two separate
blocks of insurance. In the first quarter of 1992, Employers National Life
Insurance Company, a small Texas insurance company, was purchased and merged
into Protective Life. In the third quarter of 1993, Protective Life acquired
Wisconsin National Life Insurance Company and coinsured a small block of
universal life policies.

CORPORATE AND OTHER

The Corporate and Other segment consists of several small insurance lines
of business, net investment income and expenses not attributable to the business
segments described above (including interest on substantially all debt), the
earnings of Southeast Health Plan, Inc. ("SEHP"), and the operations of several
small noninsurance subsidiaries. The earnings of this segment may fluctuate
from year to year.

In 1988, the Company acquired convertible preferred stock of SEHP, a
Birmingham-based health maintenance organization. In August 1991, the Company
converted the preferred stock into 80% of the common stock of SEHP. In August
1993, the Company sold its interest in SEHP.

In 1991, this segment's earnings were reduced from 1990 levels as a result
of interest on debt relating to a 1990 reinsurance transaction, a write-off of
certain computer equipment, and losses at SEHP.

In 1992, Corporate and Other earnings were slightly higher due to SEHP
having a $0.6 million profit compared to the loss in 1991, the SEHP increase
being largely offset by several factors of negative effect.

In 1993, the Company changed the method used to apportion net investment
income within the Company. This change resulted in increased income
attributable to the Agency, Investment Products, and Acquisitions Divisions of
$3.0 million, $2.0 million, and $2.6 million, respectively, while decreasing
income of the Corporate and Other segment.

INSURANCE IN FORCE

The Company's total consolidated life insurance in force at December 31,
1993 was $42.5 billion. The following table shows sales by face amount and
insurance in force for the Company's business segments.

<PAGE>

YEAR ENDED DECEMBER 31
------------------------------------------------------------
1993 1992 1991 1990 1989
----------- ----------- ----------- ----------- -----------
(dollars in thousands)
<S> <C> <C> <C> <C> <C>
New Business Written
Agency . . . . . . . . . . . . . $ 4,440,510 $ 4,877,038 $ 4,244,903 $ 3,581,071 $ 3,320,370
Group. . . . . . . . . . . . . . 252,345 328,258 390,141 852,893 595,053
Financial Institutions . . . . . 2,776,276 1,149,265 1,057,886 1,095,595 865,889
----------- ----------- ----------- ----------- -----------
Total. . . . . . . . . . . . . $ 7,469,131 $ 6,354,561 $ 5,692,930 $ 5,529,559 $ 4,781,312
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------

Business Acquired
Financial Institutions . . . . . $ 1,432,338
Acquisitions . . . . . . . . . . $ 4,378,812 1,302,330 $ 1,570,401
----------- ----------- ----------- ----------- -----------
Total. . . . . . . . . . . . . $ 4,378,812 $ 2,734,668 $ 0 $ 1,570,401 $ 0
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------

Insurance in Force at End of Year(1)
Agency . . . . . . . . . . . . . $22,975,577 $20,634,927 $16,655,923 $13,850,255 $11,889,328
Group. . . . . . . . . . . . . . 6,716,724 6,315,410 7,088,931 6,817,663 6,756,661
Financial Institutions . . . . . 4,306,179 3,690,610 2,446,815 2,319,150 2,220,733
Acquisitions . . . . . . . . . . 8,452,114 3,836,066 4,385,948 5,290,020 4,278,356
----------- ----------- ----------- ----------- -----------
Total. . . . . . . . . . . . . $42,450,594 $34,477,013 $30,577,617 $28,277,088 $25,145,078
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------

<FN>

(1) Reinsurance assumed has been included; reinsurance ceded (1993-$7,484,566; 1992-$6,982,127;
1991-$5,292,080; 1990-$3,597,097; 1989-$2,547,941) has not been deducted.

</TABLE>

The ratio of voluntary terminations of individual life insurance to mean
individual life insurance in force, which is determined by dividing the amount
of insurance terminated due to surrenders and lapses during the year by the mean
of the insurance in force at the beginning and end of the year, adjusted for the
timing of major acquisitions and assumptions was:

RATIO OF
YEAR ENDED VOLUNTARY
DECEMBER 31 TERMINATIONS
----------- ------------
<S> <C>
1989 . . . . . . . . . . 14.0%
1990 . . . . . . . . . . 11.6
1991 . . . . . . . . . . 8.9
1992 . . . . . . . . . . 9.0
1993 . . . . . . . . . . 8.7

</TABLE>

Net terminations reflect voluntary lapses and cash surrenders, some of
which may be due to the replacement of the Company's products with competitors'
products. Also, a higher percentage of voluntary lapses typically occurs in the
first 15 months of a policy, and accordingly, lapses will tend to increase or
decrease in proportion to the change in new insurance written during the
immediately preceding periods.

The amount of investment products in force is measured by account balances.
The following table shows guaranteed investment contract and annuity account
balances.

<PAGE>

GUARANTEED MODIFIED
YEAR ENDED INVESTMENT GUARANTEED FIXED
DECEMBER 31 CONTRACTS ANNUITIES ANNUITIES
----------- ---------- ---------- ---------
(dollars in thousands)
<S> <C> <C> <C>
1989 $ 45,578 $ 97,710
1990 726,866 $ 37,063 205,032
1991 1,264,603 115,477 324,662
1992 1,694,530 299,608 374,451
1993 2,015,075 468,689 537,053

</TABLE>

UNDERWRITING

The underwriting policies of the Company's insurance subsidiaries are
established by management. With respect to individual insurance, the
subsidiaries use information from the application and, in some cases, inspection
reports, attending physician statements, or medical examinations to determine
whether a policy should be issued as applied for, rated, or rejected. Medical
examinations of applicants are required for individual life insurance in excess
of certain prescribed amounts (which vary based on the type of insurance) and
for most ordinary insurance applied for by applicants over age 50. In the case
of "simplified issue" policies, which are issued primarily through the Financial
Institutions Division and the payroll deduction market, coverage is rejected if
the responses to certain health questions contained in the application indicate
adverse health of the applicant. For other than "simplified issue" policies,
medical examinations are requested of any applicant, regardless of age and
amount of requested coverage if an examination is deemed necessary to underwrite
the risk. Substandard risks may be referred to reinsurers for rating and in
some instances, full or partial reinsurance of the substandard risk.

The Company's insurance subsidiaries require blood samples to be drawn with
ordinary insurance applications for coverage at $100,000 (ages 16-50) or
$150,000 (age 51 and above). Blood samples are tested for a wide range of
chemical values and are screened for antibodies to the HIV virus. Applications
also contain questions permitted by law regarding the HIV virus which must be
answered by the proposed insureds.

Group insurance underwriting policies, which are administered by
experienced group underwriters, are similar to the underwriting policies of
other major group insurers. The underwriting policies are designed for single
employer groups. Initial premium rates are based on prior claim experience and
manual premium rates with relative weights depending on the size of the group
and the nature of the benefits.

INVESTMENTS

The Company's investment philosophy is to maintain a portfolio that is
matched with respect to yield, risk, and cash flow characteristics to its
liabilities. The types of assets in which the Company may invest are governed
by state laws which prescribe qualified investment assets. Within the
parameters of these laws, the Company invests its assets giving consideration to
such factors as liquidity needs, investment quality, investment return, matching
of assets and liabilities, and the composition of the investment portfolio by
asset type and credit exposure. Because liquidity is important, the Company
continually balances maturity against yield and quality considerations in
selecting new investments.

<PAGE>

The Company's asset/liability matching practices involve monitoring of
asset and liability durations for various product lines; cash flow testing under
various interest rate scenarios; and rebalancing of assets and liabilities with
respect to yield, risk, and cash flow characteristics.

In accordance with current generally accepted accounting principles, most
of the Company's fixed maturities, equity securities, and short-term investments
are valued at market. Mortgage loans, investment real estate, policy loans, and
other long-term investments are valued at amortized cost. The following table
shows the Company's investments at December 31, 1993, valued on the basis of
generally accepted accounting principles.

PERCENT OF TOTAL
ASSET VALUE INVESTMENTS
-------------------- ----------------
(dollars in thousands)
<S> <C> <C>
Fixed maturities:
Bonds:
Mortgage-backed securities $1,561,587 32.8%
United States Government
and government agencies
and authorities 92,190 1.9
States, municipalities, and
political subdivisions 15,155 0.3
Public utilities 343,623 7.2
Convertibles and bonds
with warrants attached 1,254 0.0
All other corporate bonds 850,616 17.9
Bank loan participations 151,278 3.2
Redeemable preferred stocks 35,589 0.7
---------- -----
Total fixed maturities 3,051,292 64.0
---------- -----

Equity securities:
Common stocks - industrial,
miscellaneous, and all other 36,253 0.8
Nonredeemable preferred stocks 4,343 0.1
---------- -----
Total equity securities 40,596 0.9
---------- -----

Mortgage loans on real estate 1,407,744 29.5
Investment real estate 22,061 0.5
Policy loans 141,135 3.0
Other long-term investments 20,191 0.4
Short-term investments 83,692 1.7
---------- -----
Total investments $4,766,711 100.0%
---------- -----
---------- -----

</TABLE>

Approximately 51% of the Company's bond portfolio is invested in mortgage-
backed securities. Mortgage-backed securities are based upon residential
mortgages which have been pooled into securities. Mortgage-backed securities
may have greater cash flow volatility as a result of the pass-through of
prepayments of principal on the underlying loans. Prepayments of principal on
the underlying residential loans can be expected to accelerate with decreases in
interest rates and diminish with increases in interest rates.

<PAGE>

In management's view, the overall quality of the Company's investment
portfolio continues to be strong. The following table shows the approximate
percentage distribution of the Company's fixed maturities by rating (utilizing
Standard & Poor Corporation's rating categories) at December 31, 1993:

PERCENT OF
FIXED
TYPE MATURITIES
---- ----------
<S> <C>
Bonds
AAA 52.5%
AA 7.8
A 15.1
BBB 16.2
BB or Less 2.2
Bank Loan Participations
Investment Grade 1.0
Non-Investment Grade 4.0
Redeemable Preferred Stock 1.2
-----
Total 100.0%
-----
-----

</TABLE>

At December 31, 1993, approximately 97.7% of the Company's bond portfolio
was invested in U.S. Government-backed securities or investment grade corporate
bonds and only 2.3% of its bond portfolio was rated less than investment grade
by Moody's Investors Service, Inc. ("Moody's") and Standard & Poor's Corporation
("S&P").

Risks associated with investments in less than investment-grade debt
obligations may be significantly higher than risks associated with investments
in debt securities rated investment grade. Risk of loss upon default by the
borrower is significantly greater with respect to such debt obligations than
with other debt securities because these obligations may be unsecured or
subordinated to other creditors. Additionally, there is often a thinly traded
market for such securities and current market quotations are frequently not
available for some of these securities. Issuers of less than investment-grade
debt obligations usually have higher levels of indebtedness and are more
sensitive to adverse economic conditions, such as recession or increasing
interest rates, than investment-grade issuers.

The Company also invests in those bank loan participations that are the
most senior debt issued in highly leveraged transactions. They are generally
unrated by the credit rating agencies. In selecting bank participations for
investment, the Company requires cash flows, without asset sales, to cover all
interest and scheduled amortization of the bank debt by 140% and to cover total
debt service by 110%. The debt is generally secured by most of the tangible
assets of the issuing company. Of the $151.3 million of bank loan
participations owned by the Company at December 31, 1993, $121.7 million were
classified by the Company as less than investment grade.

The Company also invests a significant portion of its portfolio in
mortgage loans. Results for these investments have been excellent due to
careful management and a focus on a specialized segment of the market. The
Company generally does not lend on speculative properties and has specialized in
making loans on either credit-oriented commercial properties, or credit-anchored
strip shopping centers in smaller towns and cities.

<PAGE>

The following table shows a breakdown of the Company's mortgage loan
portfolio by property type:

PERCENTAGE OF
TOTAL
PROPERTY TYPE MORTGAGE LOANS
------------- --------------
<S> <C>
Retail 79%
Warehouses 9
Office Building 8
Apartments 2
Mixed-use 1
Other 1
----
Total 100%
----
----

</TABLE>

The Company's mortgage lending criteria generally require that loan-to-
value ratios on each mortgage remain at or under 75%. Rental payments from
credit anchors (i.e., excluding rental payments from smaller local tenants)
generally exceed 70% of the property's operating expenses and debt service. The
average size mortgage loan in the Company's portfolio is approximately $1.4
million. The largest single loan amount is $9.3 million.

Many of the Company's mortgage loans have call or interest rate reset
provisions after five to seven years. However, if interest rates were to
significantly increase, the Company may be unable to increase the interest rates
on its existing mortgage loans commensurate with the significantly increased
market rates, or call the loans.

At December 31, 1993, 1.9% of the mortgage loan portfolio was
nonperforming. It is the Company's policy to cease to carry accrued interest on
loans that are over 90 days delinquent. For loans less than 90 days delinquent,
interest is accrued unless it is determined that the accrued interest is not
collectible. If a loan becomes over 90 days delinquent, it is the Company's
policy to initiate foreclosure proceedings or, much less often, to adopt a
workout arrangement to bring the loan current.

As a general rule, the Company does not invest directly in real estate.
The investment real estate held by the Company consists largely of properties
obtained through foreclosures or the acquisition of other insurance companies.
At foreclosure, a new appraisal is obtained, and the value of real estate
acquired through foreclosure is valued at the lesser of the mortgage loan
balance plus costs of foreclosure or appraised value. In the Company's
experience, the appraised value of foreclosed properties often equals or exceeds
the mortgage loan balance on the property plus costs of foreclosure. Also,
foreclosed properties often generate a positive cash flow, enabling the Company
to hold and manage the property until the property can be profitably sold.

The Company has established an allowance for uncollectible amounts on
investments. This allowance was $35.9 million at December 31, 1993.

A combination of futures contracts and options on treasury notes are
currently being used in connection with a hedging program which is designed to
hedge against rising interest rates for asset/liability management of certain
investments, primarily mortgage loans on real estate, and liabilities arising
from interest sensitive products such as GICs and individual annuities.

<PAGE>

Realized investment gains and losses on such contracts are deferred and
amortized over the life of the hedged asset. The Company also uses interest
rate swap contracts to effectively convert certain investments from a variable
to a fixed rate of interest.

For further discussion regarding the maturity of and the concentration of
risk among the Company's invested assets, see Note C to the Consolidated
Financial Statements.

The following table shows the investment results of the Company for the
years 1989 through 1993:

CASH, ACCRUED PERCENTAGE
INVESTMENT INCOME, EARNED ON REALIZED
YEAR ENDED AND INVESTMENTS NET AVERAGE OF CASH INVESTMENT
DECEMBER 31 AT DECEMBER 31 INVESTMENT INCOME AND INVESTMENTS GAINS (LOSSES)
- ----------- ------------------ ----------------- --------------- --------------
(dollars in thousands)
<S> <C> <C> <C> <C>
1989 $1,029,667 $ 82,453 9.5% $ 209
1990 2,077,746 136,995 9.4 (3,154)
1991 2,837,278 233,502 9.4 (3,085)
1992 3,653,074 284,069 8.9 (14)
1993 4,845,167 362,130 8.7 5,054

</TABLE>

See "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - LIQUIDITY AND CAPITAL RESOURCES" in the Company's 1993
Annual Report to Stockholders for certain information relating to the Company's
investments and liquidity.

The Company is involved in financial guarantees of the debt of others. For
further details, see Note G to Consolidated Financial Statements.

INDEMNITY REINSURANCE

As is customary in the insurance industry, the Company's insurance
subsidiaries cede insurance to other insurance companies. The ceding insurance
company remains contingently liable with respect to ceded insurance should any
reinsurer be unable to meet the obligations assumed by it. The Company sets a
limit on the amount of insurance retained on the life of any one person. In the
individual lines it will not retain more than $500,000, including accidental
death benefits, on any one life. Certain of the term-like plans of the Company
have a retention of $50,000 per life. For group insurance, the maximum amount
retained on any one life is $100,000. At December 31, 1993, the Company had
insurance in force of $42.5 billion of which approximately $7.5 billion was
ceded to reinsurers.

RESERVES

The applicable insurance laws under which the Company's insurance
subsidiaries operate require that each insurance company report policy reserves
as liabilities to meet future obligations on the outstanding policies. These
reserves are the amounts which, with the additional premiums to be received and
interest thereon compounded annually at certain assumed rates, are calculated in
accordance with applicable law to be sufficient to meet the various policy

<PAGE>

and contract obligations as they mature. These laws specify that the reserves
shall not be less than reserves calculated using certain named mortality tables
and interest rates.

The reserves carried in the Company's financial reports (presented on the
basis of generally accepted accounting principles) differ from those specified
by the laws of the various states and carried in the insurance subsidiaries'
statutory financial statements (presented on the basis of statutory accounting
principles mandated by state insurance regulation). For policy reserves other
than those for universal life policies, annuity contracts, and GICs, these
differences arise from the use of mortality and morbidity tables and interest
rate assumptions which are deemed under generally accepted accounting principles
to be more appropriate for financial reporting purposes than those required for
statutory accounting purposes; from the introduction of lapse assumptions into
the reserve calculation; and from the use of the net level premium reserve
method on all business. Policy reserves for universal life policies, annuity
contracts, and GICs are carried in the Company's financial reports at the
account value of the policy or contract.

FEDERAL INCOME TAX CONSEQUENCES

The Company's insurance subsidiaries are taxed by the federal government in
a manner similar to companies in other industries. However, certain
restrictions on consolidating life insurance company income with noninsurance
income are applicable to the Company; thus, the Company is not able to fully
consolidate the operating results of its subsidiaries for federal income tax
purposes.

Under pre-1984 tax law, certain income of the Company was not taxed
currently, but was accumulated in the "Policyholders' Surplus Account" for each
insurance company subsidiary to be taxed only when such income was distributed
to the stockholders or when certain limits on accumulated amounts were exceeded.
Consistent with current tax law, amounts accumulated in the Policyholders'
Surplus Account have been carried forward, although no accumulated income may be
added to these accounts. As of December 31, 1993, the combined Policyholders'
Surplus Accounts for the life insurance subsidiaries of the Company and the
estimated tax which would become payable on these amounts if distributed to
stockholders were $50.7 million and $17.7 million, respectively. The Company
does not anticipate any of its life insurance subsidiaries exceeding applicable
limits on amounts accumulated in these accounts and, therefore, does not expect
to involuntarily pay tax on the amounts held therein.

COMPETITION

The Company operates in a highly competitive industry. In connection with
the development and sale of its products, the Company encounters significant
competition from other insurance companies, many of which have financial
resources greater than those of the Company, as well as from other investment
alternatives available to its customers. The operating results of companies in
the insurance industry have historically been subject to significant
fluctuations due to competition, economic conditions, interest rates, investment
performance, maintenance of insurance ratings, and other factors. Management
believes that the Company's ability to compete is dependent upon, among other
things, its ability to attract and retain agents to market its insurance
products, its ability to develop competitive and profitable products, and its
maintenance of a high rating from rating agencies.

<PAGE>

Nontraditional sources of health care coverages, such as health maintenance
organizations and preferred provider organizations, are developing rapidly in
the Company's operating territory and provide competitive alternatives to the
Company's group health products.

Banks, by offering bank investment contracts currently guaranteed by the
FDIC, provide competitive alternatives to GICs. In addition, banks and other
financial institutions may be granted approval to underwrite and sell insurance
products and compete directly with the Company.

REGULATION

Insurance companies are subject to comprehensive and detailed regulation
and supervision in the states in which they transact business. The laws of the
various jurisdictions establish supervisory agencies with broad administrative
powers relative to granting and revoking licenses to transact business,
regulating trade practices, licensing agents, approving policy forms,
establishing reserve requirements, fixing maximum interest rates on life
insurance policy loans and minimum rates for accumulation of surrender values,
prescribing the form and content of required statutory financial statements, and
regulating the type and amount of investments permitted. Insurance companies
are required to file detailed annual reports with the supervisory agencies in
each of the jurisdictions in which they do business and their business and
accounts are subject to examination by such agencies at any time. Under the
rules of the National Association of Insurance Commissioners ("NAIC"), insurance
companies are examined periodically (generally every three years) by one or more
of the supervisory agencies on behalf of the states in which they do business.
To date, no such insurance department examinations have produced any significant
adverse findings regarding any insurance company subsidiary of the Company.

Recently, the insurance regulatory framework has been placed under
increased scrutiny by various states, the federal government, and the NAIC.
Various states have considered or enacted legislation which changes, and in many
cases increases, the state's authority to regulate insurance companies.
Legislation is under consideration in Congress which would result in the federal
government assuming some role in the regulation of insurance companies. The
NAIC, in conjunction with state regulators, has been reviewing existing
insurance laws and regulations. The NAIC recently approved and recommended to
the states for adoption and implementation several regulatory initiatives
designed to reduce the risk of insurance company insolvencies. These
initiatives include a risk-based capital requirement.

A life insurance company's statutory capital is computed according to rules
prescribed by the NAIC as modified by the insurance company's state of domicile.
Statutory accounting rules are different from generally accepted accounting
principles and are intended to reflect a more conservative view. The NAIC's
risk-based capital requirements require insurance companies to calculate and
report information under a risk-based capital formula. These risk-based capital
requirements are intended to allow insurance regulators to identify inadequately
capitalized insurance companies based upon the types and mixtures of risks
inherent in the insurer's operations. The formula includes components for asset
risk, liability risk, interest rate exposure, and other factors. Based upon
the December 31, 1993 statutory financial reports of the Company's insurance
subsidiaries, management believes that the Company's insurance subsidiaries are
adequately capitalized under the formula.

<PAGE>

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 that any
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.

In addition, several states, including the states in which the Company's
insurance subsidiaries are domiciled, have enacted legislation or adopted
regulations regarding insurance holding company systems. These laws require
registration of and periodic reporting by insurance companies domiciled within
the jurisdiction which control or are controlled by other corporations or
persons so as to constitute an insurance holding company system. These laws
also affect the acquisition of control of insurance companies as well as
transactions between insurance companies and companies controlling them. Most
states, including Tennessee, where Protective Life is domiciled, require
administrative approval of the acquisition of control of an insurance company
domiciled in the state or the acquisition of control of an insurance holding
company whose insurance subsidiary is incorporated in the state. In Tennessee,
the acquisition of 10% of the voting securities of a person is generally deemed
to be the acquisition of control for the purpose of the insurance holding
company statute and requires not only the filing of detailed information
concerning the acquiring parties and the plan of acquisition, but also
administrative approval prior to the acquisition.

Tennessee insurance laws also impose certain restrictions on Protective
Life's ability to pay dividends to the Company. Under Tennessee insurance laws,
Protective Life may only pay dividends out of that part of its available surplus
which is derived from realized statutory net profits. In addition, the
Tennessee Commissioner of Insurance must approve (or not disapprove within 30
days of notice) payment of a dividend from Protective Life which exceeds,
together with all dividends paid by Protective Life within the previous 12
months, the greater of (i) 10% of Protective Life's surplus as regards
policyholders at the preceding December 31 or (ii) the net gain from operations
of Protective Life for the 12 months ended on such December 31.

Additional issues related to regulation of the Company and its insurance
subsidiaries are discussed in "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - LIQUIDITY AND CAPITAL RESOURCES" in the
Company's 1993 Annual Report to Stockholders.

EMPLOYEES

The Company had 990 full-time employees, including 841 in the Home Office
in Birmingham, Alabama at December 31, 1993. These employees are covered by
contributory major medical insurance, group life, and long-term disability
insurance plans. The cost of these benefits in 1993 amounted to approximately
$2.0 million for the Company. In addition, substantially all of the employees
are covered by a pension plan. The Company also matches employee contributions
to its 401(k) Plan. See Note K to Consolidated Financial Statements.

<PAGE>

RECENT DEVELOPMENTS

The Clinton Administration has advocated changes to the current health care
delivery system which will address both affordability and availability issues.
The ultimate scope and effective date of any proposals are unknown at this time
and are likely to be modified as they are considered for enactment by Congress.
It is anticipated that these proposals may adversely affect certain products in
the Company's group health insurance business. In addition to the federal
initiatives, a number of states are considering legislative programs that are
intended to affect the accessibility and affordability of health care. Some
states have recently enacted health care reform legislation. These various
state programs (which could be preempted by any federal program) may also
adversely affect the Company's group health insurance business. However, in
light of the small relative proportion of the Company's earnings attributable to
group health insurance, management does not expect that either the federal or
state proposals will have a material adverse effect on the Company's earnings.

The Company has entered into a joint venture arrangement with the Lippo
Group to enter the Hong Kong insurance market. Subject to regulatory approval,
the Company and the Lippo Group will jointly own a recently acquired, inactive
Hong Kong insurer. Management anticipates that the Hong Kong insurer will
commence business in mid-1994. The Hong Kong insurer's products will be similar
to those currently being offered by the Company.

ITEM 2. PROPERTIES

The Company's Home Office building is located at 2801 Highway 280 South,
Birmingham, Alabama. This building includes the original 142,000 square-foot
building which was completed in 1976 and a second contiguous 220,000 square-foot
building which was completed in 1985. In addition, parking is provided for
approximately 1,000 vehicles.

The Company leases administrative space in Birmingham, Alabama; Brentwood,
Tennessee; Greenville, South Carolina; Cary, North Carolina; Indianapolis,
Indiana; and Oklahoma City, Oklahoma. Substantially all of these offices are
rented under leases that run for periods of three to five years. The aggregate
monthly rent is approximately $32 thousand.

Marketing offices are leased in 15 cities, substantially all under leases
for periods of three to five years with only three leases running longer than
five years. The aggregate monthly rent is approximately $31 thousand.

ITEM 3. LEGAL PROCEEDINGS

There are no material pending legal proceedings, other than ordinary
routine litigation incidental to the business of the Company, to which the
Company or any of its subsidiaries is a party or of which any of the Company's
properties is the subject.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matter was submitted during the fourth quarter of 1993 to a vote of
security holders of the Company.

<PAGE>

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS

Through Friday, October 1, 1993, the Company's Common Stock was traded on
the over-the-counter market (NASDAQ symbol: PROT) and was quoted on the NASDAQ
National Market System. On Monday, October 4, 1993, the Company's Common Stock
began trading on the New York Stock Exchange (NYSE symbol: PL). The following
table sets forth the highest and lowest closing prices of the Company's Common
Stock, $0.50 par value, as reported by NASDAQ and the New York Stock Exchange
during the periods indicated, along with the dividends paid per share of Common
Stock during the same periods.

RANGE DIVIDENDS
------------- ---------
HIGH LOW
---- ---
<S> <C> <C> <C>
1992
First Quarter . . . . $26 $19 $.21
Second Quarter . . . 26 1/4 21 3/4 .23
Third Quarter . . . . 28 1/2 23 1/4 .23
Fourth Quarter . . . 30 3/4 27 1/2 .23
1993
First Quarter . . . . $33 1/2 $27 1/2 $.23
Second Quarter . . . 37 30 3/4 .26
Third Quarter . . . . 50 1/2 34 1/2 .26
Fourth Quarter . . . 52 3/8 41 7/8 .26

</TABLE>

At February 18, 1994, there were approximately 2,170 holders of record of
Company Common Stock.

The Company (or its predecessor) has paid cash dividends each year since
1926 and each quarter since 1934. The Company expects to continue to pay cash
dividends, subject to the earnings and financial condition of the Company and
other relevant factors. The ability of the Company to pay cash dividends is
dependent in part on cash dividends received by the Company from its life
insurance subsidiaries. See Item 7 - "MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - LIQUIDITY AND CAPITAL RESOURCES"
in the Company's 1993 Annual Report to Stockholders. Such subsidiary dividends
are restricted by the various insurance laws of the states in which the
subsidiaries are incorporated. See Item 1 - "BUSINESS - REGULATION".

<PAGE>

ITEM 6. SELECTED FINANCIAL DATA

YEAR ENDED DECEMBER 31
--------------------------------------------------------
1993 1992 1991 1990 1989
-------- -------- -------- -------- ---------
(dollars in thousands, except per share amounts)

<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA

Premiums and policy fees . . . . . $370,758 $323,136 $273,975 $248,448 $236,830
Net investment income. . . . . . . 362,130 284,069 233,502 136,995 82,453
Realized investment gains(losses). 5,054 (14) (3,085) (3,154) 209
Other income . . . . . . . . . . . 21,695 18,835 11,556 8,197 5,231
-------- -------- -------- -------- --------

Total revenues . . . . $759,637 $626,026 $515,948 $390,486 $324,723
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------

Benefits and expenses. . . . . . . $674,593 $566,079 $464,245 $350,204 $292,437
Income tax expense . . . . . . . . $28,475 $17,384 $14,477 $11,279 $10,493
Minority interest. . . . . . . . . $19 $90 $1,437 $870 $0
Net income . . . . . . . . . . . $56,550(1) $41,420(2) $35,789 $28,133 $21,793

PER SHARE DATA

Net income(3). . . . . . . . . . . $4.13(1) $3.03(2) $2.62 $2.07 $1.58
Cash dividends . . . . . . . . . . $1.01 $0.90 $0.82 $0.73 $0.70
Weighted average number of
shares outstanding . . . . 13,690,789 13,657,993 13,649,031 13,611,646 13,803,885
Stockholders' equity . . . . . . . $26.34(4) $20.56 $18.44 $16.29 $15.50

</TABLE>

DECEMBER 31
--------------------------------------------------------
1993 1992 1991 1990 1989
-------- -------- -------- -------- ---------
(dollars in thousands)

<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA

Total assets . . . . . . . . . . . $5,316,005 $4,006,667 $3,120,290 $2,331,197 $1,232,280
Long-term debt . . . . . . . . . . $137,598 $31,014 $23,548 $2,079 $2,106
Total debt . . . . . . . . . . . $147,118 $88,248 $57,579 $81,145 $27,831
Stockholders' equity . . . . . . . $360,733(4) $281,400 $251,745 $222,326 $211,669

<FN>
- ---------------
(1) Reduced by $1,261 or $.09 per share representing a one-time adjustment to income tax expense due to the change in
the corporation income tax rate from 34% to 35%.
(2) Reduced by $1,053 or $.08 per share representing the cumulative effect of a change in accounting principle for the
adoption of SFAS No. 106.
(3) Net income per share is computed using the weighted average number of shares outstanding during each period.
(4) Increased by $34.6 million or $2.52 per share from the adoption of SFAS No. 115.

</TABLE>

<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

Information regarding the Company's financial condition and results of
operations is included under the caption "MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" in the Company's 1993 Annual
Report to Stockholders and is incorporated herein by reference.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements and supplementary data for the Company and its
subsidiaries, which are included under the caption "CONSOLIDATED FINANCIAL
STATEMENTS" in the Company's 1993 Annual Report to Stockholders, are
incorporated herein by reference.

<PAGE>

COOPERS & LYBRAND

REPORT OF INDEPENDENT ACCOUNTANTS

To the Directors and Stockholders
Protective Life Corporation
Birmingham, Alabama

Our report on the consolidated financial statements of Protective Life
Corporation and Subsidiaries has been incorporated by reference in this
Form 10-K from page 66 of the 1993 Annual Report to Stockholders of Protective
Life Corporation. In connection with our audits of such financial statements,
we have also audited the related financial statement schedules listed in the
index on page 27 of this Form 10-K.

In our opinion, the financial statement schedules referred to above, when
considered in relation to the basic financial statements taken as a whole,
present fairly, in all material respects, the information required to be
included therein.

/s/ Coopers & Lybrand
- ---------------------
COOPERS & LYBRAND

Birmingham, Alabama
February 14, 1994

<PAGE>

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE

None

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Except for the information concerning executive officers of the Company set
forth below, the information called for by this Item 10 is incorporated herein
by reference to the section entitled "ELECTION OF DIRECTORS AND INFORMATION
ABOUT NOMINEES" in the Company's definitive proxy statement for the Annual
Meeting of Stockholders, May 2, 1994, to be filed with the Securities and
Exchange Commission by the Company pursuant to Regulation 14A within 120 days
after the end of its 1993 fiscal year.

The executive officers of the Company are as follows:

Name Age Position
---- --- --------

Drayton Nabers, Jr. 53 President and Chief Executive
Officer and a Director

R. Stephen Briggs 44 Executive Vice President

John D. Johns 41 Executive Vice President and
Chief Financial Officer

Ormond L. Bentley 58 Senior Vice President,
Group

Deborah J. Long 40 Senior Vice President and
General Counsel

Jim E. Massengale 51 Senior Vice President

Steven A. Schultz 40 Senior Vice President,
Financial Institutions

Wayne E. Stuenkel 40 Senior Vice President
and Chief Actuary

A. S. Williams III 57 Senior Vice President,
Investments and Treasurer

Jerry W. DeFoor 41 Vice President and Controller,
and Chief Accounting Officer

<PAGE>

All executive officers are elected annually and serve at the pleasure of
the Board of Directors. None is related to any director of the Company or to
any other executive officer.

Mr. Nabers was President and Chief Operating Officer and a Director from
August 1982 until May 1992, when he became President and Chief Executive
Officer. From July 1981 to August 1982, he was Senior Vice President of the
Company. Since August 1982, he has also been President of Protective Life and
had been its Senior Vice President from September 1981 to August 1982. From
February 1980 to September 1981, he served as Senior Vice President, Operations
of Protective Life. From 1979 to February 1980, he was Senior Vice President,
Operations and General Counsel of Protective Life. From February 1980 to March
1983, he served as President of Empire General Life Insurance Company, a
subsidiary, and from March 1983 to December 31, 1984, he was Chairman of the
Executive Committee of Empire General. He is also a director of Energen
Corporation and National Bank of Commerce of Birmingham.

Mr. Briggs has been Executive Vice President of the Company and of
Protective Life since October 1993. From January 1993 to October 1993, he was
Senior Vice President, Life Insurance and Investment Products of the Company and
of Protective Life. Mr. Briggs had been Senior Vice President, Ordinary
Marketing of the Company since August 1988 and of Protective Life since April
1986. From July 1983 to April 1986, he was President of First Protective
Insurance Group, Inc.

Mr. Johns has been Executive Vice President and Chief Financial Officer of
the Company and of Protective Life since October 1993. From August 1988 to
October 1993, he served as Vice President and General Counsel of Sonat, Inc. He
is a director of National Bank of Commerce of Birmingham and Parisian Services,
Inc.

Mr. Bentley has been Senior Vice President, Group of the Company since
August 1988 and of Protective Life since December 1978. Mr. Bentley has been
employed by Protective Life since October 1965.

Ms. Long has been Senior Vice President and General Counsel of the Company
and of Protective Life since February 1, 1994. From August 2, 1993 to January
31, 1994, Ms. Long served as General Counsel of the Company and from February
1984 to January 31, 1994 she practiced law with the law firm of Maynard, Cooper
& Gale, P.C.

Mr. Massengale has been Senior Vice President of the Company and of
Protective Life since May 1992. From May 1989 to May 1992, he was Senior Vice
President, Operations and Systems of the Company and Protective Life. From
January 1983 to May 1989, he served as Senior Vice President, Corporate Systems
of the Company and Protective Life.

Mr. Schultz has been Senior Vice President, Financial Institutions of the
Company and of Protective Life since March 1993. Mr. Schultz served as Vice
President, Financial Institutions of the Company from February 1993 to March
1993 and of Protective Life from February 1989 to March 1993. From June 1977
through January 1989, he was employed by and served in a number of capacities
with The Minnesota Mutual Life Insurance Company, finally serving as Director,
Group Sales.

<PAGE>

Mr. Stuenkel has been Senior Vice President and Chief Actuary of the
Company and of Protective Life since March 1987. Mr. Stuenkel is a Fellow of
the Society of Actuaries and has been employed by Protective Life since
September 1978.

Mr. Williams has been Senior Vice President, Investments and Treasurer of
the Company since July 1981. Mr. Williams also serves as Senior Vice President,
Investments and Treasurer of Protective Life. Mr. Williams has been employed by
Protective Life since November 1964.

Mr. DeFoor has been Vice President and Controller, and Chief Accounting
Officer of the Company and Protective Life since April 1989. Mr. DeFoor is a
certified public accountant and has been employed by Protective Life since
August 1982.

Certain of these executive officers also serve as executive officers and/or
directors of various other Company subsidiaries.

ITEM 11. EXECUTIVE COMPENSATION

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information called for by Items 11 through 13 is incorporated herein by
reference from the Company's definitive proxy statement for the Annual Meeting
of Stockholders, May 2, 1994, to be filed with the Securities and Exchange
Commission by the Company pursuant to Regulation 14A within 120 days after the
end of its 1993 fiscal year.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a) The following documents are filed as part of this report:

1. Financial Statements:

The following financial statements set forth in
the Company's 1993 Annual Report to Stockholders
as indicated on the following table are
incorporated by reference (See Exhibit 13).

PAGE
Report of Independent Accountants. . . . . . . . 66
Consolidated Statements of Income for the years
ended December 31, 1993, 1992, and 1991 . . . . 43
Consolidated Balance Sheets as of December 31,
1993 and 1992 . . . . . . . . . . . . . . . . . 44

<PAGE>

PAGE
Consolidated Statements of Stockholders' Equity
for the years ended December 31, 1993, 1992,
and 1991. . . . . . . . . . . . . . . . . . . . 46
Consolidated Statements of Cash Flows
for the years ended December 31, 1993, 1992,
and 1991. . . . . . . . . . . . . . . . . . . . 47
Notes to Consolidated Financial Statements. . . . 48

2. Financial Statement Schedules:

The Report of Independent Accountants which covers
the financial statement schedules appears on page
23 of this report. The following schedules are
located in this report on the pages indicated.
PAGE
Schedule I - Summary of Investments -
Other Than Investments in Related Parties. . . . 33
Schedule III - Condensed Financial Information
of Registrant . . . . . . . . . . . . . . . . . 34
Schedule V - Supplementary Insurance Information . 38
Schedule VI - Reinsurance . . . . . . . . . . . . 39
Schedule IX - Short-Term Borrowings . . . . . . . 40

All other schedules to the consolidated financial
statements required by Article 7 of Regulation S-X
are not required under the related instructions or
are inapplicable and therefore have been omitted.

3. Exhibits:

Included as exhibits are the items listed below.
The Company will furnish a copy of any of the
exhibits listed upon the payment of $5.00 per
exhibit to cover the cost of the Company in
furnishing the exhibit.

ITEM NUMBER DOCUMENT

3(a) 1985 Restated Certificate of Incorporation of the Company

3(a)(1) Certificate of Amendment of 1985 Restated Certificate of
Incorporation of the Company

<PAGE>

*3(a)(2) Certificate of Designation of Junior Participating
Cumulative Preferred Stock of the Company filed with the
Secretary of State of Delaware on July 14, 1987 - Filed as
Exhibit A to the Company's Form 8-K Report filed July 15,
1987

*3(a)(3) Certificate of Correction of Certificate of Designation of
Junior Participating Cumulative Preferred Stock of the
Company filed with the Secretary of State of Delaware on
July 27, 1987 - Filed as Exhibit 3(a)(4) to the Company's
Form 10-K Annual Report for the year ended December 31, 1987

*3(b) By-laws of the Company filed as Exhibit C to the Company's
Form 10 Registration Statement filed September 4, 1981

*3(b)(1) Amended By-laws of the Company filed as Exhibit B to the
Company's Form 8-K Report filed May 18, 1983

4(a) 1985 Restated Certificate of Incorporation of the Company
(filed as Exhibit 3(a))

4(a)(1) Certificate of Amendment of 1985 Restated Certificate of
Incorporation of the Company (filed as Exhibit 3(a)(1))

*10(a) Management Incentive Plan filed as Exhibit 10(a) to the
Company's Form 10-K Annual Report for the year ended
December 31, 1984

*10(a)(1) Amendment to the Company's Management Incentive Plan renamed
as the Company's Annual Incentive Plan filed as Exhibit
10(a)(1) to the Company's Form 10-Q Report filed May 14,
1990

*10(b) Performance Share Plan filed as Exhibit G to the Company's
Form 10 Registration Statement filed September 4, 1981
(expired as to new grants)

- --------------------------
*incorporated by reference 28

<PAGE>

*10(b)(1) 1983 Performance Share Plan filed as Exhibit C to the
Company's Form 8-K Report filed May 18, 1983

*10(b)(2) The Company's 1983 Performance Share Plan (as amended March
19, 1990) filed as Exhibit 10(b)(2) to the Company's Form
10-Q Report filed May 14, 1990

*10(b)(3) The Company's 1992 Performance Share Plan filed as Exhibit
10(b)(3) to the Company's Form 10-Q filed May 15, 1992

*10(c) Excess Benefit Plan filed as Exhibit 10(c) to the Company's
Form 10-K Annual Report for the year ended December 31, 1984

*10(c)(1) Excess Benefit Plan amended and restated as of January 1,
1989 filed as Exhibit 10(c)(1) to the Company's Form 10-K
Annual Report for the year ended December 31, 1991

*10(d) Bond Purchase Agreement filed as Exhibit 10(d) to the
Company's Form 10-K Annual Report for the year ended
December 31, 1991

*10(d)(1) Escrow Agreement filed as Exhibit 10(d)(1) to the Company's
Form 10-K Annual Report for the year ended December 31, 1991

*10(e) Indemnity Agreements filed as Exhibits to the Company's Form
10-Q Report, filed August 14, 1986

*10(f) Preferred Share Purchase Rights Plan filed as Exhibit to the
Company's Form 8-A Report filed July 15, 1987, as amended
July 23 and July 29, 1987

*10(i) Form of Severance Compensation Agreement filed as Exhibit
10(i) to the Company's Form 10-K Annual Report for the year
ended December 31, 1991

*10(i)(1) Form of First Amendment to Severance Compensation Agreement
filed as Exhibit 10(i)(1) to the Company's Form 10-K Annual
Report for the year ended December 31, 1991

*10(iii)(A)(1) The Company's Deferred Compensation Plan for Directors who
are not Employees of the Company filed as Exhibit 4 to the
Company's Form S-8 filed August 27, 1993

- --------------------------
*incorporated by reference 29

<PAGE>

*10(iii)(A)(2) The Company's Deferred Compensation Plan for Officers filed
as Exhibit 4 to the Company's Form S-8 filed January 13,
1994

13 1993 Annual Report To Stockholders

21 Organization Chart of the Company and Affiliates

23 Consent of Coopers & Lybrand

24 Power of Attorney

The following is a list of each management contract or
compensatory plan or arrangement required to be filed as an
exhibit to this form pursuant to Item 14(c) of this Form 10-K:
Exhibit Item Numbers 10(a), 10(a)(1), 10(b), 10(b)(1), 10(b)(2),
10(b)(3), 10(c), 10(c)(1), 10(i), 10(i)(1), 10(iii)(A)(1), and
10(iii)(A)(2).

(b) Reports on Form 8-K:

(1) Form 8-K, filed February 17, 1993
- Item 5

(2) Form 8-K, filed April 28, 1993
- Item 5

(3) Form 8-K, filed July 28, 1993
- Item 5

(4) Form 8-K, filed August 4, 1993
- Item 2
- Item 7

(5) Form 8-K, filed September 14, 1993
- Item 5

(6) Form 8-K, filed October 1, 1993
- Item 5

(7) Form 8-K, filed October 28, 1993
- Item 5

- --------------------------
*incorporated by reference 30

<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 of the Securities Exchange Act
of 1934, the Company has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

PROTECTIVE LIFE CORPORATION

By:/s/Drayton Nabers, Jr.
--------------------------------------
Drayton Nabers, Jr.
President and Chief Executive Officer

March 25, 1994

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the Company
and in the capacities and on the dates indicated.

SIGNATURE CAPACITY IN WHICH SIGNED DATE

/s/Drayton Nabers, Jr. President and Chief Executive March 25, 1994
- ------------------------- Officer (Principal Executive
DRAYTON NABERS, JR. Officer) and Director

/s/John D. Johns Executive Vice President and March 25, 1994
- ------------------------- Chief Financial Officer
JOHN D. JOHNS (Principal Financial Officer)

/s/Jerry W. DeFoor Vice President and Controller, March 25, 1994
- ------------------------- and Chief Accounting Officer
JERRY W. DEFOOR (Principal Accounting Officer)

* Chairman of the Board and March 25, 1994
- ------------------------- Director
WILLIAM J. RUSHTON III

* Director March 25, 1994
- -------------------------
JOHN W. WOODS

* Director March 25, 1994
- -------------------------
CRAWFORD T. JOHNSON III

<PAGE>

* Director March 25, 1994
- -------------------------
WILLIAM J. CABANISS, JR.

* Director March 25, 1994
- -------------------------
H. G. PATTILLO

* Director March 25, 1994
- -------------------------
EDWARD L. ADDISON

* Director March 25, 1994
- -------------------------
JOHN J. MCMAHON, JR.

* Director March 25, 1994
- -------------------------
A. W. DAHLBERG

* Director March 25, 1994
- -------------------------
JOHN W. ROUSE, JR.

* Director March 25, 1994
- -------------------------
ROBERT T. DAVID

* Director March 25, 1994
- -------------------------
RONALD L. KUEHN, JR.

* Director March 25, 1994
- -------------------------
HERBERT A. SKLENAR

- --------------------

*Drayton Nabers, Jr., by signing his name hereto, does sign this document
on behalf of each of the persons indicated above pursuant to powers of attorney
duly executed by such persons and filed with the Securities and Exchange
Commission.

By: /s/Drayton Nabers, Jr.
--------------------------------------
DRAYTON NABERS, JR.
Attorney-in-fact

<PAGE>

SCHEDULE I - SUMMARY OF INVESTMENTS -
OTHER THAN INVESTMENTS IN RELATED PARTIES
PROTECTIVE LIFE CORPORATION AND SUBSIDIARIES
DECEMBER 31, 1993
(in thousands)

COL. A COL. B COL. C COL. D
------ ------ ------ ------
AMOUNT AT
WHICH SHOWN
IN BALANCE
TYPE OF INVESTMENT COST VALUE SHEET
------------------ ---------- ---------- ----------

<S> <C> <C> <C>
Fixed maturities:
Bonds:
Mortgage-backed securities $1,531,012 $1,561,587 $1,561,587
United States Government and
government agencies and
authorities 89,372 92,190 92,190
States, municipalities, and
political subdivisions 15,024 15,155 15,155
Public utilities 339,613 343,623 343,623
Convertibles and bonds with
warrants attached 1,421 1,254 1,254
All other corporate bonds 822,505 850,616 850,616
Bank loan participations 151,278 151,278 151,278
Redeemable preferred stocks 35,445 35,589 35,589
---------- ---------- ----------

Total fixed maturities 2,985,670 3,051,292 3,051,292
---------- ---------- ----------

Equity securities:
Common stocks - industrial,
miscellaneous, and all other 29,259 36,253 36,253
Nonredeemable preferred stocks 4,072 4,343 4,343
---------- ---------- ----------

Total equity securities 33,331 40,596 40,596
---------- ---------- ----------

Mortgage loans on real estate 1,407,744 ******** 1,407,744
Investment real estate 22,061 ******** 22,061
Policy loans 141,135 ******** 141,135
Other long-term investments 20,191 ******** 20,191
Short-term investments 83,692 ******** 83,692
---------- ----------

Total investments $4,693,824 ******** $4,766,711
---------- ----------
---------- ----------

</TABLE>

<PAGE>

SCHEDULE III - CONDENSED FINANCIAL INFORMATION
OF REGISTRANT
STATEMENTS OF INCOME
PROTECTIVE LIFE CORPORATION (PARENT COMPANY)
YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
(in thousands)

1993 1992 1991
------- ------- -------
<S> <C> <C> <C>
REVENUES
Dividends from subsidiaries* $ (91) $ 6,261 $ 5,992
Service fees from subsidiaries* 21,143 26,766 25,372
Realized investment gains 140
Investment income 4,276 2,976 2,820
Other income 3,662 154 158
------- ------- -------
28,990 36,297 34,342
------- ------- -------

EXPENSES
Operating and administrative 25,340 24,302 17,680
Interest - subsidiaries* 579 246
Interest - others 5,300 4,221 4,657
------- ------- -------
30,640 29,102 22,583
------- ------- -------

INCOME BEFORE FEDERAL INCOME
TAX AND OTHER ITEMS BELOW (1,650) 7,195 11,759

INCOME TAX EXPENSE (BENEFIT) (1,325) (503) 2,368
------- ------- -------

INCOME BEFORE EQUITY IN UNDISTRIBUTED
INCOME OF SUBSIDIARIES (325) 7,698 9,391

EQUITY IN UNDISTRIBUTED INCOME OF
SUBSIDIARIES BEFORE CUMULATIVE EFFECT
OF A CHANGE IN ACCOUNTING PRINCIPLE* 56,875 34,775 26,398
------- ------- -------

INCOME BEFORE CUMULATIVE EFFECT OF A CHANGE
IN ACCOUNTING PRINCIPLE 56,550 42,473 35,789

CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING
PRINCIPLE (1,053)
------- ------- -------

NET INCOME $56,550 $41,420 $35,789
------- ------- -------
------- ------- -------

<FN>

*Eliminated in consolidation.

</TABLE>

See notes to condensed financial statements.

<PAGE>

SCHEDULE III - CONDENSED FINANCIAL INFORMATION
OF REGISTRANT
BALANCE SHEETS
PROTECTIVE LIFE CORPORATION (PARENT COMPANY)
(in thousands)

DECEMBER 31
--------------------
1993 1992
-------- --------
<S> <C> <C>
ASSETS
Investments:
Short-term investments $ 1,997 $ 850
Long-term investments 1,041
Investment real estate 133 133
Investments in subsidiaries (equity method)* 473,313 338,160
-------- --------
475,443 340,184
Cash 408 209
Receivables from subsidiaries* 50,285 41,835
Other receivables 229
Accrued income taxes 1,216 2,973
Other 1,225 774
-------- --------
Total Assets $528,577 $386,204
-------- --------
-------- --------

LIABILITIES
Accrued expenses and other liabilities $ 19,027 $ 14,406
Deferred income taxes 1,817 4,198
Short-term debt:
Banks 9,500 57,200
Long-term debt:
Banks 137,500 29,000
-------- --------

Total Liabilities 167,844 104,804
-------- --------

STOCKHOLDERS' EQUITY
Preferred Stock
Junior Participating Cumulative
Preferred Stock
Common Stock 7,834 7,834
Additional paid-in capital 70,469 70,335
Net unrealized gains on investments
(all from subsidiaries, net of
income tax: 1993 - $21,153; 1992 - $1,628) 39,284 3,156
Retained earnings (including undistributed
income of subsidiaries: 1993 - $307,833;
1992 - $250,958) 267,361 224,638
Treasury stock (18,359) (18,363)
Unallocated stock in Employee Stock Ownership Plan (5,856) (6,200)
-------- --------

Total Stockholders' Equity 360,733 281,400
-------- --------

$528,577 $386,204
-------- --------
-------- --------

<FN>

*Eliminated in consolidation.

</TABLE>

See notes to condensed financial statements.

<PAGE>

SCHEDULE III - CONDENSED FINANCIAL INFORMATION
OF REGISTRANT
STATEMENTS OF CASH FLOWS
PROTECTIVE LIFE CORPORATION (PARENT COMPANY)
YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
(in thousands)

1993 1992 1991
------- ------- -------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $56,550 $41,420 $35,789
Adjustments to reconcile net income
to net cash provided by operating
activities:
Equity in undistributed net income
of subsidiaries* (56,875) (34,775) (26,398)
Deferred income taxes (2,381) 1,038 3,178
Gain on sale of subsidiary (3,522)
Other (net) 7,725 (6,209) 14,352
------- ------- -------

Net cash provided by operating activities 1,497 1,474 26,921
------- ------- -------

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of and/or additional investments
in subsidiaries* (41,806) (675) (14,008)
Loan to subsidiary* (20,000) (19,700)
Principal payments received on loan
to subsidiary* 11,550 4,500 1,000
Sale of subsidiary 2,091
Change in other long-term
investments 1,041 4,134 (5,175)
Change in short-term investments (1,147) 499 (549)
------- ------- -------

Net cash used in investing activities (48,271) (11,242) (18,732)
------- ------- -------

CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on line of credit
arrangements and long-term debt (7,500) (13,000) (50,743)
Proceeds from borrowing under line of
credit arrangements and long-term debt 68,300 43,700 48,900
Principal payments on long-term debt
to subsidiary* (8,997) (281)
Proceeds from borrowing under
long-term debt to subsidiary* 5,318
Dividends to stockholders (13,827) (12,304) (11,210)
------- ------- -------

Net cash provided by (used in) financing
activities 46,973 9,399 (8,016)
------- ------- -------

INCREASE (DECREASE) IN CASH 199 (369) 173
CASH AT BEGINNING OF YEAR 209 578 405
------- ------- -------
CASH AT END OF YEAR $ 408 $ 209 $ 578
------- ------- -------
------- ------- -------

<FN>

*Eliminated in consolidation.

</TABLE>

See notes to condensed financial statements.

<PAGE>

SCHEDULE III - CONDENSED FINANCIAL INFORMATION
OF REGISTRANT
PROTECTIVE LIFE CORPORATION (PARENT COMPANY)

NOTES TO CONDENSED FINANCIAL STATEMENTS

The Company publishes consolidated financial statements that are its primary
financial statements. Therefore, these parent company condensed financial
statements are not intended to be the primary financial statements of the
Company, and should be read in conjunction with the consolidated financial
statements and notes thereto of Protective Life Corporation and subsidiaries.

NOTE 1 - DEBT

At December 31, 1993, the Company had borrowed $118.0 million of its $138
million revolving line of credit. In addition, the Company has borrowed $29.0
million under an installment note. Future maturities of this note are $9.5
million in 1994, $9.5 million in 1995, and $10.0 million in 1996.

NOTE 2 - SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

1993 1992 1991
------ ------ -------
<S> <C> <C> <C>
CASH PAID (RECEIVED) DURING THE YEAR FOR:

Interest Paid to Banks $5,540 $4,131 $ 4,657

Interest Paid to Subsidiary* 613 246
------ ------ -------
$5,540 $4,744 $ 4,903
------ ------ -------
------ ------ -------
Income Taxes (reduced by amounts received
from affiliates under a tax sharing
agreement) $ (701) $ 437 $ (526)
------ ------ -------
------ ------ -------

NONCASH INVESTING AND FINANCING ACTIVITIES

Reissuance of Treasury Stock to ESOP $ 3 $ 16 $ 28
------ ------ -------
------ ------ -------

Unallocated Stock in ESOP $ 344 $ 345 $ 345
------ ------ -------
------ ------ -------

Reissuance of Treasury Stock $ 135 $1,003
------ ------
------ ------

</TABLE>

NOTE 3 - SUBSIDIARY SURPLUS DEBENTURES

Protective Life Insurance Company ("Protective Life") has issued surplus
debentures to the Company in order to finance acquisitions and growth. At
December 31, 1993, the balance of the surplus debentures was $48.9 million. The
surplus debentures are included in receivables from subsidiaries. Protective
Life must obtain the approval of the Commissioner of Insurance before it may
repay any portion of the surplus debenture.

NOTE 4 - SALE OF SUBSIDIARY

On January 27, 1993, Protective Life contributed (in the form of a dividend) its
80% ownership interest in the common stock of Southeast Health Plan, Inc.
("SEHP"). Because SEHP was in a deficit position, the transaction was recorded
as a "negative" dividend by the Company. On August 6, 1993, the Company sold
its ownership interest in SEHP. The sale has been accounted for in a manner
similar to an installment sale. A gain of $3.5 million is included in the
Company's 1993 other income.

- ----------------------------
*Eliminated in consolidation.

<PAGE>

SCHEDULE V - SUPPLEMENTARY INSURANCE INFORMATION
PROTECTIVE LIFE CORPORATION AND SUBSIDIARIES
(in thousands)

COL. A COL. B COL. C COL. D COL. E COL. F
------ ------ ------ ------ ------ ------
GIC AND
FUTURE ANNUITY
DEFERRED POLICY DEPOSITS AND PREMIUMS
POLICY BENEFITS OTHER AND
ACQUISITION AND UNEARNED POLICYHOLDERS' POLICY
SEGMENT COSTS CLAIMS PREMIUMS FUNDS FEES
------- ----------- -------- -------- -------------- ---------
<S> <C> <C> <C> <C> <C>
Year Ended
December 31, 1993:
Agency $129,265 $ 483,604 $ 368 $ 11,762 $ 77,338
Group 20,520 99,412 2,786 83,522 126,027
Financial Institutions 59,163 39,508 85,042 2,913 87,355
Investment Products 19,210 52,516 0 789,668 856
Guaranteed Investment
Contracts 1,464 0 0 2,015,075 0
Acquisitions 69,942 705,487 501 259,513 58,561
Corporate and Other 20 318 88 339 20,621
Unallocated Realized
Investment Gains (Losses) 0 0 0 0 0
-------- ---------- -------- ---------- --------
TOTAL $299,584 $1,380,845 $ 88,785 $3,162,792 $370,758
-------- ---------- -------- ---------- --------
-------- ---------- -------- ---------- --------
Year Ended
December 31, 1992:
Agency $110,408 $382,025 $ 2 $ 8,847 $ 62,776
Group 14,801 66,551 2,422 77,671 112,985
Financial Institutions 49,684 20,207 71,878 3,246 56,990
Investment Products 30,517 27,051 0 626,171 586
Guaranteed Investment
Contracts 2,256 0 0 1,694,530 0
Acquisitions 65,868 428,991 655 80,458 48,068
Corporate and Other 1,678 4,767 220 439 41,731
Unallocated Realized
Investment Gains (Losses) 0 0 0 0 0
-------- ---------- -------- ---------- --------
TOTAL $275,212 $929,592 $75,177 $2,491,362 $323,136
-------- ---------- -------- ---------- --------
-------- ---------- -------- ---------- --------
Year Ended
December 31, 1991:
Agency $ 87,801 $317,221 $ 2 $ 6,932 $ 55,755
Group 10,285 63,217 1,895 73,693 112,317
Financial Institutions 25,513 5,815 34,541 432 31,267
Investment Products 20,791 17,280 0 392,214 205
Guaranteed Investment
Contracts 2,985 0 0 1,264,603 0
Acquisitions 65,873 406,622 880 82,634 50,104
Corporate and Other 2,163 8,453 1,531 591 24,327
Unallocated Realized
Investment Gains (Losses) 0 0 0 0 0
-------- ---------- -------- ---------- --------
TOTAL $215,411 $818,608 $38,849 $1,821,099 $273,975
-------- ---------- -------- ---------- --------
-------- ---------- -------- ---------- --------

COL. A COL. G COL. H COL. I COL. J
------ ------ ------ ------ ------

AMORTIZATION
BENEFITS OF DEFERRED
NET REALIZED AND POLICY OTHER
INVESTMENT INVESTMENT SETTLEMENT ACQUISITION OPERATING
SEGMENT INCOME(1) GAINS(LOSSES) EXPENSES COSTS EXPENSES(1)
------- ---------- ------------- ---------- ------------- -----------
<C> <C> <C> <C> <C>
EXPENSES(1)
Year Ended
December 31, 1993:
Agency $ 34,154 $ 0 $ 55,973 $18,069 $ 17,548
Group 14,522 0 101,266 2,271 29,492
Financial Institutions 8,956 0 42,840 31,202 15,273
Investment Products 66,706 2,003 49,569 12,822 14,793
Guaranteed Investment
Contracts 166,058 1,175 137,379 1,170 3,279
Acquisitions 65,290 0 73,463 7,832 12,715
Corporate and Other 6,444 0 13,394 239 34,004
Unallocated Realized
Investment Gains (Losses) 0 1,876 0 0 0
-------- -------- -------- ------- --------
TOTAL $362,130 $ 5,054 $473,884 $73,605 $127,104
-------- -------- -------- ------- --------
-------- -------- -------- ------- --------
Year Ended
December 31, 1992:
Agency $ 27,723 $ 0 $ 49,755 $11,493 $ 16,457
Group 12,620 0 93,380 1,664 27,003
Financial Institutions 6,084 0 25,342 22,121 11,502
Investment Products 46,618 473 37,021 4,517 9,629
Guaranteed Investment
Contracts 137,654 962 117,321 1,267 5,495
Acquisitions 45,543 0 56,901 7,404 9,298
Corporate and Other 7,827 0 29,837 485 28,187
Unallocated Realized
Investment Gains (Losses) 0 (1,449) 0 0 0
-------- -------- -------- ------- --------
TOTAL $284,069 $ (14) $409,557 $48,951 $107,571
-------- -------- -------- ------- --------
-------- -------- -------- ------- --------
Year Ended
December 31, 1991:
Agency $ 24,611 $ 0 $ 44,316 $10,639 $ 13,550
Group 12,425 0 97,794 1,153 22,483
Financial Institutions 4,108 0 8,917 17,008 5,669
Investment Products 30,674 119 25,336 2,238 7,777
Guaranteed Investment
Contracts 105,217 (519) 91,485 826 2,559
Acquisitions 45,742 0 55,195 8,230 8,928
Corporate and Other 10,725 0 23,548 170 16,424
Unallocated Realized
Investment Gains (Losses) 0 (2,685) 0 0 0
-------- -------- -------- ------- --------
TOTAL $233,502 $(3,085) $346,591 $40,264 $ 77,390
-------- -------- -------- ------- --------
-------- -------- -------- ------- --------

<FN>

(1) Allocations of Net Investment Income and Other Operating Expenses are based on a number of assumptions
and estimates and results would change if different methods were applied.

</TABLE>

<PAGE>

SCHEDULE VI - REINSURANCE
PROTECTIVE LIFE CORPORATION AND SUBSIDIARIES
(dollars in thousands)

COL. A COL. B COL. C COL. D COL. E COL. F
------ ------ ------ ------ ------ ------
PERCENTAGE
CEDED TO ASSUMED FROM OF AMOUNT
GROSS OTHER OTHER NET ASSUMED TO
AMOUNT COMPANIES COMPANIES AMOUNT NET
------ ----------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
Year Ended
December 31, 1993:
Life insurance
in force $40,149,017 $7,484,566 $2,301,577 $34,966,028 6.6%
----------- ---------- ---------- ----------- ----
----------- ---------- ---------- ----------- ----

Premiums and
policy fees:
Life insurance $ 230,706 $ 37,995 $ 8,329 $ 201,040 4.1%
Accident/health
insurance 254,672 88,917 3,963 169,718 2.3%
----------- ---------- ---------- -----------

TOTAL $ 485,378 $ 126,912 $ 12,292 $ 370,758
----------- ---------- ---------- -----------
----------- ---------- ---------- -----------

Year Ended
December 31, 1992:
Life insurance
in force $33,811,280 $6,982,127 $ 665,733 $27,494,886 2.4%
----------- ---------- ---------- ----------- ----
----------- ---------- ---------- ----------- ----

Premiums and
policy fees:
Life insurance $ 180,018 $ 34,824 $ 16,092 $ 161,286 10.0%
Accident/health
insurance 228,192 74,531 8,189 161,850 5.1%

----------- ---------- ---------- -----------
TOTAL $ 408,210 $ 109,355 $ 24,281 $ 323,136
----------- ---------- ---------- -----------
----------- ---------- ---------- -----------

Year Ended
December 31, 1991:
Life insurance
in force $30,158,445 $5,292,080 $ 419,172 $25,285,537 1.7%
----------- ---------- ---------- ----------- ----
----------- ---------- ---------- ----------- ----

Premiums and
policy fees:
Life insurance $ 161,366 $ 28,378 $ 8,997 $ 141,985 6.3%
Accident/health
insurance 191,937 61,550 1,603 131,990 1.2%
----------- ---------- ---------- -----------

TOTAL $ 353,303 $ 89,928 $ 10,600 $ 273,975
----------- ---------- ---------- -----------
----------- ---------- ---------- -----------

</TABLE>

<PAGE>

SCHEDULE IX - SHORT-TERM BORROWINGS
PROTECTIVE LIFE CORPORATION AND SUBSIDIARIES
(dollars in thousands)

COL. A COL. B COL. C COL. D COL. E COL. F
------ ------ ------ ------ ------ ------

WEIGHTED
MAXIMUM AVERAGE AVERAGE
WEIGHTED AMOUNT AMOUNT INTEREST
BALANCE AVERAGE OUTSTANDING OUTSTANDING RATE
CATEGORY OF AGGREGATE AT END INTEREST DURING DURING DURING
SHORT-TERM BORROWINGS OF PERIOD RATE THE PERIOD THE PERIOD THE PERIOD
- --------------------- --------- -------- ----------- ----------- ----------

<S> <C> <C> <C> <C> <C>
Year Ended
December 31, 1993:
Banks None None $ 70,950 $36,821 4.1%
Repurchase Agreements None None 145,228 18,749 4.2

Year Ended
December 31, 1992:
Banks $49,700 4.3% 91,800 42,603 4.9

Year Ended
December 31, 1991:
Banks 29,500 6.5 92,200 43,141 7.6
Repurchase Agreements None None 29,155 4,009 6.3

</TABLE>

<PAGE>

EXHIBITS TO FORM 10-K
OF
PROTECTIVE LIFE CORPORATION
FOR THE
FISCAL YEAR ENDED DECEMBER 31, 1993

INDEX TO EXHIBITS

PAGE

3(a)....................................................................
3(a)(1).................................................................
13 .....................................................................
21 .....................................................................
23 .....................................................................
24 .....................................................................

<PAGE>
1985
RESTATED
CERTIFICATE OF INCORPORATION
OF
PROTECTIVE LIFE CORPORATION

The undersigned Corporation does hereby certify as follows:

(1) The original Certificate of Incorporation of this Corporation,
Protective Corporation, was filed with the Secretary of State of Delaware on
February 3, 1981. Restated Certificates of Incorporation of the Corporation
were filed with the Secretary of State of Delaware on June 26, 1981 and May 17,
1983.

(2) This Restated Certificate of Incorporation only restates and
integrates and does not further amend the provisions of the said Restated
Certificate of Incorporation as heretofore amended and there is no discrepancy
between those provisions and the provisions of this 1985 Restated Certificate
of Incorporation;

(3) This Restated Certificate of Incorporation was duly adopted by the
Board of Directors of the Corporation in accordance with Section 245 of the
General Corporation Law of the State of Delaware; and

(4) The text of the Restated Certificate of Incorporation as amended or
supplemented heretofore is hereby restated without further amendments or
changes to read as set forth in full:

ARTICLE I.

NAME
----

1.1 The name of the Corporation shall be Protective Life Corporation.

ARTICLE II.

REGISTERED AND
PRINCIPAL OFFICE
----------------

2.1 The address of its registered office in the State of Delaware is 1209
Orange Street in the City of Wilmington, County of New Castle. The name of its
registered

<PAGE>

agent at such address is The Corporation Trust Company. The location of the
principal office of the Corporation in the State of Alabama shall be 2801
Highway 280 South, Birmingham, Alabama 35223.

ARTICLE III

PURPOSES
--------

3.1 The purposes of the Corporation are to engage in any lawful acts or
activities for which corporations may be organized under the General
Corporation Law of Delaware.

ARTICLE IV

CAPITAL STOCK
-------------

4.1 The total number of shares of all classes of capital stock which the
Corporation shall have authority to issue is twenty-one million (21,000,000),
of which twenty million (20,000,000) shares of the par value of $0.50 per share
are to be of a class designated "Common Stock" and one million (1,000,000)
shares of the par value of $1.00 per share are to be of a class designated
"Preferred Stock". The Preferred Stock may be issued from time to time as a
class without series, or if so determined by the Board of Directors, either in
whole or in part in one or more series. There is hereby expressly granted to
and vested in the Board of Directors authority to fix and determine by
resolution the voting powers, full or limited, or no voting powers, and such
designations, preferences and relative, participating, optional or other
special rights, if any, and the qualifications, limitations or restrictions
thereof, if any, including specifically, but not limited to, the dividend
rights, conversion rights, redemption rights and liquidation preferences, if
any of any wholly unissued series of Preferred Stock (or of the entire class of
Preferred Stock if none of such shares has been issued), the number of shares
constituting any such series and the terms and conditions of the issue thereof.
A certificate setting forth a copy of each such resolution or resolutions and
the number of shares of stock of each such class or series may be executed,
acknowledged, filed and recorded in accordance with Delaware General
Corporation Law. Unless otherwise provided in any such resolution or
resolutions, the number of shares of stock of any such class or series so set
forth in such resolution or resolutions may thereafter be increased or
decreased (but not below the number of shares

<PAGE>

thereof then outstanding), by a certificate likewise executed, acknowledged,
filed and recorded setting forth a statement that a specified increase or
decrease therein had been authorized and directed by a resolution or
resolutions likewise adopted by the Board of Directors. In case the number of
shares shall be decreased, the number of shares so specified in the certificate
shall resume the status which they had prior to the adoption of the first
resolution or resolutions.

4.2 The number of authorized shares of any class, including Preferred
Stock, may be increased or decreased by the affirmative vote of the holders of
a majority of the outstanding shares of the Corporation entitled to vote
without the separate vote of holders of Preferred Stock voting as a class.

4.3 Except as otherwise provided by a resolution of the Board of Directors
creating any series of Preferred Stock, no holder of Preferred Stock or Common
Stock of the Corporation shall have any preemptive right as such holder (other
than such right, if any, as the Board of Directors in its discretion may by
resolution determine pursuant to this Section 4.3) to purchase, subscribe for
or otherwise acquire any shares of stock of the Corporation of any class now
or hereafter authorized, or any securities convertible into or exchangeable
for any such shares, or any warrants or any instruments evidencing rights
or options to subscribe for, purchase or otherwise acquire any such shares,
whether such shares, securities, warrants or other instruments are now, or
shall hereafter be, authorized, unissued or issued and thereafter acquired
by the Corporation.

ARTICLE V

DURATION
--------

5.1 The Corporation is to have perpetual existence.

ARTICLE VI

INTERNAL AFFAIRS
----------------

The following provisions for the regulation of the business and for the
conduct of the affairs of the Corporation, the directors and the stockholders
are hereby adopted:

<PAGE>

6.1 In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized:

To make, alter or repeal the By-laws of the Corporation.

To authorize and cause to be executed mortgages and liens upon the real
and personal property of the Corporation.

6.2 The business and affairs of the Corporation shall be managed by the
Board of Directors. The number of directors comprising the Board of Directors
shall be fixed by, or in the manner provided in, the By-laws.

6.3 Nothing contained in this Certificate of Incorporation shall be deemed
to restrict the power of the Board of Directors or members of any of its
committees to take any action required or permitted to be taken by them without
a meeting, in accordance with applicable provisions of law. No action required
to be taken or which may be taken at any annual or special meeting of
stockholders of the Corporation may taken without such a meeting, and the
power of the stockholders to consent in writing, without such a meeting, to
the taking of any action is specifically denied; provided, however, that
nothing herein contained shall be deemed to restrict the powers of the Board
of Directors as elsewhere provided herein, by law, or under the By-laws.

6.4 Any director or any officer of the Corporation elected or appointed by
the stockholders or the Board of Directors may be removed at any time in such
manner as shall be provided in the By-laws of the Corporation.

6.5 (a) The Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, including appeals (other than an action by or in the right of
the Corporation), by reason of the fact that he is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request of
the Corporation as a director, officer, partner, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and and in a manner he
reasonably believed

-4-

<PAGE>

to be in or not opposed to the best interests of the Corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
the person did not act in good faith and in a manner which he reasonably
believed to be in or to opposed to the best interests of the Corporation,
and, with respect to any criminal action or proceeding, had reasonable cause
to believe that his conduct was unlawful.

(b) The Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Corporation to procure a judgment in
its favor by reason of the fact that he is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request of
the Corporation as a director, officer, partner, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Corporation and except that no indemnification shall
be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable for negligence or misconduct in the
performance of his duty to the Corporation unless and only to the extent that
the Court of Chancery or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability
but in view of all circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Court of Chancery
or such other court shall deem proper.

(c) To the extent that a director, officer, employee or agent of the
Corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b), or in
defense of any claim, issue or matter therein, he shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by him
in connection therewith, notwithstanding that he has not been successful on
any other claim, issue or matter in any such action, suit or proceeding.

-5-

<PAGE>

(d) Any indemnification under subsections (a)
and (b) (unless ordered by a court) shall be made by the Corporation only as
authorized in the specific case upon a determination that indemnification of
the director, officer, employee or agent is proper in the circumstances because
he has met the applicable standard of conduct set forth in subsections (a) and
(b). Such determination shall be made (1) by the Board of Directors by a
majority vote of a quorum consisting of directors who were not parties to such
action, suit or proceeding, or (2) if such a quorum is not obtainable, or even
if obtainable a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion, or (3) by the stockholders.

(e) Expenses (including attorneys' fees) incurred in defending a
civil or criminal action, suit or proceeding may be paid by the Corporation in
advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Directors in the specific case upon receipt of an
undertaking by or on behalf of the director, officer, employee or agent to
repay such amount if and to the extent that it shall ultimately be determined
that he is not entitled to be indemnified by the Corporation as authorized in
this Section.

(f) The indemnification authorized by this Section shall not be
deemed exclusive of and shall be in addition to any other rights to which those
indemnified may be entitled under any statute, rule of law, provision of
by-law, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a person.

(g) For purposes of this Section 6.5, reference to "the Corporation"
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, employees or
agents, so that any person who is or was a director, officer, employee or agent
of such constituent corporation, or is or was serving at the request of such
constituent corporation as a director, officer, employee or agent or another
corporation, partnership, joint venture, trust or other enterprise, shall stand
in the same position under the

-6-

<PAGE>

provisions of this Section 6.5 with respect to the resulting or surviving
corporation as he would have with respect to such constituent corporation if
its separate existence had continued.

(h) The Corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee
or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, partner, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
any liability asserted against him and incurred by him in any such capacity
or arising out of his status as such, whether or not the Corporation would
have the power to indemnify him against such liability under the provisions
of this Section.

6.6 Meetings of stockholders may be held within or without the State of
Delaware, as the By-laws may provide, but special meetings of the stockholders
for any purpose or purposes shall be called, upon not less than 10 days advance
written notice, by resolution of the Board of Directors or its Executive
Committee or by the chief executive officer of the Corporation or, upon not
less than 60 days advance written notice, by holders of Common Stock entitled to
be voted for directors in an amount not less than a majority of the sum of
(i) the number of shares of Common Stock of the Corporation issued, outstanding
and entitled vote and (ii) the number of shares of Common Stock of the
Corporation which would become issued, outstanding and entitled to vote upon
the conversion of all outstanding convertible equity and convertible debt
securities of the Corporation into Common Stock. The books of the Corporation
may be kept (subject to any provision contained in the statutes) outside the
State of Delaware at such place or places as may be designated from time to
time by the Board of Directors or in the By-laws of the Corporation. Elections
of directors need not be by written ballot unless the By-laws of the
Corporation shall so provide.

6.7 The Corporation reserves the right to amend, alter, change or repeal
any provisions contained in this Restated Certificate of Incorporation by the
affirmative vote of the holders of a majority (except as expressly provided
hereinafter in this Section 6.7 and in Article VII) of the outstanding shares
of the Corporation entitled to vote following approval by the Board of
Directors to the extent required by Delaware law, and all rights conferred
upon stockholders herein are granted subject to this reservation.
Notwithstanding any provision of the

<PAGE>

Certificate of Incorporation or the By-laws of the Corporation (and
notwithstanding the fact that a lesser percentage may be specified by law,
this Certificate of Incorporation or the By-laws of the Corporation), the
affirmative vote of the holders of 67 percent of the outstanding shares of
capital stock of the Corporation entitled to vote for the election of directors
shall be required to amend or repeal any provision of Section 6.3, 6.6 or 6.7
of this Article VI or to adopt any provision inconsistent with said Sections of
this Article VI.

ARTICLE VII.

CERTAIN BUSINESS COMBINATIONS

7.1 Any other provision of this Certificate of Incorporation to the
contrary notwithstanding, the affirmative vote of the holders of not less than
80 percent of the outstanding shares of capital stock of the Corporation
entitled to vote generally (the "Voting Stock") and the affirmative vote of
the holders of not less than 67 percent of the Voting Stock held by
stockholders other than the Related Person (as hereinafter defined) involved in
the Business Combination (as hereinafter defined) shall be required for the
approval or authorization of any Business Combination, or of any series of
related transactions which, if taken together, would constitute a Business
Combination, with any Related Person; provided, however, that the 80 percent and
67 percent voting requirements shall not be applicable if:

(1) A Majority of the Continuing Directors (as hereinafter defined) of
the Corporation (a) has expressly approved in advance the acquisition
of Voting Stock of the Corporation that caused the Related Person
involved in the Business Combination to become a Related Person, or
(b) has approved the Business Combination; or

(2) The Business Combination is either a Reorganization (as hereinafter
defined) or a Business Combination in which the Corporation is a
surviving corporation and, in either event, the cash or fair market
value of the property, securities or other consideration to be
received per share as a result of the Business Combination by holders
of Common Stock of the Corporation other than the Related Person is
not less than the highest per share price (with appropriate
adjustments for recapitalizations and for stock splits, stock

<PAGE>
dividends and like distributions) paid by the Related Person
involved in the Business Combination in acquiring any holdings of
the Corporation's Common Stock either in or subsequent to the
transaction or series of transactions by reason of which the Related
Person became a Related Person. For purposes of this Section 7.1(2),
a good faith determination by a Majority of the Continuing Directors
of the satisfaction of this criterion shall be deemed to be
conclusive, but such determination need not be made or sought as the
exclusive means of satisfying such criterion.

Such affirmative vote shall be required notwithstanding the fact that no vote
may be required, or that a lesser percentage may be specified by law or in any
agreement with any national securities exchange or otherwise.

7.2 For purposes of this Article VII:

(a) The term "Business Combination" shall mean (i) any Reorganization
of the Corporation or a Subsidiary (as hereinafter defined) with
or into a Related Person, (ii) any sale, lease, exchange, transfer
or other disposition, including without limitation a pledge,
mortgage or any other security device, of all or any Substantial
Part (as hereinafter defined) of the assets either of the
Corporation or of a Subsidiary, or both, to a Related Person,
(iii) any Reorganization of a Related Person with or into the
Corporation or a Subsidiary, (iv) any sale, lease, exchange,
transfer or other disposition of all or any Substantial Part of
the assets of a Related Person to the Corporation or a Subsidiary,
(v) the issuance of any securities of the Corporation or a
Subsidiary to a Related Person except if such issuance were a
stock split, stock dividend or other distribution pro rata to all
holders of the same class of Voting Stock, (vi) any
reclassification of securities (including a reverse stock split)
or any other recapitalization that would have the effect of
increasing the voting power of a Related Person, and (vii) any
agreement, contract, plan or other arrangement providing for any
of the transactions described in this definition of Business
Combination.

(b) The term "Related Person" shall mean and include (i) any
individual, corporation, partnership or

<PAGE>

other person or entity which, together with its "Affiliates" and
"Associates" (as defined on March 21, 1983 in Rule 12b-2 under the
Securities Exchange Act of 1934), "beneficially owns" (as defined
on March 21, 1983 in Rule 13d-3 under the Securities Exchange Act
of 1934) in the aggregate 20 percent or more of the outstanding
Voting Stock of the Corporation, (ii) any Affiliate or Associate
of any such individual, corporation, partnership or other person
or entity, and (iii) any assignee, transferee or successor of any
of the foregoing. Notwithstanding the foregoing, the term
"Related Person" shall not include (A) the Corporation, (B) any
Subsidiary (unless the stock thereof not owned by the Corporation
is owned by a Related Person as hereinabove defined), (C) any
employee benefit plan of the Corporation or any such Subsidiary,
(D) any trustee of or fiduciary with respect to any such plan
when acting in such capacity, or (E) except as hereinbelow
provided, the individuals comprising the Board of Directors of
the Corporation, their estates, immediate families, trusts
established by them, or trusts in which they have a beneficial
interest. Any person or other entity described in (E) above may,
nevertheless, be a Related Person involved in a Business
Combination, and shall not be counted in determining a Majority
of the Continuing Directors, if an Associate or Affiliate of such
person or entity which is not excluded by any of (A) through (D),
inclusive, is a party to such Business Combination and such
person or entity has a 1 percent or greater interest in the
equity or profits of such Associate or Affiliate. Any person or
entity who at any time is a Related Person continues at all times
thereafter to be a Related Person.

(c) Notwithstanding the definition of "beneficially owned" in
subsection (b) of this Section 7.2, any Voting Stock of the
Corporation that any Related Person has the right to acquire
pursuant to any agreement, or upon exercise of conversion rights,
warrants or options, or otherwise, shall be deemed beneficially
owned by the Related Person.

(d) The term "Substantial Part" shall mean more than 20 percent of
the fair market value of the total assets of the corporation
in question, as determined in good faith by a Majority of the
Continuing Directors, as of the end of its most recent

<PAGE>

fiscal year ending prior to the time determination is being made.

(e) The term "Subsidiary" means any corporation of which a majority of
any class of equity security is owned directly or indirectly by
the Corporation.

(f) For the purposes of Section 7.1, in any Business Combination of a
Subsidiary with a Related Person, the voting provisions contained
therein shall apply in order for the Corporation to cause the
Subsidiary to approve or authorize such Business Combination.

(g) For the purposes of subsection (2) of Section 7.1, the term "other
consideration to be received" shall include, without limitation,
in the event of a Business Combination in which the Corporation is
the surviving corporation, Common Stock or other Voting Stock of
the Corporation retained by its stockholders of record immediately
prior to the consummation of the Business Combination who are not
the Related Person involved in the Business Combination.

(h) The term "Continuing Director" shall mean a director of the
Corporation at the relevant time who was a member of the Board of
Directors of the Corporation immediately prior to the earliest
time that (i) any Related Person involved in a Business
Combination, or (ii) any Related Person who is (1) a Predecessor
to such Related Person or (2) an assignor of beneficial ownership
in the Corporation to such a Related Person or to its
Predecessors, became a Related Person.

(i) The term "Majority" shall mean that number which constitutes a
majority of the members of the Board of Directors of the
Corporation immediately prior to the earliest time that (i) any
Related Person involved in the Business Combination, or (ii) any
Related Person who is (1) a Predecessor to such Related Person or
(2) an assignor of beneficial ownership in the
Corporation to such a Related Person or to its Predecessors,
became a Related Person.

(j) The term "Predecessor" shall mean each person or other entity
(i) to which the subject Related Person is a successor by merger,
consolidation,

<PAGE>
sale and purchase of substantially all of the assets, or other
reorganization or (ii) which assigned or transferred beneficial
ownership of Voting Stock of the Corporation to the subject
Related Person, directly or through successive transactions.

(k) The term "Reorganization" includes a merger, consolidation, plan
of exchange, sale of all or substantially all of the assets
(including, as pertains to a Subsidiary, bulk reinsurance or
cession of substantially all of its policies and contracts) or
other form of corporate reorganization pursuant to which shares of
Voting Stock, or other securities of the subject corporation, are
to be converted or exchanged into cash or other property,
securities or other consideration.

(l) Assignments or transfers of Common Stock of the Corporation
between Associates or Affiliates prior to a Business Combination
involving one of them as a Related Person shall not be construed
to reduce the highest per share price (with appropriate
adjustments for recapitalizations and for stock splits, stock
dividends and like distributions) paid by the Related Person
involved in the Business Combination in acquiring any holdings of
the Corporation's Common Stock, as provided in Section 7.1(2).

(m) No Associate or Affiliate of the directors of the Corporation
shall be a Related Person by attribution to such Associate or
Affiliate of the Common Stock ownership of such directors as of
March 18, 1983.

7.3 Nothing contained in this Article VII shall be construed to relieve
any Related Person from any fiduciary obligation or duty of fairness imposed by
law nor to adversely affect the rights of stockholders who are not Related
Persons under applicable principles of law and equity, including without
limitation, those rights under the laws of the states of domicile of such
stockholders, federal securities or other applicable laws, or the laws and
regulations applicable to any insurance company subsidiaries of the Corporation.

7.4 Notwithstanding any provisions of this Certificate of Incorporation or
the By-laws of the Corporation (and notwithstanding the fact that a lesser
percentage may be specified by law, this Certificate of Incorporation or

<PAGE>

the By-laws of the Corporation), the affirmative vote of the holders of not less
than 80 percent of the outstanding shares of the Voting Stock and the
affirmative vote of the holders of not less than 67 percent of the Voting Stock
held by stockholders other than a Related Person (as hereinabove defined) shall
be required to amend or repeal any provision of this Article VII or to adopt
any provision inconsistent with this Article VII.

IN WITNESS WHEREOF, Protective Life Corporation has caused its corporate
seal to be hereunto affixed and this 1985 Restated Certificate of Incorporation
to be signed by William J. Rushton, III as its Chairman of the Board and Chief
Executive Officer and Ryburn H. Bailey as its Secretary, hereby declaring and
certifying that this is its act and deed and the facts herein stated are true,
this 6 day of May, 1985.

Protective Life Corporation

By ________________________________
Its Chairman of the Board
and Chief Executive Officer

ATTEST:

____________________________________
Its Secretary

[SEAL]

<PAGE>

CERTIFICATE OF AMENDMENT
OF
1985 RESTATED CERTIFICATE OF INCORPORATION
OF PROTECTIVE LIFE CORPORATION

Protective Life Corporation, a corporation organized and existing under
and by virtue of the General Corporation Law of the State of Delaware, DOES
HEREBY CERTIFY:

FIRST: That at a meeting of the Board of Directors of Protective Life
Corporation duly called and held, a resolution was duly adopted setting forth
a proposed amendment to the 1985 Restated Certificate of Incorporation of
said Corporation, in form set forth below, declaring said amendment to be
advisable and directing the same to be submitted to a vote of the
stockholders of said Corporation at the Annual Meeting of Stockholders to
be held on May 4, 1987 or at any adjournment thereof.

SECOND: That thereafter, the said Annual Meeting of Stockholders was
duly called and held, upon notice in accordance with Section 222 of the
General Corporation Law of the State of Delaware, at which meeting the
necessary number of shares of Common Stock as required by statute were voted
in favor of the following amendment to the 1985 Restated Certificate of
Incorporation:

1. By deleting Section 6.5 of Article VI in its entirety and inserting in
lieu thereof the following:

6.5(a) A director of the Corporation shall not be personally liable to
the Corporation or its stockholders for monetary damages for
breach of fiduciary duty as a director, except for liability
(i) for any breach of the director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General
Corporation Law, or (iv) for any transaction from which the
director derived an improper personal benefit.

(b) Each person who was or is made a party or is threatened to be
made a party to or is involved in any action, suit, or
proceeding, whether civil, criminal, administrative, or
investigative (hereinafter a "proceeding"), by reason of the fact
that he or she, or a person of whom he or she is the legal
representative, is or was a director or officer of the Corporation
or is or was serving at the request of the Corporation as a
director, officer, employee, or agent of another corporation or of
a partnership, joint venture, trust or other enterprise, including
service with respect to

<PAGE>

employee benefit plans, whether the basis
of such proceeding is alleged action in an official capacity
as a director, officer, employee, or agent or in any other
capacity while serving as a director, officer, employee, or
agent, shall be indemnified and held harmless by the Corporation
to the fullest extent authorized by the Delaware General
Corporation Law, against all expense, liability, and loss
(including attorneys' fees, judgments, fines, ERISA, excise taxes,
or penalties and amounts paid or to be paid in settlement)
reasonably incurred or suffered by such person in connection
therewith and such indemnification shall continue as to a person
who has ceased to be a director, officer, employee, or agent and
shall inure to the benefit of his or her heirs, executors and
administrators; provided, however, that, except as provided in
paragraph (c) hereof, the Corporation shall indemnify any such
person seeking indemnification in connection with a proceeding
(or part thereof) initiated by such person only if such proceeding
(or part thereof) was authorized by the Board of Directors of
the Corporation. The right to indemnification conferred in
this Section shall be a contract right and shall include the right
to be paid by the Corporation the expenses incurred in defending
any such proceeding in advance of its final disposition; provided,
however, that, if the Delaware General Corporation Law requires,
the payment of such expenses incurred by a director or officer in
his or her capacity as a director or officer (and not in any other
capacity in which service was or is rendered by such person while
a director or officer, including, without limitation, service to
an employee benefit plan) in advance of the final disposition of
a proceeding, shall be made only upon delivery to the Corporation
of an undertaking, by or on behalf of such director or officer, to
repay all amounts so advanced if it shall ultimately be determined
that such director or officer is not entitled to be
indemnified under this Section or otherwise. The Corporation may,
by action of its Board of Directors, provide indemnification to
employees and agents of the Corporation with the same scope and
effect as the foregoing indemnification of directors and officers.

(c) If a claim under paragraph (b) of this Section is not paid in full
by the Corporation within thirty days after a written claim has
been received by the Corporation, the claimant may at any time
thereafter bring suit against the Corporation to recover the
unpaid amount of the claim and, if successful in whole or in part,
the claimant shall be entitled to be paid also the expense of
prosecuting such claim. It shall be a defense to any such action
(other than an action brought to enforce a claim for expenses
incurred

<PAGE>

in defending any proceeding in advance of its final disposition
where the required undertaking, if any is required, has been
tendered to the Corporation) that the claimant has not met the
standards of conduct which make it permissible under the Delaware
General Corporation Law for the Corporation to indemnify the
claimant for the amount claimed, but the burden of proving such
defense shall be on the Corporation. Neither the failure of the
Corporation (including its Board of Directors, independent legal
counsel, or its stockholders) to have made a determination prior
to the commencement of such action that indemnification of the
claimant is proper in the circumstances because he or she has met
the applicable standards of conduct set forth in the Delaware
General Corporation Law, nor an actual determination by the
Corporation (including its Board of Directors, independent legal
counsel, or its stockholders) that the claimant has not met such
applicable standard of conduct, shall be a defense to the action or
create a presumption that the claimant has not met the applicable
standards of conduct.

(d) The right to indemnification and the payment of expenses incurred
in defending a proceeding in advance of its final disposition
conferred in this Section shall not be exclusive of any other
right which any person may have or hereafter acquire under any
statute, provision of the Certificate of Incorporation, By-law,
agreement, vote of stockholders or disinterested directors,
or otherwise.

(e) The Corporation may maintain insurance, at its expense, to protect
itself and any director, officer, employee, or agent of the
Corporation or another corporation, partnership, joint venture,
trust, or other enterprise against any such expense, liability,
or loss, whether or not the Corporation would have the power to
indemnify such person against such expense, liability, or loss
under the Delaware General Corporation Law.

THIRD: That the said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.

FOURTH: That the capital of the Corporation will not be reduced under or
by reason of said amendment.

<PAGE>

IN WITNESS WHEREOF, said Protective Life Corporation has caused its
corporate seal to be hereunto affixed and this Certificate of Amendment to
be signed by William J. Rushton III, its Chairman of the Board and Chief
Executive Officer, and Ryburn H. Bailey, its Secretary, hereby declaring and
certifying that this is its act and deed and the facts herein stated are
true, this 26th day of May, 1987.

PROTECTIVE LIFE CORPORATION

BY:__________________________________
William J. Rushton III
Its Chairman of the Board
and Chief Executive Officer

ATTEST:

__________________________________
Ryburn H. Bailey
Its Secretary

(SEAL)

<PAGE>
EXHIBIT 13

CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS) 1993 1992 1991
<S> <C> <C> <C> <C>
REVENUES Premiums and policy fees (net of premiums ceded:
1993 - $126,912; 1992 - $109,355; 1991 - $89,927) $370,758 $323,136 $273,975
Net investment income 362,130 284,069 233,502
Realized investment gains (losses) 5,054 (14) (3,085)
Other income 21,695 18,835 11,556
Total revenues 759,637 626,026 515,948

BENEFITS AND Benefits and settlement expenses (net of reinsurance:
EXPENSES 1993 - $95,708; 1992 - $74,904; 1991 - $68,070) 473,884 409,557 346,591
Amortization of deferred policy acquisition costs 73,605 48,951 40,264
Other operating expenses 127,104 107,571 77,390
Total benefits and expenses 674,593 566,079 464,245

INCOME BEFORE
INCOME TAX 85,044 59,947 51,703

INCOME TAX EXPENSE Current 33,748 18,720 11,120
Deferred (5,273) (1,336) 3,357
Total income tax expense 28,475 17,384 14,477

INCOME BEFORE
MINORITY INTEREST 56,569 42,563 37,226

MINORITY INTEREST
IN INCOME OF
CONSOLIDATED
SUBSIDIARIES 19 90 1,437

INCOME BEFORE
CUMULATIVE EFFECT
OF A CHANGE IN
ACCOUNTING PRINCIPLE 56,550 42,473 35,789

CUMULATIVE EFFECT
OF A CHANGE IN
ACCOUNTING PRINCIPLE
(NET OF INCOME
TAX: $542) (1,053)

NET INCOME $ 56,550 $ 41,420 $ 35,789

INCOME PER SHARE
BEFORE CUMULATIVE
EFFECT OF A CHANGE IN
ACCOUNTING PRINCIPLE $ 4.13 $ 3.11 $ 2.62

CUMULATIVE EFFECT
OF A CHANGE IN
ACCOUNTING
PRINCIPLE PER SHARE (.08)

NET INCOME
PER SHARE $ 4.13 $ 3.03 $ 2.62

DIVIDENDS PAID
PER SHARE $ 1.01 $ .90 $ .82
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

<PAGE>

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31
(DOLLARS IN THOUSANDS) 1993 1992
<S> <C> <C>
ASSETS INVESTMENTS:
Fixed maturities,1993 at market (amortized cost: $2,985,670);
1992 at amortized cost (market: $2,247,828) $3,051,292 $2,185,015
Equity securities, at market
(cost: 1993 - $33,331; 1992 - $21,804) 40,596 26,588
Mortgage loans on real estate 1,407,744 1,178,164
Investment real estate, net of accumulated
depreciation (1993 - $4,483; 1992 - $2,497) 22,061 17,020
Policy loans 141,135 117,873
Other long-term investments 20,191 19,618
Short-term investments 83,692 52,792

Total investments 4,766,711 3,597,070
Cash 27,119 14,959
Accrued investment income 51,337 41,045
Accounts and premiums receivable, net
of allowance for uncollectible
amounts (1993 - $5,024; 1992 - $1,108) 26,315 28,345
Reinsurance receivables 102,559 4,406
Deferred policy acquisition costs 299,584 275,212
Property and equipment, net 35,664 34,746
Other assets 3,316 7,478
Assets held in separate accounts 3,400 3,406

TOTAL ASSETS $5,316,005 $4,006,667
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

<PAGE>

<TABLE>
<CAPTION>
1993 1992

<S> <C> <C> <C>
LIABILITIES Policy liabilities and accruals
Future policy benefits and claims $1,380,845 $ 929,592
Unearned premiums 88,785 75,177
Total policy liabilities and accruals 1,469,630 1,004,769
Guaranteed investment contract deposits 2,015,075 1,694,530
Annuity deposits 1,005,742 674,062
Other policyholders' funds 141,975 122,770
Other liabilities 96,682 81,326
Accrued income taxes 6,381 118
Deferred income taxes 69,269 54,727
Short-term debt 9,520 57,234
Long-term debt 137,598 31,014
Liabilities related to separate accounts 3,400 3,406
Minority interest in consolidated subsidiaries 1,311
Total liabilities 4,955,272 3,725,267
COMMITMENTS AND
CONTINGENCIES - Note G

STOCKHOLDERS' Preferred Stock, $1 par value
EQUITY Shares authorized: 850,000
Issued: none
Junior Participating Cumulative
Preferred Stock, $1 par value
Shares authorized: 150,000
Issued: none
Common Stock, $.50 par value 7,834 7,834
Shares authorized: 20,000,000
Issued: 1993 and 1992 - 15,668,231
Additional paid-in capital 70,469 70,335
Net unrealized gains on investments
(net of income tax: 1993 - $19,774; 1992 - $1,628) 39,284 3,156
Retained earnings 267,361 224,638
Treasury stock, at cost (1993 - 1,974,987 shares; 1992 - 1,978,433 shares) (18,359) (18,363)
Unallocated stock in Employee Stock Ownership Plan
(1993 - 442,000 shares; 1992 - 468,000 shares) (5,856) (6,200)
Total stockholders' equity 360,733 281,400

TOTAL LIABILITIES
AND STOCKHOLDERS'
EQUITY $5,316,005 $4,006,667
</TABLE>

<PAGE>

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
NET
UNREALIZED
GAINS
ADDITIONAL (LOSSES) UNALLOCATED TOTAL
(DOLLARS IN THOUSANDS COMMON PAID-IN ON RETAINED TREASURY STOCK IN STOCKHOLDERS'
EXCEPT PER SHARE AMOUNTS) STOCK CAPITAL INVESTMENTS EARNINGS STOCK ESOP EQUITY
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1990 $7,834 $69,460 $ (486) $170,943 $(18,535) $(6,890) $222,326
Net income for 1991 35,789 35,789
Cash dividends
($.82 per share) (11,210) (11,210)
Decrease in net unrealized
losses on investments 4,467 4,467
Reissuance of treasury stock
to ESOP (2,137 shares) 28 (28) 0
Allocation of stock to employee
accounts (28,137 shares) 373 373

Balance, December 31, 1991 7,834 69,488 3,981 195,522 (18,535) (6,545) 251,745
Net income for 1992 41,420 41,420
Cash dividends
($.90 per share) (12,304) (12,304)
Decrease in net unrealized
gains on investments (825) (825)
Reissuance of treasury stock
to ESOP (728 shares) 16 (16) 0
Allocation of stock to employee
accounts (26,728 shares) 361 361
Reissuance of treasury stock
(39,688 shares) 831 172 1,003

Balance, December 31, 1992 7,834 70,335 3,156 224,638 (18,363) (6,200) 281,400
Net income for 1993 56,550 56,550
Cash dividends
($1.01 per share) (13,827) (13,827)
Increase in net unrealized
gains on investments 36,128 36,128
Reissuance of treasury stock
to ESOP (103 shares) 3 (3) 0
Allocation of stock to employee
accounts (26,103 shares) 347 347
Reissuance of treasury stock
(3,343 shares) 131 4 135

Balance, December 31, 1993
- Note H $7,834 $70,469 $39,284 $267,361 $(18,359) $(5,856) $360,733
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

<PAGE>

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
(DOLLARS IN THOUSANDS) 1993 1992 1991
<S> <C> <C> <C> <C>
CASH FLOWS Net income $ 56,550 $ 41,420 $ 35,789
FROM Adjustments to reconcile net income to net cash
OPERATING provided by operating activities:
ACTIVITIES Amortization of deferred policy acquisition costs 73,605 48,951 40,624
Capitalization of deferred policy acquisition costs (91,564) (81,481) (63,071)
Depreciation expense 3,742 3,946 4,668
Deferred income taxes 14,253 (2,514) 4,107
Accrued income taxes 6,230 691 (1,085)
Interest credited to universal life and
investment products 220,772 173,658 132,533
Policy fees assessed on universal life
and investment products (67,314) (46,383) (37,546)
Change in accrued investment income
and other receivables (97,908) (9,157) (20,871)
Change in policy liabilities and other
policyholders' funds of traditional
life and health products 42,901 4,307 (8,003)
Change in other liabilities 12,432 5,610 11,203
Other (net) 14,959 (4,276) (3,940)
Net cash provided by operating activities 188,658 134,772 94,408
CASH FLOWS Cost of investments acquired (2,334,171) (1,991,950) (1,526,085)
FROM Maturities and principal reductions of investments 1,341,818 882,950 574,018
INVESTING Sale of investments 244,683 338,850 191,896
ACTIVITIES Acquisitions and bulk reinsurance assumptions 14,190 23,274
Purchase of property and equipment (4,682) (3,731) (5,988)
Sale of property and equipment 3,023 180 394
Net cash used in investing activities (735,139) (750,427) (765,765)
CASH FLOWS Proceeds from borrowings under line of credit
FROM arrangements and long-term debt 719,173 341,000 140,365
FINANCING Principal payments on line of credit
ACTIVITIES arrangements and long-term debt (661,717) (310,331) (163,931)
Dividends to stockholders (13,827) (12,304) (11,210)
Change in universal life and investment
product deposits 515,012 607,721 686,458
Net cash provided by financing activities 558,641 626,086 651,682
INCREASE (DECREASE)
IN CASH 12,160 10,431 (19,675)
CASH AT BEGINNING
OF YEAR 14,959 4,528 24,203
CASH AT END
OF YEAR $ 27,119 $ 14,959 $ 4,528
SUPPLEMENTAL
DISCLOSURES Cash paid during the year:
OF CASH Interest on debt $ 6,426 $ 4,457 $ 5,746
FLOW INFORMATION Income taxes $ 27,493 $ 18,007 $ 10,901
SUPPLEMENTAL Change in minority interest in consolidated
SCHEDULE OF subsidiaries $ (1,311) $ 90 $ (4,549)
NONCASH INVESTING Reissuance of treasury stock to ESOP $ 3 $ 16 $ 28
AND FINANCING Unallocated stock in ESOP $ 344 $ 345 $ 345
ACTIVITIES Reissuance of treasury stock $ 135 $ 1,003
Acquisitions and bulk reinsurance assumptions
Assets acquired $ 423,167 $ 103,557
Liabilities assumed (429,580) (130,008)
Net $ (6,413) $ (26,451)
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ALL DOLLAR AMOUNTS IN TABLES ARE IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

NOTE A. SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION
The accompanying consolidated financial statements of Protective Life
Corporation and subsidiaries (the Company) are prepared on the basis of
generally accepted accounting principles. Such accounting principles differ from
statutory reporting practices used by insurance companies in reporting to state
regulatory authorities. (See also Note B.)

ENTITIES INCLUDED
The consolidated financial statements include the accounts, after intercompany
eliminations, of Protective Life Corporation and its wholly owned subsidiaries.
Protective Life Insurance Company (Protective Life) is the Company's principal
operating subsidiary.
Additionally, the financial statements include the accounts of
majority-owned subsidiaries. The ownership interest of the other stockholders of
these subsidiaries is called a minority interest and is reported as a liability
of the Company and as an adjustment to income.

RECENTLY ISSUED ACCOUNTING STANDARDS
In 1992, the Company adopted Statement of Financial Accounting Standards (SFAS)
No. 106, "Employers' Accounting For Postretirement Benefits Other Than
Pensions." SFAS No. 106 was accounted for as a change in accounting principle
with the cumulative effect reported as a reduction to income.
In 1993, the Company adopted SFAS No. 109, "Accounting For Income Taxes."
Adoption of this accounting standard did not have a material effect on the
Company's financial statements.
The Company also adopted in 1993 SFAS No. 113, "Accounting and Reporting
for Reinsurance of Short-Duration and Long-Duration Contracts." This statement
eliminates the reporting of insurance activities net of the effects of
reinsurance ceded. The adoption of this statement increased reported assets and
liabilities by approximately $97.9 million at December 31, 1993. The Company has
not restated any previously reported financial statements as a result of
adopting this statement.
At December 31, 1993, the Company adopted SFAS No. 115, "Accounting for
Certain Investments in Debt and Equity Securities." For purposes of adopting
SFAS No.115 the Company has classified all of its investments in fixed
maturities, equity securities, and short-term investments as "available for
sale." As prescribed by SFAS No. 115, these investments are recorded at their
market values at December 31, 1993 with the resulting net unrealized gain
recorded as an increase in stockholders' equity. The effect of adopting SFAS
No. 115 at December 31, 1993 was to increase fixed maturities by $65.6 million,
decrease deferred policy acquisition costs by $12.4 million, increase the
liability for deferred income taxes by $18.6 million, and increase stockholders'
equity by $34.6 million. In accordance with the provisions of SFAS No. 115, 1992
amounts have not been restated.

INVESTMENTS
Investments are reported on the following bases less allowances for
uncollectible amounts on investments, if applicable:
- - Fixed maturities (bonds, bank loan participations, and redeemable preferred
stocks) - 1993: at current market value; 1992: at cost, adjusted for
amortization of premium or discount and other than temporary market-value
declines.
- - Equity securities (common and nonredeemable preferred stocks) - at current
market value.
- - Mortgage loans on real estate - at unpaid balances, adjusted for loan
origination costs, net of fees, and amortization of premium or discount.
- - Investment real estate - at cost, less allowances for depreciation computed on
the straight-line method. With respect to real estate acquired through
foreclosure, cost is the lesser of the loan balance plus foreclosure costs or
appraised value.
- - Policy loans - at unpaid balances.
- - Other long-term investments - at a variety of methods similar to those listed
above, as deemed appropriate for the specific investment.
- - Short-term investments - at cost, which approximates current market value.
Substantially all short-term investments have maturities of three months or
less at the time of acquisition and include approximately $11 million in bank
deposits voluntarily restricted as to withdrawal.
Realized gains and losses on sales of investments are recognized in net
income using the specific identification basis. Temporary changes in market
values of certain investments are reflected as unrealized gains or losses
directly in stockholders' equity (net of income tax) and accordingly have no
effect on net income.
A combination of futures contracts and options on treasury notes are
currently being used as hedges for asset/liability management of certain
investments, primarily mortgage loans on real estate, and liabilities arising
from interest-sensitive products such as guaranteed investment contracts and
individual annuities. Realized investment gains and losses on such contracts are
deferred and amortized over the life of the hedged asset. The Company also uses
interest rate swap contracts to convert certain investments from a variable to a
fixed rate of interest. At December 31, 1993, open interest rate swap contracts
were in a $9.0 million unrealized gain position.

CASH
Cash includes all demand deposits reduced by the amount of outstanding checks
and drafts.

<PAGE>

PROPERTY AND EQUIPMENT
Property and equipment are reported at cost. The Company uses both accelerated
and straight-line methods of depreciation based upon the estimated useful lives
of the assets. Major repairs or improvements are capitalized and depreciated
over the estimated useful lives of the assets. Other repairs are expensed as
incurred. The cost and related accumulated depreciation of property and
equipment sold or retired are removed from the accounts, and resulting gains or
losses are included in income.
Property and equipment consisted of the following at December 31:

<TABLE>
<CAPTION>
1993 1992
<S> <C> <C>
Home Office building $35,284 $35,267
Data processing equipment 13,301 11,101
Other, principally furniture and equipment 15,034 15,344
63,619 61,712
Accumulated depreciation 27,955 26,966
$35,664 $34,746
</TABLE>

REVENUES, BENEFITS, CLAIMS, AND EXPENSES
- - Traditional Life and Health Insurance Products - Traditional life insurance
products consist principally of those products with fixed and guaranteed
premiums and benefits and include whole life insurance policies, term life
insurance policies, limited-payment life insurance policies, and certain
annuities with life contingencies. Life insurance and immediate annuity premiums
are recognized as revenue when due. Health insurance premiums are recognized as
revenue over the terms of the policies. Benefits and expenses are associated
with earned premiums so that profits are recognized over the life of the
contracts. This is accomplished by means of the provision for liabilities for
future policy benefits and the amortization of deferred policy acquisition
costs.
Liabilities for future policy benefits on traditional life insurance
products have been computed using a net level method including assumptions as to
investment yields, mortality, persistency, and other assumptions based on the
Company's experience, modified as necessary to reflect anticipated trends and to
include provisions for possible adverse deviation. Reserve investment yield
assumptions are graded and range from 2.5% to 7.0%. The liability for future
policy benefits and claims on traditional life and health insurance products
includes estimated unpaid claims that have been reported to the Company and
claims incurred but not yet reported. Policy claims are charged to expense in
the period that the claims are incurred.
- - Universal Life and Investment Products - Universal life and investment
products include universal life insurance, guaranteed investment contracts,
deferred annuities, and annuities without life contingencies. Revenues for
universal life and investment products consist of policy fees that have been
assessed against policy account balances for the costs of insurance, policy
administration, and surrenders. That is, universal life and investment product
deposits are not considered revenues in accordance with generally accepted
accounting principles. Benefit reserves for universal life and investment
products represent policy account balances before applicable surrender charges
plus certain deferred policy initiation fees that are recognized in income over
the term of the policies. Policy benefits and claims that are charged to expense
include benefit claims incurred in the period in excess of related policy
account balances and interest credited to policy account balances. Interest
credit rates for universal life and investment products ranged from 3.0% to 9.4%
in 1993.
At December 31, 1993, the Company estimates the fair value of its
guaranteed investment contracts to be $2,105 million using discounted cash
flows. The surrender value of the Company's annuities which approximates fair
value was $1,003 million.
- - Policy Acquisition Costs - Commissions and other costs of acquiring
traditional life and health insurance, universal life insurance, and investment
products that vary with and are primarily related to the production of new
business have been deferred. Traditional life and health insurance acquisition
costs are being amortized over the premium-payment period of the related
policies in proportion to the ratio of annual premium income to total
anticipated premium income. Acquisition costs for universal life and investment
products are amortized over the lives of the policies in relation to the present
value of estimated gross profits from surrender charges and investment,
mortality, and expense margins. For 1993, these costs have been reduced by an
amount equal to the amortization that would have been recorded if unrealized
gains or losses on investments associated with the Company's universal life and
investment products had been realized.
At the time it adopted Statement of Financial Accounting Standards No. 97,
"Accounting and Reporting by Insurance Enterprises for Certain Long-Duration
Contracts and for Realized Gains and Losses from the Sale of Investments," the
Company made certain assumptions regarding the mortality, persistency, expenses,
and interest rates it expected to experience in future periods. Under SFAS
No. 97, these assumptions are to be best estimates and are to be periodically
updated whenever actual experience and/or expectations for the future change
from initial assumptions. Accordingly, the Company has substituted its actual
experience to date for that previously assumed.
The cost to acquire blocks of insurance representing the present value of
future profits from such blocks of insurance is also included in deferred policy
acquisition costs, discounted at interest rates averaging 15%. For acquisitions
occurring after 1988, the Company amortizes the present value of future profits
over the premium-payment period, including accrued interest at 8%. The
unamortized present value of future profits for such acquisitions was
approximately $39.4 million and $29.9 million at December 31, 1993 and 1992,
respectively. During 1993 $12.4 million of present value of future profits on
acquisitions made during the year was capitalized and $0.4 million was
amortized.

<PAGE>

The unamortized present value of future profits for all acquisitions was
$69.9 million at December 31, 1993 and $65.4 million at December 31, 1992.

PARTICIPATING POLICIES
Participating business comprises approximately 4% of the ordinary life insurance
in force and 4% of the ordinary life insurance premium income. Policyholder
dividends totaled $2.6 million in 1993, $2.6 million in 1992, and $2.8 million
in 1991.

INCOME TAXES
The Company uses the liability method of accounting for income taxes. Income tax
provisions are generally based on income reported for financial statement
purposes. Deferred federal income taxes arise from the recognition of temporary
differences between income determined for financial reporting purposes and
income tax purposes. Such temporary differences are principally related to the
deferral of policy acquisition costs and the provision for future policy
benefits and expenses.

INCOME PER SHARE OF COMMON STOCK
Per share data are based on the weighted average number of shares of Common
Stock outstanding which was 13,690,789, 13,657,993, and 13,649,031, in 1993,
1992, and 1991, respectively.

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

NOTE B. RECONCILIATION WITH STATUTORY REPORTING PRACTICES

Financial statements prepared in conformity with generally accepted accounting
principles (GAAP) differ in some respects from the statutory accounting
practices prescribed or permitted by insurance regulatory authorities. The most
significant differences are: (a) acquisition costs of obtaining new business are
deferred and amortized over the approximate life of the policies rather than
charged to operations as incurred; (b) benefit liabilities are computed using a
net level method and are based on realistic estimates of expected mortality,
interest, and withdrawals as adjusted to provide for possible unfavorable
deviation from such assumptions; (c) deferred income taxes are provided for
significant temporary differences between financial and taxable earnings; (d)
the Asset Valuation Reserve and Interest Maintenance Reserve are restored to
stockholders' equity; (e) furniture and equipment, agents' debit balances, and
prepaid expenses are reported as assets rather than being charged directly to
surplus (referred to as nonadmitted items); (f) certain items of interest
income, principally accrual of mortgage and bond discounts are amortized
differently; and (g) bonds are stated at market instead of amortized cost.
The reconciliations of net income and stockholders' equity prepared in
conformity with statutory reporting practices to that reported in the
accompanying consolidated financial statements are as follows:

<TABLE>
<CAPTION>
NET INCOME STOCKHOLDERS' EQUITY
1993 1992 1991 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C>
In conformity with statutory
reporting practices:
Protective Life
Insurance Company $41,471 $25,138 $28,071 $263,075 $206,476 $177,285
Wisconsin National Life
Insurance Company 9,591 50,885
American Foundation
Life Insurance Company 1,415 2,155 2,401 18,290 18,394 17,717
Empire General Life
Assurance Corporation 408 (201) 10,588 5,178
Capital Investors Life
Insurance Company 228 879
Protective Life Insurance
Corporation of Alabama 25 2,073
National Deposit Life
Insurance Company(1) 5,386 5,730 10,188
Protective Life Insurance
Acquisition Corporation(2) 22 (6) 2,009
Consolidation elimination (74) (1,000) (80,715) (21,572) (17,726)
53,138 32,426 35,196 265,075 208,476 189,473

</TABLE>

<PAGE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Additions (deductions) by
adjustment:
Deferred policy acquisition
costs, net of amortization 25,392 32,928 22,475 299,584 275,212 215,411
Policy liabilities and accruals (15,586) (26,486) (16,474) (69,844) (45,583) (16,216)
Deferred income tax 5,273 1,336 (3,357) (69,269) (54,727) (57,241)
Asset Valuation Reserve 43,398 25,341 27,821
Interest Maintenance Reserve (1,432) (93) 10,489 1,634
Nonadmitted items 1,190 685 (27) 7,742 (10,178) (1,521)
Timing differences on
mortgage loans on
real estate and fixed
maturity investments 1,645 1,296 3,297 7,350 (11,608) (16,131)
Net unrealized gains on
investments (334) (378) (1,648)
Realized investment losses (7,860) (2,550) (8,757)
Noninsurance affiliates (4,081) 2,990 4,666 87,693 100,435 123,930
Minority interest in
consolidated subsidiaries (19) (90) (1,437) (1,311) (1,221)
Consolidation elimination (222,790) (205,625) (209,670)
Other adjustments, net (1,110) (1,022) 207 1,639 (288) (1,242)
In conformity with generally
accepted accounting
principles $56,550 $41,420 $35,789 $360,733 $281,400 $251,745

<FN>
(1) MERGED INTO PROTECTIVE LIFE IN SEPTEMBER 1992.
(2) FORMED TO FACILITATE PROTECTIVE LIFE'S ACQUISITION OF EMPLOYERS NATIONAL
LIFE INSURANCE COMPANY. SEE NOTE F.
</TABLE>

NOTE C. INVESTMENT OPERATIONS

Major categories of net investment income for the years ended December 31 are
summarized as follows:

<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Fixed maturities $212,816 $172,919 $131,959
Equity securities 1,519 939 2,581
Mortgage loans on
real estate 130,262 108,128 88,664
Investment
real estate 2,166 1,893 1,146
Policy loans 7,558 6,781 6,395
Other, principally
short-term
investments 17,790 3,023 9,499
372,111 293,683 240,244
Investment
expenses 9,981 9,614 6,742
$362,130 $284,069 $233,502
</TABLE>

Realized investment gains (losses) for the years ended December 31 are
summarized as follows:

<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Fixed maturities $ 10,508 $ 8,163 $ 2,547
Equity securities 2,230 3,688 763
Mortgage loans and
other investments (7,684) (11,865) (6,395)
$ 5,054 $ (14) $ (3,085)
</TABLE>

The Company has established an allowance for uncollectible amounts on
investments. The allowance totaled $35.9 million, $27.2 million, and $17.5
million at December 31, 1993, 1992, and 1991, respectively. Additions to the
allowance are included in realized investment losses. Without such additions the
Company had realized investment gains of $13.8 million, $9.7 million, and $7.4
million in 1993, 1992, and 1991, respectively.
In 1993, gross gains on the sale of investments available for sale (fixed
maturities, equity securities, and short-term investments) were $8.3 million,
and gross losses were less than $0.4 million. In 1992, gross gains on the sale
of fixed maturities were $12.8 million, and gross losses were $1.7 million. In
1991, gross gains were $4.8 million, and gross losses were $1.9 million.

<PAGE>

The amortized cost and estimated market values of the Company's investments
classified as available for sale at December 31, 1993 are as follows:

<TABLE>
<CAPTION>
GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED MARKET
1993 COST GAINS LOSSES VALUES
<S> <C> <C> <C> <C>
Fixed maturities:
Bonds:
Mortgage-backed securities $1,531,012 $31,532 $ 957 $1,561,587
United States Govern-
ment and authorities 89,372 2,818 0 92,190
States, municipalities,
and political subdivisions 15,024 133 2 15,155
Public utilities 339,613 4,262 252 343,623
Convertibles and
bonds with warrants 1,421 0 167 1,254
All other corporate bonds 822,505 28,799 688 850,616
Bank loan participations 151,278 0 0 151,278
Redeemable preferred stocks 35,445 226 82 35,589
2,985,670 67,770 2,148 3,051,292
Equity securities 33,331 8,560 1,295 40,596
Short-term investments 83,692 0 0 83,692
$3,102,693 $76,330 $3,443 $3,175,580
</TABLE>

The amortized cost and estimated market values of the Company's investments
in fixed maturities at December 31, 1992 are as follows:

<TABLE>
<CAPTION>
GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED MARKET
1992 COST GAINS LOSSES VALUES
<S> <C> <C> <C> <C>
Bonds:
Mortgage-backed securities $1,269,620 $35,637 $0 $1,305,257
United States Govern-
ment and authorities 21,307 2,595 0 23,902
States, municipalities,
and political subdivisions 935 228 0 1,163
Public utilities 260,590 7,787 0 268,377
Convertibles and
bonds with warrants 5,224 193 0 5,417
All other corporate bonds 473,536 15,883 0 489,419
Bank loan participations 148,683 0 0 148,683
Redeemable preferred stocks 5,120 490 0 5,610
$2,185,015 $62,813 $0 $2,247,828
</TABLE>

The amortized cost and estimated market value of fixed maturities at
December 31, by contractual maturity, are shown below. Expected maturities will
differ from contractual maturities because borrowers may have the right to call
or to prepay certain of these obligations.

<TABLE>
<CAPTION>
ESTIMATED ESTIMATED
AMORTIZED MARKET
1993 COST VALUES
<S> <C> <C>
Due in one year or less $ 24,667 $ 24,755
Due after one year through five years 359,545 367,836
Due after five years through ten years 550,773 567,778
Due after ten years 2,050,685 2,090,923
$2,985,670 $3,051,292

<CAPTION>
ESTIMATED ESTIMATED
AMORTIZED MARKET
1992 COST VALUES
<S> <C> <C>
Due in one year or less $ 26,474 $ 26,790
Due after one year through five years 305,732 310,355
Due after five years through ten years 271,307 281,648
Due after ten years 1,581,502 1,629,035
$2,185,015 $2,247,828
</TABLE>

The approximate percentage distribution of the Company's fixed maturity
investments by quality rating at December 31 is as follows:

<PAGE>

<TABLE>
<CAPTION>
RATING 1993 1992
<S> <C> <C>
AAA 52.5% 51.7%
AA 7.8 10.0
A 15.1 15.8
BBB
Bonds 16.2 12.9
Bank loan participations 1.0 2.7
BB or less
Bonds 2.2 2.5
Bank loan participations 4.0 4.1
Redeemable preferred stocks 1.2 0.3
100.0% 100.0%
</TABLE>

At December 31, 1993, the Company had bonds which were rated less than
investment grade of $67.3 million having an amortized cost of $66.7 million.
Additionally, the Company had bank loan participations which were rated less
than investment grade of $121.7 million having an amortized cost of $121.7
million.
The change in unrealized gains (losses), net of tax, on fixed maturity and
equity securities for the years ended December 31 is summarized as follows:

<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Fixed maturities $1,198 $ 76 $65,955
Equity securities $1,565 $(825) $ 4,467
</TABLE>

At December 31, 1993, all of the Company's mortgage loans were commercial
loans of which 79% were retail, 9% were warehouses, and 8% were office
buildings. The Company specializes in making mortgage loans on either
credit-oriented or credit-anchored commercial properties, most of which are
strip shopping centers in smaller towns and cities. No single tenant's leased
space represents more than 7% of mortgage loans. Approximately 85% of the
mortgage loans are on properties located in the following states listed in
decreasing order of significance: Alabama, North Carolina, Tennessee, Georgia,
South Carolina, Texas, Florida, Mississippi, Virginia, Colorado, California,
Ohio, Wisconsin, Illinois, Indiana, and Michigan.
Many of the mortgage loans have call provisions after 5 to 7 years.
Assuming the loans are called at their next call dates, approximately $50.2
million would become due in 1994, $480.1 million in 1995 to 1998, and $218.7
million in 1999 to 2003.
At December 31, 1993, the average mortgage loan was $1.4 million, and the
weighted average interest rate was 9.6%. The largest single mortgage loan was
$9.3 million. While the Company's $1,407.7 million of mortgage loans do not have
quoted market values, at December 31, 1993, the Company estimates the market
value of its mortgage loans to be $1,524.2 million using discounted cash flows
from the next call date.
At December 31, 1993 and 1992, the Company's problem mortgage loans and
foreclosed properties totaled $27.1 million and $16.4 million, respectively. The
Company expects no significant loss of principal.
Certain investments, principally real estate, with a carrying value of $9.9
million, were nonincome producing for the twelve months ended December 31, 1993.
Mortgage loans to Fletcher Bright, Kenneth Karl, and Edens & Avant totaling
$92.1 million, $48.5 million, and $40.1 million, respectively, exceeded ten
percent of stockholders' equity at December 31, 1993.
The Company believes it is not practicable to determine the fair value of
its policy loans since there is no stated maturity, and policy loans are often
repaid by reductions to policy benefits. Policy loan interest rates generally
range from 4.5% to 8.0%. The fair values of the Company's other long-term
investments approximate cost.

NOTE D. FEDERAL INCOME TAXES

The Company's effective income tax rate varied from the maximum federal income
tax rate as follows:

<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Statutory federal income tax rate
applied to pretax income 35.0% 34.0% 34.0%
Amortization of nondeductible goodwill 0.1 1.1 0.4
Dividends received deduction and
tax-exempt interest (0.5) (1.3) (1.5)
Tax benefits arising from prior acquisitions
and other adjustments (2.6) (4.8) (4.9)
32.0% 29.0% 28.0%
</TABLE>

<PAGE>

In August 1993, the corporate income tax rate was increased from 34% to 35%
which resulted in a one-time increase to income tax expense of $1.3 million or
$.09 per share due to a recalculation of the Company's deferred income tax
liability. The effective income tax rate for 1993 of 32% excludes the one-time
increase.
The provision for federal income tax differs from amounts currently payable
due to certain items reported for financial statement purposes in periods which
differ from those in which they are reported for tax purposes.
Details of the deferred income tax provision for the years ended
December 31 are as follows:

<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Deferred policy acquisition costs $ 8,861 $ 7,164 $ 2,886
Benefit and other policy liability changes (10,416) (9,005) (5,601)
Temporary differences of investment income 336 1,153
Effect of operating loss carryforward 5,799
Other items (3,718) 169 (880)

$ (5,273) $ (1,336) $ 3,357
</TABLE>

The components of the Company's net deferred income tax liability as of
December 31, 1993 were as follows:

<TABLE>
<CAPTION>
1993
<S> <C>
Deferred income tax assets:
Policy and policyholder liability reserves $25,123
Other 4,333
29,456
Deferred income tax liabilities:
Deferred policy acquisition costs 79,199
Unrealized gain on investments 19,526
98,725
Net deferred income tax liability $69,269
</TABLE>

Under pre-1984 life insurance company income tax laws, a portion of the
Company's gain from operations which was not subject to current income taxation
was accumulated for income tax purposes in a memorandum account designated as
Policyholders' Surplus. The aggregate accumulation in this account at December
31, 1993 was approximately $50.7 million. Should the accumulation in the
Policyholders' Surplus account of the life insurance subsidiaries exceed certain
stated maximums, or should distributions including cash dividends be made to
Protective Life Corporation in excess of approximately $184.0 million, such
excess would be subject to federal income taxes at rates then effective.
Deferred income taxes have not been provided on amounts designated as
Policyholders' Surplus. The Company does not anticipate involuntarily paying
income tax on amounts in the Policyholders' Surplus accounts.
At December 31,1993, the Company has no unused income tax loss
carryforwards.

NOTE E. DEBT

Short-term and long-term debt at December 31 are summarized as follows:

<TABLE>
<CAPTION>
1993 1992
<S> <C> <C>
Short-term debt:
Notes payable to banks $49,700
Current portion of long-term debt $ 9,520 7,534
$ 9,520 $57,234

Long-term debt:
Notes payable to banks $137,500 $29,000
Mortgage and other notes payable
less current portion 98 2,014
$137,598 $31,014
</TABLE>

Under a three-year revolving line of credit arrangement with several banks,
the Company can borrow up to $138 million on an unsecured basis. No compensating
balances are required to maintain the line of credit. At December 31, 1993, the
Company had borrowed $118.0 million under this credit arrangement at a weighted
average interest rate of 4.0%.
At December 31, 1993, the Company had borrowed $29.0 million under a
variable rate term note to be repaid in installments through 1996. At
December 31, 1993, the note's rate of interest was 4.4%.
The aforementioned term note and revolving line of credit arrangement
contain, among other provisions, requirements for maintaining certain financial
ratios and restrictions on indebtedness incurred by the Company and its
subsidiaries. Additionally, the Company, on a consolidated basis, cannot incur
debt in excess of 40% of its total capital.

<PAGE>

The Company believes the fair value of its debt approximates book value due
to the debt being either short-term or variable rate.
Future maturities of the long-term debt are $9.5 million in 1994, $9.5
million in 1995, and $128.0 million in 1996.
Interest expense on debt totaled $6.3 million, $4.8 million, and $5.7 million in
1993, 1992, and 1991, respectively.

NOTE F. ACQUISITIONS AND SALE OF SUBSIDIARY

In March 1992, regulatory approval was received to merge Employers National Life
Insurance Company into Protective Life. Additionally, effective July 1, 1992,
the Company assumed all of the policy obligations associated with the credit
life and credit accident and health insurance business produced by Durham Life
Insurance Company.
In July 1993, the Company acquired Wisconsin National Life Insurance
Company (Wisconsin National). In addition, the Company reinsured a block of
universal life policies.
These transactions have been accounted for as purchases, and the results of
the transactions have been included in the accompanying financial statements
since the effective dates of the agreements.
Summarized below are the consolidated results of operations for 1993 and
1992, on an unaudited proforma basis, as if the Wisconsin National acquisition
had occurred as of January 1, 1992. The pro forma information is based on the
Company's consolidated results of operations for 1993 and 1992 and on data
provided by Wisconsin National, after giving effect to certain pro forma
adjustments. The pro forma financial information does not purport to be
indicative of results of operations that would have occurred had the transaction
occurred on the basis assumed above nor are they indicative of results of the
future operations of the combined enterprises.

<TABLE>
<CAPTION>
1993 1992
(UNAUDITED)
<S> <C> <C>
Total revenues $791,396 $693,950
Net income $ 58,428 $ 45,613
Net income per share $ 4.27 $ 3.34
</TABLE>

In August 1993, the Company sold its ownership interest in Southeast Health
Plan, Inc.

NOTE G. COMMITMENTS AND CONTINGENT LIABILITIES

At December 31, 1993, the Company was committed to fund mortgage loans and to
purchase fixed maturity and other long-term investments in the amount of $168.0
million. Also, the Company has issued a guarantee in connection with the sale of
certain tax-exempt mortgage loans which may be put to the Company in the event
of default. At December 31, 1993, the loans totaled $25.8 million.
At December 31, 1993, the Company was contingently liable as a guarantor of
$8.1 million in mortgage debt in the name of a motel joint venture in which the
Company is a partner. Should the joint venture become unable to meet its
obligation on this debt, the Company would assume title to the real estate
development along with the debt.
The Company is contingently liable to obtain a $20 million letter of credit
under indemnity agreements with its directors. Such agreements provide insurance
protection in excess of the directors' and officers' liability insurance in
force at the time up to $20 million. Should certain events occur constituting a
change in control of the Company, the Company must obtain the letter of credit
upon which directors may draw for defense or settlement of any claim relating to
performance of their duties as directors. The Company has similar agreements
with certain of its officers providing up to $10 million in indemnification
which are not secured by the obligation to obtain a letter of credit.
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.

NOTE H. STOCKHOLDERS' EQUITY AND RESTRICTIONS

The Company has adopted a Share Purchase Rights Plan that provides rights to
holders of the Company's Common Stock to receive Junior Participating Cumulative
Preferred Stock under certain circumstances. The Company can redeem the rights
at $.01 per right until ten business days following a public announcement that
20% or more of the Company's Common Stock has been acquired by one or more
related investors. If, after the rights become exercisable, the Company becomes
involved in a merger or certain other major corporate transactions, each right
then outstanding (other than those held by the 20% holder) would entitle its
holder to buy from the acquirer or the Company or its successor, Common Stock of
the acquirer or the Company or its successor worth twice the exercise price.
Stockholders have authorized 1,000,000 shares of Preferred Stock, $1.00 par
value. Other terms, including preferences, voting, and conversion rights, may be
established by the Board of Directors. In connection with the Share

<PAGE>

Purchase Rights Plan, 150,000 of these shares have been designated as Junior
Participating Cumulative Preferred Stock, $1.00 par value, and were unissued at
December 31, 1993. The remaining 850,000 shares of Preferred Stock, $1.00 par
value, were also unissued at December 31, 1993.
During 1990, the Company's Board of Directors approved the formation of an
Employee Stock Ownership Plan (ESOP). In December 1990, 520,000 shares of the
Company's Common Stock, which had been held by Protective Life and accounted for
as treasury shares, were transferred to the ESOP in exchange for a $6.9 million
note. The stock is used to match employee contributions to the Company's 401(k)
Plan. The stock held by the ESOP that has not yet been used to match employee
contributions is the unallocated stock shown as a reduction to stockholders'
equity. The ESOP shares are dividend-paying and therefore are considered
outstanding for earnings per share calculations. Dividends on the shares will be
used to pay the ESOP's note to Protective Life. If certain events associated
with a change in control of the Company occur, any unallocated shares held by
the ESOP will become allocable to employee 401(k) accounts.
The Company may from time to time transfer or buy in the open market
additional shares of Common Stock to complete its 401(k) employer match
obligation. Accordingly, in 1992, the Company transferred 728 shares of Common
Stock to the ESOP and transferred another 103 shares during 1993.
At December 31, 1993, approximately $172 million of consolidated
stockholders' equity represented net assets of the Company's insurance
subsidiaries that cannot be transferred in the form of dividends, loans, or
advances to the parent company. Generally, the net assets of the Company's
insurance subsidiaries available for transfer to the parent company are limited
to the amounts that the insurance subsidiaries' net assets, as determined in
accordance with statutory accounting practices, exceed certain minimum amounts.
However, payments of such amounts as dividends may be subject to approval by
regulatory authorities.

NOTE I. RELATED PARTY MATTERS

Certain corporations with which the Company's directors were affiliated paid the
Company premiums and policy fees for various types of group insurance. Such
premiums and policy fees amounted to $10.3 million, $10.9 million, and $10.4
million in 1993, 1992, and 1991, respectively.

NOTE J. BUSINESS SEGMENTS

The Company operates predominantly in the life and accident and health insurance
industry. The following table sets forth revenues, income before income tax, and
identifiable assets of the Company's business segments. The primary components
of revenues are premiums and policy fees, net investment income, and realized
investment gains and losses. Premiums and policy fees are attributed directly to
each business segment. Net investment income is allocated based on directly
related assets required for transacting that segment of business.
Realized investment gains (losses) and expenses are allocated to the
segments in a manner which most appropriately reflects the operations of that
segment. Unallocated realized investment gains (losses) are deemed not to be
associated with any specific segment.
Assets are allocated based on policy liabilities and deferred policy
acquisition costs directly attributable to each segment.
There are no significant intersegment transactions.

Total revenues

<TABLE>
<CAPTION>
(DOLLARS IN THOUSANDS) 1993 1992 1991
<S> <C> <C> <C>
Agency $ 111,654 $ 90,690 $ 80,592
Group 143,423 129,778 129,576
Financial Institutions 97,511 64,376 36,041
Investment Products 80,115 55,768 35,742
Guaranteed Investment Contracts 167,233 138,616 104,803
Acquisitions 123,855 93,634 95,847
Corporate and Other 33,970 54,613 36,032
Unallocated Realized Investment Gains (Losses) 1,876 (1,449) (2,685)
$ 759,637 $ 626,026 $ 515,948
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
<S> <C> <C> <C>
Agency 14.7% 14.5% 15.6%
Group 18.9 20.7 25.1
Financial Institutions 12.9 10.2 7.0
Investment Products 10.6 8.9 6.9
Guaranteed Investment Contracts 22.0 22.2 20.4
Acquisitions 16.3 15.0 18.5
Corporate and Other 4.4 8.7 7.0
Unallocated Realized Investment Gains (Losses) 0.2 (0.2) (0.5)
100.0% 100.0% 100.0%

Income Before Income Tax

Agency $ 20,064 $ 12,985 $ 12,087
Group 10,394 7,731 8,146
Financial Institutions 8,196 5,411 4,447
Investment Products 2,931 4,601 391
Guaranteed Investment Contracts* 25,405 14,533 9,933
Acquisitions 29,845 20,031 23,494
Corporate and Other* (13,667) (3,896) (4,110)
Unallocated Realized Investment Gains (Losses) 1,876 (1,449) (2,685)
$ 85,044 $ 59,947 $ 51,703
Agency 23.6% 21.7% 23.4%
Group 12.2 12.9 15.8
Financial Institutions 9.6 9.0 8.6
Investment Products 3.5 7.7 0.8
Guaranteed Investment Contracts 29.9 24.2 19.1
Acquisitions 35.1 33.4 45.4
Corporate and Other (16.1) (6.5) (7.9)
Unallocated Realized Investment Gains (Losses) 2.2 (2.4) (5.2)
100.0% 100.0% 100.0%

Identifiable Assets

Agency $ 642,325 $ 507,460 $ 412,019
Group 208,968 161,744 149,218
Financial Institutions 192,486 146,713 67,404
Investment Products 879,365 686,503 432,054
Guaranteed Investment Contracts 2,041,564 1,696,786 1,291,743
Acquisitions 1,145,357 599,022 576,549
Corporate and Other 205,940 208,439 191,303
$5,316,005 $4,006,667 $3,120,290
Agency 12.1% 12.7% 13.2%
Group 3.9 4.0 4.8
Financial Institutions 3.6 3.7 2.2
Investment Products 16.6 17.1 13.8
Guaranteed Investment Contracts 38.4 42.3 41.4
Acquisitions 21.5 15.0 18.5
Corporate and Other 3.9 5.2 6.1
100.0% 100.0% 100.0%

<FN>
*INCOME BEFORE INCOME TAX FOR THE GUARANTEED INVESTMENT CONTRACTS DIVISION HAS
NOT BEEN REDUCED BY PRETAX MINORITY INTEREST OF $1,631 IN 1991. INCOME BEFORE
INCOME TAX FOR THE CORPORATE AND OTHER SEGMENT HAS NOT BEEN REDUCED BY PRETAX
MINORITY INTEREST OF $19 IN 1993 AND $90 IN 1992 AND 1991.
</TABLE>

NOTE K. EMPLOYEE BENEFIT PLANS

The Company has a defined benefit pension plan covering substantially all of its
employees. The benefits are based on years of service and the employee's highest
thirty-six consecutive months of compensation. The Company's funding policy is
to contribute amounts to the plan sufficient to meet the minimum funding
requirements of ERISA plus such additional amounts as the Company may determine
to be appropriate from time to time. Contributions are intended to provide not
only for benefits attributed to service to date but also for those expected to
be earned in the future.
The actuarial present value of benefit obligations and the funded status of
the plan at December 31 are as follows:

<PAGE>

<TABLE>
<CAPTION>
1993 1992
<S> <C> <C>
Accumulated benefit obligation, including vested
benefits of $12,406 in 1993 and $10,306 in 1992 $ 12,692 $10,537
Projected benefit obligation for service
rendered to date $ 20,480 $16,999
Plan assets at fair value (group annuity contract
with Protective Life) 15,217 13,608
Plan assets less than the projected benefit obligation (5,263) (3,391)
Unrecognized net loss from past experience
different from that assumed 2,244 550
Unrecognized prior service cost 2,069 2,256
Unrecognized net transition asset (118) (135)
Net pension liability recognized in balance sheet $(1,068) $ (720)
</TABLE>

Net pension cost includes the following components for the years ended
December 31:

<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Service cost - benefits earned during the year $ 1,191 $ 970 $ 690
Interest cost on projected benefit obligation 1,396 1,257 956
Actual return on plan assets (1,270) (1,172) (1,102)
Net amortization and deferral 704 130 113
Net pension cost $ 2,021 $ 1,185 $ 657
</TABLE>

Assumptions used to determine the benefit obligations as of December 31
were as follows:

<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Weighted average discount rate 7.5% 8.0% 8.0%
Rates of increase in compensation level 5.5% 6.0% 6.0%
Expected long-term rate of return on assets 8.5% 8.5% 8.5%
</TABLE>

Assets of the pension plan are included in the general assets of Protective
Life. Upon retirement, the amount of pension plan assets vested in the retiree
are used to purchase a single premium annuity from Protective Life in the
retiree's name. Therefore, amounts presented above as plan assets exclude assets
relating to retirees.
The Company also sponsors an unfunded Excess Benefits Plan, which is a
nonqualified plan that provides defined pension benefits in excess of limits
imposed by federal tax law. At December 31, 1993, the projected benefit
obligation of this plan totaled $2.6 million.
In addition to pension benefits, the Company provides limited health care
benefits to eligible retired employees until age 65. The Company has adopted
Statement of Financial Accounting Standards No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions."
At January 1, 1992, the Company recognized a $1.6 million accumulated
postretirement benefit obligation, of which $0.9 million relates to current
retirees, and $0.7 million relates to active employees. The $1.6 million
(representing the Company's entire liability for such benefits), net of $0.5
million tax, was accounted for as a cumulative effect of a change in accounting
principle and shown as a reduction to income. The postretirement benefit is
provided by an unfunded plan. At December 31, 1993, the liability for such
benefits totaled $1.6 million. The expense recorded by the Company was $0.2
million in 1993 and 1992. The Company's obligation is not materially affected by
a 1% change in the health care cost trend assumptions used in the calculation of
the obligation.
Life insurance benefits for retirees are provided through the purchase of
life insurance policies upon retirement equal to the employees' annual
compensation. This plan is partially funded at a maximum of $50 thousand face
amount of insurance.
In 1990, the Company established an Employee Stock Ownership Plan to match
employee contributions to the Company's existing 401(k) Plan. Previously, the
Company matched employee contributions in cash. The expense recorded by the
Company for this employee benefit was $249 thousand, $412 thousand, and $451
thousand in 1993, 1992, and 1991, respectively.

NOTE L. REINSURANCE

The Company assumes risks from and reinsures certain parts of its risks with
other insurers under yearly renewable term, coinsurance, and modified
coinsurance agreements. Yearly renewable term and coinsurance agreements are
accounted for by passing a portion of the risk to the reinsurer. Generally, the
reinsurer receives a proportionate part of the premiums less commissions and is
liable for a corresponding part of all benefit payments. Modified coinsurance is
accounted for similarly to coinsurance except that the liability for future
policy benefits is held by the original company, and settlements are made on a
net basis between the companies. While the amount retained on an individual life
will vary based upon age and mortality prospects of the risk, the Company will
not carry more than $500 thousand individual life insurance on a single risk.

<PAGE>

The Company has reinsured approximately $7.5 billion, $7.0 billion, and
$5.3 billion in face amount of life insurance risks with other insurers
representing $37.9 million, $34.8 million, and $28.3 million of premium income
for 1993, 1992, and 1991, respectively. The Company has also reinsured accident
and health risks representing $88.9 million, $74.6 million, and $61.6 million of
premium income for 1993, 1992, and 1991, respectively. In 1992, policy
liabilities and accruals are shown net of policy and claim reserves relating to
insurance ceded of $90.1 million. In 1993, policy and claim reserves relating to
insurance ceded of $97.8 million are included in reinsurance receivables. Should
any of the reinsurers be unable to meet its obligation at the time of the claim,
obligation to pay such claim would remain with the Company. At December 31, 1993
and 1992, the Company had paid $4.8 million and $4.4 million respectively, of
ceded benefits which are recoverable from reinsurers.

NOTE M. CONSOLIDATED QUARTERLY RESULTS - UNAUDITED

Protective Life Corporation's unaudited consolidated quarterly operating data
for the years ended December 31, 1993 and 1992 are presented below. In the
opinion of management, all adjustments (consisting of normal recurring accruals)
necessary for a fair presentation of quarterly results have been reflected in
the data which follow. It is also management's opinion, however, that quarterly
operating data for insurance enterprises are not indicative of results to be
achieved in succeeding quarters or years. In order to obtain a more accurate
indication of performance, there should be a review of operating results,
changes in stockholders' equity, and cash flows for a period of several years.
Fluctuation in short-term performance may be due to the long-term nature of the
insurance business, seasonal patterns in premium production and policy claims,
as well as to the varying yields obtained on invested assets. The data below
should be read in conjunction with the "Management's Discussion and Analysis of
Financial Condition and Results of Operations" appearing elsewhere herein.

<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
1993 QUARTER QUARTER QUARTER QUARTER
<S> <C> <C> <C> <C>
Premiums and policy fees $ 85,848 $ 93,340 $ 94,421 $ 97,149
Net investment income 81,196 85,180 95,697 100,057
Realized investment gains (losses) 125 677 (39) 4,291
Other income 4,930 5,392 6,607 4,766
Total revenues 172,099 184,589 196,686 206,263
Benefits and expenses 154,804 164,484 176,654 178,651
Income before income tax 17,295 20,105 20,032 27,612
Income tax expense 5,361 6,607 7,671 8,836
Minority interest 15 4
Net income $ 11,919 $ 13,494 $ 12,361 $ 18,776
Net income per share $ .87 $ .99 $ .90 $ 1.37
Average shares outstanding 13,689,861 13,689,901 13,690,119 13,693,244
</TABLE>

<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
1992 QUARTER QUARTER QUARTER QUARTER
<S> <C> <C> <C> <C>
Premiums and policy fees $ 74,414 $ 77,105 $ 86,826 $ 84,791
Net investment income 65,243 68,477 73,109 77,240
Realized investment gains (losses) 656 (347) (203) (120)
Other income 4,201 4,517 4,463 5,654
Total revenues 144,514 149,752 164,195 167,565
Benefits and expenses 130,737 134,503 148,965 151,874
Income before income tax 13,777 15,249 15,230 15,691
Income tax expense 3,858 4,559 4,417 4,550
Minority interest 22 23 22 23
Change in accounting principle 1,053
Net income $ 8,844 $ 10,667 $ 10,791 $ 11,118
Net income per share $ .65 $ .78 $ .79 $ .81
Average shares outstanding 13,649,750 13,660,152 13,677,801 13,679,757

</TABLE>

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

RESULTS OF OPERATIONS

PREMIUMS AND POLICY FEES
The following table sets forth for the periods shown the amount of premiums and
policy fees and the percentage change from the prior period:

PREMIUMS AND POLICY FEES

<TABLE>
<CAPTION>
YEAR ENDED AMOUNT PERCENTAGE
DECEMBER 31 (IN THOUSANDS) INCREASE
<S> <C> <C>
1991 $273,975 10.3%
1992 323,136 17.9
1993 370,758 14.7
</TABLE>

Premiums and policy fees increased $49.2 million or 17.9% in 1992 over
1991. In the 1991 third quarter, the Company converted preferred stock into
common stock to become the 80% owner of Southeast Health Plan, Inc. (SEHP), a
Birmingham-based health maintenance organization, in which the Company had an
investment since 1988. Beginning in the 1991 third quarter, the results of SEHP
are reported in the Company's financial statements on a consolidated basis. The
inclusion of SEHP's premiums in 1992 represents a $17.4 million increase.
Increases in premiums and policy fees from the Agency and Financial Institutions
Divisions represent $7.0 million and $25.7 million of the increase,
respectively. Effective July 1, 1992, the Financial Institutions Division
assumed Durham Life Insurance Company's (Durham) credit business representing
$15.1 million of the Division's $25.7 million increase. A small acquisition in
the 1992 first quarter increased premiums and policy fees $3.6 million.
Decreases in older acquired blocks of policies represent a $5.6 million decrease
in premiums and policy fees.
Premiums and policy fees increased $47.6 million or 14.7% in 1993 over
1992. Increases in premiums and policy fees from the Agency, Group, and
Financial Institutions Divisions represent increases of $14.6 million, $13.0
million, and $30.4 million, respectively. The Durham acquisition represents
$17.8 million of the Financial Institutions Division's $30.4 million increase.
On July 30, 1993, the Company completed its acquisition of Wisconsin National
Life Insurance Company (Wisconsin National). The acquisition increased premiums
and policy fees by $11.7 million. The reinsurance of a block of universal life
policies on July 1, 1993 resulted in a $3.2 million increase. Decreases in older
acquired blocks of policies represented a $4.5 million decrease in premiums and
policy fees. On August 6, 1993, the Company completed the sale of its ownership
interest in SEHP. The sale of SEHP decreased premiums and policy fees $21.2
million in 1993.

NET INVESTMENT INCOME
The following table sets forth for the periods shown the amount of net
investment income, the percentage change from the prior period, and the
percentage earned on average cash and investments:

NET INVESTMENT INCOME

<TABLE>
<CAPTION>
PERCENTAGE EARNED
YEAR ENDED AMOUNT PERCENTAGE ON AVERAGE
DECEMBER 31 (IN THOUSANDS) INCREASE CASH AND INVESTMENTS
<S> <C> <C> <C>
1991 $233,502 70.5% 9.4%
1992 284,069 21.7 8.9
1993 362,130 27.5 8.7
</TABLE>

Net investment income for 1991 was $96.5 million or 70.5% higher, 1992 was
$50.6 million or 21.7% higher, and 1993 was $78.1 million or 27.5% higher than
the preceding year, primarily due to increases in the average amount of invested
assets. Invested assets have increased primarily due to receiving annuity and
guaranteed investment contract (GIC) deposits and to acquisitions. Annuity and
GIC deposits are not considered revenues in accordance with generally accepted
accounting principles. These deposits are included in the liability section of
the balance sheet. The Wisconsin National acquisition resulted in an increase in
1993 net investment income of $14.5 million. Due to the general decline in
interest rates, the Company's percentage earned on average cash and investments
has decreased slightly since 1991.

REALIZED INVESTMENT GAINS (LOSSES)
The Company generally purchases its investments with the intent to hold to
maturity by purchasing investments that match future cash-flow needs. The sales
of investments that have occurred result from portfolio management decisions to
maintain proper matching of assets and liabilities.
The following table sets forth realized investment gains or losses for the
periods shown:

<PAGE>

REALIZED INVESTMENT GAINS (LOSSES)

<TABLE>
<CAPTION>
REALIZED
YEAR ENDED INVESTMENT GAINS (LOSSES)
DECEMBER 31 (IN THOUSANDS)
<S> <C>
1991 $(3,085)
1992 (14)
1993 5,054
</TABLE>

The Company maintains an allowance for uncollectible amounts on investments
based upon industry default rates for different asset types. The allowance
totaled $35.9 million at December 31, 1993. Additions to the allowance are
treated as realized investment losses. During 1991, the Company added $10.5
million to this allowance which more than offset $7.4 million of net realized
investment gains. During 1992, the Company added $9.7 million to this allowance
which offset the $9.7 million of net realized investment gains. During 1993, the
Company added $8.7 million to this allowance which partially offset the $13.8
million of net realized investment gains.

OTHER INCOME
The following table sets forth other income for the periods shown:

OTHER INCOME

<TABLE>
<CAPTION>
YEAR ENDED OTHER INCOME
DECEMBER 31 (IN THOUSANDS)
<S> <C>
1991 $11,556
1992 18,835
1993 21,695
</TABLE>

Other income consists primarily of revenues of the Company's broker-dealer
subsidiaries, fees from administrative-services-only types of group accident and
health insurance contracts, and revenues of the Company's wholly owned insurance
marketing organizations and other small noninsurance subsidiaries. The sale of
SEHP reduced other income approximately $2.0 million which was more than offset
by a $3.5 million gain on the sale of SEHP. Other income from recurring sources
increased $3.3 million in 1992 and $1.4 million in 1993.

INCOME BEFORE INCOME TAX
The following table sets forth income or loss before income tax by business
segment for the periods shown:

INCOME BEFORE INCOME TAX

<TABLE>
<CAPTION>
INCOME (LOSS) BEFORE INCOME TAX
YEAR ENDED DECEMBER 31
(IN THOUSANDS)

BUSINESS SEGMENT 1991 1992 1993
<S> <C> <C> <C>
Agency $12,087 $12,985 $20,064
Group 8,146 7,731 10,394
Financial Institutions 4,447 5,411 8,196
Investment Products 391 4,601 2,931
Guaranteed Investment Contracts* 9,933 14,533 25,405
Acquisitions 23,494 20,031 29,845
Corporate and Other* (4,110) (3,896) (13,667)
Unallocated Realized Investment Gains (Losses) (2,685) (1,449) 1,876
$51,703 $59,947 $85,044
<FN>
* INCOME BEFORE INCOME TAX FOR THE GUARANTEED INVESTMENT CONTRACTS DIVISION HAS
NOT BEEN REDUCED BY PRETAX MINORITY INTEREST OF $1,631 IN 1991. INCOME BEFORE
INCOME TAX FOR THE CORPORATE AND OTHER SEGMENT HAS NOT BEEN REDUCED BY PRETAX
MINORITY INTEREST OF $90 IN 1991 AND 1992, AND $19 IN 1993.
</TABLE>

In 1993 the Company changed the method used to apportion net investment
income within the Company. This change resulted in increased income attributable
to the Agency, Investment Products, and Acquisitions Divisions of $3.0 million,
$2.0 million, and $2.6 million, respectively, while decreasing income of the
Corporate and Other segment.
Agency pretax earnings increased $0.9 million in 1992 as compared to 1991
reflecting increased sales, better persistency, and improved mortality. Agency
1993 pretax earnings of $20.1 million were $7.1 million higher than 1992. The
improvement was due primarily to a growing block of business, brought about by
sales, continued strong persistency, and favorable mortality experience.
Group pretax earnings were $0.4 million lower in 1992 as compared to 1991
due to both lower group health and group life earnings. Improved earnings in
cancer and dental products were more than offset by lower traditional group
health earnings. Group 1993 pretax earnings of $10.4 million were $2.7 million
higher than 1992. Group life and annuity earnings

<PAGE>

improved by $1.7 million, and group health earnings improved by $1.0 million
primarily due to improved cancer and dental earnings.
Pretax earnings of the Financial Institutions Division were $1.0 million
higher in 1992 as compared to 1991. Effective July 1, 1992, Protective Life
assumed all of the policy obligations associated with the credit life and credit
accident and health insurance business produced by Durham. The assumption
contributed $1.6 million to the Division's 1992 results, which was partially
offset by lower credit life and health earnings on account of higher mortality
and morbidity in the Division's other lines. The Financial Institutions
Division's 1993 pretax earnings of $8.2 million were up $2.8 million from 1992.
The Durham acquisition represented $0.7 million of the increase. The balance of
the increase was due to premium growth and improved claims ratios in the
Division's other lines.
The Investment Products Division's pretax earnings were $4.2 million higher
in 1992, compared to 1991. The earnings improvement was primarily due to having
a greater amount of annuity deposits. Annuity deposits associated with the
Division were $648 million at December 31, 1992, compared to $395 million at
December 31, 1991. The Division's 1993 earnings of $2.9 million were $1.7
million lower than 1992. These results reflect an increase of $3.2 million of
amortization of deferred policy acquisition costs, in part to shorten the
amortization period on book value annuities, sales of which were substantially
discontinued in 1992. Annuity deposits totaled $836 million at December 31,
1993. Average deposits for the year were $742 million, 42% higher than for 1992.
The Guaranteed Investment Contracts (GIC) Division had pretax earnings of
$14.5 million in 1992 and $25.4 million in 1993. GIC earnings have increased due
to the growth in GIC deposits placed with the Company. At December 31, 1993, GIC
deposits totaled $2.0 billion, compared to $1.7 billion one year earlier and
$1.3 billion at December 31, 1991.
A portion of the earnings of the GIC Division was earned in a
majority-owned subsidiary which became wholly owned in the 1991 third quarter.
The ownership interest of the other stockholders in the earnings of the
subsidiary before it became wholly owned was $1.3 million ($1.6 million pretax)
in 1991.
Pretax earnings from the Acquisitions Division decreased $3.5 million in
1992 as compared to 1991, primarily due to higher mortality and lapses in its
various blocks of acquired policies. Earnings from the Acquisitions Division are
normally 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 Acquisitions Division had pretax earnings of $29.8 million for 1993,
$9.8 million higher than 1992. On July 30, 1993, the Company completed its
acquisition of Wisconsin National. The Company also reinsured a block of
universal life policies during the 1993 third quarter. These two acquisitions
contributed $5.1 million to the Division's 1993 earnings. The Division also
experienced improved results in its other blocks of acquired policies.
The Corporate and Other segment consists of several small insurance lines
of business, net investment income and other operating expenses not identified
with the preceding operating divisions (including interest on substantially all
debt), the earnings of SEHP, and the operations of several small noninsurance
subsidiaries. Pretax losses for this segment were $0.2 million lower in 1992 as
compared to 1991 due to SEHP having a $0.6 million profit, compared to a loss in
1991, the SEHP increase being largely offset by several factors of negative
effect. Pretax losses of this segment were $9.8 million higher in 1993 as
compared to 1992 primarily due to the aforementioned reapportionment of net
investment income within the Company. On August 6, 1993, the Company sold its
ownership interest in SEHP. The sale has been accounted for in a manner similar
to an installment sale. The segment's 1993 results include a gain of $3.5
million attributable to the sale of SEHP which was more than offset by higher
expenses.

INCOME TAX EXPENSE

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

INCOME TAX EXPENSE

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31 EFFECTIVE INCOME TAX RATES
<S> <C>
1991 28%
1992 29
1993 32
</TABLE>

For the year ended December 31, 1992, the effective income tax rate was
29%. In August 1993, the corporate income tax rate was increased from 34% to 35%
which resulted in a one-time increase to income tax expense of $1.3 million or
$.09 per share due to a recalculation of the Company's deferred income tax
liability. The effective income tax rate for 1993, excluding the one-time
increase, was 32%. Management's estimate of the effective income tax rate for
1994 is 32%.

<PAGE>

NET INCOME
The following table sets forth net income and net income per share for the
periods shown:

NET INCOME

<TABLE>
<CAPTION>
YEAR ENDED AMOUNT PER PERCENTAGE
DECEMBER 31 (IN THOUSANDS) SHARE INCREASE
<S> <C> <C> <C>
1991 $35,789 $2.62 26.6%
1992 41,420 3.03 15.6
1993 56,550 4.13 36.3
</TABLE>

Compared to 1991, net income per share in 1992 increased 15.6%, reflecting
improved earnings in its Agency, Financial Institutions, Investment Products,
and GIC Divisions, and higher realized investment gains which were partially
offset by an allowance for uncollectible amounts on investments and lower
earnings in the Group and Acquisitions Divisions. Additionally, 1992 includes a
reduction to income of $1.1 million reported as the cumulative effect of a
change in accounting principle associated with the Company's adoption of
Statement of Financial Accounting Standards No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions." Net income per share in 1993 was
36.3% higher than 1992, reflecting improved earnings in the Agency, Group,
Financial Institutions, GIC, and Acquisitions Divisions, and higher realized
investment gains.

RECENTLY ISSUED ACCOUNTING STANDARDS
In May 1993, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 114, "Accounting by Creditors for
Impairment of a Loan." The Company anticipates that the impact of adopting SFAS
No. 114 on its financial condition will be immaterial.
The American Institute of Certified Public Accountants has issued Statement
of Position 93-6, "Employers' Accounting For Employee Stock Ownership Plans"
(ESOP). Under certain "grandfathering" provisions in the Statement, employers
may elect not to apply the new accounting rules to shares acquired by ESOPs
before December 31, 1992. The Company does not plan to apply the new rules to
its existing ESOP.

LIQUIDITY AND CAPITAL RESOURCES
The Company's operations usually produce a positive cash flow. This cash flow is
used to fund an investment portfolio to finance future benefit payments
including those arising from various types of deposit contracts. Since future
benefit payments largely represent long-term obligations reserved using certain
assumed interest rates, the Company's investments are predominantly in
long-term, fixed-rate investments such as bonds and mortgage loans which provide
a sufficient return to cover these obligations.
Many of the Company's products contain surrender charges and other features
which reward persistency and penalize the early withdrawal of funds. With
respect to such products, surrender charges are generally sufficient to cover
the Company's unamortized deferred policy acquisition costs with respect to the
policy being surrendered. GICs and certain annuity contracts have market-value
adjustments which protect the Company against investment losses if interest
rates are higher at the time of surrender as compared to interest rates at the
time of issue.
The Company has adopted Statement of Financial Accounting Standards No.
115, "Accounting For Certain Investments In Debt And Equity Securities."
Accordingly, the Company's investments in debt and equity securities are
reported in the 1993 financial statements at market value, and investments in
mortgage loans are reported at amortized cost. At December 31, 1993, the fixed
maturity investments (bonds, bank loan participations, and redeemable preferred
stocks) had a market value of $3,051.3 million, which is 2.2% above amortized
cost (less allowances for uncollectible amounts on investments) of $2,985.7
million. The Company had $1,407.7 million in mortgage loans at December 31,
1993. While the Company's mortgage loans do not have quoted market values, at
December 31, 1993, the Company estimates the market value of its mortgage loans
to be $1,524.2 million(using discounted cash flows from the next call date)
which is 8.3% in excess of amortized book value. Most of the Company's mortgage
loans have significant prepayment penalties. These assets are invested for terms
approximately corresponding to anticipated future benefit payments. Thus, market
fluctuations should not adversely affect liquidity.
At December 31, 1993, delinquent mortgage loans and foreclosed real estate
were 0.5% of assets. Bonds rated less than investment grade were 1.3% of assets.
Additionally, the Company had bank loan participations that were less than
investment grade representing 2.3% of assets. The Company does not expect these
investments to adversely affect its liquidity or ability to hold its other
investments to maturity. The Company's allowance for uncollectible amounts on
investments was $35.9 million at December 31, 1993.
Policy loans at December 31, 1993 were $141.1 million, an increase of $23.3
million from December 31, 1992. The acquisition of Wisconsin National increased
policy loans by $13.5 million, and the reinsurance of a block of universal life
policies added an additional $12.1 million. Otherwise, policy loans decreased
$2.3 million. Policy loan rates are generally in the 4.5% to 8.0% range. Such
rates at least equal the assumed interest rates used for future policy benefits.
The Company believes its asset/liability matching practices and certain
product features provide significant protection for the Company against the
effects of changes in interest rates. However, approximately 24% of the
Company's liabilities relate to products (primarily whole life insurance) the
profitability of which may be affected by changes in interest rates. The effect
of such changes in any one year is not expected to be material. Additionally,
the Company believes its asset/liability matching practices provide sufficient
liquidity to enable it to fulfill its obligation to

<PAGE>

pay benefits under its various insurance and deposit contracts.
The Company's asset/liability matching practices involve the monitoring of
asset and liability durations for various product lines; cash flow testing under
various interest rate scenarios; and the continuous rebalancing of assets and
liabilities with respect to yield, risk, and cash flow characteristics.
A combination of futures contracts and options on treasury notes are
currently being used as hedges for asset/liability management of certain
investments, primarily mortgage loans on real estate, and liabilities arising
from interest-sensitive products such as GICs and annuities. Realized investment
gains and losses of such contracts are deferred and amortized over the life of
the hedged asset. The Company also uses interest rate swap contracts to convert
certain investments from a variable to a fixed rate of interest.
In anticipation of receiving GIC and annuity deposits, the life insurance
subsidiaries were committed at December 31, 1993 to fund mortgage loans and to
purchase fixed maturity and other long-term investments in the amount of $168
million. The Company's subsidiaries held $108.4 million in cash and short-term
investments at December 31, 1993. Protective Life Corporation had an additional
$2.4 million in cash and short-term investments available for general corporate
purposes.
While the Company generally anticipates that the cash flows of its
subsidiaries will be sufficient to meet their investment commitments and
operating cash needs, the Company recognizes that investment commitments
scheduled to be funded may from time to time exceed the funds then available.
Therefore, the Company has arranged sources of credit for its insurance
subsidiaries to utilize to fund investments in such circumstances. The Company
expects that the rate received on its investments will equal or exceed its
borrowing rate. Additionally, the Company may from time to time sell
short-duration GICs to complement its cash management practices.
At December 31, 1993, Protective Life Corporation had borrowed $118 million
of its $138 million revolving line of credit on short-term notes bearing
interest rates averaging 4.0%. In addition, Protective Life Corporation has
borrowed $29 million under a four-year installment note at a rate of 4.4%. In
total, Protective Life Corporation's borrowings increased $60.8 million during
1993, approximately $35 million of which was used to finance acquisitions, and
the remainder contributed as additional statutory capital to its insurance
subsidiaries to support their future growth. Management expects to register
under the Securities Act of 1933, probably on a delayed (or "shelf") basis,
preferred stock and debt securities of Protective Life Corporation, and
preferred securities of a special purpose finance subsidiary, to reduce existing
bank borrowings and to give the Company flexibility in connection with future
acquisition opportunities.
Protective Life Corporation's cash flow is dependent on cash dividends from
its subsidiaries, payments on surplus notes, revenues from investment, data
processing, legal, and management services rendered to the subsidiaries, and
investment income. At December 31, 1993, approximately $172 million of
consolidated stockholders' equity represented net assets of the Company's
insurance subsidiaries that cannot be transferred to the Company in the form of
dividends, loans, or advances. In addition, the states in which the Company's
insurance subsidiaries are domiciled impose certain restrictions on the
insurance subsidiaries' ability to pay dividends to Protective Life Corporation.
Also, distributions, including cash dividends to Protective Life Corporation
from its life insurance subsidiaries, in excess of approximately $184 million,
would be subject to federal income tax at rates then effective. The Company does
not anticipate involuntarily making distributions that would be subject to tax.
For the foregoing reasons and due to the expected growth of the Company's
insurance sales, the Company will retain substantial portions of the earnings of
its life insurance subsidiaries in those companies primarily to support their
future growth. Because Protective Life Corporation's cash disbursements have
from time to time exceeded its cash receipts, such shortfalls have been funded
through various external financings. Therefore, Protective Life Corporation may
from time to time require additional external financing.
A life insurance company's statutory capital is computed according to rules
prescribed by the National Association of Insurance Commissioners (NAIC), as
modified by the insurance company's state of domicile. Statutory accounting
rules are different from generally accepted accounting principles and are
intended to reflect a more conservative view by, for example, requiring
immediate expensing of policy acquisition costs. The achievement of long-term
growth will require growth in the statutory capital of the Company's insurance
subsidiaries. The subsidiaries may secure additional statutory capital through
various sources, such as internally generated statutory earnings or equity
contributions by the Company from funds generated through debt or equity
offerings.
The NAIC's risk-based capital requirements require insurance companies to
calculate and report information under a risk-based capital formula. These
requirements are intended to allow insurance regulators to identify inadequately
capitalized insurance companies based upon the types and mixtures of risks
inherent in the insurer's operations. The formula includes components for asset
risk, liability risk, interest rate exposure, and other factors. Based upon the
December 31, 1993 statutory financial reports of the Company's insurance
subsidiaries, the Company's insurance subsidiaries are adequately capitalized
under the formula.
Under insurance guaranty fund laws, in most states, insurance companies
doing business in a participating state can be assessed up to prescribed limits
for policyholder losses incurred by insolvent companies. The Company does not
believe that any such assessments will be materially different from amounts
already provided for in the financial statements.

<PAGE>

IMPACT OF INFLATION
Inflation increases the need for insurance. Many policyholders who once had
adequate insurance programs increase their life insurance coverage to provide
the same relative financial benefits and protection. The effect of inflation on
medical costs leads to accident and health policies with higher benefits. Thus,
inflation has increased the need for life and accident and health products.
The higher interest rates that have traditionally accompanied inflation
also affect the Company's investment operation. Policy loans increase as policy
loan interest rates become relatively more attractive. As interest rates
increase, disintermediation of GIC and annuity deposits and ordinary life policy
cash values may increase, the market value of the Company's fixed-rate long-term
investments may decrease, and the Company may be unable to implement fully the
interest rate reset and call provisions of its mortgage loans. The difference
between the interest rate earned on investments and the interest rate credited
to interest-sensitive products may also be adversely affected by rising interest
rates.
Inflation has materially increased the cost of health care. The adequacy of
premium rates in relation to the level of accident and health claims is
constantly monitored, and where appropriate, premium rates on such policies are
increased as policy benefits increase. Failure to make such increases
commensurate with health care cost increases may result in a loss from health
insurance.
The Company does not believe the current rate of inflation will
significantly affect its operations. However, lower interest rates may reduce
earnings as older higher-yielding investments are repaid, and the proceeds are
reinvested at lower current rates.

<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

TO THE We have audited the accompanying consolidated balance sheets
DIRECTORS AND of Protective Life Corporation and subsidiaries as of
STOCKHOLDERS December 31, 1993 and 1992, and the related consolidated
PROTECTIVE LIFE statements of income, stockholders' equity, and cash
CORPORATION flows for each of the three years in the period ended
BIRMINGHAM, December 31, 1993. These financial statements are the
ALABAMA responsibility of the Company's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we
plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to
above present fairly, in all material respects, the
consolidated financial position of Protective Life
Corporation and subsidiaries as of December 31, 1993 and
1992, and the consolidated results of their operations and
their cash flows for each of the three years in the period
ended December 31, 1993, in conformity with generally
accepted accounting principles.
As discussed in Note A to the Consolidated Financial
Statements, the Company changed its method of accounting for
certain investments in debt and equity securities in 1993.
Also as discussed in Note K, the Company changed its method
of accounting for postretirement benefits other than pensions
in 1992.

Coopers & Lybrand
BIRMINGHAM, ALABAMA
FEBRUARY 14, 1994

<PAGE>

EXHIBIT 21
TO
FORM 10-K
OF
PROTECTIVE LIFE CORPORATION
FOR
FISCAL YEAR
ENDED DECEMBER 31, 1993

The following wholly-owned subsidiary of Protective Life Corporation is
incorporated under the laws of the State of Tennessee and does business under
its corporate name:

Protective Life Insurance Company

The following wholly-owned subsidiary of Protective Life Insurance Company
is incorporated under the laws of the State of Alabama and does business under
its corporate name:

American Foundation Life Insurance Company

The following wholly-owned subsidiary of Protective Life Insurance Company
is incorporated under the laws of the State of Wisconsin and does business under
its corporate name:

Wisconsin National Life Insurance Company

<PAGE>

Exhibit 23

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the incorporation by reference in the registration statement of
Protective Life Corporation on Form S-8 (File No. 2-91276) of our report, which
includes an explanatory paragraph with respect to changes in the Company's
methods of accounting for certain investments in debt and equity securities in
1993 and postretirement benefits other than pensions in 1992, dated
February 14, 1994, on our audits of the consolidated financial statements and
financial statement schedules of Protective Life Corporation as of December 31,
1993 and 1992 and for the years ended Decmember 31, 1993, 1992 and 1991 which
report is included or incorporated by reference in this Annual Report on Form
10-K.

/s/ Coopers & Lybrand
- ---------------------
COOPERS & LYBRAND

March 25, 1994

<PAGE>

Exhibit 24

DIRECTORS'
POWER OF ATTORNEY
-----------------

KNOW ALL MEN BY THESE PRESENTS, That each of the undersigned Directors of
Protective Life Corporation, a Delaware corporation, ("Company") by his
execution hereof or upon an identical counterpart hereof, does hereby
constitute and appoint William J. Rushton III, Drayton Nabers, Jr.,
John D. Johns, or Jerry W. DeFoor, and each or any of them, his true and
lawful attorneys-in-fact and agents, for him and in his name, place and stead,
to execute and sign the 1993 Annual Report on Form 10-K to be filed by the
Company with the Securities and Exchange Commission, pursuant to the
provisions of the Securities Exchange Act of 1934 and, further, to execute and
sign any and all amendments to such Annual Report, and to file same, with all
exhibits and schedules thereto and all other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done
in and about the premises, as fully to all intents and purposes as the
undersigned might or could do in person, hereby ratifying and confirming all
the acts of said attorneys-in-fact and agents or any of them which
they may lawfully do in the premises or cause to be done by virtue hereof.

IN WITNESS WHEREOF, each of the undersigned has hereunto set his hand and seal
this 25th day of March, 1994.

WITNESS TO ALL SIGNATURES:

/s/ John K. Wright
- ------------------
John K. Wright

/s/ William J. Rushton III
- --------------------------
William J. Rushton III

/s/ John W. Woods
- -----------------
John W. Woods

/s/ Crawford F. Johnson III
- ---------------------------
Crawford F. Johnson III

/s/ William J. Cabaniss, Jr.
- ----------------------------
William J. Cabaniss, Jr.

/s/ H. G. Pattillo
- ------------------
H. G. Pattillo

/s/ Drayton Nabers, Jr.
- -----------------------
Drayton Nabers, Jr.

/s/ Edward L. Addison
- ---------------------
Edward L. Addison

/s/ John J. McMahon, Jr.
- ------------------------
John J. McMahon, Jr.

/s/ A. W. Dahlberg
- ------------------
A. W. Dahlberg

/s/ John W. Rouse, Jr.
- ----------------------
John W. Rouse, Jr.

/s/ Robert T. David
- -------------------
Robert T. David

/s/ Ronald L. Kuehn, Jr.
- ------------------------
Ronald L. Kuehn, Jr.

/s/ Herbert A. Sklenar
- ----------------------
Herbert A. Sklenar