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Fitch Affirms Protective Life Corporation's Ratings.

Business Editors


Following today's announcement that Protective Life Corporation (PL) will report a loss in its the health insurance lines (primarily due to reserve strengthening) in the second quarter which ended June 30, and sell substantially all of its Dental Benefits Division to Fortis, Inc., Fitch has affirmed all ratings (see detail list below).

The Rating Outlook for all ratings is Stable.

Affirmation of the insurer financial strength and debt ratings reflect that while Protective Life Insurance Company (PLIC) will report a loss in its runoff and discontinued health insurance lines primarily due to a reserve strengthening of $16 million related to increased claims, Fitch believes that management has appropriately addressed all concerns. Reserves have been reviewed by third party actuaries, price increases for the business in runoff have been implemented, and additional reserves were posted for possible future losses. Fitch expects reserves for the health insurance lines to be adequate.

The approximately $300 million proceeds from the sale of the Dental Benefits Division are expected to fund the previously announced purchase of Inter-State Assurance Company and First Variable Life Insurance Company, and provide PL with approximately $200 million free capital available to invest in other business opportunities. The company is expected to remain within its leverage targets.

Protective Life Corporation (PLC) is a holding company, domiciled in Delaware, with assets and stockholders' equity of $16.3 billion and $1.3 billion, respectively, at March 31, 2001.

Entity/Issue/Type Action Rating/Outlook

Protective Life Insurance Company
--Insurer financial strength Affirmed `AA'/Stable.

Protective Life and Annuity Insurance Company
--Insurer financial strength Affirmed `AA'/Stable.

Empire General Life Assurance Company
--Insurer financial strength Affirmed `AA'/Stable.

West Coast Life Insurance Company
--Insurer financial strength Affirmed `AA'/Stable.

Protective Life Corporation
--Senior debt Affirmed `A+'/Stable.

PLC Capital Trust I
--Trust originated pfd secs Affirmed `A'/Stable.

PLC Capital Trust II
--FEELINE PRIDES Affirmed `A'/Stable.

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Publication:Business Wire
Date:Jul 10, 2001
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