UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 20062007

OR

For the transition period from              to             

Commission file number 033-37576

UNION SECURITY INSURANCE COMPANY

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code: (651) 361-4000

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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

¨Large accelerated filer  ¨    Accelerated filer  ¨    Non-accelerated filer  x  Non-accelerated filer

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

As of November 1, 2006,2007, there were 1,000,000 shares of common stock of the registrant outstanding, all of which are owned by Assurant, Inc.

THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTIONS H(1)(a) AND (b) OF FORM 10-Q AND IS FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT.

UNION SECURITY INSURANCE COMPANY

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 20062007

TABLE OF CONTENTS

Union Security Insurance Company

Consolidated Balance Sheets

At September 30, 20062007 (Unaudited) and December 31, 20052006

See the accompanying notes to the consolidated financial statements.

Union Security Insurance Company

Consolidated Balance Sheets

At September 30, 20062007 (Unaudited) and December 31, 20052006

See the accompanying notes to the consolidated financial statements.

Union Security Insurance Company

Consolidated Statements of Operations (Unaudited)

Three and Nine Months Ended September 30, 20062007 and 20052006

See the accompanying notes to the consolidated financial statements.

Union Security Insurance Company

Consolidated Statement of Changes in Stockholder’s Equity (Unaudited)

From December 31, 20052006 to September 30, 2006 (Unaudited)2007

See the accompanying notes to the consolidated financial statements.

Union Security Insurance Company

Consolidated Statements of Cash Flows (Unaudited)

Nine Months Ended September 30, 20062007 and 20052006

See the accompanying notes to the consolidated financial statements.

Union Security Insurance Company

Notes to the Consolidated Financial Statements (Unaudited)

Nine Months Ended September 30, 2006(in thousands, except per share and 2005share amounts)

1. Nature of Operations

Union Security Insurance Company (the “Company”), formerly known as Fortis Benefits Insurance Company, is a provider of life and health insurance products.products including group disability insurance, group dental insurance, group life insurance, small employer group health insurance and pre-funded funeral insurance. The Company is an indirect wholly ownedwholly-owned subsidiary of Assurant, Inc. (the “Parent”). Assurant, Inc.’sThe Parent’s common stock is traded on the New York Stock Exchange under the symbol AIZ.

The Company was redomesticated to Iowa from Minnesota in 2004 and changed its name from Fortis Benefits Insurance Company in 2005.2004. The Company distributes its products in all states except New York. The Company’s revenues are derived principally from group employee benefits, group health and pre-funded funeral products.

Effective April 1,December 31, 2006, the Company transferred assets and liabilities related to its Canadian operations to Assurant Life of CanadaInternational Dental Plans, Inc. (“ALOC”IDP”). ALOC is also, an indirect wholly-owned subsidiary of the Parent. See Note 6 – Related Party Transactions for further details.Parent, was merged into the operations of the Company. Accordingly, all prior period amounts have been restated to conform to the 2007 presentation.

2. Basis of Presentation

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Accordingly, these statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

In the opinion of management, all adjustments (consisting only of a normal recurring accruals)nature) considered necessary for a fair statement of the consolidated financial statements have been included. Certain prior period amounts have been reclassified to conform to the 20062007 presentation.

Dollar amounts are in thousands except for number of shares.

The consolidated financial statements include the accounts of the Company and all of its wholly ownedwholly-owned subsidiaries. All inter-company transactions and balances are eliminated in consolidation.

Operating results for the three and nine months ended September 30, 20062007 are not necessarily indicative of the results that may be expected for the year ending December 31, 2006.2007. The accompanying unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s annual reportAnnual Report on Form 10-K for the year ended December 31, 2005.2006.

3. Recently Adopted

Recent Accounting Pronouncements Adopted

On January 1, 2006,2007, the ParentCompany adopted AICPA Statement of Financial Accounting Standards (“FAS”) No. 123 (revised 2004),Share-Based Payment (“FAS 123R”) which replaces Statement of Financial Accounting Standards No. 123, Share-Based Payment and supersedes Accounting Principles Board Opinion No. 25,Position 05-1,Accounting by Insurance Enterprises for Stock IssuedDeferred Acquisition Costs in Connection with Modifications or Exchanges of Insurance Contracts,(“SOP 05-1”). SOP 05-1 provides guidance on internal replacements of insurance and investment contracts. An internal replacement is a modification in product benefits, features, rights or coverages that occurs by the exchange of a contract for a new contract or by amendment, endorsement, or rider to Employees. FAS 123R requires all share-based payments to employees, including grantsa contract, or by the election of employee stock options, to be recognized in the financial statements based on their fair values. The pro forma disclosuresa feature or coverage within a contract.

Union Security Insurance Company

Notes to the Consolidated Financial Statements (Unaudited)

Nine Months Ended September 30, 20062007 and 20052006

previously permitted under FAS 123(in thousands, except per share and share amounts)

Modifications that result in a new contract that is substantially different from the replaced contract are no longeraccounted for as an alternativeextinguishment of the replaced contract, and the associated unamortized deferred acquisition cost (“DAC”), unearned revenue liabilities and deferred sales inducements from the replaced contract must be reported as an expense immediately. Modifications resulting in a new contract that is substantially the same as the replaced contract are accounted for as a continuation of the replaced contract. Prior to financial statement recognition. Under FAS 123R,the adoption of the SOP 05-1, certain internal replacements that did not meet the new criteria were accounted for as continuations of the replaced contract. Therefore, the accounting policy for certain internal replacements has changed as a result of the adoption of this SOP. At adoption, the Company must determinerecognized a $4,118 decrease to deferred acquisition costs, which was accounted for as a reduction to the appropriateJanuary 1, 2007 balance of retained earnings.

On January 1, 2007, the Company adopted FAS No. 155,Accounting for Certain Hybrid Financial Instruments—an amendment of FASB Statements No. 133 (“FAS 133”) and 140(“FAS 155”). This statement resolves issues addressed in FAS 133 Implementation Issue No. D1,Application of Statement 133 to Beneficial Interest in Securitized Financial Assets. FAS 155 (a) permits fair value modelremeasurement for any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation; (b) clarifies which interest-only strips and principal-only strips are not subject to be usedthe requirements of FAS 133; (c) establishes a requirement to evaluate beneficial interests in securitized financial assets to identify interests that are freestanding derivatives or that are hybrid financial instruments that contain an embedded derivative requiring bifurcation; (d) clarifies that concentrations of credit risk in the form of subordination are not embedded derivatives; and (e) eliminates restrictions on a qualifying special-purpose entity’s ability to hold passive derivative financial instruments that pertain to beneficial interests that are or contain a derivative financial instrument. FAS 155 also requires presentation within the financial statements that identifies those hybrid financial instruments for valuing share-based payments,which the amortization method for compensation cost,fair value election has been applied and information on the transition method to be used at date of adoption. The Parent adopted FAS 123R using the modified prospective method which requires that compensation expense be recorded for all unvested stock options at the beginningincome statement impact of the first quarterchanges in fair value of adoption of FAS 123R.those instruments. The adoption of FAS 123R155 did not have a material impact on the Company’s consolidatedresults of operations or financial statements.condition.

On January 1, 2006,2007, the Company adopted FAS No. 154,Accounting Changes and Error Corrections, a replacementthe provisions of APB Opinion No. 20, Accounting Changes, and Statement No. 3, Reporting Accounting Changes in Interim Financial Statements (“FAS 154”). FAS 154 changes the accounting and reporting of a change in accounting principle. Prior to FAS 154, the majority of voluntary changes in accounting principles were required to be recognized as a cumulative effect adjustment within net income during the period of the change. FAS 154 requires retrospective application to prior period financial statements unless it is impracticable to determine either the period-specific effects or the cumulative effect of the change. The adoption of FAS 154 did not have a material effect on the Company’s consolidated financial position or results of operations.

In June 2006, the FASB issued Interpretation No. 48,Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109(“FIN 48”).This interpretation clarifies There was no impact as a result of adoption on the accountingCompany’s January 1, 2007 retained earnings. At adoption, total unrecognized tax benefits were $50,251. Of the total unrecognized tax benefits, $44,217, if recognized, would impact the Company’s consolidated effective tax rate. The Company files income tax returns in the U.S. and various state and foreign jurisdictions. The Company has substantially concluded all U.S. federal income tax matters for uncertaintyyears through 2002. During 2007, the Company settled an appealed matter with the Internal Revenue Service, which resulted in a decrease to income tax expense of $8,695 and a decrease to tax related interest of $3,262. Substantially all state, local and non-U.S. income tax matters have been concluded for the years through 1999. The Company’s continuing practice is to recognize interest and/or penalties related to income tax matters in income taxes recognized in an enterprise’s financial statements. This interpretation prescribes a recognition threshold and measurement attributetax expense. At the date of adoption, the Company had $7,381 accrued for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This interpretation also provides guidance on derecognition, classification,related interest and penalties accounting in interim periods, disclosure, and transition. The interpretation is effective for fiscal years beginning after December 15, 2006 and, therefore, theon its Consolidated Balance Sheets.

Union Security Insurance Company is required to adopt FIN 48 by the first quarter of 2007. The Company is currently evaluating the requirements of FIN 48 and the potential impact on the Company’s consolidated financial statements.

OnNotes to the Consolidated Financial Statements (Unaudited)

Nine Months Ended September 15,30, 2007 and 2006

(in thousands, except per share and share amounts)

Recent Accounting Pronouncements Outstanding

In September 2006, the FASBFinancial Accounting Standards Board (“FASB”) issued FAS No. 157,Fair Value Measurements (“(“FAS 157”). FAS 157 defines fair value, addresses how companies should measure fair value when they are required to use a fair value measure for recognition or disclosure purposes under GAAP, and expands disclosures about fair value measurements. FAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years and, therefore,years. Therefore, the Company is required to adopt FAS 157 by the first quarter ofon January 1, 2008. The Company is currently evaluating the requirements of FAS 157 and the potential impact on the Company’s consolidated financial statements.position or results of operations.

On September 29, 2006In February 2007, the FASB issued FAS 158,No. 159,Employers’ AccountingThe Fair Value Option for Defined Benefit PensionFinancial Assets and Other Postretirement PlansFinancial Liabilities(“FAS 158”159”). This standard requires companiesFAS 159 provides a choice to recognize a net liability or asset to report the funded status of their defined benefit pension and other postretirement plans on their balance sheet with an offsetting adjustment to accumulated other comprehensive income. FAS 158 requires companies to make additional disclosures, but does not change how pensions and postretirement benefits are accounted for and reported in the income statement. The Parent sponsors a defined benefit pension planmeasure many financial instruments and certain other post

Union Security Insurance Company

Notes toitems at fair value on specified election dates and requires disclosures about the Financial Statements (Unaudited)

Nine Months Ended September 30, 2006election of the fair value option. Unrealized gains and 2005

retirement benefits covering employees and certain agents who meet eligibility requirements as to age and length of service. The Companylosses on items for which the fair value option has no legal obligation for benefits under these plans.been elected are reported in earnings. FAS 158 provides for two alternatives for transition for companies where the measurement date of plan assets and obligations is not the same as the fiscal year-end date. The Parent’s measurement date and fiscal year-end date are the same, therefore the adoption of one of these alternatives is not applicable. FAS 158’s requirement to record the funded status on the balance sheet and to make additional disclosures159 is effective infor fiscal years endingbeginning after DecemberNovember 15, 2006 and, therefore,2007. Therefore, the ParentCompany is required to adopt FAS 158 as of December 31, 2006.159 on January 1, 2008. The adoptionCompany is currently evaluating the requirements of FAS 158 is not expected to have a material159 and the potential impact on the Company’s consolidated financial statements.

In September 2006, the Securities and Exchange Commission staff issued Staff Accounting Bulletin No. 108, “Considering the Effectsposition or results of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements” (“SAB 108”). SAB 108 provides guidance for how errors should be evaluated to assess materiality from a quantitative perspective. SAB 108 permits companies to initially apply its provisions by either restating prior financial statements or recording the cumulative effect of initially applying the approach as adjustments to the carrying values of assets and liabilities as of January 1, 2006 with an offsetting adjustment to retained earnings. SAB 108 is required to be adopted by December 31, 2006 and is not expected to have an effect on the Company’s consolidated financial statements.operations.

4. Retirement and Other Employee Benefits

The Parent sponsors a defined benefit pension plan and certain other post retirement benefits covering employees and certain agents who meet eligibility requirements as to age and length of service. Plan assets of the defined benefit plans are not specifically identified by each participating subsidiary. Therefore, a breakdown of plan assets is not reflected in these financial statements. The Company has no legal obligation for benefits under these plans. The benefits are based on years of service and career compensation. The Parent’s pension plan funding policy is to contribute amounts to the plan sufficient to meet the minimum funding requirements set forth in the Employee Retirement Income Security Act of 1974, plus additional amounts as the Parent may determine to be appropriate from time to time up to the maximum permitted, and to charge each subsidiary an allocable amount based on its employee census. Pension costs allocated to the Company were $1,908$1,725 and $1,965$1,908 for the three months ended September 30, 20062007 and 2005,2006, respectively, and $5,724$5,176 and $5,918$5,724 for the nine months ended September 30, 20062007 and 2005,2006, respectively.

The Company participates in a contributory profit sharing plan, sponsored by the Parent, covering employees and certain agents who meet eligibility requirements as to age and length of service. Benefits are payable to participants on retirement or disability and to the beneficiaries of participants in the event of death. For employees hired on or before December 31, 2000, the first 3% of an employee’s contribution is matched 200% by the Company. The second 2% is matched 50% by the Company. For employees hired after December 31, 2000, the first 3% of an employee’s contribution is matched 100% by the Company. The second 2% is matched 50% by the Company. The amounts expensed by the Company were $1,177$1,317 and $1,238$1,177 for the three months ended September 30, 20062007 and 2005,2006, respectively, and $4,454$4,513 and $4,218$4,454 for the nine months ended September 30, 2007 and 2006, and 2005, respectively.

Union Security Insurance Company

Notes to the Financial Statements (Unaudited)

Nine Months Ended September 30, 2006 and 2005

With respect to retirement benefits, the Company participates in other health care and life insurance benefit plans (postretirement benefits) for retired employees, sponsored by the Parent. Health care benefits, either through the Parent’s retiree plan for retirees under age 65 or through a cost offset for individually purchased Medigap policies for retirees over age 65, are available to employees who retire on or after January 1, 1993, at age 55 or older, with 10 years or more service. Life insurance, on a retiree pay all basis, is available to those who retire on or after January 1, 1993.

5. Commitments and Contingencies

The Company is regularly involved in litigation in the ordinary course of business, both as a defendant and as a plaintiff. The Company may from time to time be subject to a variety of legal and regulatory actions relating to the Company’s current and past business operations. While the Company cannot predict the outcome of any pending or future litigation, examination or investigation, the Company does not believe that any pending matter will have a material adverse effect on the Company’s financial condition or results of operations.

6. Related Party Transactions

On April 1, 2006, the Company transferred the assets and liabilities related to its Canadian operations to ALOC, an indirectly wholly owned subsidiary of the Parent, in exchange for ALOC common stock equal to the fair value of the net assets transferred. The Company transferred assets of approximately $469,000 and liabilities of approximately $401,000 related to its Canadian operations to ALOC for the purpose of re-domesticating its Canadian operations to Canada. In return, the Company received approximately $75,000 of ALOC common stock which was then sold to the Parent. In addition, there was a reinsurance agreement between the Company and ALOC for the existing insurance in force in which the Company was relieved of any liability to the insured. As a result of these transactions, the Company recognized an increase to equity of approximately $7,600.

PART I

FINANCIAL INFORMATION

Item 2. Management’s Discussion And Analysis Of Financial Condition And Results Of Operations.

(Dollar amounts in thousands except share data.thousands.)

Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) addresses the financial condition of Union Security Insurance Company and its subsidiaries (collectively, USIC or the Company) as of September 30, 2006,2007, compared with December 31, 2005,2006, and its results of operations for the three and nine months ended September 30, 2006,2007, compared with the equivalent 2005 period.2006 periods. This discussion should be read in conjunction with USIC’sthe Company’s MD&A and annual audited financial statements as of December 31, 20052006 included in the Company’s Form 10-K for the year ended December 31, 20052006 filed with the U.S. Securities and Exchange Commission (hereafter referred to as the Company’s 20052006 Form 10-K) and unaudited interim consolidated financial statements and related notes included elsewhere in this Form 10-Q.

Some of the statements in this MD&A and elsewhere in this report may contain forward-looking statements which reflect our current views with respect to, among other things, future events and financial performance. You can identify these forward-looking statements by the use of forward-looking words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of those words or other comparable words. Any forward-looking statements contained in this report are based upon our historical performance and on current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause our actual results to differ materially from those indicated in this report. We believe that these factors include but are not limited to those described under the subsection entitled “Risk Factors” in our 20052006 Form 10-K. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this report. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may vary materially from what we projected. Any forward-looking statements you read in this report reflect our current views with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, financial condition, growth strategy and liquidity.

Critical Factors Affecting Results

Our results depend on the adequacy of our product pricing, underwriting and the accuracy of our methodology for the establishment of reserves for future policyholder benefits and claims, returns on invested assets and our ability to manage our expenses. Therefore, factors affecting these items may have a material adverse effect on our results of operations or financial condition.

Critical Accounting Policies and Estimates

Our 20052006 Form 10-K described the accounting policies and estimates that are critical to the understanding of our results of operations, financial condition and liquidity. The accounting policies and estimates described in the 20052006 Form 10-K were consistently applied to the unaudited interim consolidated interim financial statements for the three and nine months ended September 30, 2006.2007.

Recent Accounting Pronouncements

See – Financial Statement Footnote 3.

The tables below present information regarding our consolidated results of operations:

For The Three Months Ended September 30, 20062007 Compared to The Three Months Ended September 30, 2005.2006.

Net Income

Net income decreased by $3,877,$7,608, or 10%21%, to $35,419$27,817 for the three months ended September 30, 20062007 from $39,296$35,425 for the three months ended September 30, 2005.2006. This decrease is primarily duewas attributable to the decline ofless favorable experience in our group life business and small employer group health businessesan increase in net realized losses on investments of $3,875, (after-tax) due to lower sales and increased lapses caused by competition andan increase in other than temporary impairments. Also contributing to the transfer of our Canadian pre-funded funeral business todecrease in net income was an affiliateincrease in the secondeffective income tax rate, as the prior quarter of 2006. Partially offsetting these decreases are improved loss ratios in our group disability and group dental business.received a greater tax benefit from the dividend received deduction.

Total Revenues

Total revenues decreased by $99,973,$32,335, or 20%8%, to $403,688$371,379 for the three months ended September 30, 20062007 from $503,661$403,714 for the three months ended September 30, 2005.2006. This decrease is primarily due to lowera decrease in net earned premiums and other considerations of $89,182 driven by$21,585 and an increase in net realized losses on investments of $5,961. Net earned premiums and other considerations decreased primarily due to a decline in our small employer group health business as a result of lower sales and membership, declines in our group disability and group life businesses resulting from the salecontinuing implementation of the Independent – United States distribution channel in our pre-funded funeral business, the loss of a client in our accidental deathbusiness’ small case strategy and dismemberment (AD&D) business and the transfer of our Canadian pre-funded funeral businessadherence to an affiliate.pricing discipline. Also contributing to the decrease in net earned premiums and other considerations are declineswas the sale of the Independent–U.S. distribution channel in our group dental, group life,pre-funded funeral (“preneed”) business and small employer group health businesses allthe loss of a client in our accidental death and dismemberment (“AD&D”) business. Net realized losses increased primarily due to lower sales and higher lapses, partially offset by an increase of $6,959 in disability business written through our Disability Risk Management Services (DRMS) distribution channel. Net investment income decreased by $6,891 due to the transfer of our Canadian pre-funded funeral business to an affiliate and $2,560 of income realized in the third quarter of 2005 from a real estate partnership.other than temporary impairments.

Total Benefits, Losses and Expenses

Total benefits, losses and expenses decreased by $90,292,$23,609, or 20%7%, to $353,209$329,616 for the three months ended September 30, 20062007 from $443,501$353,225 for the three months ended September 30, 2005.2006. This decrease is primarily due to apolicyholder benefits and selling, underwriting and general expenses decreasing $14,239 and $9,370, respectively. The decrease in policyholder benefits of $65,212is driven by the sale of the Independent – United States distribution channel in our pre-funded funeral business and favorable experience in our group disability and group dental business. Also contributingbusinesses, partially offset by less favorable group life experience relative to the decrease in policyholderprior year. Policyholder benefits is an overall declineand selling, underwriting and general

expenses also decreased due to the sale of membersour Independent – U.S. distribution channel in our small employer group healthpreneed business, the loss of a client in our AD&D business and the transfer oflower sales and renewals in our Canadian pre-funded funeral business to an affiliate. Selling, underwriting and general expensessmall employer group health business.

Income Tax Expense

Income tax expense decreased by $25,080$1,118, or 7%, to $13,946 for the three months ended September 30, 2007 from $15,064 for the three months ended September 30, 2006. The effective income tax rate in the current quarter increased compared with the comparable 2006 period due to a greater tax benefit received from the dividend received deduction in 2006.

For The Nine Months Ended September 30, 2007 Compared to The Nine Months Ended September 30, 2006.

Net Income

Net income increased $24,241, or 25%, to $122,695 for the nine months ended September 30, 2007 from $98,454 for the nine months ended September 30, 2006. This increase is primarily due to favorable group disability experience, an increase in net investment income from real estate partnerships, and an increase in fees and other income related to the sale of the Independent – U.S. distribution channel in our pre-funded funeral business. Net income also increased due to a reduction of our income tax expense due to lower commission expensetax contingencies associated with a favorable tax settlement. These increases to net income were partially offset by a decline in our small employer group health and group dental businesses.

Total Revenues

Total revenues decreased $102,247, or 8%, to $1,192,007 for the nine months ended September 30, 2007 from $1,294,254 for the nine months ended September 30, 2006. This decrease is primarily due to a decrease in net earned premiums and other considerations of $106,337. Net earned premiums and other considerations decreased due to declines in our small employer group health business as a result of lower sales and membership, declines in our group dental and group life businesses resulting from the continuing implementation of the business’ small case strategy and adherence to pricing discipline. Also contributing to the decrease in net earned premiums and other considerations is the loss of a client in our AD&D business, the sale of the Independent – United StatesU.S. distribution channel in our pre-funded funeralpreneed business and the transfer of our Canadian pre-funded funeralpreneed business to an affiliate.

For The Nine Months Ended September 30, 2006 Compared to The Nine Months Ended September 30, 2005.

Net Income

Net income increased by $2,070, or 2%, to $98,435 for Partially offsetting the nine months ended September 30, 2006 from $96,365 for the nine months ended September 30, 2005. This increase indecreased net income is primarily due to improved loss ratios in our group disability and group dental businesses and lower commission expense, partially offset by the transfer of our Canadian pre-funded funeral business to an affiliate.

Total Revenues

Total revenues decreased by $264,029, or 17%, to $1,294,168 for the nine months ended September 30, 2006 from $1,558,197 for the nine months ended September 30, 2005. Net earned premiums and other considerations decreased by $254,310 primarilyare increases in fees and other income and net investment income of $5,363 and $3,977, respectively. Fees and other income increased due to the sale of the Independent – United Statesmarketing rights of the Independent-U.S. distribution channel in our pre-funded funeralpreneed business, the loss of a client in our AD&D business, and declines in our group life, group dental and small employer group businesses resulting from lower sales and higher lapses. These decreases are partially offset by growth in disability business written through our DRMS distribution channel, includingwhile net investment income increased due to an increase of $14,179 for single premiums related to risk for closed blocks of business. Amortization of deferred gains on disposal of businesses decreased by $5,701 consistent with the anticipated run-off of the business ceded to The Hartford in 2001 and John Hancock in 2000.real estate investment income.

Total Benefits, Losses and Expenses

Total benefits, losses and expenses decreased by $265,809,$126,074, or 19%11%, to $1,147,488$1,021,471 for the nine months ended September 30, 20062007 from $1,413,297$1,147,545 for the nine months ended September 30, 2005.2006. This decrease iswas primarily due to a decrease in policyholder benefits of $204,584$86,852 driven by the sale of the Independent – United States distribution channel in our pre-funded funeral business, the loss of a client in our AD&D business, and favorable experience in our group dental,disability and group disability,life businesses, a reduction in policyholder benefits related to closed blocks of business and the decline of our small employer group businesses. Selling,health business. Policyholder benefits and selling, underwriting and general expenses also decreased by $61,225 primarily due to a decrease in commission expense as a result of the loss of a client in our AD&D business, the sale of the Independent – United StatesIndependent–U.S. distribution channel in our pre-funded funeralpreneed business, and the transfer of our Canadian pre-funded funeralpreneed business to an affiliate and lower commission expense on small employer group businessaffiliate.

Income Taxes

Income taxes decreased $414, or 1%, to $47,841 for the nine months ended September 30, 2007 from lower sales and renewals.$48,255 for the nine months ended September 30, 2006. The effective income tax rate of 28.1% for nine months ended September 30, 2007 decreased compared with 32.9% as of nine months ended September 30, 2006 due to a $12,500 reduction in certain tax contingencies in 2007 associated with a favorable tax settlement.

Item 3. Quantitative And Qualitative Disclosures About Market Risk.

Not required under the reduced disclosure format.

Item 4.Controls And Procedures.

UnderEvaluation of disclosure controls and procedures under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2006.2007. Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of that date in providing a reasonable level of assurance that information we are required to disclose in reports we file or furnish under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods in United States Securities and Exchange Commission (“SEC”) rules and forms. Further, our disclosure controls and procedures were effective in providing a reasonable level of assurance that information required to be disclosed by us in such reports is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

PART II

OTHER INFORMATION

Item 1A.Risk Factors.

Our 20052006 Annual Report on Form 10-K described our Risk Factors. There have been no material changes toAs discussed in Note 11—Commitments and Contingencies and in Item 1—Legal Proceedings of the Risk Factors duringParent’s Quarterly Report on Form 10-Q for the nine monthsperiod ended September 30, 2006.2007, additional developments in the Parent’s SEC investigation have occurred since we filed our 2006 Annual Report on Form 10-K. The disclosures in the aforementioned sections of the Parent’s third quarter 2007 10-Q are incorporated by reference into our Risk Factors. Please see the Parent’s third quarter 2007 10-Q filed with the SEC and available on the SEC’s website atwww.sec.gov or through Assurant’s website atwww.assurant.com for further details.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Not required under the reduced disclosure format.

Item 3. Defaults Upon Senior Securities.

Not required under the reduced disclosure format.

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

Not required under the reduced disclosure format.

Item 5. Other Information.

Item 6. Exhibits

The following exhibits either (a) are filed with this report or (b) have previously been filed with the SEC and are incorporated herein by reference to those prior filings.report. Exhibits are available upon request at the investor relations section of our website, located at www.assurant.com.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on November 20, 2006.9, 2007.

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