UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED MARCH 31,SEPTEMBER 30, 2007

OR

For the transition period fromto

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 MayNovember 1, 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 MARCH 31,SEPTEMBER 30, 2007

TABLE OF CONTENTS

Union Security Insurance Company

Consolidated Balance Sheets

At March 31,September 30, 2007 (Unaudited) and December 31, 2006

See the accompanying notes to the consolidated financial statements.

Union Security Insurance Company

Consolidated Balance Sheets

At March 31,September 30, 2007 (Unaudited) and December 31, 2006

See the accompanying notes to the consolidated financial statements.

Union Security Insurance Company

Consolidated Statements of Operations (Unaudited)

Three and Nine Months Ended March 31,September 30, 2007 and 2006

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, 2006 to March 31,September 30, 2007 (Unaudited)

See the accompanying notes to the consolidated financial statements.

Union Security Insurance Company

Consolidated Statements of Cash Flows (Unaudited)

ThreeNine Months Ended March 31,September 30, 2007 and 2006

See the accompanying notes to the consolidated financial statements.

Union Security Insurance Company

Notes to the Consolidated Financial Statements (Unaudited)

Three Months Ended March 31, 2007(in thousands, except per share and 2006share amounts)

Union Security Insurance Company (the “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”). The 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. The Company distributes its products in all states except New York. The Company’s revenues are derived principally from group employee benefits and group health products. The Company offers group disability insurance, group dental insurance, group life insurance, small employer group health insurance and pre-funded funeral insurance.

Effective December 31, 2006, International Dental Plans, Inc. (“IDP”), an indirect wholly ownedwholly-owned subsidiary of the Parent, was merged into the operations of the Company. Accordingly, all prior period amounts have been restated to conform to the 2007 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 2007 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 March 31,September 30, 2007 are not necessarily indicative of the results that may be expected for the year ending December 31, 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, 2006.

Recent Accounting Pronouncements Adopted

On January 1, 2007, the Company adopted AICPA Statement of Position 05-1,Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection with Modifications or Exchanges orof Insurance Contracts,(“SOP 05-1”). SOP 05-1 provides guidance

Union Security Insurance Company

Notes to the Consolidated Financial Statements (Unaudited)

Three Months Ended March 31, 2007 and 2006

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 a contract, or by the election of a feature or coverage within a contract.

Union Security Insurance Company

Notes to the Consolidated Financial Statements (Unaudited)

Nine Months Ended September 30, 2007 and 2006

(in thousands, except per share and share amounts)

Modifications that result in a new contract that is substantially different from the replaced contract are accounted for as an extinguishment of the replaced contract, and the associated unamortized DAC,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 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 recognized a $4,118 decrease to deferred acquisition costs, which was accounted for as a reduction to the January 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 remeasurement 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 the 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 which the fair value election has been applied and information on the income statement impact of the changes in fair value of those instruments. The adoption of FAS 155 did not have a material impact on the Company’s results of operations or financial statements.condition.

On January 1, 2007, the Company adopted the provisions of FASB Interpretation No. 48,Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109 (“(“FIN 48”). There was no impact as a result of adoption on the Company’s January 1, 2007 retained earnings. At adoption, total unrecognized tax benefits arewere $50,251. Of the total unrecognized tax benefits, approximately $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 years through 2002,2002. During 2007, the Company settled an appealed matter with the exception of one item from 2001 that is under appeals. The final outcome of this appeal is not yet determinable; however, management does not anticipate the adjustments would resultInternal Revenue Service, which resulted in a material changedecrease to the financial statements.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 tax expense. At the date of adoption, the Company had approximately $7,381 accrued for tax related interest and penalties on its Consolidated Balance Sheets.

Union Security Insurance Company

Notes to the Consolidated Financial Statements (Unaudited)

ThreeNine Months Ended March 31,September 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. Therefore, the Company is required to adopt FAS 157 in 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.

In February 2007, the FASB issued FAS No. 159,The Fair Value Option for Financial Assets and Financial Liabilities(“FAS 159”). FAS 159 provides a choice to measure many financial instruments and certain other items at fair value on specified election dates and requires disclosures about the election of the fair value option. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. FAS 159 is effective for fiscal years beginning after November 15, 2007. Therefore, the Company is required to adopt FAS 159 in the first quarter ofon January 1, 2008. The Company is currently evaluating the requirements of FAS 159 and the potential impact on the Company’s consolidated financial statements.position or results of operations.

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. Pension costs allocated to the Company were $1,571$1,725 and $1,908 for the three months ended March 31,September 30, 2007 and 2006, respectively, and $5,176 and $5,724 for the nine months ended September 30, 2007 and 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. The amounts expensed by the Company were $1,920$1,317 and $2,018$1,177 for the three months ended March 31,September 30, 2007 and 2006, respectively, and $4,513 and $4,454 for the nine months ended September 30, 2007 and 2006, respectively.

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.

PART I

FINANCIAL INFORMATION

(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 March 31,September 30, 2007, compared with December 31, 2006, and its results of operations for the three and nine months ended March 31,September 30, 2007, compared with the equivalent 2006 period.periods. This discussion should be read in conjunction with the Company’s MD&A and annual audited financial statements as of December 31, 2006 included in the Company’s Form 10-K for the year ended December 31, 2006 filed with the U.S. Securities and Exchange Commission (hereafter referred to as the Company’s 2006 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 2006 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 2006 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 2006 Form 10-K were consistently applied to the unaudited interim consolidated interim financial statements for the three and nine months ended March 31,September 30, 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 March 31,September 30, 2007 Compared to The Three Months Ended March 31,September 30, 2006.

Net Income

Net income increased by $12,480,decreased $7,608, or 35%21%, to $48,049$27,817 for the three months ended March 31,September 30, 2007 from $35,569$35,425 for the three months ended March 31,September 30, 2006. This decrease was attributable to less favorable experience in our group life business and an increase is primarilyin net realized losses on investments of $3,875, (after-tax) due to an increase in investmentother than temporary impairments. Also contributing to the decrease in net income was an increase in the effective income tax rate, as the prior quarter received a greater tax benefit from real estate partnerships of approximately $10,920 (after tax) and favorable group disability and group life experience, partially offset by a decline in our small employer group health business.the dividend received deduction.

Total Revenues

Total revenues decreased by $44,274,$32,335, or 9%8%, to $439,237$371,379 for the three months ended March 31,September 30, 2007 from $483,511$403,714 for the three months ended March 31,September 30, 2006. This decrease is primarily due to a decrease in net earned premiums and other considerations partially offset by increasesof $21,585 and an increase in net investment income.realized losses on investments of $5,961. Net earned premiums and other considerations decreased $57,219, or 15%, 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 group dental and group life businesses as a resultresulting from the continuing implementation of the residual impact of lower sales and persistency over the past several quarters as the business continues to implement itsbusiness’ small case strategy.strategy and adherence to pricing discipline. Also contributing to the decrease in net earned premiums and other considerations was the transfersale of the Independent–U.S. distribution channel in our Canadian pre-funded funeral (“preneed”) business and the loss of a client in our accidental death and dismemberment (“AD&D”) business, the sale of the Independent – U.S. distribution channel in our pre-funded funeral business and a decline in our small employer group health business. The increase in net investment income wasNet realized losses increased primarily due to an increase in income from real estate partnerships of approximately $16,800 and higher yields, partially offset by lower average invested assets.other than temporary impairments.

Total Benefits, Losses and Expenses

Total benefits, losses and expenses decreased by $67,016,$23,609, or 16%7%, to $363,603$329,616 for the three months ended March 31,September 30, 2007 from $430,619$353,225 for the three months ended March 31,September 30, 2006. This decrease is due to policyholder benefits and selling, underwriting and general expenses decreasing $14,239 and $9,370, respectively. The decrease in policyholder benefits is driven by favorable experience in our group disability and group dental businesses, partially offset by less favorable group life experience relative to the prior year. Policyholder benefits and selling, underwriting and general

expenses also decreased due to the sale of our Independent – U.S. distribution channel in our preneed business, the loss of a client in our AD&D business and lower sales and renewals in our small employer group health business.

Income Tax Expense

Income tax expense decreased by $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 tax 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 – U.S. distribution channel in our preneed business and the transfer of our Canadian preneed business to an affiliate. Partially offsetting the decreased net earned premiums and other considerations are 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 marketing rights of the Independent-U.S. distribution channel in our preneed business, while net investment income increased due to an increase in real estate investment income.

Total Benefits, Losses and Expenses

Total benefits, losses and expenses decreased $126,074, or 11%, to $1,021,471 for the nine months ended September 30, 2007 from $1,147,545 for the nine months ended September 30, 2006. This decrease was primarily due to a decrease in policyholder benefits of $86,852 driven by favorable experience in our group disability

and group life businesses.businesses, a reduction in policyholder benefits related to closed blocks of business and the decline of our small employer group health business. Policyholder benefits and selling, underwriting and general expenses also decreased due to the loss of a client in our AD&D business, the sale of the Independent–U.S. distribution channel in our preneed business, and the transfer of our Canadian pre-funded funeralpreneed business the loss ofto an AD&D client and the sale of our Independent – United States distribution channel in our pre-funded funeral business. Selling, underwriting and general expenses also decreased due to lower commission expense as a result of lower sales and renewals in our small employer group health business.affiliate.

Income Taxes

Income taxes increased by $10,262,decreased $414, or 59%1%, to $27,585$47,841 for the threenine months ended March 31,September 30, 2007 from $17,323$48,255 for the threenine months ended March 31,September 30, 2006. This increase was partlyThe 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 additional income taxes of approximately $1,100 due to an increasea $12,500 reduction in certain prior year tax liabilities. In addition, during the first quarter ofcontingencies in 2007 income taxes were revised to reflect additional information related to 2006associated with a favorable tax return adjustments. The remainder of the increase is proportionate to the increase in income before income taxes.settlement.

Item 3.

Quantitative And Qualitative Disclosures About Market Risk.

Not required under the reduced disclosure format.

Evaluation 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 March 31,September 30, 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

Our 2006 Annual Report on Form 10-K described our Risk Factors. ThereAs discussed in Note 11—Commitments and Contingencies and in Item 1—Legal Proceedings of the Parent’s Quarterly Report on Form 10-Q for the period ended September 30, 2007, additional developments in the Parent’s SEC investigation have been no material changes tooccurred 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 duringFactors. Please see the three months ended March 31, 2007.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.

Not required under the reduced disclosure format.

Not required under the reduced disclosure format.

Not required under the reduced disclosure format.

The following exhibits are filed with this report. Exhibits are available upon request at the investor relations section of our website, located at www.assurant.com.

31.2		Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.
32.1		Certification of Chief Executive Officer of Union Security Insurance Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification of Chief Financial Officer of Union Security Insurance Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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 MayNovember 9, 2007.

1415