Union Security Insurance 10-Q 2005 Q2 Quarterly report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

[ x ]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2005
	OR
[    ]	TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                    to

Commission file number 033-37576

FORTIS BENEFITS INSURANCE COMPANY

(Exact name of registrant as specified in its charter)

IOWA	81-0170040
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

729 INSURANCE EXCHANGE BUILDING DES MOINES, IOWA	50309
(Address of Principal Executive Offices)	(Zip Code)

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

NOT APPLICABLE
(Former name, former address and former fiscal year, if changed since last report)

          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 an accelerated filer (as defined in Exchange Act Rule 12b-2).

Yes               No   X  

          As of August 1, 2005, 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.

FORTIS BENEFITS INSURANCE COMPANY
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2005

TABLE OF CONTENTS

Item		Page
Number		Number
PART I FINANCIAL INFORMATION
1.	FINANCIAL STATEMENTS		2
	Fortis Benefits Insurance Company Consolidated Balance Sheets at June 30, 2005 (Unaudited) and December 31, 2004		2
	Fortis Benefits Insurance Company Consolidated Statement of Operations for the three and six months ended June 30, 2005 and 2004 (Unaudited)		4
	Fortis Benefits Insurance Company Consolidated Statement of Changes in Stockholder’s Equity from December 31, 2004 to June 30, 2005 (Unaudited)		5
	Fortis Benefits Insurance Company Consolidated Statement of Cash Flows (Unaudited) for the six months ended June 30, 2005 and 2004		6
	Fortis Benefits Insurance Company Notes to the Consolidated Financial Statements For the six months ended June 30, 2005 and 2004 (Unaudited)		7
2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		10
3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK *		12
4.	CONTROLS AND PROCEDURES		12
PART II OTHER INFORMATION
2.	UNREGISTERED SALE OF EQUITY SECURITIES AND USE OF PROCEEDS*		13
3.	DEFAULTS UPON SENIOR SECURITIES *		13
4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS *		13
5.	OTHER INFORMATION		13
6.	EXHIBITS		13
SIGNATURES			14
EX-31.1: CERTIFICATION
EX-31.2: CERTIFICATION
EX-32.1: CERTIFICATION
EX-32.2: CERTIFICATION

* Not required under reduced disclosure pursuant to General Instruction H(1) (a) and (b) of Form 10-Q

Fortis Benefits Insurance Company

Consolidated Balance Sheets
At June 30, 2005 (Unaudited) and December 31, 2004

	June 30,		December 31,
	2005		2004
	(in thousands except number of shares)
			��
Assets
Investments:
Fixed maturities available for sale, at fair value (amortized cost — $3,419,286 in 2005 and $3,352,819 in 2004)	$	3,711,953	$	3,600,516
Equity securities available for sale, at fair value (cost — $253,336 in 2005 and $241,101 in 2004)		257,474		248,722
Commercial mortgage loans on real estate at amortized cost		703,332		695,921
Policy loans		9,876		9,956
Short-term investments		28,570		47,989
Collateral held under securities lending		352,877		332,276
Other investments		62,607		49,020
Total investments		5,126,689		4,984,400
Cash and cash equivalents		20,612		43,362
Premiums and accounts receivable, net		87,185		78,669
Reinsurance recoverables		1,254,966		1,238,111
Due from affiliates		3,305		5,967
Accrued investment income		51,365		51,933
Deferred acquisition costs		121,631		116,060
Property and equipment, at cost less accumulated depreciation		1,282		1,507
Deferred income taxes, net		—		20,515
Goodwill		155,950		156,104
Value of business acquired		36,553		39,413
Other assets		34,395		38,708
Assets held in separate accounts		3,191,724		3,435,089
Total assets	$	10,085,657	$	10,209,838

See the accompanying notes to the consolidated financial statements.

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Fortis Benefits Insurance Company

Consolidated Balance Sheets
At June 30, 2005 (Unaudited) and December 31, 2004

	June 30,		December 31,
	2005		2004
	(in thousands except number of shares)
Liabilities
Future policy benefits and expenses	$	3,072,517	$	3,028,030
Unearned premiums		41,862		46,228
Claims and benefits payable		1,946,298		1,884,608
Commissions payable		18,383		19,721
Reinsurance balances payable		3,518		6,727
Funds held under reinsurance		99		93
Deferred gain on disposal of businesses		188,738		206,182
Obligation under securities lending		352,877		332,276
Accounts payable and other liabilities		127,296		159,798
Deferred income taxes, net		4,329		—
Tax payable		13,353		7,987
Liabilities related to separate accounts		3,191,724		3,435,089
Total liabilities		8,960,994		9,126,739
Stockholder’s equity
Common stock, par value $5 per share, 1,000,000 shares authorized, issued, and outstanding		5,000		5,000
Additional paid-in capital		516,570		516,570
Retained earnings		405,923		388,854
Accumulated other comprehensive income		197,170		172,675
Total stockholder’s equity		1,124,663		1,083,099
Total liabilities and stockholder’s equity	$	10,085,657	$	10,209,838

See the accompanying notes to the consolidated financial statements.

3

Fortis Benefits Insurance Company

Consolidated Statements of Operations (Unaudited)
Three and Six Months Ended June 30, 2005 and 2004

	Three Months Ended June 30,						Six Months Ended June 30,
	2005			2004			2005			2004
	(in thousands)
Revenues
Net earned premiums and other considerations	$	428,656		$	432,467		$	884,721		$	871,025
Net investment income		79,063			70,080			148,177			137,176
Net realized (losses) gains on investments		(611	)		(12	)		(210	)		3,580
Amortization of deferred gain on disposal of businesses		8,702			10,752			17,444			21,610
Fees and other income		1,458			2,853			4,404			6,743
Total revenues		517,268			516,140			1,054,536			1,040,134
Benefits, losses and expenses
Policyholder benefits		332,619			330,217			692,460			685,495
Amortization of deferred acquisition costs and value of business acquired		21,156			20,279			39,122			35,229
Underwriting, general and administrative expenses		121,671			119,721			238,214			238,736
Total benefits, losses and expenses		475,446			470,217			969,796			959,460
Income before income taxes		41,822			45,923			84,740			80,674
Income taxes		12,388			15,506			27,671			27,544
Net income	$	29,434		$	30,417		$	57,069		$	53,130

See the accompanying notes to the consolidated financial statements.

4

Fortis Benefits Insurance Company

Consolidated Statements of Changes in Stockholder’s Equity
From December 31, 2004 to June 30, 2005 (Unaudited)

								Accumulated
			Additional					Other
	Common		Paid-in		Retained			Comprehensive
	Stock		Capital		Earnings			Income (Loss)			Total
	(in thousands)
Balance, December 31, 2004	$	5,000	$	516,570	$	388,854		$	172,675		$	1,083,099
Dividends		—		—		(40,000	)		—			(40,000	)
Comprehensive income:
Net income		—		—		57,069			—			57,069
Other comprehensive income:
Net change in unrealized gains on securities		—		—		—			26,964			26,964
Foreign currency translation		—		—		—			(2,469	)		(2,469	)
Total other comprehensive income		—		—		—			—			24,495
Total comprehensive income		—		—		—			—			81,564
Balance, June 30, 2005	$	5,000	$	516,570	$	405,923		$	197,170		$	1,124,663

See the accompanying notes to the consolidated financial statements.

5

Fortis Benefits Insurance Company

Consolidated Statements of Cash Flows (Unaudited)
Three Months Ended June 30, 2005 and 2004

	Six Months Ended June 30,
	2005			2004
	(in thousands)
Net cash provided by operating activities	$	107,830		$	84,126
Investing activities
Sales of:
Fixed maturities available for sale		188,926			355,766
Equity securities available for sale		15,784			18,629
Other invested assets		5,165			4,581
Maturities, prepayments, and scheduled redemption of:
Fixed maturities available for sale		118,993			88,413
Purchase of:
Fixed maturities available for sale		(383,771	)		(445,440	)
Equity securities available for sale		(28,428	)		(55,769	)
Other invested assets		(18,752	)		(10,946	)
Change in commercial mortgage loans on real estate		(7,969	)		(60,716	)
Change in short term investments		19,418			33,521
Change in collateral held under securities lending		(20,601	)		39,631
Change in policy loans		54			—
Net cash (used in) investing activities	$	(111,181	)	$	(32,330	)
Financing activities
Dividends paid		(40,000	)		(25,000	)
Change in obligation under securities lending		20,601			(39,631	)
Net cash (used in) provided by financing activities		(19,399	)		(64,631	)
Change in cash and cash equivalents		(22,750	)		(12,835	)
Cash and cash equivalents at beginning of period		43,362			29,176
Cash and cash equivalents at end of period	$	20,612		$	16,341

See the accompanying notes to the consolidated financial statements.

6

Fortis Benefits Insurance Company
Notes to the Consolidated Financial Statements
Six Months Ended June 30, 2005 and 2004 (Unaudited)

1. Nature of Operations

Fortis Benefits Insurance Company (the “Company”) is a provider of life and health insurance products. The Company is an indirect wholly owned subsidiary of Assurant, Inc. (the “Parent”). Assurant, Inc. 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 products and from individual and group health and pre-need products. The Company offers insurance products, including life insurance policies, annuity contracts, and group life, accident and health insurance policies.

2. Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements in conformity with GAAP requires management to make estimates when recording transactions resulting from business operations based on information currently available. The most significant items on the Company’s balance sheet that involve accounting estimates and actuarial determinations are the value of business acquired (“VOBA”), goodwill, reinsurance recoverables, valuation of investments, deferred acquisition costs (“DAC”), liabilities for future policy benefits and expenses, taxes, and claims and benefits payable. The accounting estimates and actuarial determinations are sensitive to market conditions, investment yields, mortality, morbidity, commissions and other acquisition expenses, and terminations by policyholders. As additional information becomes available or actual amounts are determinable, the recorded estimates will be revised and reflected in operating results. Although some

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variability is inherent in these estimates, the Company believes the amounts provided are reasonable and adequate.

Dollar amounts are presented in U.S. dollars and all amounts are in thousands except for number of shares.

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

3. Recently Adopted Accounting Pronouncements

In June 2005, the FASB issued Statement of Financial Accounting Standards No. 154,Accounting Changes and Error Corrections, a replacement 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. FAS 154 is effective for accounting changes made in fiscal years beginning after December 15, 2005 but does not change the transition provisions of any existing accounting pronouncements. The Company does not believe the adoption of FAS 154 will have a material effect on our consolidated financial position or results of operations.

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4. Retirement and Other Employee Benefits

The Company is an indirect wholly-owned subsidiary of Assurant, Inc., which 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. Assurant’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 Assurant 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 cost allocated to the Company amounted to approximately $3,953 and $3,504 for the six months ended June 30, 2005 and 2004, respectively.

The Company participates in a contributory profit sharing plan, sponsored by Assurant, 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 amount expensed was approximately $2,980 and $2,845 for the six months ended June 30, 2005 and 2004, respectively.

With respect to retirement benefits, the Company participates in other health care and life insurance benefit plans (postretirement benefits) for retired employees, sponsored by Assurant. Health care benefits, either through a Assurant sponsored 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.

The Company’s Parent has been part of industry-wide investigations into certain loss mitigation products and finite risk insurance. The Parent has previously received subpoenas for information from the United States Securities and Exchange Commission and the United States Attorney for the Southern District of New York. A disclosure of these investigations is provided in the Parent’s Quarterly report on Form 10Q for the fiscal quarter ended June 30, 2005.

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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.)

               Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) addresses the financial condition of Fortis Benefits Insurance Company and its subsidiaries (collectively, FBIC or the Company) as of June 30, 2005, compared with December 31, 2004, and its results of operations for the three and six months ended June 30, 2005, compared with the equivalent 2004 period. This discussion should be read in conjunction with FBIC’s MD&A and annual audited financial statements as of December 31, 2004 filed with the Company’s Form 10-K for the year ended December 31, 2004 filed with the U.S. Securities and Exchange Commission (hereafter referred to as the Company’s 2004 Form 10-K) and unaudited 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 that 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. 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.

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

	For the Three Months Ended								For the Six Months Ended
	June 30,								June 30,
	2005				2004				2005				2004
	(in thousands)								(in thousands)
Revenues:
Net earned premiums and other considerations		$	428,656			$	432,467			$	884,721			$	871,025
Net investment income			79,063				70,080				148,177				137,176
Net realized (losses) gains on investments			(611	)			(12	)			(210	)			3,580
Amortization of deferred gains on disposal of businesses			8,702				10,752				17,444				21,610
Fees and other income			1,458				2,853				4,404				6,743
Total revenues			517,268				516,140				1,054,536				1,040,134
Benefits, losses and expenses:
Policyholder benefits			332,619				330,217				692,460				685,495
Selling, underwriting and general expenses(1)			142,827				140,000				277,336				273,965
Total benefits, losses and expenses			475,446				470,217				969,796				959,460
Income before income taxes			41,822				45,923				84,740				80,674
Income taxes			12,388				15,506				27,671				27,544
Net income		$	29,434			$	30,417			$	57,069			$	53,130

(1)          Includes amortization of deferred acquisition costs and value of business acquired and underwriting, general and administrative expenses.

For The Three Months Ended June 30, 2005 Compared to The Three Months Ended June 30, 2004.

Net Income

               Net income decreased by $983, or 3%, to $29,434 for the three months ended June 30, 2005 from $30,417 for the three months ended June 30, 2004. The decrease in net income was due to an increase in policyholder benefits of $2,402, a decrease in net earned premiums and other considerations of $3,811, an increase in selling, underwriting and general expenses of $2,827, and a decrease in fees and other income of $1,395. Offsetting the above mentioned decreases was an increase in net investment income of $8,983.

Total Revenues

               Total revenues were essentially flat at $517,268 for the three months ended June 30, 2005 from $516,140 for the three months ended June 30, 2004. Net investment income increased by $8,983 primarily due to the liquidation of our limited partnership investment in a real estate joint venture which was accounted for under the equity method of accounting. Net earned premiums and other considerations decreased by $3,811 due to lower health premiums as a result of lower membership, partially offset by growth in disability business written through alternate distribution sources. Amortization of deferred gains on disposal of businesses also decreased by $2,050 consistent with the anticipated run-off of business ceded to The Hartford in 2001 and John Hancock in 2000. Fees and other income decreased by $1,395 due to a decline in the value of the Consumer Price Index Cap, a derivative instrument.

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Total Expenses

               Total expenses increased by $5,229, or 1%, to $475,446 for the three months ended June 30, 2005 from $470,217 for the three months ended June 30, 2004. The increase in expenses was partially due to an increase in policyholder benefits of $2,402 driven by reduced disability claim closures due to death and an increase in business written through alternate distribution sources. Also contributing to the increase in expenses were higher selling, underwriting and general expenses of $2,827 driven by increased amortization of deferred acquisition costs due to higher deferred costs being amortized in the current year.

For The Six Months Ended June 30, 2005 Compared to The Six Months Ended June 30, 2004.

Net Income

               Net income increased by $3,939, or 7%, to $57,069 for the six months ended June 30, 2005 from $53,130 for the six months ended June 30, 2004. The increase in net income was largely due to an increase in net earned premiums and other considerations of $13,696 and higher net investment income of $11,001. Offsetting factors to the above include an increase in policyholder benefits of $6,965 and an increase in selling, underwriting and general expenses of $3,371. Other offsetting factors were a decrease in net realized gain on investments of $3,790, a decrease in amortization of deferred gains on disposal of businesses of $4,166, and a decrease in fees and other income of $2,339.

Total Revenues

               Total revenues increased by $14,402, or 1%, to $1,054,536 for the six months ended June 30, 2005 from $1,040,134 for the six months ended June 30, 2004. Net earned premiums and other considerations increased by $13,696 due primarily to growth in business written through alternate distribution sources, as well as increased sales in our group disability and group life products. Net investment income increased by $11,001 primarily due to the liquidation of our limited partnership investment in a real estate joint venture which is accounted for under the equity method of accounting. Amortization of deferred gains on disposal of businesses decreased by $4,166 consistently with the anticipated run-off of the business ceded to The Hartford in 2001 and John Hancock in 2000. Fees and other income decreased $2,339 due to a decline in the value of the Consumer Price Index Cap, a derivative instrument.

Total Expenses

               Total expenses increased by $10,336, or 1%, to $969,796 for the six months ended June 30, 2005 from $959,460 for the six months ended June 30, 2004. The increase in expenses was due to an increase in policyholder benefits of $6,965 driven by reduced disability claim closures due to death and an increase in business written through alternate distribution sources. Selling, underwriting and general expenses increased by $3,371 driven by increased amortization of deferred acquisition costs due to higher deferred costs being amortized in the current year.

Item 3.  Quantitative And Qualitative Disclosures About Market Risk.

               Not required under the reduced disclosure format.

Item 4.  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 June 30, 2005. 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

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periods in 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 2.  Unregistered Sale 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.

(a)	None.
(b)	Because all of the Company’s outstanding common stock is held indirectly by Assurant, Inc., the Company does not file a Schedule 14A and has not adopted any procedures by which security holders may recommend nominees to the registrant’s board of directors.

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. Exhibits are available upon request at the investor relations section of our website, located at www.assurant.com.

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

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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 August 12, 2005.

FORTIS BENEFITS INSURANCE COMPANY

By:  /s/ P. Bruce Camacho

Name:  P. Bruce Camacho

Title:  President and Chief
Executive Officer

By:  /s/ Ranell M. Jacobson

Name:  Ranell M. Jacobson

Title:  Treasurer

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