Union Security Life Insurance Co Of New York 10-Q 2006 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 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 SEPTEMBER 30, 2006

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 033-71690

UNION SECURITY LIFE INSURANCE COMPANY OF NEW YORK

(Exact name of registrant as specified in its charter)

NEW YORK	13-2699219
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

212 HIGHBRIDGE STREET, SUITE D FAYETTEVILLE, NEW YORK	13066
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (315) 637-4232

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    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, there were 100,000 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 LIFE INSURANCE COMPANY OF NEW YORK

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2006

TABLE OF CONTENTS

Item Number		Page Number
	PART I FINANCIAL INFORMATION
1.	FINANCIAL STATEMENTS	2
	Union Security Life Insurance Company of New York Balance Sheets at September 30, 2006 (Unaudited) and December 31, 2005	2
	Union Security Life Insurance Company of New York Statements of Operations (Unaudited) for the three and nine months ended September 30, 2006 and 2005	4
	Union Security Life Insurance Company of New York Statement of Changes in Stockholder’s Equity from December 31, 2005 to September 30, 2006 (Unaudited)	5
	Union Security Life Insurance Company of New York Statements of Cash Flows (Unaudited) for the nine months ended September 30, 2006 and 2005	6
	Union Security Life Insurance Company of New York Notes to the Financial Statements for the nine months ended September 30, 2006 and 2005 (Unaudited)	7
2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	11
3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK *	13
4.	CONTROLS AND PROCEDURES	13
	PART II OTHER INFORMATION
1A.	RISK FACTORS	14
2.	UNREGISTERED SALE OF EQUITY SECURITIES AND USE OF PROCEEDS*	14
3.	DEFAULTS UPON SENIOR SECURITIES *	14
4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS *	14
5.	OTHER INFORMATION	14
6.	EXHIBITS	14
SIGNATURES		15

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

Union Security Life Insurance Company of New York

Balance Sheets

At September 30, 2006 (Unaudited) and December 31, 2005

	September 30, 2006		December 31, 2005
	(in thousands except number of shares)
Assets
Investments:
Fixed maturities available for sale, at fair value (amortized cost - $108,656 in 2006 and $113,980 in 2005)	$	112,356	$	119,604
Equity securities available for sale, at fair value (cost - $9,378 in 2006 and $9,046 in 2005)		9,222		8,790
Commercial mortgage loans on real estate, at amortized cost		21,570		13,996
Policy loans		120		98
Short-term investments		4,047		3,341
Other investments		2,617		3,028
Total investments		149,932		148,857
Cash and cash equivalents		14,681		2,863
Premiums and accounts receivable, net		2,965		3,359
Reinsurance recoverables		99,280		94,660
Due from affiliates		—		327
Accrued investment income		1,849		1,605
Tax receivable		528		122
Deferred acquisition costs		1,158		1,437
Deferred income taxes, net		2,136		1,999
Goodwill		2,038		2,038
Other assets		139		84
Assets held in separate accounts		21,574		25,343
Total assets	$	296,280	$	282,694

See the accompanying notes to the financial statements.

2

Union Security Life Insurance Company of New York

Balance Sheets

At September 30, 2006 (Unaudited) and December 31, 2005

	September 30, 2006		December 31, 2005
	(in thousands except number of shares)
Liabilities
Future policy benefits and expenses	$	38,967	$	35,762
Unearned premiums		11,471		14,008
Claims and benefits payable		137,848		135,176
Commissions payable		4,791		4,463
Reinsurance balances payable		1,640		2,596
Funds held under reinsurance		79		83
Deferred gain on disposal of businesses		4,723		5,454
Accounts payable and other liabilities		3,888		3,366
Due to affiliates		6,026		—
Liabilities related to separate accounts		21,574		25,343
Total liabilities	$	231,007	$	226,251
Commitments and contingencies (Note 5)	$	—	$	—
Stockholder’s equity
Common stock, par value $20 per share, 100,000 shares authorized, issued, and outstanding		2,000		2,000
Additional paid-in capital		43,006		43,006
Retained earnings		17,964		7,948
Accumulated other comprehensive income		2,303		3,489
Total stockholder’s equity		65,273		56,443
Total liabilities and stockholder’s equity	$	296,280	$	282,694

See the accompanying notes to the financial statements.

3

Union Security Life Insurance Company of New York

Statements of Operations (Unaudited)

Three and Nine Months Ended September 30, 2006 and 2005

	Three Months Ended September 30,						Nine Months Ended September 30,
	2006			2005			2006			2005
	(in thousands)
Revenues
Net earned premiums and other considerations	$	19,979		$	15,155		$	47,151		$	45,783
Net investment income		2,266			2,154			6,788			6,516
Net realized (losses) gains on investments		(96	)		(18	)		(395	)		113
Amortization of deferred gain on disposal of businesses		244			313			731			947
Fees and other income		12			3			30			25
Total revenues		22,405			17,607			54,305			53,384
Benefits, losses and expenses
Policyholder benefits		11,918			7,635			25,594			26,660
Amortization of deferred acquisition costs		269			120			809			760
Underwriting, general and administrative expenses		4,386			4,837			12,662			13,291
Total benefits, losses and expenses		16,573			12,592			39,065			40,711
Income before income taxes		5,832			5,015			15,240			12,673
Income taxes		1,976			1,782			5,224			4,419
Net income	$	3,856		$	3,233		$	10,016		$	8,254

See the accompanying notes to the financial statements.

4

Union Security Life Insurance Company of New York

Statement of Changes in Stockholder’s Equity

From December 31, 2005 to September 30, 2006 (Unaudited)

	Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)			Total
	(in thousands except number of shares)
Balance, December 31, 2005	$	2,000	$	43,006	$	7,948	$	3,489		$	56,443
Comprehensive income:
Net income		—		—		10,016		—			10,016
Other comprehensive loss:
Net change in unrealized gains on securities		—		—		—		(1,186	)		(1,186	)
Total other comprehensive loss											(1,186	)
Total comprehensive income											8,830
Balance, September 30, 2006	$	2,000	$	43,006	$	17,964	$	2,303		$	65,273

See the accompanying notes to the financial statements.

5

Union Security Life Insurance Company of New York

Statements of Cash Flows (Unaudited)

Nine Months Ended September 30, 2006 and 2005

	Nine Months Ended September 30,
	2006			2005
	(in thousands)
Net cash provided by operating activities	$	15,121		$	4,353
Investing activities
Sales of:
Fixed maturities available for sale		11,248			15,820
Equity securities available for sale		2,767			771
Other invested assets		411			256
Maturities, prepayments, and scheduled redemption of:
Fixed maturities available for sale		5,959			12,002
Purchase of:
Fixed maturities available for sale		(12,218	)		(18,882	)
Equity securities available for sale		(3,168	)		(1,257	)
Change in commercial mortgage loans on real estate		(7,574	)		(2,515	)
Change in short-term investments		(706	)		(10,568	)
Change in policy loans		(22	)		(16	)
Net cash (used in) investing activities		(3,303	)		(4,389	)
Change in cash and cash equivalents		11,818			(36	)
Cash and cash equivalents at beginning of period		2,863			5,360
Cash and cash equivalents at end of period	$	14,681		$	5,324

See the accompanying notes to the financial statements.

6

Union Security Life Insurance Company of New York

Notes to the Financial Statements (Unaudited)

Nine Months Ended September 30, 2006 and 2005

1. Nature of Operations

Union Security Life Insurance Company of New York (the “Company”), formerly known as First Fortis Life Insurance Company, is a provider of life insurance products. The Company is a wholly owned subsidiary of Assurant, Inc. (the “Parent”). Assurant, Inc.’s common stock is traded on the New York Stock Exchange under the symbol AIZ.

The Company is domiciled in New York and is qualified to sell life, health and annuity insurance in the state of New York. The Company’s revenues are derived principally from group employee benefits and credit products. The Company offers credit insurance, group disability insurance, group dental insurance and group life insurance.

2. Basis of Presentation

The accompanying unaudited interim 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 normal recurring accruals) considered necessary for a fair statement of the financial statements have been included. Certain prior period amounts have been reclassified to conform to the 2006 presentation.

Dollar amounts are in thousands except for number of shares.

Operating results for the three and nine months ended September 30, 2006 are not necessarily indicative of the results that may be expected for the year ending December 31, 2006. The accompanying interim financial statements should be read in conjunction with the audited financial statements and related notes included in the Company’s annual report on Form 10-K for the year ended December 31, 2005.

3. Recently Adopted Accounting Pronouncements

On January 1, 2006, the Parent adopted 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,Accounting for Stock Issued to Employees. FAS 123R requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. The pro forma disclosures previously permitted under FAS 123 are no longer an alternative to financial statement recognition. Under FAS 123R, the Company must determine the appropriate fair value model to be used for valuing share-based payments, the amortization method for compensation cost, and 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 beginning of the first quarter of adoption of FAS 123R. The adoption of FAS 123R did not have a material impact on the Company’s financial statements.

7

Union Security Life Insurance Company of New York

Notes to the Financial Statements (Unaudited)

Nine Months Ended September 30, 2006 and 2005

On January 1, 2006, the Company adopted FAS 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. The adoption of FAS 154 did not have a material effect on the Company’s 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 the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. This interpretation prescribes a recognition threshold and measurement attribute 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, interest and penalties, accounting in interim periods, disclosure, and transition. The interpretation is effective for fiscal years beginning after December 15, 2006 and, therefore, the 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 financial statements.

On September 15, 2006 the FASB issued FAS 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, the Company is required to adopt FAS 157 by the first quarter of 2008. The Company is currently evaluating the requirements of FAS 157 and the potential impact on the Company’s financial statements.

On September 29, 2006 the FASB issued FAS 158,Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans (“FAS 158”). This standard requires companies 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 plan and certain other post retirement benefits covering employees and certain agents who meet eligibility requirements as to age and length of service. The Company has no legal obligation for benefits under these plans. 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 disclosures is effective in fiscal years ending after December 15, 2006 and, therefore, the Parent is required to adopt FAS 158 as of December 31, 2006. The adoption of FAS 158 is not expected to have a material impact on the Company’s financial statements.

8

Union Security Life Insurance Company of New York

Notes to the Financial Statements (Unaudited)

Nine Months Ended September 30, 2006 and 2005

In September 2006, the Securities and Exchange Commission staff issued Staff Accounting Bulletin No. 108, “Considering the Effects 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 financial statements.

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 $31 for the three months ended September 30, 2006 and 2005, and $93 for the nine months ended September 30, 2006 and 2005.

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 $6 and $11 for the three months ended September 30, 2006 and 2005, respectively, and $32 and $23 for the nine months ended September 30, 2006 and 2005, 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 our Parent. Health care benefits, either through the Parent’s 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.

9

Union Security Life Insurance Company of New York

Notes to the Financial Statements (Unaudited)

Nine Months Ended September 30, 2006 and 2005

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.

10

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 Union Security Life Insurance Company of New York (USLICONY or the Company) as of September 30, 2006, compared with December 31, 2005, and its results of operations for the three and nine months ended September 30, 2006, compared with the equivalent 2005 period. This discussion should be read in conjunction with USLICONY’s MD&A and annual audited financial statements as of December 31, 2005 included in the Company’s Form 10-K for the year ended December 31, 2005 filed with the U.S. Securities and Exchange Commission (hereafter referred to as the Company’s 2005 Form 10-K) and unaudited 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 2005 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 2005 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 2005 Form 10-K were consistently applied to the interim financial statements for the nine months ended September 30, 2006.

Recent Accounting Pronouncements

See – Financial Statement Footnote 3.

11

The tables below present information regarding our results of operations:

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2006			2005			2006			2005
	(in thousands)						(in thousands)
Revenues:
Net earned premiums and other considerations	$	19,979		$	15,155		$	47,151		$	45,783
Net investment income		2,266			2,154			6,788			6,516
Net realized (losses) gains on investments		(96	)		(18	)		(395	)		113
Amortization of deferred gains on disposal of businesses		244			313			731			947
Fees and other income		12			3			30			25
Total revenues		22,405			17,607			54,305			53,384
Benefits, losses and expenses:
Policyholder benefits		11,918			7,635			25,594			26,660
Selling, underwriting and general expenses(1)		4,655			4,957			13,471			14,051
Total benefits, losses and expenses		16,573			12,592			39,065			40,711
Income before income taxes		5,832			5,015			15,240			12,673
Income taxes		1,976			1,782			5,224			4,419
Net income	$	3,856		$	3,233		$	10,016		$	8,254

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

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

Net Income

Net income increased by $623, or 19%, to $3,856 for the three months ended September 30, 2006 from $3,233 for the three months ended September 30, 2005. The increase in net income is primarily due to improved loss ratios in our group life and group dental businesses and a reduction of selling, underwriting and general expenses in our domestic credit business.

Total Revenues

Total revenues increased by $4,798, or 27%, to $22,405 for the three months ended September 30, 2006 from $17,607 for the three months ended September 30, 2005. This increase is primarily due to an increase in net earned premiums and other considerations of $4,824 driven by growth in disability business written through our Disability Risk Management Services (DRMS) distribution channel, partially offset by the continued decline in our domestic credit business and decreases in our group dental and group life businesses resulting from lower sales and higher lapses.

Total Benefits, Losses and Expenses

Total benefits, losses and expenses increased by $3,981, or 32%, to $16,573 for the three months ended September 30, 2006 from $12,592 for the three months ended September 30, 2005. This increase is primarily due to an increase in policyholder benefits of $4,283 driven by the assumption of reserves related

12

to a closed block of single premium business through our DRMS channel, partially offset by declines in our group life and group dental businesses as a result of lower sales and higher lapses, favorable claim closures in our group disability business, and the continued decline in our domestic credit business.

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

Net Income

Net income increased by $1,762, or 21%, to $10,016 for the nine months ended September 30, 2006 from $8,254 for the nine months ended September 30, 2005. This increase in net income was primarily due to improved loss ratios in our group disability, group life and group dental businesses.

Total Revenues

Total revenues increased by $921, or 2%, to $54,305 for the nine months ended September 30, 2006 from $53,384 for the nine months ended September 30, 2005. Net earned premiums and other considerations increased by $1,368 due to an increase in premiums related to a closed block of business through our DRMS channel, partially offset lower group dental, group disability and group life premiums as a result of lower sales and higher lapses, the continued decline in our domestic credit business and a decrease in net realized gains on investments of $508.

Total Benefits, Losses and Expenses

Total benefits, losses and expenses decreased by $1,646, or 4%, to $39,065 for the nine months ended September 30, 2006 from $40,711 for the nine months ended September 30, 2005. This decrease was primarily due to a decrease in policyholder benefits of $1,066 attributable to favorable claims experience in our group disability, group life and group dental businesses and the continued decline in our domestic credit business, partially offset by the assumption of reserves related to a closed block of single premium business through our DRMS channel. Selling, underwriting and general expenses decreased due to the continued decline in our domestic credit business.

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 September 30, 2006. 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.

13

PART II

OTHER INFORMATION

Item 1A –Risk Factors.

Our 2005 Form 10-K described our Risk Factors. There have been no material changes to the Risk Factors during the nine months ended September 30, 2006.

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.

(a) None.

(b) Because all of the Company’s outstanding common stock is held directly 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 Chief Executive Officer.
31.2	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.
32.1	Certification of Chief Executive Officer of Union Security Life Insurance Company of New York 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 Life Insurance Company of New York pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

14

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.

UNION SECURITY LIFE INSURANCE COMPANY OF NEW YORK
By:	/s/ P. Bruce Camacho
Name:	P. Bruce Camacho
Title:	President and Chief Executive Officer
By:	/s/ Peter A. Walker
Name:	Peter A. Walker
Title:	Treasurer and Chief Financial Officer

15