See the accompanying notes to the consolidated financial statements.

Union Security Insurance Company

Consolidated Statements of Cash Flows (Unaudited)

SixThree Months Ended June 30,March 31, 2007 and 2006 and 2005

See the accompanying notes to the consolidated financial statements.

Union Security Insurance Company

Notes to the Consolidated Financial Statements (Unaudited)

SixThree Months Ended June 30,March 31, 2007 and 2006 and 2005

Union Security Insurance Company (the “Company”), formerly known as Fortis Benefits Insurance 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.’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 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 products.insurance.

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-ownedwholly 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.

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 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 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 owned subsidiaries. All inter-company transactions and balances are eliminated in consolidation.

Operating results for the three and six months ended June 30, 2006March 31, 2007 are not necessarily indicative of the results that may be expected for the year ending December 31, 2006.2007. The accompanying interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s annual report on Form 10-K for the year ended December 31, 2005.

Restatement of Interim Consolidated Statements of Cash Flows (unaudited)

The Interim Consolidated Statements of Cash Flows (unaudited) for the six months ended June 30, 2006 and 2005 have been restated to reflect changes in the net receivable/payable from unsettled investment purchases and sales, previously classified within “adjustments to reconcile net income to net cash provided by (used in) operating activities,” have been reclassified to cash flows from investing activities, to the extent such balances pertained to investments classified as available for sale.

As a result of the restatements to correct these errors, previously reported cash flows provided by (used in) operating activities and cash flows provided by (used in) investing activities were increased or reduced for the six months ended June 30, 2006 and 2005 as follows:

The restatements had no impact on the total change in cash and cash equivalents within the Unaudited Interim Consolidated Statements of Cash Flows or on the Unaudited Consolidated Statements of Operations or Unaudited Interim Consolidated Balance Sheet.2006.

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 Issued to EmployeesDeferred Acquisition Costs in Connection with Modifications or Exchanges or Insurance Contracts,(“SOP 05-1”). 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 disclosuresSOP 05-1 provides guidance

Union Security Insurance Company

Notes to the Consolidated Financial Statements (Unaudited)

SixThree Months Ended June 30,March 31, 2007 and 2006 and 2005

previously permitted under FAS 123on 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. 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 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 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 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 consolidated financial statements.

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 our 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 are $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 uncertaintyyears through 2002, 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 result in a material change to the financial statements. 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 approximately $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 inon its Consolidated Balance Sheets.

Union Security Insurance Company

Notes to the Consolidated Financial Statements (Unaudited)

Three Months Ended March 31, 2007 and 2006

Recent Accounting Pronouncements Outstanding

In September 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 disclosure,within those fiscal years. Therefore, the Company is required to adopt FAS 157 in the first quarter of 2008. The Company is currently evaluating the requirements of FAS 157 and transition. the potential impact on the Company’s financial statements.

In February 2007, the FASB issued FAS 159,The InterpretationFair 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 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 DecemberNovember 15, 2006 and, therefore,2007. Therefore, the Company is required to adopt FIN 48 byFAS 159 in the first quarter of 2007.2008. The Company does not believeis currently evaluating the adoptionrequirements of FIN 48 will have a material effectFAS 159 and the potential impact on our consolidatedthe Company’s financial position or results of operations.statements.

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 costcosts allocated to the Company amounted to approximatelywere $1,571 and $1,908 and $1,973 for the three months ended June 30,March 31, 2007 and 2006, and 2005, respectively, and $3,816 and $3,953 for the six months ended June 30, 2006 and 2005, respectively.

Union Security Insurance Company

Notes to the Financial Statements (Unaudited)

Six Months Ended June 30, 2006 and 2005

The Company participates in a contributory profit sharing plan, sponsored by ourthe 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 amountamounts expensed by the Company was approximately $1,259were $1,920 and $1,115$2,018 for the three months ended June 30,March 31, 2007 and 2006, and 2005, respectively, and $3,277 and $2,980, for the six months ended June 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 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.

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.

Union Security Insurance CompanyPART I

Notes to the Financial Statements (Unaudited)

Six Months Ended June 30, 2006 and 2005FINANCIAL INFORMATION

On April 1,(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 Insurance Company and its subsidiaries (collectively, USIC or the Company) as of March 31, 2007, compared with December 31, 2006, and its results of operations for the Company transferredthree months ended March 31, 2007, compared with the assetsequivalent 2006 period. This discussion should be read in conjunction with the Company’s MD&A and liabilitiesannual 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 consolidated financial statements and related to its Canadian operations to ALOC, an indirectly wholly owned subsidiarynotes included elsewhere in this Form 10-Q.

Some of the Parent,statements in exchange for ALOC common stock equalthis 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 fair valueuse of forward-looking words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the net assets transferred.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 Company transferred assetsinclusion of approximately $469,000this 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 liabilities of approximately $401,000 relateduncertainties. Accordingly, there are or will be important factors that could cause our actual results to its Canadian operationsdiffer materially from those indicated in this report. We believe that these factors include but are not limited to ALOC forthose described under the purpose of re-domesticating its Canadian operationssubsection 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 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 ofpublicly update or review any liability to the insured. Asforward-looking statement, whether as a result of new information, future developments or otherwise. If one or more of these transactions,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 Company recognizedadequacy 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 consolidated interim financial statements for the three months ended March 31, 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, 2007 Compared to The Three Months Ended March 31, 2006.

Net Income

Net income increased by $12,480, or 35%, to $48,049 for the three months ended March 31, 2007 from $35,569 for the three months ended March 31, 2006. This increase is primarily due to an increase to equityin investment income from real estate partnerships of approximately $7,600.$10,920 (after tax) and favorable group disability and group life experience, partially offset by a decline in our small employer group health business.

Total Revenues

Total revenues decreased by $44,274, or 9%, to $439,237 for the three months ended March 31, 2007 from $483,511 for the three months ended March 31, 2006. This decrease is primarily due to a decrease in net earned premiums and other considerations, partially offset by increases in net investment income. Net earned premiums and other considerations decreased $57,219, or 15%, primarily due to declines in our group disability, group dental and group life businesses as a result of the residual impact of lower sales and persistency over the past several quarters as the business continues to implement its small case strategy. Also contributing to the decrease in net earned premiums and other considerations was the transfer of our Canadian pre-funded funeral business, 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 was 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.

Total Benefits, Losses and Expenses

Total benefits, losses and expenses decreased by $67,016, or 16%, to $363,603 for the three months ended March 31, 2007 from $430,619 for the three months ended March 31, 2006. This decrease is primarily due to a decrease in policyholder benefits driven by favorable experience in our group disability

and group life businesses. Policyholder benefits and selling, underwriting and general expenses also decreased due to the transfer of our Canadian pre-funded funeral business, the loss of 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.

Income Taxes

Income taxes increased by $10,262, or 59%, to $27,585 for the three months ended March 31, 2007 from $17,323 for the three months ended March 31, 2006. This increase was partly due to additional income taxes of approximately $1,100 due to an increase in certain prior year tax liabilities. In addition, during the first quarter of 2007, income taxes were revised to reflect additional information related to 2006 tax return adjustments. The remainder of the increase is proportionate to the increase in income before income taxes.

Item 4.3.

Quantitative And Qualitative Disclosures About Market Risk.

Not required under the reduced disclosure format.

UnderEvaluation of disclosure controls and procedures under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer, we had previouslyhave evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2006.March 31, 2007. Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer had previouslyhave 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.

In connection with this filing on Form 10-Q/A, the Chief Executive Officer and the Chief Financial Officer reevaluated our disclosure controls and procedures and concluded they were effective as of June 30, 2006 as described above. In reaching this conclusion, management considered the impact of the restatement described in Note 2 to the financial statements included in this filing.

PART II

OTHER INFORMATION

Our 2006 Form 10-K described our Risk Factors. There have been no material changes to the Risk Factors during the three months ended March 31, 2007.

Not required under the reduced disclosure format.

Not required under the reduced disclosure format.

Not required under the reduced disclosure format.

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.May 9, 2007.

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