<PAGE>

                                  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, 2004

                                       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)

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

          576 BIELENBERG DRIVE
          WOODBURY, MINNESOTA                                        55125
(Address of Principal Executive Offices)                          (Zip Code)

                                 (651) 361-4000
              (Registrant's Telephone Number, Including Area Code)

                                 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]

      The number of shares of the registrant's common stock outstanding at
October 29, 2004 was 1,000,000, all of which are owned indirectly by Assurant,
Inc.

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

                        FORTIS BENEFITS INSURANCE COMPANY
                          QUARTERLY REPORT ON FORM 10-Q
                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2004
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
ITEM                                                                                               PAGE
NUMBER                                                                                            NUMBER
------                                                                                            ------
<S>                                                                                               <C>
                                              PART I
                                       FINANCIAL INFORMATION

1.   Financial Statements.....................................................................      2
     Unaudited interim consolidated balance sheets of Fortis Benefits Insurance Company
     at September 30, 2004  and December 31, 2003.                                                  2
     Unaudited interim consolidated statements of operations of Fortis Benefits Insurance
     Company for the three and nine months ended September 30, 2004 and 2003.                       4
     Unaudited interim consolidated statements of changes in stockholder's equity of
     Fortis Benefits Insurance Company for the nine months ended September 30, 2004.                5
     Unaudited interim consolidated statements of cash flows of
     Fortis Benefits Insurance Company for the nine months ended September 30, 2004 and 2003.       6
     Notes to the unaudited consolidated financial statements of Fortis Benefits
     Insurance Company                                                                              7

2.   Management's Discussion and Analysis of Financial Condition and
     Results of Operations....................................................................     10

3.   Quantitative and Qualitative Disclosures About Market Risk *  ...........................     13

4.   Controls and Procedures..................................................................     13

                                              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 *  ..................................     14

5.   Other Information........................................................................     14

6.   Exhibits.................................................................................     14

Signatures....................................................................................     16
</TABLE>

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

<PAGE>

FORTIS BENEFITS INSURANCE COMPANY
CONSOLIDATED BALANCE SHEETS
AT SEPTEMBER 30, 2004 (UNAUDITED) AND DECEMBER 31, 2003

<TABLE>
<CAPTION>
                                                                              SEPTEMBER 30,     DECEMBER 31,
                                                                              -------------     ------------
                                                                                  2004            2003
                                                                              -------------     ------------
                                                                        (IN THOUSANDS EXCEPT NUMBER OF SHARES)
<S>                                                                           <C>               <C>
ASSETS

Investments:
  Fixed maturities available for sale, at fair value (amortized
     cost - $3,257,894 in 2004 and $3,227,043 in 2003)                         $3,491,974       $3,452,299
  Equity securities available for sale, at fair value
     (cost - $239,313 in 2004 and $199,287 in 2003)                               243,914          208,149
  Commercial mortgage loans on real estate at amortized cost                      698,267          634,615
  Policy loans                                                                      9,970           10,678
  Short-term investments                                                           62,459           71,057
  Other investments                                                                64,941           51,831
                                                                               ----------       -----------
     Total investments                                                          4,571,525        4,428,629

Cash and cash equivalents                                                          15,853           29,176
Premiums and accounts receivable                                                   80,570           65,605
Reinsurance recoverables                                                        1,234,938        1,210,299
Accrued investment income                                                          55,542           49,756
Deferred acquisition costs                                                        112,657          103,606
Property and equipment, at cost less accumulated depreciation                       1,767            2,566
Deferred income taxes, net                                                         34,783           54,249
Goodwill                                                                          155,660          156,985
Value of business acquired                                                         40,880           45,710
Other assets                                                                       38,390           41,710
Assets held in separate accounts                                                3,265,378        3,516,070
                                                                               ----------       -----------
     Total assets                                                              $9,607,943       $9,704,361
                                                                               ==========       ===========
</TABLE>

       See the accompanying notes to the consolidated financial statements

                                       2
<PAGE>

FORTIS BENEFITS INSURANCE COMPANY
CONSOLIDATED BALANCE SHEETS
AT SEPTEMBER 30, 2004 (UNAUDITED) AND DECEMBER 31, 2003

<TABLE>
<CAPTION>
                                                             SEPTEMBER 30,      DECEMBER 31,
                                                             ------------       -----------
                                                                 2004              2003
                                                             ------------       -----------
                                                         (IN THOUSANDS EXCEPT NUMBER OF SHARES)
<S>                                                          <C>                <C>
LIABILITIES
Future policy benefits and expenses                            $2,972,090       $2,869,324
Unearned premiums                                                  42,970           50,002
Claims and benefits payable                                     1,869,251        1,810,847
Commissions payable                                                16,754           15,918
Reinsurance balances payable                                        1,673            5,138
Funds held under reinsurance                                           93              100
Deferred gain on disposal of businesses                           216,942          249,481
Due to affiliates                                                       -            3,478
Accounts payable and other liabilities                            153,380          141,309
Tax payable                                                        12,114           22,112
Liabilities related to separate accounts                        3,265,378        3,516,070
                                                               ----------       ----------
        Total liabilities                                       8,550,645        8,683,779

Commitments and Contingencies (Note 5)                                  -                -


STOCKHOLDER'S EQUITY
Common stock, $5 par value, 1,000,000 shares authorized,
  issued and outstanding                                            5,000            5,000
Additional paid-in capital                                        516,570          516,570
Retained earnings                                                 377,996          342,610
Accumulated other comprehensive income                            157,732          156,402
                                                               ----------       ----------
        Total stockholder's equity                              1,057,298        1,020,582
                                                               ----------       ----------
        Total liabilities and stockholder's equity             $9,607,943       $9,704,361
                                                               ==========       ==========
</TABLE>

       See the accompanying notes to the consolidated financial statements

                                       3
<PAGE>

FORTIS BENEFITS INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003 (UNAUDITED)

<TABLE>
<CAPTION>
                                                          THREE MONTHS ENDED SEPTEMBER 30,  NINE MONTHS ENDED SEPTEMBER 30,
                                                          -------------------------------   -------------------------------
                                                            2004                   2003        2004                 2003
                                                          --------               --------   ----------           ----------
                                                                                   (IN THOUSANDS)
<S>                                                       <C>                    <C>        <C>                  <C>
REVENUES
Net earned premiums and other considerations              $426,506               $412,697   $1,297,531           $1,257,509
Net investment income                                       67,804                 67,191      204,980              194,709
Net realized gains on investments                              516                  2,990        4,096                5,035
Amortization of deferred gain on disposal of businesses     10,929                 13,945       32,539               39,896
Fees and other income                                        1,937                  3,272        8,681                9,820
                                                          --------               --------   ----------           ----------
        Total revenues                                     507,692                500,095    1,547,827            1,506,969
BENEFITS, LOSSES AND EXPENSES
Policyholder benefits                                      316,646                286,254    1,002,142              941,908
Amortization of deferred acquisition costs and
  value of business acquired                                19,388                 14,872       54,617               42,430
Underwriting, general and administrative expenses          124,485                135,245      363,220              372,449
                                                          --------               --------   ----------           ----------
        Total benefits, losses and expenses                460,519                436,371    1,419,979            1,356,787
                                                          --------               --------   ----------           ----------
Income before income taxes                                  47,173                 63,724      127,848              150,182
Income taxes                                                16,568                 20,144       44,112               50,354
                                                          --------               --------   ----------           ----------
        Net income                                        $ 30,605               $ 43,580   $   83,736           $   99,828
                                                          ========               ========   ==========           ==========
</TABLE>

      See the accompanying notes to the consolidated financial statements

                                       4
<PAGE>

FORTIS BENEFITS INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
FROM DECEMBER 31, 2003 THROUGH SEPTEMBER 30, 2004 (UNAUDITED)

<TABLE>
<CAPTION>
                                                          ADDITIONAL             ACCUMULATED OTHER
                                                 COMMON    PAID-IN     RETAINED    COMPREHENSIVE
                                                  STOCK    CAPITAL     EARNINGS     INCOME (LOSS)     TOTAL
                                                 -------  ----------  ---------  -----------------  -----------
                                                                     (IN THOUSANDS)
<S>                                              <C>       <C>        <C>        <C>                <C>
Balance, December 31, 2003                       $ 5,000   $516,570   $ 342,610        $ 156,402    $ 1,020,582
Comprehensive income(loss):
        Net income                                     -          -      83,736                -         83,736
        Net change in unrealized gains(losses)
          on securities                                -          -           -            2,232          2,232
        Foreign currency translation                   -          -         (23)             771            748
                                                                                                    -----------
          Total comprehensive income                                                                     86,716
Dividends                                              -          -     (50,000)               -        (50,000)
Other                                                  -          -       1,673           (1,673)             -
                                                 -------   --------   ---------        ---------    -----------
Balance, September 30, 2004                      $ 5,000   $516,570   $ 377,996        $ 157,732    $ 1,057,298
                                                 =======   ========   =========        =========    ===========
</TABLE>


      See the accompanying notes to the consolidated financial statements

                                       5
<PAGE>


FORTIS BENEFITS INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF CASHFLOWS
NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003 (UNAUDITED)

<TABLE>
<CAPTION>
                                                          NINE MONTHS ENDED SEPTEMBER 30,
                                                          -------------------------------
                                                              2004              2003
                                                          ------------      ------------
                                                                  (IN THOUSANDS)
<S>                                                       <C>               <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES                 $    167,282      $    156,547

INVESTING ACTIVITIES
  Sales of:
  Fixed maturities available for sale                          547,384           501,377
  Equity securities available for sale                          29,011            42,158
  Other invested assets                                          7,930            20,463
Maturities, prepayments, and scheduled redemption of:
  Fixed maturities available for sale                          132,266           253,770
Purchases of:
  Fixed maturities available for sale                         (703,777)       (1,006,620)
  Equity securities available for sale                         (68,723)         (126,744)
  Other invested assets                                        (20,307)          (12,433)
Change in commercial mortgage loans on real estate             (62,987)          (53,938)
Change in short term investments                                 8,598           192,481
                                                          ------------      ------------
Net cash used in investing activities                         (130,605)         (189,486)

FINANCING ACTIVITIES
Dividends paid                                                 (50,000)                -
                                                          ------------      ------------
Net cash used in financing activities                          (50,000)                -

Change in cash and cash equivalents                            (13,323)          (32,939)
Cash and cash equivalents at beginning of period                29,176            49,575
                                                          ------------      ------------
Cash and cash equivalents at end of period                $     15,853      $     16,636
                                                          ============      ============
</TABLE>


       See the accompanying notes to the consolidated financial statements


                                        6
<PAGE>


FORTIS BENEFITS INSURANCE COMPANY
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003 (UNAUDITED)

1.    NATURE OF OPERATIONS

      Fortis Benefits Insurance Company (the "Company") is a provider of life
and health insurance products. At January 1, 2004, the Company was an indirect
wholly owned subsidiary of Assurant, Inc. (formerly Fortis, Inc.), which itself
was an indirect, wholly owned subsidiary of Fortis N.V. of the Netherlands and
Fortis SA/NV of Belgium (collectively, the "Fortis") through their affiliates,
including their wholly owned subsidiary, Fortis Insurance N.V.

      On February 5, 2004, Fortis sold approximately 65% of its ownership
interest in Assurant, Inc. via an Initial Public Offering ("IPO"). In connection
with the IPO, Fortis, Inc. was merged into Assurant, Inc., a Delaware
corporation, which was formed solely for the purpose of the redomestication of
Fortis, Inc. After the merger, Assurant, Inc. became the successor to the
business, operations and obligations of Fortis, Inc. Assurant, Inc. is traded on
the New York Stock Exchange under the symbol AIZ.

      The Company is incorporated in Minnesota and distributes its products in
all states except New York. The Company's revenues are derived principally from
group employee benefits products and from individual pre-funded funeral
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 unaudited interim consolidated financial statements have
been prepared in accordance with generally accepted accounting principles 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 presentation of the
financial statements have been included. Certain prior period amounts have been
reclassified to conform to the 2004 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 significant inter-company
transactions and balances are eliminated in consolidation.

      Operating results for the three and nine months ended September 30, 2004
are not necessarily indicative of the results that may be expected for the year
ending December 31, 2004. The accompanying interim consolidated financial
statements should be read in conjunction with the audited consolidated financial
statements and related notes on form 10K for the fiscal year ended December 31,
2003.

3.    RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS

      On July 7, 2003, the Accounting Standards Executive Committee ("AcSEC") of
the American Institute of Certified Public Accountants ("AICPA") issued
Statement of Position 03-1, Accounting and Reporting by Insurance Enterprises
for Certain Nontraditional Long Duration Contracts and for Separate Accounts
("SOP 03-1"). SOP 03-1 provides guidance on a number of topics unique to
insurance enterprises, including separate account presentation, interest in
separate accounts, gains and losses on the transfer of assets from the general
account to a separate account, liability valuation, returns based on a
contractually referenced pool of assets or index, accounting for contracts that
contain death or other insurance benefit features, accounting for reinsurance
and other similar contracts, accounting for

                                       7
<PAGE>

FORTIS BENEFITS INSURANCE COMPANY
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003 (UNAUDITED)

annuitization benefits and sales inducements to contract holders. SOP 03-1 was
adopted by the Company on January 1, 2004. The adoption of this statement did
not have a material impact on the Company's financial position or the results of
operations.

      In March 2004, the Emerging Issues Task Force ("EITF") reached a final
consensus on Issue 03-1, "The Meaning of Other Than Temporary Impairment and Its
Application to Certain Investments" ("EITF 03-1"). EITF 03-1 provides guidance
on the disclosure requirements for other than temporary impairments of debt and
marketable equity investments that are accounted for under Financial Accounting
Standard 115 ("FAS 115"). EITF 03-1 also provides guidance for evaluating
whether an investment is other than temporarily impaired. The adoption of EITF
03-1 required the Company to include certain quantitative and qualitative
disclosures for debt and marketable equity securities classified as
available-for-sale or held-to-maturity under FAS 115 that are impaired at the
balance sheet date but for which an other than temporary impairment has not been
recognized. The disclosures were effective for financial statements for fiscal
years ending after December 15, 2003. The Company adopted the disclosure
requirements of EITF 03-1 at December 31, 2003. The guidance for evaluating
whether an investment is other than temporarily impaired is effective for
reporting periods beginning after June 15, 2004; however, the Financial
Accounting Standards Board ("FASB") has issued two new proposed Staff Positions.
EITF 03-1a, which would defer the June 15, 2004 effective date of the
requirement to record impairment losses caused by the effect of increases in
interest rates or sector spreads on debt securities subject to paragraph 16 of
EITF 03-1 until further guidance is provided and EITF 03-1b, which would exclude
minor impairments from the requirement. Both Staff Positions are still in the
comment period phase. The Company is continuing to evaluate the impact of
adoption of this issue given the fact that portions of the issue are still in
the comment period. The Company currently follows the guidance on other than
temporary impairments provided by State Accounting Bulletin ("SAB") 59,
Accounting for Noncurrent Marketing Equity Securities.

      In May 2004, the FASB issued FASB Staff Position ("FSP") FAS 106-2,
Accounting and Disclosure Requirements Related to the Medicare Prescription
Drug, Improvement and Modernization Act of 2003 ("FAS 106- 2"). This statement
provides guidance on the accounting for the effects of the Medicare Prescription
Drug, Improvement and Modernization Act of 2003 ("The Act") for employers that
sponsor postretirement health care plans that provide prescription drug
benefits. FAS 106-2 also requires employers to provide certain disclosures
regarding the effect of the federal subsidy provided by The Act. The Company's
Retirement and Other Employees Benefits plan's Accumulated Pension Benefit
Obligation and net periodic postretirement benefit cost do not reflect any
amounts associated with the subsidy due to the fact that the Company is unable
to determine whether the benefits provided by its' Retirement and Other Employee
Benefits plans are actuarially equivalent to Medicare Part D under the Act. The
Company will be in a position to determine whether the benefits provided under
its' plan are actuarially equivalent to Medicare Part D under the Act once
further guidance is provided by the FASB.

4.    RETIREMENT AND OTHER EMPLOYEE BENEFITS

      The Company is an indirect wholly-owned subsidiary of Assurant, Inc.,
which sponsors a defined benefit pension plan covering employees and certain
agents who meet eligibility requirements as to age and length of service.
Pension cost allocated to the Company amounted to approximately $1,735 and
$1,479 for three months ended September 30, 2004 and 2003, respectively, and
$5,239 and $4,426 for the nine months ended September 30, 2004 and 2003,
respectively.

      The Company participates in a contributory profit sharing plan, sponsored
by Assurant, Inc. covering employees and certain agents who meet eligibility
requirements as to age and length of service. The amount expensed was
approximately $1,332 and $1,277 for three months ended September 30, 2004 and
2003, respectively, and $4,183 and $4,574 for the nine months ended September
30, 2004 and 2003, respectively.

      In addition to retirement benefits, the Company participates in other
health care and life insurance benefit plans (postretirement benefits) for
retired employees, sponsored by Assurant, Inc. There were no


                                       8
<PAGE>

FORTIS BENEFITS INSURANCE COMPANY
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003 (UNAUDITED)


net postretirement benefit costs allocated to the Company for the three and nine
months ended September 30, 2004 and 2003. The Company made contributions to the
postretirement benefit plans of approximately $411 and $403 for three months
ended September 30, 2004 and 2003, respectively, and $1,218 and $1,209 for the
nine months ended September 30, 2004 and 2003, respectively, as claims were
incurred. The Company incurred expenses related to retirement benefits of $457
and $474 for the three months ended September 30, 2004 and 2003, respectively,
and $1,367 and $1,423 the nine months ended September 30, 2004 and 2003,
respectively.

5.    COMMITMENTS AND CONTINGENCIES

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

6.    SUBSEQUENT EVENTS

      Effective October 1, 2004, Fortis Benefits Insurance Company changed its
state of domicile from Minnesota to Iowa. Following discussions with the Iowa
Department of Insurance, the company filed Restated Articles of Incorporation
with the Iowa Secretary of State. These Restated Articles of Incorporation were
accepted and approved by the Attorney General of Iowa and the Iowa Commissioner
of Insurance on October 1, 2004.

      The Iowa Department of Insurance then issued a Certificate of Authority to
the company certifying it as an Iowa corporation authorized to transact
insurance business within the state. The State of Minnesota also accepted the
Restated Articles of Incorporation and issued an amended Certificate of
Authority certifying that the company is qualified to transact business in
Minnesota as a foreign insurer.

      The primary reason for the redomestication of the company from Minnesota
to Iowa is that the company believes by so doing it can achieve significant
annual tax savings.

                                       9
<PAGE>



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 addresses the financial condition of Fortis Benefits Insurance
Company and its subsidiaries (which we refer to collectively as FBIC) as of
September 30, 2004, compared with December 31, 2003, and our results of
operations for the three and nine months ended September 30, 2004 and 2003. This
discussion should be read in conjunction with FBIC's MD&A and annual audited
financial statements as of December 31, 2003 included in our Form 10-K for the
year ended December 31, 2003 filed with the U.S. Securities and Exchange
Commission and the September 30, 2004 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.

                                       10
<PAGE>


CONSOLIDATED OVERVIEW

      The table below presents information regarding our consolidated results of
operations:

<TABLE>
<CAPTION>
                                                      FOR THE THREE MONTHS ENDED          FOR THE NINE MONTHS ENDED
                                                              SEPTEMBER 30,                     SEPTEMBER 30,
                                                    -------------    -------------   ----------------     --------------
                                                        2004              2003             2004                 2003
                                                    -------------    -------------   ----------------     --------------
                                                            (IN THOUSANDS)                       (IN THOUSANDS)
                                                    ------------------------------   -----------------------------------
<S>                                                 <C>              <C>             <C>                  <C>
REVENUES:
   Net earned premiums and other considerations     $     426,506    $     412,697   $      1,297,531     $    1,257,509
   Net investment income........................           67,804           67,191            204,980            194,709
   Net realized gains on investments............              516            2,990              4,096              5,035
   Amortization of deferred gain
     on disposal of businesses                             10,929           13,945             32,539             39,896
   Fees and other income........................            1,937            3,272              8,681              9,820
                                                    -------------    -------------   ----------------     --------------
      Total revenues............................          507,692          500,095          1,547,827          1,506,969
                                                    -------------    -------------   ----------------     --------------
BENEFITS, LOSSES AND EXPENSES:
   Policyholder benefits........................         (316,646)        (286,254)        (1,002,142)          (941,908)
   Selling, underwriting and general expenses(1)         (143,873)        (150,117)          (417,837)          (414,879)
                                                    -------------    -------------   ----------------    ---------------
      Total benefits, losses and expenses                (460,519)        (436,371)        (1,419,979)        (1,356,787)
                                                    -------------    -------------   ----------------     --------------
INCOME BEFORE INCOME TAXES......................           47,173           63,724            127,848            150,182
   Income taxes.................................          (16,568)         (20,144)           (44,112)           (50,354)
                                                    -------------    -------------   ----------------     --------------
NET INCOME .....................................    $      30,605    $      43,580   $         83,736     $       99,828
                                                    =============    =============   ================     ==============
</TABLE>

----------
(1)   Includes amortization of DAC and VOBA.

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2004 COMPARED TO THE THREE AND
NINE MONTHS ENDED SEPTEMBER 30, 2003

Total Revenues

      Total revenues increased by $7,597, or 2%, from $500,095 for the three
months ended September 30, 2003, to $507,692 for the three months ended
September 30, 2004. Total revenues increased by $40,858, or 3%, from $1,506,969
for the nine months ended September 30, 2003, to $1,547,827 for the nine months
ended September 30, 2004.

      Net earned premiums and other considerations increased by $13,809, or 3%,
from $412,697 for the three months ended September 30, 2003, to $426,506 for the
three months ended September 30, 2004. Net earned premiums and other
considerations increased by $40,022, or 3%, from $1,257,509 for the nine months
ended September 30, 2003, to $1,297,531 for the nine months ended September 30,
2004. The increases in net earned premiums and other considerations for the
three and nine months ended September 30, 2004 are primarily due to increases of
$11,835 and $27,235, respectively, in disability premiums; $2,947 and $17,725,
respectively, in health insurance premiums; and $1,353 and $4,699, respectively,
in pre-funded funeral premiums. The increases were offset by decreases of $1,205
and $4,966 for the three and nine months ended September 30, 2004, respectively,
in dental insurance premiums; and $636 and $3,669, respectively, in group life
premiums. The increases in disability premiums are primarily driven by an
increase in business written through alternative distribution sources, as well
as the transition of a block of business from administrative fee only business
to fully insured business. Net earned premium growth in the health insurance
business is primarily due to membership growth and premium rate increases.
Pre-funded funeral net earned premium increases are due to the change in mix of
business. Lower sales and


                                       11
<PAGE>
 renewals due to maintaining pricing discipline in an increasingly competitive
market was the driver for the decrease in dental premiums. Group Life net earned
premium decreases were due to the non-renewal of certain unprofitable business.

      Net investment income increased by $613, or 1%, from $67,191 for the three
months ended September 30, 2003, to $67,804 for the three months ended September
30, 2004. Net investment income increased by $10,271, or 5%, from $194,709 for
the nine months ended September 30, 2003, to $204,980 for the nine months ended
September 30, 2004. These increases were primarily due to increases in invested
assets, offset by a decrease in investment yields driven by the lower interest
rate environment.

      Net realized gains on investments declined by $2,474 from net realized
gains of $2,990 for the three months ended September 30, 2003, to net realized
gains of $516 for the three months ended September 30, 2004. Net realized gains
on investments declined by $939 from net realized gains of $5,035 for the nine
months ended September 30, 2003, to net realized gains of $4,096 for the nine
months ended September 30, 2004. Net realized gains on investment are comprised
of both other-than-temporary impairments and realized gains/(losses) on sales of
securities. We had no other-than-temporary impairments for the three months
ended September 30, 2004. For the nine months ended September 30, 2004 and 2003,
we had other-than-temporary impairments of zero and $515, respectively. There
were no individual impairments in excess of $10,000 for the three and nine
months ended September 30, 2004 and 2003.

      Amortization of deferred gain on disposal of businesses decreased by
$3,016, or 22%, from $13,945 for the three months ended September 30, 2003, to
$10,929 for the three months ended September 30, 2004. Amortization of deferred
gain on disposal of businesses decreased by $7,357, or 18%, from $39,896 for the
nine months ended September 30, 2003, to $32,539 for the nine months ended
September 30, 2004. The decreases are consistent with the run-off of the
businesses ceded to The Hartford in 2001 and John Hancock in 2000.

      Fees and other income decreased by $1,335, or 41%, from $3,272 for the
three months ended September 30, 2003, to $1,937 for the three months ended
September 30, 2004. Fees and other income decreased by $1,139, or 12%, from
$9,820 for the nine months ended September 30, 2003, to $8,681 for the nine
months ended September 30, 2004. The decreases are driven by lower
administrative services only sales.

Total Benefits, Losses and Expenses

      Total benefits, losses and expenses increased by $24,148, or 6%, from
$436,371 for the three months ended September 30, 2003, to $460,519 for the
three months ended September 30, 2004. Total benefits, losses and expenses
increased by $63,192, or 5%, from $1,356,787 for the nine months ended September
30, 2003, to $1,419,979 for the nine months ended September 30, 2004.

      Policyholder benefits increased by $30,392, or 11%, from $286,254 for the
three months ended September 30, 2003, to $316,646 for the three months ended
September 30, 2004. Policyholder benefits increased by $60,234, or 6%, from
$941,908 for the nine months ended September 30, 2003, to $1,002,142 for the
nine months ended September 30, 2004. The increases in policyholder benefits for
the three months ended September 30, 2004, are primarily due to increases of
$53,227, $5,080, and $4,641 in group life benefits, group dental insurance
benefits, and consumer protection benefits, respectively. These increases were
offset by decreases of $32,547 and $1,979, in group disability benefits and
health insurance benefits, respectively, for the three months ended September
30, 2004. The increases in policyholder benefits for the nine months ended
September 30, 2004, are primarily due to increases of $46,718, $14,072, $6,816,
$4,997 and $2,833, in group life benefits, health insurance benefits, pre-funded
funeral benefits, consumer protection benefits, and group dental insurance
benefits, respectively. These increases were offset by a decrease of $17,958 in
disability benefits for the nine months ended September 30, 2004. The three and
nine month increase in group life, group disability and group dental benefits
are primarily driven by a reduction in reserves during the three months ended
September 30, 2003. During the third quarter of 2003, we completed actuarial
reserve adequacy studies for the group disability, group life and group dental
products which reflected that, in the aggregate, these reserves were redundant
by $17,678. Therefore, we reduced reserves by $17,678 in the third quarter of
2003 to reflect these estimates. Also, contributing to the

                                       12
<PAGE>

increase was deterioration in group dental experience, partially offset by lower
group disability incidence and improved group life mortality experience. The
increase in the health insurance net earned premiums is the driver in the nine
month increase in related benefits. Consumer protection benefits are driven by
unfavorable experience on one client. Increases in pre-funded funeral benefits
are primarily due to the crediting of policy growth to a larger inforce block of
business.

      Selling, underwriting and general expenses decreased by $6,244, or 4%,
from $150,117 for the three months ended September 30, 2003, to $143,873 for the
three months ended September 30, 2004. Selling, underwriting and general
expenses increased by $2,958, or 1%, from $414,879 for the nine months ended
September 30, 2003, to $417,837 for the nine months ended September 30, 2004.
The three month decrease is driven primarily by non-recurring expenses incurred
during the third quarter of 2003. The nine month increases were primarily due to
increased commission expense due to growth in the disability, health and
pre-funded funeral businesses.

Net Income

      Net income decreased by $12,975, or 30%, from $43,580 for the three months
ended September 30, 2003, to $30,605 for the three months ended September 30,
2004. Net income decreased by $16,092, or 16%, from $99,828 for the nine months
ended September 30, 2003, to $83,736 for the nine months ended September 30,
2004.

      Income taxes decreased by $3,576, or 18%, from $20,144 for the three
months ended September 30, 2003, to $16,568 for the three months ended September
30, 2004. Income taxes decreased by $6,242, or 12%, from $50,354 for the nine
months ended September 30, 2003, to $44,112 for the nine months ended September
30, 2004. Income tax decreases for the three and nine months ended September 30,
2004 were due to a decrease in pre-tax income and an additional decrease in
taxable income due to an increase in the dividends received deduction. This was
partially offset by an increase in the tax reserve accrual.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

      Not required under 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, 2004. 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 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 reduced disclosure format.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

      Not required under reduced disclosure format.


                                       13
<PAGE>


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

        Not required under 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 at www.assurant.com

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                              EXHIBIT DESCRIPTION
-------                             -------------------
<S>        <C>
3.1        Restated Articles of Incorporation of Fortis Benefits Insurance

3.2        By-laws of Fortis Benefits Insurance Company (incorporated by reference from the Registrant's
           Registration Statement on Form S-6 and Variable Account C filed on March 17, 1986, File No.
           33-03919).

3.3        Amendments to By-laws of Fortis Benefits Insurance Company dated November 21, 1991
           (incorporated by reference from the Registrant's Post-Effective Amendment No. 1 to the
           Registration Statement on Form N-4 and Variable Account D filed on March 2, 1992, File No.
           33-37577).

3.4        Amendment to By-laws of Fortis Benefits Insurance Company dated May 1, 1999 (incorporated by
           reference from Exhibit 3(d) to the Registrant's Form 10-K filed on March 30, 2001, File No.
           33-63799).

4.1        Form of Combination Fixed and Variable Group Annuity Contract (incorporated by reference from
           Registrant's Post-Effective Amendment No. 1 to the Registration Statement on Form N-4 and
           Variable Account D filed on March 2, 1992, File No. 33-37577).

4.2        Form of Certificate to be used in connection with Form of Combination Fixed and Variable Group
           Annuity Contract filed as Exhibit 4.1 to this report (incorporated by reference from
           Registrant's Post-Effective Amendment No. 1 to the Registration Statement on Form N-4 and
           Variable Account D filed on March 2, 1992, File No. 33-37577).

4.3        Form of Application to be used in connection with Form of Certificate filed as Exhibit 4.2 to
           this report (incorporated by reference from Registrant's Post-Effective Amendment No. 1 to the
           Registration Statement on Form N-4 and Variable Account D filed on March 2, 1992, File No.
           33-37577).

4.4        Form of IRA Endorsement (incorporated by reference from Registrant's Post-Effective Amendment
           No. 1 to the Registration Statement on Form N-4 and Variable Account D filed on March 2, 1992,
           File No. 33-37577).

4.5        Form of Section 403(b) Annuity Endorsement (incorporated by reference from Registrant's
           Post-Effective Amendment No. 3 to the Registration Statement on Form N-4 and Variable Account
           D filed on March 1, 1990, File No. 33-19421).

4.6        Annuity Contract Exchange Form (incorporated by reference from Registrant's Pre-Effective
           Amendment No. 1 to the Registration Statement on Form N-4 and Variable Account D filed on
           April 19, 1988, File No. 33-19421).
</TABLE>

                                                 14
<PAGE>

<TABLE>
<S>        <C>
10.1       Amendment Number One to the Assurant, Inc. Amended and Restated 2004 Employee Stock Repurchase
           Plan.

10.2       Amendment Number One to the Fortis Executive Pension and 401K Plan.

10.3       Amendment Number Two to the Fortis, Inc. Supplemental Executive Retirement Plan.

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.
</TABLE>

                                                 15
<PAGE>

                                             SIGNATURES

      Pursuant to the requirements 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.

                              FORTIS BENEFITS INSURANCE COMPANY


Date:  November 12, 2004      By:   /s/Robert Pollock
                                  ----------------------------------------------
                                  Name: Robert B. Pollock
                                  Title: President and Chief Executive
                                         Officer (Principal Executive Officer)

Date:  November 12, 2004      By:    /s/ Ranell Jacobson
                                  ----------------------------------------------
                                  Name: Ranell Jacobson
                                  Title: Treasurer
                                         (Chief Financial Officer)

                                       16