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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



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FORM 10-Q



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|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2007

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



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UNION SECURITY INSURANCE COMPANY

(Exact name of registrant as specified in its charter)



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|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|IOWA                                                           |  | 81-0170040                          
|(State or Other Jurisdiction of Incorporation or Organization) |  | (I.R.S. Employer Identification No.)
|                                                               | 
|6941 VISTA DRIVE WEST DES MOINES, IOWA                         |  | 50266                               
|(Address of Principal Executive Offices)                       |  | (Zip Code)                          

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



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Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.    Yes  x    No ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ̈Accelerated filer ̈Non-accelerated filer  x

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, 2007, there were 1,000,000 shares of common stock of the registrant outstanding, all of which are owned by Assurant, Inc.

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



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##### Table of Contents

UNION SECURITY INSURANCE COMPANY

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2007

TABLE OF CONTENTS



|            |  |                                                                                                                    |  |           
|----------- |  | ------------------------------------------------------------------------------------------------------------------ |  | ----------
|Item Number |  |                                                                                                                    |  | PageNumber
|            |  | PART IFINANCIAL INFORMATION                                                                                        |  |           
|            |  |                                                                                                                   
|1.          |  | FINANCIAL STATEMENTS OF UNION SECURITY INSURANCE COMPANY                                                           |  | 2         
|            |  | Consolidated Balance Sheets at September 30, 2007 (Unaudited) and December 31, 2006                                |  | 2         
|            |  | Consolidated Statements of Operations (Unaudited) for the three and nine months ended September 30, 2007 and 2006  |  | 4         
|            |  | Consolidated Statement of Changes in Stockholders Equity (Unaudited) from December 31, 2006 to September 30, 2007 |  | 5         
|            |  | Consolidated Statements of Cash Flows (Unaudited) for the nine months ended September 30, 2007 and 2006            |  | 6         
|            |  | Notes to the Consolidated Financial Statements (Unaudited)                                                         |  | 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 IIOTHER INFORMATION                                                                                           |  |           
|            |  |                                                                                                                   
|1A.         |  | RISK FACTORS                                                                                                       |  | 13        
|            |  |                                                                                                                   
|2.          |  | UNREGISTERED SALE OF EQUITY SECURITIES AND USE OF PROCEEDS*                                                        |  | 13        
|            |  |                                                                                                                   
|3.          |  | DEFAULTS UPON SENIOR SECURITIES *                                                                                  |  | 13        
|            |  |                                                                                                                   
|4.          |  | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS *                                                              |  | 13        
|            |  |                                                                                                                   
|5.          |  | OTHER INFORMATION                                                                                                  |  | 13        
|            |  |                                                                                                                   
|6.          |  | EXHIBITS                                                                                                           |  | 13        
|            | 
|SIGNATURES  |  | 15                                                                                                                



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



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##### Table of Contents

Union Security Insurance Company

Consolidated Balance Sheets

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



|                                                                                                                |  |                                                   |           |                   |   |          
|--------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------- | --------- | ----------------- | - | ---------
|                                                                                                                |  | September 30, 2007                                |           | December 31, 2006
|                                                                                                                |  | (in thousands except per share and share amounts)
|Assets                                                                                                          |  |                                                   |           |                   |   |          
|Investments:                                                                                                    |  |                                                   |           |                   |   |          
|Fixed maturities available for sale, at fair value (amortized cost - $2,671,768 in 2007 and $2,823,347 in 2006) |  | $                                                 | 2,693,570 |                   | $ | 2,915,346
|Equity securities available for sale, at fair value (cost - $321,735 in 2007 and $316,087 in 2006)              |  |                                                   | 308,502   |                   |   | 320,010  
|Commercial mortgage loans on real estate at amortized cost                                                      |  |                                                   | 802,662   |                   |   | 750,283  
|Policy loans                                                                                                    |  |                                                   | 7,718     |                   |   | 7,840    
|Short-term investments                                                                                          |  |                                                   | 25,144    |                   |   | 48,141   
|Collateral held under securities lending                                                                        |  |                                                   | 306,321   |                   |   | 176,937  
|Other investments                                                                                               |  |                                                   | 73,248    |                   |   | 87,323   
|                                                                                                                |  |                                                   |           |                   |   |          
|Total investments                                                                                               |  |                                                   | 4,217,165 |                   |   | 4,305,880
|Cash and cash equivalents                                                                                       |  |                                                   | 32,272    |                   |   | 75,233   
|Premiums and accounts receivable, net                                                                           |  |                                                   | 97,657    |                   |   | 98,598   
|Reinsurance recoverables                                                                                        |  |                                                   | 1,310,078 |                   |   | 1,303,620
|Due from affiliates                                                                                             |  |                                                   | 1,820     |                   |   | 19,306   
|Accrued investment income                                                                                       |  |                                                   | 49,083    |                   |   | 46,332   
|Deferred acquisition costs                                                                                      |  |                                                   | 53,491    |                   |   | 63,571   
|Property and equipment, at cost less accumulated depreciation                                                   |  |                                                   | 339       |                   |   | 577      
|Deferred income taxes, net                                                                                      |  |                                                   | 68,741    |                   |   | 41,267   
|Goodwill                                                                                                        |  |                                                   | 156,817   |                   |   | 156,817  
|Value of business acquired                                                                                      |  |                                                   | 23,761    |                   |   | 26,667   
|Other assets                                                                                                    |  |                                                   | 36,924    |                   |   | 38,153   
|Assets held in separate accounts                                                                                |  |                                                   | 3,021,676 |                   |   | 3,020,811
|                                                                                                                |  |                                                   |           |                   |   |          
|Total assets                                                                                                    |  | $                                                 | 9,069,824 |                   | $ | 9,196,832
|                                                                                                                |  |                                                   |           |                   |   |          

See the accompanying notes to the consolidated financial statements.



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##### Table of Contents

Union Security Insurance Company

Consolidated Balance Sheets

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



|                                                                                           |  |                                                   |           |                   |   |          
|------------------------------------------------------------------------------------------ |  | ------------------------------------------------- | --------- | ----------------- | - | ---------
|                                                                                           |  | September 30, 2007                                |           | December 31, 2006
|                                                                                           |  | (in thousands except per share and share amounts)
|Liabilities                                                                                |  |                                                   |           |                   |   |          
|Future policy benefits and expenses                                                        |  | $                                                 | 2,697,161 |                   | $ | 2,747,384
|Unearned premiums                                                                          |  |                                                   | 37,504    |                   |   | 38,945   
|Claims and benefits payable                                                                |  |                                                   | 1,926,863 |                   |   | 1,938,726
|Commissions payable                                                                        |  |                                                   | 14,328    |                   |   | 16,188   
|Reinsurance balances payable                                                               |  |                                                   | 3,002     |                   |   | 3,143    
|Funds held under reinsurance                                                               |  |                                                   | 114       |                   |   | 107      
|Deferred gain on disposal of businesses                                                    |  |                                                   | 140,480   |                   |   | 158,155  
|Obligations under securities lending                                                       |  |                                                   | 306,321   |                   |   | 176,937  
|Accounts payable and other liabilities                                                     |  |                                                   | 108,019   |                   |   | 134,466  
|Income taxes payable                                                                       |  |                                                   | 11,236    |                   |   | 62,706   
|Liabilities related to separate accounts                                                   |  |                                                   | 3,021,676 |                   |   | 3,020,811
|                                                                                           |  |                                                   |           |                   |   |          
|Total liabilities                                                                          |  | $                                                 | 8,266,704 |                   | $ | 8,297,568
|                                                                                           |  |                                                   |           |                   |   |          
|Commitments and contingencies (Note 5)                                                     |  |                                                   |           |                   |   |          
|Stockholders equity                                                                       |  |                                                   |           |                   |   |          
|Common stock, par value $5 per share, 1,000,000 shares authorized, issued, and outstanding |  |                                                   | 5,000     |                   |   | 5,000    
|Additional paid-in capital                                                                 |  |                                                   | 545,635   |                   |   | 545,635  
|Retained earnings                                                                          |  |                                                   | 246,927   |                   |   | 286,350  
|Accumulated other comprehensive income                                                     |  |                                                   | 5,558     |                   |   | 62,279   
|                                                                                           |  |                                                   |           |                   |   |          
|Total stockholders equity                                                                 |  |                                                   | 803,120   |                   |   | 899,264  
|                                                                                           |  |                                                   |           |                   |   |          
|Total liabilities and stockholders equity                                                 |  | $                                                 | 9,069,824 |                   | $ | 9,196,832
|                                                                                           |  |                                                   |           |                   |   |          

See the accompanying notes to the consolidated financial statements.



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##### Table of Contents

Union Security Insurance Company

Consolidated Statements of Operations (Unaudited)

Three and Nine Months Ended September 30, 2007 and 2006



|                                                                          |  |                                  |         |   |                                 |   |         |      |  |   |           |   |  |   |           |  
|------------------------------------------------------------------------- |  | -------------------------------- | ------- | - | ------------------------------- | - | ------- | ---- |  | - | --------- | - |  | - | --------- | -
|                                                                          |  | Three Months Ended September 30, |         |   | Nine Months Ended September 30, |  
|                                                                          |  | 2007                             |         |   | 2006                            |   |         | 2007 |  |   | 2006      |  
|                                                                          |  | (in thousands)                   |        
|Revenues                                                                  |  |                                  |         |   |                                 |   |         |      |  |   |           |   |  |   |           |  
|Net earned premiums and other considerations                              |  | $                                | 306,148 |   |                                 | $ | 327,733 |      |  | $ | 941,041   |   |  | $ | 1,047,378 |  
|Net investment income                                                     |  |                                  | 63,073  |   |                                 |   | 66,808  |      |  |   | 225,136   |   |  |   | 221,159   |  
|Net realized (losses) on investments                                      |  |                                  | (6,305  | ) |                                 |   | (344    | )    |  |   | (5,959    | ) |  |   | (3,440    | )
|Amortization of deferred gain on disposal of businesses                   |  |                                  | 5,892   |   |                                 |   | 6,802   |      |  |   | 17,675    |   |  |   | 20,406    |  
|Fees and other income                                                     |  |                                  | 2,571   |   |                                 |   | 2,715   |      |  |   | 14,114    |   |  |   | 8,751     |  
|                                                                          |  |                                  |         |   |                                 |   |         |      |  |   |           |   |  |   |           |  
|Total revenues                                                            |  |                                  | 371,379 |   |                                 |   | 403,714 |      |  |   | 1,192,007 |   |  |   | 1,294,254 |  
|                                                                          |  |                                  |         |   |                                 |   |         |      |  |   |           |   |  |   |           |  
|Benefits, losses and expenses                                             |  |                                  |         |   |                                 |   |         |      |  |   |           |   |  |   |           |  
|Policyholder benefits                                                     |  |                                  | 224,656 |   |                                 |   | 238,895 |      |  |   | 705,150   |   |  |   | 792,002   |  
|Amortization of deferred acquisition costs and value of business acquired |  |                                  | 11,085  |   |                                 |   | 10,889  |      |  |   | 32,451    |   |  |   | 36,141    |  
|Underwriting, general and administrative expenses                         |  |                                  | 93,875  |   |                                 |   | 103,441 |      |  |   | 283,870   |   |  |   | 319,402   |  
|                                                                          |  |                                  |         |   |                                 |   |         |      |  |   |           |   |  |   |           |  
|Total benefits, losses and expenses                                       |  |                                  | 329,616 |   |                                 |   | 353,225 |      |  |   | 1,021,471 |   |  |   | 1,147,545 |  
|                                                                          |  |                                  |         |   |                                 |   |         |      |  |   |           |   |  |   |           |  
|Income before provision for income taxes                                  |  |                                  | 41,763  |   |                                 |   | 50,489  |      |  |   | 170,536   |   |  |   | 146,709   |  
|Provision for income taxes                                                |  |                                  | 13,946  |   |                                 |   | 15,064  |      |  |   | 47,841    |   |  |   | 48,255    |  
|                                                                          |  |                                  |         |   |                                 |   |         |      |  |   |           |   |  |   |           |  
|Net income                                                                |  | $                                | 27,817  |   |                                 | $ | 35,425  |      |  | $ | 122,695   |   |  | $ | 98,454    |  
|                                                                          |  |                                  |         |   |                                 |   |         |      |  |   |           |   |  |   |           |  

See the accompanying notes to the consolidated financial statements.



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Union Security Insurance Company

Consolidated Statement of Changes in Stockholders Equity (Unaudited)

From December 31, 2006 to September 30, 2007



|                                                             |  |                |       |                          |   |                  |  |   |                                     |   |  |       |         |   |  |   |          |  
|------------------------------------------------------------ |  | -------------- | ----- | ------------------------ | - | ---------------- |  | - | ----------------------------------- | - |  | ----- | ------- | - |  | - | -------- | -
|                                                             |  | CommonStock    |       | AdditionalPaid-inCapital |   | RetainedEarnings |  |   | AccumulatedOtherComprehensiveIncome |   |  | Total |        
|                                                             |  | (in thousands) |      
|Balance, December 31, 2006                                   |  | $              | 5,000 |                          | $ | 545,635          |  | $ | 286,350                             |   |  | $     | 62,279  |   |  | $ | 899,264  |  
|Dividends on common stock                                    |  |                |      |                          |   |                 |  |   | (158,000                            | ) |  |       |        |   |  |   | (158,000 | )
|Cumulative effect of change in accounting principle (Note 3) |  |                |      |                          |   |                 |  |   | (4,118                              | ) |  |       |        |   |  |   | (4,118   | )
|Comprehensive income:                                        |  |                |       |                          |   |                  |  |   |                                     |   |  |       |         |   |  |   |          |  
|Net income                                                   |  |                |      |                          |   |                 |  |   | 122,695                             |   |  |       |        |   |  |   | 122,695  |  
|Other comprehensive income:                                  |  |                |       |                          |   |                  |  |   |                                     |   |  |       |         |   |  |   |          |  
|Net change in unrealized gains on securities                 |  |                |      |                          |   |                 |  |   |                                    |   |  |       | (56,781 | ) |  |   | (56,781  | )
|Net change in foreign currency translation                   |  |                |      |                          |   |                 |  |   |                                    |   |  |       | 60      |   |  |   | 60       |  
|                                                             |  |                |       |                          |   |                  |  |   |                                     |   |  |       |         |   |  |   |          |  
|Total other comprehensive (loss)                             |  |                |       |                          |   |                  |  |   |                                     |   |  |       |         |   |  |   | (56,721  | )
|                                                             |  |                |       |                          |   |                  |  |   |                                     |   |  |       |         |   |  |   |          |  
|Total comprehensive income                                   |  |                |       |                          |   |                  |  |   |                                     |   |  |       |         |   |  |   | 65,974   |  
|                                                             |  |                |       |                          |   |                  |  |   |                                     |   |  |       |         |   |  |   |          |  
|Balance, September 30, 2007                                  |  | $              | 5,000 |                          | $ | 545,635          |  | $ | 246,927                             |   |  | $     | 5,558   |   |  | $ | 803,120  |  
|                                                             |  |                |       |                          |   |                  |  |   |                                     |   |  |       |         |   |  |   |          |  

See the accompanying notes to the consolidated financial statements.



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Union Security Insurance Company

Consolidated Statements of Cash Flows (Unaudited)

Nine Months Ended September 30, 2007 and 2006



|                                                       |  |                                 |          |   |      |   |          |  
|------------------------------------------------------ |  | ------------------------------- | -------- | - | ---- | - | -------- | -
|                                                       |  | Nine Months Ended September 30, |         
|                                                       |  | 2007                            |          |   | 2006 |  
|                                                       |  | (in thousands)                  |         
|Net cash (used in) provided by operating activities    |  | $                               | (12,955  | ) |      | $ | 38,667   |  
|                                                       |  |                                 |          |   |      |   |          |  
|Investing activities                                   |  |                                 |          |   |      |   |          |  
|Sales of:                                              |  |                                 |          |   |      |   |          |  
|Fixed maturities available for sale                    |  |                                 | 281,985  |   |      |   | 543,358  |  
|Equity securities available for sale                   |  |                                 | 87,102   |   |      |   | 101,678  |  
|Other invested assets                                  |  |                                 |         |   |      |   | 13,576   |  
|Property and equipment                                 |  |                                 |         |   |      |   | 22       |  
|Maturities, prepayments, and scheduled redemption of:  |  |                                 |          |   |      |   |          |  
|Fixed maturities available for sale                    |  |                                 | 182,553  |   |      |   | 109,078  |  
|Purchase of:                                           |  |                                 |          |   |      |   |          |  
|Fixed maturities available for sale                    |  |                                 | (313,156 | ) |      |   | (601,185 | )
|Equity securities available for sale                   |  |                                 | (95,305  | ) |      |   | (159,228 | )
|Other invested assets                                  |  |                                 |         |   |      |   | (30,229  | )
|Change in other investments                            |  |                                 | 14,075   |   |      |   |         |  
|Change in commercial mortgage loans on real estate     |  |                                 | (52,379  | ) |      |   | (4,770   | )
|Change in short-term investments                       |  |                                 | 22,997   |   |      |   | 57,877   |  
|Change in collateral held under securities lending     |  |                                 | (129,384 | ) |      |   | 26,090   |  
|Change in policy loans                                 |  |                                 | 122      |   |      |   | 555      |  
|                                                       |  |                                 |          |   |      |   |          |  
|Net cash (used in) provided by investing activities    |  |                                 | (1,390   | ) |      |   | 56,822   |  
|                                                       |  |                                 |          |   |      |   |          |  
|Financing activities                                   |  |                                 |          |   |      |   |          |  
|Net cash received from transfer of Canadian operations |  |                                 |         |   |      |   | 65,894   |  
|Dividends paid                                         |  |                                 | (158,000 | ) |      |   | (150,000 | )
|Change in obligation under securities lending          |  |                                 | 129,384  |   |      |   | (26,090  | )
|Contributed capital                                    |  |                                 |         |   |      |   | 10       |  
|                                                       |  |                                 |          |   |      |   |          |  
|Net cash (used in) financing activities                |  |                                 | (28,616  | ) |      |   | (110,186 | )
|                                                       |  |                                 |          |   |      |   |          |  
|Change in cash and cash equivalents                    |  |                                 | (42,961  | ) |      |   | (14,697  | )
|Cash and cash equivalents at beginning of period       |  |                                 | 75,233   |   |      |   | 19,042   |  
|                                                       |  |                                 |          |   |      |   |          |  
|Cash and cash equivalents at end of period             |  | $                               | 32,272   |   |      | $ | 4,345    |  
|                                                       |  |                                 |          |   |      |   |          |  

See the accompanying notes to the consolidated financial statements.



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Union Security Insurance Company

Notes to the Consolidated Financial Statements (Unaudited)

(in thousands, except per share and share amounts)



|1. | Nature of Operations
|-- | --------------------

Union Security Insurance
Company (the Company) is a provider of life and health insurance products including group disability insurance, group dental insurance, group life insurance, small employer group health insurance and pre-funded funeral insurance. The
Company is an indirect wholly-owned subsidiary of Assurant, Inc. (the Parent). The Parents common stock is traded on the New York Stock Exchange under the symbol AIZ.

The Company was redomesticated to Iowa from Minnesota in 2004. The Company distributes its products in all states except New York.

Effective December 31, 2006, International Dental Plans, Inc. (IDP), an indirect wholly-owned subsidiary of the Parent, was merged into
the operations of the Company. Accordingly, all prior period amounts have been restated to conform to the 2007 presentation.



|2. | Basis of 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 of a normal recurring nature) considered necessary for a fair statement of the consolidated financial statements have been included. Certain prior period amounts have been reclassified to
conform to the 2007 presentation.

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 nine months
ended September 30, 2007 are not necessarily indicative of the results that may be expected for the year ending December 31, 2007. The accompanying unaudited interim consolidated financial statements should be read in conjunction with the
audited consolidated financial statements and related notes included in the Companys Annual Report on Form 10-K for the year ended December 31, 2006.



|3. | Recent Accounting Pronouncements
|-- | --------------------------------

Recent Accounting
Pronouncements Adopted

On January 1, 2007, the Company adopted AICPA Statement of Position 05-1, Accounting by Insurance
Enterprises for Deferred Acquisition Costs in Connection with Modifications or Exchanges of Insurance Contracts,(SOP 05-1). SOP 05-1 provides guidance on internal replacements of insurance and investment contracts. An internal
replacement is a modification in product benefits, features, rights or coverages that occurs by the exchange of a contract for a new contract or by amendment, endorsement, or rider to a contract, or by the election of a feature or coverage within a
contract.



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Union Security Insurance Company

Notes to the Consolidated Financial Statements (Unaudited)

Nine Months Ended September 30, 2007 and 2006

(in thousands, except per share and share amounts)



Modifications that result in a new contract that is substantially different from the replaced contract are accounted for as an extinguishment of the replaced
contract, and the associated unamortized deferred acquisition cost (DAC), unearned revenue liabilities and deferred sales inducements from the replaced contract must be reported as an expense immediately. Modifications resulting in a new
contract that is substantially the same as the replaced contract are accounted for as a continuation of the replaced contract. Prior to the adoption of the SOP 05-1, certain internal replacements that did not meet the new criteria were accounted for
as continuations of the replaced contract. Therefore, the accounting policy for certain internal replacements has changed as a result of the adoption of this SOP. At adoption, the Company recognized a $4,118 decrease to deferred acquisition costs,
which was accounted for as a reduction to the January 1, 2007 balance of retained earnings.

On January 1, 2007, the Company
adopted FAS No. 155, Accounting for Certain Hybrid Financial Instrumentsan amendment of FASB Statements No. 133 (FAS 133) and 140(FAS 155). This statement resolves issues addressed in FAS 133
Implementation Issue No. D1, Application of Statement 133 to Beneficial Interest in Securitized Financial Assets. FAS 155 (a) permits fair value remeasurement for any hybrid financial instrument that contains an embedded derivative that
otherwise would require bifurcation; (b) clarifies which interest-only strips and principal-only strips are not subject to the requirements of FAS 133; (c) establishes a requirement to evaluate beneficial interests in securitized financial
assets to identify interests that are freestanding derivatives or that are hybrid financial instruments that contain an embedded derivative requiring bifurcation; (d) clarifies that concentrations of credit risk in the form of subordination are
not embedded derivatives; and (e) eliminates restrictions on a qualifying special-purpose entitys ability to hold passive derivative financial instruments that pertain to beneficial interests that are or contain a derivative financial
instrument. FAS 155 also requires presentation within the financial statements that identifies those hybrid financial instruments for which the fair value election has been applied and information on the income statement impact of the changes in
fair value of those instruments. The adoption of FAS 155 did not have a material impact on the Companys results of operations or financial condition.

On January 1, 2007, the Company adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxesan interpretation of FASB Statement No. 109(FIN
48). There was no impact as a result of adoption on the Companys January 1, 2007 retained earnings. At adoption, total unrecognized tax benefits were $50,251. Of the total unrecognized tax benefits, $44,217, if recognized, would
impact the Companys consolidated effective tax rate. The Company files income tax returns in the U.S. and various state and foreign jurisdictions. The Company has substantially concluded all U.S. federal income tax matters for years through
2002. During 2007, the Company settled an appealed matter with the Internal Revenue Service, which resulted in a decrease to income tax expense of $8,695 and a decrease to tax related interest of $3,262. Substantially all state, local and non-U.S.
income tax matters have been concluded for the years through 1999. The Companys continuing practice is to recognize interest and/or penalties related to income tax matters in income tax expense. At the date of adoption, the Company had $7,381
accrued for tax related interest and penalties on its Consolidated Balance Sheets.



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Union Security Insurance Company

Notes to the Consolidated Financial Statements (Unaudited)

Nine Months Ended September 30, 2007 and 2006

(in thousands, except per share and share amounts)



Recent Accounting Pronouncements Outstanding

In September 2006, the Financial Accounting Standards Board (FASB) issued FAS No. 157, Fair Value Measurements(FAS
157). FAS 157 defines fair value, addresses how companies should measure fair value when they are required to use a fair value measure for recognition or disclosure purposes under GAAP, and expands disclosures about fair value measurements.
FAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Therefore, the Company is required to adopt FAS 157 on January 1, 2008. The Company is
currently evaluating the requirements of FAS 157 and the potential impact on the Companys consolidated financial position or results of operations.

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



|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. Pension costs allocated to the Company were $1,725 and $1,908
for the three months ended September 30, 2007 and 2006, respectively, and $5,176 and $5,724 for the nine months ended September 30, 2007 and 2006, respectively.

The Company participates in a contributory profit sharing plan, sponsored by the Parent, covering employees and certain agents who meet eligibility requirements as to age and length of service. The amounts expensed by
the Company were $1,317 and $1,177 for the three months ended September 30, 2007 and 2006, respectively, and $4,513 and $4,454 for the nine months ended September 30, 2007 and 2006, 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.



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PART I

FINANCIAL INFORMATION



|Item 2. | Managements Discussion And Analysis Of Financial Condition And Results Of Operations.
|------- | --------------------------------------------------------------------------------------

(Dollar amounts in thousands.)

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
September 30, 2007, compared with December 31, 2006, and its results of operations for the three and nine months ended September 30, 2007, compared with the equivalent 2006 periods. This discussion should be read in conjunction with
the Companys MD&A and annual audited financial statements as of December 31, 2006 included in the Companys Form 10-K for the year ended December 31, 2006 filed with the U.S. Securities and Exchange Commission (hereafter
referred to as the Companys 2006 Form 10-K) and unaudited interim consolidated financial statements and related notes included elsewhere in this Form 10-Q.

Some of the statements in this MD&A and elsewhere in this report may contain forward-looking statements which reflect our current views with respect to, among other things, future events and financial performance.
You can identify these forward-looking statements by the use of forward-looking words such as outlook, believes, expects, potential, continues, may, will,
should, seeks, approximately, predicts, intends, plans, estimates, anticipates or the negative version of those words or other comparable words. Any
forward-looking statements contained in this report are based upon our historical performance and on current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by us or any
other person that the future plans, estimates or expectations contemplated by us will be achieved. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause
our actual results to differ materially from those indicated in this report. We believe that these factors include but are not limited to those described under the subsection entitled Risk Factors in our 2006 Form 10-K. These factors
should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this report. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result
of new information, future developments or otherwise. If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may vary materially from what we projected. Any
forward-looking statements you read in this report reflect our current views with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, financial
condition, growth strategy and liquidity.

Critical Factors Affecting Results

Our results depend on the adequacy of our product pricing, underwriting and the accuracy of our methodology for the establishment of reserves for future
policyholder benefits and claims, returns on invested assets and our ability to manage our expenses. Therefore, factors affecting these items may have a material adverse effect on our results of operations or financial condition.

Critical Accounting Policies and Estimates

Our 2006
Form 10-K described the accounting policies and estimates that are critical to the understanding of our results of operations, financial condition and liquidity. The accounting policies and estimates described in the 2006 Form 10-K were consistently
applied to the unaudited interim consolidated financial statements for the three and nine months ended September 30, 2007.

Recent Accounting
Pronouncements

See  Financial Statement Footnote 3.



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



|                                                         |  |                                         |          |   |                                        |   |          |      |  |   |            |   |  |   |            |  
|-------------------------------------------------------- |  | --------------------------------------- | -------- | - | -------------------------------------- | - | -------- | ---- |  | - | ---------- | - |  | - | ---------- | -
|                                                         |  | For the Three Months EndedSeptember 30, |          |   | For the Nine Months EndedSeptember 30, |  
|                                                         |  | 2007                                    |          |   | 2006                                   |   |          | 2007 |  |   | 2006       |  
|                                                         |  | (in thousands)                          |          |   |                                        |   |          |      | 
|Revenues:                                                |  |                                         |          |   |                                        |   |          |      |  |   |            |   |  |   |            |  
|Net earned premiums and other considerations             |  | $                                       | 306,148  |   |                                        | $ | 327,733  |      |  | $ | 941,041    |   |  | $ | 1,047,378  |  
|Net investment income                                    |  |                                         | 63,073   |   |                                        |   | 66,808   |      |  |   | 225,136    |   |  |   | 221,159    |  
|Net realized (losses) on investments                     |  |                                         | (6,305   | ) |                                        |   | (344     | )    |  |   | (5,959     | ) |  |   | (3,440     | )
|Amortization of deferred gains on disposal of businesses |  |                                         | 5,892    |   |                                        |   | 6,802    |      |  |   | 17,675     |   |  |   | 20,406     |  
|Fees and other income                                    |  |                                         | 2,571    |   |                                        |   | 2,715    |      |  |   | 14,114     |   |  |   | 8,751      |  
|                                                         |  |                                         |          |   |                                        |   |          |      |  |   |            |   |  |   |            |  
|Total revenues                                           |  |                                         | 371,379  |   |                                        |   | 403,714  |      |  |   | 1,192,007  |   |  |   | 1,294,254  |  
|                                                         |  |                                         |          |   |                                        |   |          |      |  |   |            |   |  |   |            |  
|Benefits, losses and expenses:                           |  |                                         |          |   |                                        |   |          |      |  |   |            |   |  |   |            |  
|Policyholder benefits                                    |  |                                         | (224,656 | ) |                                        |   | (238,895 | )    |  |   | (705,150   | ) |  |   | (792,002   | )
|Selling, underwriting and general expenses (1)           |  |                                         | (104,960 | ) |                                        |   | (114,330 | )    |  |   | (316,321   | ) |  |   | (355,543   | )
|                                                         |  |                                         |          |   |                                        |   |          |      |  |   |            |   |  |   |            |  
|Total benefits, losses and expenses                      |  |                                         | (329,616 | ) |                                        |   | (353,225 | )    |  |   | (1,021,471 | ) |  |   | (1,147,545 | )
|                                                         |  |                                         |          |   |                                        |   |          |      |  |   |            |   |  |   |            |  
|Income before income tax expense                         |  |                                         | 41,763   |   |                                        |   | 50,489   |      |  |   | 170,536    |   |  |   | 146,709    |  
|Income tax expense                                       |  |                                         | (13,946  | ) |                                        |   | (15,064  | )    |  |   | (47,841    | ) |  |   | (48,255    | )
|                                                         |  |                                         |          |   |                                        |   |          |      |  |   |            |   |  |   |            |  
|Net income                                               |  | $                                       | 27,817   |   |                                        | $ | 35,425   |      |  | $ | 122,695    |   |  | $ | 98,454     |  
|                                                         |  |                                         |          |   |                                        |   |          |      |  |   |            |   |  |   |            |  

---

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

For The Three Months Ended September 30, 2007 Compared to The Three Months Ended September 30, 2006.

Net Income

Net income decreased $7,608, or 21%, to
$27,817 for the three months ended September 30, 2007 from $35,425 for the three months ended September 30, 2006. This decrease was attributable to less favorable experience in our group life business and an increase in net realized losses
on investments of $3,875, (after-tax) due to an increase in other than temporary impairments. Also contributing to the decrease in net income was an increase in the effective income tax rate, as the prior quarter received a greater tax benefit from
the dividend received deduction.

Total Revenues

Total revenues decreased $32,335, or 8%, to $371,379 for the three months ended September 30, 2007 from $403,714 for the three months ended September 30, 2006. This decrease is primarily due to a decrease in
net earned premiums and other considerations of $21,585 and an increase in net realized losses on investments of $5,961. Net earned premiums and other considerations decreased primarily due to a decline in our small employer group health business as
a result of lower sales and membership, declines in our group disability and group life businesses resulting from the continuing implementation of the business small case strategy and adherence to pricing discipline. Also contributing to the
decrease in net earned premiums and other considerations was the sale of the IndependentU.S. distribution channel in our pre-funded funeral (preneed) business and the loss of a client in our accidental death and dismemberment
(AD&D) business. Net realized losses increased primarily due to an increase in other than temporary impairments.

Total Benefits, Losses
and Expenses

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



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##### Table of Contents

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

Income Tax Expense

Income tax expense decreased by $1,118, or 7%, to $13,946 for the three months ended September 30, 2007 from $15,064 for the three months ended
September 30, 2006. The effective income tax rate in the current quarter increased compared with the comparable 2006 period due to a greater tax benefit received from the dividend received deduction in 2006.

For The Nine Months Ended September 30, 2007 Compared to The Nine Months Ended September 30, 2006.

Net Income

Net income increased $24,241, or 25%, to
$122,695 for the nine months ended September 30, 2007 from $98,454 for the nine months ended September 30, 2006. This increase is primarily due to favorable group disability experience, an increase in net investment income from real estate
partnerships, and an increase in fees and other income related to the sale of the Independent  U.S. distribution channel in our pre-funded funeral business. Net income also increased due to a reduction of our income tax expense due to lower
tax contingencies associated with a favorable tax settlement. These increases to net income were partially offset by a decline in our small employer group health and group dental businesses.

Total Revenues

Total revenues decreased $102,247, or
8%, to $1,192,007 for the nine months ended September 30, 2007 from $1,294,254 for the nine months ended September 30, 2006. This decrease is primarily due to a decrease in net earned premiums and other considerations of $106,337. Net
earned premiums and other considerations decreased due to declines in our small employer group health business as a result of lower sales and membership, declines in our group dental and group life businesses resulting from the continuing
implementation of the business small case strategy and adherence to pricing discipline. Also contributing to the decrease in net earned premiums and other considerations is the loss of a client in our AD&D business, the sale of the
Independent  U.S. distribution channel in our preneed business and the transfer of our Canadian preneed business to an affiliate. Partially offsetting the decreased net earned premiums and other considerations are increases in fees and other
income and net investment income of $5,363 and $3,977, respectively. Fees and other income increased due to the sale of the marketing rights of the Independent-U.S. distribution channel in our preneed business, while net investment income increased
due to an increase in real estate investment income.

Total Benefits, Losses and Expenses

Total benefits, losses and expenses decreased $126,074, or 11%, to $1,021,471 for the nine months ended September 30, 2007 from $1,147,545 for the
nine months ended September 30, 2006. This decrease was primarily due to a decrease in policyholder benefits of $86,852 driven by favorable experience in our group disability and group life businesses, a reduction in policyholder benefits
related to closed blocks of business and the decline of our small employer group health business. Policyholder benefits and selling, underwriting and general expenses also decreased due to the loss of a client in our AD&D business, the sale of
the IndependentU.S. distribution channel in our preneed business, and the transfer of our Canadian preneed business to an affiliate.

Income Taxes

Income taxes decreased $414, or 1%, to $47,841 for the nine months ended September 30, 2007 from $48,255 for the nine months ended
September 30, 2006. The effective income tax rate of 28.1% for nine months ended September 30, 2007 decreased compared with 32.9% as of nine months ended September 30, 2006 due to a $12,500 reduction in certain tax contingencies in
2007 associated with a favorable tax settlement.



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##### Table of Contents

|Item 3. | Quantitative And Qualitative Disclosures About Market Risk.
|------- | -----------------------------------------------------------

Not required under the reduced disclosure format.



|Item 4T. | Controls And Procedures.
|-------- | ------------------------

Evaluation of disclosure controls and procedures under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as
of September 30, 2007. Based on this evaluation, our Chief Executive Officer and 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 Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

PART II

OTHER INFORMATION



|Item 1A. | Risk Factors.
|-------- | -------------

Our 2006
Annual Report on Form 10-K described our Risk Factors. As discussed in Note 11Commitments and Contingencies and in Item 1Legal Proceedings of the Parents Quarterly Report on Form 10-Q for the period ended September 30, 2007,
additional developments in the Parents SEC investigation have occurred since we filed our 2006 Annual Report on Form 10-K. The disclosures in the aforementioned sections of the Parents third quarter 2007 10-Q are incorporated by
reference into our Risk Factors. Please see the Parents third quarter 2007 10-Q filed with the SEC and available on the SECs website at www.sec.gov or through Assurants website at www.assurant.com for further details.



|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 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 are filed with this report. 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.



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



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##### Table of Contents

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 9, 2007.



UNION SECURITY INSURANCE COMPANYBy:

/s/ John S. RobertsName:

John S. RobertsTitle:

Interim President and Chief Executive OfficerBy:

/s/ Stacia N. AlmquistName:

Stacia N. AlmquistTitle:

Treasurer and Chief Financial Officer




15