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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2003
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 33-46620
FORTIS BENEFITS INSURANCE COMPANY
(Exact name of registrant as specified in its charter)
MINNESOTA
(State or other jurisdiction of
incorporation or organization)
81-0170040
(IRS Identification No.)
576 BIELENBERG DRIVE, WOODBURY, MN 55125
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: 651-361-4000
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 Rule 12b-2 of the Exchange Act). Yes No X
1
FORTIS BENEFITS INSURANCE COMPANY
BALANCE SHEETS
(In thousands, except share data)
- --------------------------------------------------------------------------------
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
ASSETS SEPTEMBER 30, DECEMBER 31,
2003 2002
-----------------------------
(UNAUDITED)
Investments:
Fixed maturities, at fair value (amortized cost 2003 - $3,159,355;
2002 - $2,884,670) $3,411,469 $3,044,689
Equity securities, at fair value (cost 2003 - $194,425;
2002 - $108,002) 195,649 102,214
Mortgage loans on real estate, less allowance for possible losses
(2003-- $13,273, 2002--$13,228) 635,266 578,517
Policy loans 10,616 10,301
Short-term investments 49,575 282,383
Real estate and other investments 54,087 62,248
---------- ----------
4,356,662 4,080,352
Cash and cash equivalents 19,804 9,660
Receivables:
Uncollected premiums 63,953 62,480
Reinsurance recoverable on unpaid and paid losses 1,191,794 1,151,186
Intercompany receivable 590 -
Other 33,798 16,183
---------- ----------
1,290,135 1,229,849
Accrued investment income 52,951 45,584
Deferred policy acquisition costs 134,742 123,813
Property and equipment at cost, less accumulated depreciation 2,909 3,796
Federal income tax recoverable 11,211 8,258
Deferred federal income taxes 47,325 125,317
Other assets 15,920 7,746
Identifiable intangible assets, less accumulated amortization (2003 - $2,453; 25,047 27,400
2002 - $1,400)
Goodwill 158,112 156,006
Assets held in separate accounts 3,281,557 3,126,978
---------- ----------
Total assets $9,396,375 $8,944,759
========== ==========
The accompanying notes are an integral part of the financial statements.
2
FORTIS BENEFITS INSURANCE COMPANY
BALANCE SHEETS
(In thousands, except share data)
- --------------------------------------------------------------------------------
SEPTEMBER 30, DECEMBER 31,
POLICY RESERVES AND LIABILITIES AND SHAREHOLDER'S EQUITY 2003 2002
----------------------------
(UNAUDITED)
Policy reserves and liabilities:
Future policy benefit reserves:
Traditional and pre-need life insurance $1,913,013 $1,881,137
Interest sensitive and investment products 1,046,702 1,020,724
Accident and health 1,399,748 1,264,565
---------- ----------
4,359,463 4,166,426
Unearned revenues 50,343 50,145
Other policy claims and benefits payable 234,083 257,880
Policyholder dividends payable 1,872 1,876
---------- ----------
4,645,761 4,476,327
Accrued expenses 97,344 96,099
Other liabilities 98,260 99,120
Deferred gain on reinsurance ceded 268,271 308,167
Due to affiliates - 3,842
Liabilities related to separate accounts 3,281,557 3,126,978
---------- ----------
Total policy reserves and liabilities 8,391,193 8,110,533
---------- ----------
Shareholder's equity:
Common stock, $5 par value: authorized, issued and outstanding
shares - 1,000,000 5,000 5,000
Additional paid-in capital 516,570 516,570
Retained earnings 311,287 211,459
Accumulated other comprehensive income 172,325 101,197
---------- ----------
Total shareholder's equity 1,005,182 834,226
---------- ----------
Total policy reserves and liabilities and shareholder's equity $9,396,375 $8,944,759
========== ==========
The accompanying notes are an integral part of the financial statements.
3
FORTIS BENEFITS INSURANCE COMPANY
STATEMENTS OF INCOME
(In thousands)
- --------------------------------------------------------------------------------
NINE MONTHS ENDED SEPTEMBER 30,
2003 2002
-------------------------------
(UNAUDITED) (UNAUDITED)
Revenues:
Insurance operations:
Traditional and pre-need life insurance premiums $ 368,618 $ 385,768
Interest sensitive and investment product
policy charges 119 (528)
Accident and health insurance premiums 888,772 883,529
----------- -----------
1,257,509 1,268,769
Net investment income 194,709 196,031
Net realized gains (losses) on investments 5,035 (41,736)
Amortization of gain on reinsured business 39,896 46,282
Other income 9,820 7,502
----------- -----------
Total revenues 1,506,969 1,476,848
Benefits and expenses:
Benefits to policyholders:
Traditional and pre-need life insurance 277,317 332,246
Interest sensitive investment products 1,115 4,470
Accident and health claims 663,476 656,086
----------- -----------
941,908 992,802
Policyholder dividends - 167
Amortization of deferred policy acquisition costs 35,733 35,120
Insurance commissions 137,300 119,461
General and administrative expenses 241,846 233,658
----------- -----------
Total benefits and expenses 1,356,787 1,381,208
----------- -----------
Income before income taxes 150,182 95,640
Federal income taxes
Current 7,785 23,859
Deferred 42,569 6,932
----------- -----------
Net income $ 99,828 $ 64,849
=========== ===========
Other comprehensive income:
Unrealized gain on investments 71,128 55,072
----------- -----------
Comprehensive income $ 170,956 $ 119,921
=========== ===========
The accompanying notes are an integral part of the financial statements.
4
FORTIS BENEFITS INSURANCE COMPANY
STATEMENTS OF INCOME
(In thousands)
- --------------------------------------------------------------------------------
THREE MONTHS ENDED SEPTEMBER 30,
2003 2002
--------------------------------
(UNAUDITED) (UNAUDITED)
Revenues:
Insurance operations:
Traditional and pre-need life insurance premiums $ 120,919 $ 125,469
Interest sensitive and investment product
policy charges 207 541
Accident and health insurance premiums 291,571 296,208
--------- ---------
412,697 422,218
Net investment income 67,191 66,449
Net realized gains (losses) on investments 2,990 (19,426)
Amortization of gain on reinsured business 14,603 15,402
Other income 2,614 2,119
--------- ---------
Total revenues 500,095 486,762
Benefits and expenses:
Benefits to policyholders:
Traditional and pre-need life insurance 49,942 108,435
Interest sensitive investment products 206 1,159
Accident and health claims 236,106 218,995
--------- ---------
286,254 328,589
Policyholder dividends - 572
Amortization of deferred policy acquisition costs 12,457 13,295
Insurance commissions 53,289 33,741
General and administrative expenses 84,371 76,205
--------- ---------
Total benefits and expenses 436,371 452,402
--------- ---------
Income before income taxes 63,724 34,360
Federal income taxes
Current (3,851) 24,181
Deferred 23,995 (12,813)
--------- ---------
Net income $ 43,580 $ 22,992
========= =========
Other comprehensive (loss) income:
Unrealized (losses) gain on investments (44,679) 77,488
--------- ---------
Comprehensive (loss) income $ (1,099) $ 100,480
--------- ---------
The accompanying notes are an integral part of the financial statements.
5
FORTIS BENEFITS INSURANCE COMPANY
STATEMENTS OF CASH FLOWS
(In thousands)
- --------------------------------------------------------------------------------
NINE MONTHS ENDED SEPTEMBER 30,
2003 2002
-------------------------------
(unaudited) (unaudited)
Cash flows from operating activities:
Net income $ 99,828 $ 64,849
Adjustments to reconcile net income to net cash provided by
operating activities:
Provision for depreciation 832 1,003
Amortization of gain on reinsured business (39,896) (46,282)
Amortization of investment premiums, net (2,163) (1,688)
Net realized (gains) losses on sold investments (5,035) 41,736
Policy acquisition costs deferred (47,893) (49,220)
Amortization of deferred policy acquisition costs 40,633 35,120
Provision for deferred federal income taxes 42,569 7,408
Increase in income taxes recoverable (2,632) (73,358)
Change in receivables, accrued investment income, unearned
premiums, accrued expenses, other assets, due to and
from affiliates and other liabilities 77,151 7,260
Increase in future policy benefit reserves for traditional,
interest sensitive and accident and health policies 168,806 137,696
Decrease in other policy claims and benefits and
policyholder dividends payable (23,854) (11,312)
Other (804) (191)
----------- -----------
Net cash provided by operating activities 153,240 113,021
----------- -----------
Cash flows from investing activities:
Purchases of fixed maturity investments (1,006,620) (1,572,410)
Sales and repayments of fixed maturity investments 755,147 1,309,567
Purchases of short-term investments (1,514,436) (161,974)
Sales and repayments of short-term investments 1,747,244 266,421
Purchases of other investments 242,444 (69,225)
Sales of other investments 118,557 120,614
Purchases of property and equipment - (147)
Cash paid pursuant to assumed reinsurance agreement (1,151) -
----------- -----------
Net cash used in investing activities 143,703 (107,154)
----------- -----------
Increase in cash and cash equivalents 9,537 5,867
Change in cash due to foreign exchange 607 44
Cash and cash equivalents at beginning of year 9,660 11,704
----------- -----------
Cash and cash equivalents at end of period $ 19,804 $ 17,615
=========== ===========
Noncash items:
Change in non-cash due to change in foreign exchange rates $ (804) $ (191)
=========== ===========
The accompanying notes are an integral part of the financial statements.
6
FORTIS BENEFITS INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
September 30, 2003 (In thousands)
- --------------------------------------------------------------------------------
1. GENERAL
The accompanying unaudited financial statements of Fortis Benefits
Insurance Company contain all adjustments necessary to present fairly
the balance sheet as of September 30, 2003 and the related statement of
income for the nine and three months ended September 30, 2003 and 2002,
and cash flows for the nine months ended September 30, 2003 and 2002.
Certain amounts in the 2002 financial statements have been reclassified
to conform to the 2003 presentation.
Income tax payments were $10,405 and $98,763 for the nine months ended
September 30, 2003 and 2002, respectively.
In August 2003, the Company started to utilize derivative instruments
in managing the PreNeed Segment's exposure to inflation risk. The
derivative instrument, a Consumer Price Index Cap (the "CPI CAP"),
limits the inflation risk to a maximum of 5% and has a notional amount
of $454 million amortizing to zero over 20 years. The CPI CAP does not
qualify under GAAP as an effective hedge; therefore, it is
marked-to-market on a quarterly basis and the accumulated gain or loss
is recognized in the results of operations in other income. As of
September 30, 2003, the CPI CAP included in other assets amounted to
$8,530 and the loss recorded in the results of operations totaled $170.
2. FIXED MATURITY AND EQUITY INVESTMENTS
At September 30, 2003, all fixed maturity and equity securities are
classified as available-for-sale and carried at fair value.
The amortized cost and fair values of investments available-for sale
were as follows at September 30, 2003:
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
Fixed maturities:
Governments $ 165,942 $ 10,967 $ 1 $ 176,908
Public utilities 216,992 20,798 728 237,062
Industrial and miscellaneous 2,283,000 210,513 4,456 2,489,057
Other 493,421 16,065 1,044 508,442
---------- ---------- ---------- ----------
Total fixed maturities 3,159,355 258,343 6,229 3,411,469
Equity securities 194,425 1,536 312 195,649
---------- ---------- ---------- ----------
Total $3,353,780 $ 259,879 $ 6,541 $3,607,118
========== ========== ========== ==========
The amortized cost and fair value in fixed maturities at September 30,
2003, by contractual maturity, are shown below. Expected maturities
will differ from contractual maturities because borrowers may have the
right to call or prepay obligations with or without call or prepayment
penalties.
7
FORTIS BENEFITS INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
September 30, 2003 (In thousands)
- --------------------------------------------------------------------------------
AMORTIZED FAIR
COST VALUE
Due in one year or less $ 28,973 $ 31,703
Due after one year through five years 403,355 435,073
Due after five years through ten years 1,162,049 1,242,429
Due after ten years 1,564,978 1,702,264
---------- ----------
Total $3,159,355 $3,411,469
========== ==========
Proceeds from sales of investments in fixed maturities in the
nine-month period ended September 30, 2003 and September 30, 2002 were
$728,347 and $1,309,567 respectively. Gross gains of $18,620 and
$23,260 and gross losses of $13,416 and $68,180 were realized on sales
during the nine month periods ended September 30, 2003 and 2002,
respectively.
Mortgage Loans
The Company has issued commercial mortgage loans on properties located
throughout the United States. Approximately 35.8% of outstanding
principal is concentrated in the states of New York, California and
Florida, at September 30, 2003. The Company has a diversified loan
portfolio with a small average size, which greatly reduces any loss
exposure. The Company has established a reserve for mortgage loans.
3. INVESTMENT INCOME
Net Investment Income and Net Realized Gains (Losses) on Investments:
Major categories of net investment income and realized gains (losses)
on investments for the first nine months of each year were as follows:
REALIZED GAIN (LOSS)
INVESTMENT INCOME ON INVESTMENTS
2003 2002 2003 2002
Fixed maturities $ 145,692 $ 152,072 $ 5,204 $ (44,920)
Preferred stocks 8,345 4,687 11 (66)
Common stocks 42 3,490 (210) 2,400
Mortgage loans on real estate 37,337 39,142 - 919
Policy loans 432 422 - -
Short-term investments 1,319 178 30 (69)
Real estate and other investments 7,501 1,945 - -
--------- --------- --------- ---------
200,668 201,936 $ 5,035 $ (41,736)
========= =========
Expenses (5,959) (5,905)
--------- ---------
$ 194,709 $ 196,031
========= =========
Other than temporary impairments (OTTI) are included in realized gain
and losses and consist of $7,948 and $0 for fixed maturities in 2003
and 2002, respectively. OTTI write-downs are recorded at the end of
each quarter based on the fair value of the security as of the
reporting date.
8
FORTIS BENEFITS INSURANCE COMPANY
MANAGEMENT DISCUSSION AND ANALYSIS
September 30, 2003 (In thousands)
- --------------------------------------------------------------------------------
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003 COMPARED TO SEPTEMBER 30, 2002
Fortis, Inc., the ultimate parent of Fortis Benefits Insurance Company (the
"Company") has initiated the process with the Securities and Exchange Commission
for an initial public offering of its common stock.
REVENUES
The Company distributes its products through a network of independent agents,
brokers and financial institutions. The Company's major products offered are
group dental, group disability, group life, small employer group health,
pre-funded funeral annuity and life and consumer protection coverages. The
Company's accident and health insurance business consists of group dental, group
disability, small employer group health and consumer protection products.
The Company's increase in accident and health premium is due to a combination of
product line increases and decreases. The Company's disability premium increased
at nine months ended September 30, 2003 over nine months ended September 30,
2002 due to additional reinsurance contracts assumed by the company. This
disability premium increase was offset slightly by lower disability sales
production as a result of stricter pricing discipline. Dental premiums decreased
due to lower sales production and persistency. Consumer protection premium in
the accident and health line increased as a result of increases in new business
sales. Small employer group health premiums decreased due to higher lapse rates
as a result of rate increases.
The group life products experienced lower sales and lower persistency during the
first nine months of 2003, resulting in lower life premium levels when compared
to the first nine months of 2002.
The Company continues to match investment portfolio composition to liquidity
needs and capital requirements. Net investment income decreased from $196
million during the nine months ended September 30, 2002 to $194 million during
the nine months ended September 30, 2003 due to lower yielding investment
markets. Changes in interest rates during the first nine months of 2002 and 2003
resulted in recognition of realized gains and losses upon sales of securities.
The Company had capital gains from fixed maturity investments in 2003 as opposed
to capital losses in 2002.
BENEFITS
The total year-to-date policyholder benefit to premium ratio decreased from
78.3% to 74.9% for the nine months ended September 30, 2002 and September 30,
2003, respectively. The group dental, group disability, group life, small
employer group health, pre-funded funeral and consumer protection benefit to
premium ratios for the nine months ended September 30, were 69%, 95%, 46%, 69%,
106% and 22% respectively in 2003 and 73%, 88%, 75%, 66%, 102% and 46%,
respectively in 2002.
9
FORTIS BENEFITS INSURANCE COMPANY
MANAGEMENT DISCUSSION AND ANALYSIS
September 30, 2003 (In thousands)
- --------------------------------------------------------------------------------
Group dental, group disability and group life loss ratios were all impacted by a
change in reserve estimate. During the third quarter, Fortis Employee Benefits
completed actuarial reserve adequacy studies for the group long-term disability,
group life, and group dental products, which reflected that, in the aggregate,
these reserves were redundant by $17 million (pre-tax). Therefore, reserves were
released by $17 million in the third quarter to reflect these best estimates.
The increase in the small employer group health loss ratio results from
increased claims cost on lapsed large groups along with increased loss expenses
related to conversion deficiency reserves. The favorable loss ratio change for
the consumer protection business is offset by a corresponding increase in the
contingent commission. The increase in the pre-funded funeral loss ratio is due
to a shift in the product mix from limited pay to single pay policies. Single
pay policies typically have higher first year reserves driving an increase in
the loss ratio.
EXPENSES
Commission rates have increased slightly from levels in 2002. This is primarily
due to changes in the mix of business by product lines as well as the change in
first year versus renewal premiums.
The Company's general and administrative expense to premium ratio rose slightly
to 19% from 18% at the end of the first nine months of 2003 and 2002,
respectively. The Company continues to monitor expenses, striving to improve the
expense to premium ratio, while maintaining quality and timely services to
policyholders.
ADOPTION OF NEW ACCOUNTING PRONOUNCEMENTS
In April of 2003, the FASB's Derivative Implementation Group ("DIG") released
FAS 133 Implementation Issue B36, Embedded Derivatives: Modified Coinsurance
Arrangements and Debt Instruments that Incorporate Credit Risk Exposures that
are Unrelated or Only Partially Related to the Creditworthiness of the Obligor
under those Instruments ("DIG B36"). The effective date of the implementation of
the guidance is October 1, 2003. The Company is assessing whether adoption of
DIG B36 will have a material impact on the Company's financial position or the
results of operations.
10
FORTIS BENEFITS INSURANCE COMPANY
MANAGEMENT DISCUSSION AND ANALYSIS
September 30, 2003 (In thousands)
- --------------------------------------------------------------------------------
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.
MARKET RISK AND RISK MANAGEMENT
Interest rate risk is the Company's primary market risk exposure. Substantial
and sustained increases and decreases in market interest rates can affect the
profitability of insurance products and market value of investments. The yield
realized on new investments generally increases or decreases in direct
relationship with interest rate changes. The market value of the Company's fixed
maturity and mortgage loan portfolios generally increases when interest rates
decrease and decreases when interest rates increase.
Interest rate risk is monitored and controlled through asset/liability
management. As part of the risk management process, different economic scenarios
are modeled, including cash flow testing required for insurance regulatory
purposes, to determine that existing assets are adequate to meet projected
liability cash flows. A major component of the Company's asset/liability
management program is structuring the investment portfolio with cash flow
characteristics consistent with the cash flow characteristics of the Company's
insurance liabilities. The Company uses computer models to perform simulations
of the cash flow generated from existing insurance policies under various
interest rate scenarios. Information from these models is used in the
determination of interest crediting strategies and investment strategies. The
asset/liability management discipline includes strategies to minimize exposure
to loss as market interest rates change. On the basis of these analyses,
management believes there is no material solvency risk to the Company with
respect to interest rate movements up or down of 100 basis points from year-end
levels.
Equity market risk exposure is not significant. Equity investments in the
general account are not material enough to threaten and contract owners bear the
investment risk related to the variable products. Therefore, the risks
associated with the investments supporting the variable separate accounts are
assumed by contract owners, not by the Company. The Company provides certain
minimum death benefits that depend on the performance of the variable separate
accounts. Currently the majority of these death benefit risks are reinsured
which then protects the Company from adverse mortality experience and prolonged
capital market decline.
In August 2003, the Company started to utilize derivative instruments in
managing the PreNeed Segment's exposure to inflation risk. The derivative
instrument, a Consumer Price Index Cap (the "CPI CAP"), limits the inflation
risk to a maximum of 5% and has a notional amount of $454 million amortizing to
zero over 20 years. The CPI CAP does not qualify under GAAP as an effective
hedge; therefore, it is marked-to-market on a quarterly basis and the
accumulated gain or loss is recognized in the results of operations in other
income. As of September 30, 2003, the CPI CAP included in other assets amounted
to $8,530 and the loss recorded in the results of operations totaled $170.
LIQUIDITY AND CAPITAL RESOURCES
The liquidity requirements of the Company have been met by funds provided from
operations, including investment income. Funds are principally used to provide
for policy benefits, operating expenses, commissions and investment purchases.
The impact of the declining inforce medical business has been considered in
evaluating the Company's future liquidity needs. The Company expects its
operating activities to continue to generate sufficient funds.
The National Association of Insurance Commissioners has implemented risk-based
capital standards to determine the capital requirements of a life insurance
company based upon the risks
11
FORTIS BENEFITS INSURANCE COMPANY
MANAGEMENT DISCUSSION AND ANALYSIS
September 30, 2003 (In thousands)
- --------------------------------------------------------------------------------
inherent in its operations. These standards require the computation of a
risk-based capital amount which is then compared to a company's actual total
adjusted capital. Based upon current calculations using these risk-based capital
standards, the Company's percentage of total adjusted capital is in excess of
ratios, which would require regulatory attention.
The Company's fixed maturity investments consisted of 93% investment grade bonds
as of September 30, 2003 and the Company does not expect this percentage to
change significantly in the future.
REGULATION
The Company is subject to the laws and regulations established by the Minnesota
State Insurance Department governing insurance business conducted in Minnesota
State. Periodic audits are conducted by the Minnesota Insurance Department
related to the Company's compliance with these laws and regulations. To date,
there have been no adverse findings regarding the Company's operations.
ITEM 4. CONTROLS AND PROCEDURES.
As of the end of the period covered by this report, the Company conducted an
evaluation, under the supervision and with the participation of the principal
executive officer and principal financial officer, of the Company's disclosure
controls and procedures (as defined in Rules 13a-14(c) and 15d-14(c) under the
Securities Exchange Act of 1934 (the "Exchange Act")). Based on this evaluation,
the principal executive officer and principal financial officer concluded that
the Company's disclosure controls and procedures are effective to ensure that
information required to be disclosed by the Company in reports that it files or
submits under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in Securities and Exchange Commission rules
and forms. There was no change in the Company's internal control over financial
reporting during the Company's most recently completed fiscal quarter that has
materially affected, or is reasonably likely to materially affect, the Company's
internal control over financial reporting.
12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
a. 302 Certification of Chief Executive Officer (Exhibit 31.1)
302 Certification of Chief Executive Officer (Exhibit 31.2)
906 Certification of Chief Executive Officer (Exhibit 32.1)
906 Certification of Chief Executive Officer (Exhibit 32.2)
b. None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on it's behalf by the
undersigned thereunto duly authorized.
Fortis Benefits Insurance Company
(Registrant)
/s/ Larry Cains
- ---------------------------
Larry Cains
Controller and Treasurer
Date: November 12, 2003
13