File No. 333-

United States

Securities and Exchange Commission

Washington, DC 20549

FORM S-1

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

UNION SECURITY INSURANCE COMPANY

(Exact name of registrant as specified in its charter)

Kansas

(State or other jurisdiction of incorporation or organization)

6311

(Primary Standard Industrial Identification Code)

81-0170040

(I.R.S. Employer Identification Number)

5910 Mineral Point Road, Madison, WI 53705

(800) 356-2644

(Address, including zip code, and telephone number,

including area code, of registrant’s principal executive offices)

CHRISTOPHER M. GRINNELL

TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY

1 AMERICAN ROW

HARTFORD, CT 06103

(860) 791-0750

(Name, address, including zip code, and telephone

number, including area code, of agent for service)

Approximate date of commencement of proposed sale to the public:

From time to time after the registration statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.ý

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer,""smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated filer ( ) Accelerated Filer ( )

Non-Accelerated Filer (x) Smaller Reporting Company ( )

Emerging Growth Company ( )

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided to Section 7(a)(2)(B) of the Securities Act.o

The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to Section 8(a), may determine.

The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.

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MASTERS VARIABLE ANNUITY
VARIABLE ACCOUNT D OF UNION SECURITY INSURANCE COMPANY
ISSUED BY:
UNION SECURITY INSURANCE COMPANY
5910 MINERAL POINT ROAD
MADISON, WI 53705
ADMINISTERED BY:
TALCOTT RESOLUTION LIFE AND ANNUITY INSURANCE COMPANY
PO BOX 14293
LEXINGTON, KY 40512-4293

1-800-862-6668 (CONTRACT OWNERS)
1-800-862-7155 (INVESTMENT PROFESSIONALS)
www.talcottresolution.com

This prospectus describes the Masters Variable Annuity. Masters Variable Annuity is a contract between you and Union Security Insurance Company (formerly Fortis Benefits Insurance Company) where you agree to make at least one Premium Payment and Union Security agrees to make a series of Annuity Payouts at a later date. This Contract is a flexible premium, tax-deferred, variable annuity offered to both individuals and groups. Availability of portfolio companies may vary by employer. Participants should reference their plan documents for a list of available portfolio companies. Surrenders may be subject to a surrender charge and/or a Market Value Adjustment ("MVA"). If you receive services for your Contract from a third-party financial intermediary who charges an advisory fee for their services, that fee is in addition to Contract fees and expenses. If you elect to pay the advisory fee by taking withdrawals from your Contract Value, the deduction for that fee is subject to surrender charges and will count toward your Annual Withdrawal Amount. Withdrawals to pay advisory fees will also reduce death benefits under the Contract and may be subject to federal and state income taxes and a 10% federal penalty tax.

The variable annuity product described in this prospectus is no longer for sale. However, we continue to administer the in force annuity contracts.

Please read this everything prospectus carefully and keep it for your records and for future reference. This prospectus is filed with the Securities and Exchange Commission (“SEC” or “Commission”). The SEC has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense. This prospectus and the SAI can also be obtained free of charge from us by calling 1-800-862-6668 or from the SEC’s website (www.sec.gov).

Additional information about certain investment products, including variable annuities, has been prepared by the SEC’s staff and is available at Investor.gov.

Talcott Resolution Distribution Company, Inc. serves as principal underwriter for the Contracts.

An investment in the Contract is subject to risk, including risk of loss. See "Principal Risks of Investing in the Contract" beginning on page 9.


NOT INSURED BY FDIC OR ANY FEDERAL GOVERNMENT AGENCY			MAY LOSE VALUE			NOT A DEPOSIT OF OR GUARANTEED BY ANY BANK OR ANY BANK AFFILIATE


Date of Prospectus: May 1, 2024

Table of Contents


			Page

1. Glossary			3
2. Key Information Table			4
3. Overview of the Contract			6
4. Fee Tables			8
5. Principal Risks of Investing in the Contract			9
6. General Contract Information			10
a. Union Security Insurance Company			10
b. The General Account			10
c. The Separate Account			10
d. The Funds			11
e. Guarantee Periods			12
f. Market Value Adjustment for Guarantee Periods			12
7. The Contract			13
a. Purchases and Contract Value			13
b. Contract Rights			17
c. Charges and Fees			18
d. Surrenders			20
e. Annuity Payouts			21
8. Benefits Under the Contract			23
9. Death Benefit			24
10. Other Programs Available			26
11. Other Information			27
a. State Variations			27
b. Legal Proceedings			27
c. More Information			28
d. Financial Statements			28
e. Cybersecurity and Disruptions to Business Operations			28
12. Further Information About Union Security Insurance Company			30
13. Federal Tax Considerations/Information Regarding Tax Qualified Plans			51
Appendix A - Funds Available Under the Contract			APP A-1
Appendix C - Sample Market Value Adjustment Calculations			APP B-1
Appendix D - Investments by Union Security			APP C-1
Appendix E - Death Benefit Examples			APP D-1

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1.Glossary

Except as provided elsewhere in this prospectus, the following capitalized terms shall have the meaning ascribed below:

Account: Any of the Sub-Accounts or Guarantee Periods.

Accumulation Period: The time after you purchase the Contract until we begin to make Annuity Payouts.

Accumulation Units: If you allocate your Premium Payment to any of the Sub-Accounts, we will convert those Payments into Accumulation Units in the selected Sub-Accounts. Accumulation Units are valued at the end of each Valuation Day and are used to calculate the value of your Contract prior to Annuitization.

Accumulation Unit Value: The daily price of Accumulation Units on any Valuation Day.

Administrative Office: Our overnight mailing address is Talcott Resolution - Annuity Service Operations, 6716 Grade Lane, Building 9, Louisville, KY 40213. Our standard mailing address is Talcott Resolution - Annuity Service Operations, PO Box 14293, Lexington, KY 40512-4293.

Anniversary Value: The value equal to the Contract Value as of a Contract Anniversary, as adjusted for subsequent Premium Payments and partial Surrenders.

Annual Withdrawal Amount (AWA): This is the amount you can Surrender per Contract Year without paying a Contingent Deferred Sales Charge. This amount is non-cumulative, meaning that it cannot be carried over from one year to the next.

Annuitant: The person on whose life the Contract is issued. The Annuitant may not be changed after your Contract is issued.

Annuity Calculation Date: The date we calculate the first Annuity Payout.

Annuity Commencement Date: The later of the 10th Contract Anniversary or the date the Annuitant reaches age 90, unless you elect an earlier date or we, in our sole discretion, agree to postpone to another date following our receipt of an extension request.

Annuity Payout: The money we pay out after the Annuity Commencement Date for the duration and frequency you select.

Annuity Payout Option: Any of the options available for payout after the Annuity Commencement Date or death of the Contract Owner or Annuitant.

Annuity Period: The time during which we make Annuity Payouts.

Annuity Unit: The unit of measure we use to calculate the value of your Annuity Payouts under a variable dollar amount Annuity Payout Option.

Annuity Unit Value: The daily price of Annuity Units on any Valuation Day.

Beneficiary: The person entitled to receive benefits pursuant to the terms of the Contract upon the death of any Contract Owner, joint Contract Owner or Annuitant.

Charitable Remainder Trust: An irrevocable trust, where an individual donor makes a gift to the trust, and in return receives an income tax deduction. In addition, the individual donor has the right to receive a percentage of the trust earnings for a specified period of time.

Code: The Internal Revenue Code of 1986, as amended.

Commuted Value: The present value of any remaining guaranteed Annuity Payouts. This amount is calculated using the Assumed Investment Return for variable dollar amount Annuity Payouts and a rate of return determined by us for fixed dollar amount Annuity Payouts.

Contingent Annuitant: The person you may designate to become the Annuitant if the original Annuitant dies before the Annuity Commencement Date. You must name a Contingent Annuitant before the original Annuitant’s death. This is only available if you own a Non-Qualified Contract.

Contingent Deferred Sales Charge (CDSC): The deferred sales charge, if applicable, that may apply when you make a full or partial Surrender. The CDSC is also referred to as the "surrender charge" in this prospectus.

Contract: The individual Annuity Contract and any endorsements or riders. Group participants and some individuals may receive a certificate rather than a Contract.

Contract Anniversary: The anniversary of the date we issued your Contract. If the Contract Anniversary falls on a Non-Valuation Day, then the Contract Anniversary will be the next Valuation Day.

Contract Owner, Owner or you: The owner or holder of the Contract described in this prospectus including any joint Owner(s). We do not capitalize “you” in the prospectus.

Contract Value: The total value of the Accounts on any Valuation Day.

Contract Year: Any 12 month period between Contract Anniversaries, beginning with the date the Contract was issued.

Death Benefit: The amount payable if the Contract Owner, joint Contract Owner or the Annuitant dies before the Annuity Commencement Date.

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Dollar Cost Averaging: A program that allows you to systematically make transfers between Accounts available in your Contract.

Fund: A registered investment company or a series thereof in which assets of a Sub-Account may be invested.

General Account: This account holds our company assets and any assets not allocated to a Separate Account.

Joint Annuitant: The person on whose life Annuity Payouts are based if the Annuitant dies after Annuitization. You may name a Joint Annuitant only if your Annuity Payout Option provides for a survivor. The Joint Annuitant may not be changed.

Market Value Adjustment: An adjustment that either increases or decreases the amount we pay you under certain circumstances.

Net Investment Factor: This is used to measure the investment performance of a Sub-Account from one Valuation Day to the next, and is also used to calculate your Annuity Payout amount.

1934 Act: The Securities Exchange Act of 1934, as amended.

1940 Act: The Investment Company Act of 1940, as amended.

Non-Valuation Day: Any day the New York Stock Exchange is not open for trading.

Payee: The person or party you designate to receive Annuity Payouts.

Premium Payment: Money sent to us to be invested in your Contract.

Premium Tax: A tax charged by a state or municipality on Premium Payments.

Qualified Contract: A Contract that is defined as a tax-qualified retirement plan in the Code.

Required Minimum Distribution (RMD): A federal requirement that individuals of a specified age and older must take a distribution from their tax-qualified retirement account by December 31, each year. For employer sponsored qualified Contracts, the individual must begin taking distributions at the specified age or upon retirement, whichever comes later. The required beginning date is now based on “applicable age” as defined in the Code. If you attain age 72 after 2022 and age 72 before 2033, your applicable age is 73. If you attain age 74 after 2032, your applicable age is 75. If you were born in 1959, you should consult your tax advisor regarding your “applicable age” because it is unclear under SECURE 2.0, as enacted, whether your “applicable age” is age 73 or age 75.

Spouse: A person related to a Contract Owner by marriage pursuant to the Code.

Sub-Account Value: The value of each Sub-Account on or before the Annuity Calculation Date, which is determined on any day by multiplying the number of Accumulation Units by the Accumulation Unit Value for each Sub-Account.

Surrender: A complete or partial withdrawal from your Contract.

Surrender Value: The amount we pay you if you terminate your Contract before the Annuity Commencement Date. The Surrender Value is equal to the Contract Value minus any applicable charges (subject to rounding) and increased or decreased, as applicable, by any MVA.

Union Security: Union Security Insurance Company, the company that issued this Contract.

Valuation Day: Every day the New York Stock Exchange is open for trading. Values of the Separate Account are determined as of the close of the New York Stock Exchange. The Exchange generally closes at 4:00 p.m. Eastern Time but may close earlier on certain days and as conditions warrant.

Valuation Period: The time span between the close of trading at the New York Stock Exchange from one Valuation Day to the next.

We, us, our, the Company or Talcott Resolution: Talcott Resolution Life and Annuity Insurance Company.

2. Key Information Table

Important Information You Should Consider About the Contract

FEES AND EXPENSES

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Charges for Early Withdrawals

Your Contract may be subject to surrender charges. Surrender charges may apply to both partial and full Surrenders.

•If you withdraw money from your contract within 7 years following your last premium payment, you may be assessed a surrender charge of up to 7% (as a percentage of premium payments withdrawn), declining to 0% over that time period.

For example, if you were to withdraw $100,000 during a surrender charge period, you could be assessed a charge of up to $7,000 for your contract.

4. Fee Table

7. The Contract - c. Charges and Fees - Sales Charges

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Transaction Charges

Other than surrender charges (if any), there are no charges for other contract transactions (e.g., transferring money between investment options).

•Amounts in a multi-year Guarantee Period that are withdrawn, transferred, or annuitized more than 15 days before or after the end of the Guarantee Period may be subject to a negative or positive market value adjustment (MVA).

4. Fee Table

Ongoing Fees and Expenses (annual charges)

The table below describes the current fees and expenses of the contract that you may pay each year, depending on the options you choose. Please refer to your contract specifications page for information about the specific fees you will pay each year based on the options you have elected. Fees and expenses do not reflect any advisory fees paid to financial intermediaries from Contract Value or other assets of the Contract Owner, and that if such charges were reflected, the fees and expenses would be higher.

4. Fee Table

7. The Contract - c. Charges and Fees

Annual Fee

Minimum

Maximum

Base Contract
(varies by contract class)

1.36%¹

Investment Options
(fund fees and expenses)

0.13%²

0.90%²

1 As a percentage of average daily Sub-Account Values.

2 As a percentage of fund net assets.

Because your contract is customizable, the choices you make affect how much you will pay. To help you understand the cost of owning your contract, the following table shows the lowest and highest cost you could pay each year, based on current charges. This estimate assumes that you do not take withdrawals from the contract, which could add surrender charges that substantially increase costs.

Lowest Annual Cost: $1,780

Highest Annual Cost: $2,608

Assumes:

•Investment of $100,000

•5% annual appreciation

•Least expensive fund fees and expenses

•Most expensive fund fees and expenses

•No sales charges or advisory fees

•No additional premium payments, transfers or withdrawals

RISKS

Location in Prospectus

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Risk of Loss

You can lose money by investing in this contract, including loss of principal.

5. Principal Risks of Investing in the Contract

Not a Short-Term Investment

•This contract is not designed for short-term investing and is not appropriate for an investor who needs ready access to cash.

•Surrender charges may apply to withdrawals. If you take a withdrawal, a surrender charge may reduce the value of your contract or the amount of money that you actually receive.

•Withdrawals from a multi-year Guarantee Period more than 15 days before or after the end of the Guarantee Period may be subject to a negative or positive MVA.

•The benefits of tax deferral and long-term income are generally more beneficial to investors with a long-time horizon.

•A 10% penalty tax may be applied to withdrawals before age 59½.

Risks Associated with Investment Options

•An investment in this contract is subject to the risk of poor investment performance. Performance can vary depending on the performance of the investment options that you choose under the contract (e.g., Funds).

•Each investment option has its own unique risks.

•You should review the investment options before making an investment decision.

Insurance Company Risks

An investment in the contract is subject to the risks related to us. Any obligations (including under any Guarantee Period), guarantees or benefits of the contract are subject to our claims-paying ability. If we experience financial distress, we may not be able to meet our obligations to you. More information about Union Security, including our financial strength ratings, is available upon request by visiting www.trustage.com or by calling 1-800-356-2644.

RESTRICTIONS

Location in Prospectus

Investments

•Certain investment options may not be available under your contract.

•You are allowed to make 1 transfer between the fund options per day. You are allowed to make 20 transfers between the fund options per year before we require you to submit additional transfer requests by mail. Your transfer between the fund options are subject to policies designed to deter excessively frequent transfers and market timing. These transfer restrictions do not apply to transfers under the contract's automatic transfer programs.

•Amounts in a multi-year Guarantee Period that are transferred or annuitized more than 15 days before or after the end of the Guarantee Period may be subject to a negative or positive MVA.

•We reserve the right to remove or substitute funds as investment options.

6. General Information

7. The Contract - a. Purchases and Contract Value

Appendix A - Funds Available under the Contract

TAXES

Location in Prospectus

Tax Implications

•Consult with a tax professional to determine the tax implications of an investment in and payment received under the contract.

•If you purchased the contract through a tax-qualified plan or IRA, you do not get any additional tax deferral under the contract.

•Earnings on your contract are taxed at ordinary income rates when you withdraw them and you may have to pay a penalty if you take a withdrawal before age 59-1/2.

13. Federal Tax Considerations/Information Regarding Tax-Qualified Plans

CONFLICTS OF INTEREST

Location in Prospectus

Investment Professional Compensation

Your investment professional may receive compensation for selling this contract to you, in the form of commissions, additional payments, and non-cash compensation. We may share the revenue we earn on this contract with your investment professional's firm. This conflict of interest may influence your investment professional to recommend this contract over another investment for which the investment professional is not compensated or compensated less.

11. Miscellaneous - (c) How Contracts Were Sold

Exchanges

Some investment professionals may have a financial incentive to offer you a new contract in place of the one you already own. You should only exchange a contract you already own if you determine, after comparing the features, fees and risks of both contracts, that it is better for you to purchase the new contract rather than continue to own your existing contract.

7.a. Purchases and Contract Value - Replacement of Annuities

3. Overview of the Contract

Purpose of the Contract

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The Contract is designed for retirement planning purposes. You make investments in the Contract’s investment options during the accumulation phase. The value of your investments is used to set your benefits under the Contract. At the end of the accumulation phase, we use that accumulated value to set the payments that we make during the payout phase. The payout phase is often referred to as the annuity phase. Investing in the Contract's investment options involves risk and you can lose your money. On the other hand, investing in the Contract can provide you with the opportunity to grow your money through investing in the Contract's investment options during the accumulation phase. Generally speaking, the longer your accumulation phase, the greater your accumulated value will be for setting your benefits and annuity payouts. The Contract also includes a death benefit to help financially protect your Beneficiaries.

The variable annuity product described in this prospectus is no longer for sale. However, we continue to administer the in force annuity contracts.

This Contract may be appropriate for you if you have a long investment time horizon. It is not intended for people who may need to make early or frequent withdrawals or who intend to engage in frequent trading in the Funds that are available under the Contract.

Phases of the Contract

The contract has two phases: (1) an accumulation phase (for savings) and (2) a payout phase (for income).

Accumulation Period. To accumulate value during the Accumulation Period, you invest your Premium Payments and earnings in the investment options that are available under the Contract, which include:

•The Fund options (also referred to as Sub-Accounts), which have different underlying mutual funds with different investment objectives, strategies and risks. A list of the Funds under the Contract is provided in an appendix to this prospectus. See Appendix A - Funds Available Under the Contract.

•Guarantee Periods, which guarantee principal and credit a guaranteed interest rate for the number of years you select, up to a maximum of ten years. Withdrawing, transferring, or annuitizing amounts in a Guarantee Period more than 15 days before or after the end of the Guarantee Period may result in a MVA. An MVA may be positive or negative depending on market conditions and the length of time remaining in the Guarantee Period. Guarantee Periods are not available in Nevada or Pennsylvania.

Annuity Period. Your Contract enters the payout phase on the date the Annuitant reaches age 75 (or age 110 if you are eligible to defer the Annuity Commencement Date and properly elect it). When your Contract enters the payout phase, your accumulated value is converted into a stream of income payments from us (i.e., the Annuity Payout). There are a variety of Annuity Payout Options from which you may choose, including payments for life or for a guaranteed period of years. The payments may be fixed or variable or a combination of both. Variable payments will vary based on the performance of the investment options you select.

During the payout phase, you will no longer be able to take withdrawals from your Contract and no amounts will be payable upon death unless the Annuity Payout Option that you selected provides otherwise. Your living benefits generally terminate when you enter the payout phase.

Contract Features

Accessing Your Money. Before your Contract is annuitized, you can withdraw money from your Contract at any time. If you take a withdrawal, you may have to pay a surrender charge and/or income taxes, including a tax penalty if you are younger than age 59½.

Tax Treatment. You can transfer money between investment options without tax implications, and earnings (if any) on your investments are generally tax-deferred. You are taxed only upon: (1) making a withdrawal; (2) receiving a payment from us; or (3) payment of a death benefit.

Death Benefits. The Contract includes a standard death benefit that will pay the higher of Contract Value or total Premium Payments (adjusted for prior withdrawals) upon your or the Annuitant’s death.

Additional Features and Services. Certain additional features and services related to the Contract are summarized below. There are no additional charges associated with these features or services unless otherwise indicated. Not all features and services may be available under your Contract.

•InvestEase. Allows you to have money automatically transferred from your checking or savings account into your Contract on a monthly or quarterly basis.

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•Asset Rebalancing. Allows you to automatically rebalance Contract Value at a specified frequency to the asset allocation percentages that you previously selected.

•Dollar Cost Averaging. We offer two Dollar Cost Averaging programs:

◦Fixed Amount DCA. Allows you to regularly transfer a fixed amount from any Fund Option to another Fund option.

◦Earnings/Interest DCA. Allows you to regularly transfer earnings (or interest) from your investments in the Fund options to another Fund option.

Automatic Income Program. Allows you to make withdrawals of up to 10% of your total Premium Payments (or, if an optional withdrawal benefit has been elected, up to the allowable limit under the benefit) annually without any surrender charges that would otherwise apply.

4. Fee Tables

The following tables describe the fees and expenses that you will pay when buying, owning and surrendering or making withdrawals from the Contract. Please refer to your Contract specifications page for information about the specific fees you will pay each year.

The first table describes the fees and expenses that you will pay at the time that you buy, Surrender or make withdrawals from the Contract, or transfer Contract value between investment options. State premium taxes may also be deducted.

Fees and expenses do not reflect any advisory fees paid to financial intermediaries from Contract Value or other assets of the Contract Owner, and that if such charges were reflected, the fees and expenses would be higher.

Transaction Expenses


			During Accumulation Period
Deferred Sales Load (or Contingent Deferred Sales Charge or CDSC) (as a percentage of Premium Payments withdrawn) (1)			7%

(1) Each Premium Payment has its own CDSC schedule:


Number of years from Premium Payment			Contingent Deferred Sales Charge
1			7%
2			6%
3			5%
4			4%
5			3%
6			2%
7			1%
8 or more			0%

The CDSC is not assessed on partial Surrenders which do not exceed the AWA. See "The Contract - c. Charges and Fees - The Contingent Deferred Sales Charge (Surrender Charge).

The next table describes the fees and expenses that you will pay each year during the time that you own the Contract, not including annual Fund fees and expenses.

Annual Contract Expenses


Base Contract Charges (as a percentage of average daily Sub-Account Values)			1.35%

The following tables show the minimum and maximum total operating expenses charged by the Funds that you may pay periodically during the time that you own the Contract. See Appendix A for a complete list of Funds available under the Contract, including their annual expenses.


	Minimum	Maximum
Annual Fund Expenses
(expenses that are deducted from Fund assets, including management fees, distribution and/or service fees (12b-1) fees, and other expenses)	0.13%	0.90%

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EXAMPLE

This Example is intended to help you compare the cost of investing in this variable annuity with the cost of investing in other variable annuities. These costs include transaction expenses, annual Contract expenses, and annual Fund expenses.

The Example assumes that you invest $100,000 in a specific version and class of the Contract for the time periods indicated. The Example also assumes that your investment has a 5% return each year and assumes the most expensive combination of annual Fund expenses. The Example does not reflect any advisory fees paid to financial intermediaries from Contract Value or other assets of the Contract Owner, and that if such charges were reflected, costs would be higher. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:

(1)If you Surrender your Contract at the end of the applicable time period:


1 year	3 years	5 years	10 years
$8,795	$12,022	$15,169	$26,069

(2)If you annuitize at the end of the applicable time period or if you do not Surrender your Contract:


1 year	3 years	5 years	10 years
$2,306	$7,107	$12,169	$26,069

5. Principal Risks of Investing in the Contract

Risk of Loss. You can lose money by investing in this Contract, including loss of principal. The value of your Contract is not guaranteed by the U.S. government or any federal government agency, insured by the FDIC, or guaranteed by any bank.

Short-Term Investment Risk. This Contract is not designed for short-term investing and may not be appropriate for an investor who needs ready access to cash. The benefits of tax deferral, long-term income, and living benefit protections mean that this Contract is more beneficial to investors with a long-time horizon. A Surrender charge may apply to Surrenders exceeding the AWA.

Fund Options Risk. Amounts that you invest in the Sub-Accounts are subject to the risk of poor investment performance. You assume all of the investment risk. Generally, if the Sub-Accounts you select make money, your Contract Value goes up, and if they lose money, your Contract Value goes down. Each Sub-Account’s performance depends on the performance of its underlying Fund. Each Fund has its own investment risks, and you are exposed to a Fund’s investment risks when you invest in the corresponding Sub-Account.

Withdrawal Risk. You should carefully consider the risks associated with Surrenders under the Contract. If you make a Surrender prior to age 59½, there may be adverse tax consequences, including a 10% federal income tax penalty on the taxable portion of the Surrender. Surrenders before age 59½ may also affect the tax-qualified status of some Contracts. You should also consider the impact that a partial Surrender may have on the standard benefits under your Contract. Partial Surrenders will reduce the value of your Death Benefit. You cannot make withdrawals from the Contract after it is annuitized unless the Annuity Payout Option you selected provides otherwise.

Advisory Fee Withdrawal Risk. If you receive services for your Contract from a third-party financial intermediary who charges an advisory fee for their services, that fee is in addition to Contract fees and expenses. If you elect to pay the advisory fee by taking withdrawals from your Contract Value, the deduction for that fee is subject to surrender charges and will count toward your Annual Withdrawal Amount. Withdrawals to pay advisory fees will also reduce death benefits under the Contract and may be subject to federal and state income taxes and a 10% federal penalty tax.

Transfer Risk. You are allowed to make only one transfer between the Sub-Accounts per day, and you are allowed to only make 20 transfers between the Sub-Accounts per year before we require you to submit additional transfer requests by mail. Any transfer restrictions under the Contract that are applicable to you may limit your ability to readily change how your Contract Value is invested in response to changing market conditions or changes in your personal circumstances.

Guarantee Period Risk. A Guarantee Period may not be appropriate for you if you do not expect to remain invested in the Guarantee Period until its maturity, which could be several years. Withdrawing, transferring, or annuitizing amounts in a Guarantee Period more than 15 days before or after the end of the Guarantee Period may result in a negative MVA, depending on market conditions and the length of time remaining in the Guarantee Period. A negative MVA could significantly reduce the value of your investment. MVAs do not apply to one-year Guarantee Periods. However, if you transfer amounts out of a one-year Guarantee Period, you may not make a transfer into a one-year Guarantee Period for six months.

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Financial Strength and Claims-Paying Ability Risk. Union Security is the insurance company that issued your Contract. All guarantees under the Contract are subject to our financial strength and claims-paying capabilities. If we experience financial distress, we may not be able to meet our obligations to you. All guarantees and obligations under any Guarantee Period are subject to our financial strength and claims paying ability. See Section 13. Further Information About Union Security Insurance Company for financial information about Union Security Insurance Company.

Cybersecurity and Business Interruption Risk. Our business is highly dependent upon the effective operation of our computer systems and those of our business partners, so our business is vulnerable to systems failures and cyber-attacks. Systems failures and cyber-attacks may adversely affect us, your Contract and your Contract Value. In addition to cybersecurity risks, we are exposed to the risk that natural and man-made disasters and catastrophes may significantly disrupt our business operations and our ability to administer the Contract. There can be no assurance that we or our service providers will be able to successfully avoid negative impacts associated with systems failures, cyber-attacks, or natural and man-made disasters and catastrophes.

6. General Contract Information

a.Union Security Insurance Company

Union Security Insurance Company ("Union Security" or the "Company") is the issuer of the Contracts. Union Security is a Kansas corporation founded in 1910. It is qualified to sell life insurance and annuity contracts in the District of Columbia and in all states except New York. Union Security's offices are located at 440 Mount Rushmore Road, Rapid City, South Dakota 57701.

Union Security is a wholly-owned subsidiary of CMFG Life Insurance Company (“CMFG Life”), an Iowa life insurance company. CMFG Life’s ultimate parent is CUNA Mutual Holding Company (“CM Holding”), a mutual insurance holding company organized under the laws of Iowa. CM Holding is an insurance and financial services company that provides products and services to credit unions, credit union members, and individual consumers. All of the guarantees and commitments under the policies are general obligations of Union Security. None of Union Security’s affiliated companies has any legal obligation to back Union Security’s obligations under the policies.

All of the guarantees and commitments under the contracts including the Death Benefit and Annuity Payout, and the guarantees under the Fixed Accumulation Feature and any Guarantee Period are general obligations of Union Security, subject to Union Security's financial strength and claims-paying ability. None of Union Security's affiliated companies has any legal obligation to back Union Security's obligations under the contracts.

On April 1, 2001, Union Security entered into an agreement with Talcott Resolution Life and Annuity Insurance Company ("Talcott Resolution") to co-insure the obligations of Union Security under the variable annuity Contracts and to provide administration for the Contracts. Talcott Resolution was originally incorporated under the laws of Wisconsin on January 9, 1956, and subsequently redomiciled to Connecticut. Talcott Resolution's corporate offices are located at 1 American Row, Hartford, CT 06103. Talcott Resolution is ultimately controlled by A. Michael Muscolino and Alan Waxman.

b. The General Account

All of the guarantees and commitments under the Contracts including the Death Benefit and Annuity Payout, and the guarantees under any Guarantee Period are general obligations of Union Security, subject to Union Security's financial strength and claims-paying ability. None of Union Security's affiliated companies has any legal obligation to back Union Security's obligations under the Contracts. We invest the assets of the General Account according to the laws governing the investments of insurance company general accounts. The General Account is not a bank account and is not insured by the FDIC or any other government agency. We receive a benefit from all amounts held in our General Account. Amounts in our General Account are available to our general creditors. We issue other types of insurance policies and financial products and pay our obligations under these products from our assets in the General Account.

c. The Separate Account

The Sub-Accounts are part of Variable Account D of Union Security Insurance Company, a segregated asset account of Union Security Insurance Company. The Separate Account is registered as a unit investment trust under the 1940 Act and was established on October 14, 1987. The Separate Account meets the definition of “separate account” under federal securities laws. The Separate Account holds only assets for variable annuity contracts.

The Separate Account:

•is credited with income, gains and losses credited to, or charged against, the Separate Account that reflect the Separate Account's own investment experience and not the investment experience of our other assets, including our General Account or our other separate accounts; and

•may not be used to pay any of our liabilities other than those arising from the Contracts and other variable annuities supported by the Separate Account.

Union Security is obligated to pay all amounts guaranteed to investors under the Contract. We do not guarantee the investment results of the Separate Account.

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d. The Funds

The Sub-Accounts are subdivisions of our Separate Account, an account that keeps your Contract assets separate from our company assets. The Sub-Accounts then purchase shares of mutual funds set up exclusively for variable annuity or variable life insurance products. These are not the same mutual funds that you buy through your investment professional even though they may have similar investment strategies and the same portfolio managers. Each Fund has varying degrees of investment risk. Funds are also subject to separate fees and expenses such as management fees, distribution charges and operating expenses. We do not guarantee the investment results of any Fund. Certain Funds may not be available to you.

Information regarding each Fund, including (i) its name, (ii) its type, (iii) its investment adviser and any sub-investment adviser, (iv) current expenses, and (v) performance is available in an appendix to this prospectus. See Appendix A - Funds Available Under the Contract. Each Fund has issued a prospectus that contains more detailed information about the Fund. Read these prospectuses carefully before investment. Paper or electronic copies of the Fund prospectuses may be obtained by calling us at 1-800-862-6668, emailing us at asccontactus@talcottresolution.com or visiting: https://vpx.broadridge.com/GetContract1.asp?clientid=talcottvpx&fundid=34956F802.

The Funds may not be available in all states.

Voting Rights — We are the legal owners of all Fund shares held in the Separate Account and we have the right to vote at the Funds’ shareholder meetings. To the extent required by federal securities laws or regulations, we will:

•notify you of any Fund shareholders’ meeting if the shares held for your Contract may be voted;

•send proxy materials and a form of instructions that you can use to tell us how to vote the Fund shares held for your Contract;

•arrange for the handling and tallying of proxies received from Owners;

•vote all Fund shares attributable to your Contract according to timely instructions received from you, and

•vote all Fund shares for which no timely voting instructions are received in the same proportion as shares for which timely voting instructions have been received.

If any federal securities laws or regulations, or their present interpretation, change to permit us to vote Fund shares on our own, we may decide to do so. You may attend any shareholder meeting at which Fund shares held for your Contract may be voted. After we begin to make Annuity Payouts to you, the number of votes you have will decrease. There is no minimum number of shares for which we must receive timely voting instructions before we vote the shares. Therefore, as a result of proportional voting, the instruction of a small number of Owners could determine the outcome of matters subject to shareholder vote.

Substitutions, Additions, or Deletions of Funds — We reserve the right, subject to any applicable law, to make certain changes to the Funds offered under your Contract. We may, in our sole discretion, establish new Funds. New Funds will be made available to existing Contract Owners as we determine appropriate. We may also close one or more Funds to additional Premium Payments or transfers from existing Sub-Accounts. Unless otherwise directed, investment instructions will be automatically updated to reflect the Fund surviving after any merger, substitution or liquidation.

We may eliminate the shares of any of the Funds from the Contract for any reason and we may substitute shares of another registered investment company for the shares of any Fund already purchased or to be purchased in the future by the Separate Account. To the extent required by the Investment Company Act of 1940 (the "1940 Act"), substitutions of shares attributable to your interest in a Fund will not be made until we have satisfied applicable law and we have notified you of the change.

In the event of any substitution or change, we may, by appropriate endorsement, make any changes in the Contract necessary or appropriate to reflect the substitution or change. If we decide that it is in the best interest of Contract Owners, the Separate Account may be operated as a management company under the 1940 Act or any other form permitted by law, may be deregistered under the 1940 Act in the event such registration is no longer required, or may be combined with one or more other Separate Accounts.

Administrative and Distribution Services — Union Security has entered into agreements with the investment advisers or distributors of many of the Funds. Under the terms of these agreements, Union Security, or its agents, provide administrative and distribution related services and the Funds pay fees that are usually based on an annual percentage of the average daily net assets of the Funds. These agreements may be different for each Fund or each Fund family and may include fees under a distribution and/or servicing plan adopted by a Fund pursuant to Rule 12b-1 under the Investment Company Act of 1940.

Fees We Receive from Funds and related parties — Talcott Resolution receives substantial and varying administrative service payments and Rule 12b-1 fees from certain Funds or related parties. These types of payments and fees are sometimes referred to as "revenue sharing" payments. Talcott Resolution considers revenue sharing payments and fees among a number of factors when deciding to add or keep a fund on the menu of Funds that we offer through the Contract. Talcott Resolution collects these payments and fees under agreements with a Fund's principal underwriter, transfer agent, investment adviser and/or other entities related to the Fund. Talcott Resolution expects to make a profit on these fees.

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The availability of these types of arrangements creates an incentive for us to seek and offer Funds (and classes of shares of such Funds) that pay us revenue sharing. Other funds (or available classes of shares) may have lower fees and better overall investment performance.

As of December 31, 2023, we have entered into arrangements to receive administrative service payments and/or Rule 12b-1 fees from each of the following Fund complexes (or affiliated entities): AllianceBernstein Variable Products Series Funds & Alliance Bernstein Investments, American Century Investment Services, Inc, Federated Securities Corp, Hartford HLS Funds, Invesco Advisors Inc., MFS Fund Distributors, Inc. & Massachusetts Financial Services Company, Nationwide Fund Distributors LLC, Nationwide Fund Advisors, Neuberger Berman Management Inc, Pioneer Variable Contracts Trust & Pioneer Investment Management, Inc. & Pioneer Funds Distributor, Inc., Van Eck Securities Corp; Van Eck Fund, Inc; Van Eck World Wide Investment Trust Funds, LLC, Voya Investment Management, and Wells Fargo Variable Trust.

Not all Fund complexes pay the same amounts of revenue sharing payments and/or Rule 12b-1 fees. Therefore, the amount of fees we collect may be greater or smaller based on the Funds you select. Revenue sharing and Rule 12b-1 fees did not exceed 0.25% in 2023, of the annual percentage of the average daily net assets (for instance, assuming that you invested in a Fund that paid us the maximum fees and you maintained a hypothetical average balance of $10,000, we would collect $25 from that fund). We will endeavor to update this listing annually and interim arrangements may not be reflected. For the fiscal year ended December 31, 2023, revenue sharing and Rule 12b-1 fees did not exceed $1.2 million.

e. Guarantee Periods

Any amount you allocate to our General Account under this Contract earns a guaranteed interest rate beginning on the date you make the allocation. The guaranteed interest rate continues for the number of years you select, up to a maximum of ten years. We call this a Guarantee Period. At the end of your Guarantee Period, your Contract Value, including accrued interest, will be allocated to a new Guarantee Period that is the same length as your original Guarantee Period. However, you may reallocate your Contract Value to different then available Guarantee Periods or to the Sub-Accounts. If you decide to reallocate your Contract Value, you must do so by sending us a written request. We must receive your written request at least three business days before the end of your Guarantee Period. The first day of your new Guarantee Period or other reallocation will be the day after the end of your previous Guarantee Period. We will notify you at least 45 days and not more than 75 days before the end of your Guarantee Period.

Each Guarantee Period has its own guaranteed interest rate, which may differ from other Guarantee Periods. We will, at our discretion, change the guaranteed interest rate for future Guarantee Periods. These changes will not affect the guaranteed interest rates we are paying on current Guarantee Periods. The guaranteed interest rate will never be less than an effective annual rate of 4%. We cannot predict or assure the level of any future guaranteed interest rates in excess of an effective annual rate of 4%.

We declare the guaranteed interest rates from time to time as market conditions dictate. We advise you of the guaranteed interest rate for a Guarantee Period at the time we receive a Premium Payment from you, or at the time we execute a transfer you have requested, or at the time a Guarantee Period is renewed. You may obtain information concerning the guaranteed interest rates that apply to the various Guarantee Periods. You may obtain this information from our home office or from your sales representative at any time.

The maximum amount you can invest in a Guarantee Period is $500,000.

We do not have a specific formula for establishing the guaranteed interest rates for the Guarantee Periods. Guaranteed interest rates may be influenced by the available interest rates on the investments we acquire with the amounts you allocate for a particular Guarantee Period. Guaranteed interest rates do not necessarily correspond to the available interest rates on the investments we acquire with the amounts you allocate for a particular Guarantee Period. In addition, when we determine guaranteed interest rates, we may consider:

• the duration of a Guarantee Period,

• regulatory and tax requirements,

• sales and administrative expenses we bear,

• risks we assume,

• our profitability objectives, and

• general economic trends.

Asset Rebalancing is not available for the Guarantee Periods.

Please see section 11.a. "State Variations" for more information.

f. Market Value Adjustment for Guarantee Periods

Except as described below, we will apply an MVA to any general account value invested in a Guarantee Period that is surrendered, transferred, or otherwise paid out (annuitized) before the end of the Guarantee Period. For example, we will apply an MVA to the general account value that we pay as an amount applied to an Annuity Payout option, or as an amount paid as a single sum in lieu of an Annuity Payout.

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The purpose of the MVA is to generally transfer the risk to you of prematurely liquidating your investment. The MVA reflects both the amount of time left in your Guarantee period and the difference between the rate of interest credited to your current Guarantee period and the interest rate we are crediting to a new Guarantee Period with a duration equal to the amount of time left in your Guarantee Period. If your Guarantee Period's rate of interest is lower than the sum of the new Guarantee Period interest rate and the MVA factor, then the application of the MVA will reduce the amount you receive or transfer. Conversely, if your Guarantee Period's rate of interest is higher than the sum of the rate of interest we are crediting for the new Guarantee Period and the MVA factor, then the application of the MVA will increase the amount you receive or transfer. You will find a sample MVA calculation in Appendix B.

We do not apply a MVA to withdrawals and transfers of the general account value in the following circumstances:

1.Death benefits paid pursuant to a Contract;

2.Surrenders or transfers from the one-year Guarantee Period;

3.Surrenders, transfers and annuitization during a 30 day period that begins 15 days before the end of the Guarantee Period in which the general account value was being held, and that ends 15 days after the end of the Guarantee Period in which the general account value was being held; and

4.Surrenders or transfers from a Guarantee Period on a periodic, automatic basis. This exception only applies to such withdrawals or transfers under a formal company program. We may impose conditions and limitations on any formal company program for the withdrawal or transfer of general account values. Ask your representative about the availability of such a program in your state and applicable conditions and limitations.

7. The Contract

a.Purchases and Contract Value

What types of Contracts are available?

The Contract is an individual or group tax-deferred variable annuity contract. It is designed for retirement planning purposes and may be purchased by any individual, group or trust, including:

• Any trustee or custodian for a retirement plan qualified under Sections 401(a) or 403(a) of the Code;

• Individual Retirement Annuities adopted according to Section 408 of the Code;

• Employee pension plans established for employees by a state, a political subdivision of a state, or an agency of either a state or a political subdivision of a state; and

• Certain eligible deferred compensation plans as defined in Section 457 of the Code.

We will no longer accept additional Premium Payments into any individual annuity contract funded through a 403(b) plan.

The examples above represent Qualified Contracts, as defined by the Code. In addition, individuals and trusts can also purchase Contracts that are not part of a tax qualified retirement plan. These are known as Non-Qualified Contracts.

If you are purchasing the Contract for use in an IRA or other qualified retirement plan, you should consider other features of the Contract besides tax deferral, since any investment vehicle used within an IRA or other qualified plan receives tax-deferred treatment under the Code.

How do I purchase a Contract?

This Contract is no longer available for new sales.

Premium Payments sent to us must be made in U.S. dollars and checks must be drawn on U.S. banks. We do not accept cash, third party checks or double endorsed checks. We reserve the right to limit the number of checks processed at one time. If your check does not clear, your purchase will be cancelled and you could be liable for any losses or fees incurred. A check must clear our account through our Administrative Office to be considered to be in good order.

Premium Payments may not exceed $1 million without our prior approval. We reserve the right to impose special conditions on anyone who seeks our approval to exceed this limit.

You and your Annuitant must not be older than age 85 on the date that your Contract is issued. You must be of minimum legal age in the state where the Contract is being purchased or a guardian must act on your behalf.

It is important that you notify us if you change your address. If your mail is returned to us, we are likely to suspend future mailings until an updated address is obtained. In addition, we may rely on a third party, including the US Postal Service, to update your current address. Failure to give us a current address may result in payments due and payable on your annuity contract being considered abandoned property under state law, and remitted to the applicable state.

Replacement of Annuities

A "replacement" occurs when a new contract is purchased and, in connection with the sale, an existing contract is surrendered, lapsed, forfeited, assigned to the replacing insurer, otherwise terminated, or used in a financed purchase. A "financed purchase" occurs when the purchase of a new annuity contract involves the use of the funds obtained from the values of an existing annuity contract through Withdrawal, Surrender or loan.

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There are circumstances in which replacing your existing annuity contract can benefit you. However, a replacement may not be in your best interest. Accordingly, you should make a careful comparison of the cost and benefits of your existing contract and the proposed contract with the assistance of your financial and tax advisers to determine whether replacement is in your best interest. You should be aware that the person selling you the new contract will generally earn a commission if you buy the new contract through a replacement. Remember that if you replace a contract with another contract, you might have to pay a surrender charge on the replaced contract, and there may be a new surrender charge period for the new contract. In addition, other charges may be higher (or lower) and the benefits may be different.

You should also note that once you have replaced your variable annuity contract, you generally cannot reinstate it even if you choose not to accept your new variable annuity contract during your "free look" period. The only exception to this rule would be if your previously issued contract was issued in a state that requires the insurer to reinstate the previously surrendered contract if the owner chooses to reject their new variable annuity contract during their "free look" period.

How are Premium Payments applied to my Contract?

Your initial Premium Payment will be invested within two Valuation Days of our receipt of both a properly completed application order request and the Premium Payment. If we receive your subsequent Premium Payment before the close of the New York Stock Exchange, it will be priced on the same Valuation Day. If we receive your Premium Payment after the close of the New York Stock Exchange, it will be invested on the next Valuation Day. If we receive your subsequent Premium Payment on a Non-Valuation Day, the amount will be invested on the next Valuation Day. Unless we receive new instructions, we will invest the Premium Payment based on your last allocation instructions on record. We will send you a confirmation when we invest your Premium Payment.

If the request or other information accompanying the initial Premium Payment is incomplete when received, we will hold the money in a non-interest bearing account for up to five Valuation Days (from the Valuation Day that we actually receive your initial Premium Payment at our Administrative Office together with the Premium Payment) while we try to obtain complete information. If we cannot obtain the information within five Valuation Days, we will either return the Premium Payment and explain why the Premium Payment could not be processed or keep the Premium Payment if you authorize us to keep it until you provide the necessary information.

Contract Owners should discuss the impact of deducting advisory fees from Contract Value with their financial intermediaries prior to making any election.

How is the value of my Contract calculated before the Annuity Commencement Date?

The Contract Value is the sum of all Accounts. There are two things that affect your Sub-Account value: (1) the number of Accumulation Units and (2) the Accumulation Unit Value. The Sub-Account value is determined by multiplying the number of Accumulation Units by the Accumulation Unit Value. On any Valuation Day, your Contract Value will fluctuate because Accumulation Unit Values are affected by the performance of the underlying Funds and the deduction of expenses and certain charges in the Sub-Account.

When Premium Payments are credited to your Sub-Accounts, they are converted into Accumulation Units by dividing the amount of your Premium Payments, minus any Premium Taxes, by the Accumulation Unit Value for that day. The more Premium Payments you make to your Contract, the more Accumulation Units you will own. You decrease the number of Accumulation Units you have by requesting Surrenders, transferring money out of an Account, settling a Death Benefit claim or by annuitizing your Contract.

To determine the current Accumulation Unit Value, we take the prior Valuation Day's Accumulation Unit Value and multiply it by the Net Investment Factor for the current Valuation Day.

The Net Investment Factor is used to measure the investment performance of a Sub-Account from one Valuation Day to the next. The Net Investment Factor for each Sub-Account equals:

• The net asset value per share plus applicable distributions per share of each Fund at the end of the current Valuation Day divided by

• The net asset value per share of each Fund at the end of the prior Valuation Day; multiplied by

• The daily expense factor for the mortality and expense risk charge adjusted for the number of days in the period, and any other applicable charges.

If you elect to pay an advisory fee to a third-party financial intermediary for advisory services by taking withdrawals from your Contract Value, the deduction for that fee will result in the cancellation of accumulation units.

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We will send you a statement at least annually, which tells you how many Accumulation Units you have, their value and your total Contract Value.

A Contract's Guarantee Period value is guaranteed by Union Security. We bear the investment risk with respect to amounts allocated to a Guarantee Period, except to the extent that (1) we may vary the guaranteed interest rate for future Guarantee Periods (subject to the 4% effective annual minimum) and (2) the MVA imposes investment risks on you. The Contract's Guarantee Period value on any Valuation Date is the sum of its general account values in each Guarantee Period on that date. The general account value in a Guarantee Period is equal to the following amounts, in each case increased by accrued interest at the applicable guaranteed interest rate:

• The amount of Premium Payments or transferred amounts allocated to the Guarantee Period; less

• The amount of any transfers or Surrenders out of the Guarantee Period.

Can I transfer from one investment choice to another?

Subject to the restrictions below, you may transfer Contract Value:

• From a Sub-Account to another Sub-Account;

• From a Sub-Account to a Guarantee Period;

• From a Guarantee Period to a Sub-Account;

• From a Guarantee Period to another Guarantee Period.

Transfers from a Guarantee Period may be subject to an MVA.

Can I transfer from one Sub-Account to another?

You may make transfers between the Sub-Accounts offered in this Contract according to our policies and procedures as amended from time to time.

What is a Sub-Account Transfer?

A Sub-Account transfer is a transaction requested by you that involves reallocating part or all of your Contract Value among the Funds available in your Contract. Your transfer request will be processed as of the end of the Valuation Day that it received is in good order. Otherwise, your request will be processed on the following Valuation Day. We will send you a confirmation when we process your transfer. You are responsible for verifying transfer confirmations and promptly advising us of any errors within 30 days of receiving the confirmation.

What Happens When I Request a Sub-Account Transfer?

Many Contract Owners request Sub-Account transfers. Some request transfers into (purchases) a particular Sub-Account, and others request transfers out of (redemptions) a particular Sub-Account. In addition, some Contract Owners allocate new Premium Payments to Sub-Accounts, and others request Surrenders. We combine all the daily requests to transfer out of a Sub-Account along with all Surrenders from that Sub-Account and determine how many shares of that Fund we would need to sell to satisfy all Contract Owners' "transfer-out" requests. At the same time, we also combine all the daily requests to transfer into a particular Sub-Account or new Premium Payments allocated to that Sub-Account and determine how many shares of that Fund we would need to buy to satisfy all Contract Owners' "transfer-in" requests.

Many of the Funds that are available as investment options in our variable annuity products are also available as investment options in variable life insurance policies, retirement plans, funding agreements and other products offered by us or our affiliates. Each day, investors and participants in these other products engage in similar transfer transactions.

We take advantage of our size and available technology to combine sales of a particular Fund for many of the variable annuities, variable life insurance policies, retirement plans, funding agreements or other products offered by us or our affiliates. We also combine many of the purchases of that particular Fund for many of the products we offer. We then "net" these trades by offsetting purchases against redemptions. Netting trades has no impact on the net asset value of the Fund shares that you purchase or sell. This means that we sometimes reallocate shares of a Fund rather than buy new shares or sell shares of the Fund.

If we combine all transfer-out (redemption) requests and Surrenders of a stock Fund Sub-Account with all other sales of that Fund from all our other products, we may have to sell $1 million dollars of that Fund on any particular day. However, if other Contract Owners and the owners of other products offered by us, want to transfer-in (purchase) an amount equal to $300,000 of that same Fund, then we would send a sell order to the Fund for $700,000 (a $1 million sell order minus the purchase order of $300,000) rather than making two or more transactions.

What Restrictions Are There on My Ability to Make a Sub-Account Transfer?

First, you may make only one Sub-Account transfer request each day. We limit each Contract Owner to one Sub-Account transfer request each Valuation Day. We count all Sub-Account transfer activity that occurs on any one Valuation Day as one "Sub-Account transfer;" however, you cannot transfer the same Contract Value more than once a Valuation Day.

Examples


Transfer Request Per Valuation Day			Permissible?

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Transfer $10,000 from a money market Sub-Account to a growth Sub-Account			Yes
Transfer $10,000 from a money market Sub-Account to any number of other Sub-Accounts (dividing the $10,000 among the other Sub-Accounts however you chose)			Yes
Transfer $10,000 from any number of different Sub-Accounts to any number of other Sub-Accounts			Yes
Transfer $10,000 from a money market Sub-Account to a growth Sub-Account and then, before the end of that same Valuation Day, transfer the same $10,000 from the growth Sub-Account to an international Sub-Account			No

Second, you are allowed to submit a total of 20 Sub-Account transfers each Contract Year (the "Transfer Rule") by U.S. Mail, Voice Response Unit, Internet or telephone. Once you have reached the maximum number of Sub-Account transfers, you may only submit any additional Sub-Account transfer requests and any trade cancellation requests in writing through U.S. Mail or overnight delivery service. In other words, Voice Response Unit, Internet or telephone transfer requests will not be honored. We may, but are not obligated to, notify you when you are in jeopardy of approaching these limits. For example, we will send you a letter after your 10th Sub-Account transfer to remind you about the Transfer Rule. After your 20th transfer request, our computer system will not allow you to do another Sub-Account transfer by telephone, Voice Response Unit or via the Internet. You will then be instructed to send your Sub-Account transfer request by U.S. Mail or overnight delivery service.

We reserve the right to aggregate your Contracts (whether currently existing or those recently surrendered) for the purposes of enforcing these restrictions.

The Transfer Rule does not apply to Sub-Account transfers that occur automatically as part of a Company-sponsored Dollar Cost Averaging program. Reallocations made based on a Fund merger, substitution or liquidation also do not count toward this transfer limit. Restrictions may vary based on state law.

We make no assurances that the Transfer Rule is or will be effective in detecting or preventing market timing.

Third, policies have been designed to restrict excessive Sub-Account transfers. You should not purchase this Contract if you want to make frequent Sub-Account transfers for any reason. In particular, don't purchase this Contract if you plan to engage in "market timing," which includes frequent transfer activity into and out of the same Fund, or frequent Sub-Account transfers in order to exploit any inefficiencies in the pricing of a Fund. Even if you do not engage in market timing, certain restrictions may be imposed on you.

Generally, you are subject to Fund trading policies, if any. We are obligated to provide, at the Fund's request, tax identification numbers and other shareholder identifying information contained in our records to assist Funds in identifying any pattern or frequency of Sub-Account transfers that may violate their trading policy. In certain instances, we have agreed to serve as a Fund's agent to help monitor compliance with that Fund's trading policy.

We are obligated to follow each Fund's instructions regarding enforcement of their trading policy. Penalties for violating these policies may include, among other things, temporarily or permanently limiting or banning you from making Sub-Account transfers into a Fund or other funds within that fund complex. We are not authorized to grant exceptions to a Fund's trading policy. Please refer to each Fund's prospectus for more information. Transactions that cannot be processed because of Fund trading policies will be considered not in good order.

In certain circumstances, fund trading policies do not apply or may be limited. For instance:


•			Certain types of financial intermediaries may not be required to provide us with shareholder information.
•			"Excepted funds" such as money market funds and any Fund that affirmatively permits short-term trading of its securities may opt not to adopt this type of policy. This type of policy may not apply to any financial intermediary that a Fund treats as a single investor.
•			A Fund can decide to exempt categories of contract holders whose contracts are subject to inconsistent trading restrictions or none at all.
•			Non-shareholder initiated purchases or redemptions may not always be monitored. These include Sub-Account transfers that are executed: (i) automatically pursuant to a company-sponsored contractual or systematic program such as transfers of assets as a result of "dollar cost averaging" programs, asset allocation programs, automatic rebalancing programs, annuity payouts, loans, or systematic withdrawal programs; (ii) as a result of the payment of a Death Benefit; (iii) as a step-up in Contract Value pursuant to a Contract Death Benefit or guaranteed minimum withdrawal benefit; (iv) as a result of any deduction of charges or fees under a Contract; or (v) as a result of payments such as loan repayments, scheduled contributions, scheduled withdrawals or surrenders, retirement plan salary reduction contributions, or planned premium payments.

Possibility of undetected abusive trading or market timing. We may not be able to detect or prevent all abusive trading or market timing activities. For instance:

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•			Since we net all the purchases and redemptions for a particular Fund for this and many of our other products, transfers by any specific market timer could be inadvertently overlooked.
•			Certain forms of variable annuities and types of Funds may be attractive to market timers. We cannot provide assurances that we will be capable of addressing possible abuses in a timely manner.
•			These policies apply only to individuals and entities that own this Contract or have the right to make transfers (regardless of whether requests are made by you or anyone else acting on your behalf). However, the Funds that make up the Sub-Accounts of this Contract are also available for use with many different variable life insurance policies, variable annuity products and funding agreements, and are offered directly to certain qualified retirement plans. Some of these products and plans may have less restrictive transfer rules or no transfer restrictions at all.
•			In some cases, we are unable to count the number of Sub-Account transfers requested by group annuity participants co-investing in the same Funds ("Participants") or enforce the Transfer Rule because we do not keep Participants' account records for a Contract. In those cases, the Participant account records and Participant Sub-Account transfer information are kept by such owners or its third party service provider. These owners and third party service providers may provide us with limited information or no information at all regarding Participant Sub-Account transfers.

How am I affected by frequent Sub-Account Transfers?

We are not responsible for losses or lost investment opportunities associated with the effectuation of these policies. Frequent Sub-Account transfers may result in the dilution of the value of the outstanding securities issued by a Fund as a result of increased transaction costs and lost investment opportunities typically associated with maintaining greater cash positions. This can adversely impact Fund performance and, as a result, the performance of your Contract. This may also lower the Death Benefit paid to your Beneficiary or lower Annuity Payouts for your Payee as well as reduce value of other optional benefits available under your Contract.

Separate Account investors could be prevented from purchasing Fund shares if we reach an impasse on the execution of a Fund's trading instructions. In other words, a Fund complex could refuse to allow new purchases of shares by all our variable product investors if the Fund and we cannot reach a mutually acceptable agreement on how to treat an investor who, in a Fund's opinion, has violated the Fund's trading policy.

In some cases, we do not have the tax identification number or other identifying information requested by a Fund in our records. In those cases, we rely on the Contract Owner to provide the information. If the Contract Owner does not provide the information, we may be directed by the Fund to restrict the Contract Owner from further purchases of Fund shares. In those cases, all participants under a plan funded by the Contract will also be precluded from further purchases of Fund shares.

Power of Attorney — You may authorize another person to make transfers on your behalf by submitting a completed power of attorney form. Once we have the completed form on file, we will accept transfer instructions from your designated third party, subject to any transfer restrictions in place, until we receive new instructions in writing from you. You will not be able to make transfers or other changes to your Contract if you have authorized someone else to act under a power of attorney.

Transfers between the Sub-Accounts and Guarantee Periods — You may transfer from the Sub-Accounts to a Guarantee Period or from one Guarantee Period to another Guarantee Period. Transfers from a Guarantee Period are subject to an MVA if the transfer is:

• more than 15 days before or 15 days after the expiration of the existing Guarantee Period, or

• are not part of a formal Union Security program for the transfer of general account value.

The amount of any positive or negative MVA will be added or deducted from the transferred amount.

General Account Transfer Restrictions — We reserve the right to defer transfers from the general account for up to 6 months from the date of your request (a "transfer moratorium"). After any transfer, you must wait six months before moving Sub-Account Values back to a Guarantee Period in the general account. After the Annuity Commencement Date, you may not make transfers from the general account.

We generally intend to enforce these restrictions during periods of extreme volatility within the U.S. stock markets or when we have significant concerns about disintermediation. If we enforce this restriction:

• The last then effective Guarantee Period and guaranteed interest rate will remain in effect until the end of the transfer moratorium;

• The MVA will take into consideration the amount of time consumed by the transfer moratorium only with regard to the Guaranteed Period during which the transfer moratorium was declared; and

• Rates of interest that we will credit for the new Guaranteed Period will be automatically reset to the rate of interest we declare as of the conclusion of the transfer moratorium.

b. Contract Rights

You, as Contract Owner, may exercise all the rights under the Contract. The prospectus discusses these rights, including your right, during the Accumulation Period, to make Premium Payments and provide instructions to us to allocate your Contract Value among the Sub-Accounts and a Guarantee Period. You, as Contract Owner, may also request a full or partial

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Surrender from the Contract, designate an Annuitant and elect to receive Annuity Payouts. This prospectus also discusses the Death Benefit payable under the Contract and the rights of any Beneficiary.

c. Charges and Fees

The following charges and fees are associated with the Contract:

The Contingent Deferred Sales Charge (Surrender Charge)

The CDSC covers some of the expenses relating to the sale and distribution of the Contract, including commissions paid to investment professionals and the cost of preparing sales literature and other promotional activities.

We assess a CDSC when you request a full or partial Surrender. The percentage of the CDSC is based on how long your Premium Payments have been in the Contract. The CDSC will not exceed the total amount of the Premium Payments made. Each Premium Payment has its own CDSC schedule. Premium Payments are Surrendered in the order in which they were received. The longer you leave your Premium Payments in the Contract, the lower the CDSC will be when you Surrender.

The CDSC is a percentage of the amount Surrendered and is equal to:


Number of years from Premium Payment			Contingent Deferred Sales Charge
1			7%
2			6%
3			5%
4			4%
5			3%
6			2%
7			1%
8 or more			0%

When you request a withdrawal under the Contract, you may choose to have the withdrawal processed as either a gross withdrawal or net withdrawal. Your choice may impact the amount of withdrawal proceeds that you receive, as follows:

(a) Gross Withdrawal – We will withdraw only the amount requested from your Contract. If your withdrawal is subject to CDSCs, other charges, or tax withholdings, you will receive the amount requested minus the applicable CDSCs, other charges, and tax withholdings. As such, you may not receive the full amount requested.

(b) Net Withdrawal – To the extent necessary, we will increase the withdrawal amount so that, after the deduction of any applicable CDSCs, other charges, and/or tax withholdings, you will receive the full amount requested. Please note that CDSCs will be based on the total amount withdrawn, not the amount requested, so a net withdrawal may result in more CDSCs than a gross withdrawal.

In the absence of instructions, we will process a withdrawal request as a net withdrawal.

The following hypothetical examples help illustrate the difference between a gross withdrawal (Example 1) and a net withdrawal (Example 2).


Example 1 Gross Withdrawal		Example 2 Net Withdrawal
Assume the following: You made an initial Premium Payment of $10,000 five years ago and no additional Premium Payments thereafter. You request a partial withdrawal of $5,000, and you have not taken any portion of your AWA for the year. The only charges applicable to the withdrawal are CDSCs. You instruct us to process your request as a gross withdrawal. We will deduct a CDSC as follows:		Assume the following: You made an initial Premium Payment of $10,000 five years ago and no additional Premium Payments thereafter. You request a partial withdrawal of $5,000, and you have not taken any portion of your AWA for the year. The only charges applicable to the withdrawal are CDSCs. You instruct us to process your request as a net withdrawal, or you do not provide instructions. We will deduct a CDSC as follows:
	First, the portion of the withdrawal that is not in excess of the AWA, which is equal to 10% of total Premium Payments (i.e., $1,000), with be withdrawn without a CDSC.		First, the portion of the withdrawal that is not in excess of the AWA, which is equal to 10% of total Premium Payments (i.e., $1,000), with be withdrawn without a CDSC.
	We will then withdraw the remaining $4,000. A CDSC of 3%, or $120, is assessed on the withdrawal.		We will then increase the remaining amount to be withdrawn from $4,000 to $4,124. A CDSC of 4%, or $124, is assessed on the withdrawal.
	The total amount withdrawn is $5,000 and your Contract Value is reduced by $5,000. The CDSC is $120. You will receive $4,880 in withdrawal proceeds.		The total amount withdrawn is $5,124 and your Contract Value is reduced by $5,124. The CDSC is $124. You will receive $5,000 in withdrawal proceeds.

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All withdrawals may be subject to federal and state income taxes, including a 10% federal penalty tax if taken before age 59½. If you have any questions about net and gross withdrawals, please contact us or your Investment Professional.

The following Surrenders are NOT subject to a CDSC:

• AWA — During the first seven years from each Premium Payment, you may, each Contract Year, take partial Surrenders up to 10% of the total Premium Payments. If you do not take 10% one year, you may not take more than 10% the next year. These amounts are different for group unallocated Contracts and Contracts issued to a Charitable Remainder Trust.

• Surrenders made from Premium Payments invested for more than seven years — After the seventh Contract Year, you may take the total of: (a) all Premium Payments held in your Contract for more than seven years, and (b) 10% of Premium Payments made during the last seven years and (c) all of your earnings.

Under the following situations, the CDSC is WAIVED:

• Upon eligible confinement as described in the Waiver of Sales Charge Rider. We will waive any CDSC applicable to a partial or full Surrender if you, the joint owner or the Annuitant, is confined for at least 60 calendar days to a: (a) facility recognized as a general hospital by the proper authority of the state in which it is located; or (b) facility recognized as a general hospital by the Joint Commission on the Accreditation of Hospitals; or (c) facility certified as a hospital or long-term care facility; or (d) nursing home licensed by the state in which it is located and offers the services of a registered nurse 24 hours a day. If you, the joint owner or the Annuitant is confined when you purchase the Contract, this waiver is not available. For it to apply, you must: (a) have owned the Contract continuously since it was issued, (b) provide written proof of confinement satisfactory to us, and (c) request the Surrender within 60 calendar days of the last day of confinement. This waiver may not be available in all states. This waiver is also not available for confinements due to substance abuse or mental disorders without a demonstrable organic disease. Please contact your investment professional or us to determine if it is available for you.

• For RMDs. This allows Annuitants who are subject to RMDs, with a Contract held under an Individual Retirement Account or 403(b) plan, to Surrender an amount equal to the RMD for the Contract without a CDSC. All requests for RMDs must be in writing.

• On or after the Annuitant's 110th birthday.

The following situations are NOT subject to a CDSC:

• Upon death of the Annuitant or Contract Owner. No CDSC will be deducted if the Annuitant or Contract Owner dies.

• Upon Annuitization. The CDSC is not deducted when you annuitize the Contract. We will charge a CDSC if the Contract is fully Surrendered during the CDSC period under an Annuity Payout Option which allows Surrenders.

• For substantially equal periodic payments. We will waive the CDSC if you take part in a program for partial Surrenders where you receive a scheduled series of substantially equal periodic payments. Payments under this program must be made at least annually for your life (or your life expectancy) or the joint lives (or joint life expectancies) of you and your designated Beneficiary.

Mortality and Expense Risk Charge (Base Contract Charge)

For assuming mortality and expense risks under the Contract, we deduct a daily charge at an maximum annual rate of 1.25% of Sub-Account Value. The mortality and expense risk charge is broken into charges for mortality risks and an expense risk:

• Mortality Risk — There are two types of mortality risks that we assume, those made while your Premium Payments are accumulating and those made once Annuity Payouts have begun.

During the period your Premium Payments are accumulating, we are required to cover any difference between the Death Benefit paid and the Surrender Value. These differences may occur during periods of declining value or in periods where the CDSCs would have been applicable. The risk that we bear during this period is that actual mortality rates, in aggregate, may exceed expected mortality rates.

Once Annuity Payouts have begun, we may be required to make Annuity Payouts as long as the Annuitant is living, regardless of how long the Annuitant lives. The risk that we bear during this period is that actual mortality rates, in aggregate, may be lower than expected mortality rates.

• Expense Risk — We also bear an expense risk that the CDSCs collected before the Annuity Commencement Date may not be enough to cover the actual cost of selling, distributing and administering the Contract.

Although variable Annuity Payouts will fluctuate with the performance of the underlying Fund selected, your Annuity Payouts will not be affected by (a) the actual mortality experience of our Annuitants, or (b) our actual expenses if they are greater than the deductions stated in the Contract. Because we cannot be certain how long our Annuitants will live, we charge this percentage fee based on the mortality tables currently in use. The mortality and expense risk charge enables us to keep our commitments and to pay you as planned.

Administrative Charge (Base Contract Charge)

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This is a charge for the costs incurred in connection with the administration of the Contract. This is an administrative fee equal to an annual charge of 0.10% of the Contract Values held in the Separate Account.

Premium Taxes

We deduct Premium Taxes, imposed on us, by a state or other government agency. Some states collect the taxes when Premium Payments are made; others collect at Annuitization. Since we pay Premium Taxes when they are required by applicable law, we may deduct them from your Contract when we pay the taxes, upon Surrender, or on the Annuity Commencement Date. The Premium Tax rate varies by state or municipality and currently ranges from 0% – 3.5%.

Charges Against the Funds

The Separate Account purchases shares of the Funds at net asset value. The net asset value of the Fund shares reflects investment advisory fees and administrative expenses already deducted from the assets of the Funds. These charges are described in the Fund prospectuses.

Deduction of Advisory Fee

If you receive services for your Contract from a third-party financial intermediary who charges an advisory fee for their services, that fee is in addition to Contract fees and expenses. If you elect to pay the advisory fee by taking withdrawals from your Contract Value, both you and your financial intermediary must sign an enrollment form authorizing the withdrawals and submit a fee payment request form for the specific dollar amount of the fee payment you want withdrawn from your Contract and sent to your financial intermediary. We will deduct your requested fee payment amount on a pro-rata basis from the Sub-Account Values and Fixed Accumulation Feature (if available). Guarantee Periods, if available under the Contract, are excluded. Your financial intermediary must submit a new fee payment request form to us for each payment. Payments will generally be processed on the same day the request is received in good order. You may revoke your authorization at any time by giving notice to us. If you elect to pay your advisory fee by taking withdrawals from your Contract Value, the deduction for that fee is subject to surrender charges and will count toward your Annual Withdrawal Amount. Withdrawals to pay advisory fees will also reduce death benefits and other guaranteed benefits under the Contract and may be subject to federal and state income taxes and a 10% federal penalty tax. Contract Owners should discuss the impact of deducting advisory fees from Contract Value with their financial intermediaries prior to making any election.

d. Surrenders

What kinds of Surrenders are available?

Full Surrenders before the Annuity Commencement Date — When you Surrender your Contract before the Annuity Commencement Date and while the Annuitant is living, the Surrender Value of the Contract will be made in a lump sum payment. The Surrender Value is the Contract Value minus any applicable CDSC and Premium Taxes and adjusted for any positive or negative MVA. The Surrender Value may be more or less than the amount of the Premium Payments made to a Contract.

Partial Surrenders before the Annuity Commencement Date — You may request a partial Surrender of Contract Value at any time before the Annuity Commencement Date and while the Annuitant is living. There are two restrictions:

• The partial Surrender amount must be at least equal to $1,000, our current minimum for partial Surrenders, and

• The Contract must have a minimum Contract Value of $1,000 after the Surrender. We reserve the right to close your Contract and pay the full Surrender Value if the Contract Value is under the minimum after the Surrender. See section 11.a "State Variations" for more information.

How do I request a Surrender?

Requests for full Surrenders must be in writing. Requests for partial Surrenders can be made in writing or by telephone. We will send your money within seven days of receiving complete instructions. However, we may postpone payment of Surrenders whenever: (a) the New York Stock Exchange is closed, (b) trading on the New York Stock Exchange is restricted by the SEC, (c) the SEC permits and orders postponement, or (d) the SEC determines that an emergency exists to restrict valuation.

Written Requests — To request a full or partial Surrender, complete a Surrender Form or send us a letter, signed by you, stating:

• the dollar amount that you want to receive, either before or after we withhold taxes and deduct for any applicable charges,

• your tax withholding amount or percentage, if any, and

• your mailing address.

You may submit this form via mail or fax.

If there are joint Contract Owners, both must authorize all Surrenders. For a partial Surrender, specify the Accounts that you want your Surrender to come from, otherwise, the Surrender will be taken in proportion to the value in each Account.

Telephone Requests — To request a partial Surrender by telephone, we must have received your completed Telephone Redemption Program Enrollment Form. If there are joint Contract Owners, both must sign this form. By signing the form, you authorize us to accept telephone instructions for partial Surrenders from either Contract Owner. Telephone authorization will remain in effect until we receive a written cancellation notice from you or your joint Contract Owner, we discontinue the

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program; or you are no longer the owner of the Contract. There are some restrictions on telephone surrenders, please call us with any questions.

We may record telephone calls and use other procedures to verify information and confirm that instructions are genuine. We will not be liable for losses or expenses arising from telephone instructions reasonably believed to be genuine. We may modify the requirements for telephone redemptions at any time.

Telephone Surrender instructions received before the close of the New York Stock Exchange will be processed on that Valuation Day. Otherwise, your request will be processed on the next Valuation Day.

Completing a Power of Attorney form for another person to act on your behalf may prevent you from making Surrenders via telephone.

What should be considered about taxes?

There are certain tax consequences associated with Surrenders:

Prior to age 591/2 — If you make a Surrender prior to age 591/2, there may be adverse tax consequences including a 10% federal income tax penalty on the taxable portion of the Surrender payment. Surrendering before age 591/2 may also affect the continuing tax-qualified status of some Contracts.

We do not monitor Surrender requests. To determine whether a Surrender is permissible, with or without federal income tax penalty, please consult your personal tax adviser.

More than one Contract issued in the same calendar year — If you own more than one contract issued by us or our affiliates in the same calendar year, then these contracts may be treated as one contract for the purpose of determining the taxation of distributions prior to the Annuity Commencement Date. Please consult your tax adviser for additional information.

Internal Revenue Code section 403(b) annuities — Section 403(b) annuities have limits on full and partial Surrenders. Contributions to your Contract and any increases in cash value may not be distributed unless you are: (a) age 591/2, (b) no longer employed, (c) deceased, (d) disabled, or (e) experiencing a financial hardship (cash value increases may not be distributed for hardships prior to age 591/2). Distributions prior to age 591/2 due to financial hardship; unemployment or retirement may still be subject to a penalty tax of 10%.

We will no longer accept any incoming 403(b) exchanges or applications for 403(b) individual annuity contracts.

We encourage you to consult with your qualified tax adviser before making any Surrenders. Please see Section 13. Federal Tax Considerations/Information Regarding Tax-Qualified Plans for more information.

e. Annuity Payouts

This section describes what happens when we begin to make regular Annuity Payouts from your Contract. You, as the Contract Owner, should answer five questions:

• When do you want Annuity Payouts to begin?

• Which Annuity Payout Option do you want to use?

• How often do you want to receive Annuity Payouts?

• What is the Assumed Investment Return?

• Do you want Annuity Payouts to be fixed or variable or a combination?

Please check with your investment professional to select the Annuity Payout Option that best meets your income needs.

1. When do you want Annuity Payouts to begin?

Consider the age you will be when you start Annuity Payouts. Annuity Payouts started at a younger age will be greater than at an older age. You select an Annuity Commencement Date when you purchase your Contract or at any time before you begin receiving Annuity Payouts. You may change the Annuity Commencement Date by notifying us within thirty days prior to the date. The Annuity Commencement Date cannot be deferred beyond the Annuitant's 110th birthday. The date you select may have tax consequences, so please check with a qualified tax advisor. You cannot begin to take Annuity Payouts until the end of the 2nd Contract Year. If this Contract is issued to the trustee of a Charitable Remainder Trust, the Annuity Commencement Date may be deferred to the Annuitant's 100th birthday.

The Annuity Calculation Date is when the amount of your Annuity Payout is determined. This occurs within five Valuation Days before your selected Annuity Commencement Date.

All Annuity Payouts, regardless of frequency, will occur on the same day of the month as the Annuity Commencement Date. After the initial payout, if an Annuity Payout date falls on a Non-Valuation Day, the Annuity Payout is computed on the prior Valuation Day. If the Annuity Payout date does not occur in a given month due to a leap year or months with only 28 days (i.e. the 31st), the Annuity Payout will be computed on the last Valuation Day of the month.

2. Which Annuity Payout Option do you want to use?

Your Contract contains the Annuity Payout Options described below. The Annuity Proceeds Settlement Option is an option that can be elected by the Beneficiary and is described in the "Death Benefit" section. We may at times offer other Annuity Payout Options. Once we begin to make Annuity Payouts, the Annuity Payout Option cannot be changed.

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Life Annuity

We make Annuity Payouts as long as the Annuitant is living. When the Annuitant dies, we stop making Annuity Payouts. A Payee would receive only one Annuity Payout if the Annuitant dies after the first payout, two Annuity Payouts if the Annuitant dies after the second payout, and so forth.

Life Annuity With Payments Guaranteed for 10 or 20 Years

We will make Annuity Payouts as long as the Annuitant is living, but we at least guarantee to make Annuity Payouts for a time period you select either 10 or 20 years. If the Annuitant dies before the guaranteed number of years have passed, then the Beneficiary may elect to continue Annuity Payouts for the remainder of the guaranteed number of years. If the Contract is a qualified contract, the annuity payments may need to be modified after the death of the individual or designated beneficiary, as necessary to comply with IRS rules and regulations.

When considering a guarantee period, keep in mind:

•Having guaranteed Annuity Payouts will usually lower the Annuity Payout amount.

•The longer the guaranteed period will usually lower the Annuity Payout amount.

Joint and Full Survivor Life Annuity

We will make Annuity Payouts as long as the Annuitant and Joint Annuitant are living. When one Annuitant dies, we continue to make Annuity Payouts to the Contract Owner until that second Annuitant dies. Adding a joint life will usually lower the payout amount. At younger ages there is little impact, the impact is greater at older ages.

We may offer other available Annuity Payout Options.

• You cannot make full or partial Surrenders from your Contract once Annuity Payouts begin.

• For Qualified Contracts, if you elect an Annuity Payout Option with a Period Certain, the guaranteed number of years must be less than the life expectancy of the Annuitant at the time the Annuity Payouts begin. We compute life expectancy using the IRS mortality tables.

• Automatic Annuity Payouts — If you do not elect an Annuity Payout Option, Annuity Payouts will automatically begin on the Annuity Commencement Date under the Life Annuity with Payments for a Period Certain Annuity Payout Option with a ten-year period certain. Automatic Annuity Payouts will be fixed dollar amount Annuity Payouts, variable dollar amount Annuity Payouts, or a combination of fixed or variable dollar amount Annuity Payouts, depending on the investment allocation of your Account in effect on the Annuity Commencement Date.

3. How often do you want the Payee to receive Annuity Payouts?

In addition to selecting an Annuity Commencement Date and an Annuity Payout Option, you must also decide how often you want the Payee to receive Annuity Payouts. You may choose to receive Annuity Payouts:

• monthly,

• quarterly,

• semiannually, or

• annually.

Annual Annuity Payouts are less than 12 times the monthly payout amount due to a modal factor based on the AIR for variable Annuity Payouts or minimum interest rate for fixed Annuity Payouts. Once you select a frequency, it cannot be changed. If you do not make a selection, the Payee will receive monthly Annuity Payouts. You must select a frequency that results in an Annuity Payout of at least $50. If the amount falls below $50, we have the right to change the frequency to bring the Annuity Payout up to at least $50.

See Section 11.a. State Variations for more information.

4. What is the Assumed Investment Return?

The Assumed Investment Return ("AIR") is the investment return before we start to make Annuity Payouts. It is a critical assumption for calculating variable dollar amount Annuity Payouts. The first Annuity Payout will be based upon the AIR. A lower AIR will start with a lower payout amount. The remaining Annuity Payouts will fluctuate based on the performance of the underlying Funds. The AIR for this Contract is 4%.

For example, if the Sub-Accounts earned exactly the same as the AIR, then the second monthly Annuity Payout Option is the same as the first. If the Sub-Accounts earned more than the AIR, then the second monthly Annuity Payout Option is higher than the first. If the Sub-Accounts earned less than the AIR, then the second monthly Annuity Payout Option is lower than the first.

Level variable dollar Annuity Payouts would be produced if the investment returns remained constant and equal to the AIR. In fact, Annuity Payouts will vary up or down as the investment rate varies up or down from the AIR.

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5. Do you want fixed dollar amount or variable dollar amount Annuity Payouts or a combination of both?

You may choose an Annuity Payout Option with fixed dollar amounts, variable dollar amounts or a combination depending on your income needs. Fixed dollar Annuity Payouts do not change. Variable dollar Annuity Payouts change with every payout. A lower AIR will start with a lower payout amount.

Fixed Dollar Amount Annuity Payouts — Once a fixed dollar amount Annuity Payout begins, you cannot change your selection to receive variable dollar amount Annuity Payout. You will receive equal fixed dollar amount Annuity Payouts throughout the Annuity Payout period. Fixed dollar amount Annuity Payout amounts are determined by multiplying the Contract Value, minus any applicable Premium Taxes, by an annuity rate. The annuity rate is set by us and is not less than the rate specified in the fixed dollar amount Annuity Payout Option tables in your Contract.

Variable Dollar Amount Annuity Payouts — A variable dollar amount Annuity Payout is based on the investment performance of the Sub-Accounts. The variable dollar amount Annuity Payouts may fluctuate with the performance of the underlying Funds. To begin making variable dollar amount Annuity Payouts, we convert the first Annuity Payout amount to a set number of Annuity Units and then price those units to determine the Annuity Payout amount. The number of Annuity Units that determines the Annuity Payout amount remains fixed unless you transfer units between Sub-Accounts.

The dollar amount of the first variable Annuity Payout depends on:

• the Annuity Payout Option chosen,

• the Annuitant's attained age and gender (if applicable),

• the applicable annuity purchase rates based on the 1983a Individual Annuity Mortality table and,

• the Assumed Investment Return

The total amount of the first variable dollar amount Annuity Payout is determined by dividing the Contract Value minus any applicable Premium Taxes, by $1,000 and multiplying the result by the payment factor defined in the Contract for the selected Annuity Payout Option.

The dollar amount of each subsequent variable dollar amount Annuity Payout is equal to the total of Annuity Units for each Sub-Account multiplied by Annuity Unit Value for each Sub-Account.

The Annuity Unit Value of each Sub-Account for any Valuation Period is equal to the Accumulation Unit Value Net Investment Factor for the current Valuation Period multiplied by the Annuity Unit Factor, multiplied by the Annuity Unit Value for the preceding Valuation Period. The Annuity Unit Factor for a 4% AIR is 0.999893.

Combination Annuity Payouts — You may choose to receive a combination of fixed dollar amount and variable dollar amount annuity payouts as long as they total 100% of your Annuity Payout. For example, you may choose to receive 40% fixed dollar amount and 60% variable dollar amount to meet your income needs. Combination Annuity Payouts are not available during the first two Contract Years.

Transfer of Annuity Units — After the Annuity Calculation Date, you may transfer dollar amounts of Annuity Units from one Sub-Account to another. On the day you make a transfer, the dollar amounts are equal for both Sub-Accounts and the number of Annuity Units will be different. We will transfer the dollar amount of your Annuity Units the day we receive your written request if received before the close of the New York Stock Exchange. Otherwise, the transfer will be made on the next Valuation Day. All Sub-Account transfers must comply with our Sub-Account transfer restriction policies. For more information on Sub-Account transfer restrictions please see the sub-section entitled "Can I transfer from one Sub-Account to another?" under the section entitled "The Contract."

8. Benefits Under the Contract

The following table summarizes information about the benefits under the Contract.


Standard Benefits (No Additional Charge)
Name of Benefit	Purpose	Brief Description of Restrictions/Limitations
InvestEase®	Electronic transfer of funds from your bank account into your Contract	•Minimum amount for each transfer is $50
Asset Rebalancing	Allows you to automatically rebalance Contract Value in the Sub-Accounts at a specified frequency to the asset allocation percentages that you previously selected	•Only one set of asset allocation instructions at a time •Guarantee Periods excluded
Dollar Cost Averaging - Fixed Amount DCA	Provides for automatic, periodic transfers of fixed amounts from investment options to other investment options	•Transfers may be monthly or quarterly •Must perform at least three transfers to remain in the program

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Dollar Cost Averaging - Earnings/Interest DCA	Provides for automatic, periodic transfers of earnings or interest from investment options to other investment options	•Transfers may be monthly or quarterly •Must perform at least three transfers to remain in the program
Automatic Income Program	Provides for automatic, periodic partial withdrawals up to 10% of total Premium Payments, each Contract Year, without any early withdrawal charges	•Partial withdrawals may occur monthly, quarterly, semi-annually or annually •Minimum amount of each withdrawal is $100 •Amounts withdrawn count towards the AWA
Death Benefit – issued without the Enhanced Death Benefit or before May, 1, 1997	Upon the Contract Owner's or Annuitant's death during the Accumulation Period, provides for payment of the higher of (i) Contract Value adjusted for any applicable MVA; (ii) total Premium Payments (adjusted for prior withdrawals); or (iii) the Contract Value on the last seven-year Contract Anniversary before the earlier of the decedent's death or age 75, adjusted for any applicable MVA, minus any partial Surrenders since that last seven-year anniversary	•Partial withdrawals may significantly reduce the benefit by more than the amount withdrawn due to a positive MVA if invested in Guarantee Periods •No increases to Contract Value on the last seven year highest Anniversary after 75th birthday Terminates upon entering the Annuity Period •Advisory fee withdrawals impact the benefit in the same manner as any other partial withdrawal, therefore such withdrawals may significantly reduce the benefit on a dollar-for-dollar basis also adjusted by the MVA
Death Benefit – issued with the Enhanced Death Benefit after May 1, 1997	Upon the Contract Owner's or Annuitant's death during the Accumulation Period, provides for payment of the higher of (i) Contract Value adjusted for any applicable MVA; (ii) Rollup Amount; or (iii) the Contract Value on the last seven-year Contract Anniversary	•Partial withdrawals may significantly reduce the benefit, including by more than the amount withdrawn •No increases to Contract Value on the last seven year Anniversary after 75th birthday •No increases to Rollup Amount after 75th birthday Terminates upon entering the Annuity Period •Advisory fee withdrawals impact the benefit in the same manner as any other partial withdrawal, therefore such withdrawals may significantly reduce the benefit on a dollar-for-dollar basis also adjusted by the MVA
Hospital or Skilled Health Care facility confinement waiver	Provides a waiver of surrender charges if a covered person is confined to a defined facility	•A covered person must meet the preset conditions for a preset amount to time to qualify for the waiver of surrender charges on a full or partial withdrawal

9. Death Benefit

What is the Death Benefit and how is it calculated?

The Death Benefit is the amount we will pay if the Contract Owner or Annuitant dies before the Annuity Commencement Date. The Death Benefit is calculated when we receive a certified death certificate or other legal document acceptable to us.

Until we receive proof of death and the completed instructions from the Beneficiary, the Death Benefit will remain invested in the same Accounts, according to the Contract Owner's last instructions. Therefore, the Death Benefit amount will fluctuate with the performance of the underlying Funds. When there is more than one Beneficiary, we will calculate the Accumulation Units for each Sub-Account for each Beneficiary's portion of the proceeds.

If your Contract was issued with the Enhanced Death Benefit Rider after May 1, 1997, the Death Benefit is calculated as follows:

If death occurs before the earlier of the Contract Owner's or Annuitant's 75th birthday, the Death Benefit is the greatest of:

• The total Premium Payments you have made to us minus the dollar amount of any partial Surrenders, compounded annually at 3% and capped at a maximum of 200% of total Premium Payments minus the dollar amount of any partial Surrenders (the "Rollup Amount"); or

• The Contract Value of your Contract adjusted for any applicable MVA; or

• The Contract Value on the last Contract Seven Year Anniversary before the earlier of the date of death, or the Contract Owner's or the Annuitant's 75th birthday, adjusted for any applicable MVA, minus the dollar amount of any partial Surrenders since that Seven Year Anniversary.

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Your Contract's Seven Year Anniversary is the seventh anniversary of the date your Contract was issued, and each following seventh anniversary of that date.

If death occurs on or after the earlier of Contract Owner's or Annuitant's 75th birthday, the Death Benefit is the greatest of:

• The Rollup Amount on the earlier of the Contract Owner's or Annuitant's 75th birthday plus any Premium Payments made since that birthday, minus the dollar amount of any partial Surrenders since that birthday; or

• The Contract Value of your Contract adjusted for any applicable MVA; or

If your Contract was issued without the Enhanced Death Benefit Rider or before May 1, 1997, the Death Benefit is calculated as follows:

• The total Premium Payments you have made to us minus any partial Surrenders; or

• The Contract Value of your Contract adjusted for any applicable MVA; or

See Appendix D - Death Benefit Examples for more information.

Withdrawals to Pay Advisory Fees

If you receive services for your Contract from a third-party financial intermediary who charges an advisory fee for their services, and you direct us to deduct your advisory fees from your Contract Value, we will treat that deduction as a withdrawal from your Contract Value. Advisory fee withdrawals have the same impact on the value of the death benefit, including the standard death benefit, as any other partial Surrenders. As such, advisory fee withdrawals can severely affect the value of any guaranteed death benefit under your Contract. Such withdrawals may reduce your benefit by the dollar amount actually surrendered and also adjusted by the MVA as illustrated in the example below. Contract Owners should discuss the impact of deducting advisory fees from Contract Value with their financial intermediaries prior to making any election.

Example: This hypothetical example shows only the impact to the total Premium Payments component of your Death Benefit. Since the advisory fee is deducted from your Contract Value, all components of the Death Benefit will be impacted as prescribed in the death benefit definition.

Partial surrenders reduce the total Premium Payments dollar for dollar.

The total Premium Payments equal $100,000. There is a 1 percent annual advisory fee on the initial Premium Payment which equals $1,000 per contract year fee. After 10 years of deducting $1,000 from the total Premium Payments, that component of the death benefit is $90,000.

How is the Death Benefit paid?

The Death Benefit may be taken in one lump sum or under any of the Annuity Payout Options then being offered by us. On the date we receive proof of death and complete instructions from the Beneficiary, we will compute the Death Benefit to be paid out or applied to a selected Annuity Payout Option. When there is more than one Beneficiary, we will calculate the Death Benefit amount for each Beneficiary's portion of the proceeds and then pay it out or apply it to a selected Annuity Payout Option according to each Beneficiary's instructions. If we receive the complete instructions on a Non-Valuation Day, computations will take place on the next Valuation Day.

If the Death Benefit is $5,000 or more, the Beneficiary may elect to have their Death Benefit paid through our "Talcott Resolution Pathways Program" (formerly "Safe Haven"). Under this program, the proceeds remain in our General Account and the Beneficiary will receive a draft book. Proceeds are guaranteed by the claims paying ability of the Company; however, it is not a bank account and is not insured by the Federal deposit Insurance Corporation (FDIC), nor is it backed by any federal or state government agency. The Beneficiary can write one draft for total payment of the Death Benefit, or keep the money in the General Account and write drafts as needed. We will credit interest at a rate determined periodically in our sole discretion. The interest rate is based upon the analysis of interest rates credited to funds left on deposit with other insurance companies under programs similar to the Talcott Resolution Pathways Program. In determining the interest rate, we also factor in the impact of our profitability, general economic trends, competitive factors and administrative expenses. The interest rate credit is not subject to minimum interest rates prescribed by state non-forfeiture laws. For federal income tax purposes, the Beneficiary will be deemed to have received the lump sum payment on transfer of the Death benefit amount to the General account. The interest will be taxable to the Beneficiary in the tax year that it is credited. We may not offer the Talcott Resolution Pathways Program in all states and we reserve the right to discontinue offering it at any time. Although there are no direct charges for the program, we earn investment income from the proceeds. The Investment income we earn is likely more than the amount of interest we credit; therefore, we make a profit from the difference.

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The Beneficiary may elect under the Annuity Proceeds Settlement Option “Death Benefit Remaining with the Company” to leave proceeds from the Death Benefit invested with us for up to five or ten years from the date of death if death occurred before the Annuity Commencement Date. The available period (five or ten years) depends on whether the Contract is non-qualified or an IRA and the Owner's date of death. Once we receive a certified death certificate or other legal documents acceptable to us, the Beneficiary can: (a) make Sub-Account transfers (subject to applicable restrictions) and (b) take Surrenders without paying CDSCs, if any. We reserve the right to inform the IRS in the event that we believe that any Beneficiary has intentionally delayed delivering proper proof of death in order to circumvent applicable Code proceeds payment duties. We shall endeavor to fully discharge the last instructions from the Owner wherever possible or practical.

The Beneficiary of a non-qualified Contract may also elect the Single Life Expectancy Only option. This option allows the Beneficiary to take the Death Benefit in a series of payments spread over a period equal to the Beneficiary’s remaining life expectancy. Distributions are calculated based on IRS life expectancy tables. This option is subject to different limitations, qualifications and conditions. Not all beneficiaries will be able to elect this option.

Required Distributions — If the Owner dies before the Annuity Commencement Date, the Death Benefit must be distributed within five years after death or be distributed under a distribution option or Annuity Payout Option that satisfies the Alternatives to the Required Distributions described below. Please see Section (C)(2)(f) of Section 13. Federal Tax Considerations for more information. If your Contract is qualified, please see Section 13. Information Regarding Tax-Qualified Plans for additional information.

If the Contract Owner dies on or after the Annuity Commencement Date under an Annuity Payout Option that permits the Beneficiary to elect to continue Annuity Payouts or receive the Commuted Value, any remaining value must be distributed at least as rapidly as under the payment method being used as of the Contract Owner's death.

If the Contract Owner is not an individual (e.g. a trust), then the original Annuitant will be treated as the Contract Owner in the situations described above and any change in the original Annuitant will be treated as the death of the Contract Owner.

What should the Beneficiary consider?

Alternatives to the Required Distributions — The selection of an Annuity Payout Option and the timing of the selection will have an impact on the tax treatment of the Death Benefit. To receive favorable tax treatment, the Annuity Payout Option selected: (a) cannot extend beyond the Beneficiary's life or life expectancy, and (b) must begin within one year of the date of death.

If these conditions are not met, the Death Benefit will be treated as a lump sum payment for tax purposes. This sum will be taxable in the year in which it is considered received.

Spousal Contract Continuation — If the Contract Owner dies and the Beneficiary is the Contract Owner's spouse, the Beneficiary may elect to continue the Contract as the Contract Owner, receive the death benefit in one lump sum payment or elect an Annuity Payout Option. If the Contract continues with the spouse as Contract Owner, we will adjust the Contract Value to the amount that we would have paid as the Death Benefit payment, had the spouse elected to receive the Death Benefit as a lump sum payment. Spousal Contract Continuation will only apply one time for each Contract. If you do not name another Beneficiary at the time of continuation, the Beneficiary will default to your estate.

10. Other Programs Available

We may discontinue, modify or amend any of these Programs or any other programs we establish. Any change other than termination of a Program will not affect Contract Owners currently enrolled in the Program. There is no additional charge for these programs. If you are enrolled in any of these programs while a fund merger, substitution or liquidation takes place, unless otherwise noted in any communication from us, your Contract Value invested in such underlying Fund will be transferred automatically to the designated surviving Fund in the case of mergers and any available Money Market Fund in the case of Fund liquidations. Your enrollment instructions will be automatically updated to reflect the surviving Fund or a Money Market Fund for any continued and future investments.

InvestEase® Program

InvestEase®, which was formerly called "PAC," is an electronic transfer program that allows you to have money automatically transferred from your checking or savings account, and invested in your Contract. It is available for Premium Payments made after your initial Premium Payment. The minimum amount for each transfer is $50. You can elect to have transfers occur either monthly or quarterly, and they can be made into any Account available in your Contract.

Automatic Income Program

This systematic withdrawal feature allows you to make partial Surrenders up to 10% of your total Premium Payments each Contract Year without a CDSC, if applicable. You can designate the Funds to be surrendered from and also choose the frequency of partial Surrenders (monthly, quarterly, semiannual, or annually). The minimum amount of each Surrender is $100. Amounts taken under this program will count towards the AWA and rider limit, and if received prior to age 59½, may have adverse tax consequences, including a 10% federal income tax penalty on the taxable portion of the Surrender

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payment. You may satisfy Code Section 72(t)/(q) requirements by enrolling in this program. Please see Section 13 for more information about the tax consequences associated with your Contract.

Asset Rebalancing

In asset rebalancing, you select a portfolio of Funds, and we will rebalance your assets at the specified frequency to reflect the original allocation percentages you selected. You can choose how much of your Contract Value you want to invest in this program. You can also combine this program with others such as the Automatic Income Program and Dollar Cost Averaging Program (subject to restrictions). You may designate only one set of asset allocation instructions at a time. Asset Rebalancing is not available for Guarantee Periods.

Dollar Cost Averaging Programs

We currently offer two different types of Dollar Cost Averaging Programs. If you enroll, you may select either the Fixed Amount DCA Program or the Earnings/Interest DCA Program. The Fixed Amount DCA Program allows you to regularly transfer an amount you select from any Fund into a different Fund. The Earnings/Interest DCA Program allows you to regularly transfer the interest from the earnings from one Fund into a different Fund. For either Program, you may select transfers on a monthly or quarterly basis, but you must at least make three transfers during the Program. The Fixed Amount DCA Program begins at the end of the length of the transfer period you selected plus two business days. That means if you select a monthly transfer, your Earnings/Interest DCA Program will begin one month plus two business days after your enrollment.

Other Program considerations

•You may terminate your enrollment in any Program at any time.

•We may discontinue, modify or amend any of these Programs at any time. We will automatically and unilaterally amend your enrollment instructions if:

◦any Fund is merged or substituted into another Fund — then your allocations will be directed to the surviving Fund;

◦any Fund is liquidated — then your allocations will be directed to any available money market Fund.

You may always provide us with updated instructions following any of these events.

•Continuous or periodic investment neither insures a profit nor protects against a loss in declining markets. Because these Programs involve continuous investing regardless of fluctuating price levels, you should carefully consider your ability to continue investing through periods of fluctuating prices.

•We make available educational information and materials (e.g., pie charts, graphs, or case studies) that can help you select a model portfolio, but we do not recommend models or otherwise provide advice as to what model portfolio may be appropriate for you.

•These Programs may be adversely affected by Fund trading policies.

11. Other Information

a.State Variations

Florida - The MVA calculation is: [( 1+ i )/( 1 + j + .0025)] N/12 - 1

i is Guaranteed Rate j is Current Rate

N is Number of months remaining

Nevada - Guarantee Periods are not available for this Contract.

New York - The MVA calculation is: [( 1+ i )/( 1 + j + .0025)] N/12 - 1

i is Guaranteed Rate j is Current Rate

N is Number of months remaining

Pennsylvania - Guarantee Periods are not available for this Contract.

Texas - The minimum Contract Value in Texas must be $1,000 after the Surrender with no Premium Payments made during the prior two Contract Years.

b. Legal Proceedings

We are regularly involved in litigation in the ordinary course of business. We may from time to time be subject to a variety of legal and regulatory actions relating to our current and past business operations. While we cannot predict the outcome of any pending or future litigation, examination or investigation, and although no assurances can be given, we do not believe that any pending matter is likely to have a material adverse effect on the Separate Account, the ability of the Principal Underwriter to perform its contract with the Separate Account, or the ability of the Company to meet its obligations under the Contracts.

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c. More Information

Assignment — A Non-Qualified Contract may be assigned. We must be properly notified in writing of an assignment. Any Annuity Payouts or Surrenders requested or scheduled before we record an assignment will be made according to the instructions we have on record. We are not responsible for determining the validity of an assignment. Assigning a Non-Qualified Contract may require the payment of income taxes and certain penalty taxes. Please consult a qualified tax adviser before assigning your Contract.

A Qualified Contract may not be transferred or otherwise assigned, unless allowed by applicable law.

Contract Modification — The Annuitant may not be changed. However, if the Annuitant is still living, the Contingent Annuitant may be changed at any time prior to the Annuity Commencement Date by sending us written notice.

We may modify the Contract, but no modification will affect the amount or term of any Contract unless a modification is required to conform the Contract to applicable federal or state law. No modification will effect the method by which Contract Values are determined.

How Contracts Were Sold — Talcott Resolution Distribution Company, Inc. ("TDC") serves as principal underwriter for the Contracts. TDC is registered with the Securities and Exchange Commission under the Securities Act of 1934 as a broker-dealer and is a member of the Financial Industry Regulatory Authority (FINRA). The principal business address is 1 American Row, Hartford, CT 06103.TDC is affiliated to Talcott Resolution through common control.

Contracts were sold by individuals who were appointed by us as insurance agents and who were investment professionals of broker-dealers that entered into selling agreements with TDC. We generally bear the expenses of providing services pursuant to Contracts, including the payment of expenses relating to the distribution of prospectuses for sales purposes as well as any advertising or sales literature (provided, however, we may offset some or all of these expenses by, among other things, administrative service fees received from Fund complexes).

Commissions — We pay compensation to broker-dealers, financial institutions and other affiliated broker-dealers ("Financial Intermediaries") for the sale of the Contracts according to selling agreements with Financial Intermediaries. Affiliated broker-dealers also employ wholesalers in the sales process. Wholesalers typically receive commissions based on the type of Contract or optional benefits sold. Commissions are based on a specified amount of Premium Payments or Contract Value. Your investment professional may be compensated on a fee for services and/or commission basis.

We pay an up-front commission of up to 7% of your Contract Value at the time of sale to the Financial Intermediary that your investment professional is associated with. Your investment professional's Financial Intermediary may also receive on-going or trail commissions of generally not more than 1% of your Contract Value. Investment professionals may have multiple options on how they wish to allocate their commissions and/or compensation. Compensation paid to your investment professional may also vary depending on the particular arrangements between your investment professional and their Financial Intermediary. We are not involved in determining your investment professional's compensation. You are encouraged to ask your investment professional about the basis upon which he or she will be personally compensated for the advice or recommendations provided in connection with this transaction.

If you enter into an agreement for investment advisory services for your Contract with a financial intermediary who acts as an investment adviser and charges you an advisory fee for their services, you pay that advisory fee under your agreement with the financial intermediary. We do not intend to pay Sales Commissions to financial intermediaries who receive investment advisory fees from Contract Owners because such financial intermediaries receive compensation in connection with the Contract in the form of those advisory fees.

d. Financial Statements

Our financial statements are included in Section 12 of this prospectus. Financial statements for the Separate Account are incorporated by reference in the Statement of Additional Information. To receive a copy of the Statement of Additional Information free of charge, call your investment professional or contact us. The back cover page of this prospectus includes instructions on how to request a Statement of Additional Information from us.

As of May 1, 2009, Union Security has relied on the exemption provided by Rule 12h-7 under the Securities Exchange Act of 1934, as amended, and accordingly, does not intend to file with the U.S. Securities Exchange Commission annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, or any other reports under such Act.

e. Cybersecurity and Disruptions to Business Operations

Our business is highly dependent upon the effective operation of our computer systems and those of our business partners and service providers. Our business is therefore vulnerable to disruptions from utility outages and susceptible to operational and information security risks resulting from system failures and cybersecurity incidents. These risks include, among other things, the theft, misuse, corruption and destruction of electronic data, interference with or denial of service, attacks on systems or websites and other operational disruptions that could severely impede our ability to conduct our business and administer the Contract. Financial services companies and their third-party service providers are increasingly the targets of cyber-attacks involving the encryption of data (e.g., ransomware), disruptions in communications (e.g., denial of service), or unauthorized access to or release of personal or confidential information. In 2023, we were notified of a data security

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incident involving the MOVEit file transfer system used by numerous financial services companies. A third-party vendor uses that software on our behalf to, among other things, identify the deaths of insured persons and annuitants under life insurance policies and annuity contracts. We notified affected customers as required by law, and we continue to assess and investigate the overall impact of the incident. The techniques used to attack systems and networks change frequently, are becoming more sophisticated, and can originate from a wide variety of sources. The use of remote or flexible work arrangements, remote access tools, and mobile technology has expanded potential targets for cyber-attack.

System failures and cybersecurity incidents may adversely affect you and/or your Contract. For instance, a cyber-attack may interfere with our ability to process Contract transactions or calculate Contract values, including Accumulation Unit values, or could result in the release of confidential customer information. Such events could also adversely affect us, as they may result in regulatory fines, financial losses and reputational damage. Cybersecurity incidents may also impact the issuers of securities in which the underlying funds invest, which may cause the funds underlying your Contract to lose value. Although we take efforts to protect our systems from cybersecurity incidents, there can be no assurance that we or our service providers or the underlying funds will be able to avoid cybersecurity incidents affecting Contract owners in the future. It is possible that a cybersecurity incident could persist for an extended period of time without detection.

We are also exposed to risks related to natural and man-made disasters, and other severe events, such as storms, public health crises, terrorist acts, and military actions, any of which could adversely affect our business operations. While we have a business continuity plan and have taken precautions, we cannot assure you that severe events will not result in interruptions to our business operations, particularly if such events affect our computer systems or result in a significant number of our employees becoming unavailable. Interruptions to our business operations may impair our ability to effectively administer the Contract, including our ability to process orders and calculate Contract values. Additionally, our third-party service providers and other third-parties related to our business (such as financial intermediaries or underlying funds) are subject to similar risks. Successful implementation and execution of their business continuity policies and procedures are largely beyond our control. Disruptions to their business operations may impair our own business operations.

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12. Further Information About Union Security Insurance Company

ITEM 3. RISK FACTORS

Certain factors may have a material adverse effect on our business, financial condition, results of operations and cash flows of Union Security Insurance Company (referred to in this Risk Factors section as "we", "us", or "the Company") and its parent companies. You should carefully consider them, along with the other information presented in this report. It is not possible to predict or identify all such factors. Additional risks and uncertainties that are not yet identified or that we currently believe to be immaterial may also materially harm our business, financial condition, results of operations and cash flows.

Financial Risks

•Reinsurance may not be adequate or available to protect us against losses, and we are subject to the credit risk of reinsurers.

•Our actual claims losses may exceed our reserves for claims, requiring us to establish additional reserves or to incur additional expense for settling unreserved liabilities, which could have a material adverse effect on our results of operations, profitability and capital.

•Through reinsurance, the Parent has sold or exited businesses that could again become our direct financial and administrative responsibility if the reinsurers become insolvent.

•Our investment portfolio is subject to market risk, including changes in interest rates, that may adversely affect our results of operations and financial condition.

•Our investment portfolio is subject to credit, liquidity and other risks that may adversely affect our results of operations and financial condition.

•The value of our deferred tax assets could become impaired, which could materially and adversely affect our results of operations and financial condition.

•We may be unable to accurately predict and price for claims and other costs, which could reduce our profitability.

•A decline in our financial strength ratings could adversely affect our results of operations and financial condition.

•Due to the structure of our commission program, we are exposed to risks related to the creditworthiness and reporting systems of some of our agents, third party administrators and clients.

Legal and Regulatory Risks

We are subject to extensive laws and regulations and risks related to changes in regulation and litigation and regulatory actions. Change in tax laws and regulations could have a material adverse impact on our results of operations and financial condition.

Business, Strategic and Operational Risks

•Our revenues and profits may decline if we are unable to maintain relationships with significant clients, distributors and other parties, or renew contracts with them on favorable terms, or if those parties face financial, reputational or regulatory issues.

•Our inability to successfully recover should we experience a business continuity event could have a material adverse effect on our business, financial condition and results of operations.

Technology, Cybersecurity, and Privacy Risks

•The failure to effectively maintain and modernize our information technology systems and infrastructure could adversely affect our business.

•We could incur significant liability if our information systems or those of third parties are breached or we or third parties otherwise fail to protect the security of data residing on our respective systems, which could adversely affect our business and results of operations.

•The costs of complying with, or our failure to comply with, U.S. laws related to privacy, data security and data protection could adversely affect our financial condition, operating results and reputation.

Macroeconomic, Political and Global Market Risks

•General economic, financial market and political conditions and conditions in the markets in which we operate may materially adversely affect our results of operations and financial condition.

General Risk Factors

•Employee misconduct could harm us by subjecting us to significant legal liability, regulatory scrutiny and reputational harm.

For a more complete discussion of these risks, please see below.

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Financial Risks

Reinsurance may not be adequate or available to protect us against losses, and we are subject to the credit risk of reinsurers.

As part of our overall risk and capacity management strategy, we purchase reinsurance for certain risks we underwrite. Although reinsurers are liable to us for claims contractually ceded under our reinsurance arrangements, we remain liable to the insured as the direct insurer on all risks reinsured. Ceded reinsurance arrangements therefore do not eliminate our obligation to pay claims. We are subject to credit risk with respect to our ability to recover amounts due from reinsurers. The inability to collect amounts due from reinsurers could materially adversely affect our results of operations and financial condition.

Our actual claims losses may exceed our reserves for claims, requiring us to establish additional reserves or to incur additional expense for settling unreserved liabilities, which could have a material adverse effect on our results of operations, profitability and capital.

We maintain reserves to cover our estimated ultimate exposure for claims and claim adjustment expenses with respect to reported claims and incurred but not reported (“IBNR”) claims as of the end of each accounting period. The determination of reserve estimates is inherently a matter of judgment and our ultimate liabilities could exceed reserves for a variety of reasons, including changes in macroeconomic factors (such as unemployment and interest rates), case development and other factors. From time to time, we also adjust our reserves, and may adjust our reserving methodology, as these factors, our claims experience and estimates of future trends in claim frequency and severity change. Reserve development, changes in our reserving methodology and paid losses exceeding corresponding reserves could have a material adverse effect on our results of operations, profitability and capital.

Through reinsurance, the Company has sold or exited businesses that could again become our direct financial and administrative responsibility if the reinsurers become insolvent.

In the past, the Company has sold, and in the future the Company may sell, businesses through reinsurance ceded to third parties. The three reinsurers with the largest reinsurance recoverable balances relating to these dispositions were Sun Life Assurance Company of Canada (“Sun Life”), John Hancock Life Insurance Company ("John Hancock") and Talcott Resolution Life and Annuity Insurance Company (“Talcott Resolution”). The A.M. Best Company (“A.M. Best”) ratings of Sun Life, John Hancock and Talcott Resolution are currently A+, A+ and B++, respectively. Most of the assets backing reserves coinsured/reinsured under these and other sales are held in trusts or separate accounts. However, if the reinsurers became insolvent, the assets in the trusts or separate accounts could prove insufficient to support the liabilities that would revert to us.

We also face the risk of again becoming responsible for administering these businesses in the event of reinsurer insolvency. We do not currently have the administrative systems and capabilities to process these businesses. Accordingly, we would need to obtain those capabilities in the event of an insolvency of one or more of the reinsurers. We might be forced to obtain such capabilities on unfavorable terms with a resulting material adverse effect on our results of operations and financial condition. In addition, other third parties to whom the Parent has sold businesses in the past may in turn sell these businesses to other third parties, through reinsurance or otherwise, and we could face credit risks and risks related to the new administrative systems and capabilities of these third parties in administering these businesses.

Our investment portfolio is subject to market risk, including changes in interest rates, that may adversely affect our results of operations and financial condition.

Investment returns are an important part of our profitability. Our investments are subject to market-wide risks and fluctuations, including in the fixed maturity and equity securities markets, which could impair our profitability, financial condition and cash flows. Further, in pricing our products and services, we incorporate assumptions regarding returns on our investments. Market conditions may not allow us to invest in assets with sufficiently high returns to meet our pricing assumptions and profit targets over the long term.

We are subject to interest rate risk in our investment portfolio. Changes in interest rates may materially adversely affect the performance of some of our investments, including by materially reducing the fair value of and investment income from fixed maturity securities and increasing unrealized losses in our investment portfolio. The fair market value of fixed maturity securities generally increases or decreases in an inverse relationship with fluctuations in interest rates, while investment income from fixed maturity securities generally increases or decreases directly with interest rates. In addition, actual investment income and cash flows from investments that carry prepayment risk, such as mortgage-backed and other asset-backed securities, may differ from those anticipated at the time of investment as a result of interest rate fluctuations. Recent periods have been characterized by increased interest rates. Though we employ asset/liability management strategies to manage the adverse effects of interest rate changes, significant fluctuations in the level of interest rates may require us to liquidate investments prior to maturity at a significant loss to pay claims, which could have a material adverse effect on our results of operations and financial condition.

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In addition, extended periods of declining interest rates or rising inflation may cause compression in the spread between the death benefit growth rates on our Preneed insurance policies and the investment income that we can earn, resulting in a negative spread, which may have a material adverse effect on our results of operations and our overall financial condition.

Our investment portfolio is subject to credit, liquidity and other risks that may adversely affect our results of operations and financial condition.

We are subject to credit risk in our investment portfolio, primarily from our investments in fixed maturity securities, including corporate bonds, municipal bonds, asset-backed securities, residential mortgage-backed securities and commercial mortgage-backed securities. Defaults by third parties in the payment or performance of their obligations could reduce our investment income or result in realized investment losses. The value of our investments may be materially adversely affected by downgrades in the corporate bonds included in our portfolio, increases in treasury rates or credit spreads and by other factors that may result in realized and unrealized investment losses and other-than-temporary impairments. The determination that a security has incurred an other-than-temporary impairment requires the judgment of management and there are inherent risks and uncertainties involved in making these judgments. Changes in facts, circumstances or critical assumptions could cause management to conclude that further impairments have occurred, which could lead to additional losses on investments. Each of these events may cause us to reduce the carrying value of our investment portfolio.

The value of any particular fixed maturity security is subject to impairment based on the creditworthiness of its issuer. Below investment grade securities generally are expected to provide higher returns but present greater risk and can be less liquid than investment grade securities. A significant increase in defaults and impairments on our fixed maturity securities portfolio could materially adversely affect our results of operations and financial condition.

Investments in equity securities generally are expected to provide higher total returns but present greater risk to preservation of capital than our fixed maturity securities. All changes in the fair value of equity securities are reported in our statements of operations, which has increased the volatility of our financial results.

Our investments in commercial mortgage loans on real estate are relatively illiquid. If we require extremely large amounts of cash on short notice, we may have difficulty selling these investments at attractive prices and in a timely manner.

The value of our deferred tax assets could become impaired, which could materially and adversely affect our results of operations and financial condition.

In accordance with applicable income tax guidance, we must determine whether our ability to realize the value of our deferred tax asset or to recognize certain tax liabilities related to uncertain tax positions is “more likely than not.” Under current income tax guidance, a deferred tax asset should be reduced by a valuation allowance, or a liability related to uncertain tax positions should be accrued, if, based on the weight of all available evidence, it is more likely than not that some portion of the deferred tax asset will not be realized. The realization of deferred tax assets depends upon the existence of sufficient taxable income of the same character during the carryback or carry-forward periods.

In determining the appropriate valuation allowance, management made certain judgments relating to recoverability of deferred tax assets, use of tax loss and tax credit carry-forwards, levels of expected future taxable income and available tax planning strategies. The assumptions in making these judgments are updated periodically on the basis of current business conditions affecting us and overall economic conditions. These management judgments are therefore subject to change due to factors that include, but are not limited to, changes in our ability to realize sufficient taxable income of the same character in the same jurisdiction or in our ability to execute other tax planning strategies. Furthermore, any future changes in tax laws could impact the value of our deferred tax assets. Management will continue to assess and determine the need for, and the amount of, the valuation allowance in subsequent periods. Any change in the valuation allowance could have a material adverse impact on our results of operations and financial condition.

We may be unable to accurately predict and price for claims and other costs, which could reduce our profitability.

Our profitability could be reduced if we are unable to accurately predict and price for claims and other costs, including the frequency and severity of claims. This ability could be affected by various factors, including inflation, changes in the regulatory environment, changes in industry practices, changes in legal, social or environmental conditions or new technologies. Political or economic conditions can also affect the availability of programs on which our business may rely to accurately predict claims and other costs. In addition, modeling tools that support business decisions involve historical data and numerous assumptions that may differ materially from actual events. The inability to accurately predict and price for claims and other costs could materially adversely affect our results of operations and financial condition.

A decline in our financial strength ratings could adversely affect our results of operations and financial condition.

Ratings are important considerations in establishing the competitive position of insurance companies. An A.M. Best rating represents A.M. Best’s opinion regarding our ability to meet our financial obligations to policyholders. Our A.M. Best rating is subject to periodic review by A.M. Best, and we cannot assure that we will be able to retain it. During the year ended December 31, 2023. A.M. Best affirmed our rating.

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A.M. Best may change its methodology or requirements for determining ratings, or it may become more conservative in assigning ratings. A.M. Best could also increase capital requirements for us, thereby reducing deployable capital for the Company. A reduction in our rating could materially adversely affect our standing in the insurance industry and the demand for our products from intermediaries and consumers, which could materially adversely affect our results of operations. In addition, any reduction in our financial strength ratings could adversely affect our cost of borrowing.

Due to the structure of our commission program, we are exposed to risks related to the creditworthiness and reporting systems of some of our agents, third party administrators and clients.

We are subject to the credit risk of some of the agents, third party administrators and clients with which we contract in our businesses. For example, we advance agents' commissions as part of our preneed insurance offerings. These advances are a percentage of the total face amount of coverage. There is a one-year payback provision against the agency if death or lapse occurs within the first policy year.

In addition, some of our agents, third party administrators and clients collect and report premiums or pay claims on our behalf. These parties' failure to remit all premiums collected or to pay claims on our behalf on a timely and accurate basis could have an adverse effect on our results of operations.

Legal and Regulatory Risks

We are subject to extensive laws and regulations and risks related to changes in regulation and litigation and regulatory actions.

We are subject to comprehensive regulation and oversight by the Kansas Insurance Department in jurisdictions in which we do business. The Kansas Insurance Department has broad administrative powers with respect to all aspects of the insurance business and, in particular, monitors the manner in which an insurance company offers, sells and administers its products. Therefore, we may from time to time be subject to a variety of legal and regulatory actions relating to our current and past business operations and practices.

Legislation or other regulatory reform that increases the regulatory requirements imposed on us or that changes the way we are able to do business may significantly harm our business or results of operations in the future.

In addition, regulators in certain states have hired third party auditors to audit the unclaimed property records of insurance companies operating in those states.

The prevalence and outcomes of any such actions cannot be predicted, and no assurances can be given that such actions or any litigation would not materially adversely affect our results of operations and financial condition. In addition, if we were to experience difficulties with our relationship with a regulatory body in a given jurisdiction, it could have a material adverse effect on our ability to do business in that jurisdiction.

As part of a previously disclosed settlement between Assurant, Inc. (the former parent entity) and the SEC, the SEC granted permanent relief to the Company, exempting it from limitations on serving as depositor to investment companies under Section 9(a) of the Investment Company Act of 1940. If the Company fails to continue to meet the conditions in the application for permanent relief, then the Company could lose its ability to act as depositor of the separate accounts related to the Fortis Financial Group businesses sold to Talcott Resolution (formerly owned by The Hartford) in 2001. This could result in significant costs to restructure the modified coinsurance structure currently in place.

We depend on the Parent for certain administrative, strategic and operational support. We cannot predict at this time the effect that current litigation, investigations and regulatory activity will have on the Parent or our business, but any adverse outcome could have a material adverse effect on our business, results of operations or financial condition.

Changes in tax laws and regulations could have a material adverse impact on our results of operations and financial condition.

Federal or state tax laws and regulations, or their interpretation and application, are subject to significant change and may adversely affect our results of operations and financial condition. For example, on December 22, 2017, TCJA, which significantly amended the Internal Revenue Code of 1986, was enacted. Compliance with the TCJA may require the collection of information not regularly produced within the Company or by the Parent, the use of estimates in our financial statements, and the exercise of significant judgment in accounting for its provisions. The overall impact of the TCJA is uncertain due to the ambiguities in the application of certain provisions of the TCJA, the impact of future guidance, interpretations or rules issued by government agencies in applying the TCJA and potential court decisions interpreting the legislation. Future changes in tax laws, including changes in the application or interpretation of the TCJA, or increases to the corporate tax rate, could have a material adverse impact on our results of operations and financial condition. In addition, the Organization for Economic Co-operation and Development's efforts around Global Pillars I and II dealing with possible new digital taxes and global minimum taxes, if enacted, could increase the Company's overall tax burden, adversely impacting the Company's business, results of operations and financial condition.

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Business, Strategic and Operational Risks

Our revenues and profits may decline if we are unable to maintain relationships with significant clients, distributors and other parties, or renew contracts with them on favorable terms, or if those parties face financial, reputational or regulatory issues.

The success of our business depends largely on our relationships and contractual arrangements with significant clients, distributors and other parties, including vendors. If our key clients, distributors, vendors or other parties terminate important business arrangements with us, or renew contracts on terms less favorable to us, we may fail to meet our business objectives and targets, and our cash flows, results of operations and financial condition could be materially adversely affected.

We receive a substantial portion of our revenue from a few clients. A reduction in business with or the loss of one or more of our significant clients could have a material adverse effect on our results of operations and cash flows. Reliance on a few significant clients may weaken our bargaining power and we may be unable to renew contracts with them on favorable terms or at all.

We are also subject to the risk that clients, distributors and other parties may face financial difficulties, reputational issues, problems with respect to their own products and services or regulatory restrictions or compliance issues that may lead to a decrease in or cessation of sales of our products and services and have other adverse impacts on our results of operations or financial condition.

Our inability to successfully recover should we experience a business continuity event could have a material adverse effect on our business, financial condition and results of operations.

If we experience a local or regional business continuity event, such as an earthquake, hurricane, flood, terrorist attack, pandemic, security breach, cyber-attack, power loss, computer, telecommunication or other systems failure or other natural or man-made disaster, our ability to continue operations will depend on an effective disaster recovery plan and system, including the continued availability of our personnel, vendors and other third parties and work facilities, and the proper functioning of our computer, telecommunication and other systems and operations. We have from time to time experienced business continuity events, including events that impacted the availability of our systems. See “ – Technology, Cybersecurity and Privacy Risks–The failure to effectively maintain and modernize our information technology systems and infrastructure and integrate those of acquired businesses could adversely affect our business.”

Our operations depend in particular upon our ability to protect our technology infrastructure against damage and interruption. If a business continuity event occurs, we could lose Company, customer, vendor and other third-party data, lose significant processing capability or experience interruptions to our operations or delivery of products and services to our clients and their customers, which has occurred from time to time and which could have a material adverse effect on our business, financial condition and results of operations. A cyber-attack or other business continuity event affecting us or key third parties with whom we work could result in a significant and extended disruption in the functioning of our information technology systems or operations, requiring us to incur significant expense to address and remediate or otherwise resolve such issues. An extended outage could result in the loss of premium income, fee income and clients, reputational damage, substantial volatility in our financial results and a decline in our revenues. See “ – Technology, Cybersecurity and Privacy Risks – We could incur significant liability if our information systems or those of third parties are breached or we or third parties otherwise fail to protect the security of data residing on our respective systems, which could adversely affect our business and results of operations.”

A disaster or other business continuity event on a significant scale or affecting our key businesses or our data center, or our inability to successfully recover from such an event and any legislative and regulatory responses thereto, could materially interrupt our business operations and result in material financial loss, loss of human capital, regulatory actions, reputational harm, loss of customers or damaged customer relationships, legal liability and other adverse consequences. Our liability insurance policies may not fully cover, in type or amount, the cost of a successful recovery in the event of such a disruption.

Conflicts around the world and the resulting responses by the United States and other governments could create economic disruption that results in increased market volatility and present economic uncertainty. The duration of these events and their future impact on the financial markets and global economy, are difficult to determine. Any such impact could adversely affect the performance of the securities that comprise the reference Indices and may lead to losses on your investment in the Allocation Options.

Technology, Cybersecurity and Privacy Risks

We could incur significant liability if our information systems or those of third parties are breached or we or third parties otherwise fail to protect the security of data residing on our respective systems, which could adversely affect our business and results of operations.

We rely on the uninterrupted and secure operation of our information technology systems to operate our business and securely process, transmit and store electronic information. This electronic information includes confidential and other

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sensitive information, including personal data, that we receive from our customers, vendors and other third parties. In the normal course of business, we also share confidential and other sensitive information with our vendors and other third parties with whom we work. Our information technology systems and safety control systems and those of our vendors and other third parties are vulnerable to damage or interruption from a variety of external threats, including cyber attacks, computer viruses, malware, ransomware and other types of data and systems related events. Our systems are also subject to compromise from internal threats such as improper action by employees and third parties who may have otherwise legitimate access to our systems. Our call centers subject us to additional risk from internal threats due to access to personal information. Moreover, we face the ongoing challenge of managing access controls in a complex environment. The latency of a compromise is often measured in months but could be years, and we may not be able to detect a compromise in a timely manner. We could experience significant financial and reputational harm if our information systems are breached, sensitive client or Company data are compromised, surreptitiously modified, rendered inaccessible for any period of time or maliciously made public, or if we fail to make adequate disclosures to the public or law enforcement agencies following any such event.

Cyber threats are rapidly evolving and becoming increasingly sophisticated. We are at risk of attack by a growing list of adversaries, including state-sponsored organizations, organized crime, hackers and “hacktivists” (activist hackers), through use of increasingly sophisticated methods of attack, including long-term, persistent attacks referred to as advanced persistent threats or attacks via yet unknown vulnerabilities referred to as zero-day threats. Because the techniques used to obtain unauthorized access or sabotage systems change frequently and generally are not identified until they are launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures, resulting in potential data loss or other damage to information technology systems. As the breadth and complexity of the technologies we use continue to grow, including as a result of the use of mobile devices, cloud services, social media and the increased reliance on devices connected to the Internet, the potential risk of security breaches and cyber-attacks also increases.

Our data protection measures may not be effective to protect our network and systems from such threats. Should an attacker gain access to our network using compromised credentials of an authorized user or otherwise, we are at risk that the attacker might successfully leverage that access to compromise additional systems and data. Certain measures that could increase the security of our systems take significant time and resources to deploy broadly and may not be effective against an attack. Additionally, our policies, procedures and technical safeguards may be insufficient to prevent or detect improper access to confidential, personal or proprietary information and other cybersecurity incidents, assess the severity or impact of any such incidents or appropriately respond in a timely manner. The inability to implement, maintain and upgrade effective protective measures and other safeguards or adequately respond to a breach could have a material adverse effect on our business.

To safeguard against the accidental introduction of security vulnerabilities, we continue to invest in the development of software in accordance with best practices. In addition, our information systems must be continually patched and upgraded to protect against vulnerabilities. As the volume of new software vulnerabilities continues to increase, as has the criticality of patches and other remedial measures. Accordingly, we are at risk that cyber attackers exploit these vulnerabilities before they have been addressed. Due to the large number and age of the systems and platforms that we operate and the increased frequency at which vendors issue security patches to their products, the need to test patches and, in some cases coordinate with clients and vendors, before they can be deployed, we are at risk that we cannot deploy in a timely and effective manner. We are also dependent on vendors and other third parties, such as cloud service providers, to keep their systems patched in order to protect our data. Any failure related to these activities could have a material adverse effect on our business. We have vendors and other third parties who receive data from us in connection with the services we offer our customers. In addition, we have migrated certain data, and may increasingly migrate data, to the cloud hosted by third party providers. We are at risk of a cyber-attack involving a vendor or other third party, which could result in a breakdown of such third party’s data protection measures or access to our infrastructure through the third party. To the extent that a vendor or third party suffers a cyber-attack that compromises their operations, our data and our customers’ data could be compromised or we may experience possible service interruption, which could have a material adverse effect on our business.

We have from time to time experienced cybersecurity incidents, such as malware incursions, distributed denial of service attacks, employee misconduct and incidents resulting from human error, such as loss of portable and other data storage devices. Like many companies, we are subject to regular phishing email and social media engineering campaigns directed at our employees that can result in malware infections and financial and data losses. Although some of these incidents have resulted in data loss and other damages, to date, they have not had a material adverse effect on our business or operations. In the future, these types of incidents could result in confidential, personal or proprietary information being lost or stolen, surreptitiously modified, rendered inaccessible for any period of time, or maliciously made public, including client, employee or Company data, which could have a material adverse effect on our business.

Improper access to or disclosure of sensitive client or Company information could harm our reputation and subject us to significant liability under our contracts, as well as under existing or future laws, rules and regulations. In the event of a

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cyber-attack, we might have to take our systems offline, which could interfere with services to our clients or damage our reputation. We also may be unable to detect an incident, assess its severity or impact, or appropriately respond and recover any financial and data loss in a timely manner. We may be required to expend significant additional resources to mitigate the damage and to protect against future damage. In addition, our Parent's liability insurance, which includes cyber insurance, may not be sufficient in type or amount to cover us against claims related to security breaches, cyber attacks and other related data and system incidents.

The failure to effectively maintain and modernize our information technology systems and infrastructure could adversely affect our business.

The success of our business depends on our ability to maintain effective, secure and reliable information technology systems and infrastructure and to modernize them to support current and new clients and conduct business in an efficient and cost-effective manner.

Our ability to modernize our information technology systems and infrastructure requires us to execute large-scale, complex programs and projects, which rely on the commitment of significant financial and managerial resources and effective planning and management processes. We may be unable to implement these programs and projects effectively, efficiently or in a timely manner, which could result in poor customer experience, cost overruns, additional expenses, reputational harm, legal and regulatory actions and other adverse consequences.

If we are unable to maintain information technology systems, procedures (including technology continuity planning and recovery testing) and controls that function effectively without interruption and securely (including through a failure to replace or update redundant or obsolete hardware, applications or software systems), or to update our systems, we may not be able to successfully offer our products, conduct our business and account for transactions in an appropriate and timely manner and our relationships with clients could be adversely affected. We are also dependent on vendors and other third parties to maintain reliable network systems that provide adequate speed and data capacity. For example, we utilize third-party cloud service providers in connection with certain aspects of our business and operations, and any disruption of, or interference with, our use of such cloud services could adversely impact our business and operations. We have from time to time experienced failures that result in the unavailability of information technology systems upon which our clients rely. Such failures could result in loss of business and adversely affect our financial condition and results of operations.

The costs of complying with, or our failure to comply with, U.S. laws related to privacy, data security and data protection could adversely affect our financial condition, operating results and reputation.

In providing services and solutions to our customers and operating our business, we process, store and transfer sensitive customer, end-consumer and Company data, including personal data, in and across multiple jurisdictions. As a result, we are or may become subject to a variety of laws and regulations regarding privacy, data protection and data security. These laws and regulations are continuously evolving and developing. At the state level, the New York State Department of Financial Services (the “NYDFS”) has issued cybersecurity regulations that impose an array of detailed security measures on covered entities and California passed a comprehensive privacy act that increases California residents’ privacy rights. The scope and interpretation of the laws that are or may be applicable to us are often uncertain and may be conflicting. All of these evolving compliance and operational requirements impose significant costs that are likely to increase over time and may restrict the way services involving data are offered, all of which may adversely affect our results of operations. Complying with these and similar laws and regulations also requires us to make significant changes to our operations, which rely on the commitment of significant financial and managerial resources and effective planning and management processes. We may be unable to implement required operational changes effectively, efficiently or in a timely manner, which could result in cost overruns, additional expenses, reputational harm, legal and regulatory actions and other adverse consequences.

Unauthorized disclosure or transfer of personal or otherwise sensitive data, whether through systems failure, employee negligence, fraud, misappropriation or other means, by us, our vendors or other parties with whom we do business could subject us to significant litigation, monetary damages, regulatory enforcement actions, fines, criminal prosecution and other adverse consequences in one or more jurisdictions. Such events could also result in negative publicity and damage to our reputation and cause us to lose clients, which could have a material adverse effect on our results of operations.

Macroeconomic, Political and Global Market Risks

General economic, financial market and political conditions and conditions in the markets in which we operate may materially adversely affect our results of operations and financial condition.

Limited availability of credit, deterioration of the global markets, declines in consumer confidence and consumer spending, increases in prices or in the rate of inflation, periods of high unemployment, persistently low or rapidly increasing interest rates, disruptive geopolitical events and other events outside of our control, such as a major epidemic or a pandemic or political or civil unrest, could contribute to increased volatility and diminished expectations for the economy and the financial markets.

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These conditions could adversely affect our business. Specifically, during periods of economic downturn:

•individuals and businesses may (i) choose not to purchase our insurance products and other products and services, (ii) terminate existing policies or contracts or permit them to lapse and (iii) choose to reduce the amount of coverage they purchase;

•conditions in the markets in which we operate may deteriorate;

•clients are more likely to underperform expectations, experience financial distress, and declare bankruptcy which could have an adverse impact on the remittance of premiums from such clients and the collection of receivables from such clients for items such as unearned premiums and could otherwise expose us to credit risk;

•there is a higher loss ratio on credit card and installment loan insurance due to rising unemployment;

•there is an increased risk of fraudulent insurance claims; and

•there may be substantial decreases in loan availability and origination, which could reduce the demand for credit insurance that we write.

Inflationary pressures may also affect the costs associated with our preneed insurance policies, particularly those that are guaranteed to grow with the Consumer Price Index. Conversely, deflationary pressures may affect the pricing of our products and services.

General Risk Factors

Employee misconduct could harm us by subjecting us to significant legal liability, regulatory scrutiny and reputational harm.

Our ability to attract and retain employees and clients depends upon our corporate culture. Our employees are the cornerstone of our culture and acts of misconduct by any employee, and particularly by senior management, could erode trust and confidence and damage our reputation. Our employees could engage or be accused of engaging in misconduct that subjects us to litigation, regulatory sanctions, financial costs and serious harm to our reputation or financial position. Employee misconduct could also prompt regulators to allege or determine, on the basis of such misconduct, that we have not established an adequate program to inform employees of applicable rules or to detect and deter violations of such rules. It is not always possible to deter employee misconduct and the precautions we take to detect and prevent misconduct may not be effective. Misconduct by employees, or even unsubstantiated allegations, could have a material adverse effect on our financial position, reputation and business.

CORPORATE HISTORY OF THE COMPANY

Union Security Insurance Company (“Company”, “Union Security”, “we”, “us”, or “our”) is a stock life insurance company formed in 1910 and domiciled in the State of Kansas and is a wholly owned subsidiary of CMFG Life Insurance Company (“CMFG Life”), an Iowa life insurance company. CMFG Life’s ultimate parent is CUNA Mutual Holding Company (“CM Holding”), a mutual insurance holding company organized under the laws of Iowa. CM Holding is an insurance and financial services company that provides products and services to credit unions, credit union members, and individual consumers. From 1984 to July 31, 2021, the Company had been an indirect wholly-owned subsidiary of Assurant, Inc. ("Assurant"), which is a global provider of risk management solutions in the housing and lifestyle markets, protecting where people live and the goods they buy.

The Company is a provider of pre-funded funeral insurance ("preneed") products and accidental death and dismemberment policies. Prior to March 2016, the Company was also a provider of life and health insurance products, including group insurance products. In March 2016, Assurant, Inc. ("Assurant") sold its Assurant Employee Benefits ("AEB") segment mainly through a series of reinsurance transactions with the United States branch of Sun Life Assurance Company of Canada ("Sun Life"), a subsidiary of Sun Life Financial Inc. The sale of AEB had a material impact to the results of operations, cash flows and financial condition of the Company. The Company's financial statements also reflect the assets, liabilities and activity associated with businesses that were sold through reinsurance and coinsurance arrangements. In 2001, Assurant entered into a reinsurance agreement with Talcott Resolution (formerly owned by The Hartford) for the sale of the Fortis Financial Group ("FFG") division. In 2000, the Company divested its Long-Term Care ("LTC") operations to John Hancock Life Insurance Company, a subsidiary of Manulife Financial Corporation ("John Hancock").

The Company is licensed to sell life, health and annuity insurance in the District of Columbia and in all states except New York. However, as referenced above, most of the businesses of the Company were sold through reinsurance or coinsurance arrangements and therefore most revenue and income activity is offset by the reinsurance or coinsurance arrangements.

The Company's business activities and revenues have declined significantly since the 2016 sale of the Assurant Employee Benefits business ("AEB").

Union Security does not have any publicly issued equity or debt securities. However, we are subject to certain filing requirements under the federal securities laws because we have issued certain variable and market value adjusted insurance contracts, which are required to be registered as securities. Assurant exited this line of business and sold the

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business segment, then referred to as FFG, to Talcott Resolution (formerly owned by The Hartford) in 2001. This sale was accomplished by means of reinsurance and modified coinsurance. As a result, Talcott Resolution is contractually responsible for servicing the insurance contracts, including the payment of benefits, oversight of investment management, overall contract administration and funding of reserves. If Talcott Resolution fails to fulfill its obligations, we will be obligated to perform the services and make the required payments and funding.

As of December 31, 2023, we had no direct employees. We have several CMFG Life employees across various locations supporting our legal, investment management, administrative, claims handling, actuarial, tax, accounting, and financial functions. We believe that employee relations are satisfactory.

LEGAL PROCEEDINGS

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(E) FINANCIAL STATEMENTS

INDEX

Financial Statements of Union Security Insurance Company

Independent Auditor's Report.................................................................................................................................................F-1

Statutory Basis Statements of Admitted Assets, Liabilities and Capital and Surplus as of December 31, 2023 and 2022....F-4

Statutory Basis Statements of Operations For Years Ended December 31, 2023, 2022 and 2021.......................................F-5

Statutory Basis Statements of Changes in Capital and Surplus For Years Ended December 31, 2023, 2022 and 2021......F-6

Statutory Basis Statements of Cash Flows For Years Ended December 31, 2023, 2022 and 2021......................................F-7

Notes to Statutory Basis Financial Statements......................................................................................................................F-8

Supplemental Schedules......................................................................................................................................................F-44

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INDEPENDENT AUDITOR'S REPORT

The Board of Directors of

Union Security Insurance Company

Topeka, Kansas

Opinions

We have audited the statutory basis financial statements of Union Security Insurance Company (the

“Company”), which comprise the statutory basis statements of admitted assets, liabilities and capital and

surplus as of December 31, 2023 and 2022 and the related statutory basis statements of operations,

changes in capital and surplus, and cash flows for each of the three years in the period ended December

31, 2023, and the related notes to the statutory basis financial statements (collectively referred to as the

“statutory basis financial statements”).

Unmodified Opinion on Statutory Basis of Accounting

In our opinion, the statutory basis financial statements present fairly, in all material respects, the

admitted assets, liabilities and capital and surplus of the Company as of December 31, 2023 and 2022,

and the results of its operations and its cash flows for each of the three years in the period ended

December 31, 2023, in accordance with the accounting practices prescribed or permitted by the Kansas

Insurance Department, described in Note 2.

Adverse Opinion on Accounting Principles Generally Accepted in the United States of America

In our opinion, because of the significance of the matter described in the Basis for Adverse Opinion on

Accounting Principles Generally Accepted in the United States of America section of our report, the

statutory basis financial statements do not present fairly, in accordance with accounting principles

generally accepted in the United States of America, the financial position of the Company as of December

31, 2023 and 2022, or the results of its operations or its cash flows for each of the three years in the period ended December 31, 2023.

Basis for Opinions

We conducted our audit in accordance with auditing standards generally accepted in the United States of

America (GAAS). Our responsibilities under those standards are further described in the Auditor’s

Responsibilities for the Audit of the Statutory Basis Financial Statements section of our report. We are

required to be independent of the Company, and to meet our other ethical responsibilities, in

accordance with the relevant ethical requirements relating to our audit. We believe that the audit

evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Basis for Adverse Opinion on Accounting Principles Generally Accepted in the United States of America

As described in Note 2 to the statutory basis financial statements, the statutory basis financial statements

are prepared by the Company using the accounting practices prescribed or permitted by the Kansas

Insurance Department, which is a basis of accounting other than accounting principles generally accepted in the United States of America, to meet the requirements of the Kansas Insurance Department. The effects on the statutory basis financial statements of the variances between the statutory basis of accounting described in Note 2 and accounting principles generally accepted in the United States of

America, although not reasonably determinable, are presumed to be material and pervasive.

Emphasis of Matter

As discussed in Note 1 to the statutory basis financial statements, the results of the Company may not be

indicative of those of a stand-alone entity, as the Company is a member of a controlled group of affiliated

companies. Our opinion is not modified with respect to this matter.

Responsibilities of Management for the Statutory Basis Financial Statements

Management is responsible for the preparation and fair presentation of the statutory basis financial

statements in accordance with the accounting practices prescribed or permitted by the Kansas Insurance

Department. Management is also responsible for the design, implementation, and maintenance of

internal control relevant to the preparation and fair presentation of statutory basis financial statements

that are free from material misstatement, whether due to fraud or error.

F-1

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In preparing the statutory basis financial statements, management is required to evaluate whether there

are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s

ability to continue as a going concern for one year after the date that the statutory basis financial

statements are issued.

Auditor’s Responsibilities for the Audit of the Statutory Basis Financial Statements

Our objectives are to obtain reasonable assurance about whether the statutory basis financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the statutory basis financial statements.

In performing an audit in accordance with GAAS, we:

•Exercise professional judgment and maintain professional skepticism throughout the audit.

•Identify and assess the risks of material misstatement of the statutory basis financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the statutory basis financial statements.

•Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, no such opinion is expressed.

•Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the statutory basis financial statements.

•Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control–related matters that we identified during the audit.

Report on Supplemental Schedules

Our 2023 audit was conducted for the purpose of forming an opinion on the 2023 statutory basis financial

statements as a whole. The supplemental schedule of selected financial data, summary investment

schedule, and reinsurance contract interrogatories as of and for the year ended December 31, 2023, are

presented for purposes of additional analysis and are not a required part of the 2023 statutory basis

financial statements. These schedules are the responsibility of the Company's management and were

derived from and relate directly to the underlying accounting and other records used to prepare the

statutory basis financial statements. Such schedules have been subjected to the auditing procedures

applied in our audit of the 2023 statutory basis financial statements and certain additional procedures,

including comparing and reconciling such schedules directly to the underlying accounting and other

records used to prepare the statutory basis financial statements or to the statutory basis financial

statements themselves, and other additional procedures in accordance with auditing standards generally

accepted in the United States of America. In our opinion, such schedules are fairly stated in all material

respects in relation to the 2023 statutory basis financial statements as a whole.

/s/ Deloitte & Touche LLP

Chicago, Illinois

March 21, 2024

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Union Security Insurance Company

Statutory Basis Statements of Admitted Assets, Liabilities and Capital and Surplus


	December 31,
	2023		2022
	($ in 000s)
Cash and invested assets
Bonds and notes	$	593,296	$	689,808

Preferred stocks - unaffiliated	27,100		28,466
Mortgage loans	81,949		36,721
Contract loans	3,869		4,518

Derivatives	—		23
Other invested assets	28,838		16,951
Cash, cash equivalents and short-term investments	11,362		63,027
Total cash and invested assets	746,414		839,514
Premiums deferred and uncollected	390		434

Accrued investment income	7,959		9,158
Federal income taxes recoverable	363		—
Amounts due from reinsurers	2,613		1,835
Receivables from affiliates	11,627		37

Net deferred tax asset	4,081		4,254
Other assets	1,425		2,763
Separate account assets	1,821,543		1,680,236
Total admitted assets	$	2,596,415	$	2,538,231
Liabilities
Policy reserves
Life insurance and annuity contracts	$	556,220	$	593,180
Accident and health contracts	3,626		3,716
Liability for deposit-type contracts	16,227		16,986
Policy and contract claims	10,622		16,237
Interest maintenance reserve	19,355		19,598
Asset valuation reserve	7,296		4,357
Reinsurance payable	5,635		5,319

Amount held for others	6,175		5,415
Payable to affiliates	273		24,520
Commissions, expenses, taxes, licenses, and fees accrued	2,805		2,194
Federal income taxes payable	—		5,297
Other liabilities	1,842		15,578
Separate account liabilities	1,821,543		1,680,236
Total liabilities	2,451,619		2,392,633
Capital and surplus
Capital
Common stock, $5 par value, 1,000,000 shares authorized, issued and outstanding	5,000		5,000
Paid-in capital	79,886		79,886
Deferred gains	17,216		22,329
Unassigned surplus	42,694		38,383
Total capital and surplus	144,796		145,598
Total liabilities and capital and surplus	$	2,596,415	$	2,538,231

See the accompanying Notes to Financial Statements

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Union Security Insurance Company

Statutory Basis Statements of Operations


	Years Ended December 31,
	2023		2022		2021
	($ in 000s)
Income
Premiums and other considerations
Life and annuity contracts	$	1,942	$	2,141	$	3,166
Accident and health contracts	219		275		939



Net investment income	41,172		49,567		54,696
Commission and fee income	19,885		18,613		24,329
Other income	1,263		2,331		2,365
Total income	64,481		72,927		85,495
Benefits and expenses
Death and annuity benefits	54,891		64,417		70,725

Disability and accident and health benefits	765		283		1,404

Interest on deposit-type contracts	1,802		1,826		2,286
Other benefits to policyholders and beneficiaries	940		650		2,507
Surrender benefits	3,238		3,406		2,396
Decrease in policy reserves-life and annuity contracts and accident and health insurance	(37,049)		(46,325)		(53,599)
General insurance expenses	9,120		16,707		8,864
Insurance taxes, licenses, fees, and commissions	14,111		14,048		15,592
Total benefits and expenses	47,818		55,012		50,175
Income before dividends to policyholders, federal income tax expense and net realized capital gains (losses)	16,663		17,915		35,320
Dividends to policyholders	531		601		617
Income before federal income tax expense and net realized capital gains (losses)	16,132		17,314		34,703
Federal income tax expense	1,845		3,754		4,503
Income before net realized capital gains (losses)	14,287		13,560		30,200
Net realized capital gains (losses), excluding gains (losses) transferred to IMR, net of tax expense (2023 - $795; 2022 - $8,388; 2021 - $3,809) excluding taxes transferred to (from) IMR (2023 - ($267); 2022 - $1,002; 2021 - ($4,085))	(9,018)		(9,341)		54,684
Net income	$	5,269	$	4,219	$	84,884

See the accompanying Notes to Financial Statements

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Union Security Insurance Company

Statutory Basis Statements of Changes in Capital and Surplus


	Years Ended December 31,
	2023		2022		2021
	($ in 000s)
Capital and surplus at beginning of year Additions (deductions)	$	145,598	$	205,557	$	127,913
Net income	5,269		4,219		84,884
Change in unrealized capital gains (losses), net of tax (2023 - $2,213; 2022 - ($1,138); 2021 - $317)	8,320		(4,280)		1,189
Change in nonadmitted assets	(2,231)		(11,850)		15,670
Change in net deferred income tax	3,892		12,194		(20,976)
Change in asset valuation reserve	(2,939)		2,506		3,647

Dividends to stockholder	(8,000)		(60,000)		—
Extinguishment or reclassification of balances with former parent	—		—		93
Amortization of gain on sale	(4,092)		(1,101)		(4,614)
Amortization of gain on reinsurance (see Note 7)	(1,021)		(1,647)		(2,249)
Net additions (deductions)	(802)		(59,959)		77,644
Capital and surplus at end of year	$	144,796	$	145,598	$	205,557

See the accompanying Notes to Financial Statements

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Union Security Insurance Company

Statutory Basis Statements of Cash Flows


	Years Ended December 31,
	2023		2022		2021
	($ in 000s)
Cash from operating activities
Premiums and other considerations	$	1,517	$	2,990	$	4,179
Net investment income received	42,682		50,205		49,785
Other income	15,105		18,846		23,419
Policy and contract benefits and dividends paid	(67,575)		(68,392)		(78,471)
Operating expenses paid	(23,366)		(32,494)		(22,308)
Federal income taxes paid	(8,300)		(10,300)		(5,778)
Net cash used in operating activities	(39,937)		(39,145)		(29,174)


Cash from investing activities
Proceeds from investments sold, matured or repaid

Bonds and notes	100,020		125,851		194,450
Stocks	1,811		2,000		28,155
Mortgage loans	722		10,487		4,933
Other invested assets	2,949		2,017		74,362
Miscellaneous proceeds (expenses)	(5)		15,616		—
Total investment proceeds	105,497		155,971		301,900
Cost of investments acquired
Bonds and notes	10,000		37,406		274,539

Mortgage loans	45,950		34,050		4,755
Other invested assets	13,696		8,700		—
Miscellaneous applications	27,793		—		969


Total investments acquired	97,439		80,156		280,263
Net increase in contract loans	(650)		(406)		(343)
Net cash provided by investing activities	8,708		76,221		21,980
Cash from financing and miscellaneous activities
Borrowed (repaid) funds	(20,777)		20,307		—
Dividends to stockholder	—		(1,078)		—
Other	341		(3,751)		(3,308)
Net cash provided (used) in financing and miscellaneous activities	(20,436)		15,478		(3,308)
Net change in cash and cash equivalents	(51,665)		52,554		(10,502)
Cash and cash equivalents at the beginning of year	63,027		10,473		20,975
Cash and cash equivalents at the end of year	$	11,362	$	63,027	$	10,473

Supplemental disclosure of non-cash items:
Non-cash transfer of bonds as a dividend to stockholder	$	8,000	$	29,517	$	—
Non-cash transfer of mortgage loans as a dividend to stockholder	—		29,405		—
Non-cash exchanges of bonds and notes	—		4,466		11,561

See the accompanying Notes to Financial Statements

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UNION SECURITY INSURANCE COMPANY

Notes to Statutory Basis Financial Statements

($ in 000s)

Note 1: Nature of Business

Union Security Insurance Company (“USIC” or the "Company") is a stock life insurance company domiciled in the State of Kansas and is a wholly-owned subsidiary of CMFG Life Insurance Company ("CMFG Life"), an Iowa life insurance Company. CMFG Life’s ultimate parent is CUNA Mutual Holding Company (“CMHC”), a mutual insurance holding company organized under the laws of Iowa. CMFG Life and its affiliated companies primarily sell insurance and other products to credit unions and consumers. USIC distributes its products in all states in the U.S. and the District of Columbia, except New York. The Company is a provider of pre-funded funeral insurance (“preneed”) products as well as traditional life insurance and annuities. The majority of the Company’s 2023 life insurance premiums were generated in California, Texas, Pennsylvania, Illinois, Florida, and New Jersey. The majority of the Company’s 2023 annuity deposits were generated in California, Arkansas, Minnesota, Pennsylvania, Missouri, and Illinois.

The Company was acquired by CMFG Life in 2021.

The Company had previously engaged in other insurance business activities prior to dispositions of such businesses through reinsurance arrangements. The reinsurance and coinsurance activities related to these businesses are described in Note 7, Reinsurance.

•In 2000, the Company divested its long-term care ("LTC") operations to John Hancock Life Insurance Company ("John Hancock"), using reinsurance and coinsurance. Assets supporting the LTC liabilities ceded are mainly held in trusts.

•In 2001, the Company entered into a reinsurance agreement with Hartford Life and Annuity Insurance Company (“Hartford Life”) for the sale of the Fortis Financial Group ("FFG") division, which sold variable life insurance and annuity products. The separate accounts relating to FFG are still reflected in the Company's statements of admitted assets, liabilities and capital and surplus. In May 2018, Hartford Life was purchased by a group of investors and became Talcott Resolution Life Insurance Company (“Talcott Resolution”).

•In 2016, the Company sold its employee benefits segment mainly through a series of reinsurance transactions with the United States branch of Sun Life Assurance Company of Canada ("Sun Life"), a subsidiary of Sun Life Financial Inc.

The accompanying statutory basis financial statements reflect various transactions and balances with the Company’s affiliates. See Note 6, Related Party Transactions, for a description of the significant transactions. While the Company believes that these transactions were at reasonable terms, the results of operations of the Company may have materially differed had these transactions been consummated with unrelated parties.

Note 2: Summary of Significant Accounting Policies

Basis of Presentation

The accompanying statutory basis financial statements of the Company have been prepared in conformity with accounting practices prescribed or permitted by the Kansas Insurance Department (“Insurance Department”), which differ in some respects from accounting principles generally accepted in the United States of America (“GAAP”).

Prescribed statutory accounting practices are practices incorporated directly or by reference in state laws, regulations and general administrative rules and are applicable to all insurance enterprises domiciled in a particular state. The Insurance Department has identified the Accounting Practices and Procedures Manual (“APPM”), as promulgated by the National Association of Insurance Commissioners (“NAIC”), as a source of prescribed statutory accounting practices for insurers domiciled in Kansas. Permitted statutory accounting practices encompass all accounting practices not prescribed by the NAIC and are approved by the insurance department of the insurer’s state of domicile. The Company does not utilize any permitted practices.

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GAAP/Statutory Accounting Differences

The following summary identifies the significant differences between the accounting practices prescribed or permitted by the Insurance Department and GAAP:

“Nonadmitted assets” (principally a portion of deferred taxes and certain receivables) are excluded from the statutory basis statements of admitted assets, liabilities and capital and surplus through a direct charge to unassigned surplus. Under GAAP, nonadmitted assets are presented in the balance sheet, net of any valuation allowance.

Investments in bonds and notes are generally carried at amortized cost, while under GAAP, they are carried at either amortized cost or fair value based on their classification according to the Company’s ability and intent to hold or trade the securities.

The change in carrying value of limited partnerships is reported directly in unassigned surplus, while under GAAP, the change is reflected in net investment income.

Distributions from limited partnerships that are not a return of capital are recorded as net investment income, while under GAAP, distributions from limited partnerships that are not a return of capital are recorded as a reduction in the carrying value of the limited partnerships.

For statutory accounting, the change in fair value of unaffiliated preferred stock is recorded in surplus in the statutory basis statements of changes in capital and surplus. For GAAP, the change in fair value of unaffiliated preferred stock is recorded in net realized investment gains (losses) in the statement of operations and comprehensive income.

The changes in fair value of derivative contracts are recorded in unassigned surplus as a change in net unrealized capital (losses), while under GAAP they are recorded in the statement of operations and comprehensive income unless the contracts meet certain hedge accounting criteria.

For statutory accounting, after an other-than-temporary impairment (“OTTI”) of bonds (other than loan-backed securities) is recorded, the fair value of the other-than-temporarily impaired bond becomes its new cost basis. For GAAP, an impairment is based on the net present value of expected cash flows if the Company intends to hold the security until it has recovered, and an impairment is recorded as a valuation allowance. If the Company does not intend to hold to recovery, the Company records an impairment, and the fair value becomes its new cost basis. For loan-backed securities, the impairment for statutory accounting is based on future cash flows.

The determination of a statutory impairment loss for mortgage loans is based on whether a loss on an individual loan is considered probable, whereas, for GAAP, a credit loss allowance is determined using an estimate of lifetime expected losses. The GAAP allowance is determined by pooling loans that share similar risk characteristics and considers current economic conditions to establish an estimate of lifetime credit losses, while loans with dissimilar characteristics are removed from the pool and evaluated for impairment individually.

For statutory accounting, the Company establishes a valuation allowance for credit losses on reinsurance recoverables when it concludes that it is probable that an individual reinsurer will not meet its obligations. Under GAAP, the establishment of an allowance for credit losses on reinsurance recoverables is based on lifetime expected losses for pools of similar reinsurers, segmented by credit rating.

Acquisition costs, such as commissions, premium taxes, and other costs relating to acquiring new and renewal business are expensed as incurred, while under GAAP, acquisition expenses directly related to the successful acquisition of new and renewal business are deferred and amortized over the periods benefited.

Policy reserves are established based on mortality and interest assumptions prescribed or permitted by state statutes, without consideration for withdrawals, which may differ from reserves established for GAAP using assumptions with respect to mortality, interest, expense, and withdrawals that are based on company experience and expectations.

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Under both GAAP and statutory accounting, deferred federal income taxes are provided for net unrealized capital gains or losses on investments and the temporary differences between the reporting and tax bases of assets and liabilities; however, there are limits as to the amount of deferred tax assets that may be reported as admitted assets under statutory accounting. Further, the change in deferred taxes is recognized as an adjustment to unassigned surplus under statutory accounting. For GAAP, changes in deferred taxes related to revenue and expense items are recorded in the statement of operations and comprehensive income. A federal income tax provision is required on a current basis only for the statutory basis statement of operations.

The asset valuation reserve (“AVR”), a statutory only reserve established by formula for the purpose of stabilizing the surplus of the Company against fluctuations in the fair value of certain invested assets, is recorded as a liability by a direct charge to unassigned surplus for statutory accounting. Such a reserve is not recorded under GAAP. For statutory accounting, the interest maintenance reserve (“IMR”) defers recognition of interest rate-related gains and losses resulting from the disposal of investment securities and amortizes them into income over the remaining contractual maturities of those securities; under GAAP, such gains and losses are recognized in income immediately.

Deposits, surrenders, and benefits on universal life type contracts are recorded in the statutory basis statement of operations, while such deposits and benefits are credited or charged directly to the policyholder account balances under GAAP. As a result, under GAAP, revenues on these types of contracts are composed of contract charges and fees, which are recognized when assessed against the account balance. Under GAAP, amounts collected are credited directly to policyholder account balances, and the benefits and claims on these contracts that are charged to expense only include benefits incurred in the period in excess of related policyholder account balances.

Amounts due from reinsurers for their share of ceded policy reserves and ceded policy and contract claim reserves are netted against the reserves rather than shown as assets under GAAP.

Comprehensive income and its components are not presented in the statutory basis financial statements, whereas under GAAP, comprehensive income is presented and changes in comprehensive income are reflected in accumulated other comprehensive income, a component of stockholder’s equity.

The statutory basis statements of cash flows are presented in the required statutory format. Under GAAP, the indirect method for the statement of cash flows requires a reconciliation of net income to net cash provided by operating activities.

Under GAAP, an acquiring entity is permitted to push down the fair values of acquired assets and liabilities, including goodwill and other intangible assets, to the acquired entity's balance sheet ("pushdown accounting"). Pushdown accounting is not allowed under statutory accounting.

Certain reinsurance transactions representing the disposal of product lines resulted in gains, which are deferred in unassigned surplus for statutory accounting, and are being amortized to income over the estimated lives of the underlying policies. For GAAP, these deferred gains were eliminated upon the acquisition of USIC due to GAAP purchase accounting.

Use of Estimates

The preparation of the statutory basis financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the statutory basis financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and, in some cases, the difference could be material. Investment valuations, determination of other-than-temporary impairments, deferred tax asset valuation reserves, provision for income taxes, policy and claim reserves, and reinsurance balances are most affected by the use of estimates and assumptions.

Investments

Investments are valued as prescribed by the NAIC.

Bonds and notes: Bonds and notes with an NAIC designation of 1 through 5 are generally stated at amortized cost. Bonds and notes with an NAIC designation of 6 are stated at the lower of amortized cost or fair value. Loan-backed and structured securities may be carried at the lower of amortized cost or fair value if they receive an initial designation of 6 under the multiple-designation methodology. Prepayment assumptions for loan-backed and structured securities are obtained from historical industry prepayment averages, industry survey values or internal estimates to determine the effective yield. Changes in the anticipated prepayments are incorporated when determining statement values. Changes in estimated cash flows from the previous assumptions are accounted for using the prospective method.

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Preferred stocks - unaffiliated: Preferred stocks are carried at amortized cost or the lower of amortized cost or fair value depending on the NAIC designation, unless the preferred stock is perpetual or mandatorily convertible, in which case it is carried at fair value.

Mortgage loans: Mortgage loans are carried at their amortized cost, net of impairments. A mortgage loan is considered impaired and a valuation allowance is established when it becomes probable, based on current information and events, that the Company will be unable to collect the total amounts due according to the contractual terms of the mortgage agreement. Impairments are recorded in net realized capital gains (losses) and are determined based upon the carrying value of the recorded investment in the mortgage loan and the estimated fair value of the underlying collateral.

Contract loans: Contract loans are reported at their unpaid principal balances. Valuation allowances are not established for contract loans, as they are fully collateralized by the cash surrender value of the underlying insurance policies. Any unpaid principal or interest on the loan is deducted from the cash surrender value or the death benefit prior to settlement of the insurance policy.

Other invested assets: Other invested assets include surplus notes carried at amortized cost and a limited partnership.

The limited partnership represents an interest in an affiliate, which invests in unaffiliated limited partnerships, and is accounted for using the equity method of accounting with changes in its carrying amount recorded directly to unassigned surplus. Accordingly, the Company’s investment in the limited partnership is carried at cost plus or minus the Company’s equity in the undistributed earnings or losses as reported by the partnership. Due to the timing of the availability of financial statements from the underlying partnerships’ general partners, the underlying limited partnerships are generally recorded on a three-month lag, as adjusted for contributions and distributions.

Net investment income: Net investment income is recognized on an accrual basis and dividends are recorded as earned at the ex-dividend date. Net investment income includes amortization of premiums and accretion of discounts on an effective-yield basis using expected cash flows. Prepayment penalties on mortgage loans are recorded as net investment income. Mortgage loan origination fees are included in income in the period received. Limited partnership income is recorded and classified in accordance with general partner instructions. Distributions from underlying investments in limited partnerships, other than those classified as a return of capital, are reported as net investment income.

Net realized capital gains (losses): Net realized capital gains (losses) on the sale of investments are determined based upon the specific identification method and are recorded on the trade date. Capital gain and loss distributions from underlying investments in limited partnerships are classified as net realized gains (losses).

Net unrealized capital gains (losses): Net unrealized capital gains (losses) are included in unassigned surplus, net of deferred federal income taxes.

NAIC 5GI securities: Investments with an NAIC 5GI rating signify the NAIC designation was assigned in reliance on the Company’s certification that documentation necessary to permit a full credit analysis of the security does not exist and that the issuer of the security is current in all principal and interest payments. In 2023 and 2022, the Company had no NAIC 5GI bonds and notes.

Derivatives

The Company used an interest rate swap to manage its exposure to inflation risk. The swap was recorded at estimated fair value with changes in fair value recorded as net unrealized capital gains (losses) in unassigned surplus. Annually, the Company exchanged cash with a third party based on an established index. The cash exchanged was calculated by comparing the consumer price index to an agreed notional principal amount. The swap was effective August 1, 2003 and limited the Company’s exposure to inflation risk to a maximum of 5% associated with the pre-funded funeral insurance business that was tied to the Consumer Price Index. The swap had a notional amount of $81,017 and fair value of $23 as of December 31, 2022. The swap matured August 1, 2023.

Cash, Cash Equivalents and Short-term Investments

Cash includes unrestricted deposits in financial institutions and short-term investments include those with maturities at the date of purchase of one year or less. Cash equivalents include money market mutual funds and investments with maturities at the date of purchase of 90 days or less and are reported at carrying value, which approximates amortized cost. Short-term investments, other than money market funds, are reported at amortized cost. Money market mutual funds are valued based on the closing price as of December 31.

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Policy Reserves

Life, annuity, long-term care and other accident and health benefit reserves are developed by actuarial methods and are determined based on published tables using statutorily specified interest rates and valuation methods that will provide, in the aggregate, reserves that are greater than or equal to the minimum or guaranteed policy cash values or the amounts required by the Insurance Department. The Company waives deduction of deferred fractional premiums on the death of insureds and returns any unearned premium beyond the date of death.

Returns of premium beyond the date of death are calculated using standard industry formulas.

Surrender values on policies do not exceed the corresponding benefit reserves. Additional reserves are established when the results of cash flow testing under various interest rate scenarios indicate the need for such reserves or the net premiums exceed the gross premiums on any insurance in force. Changes in reserve valuation basis are recorded as a direct increase or decrease in unassigned funds.

Tabular interest and tabular cost for life insurance has been determined from the basic data for the calculation of policy reserves. Tabular interest for annuities has been determined by formula. Tabular less actual reserves released has been determined by formula. Tabular interest on funds not involving life contingencies is calculated as the product of such valuation rate of interest times the mean of the amount of funds subject to such valuation rate of interest held at the beginning and end of the year of valuation.

Liability for Deposit-Type Contracts

The Company recognizes a liability for policyholder deposits that are not subject to policyholder mortality or longevity risk at the stated account value. The account value equals the sum of the original deposit plus accumulated interest, less any withdrawals and expense charges. Such deposits primarily represent annuity contracts without life contingencies, amounts left on deposit with the Company by beneficiaries or policy owners, and annual dividends credited to policyholders left on deposit.

Policy and Contract Claim Reserves

Liabilities established for unpaid benefits for life and accident and health insurance contracts represent the estimated amounts required to cover the ultimate cost of settling reported and incurred but unreported losses. These estimates are adjusted in the aggregate for ultimate loss expectations based on historical experience patterns and current economic trends. Any change in the probable ultimate liabilities, which might arise from new information emerging, is reflected in the statutory basis statements of operations in the period the change is determined to be necessary.

Revenue Recognition

Premiums for life policies are recorded as revenue when due. Annuity premiums are recorded as revenue when received. Accident and health premiums are recorded as revenue when due and earned ratably over the period covered by the policy. Other income is recorded as earned.

Income Tax

Deferred income taxes are recognized, subject to an admissibility test for deferred tax assets, and represent the future tax consequences attributable to differences between the statutory basis financial statement carrying amount of assets and liabilities and their respective tax bases. Gross deferred tax assets are reduced by a statutory valuation allowance if it is more likely than not that some portion or all of the deferred tax assets will not be realized. See Note 5, Income Tax, for the components of the admissibility test used to calculate the admitted deferred tax assets. Recorded deferred tax amounts are adjusted to reflect changes in income tax rates and other tax law provisions as they are enacted. The net change in deferred taxes is recorded directly to unassigned surplus.

The Company is subject to tax-related audits. The Company accounts for any federal and foreign tax contingent liabilities in accordance with Statement of Statutory Accounting Principles (“SSAP”) No. 5R, Liabilities, Contingencies and Impairments of Assets, as modified by SSAP No. 101, Income Taxes, and any state and other tax contingent liabilities in accordance with SSAP No. 5R.

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Reinsurance

Reinsurance premiums, claims and benefits, commission expense reimbursements and reserves related to reinsured business ceded are accounted for on a basis consistent with the accounting for the underlying direct policies issued and the terms of the reinsurance contracts. Premiums and benefits ceded to other companies have been reported as reductions of premium income and benefits in the accompanying statutory basis statements of operations. Policy and claim reserves are reported net of unbilled reinsurance recoverables. The Company has evaluated its reinsurance contracts and determined that all significant contracts transfer the underlying economic risk of loss. If the Company determines it is probable that a reinsurance amount will not be collectible, the amounts are designated as doubtful accounts and an allowance is established for the estimated uncollectible amount. The allowance for uncollectible accounts is estimated based on a combination of write-off history, aging analysis, and any specific, known doubtful accounts. Amounts are written off when they are deemed uncollectible.

Separate Accounts

Separate account assets and liabilities reported in the accompanying statutory basis statements of admitted assets, liabilities and capital and surplus represent funds that are separately administered, principally for variable life and variable annuity contracts, and for which the contract holder, rather than the Company, bears the investment risk. Separate account assets are reported at fair value.

Separate account reserves for the payment of future policy benefits are computed under the Commissioner’s Reserve Valuation Method for variable universal life policies and Commissioner’s Annuity Reserve Valuation Method for variable annuity policies. The Company applies these methods by reporting an asset that partially offsets the separate account liabilities and through direct reduction of certain policy reserves.

Prior to April 2001, FFG had issued variable insurance products registered as securities under the Securities Act of 1933. These products featured fixed premiums, a minimum death benefit, and policyholder returns linked to an underlying portfolio of securities. The variable insurance products issued by FFG were fully ceded to Talcott Resolution.

Premiums received and benefits paid on variable life and variable annuity policies, which are presented net of reinsurance (see Note 7) in the statutory basis statements of operations, are included in the life premiums and policy benefits of the Company, respectively.

Statutory Valuation Reserves

The IMR is maintained for the purpose of stabilizing the surplus of the Company against gains and losses on sales of investments that are primarily attributable to changing interest rates. The interest rate-related gains and losses are deferred and amortized into income over the remaining lives of the securities sold. If the IMR is calculated to be a net asset, the Company admits the IMR asset until it reaches 10% of adjusted capital and surplus and is included in other assets on the Statutory Basis Statement of Admitted Assets, Liabilities and Capital and Surplus.

The AVR is a formulaic reserve for fluctuations in the values of invested assets, primarily bonds and notes, mortgage loans, unaffiliated preferred stocks, and limited partnerships. Changes in the AVR are charged or credited directly to unassigned surplus.

Recently Adopted Accounting Standard Updates

The NAIC adopted INT 23-01 Net Negative (Disallowed) Interest Maintenance Reserve (“INT 23-01”), which is an interpretation that prescribes limited-time, optional, statutory accounting guidance as an exception to the existing guidance detailed in SSAP No. 7 Asset Valuation Reserve and Interest Maintenance Reserve. Under the INT 23-01, reporting entities are allowed to admit negative IMR if certain criteria are met. The adoption of this guidance had no impact on the Company, as USIC did not report any negative IMR at December 31, 2023.

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Accounting Standards Updates Pending Adoption

During 2023, the NAIC issued updates to SSAPs related to its bond definition project that clarifies the definition of bond investments. The new principles-based bond definition is applied to securities to determine whether they should be classified as long-term bonds or equity securities for statutory reporting purposes. Under the new guidance, a bond must represent a creditor relationship with a fixed payment schedule and qualify as either an issuer credit obligation or an asset-backed security. Securities with equity-like characteristics or ownership interests are not bonds and are to be reported on a separate reporting schedule in the Annual Statement. The new guidance will be effective on January 1, 2025. The Company’s implementation project is in progress, and the impact on the statutory basis financial statements is still being assessed.

Note 3: Investments

Bonds and Notes

The statement value, which generally represents amortized cost, gross unrealized gains and losses, and fair value of investments in bonds and notes at December 31, 2023 are as follows:




	Statement		Gross Unrealized
	Value		Gains		Losses		Fair Value

U.S. government and agencies	$	1,024	$	3	$	(149)	$	878
States, territories and possessions	2,410		—		(137)		2,273
Political subdivisions of states,
territories and possessions	35,941		427		(9,251)		27,117


Industrial and miscellaneous	405,303		42,490		(16,935)		430,858

Residential mortgage-backed securities	28,979		92		(5,751)		23,320
Commercial mortgage-backed securities	55,072		138		(9,274)		45,936

Other structured securities	64,567		260		(3,248)		61,579

Total bonds and notes	$	593,296	$	43,410	$	(44,745)	$	591,961

The statement value, which generally represents amortized cost, gross unrealized gains and losses, and fair value of investments in bonds and notes at December 31, 2022 are as follows:





	Statement		Gross Unrealized
	Value		Gains		Losses		Fair Value

U.S. government and agencies	$	1,532	$	5	$	(167)	$	1,370
States, territories and possessions	2,412		—		(241)		2,171
Political subdivisions of states,
territories and possessions	36,114		224		(10,855)		25,483

Industrial and miscellaneous	496,465		38,061		(25,253)		509,273
Residential mortgage-backed securities	31,061		94		(5,758)		25,397
Commercial mortgage-backed securities	55,652		131		(10,051)		45,732
Other structured securities	66,572		676		(5,964)		61,284

Total bonds and notes	$	689,808	$	39,191	$	(58,289)	$	670,710

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The statement value and fair value of bonds and notes at December 31, 2023, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Because of the potential for prepayment on mortgage-backed and non-mortgage asset-backed securities, such securities have not been displayed in the table below by contractual maturity.




	Statement
	Value		Fair Value
Due in one year or less	$	461	$	461
Due after one year through five years	43,584		45,602
Due after five years through ten years	102,827		102,586
Due after ten years	297,806		312,477




Residential mortgage-backed securities	28,979		23,320
Commercial mortgage-backed securities	55,072		45,936

Other structured securities	64,567		61,579
Total bonds and notes	$	593,296	$	591,961

The Company holds bonds as the result of a securitization transaction whereby the Company transferred commercial mortgage loans into an affiliated real estate trust and subsequently purchased bonds from the trust. These bonds have a carrying value of $3,890 and $3,807 and a fair value of $3,983 and $3,863 as of December 31, 2023 and 2022, respectively.

Preferred Stocks – Unaffiliated

The statement value, gross unrealized gains and losses and fair value of unaffiliated preferred stocks at December 31 are as follows:




	Statement		Gross Unrealized
Preferred Stocks	Value		Gains		Losses		Fair Value

December 31, 2023	$	27,100	$	58	$	—	$	27,158
December 31, 2022	28,466		137		—		28,603

Mortgage Loans

The Company’s mortgage loan portfolio consists of commercial mortgage loans, all of which are collateralized by completed properties. At December 31, 2023, the commercial mortgage loan portfolio had an average remaining life of 7.8 years, with all principal due prior to 2044. The Company limits its concentrations of credit risk. No loan to a single borrower represented more than 9.4% of the aggregate mortgage loan portfolio balance.

The following table provides the current amounts of the mortgage loan portfolio at December 31:




	2023		2022
Current	$	81,949	$	36,721
Total carrying value	$	81,949	$	36,721

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There were no past due amounts or impaired loans and the Company has no interest accrued on loans greater than 90 days past due as of December 31, 2023 and 2022.

The Company’s mortgage loans are located throughout the United States. The following table identifies states with greater than 5% of the commercial mortgage portfolio based on current principal amounts at December 31:




	2023		2022
California	26.5	%	13.6	%
Colorado	14.0		16.3
Arizona	10.6		12.7
Ohio	10.4		23.1
Pennsylvania	9.4		*
Maryland	7.9		*
Missouri	6.3		*
Georgia	5.7		13.3
New Hampshire	*		8.1
Oregon	*		6.9
Illinois	*		5.4

The types of properties collateralizing the commercial mortgage loans based on current principal amounts at December 31 are as follows:




	2023		2022
Industrial	49.3	%	50.9	%
Apartment	24.0		36.4
Retail	18.6		5.7

Office	8.1		6.9


Total	100.0	%	100.0	%

The Company had no commitments as of December 31, 2023 or 2022 to lend additional funds to mortgagors whose existing mortgage terms had been restructured in a troubled debt restructuring. There were no mortgage loan restructures in 2023 or 2022.

Valuation allowances are maintained at a level that is adequate to absorb estimated probable credit losses of each specific loan. Management performs a periodic evaluation of the adequacy of the allowance for losses based on past loan loss experience, known and inherent credit risks in the portfolio, adverse situations that may affect the borrower’s ability to repay (including timing of future payments), the estimated value of the underlying collateral, composition of the loan portfolio, current economic conditions, cash flow of the underlying properties, property occupancy and other relevant factors. Trends in market vacancy and rental rates are incorporated into the analysis of monitored loans and may contribute to the establishment of (or an increase or decrease in) an allowance for credit losses. In addition, a review of each loan in the commercial mortgage loan portfolio is performed on a quarterly basis to identify emerging credit risks. A valuation allowance is established or adjusted for specific loans as warranted based on this analysis. The Company’s process for determining past due or delinquency status begins when a payment date is missed. The Company places loans on nonaccrual status when it is probable that income is uncollectible. Income received after a loan is put on nonaccrual status is recognized on a cash basis. As of December 31, 2023 and 2022, there were no mortgage loans in nonaccrual status and no valuation allowance was established for mortgage loans. Mortgage loans deemed uncollectible are written off against the allowance for losses. The allowance is also adjusted for any subsequent recoveries.

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The Company measures and assesses the credit quality of mortgage loans by using loan to value and debt service coverage ratios. The loan to value ratio compares the principal amount of the loan to the fair value of the underlying property collateralizing the loan and is commonly expressed as a percentage. Loan to value ratios greater than 100% indicate that the principal amount is greater than the collateral value. Therefore, all else being equal, a lower loan to value ratio generally indicates a higher quality loan. The debt service coverage ratio compares a property’s net operating income to its debt service payments. Debt service coverage ratios of less than 1.0 indicate that property operations do not generate enough income to cover its current debt payments. Therefore, a higher debt service coverage ratio generally indicates a higher quality loan. The loan to value and debt service coverage ratios are updated regularly.

Loan to value and debt service coverage ratios were as follows at December 31:




	2023			2022
			Average			Average
	Principal		Debt Service	Principal		Debt Service
Loan to Value	Amount		Coverage Ratio	Amount		Coverage Ratio

Less than 65%	$	81,949	2.43	$	36,721	1.89


Total	$	81,949	2.43	$	36,721	1.89

Limited Partnerships

The Company owns a portion of MCA Fund VI LP, an affiliated limited partnership, which invests in unaffiliated limited partnerships across a diversified mix of private equity, mezzanine, real estate and natural resource funds. The Company‘s investment was $20,565 and $8,317 at December 31, 2023 and December 31, 2022, respectively. The Company funded commitments of $12,617 and $8,698 in 2023 and 2022, respectively. MCA Fund VI LP terminates on January 1, 2037, unless extended.

The financial statements of MCA Fund VI LP were not audited at December 31, 2023 or 2022, and therefore the Company utilized the look-through approach for the valuation. The Company recorded the value of its investments in these limited partnerships on a lag, based on the net asset value disclosed in the audited financial statements of the underlying limited partnerships. All liabilities, funded commitments, and contingencies related to the underlying entities are reflected in the Company's net carrying values of the limited partnerships.

The Company’s maximum exposure to loss associated with MCA Fund VI LP is $84,607 and $64,264 at December 31, 2023 and 2022, respectively, which is the amount invested plus other commitments and guarantees. As described in Note 10, Commitments and Contingencies, the Company makes commitments to limited partnerships in the normal course of business. Excluding these commitments, the Company did not provide financial or other support to MCA Fund VI LP during the year ended December 31, 2023 and 2022.

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Cash, Cash Equivalents and Short-term Investments

The details of cash, cash equivalents and short-term investments as of December 31, are as follows:




	2023		2022

Short-term investment - U.S. government securities	$	—	$	14,679
Money market mutual funds	8,633		32,433
Cash	2,729		15,915

Total cash, cash equivalents and short-term investments	$	11,362	$	63,027

Accrued Investment Income

Sources of accrued investment income as of December 31 are shown in the table below.




	2023		2022

Bonds and notes	$	7,355	$	8,701
Mortgage loans	343		84
Preferred stocks - unaffiliated	151		138
Contract loans	74		88
Cash and cash equivalents	36		147

Total accrued investment income	$	7,959	$	9,158

Due and accrued investment income over 90 days past due is excluded from the statutory basis statements of admitted assets, liabilities and capital and surplus as a nonadmitted asset. There was no accrued investment income excluded at December 31, 2023 or 2022 on this basis.

Net Investment Income

Sources of net investment income for the years ended December 31 are summarized as follows:




	2023		2022		2021

Bonds and notes	$	36,038	$	41,793	$	44,726

Preferred stocks - unaffiliated	1,653		1,709		2,867
Mortgage loans	2,652		2,467		2,083
Contract loans	214		257		293
Derivatives	—		3,237		—

Other invested assets	552		602		5,482
Cash and cash equivalents	599		442		2
Other	578		27		138

Gross investment income	42,286		50,534		55,591
Less investment expenses	1,114		967		895

Net investment income	$	41,172	$	49,567	$	54,696

Investment expenses include interest, salaries, brokerage fees and securities’ custodial fees.

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Total net investment income recognized as a result of prepayment penalties or acceleration fees was $427 and $1,082 for the years ended 2022, and 2021, respectively. There was no net investment income recognized as a result of prepayment penalties or acceleration fees for the year ended December 31, 2023.

Net Realized Capital Gains (Losses)

Net realized capital gains (losses) for the years ended December 31 are summarized as follows:




	2023		2022		2021

Bonds and notes:
Gross gains from sales	$	1,104	$	5,420	$	13,536
Gross losses from sales	(260)		(8,911)		(453)
Other	799		—		2,810
Common stocks - unaffiliated:
Gross gains from sales	—		—		669
Preferred stocks - unaffiliated:
Gross gains from sales	—		—		2,153
Gross losses from sales	(361)		—		(140)
Other	—		(27)		2,110
Mortgage loans:
Gross losses from sales	—		(1,253)		—
Limited partnerships:
Gross gains from distributions	205
Other invested assets:
Gross gain from sales	—		49		53,177
Derivative financial instruments	(8,705)		—		—

Net realized capital gains (losses) before taxes and transfer to IMR	(7,218)		(4,722)		73,862
Tax on net realized capital gains (losses)	(527)		(9,390)		276
Transfer to IMR	(1,273)		4,771		(19,454)


Net realized capital gains (losses)	$	(9,018)	$	(9,341)	$	54,684

Proceeds from the sale of bonds and notes were $21,209, $105,763, and $65,623 in 2023, 2022, and 2021, respectively. Proceeds from the sale of stocks were $1,811 and $19,009 in 2023 and 2021, respectively. There were no proceeds from the sale of stocks in 2022.

Other-Than-Temporary Impairments of Investments

Investment securities are reviewed for OTTI on an ongoing basis. The Company creates a watchlist of securities based largely on the fair value of an investment security relative to its amortized cost. When the fair value drops below the Company’s amortized cost, the Company monitors the security for OTTI. The determination of OTTI requires significant judgment on the part of the Company and depends on several factors, including, but not limited to:

•The existence of any plans to sell the investment security.

•The extent to which fair value is less than statement value.

•The underlying reason for the decline in fair value (credit concerns, interest rates, etc.).

•The financial condition and near-term prospects of the issuer/borrower, including the ability to meet contractual obligations, relevant industry trends and conditions and cash flow analysis.

•For loan-backed and structured securities and equity securities, the Company’s intent and ability to retain its investment for a period of time sufficient to allow for an anticipated recovery in fair value.

•The Company’s ability to recover all amounts due according to the contractual terms of the agreements.

•The Company’s collateral position, in the case of bankruptcy or restructuring.

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A bond is considered to be other-than-temporarily impaired when the fair value is less than the amortized cost basis and its value is not expected to recover through the Company’s holding period. When this occurs, the Company records a net realized capital loss equal to the difference between the amortized cost and fair value. The fair value of the other-than-temporarily impaired security becomes its new cost basis. If the bond is a loan-backed or structured security, it is considered to be other-than-temporarily impaired when the amortized cost exceeds the present value of cash flows expected to be collected and its value is not expected to recover through the Company’s holding period. The amount of the OTTI recognized in net income as a realized loss equals the difference between the investment's amortized cost basis and its expected cash flows.

For certain securitized financial assets with contractual cash flows, the Company is required to update its best estimate of cash flows over the life of the security. If the fair value of a securitized financial asset is less than its cost or amortized cost and there has been a decrease in the present value of the estimated cash flows since the last revised estimate, considering both timing and amount, an OTTI charge equal to the difference between amortized cost and present value of future cash flows is recognized. The Company also considers its intent and ability to retain a temporarily impaired security until recovery. Estimating future cash flows involves judgment and includes both quantitative and qualitative factors. Such determinations incorporate various information and assessments regarding the future performance of the underlying collateral. In addition, projections of expected future cash flows may change based upon new information regarding the performance of the underlying collateral.

For investments in limited partnerships, the Company reviews the financial condition and future profitability of the limited partnership interest to assess whether any excess of its initial cost basis over the current carrying basis determined using the equity method of accounting is other-than-temporary. If such excess is deemed to be other-than-temporary, the amount is recorded as a net realized capital loss.

For those stocks with a decline in the fair value deemed to be other-than-temporary, a net realized capital loss is recorded equal to the difference between the fair value and cost basis of the security. The previous cost basis less the amount of the estimated impairment becomes the security’s new cost basis. The Company asserts its intent and ability to retain those stocks deemed to be temporarily impaired until the price recovers. Once identified, these securities are restricted from trading.

Management believes it has made an appropriate provision for other-than-temporarily impaired securities owned at December 31, 2023. As a result of the subjective nature of these estimates, however, additional provisions may subsequently be determined to be necessary, as new facts emerge and a greater understanding of economic trends develop. Additional OTTI will be recorded as appropriate and as determined by the Company’s regular monitoring procedures of additional facts. In light of the variables involved, such additional OTTI could be significant.

The Company did not recognize any OTTI on loan-backed and structured securities during 2023, 2022, and 2021 caused by an intent to sell or lack of intent and ability to hold until recovery of the amortized cost basis.

The Company recognized no credit related OTTI on loan-backed securities in 2023

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Net Unrealized Capital Gains (Losses)

Information regarding the Company’s bonds and notes with unrealized losses at December 31, 2023 is presented below, segregated between those that have been in a continuous unrealized loss position for less than twelve months and those that have been in a continuous unrealized loss position for twelve or more months.




	Months in Unrealized Loss Position
	Less Than				Twelve				Total
	Twelve Months				Months or Greater				December 31, 2023
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
U.S. government and agencies	$	—	$	—	$	822	$	(149)	$	822	$	(149)
States, territories and possessions	—		—		2,273		(137)		2,273		(137)
Political subdivisions of states,
territories and possessions	—		—		23,896		(9,251)		23,896		(9,251)
Industrial and miscellaneous	5,040		(27)		111,399		(16,908)		116,439		(16,935)
Residential mortgage-backed
securities	—		—		22,517		(5,751)		22,517		(5,751)
Commercial mortgage-backed
securities	—		—		43,951		(9,274)		43,951		(9,274)
Other structured securities	4,899		(76)		51,659		(3,172)		56,558		(3,248)




Total temporarily
impaired securities	$	9,939	$	(103)	$	256,517	$	(44,642)	$	266,456	$	(44,745)

At December 31, 2023, the Company owned 238 bonds and notes with a fair value of $266,456 in an unrealized investment loss position. There were 225 bonds and notes with a fair value of $256,517 in an unrealized loss position for twelve or more months. The aggregate severity of unrealized losses for bonds and notes with a loss period of twelve months or greater is approximately 14.8% of amortized cost. The total fair value of bonds and notes with unrealized losses at December 31, 2023 and which are rated “investment grade” based on having an NAIC rating of 1 or 2 is $256,111 or 96.1% of the total fair value of all bonds and notes with unrealized losses at December 31, 2023. Total unrealized losses on investment grade bonds and notes were $43,546 at December 31, 2023.

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Information regarding the Company’s bonds and notes and stocks with unrealized losses at December 31, 2022 is presented below, segregated between those that have been in a continuous unrealized loss position for less than twelve months and those that have been in a continuous unrealized loss position for twelve or more months.




	Months in Unrealized Loss Position
	Less Than				Twelve				Total
	Twelve Months				Months or Greater				December 31, 2022
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
U.S. government and agencies	$	—	$	—	$	809	$	(167)	$	809	$	(167)
States, territories and
possessions	—		—		2,171		(241)		2,171		(241)
Political subdivisions of states,
territories and possessions	3,546		(1,064)		18,916		(9,791)		22,462		(10,855)
Industrial and miscellaneous	28,564		(2,813)		140,381		(22,440)		168,945		(25,253)
Residential mortgage-backed
securities	—		—		24,446		(5,758)		24,446		(5,758)
Commercial mortgage-backed
securities	3,948		(874)		39,868		(9,177)		43,816		(10,051)
Other structured securities	9,547		(1,146)		45,974		(4,818)		55,521		(5,964)

Total temporarily
impaired securities	$	45,605	$	(5,897)	$	272,565	$	(52,392)	$	318,170	$	(58,289)

At December 31, 2022, the Company owned 314 bonds and notes with a fair value of $318,170 in an unrealized investment loss position. There were 282 bonds and notes with a fair value of $272,565 in an unrealized loss position for twelve or more months. The aggregate severity of unrealized losses for bonds and notes with a loss period of twelve months or greater is approximately 16.1% of amortized cost. The total fair value of bonds and notes with unrealized losses at December 31, 2022 and which are rated “investment grade” based on having an NAIC rating of 1 or 2 is $301,529 or 94.8% of the total fair value of all bonds and notes with unrealized losses at December 31, 2022. Total unrealized losses on investment grade bonds and notes were $56,219 at December 31, 2022.

Investment Credit Risk

The Company maintains a diversified investment portfolio including issuer, sector and geographic stratification, where applicable, and has established certain exposure limits, diversification standards, and review procedures to mitigate credit risk.

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Restricted Assets

As of December 31, 2023 and 2022, the Company has securities that were restricted or on deposit with government authorities as required by law to satisfy regulatory requirements or with trustees as required by reinsurance agreements.

Restricted assets by category as of December 31 are as follows:




	2023						2022
	Total		Restricted		Restricted to		Total		Restricted		Restricted to
	Admitted		to Total		Total Admitted		Admitted		to Total		Total Admitted
	Restricted		Assets		Assets		Restricted		Assets		Assets
On deposit with states and
other regulatory bodies	$	3,205	0.1	%	0.1	%	$	3,085	0.1	%	0.1	%
Pledged as collateral not
captured in other categories	302,142		11.6	%	11.6	%	300,238		11.8	%	11.8	%
Total restricted assets	$	305,347	11.7	%	11.6	%	$	303,323	11.9	%	11.9	%

Note 4: Fair Value

The Company uses fair value measurements to record fair value of certain assets and liabilities and to estimate fair value of financial instruments not recorded at fair value but required to be disclosed at fair value. Certain financial instruments, such as insurance policy liabilities other than deposit-type contracts and investments accounted for using the equity method, are excluded from the fair value disclosure requirements. The Company uses fair value measurements obtained using observable inputs or internally determined estimates to estimate fair value.

Valuation Hierarchy

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value of assets and liabilities into three broad levels. The Company has categorized its financial instruments, based on the degree of subjectivity inherent in the valuation technique, as follows:

•Level 1: Inputs are directly observable and represent quoted prices for identical assets or liabilities in active markets the Company has the ability to access at the measurement date.

•Level 2: All significant inputs are observable, either directly or indirectly, other than quoted prices included in Level 1, for the asset or liability. This includes: (i) quoted prices for similar instruments in active markets, (ii) quoted prices for identical or similar instruments in markets that are not active, (iii) inputs other than quoted prices that are observable for the instruments and (iv) inputs that are derived principally from or corroborated by observable market data by correlation or other means.

•Level 3: One or more significant inputs are unobservable and reflect the Company’s estimates of the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk.

For purposes of determining the fair value of the Company’s assets and liabilities, observable inputs are those inputs used by market participants in valuing financial instruments, which are developed based on market data obtained from independent sources. In the absence of sufficient observable inputs, unobservable inputs, reflecting the Company’s estimates of the assumptions market participants would use in valuing financial assets and liabilities, are developed based on the best information available in the circumstances. The Company uses prices and inputs that are current as of the measurement date. In some instances, valuation inputs used to measure fair value fall into different levels of the fair value hierarchy. The category level in the fair value hierarchy is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

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The hierarchy requires the use of market observable information when available for measuring fair value. The availability of observable inputs varies by investment. In situations where the fair value is based on inputs that are unobservable in the market or on inputs from inactive markets, the determination of fair value requires more judgment and is subject to the risk of variability. The degree of judgment exercised by the Company in determining fair value is typically greatest for investments categorized in Level 3. Transfers in and out of level categorizations are reported as having occurred at the end of the quarter in which the transfer occurred.

Valuation Process

The Company is responsible for the determination of fair value and the supporting assumptions and methodologies. The Company gains assurance on the overall reasonableness and consistent application of valuation methodologies and inputs and compliance with accounting standards through the execution of various processes and controls designed to provide assurance that assets and liabilities are appropriately valued.

The Company has policies and guidelines that require the establishment of valuation methodologies and consistent application of such methodologies. These policies and guidelines govern the use of inputs and price source hierarchies and provide controls around the valuation processes. These controls include appropriate review and analysis of prices against market activity or indicators of reasonableness, approval of price source changes, price overrides, methodology changes and classification of fair value hierarchy levels. The valuation policies and guidelines are reviewed and updated as appropriate.

For fair values received from third parties or internally estimated, the Company’s processes are designed to provide assurance that the valuation methodologies and inputs are appropriate and consistently applied, the assumptions are reasonable and consistent with the objective of determining fair value, and the fair values are appropriately recorded. The Company performs procedures to understand and assess the methodologies, process and controls of valuation service providers. In addition, the Company may validate the reasonableness of fair values by comparing information obtained from valuation service providers or brokers to other third-party valuation sources for selected securities. When using internal valuation models, these models are developed by the Company’s investment group using established methodologies. The models, including key assumptions, are reviewed with various investment sector professionals, accounting, operations, compliance, and risk management professionals. In addition, when fair value estimates involve a high degree of subjectivity, the Company validates them through reviews by members of management who have relevant expertise and who are independent of those charged with executing investment transactions.

Transfers Between Levels

There were no transfers between levels in 2023 and 2022.

Fair Value Measurement

The following table summarizes the Company’s assets that are measured at fair value on a recurring basis as of December 31, 2023.




Assets, at Fair Value	Level 1		Level 2		Level 3		Total
Preferred stock - unaffiliated	$	—	$	26,302	$	—	$	26,302
Cash equivalents	8,633		—		—		8,633

Separate account assets	1,775,541		45,631		—		1,821,172
Total assets	$	1,784,174	$	71,933	$	—	$	1,856,107

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The following table summarizes the Company’s assets that are measured at fair value on a recurring basis as of December 31, 2022.




Assets, at Fair Value	Level 1		Level 2		Level 3		Total
Preferred stock - unaffiliated	$	—	$	23,506	$	—	$	23,506
Cash equivalents	32,433		—		—		32,433
Derivatives	—		23		—		23
Separate account assets	1,622,216		57,583		—		1,679,799
Total assets	$	1,654,649	$	81,112	$	—	$	1,735,761

The Company had no liabilities measured at fair value on a recurring basis as of December 31, 2023 and 2022.

Fair Value Measurement of Financial Instruments

The following table summarizes the carrying amounts and fair values of the Company’s financial instruments for which it is practicable to estimate fair value by fair value measurement level at December 31, 2023:




	Carrying
	Amount		Fair Value		Level 1		Level 2		Level 3

Financial instruments recorded
as assets:
Bonds and notes	$	593,296	$	591,961	$	—	$	587,978	$	3,983
Preferred stocks - unaffiliated	27,100		27,158		—		27,158		—
Mortgage loans	81,949		79,793		—		—		79,793
Cash equivalents and short-term
investments	8,633		8,633		8,633		—		—
Other invested assets	8,257		9,040		—		9,040		—

Contract loans	3,869		4,506		—		—		4,506
Separate account assets	1,821,543		1,821,172		1,775,541		45,631		—
Financial instruments recorded
as liabilities:
Deposit-type contracts	16,227		13,910		—		13,910		—
Annuity contracts	16,108		13,809		—		13,809		—
Separate account liabilities	1,821,543		1,821,172		1,775,541		45,631		—

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The following table summarizes the carrying amounts and fair values of the Company’s financial instruments for which it is practical to estimate by fair value measurement level at December 31, 2022.




	Carrying
	Amount		Fair Value		Level 1		Level 2		Level 3

Financial instruments recorded
as assets:
Bonds and notes	$	689,808	$	670,710	$	—	$	666,847	$	3,863
Preferred stocks - unaffiliated	28,466		28,603		—		28,603		—
Mortgage loans	36,721		34,327		—		—		34,327
Cash equivalents and
short-term investments	47,112		47,112		32,433		14,679		—
Other invested assets	8,606		9,270		—		9,270		—
Derivatives	23		23		—		23		—
Contract loans	4,518		5,150		—		—		5,150
Separate account assets	1,680,236		1,679,799		1,622,216		57,583		—
Financial instruments recorded
as liabilities:
Deposit-type contracts	16,986		15,174		—		15,174		—
Annuity contracts	16,378		14,631		—		14,631		—
Separate account liabilities	1,680,236		1,679,799		1,622,216		57,583		—

The carrying amounts for accrued investment income and certain receivables and payables approximate their fair values due to their short-term nature and have been excluded from the fair value tables above.

Determination of Fair Values

The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments by fair value hierarchy level:

Level 1 Measurements

Cash equivalents and short-term investments: Consists of money market mutual funds which are valued based on the closing price as of December 31.

Separate account assets and liabilities: Consists of mutual funds. Valuation is based on the closing price as of the balance sheet date. Separate account liabilities represent the account value owed to the customer; the fair value is determined by reference to the fair value of the related separate account assets.

Level 2 Measurements

Bonds and notes: Valuation is principally based on observable inputs including quoted prices for similar assets in markets that are active and observable market data.

Preferred stocks - unaffiliated: Consists of privately placed preferred stock. Valuation is based on observable market inputs such as risk-free rates and market comparables.

Cash equivalents and short-term investments: Consists of an U.S. Treasury security which is classified as cash equivalents and short-term investments. Valuation is principally based on observable inputs including quoted prices for similar assets in markets that are active and observable market data.

Other invested assets: Consists of surplus notes. Valuation is principally based on observable inputs including quoted prices for similar assets in markets that are active and observable market data.

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Derivatives: Consists of swaps. Valuation inputs having a significant effect on fair value include market quoted interest rates, market implied volatility and other observable inputs regularly used by industry participants in the over-the-counter derivatives market.

Separate account assets and liabilities: Separate account assets are investments in bonds and notes where valuation is principally based on observable inputs including quoted prices for similar assets in markets that are active and observable market data. Separate account liabilities represent the account value owed to the customer; the fair value is determined by reference to the fair value of the related separate account assets.

Deposit-type and annuity contracts: The fair value of the Company’s liabilities under deposit-type and annuity contracts is based on the account balance less applicable surrender charges and considering applicable market value adjustments, such as a spread equivalent to the cost of funds for insurance companies.

Level 3 Measurements

Bonds and notes: Valuation is principally based on unobservable inputs that are significant including estimated prices for similar assets in markets that may not be active. When available, market indices and observable inputs, along with analytical modeling are used. However, observable inputs on non-distressed asset trades are not frequent.

Mortgage loans: The fair value for mortgage loans is estimated using discounted cash flow analyses with interest rates currently being offered in the marketplace for similar loans to borrowers with similar credit ratings. Loans with similar characteristics are aggregated for purposes of the calculations. Fair values for mortgages in default are reported at the estimated fair value of the underlying collateral.

Contract loans: The fair value for contract loans is estimated using discounted cash flow analysis with interest rates currently being offered in the marketplace for similar loans to borrowers with similar credit ratings.

Note 5: Income Tax

The Company files a stand-alone U.S. federal income tax return as it is not eligible to be included in the CMHC consolidated U.S. federal income tax return until January 1, 2027.

For the period January 1, 2021 to July 31, 2021, the Company was included in the U.S. federal income tax return filed by Assurant. Tax liabilities were allocated within the Assurant consolidated group according to tax allocation principles prescribed by the Internal Revenue Code of 1986 and related income tax regulations applicable to life and non-life consolidated income tax returns. The method of allocation between the companies was subject to written agreement, approved by the Assurant Board of Directors. Allocation was based upon separate return calculations with current credit for net losses to the extent to which they were used in the consolidated return. Intercompany tax balances were to be settled within 30 days of paying quarterly tax estimates and filing of the consolidated federal income tax return.

Current income tax expense consists of the following for the years ended December 31:




	2023		2022		2021

Federal income tax expense on operations	$	1,845	$	3,754	$	4,503
Federal income tax expense (benefit) on
net realized capital gains (losses)	795		8,388		3,809

Federal income tax expense	$	2,640	$	12,142	$	8,312

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Table of Contents

The 2023 change in net deferred income tax is comprised of the following:




	December 31,		December 31,
	2023		2022		Change

Adjusted gross deferred tax assets	$	18,622	$	16,638	$	1,984
Total deferred tax liabilities	(862)		(557)		(305)

Net deferred tax asset (excluding nonadmitted)	$	17,760	$	16,081	$	1,679

Tax effect of net unrealized capital gains and losses,
unrealized foreign exchange capital gains and losses,
and changes as a result of other surplus adjustments					2,213

Change in net deferred income tax					$	3,892

The 2022 change in net deferred income tax is comprised of the following:




	December 31,		December 31,
	2022		2021		Change

Adjusted gross deferred tax assets	$	16,638	$	5,880	$	10,758
Total deferred tax liabilities	(557)		(3,131)		2,574

Net deferred tax asset (excluding nonadmitted)	16,081		2,749		13,332

Tax effect of net unrealized capital gains and losses,
unrealized foreign exchange capital gains and losses,
and changes as a result of other surplus adjustments					(1,138)

Change in net deferred income tax					$	12,194

The 2021 change in net deferred income tax is comprised of the following:




	December 31,		December 31,
	2021		2020		Change

Adjusted gross deferred tax assets	$	5,880	$	30,913	$	(25,033)
Total deferred tax liabilities	(3,131)		(6,871)		3,740

Net deferred tax asset (excluding nonadmitted)	2,749		24,042		(21,293)

Tax effect of net unrealized capital gains and losses,
unrealized foreign exchange capital gains and losses,
and changes as a result of other surplus adjustments					317

Change in net deferred income tax					$	(20,976)

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Table of Contents

Reconciliation to U.S. Tax Rate

The total statutory provision for income taxes for the years ended December 31, 2023, 2022, and 2021 differs from the amount computed by applying the U.S. federal corporate income tax rate of 21% to income before federal income taxes plus gross realized capital gains (losses) due to the items listed in the following reconciliation:




	2023		2022		2021

Tax expense computed at federal corporate rate	$	2,616	$	2,644	$	22,799
Dividends received deductions	(866)		(748)		(1,579)
Foreign tax credit	(138)		(103)		(161)
Income tax benefit related to prior years	(690)		(745)		(2,923)
Nonadmitted assets	(80)		(5)		78
Interest maintenance reserve amortization	(262)		(485)		(493)
Amortization of deferred gain on reinsurance	(1,817)		(578)		(1,441)
Change in deferred income tax due to purchase accounting	—		—		13,031
Tax exempt investment income	(17)		(34)		(37)
Other	2		2		14

Total statutory income taxes	$	(1,252)	$	(52)	$	29,288

Federal income tax expense	$	2,640	$	12,142	$	8,312
Change in net deferred income tax	(3,892)		(12,194)		20,976

Total statutory income taxes	$	(1,252)	$	(52)	$	29,288

Deferred Income Taxes

The components of the net deferred tax asset at December 31 are as follows:




	December 31, 2023						December 31, 2022						Change
	Ordinary		Capital		Total		Ordinary		Capital		Total		Ordinary		Capital		Total
Gross deferred
tax assets	$	11,043	$	7,579	$	18,622	$	9,123	$	7,515	$	16,638	$	1,920	$	64	$	1,984
Statutory
valuation
allowance
adjustment	—		—		—		—		—		—		—		—		—
Adjusted gross
deferred tax
assets	11,043		7,579		18,622		9,123		7,515		16,638		1,920		64		1,984
Deferred tax
assets
nonadmitted	6,100		7,579		13,679		4,312		7,515		11,827		1,788		64		1,852
Admitted deferred
tax assets	4,943		—		4,943		4,811		—		4,811		132		—		132
Deferred tax
liabilities	(352)		(510)		(862)		(437)		(120)		(557)		85		(390)		(305)
Net admitted
deferred tax
assets	$	4,591	$	(510)	$	4,081	$	4,374	$	(120)	$	4,254	$	217	$	(390)	$	(173)

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The nonadmitted deferred tax asset increased $1,852 in 2023 and $11,827 in 2022. There are no known deferred tax liabilities not recognized. Gross deferred tax assets are reduced by a statutory valuation allowance adjustment if it is more likely than not that some portion or all of the deferred tax assets will not be realized

The tax effects of temporary differences that give rise to the significant portions of the deferred tax assets and liabilities at

December 31 are as follows:




	2023		2022		Change
Ordinary deferred tax assets:
Deferred acquisition costs	$	6,256	$	4,359	$	1,897
Life and accident and health reserves	4,300		4,429		(129)

Policyholder dividends accrual	137		137		—
Other	350		198		152
Subtotal ordinary deferred tax assets	11,043		9,123		1,920
Nonadmitted ordinary deferred tax assets	6,100		4,312		1,788
Admitted ordinary deferred tax assets	4,943		4,811		132
Capital deferred tax assets:
Investments	7,579		7,515		64
Nonadmitted capital deferred tax assets	7,579		7,515		64
Admitted capital deferred tax asset	—		—		—
Admitted deferred tax assets	4,943		4,811		132
Ordinary deferred tax liabilities:
Investments	(33)		(30)		(3)
Deferred and uncollected premium	(82)		(91)		9
Unrealized gains	—		(5)		5
Guaranty fund liabilities	(222)		(311)		89
Other	(15)		—		(15)
Total ordinary deferred tax liabilities	(352)		(437)		85
Capital deferred tax liabilities:

Unrealized gains	(510)		(120)		(390)
Subtotal capital deferred tax liabilities	(510)		(120)		(390)
Total deferred tax liabilities	(862)		(557)		(305)
Net admitted deferred tax asset	$	4,081	$	4,254	$	(173)

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Table of Contents

Deferred Tax Asset Admission Calculation

The components of the deferred tax asset admission calculation at December 31 are as follows:



	December 31, 2023						December 31, 2022						Change
	Ordinary		Capital		Total		Ordinary		Capital		Total		Ordinary		Capital		Total
(a) Federal income taxes paid in prior years recoverable through loss carrybacks	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
(b) Adjusted gross deferred tax assets expected to be realized after application of the threshold limitation; the lesser of (i) or (ii):	4,081		—		4,081		4,253		—		4,253		(172)		—		(172)
(i) Adjusted gross deferred tax assets expected to be realized following the balance sheet date	4,081		—		4,081		4,253		—		4,253		(172)		—		(172)
(ii) Adjusted gross deferred tax assets allowed per limitation threshold	—		—		21,107		—		—		21,202		—		—		(95)
(c) Adjusted gross deferred tax assets offset by gross deferred tax liabilities	862		—		862		558		—		558		304		—		304
Admitted deferred tax asset	$	4,943	$	—	$	4,943	$	4,811	$	—	$	4,811	$	132	$	—	$	132

The amounts calculated in (b)(i) and (b)(ii) in the table above are based on the following information:




	2023			2022
Ratio percentage used to determine recovery period and threshold limitation amount (risk-based capital ("RBC") reporting entity)	824		%	776		%
Recovery period used in (b)(i)	3 years			3 years
Percentage of adjusted capital and surplus used in (b)(ii)	15		%	15		%
Amount of adjusted capital and surplus used in (b)(ii)	$	140,716		$	141,345

The impact of tax planning strategies as of December 31, 2023 is shown in the following table:



	December 31, 2023
	Ordinary			Capital

Determination of adjusted gross deferred tax assets
and net admitted deferred tax assets, by tax character as a percentage
Adjusted gross DTAs	$	11,043		$	7,579
Percentage of adjusted gross DTAs by tax character attributable to
the impact of tax planning strategies	—		%	—		%
Net admitted adjusted gross DTAs	4,943			—
Percentage of net admitted adjusted gross DTAs by tax character
admitted because of the impact of tax planning strategies	8.3		%	—		%

The Company did not use tax planning strategies in the calculation of adjusted gross deferred tax assets and net admitted deferred tax assets as of December 31, 2022.

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Other Tax Items

On July 31, 2021, the stock of the Company was acquired by CMFG Life. For tax purposes, the transaction was treated as a reinsurance transaction. This treatment resulted in the reset of the tax basis of assets which impacted the related deferred tax values. The impact was included in the change in net deferred income tax and in the Reconciliation to U.S. Tax Rate (included above within in Note 5, Income Tax) for the year ended December 31, 2021. Also, the terms of the transaction resulted in the extinguishment or reclassification of certain balances with the former parent. The net impact was reported as an increase to unassigned surplus for the year ended December 31, 2021.

As of December 31, 2023 and 2022, the Company did not have any federal capital loss, operating loss, or credit carryforwards.

Income taxes incurred in 2023, 2022, and 2021 of $303, $7,529, and $4,250, respectively, are available for recoupment in the event of future capital losses.

The Company did not have any protective tax deposits under Section 6603 of the Internal Revenue Code.

There were no tax contingencies as of December 31, 2023 or 2022.

The Company recognizes interest and penalties accrued related to tax contingencies in income tax expense in the statutory basis statements of operations. The Company had no changes in interest and penalties during the years ended December 31, 2023 and 2022. During the year ended 2021, the Company recognized an increase of $212 in interest and penalties. The Company did not accrue any interest or penalties at December 31, 2023 and 2022, respectively.

The Company files a U.S. federal income tax return and files income tax returns in various states. The Company is subject to tax audits. These audits may result in additional tax liabilities. For the major jurisdictions where it operates, the Company is open to income tax examinations for the years ended after August 1, 2021. For the major jurisdictions where it operates, years ended prior to August 1, 2021 may remain open. Any adjustment to income tax liabilities for periods prior to August 1, 2021 are the sole obligation or benefit of the former owner, Assurant, Inc.

The Inflation Reduction Act was enacted on August 16, 2022, and included a new corporate alternative minimum tax (CAMT). The CAMT is effective for tax years beginning after 2022. The Company has determined that it is a nonapplicable reporting entity that does not reasonably expect to be an applicable corporation for the 2023 tax year.

Note 6: Related Party Transactions

In the normal course of business, the Company has various transactions with related entities, such as information technology support, benefit plan administration and costs associated with accounting, actuarial, tax, investment and administrative services. In certain circumstances, expenses are shared between the companies. Expenses incurred that are specifically identifiable with a particular company are borne by that company; other expenses are allocated among the companies on the basis of time and usage studies. Amounts due from intercompany activity are generally settled monthly. CMFG Life and other affiliates allocated expenses to the Company of $9,187, $14,866, and $4,480 in 2023, 2022, and 2021, respectively. Additionally, the Company was reimbursed $272, $30, and $254 in 2023, 2022, and 2021, respectively.

Since CMFG Life’s acquisition of the Company on July 31, 2021, MEMBERS Capital Advisors, Inc. (“MCA”), which is 100% owned by CUNA Mutual Investment Corporation, an affiliate, manages substantially all of the Company's invested assets in accordance with policies, directives, and guidelines established by the Company. The Company recorded investment management fees totaling $1,114, $967, and $474 in 2023, 2022, and 2021, respectively.

Pursuant to agreements used for cash management, the Company periodically borrows from or lends to affiliates. Balances must be repaid within 364 days and interest is charged pursuant to the terms of the agreement. The Company recorded affiliated interest expense related to the cash management agreement of $69 and $406 in 2023 and 2022, respectively. The Company recorded affiliated interest income of $563 and $19 in 2023 and 2022, respectively, related to the cash management agreement. There was no affiliate interest income or charges in 2021. The Company had outstanding lending to CMFG Life, which is included in receivables from affiliates, of $13,952 at December 31, 2023. The Company had an outstanding borrowing due to CMFG Life, which is included in payable to affiliates, of $20,307 at December 31, 2022.

As of December 31, 2023 and 2022, $2,375 and $3,976 was due to CMFG Life for expense sharing transactions as described above, respectively.

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Table of Contents

In 2023, the Company paid CMFG Life dividends of debt securities of $8,000. In 2022, the Company paid CMFG Life extraordinary dividends composed of mortgage loans, debt securities and cash of $60,000 which the Company received timely approval from the Insurance Department.

Prior to CMFG Life’s acquisiton of the Company in 2021, the Company received various services from its prior owner and its affiliates. These services include information technology support, benefit plan administration, corporate insurance, accounting, tax, auditing, investment, actuarial and other administrative functions. The net expenses allocated to the Company for these services were $4,449 for 2021.

The amount paid by the Company to its prior owner through a tax sharing agreement was $3,771 for 2021.

The Company ceded group accidental death and disability premiums to former affiliates of $1,703 for 2021.

Administrative expenses allocated to the Company from its prior owner and CMFG Life may be greater or less than the expenses that would be incurred if the Company were operating on a separate company basis.

Note 7: Reinsurance

The Company enters into reinsurance agreements for the purpose of limiting its exposure to loss on any one single insured, diversifying its risk and limiting its overall financial exposure, to exit certain products, and to meet its overall financial objectives. Certain premiums and benefits are assumed from and ceded to other insurance companies under various reinsurance agreements.

The following table shows the effect of reinsurance on premiums, benefits, and surrenders, and increase in policy

reserves for 2023, 2022, and 2021.




	2023		2022		2021
Premiums earned:
Direct	$	121,845	$	126,839	$	143,981
Assumed premiums	1,651		1,798		3,408
Ceded to affiliates	—		—		(1,703)
Ceded to non-affiliate	(121,335)		(126,221)		(141,581)
Premiums and other considerations	$	2,161	$	2,416	$	4,105
Benefits and surrender expenses:
Direct	$	519,456	$	474,841	$	535,716
Assumed from non-affiliates	24,456		24,669		31,086
Ceded to affiliates	—		—		(360)
Ceded to non-affiliates	(482,276)		(428,928)		(487,124)
Benefits and surrender expenses, net of reinsurance	$	61,636	$	70,582	$	79,318
Decrease in policy reserves:
Direct	$	(146,006)	$	(60,950)	$	(16,028)
Assumed from non-affiliates	(13,683)		(17,040)		(20,172)

Ceded to non-affiliates	122,640		31,665		(17,399)
Decrease in policy reserves, net of reinsurance	$	(37,049)	$	(46,325)	$	(53,599)

Policy reserves and claim liabilities are stated net of reinsurance balances ceded of $570,468 and $613,133 as of December 31, 2023 and 2022.

The Company entered into a reinsurance agreement with Sun Life for the sale of its employee benefits segment as discussed in Note 1. The agreement resulted in a gain of $416,387 which was deferred as a component of capital and surplus on the statutory basis statements of changes in capital and surplus. The deferred gain is recognized net of tax basis as profits are earned within the reinsured business. The amount of gain amortized as income in the statutory basis statements of operations for the years ended December 31, 2023, 2022, and 2021 was $1,021, $1,647, and $2,249, respectively. The Company ceded premiums of $3,496, $3,632, and $6,374 during the years ended December 31, 2023, 2022, and 2021, respectively, related to this agreement. In addition, as of December 31, 2023 and 2022, total ceded reserves related to this agreement were $320,809 and $373,117, respectively.

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The Company assumed premium from IA American Life Insurance Company, a former affiliate, of $1,629, $1,810, and $860 for the years ended December 31, 2023, 2022, and 2021, respectively, and reserves of $220,983 and $219,440 as of December 31, 2023 and 2022, respectively.

The Company entered into a reinsurance agreement with Talcott Resolution for the sale of the FFG division, which sold variable life insurance and annuity products as discussed in Note 1. The ceded reserves related to this agreement were $444,488 and $465,922 as of December 31, 2023 and 2022, respectively. In addition, under the reinsurance agreement, Talcott Resolution is obligated to contribute funds to increase the value of the separate accounts relating to the business sold if such value declines below contractual guarantees. If Talcott Resolution fails to fulfill these obligations, the Company will be obligated to make these payments. Prudential Financial Inc. administers the Company’s individual life insurance policies ceded under this agreement while Talcott Resolution administers the remaining contracts.

The Company divested its LTC operations to John Hancock as discussed in Note 1. Under this reinsurance agreement, the Company ceded $53,299, $56,639, and $65,572 of premiums to John Hancock during the years ended December 31, 2023, 2022, and 2021, respectively. The ceded reserves related to this agreement were $2,522,334 and $2,564,651, including $443,267 and $485,389 of premium deficiency reserves, as of December 31, 2023 and 2022, respectively.

In the event Sun Life, Talcott Resolution or John Hancock are unable to meet their policy and administrative obligations for the ceded business, the business risk and administration would revert back to the Company. To mitigate this exposure to reinsurance insolvencies, the Company evaluates the financial condition of its reinsurers and holds collateral as security under the reinsurance agreements.

Note 8: Withdrawal Characteristics of Annuity Reserves, Deposit Liabilities, and Life Reserves

The following tables show the withdrawal characteristics of the Company’s annuity reserves and deposit liabilities at December 31, 2023, which are reported as policy reserves on annuity contracts and liability for deposit-type contracts are as follows:

Individual Annuities



			Separate		Separate
	General		Account with		Account				% of
December 31, 2023	Account		Guarantees		Nonguaranteed		Total		Total

Subject to discretionary withdrawal -
lump sum:
With market value adjustment	$	—	$	35,181	$	—	$	35,181	5.0	%
At book value less surrender
charge of 5% or more	138		—		—		138		—	%
At market value	—		—		457,386		457,386		64.5	%

Total with adjustment or
at market value	138		35,181		457,386		492,705		69.5	%
At book value with minimal or
no charge adjustment	159,616		—		—		159,616		22.5	%
Not subject to
discretionary withdrawal	35,633		—		21,074		56,707		8.0	%

Gross annuity reserves and
deposit liabilities	195,387		35,181		478,460		709,028		100.0	%
Ceded reserves	181,079		—		—		181,079

Total net annuity reserves
and deposit liabilities	$	14,308	$	35,181	$	478,460	$	527,949

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Table of Contents

Group Annuities



			Separate		Separate
	General		Account with		Account				% of
December 31, 2023	Account		Guarantees		Nonguaranteed		Total		Total

Subject to discretionary withdrawal -
lump sum:
With market value adjustment	$	—	$	23,218	$	—	$	23,218	16.9	%
At market value	—		—		110,983		110,983		80.8	%
Total with adjustment or
at market value	—		23,218		110,983		134,201		97.7	%
At book value with minimal or
no charge adjustment	3,163		—		—		3,163		2.3	%

Gross annuity reserves and
deposit liabilities	3,163		23,218		110,983		137,364		100.0	%
Ceded reserves	56		—		—		56

Total net annuity reserves
and deposit liabilities	$	3,107	$	23,218	$	110,983	$	137,308

Deposit-Type Contracts



			Separate		Separate
	General		Account with		Account				% of
December 31, 2023	Account		Guarantees		Nonguaranteed		Total		Total

At book value with minimal or
no charge adjustment	$	16,227	$	—	$	—	$	16,227	100.0	%

Not subject to
discretionary withdrawal	—		—		—		—		—	%


Gross annuity reserves and
deposit liabilities	16,227		—		—		16,227		100.0	%
Reinsurance ceded	—		—		—		—








Total net annuity reserves
and deposit liabilities	$	16,227	$	—	$	—	$	16,227

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The following tables show the withdrawal characteristics of the Company’s annuity reserves and deposit liabilities at December 31, 2022, which are reported as policy reserves on annuity contracts and liability for deposit-type contracts are as follows:

Individual Annuities



			Separate		Separate
	General		Account with		Account				% of
December 31, 2022	Account		Guarantees		Nonguaranteed		Total		Total

Subject to discretionary withdrawal -
lump sum:
With market value adjustment	$	—	$	39,979	$	—	$	39,979	5.6	%
At book value less surrender
charge of 5% or more	144		—		—		144		—	%
At market value	—		—		444,173		444,173		61.9	%

Total with adjustment or
at market value	144		39,979		444,173		484,296		67.5	%
At book value with minimal or
no charge adjustment	179,219		—		—		179,219		25.0	%
Not subject to
discretionary withdrawal	35,675		—		17,920		53,595		7.5	%

Gross annuity reserves and
deposit liabilities	215,038		39,979		462,093		717,110		100.0	%
Ceded reserves	200,591		—		—		200,591

Total net annuity reserves
and deposit liabilities	$	14,447	$	39,979	$	462,093	$	516,519

Group Annuities



			Separate		Separate
	General		Account with		Account				% of
December 31, 2022	Account		Guarantees		Nonguaranteed		Total		Total

Subject to discretionary withdrawal -
lump sum:
With market value adjustment	$	—	$	26,226	$	—	$	26,226	19.7	%
At market value	—		—		103,674		103,674		77.8	%
Total with adjustment or
at market value	—		26,226		103,674		129,900		97.5	%
At book value with minimal or
no charge adjustment	3,421		—		—		3,421		2.5	%

Gross annuity reserves and
deposit liabilities	3,421		26,226		103,674		133,321		100.0	%
Ceded reserves	61		—		—		61

Total net annuity reserves
and deposit liabilities	$	3,360	$	26,226	$	103,674	$	133,260

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Table of Contents

Deposit-Type Contracts



			Separate		Separate
	General		Account with		Account				% of
December 31, 2022	Account		Guarantees		Nonguaranteed		Total		Total










At book value with minimal or
no charge adjustment	16,986		—		—		16,986		100.0	%
Not subject to
discretionary withdrawal	—		—		—		—		—	%

Gross annuity reserves and
deposit liabilities	16,986		—		—		16,986		100.0	%
Reinsurance ceded	—		—		—		—

Total net annuity reserves
and deposit liabilities	$	16,986	$	—	$	—	$	16,986

The following table shows policy liabilities associated with the Company’s annuity products as of December 31:




	2023		2022
Annuities	$	17,415	$	17,807
Deposit-type contracts	16,227		16,986
Annuity reserves from the separate accounts	647,842		631,972
Total annuity reserves	$	681,484	$	666,765

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Table of Contents

The following table shows life reserves by withdrawal characteristics at December 31, 2023:




							Separate Account -
	General Account						Non-Guaranteed
	Account		Cash				Account		Cash
	Value		Value		Reserve		Value		Value		Reserve
Subject to discretionary withdrawal,
surrender values, or policy loans:
Term policies with cash value	$	46,131	$	68,597	$	69,316	$	—	$	—	$	—
Universal life	71,767		71,768		80,500		—		—		—
Other permanent cash value
life insurance	—		531,555		560,917		—		—		—
Variable universal life	108,392		107,894		111,566		1,146,243		1,146,243		1,146,243
Miscellaneous reserves	—		15,238		17,849		—		—		—
Not subject to discretionary withdrawal
or no cash values:
Term policies with cash value	—		—		4,855		—		—		—
Accidental death benefits	—		—		480		—		—		—
Disability - active lifes	—		—		224		—		—		—
Disability - disabled lives	—		—		63,497		—		—		—
Miscellaneous reserves	—		—		6,717		—		—		—
Gross reserves before reinsurance	226,290		795,052		915,921		1,146,243		1,146,243		1,146,243
Ceded reinsurance	226,290		287,864		377,116		—		—		—
Net reserves	$	—	$	507,188	$	538,805	$	1,146,243	$	1,146,243	$	1,146,243

F-37

Table of Contents

The following table shows life reserves by withdrawal characteristics at December 31, 2022:




							Separate Account -
	General Account						Non-Guaranteed
	Account		Cash				Account		Cash
	Value		Value		Reserve		Value		Value		Reserve
Subject to discretionary withdrawal,
surrender values, or policy loans:
Term policies with cash value	$	48,640	$	49,455	$	50,932	$	—	$	—	$	—
Universal life	75,146		75,147		84,244		—		—		—
Other permanent cash value
life insurance	—		—		—		—		—		—
Variable universal life	107,275		106,816		110,250		1,033,298		1,033,298		1,033,298
Miscellaneous reserves	—

UNION SECURITY INSURANCE CO S-1