N-VPFS/A 1 vadcombo.htm N-VPFS/A VADCOMBO



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Contract Owners of Variable Account D of Union Security Insurance Company and the Board of Directors of Talcott Resolution Life Insurance Company

Opinion on the Financial Statements and Financial Highlights

We have audited the accompanying statements of assets and liabilities for each of the Sub-Accounts listed below comprising Variable Account D of Union Security Insurance Company (the “Account”), as of December 31, 2021, the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes.

American Century VP Balanced Fund
Invesco V.I. Health Care Fund
American Century VP Capital Appreciation Fund
Invesco V.I. Technology Fund
AB VPS International Growth Portfolio
MFS® Growth Series
Invesco V.I. Core Equity Fund
MFS® High Yield Portfolio
Invesco V.I. International Growth Fund
MFS® Income Portfolio
Invesco V.I. Government Money Market Fund
Neuberger Berman AMT Short Duration Bond Portfolio
AB VPS Large Cap Growth Portfolio
Pioneer Fund VCT Portfolio
Allspring VT Omega Growth Fund
DWS CROCI® International VIP
(Formerly Wells Fargo VT Omega Growth Fund)
Pioneer Select Mid Cap Growth VCT Portfolio
Federated Hermes Fund for U.S. Government Securities II
VanEck VIP Emerging Markets Bond Fund
Federated Hermes High Income Bond Fund II
VanEck VIP Global Resources Fund
Federated Hermes Government Money Fund II
(Formerly VanEck VIP Global Hard Assets Fund)
Federated Hermes Quality Bond Fund II
Allspring VT Index Asset Allocation Fund
Federated Hermes Managed Volatility Fund II
(Formerly Wells Fargo VT Index Asset Allocation Fund)
Federated Hermes Kaufmann Fund II
Allspring VT International Equity Fund
Hartford Balanced HLS Fund
(Formerly Wells Fargo VT International Equity Fund)
Hartford Total Return Bond HLS Fund
Allspring VT Small Cap Growth Fund
Hartford Capital Appreciation HLS Fund
(Formerly Wells Fargo VT Small Cap Growth Fund)
Hartford Dividend and Growth HLS Fund
Allspring VT Discovery Fund
Hartford Disciplined Equity HLS Fund
(Formerly Wells Fargo VT Discovery Fund)
Hartford International Opportunities HLS Fund
Allspring VT Opportunity Fund
Hartford Ultrashort Bond HLS Fund
(Formerly Wells Fargo VT Opportunity Fund)
Hartford SmallCap Growth HLS Fund
Voya Global High Dividend Low Volatility Portfolio
Hartford Stock HLS Fund
NVIT Emerging Markets Fund
VY® JPMorgan Emerging Markets Equity Portfolio

We have also audited the accompanying statements of assets and liabilities of Hartford MidCap HLS Fund, BlackRock S&P 500 Index V.I. Fund, and Neuberger Berman AMT Sustainable Equity Portfolio, and the related statements of operations, statements of changes in net assets, and financial highlights for the periods indicated in the table below, and the related notes.

Sub-Account
Statements of Assets and Liabilities
Statements of Operations
Statements of Changes in Net Assets
Financial Highlights
As of
For the
For the
For the
Hartford MidCap HLS Fund
December 31, 2021
Year ended December 31, 2021
Year ended December 31, 2021 and the period from September 18, 2020 to December 31, 2020
Year ended December 31, 2021 and the period from September 18, 2020 to December 31, 2020


BlackRock S&P 500 Index V.I. Fund
December 31, 2021
Year ended December 31, 2021
Two years in the period ended December 31, 2021
Three years ended December 31, 2021 and the period from April 20, 2018 to December 31, 2018
Neuberger Berman AMT Sustainable Equity Portfolio
December 31, 2021
Year ended December 31, 2021
Two years in the period ended December 31, 2021
Two years ended December 31, 2021 and the period from April 30, 2019 to December 31, 2019


In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of each of the Sub-Accounts listed above comprising Variable Account D of Union Security Insurance Company as of December 31, 2021, and the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended (or for the period listed in the table above), and the financial highlights for each of the five years in the period then ended (or for the period listed in the table above), in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements and financial highlights are the responsibility of the Account’s management. Our responsibility is to express an opinion on the Account’s financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Account in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Account is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Account’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of December 31, 2021, by correspondence with the mutual fund companies. We believe that our audits provide a reasonable basis for our opinion.

/s/ DELOITTE & TOUCHE LLP

Hartford, Connecticut

April 13, 2022

We have served as the auditor of the Sub-Accounts that comprise Variable Account D of Union Security Insurance Company since
2002.


VARIABLE ACCOUNT D
Union Security Insurance Company
Statements of Assets and Liabilities
December 31, 2021
American Century VP Balanced FundAmerican Century VP Capital Appreciation FundAB VPS International Growth PortfolioInvesco V.I. Core Equity FundInvesco V.I. International Growth FundInvesco V.I. Government Money Market FundAB VPS Large Cap Growth PortfolioAllspring VT Omega Growth FundFederated Hermes Fund for U.S. Government Securities IIFederated Hermes High Income Bond Fund II
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account (1)Sub-Account Sub-Account
Assets:
  Investments, at fair value
class 2$— $— $— $— $— $— $— $5,344,050 $— $— 
class A— — 268,263 — — — 1,678,466 — — — 
class D— — — — — — — — — — 
class I785,646 366,889 — — — — — — — — 
class IA— — — — — — — — — — 
class INIT— — — — — — — — — — 
class PRIM— — — — — — — — 370,748 1,668,994 
class S— — — — — — — — — — 
class S1— — — 1,979,118 511,705 8,605,249 — — — — 
class SRV— — — — — — — — — — 
                   Total investments785,646 366,889 268,263 1,979,118 511,705 8,605,249 1,678,466 5,344,050 370,748 1,668,994 
  Due from Sponsor Company— — — — 1,030 11,642 — — — — 
  Receivable for fund shares sold10 5 3 903 — — 21 5,850 12 53 
  Other assets— — 1 — 1 — — — 1 — 
 Total assets785,656 366,894 268,267 1,980,021 512,736 8,616,891 1,678,487 5,349,900 370,761 1,669,047 
Liabilities:
  Due to Sponsor Company10 5 3 903 — — 21 5,850 12 53 
  Payable for fund shares purchased— — — — 1,030 11,642 — — — — 
  Other liabilities— — — — — — — — — 1 
 Total liabilities10 5 3 903 1,030 11,642 21 5,850 12 54 
Net assets:
  For contract liabilities$785,646 $366,889 $268,264 $1,979,118 $511,706 $8,605,249 $1,678,466 $5,344,050 $370,749 $1,668,993 
Contract Liabilities:
class 2$— $— $— $— $— $— $— $5,344,050 $— $— 
class A— — 268,264 — — — 1,678,466 — — — 
class D— — — — — — — — — — 
class I785,646 366,889 — — — — — — — — 
class IA— — — — — — — — — — 
class INIT— — — — — — — — — — 
class PRIM— — — — — — — — 370,749 1,668,993 
class S— — — — — — — — — — 
class S1— — — 1,979,118 511,706 8,605,249 — — — — 
class SRV— — — — — — — — — — 
  Total contract liabilities$785,646 $366,889 $268,264 $1,979,118 $511,706 $8,605,249 $1,678,466 $5,344,050 $370,749 $1,668,993 
Shares:
class 2— — — — — — — 128,185 — — 
class A— — 9,895 — — — 18,031 — — — 
class D— — — — — — — — — — 
class I82,181 19,620 — — — — — — — — 
class IA— — — — — — — — — — 
class INIT— — — — — — — — — — 
class PRIM— — — — — — — — 34,617 261,188 
class S— — — — — — — — — — 
class S1— — — 52,371 12,357 8,605,249 — — — — 
class SRV— — — — — — — — — — 
  Total shares82,181 19,620 9,895 52,371 12,357 8,605,249 18,031 128,185 34,617 261,188 
Cost$601,113 $299,965 $228,966 $1,581,207 $311,299 $8,605,249 $987,876 $3,290,880 $384,319 $1,735,808 
Deferred contracts in the accumulation period:
  Units owned by participants #13,731 4,348 13,555 60,147 18,513 863,335 11,376 89,995 21,257 55,286 
  Minimum unit fair value #*$53.939947 $84.378098 $15.944082 $30.659951 $26.700839 $8.916271 $136.399400 $55.404649 $16.443932 $27.726213 
  Maximum unit fair value #*$53.939947 $84.378098 $15.944082 $57.760516 $26.700839 $10.055510 $136.399400 $55.404649 $23.448558 $43.953100 
  Contract liability$740,650 $366,889 $216,130 $1,949,936 $494,316 $8,029,034 $1,551,715 $4,986,168 $370,444 $1,667,632 
Contracts in payout (annuitization) period:
Units owned by participants #834 — 3,270 891 651 61,765 929 6,459 13 31 
Minimum unit fair value #*$53.939947 $— $15.944082 $30.659951 $26.700839 $9.267662 $136.399400 $55.404649 $23.448558 $43.953100 
Maximum unit fair value #*$53.939947 $— $15.944082 $57.760516 $26.700839 $10.055510 $136.399400 $55.404649 $23.448558 $43.953100 
Contract liability$44,996 $— $52,134 $29,182 $17,390 $576,215 $126,751 $357,882 $305 $1,361 
# Rounded units/unit fair values
* For Sub-Accounts with only one unit fair value, the unit fair value is illustrated in both the minimum and maximum unit fair value rows.
The accompanying notes are an integral part of these financial statements.

VARIABLE ACCOUNT D
Union Security Insurance Company
Statements of Assets and Liabilities (continued)
December 31, 2021
Federated Hermes Government Money Fund IIFederated Hermes Quality Bond Fund IIFederated Hermes Managed Volatility Fund IIFederated Hermes Kaufmann Fund IIHartford Balanced HLS FundHartford Total Return Bond HLS FundHartford Capital Appreciation HLS FundHartford Dividend and Growth HLS FundHartford Disciplined Equity HLS FundHartford International Opportunities HLS Fund
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Assets:
  Investments, at fair value
class 2$— $— $— $— $— $— $— $— $— $— 
class A— — — — — — — — — — 
class D— — — — — — — — — — 
class I— — — — — — — — — — 
class IA— — — — 56,561,198 25,116,906 16,124,782 34,597,203 401,183,901 21,023,910 
class INIT— — — — — — — — — — 
class PRIM— 1,192,640 10,987,075 8,283,443 — — — — — — 
class S— — — — — — — — — — 
class S1— — — — — — — — — — 
class SRV585,237 — — — — — — — — — 
                   Total investments585,237 1,192,640 10,987,075 8,283,443 56,561,198 25,116,906 16,124,782 34,597,203 401,183,901 21,023,910 
  Due from Sponsor Company— — — — — 70,694 — — — 56,353 
  Receivable for fund shares sold20 42 384 291 58,401 — 2,227 34,537 453,423 — 
  Other assets1 — — — 4 — 1 — 1 — 
 Total assets585,258 1,192,682 10,987,459 8,283,734 56,619,603 25,187,600 16,127,010 34,631,740 401,637,325 21,080,263 
Liabilities:
  Due to Sponsor Company20 42 384 291 58,401 — 2,227 34,537 453,423 — 
  Payable for fund shares purchased— — — — — 70,694 — — — 56,353 
  Other liabilities— — — — — 8 — 3 — 2 
 Total liabilities20 42 384 291 58,401 70,702 2,227 34,540 453,423 56,355 
Net assets:
  For contract liabilities$585,238 $1,192,640 $10,987,075 $8,283,443 $56,561,202 $25,116,898 $16,124,783 $34,597,200 $401,183,902 $21,023,908 
Contract Liabilities:
class 2$— $— $— $— $— $— $— $— $— $— 
class A— — — — — — — — — — 
class D— — — — — — — — — — 
class I— — — — — — — — — — 
class IA— — — — 56,561,202 25,116,898 16,124,783 34,597,200 401,183,902 21,023,908 
class INIT— — — — — — — — — — 
class PRIM— 1,192,640 10,987,075 8,283,443 — — — — — — 
class S— — — — — — — — — — 
class S1— — — — — — — — — — 
class SRV585,238 — — — — — — — — — 
  Total contract liabilities$585,238 $1,192,640 $10,987,075 $8,283,443 $56,561,202 $25,116,898 $16,124,783 $34,597,200 $401,183,902 $21,023,908 
Shares:
class 2— — — — — — — — — — 
class A— — — — — — — — — — 
class D— — — — — — — — — — 
class I— — — — — — — — — — 
class IA— — — — 1,594,621 2,224,704 297,176 1,254,431 19,241,434 1,005,929 
class INIT— — — — — — — — — — 
class PRIM— 105,918 851,711 340,742 — — — — — — 
class S— — — — — — — — — — 
class S1— — — — — — — — — — 
class SRV585,237 — — — — — — — — — 
  Total shares585,237 105,918 851,711 340,742 1,594,621 2,224,704 297,176 1,254,431 19,241,434 1,005,929 
Cost$585,237 $1,165,352 $8,310,864 $5,567,848 $40,413,001 $25,783,540 $13,679,061 $26,743,189 $296,688,805 $13,860,292 
Deferred contracts in the accumulation period:
  Units owned by participants #55,336 57,985 531,237 201,542 5,044,895 5,338,557 2,431,582 6,293,594 4,264,984 4,937,289 
  Minimum unit fair value #*$7.266821 $20.119004 $19.973550 $40.496692 $10.415654 $4.223438 $6.061890 $4.773720 $13.871599 $3.796306 
  Maximum unit fair value #*$10.767116 $21.004504 $38.127164 $41.479934 $34.979332 $21.646235 $6.790901 $13.359161 $103.836497 $20.588478 
  Contract liability$585,238 $1,192,640 $10,973,550 $8,283,443 $54,314,436 $24,693,458 $16,044,347 $34,127,924 $386,780,080 $20,436,178 
Contracts in payout (annuitization) period:
Units owned by participants #— — 355 — 215,711 100,260 12,071 86,101 155,660 140,832 
Minimum unit fair value #*$— $— $38.127164 $— $10.415654 $4.223438 $6.663616 $5.450303 $13.871599 $4.173262 
Maximum unit fair value #*$— $— $38.127164 $— $10.415654 $4.223438 $6.663616 $5.450303 $103.836497 $4.173262 
Contract liability$— $— $13,525 $— $2,246,766 $423,440 $80,436 $469,276 $14,403,822 $587,730 
# Rounded units/unit fair values
* For Sub-Accounts with only one unit fair value, the unit fair value is illustrated in both the minimum and maximum unit fair value rows.
The accompanying notes are an integral part of these financial statements.

VARIABLE ACCOUNT D
Union Security Insurance Company
Statements of Assets and Liabilities (continued)
December 31, 2021
Hartford MidCap HLS FundHartford Ultrashort Bond HLS FundHartford SmallCap Growth HLS FundHartford Stock HLS FundVY® JPMorgan Emerging Markets Equity PortfolioInvesco V.I. Health Care FundInvesco V.I. Technology FundMFS® Growth SeriesMFS® High Yield PortfolioMFS® Income Portfolio
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Assets:
  Investments, at fair value
class 2$— $— $— $— $— $— $— $— $— $— 
class A— — — — — — — — — — 
class D— — — — — — — — — — 
class I— — — — 111,082 — — — — — 
class IA29,956,134 17,354,150 47,773,656 5,333,018 — — — — — — 
class INIT— — — — — — — 4,500,891 417,260 226,234 
class PRIM— — — — — — — — — — 
class S— — — — — — — — — — 
class S1— — — — — 652,461 1,222,378 — — — 
class SRV— — — — — — — — — — 
                   Total investments29,956,134 17,354,150 47,773,656 5,333,018 111,082 652,461 1,222,378 4,500,891 417,260 226,234 
  Due from Sponsor Company22,680 20,670 117,768 — — — — — — — 
  Receivable for fund shares sold— — — 8,800 1 8 15 848 14 3 
  Other assets1 1 1 — — — — 1 — — 
 Total assets29,978,815 17,374,821 47,891,425 5,341,818 111,083 652,469 1,222,393 4,501,740 417,274 226,237 
Liabilities:
  Due to Sponsor Company— — — 8,800 1 8 15 848 14 3 
  Payable for fund shares purchased22,680 20,670 117,768 — — — — — — — 
  Other liabilities— — — 1 — — — — — — 
 Total liabilities22,680 20,670 117,768 8,801 1 8 15 848 14 3 
Net assets:
  For contract liabilities$29,956,135 $17,354,151 $47,773,657 $5,333,017 $111,082 $652,461 $1,222,378 $4,500,892 $417,260 $226,234 
Contract Liabilities:
class 2$— $— $— $— $— $— $— $— $— $— 
class A— — — — — — — — — — 
class D— — — — — — — — — — 
class I— — — — 111,082 — — — — — 
class IA29,956,135 17,354,151 47,773,657 5,333,017 — — — — — — 
class INIT— — — — — — — 4,500,892 417,260 226,234 
class PRIM— — — — — — — — — — 
class S— — — — — — — — — — 
class S1— — — — — 652,461 1,222,378 — — — 
class SRV— — — — — — — — — — 
  Total contract liabilities$29,956,135 $17,354,151 $47,773,657 $5,333,017 $111,082 $652,461 $1,222,378 $4,500,892 $417,260 $226,234 
Shares:
class 2— — — — — — — — — — 
class A— — — — — — — — — — 
class D— — — — — — — — — — 
class I— — — — 4,809 — — — — — 
class IA743,144 1,735,415 1,305,291 46,818 — — — — — — 
class INIT— — — — — — — 56,715 74,644 23,062 
class PRIM— — — — — — — — — — 
class S— — — — — — — — — — 
class S1— — — — — 19,269 32,100 — — — 
class SRV— — — — — — — — — — 
  Total shares743,144 1,735,415 1,305,291 46,818 4,809 19,269 32,100 56,715 74,644 23,062 
Cost$26,823,585 $17,491,944 $31,210,485 $2,975,238 $108,790 $502,282 $828,434 $2,359,045 $440,440 $233,172 
Deferred contracts in the accumulation period:
  Units owned by participants #2,274,729 8,514,515 446,484 1,037,886 2,771 7,766 15,896 53,131 29,846 16,146 
  Minimum unit fair value #*$12.908422 $1.114926 $49.316146 $4.698520 $31.175356 $82.337161 $68.682722 $61.612291 $13.580157 $13.937160 
  Maximum unit fair value #*$13.016128 $12.866046 $111.266588 $35.206416 $31.175356 $82.337161 $68.682722 $126.491514 $14.723698 $13.937160 
  Contract liability$29,546,608 $16,846,740 $46,931,241 $5,251,687 $86,378 $639,426 $1,091,764 $4,189,040 $412,092 $225,032 
Contracts in payout (annuitization) period:
Units owned by participants #31,507 297,705 7,571 15,746 792 158 1,902 3,775 375 86 
Minimum unit fair value #*$12.998116 $1.676797 $111.266588 $5.164974 $31.175356 $82.337161 $68.682722 $61.612291 $13.580157 $13.937160 
Maximum unit fair value #*$12.998116 $12.866046 $111.266588 $5.164974 $31.175356 $82.337161 $68.682722 $126.491514 $14.723698 $13.937160 
Contract liability$409,527 $507,411 $842,416 $81,330 $24,704 $13,035 $130,614 $311,852 $5,168 $1,202 
# Rounded units/unit fair values
* For Sub-Accounts with only one unit fair value, the unit fair value is illustrated in both the minimum and maximum unit fair value rows.
The accompanying notes are an integral part of these financial statements.

VARIABLE ACCOUNT D
Union Security Insurance Company
Statements of Assets and Liabilities (continued)
December 31, 2021
BlackRock S&P 500 Index V.I. FundNeuberger Berman AMT Short Duration Bond PortfolioPioneer Fund VCT PortfolioDWS CROCI® International VIPPioneer Select Mid Cap Growth VCT PortfolioVanEck VIP Emerging Markets Bond FundVanEck VIP Global Resources FundAllspring VT Index Asset Allocation FundAllspring VT International Equity FundAllspring VT Small Cap Growth Fund
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account (2)Sub-Account (3)Sub-Account (4)Sub-Account (5)
Assets:
  Investments, at fair value
class 2$— $— $— $— $— $— $— $1,700,677 $11,249 $2,121,771 
class A— — — 336,623 — — — — — — 
class D— — — — — — — — — — 
class I53,272,634 100,979 1,311,403 — 2,402,700 — — — — — 
class IA— — — — — — — — — — 
class INIT— — — — — 18,113 357,665 — — — 
class PRIM— — — — — — — — — — 
class S— — — — — — — — — — 
class S1— — — — — — — — — — 
class SRV— — — — — — — — — — 
                   Total investments53,272,634 100,979 1,311,403 336,623 2,402,700 18,113 357,665 1,700,677 11,249 2,121,771 
  Due from Sponsor Company— — — 271 — — — — — 2,454 
  Receivable for fund shares sold29,698 1 16 — 30 — 4 65 — — 
  Other assets— — — — — — — — — — 
 Total assets53,302,332 100,980 1,311,419 336,894 2,402,730 18,113 357,669 1,700,742 11,249 2,124,225 
Liabilities:
  Due to Sponsor Company29,698 1 16 — 30 — 4 65 — — 
  Payable for fund shares purchased— — — 271 — — — — — 2,454 
  Other liabilities1 — — — — 1 — — — — 
 Total liabilities29,699 1 16 271 30 1 4 65 — 2,454 
Net assets:
  For contract liabilities$53,272,633 $100,979 $1,311,403 $336,623 $2,402,700 $18,112 $357,665 $1,700,677 $11,249 $2,121,771 
Contract Liabilities:
class 2$— $— $— $— $— $— $— $1,700,677 $11,249 $2,121,771 
class A— — — 336,623 — — — — — — 
class D— — — — — — — — — — 
class I53,272,633 100,979 1,311,403 — 2,402,700 — — — — — 
class IA— — — — — — — — — — 
class INIT— — — — — 18,112 357,665 — — — 
class PRIM— — — — — — — — — — 
class S— — — — — — — — — — 
class S1— — — — — — — — — — 
class SRV— — — — — — — — — — 
  Total contract liabilities$53,272,633 $100,979 $1,311,403 $336,623 $2,402,700 $18,112 $357,665 $1,700,677 $11,249 $2,121,771 
Shares:
class 2— — — — — — — 74,233 5,541 151,123 
class A— — — 43,604 — — — — — — 
class D— — — — — — — — — — 
class I1,651,865 9,635 66,232 — 68,845 — — — — — 
class IA— — — — — — — — — — 
class INIT— — — — — 2,253 13,441 — — — 
class PRIM— — — — — — — — — — 
class S— — — — — — — — — — 
class S1— — — — — — — — — — 
class SRV— — — — — — — — — — 
  Total shares1,651,865 9,635 66,232 43,604 68,845 2,253 13,441 74,233 5,541 151,123 
Cost$39,776,930 $104,355 $1,140,905 $328,353 $1,886,331 $22,390 $319,792 $1,185,504 $17,364 $1,365,396 
Deferred contracts in the accumulation period:
  Units owned by participants #3,043,024 5,622 25,789 15,436 26,365 644 5,344 52,219 687 30,022 
  Minimum unit fair value #*$16.764316 $17.112817 $50.750212 $20.800665 $89.872357 $23.831347 $31.815931 $32.442721 $16.364818 $70.279710 
  Maximum unit fair value #*$17.707991 $17.112817 $50.750212 $20.800665 $89.872357 $23.831347 $31.815931 $32.442721 $16.364818 $70.279710 
  Contract liability$52,086,654 $96,210 $1,308,779 $321,078 $2,369,448 $15,353 $170,034 $1,694,125 $11,249 $2,109,958 
Contracts in payout (annuitization) period:
Units owned by participants #69,068 279 52 747 370 116 5,897 202 — 168 
Minimum unit fair value #*$17.095462 $17.112817 $50.750212 $20.800665 $89.872357 $23.831347 $31.815931 $32.442721 $— $70.279710 
Maximum unit fair value #*$17.707991 $17.112817 $50.750212 $20.800665 $89.872357 $23.831347 $31.815931 $32.442721 $— $70.279710 
Contract liability$1,185,979 $4,769 $2,624 $15,545 $33,252 $2,759 $187,631 $6,552 $— $11,813 
# Rounded units/unit fair values
* For Sub-Accounts with only one unit fair value, the unit fair value is illustrated in both the minimum and maximum unit fair value rows.
The accompanying notes are an integral part of these financial statements.

VARIABLE ACCOUNT D
Union Security Insurance Company
Statements of Assets and Liabilities (concluded)
December 31, 2021
Allspring VT Discovery FundAllspring VT Opportunity FundVoya Global High Dividend Low Volatility PortfolioNVIT Emerging Markets FundNeuberger Berman AMT Sustainable Equity Portfolio
Sub-Account (6)Sub-Account (7)Sub-Account Sub-Account Sub-Account
Assets:
  Investments, at fair value
class 2$759,881 $157,023 $— $— $— 
class A— — — — — 
class D— — — 298,430 — 
class I— — — — 650,020 
class IA— — — — — 
class INIT— — — — — 
class PRIM— — — — — 
class S— — 329,765 — — 
class S1— — — — — 
class SRV— — — — — 
                   Total investments759,881 157,023 329,765 298,430 650,020 
  Due from Sponsor Company— — — — — 
  Receivable for fund shares sold9 6 4 4 8 
  Other assets— 1 — — 1 
 Total assets759,890 157,030 329,769 298,434 650,029 
Liabilities:
  Due to Sponsor Company9 6 4 4 8 
  Payable for fund shares purchased— — — — — 
  Other liabilities— — — — — 
 Total liabilities9 6 4 4 8 
Net assets:
  For contract liabilities$759,881 $157,024 $329,765 $298,430 $650,021 
Contract Liabilities:
class 2$759,881 $157,024 $— $— $— 
class A— — — — — 
class D— — — 298,430 — 
class I— — — — 650,021 
class IA— — — — — 
class INIT— — — — — 
class PRIM— — — — — 
class S— — 329,765 — — 
class S1— — — — — 
class SRV— — — — — 
  Total contract liabilities$759,881 $157,024 $329,765 $298,430 $650,021 $— $— $— $— $— 
Shares:
class 217,779 4,469 — — — 
class A— — — — — 
class D— — — 22,122 — 
class I— — — — 17,554 
class IA— — — — — 
class INIT— — — — — 
class PRIM— — — — — 
class S— — 26,680 — — 
class S1— — — — — 
class SRV— — — — — 
  Total shares17,779 4,469 26,680 22,122 17,554 
Cost$572,640 $112,560 $282,785 $246,930 $470,213 
Deferred contracts in the accumulation period:
  Units owned by participants #5,010 4,040 17,028 9,782 39,214 
  Minimum unit fair value #*$130.842635 $36.262856 $15.567477 $14.198105 $16.508774 
  Maximum unit fair value #*$130.842635 $36.262856 $15.567477 $14.198105 $16.508774 
  Contract liability$655,509 $146,504 $265,083 $138,889 $647,382 
Contracts in payout (annuitization) period:
Units owned by participants #798 290 4,155 11,237 160 
Minimum unit fair value #*$130.842635 $36.262856 $15.567477 $14.198105 $16.508774 
Maximum unit fair value #*$130.842635 $36.262856 $15.567477 $14.198105 $16.508774 
Contract liability$104,372 $10,520 $64,682 $159,541 $2,639 
# Rounded units/unit fair values
* For Sub-Accounts with only one unit fair value, the unit fair value is illustrated in both the minimum and maximum unit fair value rows.
The accompanying notes are an integral part of these financial statements.



(1) Formerly Wells Fargo VT Omega Growth Fund. Change effective December 03, 2021.
(2) Formerly VanEck VIP Global Hard Assets Fund. Change effective May 01, 2021.
(3) Formerly Wells Fargo VT Index Asset Allocation Fund. Change effective December 03, 2021.
(4) Formerly Wells Fargo VT International Equity Fund. Change effective December 03, 2021.
(5) Formerly Wells Fargo VT Small Cap Growth Fund. Change effective December 03, 2021.
(6) Formerly Wells Fargo VT Discovery Fund. Change effective December 03, 2021.
(7) Formerly Wells Fargo VT Opportunity Fund. Change effective December 03, 2021.



VARIABLE ACCOUNT D
Union Security Insurance Company
Statements of Operations
For the Periods Ended December 31, 2021
American Century VP Balanced FundAmerican Century VP Capital Appreciation FundAB VPS International Growth PortfolioInvesco V.I. Core Equity FundInvesco V.I. International Growth FundInvesco V.I. Government Money Market FundAB VPS Large Cap Growth PortfolioAllspring VT Omega Growth FundFederated Hermes Fund for U.S. Government Securities IIFederated Hermes High Income Bond Fund II
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account (1)Sub-Account Sub-Account
Investment income:
  Dividends$5,232 $— $— $11,874 $6,553 $557 $— $— $16,193 $78,997 
Expenses:
  Administrative charges— — — — (760)— — — (330)(1,417)
  Mortality and expense risk and other charges(3,254)(1,404)(1,111)(24,124)(6,336)(107,233)(7,162)(74,901)(5,159)(17,924)
    Total expenses(3,254)(1,404)(1,111)(24,124)(7,096)(107,233)(7,162)(74,901)(5,489)(19,341)
    Net investment income (loss)1,978 (1,404)(1,111)(12,250)(543)(106,676)(7,162)(74,901)10,704 59,656 
Net realized and unrealized gain (loss) on investments:
  Net realized gain (loss) on security transactions10,906 5,935 3,387 38,544 22,270 — 100,069 276,839 (15,396)(6,690)
  Net realized gain distributions32,820 32,993 22,619 40,670 34,606 — 109,512 552,919 — — 
  Change in unrealized appreciation (depreciation) during the period55,863 (12,038)(8,256)357,137 (34,706)— 198,529 (82,767)(14,833)4,734 
    Net gain (loss) on investments99,589 26,890 17,750 436,351 22,170 — 408,110 746,991 (30,229)(1,956)
    Net increase (decrease) in net assets resulting from operations$101,567 $25,486 $16,639 $424,101 $21,627 $(106,676)$400,948 $672,090 $(19,525)$57,700 
The accompanying notes are an integral part of these financial statements.
VARIABLE ACCOUNT D
Union Security Insurance Company
Statements of Operations (continued)
For the Periods Ended December 31, 2021
Federated Hermes Government Money Fund IIFederated Hermes Quality Bond Fund IIFederated Hermes Managed Volatility Fund IIFederated Hermes Kaufmann Fund IIHartford Balanced HLS FundHartford Total Return Bond HLS FundHartford Capital Appreciation HLS FundHartford Dividend and Growth HLS FundHartford Disciplined Equity HLS FundHartford International Opportunities HLS Fund
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Investment income:
  Dividends$10 $30,215 $195,490 $— $549,803 $618,829 $74,362 $415,991 $2,157,124 $219,847 
Expenses:
  Administrative charges(619)(1,209)(10,616)— (56,277)(26,143)— — (381,451)— 
  Mortality and expense risk and other charges(7,315)(14,457)(127,586)(112,713)(712,072)(333,925)(221,824)(448,038)(4,884,057)(302,146)
    Total expenses(7,934)(15,666)(138,202)(112,713)(768,349)(360,068)(221,824)(448,038)(5,265,508)(302,146)
    Net investment income (loss)(7,924)14,549 57,288 (112,713)(218,546)258,761 (147,462)(32,047)(3,108,384)(82,299)
Net realized and unrealized gain (loss) on investments:
  Net realized gain (loss) on security transactions— 1,843 266,784 391,987 2,158,102 5,068 437,364 719,430 11,410,606 907,175 
  Net realized gain distributions— 10,480 — 603,236 2,968,555 631,787 1,387,284 1,585,518 16,060,227 — 
  Change in unrealized appreciation (depreciation) during the period— (59,952)1,377,563 (759,236)4,335,339 (1,532,663)294,039 6,106,044 57,724,495 508,553 
    Net gain (loss) on investments— (47,629)1,644,347 235,987 9,461,996 (895,808)2,118,687 8,410,992 85,195,328 1,415,728 
    Net increase (decrease) in net assets resulting from operations$(7,924)$(33,080)$1,701,635 $123,274 $9,243,450 $(637,047)$1,971,225 $8,378,945 $82,086,944 $1,333,429 
The accompanying notes are an integral part of these financial statements.


VARIABLE ACCOUNT D
Union Security Insurance Company
Statements of Operations (continued)
For the Periods Ended December 31, 2021
Hartford MidCap HLS FundHartford Ultrashort Bond HLS FundHartford SmallCap Growth HLS FundHartford Stock HLS FundVY® JPMorgan Emerging Markets Equity PortfolioInvesco V.I. Health Care FundInvesco V.I. Technology FundMFS® Growth SeriesMFS® High Yield PortfolioMFS® Income Portfolio
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Investment income:
  Dividends$— $127,429 $— $59,921 $— $1,209 $— $— $22,514 $7,228 
Expenses:
  Administrative charges— (17,236)(50,657)— — — — (3,651)— — 
  Mortality and expense risk and other charges(425,470)(223,253)(639,319)(71,459)(651)(2,621)(5,317)(38,193)(5,246)(1,605)
    Total expenses(425,470)(240,489)(689,976)(71,459)(651)(2,621)(5,317)(41,844)(5,246)(1,605)
    Net investment income (loss)(425,470)(113,060)(689,976)(11,538)(651)(1,412)(5,317)(41,844)17,268 5,623 
Net realized and unrealized gain (loss) on investments:
  Net realized gain (loss) on security transactions580,757 (4,452)2,677,651 235,545 4,167 26,818 11,531 162,478 (4,453)8,566 
  Net realized gain distributions4,813,412 — 3,955,795 178,625 11,161 62,864 112,290 576,858 — 9,383 
  Change in unrealized appreciation (depreciation) during the period(2,539,626)(155,799)(4,565,084)630,257 (29,235)(20,699)32,361 132,242 (2,175)(23,171)
    Net gain (loss) on investments2,854,543 (160,251)2,068,362 1,044,427 (13,907)68,983 156,182 871,578 (6,628)(5,222)
    Net increase (decrease) in net assets resulting from operations$2,429,073 $(273,311)$1,378,386 $1,032,889 $(14,558)$67,571 $150,865 $829,734 $10,640 $401 
The accompanying notes are an integral part of these financial statements.
VARIABLE ACCOUNT D
Union Security Insurance Company
Statements of Operations (continued)
For the Periods Ended December 31, 2021
BlackRock S&P 500 Index V.I. FundNeuberger Berman AMT Short Duration Bond PortfolioPioneer Fund VCT PortfolioDWS CROCI® International VIPPioneer Select Mid Cap Growth VCT PortfolioVanEck VIP Emerging Markets Bond FundVanEck VIP Global Resources FundAllspring VT Index Asset Allocation FundAllspring VT International Equity FundAllspring VT Small Cap Growth Fund
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account (2)Sub-Account (3)Sub-Account (4)Sub-Account (5)
Investment income:
  Dividends$639,738 $2,636 $3,554 $8,404 $— $964 $1,407 $9,615 $123 $— 
Expenses:
  Administrative charges— — — (519)— — — (2,472)— (3,352)
  Mortality and expense risk and other charges(649,032)(460)(4,950)(4,327)(10,933)(85)(1,419)(20,604)(217)(27,931)
    Total expenses(649,032)(460)(4,950)(4,846)(10,933)(85)(1,419)(23,076)(217)(31,283)
    Net investment income (loss)(9,294)2,176 (1,396)3,558 (10,933)879 (12)(13,461)(94)(31,283)
Net realized and unrealized gain (loss) on investments:
  Net realized gain (loss) on security transactions1,168,528 (24)793 496 24,069 (104)1,973 57,119 (4,822)81,752 
  Net realized gain distributions3,590,338 — 82,974 — 331,990 — — 151,084 — 244,053 
  Change in unrealized appreciation (depreciation) during the period6,905,714 (1,849)178,592 21,632 (176,480)(1,631)42,401 25,828 6,644 (160,177)
    Net gain (loss) on investments11,664,580 (1,873)262,359 22,128 179,579 (1,735)44,374 234,031 1,822 165,628 
    Net increase (decrease) in net assets resulting from operations$11,655,286 $303 $260,963 $25,686 $168,646 $(856)$44,362 $220,570 $1,728 $134,345 
The accompanying notes are an integral part of these financial statements.





VARIABLE ACCOUNT D
Union Security Insurance Company
Statements of Operations (concluded)
For the Periods Ended December 31, 2021
Allspring VT Discovery FundAllspring VT Opportunity FundVoya Global High Dividend Low Volatility PortfolioNVIT Emerging Markets FundNeuberger Berman AMT Sustainable Equity Portfolio
Sub-Account (6)Sub-Account (7)Sub-Account Sub-Account Sub-Account
Investment income:
  Dividends$— $56 $5,965 $2,910 $2,289 
Expenses:
  Administrative charges— — — — — 
  Mortality and expense risk and other charges(3,850)(1,937)(1,147)(1,395)(2,617)
    Total expenses(3,850)(1,937)(1,147)(1,395)(2,617)
    Net investment income (loss)(3,850)(1,881)4,818 1,515 (328)
Net realized and unrealized gain (loss) on investments:
  Net realized gain (loss) on security transactions49,122 1,494 4,186 7,060 1,322 
  Net realized gain distributions59,673 6,743 — — 11,705 
  Change in unrealized appreciation (depreciation) during the period(151,365)21,536 36,163 (34,814)105,202 
    Net gain (loss) on investments(42,570)29,773 40,349 (27,754)118,229 
    Net increase (decrease) in net assets resulting from operations$(46,420)$27,892 $45,167 $(26,239)$117,901 
The accompanying notes are an integral part of these financial statements.













(1) Formerly Wells Fargo VT Omega Growth Fund. Change effective December 03, 2021.
(2) Formerly VanEck VIP Global Hard Assets Fund. Change effective May 01, 2021.
(3) Formerly Wells Fargo VT Index Asset Allocation Fund. Change effective December 03, 2021.
(4) Formerly Wells Fargo VT International Equity Fund. Change effective December 03, 2021.
(5) Formerly Wells Fargo VT Small Cap Growth Fund. Change effective December 03, 2021.
(6) Formerly Wells Fargo VT Discovery Fund. Change effective December 03, 2021.
(7) Formerly Wells Fargo VT Opportunity Fund. Change effective December 03, 2021.



VARIABLE ACCOUNT D
Union Security Insurance Company
Statements of Changes in Net Assets
For the Periods Ended December 31, 2021
American Century VP Balanced FundAmerican Century VP Capital Appreciation FundAB VPS International Growth PortfolioInvesco V.I. Core Equity FundInvesco V.I. International Growth FundInvesco V.I. Government Money Market FundAB VPS Large Cap Growth PortfolioAllspring VT Omega Growth FundFederated Hermes Fund for U.S. Government Securities IIFederated Hermes High Income Bond Fund II
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account (1)Sub-Account Sub-Account
Operations:
  Net investment income (loss)$1,978 $(1,404)$(1,111)$(12,250)$(543)$(106,676)$(7,162)$(74,901)$10,704 $59,656 
  Net realized gain (loss) on security transactions10,906 5,935 3,387 38,544 22,270 — 100,069 276,839 (15,396)(6,690)
  Net realized gain distributions32,820 32,993 22,619 40,670 34,606 — 109,512 552,919 — — 
  Change in unrealized appreciation (depreciation) during the period55,863 (12,038)(8,256)357,137 (34,706)— 198,529 (82,767)(14,833)4,734 
  Net increase (decrease) in net assets resulting from operations101,567 25,486 16,639 424,101 21,627 (106,676)400,948 672,090 (19,525)57,700 
Unit transactions:
  Purchases— — — 2,300 — 45,968 — 1,795 112 — 
  Net transfers14,058 100,918 31,847 88,648 43,430 2,744,609 (93,389)(3,757)(364,451)84,950 
  Surrenders for benefit payments and fees(469)(8,398)(12,296)(137,627)(36,673)(1,989,294)(1,027)(444,866)(11,114)(73,083)
  Other transactions— — — 9 — 2 — 17 — — 
  Death benefits— — — (82,850)— (254,224)— (130,083)(8,626)(15,911)
  Net annuity transactions(3,878)— (4,075)(15,448)(1,898)(7,024)(45,430)(389)(27)(243)
  Net increase (decrease) in net assets resulting from unit transactions9,711 92,520 15,476 (144,968)4,859 540,037 (139,846)(577,283)(384,106)(4,287)
  Net increase (decrease) in net assets111,278 118,006 32,115 279,133 26,486 433,361 261,102 94,807 (403,631)53,413 
Net assets:
  Beginning of period674,368 248,883 236,149 1,699,985 485,220 8,171,888 1,417,364 5,249,243 774,380 1,615,580 
  End of period$785,646 $366,889 $268,264 $1,979,118 $511,706 $8,605,249 $1,678,466 $5,344,050 $370,749 $1,668,993 
The accompanying notes are an integral part of these financial statements.


VARIABLE ACCOUNT D
Union Security Insurance Company
Statements of Changes in Net Assets (continued)
For the Periods Ended December 31, 2021
Federated Hermes Government Money Fund IIFederated Hermes Quality Bond Fund IIFederated Hermes Managed Volatility Fund IIFederated Hermes Kaufmann Fund IIHartford Balanced HLS FundHartford Total Return Bond HLS FundHartford Capital Appreciation HLS FundHartford Dividend and Growth HLS FundHartford Disciplined Equity HLS FundHartford International Opportunities HLS Fund
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Operations:
  Net investment income (loss)$(7,924)$14,549 $57,288 $(112,713)$(218,546)$258,761 $(147,462)$(32,047)$(3,108,384)$(82,299)
  Net realized gain (loss) on security transactions— 1,843 266,784 391,987 2,158,102 5,068 437,364 719,430 11,410,606 907,175 
  Net realized gain distributions— 10,480 — 603,236 2,968,555 631,787 1,387,284 1,585,518 16,060,227 — 
  Change in unrealized appreciation (depreciation) during the period— (59,952)1,377,563 (759,236)4,335,339 (1,532,663)294,039 6,106,044 57,724,495 508,553 
  Net increase (decrease) in net assets resulting from operations(7,924)(33,080)1,701,635 123,274 9,243,450 (637,047)1,971,225 8,378,945 82,086,944 1,333,429 
Unit transactions:
  Purchases16,212 272 98,001 6,166 316,014 200,116 54,163 114,865 1,656,382 93,930 
  Net transfers(17,549)40,872 (128,795)65,271 (525,748)625,123 (288,801)135,593 (8,127,390)(74,468)
  Surrenders for benefit payments and fees(14,120)(23,336)(662,854)(588,407)(4,749,590)(1,967,703)(864,753)(2,453,010)(32,963,053)(1,759,775)
  Other transactions69 — (169)(572)(68)(224)624 116 (3,268)(68)
  Death benefits(44,457)(12,083)(479,965)(432,361)(1,682,972)(425,082)(215,772)(606,974)(6,943,762)(271,082)
  Net annuity transactions— — (1,333)— (158,384)(117,106)52,548 25,517 (190,054)(61,910)
  Net increase (decrease) in net assets resulting from unit transactions(59,845)5,725 (1,175,115)(949,903)(6,800,748)(1,684,876)(1,261,991)(2,783,893)(46,571,145)(2,073,373)
  Net increase (decrease) in net assets(67,769)(27,355)526,520 (826,629)2,442,702 (2,321,923)709,234 5,595,052 35,515,799 (739,944)
Net assets:
  Beginning of period653,007 1,219,995 10,460,555 9,110,072 54,118,500 27,438,821 15,415,549 29,002,148 365,668,103 21,763,852 
  End of period$585,238 $1,192,640 $10,987,075 $8,283,443 $56,561,202 $25,116,898 $16,124,783 $34,597,200 $401,183,902 $21,023,908 
The accompanying notes are an integral part of these financial statements.
VARIABLE ACCOUNT D
Union Security Insurance Company
Statements of Changes in Net Assets (continued)
For the Periods Ended December 31, 2021
Hartford MidCap HLS FundHartford Ultrashort Bond HLS FundHartford SmallCap Growth HLS FundHartford Stock HLS FundVY® JPMorgan Emerging Markets Equity PortfolioInvesco V.I. Health Care FundInvesco V.I. Technology FundMFS® Growth SeriesMFS® High Yield PortfolioMFS® Income Portfolio
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Operations:
  Net investment income (loss)$(425,470)$(113,060)$(689,976)$(11,538)$(651)$(1,412)$(5,317)$(41,844)$17,268 $5,623 
  Net realized gain (loss) on security transactions580,757 (4,452)2,677,651 235,545 4,167 26,818 11,531 162,478 (4,453)8,566 
  Net realized gain distributions4,813,412 — 3,955,795 178,625 11,161 62,864 112,290 576,858 — 9,383 
  Change in unrealized appreciation (depreciation) during the period(2,539,626)(155,799)(4,565,084)630,257 (29,235)(20,699)32,361 132,242 (2,175)(23,171)
  Net increase (decrease) in net assets resulting from operations2,429,073 (273,311)1,378,386 1,032,889 (14,558)67,571 150,865 829,734 10,640 401 
Unit transactions:
  Purchases101,303 48,232 165,493 43,148 — — — 1,100 — — 
  Net transfers177,982 491,869 (113,632)159,141 (9,354)(44,051)(4,192)27,106 (58,039)(215,852)
  Surrenders for benefit payments and fees(1,689,879)(1,151,180)(3,623,857)(390,961)(308)(127)(1,907)(94,447)(14,527)(9,926)
  Other transactions15 58 (409)5 — — — 9 — — 
  Death benefits(429,778)(303,800)(799,740)(57,465)— — — (50,159)(11,205)— 
  Net annuity transactions(68,758)(112,934)(78,087)54,688 (2,353)(1,004)(11,732)(60,553)(1,337)(180)
  Net increase (decrease) in net assets resulting from unit transactions(1,909,115)(1,027,755)(4,450,232)(191,444)(12,015)(45,182)(17,831)(176,944)(85,108)(225,958)
  Net increase (decrease) in net assets519,958 (1,301,066)(3,071,846)841,445 (26,573)22,389 133,034 652,790 (74,468)(225,557)
Net assets:
  Beginning of period29,436,177 18,655,217 50,845,503 4,491,572 137,655 630,072 1,089,344 3,848,102 491,728 451,791 
  End of period$29,956,135 $17,354,151 $47,773,657 $5,333,017 $111,082 $652,461 $1,222,378 $4,500,892 $417,260 $226,234 
The accompanying notes are an integral part of these financial statements.
VARIABLE ACCOUNT D
Union Security Insurance Company
Statements of Changes in Net Assets (continued)
For the Periods Ended December 31, 2021
BlackRock S&P 500 Index V.I. FundNeuberger Berman AMT Short Duration Bond PortfolioPioneer Fund VCT PortfolioDWS CROCI® International VIPPioneer Select Mid Cap Growth VCT PortfolioVanEck VIP Emerging Markets Bond FundVanEck VIP Global Resources FundAllspring VT Index Asset Allocation FundAllspring VT International Equity FundAllspring VT Small Cap Growth Fund
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account (2)Sub-Account (3)Sub-Account (4)Sub-Account (5)
Operations:
  Net investment income (loss)$(9,294)$2,176 $(1,396)$3,558 $(10,933)$879 $(12)$(13,461)$(94)$(31,283)
  Net realized gain (loss) on security transactions1,168,528 (24)793 496 24,069 (104)1,973 57,119 (4,822)81,752 
  Net realized gain distributions3,590,338 — 82,974 — 331,990 — — 151,084 — 244,053 
  Change in unrealized appreciation (depreciation) during the period6,905,714 (1,849)178,592 21,632 (176,480)(1,631)42,401 25,828 6,644 (160,177)
  Net increase (decrease) in net assets resulting from operations11,655,286 303 260,963 25,686 168,646 (856)44,362 220,570 1,728 134,345 
Unit transactions:
  Purchases167,959 — — 395 — — — — — 695 
  Net transfers565,073 — 124,211 2,427 (9,282)— 81,097 (5,077)— (5,768)
  Surrenders for benefit payments and fees(2,938,488)(1,280)(1,718)(21,782)(2,759)(2)(1,668)(90,567)(2)(99,044)
  Other transactions(936)— — 1 — — — 1 — 2 
  Death benefits(647,517)— — (15,853)— — — (62,904)(10,475)(42,787)
  Net annuity transactions(115,319)(750)(431)8,683 (2,908)(238)(17,272)(1,714)— (14,993)
  Net increase (decrease) in net assets resulting from unit transactions(2,969,228)(2,030)122,062 (26,129)(14,949)(240)62,157 (160,261)(10,477)(161,895)
  Net increase (decrease) in net assets8,686,058 (1,727)383,025 (443)153,697 (1,096)106,519 60,309 (8,749)(27,550)
Net assets:
  Beginning of period44,586,575 102,706 928,378 337,066 2,249,003 19,208 251,146 1,640,368 19,998 2,149,321 
  End of period$53,272,633 $100,979 $1,311,403 $336,623 $2,402,700 $18,112 $357,665 $1,700,677 $11,249 $2,121,771 
The accompanying notes are an integral part of these financial statements.
VARIABLE ACCOUNT D
Union Security Insurance Company
Statements of Changes in Net Assets (concluded)
For the Periods Ended December 31, 2021
Allspring VT Discovery FundAllspring VT Opportunity FundVoya Global High Dividend Low Volatility PortfolioNVIT Emerging Markets FundNeuberger Berman AMT Sustainable Equity Portfolio
Sub-Account (6)Sub-Account (7)Sub-Account Sub-Account Sub-Account
Operations:
  Net investment income (loss)$(3,850)$(1,881)$4,818 $1,515 $(328)
  Net realized gain (loss) on security transactions49,122 1,494 4,186 7,060 1,322 
  Net realized gain distributions59,673 6,743 — — 11,705 
  Change in unrealized appreciation (depreciation) during the period(151,365)21,536 36,163 (34,814)105,202 
  Net increase (decrease) in net assets resulting from operations(46,420)27,892 45,167 (26,239)117,901 
Unit transactions:
  Purchases— — — — — 
  Net transfers(53,322)12,000 81,742 35,495 31,868 
  Surrenders for benefit payments and fees(34)(2,412)(1,741)(1,350)(2,567)
  Other transactions— — — — — 
  Death benefits— — — — — 
  Net annuity transactions(8,432)(1,520)(7,163)(14,175)(222)
  Net increase (decrease) in net assets resulting from unit transactions(61,788)8,068 72,838 19,970 29,079 
  Net increase (decrease) in net assets(108,208)35,960 118,005 (6,269)146,980 
Net assets:
  Beginning of period868,089 121,064 211,760 304,699 503,041 
  End of period$759,881 $157,024 $329,765 $298,430 $650,021 
The accompanying notes are an integral part of these financial statements.



(1) Formerly Wells Fargo VT Omega Growth Fund. Change effective December 03, 2021.
(2) Formerly VanEck VIP Global Hard Assets Fund. Change effective May 01, 2021.
(3) Formerly Wells Fargo VT Index Asset Allocation Fund. Change effective December 03, 2021.
(4) Formerly Wells Fargo VT International Equity Fund. Change effective December 03, 2021.
(5) Formerly Wells Fargo VT Small Cap Growth Fund. Change effective December 03, 2021.
(6) Formerly Wells Fargo VT Discovery Fund. Change effective December 03, 2021.
(7) Formerly Wells Fargo VT Opportunity Fund. Change effective December 03, 2021.





VARIABLE ACCOUNT D
Union Security Insurance Company
Statements of Changes in Net Assets
For the Periods Ended December 31, 2020
American Century VP Balanced FundAmerican Century VP Capital Appreciation FundAB VPS International Growth PortfolioInvesco V.I. Core Equity FundInvesco V.I. International Growth FundInvesco V.I. Government Money Market FundAB VPS Large Cap Growth PortfolioWells Fargo VT Omega Growth FundFederated Hermes Fund for U.S. Government Securities IIFederated Hermes High Income Bond Fund II
Sub-AccountSub-AccountSub-AccountSub-AccountSub-AccountSub-AccountSub-AccountSub-AccountSub-AccountSub-Account
Operations:
Net investment income (loss)$4,572 $(818)$1,753 $69 $3,664 $(82,216)$(5,380)$(61,139)$7,063 $82,833 
Net realized gain (loss) on security transactions10,359 (489)(1,412)22,923 59,188 — 71,526 142,140 317 (34,765)
Net realized gain distributions21,710 19,198 16,547 352,575 9,661 — 94,054 340,546 — — 
Change in unrealized appreciation (depreciation) during the period36,291 51,375 35,429 (197,044)(22,443)— 190,286 1,149,202 8,937 12,354 
Net increase (decrease) in net assets resulting from operations72,932 69,266 52,317 178,523 50,070 (82,216)350,486 1,570,749 16,317 60,422 
Unit transactions:
Purchases— — — 1,765 188 3,489 — 1,260 — 15,078 
Net transfers(21,441)10,624 (7,204)(45,302)(72,059)2,404,494 (88,847)(13,935)445,287 (63,869)
Net interfund transfers due to corporate actions— — — — — — — — — — 
Surrenders for benefit payments and fees(288)(34)(32)(96,501)(17,577)(1,892,533)(389)(255,509)(10,452)(69,688)
Other transactions(1)— — (1)— 23 (2)(545)1 — 
Death benefits— 29 122 (80,670)(32,459)(174,126)— (136,322)(14,136)(150,462)
Net annuity transactions(3,579)— (3,500)(5,882)(1,881)(171,851)(28,264)(50,298)(31)(6,004)
Net increase (decrease) in net assets resulting from unit transactions(25,309)10,619 (10,614)(226,591)(123,788)169,496 (117,502)(455,349)420,669 (274,945)
Net increase (decrease) in net assets47,623 79,885 41,703 (48,068)(73,718)87,280 232,984 1,115,400 436,986 (214,523)
Net assets:
Beginning of period626,745 168,998 194,446 1,748,053 558,938 8,084,608 1,184,380 4,133,843 337,394 1,830,103 
End of period$674,368 $248,883 $236,149 $1,699,985 $485,220 $8,171,888 $1,417,364 $5,249,243 $774,380 $1,615,580 
The accompanying notes are an integral part of these financial statements.
VARIABLE ACCOUNT D
Union Security Insurance Company
Statements of Changes in Net Assets (continued)
For the Periods Ended December 31, 2020
Federated Hermes Government Money Fund IIFederated Hermes Quality Bond Fund IIFederated Hermes Managed Volatility Fund IIFederated Hermes Kaufmann Fund IIHartford Balanced HLS FundHartford Total Return Bond HLS FundHartford Capital Appreciation HLS FundHartford Dividend and Growth HLS FundHartford Disciplined Equity HLS Fund
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Operations:
Net investment income (loss)$(7,078)$17,245 $135,086 $(102,971)$151,195 $422,360 $(56,063)$268,616 $(631,977)
Net realized gain (loss) on security transactions— 1,893 69,515 200,373 1,328,555 85,721 33,564 (115,516)1,507,539 
Net realized gain distributions— 3,482 — 736,765 2,660,671 43,610 987,707 579,475 2,656,463 
Change in unrealized appreciation (depreciation) during the period— 52,851 (296,550)1,160,524 744,041 986,110 1,502,957 1,930,369 41,154,703 
Net increase (decrease) in net assets resulting from operations(7,078)75,471 (91,949)1,994,691 4,884,462 1,537,801 2,468,165 2,662,944 44,686,728 
Unit transactions:
Purchases— 28,943 108,759 161,270 256,468 194,987 53,593 298,724 343,721 
Net transfers63,647 43,505 (111,268)(40,847)468,047 1,975,340 383,725 (603,828)(13,852,516)
Net interfund transfers due to corporate actions— — — — — 7,136,546 — 15,564,677 302,150,696 
Surrenders for benefit payments and fees(13,355)(44,067)(249,698)(238,249)(4,506,901)(2,260,730)(1,134,618)(1,047,006)(10,371,071)
Other transactions2 1 (5)11 (2,155)32 (355)(85)(2,174)
Death benefits(25,057)(52,161)(565,906)(405,529)(1,442,079)(1,079,137)(192,963)(817,000)(2,672,457)
Net annuity transactions— — (15,803)(8,630)139,567 193,418 (645)237,324 9,466,800 
Net increase (decrease) in net assets resulting from unit transactions25,237 (23,779)(833,921)(531,974)(5,087,053)6,160,456 (891,263)13,632,806 285,062,999 
Net increase (decrease) in net assets18,159 51,692 (925,870)1,462,717 (202,591)7,698,257 1,576,902 16,295,750 329,749,727 
Net assets:
Beginning of period634,848 1,168,303 11,386,425 7,647,355 54,321,091 19,740,564 13,838,647 12,706,398 35,918,376 
End of period$653,007 $1,219,995 $10,460,555 $9,110,072 $54,118,500 $27,438,821 $15,415,549 $29,002,148 $365,668,103 
The accompanying notes are an integral part of these financial statements.
VARIABLE ACCOUNT D
Union Security Insurance Company
Statements of Changes in Net Assets (continued)
For the Periods Ended December 31, 2020
Hartford International Opportunities HLS FundHartford MidCap HLS FundHartford Ultrashort Bond HLS FundHartford SmallCap Growth HLS FundHartford Stock HLS Fund
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
Operations:
Net investment income (loss)$97,493 $(94,313)$42,398 $(555,850)$8,405 
Net realized gain (loss) on security transactions427,464 171,345 25,463 1,787,322 240,229 
Net realized gain distributions— 410,489 — 1,503,494 273,733 
Change in unrealized appreciation (depreciation) during the period2,789,756 5,672,175 (96,218)9,530,691 (101,437)
Net increase (decrease) in net assets resulting from operations3,314,713 6,159,696 (28,357)12,265,657 420,930 
Unit transactions:
Purchases147,470 90,131 87,074 164,814 17,667 
Net transfers54,458 (379,945)675,269 (774,178)82,986 
Net interfund transfers due to corporate actions— 24,057,697 11,182,071 — — 
Surrenders for benefit payments and fees(2,014,022)(661,407)(1,289,052)(3,966,125)(226,746)
Other transactions(102)(1,173)(58)41 5 
Death benefits(345,967)(177,360)(308,587)(683,094)(109,160)
Net annuity transactions(19,643)348,538 476,550 121,632 (2,078)
Net increase (decrease) in net assets resulting from unit transactions(2,177,806)23,276,481 10,823,267 (5,136,910)(237,326)
Net increase (decrease) in net assets1,136,907 29,436,177 10,794,910 7,128,747 183,604 
Net assets:
Beginning of period20,626,945 — 7,860,307 43,716,756 4,307,968 
End of period$21,763,852 $29,436,177 18,655,217 50,845,503 4,491,572 
The accompanying notes are an integral part of these financial statements.
VARIABLE ACCOUNT D
Union Security Insurance Company
Statements of Changes in Net Assets (continued)
For the Periods Ended December 31, 2020
VY® JPMorgan Emerging Markets Equity PortfolioInvesco V.I. Health Care FundInvesco V.I. Technology FundMFS® Growth SeriesMFS® High Yield PortfolioMFS® Income PortfolioBlackRock S&P 500 Index V.I. FundNeuberger Berman AMT Short Duration Bond PortfolioPioneer Fund VCT Portfolio
Sub-AccountSub-AccountSub-AccountSub-AccountSub-AccountSub-AccountSub-AccountSub-AccountSub-Account
Operations:
Net investment income (loss)$4,665 $(717)$(4,035)$(34,128)$21,355 $14,147 $176,240 $1,914 $2,500 
Net realized gain (loss) on security transactions233,010 7,468 99,302 243,632 (5,776)261 346,020 (1,016)(8,471)
Net realized gain distributions107,890 13,461 82,868 215,223 — — 2,577,263 — 65,825 
Change in unrealized appreciation (depreciation) during the period(118,190)55,857 162,197 479,237 1,825 16,346 3,114,093 2,014 115,843 
Net increase (decrease) in net assets resulting from operations227,375 76,069 340,332 903,964 17,404 30,754 6,213,616 2,912 175,697 
Unit transactions:
Purchases— — — 727 188 — 231,684 — — 
Net transfers(3,669)3,276 17,062 (17,150)(9,709)193,112 73,168 (6,096)16,545 
Net interfund transfers due to corporate actions— — — — — — — — — 
Surrenders for benefit payments and fees(345,354)(144)(4,197)(148,235)(12,606)(3,934)(3,638,608)(3,325)(54)
Other transactions— — (3)(2)— — 123 — 16 
Death benefits(526,272)(60)188 (112,082)(20,521)— (693,015)— (22,573)
Net annuity transactions(1,951)(874)(58,605)(49,256)(1,346)(186)(81,071)(760)(345)
Net increase (decrease) in net assets resulting from unit transactions(877,246)2,198 (45,555)(325,998)(43,994)188,992 (4,107,719)(10,181)(6,411)
Net increase (decrease) in net assets(649,871)78,267 294,777 577,966 (26,590)219,746 2,105,897 (7,269)169,286 
Net assets:
Beginning of period787,526 551,805 794,567 3,270,136 518,318 232,045 42,480,678 109,975 759,092 
End of period$137,655 $630,072 $1,089,344 $3,848,102 $491,728 $451,791 $44,586,575 $102,706 $928,378 
The accompanying notes are an integral part of these financial statements.
VARIABLE ACCOUNT D
Union Security Insurance Company
Statements of Changes in Net Assets (continued)
For the Periods Ended December 31, 2020
DWS CROCI® International VIPPioneer Select Mid Cap Growth VCT PortfolioVanEck VIP Emerging Markets Bond FundVanEck VIP Global Hard Assets FundWells Fargo VT Index Asset Allocation FundWells Fargo VT International Equity FundWells Fargo VT Small Cap Growth FundWells Fargo VT Discovery FundWells Fargo VT Opportunity FundVoya Global High Dividend Low Volatility Portfolio
Sub-AccountSub-AccountSub-AccountSub-AccountSub-AccountSub-AccountSub-AccountSub-AccountSub-AccountSub-Account
Operations:
Net investment income (loss)$6,541 $(7,882)$1,180 $939 $(8,721)$264 $(22,495)$(2,893)$(1,110)$3,672 
Net realized gain (loss) on security transactions(12,045)13,512 (127)(9,332)27,104 (4,228)36,164 31,311 8,015 96 
Net realized gain distributions— 124,951 — — 118,977 — 92,929 55,586 9,798 — 
Change in unrealized appreciation (depreciation) during the period1,510 487,030 435 44,207 79,025 4,179 672,664 246,649 5,264 (9,210)
Net increase (decrease) in net assets resulting from operations(3,994)617,611 1,488 35,814 216,385 215 779,262 330,653 21,967 (5,442)
Unit transactions:
Purchases395 — — — — — 695 — — — 
Net transfers3,765 (82,933)— (2,546)579 — (28,307)(93,493)(135)(21,840)
Net interfund transfers due to corporate actions— — — — — — — — — — 
Surrenders for benefit payments and fees(18,057)(977)(2)(33)(26,629)(4,543)(89,549)(765)(4,571)(28)
Other transactions2 — — 536 5 — (12)(2)— — 
Death benefits(13,356)— — — (47,687)— (12,392)— (21,267)— 
Net annuity transactions(2,953)(2,229)(235)(11,685)(2,070)— (11,900)(6,785)(1,187)(6,234)
Net increase (decrease) in net assets resulting from unit transactions(30,204)(86,139)(237)(13,728)(75,802)(4,543)(141,465)(101,045)(27,160)(28,102)
Net increase (decrease) in net assets(34,198)531,472 1,251 22,086 140,583 (4,328)637,797 229,608 (5,193)(33,544)
Net assets:
Beginning of period371,264 1,717,531 17,957 229,060 1,499,785 24,326 1,511,524 638,481 126,257 245,304 
End of period$337,066 $2,249,003 $19,208 $251,146 $1,640,368 $19,998 $2,149,321 $868,089 $121,064 $211,760 
The accompanying notes are an integral part of these financial statements.
VARIABLE ACCOUNT D
Union Security Insurance Company
Statements of Changes in Net Assets (concluded)
For the Periods Ended December 31, 2020
NVIT Emerging Markets FundNeuberger Berman AMT Sustainable Equity Portfolio
Sub-AccountSub-Account
Operations:
Net investment income (loss)$2,991 $715 
Net realized gain (loss) on security transactions2,455 (2,027)
Net realized gain distributions— 17,815 
Change in unrealized appreciation (depreciation) during the period27,100 61,076 
Net increase (decrease) in net assets resulting from operations32,546 77,579 
Unit transactions:
Purchases— — 
Net transfers— (7,295)
Net interfund transfers due to corporate actions— — 
Surrenders for benefit payments and fees(23)(88)
Other transactions470 1 
Death benefits— — 
Net annuity transactions(11,274)(178)
Net increase (decrease) in net assets resulting from unit transactions(10,827)(7,560)
Net increase (decrease) in net assets21,719 70,019 
Net assets:
Beginning of period282,980 433,022 
End of period$304,699 $503,041 
The accompanying notes are an integral part of these financial statements.






VARIABLE ACCOUNT D
Union Security Insurance Company
Notes to Financial Statements
December 31, 2021

1. Organization:

Variable Account D (the “Account”) is a separate investment account established by Union Security Insurance Company (the “Sponsor Company”) and is registered with the Securities and Exchange Commission (“SEC”) as a unit investment trust under the Investment Company Act of 1940, as amended. Both the Sponsor Company and the Account are subject to supervision and regulation by the Department of Insurance of the State of Minnesota and the SEC. The contract owners of the Sponsor Company direct their deposits into various investment options (the “Sub-Accounts”) within the Account.

The Account is comprised of the following Sub-Accounts:

American Century VP Balanced Fund, American Century VP Capital Appreciation Fund, AB VPS International Growth Portfolio, Invesco V.I. Core Equity Fund, Invesco V.I. International Growth Fund, Invesco V.I. Government Money Market Fund, AB VPS Large Cap Growth Portfolio, Allspring VT Omega Growth Fund (Formerly Wells Fargo VT Omega Growth Fund), Federated Hermes Fund for U.S. Government Securities II, Federated Hermes High Income Bond Fund II, Federated Hermes Government Money Fund II, Federated Hermes Quality Bond Fund II, Federated Hermes Managed Volatility Fund II, Federated Hermes Kaufmann Fund II, Hartford Balanced HLS Fund, Hartford Total Return Bond HLS Fund, Hartford Capital Appreciation HLS Fund, Hartford Dividend and Growth HLS Fund, Hartford Disciplined Equity HLS Fund, Hartford International Opportunities HLS Fund, Hartford MidCap HLS Fund, Hartford Ultrashort Bond HLS Fund, Hartford SmallCap Growth HLS Fund, Hartford Stock HLS Fund, VY® JPMorgan Emerging Markets Equity Portfolio, Invesco V.I. Health Care Fund, Invesco V.I. Technology Fund, MFS® Growth Series, MFS® High Yield Portfolio, MFS® Income Portfolio, BlackRock S&P 500 Index V.I. Fund, Neuberger Berman AMT Short Duration Bond Portfolio, Pioneer Fund VCT Portfolio, DWS CROCI® International VIP, Pioneer Select Mid Cap Growth VCT Portfolio, VanEck VIP Emerging Markets Bond Fund, VanEck VIP Global Resources Fund (Formerly VanEck VIP Global Hard Assets Fund), Allspring VT Index Asset Allocation Fund (Formerly Wells Fargo VT Index Asset Allocation Fund), Allspring VT International Equity Fund (Formerly Wells Fargo VT International Equity Fund), Allspring VT Small Cap Growth Fund (Formerly Wells Fargo VT Small Cap Growth Fund), Allspring VT Discovery Fund (Formerly Wells Fargo VT Discovery Fund), Allspring VT Opportunity Fund (Formerly Wells Fargo VT Opportunity Fund), Voya Global High Dividend Low Volatility Portfolio, NVIT Emerging Markets Fund, Neuberger Berman AMT Sustainable Equity Portfolio.

The Sub-Accounts are invested in mutual funds (the “Funds”) of the same name. Each Sub-Account may invest in one or more share classes of a Fund, depending upon the product(s) available in that Sub-Account. A contract owner's unitized performance correlates with the share class associated with the contract owner's product.

If a Fund is subject to a merger by the Fund Manager, the Sub-Account invested in the surviving Fund acquires, at fair value, the net assets of the Sub-Account associated with the merging Fund on the date disclosed. These transfers are reflected in net interfund transfers due to corporate actions on the Statements of Changes in Net Assets.
Under applicable insurance law, the assets and liabilities of the Account are clearly identified and distinguished from the Sponsor Company’s other assets and liabilities and are not chargeable with liabilities arising out of any other business the Sponsor Company may conduct.

2. Significant Accounting Policies:

The Account qualifies as an investment company and follows the accounting and reporting guidance as defined in Accounting Standards Codification 946, "Financial Services - Investment Companies." The following is a summary of significant accounting policies of the Account, which are in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"):

a) Security Transactions - Security transactions are recorded on the trade date (date the order to buy or sell is executed). Realized gains and losses on the sales of securities are computed using the average cost method. Dividend income is either accrued daily or as of the ex-dividend date based upon the Fund. Net realized gain distributions are accrued as of the ex-
dividend date. Net realized gain distributions represent those dividends from the Funds which are characterized as capital gains under tax regulations.

b) Unit Transactions - Unit transactions are executed based on the unit values calculated at the close of the business day.

c) Federal Income Taxes - The operations of the Account form a part of, and are taxed with, the total operations of the Sponsor Company, which is taxed as an insurance company under the Internal Revenue Code ("IRC"). Under the current provisions of the IRC, the Sponsor Company does not expect to incur federal income taxes on the earnings of the Account to the extent the earnings are credited to the contract owners. Based on this, no charge is being made currently to the Account for federal income taxes. The Sponsor Company will review periodically the status of this policy. In the event of changes in the tax law, a charge may be made in future years for any federal income taxes that would be attributable to the contracts.

d) Use of Estimates - The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amounts of income and expenses during the period. Actual results could differ from those estimates. The most significant estimates contained within the financial statements are the fair value measurements.

e) Mortality Risk - The mortality risk associated with net assets allocated to contracts in the annuity period is determined using certain mortality tables. The mortality risk is fully borne by the Sponsor Company and may result in additional amounts being transferred into the Account by the Sponsor Company to cover greater longevity of contract owners than expected. Conversely, if amounts allocated exceed amounts required, transfers may be made to the Sponsor Company. These amounts are included in net annuity transactions on the accompanying statements of changes in net assets.

f) Fair Value Measurements - The Sub-Accounts' investments are carried at fair value in the Account’s financial statements. The investments in shares of the Funds are valued at the December 31, 2021 closing net asset value as determined by the appropriate Fund Manager. For financial instruments that are carried at fair value, a hierarchy is used to place the instruments into three broad levels (Levels 1, 2 and 3) by prioritizing the inputs in the valuation techniques used to measure fair value.

Level 1: Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in active markets that the Account has the ability to access at the measurement date. Level 1 investments include mutual funds.

Level 2: Observable inputs, other than unadjusted quoted prices included in Level 1, for the asset or liability or prices for similar assets and liabilities. Level 2 investments include those that are model priced by vendors using observable inputs.

Level 3: Valuations that are derived from techniques in which one or more of the significant inputs are unobservable (including assumptions about risk). Because Level 3 fair values, by their nature, contain unobservable market inputs, considerable judgment is used to determine the Level 3 fair values. Level 3 fair values represent the best estimate of an amount that could be realized in a current market exchange absent actual market exchanges.

In certain cases, the inputs used to measure fair value fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

As of December 31, 2021, the Sub-Accounts invest in mutual funds which are carried at fair value and represent Level 1 investments under the fair value hierarchy levels. There were no Level 2 or Level 3 investments in the Sub-Accounts. The Account’s policy is to recognize transfers of securities among the levels at the beginning of the reporting period. There were no transfers among the levels for the periods ended December 31, 2021 and 2020.

g) Accounting for Uncertain Tax Positions - The statute of limitations is closed through the 2017 tax year and the Sponsor Company is not currently under examination for any open years.  Management evaluates whether or not there are uncertain tax positions that require financial statement recognition and has determined that no reserves for uncertain tax positions are required at December 31, 2021.

h) Novel Coronavirus - Since the first quarter of 2020, the novel coronavirus (“COVID-19”) has resulted in extreme stress and disruption in the global economy and financial markets. While the markets have rebounded, the pandemic has adversely impacted, and may continue to adversely impact, the financial performance of the funds in which the Sub-Accounts invest. Due to the highly uncertain nature of these conditions, it is not possible to estimate the ultimate impacts at this time. Management will continue to monitor developments, and their impact on the fair value of the funds.



3. Administration of the Account and Related Charges:

Each Sub-Account is charged certain fees, according to contract terms, as follows:

a) Mortality and Expense Risk Charges - The Sponsor Company, as an issuer of variable annuity contracts, assesses mortality and expense risk charges for which it receives a maximum annual fee of 1.40% of the Sub-Account’s average daily net assets. These charges are reflected in the accompanying statements of operations as a reduction in unit value.

b) Tax Expense Charges - If applicable, the Sponsor Company will make deductions up to a maximum rate of 3.5% of the contract’s average daily net assets to meet premium tax requirements. An additional tax charge based on a percentage of the Sub-Account’s average daily net assets may be assessed on partial withdrawals or surrenders. These charges are a redemption of units from applicable contract owners’ accounts and are reflected in surrenders for benefit payments and fees on the accompanying statements of changes in net assets.

c) Administrative Charges - The Sponsor Company provides administrative services to the Account and receives a maximum annual fee of 0.15% of the Sub-Account’s average daily net assets for these services. These charges are reflected in the accompanying statements of operations as a reduction in unit value.

d) Annual Maintenance Fees - An annual maintenance fee in the amount of $35 may be charged. These expenses are deducted through a redemption of units from applicable contract owners’ accounts and are reflected in surrenders for benefit payments and fees in the accompanying statements of changes in net assets.

e) Rider Charges - The Sponsor Company will make certain deductions (as a percentage of average daily Sub-Account value) for various rider charges:

Enhanced Death Benefit charge maximum of 0.45%
Guaranteed Payout Plan charge maximum of 0.35%

These charges can be assessed as a reduction in unit values or a redemption of units from applicable contract owners’ accounts as specified in the product prospectus.




4. Purchases and Sales of Investments:

The cost of purchases and proceeds from sales of investments for the period ended December 31, 2021 were as follows:
Sub-AccountPurchases at CostProceeds from Sales
American Century VP Balanced Fund$95,593 $51,085 
American Century VP Capital Appreciation Fund$156,155 $32,045 
AB VPS International Growth Portfolio$57,958 $20,975 
Invesco V.I. Core Equity Fund$154,029 $270,577 
Invesco V.I. International Growth Fund$84,504 $45,582 
Invesco V.I. Government Money Market Fund$5,022,128 $4,588,766 
AB VPS Large Cap Growth Portfolio$216,041 $253,536 
Allspring VT Omega Growth Fund+$565,597 $664,862 
Federated Hermes Fund for U.S. Government Securities II$103,191 $476,593 
Federated Hermes High Income Bond Fund II$182,946 $127,577 
Federated Hermes Government Money Fund II$4,178 $71,947 
Federated Hermes Quality Bond Fund II$90,372 $59,617 
Federated Hermes Managed Volatility Fund II$267,427 $1,385,254 
Federated Hermes Kaufmann Fund II$661,751 $1,121,131 
Hartford Balanced HLS Fund$3,815,174 $7,865,918 
Hartford Total Return Bond HLS Fund$2,445,177 $3,239,498 
Hartford Capital Appreciation HLS Fund$2,292,603 $2,314,775 
Hartford Dividend and Growth HLS Fund$2,894,863 $4,125,279 
Hartford Disciplined Equity HLS Fund$18,454,770 $52,074,073 
Hartford International Opportunities HLS Fund$573,855 $2,729,527 
Hartford MidCap HLS Fund$5,390,331 $2,911,505 
Hartford Ultrashort Bond HLS Fund$973,596 $2,114,414 
Hartford SmallCap Growth HLS Fund$5,430,345 $6,614,758 
Hartford Stock HLS Fund$543,805 $568,163 
VY® JPMorgan Emerging Markets Equity Portfolio$33,871 $35,376 
Invesco V.I. Health Care Fund$108,295 $92,026 
Invesco V.I. Technology Fund$120,899 $31,757 
MFS® Growth Series$660,144 $302,074 
MFS® High Yield Portfolio$63,213 $131,053 
MFS® Income Portfolio$18,621 $229,573 
BlackRock S&P 500 Index V.I. Fund$5,514,899 $4,903,084 
Neuberger Berman AMT Short Duration Bond Portfolio$2,742 $2,594 
Pioneer Fund VCT Portfolio$212,954 $9,314 
DWS CROCI® International VIP$12,428 $34,999 
Pioneer Select Mid Cap Growth VCT Portfolio$408,803 $102,696 
VanEck VIP Emerging Markets Bond Fund$1,240 $600 
VanEck VIP Global Resources Fund+$85,853 $23,708 
Allspring VT Index Asset Allocation Fund+$161,975 $184,613 
Allspring VT International Equity Fund+$123 $10,694 
Allspring VT Small Cap Growth Fund+$251,356 $200,482 
Allspring VT Discovery Fund+$144,556 $150,521 
Allspring VT Opportunity Fund+$18,795 $5,864 
Voya Global High Dividend Low Volatility Portfolio$108,873 $31,216 
NVIT Emerging Markets Fund$47,320 $25,835 
Neuberger Berman AMT Sustainable Equity Portfolio$45,860 $5,404 

+ See Note 1 for additional information related to this Sub-Account.

5. Changes in Units Outstanding:

The changes in units outstanding for the period ended December 31, 2021 were as follows:

Sub-Account
Units IssuedUnits RedeemedNet Increase(Decrease)
American Century VP Balanced Fund1,100 944 156 
American Century VP Capital Appreciation Fund1,475 391 1,084 
AB VPS International Growth Portfolio2,159 1,295 864 
Invesco V.I. Core Equity Fund2,149 8,487 (6,338)
Invesco V.I. International Growth Fund1,647 1,458 189 
Invesco V.I. Government Money Market Fund548,317 487,514 60,803 
AB VPS Large Cap Growth Portfolio864 1,901 (1,037)
Allspring VT Omega Growth Fund+1,224 12,185 (10,961)
Federated Hermes Fund for U.S. Government Securities II4,018 20,149 (16,131)
Federated Hermes High Income Bond Fund II2,595 3,646 (1,051)
Federated Hermes Government Money Fund II403 6,134 (5,731)
Federated Hermes Quality Bond Fund II2,428 2,167 261 
Federated Hermes Managed Volatility Fund II3,887 65,003 (61,116)
Federated Hermes Kaufmann Fund II1,490 24,312 (22,822)
Hartford Balanced HLS Fund61,664 728,785 (667,121)
Hartford Total Return Bond HLS Fund280,411 651,084 (370,673)
Hartford Capital Appreciation HLS Fund139,679 342,548 (202,869)
Hartford Dividend and Growth HLS Fund215,144 798,804 (583,660)
Hartford Disciplined Equity HLS Fund35,789 614,273 (578,484)
Hartford International Opportunities HLS Fund101,197 613,050 (511,853)
Hartford MidCap HLS Fund53,003 202,898 (149,895)
Hartford Ultrashort Bond HLS Fund492,799 1,016,059 (523,260)
Hartford SmallCap Growth HLS Fund15,168 60,680 (45,512)
Hartford Stock HLS Fund84,275 125,260 (40,985)
VY® JPMorgan Emerging Markets Equity Portfolio611 1,011 (400)
Invesco V.I. Health Care Fund552 1,183 (631)
Invesco V.I. Technology Fund140 406 (266)
MFS® Growth Series765 4,169 (3,404)
MFS® High Yield Portfolio2,840 8,772 (5,932)
MFS® Income Portfolio151 16,340 (16,189)
BlackRock S&P 500 Index V.I. Fund94,695 287,396 (192,701)
Neuberger Berman AMT Short Duration Bond Portfolio8 126 (118)
Pioneer Fund VCT Portfolio2,631 97 2,534 
DWS CROCI® International VIP619 1,891 (1,272)
Pioneer Select Mid Cap Growth VCT Portfolio832 1,019 (187)
VanEck VIP Emerging Markets Bond Fund11 21 (10)
VanEck VIP Global Resources Fund+2,634 738 1,896 
Allspring VT Index Asset Allocation Fund+1,037 6,451 (5,414)
Allspring VT International Equity Fund+— 601 (601)
Allspring VT Small Cap Growth Fund+130 2,402 (2,272)
Allspring VT Discovery Fund+612 1,076 (464)
Allspring VT Opportunity Fund+339 117 222 
Voya Global High Dividend Low Volatility Portfolio6,950 2,093 4,857 
NVIT Emerging Markets Fund2,850 1,574 1,276 
Neuberger Berman AMT Sustainable Equity Portfolio2,107 189 1,918 

+ See Note 1 for additional information related to this Sub-Account.












The changes in units outstanding for the period ended December 31, 2020 were as follows:
Sub-Account
Units IssuedUnits RedeemedNet Increase(Decrease)
American Century VP Balanced Fund1,254 1,846 (592)
American Century VP Capital Appreciation Fund1,146 1,025 121 
AB VPS International Growth Portfolio2,503 3,543 (1,040)
Invesco V.I. Core Equity Fund329 10,326 (9,997)
Invesco V.I. International Growth Fund110 5,705 (5,595)
Invesco V.I. Government Money Market Fund450,086 431,708 18,378 
AB VPS Large Cap Growth Portfolio1,747 3,442 (1,695)
Wells Fargo VT Omega Growth Fund284 12,308 (12,024)
Federated Hermes Fund for U.S. Government Securities II31,104 13,307 17,797 
Federated Hermes High Income Bond Fund II548 10,438 (9,890)
Federated Hermes Government Money Fund II6,376 4,160 2,216 
Federated Hermes Quality Bond Fund II2,194 3,505 (1,311)
Federated Hermes Managed Volatility Fund II2,691 53,292 (50,601)
Federated Hermes Kaufmann Fund II1,131 16,283 (15,152)
Hartford Balanced HLS Fund207,178 823,745 (616,567)
Hartford Total Return Bond HLS Fund2,108,937 715,783 1,393,154 
Hartford Capital Appreciation HLS Fund294,817 500,585 (205,768)
Hartford Dividend and Growth HLS Fund4,435,728 717,465 3,718,263 
Hartford Disciplined Equity HLS Fund4,743,936 280,270 4,463,666 
Hartford International Opportunities HLS Fund206,209 906,936 (700,727)
Hartford MidCap HLS Fund2,581,003 124,872 2,456,131 
Hartford Ultrashort Bond HLS Fund7,075,761 1,180,236 5,895,525 
Hartford SmallCap Growth HLS Fund20,648 83,757 (63,109)
Hartford Stock HLS Fund94,318 159,262 (64,944)
VY® JPMorgan Emerging Markets Equity Portfolio32,677 58,901 (26,224)
Invesco V.I. Health Care Fund837 819 18 
Invesco V.I. Technology Fund5,864 6,967 (1,103)
MFS® Growth Series2,709 9,867 (7,158)
MFS® High Yield Portfolio1,189 4,703 (3,514)
MFS® Income Portfolio15,416 1,122 14,294 
BlackRock S&P 500 Index V.I. Fund125,349 494,817 (369,468)
Neuberger Berman AMT Short Duration Bond Portfolio780 1,399 (619)
Pioneer Fund VCT Portfolio465 735 (270)
DWS CROCI® International VIP578 2,577 (1,999)
Pioneer Select Mid Cap Growth VCT Portfolio603 2,167 (1,564)
VanEck VIP Emerging Markets Bond Fund12 22 (10)
VanEck VIP Global Hard Assets Fund381 1,143 (762)
Wells Fargo VT Index Asset Allocation Fund20 2,978 (2,958)
Wells Fargo VT International Equity Fund— 333 (333)
Wells Fargo VT Small Cap Growth Fund168 3,226 (3,058)
Wells Fargo VT Discovery Fund652 1,849 (1,197)
Wells Fargo VT Opportunity Fund1,230 2,234 (1,004)
Voya Global High Dividend Low Volatility Portfolio75 2,372 (2,297)
NVIT Emerging Markets Fund600 1,468 (868)
Neuberger Berman AMT Sustainable Equity Portfolio198 1,118 (920)


6. Financial Highlights:

The following is a summary of units, unit fair values, net assets, expense ratios, investment income ratios, and total return ratios as of or for each of the periods presented for the aggregate of all share classes within each Sub- Account that had outstanding units during the period ended December 31, 2021. The ranges presented are calculated using the results of only the contracts with the highest and lowest expense ratios that had assets during the period reported. A specific unit value or ratio may be outside of the range presented in this table due to the initial assigned unit values, combined with varying performance and/or length of time since inception of the presented expense ratios that had assets during the period reported. Investment income and total return ratios are calculated for the period the related share class within the Sub-Account is active, while the expense ratio is annualized. In the case of fund mergers, the expense, investment income, and total return ratios are calculated using only the results of the surviving fund and exclude the results of the fund merged into the surviving fund. For the fund merged into the surviving fund the results are through the date of the fund merger. Corporate actions are identified for only the current year, prior years’ corporate actions are disclosed in the respective year’s report.

 Units # Unit
Fair Value
Lowest to Highest #		 Net AssetsExpense
Ratio Lowest to Highest*		Investment
Income
Ratio Lowest to Highest**		Total Return Ratio
Lowest to Highest***
American Century VP Balanced Fund
202114,565$53.939947 to$53.939947$785,6460.45 %to0.45%0.72 %to0.72%15.25 %to15.25%
202014,409$46.802498 to$46.802498$674,3680.45 %to0.45%1.18 %to1.18%12.02 %to12.02%
201915,001$41.779788 to$41.779788$626,7450.45 %to0.45%1.55 %to1.55%19.31 %to19.31%
201815,023$35.016715 to$35.016715$526,0440.45 %to0.45%1.37 %to1.37%(4.26)%to(4.26)%
201718,649$36.575388 to$36.575388$682,0770.45 %to0.45%1.53 %to1.53%13.40 %to13.40%
American Century VP Capital Appreciation Fund
20214,348$84.378098 to$84.378098$366,8890.45 %to0.45%— %to—%10.66 %to10.66%
20203,264$76.252223 to$76.252223$248,8830.45 %to0.45%— %to—%41.82 %to41.82%
20193,143$53.768143 to$53.768143$168,9980.45 %to0.45%— %to—%34.96 %to34.96%
20183,003$39.841347 to$39.841347$119,6380.45 %to0.45%— %to—%(5.62)%to(5.62)%
20173,164$42.214726 to$42.214726$133,5850.45 %to0.45%— %to—%21.24 %to21.24%
AB VPS International Growth Portfolio
202116,825$15.944082 to$15.944082$268,2640.45 %to0.45%— %to—%7.76 %to7.76%
202015,961$14.795446 to$14.795446$236,1490.45 %to0.45%1.36 %to1.36%29.36 %to29.36%
201917,001$11.437596 to$11.437596$194,4460.45 %to0.45%0.55 %to0.55%26.95 %to26.95%
201819,944$9.009225 to$9.009225$179,6800.45 %to0.45%0.48 %to0.48%(17.78)%to(17.78)%
201738,880$10.957487 to$10.957487$426,0280.45 %to0.45%1.20 %to1.20%34.42 %to34.42%
Invesco V.I. Core Equity Fund
202161,038$30.659951 to$57.760516$1,979,1180.45 %to1.40%0.65 %to0.67%25.96 %to27.17%
202067,376$24.340114 to$45.421419$1,699,9850.45 %to1.40%1.21 %to1.34%12.27 %to13.34%
201977,373$21.680276 to$40.075446$1,748,0530.45 %to1.40%0.92 %to0.97%27.17 %to28.39%
201890,432$17.047789 to$31.214866$1,599,2720.45 %to1.40%0.89 %to0.89%(10.66)%to(9.80)%
201798,633$19.080856 to$34.606963$1,953,9290.45 %to1.40%1.00 %to1.07%11.60 %to12.67%
Invesco V.I. International Growth Fund
202119,164$26.700839 to$26.700839$511,7061.40 %to1.40%1.29 %to1.29%4.42 %to4.42%
202018,975$25.571344 to$25.571344$485,2201.40 %to1.40%2.21 %to2.21%12.41 %to12.41%
201924,570$22.748095 to$22.748095$558,9381.40 %to1.40%1.59 %to1.59%26.79 %to26.79%
201826,038$17.942000 to$17.942000$467,1741.40 %to1.40%1.97 %to1.97%(16.16)%to(16.16)%
201731,911$21.399730 to$21.399730$682,8661.40 %to1.40%1.42 %to1.42%21.29 %to21.29%
Invesco V.I. Government Money Market Fund
2021925,100$8.916271 to$10.055510$8,605,2490.45 %to1.85%0.01 %to0.01%(1.83)%to(0.44)%
2020864,297$9.082139 to$10.100226$8,171,8880.45 %to1.85%0.24 %to0.30%(1.54)%to(0.16)%
2019845,919$9.224586 to$10.116003$8,084,6080.45 %to1.85%1.89 %to2.08%0.03 %to1.44%
20181,131,869$9.221846 to$9.972408$10,748,9940.45 %to1.85%1.60 %to1.73%(0.31)%to1.09%
20171,095,865$9.250646 to$9.864478$10,360,7990.45 %to1.85%0.57 %to0.59%(1.28)%to0.11%
AB VPS Large Cap Growth Portfolio
202112,305$136.399400to$136.399400$1,678,4660.45 %to0.45%— %to—%28.39 %to28.39%
202013,342$106.234770to$106.234770$1,417,3640.45 %to0.45%— %to—%34.88 %to34.88%
201915,037$78.764595 to$78.764595$1,184,3800.45 %to0.45%— %to—%34.09 %to34.09%
201816,339$58.739089 to$58.739089$959,7400.45 %to0.45%— %to—%2.12 %to2.12%
201716,788$57.520608 to$57.520608$965,6290.45 %to0.45%— %to—%31.39 %to31.39%
Allspring VT Omega Growth Fund+
202196,454$55.404649 to$55.404649$5,344,0501.40 %to1.40%— %to—%13.37 %to13.37%
2020107,415$48.868847 to$48.868847$5,249,2431.40 %to1.40%— %to—%41.20 %to41.20%
2019119,439$34.610615 to$34.610615$4,133,8431.40 %to1.40%— %to—%35.14 %to35.14%
2018136,402$25.610558 to$25.610558$3,493,3371.40 %to1.40%— %to—%(1.12)%to(1.12)%
2017160,690$25.900109 to$25.900109$4,161,8911.40 %to1.40%0.01 %to0.01%32.73 %to32.73%
Federated Hermes Fund for U.S. Government Securities II
202121,270$16.443932 to$23.448558$370,7490.45 %to1.40%2.00 %to3.50%(3.41)%to(2.48)%
202037,401$17.023919 to$24.046053$774,3800.45 %to1.40%1.52 %to2.50%3.75 %to4.74%
201919,604$16.408594 to$22.957844$337,3940.45 %to1.40%2.04 %to2.45%4.43 %to5.42%
201821,448$15.713102 to$21.776910$348,5480.45 %to1.40%2.42 %to3.98%(0.94)%to—%
201728,821$15.862692 to$21.776381$502,6900.45 %to1.40%1.87 %to2.46%0.51 %to1.47%
Federated Hermes High Income Bond Fund II
202155,317$27.726213 to$43.953100$1,668,9930.45 %to1.40%4.15 %to4.89%3.39 %to4.38%
202056,368$26.816946 to$42.109799$1,615,5800.45 %to1.40%6.20 %to6.37%4.12 %to5.11%
201966,258$25.755522 to$40.060880$1,830,1030.45 %to1.40%5.82 %to6.01%12.95 %to14.03%
201869,648$22.802154 to$35.131997$1,691,6500.45 %to1.40%8.23 %to9.64%(4.63)%to(3.72)%
201777,425$23.909531 to$36.489819$1,977,6730.45 %to1.40%6.82 %to7.43%5.45 %to6.46%
Federated Hermes Government Money Fund II
202155,336$7.266821 to$10.767116$585,2381.20 %to1.40%— %to—%(1.39)%to(1.19)%
202061,067$7.369148 to$10.896918$653,0071.20 %to1.40%0.20 %to0.21%(1.19)%to(0.99)%
201958,851$7.457804 to$11.005977$634,8481.20 %to1.40%1.62 %to1.84%0.23 %to0.43%
201861,670$7.440688 to$10.958779$662,5251.20 %to1.40%1.23 %to1.25%(0.16)%to0.04%
201768,827$7.452328 to$10.953993$738,1861.20 %to1.40%0.30 %to0.36%(1.08)%to(0.88)%
Federated Hermes Quality Bond Fund II
202157,985$20.119004 to$21.004504$1,192,6401.20 %to1.40%2.46 %to2.53%(2.77)%to(2.57)%
202057,724$20.691383 to$21.558904$1,219,9951.20 %to1.40%2.77 %to2.77%6.62 %to6.83%
201959,035$19.407327 to$20.180626$1,168,3031.20 %to1.40%2.86 %to2.86%7.92 %to8.14%
201857,547$17.982715 to$18.661911$1,054,5961.20 %to1.40%3.07 %to3.11%(1.97)%to(1.78)%
201758,714$18.345002 to$18.999845$1,096,0461.20 %to1.40%3.24 %to3.30%2.59 %to2.79%
Federated Hermes Managed Volatility Fund II
2021531,592$19.973550 to$38.127164$10,987,0750.45 %to1.40%1.79 %to1.82%16.86 %to17.98%
2020592,708$17.091203 to$32.316859$10,460,5550.45 %to1.40%2.52 %to2.60%(0.47)%to0.48%
2019643,309$17.172190 to$32.163028$11,386,4250.45 %to1.40%2.07 %to2.11%18.56 %to19.69%
2018718,352$14.484222 to$26.872285$10,697,1190.45 %to1.40%2.31 %to2.59%(9.77)%to(8.90)%
2017435,280$16.051755 to$29.498824$7,185,6820.45 %to1.40%3.82 %to4.06%16.47 %to17.58%
Federated Hermes Kaufmann Fund II
2021201,542$40.496692 to$41.479934$8,283,4431.20 %to1.40%— %to—%1.09 %to1.29%
2020224,364$40.061990 to$40.952717$9,110,0721.20 %to1.40%— %to—%27.00 %to27.26%
2019239,516$31.543829 to$32.180772$7,647,3551.20 %to1.40%— %to—%31.33 %to31.59%
2018259,649$24.019149 to$24.455267$6,305,4281.20 %to1.40%— %to—%2.90 %to3.10%
2017285,174$23.343188 to$23.719544$6,720,1531.20 %to1.40%— %to—%26.55 %to26.80%
Hartford Balanced HLS Fund
20215,260,606$28.027441 to$34.979332$56,561,2021.25 %to1.85%0.94 %to1.00%17.45 %to18.16%
20205,927,727$23.862965 to$29.603844$54,118,5001.25 %to1.85%1.57 %to1.62%9.57 %to10.23%
20196,544,294$21.778707 to$26.856544$54,321,0911.25 %to1.85%1.86 %to1.88%20.55 %to21.27%
20187,466,556$18.066616 to$22.145722$51,107,1391.25 %to1.85%1.74 %to1.80%(6.98)%to(6.42)%
20178,348,067$19.421982 to$23.664595$61,319,3341.25 %to1.85%2.23 %to2.25%13.47 %to14.16%
Hartford Total Return Bond HLS Fund
20215,438,817$18.979998 to$21.646235$25,116,8981.25 %to1.85%2.40 %to2.40%(2.76)%to(2.18)%
20205,809,490$19.519028 to$22.127794$27,438,8211.25 %to1.85%3.34 %to3.40%7.03 %to7.67%
20194,416,336$18.237099 to$20.550906$19,740,5641.25 %to1.85%3.90 %to3.91%8.62 %to9.28%
20184,767,465$16.789305 to$18.806271$19,531,4521.25 %to1.85%3.74 %to3.76%(2.63)%to(2.04)%
20175,417,320$17.241995 to$19.197797$22,801,1041.25 %to1.85%2.83 %to2.88%3.23 %to3.85%
Hartford Capital Appreciation HLS Fund
20212,443,653$6.061890 to$6.790901$16,124,7831.25 %to1.85%0.43 %to0.47%12.66 %to13.34%
20202,646,522$5.380782 to$5.991844$15,415,5491.25 %to1.85%0.76 %to0.97%19.68 %to20.40%
20192,852,290$4.495936 to$4.976588$13,838,6471.25 %to1.85%1.17 %to1.19%28.88 %to29.65%
20183,226,812$3.488601 to$3.838468$12,093,7701.25 %to1.85%0.87 %to0.88%(8.66)%to(8.11)%
20173,573,990$3.819481 to$4.177379$14,588,4851.25 %to1.85%1.05 %to1.11%19.90 %to20.62%

Hartford Dividend and Growth HLS Fund
20216,379,695$4.773720 to$13.359161$34,597,2001.25 %to1.85%1.29 %to1.29%29.58 %to30.36%
20206,963,355$3.684035 to$10.248073$29,002,1481.25 %to1.85%3.05 %to3.38%5.79 %to6.43%
20193,245,092$3.482290 to$9.628925$12,706,3981.25 %to1.85%1.80 %to1.81%26.25 %to27.01%
20183,505,926$2.758309 to$3.205920$10,816,2611.15 %to1.85%0.13 %to1.87%(7.06)%to(6.40)%
20174,162,671$2.967705 to$3.425230$13,851,5611.15 %to1.85%1.57 %to1.67%16.19 %to17.01%
Hartford Disciplined Equity HLS Fund
20214,420,644$27.717574 to$49.616709$401,183,9021.25 %to1.85%0.57 %to0.58%23.22 %to23.96%
20204,999,128$22.494858 to$40.026895$365,668,1031.25 %to1.85%0.36 %to0.79%15.88 %to16.57%
2019535,462$19.412578 to$34.335766$35,918,3761.25 %to1.85%0.90 %to0.93%31.66 %to32.46%
2018616,484$14.744039 to$25.922391$31,191,0621.25 %to1.85%0.75 %to0.79%(3.79)%to(3.21)%
2017714,051$15.324869 to$26.782302$37,036,0961.25 %to1.85%0.77 %to1.00%19.68 %to20.40%
Hartford International Opportunities HLS Fund
20215,078,121$3.796306 to$4.252970$21,023,9081.25 %to1.85%1.01 %to1.03%5.84 %to6.48%
20205,589,974$3.586780 to$3.994202$21,763,8521.25 %to1.85%1.96 %to2.16%18.24 %to18.95%
20196,290,701$3.033444 to$3.357803$20,626,9451.25 %to1.85%1.79 %to1.88%24.11 %to24.86%
20187,272,764$2.444169 to$2.689337$19,121,1311.25 %to1.85%1.84 %to1.88%(20.24)%to(19.76)%
20177,859,732$3.064266 to$3.351439$25,782,3861.25 %to1.85%1.43 %to1.44%22.96 %to23.70%
Hartford MidCap HLS Fund
20212,306,236$12.908422 to$13.016128$29,956,1351.25 %to1.85%— %to—%7.89 %to8.54%
2020♦2,456,131$11.964111 to$11.991761$29,436,1771.25 %to1.85%0.05 %to0.05%19.64 %to19.92%
Hartford Ultrashort Bond HLS Fund
20218,812,220$9.550562 to$10.339503$17,354,1510.45 %to1.85%0.70 %to0.70%(2.02)%to(0.63)%
20209,335,480$9.747082 to$10.405540$18,655,2170.45 %to1.85%1.48 %to2.41%(0.42)%to0.98%
20193,439,955$9.788308 to$10.304269$7,860,3070.45 %to1.85%1.79 %to1.87%0.93 %to2.35%
20183,633,345$9.698259 to$10.067550$8,268,8560.45 %to1.85%0.95 %to1.13%(0.30)%to1.11%
20173,947,955$9.727059 to$9.957083$8,460,9230.45 %to1.85%0.74 %to0.80%(0.84)%to0.56%
Hartford SmallCap Growth HLS Fund
2021454,055$49.316146 to$74.846454$47,773,6571.25 %to1.85%— %to—%2.11 %to2.73%
2020499,567$48.296829 to$72.860753$50,845,5031.25 %to1.85%— %to—%30.76 %to31.54%
2019562,676$36.936398 to$55.389337$43,716,7561.25 %to1.85%— %to—%33.33 %to34.13%
2018631,053$27.703884 to$41.295941$36,513,8401.25 %to1.85%— %to—%(13.32)%to(12.80)%
2017717,024$31.960764 to$47.356008$47,458,1071.25 %to1.85%0.04 %to0.04%17.87 %to18.58%
Hartford Stock HLS Fund
20211,053,632$5.164974 to$35.206416$5,333,0171.35 %to1.85%1.24 %to1.27%22.69 %to23.31%
20201,094,617$4.188771 to$28.695341$4,491,5721.35 %to1.85%1.67 %to1.78%10.02 %to10.57%
20191,159,561$3.852909 to$26.081342$4,307,9681.25 %to1.85%0.16 %to1.73%28.82 %to29.59%
20181,249,090$2.973126 to$20.246974$3,583,7711.25 %to1.85%1.60 %to1.64%(1.97)%to(1.38)%
20171,447,454$3.014845 to$20.654733$4,213,0141.25 %to1.85%0.21 %to1.96%17.65 %to18.36%
VY® JPMorgan Emerging Markets Equity Portfolio
20213,563$31.175356 to$31.175356$111,0820.45 %to0.45%— %to—%(10.25)%to(10.25)%
20203,963$34.735217 to$34.735217$137,6550.45 %to0.45%0.85 %to0.85%33.14 %to33.14%
201930,187$26.089060 to$26.089060$787,5260.45 %to0.45%0.13 %to0.13%31.52 %to31.52%
201832,999$19.836018 to$19.836018$654,5630.45 %to0.45%0.86 %to0.86%(16.96)%to(16.96)%
201738,492$23.887007 to$23.887007$919,4700.45 %to0.45%0.66 %to0.66%42.71 %to42.71%
Invesco V.I. Health Care Fund
20217,924$82.337161 to$82.337161$652,4610.45 %to0.45%0.21 %to0.21%11.80 %to11.80%
20208,555$73.649958 to$73.649958$630,0720.45 %to0.45%0.32 %to0.32%13.95 %to13.95%
20198,537$64.635894 to$64.635894$551,8050.45 %to0.45%0.04 %to0.04%31.91 %to31.91%
201813,008$49.000035 to$49.000035$637,4070.45 %to0.45%— %to—%0.45 %to0.45%
201716,141$48.779283 to$48.779283$787,3450.45 %to0.45%0.37 %to0.37%15.31 %to15.31%
Invesco V.I. Technology Fund
202117,798$68.682722 to$68.682722$1,222,3780.45 %to0.45%— %to—%13.90 %to13.90%
202018,064$60.302103 to$60.302103$1,089,3440.45 %to0.45%— %to—%45.46 %to45.46%
201919,167$41.456355 to$41.456355$794,5670.45 %to0.45%— %to—%35.27 %to35.27%
201822,124$30.647133 to$30.647133$678,0550.45 %to0.45%— %to—%(0.90)%to(0.90)%
201720,731$30.925706 to$30.925706$641,1140.45 %to0.45%— %to—%34.53 %to34.53%
MFS® Growth Series
202156,906$61.612291 to$126.491514$4,500,8920.45 %to1.40%— %to—%21.82 %to22.98%
202060,310$50.578194 to$102.856831$3,848,1020.45 %to1.40%— %to—%30.02 %to31.27%
201967,468$38.898921 to$78.358131$3,270,1360.45 %to1.40%— %to—%36.23 %to37.53%
201870,574$28.554044 to$56.975737$2,482,9270.45 %to1.40%0.09 %to0.09%1.24 %to2.21%
201774,071$28.203987 to$55.744828$2,515,9540.45 %to1.40%0.10 %to0.11%29.58 %to30.81%
MFS® High Yield Portfolio
202130,221$13.580157 to$14.723698$417,2600.45 %to1.40%4.75 %to4.84%2.05 %to3.02%
202036,153$13.307584 to$14.291768$491,7280.45 %to1.40%5.62 %to5.65%3.63 %to4.61%
201939,667$12.842008 to$13.661410$518,3180.45 %to1.40%5.63 %to6.24%13.21 %to14.29%
201850,166$11.343319 to$11.953081$574,4670.45 %to1.40%4.35 %to5.56%(4.43)%to(3.51)%
201758,419$11.868670 to$12.388408$701,1380.45 %to1.40%5.83 %to6.45%5.20 %to6.21%
MFS® Income Portfolio
202116,232$13.937160 to$13.937160$226,2340.45 %to0.45%2.03 %to2.03%0.02 %to0.02%
202032,421$13.934971 to$13.934971$451,7910.45 %to0.45%4.01 %to4.01%8.86 %to8.86%
201918,127$12.801009 to$12.801009$232,0450.45 %to0.45%3.64 %to3.64%11.10 %to11.10%
201816,951$11.522086 to$11.522086$195,3150.45 %to0.45%3.99 %to3.99%(2.43)%to(2.43)%
201716,910$11.808794 to$11.808794$199,6970.45 %to0.45%4.46 %to4.46%5.76 %to5.76%
BlackRock S&P 500 Index V.I. Fund
20213,112,092$16.764316 to$17.707991$53,272,6330.45 %to1.85%1.33 %to1.39%26.18 %to27.96%
20203,304,793$13.285973 to$13.838901$44,586,5750.45 %to1.85%1.74 %to1.83%16.07 %to17.71%
20193,674,261$11.446175 to$11.756828$42,480,6780.45 %to1.85%1.90 %to2.08%28.94 %to30.75%
2018♦4,041,887$8.877389 to$8.991602$36,052,6640.45 %to1.85%0.88 %to0.98%(11.23)%to(10.08)%
Neuberger Berman AMT Short Duration Bond Portfolio
20215,901$17.112817 to$17.112817$100,9790.45 %to0.45%2.58 %to2.58%0.29 %to0.29%
20206,019$17.063560 to$17.063560$102,7060.45 %to0.45%2.26 %to2.26%2.99 %to2.99%
20196,638$16.567646 to$16.567646$109,9750.45 %to0.45%2.01 %to2.01%3.22 %to3.22%
20186,696$16.050633 to$16.050633$107,4770.45 %to0.45%0.71 %to0.71%0.57 %to0.57%
201724,910$15.960099 to$15.960099$397,5580.45 %to0.45%1.74 %to1.74%0.44 %to0.44%
Pioneer Fund VCT Portfolio
202125,841$50.750212 to$50.750212$1,311,4030.45 %to0.45%0.32 %to0.32%27.41 %to27.41%
202023,307$39.832887 to$39.832887$928,3780.45 %to0.45%0.77 %to0.77%23.72 %to23.72%
201923,577$32.195578 to$32.195578$759,0920.45 %to0.45%1.02 %to1.02%30.74 %to30.74%
201824,271$24.625287 to$24.625287$597,6850.45 %to0.45%1.14 %to1.14%(1.95)%to(1.95)%
201724,150$25.115453 to$25.115453$606,5460.45 %to0.45%1.20 %to1.20%21.17 %to21.17%
DWS CROCI® International VIP
202116,183$20.800665 to$20.800665$336,6231.40 %to1.40%2.43 %to2.43%7.72 %to7.72%
202017,455$19.310127 to$19.310127$337,0661.40 %to1.40%3.51 %to3.51%1.18 %to1.18%
201919,454$19.084005 to$19.084005$371,2641.40 %to1.40%3.09 %to3.09%20.08 %to20.08%
201821,236$15.892474 to$15.892474$337,5041.40 %to1.40%1.02 %to1.02%(15.58)%to(15.58)%
201724,873$18.826505 to$18.826505$468,2691.40 %to1.40%7.17 %to7.17%20.27 %to20.27%
Pioneer Select Mid Cap Growth VCT Portfolio
202126,735$89.872357 to$89.872357$2,402,7000.45 %to0.45%— %to—%7.58 %to7.58%
202026,922$83.536817 to$83.536817$2,249,0030.45 %to0.45%— %to—%38.55 %to38.55%
201928,486$60.295075 to$60.295075$1,717,5310.45 %to0.45%— %to—%32.48 %to32.48%
201829,641$45.511060 to$45.511060$1,348,9910.45 %to0.45%— %to—%(6.90)%to(6.90)%
201730,529$48.884675 to$48.884675$1,492,4220.45 %to0.45%0.08 %to0.08%29.44 %to29.44%

VanEck VIP Emerging Markets Bond Fund
2021760$23.831347 to$23.831347$18,1120.45 %to0.45%5.11 %to5.11%(4.48)%to(4.48)%
2020770$24.949701 to$24.949701$19,2080.45 %to0.45%7.29 %to7.29%8.43 %to8.43%
2019780$23.009196 to$23.009196$17,9570.45 %to0.45%0.33 %to0.33%12.11 %to12.11%
2018791$20.523658 to$20.523658$16,2500.45 %to0.45%7.47 %to7.47%(6.56)%to(6.56)%
2017805$21.964215 to$21.964215$17,6690.45 %to0.45%3.93 %to3.93%11.74 %to11.74%
VanEck VIP Global Resources Fund+
202111,241$31.815931 to$31.815931$357,6650.45 %to0.45%0.45 %to0.45%18.38 %to18.38%
20209,345$26.874978 to$26.874978$251,1460.45 %to0.45%0.93 %to0.93%18.58 %to18.58%
201910,107$22.664471 to$22.664471$229,0600.45 %to0.45%— %to—%11.37 %to11.37%
201811,089$20.351228 to$20.351228$225,6770.45 %to0.45%— %to—%(28.60)%to(28.60)%
201712,220$28.502729 to$28.502729$348,3000.45 %to0.45%— %to—%(2.14)%to(2.14)%
Allspring VT Index Asset Allocation Fund+
202152,421$32.442721 to$32.442721$1,700,6771.40 %to1.40%0.58 %to0.58%14.38 %to14.38%
202057,835$28.362901 to$28.362901$1,640,3681.40 %to1.40%0.82 %to0.82%14.97 %to14.97%
201960,793$24.670205 to$24.670205$1,499,7851.40 %to1.40%1.08 %to1.08%18.49 %to18.49%
201873,557$20.821122 to$20.821122$1,531,5321.40 %to1.40%0.97 %to0.97%(4.25)%to(4.25)%
201776,189$21.746203 to$21.746203$1,656,8171.40 %to1.40%0.74 %to0.74%10.69 %to10.69%
Allspring VT International Equity Fund+
2021687$16.364818 to$16.364818$11,2491.40 %to1.40%0.79 %to0.79%5.38 %to5.38%
20201,288$15.528883 to$15.528883$19,9981.40 %to1.40%2.72 %to2.72%3.47 %to3.47%
20191,621$15.007900 to$15.007900$24,3261.40 %to1.40%2.48 %to2.48%13.88 %to13.88%
20186,606$13.178318 to$13.178318$87,0611.40 %to1.40%10.84 %to10.84%(18.43)%to(18.43)%
20177,618$16.155588 to$16.155588$123,0691.40 %to1.40%2.74 %to2.74%22.61 %to22.61%
Allspring VT Small Cap Growth Fund+
202130,190$70.279710 to$70.279710$2,121,7711.40 %to1.40%— %to—%6.15 %to6.15%
202032,462$66.210880 to$66.210880$2,149,3211.40 %to1.40%— %to—%55.59 %to55.59%
201935,520$42.554193 to$42.554193$1,511,5241.40 %to1.40%— %to—%23.10 %to23.10%
201839,307$34.569795 to$34.569795$1,358,8321.40 %to1.40%— %to—%(0.10)%to(0.10)%
201743,893$34.604137 to$34.604137$1,518,8801.40 %to1.40%— %to—%24.11 %to24.11%
Allspring VT Discovery Fund+
20215,808$130.842635to$130.842635$759,8810.45 %to0.45%— %to—%(5.47)%to(5.47)%
20206,272$138.409753to$138.409753$868,0890.45 %to0.45%— %to—%61.92 %to61.92%
20197,469$85.479931 to$85.479931$638,4810.45 %to0.45%— %to—%38.40 %to38.40%
20187,412$61.764359 to$61.764359$457,7950.45 %to0.45%— %to—%(7.48)%to(7.48)%
20178,024$66.757515 to$66.757515$535,7030.45 %to0.45%— %to—%28.55 %to28.55%
Allspring VT Opportunity Fund+
20214,330$36.262856 to$36.262856$157,0241.40 %to1.40%0.04 %to0.04%23.04 %to23.04%
20204,108$29.471419 to$29.471419$121,0641.40 %to1.40%0.47 %to0.47%19.32 %to19.32%
20195,112$24.698710 to$24.698710$126,2571.40 %to1.40%0.27 %to0.27%29.64 %to29.64%
20185,787$19.051769 to$19.051769$110,2601.40 %to1.40%0.18 %to0.18%(8.44)%to(8.44)%
20176,134$20.807270 to$20.807270$127,6271.40 %to1.40%0.68 %to0.68%18.76 %to18.76%
Voya Global High Dividend Low Volatility Portfolio
202121,183$15.567477 to$15.567477$329,7650.45 %to0.45%2.34 %to2.34%20.02 %to20.02%
202016,326$12.970350 to$12.970350$211,7600.45 %to0.45%2.23 %to2.23%(1.54)%to(1.54)%
201918,623$13.172670 to$13.172670$245,3040.45 %to0.45%2.53 %to2.53%20.87 %to20.87%
201820,873$10.898385 to$10.898385$227,4860.45 %to0.45%4.43 %to4.43%(9.52)%to(9.52)%
201723,563$12.045261 to$12.045261$283,8270.45 %to0.45%1.95 %to1.95%22.89 %to22.89%
NVIT Emerging Markets Fund
202121,019$14.198105 to$14.198105$298,4300.45 %to0.45%0.94 %to0.94%(8.00)%to(8.00)%
202019,743$15.433324 to$15.433324$304,6990.45 %to0.45%1.63 %to1.63%12.41 %to12.41%
201920,611$13.728960 to$13.728960$282,9800.45 %to0.45%2.11 %to2.11%22.03 %to22.03%
201822,123$11.250307 to$11.250307$248,8860.45 %to0.45%0.32 %to0.32%(18.08)%to(18.08)%
201726,987$13.732878 to$13.732878$370,6090.45 %to0.45%1.01 %to1.01%40.46 %to40.46%
Neuberger Berman AMT Sustainable Equity Portfolio
202139,374$16.508774 to$16.508774$650,0210.45 %to0.45%0.39 %to0.39%22.92 %to22.92%
202037,456$13.430218 to$13.430218$503,0410.45 %to0.45%0.62 %to0.62%19.03 %to19.03%
2019♦38,376$11.283483 to$11.283483$433,0220.45 %to0.45%0.41 %to0.41%12.83 %to12.83%


*Represents the annualized contract expenses of the Sub-Account for the period indicated and includes only those expenses that are charged through a reduction in the unit values. Excluded are expenses of the Funds and charges made directly to contract owner accounts through the redemption of units. Where the expense ratio is the same for each unit value, it is presented in both the lowest and highest columns.

**These amounts represent the dividends, excluding distributions of capital gains, received by the Sub-Account from the Fund, net of management fees assessed by the Fund’s manager, divided by the average net assets. These ratios exclude those expenses, such as mortality and expense risk charges, that result in direct reductions in the unit values. The recognition of investment income by the Sub-Account is affected by the timing of the declaration of dividends by the Fund in which the Sub-Account invests. Where the investment income ratio is the same for each unit value, it is presented in both the lowest and highest columns.    

***Represents the total return for the period indicated and reflects a deduction only for expenses assessed through the daily unit value calculation. The total return does not include any expenses assessed through the redemption of units; inclusion of these expenses in the calculation would result in a reduction in the total return presented. Investment options with a date notation in the notes on the Statements of Operations indicate the effective date of that investment option in the Account. The total return is calculated for the period indicated.
# Rounded units/unit fair values. Where only one unit value exists, it is presented in both the lowest and highest columns.

+ See Note 1 for additional information related to this Sub-Account.

♦ Investment income and total return ratios are calculated for the period the related share class within the Sub-Account is active, while the expense ratio is annualized.

7. Subsequent Events:


Management has evaluated events subsequent to December 31, 2021 and through April 13, 2022, the date the financial statements were available to be issued, noting there are no other subsequent events requiring adjustment or disclosure in the financial statements.

 


INDEPENDENT AUDITOR'S REPORT
Board of Directors and Stockholder 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, 2021, and the related statutory basis statements of operations, changes in capital and surplus, and cash flows for the year then ended, 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 2021 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, 2021, and the results of its operations and its cash flows for the year then ended, 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 2021 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, 2021, or the results of its operations or its cash flows for the year then ended.
Predecessor Auditors' Opinion on 2020 and 2019 Statutory Basis Financial Statements
The statutory basis financial statements of the Company as of December 31, 2020 and for each of the years in the two year period ended December 31, 2020, were audited by other auditors whose report, dated May 12, 2021, expressed an opinion that those statutory basis financial statements were not fairly presented in accordance with accounting principles generally accepted in the United States of America; however, such report also expressed an unmodified opinion on those statutory basis financial statements in accordance with the accounting practices prescribed or permitted by the Kansas Insurance Department, described in Note 2.
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
F-1

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, 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.
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.
F-2

•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 2021 audit was conducted for the purpose of forming an opinion on the 2021 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, 2021, are presented for purposes of additional analysis and are not a required part of the 2021 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 2021 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 2021 statutory basis financial statements as a whole.
/s/ DELOITTE & TOUCHE LLP

Chicago, Illinois
April 1, 2022

F-3

Union Security Insurance Company
Statutory Basis Statements of Admitted Assets, Liabilities and Capital and Surplus
December 31,
 20212020
 ($ in thousands)
Cash and invested assets
Bonds and notes$815,974 $713,102 
Common stocks - unaffiliated— 1,926 
Preferred stocks - unaffiliated30,543 51,795 
Mortgage loans43,816 43,994 
Contract loans4,924 5,274 
Derivatives310 — 
Other invested assets10,359 31,706 
Cash, cash equivalents and short-term investments10,473 20,975 
Total cash and invested assets916,399 868,772 
Premiums deferred and uncollected499 — 
Accrued investment income10,123 10,650 
Amounts due from reinsurers2,397 2,418 
Receivables from affiliates1,456 — 
Net deferred tax asset2,749 8,392 
Other assets3,284 6,501 
Separate account assets2,212,889 2,011,293 
Total admitted assets$3,149,796 $2,908,026 
Liabilities
Policy reserves
   Life insurance and annuity contracts$638,876 $692,967 
   Accident and health contracts4,344 4,650 
Policy and contract claims13,769 12,666 
Liability for deposit-type contracts17,459 17,103 
Interest maintenance reserve25,676 12,655 
Asset valuation reserve6,863 10,510 
Reinsurance payable2,359 3,286 
Amount held for others5,567 5,628 
Payable to affiliates1,937 934 
Commissions, expenses, taxes, licenses, and fees accrued7,752 7,221 
Federal income taxes payable3,455 1,014 
Other liabilities3,293 186 
Separate account liabilities2,212,889 2,011,293 
Total liabilities2,944,239 2,780,113 
Capital and surplus
Capital
   Common stock, $5 par value, 1,000,000 shares authorized, issued, outstanding5,000 5,000 
   Paid-in capital79,886 79,886 
   Deferred gains25,077 29,227 
   Unassigned surplus95,594 13,800 
Total capital and surplus205,557 127,913 
Total liabilities and capital and surplus$3,149,796 $2,908,026 
See the accompanying Notes to Financial Statements
F-4

Union Security Insurance Company
Statutory Basis Statements of Operations
 Years Ended December 31,
 202120202019
 ($ in thousands)
Income
Premiums and other considerations
   Life and annuity contracts$3,166 $3,050 $3,889 
   Accident and health contracts939 — — 
Net investment income54,696 53,426 59,176 
Commission and fee income24,329 30,798 63,499 
Other income2,365 2,311 2,780 
Total income85,495 89,585 129,344 
Benefits and expenses
Death and annuity benefits70,725 76,413 70,188 
Disability and accident and health benefits1,404 — — 
Interest on deposit-type contracts2,286 1,512 1,061 
Other benefits to policyholders an beneficiaries2,507 2,278 1,333 
Surrender benefits2,396 1,985 2,113 
Decrease in policy reserves-life and annuity contracts and
   accident and health insurance		(53,599)(55,924)(47,484)
General insurance expenses8,864 8,941 7,471 
Insurance taxes, licenses, fees, and commissions15,592 17,365 36,763 
Total benefits and expenses50,175 52,570 71,445 
Income before dividends to policyholders, federal income
   tax expense (benefit) and net realized capital gains (losses)		35,320 37,015 57,899 
Dividends to policyholders617 758 501 
Income before federal income tax expense (benefit)
   and net realized capital gains (losses)		34,703 36,257 57,398 
Federal income tax expense4,503 827 7,062 
Income before net realized capital gains (losses)30,200 35,430 50,336 
Net realized capital gains (losses), excluding gains transferred
   to (from) IMR, net of tax expense (benefit) (2021 - $3,809;
   2020 - ($459); 2019 - $1,716) excluding taxes transferred
   to (from) IMR (2021 - ($4,085); 2020 - $406; 2019 - $817)		54,684 (773)(2,185)
Net income$84,884 $34,657 $48,151 

See the accompanying Notes to Financial Statements
F-5

Union Security Insurance Company
Statutory Basis Statements of Changes in Capital and Surplus

 Years Ended December 31,
 202120202019
 (in thousands)
Capital and surplus at beginning of year
Additions (deductions)		$127,913 $123,639 $126,266 
Net income84,884 34,657 48,150 
Change in unrealized capital gains (losses), net of
   tax (2021 - $317; 2020 - $73; 2019 - $412)		1,189 273 1,552 
Change in nonadmitted assets15,670 1,391 (2,392)
Change in net deferred income tax(20,976)(2,786)2,898 
Change in asset valuation reserve3,647 69 (889)
Change in paid in capital— — (14,000)
Dividends to stockholder— (18,000)(13,000)
Extinguishment or reclassification
   of balances with former parent		93 — — 
Amortization of gain on sale(4,614)(4,903)(4,071)
Amortization of gain on reinsurance (see Note 7)(2,249)(6,427)(20,875)
Net additions (deductions)77,644 4,274 (2,627)
Total comprehensive income$205,557 $127,913 $123,639 

See the accompanying Notes to Financial Statements
F-6

Union Security Insurance Company
Statutory Basis Statements of Cash Flows

 Years Ended December 31,
 202120202019
 (in millions)
Cash from operating activities
Premiums and other considerations$4,179 $3,100 $4,017 
Net investment income received49,785 52,597 56,537 
Other income23,419 19,509 38,397 
Policy and contract benefits and dividends paid(78,471)(77,811)(77,831)
Operating expenses paid(22,308)(21,887)(37,941)
Federal income taxes paid(5,778)(3,104)(9,386)
Net cash used in operating activities(29,174)(27,596)(26,207)
Cash from investing activities
Proceeds from investments sold, matured or repaid
   Bonds and notes194,450 68,587 137,586 
   Stocks28,155 2,829 21,371 
   Mortgage loans 4,933 3,404 7,212 
   Other invested assets 74,362 5,872 13,247 
Total investment proceeds301,900 80,692 179,416 
Cost of investments acquired
Bonds and notes274,539 23,270 121,079 
Stocks— 1,000 8,860 
Mortgage loans 4,755 — — 
Other invested assets— 909 6,721 
Miscellaneous applications969 — — 
Total investments acquired280,263 25,179 136,660 
Net decrease in contract loans(343)(281)(383)
Net cash provided by investing activities21,980 55,794 43,139 
Cash from financing and miscellaneous activities
Dividends to stockholder— (18,000)(27,000)
Other (3,308)155 (2,292)
Net cash used in financing
   and miscellaneous activities		(3,308)(17,845)(29,292)
Net change in cash and cash equivalents(10,502)10,353 (12,360)
Cash and cash equivalents at the beginning of year20,975 10,622 22,982 
Cash and cash equivalents at the end of year$10,473 $20,975 $10,622 
Supplemental disclosure of non-cash items:
Non-cash exchanges of bonds and notes, disposals11,561 — — 
Non-cash exchanges of bonds and notes, acquisitions$(11,561)$— $— 





See the accompanying Notes to Financial Statements
F-7
UNION SECURITY INSURANCE COMPANY
Notes to Statutory Basis Financial Statements
($ in 000s)

F-8
UNION SECURITY INSURANCE COMPANY
Notes to Statutory Basis Financial Statements
($ in 000s)
Note 1: Nature of Business
Union Security Insurance Company (the "Company") is a stock life insurance company domiciled in the State of Kansas and distributes its products in the District of Columbia and all states, except New York. The Company is a provider of pre-funded funeral insurance (“preneed”) products and accidental death and dismemberment policies as well as traditional life insurance and annuities.

On July 31, 2021, the Company and its direct parent, Preneed Holdings, LLC (an LLC created to facilitate the sale), were acquired from Assurant, Inc. (“Assurant”) by CMFG Life Insurance Company (“CMFG Life”). CMFG Life is a life insurance company domiciled in Iowa. CMFG Life’s ultimate parent is CUNA Mutual Holding Company (“CMHC”), a mutual insurance holding company organized under the laws of Iowa. Preneed Holdings, LLC was subsequently dissolved and the Company is now a direct subsidiary of CMFG Life.

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.
a.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.
b.In 2001, the Company entered into a reinsurance agreement with Hartford Life and Annuity Insurance Company 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.
c.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.

In March 2020, the World Health Organization declared a worldwide pandemic regarding the outbreak of a novel coronavirus disease (“COVID-19”). The pandemic has affected the states where the Company operates, causing economic effects including temporary closures of businesses and reduced consumer activity. Because of the size, breadth and length of the pandemic, all of the direct and indirect consequences of COVID-19 are not yet known and may not emerge for some time. The COVID-19 pandemic has created a higher risk of mortality, negatively impacted the U.S. and global economy, and created increased volatility in capital markets. As a result, the Company’s ability to sell products through its regular channels and the demand for its products and services could be impacted. The extent to which the COVID-19 pandemic could continue to impact the Company’s business, results of operations, or financial condition will depend on continued future developments which are highly uncertain and cannot be predicted. To date, the Company has not experienced any material impacts to its financial position or results of operations and related cash flows.
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. There are no permitted practices applicable to the Company.


F-9
UNION SECURITY INSURANCE COMPANY
Notes to Statutory Basis Financial Statements
($ in 000s)
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.

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

For statutory accounting, after an other-than-temporary impairment 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, while loans with dissimilar characteristics are removed from the pool and evaluated for impairment individually.

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.

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
F-10
UNION SECURITY INSURANCE COMPANY
Notes to Statutory Basis Financial Statements
($ in 000s)
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 amortized to income over the estimated lives of the underlying policies. These deferred gains were eliminated in 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.

Common stocks - unaffiliated: Investments in unaffiliated common stocks are stated at fair value.

Preferred stocks - unaffiliated: For 2021, preferred stocks are carried at amortized cost or the lower of amortized cost or NAIC fair value depending on the NAIC designation, unless the preferred stock is perpetual or has mandatory sinking fund provisions, in which case it is carried at fair value. For 2020, preferred stocks are carried at amortized cost or the lower of amortized cost or NAIC fair value depending on the NAIC designation and whether the preferred stock has mandatory sinking fund provisions.

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
F-11
UNION SECURITY INSURANCE COMPANY
Notes to Statutory Basis Financial Statements
($ in 000s)
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 limited partnerships and surplus notes carried at amortized cost. The limited partnerships are reported using the equity method of accounting. In applying the equity method, the Company uses financial information provided by the investee.

At December 31, 2020, the Company held $21,018 of investments in real estate joint ventures and other partnerships; there were no investments in limited partnerships at December 31, 2021.

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 reflects 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.

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 2021 and 2020, the Company had no NAIC 5GI bonds and notes.

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.

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. Such adjustments could be material.

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. 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, tabular less actual reserves released, and tabular cost have 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.

F-12
UNION SECURITY INSURANCE COMPANY
Notes to Statutory Basis Financial Statements
($ in 000s)
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.

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 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.

Reinsurance

Reinsurance premiums claims and benefits, 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 their 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 using reinsurance.
F-13
UNION SECURITY INSURANCE COMPANY
Notes to Statutory Basis Financial Statements
($ in 000s)

Premiums received and benefits paid on variable life and variable annuity policies, which are presented net of reinsurance (see Note 7) in the 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, it is nonadmitted.

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

Recently Adopted Accounting Standards

The accounting guidance in SSAP No. 32, Preferred Stock, was amended effective January 1, 2021, becoming SSAP No. 32R. The amendments were primarily intended to improve the definitions of redeemable and perpetual preferred stock, incorporate guidance for mandatorily convertible preferred stock, and clarify measurement, impairment and dividend recognition guidance. The adoption of SSAP No. 32R did not have a material impact on the Company's financial position, results of operations, or cash flows.









F-14
UNION SECURITY INSURANCE COMPANY
Notes to Statutory Basis Financial Statements
($ in 000s)
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, 2021 are as follows:
StatementGross Unrealized
ValueGainsLossesFair Value
U.S. government and agencies$ 1,532$ 55$ (11)$ 1,576
States, territories and possessions2,414274-2,688
Political subdivisions of states,
territories and possessions29,6431,178(439)30,382
Special revenue and special
assessment obligations2,501593-3,094
Industrial and miscellaneous603,000187,926(979)789,947
Mortgage-backed securities:
Residential mortgage37,0541,636(121)38,569
Commercial mortgage56,0721,013(253)56,832
Non-mortgage asset-backed securities:
Other structured securities83,7582,031(196)85,593
Total bonds and notes$ 815,974$ 194,706$ (1,999)$ 1,008,681

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, 2020 are as follows:

StatementGross Unrealized
ValueGainsLossesFair Value
Bonds and notes:
U.S. government$ 573$ 91$ -$ 664
Foreign governments8,4032,078(387)10,094
States and political subdivisions2,527372-2,899
Special revenue16,1343,885-20,019
Hybrid25,7217,135-32,856
Loan-backed and structured143,1167,056(351)149,821
Industrial and miscellaneous516,628220,425(1,309)735,744
Total bonds and notes$ 713,102$ 241,042$ (2,047)$ 952,097











F-15
UNION SECURITY INSURANCE COMPANY
Notes to Statutory Basis Financial Statements
($ in 000s)
The statement value and fair value of bonds and notes at December 31, 2021, 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
ValueFair Value
Due in one year or less$ 251$ 253
Due after one year through five years27,87532,497
Due after five years through ten years194,848225,200
Due after ten years416,116569,737
Mortgage-backed securities:
Residential mortgage37,05438,569
Commercial mortgage56,07256,832
Non-mortgage asset-backed securities:
Other structured securities83,75885,593
Total bonds and notes$ 815,974$ 1,008,681

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 this real estate trust. These bonds have a carrying value of $3,731 and a fair value of $4,617 and a carrying value of $3,640 and a fair value of $3,995 as of December 31, 2021 and 2020, respectively.

Common and Preferred Stocks – Unaffiliated

The Company held no unaffiliated common stocks at December 31, 2021. At December 31, 2020, the cost and fair value of unaffiliated common stocks was $1,926. There were no gross unrealized gains and losses.

The statement value, gross unrealized gains and losses and fair value of unaffiliated preferred stocks at December 31 are as follows:
StatementGross Unrealized
Preferred StocksValueGainsLossesFair Value
December 31, 2021$ 30,543$ -$ -$ 30,543
December 31, 202051,79511,561(138)63,218

Mortgage Loans

The Company’s mortgage loan portfolio consists mainly of commercial mortgage loans. All outstanding commercial mortgage loans are collateralized by completed properties. At December 31, 2021, the commercial mortgage loan portfolio had an average remaining life of 3.8 years, with all principal due prior to 2034. The Company limits its concentrations of credit risk. No loan to a single borrower represented more than 17.3% of the aggregate mortgage loan portfolio balance.

The following table provides the current and past due amounts of the mortgage loan portfolio at December 31:
20212020
Current$ 43,816$ 43,994
Total carrying value$ 43,816$ 43,994

F-16
UNION SECURITY INSURANCE COMPANY
Notes to Statutory Basis Financial Statements
($ in 000s)

There were no impaired loans and the Company has no interest accrued on loans greater than 90 days past due as of December 31, 2021 and 2020.

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 at December 31, 2021:
2021
California19.8%
Alabama17.3
Arizona10.9
Maryland10.4
Utah9.1
Connecticut8.8
Texas5.4
Minnesota5.2

At December 31, 2020, approximately 49% of the commercial mortgage loan carrying value was concentrated in the states of California, Alabama, and Maryland.

The types of properties collateralizing the commercial mortgage loans at December 31 are as follows:
2021
Industrial56.7%
Office22.7
Retail15.9
Other4.7
Total100%

Although the Company has a diversified loan portfolio, an economic downturn could have an adverse impact on the ability of its debtors to pay their loans.

The Company has no commitments as of December 31, 2021 or 2020 to lend additional funds to mortgagors whose existing mortgage terms have been restructured in a troubled debt restructuring. There were no mortgage loan restructures in 2021 or 2020.

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 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 our commercial mortgage loan portfolio is performed on a quarterly basis to identify emerging 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, 2021 and 2020, 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.
F-17
UNION SECURITY INSURANCE COMPANY
Notes to Statutory Basis Financial Statements
($ in 000s)

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, 2021:
         
2021
Average
PrincipalDebt Service
Loan to ValueAmountCoverage Ratio
Less than 65%$ 36,1971.86
65% to 74%7,6191.17
Total$ 43,8161.82
Loan to value and debt service coverage ratios were as follows at December 31, 2020:         
2020
Average
PrincipalDebt Service
Loan to ValueAmountCoverage Ratio
70% and less$ 43,9942.37
Total$ 43,9942.37

Cash, Cash Equivalents and Short-term Investments

The details of cash, cash equivalents and short-term investments as of December 31, are as follows:
20212020
Money market mutual funds$ 10,844$ 18,886
Cash(371)2,089
Total cash, cash equivalents and short-term investments$ 10,473$ 20,975






F-18
UNION SECURITY INSURANCE COMPANY
Notes to Statutory Basis Financial Statements
($ in 000s)
Net Investment Income

Sources of net investment income for the years ended December 31 are summarized as follows:
202120202019
Bonds and notes$ 44,726$ 46,025$ 47,934
Common stocks - unaffiliated528279
Preferred stocks - unaffiliated2,8673,3013,748
Mortgage loans2,0832,3982,853
Contract loans293322340
Other invested assets5,4823,0975,322
Cash and cash equivalents235301
Other86--
Gross investment income55,59155,26060,577
Less investment expenses8951,8341,401
Net investment income$ 54,696$ 53,426$ 59,176

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

Due and accrued investment income over 90 days past due is excluded from the consolidated 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, 2021 or 2020 on this basis.

Total net investment income recognized as a result of prepayment penalties or acceleration fees was $1,082, $439, and $382 for the years ended December 31, 2021, 2020 and 2019, respectively.

Net Realized Capital Gains (Losses)

Net realized capital gains (losses) for the year ended December 31 are summarized as follows:
2021
Bonds and notes:
Gross gains from sales$ 13,536
Gross losses from sales(453)
Other2,810
Common stocks - unaffiliated:
Gross gains from sales669
Preferred stocks - unaffiliated:
Gross gains from sales2,153
Gross losses from sales(140)
Other2,110
Other invested assets:
Gross gains from sales53,177
Net realized capital gains (losses) before taxes and transfer to
interest maintenance reserve73,862
Tax on net realized capital gains (losses)276
Transfer to interest maintenance reserve(19,454)
Net realized capital gains (losses)$ 54,684
F-19
UNION SECURITY INSURANCE COMPANY
Notes to Statutory Basis Financial Statements
($ in 000s)
         
Proceeds from the sale of bonds and notes were $65,623 in 2021. Proceeds from the sale of stocks were $19,009 in 2021.

Net realized capital gains (losses) for the years ended December 31, 2020 and 2019 are summarized as follows:
20202019
Bonds and notes:
Proceeds from sales$ 25,943$ 92,312
Gross realized gains2,8074,214
Gross realized losses(1,458)(930)
Net realized gains from sales of bonds1,3493,284
Preferred stocks - unaffiliated:
Proceeds from sales-16,944
Gross realized gains160866
Gross realized losses-(255)
Net realized gains from sales of preferred stocks160611
Net realized capital losses related to sales and other2942,604
Amount transferred to IMR (net of related tax expense
of $405 in 2020 and $817 in 2019)1,5263,073
Tax on net realized capital gains (losses)459(1,716)
Net realized capital gains (losses)$ (773)$ (2,185)

Other-Than-Temporary Investment Impairments

Investment securities are reviewed for other-than-temporary impairment (“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.

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 other-than-temporary impairment recognized in net income as a realized loss equals the difference between the
F-20
UNION SECURITY INSURANCE COMPANY
Notes to Statutory Basis Financial Statements
($ in 000s)
investment's amortized cost basis and its expected cash flows. In determining whether an unrealized loss is expected to be other-than-temporary, the Company considers, among other factors, any plans to sell the security, the severity of impairment, financial position of the issuer, recent events affecting the issuer’s business and industry sector, credit ratings, and the intent and ability of the Company to hold the investment until the fair value has recovered above its cost basis.

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 gain (loss).

For those equity securities 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 equity securities 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, 2021. 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 2021, 2020 and 2019 caused by an intent to sell or lack of intent and ability to hold until recovery of the amortized cost basis.

























F-21
UNION SECURITY INSURANCE COMPANY
Notes to Statutory Basis Financial Statements
($ in 000s)
Net Unrealized Capital Gains (Losses)

Information regarding the Company’s bonds and notes with unrealized losses at December 31, 2021 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 ThanTwelveTotal
Twelve MonthsMonths or GreaterDecember 31, 2021
Fair ValueUnrealized LossFair ValueUnrealized LossFair ValueUnrealized Loss
U.S. government and agencies$962 $ (11)$ -$ -$ 962$ (11)
Political subdivisions of states, territories and possessions20,551 (439)--20,551(439)
Industrial and miscellaneous36,012(979)--36,012(979)
Mortgage-backed
Residential mortgage12,363(121)--12,363(121)
Commercial mortgage32,092(253)--32,092(253)
Collateralized loan and debt obligations
Other structured securities50,081(196)--50,081(196)
Total bonds and notes152,061(1,999)--152,061(1,999)
Total temporarily
impaired securities$ 152,061$ (1,999)$ -$ -$ 152,061$ (1,999)

At December 31, 2021, the Company owned 96 bonds and notes with a fair value of $152,061 in an unrealized investment loss position. There were no bonds or notes in an unrealized loss position for twelve or more months. The total fair value of bonds and notes with unrealized losses at December 31, 2021 and which are rated “investment grade” based on having an NAIC rating of 1 or 2 is $148,940 or 97.9% of the total fair value of all bonds and notes with unrealized losses at December 31, 2021. Total unrealized losses on investment grade bonds and notes were $1,820 at December 31, 2021.















F-22
UNION SECURITY INSURANCE COMPANY
Notes to Statutory Basis Financial Statements
($ in 000s)





Information regarding the Company’s bonds and notes and stocks with unrealized losses at December 31, 2020 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 ThanTwelveTotal
Twelve MonthsMonths or GreaterDecember 31, 2020
Fair ValueUnrealized LossFair ValueUnrealized LossFair ValueUnrealized Loss
Bonds and notes:
Foreign governments$ 3,640$ (387)$ -$ -$ 3,640$ (387)
Loan-backed and structured7,872(183)19,678(167)27,550(350)
Industrial and miscellaneous10,932(1,309)--10,932(1,309)
Total bonds and notes$ 22,444$ (1,879)$ 19,678$ (167)$ 42,122$ (2,046)
Stocks:
Common stocks - unaffiliated$ 1,431$ (220)$ -$ -$ 1,431$ (220)
Preferred stocks - unaffiliated--1,727(136)1,727(136)
Total stocks - unaffiliated$ 1,431$ (220)$ 1,727$ (136)$ 3,158$ (356)

The total gross unrealized losses were approximately 5% of the aggregate fair value of the related securities at December 31, 2020. Approximately 87% of these gross unrealized losses had been in a continuous loss position for less than twelve months in 2020. The total gross unrealized losses were comprised of 21 individual securities in 2020.

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.








F-23
UNION SECURITY INSURANCE COMPANY
Notes to Statutory Basis Financial Statements
($ in 000s)





Restricted Assets

Restricted assets by category as of December 31 are as follows:
20212020
TotalRestrictedRestricted toTotalRestrictedRestricted to
Admittedto TotalTotal AdmittedAdmittedto TotalTotal Admitted
RestrictedAssetsAssetsRestrictedAssetsAssets
On deposit with states and other regulatory bodies$ 3,0180.1%0.1%$ 2,0130.1%0.1%
Pledged as collateral not captured in other categories285,4299.1%9.1%275,7239.4%9.4%
Total restricted assets$ 288,4479.2%9.2%$ 277,7369.5%9.5%


F-24
UNION SECURITY INSURANCE COMPANY
Notes to Statutory Basis Financial Statements
($ in 000s)
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.

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. Therefore, for all transfers into Level 3, all realized gains and losses and all changes in unrealized gains and losses in the fourth quarter are not reflected in the Level 3 rollforward table.

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
F-25
UNION SECURITY INSURANCE COMPANY
Notes to Statutory Basis Financial Statements
($ in 000s)
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 2021 and 2020.

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, 2021.
Assets, at Fair ValueLevel 1Level 2Level 3Total
Preferred stock - unaffiliated$ -$ 30,543$ -$ 30,543
Cash equivalents10,844--10,844
Derivatives-310-310
Separate account assets2,148,71363,637-2,212,350
Total assets$ 2,159,557$ 94,490$ -$ 2,254,047





















F-26
UNION SECURITY INSURANCE COMPANY
Notes to Statutory Basis Financial Statements
($ in 000s)
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, 2021:

Carrying
AmountFair ValueLevel 1Level 2Level 3
Financial instruments recorded
as assets:
Bonds and notes$ 815,974$ 1,008,681$ -$ 941,005$ 67,676
Preferred stocks - unaffiliated30,54330,543-30,543-
Mortgage loans43,81646,498--46,498
Cash equivalents and short-term
investments10,84410,84410,844--
Other invested assets10,35913,795-13,795-
Derivatives310310-310-
Contract loans4,9246,844--6,844
Separate account assets2,212,3502,212,3502,148,71363,637-
Financial instruments recorded
as liabilities:
Deposit-type contracts17,45918,898-18,898-
Annuity contracts17,17918,595-18,595-
Separate account liabilities2,212,3502,212,3502,148,71363,637-

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

The following table summarizes the carrying amounts and fair values of USIC’s financial instruments for which it is practical to estimate by fair value measurement level at December 31, 2020:
Carrying
ValueFair ValueLevel 1Level 2Level 3
Financial assets:
Bonds and notes$ 713,102$ 952,097$ -$ 939,645$ 12,452
Common stocks - unaffiliated1,9261,9261,926--
Preferred stocks - unaffiliated51,79563,218-62,1691,049
Mortgage loans43,99450,030--50,030
Cash, cash equivalents and short-term investments20,97520,97520,975--
Other invested assets15,96219,7855,27414,334177
Separate account assets2,011,2932,011,2931,937,05474,239-
Total financial assets$ 2,859,047$ 3,119,324$ 1,965,229$ 1,090,387$ 63,708
Financial liabilities:
Individual and group annuities
(subject to discretionary withdrawal)193,798241,221--241,221
Deposit-type contracts37,59637,59633,4684,128-
Separate account liabilities2,011,2932,011,2931,937,05474,239-
Total financial liabilities$ 2,242,687$ 2,290,110$ 1,970,522$ 78,367$ 241,221
F-27
UNION SECURITY INSURANCE COMPANY
Notes to Statutory Basis Financial Statements
($ in 000s)
Determination of Fair Values

The Company determines the estimated fair value of its investments using primarily the market approach and the income approach. The use of quoted prices and matrix pricing or similar techniques are examples of market approaches, while the use of discounted cash flow methodologies is an example of the income approach. A summary of valuation techniques for classes of financial assets and liabilities by fair value hierarchy level are as follows:

Level 1 Measurements

Common stocks - unaffiliated: Valuation is based on the published redemption price at which the Company could transact.

Cash equivalents and short-term investments: Consists of money market mutual funds and treasury bills. Valuation for money markets is based on the closing price as of the balance sheet date. Valuation for treasury bills is principally based on observable inputs including quoted prices for identical assets in markets that are active.

Deposit-type contracts: For 2020, the fair value of the Company’s liabilities under deposit-type insurance 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.

Separate account assets and liabilities: Consists of money market funds and it also includes 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.

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.

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 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; and options where valuation is based primarily on quoted interest rates, market-implied volatility and other observable inputs regularly used by industry participants in over-the-counter derivatives markets. 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.

Preferred stocks - unaffiliated: For 2020, the Level 3 stocks are priced using non-binding third-party manager quotes, for which the underlying quantitative inputs are not developed by the Company and are not readily available or observable.

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.

F-28
UNION SECURITY INSURANCE COMPANY
Notes to Statutory Basis Financial Statements
($ in 000s)
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.

Individual and group annuities (subject to discretionary withdrawal): For 2020, the fair values for the Company’s liabilities under investment-type insurance contracts within the individual and group annuities are determined using discounted cash flow analysis.

Note 5: Income Tax

The Company was included in the 2020 consolidated U.S. federal income tax return filed by Assurant. The Company will be included in the 2021 consolidated U.S. federal income tax return filed by Assurant for the period January 1, 2021 through July 31, 2021 and will file a stand-alone U.S. federal income tax return for the period August 1, 2021 through December 31, 2021. The Company is not eligible to be included in the CMHC consolidated U.S. federal income tax return until January 1, 2027.

The U.S. consolidated federal income tax return filed by Assurant includes the following entities: Assurant, Inc., Assurant Service Protection, Inc., American Bankers General Agency, Inc., American Bankers Insurance Co. of Florida, American Bankers Insurance Group, American Bankers Life Assurance Co. of Florida, American Bankers Management Co., Inc., American Financial & Automotive Services, Inc., American Financial Warranty Corporation, American Memorial Life Insurance Co., American Security Insurance Co., Assurant Captive Insurance Company, Inc., Assurant IA Holding Corp., Assurant Insurance Agency, Inc., Assurant Payment Services, Inc., Assurant Reinsurance of Turks & Caicos, Ltd., Assurant BARC Reinsurance Ltd., Assurant Device Services, Inc., Automotive Warranty Services, Inc., Automotive Warranty Services of Florida, Inc., Coast to Coast Dealer Services Inc., Consumer Assist Network Association, Inc., Consumer Program Administrators, Inc., Dealer Performance, Inc., Eck & Glass, Inc., Family Considerations, Inc., Federal Warranty Service Corp., FFG Corporation, First Extended, Inc., First Extended Service Corporation, First Extended Service Corporation of Florida, Florida Office Corp., GP Legacy Place, Inc., Hyla Mobile Inc., Flipswap Inc, Recellular Acquisitions Inc, Hyla International Inc, HMCA Inc, Assurant New Ventures, Incorporated, Service Optimization Solutions, Inc., Insureco Agency and Services, Inc. (CA), Insureco, Inc., Interfinancial, Inc., IQ Data International, Inc., John Alden Life Insurance Co., Mobile Defense, Inc., MS Diversified Corp., National Insurance Agency, Inc., National Product Care Company, North American Warranty, Inc., Product Care, Inc., Privowny, Inc. Reliable Lloyds Insurance Co., Resource Acquisition Corporation, Assurant Automotive(FKA Resource Automotive, Inc.), Assurant Dealer Services, Inc.(FKA Resource Dealer Group, Inc.), Resource Training, Inc., ServicePlan, Inc., ServicePlan of Florida, Inc., Service Protection, Inc., Service Saver, Inc., Shipsurance Insurance Services, Inc., Standard Guaranty Insurance Co., SOSI-Fixt, Inc., Sureway, Inc., TeleCom Re, Inc., The Warranty Group, Inc., TrackSure Insurance Agency, Inc., TS Holdings, Inc., TWG Holdings, Inc., TWG Home Warranty Services, Inc., TWG Innovative Solutions, Inc., TWG Securities, Inc., TWG Warranty Group, Inc., TWG Warranty Services, Inc., Union Security Insurance Co., Union Security Life Insurance Co. of NY, United Service Protection Corp., United Service Protection, Inc., Virginia Surety Company, Inc., Voyager Group, Inc., Voyager Indemnity Insurance Co., Voyager Service Warranties, Inc., Wolverine Acquisitions, Inc., and Wolverine Interco, Inc.

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 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:
202120202019
Federal income tax expense (benefit) on operations$ 4,503$ 827$ 7,062
Federal income tax expense (benefit) on
net realized capital gains (losses)3,809(459)1,716
Federal income tax expense$ 8,312$ 368$ 8,778
F-29
UNION SECURITY INSURANCE COMPANY
Notes to Statutory Basis Financial Statements
($ in 000s)
The 2021 change in net deferred income tax is comprised of the following:
December 31,December 31,
20212020Change
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 adjustments317
Change in net deferred income tax$ (20,976)

The 2020 change in net deferred income tax is comprised of the following:
December 31,December 31,
20202019Change
Adjusted gross deferred tax assets$ 30,913$ 32,882$ (1,969)
Total deferred tax liabilities(6,871)(5,981)(890)
Net deferred tax asset (excluding nonadmitted)$ 24,042$ 26,901(2,859)
Tax effect of net unrealized capital gains and losses,
unrealized foreign exchange capital gains and losses,
and changes as a result of other surplus adjustments73
Change in net deferred income tax$ (2,786)

The 2019 change in net deferred income tax is comprised of the following:
December 31,December 31,
20192018Change
Adjusted gross deferred tax assets$ 32,882$ 31,663$ 1,219
Total deferred tax liabilities(5,981)(7,248)1,267
Net deferred tax asset (excluding nonadmitted)$ 26,901$ 24,4152,486
Tax effect of net unrealized capital gains and losses,
unrealized foreign exchange capital gains and losses,
and changes as a result of other surplus adjustments412
Change in net deferred income tax$ 2,898



F-30
UNION SECURITY INSURANCE COMPANY
Notes to Statutory Basis Financial Statements
($ in 000s)
Reconciliation to U.S. Tax Rate

The total statutory provision for income taxes for the year ended December 31, 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:
2021
Tax expense computed at federal corporate rate$ 22,799
Dividends received deductions(1,579)
Foreign tax credit(161)
Income tax benefit related to prior years(2,923)
Nonadmitted assets78
Interest maintenance reserve amortization(493)
Amortization of deferred gain on reinsurance(1,441)
Change in deferred income tax due to purchase accounting13,031
Tax exempt investment income(37)
Other14
Total statutory income taxes$ 29,288
Federal income tax expense$ 8,312
Change in net deferred income tax20,976
Total statutory income taxes$ 29,288

The total statutory provision for income taxes for the years ended December 31, 2020 and 2019 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:
Effective Tax Rate
20202019
Statutory income before taxes21.0%21.0%
(including capital gains and losses)
Interest maintenance reserve-1.3%-1.0%
Amortization of deferred gain on reinsurance-6.5%-8.7%
Dividend received deduction-3.0%-1.3%
Other permanent adjustments-1.6%-0.2%
Total adjustments-12.4%-11.2%
Total8.6%9.8%
Federal income tax incurred1.0%14.6%
Change in net deferred income tax7.6%-4.8%
Total statutory income taxes8.6%9.8%




F-31
UNION SECURITY INSURANCE COMPANY
Notes to Statutory Basis Financial Statements
($ in 000s)
Deferred Income Taxes

The components of the net deferred tax asset at December 31 are as follows:
December 31, 2021December 31, 2020Change
OrdinaryCapitalTotalOrdinaryCapitalTotalOrdinaryCapitalTotal
Gross deferred
tax assets$ 5,880$ -$ 5,880$ 26,351$ 4,562$ 30,913$ (20,471)$ (4,562)$ (25,033)
Statutory
valuation
allowance
adjustment---------
Adjusted gross
deferred tax
assets5,880-5,88026,3514,56230,913(20,471)(4,562)(25,033)
Deferred tax
assets
nonadmitted---(15,650)-(15,650)15,650-15,650
Admitted deferred
tax assets5,880-5,88010,7014,56215,263(4,821)(4,562)(9,383)
Deferred tax
liabilities(765)(2,366)(3,131)(1,093)(5,778)(6,871)3283,4123,740
Net admitted
deferred tax
assets$ 5,115$ (2,366)$ 2,749$ 9,608$ (1,216)$ 8,392$ (4,493)$ (1,150)$ (5,643)

The nonadmitted deferred tax asset decreased $15,650 in 2021 and decreased $1,397 in 2020. 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.






























F-32
UNION SECURITY INSURANCE COMPANY
Notes to Statutory Basis Financial Statements
($ in 000s)
The tax effects of temporary differences that give rise to the significant portions of the deferred tax assets and liabilities at
December 31are as follows:
20212020Change
Ordinary deferred tax assets:
Deferred acquisition costs$ 1,161$ 16,020$ (14,859)
Life and accident and health reserves4,4994,745(246)
Investments-4,742(4,742)
Policyholder dividends accrual137-137
Other83844(761)
Subtotal ordinary deferred tax assets5,88026,351(20,471)
Nonadmitted ordinary deferred tax assets-(15,650)15,650
Admitted ordinary deferred tax assets5,88010,701(4,821)
Capital deferred tax assets:
Investments-2,158(2,158)
Unrealized losses-2,404(2,404)
Admitted capital deferred tax asset-4,562(4,562)
Admitted deferred tax assets5,88015,263(9,383)
Ordinary deferred tax liabilities:
Investments(42)(86)44
Deferred and uncollected premium(105)(208)103
Reserves-(799)799
Unrealized gains(65)-(65)
Guaranty fund liabilities(553)-(553)
Total ordinary deferred tax liabilities(765)(1,093)328
Capital deferred tax liabilities:
Investments(1,169)(5,743)4,574
Unrealized gains(1,197)(35)(1,162)
Subtotal capital deferred tax liabilities(2,366)(5,778)3,412
Total deferred tax liabilities(3,131)(6,871)3,740
Net admitted deferred tax asset$ 2,749$ 8,392$ (5,643)



















F-33
UNION SECURITY INSURANCE COMPANY
Notes to Statutory Basis Financial Statements
($ in 000s)
Deferred Tax Asset Admission Calculation

The components of the deferred tax asset admission calculation at December 31 are as follows:
December 31, 2021December 31, 2020Change
OrdinaryCapitalTotalOrdinaryCapitalTotalOrdinaryCapitalTotal
(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):4,549-4,5498,392-8,392(3,843)-(3,843)
(i) Adjusted gross deferred tax assets expected to be realized following the balance sheet date4,549-4,5498,392-8,392(3,843)-(3,843)
(ii) Adjusted gross deferred tax assets allowed per limitation threshold--30,421--17,928--12,493
(c) Adjusted gross deferred tax assets offset by gross deferred tax liabilities1,331-1,3312,3094,5626,871(978)(4,562)(5,540)
Admitted deferred tax asset$ 5,880$ -$ 5,880$ 10,701$ 4,562$ 15,263$ (4,821)$ (4,562)$ (9,383)

The amounts calculated in (b)(i) and (b)(ii) in the table above are based on the following information:
20212020
Ratio percentage used to determine recovery period and
     threshold limitation amount (risk-based capital ("RBC") reporting entity)
1039%596%
Recovery period used in (b)(i)3 years3 years
Percentage of adjusted capital and surplus used in (b)(ii)15%15%
Amount of adjusted capital and surplus used in (b)(ii)$ 202,809$ 119,521

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, 2021 and 2020.

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 is included in the change in net deferred income tax and in the effective tax rate analysis. Also, the terms of the transaction resulted in the extinguishment or reclassification of certain balances with the former parent. The net impact is reported as an increase to unassigned surplus.

As of December 31, 2021, the Company did not have any federal capital loss, operating loss, or credit carryforwards.

Income taxes incurred in 2021 of $3,414 are available for recoupment in the event of future capital losses. The Company has no taxes incurred in 2020 or 2019 that 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.

A reconciliation of the beginning and ending amount of tax contingences as of December 31 is as follows:
F-34
UNION SECURITY INSURANCE COMPANY
Notes to Statutory Basis Financial Statements
($ in 000s)
20212020
Balance at January 1$ 2,425$ 2,425
Reductions for prior years' tax positions(2,425)-
Balance at December 31$ -$ 2,425

The overall effective income tax rate in future periods will be affected if the balances of the tax contingencies as of December 31, 2021 are revalued. The Company has no tax loss contingencies for which it is reasonably possible that the total liability will significantly increase within twelve months of the reporting date.

The Company recognizes interest and penalties accrued related to tax contingencies in income tax expense in the statutory basis statements of operations. During the years ended December 31, 2021, 2020 and 2019, the Company recognized a decrease of $212 and increases of $103 and $97, respectively, in interest and penalties. The Company had accrued $0 and $212 for the payment of interest and penalties at December 31, 2021 and 2020, 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, any adjustment to income tax liabilities for periods prior to August 1, 2021 are the sole obligation or benefit of the prior owner.

F-35
UNION SECURITY INSURANCE COMPANY
Notes to Statutory Basis Financial Statements
($ in 000s)
Note 6: Related Party Transactions

Subsequent to July 31, 2021, 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 of $4,480 to the Company in 2021.

After the acquisition by CMFG Life, the Company hired MEMBERS Capital Advisors, Inc. (“MCA”) as its investment advisor for most of its portfolio. MCA investment management fees recorded were $474 in 2021.

Subsequent to July 31, 2021, the Company entered into a cash management agreement, whereby 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.

Amounts due to/from affiliates are shown in the following table as of December 31:
2021
Due to the Company:
CMFG Life$ 997
American Memorial Life Insurance Company365
All other affiliates94
Total$ 1,456
Due from the Company:
CMFG Life$ 863
MCA330
CUNA Mutual Insurance Agency, Inc.132
All other affiliates612
Total$ 1,937

Prior to July 31, 2021, capital and surplus transactions between former direct parent, Interfinancial, Inc., (see Note 1 for more details on the change in ownership) is shown in the following table
202120202019
Dividends paid from USIC to:
Interfinancial, Inc.$ -$ 18,000$ 27,000
Total$ -$ 18,000$ 27,000

The Company paid $14,000 of extraordinary dividends as a return of gross paid-in and contributed surplus in 2019.
The Company received timely approval from the Kansas Insurance Department prior to the payment of all dividends.

In 2020, 2019 and January 1, 2021 through July 31, 2021, the Company received various services from Assurant 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, $6,327, and $7,258 for the periods ended July 31, 2021, December 31, 2020, and December 31, 2019, respectively.

The amounts paid by the Company to Assurant through a tax sharing agreement were $3,771, $3,111, and $9,386 at July 31, 2021, December 31, 2020, and December 31, 2019, respectively.


F-36
UNION SECURITY INSURANCE COMPANY
Notes to Statutory Basis Financial Statements
($ in 000s)
The Company provides underwriting, claims handling, information technology and administrative services to Assurant and its affiliates and recorded income of $0, $4,009 and $5,439 through July 31, 2021 and in 2020 and 2019, respectively, for these services.

Receivables due from affiliates of Assurant were $952 at December 31, 2020 and included with other assets. Asset amounts are included on the statements of admitted assets, liabilities and capital and surplus. The receivable or payable due from Assurant, subsidiaries and affiliates are non-interest bearing and the terms of the agreement require that the amounts are settled within 30 days.

The Company ceded group accidental death and disability to its affiliate, American Bankers Life Assurance Company (“ABLAC”). The Company ceded $1,449, $2,900 and $3,195 of premiums to ABLAC for the periods ended July 31, 2021, December 31, 2020, and December 31, 2019, respectively. The Company ceded minimal reserves to ABLAC at December 31, 2020 and 2019, respectively.

The Company ceded group accidental death and disability to its affiliate, American Bankers Insurance Company (“ABIC”). The Company ceded $253, $473, and $546 of premiums to ABIC for the periods ended July 31, 2021, December 31, 2020, and December 31, 2019, respectively. The Company ceded minimal reserves to ABIC at December 31, 2020 and 2019.

Administrative expenses allocated to the Company from Assurant 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.

Prior to July 31, 2021, the Company’s affiliate Assurant, purchased, bonds for $3,755 and other invested assets for $75,130, all at fair value, from the Company.

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 2021.
2021
Premiums earned:
Direct$ 143,981
Assumed premiums3,408
Ceded to affiliates(1,703)
Ceded to non-affiliate(141,581)
Premiums and other considerations$ 4,105
Benefits and surrender expenses:
Direct$ 535,716
Assumed from non-affiliates31,086
Ceded to affiliates(360)
Ceded to non-affiliates(487,124)
Benefits and surrender expenses, net of reinsurance$ 79,318
Decrease in policy reserves:
Direct$ (16,028)
Assumed from non-affiliates(20,172)
Ceded to affiliates-
Ceded to non-affiliates(17,399)
Decrease in policy reserves, net of reinsurance$ (53,599)

Policy reserves and claim liabilities are stated net of reinsurance balances ceded of $656,989 as of December 31, 2021.

F-37
UNION SECURITY INSURANCE COMPANY
Notes to Statutory Basis Financial Statements
($ in 000s)
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, 2021, 2020 and 2019 was $2,249, $6,427, and $20,875, respectively. The Company ceded premiums of $6,374, $51,146, and $223,733 during the years ended December 31, 2021, 2020 and 2019, respectively, related to this agreement. In addition, as of December 31, 2021 and 2020, total ceded reserves related to this agreement were $429,255 and $485,428, respectively.

The Company assumed premium from IA American Life Insurance Company, a subsidiary of Assurant, of $860, $2,196, and $2,433 for the years ended December 31, 2021, 2020 and 2019, respectively, and reserves of $233,292 and $252,642 as of December 31, 2021 and December 31, 2020, respectively.

The Company entered into a reinsurance agreement with Talcott Resolution for the sale of its FFG division. The ceded reserves related to this agreement were $482,489 and $495,210 as of December 31, 2021 and 2020, 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. Under this reinsurance agreement, the Company ceded $65,572, $68,581, and $71,273 of premiums to John Hancock during the years ended December 31, 2021, 2020 and 2019, respectively. The ceded reserves related to this agreement were $2,527,046 and $2,436,310, including $463,744 and $433,678 of premium deficiency reserves, in 2021 and 2020, respectively.

If 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.

The following table shows the effect of reinsurance on premiums for the years ended December 31:
20202019
Premiums earned:
Direct$ 190,850$ 357,653
Assumed premiums2,2013,469
Ceded premiums(190,001)(357,233)
Premiums and other considerations$ 3,050$ 3,889
















F-38
UNION SECURITY INSURANCE COMPANY
Notes to Statutory Basis Financial Statements
($ in 000s)
The following table provides the reductions in certain items in the statutory basis financial statements as a result of ceded reinsurance agreements along with reinsurance balances recoverable for the years ended December 31:
2020
Ceded aggregate reserves$ 3,443,072
Ceded contract claims39,404
Ceded other policy liabilities21,527
Reinsurance balances receivable2,419
Total$ 3,506,422
Ceded incurred benefits$ 298,113

Note 8: Liability for Claim Reserves

The liability for unpaid accident and health claim and claim adjustment expenses as of December 31, 2021 was $873,169. The Company incurred $245 and paid $226 of accident and health claims and claim adjustment expenses in 2021, of which $63 of incurred claims and $109 of paid claims was attributable to insured or covered events of prior years.
Note 9: 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, 2021, which are reported as policy reserves on annuity contracts and liability for deposit-type contracts are as follows:

Individual Annuities
SeparateSeparate
GeneralAccount withAccount% of
December 31, 2021AccountGuaranteesNonguaranteedTotalTotal
Subject to discretionary withdrawal -
lump sum:
With market value adjustment$ -$ 42,815$ -$ 42,8154.8%
At book value less surrender
charge of 5% or more----0.0%
At market value--627,874627,87470.3%
Total with adjustment or
at market value-42,815627,874670,68975.1%
At book value with minimal or
no charge adjustment185,219--185,21920.8%
Not subject to
discretionary withdrawal36,617--36,6174.1%
Gross annuity reserves and
deposit liabilities221,83642,815627,874892,525100.0%
Ceded reserves206,730--206,730
Total net annuity reserves
and deposit liabilities$ 15,106$ 42,815$ 627,874$ 685,795
Group Annuities
F-39
UNION SECURITY INSURANCE COMPANY
Notes to Statutory Basis Financial Statements
($ in 000s)
SeparateSeparate
GeneralAccount withAccount% of
December 31, 2021AccountGuaranteesNonguaranteedTotalTotal
Subject to discretionary withdrawal -
lump sum:
With market value adjustment$ -$ 27,006$ -$ 27,00615.8%
At market value--140,474140,47482.1%
Total with adjustment or
at market value-27,006140,474167,48097.9%
At book value with minimal or
no charge adjustment3,681--3,6812.1%
Gross annuity reserves and
deposit liabilities3,68127,006140,474171,161100.0%
Ceded reserves76--76
Total net annuity reserves
and deposit liabilities$ 3,605$ 27,006$ 140,474$ 171,085

Deposit-Type Contracts
SeparateSeparate
GeneralAccount withAccount% of
December 31, 2021AccountGuaranteesNonguaranteedTotalTotal
Subject to discretionary withdrawal -
lump sum:
With market value adjustment$ -$ -$ -$ -0.0%
At book value less surrender
charge of 5% or more----0.0%
At fair value----0.0%
Total with adjustment or
at fair value----0.0%
At book value with minimal or
no charge adjustment17,459--17,459100.0%
Not subject to
discretionary withdrawal----0.0%
Gross annuity reserves and
deposit liabilities17,459--17,459100.0%
Reinsurance ceded----
Total net annuity reserves
and deposit liabilities$ 17,459$ -$ -$ 17,459

The following tables show the withdrawal characteristics of the Company’s annuity reserves and deposit liabilities at December 31, 2020, which are reported as policy reserves on annuity contracts and liability for deposit-type contracts are as follows:


F-40
UNION SECURITY INSURANCE COMPANY
Notes to Statutory Basis Financial Statements
($ in 000s)
Individual Annuities
SeparateSeparate
GeneralAccount withAccount% of
December 31, 2020AccountGuaranteesNonguaranteedTotalTotal
Subject to discretionary withdrawal -
lump sum:
With market value adjustment$ -$ 42,282$ -$ 42,2824.9%
At book value less surrender
charge of 5% or more77--770.0%
At market value--585,702585,70268.8%
Total with adjustment or
at market value7742,282585,702628,06173.7%
At book value with minimal or
no charge adjustment189,630--189,63022.3%
Not subject to
discretionary withdrawal34,113--34,1134.0%
Gross annuity reserves and
deposit liabilities223,82042,282585,702851,804100.0%
Ceded reserves207,899--207,899
Total net annuity reserves
and deposit liabilities$ 15,921$ 42,282$ 585,702$ 643,905

Group Annuities
SeparateSeparate
GeneralAccount withAccount% of
December 31, 2020AccountGuaranteesNonguaranteedTotalTotal
Subject to discretionary withdrawal -
lump sum:
With market value adjustment$ -$ 28,602$ -$ 28,60217.5%
At market value133,765133,76580.7%
Total with adjustment or
at market value-28,602133,765162,36797.7%
At book value with minimal or
no charge adjustment4,091--4,0912.3%
Gross annuity reserves and
deposit liabilities4,09128,602133,765166,458100.0%
Ceded reserves80--80
Total net annuity reserves
and deposit liabilities$ 4,011$ 28,602$ 133,765$ 166,378





F-41
UNION SECURITY INSURANCE COMPANY
Notes to Statutory Basis Financial Statements
($ in 000s)

Deposit-Type Contracts
SeparateSeparate
GeneralAccount withAccount% of
December 31, 2020AccountGuaranteesNonguaranteedTotalTotal
Subject to discretionary withdrawal -
lump sum:
With market value adjustment$ -$ -$ -$ -0.0%
At book value less surrender
charge of 5% or more----0.0%
At fair value----0.0%
Total with adjustment or
at fair value----0.0%
At book value with minimal or
no charge adjustment17,103--17,103100.0%
Not subject to
discretionary withdrawal----0.0%
Gross annuity reserves and
deposit liabilities17,103--17,103100.0%
Reinsurance ceded----
Total net annuity reserves
and deposit liabilities$ 17,103$ -$ -$ 17,103

The following table shows policy liabilities associated with the Company’s annuity products as of December 31:
2021
Annuities$ 18,711
Deposit-type contracts17,459
Annuity reserves from the separate accounts838,169
Total annuity reserves$ 874,339


















F-42
UNION SECURITY INSURANCE COMPANY
Notes to Statutory Basis Financial Statements
($ in 000s)


The following table shows life reserves by withdrawal characteristics at December 31, 2021:
Separate Account -
General AccountNon-Guaranteed
AccountCashAccountCash
ValueValueReserveValueValueReserve
Subject to discretionary withdrawal,
surrender values, or policy loans:
Term policies with cash value$ 51,988$ 52,843$ 54,441$ -$ -$ -
Universal life78,96178,96188,588---
Other permanent cash value
life insurance------
Variable universal life106,002105,828109,6401,364,0631,364,0631,364,063
Miscellaneous reserves-618,523655,958---
Not subject to discretionary withdrawal
or no cash values:
Term policies without cash value¹--3,114---
Accidental death benefits¹--26---
Disability - active lives¹--220---
Disability - disabled lives¹--2,333---
Miscellaneous reserves¹--20,670---
Gross reserves before reinsurance236,951856,155934,9901,364,0631,364,0631,364,063
Ceded reinsurance236,951287,934314,825---
Net reserves$ -$ 568,221$ 620,165$1,364,063$1,364,063$1,364,063
1 Account value and cash value not applicable.



























F-43
UNION SECURITY INSURANCE COMPANY
Notes to Statutory Basis Financial Statements
($ in 000s)
The following table shows life reserves by withdrawal characteristics at December 31, 2020:
Separate Account -
General AccountNon-Guaranteed
AccountCashAccountCash
ValueValueReserveValueValueReserve
Subject to discretionary withdrawal,
surrender values, or policy loans:
Term policies with cash value$ 55,003$ 56,136$ 57,910$ -$ -$ -
Universal life82,11882,11990,978---
Other permanent cash value
life insurance-142243---
Variable universal life107,278106,443110,6161,210,9911,210,9911,210,991
Miscellaneous reserves-685,675728,861---
Not subject to discretionary withdrawal
or no cash values:
Term policies without cash value¹--5,819---
Accidental death benefits¹--24---
Disability - active lives¹--200---
Disability - disabled lives¹--96,556---
Miscellaneous reserves¹--22,109---
Gross reserves before reinsurance244,399930,5151,113,3181,210,9911,210,9911,210,991
Ceded reinsurance244,399313,042440,283---
Net reserves$ -$ 617,473$ 673,035$1,210,991$1,210,991$1,210,991
1 Account value and cash value not applicable.

The following table shows policy liabilities associated with the Company’s life products as of December 31:
2021
Life$ 618,280
Miscellaneous1,885
Life reserves from the separate accounts1,364,063
Total life insurance reserves$1,984,228

Note 10: Statutory Financial Data and Dividend Restrictions

RBC requirements promulgated by the NAIC and adopted by the Insurance Department require U. S. life insurers to maintain minimum capitalization levels that are determined based on formulas incorporating asset risk, insurance risk, and business risk. The adequacy of the Company’s actual capital is evaluated by a comparison to the RBC results, as determined by the formula. At December 31, 2021 and 2020, USIC’s adjusted capital exceeded the RBC minimum requirements, as required by the NAIC.

Under applicable Kansas state insurance laws and regulations, the Company is required to maintain minimum capital and surplus of $1,200 at December 31, 2021. The Insurance Department also requires a $400 deposit for fair value of securities that must be held for the protection of all Company’s policyholders or creditors, or both.

USIC is subject to statutory regulations as to maintenance of policyholders’ surplus and payment of stockholder dividends. Generally, dividends to the parent must be reported to the appropriate state regulatory authority in advance of payment and
F-44
UNION SECURITY INSURANCE COMPANY
Notes to Statutory Basis Financial Statements
($ in 000s)
extraordinary dividends, as defined by statutes, require regulatory approval. USIC could pay up to $30,200 in stockholder dividends in 2022 without the approval of the Insurance Department.

Note 11: Commitments and Contingencies

Investment Commitments

The Company has the following investment commitments outstanding at December 31:
         

20212020
Mortgage loans$ 2,550$ -
Total investment commitments$ 2,550$ -

Insurance Guaranty Funds

The Company is liable for guaranty fund assessments related to unaffiliated insurance companies that have become insolvent during 2021 and prior years. The Company includes a provision for all known assessments that will be levied as well as an estimate of amounts that it believes will be assessed in the future relating to past insolvencies. The Company has established a liability of $4,161 and $4,200 at December 31, 2021 and 2020, respectively, for guaranty fund assessments. The Company also estimates the amount recoverable from future premium tax payments related to these accrued assessments and has established an asset of $2,638 and $2,989 as of December 31, 2021 and 2020, respectively. Recoveries of assessments from premium taxes are generally made over a five-year period.

Assets recognized from paid and accrued premium tax offsets and policy surcharges are summarized as follows:
20212020
Asset recognized from paid and accrued
premium tax offsets prior year-end$ 2,989$ 3,531
Decreases:
Premium tax offset applied467493
Accrued assessments29118
Total decreases496611
Increases:
Creditable guaranty fund assessments paid14569
Total increases14569
Asset recognized from paid and accrued
premium tax offsets year-end$ 2,638$ 2,989

Due to the uncertainty of the anticipated cashflows related to invoicing of the remaining assessments from insolvencies of entities that wrote LTC contracts, the following related guaranty fund liabilities and assets at December 31, 2021 have not been discounted:
F-45
UNION SECURITY INSURANCE COMPANY
Notes to Statutory Basis Financial Statements
($ in 000s)
Name of InsolvencyGuaranty Fund AssessmentRelated Assets
Penn Treaty$ 2,167$ 2,167
Others1,994471
Total$ 4,161$ 2,638

Legal Matters

Various legal and regulatory actions, including state market conduct exams and federal tax audits, are currently pending that involve the Company and specific aspects of its conduct of business. Like other members of the insurance industry, the Company is routinely involved in a number of lawsuits and other types of proceedings, some of which may involve claims for substantial or indeterminate amounts. These actions are based on a variety of issues and involve a range of the Company's practices. The ultimate outcome of these disputes is unpredictable.

These matters in some cases raise difficult and complicated factual and legal issues and are subject to many uncertainties and complexities, including but not limited to, the underlying facts of each matter; novel legal issues; variations between jurisdictions in which matters are being litigated, heard or investigated; differences in applicable laws and judicial interpretations; the length of time before many of these matters might be resolved by settlement, through litigation or otherwise and, in some cases, the timing of their resolutions relative to other similar matters involving other companies. In connection with regulatory examinations and proceedings, government authorities may seek various forms of relief, including penalties, restitution and changes in business practices. The Company may not be advised of the nature and extent of relief sought until the final stages of the examination or proceeding. In the opinion of management, the ultimate liability, if any, resulting from all such pending actions will not materially affect the consolidated statutory basis financial statements of the Company.


Note 12: Unassigned Surplus

Unassigned surplus at December 31 considers the accumulated balances for the following items:
20212020
Nonadmitted assets:
Other$ (396)$ (416)
Total nonadmitted assets deducted from surplus$ (396)$ (16,066)
Asset valuation reserve deducted from surplus$ (6,863)$ 10,510
Deferred gain on sale of FFG15,314
Deferred gain on reinsurance with Sun Life9,763
Unrealized capital losses deducted from surplus(6,013)2,172

F-46
UNION SECURITY INSURANCE COMPANY
Notes to Statutory Basis Financial Statements
($ in 000s)
Note 13: Premiums Deferred and Uncollected

Deferred and uncollected life insurance premiums as of December 31 are shown in the following table:
2021
Net of
GrossLoading
Ordinary new business$ -$ (352)
Ordinary renewal841841
Group Life--
Accident and health44
Totals$ 845$ 493

Gross premium represents the amount of premium charged to the policyholders. The amounts net of loading excludes the portion of the gross premium attributable to expenses and certain pricing assumptions.
Note 14: Separate Accounts

The general account of the Company had no separate account guarantees as of December 31, 2021.

Separate accounts held by the Company represent policyholder funds for variable annuity and variable life contracts. The separate account assets primarily consist of mutual funds that contain common stocks. Additionally, the separate accounts include long-term bonds and short-term investments, which are carried at estimated fair value.

In 2001, the Company fully ceded its separate accounts business on a modified co-insurance basis to Talcott Resolution.

The separate account assets legally insulated and not legally insulated from the general account as of December 31, 2021 are attributed to the following products/transactions:
20212020
Separate AccountSeparate Account
LegallyAssets NotLegallyAssets Not
Insulated AssetsLegally InsulatedInsulated AssetsLegally Insulated
Individual variable annuity$ 768,904$ -$ 720,173$ -
Variable life1,364,063-1,211,426-
Modified guarantee contracts-79,922-79,922
Total assets$ 2,132,967$ 79,922$ 1,931,599$ 79,922

The Company’s separate accounts, primarily for individual policyholders, do not have any minimum guarantees and the investment risks associated with market value charges are borne entirely by the policyholder.












F-47
UNION SECURITY INSURANCE COMPANY
Notes to Statutory Basis Financial Statements
($ in 000s)
Information relating to the Company’s separate account business as of December 31 is set forth in the tables below:
20212020
Non-Indexed with Guarantees Less Than/Equal to 4%Non-GuaranteedTotalNon-Indexed with Guarantees Less Than/Equal to 4%Non-GuaranteedTotal
Reserves for accounts
with assets at fair value$ 69,821$ 2,132,058$ 2,201,879$ 70,884$ 1,930,458$ 2,001,342
Reserves with assets subject
to discretionary withdrawal:
At fair value-2,132,0582,132,058-1,930,4581,930,458
With market value adjustment69,821-69,82170,884-70,884
Subtotal separate account liabilities$ 69,821$ 2,132,058$ 2,201,879$ 70,884$ 1,930,458$ 2,001,342
Transfer to separate accounts11,0109,951
Total separate account liabilities$ 2,212,889$ 2,011,293

Details of the net transfers to (from) separate accounts are shown in the table below for the years ended:
20212020
Transfers to separate accounts$ 38,580$ 39,424
Transfers from separate accounts(154,303)(142,024)
Reinsurance ceded115,723102,600
Transfers as reported in the Statement of Operations$ -$ -
F-48
UNION SECURITY INSURANCE COMPANY
Notes to Statutory Basis Financial Statements
($ in 000s)
Note 15: Subsequent Events

The Company evaluated subsequent events from December 31, 2021 through April 1, 2022, the date the statutory basis financial statements were available for issuance. During this period, there were no significant subsequent events that require adjustment to or disclosure in the accompanying statutory basis financial statements.
F-49
UNION SECURITY INSURANCE COMPANY
Supplemental Schedules




Net investment income earned:
Government bonds$ 277
Bonds exempt from U.S. tax-
Other bonds (unaffiliated)44,449
Bonds of affiliates-
Preferred stocks (unaffiliated)2,867
Preferred stocks of affiliates-
Common stocks (unaffiliated)52
Common stocks of affiliates-
Mortgage loans2,083
Real estate4,584
Premium notes, contract loans and liens293
Cash-
Cash equivalents2
Short-term investments-
Other invested assets898
Derivatives-
Aggregate write-ins for net investment income86
Gross net investment income$ 55,591
Real estate owned - book value less encumbrances (excluding home office)
Mortgage loans - book value:
Farm mortgages$ -
Residential mortgages-
Commercial mortgages43,816
Total mortgage loans$ 43,816
Mortgage loans by standing - book value:
Good standing$ 43,816
Good standing with restructured terms-
Interest overdue more than three months, not in foreclosure-
Foreclosure in process-
Other long-term assets-statement value
Collateral loans-
Bonds and stocks of parents, subsidiaries and affiliates - book value
Bonds
Preferred stocks-
Common stocks










F-50
UNION SECURITY INSURANCE COMPANY
Supplemental Schedules
Bonds and short-term investments by class and maturity:
Bonds by maturity - statement value
Due within one year or less$ 7,985
Over 1 year through 5 years76,903
Over 5 years through 10 years307,477
Over 10 years through 20 years299,484
Over 20 years124,125
Total by maturity$ 815,974
Bonds by class - statement value
Class 1$ 439,288
Class 2351,124
Class 325,562
Class 4-
Class 5-
Class 6-
Total by class$ 815,974
Total bonds publicly traded769,297
Total bonds privately placed46,677
Preferred stocks - statement value30,543
Common stocks - market value-
Short-term investments - book value-
Options, caps & floors - statement value-
Options, caps & floors written and in force - statement value (excluding liabilities)-
Collar, swap & forward agreements open - statement value-
Futures contracts open - current value (excluding liabilities)-
Cash(371)
Cash equivalents10,844






















F-51
UNION SECURITY INSURANCE COMPANY
Supplemental Schedules

Life insurance in force:
Industrial$ 22,852
Ordinary7,114,896
Group life648,933
Amount of accidental death insurance in force under ordinary policies92,477
Life insurance policies with disability provisions in force:
Ordinary4,129
Group life6,711
Supplementary contracts in-force:
Ordinary - not involving life contingencies:
Amount on deposit4,362
Amount of income payable-
Ordinary - involving life contingencies:
Amount on deposit-
Amount of income payable42































F-52
UNION SECURITY INSURANCE COMPANY
Supplemental Schedules
Annuities:
Ordinary
Immediate - amount of income payable$ 4,674
Deferred - fully paid - account balance808,676
Deferred - not fully paid - account balance5,066
Accident and health insurance - premium in force
Group2,325
Credit-
Other95,322
Dividend accumulations - account balance13,251

Claim payments 2021
Group accident and health - year ended December 31
20213
202098
201956
201844
2017277
Prior999
Other accident and health
2021106
2020251
2019260
2018445
2017572
Prior263
Obligations under securities lending-



F-53
UNION SECURITY INSURANCE COMPANY
Supplemental Schedules

GrossAdmitted Invested Assets
InvestmentReported in the Annual Statement
Investment CategoriesHoldingsAmountPercentage
Long-Term Bonds (Schedule D, Part 1):
U.S. governments$ 7,210$ 7,2100.8%
All other governments--0.0%
U.S. states, territories and possessions, etc. guaranteed2,4142,4140.3%
U.S. political subdivisions of states, territories,
and possessions, guaranteed29,64329,6433.2%
U.S. special revenue and special assessment
obligations, etc. non-guaranteed51,09551,0955.6%
Industrial and miscellaneous725,612725,61279.2%
Hybrid securities--0.0%
Parent, subsidiaries and affiliates--0.0%
SVO identified funds--0.0%
Unaffiliated Bank loans--0.0%
Total long-term bonds815,974815,97489.1%
Preferred stocks
Industrial and miscellaneous (Unaffiliated)30,54330,5433.3%
Parent, subsidiaries and affiliates--0.0%
Total preferred stocks30,54330,5433.3%
Common stocks--0.0%
Mortgage loans43,81643,8164.9%
Cash, cash equivalents and short-term investments10,47310,4731.1%
Contract loans4,9244,9240.5%
Derivatives3103100.0%
Other invested assets (Schedule BA)10,35910,3591.1%
Receivable for securities--0.0%
Total invested assets$ 916,399$ 916,399100.0%











F-54
UNION SECURITY INSURANCE COMPANY
Supplemental Schedules

1.USIC has applied reinsurance accounting, as described in SSAP No. 61R, to reinsurance contracts entered into, renewed or amended on or after January 1, 1996, which do not include risk-limiting features, as described in SSAP No. 61R.
2.USIC has not entered into, renewed or amended reinsurance contracts on or after January 1, 1996, which contain provisions that allow (1) the reporting of losses or settlements with the reinsurer to occur less frequently than quarterly or (2) payments due from the reinsurer to not be made in cash within ninety days of the settlement date unless there is no activity during the period.
3.USIC has not entered into, renewed or amended reinsurance contracts on or after January 1, 1996, which contain a payment schedule, accumulating retentions from multiple years or any features inherently designed to delay timing of the reimbursement to the ceding company.
4.USIC has not ceded any risk during the period ended December 31, 2020 under any reinsurance contracts entered into, renewed or amended on or after January 1, 1996 accounted for as reinsurance under GAAP and as a deposit under SSAP No. 61R.
5.USIC cedes certain annuity contracts which are accounted for as reinsurance ceded under statutory accounting. These contracts are accounted for as investment-type contracts under GAAP; as such, deposits are not reported as revenues for GAAP. Consequently, deposit accounting is used to account for the reinsurance agreement for GAAP.
F-55
UNION SECURITY INSURANCE COMPANY
Supplemental Schedules
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F-56
UNION SECURITY INSURANCE COMPANY
Supplemental Schedules
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F-57
UNION SECURITY INSURANCE COMPANY
Supplemental Schedules
picture5.jpg
F-58
UNION SECURITY INSURANCE COMPANY
Supplemental Schedules
picture6.jpg

F-59
UNION SECURITY INSURANCE COMPANY
Supplemental Schedules
picture7.jpg
F-60
UNION SECURITY INSURANCE COMPANY
Supplemental Schedules
picture8.jpg
F-61