Edgar Filing: ASSURANT INC

Form 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2007

¨	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Assurant, Inc.

(Exact name of registrant as specified in its charter)

Delaware

001-31978

39-1126612

(State or other jurisdiction

of incorporation)

(Commission File Number)

(I.R.S. Employer

Identification No.)

One Chase Manhattan Plaza, 41st Floor

New York, New York 10005

(212) 859-7000

(Address, including zip code, and telephone number, including

area code, of Registrant’s Principal Executive Offices)

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer x Accelerated filer ¨ Non-accelerated filer ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ¨ NO x

The number of shares of the registrant’s Common Stock outstanding at August 1, 2007 was 119,124,577.

ASSURANT, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2007

TABLE OF CONTENTS


Item Number		Page Number
	PART I FINANCIAL INFORMATION

1.	Financial Statements	2
	Assurant, Inc. and Subsidiaries Consolidated Balance Sheets at June 30, 2007 (unaudited) and December 31, 2006	2
	Assurant, Inc. and Subsidiaries Consolidated Statement of Operations (unaudited) for the three and six months ended June 30, 2007 and 2006	4
	Assurant, Inc. and Subsidiaries Consolidated Statement of Changes in Stockholders’ Equity (unaudited) from December 31, 2006 through June 30, 2007	5
	Assurant, Inc. and Subsidiaries Consolidated Statement of Cash Flows (unaudited) for the six months ended June 30, 2007 and 2006	6
	Assurant, Inc. and Subsidiaries Notes to Consolidated Financial Statements (unaudited) for the three and six months ended June 30, 2007 and 2006 (unaudited)	7
2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
3.	Quantitative and Qualitative Disclosures About Market Risk	39
4.	Controls and Procedures	39

	PART II OTHER INFORMATION

1.	Legal Proceedings	40
1A.	Risk Factors	40
2.	Unregistered Sale of Equity Securities and Use of Proceeds	40
4.	Submission of Matters to a Vote of Security Holders	41
6.	Exhibits	41
	Signatures	42

Assurant, Inc. and Subsidiaries

Consolidated Balance Sheets

At June 30, 2007 (unaudited) and December 31, 2006


	June 30, 2007		December 31, 2006
	(in thousands except number of shares)
Assets
Investments:
Fixed maturities available for sale, at fair value (amortized cost—$ 9,305,755 in 2007 and $8,934,017 in 2006)	$	9,267,665	$	9,118,049
Equity securities available for sale, at fair value (cost—$ 738,170 in 2007 and $735,566 in 2006)		727,170		741,639
Commercial mortgage loans on real estate, at amortized cost		1,356,957		1,266,158
Policy loans		57,872		58,733
Short-term investments		263,945		314,114
Collateral held under securities lending		629,263		365,958
Other investments		547,858		564,494

Total investments		12,850,730		12,429,145
Cash and cash equivalents		1,010,071		987,672
Premiums and accounts receivable, net		560,544		612,011
Reinsurance recoverables		3,865,447		3,914,972
Accrued investment income		142,470		137,803
Deferred acquisition costs		2,634,497		2,397,906
Property and equipment, at cost less accumulated depreciation		279,748		275,201
Goodwill		791,195		790,519
Value of business acquired		126,710		134,437
Other assets		195,661		186,939
Assets held in separate accounts		3,315,882		3,298,543

Total assets	$	25,772,955	$	25,165,148

See the accompanying notes to the consolidated financial statements

Assurant, Inc. and Subsidiaries

Consolidated Balance Sheets

At June 30, 2007 (unaudited) and December 31, 2006


	June 30, 2007			December 31, 2006
	(in thousands except number of shares)
Liabilities
Future policy benefits and expenses	$	6,818,728		$	6,766,343
Unearned premiums		4,860,076			4,429,893
Claims and benefits payable		3,403,060			3,412,166
Commissions payable		235,552			304,640
Reinsurance balances payable		107,397			84,891
Funds held under reinsurance		54,103			49,980
Deferred gain on disposal of businesses		233,316			249,911
Obligation under securities lending		629,263			365,958
Accounts payable and other liabilities		1,251,910			1,282,903
Deferred income taxes, net		3,677			57,157
Income taxes payable		51,621			36,232
Debt		971,818			971,774
Mandatorily redeemable preferred stock		22,160			22,160
Liabilities related to separate accounts		3,315,882			3,298,543

Total liabilities	$	21,958,563		$	21,332,551

Commitments and contingencies (Note 10)
Stockholders’ equity
Common stock, par value $.01 per share, 800,000,000 shares authorized, 143,777,034 and 143,080,961 shares issued, 119,883,278 and 122,618,317 shares outstanding at June 30, 2007 and December 31, 2006, respectively	$	1,436		$	1,430
Additional paid-in capital		2,893,403			2,894,892
Retained earnings		1,989,405			1,676,171
Accumulated other comprehensive (loss) income		(48,216	)		88,064
Treasury stock, at cost; 23,714,843 and 20,308,610 shares at June 30, 2007 and December 31 2006, respectively		(1,021,636	)		(827,960	)

Total stockholders’ equity		3,814,392			3,832,597

Total liabilities and stockholders’ equity	$	25,772,955		$	25,165,148

See the accompanying notes to the consolidated financial statements

Assurant, Inc. and Subsidiaries

Consolidated Statement of Operations (Unaudited)

Three and Six Months Ended June 30, 2007 and 2006


	Three Months Ended June 30,					Six Months Ended June 30,
	2007			2006		2007		2006
	(In thousands except number of shares and per share amounts)
Revenues
Net earned premiums and other considerations	$	1,798,687		$	1,685,322	$	3,558,196	$	3,357,975
Net investment income		190,302			180,438		407,198		373,000
Net realized (losses) gains on investments		(3,086	)		2,272		2,484		(2,180	)
Amortization of deferred gain on disposal of businesses		8,246			10,022		16,595		18,855
Fees and other income		70,578			71,036		137,517		131,222

Total revenues		2,064,727			1,949,090		4,121,990		3,878,872
Benefits, losses and expenses
Policyholder benefits		903,081			874,204		1,793,530		1,763,883
Amortization of deferred acquisition costs and value of business acquired		355,045			284,781		674,759		570,164
Underwriting, general and administrative expenses		538,831			542,627		1,093,116		1,039,676
Interest expense		15,296			15,315		30,593		30,630

Total benefits, losses and expenses		1,812,253			1,716,927		3,591,998		3,404,353
Income before income taxes and cumulative effect of change in accounting principle		252,474			232,163		529,992		474,519
Income taxes		86,194			81,027		184,255		162,458

Net income before cumulative effect of change in accounting principle		166,280			151,136		345,737		312,061
Cumulative effect of change in accounting principle		—			—		—		1,547

Net Income	$	166,280		$	151,136	$	345,737	$	313,608

Earnings per share:
Basic
Net income before cumulative effect of change in accounting principle	$	1.38		$	1.18	$	2.85	$	2.42
Cumulative effect of change in accounting principle		—			—		—		0.01

Net income	$	1.38		$	1.18	$	2.85	$	2.43

Diluted
Net income before cumulative effect of change in accounting principle	$	1.36		$	1.16	$	2.80	$	2.38
Cumulative effect of change in accounting principle		—			—		—		0.01

Net income	$	1.36		$	1.16	$	2.80	$	2.39

Dividends per share	$	0.12		$	0.10	$	0.22	$	0.18

Share Data:
Weighted average shares outstanding used in per share calculations		120,657,052			128,488,126		121,399,339		129,239,104
Plus: Dilutive securities		1,835,452			1,839,508		1,934,888		1,958,041

Weighted average shares used in diluted per share calculations		122,492,504			130,327,634		123,334,227		131,197,145

See the accompanying notes to the consolidated financial statements

Assurant, Inc. and Subsidiaries

Consolidated Statement of Changes in Stockholders’ Equity (unaudited)

From December 31, 2006 through June 30, 2007


	Common Stock		Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Total			Shares of Common Stock Issued
Balance, December 31, 2006	$	1,430	$	2,894,892		$	1,676,171		$	88,064		$	(827,960	)	$	3,832,597		143,080,961
Stock plan exercises		6		(18,234	)		—			—			—			(18,228	)	696,073
Stock plan compensation expense		—		9,371			—			—			—			9,371		—
Tax benefit of exercise of stock options		—		7,374			—			—			—			7,374		—
Dividends		—		—			(26,731	)		—			—			(26,731	)	—
Acquisition of Treasury Shares		—		—			—			—			(193,676	)		(193,676	)	—
Cumulative effect of change in accounting principles (Note 2)		—		—			(5,772	)		—			—			(5,772	)	—
Comprehensive income:
Net income		—		—			345,737			—			—			345,737		—
Other comprehensive income:
Net change in unrealized (losses) on securities, net of taxes		—		—			—			(156,126	)		—			(156,126	)	—
Foreign currency translation, net of taxes		—		—			—			15,115			—			15,115		—
Amortization of pension and postretirement unrecognized net periodic benefit (cost), net of taxes		—		—			—			4,731			—			4,731		—

Total other comprehensive income																(136,280	)	—

Total Comprehensive income:																209,457		—

Balance, June 30, 2007	$	1,436	$	2,893,403		$	1,989,405		$	(48,216	)	$	(1,021,636	)	$	3,814,392		143,777,034

See the accompanying notes to the consolidated financial statements

Assurant, Inc. and Subsidiaries

Consolidated Statement of Cash Flows (unaudited)

Six Months Ended June 30, 2007 and 2006


	Six Months Ended June 30,
	2007			2006
	(in thousands)
Net cash provided by operating activities	$	516,157		$	304,259

Investing activities
Sales of:
Fixed maturities available for sale		1,002,756			1,033,280
Equity securities available for sale		137,069			143,411
Property and equipment		105			1,359
Equity interest		1,151			—
Maturities, prepayments, and scheduled redemption of:
Fixed maturities available for sale		372,995			331,667
Purchases of:
Fixed maturities available for sale		(1,620,973	)		(1,820,858	)
Equity securities available for sale		(128,226	)		(168,640	)
Property and equipment		(29,965	)		(23,693	)
Subsidiary, net of cash (paid) received		(3,458	)		47,514
Change in commercial mortgage loans on real estate		(88,938	)		(39,618	)
Change in short term investments		51,774			188,937
Change in other invested assets		16,187			(11,468	)
Change in policy loans		988			1,944
Change in collateral held under securities lending		(263,305	)		4,723

Net cash (used in) investing activities		(551,840	)		(311,442	)

Financing activities
Repayment of mandatorily redeemable preferred stock		—			(1,000	)
Excess tax benefits from stock-based payment arrangements		7,374			675
Acquisition of treasury stock		(190,688	)		(163,496	)
Dividends paid		(26,731	)		(23,269	)
Change in obligation under securities lending		263,305			(4,723	)
Commercial paper issued		39,958			39,962
Commercial paper repaid		(40,000	)		(40,000	)

Net cash provided by (used in) financing activities		53,218			(191,851	)

Effect of exchange rate changes on cash and cash equivalents		4,864			6,966

Change in cash and cash equivalents		22,399			(192,068	)
Cash and cash equivalents at beginning of period		987,672			855,569

Cash and cash equivalents at end of period	$	1,010,071		$	663,501

See the accompanying notes to the consolidated financial statements

Assurant, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Six Months Ended June 30, 2007 and 2006

1.	Nature of Operations

Assurant, Inc. (formerly, Fortis, Inc.) (the “Company”) is a holding company whose subsidiaries provide specialized insurance products and related services in North America and selected international markets. Prior to the Initial Public Offering (the “IPO”) on February 5, 2004, Fortis, Inc. was incorporated in Nevada and was indirectly wholly owned by Fortis N.V. of the Netherlands and Fortis SA/NV of Belgium (collectively, “Fortis”) through their affiliates, including their wholly owned subsidiary, Fortis Insurance N.V.

In connection with the IPO, Fortis, Inc. was merged into Assurant, Inc., a Delaware corporation, which was formed solely for the purpose of the redomestication of Fortis, Inc. After the merger, Assurant, Inc. became the successor to the business, operations and obligations of Fortis, Inc. Assurant, Inc. is traded on the New York Stock Exchange under the symbol AIZ.

Through its operating subsidiaries, the Company provides creditor-placed homeowners insurance, manufactured housing homeowners insurance, debt protection administration, credit insurance, warranties and extended service contracts, individual health and small employer group health insurance, group dental insurance, group disability insurance, group life insurance and pre-funded funeral insurance.

2.	Basis of Presentation

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Accordingly, these statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

In the opinion of management, all adjustments (consisting only of normal recurring accruals) considered necessary for a fair statement of the financial statements have been included. Certain prior period amounts have been reclassified to conform to the 2007 presentation.

The Company recorded a cumulative effect of change in accounting principles of $(4,264) and $(1,508) on January 1, 2007. The charge of $(4,264) related to the adoption of AICPA Statement of Position 05-1, Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection With Modification or Exchange of Insurance Contracts, (“SOP 05-1”) and the charge of $(1,508) related to the adoption of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109 (“FIN 48”) (Note 3) are reflected in the statement of changes in stockholder’s equity as required. The Company also recorded a cumulative effect of change in accounting principle of $1,547 on January 1, 2006 related to the adoption of Statement of Financial Accounting Standards (“FAS”) No. 123 (revised 2004), Share Based Payment (“FAS 123R”) which is reflected in the statement of operations.

Amounts are in thousands, except for number of shares and per share amounts.

The consolidated financial statements include the accounts of the Company and all of its wholly owned subsidiaries. All inter-company transactions and balances are eliminated in consolidation.

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

Assurant, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Six Months Ended June 30, 2007 and 2006

3.	Recent Accounting Pronouncements

Recent Accounting Pronouncements Adopted

On January 1, 2007, the Company adopted SOP 05-1. SOP 05-1 provides guidance on internal replacements of insurance and investment contracts. An internal replacement is a modification in product benefits, features, rights or coverages that occurs by the exchange of a contract for a new contract or by amendment, endorsement, or rider to a contract, or by the election of a feature or coverage within a contract. Modifications that result in a new contract that is substantially different from the replaced contract are accounted for as an extinguishment of the replaced contract, and the associated unamortized DAC, unearned revenue liabilities and deferred sales inducements from the replaced contract must be reported as an expense immediately. Modifications resulting in a new contract that is substantially the same as the replaced contract are accounted for as a continuation of the replaced contract. Prior to the adoption of the SOP 05-1, certain internal replacements that did meet new criteria were accounted for as continuations of the replaced contract. Therefore, the accounting policy for certain internal replacements has changed as a result of the adoption of this SOP. At adoption, the Company recognized a $4,264 decrease to deferred acquisition costs, which was accounted for as a reduction to the January 1, 2007 balance of retained earnings.

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

On January 1, 2007, the Company adopted FIN 48. As a result of the implementation, the Company recognized a $1,508 increase to the liability for unrecognized tax benefits, which as required was accounted for as a reduction to the January 1, 2007 balance of retained earnings. At adoption, total unrecognized tax benefits are $33,339. Of the total unrecognized tax benefits, $11,998, if recognized, would impact the Company’s consolidated effective tax rate. The Company, or one of its subsidiaries, files income tax returns in the U.S. and various state and foreign jurisdictions. The Company has substantially concluded all U.S. federal income tax matters for years through 2002, with the exception of one item from 2001 that was under appeals. The issue under appeals relates to the sale of one of the Company’s businesses. During the second quarter of 2007, management agreed to a settlement with the IRS on this issue. The settlement did not result in a material change to the financial statements. Substantially all state, local and non-U.S. income tax matters have been concluded for the years through 1999. The Company’s continuing practice is to recognize interest and/or penalties related to income tax matters in income tax expense. At the date of adoption, the Company had $3,541 accrued for tax related interest and penalties on its Consolidated Balance Sheets. The Company does not anticipate a significant change to the total amount of unrecognized tax benefits within the next 12 months.

Assurant, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Six Months Ended June 30, 2007 and 2006

Recent Accounting Pronouncements Outstanding

In September 2006, the FASB issued FAS No. 157, Fair Value Measurements (“FAS 157”). FAS 157 defines fair value, addresses how companies should measure fair value when they are required to use a fair value measure for recognition or disclosure purposes under GAAP, and expands disclosures about fair value measurements. FAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Therefore, the Company is required to adopt FAS 157 in the first quarter of 2008. The Company is currently evaluating the requirements of FAS 157 and the potential impact on the Company’s financial statements.

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

In March 2007, the FASB ratified the consensus reached by the Emerging Issues Task Force (“EITF”) in Issue 06-10, Accounting for Deferred Compensation and Postretirement Benefit Aspects of Collateral Assignment Split-Dollar Life Insurance Arrangements (“EITF 06-10”). EITF 06-10 provides guidance regarding the employer’s recognition of the liability and the related compensation costs for collateral assignment split-dollar life insurance arrangements that provide a benefit to an employee that extends into postretirement periods. This consensus concludes that for a collateral assignment split-dollar life insurance arrangement, an employer should recognize a liability for future benefits in accordance with FASB Statement No. 106 (if, in substance, a postretirement benefit plan exists) or APB Opinion No. 12 (if the arrangement is, in substance, an individual deferred compensation contract) based on the substantive agreement with the employee. EITF 06-10 also provides guidance regarding the employer’s recognition of the asset in collateral assignment split-dollar life insurance arrangements. EITF 06-10 is effective for financial statements issued for fiscal years beginning after December 15, 2007 and therefore the Company is required to adopt EITF 06-10 in the first quarter of 2008. The Company is currently evaluating the requirements of EITF 06-10 and the potential impact on the Company’s financial statements.

Debt

In February 2004, the Company issued two series of senior notes with an aggregate principal amount of $975,000. The Company received net proceeds from this transaction of $971,537, which represents the principal amount less the discount. The discount will be amortized over the life of the notes.

The interest expense incurred related to the senior notes was $15,047 for the three months ended June 30, 2007 and 2006, respectively, and $30,094 for the six months ended June 30, 2007 and 2006, respectively. There was $22,570 of accrued interest at June 30, 2007 and 2006, respectively. The Company made an interest payment of $30,094 on February 15, 2007.

In March 2004, the Company established a $500,000 commercial paper program, which is available for working capital and other general corporate purposes. This program is backed up by a $500,000 senior revolving credit facility. On January 9, 2007 and April 18, 2007, the Company used $20,000 and $20,000, respectively, from the commercial paper program for general corporate purposes, which was repaid on January 16, 2007 and April 25, 2007, respectively. There were no amounts relating to the commercial paper program outstanding at June 30, 2007. The Company did not use the revolving credit facility during the six months ended June 30, 2007 and no amounts are currently outstanding.

Assurant, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Six Months Ended June 30, 2007 and 2006

The revolving credit facility contains restrictive covenants. The terms of the revolving credit facility also require that the Company maintain certain specified minimum ratios and thresholds. The Company is in compliance with all covenants and the Company maintains all specified minimum ratios and thresholds.

5.	Stock Based Compensation

Directors Compensation Plan

The Company’s Directors Compensation Plan permits the issuance of up to 500,000 shares of the Company’s common stock to Non-Employee Directors. The compensation expense recorded related to these shares was $625 and $565 for the three and six months ended June 30, 2007 and 2006, respectively.

Long-Term Incentive Plan

The 2004 Long-Term Incentive Plan provides for the granting of up to 10,000,000 shares of the Company’s common stock to employees and officers under the Assurant Long Term Incentive Plan, Business Value Rights Program and CEO Equity Grants Program.

Restricted Stock

A summary of the Company’s outstanding Restricted Stock as of June 30, 2007, is presented below:


	Shares		Weighted-Average Grant-Date Fair Value
Shares outstanding at December 31, 2006	154,033		$	45.55
Grants	83,409			53.88
Vests	(52,863	)		44.08
Forfeitures	(5,667	)		46.48

Shares outstanding at June 30, 2007	178,912		$	49.84

The compensation expense recorded related to restricted stock was $912 and $909 for the three months ended June 30, 2007 and 2006, respectively, and $2,080 and $1,520 for the six months ended June 30, 2007 and 2006, respectively. The related total income tax benefit recognized was $319 and $318 for the three months ended June 30, 2007 and 2006, respectively, and $728 and $531 for the six months ended June 30, 2007 and 2006, respectively. The weighted average grant date fair value for restricted stock granted during the six months ended June 30, 2007 and 2006 was $53.88 and $49.36, respectively.

As of June 30, 2007, there was $5,198 of unrecognized compensation cost related to outstanding restricted stock. That cost is expected to be recognized over a weighted-average period of 1.4 years. The total fair value of shares vested during the three months ended June 30, 2007 and 2006 was $2,826 and $1,296, respectively, and $3,003 and $2,231 for the six months ended June 30, 2007 and 2006, respectively.

Assurant, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Six Months Ended June 30, 2007 and 2006

Stock Appreciation Rights (“SAR”)

A summary of the Company’s SARs as of June 30, 2007 is presented below:


	Rights		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
SARs outstanding, December 31, 2006	6,212,180		$	32.35
Grants	1,541,505			53.52
Exercises	(1,573,858	)		24.66
Forfeitures and adjustments	(125,201	)		45.16

SARs outstanding, June 30, 2007	6,054,626		$	39.48	4.1	$	117,735

SARs exercisable at June 30, 2007	2,165,788		$	25.86	5.3	$	71,620

There were 9,980 and 1,400,377 SARs granted during the three months ended June 30, 2007 and 2006, respectively, and 1,541,505 and 1,400,377 SARs granted during the six months ended June 30, 2007 and 2006, respectively. The compensation expense recorded related to SARs was $3,840 and $3,728 for the three months ended June 30, 2007 and 2006, respectively, and $6,005 and $6,678 for the six months ended June 30, 2007 and 2006, respectively. The related income tax benefit recognized was $1,305 and $1,274 for the three months ended June 30, 2007 and 2006, respectively, and $2,063 and $2,306 for the six months ended June 30, 2007 and 2006, respectively. The weighted average grant date fair value for SARs granted during the six months ended June 30, 2007 was $11.37.

The total intrinsic value of SARs exercised during the six months ended June 30, 2007 and 2006 was $52,447 and $8,406, respectively. As of June 30, 2007, there was approximately $22,956 of unrecognized compensation cost related to outstanding SARs. That cost is expected to be recognized over a weighted-average period of 1.7 years.

The fair value of each SAR outstanding was estimated on the date of grant using the Black-Scholes option-pricing model. Expected volatilities for awards issued during the six months ended June 30, 2007 were based on the median historical stock price volatility of a peer group of insurance companies and implied volatilities from traded options on the Company’s stock. The expected term for grants issued during the six months ended June 30, 2007 was assumed to equal the average of the vesting period of the SARs and the full contractual term of the SARs. The risk-free rate for periods within the contractual life of the option was based on the U.S. Treasury yield curve in effect at the time of grant.


	For awards granted during the six months ended June 30,
	2007	2006
Expected Volatility	19.99 - 20.57%	20.25 - 22.85%
Risk Free Interest Rates	4.41 - 4.43%	4.77 - 4.89%
Dividend Yield	0.75%	0.65%
Expected Life	3.0 - 4.0	3.00 - 3.88

Assurant, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Six Months Ended June 30, 2007 and 2006

Employee Stock Purchase Plan

Under the Employee Stock Purchase Plan (“ESPP”), the Company is authorized to issue up to 5,000,000 new shares to employees who are participants in the ESPP. The compensation expense recorded related to the ESPP was $324 and $257 for the three months ended June 30, 2007 and 2006, respectively, and $660 and $574 for the six months ended June 30, 2007 and 2006, respectively.

In January 2007, the Company issued 80,282 shares to employees at a price of $43.52 for the offering period of July 1 through December 31, 2006, related to the ESPP. In January 2006, the Company issued 73,992 shares to employees at a price of $32.59 for the offering period of July 1 through December 31, 2005, related to the ESPP.

In July 2007, the Company issued 75,468 shares to employees at a price of $50.26 for the offering period of January 1 through June 30, 2007, related to the ESPP. In July 2006, the Company issued 78,575 shares to employees at a price of $39.66 for the offering period of January 1 through June 30, 2006, related to the ESPP.

The fair value of each award under the ESPP was estimated at the beginning of each offering period using the Black-Scholes option-pricing model and the assumptions in the following table. Expected volatilities are based on implied volatilities from traded options on the Company’s stock and the historical volatility of the Company’s stock. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.


	For awards issued during the six months ended June 30,
	2007		2006
Expected Volatility	22.43	%	21.09	%
Risk Free Interest Rates	5.24	%	3.35	%
Dividend Yield	0.82	%	0.88	%
Expected Life	0.5		0.5

Assurant, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Six Months Ended June 30, 2007 and 2006

6.	Stock Repurchase

The following table shows the shares repurchased during the periods indicated:


Period in 2007	Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Program
January	360,000	$	56.12	360,000
February	370,000		54.70	370,000
March	691,833		53.50	691,833
April	623,000		57.01	623,000
May	647,700		59.78	647,700
June	713,700		58.82	713,700

Total	3,406,233	$	56.86	3,406,233

For the six months ended June 30, 2007, the Company repurchased 3,406,233 shares of the Company’s outstanding common stock at a cost of $193,676 and has $379,879 remaining to purchase shares pursuant to the November 10, 2006 publicly announced repurchase program.

Assurant, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Six Months Ended June 30, 2007 and 2006

7.	Earnings Per Common Share

The following table presents the weighted average common shares used in calculating basic earnings per common share and those used in calculating diluted earnings per common share for each income category presented below.


	Three months ended June 30,				Six months ended June 30,
	2007		2006		2007		2006
Numerator
Net income before cumulative effect of change in accounting principle	$	166,280	$	151,136	$	345,737	$	312,061
Cumulative effect of change in accounting principle (Note 2)		—		—		—		1,547

Net income	$	166,280	$	151,136	$	345,737	$	313,608

Denominator
Weighted average shares outstanding used in basic per share calculations		120,657,052		128,488,126		121,399,339		129,239,104
Incremental common shares from assumed:
SARs		1,671,766		1,749,120		1,777,823		1,818,701
Restricted stock		88,127		54,400		81,506		54,660
ESPP		75,559		35,988		75,559		84,680

Weighted average shares used in diluted per share calculations		122,492,504		130,327,634		123,334,227		131,197,145

Earnings per share:
Basic
Net income before cumulative effect of change in accounting principle	$	1.38	$	1.18	$	2.85	$	2.42
Cumulative effect of change in accounting principle		—		—		—		0.01

Net income	$	1.38	$	1.18	$	2.85	$	2.43

Diluted
Net income before cumulative effect of change in accounting principle	$	1.36	$	1.16	$	2.80	$	2.38
Cumulative effect of change in accounting principle		—		—		—		0.01

Net income	$	1.36	$	1.16	$	2.80	$	2.39

Average restricted shares totaling 220 and 16,125 for the three months ended June 30, 2007 and 2006, respectively, and 43,475 and 39,325 for the six months ended June 30, 2007 and 2006, respectively, were outstanding but were anti-dilutive and thus not included in the computation of diluted EPS under the treasury stock method. Average SARs totaling 1,512,666 and 698,939 for the three months ended June 30, 2007 and 2006, respectively, and 975,700 and 742,317 for the six months ended June 30, 2007 and 2006, respectively, were also outstanding but were anti-dilutive and thus not included in the computation of diluted EPS under the treasury stock method.

Assurant, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Six Months Ended June 30, 2007 and 2006

8.	Retirement and Other Employee Benefits

The components of net periodic benefit cost for the Company’s qualified pension benefits plan, nonqualified pension benefits plan and retirement health benefits plan for the three and six months ended June 30, 2007 and 2006 were as follows:


	Qualified Pension Benefits						Nonqualified Pension Benefits (1)				Retirement Health Benefits
	For the three months ended June 30,						For the three months ended June 30,				For the three months ended June 30,
	2007			2006			2007		2006		2007			2006
Service cost	$	5,184		$	4,961		$	509	$	465	$	734		$	698
Interest cost		6,165			5,459			1,429		1,316		866			771
Expected return on plan assets		(8,141	)		(7,135	)		—		—		(314	)		(283	)
Amortization of prior service cost		764			764			275		165		336			333
Amortization of net loss		1,868			1,996			385		904		—			—
Settlement Charge under FAS 88		—			—			115		609		—			—

Net periodic benefit cost	$	5,840		$	6,045		$	2,713	$	3,459	$	1,622		$	1,519

	Qualified Pension Benefits						Nonqualified Pension Benefits (1)				Retirement Health Benefits
	For the six months ended June 30,						For the six months ended June 30,				For the six months ended June 30,
	2007			2006			2007		2006		2007			2006
Service cost	$	10,234		$	9,861		$	1,009	$	915	$	1,484		$	1,398
Interest cost		12,215			10,734			2,804		2,616		1,766			1,596
Expected return on plan assets		(15,941	)		(14,160	)		—		—		(614	)		(558	)
Amortization of prior service cost		1,539			1,539			600		340		661			658
Amortization of net loss		3,468			4,071			1,010		1,829		—			—
Settlement Charge under FAS 88		—			—			115		609		—			—

Net periodic benefit cost	$	11,515		$	12,045		$	5,538	$	6,309	$	3,297		$	3,094

(1)	The Company’s nonqualified plans are unfunded.

During the first six months of 2007, the Company contributed $20,000 to the qualified pension benefits plan. The Company expects to contribute $40,000 to the qualified pension benefits plan for the full year 2007.

9.	Segment Information

On April 1, 2006, the Company separated Assurant Solutions business segment into two business segments: Assurant Solutions and Assurant Specialty Property. In addition, concurrent with the creation of the new Assurant Solutions and Assurant Specialty Property segments, the Company realigned the Preneed segment under the new Assurant Solutions segment.

In connection with the segment changes described above, the Company transferred the run-off Asbestos business previously in the Assurant Solutions segment to the Corporate & Other segment. The transfer of this business is consistent with the Company’s policy of managing run-off business in the Corporate & Other segment.

Assurant, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Six Months Ended June 30, 2007 and 2006

The Company has five reportable segments, which are defined based on the nature of the products and services offered: Assurant Solutions, Assurant Specialty Property, Assurant Health, Assurant Employee Benefits, and Corporate & Other. Assurant Solutions provides credit insurance, including life, disability and unemployment, debt protection administration services, warranties and extended service contracts, life insurance policies and annuity products that provide benefits to fund pre-arranged funerals. Assurant Specialty Property provides creditor-placed homeowners insurance and manufactured housing homeowners insurance. Assurant Health provides individual, short-term and small group health insurance. Assurant Employee Benefits provides employee and employer paid dental, disability, and life insurance products and related services. Corporate & Other includes activities of the holding company, financing and interest expenses, net realized gains (losses) on investments, interest income earned from short-term investments held and additional costs associated with excess of loss reinsurance programs reinsured and ceded to certain subsidiaries in the London market between 1995 and 1997. Corporate & Other also includes the amortization of deferred gains associated with the sales of Fortis Financial Group and Long-Term Care through reinsurance agreements.

The Company evaluates performance of the operating business segments based on segment income (loss) after-tax excluding realized gains (losses) on investments. The Company determines reportable segments in a manner consistent with the way the Company organizes for purposes of making operating decisions and assessing performance.

The following tables summarize selected financial information by segment:

Assurant, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Six Months Ended June 30, 2007 and 2006


	Three Months Ended June 30, 2007
	Solutions		Specialty Property		Health		Employee Benefits		Corporate & Other			Consolidated
Revenues
Net earned premiums and other considerations	$	618,675	$	393,614	$	513,936	$	272,462	$	—		$	1,798,687
Net investment income		100,784		23,667		16,290		39,408		10,153			190,302
Net realized losses on investments		—		—		—		—		(3,086	)		(3,086	)
Amortization of deferred gain on disposal of businesses		—		—		—		—		8,246			8,246
Fees and other income		40,957		12,654		10,445		6,379		143			70,578

Total revenues		760,416		429,935		540,671		318,249		15,456			2,064,727
Benefits, losses and expenses
Policyholder benefits		258,527		130,866		329,327		184,361		—			903,081
Amortization of deferred acquisition costs and value of business acquired		276,882		65,448		4,617		8,098		—			355,045
Underwriting, general and administrative expenses		178,258		93,844		154,471		92,964		19,294			538,831
Interest expense		—		—		—		—		15,296			15,296

Total benefits, losses and expenses		713,667		290,158		488,415		285,423		34,590			1,812,253
Segment income (loss) before income tax		46,749		139,777		52,256		32,826		(19,134	)		252,474
Income taxes		16,539		49,570		18,418		11,351		(9,684	)		86,194

Segment income (loss) after tax	$	30,210	$	90,207	$	33,838	$	21,475	$	(9,450	)

Net Income												$	166,280


	Three Months Ended June 30, 2006
	Solutions		Specialty Property		Health		Employee Benefits		Corporate & Other			Consolidated
Revenues
Net earned premiums and other considerations	$	592,182	$	290,972	$	519,587	$	282,581	$	—		$	1,685,322
Net investment income		98,951		17,923		17,110		38,744		7,710			180,438
Net realized gains on investments		—		—		—		—		2,272			2,272
Amortization of deferred gain on disposal of businesses		—		—		—		—		10,022			10,022
Fees and other income		39,525		13,587		10,250		7,547		127			71,036

Total revenues		730,658		322,482		546,947		328,872		20,131			1,949,090
Benefits, losses and expenses
Policyholder benefits		247,208		110,474		321,322		195,195		5			874,204
Amortization of deferred acquisition costs and value of business acquired		212,671		59,541		6,374		6,195		—			284,781
Underwriting, general and administrative expenses		211,758		62,828		156,645		95,632		15,764			542,627
Interest expense		—		—		—		—		15,315			15,315

Total benefits, losses and expenses		671,637		232,843		484,341		297,022		31,084			1,716,927
Segment income (loss) before income tax		59,021		89,639		62,606		31,850		(10,953	)		232,163
Income taxes		21,873		30,363		21,590		11,260		(4,059	)		81,027

Segment income (loss) after tax	$	37,148	$	59,276	$	41,016	$	20,590	$	(6,894	)

Net Income												$	151,136

Assurant, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Six Months Ended June 30, 2007 and 2006


	Six Months Ended June 30, 2007
	Solutions		Specialty Property		Health		Employee Benefits		Corporate & Other			Consolidated
Revenues
Net earned premiums and other considerations	$	1,201,686	$	760,655	$	1,026,720	$	569,135	$	—		$	3,558,196
Net investment income		212,801		45,536		35,560		91,295		22,006			407,198
Net realized gains on investments		—		—		—		—		2,484			2,484
Amortization of deferred gain on disposal of businesses		—		—		—		—		16,595			16,595
Fees and other income		79,008		25,250		20,133		12,656		470			137,517

Total revenues		1,493,495		831,441		1,082,413		673,086		41,555			4,121,990
Benefits, losses and expenses
Policyholder benefits		501,871		247,653		647,111		396,895		—			1,793,530
Amortization of deferred acquisition costs and value of business acquired		518,760		130,573		10,726		14,700		—			674,759
Underwriting, general and administrative expenses		364,025		199,518		309,772		184,388		35,413			1,093,116
Interest expense		—		—		—		—		30,593			30,593

Total benefits, losses and expenses		1,384,656		577,744		967,609		595,983		66,006			3,591,998
Segment income (loss) before income tax		108,839		253,697		114,804		77,103		(24,451	)		529,992
Income taxes		34,560		89,056		40,442		26,671		(6,474	)		184,255

Segment income (loss) after tax	$	74,279	$	164,641	$	74,362	$	50,432	$	(17,977	)

Net income												$	345,737


	At June 30, 2007
Segment Assets:
Segments assets, excluding goodwill	$	11,134,734	$	2,571,878	$	1,301,030	$	2,866,731	$	7,107,387		$	24,981,760

Goodwill													791,195

Total Assets												$	25,772,955


	Six Months Ended June 30, 2006
	Solutions		Specialty Property		Health		Employee Benefits		Corporate & Other			Consolidated
Revenues
Net earned premiums and other considerations	$	1,162,570	$	543,721	$	1,042,992	$	608,692	$	—		$	3,357,975
Net investment income		196,033		34,713		41,111		79,583		21,560			373,000
Net realized losses on investments		—		—		—		—		(2,180	)		(2,180	)
Amortization of deferred gain on disposal of businesses		—		—		—		—		18,855			18,855
Fees and other income		73,695		23,045		19,976		14,379		127			131,222

Total revenues		1,432,298		601,479		1,104,079		702,654		38,362			3,878,872
Benefits, losses and expenses
Policyholder benefits		495,588		180,933		646,723		440,634		5			1,763,883
Amortization of deferred acquisition costs and value of business acquired		430,378		114,037		13,473		12,276		—			570,164
Underwriting, general and administrative expenses		388,929		117,421		312,258		188,665		32,403			1,039,676
Interest expense		—		—		—		—		30,630			30,630

Total benefits, losses and expenses		1,314,895		412,391		972,454		641,575		63,038			3,404,353
Segment income (loss) before income tax		117,403		189,088		131,625		61,079		(24,676	)		474,519
Income taxes		40,508		65,368		45,513		21,304		(10,235	)		162,458

Segment income (loss) after tax	$	76,895	$	123,720	$	86,112	$	39,775	$	(14,441	)	$	312,061

Cumulative effect of change in accounting principle													1,547

Net income												$	313,608

	At December 31, 2006
Segment Assets:
Segments assets, excluding goodwill	$	10,637,152	$	2,189,673	$	1,278,108	$	2,806,337	$	7,463,359		$	24,374,629

Goodwill													790,519

Total Assets												$	25,165,148

Assurant, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Six Months Ended June 30, 2007 and 2006

10.

Commitments and Contingencies

In the normal course of business, letters of credit are issued primarily to support reinsurance arrangements. These letters of credit are supported by commitments with financial institutions. The Company had $33,813 of letters of credit outstanding as of June 30, 2007.

The Company is involved in litigation in the ordinary course of business, both as a defendant and as a plaintiff. The Company may from time to time be subject to a variety of legal and regulatory actions relating to the Company’s current and past business operations. While the Company cannot predict the outcome of any pending or future litigation, examination or investigation and although no assurances can be given, the Company does not believe that any pending matter will have a material adverse effect individually or in the aggregate, on the Company’s financial condition, results of operations, or cash flows.

One of the Company’s subsidiaries, American Reliable Insurance Company (“ARIC”), participated in certain excess of loss reinsurance programs in the London market and, as a result, reinsured certain personal accident, ransom and kidnap insurance risks from 1995 to 1997. ARIC and a foreign affiliate ceded a portion of these risks to retrocessionaires. ARIC ceased reinsuring such business in 1997. However, certain risks continued beyond 1997 due to the nature of the reinsurance contracts written. ARIC and some of the other reinsurers involved in the programs are seeking to avoid certain treaties on various grounds, including material misrepresentation and non-disclosure by the ceding companies and intermediaries involved in the programs. Similarly, some of the retrocessionaires are seeking avoidance of certain treaties with ARIC and the other reinsurers and some reinsureds are seeking collection of disputed balances under some of the treaties. The disputes generally involve multiple layers of reinsurance, and allegations that the reinsurance programs involved interrelated claims “spirals” devised to disproportionately pass claims losses to higher-level reinsurance layers.

Many of the companies involved in these programs, including ARIC, are currently involved in negotiations, arbitrations and/or litigation between multiple layers of retrocessionaires, reinsurers, ceding companies and intermediaries, including brokers, in an effort to resolve these disputes. Many of the disputes involving ARIC and an affiliate, Bankers Insurance Company Limited (“BICL”), relating to the 1995 and 1997 program years, were resolved by settlement or arbitration in 2005. As a result of the settlements and an arbitration (in which ARIC did not prevail) additional information became available in 2005, and based on management’s best estimate, the Company increased its reserves and recorded a total pre-tax charge of $61,943 for the year ended December 31, 2005. Negotiations, arbitrations and litigation are still ongoing or will be scheduled for the remaining disputes. On February 28, 2006 there was a settlement relating to the 1996 program. Loss accruals previously established relating to the 1996 program were adequate. The Company believes, based on information currently available, that the amounts accrued for currently outstanding disputes are adequate. However, the inherent uncertainty of arbitrations and lawsuits, including the uncertainty of estimating whether any settlements the Company may enter into in the future would be on favorable terms, makes it difficult to predict the outcomes with certainty.

As part of an ongoing, industry-wide investigation, the Company has received subpoenas and requests from the Securities and Exchange Commission in connection with its investigation into certain loss mitigation products. The Company is cooperating fully and is complying with the requests.

The Company conducted an evaluation of the transactions that could potentially fall within the scope of the subpoenas, as defined by the authorities, and has provided information as requested. Based on the Company’s investigation to date, the Company has concluded that there was a verbal side agreement with respect to one of our reinsurers under our catastrophic reinsurance program. While management believes that the difference resulting from the appropriate alternative accounting treatment would be immaterial to our financial position or results of operations, regulators may reach a different conclusion. In 2004 and 2003, premiums ceded to this reinsurer were $2,600 and $1,500, respectively, and losses ceded were $10,000 and zero, respectively. This contract expired in December 2004 and was not renewed.

In July 2007, the Company learned that each of the following five individuals, Robert B. Pollock, President and Chief Executive Officer, Philip Bruce Camacho, Executive Vice President and Chief Financial Officer, Adam Lamnin, Executive Vice President and Chief Financial Officer of Assurant Solutions/Assurant Specialty Property, Michael Steinman, Senior Vice President and Chief Actuary of Assurant Solutions/Assurant Specialty Property and Dan Folse, Vice President-Risk Management of Assurant Solutions/Assurant Specialty Property, received Wells notices from the SEC in connection with its ongoing investigation. A Wells notice is an indication that the staff of the SEC is considering recommending that the SEC bring a civil

Assurant, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Six Months Ended June 30, 2007 and 2006

enforcement action against the recipient for violating various provisions of the federal securities laws. Under SEC procedures, the recipients have the opportunity to respond to the SEC staff before a formal recommendation is finalized. The Board of Directors formed a Special Committee of non-management directors that continues the Board’s work of evaluating the situation. Since its formation, the Special Committee has reviewed the relevant documents, conducted interviews and worked with outside counsel in order to continue the investigation begun by the Audit Committee and to recommend appropriate actions to the Board with respect to the SEC investigation. On July 17, 2007, the Company announced that the Board of Directors had placed all five employees on administrative leave, pending further review of this matter. On July 18, the Board of Directors appointed J. Kerry Clayton as interim President and Chief Executive Officer and Michael J. Peninger as interim Chief Financial Officer of the Company. On August 9, 2007, Messrs. Steinman and Folse’s employment with the Company was terminated. Messrs. Pollock, Camacho, and Lamnin remain on administrative leave.

In relation to the SEC investigation discussed above, the SEC may impose fines and/or penalties on the Company and individuals involved; however, the Company has not accrued for fines and/or penalties since it cannot reasonably estimate the amount of such fines and/or penalties at this time.

11.

Subsequent Events

On July 12, 2007, the Company acquired Swansure Group (“Swansure”), a privately held company in the United Kingdom. Swansure owns D&D Homecare Limited and Adminicle Limited. D&D Homecare designs and distributes general insurance products, including mortgage payment protection and buildings and contents insurance. Adminicle provides a range of insurance administration and outsourcing services, including premium processing and disbursement, policy fulfillment, claims and data processing, and performance reporting.

On July 1, 2007, the Company acquired 100% of the outstanding stock of Mayflower National Life Insurance Company (“Mayflower”). Mayflower is a leading provider of preneed insurance products and services and is expected to add approximately $52,000 of additional annual net earned premiums to the Assurant Solutions segment.

Please also see Note 10—Commitments and Contingencies regarding developments in the SEC investigation.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

(Dollar amounts in thousands except share data)

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) addresses the financial condition of Assurant, Inc. and its subsidiaries (which we refer to collectively as Assurant) as of June 30, 2007, compared with December 31, 2006, and our results of operations for the three and six months ended June 30, 2007 and 2006. This discussion should be read in conjunction with our MD&A and annual audited financial statements as of December 31, 2006 included in our Annual Report on Form 10-K for the year ended December 31, 2006 filed with the U.S Securities and Exchange Commission (“SEC”) and the June 30, 2007 unaudited consolidated financial statements and related notes included elsewhere in this Form 10-Q.

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

Company Overview

Assurant is a premier provider of specialized insurance products and related services in North America and selected international markets. On April 1, 2006, the Company separated the Assurant Solutions business segment into two business segments: Assurant Solutions and Assurant Specialty Property. In addition, concurrent with the creation of the new Assurant Solutions and Assurant Specialty Property segments, the Company realigned the Preneed segment under the new Assurant Solutions segment. The four business segments — Assurant Solutions; Assurant Specialty Property; Assurant Health; and Assurant Employee Benefits — have partnered with clients who are leaders in their industries and have built leadership positions in a number of specialty insurance market segments in the U.S. and selected international markets. The Assurant business segments provide creditor-placed homeowners insurance; manufactured housing homeowners insurance; debt protection administration services; credit insurance including life, disability and unemployment; warranties and extended services contracts; individual, short-term and small employer group health insurance; group dental insurance; group disability insurance; group life insurance; and pre-funded funeral insurance.

Critical Factors Affecting Results

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

Critical Accounting Policies and Estimates

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

Recent Accounting Pronouncements

See – Financial Statement Footnote 3.

Assurant Consolidated

Overview

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


	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2007			2006			2007			2006
	(in thousands)						(in thousands)
Revenues:
Net earned premiums and other considerations	$	1,798,687		$	1,685,322		$	3,558,196		$	3,357,975
Net investment income		190,302			180,438			407,198			373,000
Net realized (losses) gains on investments		(3,086	)		2,272			2,484			(2,180	)
Amortization of deferred gain on disposal of businesses		8,246			10,022			16,595			18,855
Fees and other income		70,578			71,036			137,517			131,222

Total revenues		2,064,727			1,949,090			4,121,990			3,878,872

Benefits, losses and expenses:
Policyholder benefits		(903,081	)		(874,204	)		(1,793,530	)		(1,763,883	)
Selling, underwriting and general expenses (1)		(893,876	)		(827,408	)		(1,767,875	)		(1,609,840	)
Interest expense		(15,296	)		(15,315	)		(30,593	)		(30,630	)

Total benefits, losses and expenses		(1,812,253	)		(1,716,927	)		(3,591,998	)		(3,404,353	)

Income before income tax and cumulative effect of change in accounting principle		252,474			232,163			529,992			474,519
Income taxes		(86,194	)		(81,027	)		(184,255	)		(162,458	)

Net Income before cumulative effect of change in accounting principle		166,280			151,136			345,737			312,061

Cumulative effect of change in accounting principle		—			—			—			1,547

Net Income	$	166,280		$	151,136		$	345,737		$	313,608

(1)	Includes amortization of DAC and VOBA and underwriting, general and administrative expenses.

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

Net Income

Net income increased by $15,144, or 10%, to $166,280 for the three months ended June 30, 2007 from $151,136 for the three months ended June 30, 2006. The increase was primarily driven by improvement in Assurant Specialty Property’s creditor-placed homeowners business including results from the acquisition of Safeco Financial Insurance Services (“SFIS”) in May 2006, and to a lesser extent, continued favorable group disability and group life experience from Assurant Employee Benefits. These increases were partially offset by continued unfavorable loss experience in Assurant Solutions’ domestic extended service contract business, mainly related to two clients, and a decline in Assurant Health’s small employer group business, which had lower premiums and unfavorable claim experience.

For The Six Months Ended June 30, 2007 Compared to The Six Months Ended June 30, 2006.

Net Income

Net income increased by $32,129, or 10%, to $345,737 for the six months ended June 30, 2007 from $313,608 for the six months ended June 30, 2006. The increase was primarily driven by improvement in Assurant Specialty Property’s creditor-placed homeowners business, including results from the SFIS acquisition in May 2006, and Assurant Employee Benefits’ investment income from real estate partnerships and continued favorable group disability and group life experience. These increases were partially offset by the continuing decline of Assurant Health’s small employer group business, which had lower premiums and unfavorable claim experience.

Assurant Solutions

Overview

The tables below present information regarding our Assurant Solutions’ segment results of operations:


	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2007			2006			2007			2006
	(in thousands)						(in thousands)
Revenues:
Net earned premiums and other considerations	$	618,675		$	592,182		$	1,201,686		$	1,162,570
Net investment income		100,784			98,951			212,801			196,033
Fees and other income		40,957			39,525			79,008			73,695

Total revenues		760,416			730,658			1,493,495			1,432,298

Benefits, losses and expenses:
Policyholder benefits		(258,527	)		(247,208	)		(501,871	)		(495,588	)
Selling, underwriting and general expenses		(455,140	)		(424,429	)		(882,785	)		(819,307	)

Total benefits, losses and expenses		(713,667	)		(671,637	)		(1,384,656	)		(1,314,895	)

Segment income before income tax		46,749			59,021			108,839			117,403
Income taxes		(16,539	)		(21,873	)		(34,560	)		(40,508	)

Segment income after tax	$	30,210		$	37,148		$	74,279		$	76,895

Net earned premiums and other considerations:
Domestic:
Credit	$	76,109		$	98,206		$	157,030		$	194,057
Service Contracts		280,274			256,135			542,137			506,117
Other (1)		15,517			19,759			32,206			43,458

Total Domestic		371,900			374,100			731,373			743,632

International:
Credit		92,413			97,612			189,290			185,822
Service Contracts		62,543			24,416			105,260			39,177
Other (1)		10,260			13,311			19,239			27,244

Total International		165,216			135,339			313,789			252,243

Preneed		81,559			82,743			156,524			166,695

Total	$	618,675		$	592,182		$	1,201,686		$	1,162,570

Fee Income:
Domestic:
Debt protection	$	7,469		$	13,750		$	16,219		$	26,832
Service Contracts		17,190			14,432			34,067			26,999
Other (1)		5,205			4,796			11,698			8,818

Total Domestic		29,864			32,978			61,984			62,649

International		4,384			4,165			8,876			8,441
Preneed		6,709			2,382			8,148			2,605

Total	$	40,957		$	39,525		$	79,008		$	73,695


Gross written premiums (2):
Domestic:
Credit	$	167,738		$	182,489		$	329,581		$	351,416
Service Contracts		448,143			378,636			902,547			733,598
Other (1)		22,014			24,335			42,878			55,813

Total Domestic		637,895			585,460			1,275,006			1,140,827

International:
Credit		201,353			159,208			392,768			320,232
Service Contracts		86,948			71,330			166,530			137,586
Other (1)		13,933			11,817			24,355			23,254

Total International		302,234			242,355			583,653			481,072

Total	$	904,129		$	827,815		$	1,858,659		$	1,621,899

Preneed (face sales)	$	102,360		$	120,545		$	188,418		$	244,233

Combined ratio (3):
Domestic		100.8	%		99.1	%		100.9	%		99.5	%
International		109.7	%		100.0	%		106.1	%		97.8	%

(1)	This includes emerging products and run-off products lines.

(2)	Gross written premiums does not necessarily translate to an equal amount of subsequent net earned premiums since Assurant Solutions reinsures a portion of its premiums to insurance subsidiaries of its clients.

(3)	The combined ratio is equal to total benefits, losses and expenses divided by net earned premiums and other considerations and fees and other income excluding the preneed business.

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

Net Income

Segment net income decreased by $6,938, or 19%, to $30,210 for the three months ended June 30, 2007 from $37,148 for the three months ended June 30, 2006. Solutions’ net income declined primarily due to increased expenses related to our investments in international expansion and continued poor domestic service contract experience attributable to two clients. The second quarter of 2007 also included a net benefit of $3,610 (after-tax) related to three one-time items. These one-time items include $3,510 (after-tax) of contract settlement fees received related to the sale of marketing rights for the Independent U.S. preneed business, $4,500 (after-tax) of income stemming from improvements in our reconciliation of clients’ commission payable accounts, partially offset by $4,400 (after-tax) in losses resulting from unfavorable experience in a credit life product in Brazil, which has since been repriced for some clients and discontinued for another client.

Total Revenues

Total revenues increased by $29,758 or 4%, to $760,416 for the three months ended June 30, 2007 from $730,658 for the three months ended June 30, 2006. This increase is due to an increase in net earned premiums and other considerations of $26,493. The increase in premiums is primarily attributable to higher net earned premiums in our service contract and international businesses. These increases are partially offset by the decrease in the net earned premium in our Preneed business due to the sale of the Independent-U.S. distribution channel combined with the continued decline of our domestic credit insurance business. The revenue was partially offset by reduced fee income resulting from the loss of a debt deferment client.

We experienced growth in most of our core product lines, with the exception of our domestic credit insurance business and other run-off products. Gross written premiums in our domestic credit insurance business decreased by $14,751 due to the continued decline of this product line and the loss of a client. Gross written premiums from our international credit business increased by $42,145 primarily due to growth in Canada from existing clients, and in our expansion countries. Gross written premiums in our domestic service contract business increased by $69,507 due to the addition of a new client and growth generated from existing clients. Gross written premiums in our international service contract business increased by $15,618, mainly due to increased premium from existing clients. We experienced a decrease in our Preneed business due to the sale of the U.S. Independent distribution channel in November 2005.

Total Benefits, Losses and Expenses

Total benefits, losses and expenses increased by $42,030, or 6%, to $713,667 for the three months ended June 30, 2007 from $671,637 for the three months ended June 30, 2006. This increase was primarily due to an increase in selling underwriting and general expenses of $30,712. Commissions, taxes, licenses and fees, of which amortization of DAC is a component, increased by $28,343 primarily due to the associated increase in revenues, an increase in commission rates due to a change in the mix of business and losses resulting from unfavorable experience in a credit life product in Brazil, which has since been repriced for some clients and discontinued for another client. The commission rate increase is due to the higher commission rates on our growing service contract business compared to the lower commission rates on the decreasing U.S. Independent Preneed business. Policyholder benefits increased by $11,319 primarily driven by growth in our international and domestic service contract businesses. This was offset by decreased policyholder benefits resulting from the sale of the Independent U.S. Preneed business.

For The Six Months Ended June 30, 2007 Compared to The Six Months Ended June 30, 2006.

Net Income

Segment net income decreased by $2,616, or 3%, to $74,279 for the six months ended June 30, 2007 from $76,895 for the six months ended June 30, 2006. Solutions’ net income declined primarily due to increased expenses related to investments made to support the business’ international strategic expansion and continued poor domestic service contract experience attributable to two clients. These results include $4,400 (after-tax) in losses resulting from unfavorable experience in a credit life product in Brazil, which has since been repriced for some clients and discontinued for another client. These declines were partially offset by an increase in investment income from real estate partnerships of $8,400 (after-tax), the receipt of $3,510 (after-tax) of contract settlement fees related to the sale of marketing rights for the Independent U.S. Preneed business in November 2005, and $4,500 (after-tax) of income stemming from improvements in our reconciliation of clients’ commission payable accounts.

Total Revenues

Total revenues increased by $61,197 or 4%, to $1,493,495 for the six months ended June 30, 2007 from $1,432,298 for the six months ended June 30, 2006. This increase is due to an increase in net earned premiums and other considerations of $39,116. This increase is primarily attributable to higher net earned premiums in our service contract and international businesses. These increases are partially offset by the decrease in the net earned premium in our Preneed business due to the sale of the Independent-U.S. distribution channel combined with the continued decline of our domestic credit insurance business. The increase in revenues was also due to an increase in net investment income of $16,768, or 9%, primarily due to an increase in investment income from real estate partnerships of approximately $13,000 and higher average invested assets. The increase in revenue was also attributable to increase in fees and other income of $5,314, or 7%, which resulted from $5,400 of fees recognized from the sale of the marketing rights of the Independent U.S. Preneed business. This increase in revenues was partially offset by reduced fee income resulting from the loss of a debt deferment client.

We experienced growth in most of our core product lines, with the exception of our domestic credit insurance business and other run-off products. Gross written premiums in our domestic credit insurance business decreased by $21,835 due to the continued decline of this product line and the loss of a client. Gross written premiums from our international credit business increased by $72,536 primarily due to growth in Canada from existing clients, and in our expansion countries. Gross written premiums in our domestic service contract business increased by $168,949 due to the addition of a new client and growth generated from existing clients. Gross written premiums in our international service contract business increased by $28,944, mainly due to increased premium from existing clients. We also experienced a decrease in our Preneed business due to the sale of the U.S. Independent distribution channel.

Total Benefits, Losses and Expenses

Total benefits, losses and expenses increased by $69,761, or 5%, to $1,384,656 for the six months ended June 30, 2007 from $1,314,895 for the six months ended June 30, 2006. This increase was due to an increase in selling underwriting and general expenses of $63,479. Commissions, taxes, licenses and fees, of which amortization of DAC is a component, increased by $58,897 primarily due to the associated increase in revenues, losses resulting from unfavorable experience in a credit life product in Brazil, which has since been repriced for some clients and discontinued for another client and increase in commission rates due to a change in the mix of business. The commission rate increase is due to the higher commission rates on our growing service contract business compared to the lower commission rates on the decreasing U.S. Independent Preneed business. General expenses increased by $4,582 due to investment made to support the business’ international strategic expansion as well as costs associated with growth of the domestic service contract business. These increases in expenses were partially offset by decrease in expenses from our domestic credit insurance business and the U.S. Preneed business, which are in runoff. Policyholder benefits increased by $6,283 primarily driven by growth in our international and domestic service contract businesses. This was offset by decreased policyholder benefits resulting from the sale of the U.S. Independent Preneed business.

Assurant Specialty Property

Overview

The tables below present information regarding our Assurant Specialty Property’s segment results of operations:


	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2007			2006			2007			2006
	(in thousands)						(in thousands)
Revenues:
Net earned premiums and other considerations	$	393,614		$	290,972		$	760,655		$	543,721
Net investment income		23,667			17,923			45,536			34,713
Fees and other income		12,654			13,587			25,250			23,045

Total revenues		429,935			322,482			831,441			601,479

Benefits, losses and expenses:
Policyholder benefits		(130,866	)		(110,474	)		(247,653	)		(180,933	)
Selling, underwriting and general expenses		(159,292	)		(122,369	)		(330,091	)		(231,458	)

Total benefits, losses and expenses		(290,158	)		(232,843	)		(577,744	)		(412,391	)

Segment income before income tax		139,777			89,639			253,697			189,088
Income taxes		(49,570	)		(30,363	)		(89,056	)		(65,368	)

Segment income after tax	$	90,207		$	59,276		$	164,641		$	123,720

Net earned premiums and other considerations by major product groupings:

Homeowners (Creditor Placed and Voluntary)	$	276,663		$	178,363		$	527,552		$	321,255
Manufactured Housing (Creditor Placed and Voluntary)		50,452			54,184			101,122			110,152
Other (1)		66,499			58,425			131,981			112,314

Total	$	393,614		$	290,972		$	760,655		$	543,721


Ratios:
Loss ratio (2)	33.2	%	38.0	%	32.6	%	33.3	%
Expense ratio (3)	39.2	%	40.2	%	42.0	%	40.8	%
Combined ratio (4)	71.4	%	76.5	%	73.5	%	72.8	%

(1)	This includes flood, renters, agricultural, specialty auto and other insurance products.

(2)	The loss ratio is equal to policyholder benefits divided by net earned premiums and other considerations.

(3)	The expense ratio is equal to selling, underwriting and general expenses divided by net earned premiums and other considerations and fees and other income.

(4)	The combined ratio is equal to total benefits, losses and expenses divided by net earned premiums and other considerations and fees and other income.

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

Net Income

Segment net income increased by $30,931, or 52%, to $90,207 for the three months ended June 30, 2007 from $59,276 for the three months ended June 30, 2006. The increase in segment income is primarily due to increased net earned premiums associated with the growth of our creditor placed homeowners business including results from the SFIS acquisition in May 2006. This increase has resulted in higher invested assets, which generated an increase of 32% in investment income. The second quarter 2007 was also positively impacted by approximately $5,500 (after-tax) from a project to improve the reconciliations of client commissions payable accounts.

Total Revenues

Total revenues increased by $107,453 or 33%, to $429,935 for the three months ended June 30, 2007 from $322,482 for the three months ended June 30, 2006. The increase is primarily due to an increase in net earned premiums and other considerations of $102,642, or 35%. This increase was primarily attributable to the growth in the creditor placed homeowners product line, including results from the SFIS acquisition, combined with continued organic growth of this business. This growth was partly driven by a higher volume in creditor placed homeowners policies issued per loans tracked for insurance and a higher average insured value on those policies. The overall increase in net earned premiums, were partially offset by higher catastrophe premium of approximately $25,500. The increase in revenues was also driven by an increase in investment income of $5,744, or 32%, due to higher invested assets.

Total Benefits, Losses and Expenses

Total benefits, losses and expenses increased by $57,315 or 25%, to $290,158 for the three months ended June 30, 2007 from $232,843 for the three months ended June 30, 2006. This was due to an increase in policyholder benefits of $20,392 and an increase in selling, underwriting, and general expenses of $36,923. The increase in policyholder benefits is primarily attributable to the continued premium growth in our creditor-placed homeowners business. The combined ratio decreased 510 basis points from 76.5% to 71.4%, primarily due to the favorable loss experience. Commissions, taxes, licenses and fees, of which amortization of DAC is a component, increased by $21,659 primarily due to the associated increase in revenues. General expenses increased by $15,263 due to increases in employment related expenses consistent with business growth and the additional operating expenses associated with the SFIS business.

For The Six Months Ended June 30, 2007 Compared to The Six Months Ended June 30, 2006.

Net Income

Segment net income increased by $40,921, or 33%, to $164,641 for the six months ended June 30, 2007 from $123,720 for the six months ended June 30, 2006. The increase in segment income is primarily due to increased net earned premiums associated with the growth of our creditor placed homeowners business including results from the SFIS acquisition in May 2006. This increase has resulted in higher invested assets, which generated an increase of 31% in our investment income.

Total Revenues

Total revenues increased by $229,962 or 38%, to $831,441 for the six months ended June 30, 2007 from $601,479 for the six months ended June 30, 2006. The increase is primarily due to an increase in net earned premiums and other considerations of $216,934. This increase was primarily attributable to the growth in creditor placed homeowners product line, including results from the SFIS acquisition, combined with continued organic growth of this business. This growth was partly driven by a higher volume of creditor placed homeowners policies issued per loans tracked for insurance and a higher average insured value on those loans. The overall increase in net earned premiums, was partially offset by higher catastrophe premium of approximately $27,100. The increase in revenues was also driven by an increase in investment income of $10,823, or 31%, due to higher invested assets.

Total Benefits, Losses and Expenses

Total benefits, losses and expenses increased by $165,353 or 40%, to $577,744 for the six months ended June 30, 2007 from $412,391 for the six months ended June 30, 2006. This increase was due to an increase in policyholder benefits of $66,720 and an increase in selling, underwriting, and general expenses of $98,633. The increase in policyholder benefits is primarily attributable to the growth in our creditor-placed homeowners business due to the continued growth of the business and approximately $9,700 in lower reimbursements from the National Flood Insurance Program. The combined ratio increased 70 basis points from 72.8% to 73.5%, due primarily to increased catastrophe reinsurance premium and lower reimbursements from the National Flood Insurance Program partially offset by lower loss experience in the creditor-placed homeowners business. Commissions, taxes, licenses and fees, of which amortization of DAC is a component, increased by $56,798 primarily due to the associated increase in revenues. General expenses increased by $41,835 due to increases in employment related expenses consistent with business growth and the additional operating expenses associated with the SFIS business.

Assurant Health

Overview

The tables below present information regarding Assurant Health’s segment results of operations:


	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2007			2006			2007			2006
	(in thousands)						(in thousands)
Revenues:
Net earned premiums and other considerations	$	513,936		$	519,587		$	1,026,720		$	1,042,992
Net investment income		16,290			17,110			35,560			41,111
Fees and other income		10,445			10,250			20,133			19,976

Total revenues		540,671			546,947			1,082,413			1,104,079

Benefits, losses and expenses:

Policyholder benefits		(329,327	)		(321,322	)		(647,111	)		(646,723	)
Selling, underwriting and general expenses		(159,088	)		(163,019	)		(320,498	)		(325,731	)

Total benefits, losses and expenses		(488,415	)		(484,341	)		(967,609	)		(972,454	)


Segment income before income tax		52,256			62,606			114,804			131,625
Income taxes		(18,418	)		(21,590	)		(40,442	)		(45,513	)

Segment income after tax	$	33,838		$	41,016		$	74,362		$	86,112


Net earned premiums and other considerations:
Individual markets:
Individual medical	$	320,442		$	300,267		$	635,104		$	597,605
Short term medical		23,499			25,489			46,060			50,490

Subtotal		343,941			325,756			681,164			648,095
Small employer group:		169,995			193,831			345,556			394,897

Total	$	513,936		$	519,587		$	1,026,720		$	1,042,992

Membership by product line:
Individual markets:
Individual medical								650			632
Short term medical								99			105

Subtotal								749			737
Small employer group:								181			226

Total								930			963

Ratios:
Loss ratio (1)		64.1	%		61.8	%		63.0	%		62.0	%
Expense ratio (2)		30.3	%		30.8	%		30.6	%		30.6	%
Combined ratio (3)		93.1	%		91.4	%		92.4	%		91.5	%

(1)	The loss ratio is equal to policyholder benefits divided by net earned premiums and other considerations.

(2)	The expense ratio is equal to selling, underwriting and general expenses divided by net earned premiums and other considerations and fees and other income.

(3)	The combined ratio is equal to total benefits, losses and expenses divided by net earned premiums and other considerations and fees and other income.

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

Net Income

Segment net income decreased by $7,178, or 18%, to $33,838 for the three months ended June 30, 2007 from $41,016 for the three months ended June 30, 2006. The decrease in segment income was primarily attributable to the continuing decline in small employer group net earned premium and higher claim experience on small employer group business.

Total Revenues

Total revenues decreased by $6,276, or 1%, to $540,671 for the three months ended June 30, 2007 from $546,947 for the three months ended June 30, 2006. Net earned premiums and other considerations from our individual markets business increased by $18,185, or 6%, due to new member sales and premium rate increases. Net earned premiums and other considerations from our small employer group business decreased by $23,836, or 12%, due to a decline in members, partially offset by premium rate increases. The small employer group business continues to experience decreases in new business due to increased competition and our strict adherence to underwriting guidelines.

Total Benefits, Losses and Expenses

Total benefits, losses and expenses increased by $4,074, or 1%, to $488,415 for the three months ended June 30, 2007 from $484,341 for the three months ended June 30, 2006. Policyholder benefits increased by $8,005, or 2%, and the benefit loss ratio increased by 230 basis points, to 64.1% from 61.8%. The increase in policyholder benefits was primarily due to the growing individual medical business. The increase in the benefit loss ratio was a result of higher claim experience in small employer group business. Selling, underwriting and general expenses decreased by $3,931, or 2%, and the expense ratio decreased by 50 basis points, to 30.3% from 30.8%. The decreases in both overall expenses and the expense ratio were primarily due to lower external consulting services.

For the Six Months Ended June 30, 2007 Compared to the Six Months Ended June 30, 2006.

Net Income

Segment net income decreased by $11,750, or 14%, to $74,362 for the six months ended June 30, 2007 from $86,112 for the six months ended June 30, 2006. The decrease in segment income was primarily attributable to the continuing decline in small employer group net earned premium and higher claim experience on small employer group business.

Total Revenues

Total revenues decreased by $21,666, or 2%, to $1,082,413 for the six months ended June 30, 2007 from $1,104,079 for the six months ended June 30, 2006. Net earned premiums and other considerations from our individual markets business increased by $33,069, or 5%, due to new member sales and premium rate increases. Net earned premiums and other considerations from our small employer group business decreased by $49,341, or 13%, due to a decline in members, partially offset by premium rate increases. The small employer group business continues to experience decreases in new business due to increased competition and our strict adherence to underwriting guidelines. Also, investment income decreased by $5,551 due to lower real estate investment income and lower overall invested assets.

Total Benefits, Losses, and Expenses

Total benefits, losses and expenses decreased by $4,845, or less than 1%, to $967,609 for the six months ended June 30, 2007 from $972,454 for the six months ended June 30, 2006. The benefit loss ratio increased by 100 basis points, to 63.0% from 62.0%. The increase in the benefit loss ratio was due primarily to higher claims experience on small employer group business. Selling, underwriting and general expenses decreased by $5,233, or 2%. The decrease in expenses was primarily due to lower external consulting services.

Assurant Employee Benefits

Overview

The tables below present information regarding Assurant Employee Benefits’ segment results of operations:


	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2007			2006			2007			2006
	(in thousands)						(in thousands)
Revenues:
Net earned premiums and other considerations	$	272,462		$	282,581		$	569,135		$	608,692
Net investment income		39,408			38,744			91,295			79,583
Fees and other income		6,379			7,547			12,656			14,379

Total revenues		318,249			328,872			673,086			702,654

Benefits, losses and expenses:
Policyholder benefits		(184,361	)		(195,195	)		(396,895	)		(440,634	)
Selling, underwriting and general expenses		(101,062	)		(101,827	)		(199,088	)		(200,941	)

Total benefits, losses and expenses		(285,423	)		(297,022	)		(595,983	)		(641,575	)

Segment income before income tax		32,826			31,850			77,103			61,079
Income taxes		(11,351	)		(11,260	)		(26,671	)		(21,304	)

Segment income after tax	$	21,475		$	20,590		$	50,432		$	39,775

Ratios:
Loss ratio (1)		67.7	%		69.1	%		69.7	%		72.4	%
Expense ratio (2)		36.2	%		35.1	%		34.2	%		32.3	%


Net earned premiums and other considerations
By major product grouping:
Group dental	$	102,567	$	108,010	$	204,102	$	219,403
Group disability single premiums for closed blocks (3)		—		—		22,847		33,920
All other group disability		115,539		119,847		233,728		241,433
Group life		54,356		54,724		108,458		113,936

Total	$	272,462	$	282,581	$	569,135	$	608,692

(1)	The loss ratio is equal to policyholder benefits divided by net earned premiums and other considerations.

(2)	The expense ratio is equal to selling, underwriting and general expenses divided by net earned premiums and other considerations and fees and other income.

(3)	This represents single premium on closed blocks of group disability business.

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

Net Income

Segment net income increased by $885 or 4% to $21,475 for the three months ended June 30, 2007 from $20,590 for the three months ended June 30, 2006. The increase in segment income was primarily driven by continued favorable group disability and group life experience. This was slightly offset by unfavorable group dental experience, driven by higher claims. The improvement in loss ratios is partially offset by the continued decrease in revenues.

Total Revenues

Total revenues decreased by $10,623 or 3% to $318,249 for the three months ended June 30, 2007 from $328,872 for the three months ended June 30, 2006. This decline is primarily due to reduced net earned premiums and other considerations, resulting from lower persistency of large cases over the past several quarters as the business continues to implement its small case strategy. Sales in second quarter of 2007 compared to the prior year period increased 45%.

Total Benefits, Losses and Expenses

Total benefits, losses and expenses decreased by $11,599 or 4% to $285,423 for the three months ended June 30, 2007 from $297,022 for the three months ended June 30, 2006. The loss ratio decreased 140 basis points, from 69.1% to 67.7%. This improvement was primarily due to continued favorable group disability experience, driven by good incidence and favorable disability recovery rates including claimants returning to work, and favorable group life experience resulting from favorable mortality. Group dental experience was unfavorable primarily due to higher claims and a favorable second quarter in the prior year. The expense ratio increased 110 basis points, from 35.1% to 36.2%. The increase in the expense ratio is primarily driven by the decrease in revenues that was proportionally larger than the decline in general expenses.

For The Six Months Ended June 30, 2007 Compared to The Six Months Ended June 30, 2006.

Net Income

Segment net income increased by $10,657 or 27% to $50,432 for the six months ended June 30, 2007 from $39,775 for the six months ended June 30, 2006. The increase in segment income was primarily driven by increased investment income from real estate partnerships of approximately $9,800 (after-tax) and continued favorable group disability experience and group life experience.

Total Revenues

Total revenues decreased by $29,568 or 4% to $673,086 for the six months ended June 30, 2007 from $702,654 for the six months ended June 30, 2006. Excluding group disability single premium for closed blocks, net earned premiums and other considerations decreased $18,494 or 3%. The decrease is primarily a result of lower persistency of large cases over the past several quarters as the business continues to implement its small case strategy. Sales have increased 53%. The decrease in revenues was partially offset by an increase in investment income of $11,712, or 15%, primarily due to an increase in investment income from real estate partnerships.

Total Benefits, Losses and Expenses

Total benefits, losses and expenses decreased by $45,592 or 7% to $595,983 for the six months ended June 30, 2007 from $641,575 for the six months ended June 30, 2006. The loss ratio decreased 270 basis points, from 72.4% to 69.7%. This improvement was primarily due to favorable group disability experience, driven by good incidence and favorable disability recovery rates including claimants returning to work, and favorable group life experience, resulting from favorable mortality. Group dental experience was unfavorable due to slightly worse claims experience. The expense ratio increased 190 basis points, from 32.3% to 34.2%, primarily driven by the decrease in revenues that was proportionally larger than the decrease in general expenses.

Assurant Corporate & Other

Overview

The Corporate and Other segment includes activities of the holding company, financing expenses, net realized gains (losses) on investments, interest income earned from short-term investments held and additional costs associated with excess of loss reinsurance programs reinsured and ceded to certain subsidiaries in the London market between 1995 and 1997. The Corporate and Other segment also includes the amortization of deferred gains associated with the sales of Fortis Financial Group (“FFG”) (a business we sold via reinsurance on April 2, 2001) and Long Term Care (“LTC”) (a business we sold via reinsurance in March 2000).

The tables below present information regarding the Corporate & Other segment’s results of operations:


	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2007			2006			2007			2006
	(in thousands)						(in thousands)
Revenues:
Net investment income	$	10,153		$	7,710		$	22,006		$	21,560
Net realized (losses) gains on investments		(3,086	)		2,272			2,484			(2,180	)
Amortization of deferred gain on disposal of businesses		8,246			10,022			16,595			18,855
Fees and other income		143			127			470			127

Total revenues		15,456			20,131			41,555			38,362

Benefits, losses and expenses:
Policyholder benefits		—			(5	)		—			(5	)
Selling, underwriting and general expenses		(19,294	)		(15,764	)		(35,413	)		(32,403	)
Interest expense		(15,296	)		(15,315	)		(30,593	)		(30,630	)

Total benefits, losses and expenses		(34,590	)		(31,084	)		(66,006	)		(63,038	)

Segment loss before income tax		(19,134	)		(10,953	)		(24,451	)		(24,676	)
Income taxes		9,684			4,059			6,474			10,235

Segment loss after tax	$	(9,450	)	$	(6,894	)	$	(17,977	)	$	(14,441	)

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

Net Income

Segment net loss increased by $2,556, or 37%, to ($9,450) for the three months ended June 30, 2007 from ($6,894) for the three months ended June 30, 2006. This increase is primarily due to additional net realized losses on investments and a decrease in the amortization of deferred gains, partially offset by approximately $2,900 of income from the change in certain tax liabilities and additional investment income.

Total Revenues

Total revenues decreased by $4,675 or 23%, to $15,456 for the three months ended June 30, 2007 from $20,131 for the three months ended June 30, 2006. Revenues declined mainly due to additional realized losses on investments of $5,358 and $1,776 of lower amortization of deferred gain on disposal of businesses. Partially offsetting these decreases was an increase in net investment income of $2,443 due to higher interest rates on cash held at the holding Company.

Total Benefits, Losses and Expenses

Total benefits, losses and expenses increased by $3,506, or 11%, to $34,590 for the three months ended June 30, 2007 from $31,084 for the three months ended June 30, 2006. This increase is primarily due to an increase in compensation expense and external consulting fees.

For The Six Months Ended June 30, 2007 Compared to The Six Months Ended June 30, 2006.

Net Income

Segment net loss increased by $3,536, or 24%, to ($17,977) for the six months ended June 30, 2007 from ($14,441) for the six months ended June 30, 2006. This increase is mainly due to additional tax expense of $2,866 related to the change in certain tax liabilities, a decrease in investment income from real estate joint ventures of $2,355 (after-tax), and a decrease in amortization of deferred gains on disposal of businesses. These increases to net loss were partially offset by a $3,032 (after-tax) increase in net realized gains and additional investment income of $2,645 (after-tax) due to higher interest rates.

Total Revenues

Total revenues increased by $3,193, or 8%, to $41,555 for the six months ended June 30, 2007 from $38,362 for the six months ended June 30, 2006. Revenues increased mainly due to an increase of $4,664 to net realized gains on investments partially offset by a decrease in the amortization of deferred gains on disposal of businesses.

Total Benefits, Losses and Expenses

Total expenses increased by $2,968, or 5%, to $66,006 for the six months ended June 30, 2007 from $63,038 for the six months ended June 30, 2006. This increase is mainly due to an increase in selling, underwriting and general expenses caused by increased compensation expenses and external consulting fees.

Investments

The following table shows the carrying value of our investments by type of security as of the dates indicated:


	As of June 30, 2007				As of December 31, 2006
Fixed maturities	$	9,267,665	72	%	$	9,118,049	73	%
Equity securities		727,170	6	%		741,639	6	%
Commercial mortgage loans on real estate		1,356,957	10	%		1,266,158	10	%
Policy loans		57,872	1	%		58,733	1	%
Short-term investments		263,945	2	%		314,114	3	%
Collateral held under securities lending		629,263	5	%		365,958	3	%
Other investments		547,858	4	%		564,494	4	%

Total investments	$	12,850,730	100	%	$	12,429,145	100	%

Of our fixed maturity securities shown above, 68% and 67% (based on total fair value) were invested in securities rated “A” or better as of June 30, 2007 and December 31, 2006, respectively.

The following table provides the cumulative net unrealized (losses) gains (pre-tax) on fixed maturity securities and equity securities as of the dates indicated:


	As of June 30, 2007			As of December 31, 2006
Fixed maturities:
Amortized cost	$	9,305,755		$	8,934,017
Net unrealized (losses) gains		(38,090	)		184,032

Fair value	$	9,267,665		$	9,118,049

Equities:
Cost	$	738,170		$	735,566
Net unrealized (losses) gains		(11,000	)		6,073

Fair value	$	727,170		$	741,639

Net unrealized gains on fixed maturity securities decreased by $222,122 from December 31, 2006 to June 30, 2007 to a net unrealized loss of $38,090. The decrease in net unrealized gains on fixed maturities was primarily due to an increase in treasury yields and corporate bond spreads. The yield on 5-year treasury securities increased 23 basis points and the yield on 10-year treasury securities increased 32 basis points between December 31, 2006 and June 30, 2007. Corporate bond spreads also widened during the same period. Net unrealized gains on equity securities, which primarily consist of non-sinking fund preferred stocks, decreased by $17,073 from December 31, 2006 to June 30, 2007 to a net unrealized loss of $11,000. The decrease is primarily due to a decrease in the Merrill Lynch Preferred Stock Hybrid Securities Index from December 31, 2006 to June 30, 2007.

Net investment income increased by $ 9,864, or 5 %, to $190,302 for the three months ended June 30, 2007 from $180,438 for the three months ended June 30, 2006. Net investment income increased by $34,198 or 8%, to $407,198 for the six months ended June 30, 2007 from $373,000 for the six months ended June 30, 2006. The increase is primarily due to an increase in invested assets and higher investment income from real estate partnerships.

The investment category of the Company’s gross unrealized losses on fixed maturities and equity securities at June 30, 2007 and the length of time the securities have been in an unrealized loss position were as follows:


	Less than 12 months					12 Months or More					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Fixed maturities
Bonds	$	4,429,758	$	(119,824	)	$	1,670,321	$	(68,066	)	$	6,100,079	$	(187,890	)

Equity securities
Common Stock	$	—	$	—		$	—	$	—		$	—	$	—
Non-redeemable preferred stocks		383,717		(9,498	)		143,571		(8,101	)		527,288		(17,599	)

Total equity securities	$	383,717	$	(9,498	)	$	143,571	$	(8,101	)	$	527,288	$	(17,599	)

Total	$	4,813,475	$	(129,322	)	$	1,813,892	$	(76,167	)	$	6,627,367	$	(205,489	)

The total unrealized loss represents 3% of the aggregate fair value of the related securities. Approximately 63% of these unrealized losses have been in a continuous loss position for less than twelve months. The total unrealized losses are comprised of 1,807 individual securities with 83% of the individual securities having an unrealized loss of less than $200. The total unrealized losses on securities that were in a continuous unrealized loss position for greater than six months but less than 12 months were approximately $17,776. There were no securities with an unrealized loss of greater than $200 having a market value below 78% of book value.

As part of our ongoing monitoring process, we regularly review our investment portfolio to ensure that investments that may be other than temporarily impaired are identified on a timely basis and that any impairment is charged against earnings in the proper period. We have reviewed these securities and recorded no additional other than temporary impairments as of June 30, 2007 and 2006, respectively. Due to issuers’ continued satisfaction of the securities’ obligations in accordance with their contractual terms and their continued expectations to do so, as well as our evaluation of the fundamentals of the issuers’ financial condition, we believe that the prices of the securities in an unrealized loss position as of June 30, 2007 in the sectors discussed above were temporarily depressed primarily as a result of the prevailing level of interest rates at the time the securities were purchased. We have the intent and ability to hold these assets until the date of recovery.

Liquidity and Capital Resources

Regulatory Requirements

Assurant, Inc. is a holding company, and as such, has limited direct operations of its own. Our holding company assets consist primarily of the capital stock of our subsidiaries. Accordingly, our future cash flows depend upon the availability of dividends and other statutorily permissible payments from our subsidiaries, such as payments under our tax allocation agreement and under management agreements with our subsidiaries. The ability to pay such dividends and to make such other payments will be limited by applicable laws and regulations of the states in which our subsidiaries are domiciled, which subject our subsidiaries to significant regulatory restrictions. The dividend requirements and regulations vary from state to state and by type of insurance provided by the applicable subsidiary. These laws and regulations require, among other things, our insurance subsidiaries to maintain minimum solvency requirements and limit the amount of dividends these subsidiaries can pay to the holding company. Solvency regulations, capital requirements and rating agencies are some of the factors used in determining the amount of capital used for dividends. For 2007, the maximum amount of distributions our subsidiaries could pay, under applicable laws and regulations without prior regulatory approval for our statutory subsidiaries, is approximately $476,070.

Liquidity

Dividends paid by our subsidiaries were $169,600 and $554,270 for the six months ended June 30, 2007 and for the year ended December 31, 2006, respectively. We use these cash inflows primarily to pay expenses, to make interest payments on indebtedness, to make dividend payments to our stockholders, and to repurchase our outstanding shares.

The primary sources of funds for our subsidiaries consist of premiums and fees collected, the proceeds from the sales and maturity of investments and investment income. Cash is primarily used to pay insurance claims, agent commissions, operating expenses and taxes. We generally invest our subsidiaries’ excess funds in order to generate income.

Generally, our subsidiaries’ premiums, fees and investment income, along with planned asset sales and maturities, provide sufficient cash to pay claims and expenses. However, there are instances where unexpected cash needs arise in excess of that available from usual operating sources. In such instances, we have several options to raise needed funds including selling assets from the subsidiaries’ investment portfolios, using holding company cash (if available), issuing commercial paper and drawing funds from our revolving credit facility. We consider the permanence of the cash need as well as the cost of each source of funds in determining which option to utilize.

We paid dividends of $0.12 per common share on June 12, 2007 to stockholders of record as of May 29, 2007 and $0.10 per common share on March 12, 2007 to stockholders of record as of February 26, 2007. Any determination to pay future dividends will be at the discretion of our Board of Directors and will be dependent upon: our subsidiaries’ payment of dividends and/or other statutorily permissible payments to us; our results of operations and cash flows; our financial position and capital requirements; general business conditions; any legal, tax, regulatory and contractual restrictions on the payment of dividends; and any other factors our Board of Directors deems relevant.

Retirement and Other Employee Benefits

Our qualified and non-qualified pension plans were under-funded by $113,026 at December 31, 2006. In prior years we established a funding policy in which service cost plus 15% of qualified plan deficit will be contributed annually. During the first six months of 2007, we contributed $20,000 to the qualified pension benefits plan. We expect to contribute $40,000 to the qualified pension benefits plan for the full year 2007.

Commercial Paper Program

In March 2004, we established a $500,000 commercial paper program, which is available for working capital and other general corporate purposes. This program is backed up by a $500,000 senior revolving credit. On January 9, 2007 and April 18, 2007, we used $20,000 and $20,000, respectively, from the commercial paper program for general corporate purposes, which was repaid on January 16, 2007 and April 25, 2007, respectively. There were no amounts relating to the commercial paper program outstanding at June 30, 2007. We did not use the revolving credit facility during the six months ended June 30, 2007 and no amounts are outstanding.

The revolving credit facility contains restrictive covenants. The terms of the revolving credit facility also require that we maintain certain specified minimum ratios or thresholds. We are in compliance with all covenants and we maintain all specified minimum ratios and thresholds.

Senior Notes

On February 18, 2004, we issued two series of senior notes in an aggregate principal amount of $975,000. The first series is $500,000 in principal amount, bears interest at 5.625% per year and is payable in a single installment due February 15, 2014. The second series is $475,000 in principal amount, bears interest at 6.750% per year and is payable in a single installment due February 15, 2034. Our senior notes are rated bbb by A.M. Best, Baa1 by Moody’s and BBB+ by S&P.

Interest on our senior notes is payable semi-annually on February 15 and August 15 of each year. The senior notes are unsecured obligations and rank equally with all of our other senior unsecured indebtedness. The senior notes are not redeemable prior to maturity.

In management’s opinion, our subsidiaries’ cash flow from operations together with our income and gains from our investment portfolio will provide sufficient liquidity to meet our needs in the ordinary course of business.

Cash Flows

We monitor cash flows at both the consolidated and subsidiary levels. Cash flow forecasts at the consolidated and subsidiary levels are provided on a monthly basis, and we use trend and variance analyses to project future cash needs.

The table below shows our recent net cash flows:


	For The Six Months Ended June 30,
	2007			2006
	(in thousands)
Net cash provided by (used in):
Operating activities (1)	$	521,021		$	311,225
Investing activities		(551,840	)		(311,442	)
Financing activities		53,218			(191,851	)

Net change in cash	$	22,399		$	(192,068	)

(1)	Includes effect of exchange rate changes on cash and cash equivalents.

Net cash provided by operating activities was $521,021 and $311,225 for the six months ended June 30, 2007 and 2006, respectively. The $209,796 increase in net cash provided by operating activities is mostly attributable to lower claims related to hurricane losses during the six month period in 2007 over the comparable period in 2006.

Net cash used in investing activities was $551,840 and $311,442 for the six months ended June 30, 2007 and 2006, respectively. The $240,398 increase in net cash used in investing activities is primarily attributable to the changes in collateral held under securities lending and short term investments.

Net cash provided by financing activities was $53,218 for the six months ended June 30, 2007 and net cash used in financing activities was $191,851 for the six months ended June 30, 2006. The $245,069 increase in cash provided by financing activities is primarily attributable to a significant cash inflow from the change in securities lending for the six month period in 2007 compared to a cash outflow for the same period in 2006, slightly offset by increases in cash used to purchase treasury stock.

The table below shows our cash outflows for distributions and dividends for the periods indicated:


	For the Six Months Ended June 30,
Security	2007		2006
	(in thousands)
Mandatorily redeemable preferred stock dividends and interest paid	$	30,550	$	30,850
Common Stock dividends		26,731		23,269

Total	$	57,281	$	54,119

Letters of Credit

In the normal course of business, letters of credit are issued to support reinsurance arrangements and other corporate initiatives. These letters of credit are supported by commitments with financial institutions. We had $33,813 and $33,219 of letters of credit outstanding as of June 30, 2007 and December 31, 2006, respectively.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk.

Our 2006 Annual Report on Form 10-K described our Quantitative and Qualitative Disclosures About Market Risk. There were no material changes to the assumptions or risks during the six months ended June 30, 2007.

Item 4.

Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

The Company’s interim Chief Executive Officer and interim Chief Financial Officer have evaluated the effectiveness of the Company’s disclosure controls and procedures pursuant to Rule 13a-15 under the Exchange Act of 1934, as of June 30, 2007. This included an evaluation of disclosure controls and procedures applicable to the period covered by and existing through the filing of this periodic report. Based on that review, the Company’s interim Chief Executive Officer and interim Chief Financial Officer have concluded that the Company’s disclosure controls and procedures are effective to provide reasonable assurance that information the Company is required to disclose in its reports under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported accurately including, without limitation, ensuring that such information is accumulated and communicated to the Company’s management as appropriate to allow timely decisions regarding required disclosure.

Internal Controls over Financial Reporting

No material weaknesses were identified at June 30, 2007. During the quarter ending June 2007, we have made no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II

OTHER INFORMATION

(Dollar Amounts In Thousands Except Share Data)

Item 1.

Legal Proceedings.

As previously disclosed, as part of an ongoing, industry-wide investigation, we have received subpoenas and requests from the Securities and Exchange Commission in connection with its investigation into certain loss mitigation products. We are cooperating fully and are complying with the requests.

We have conducted an evaluation of the transactions that could potentially fall within the scope of the subpoenas, as defined by the authorities, and have provided information as requested. Based on our investigation to date, we have concluded that there was a verbal side agreement with respect to one of our reinsurers under our catastrophic reinsurance program. While management believes that the difference resulting from the appropriate alternative accounting treatment would be immaterial to our financial position or results of operations, regulators may reach a different conclusion. In 2004 and 2003, premiums ceded to this reinsurer were $2,600 and $1,500, respectively, and losses ceded were $10,000 and zero, respectively. This contract expired in December 2004 and was not renewed.

In July 2007, we learned that each of the following five individuals, Robert B. Pollock, President and Chief Executive Officer, Philip Bruce Camacho, Executive Vice President and Chief Financial Officer, Adam Lamnin, Executive Vice President and Chief Financial Officer of Assurant Solutions/Assurant Specialty Property, Michael Steinman, Senior Vice President and Chief Actuary of Assurant Solutions/Assurant Specialty Property and Dan Folse, Vice President-Risk Management of Assurant Solutions/Assurant Specialty Property, received Wells notices from the SEC in connection with its ongoing investigation. A Wells notice is an indication that the staff of the SEC is considering recommending that the SEC bring a civil enforcement action against the recipient for violating various provisions of the federal securities laws. Under SEC procedures, the recipients have the opportunity to respond to the SEC staff before a formal recommendation is finalized. The Board of Directors formed a Special Committee of non-management directors that continues the Board’s work of evaluating the situation. Since its formation, the Special Committee has reviewed the relevant documents, conducted interviews and worked with outside counsel in order to continue the investigation begun by the Audit Committee and to recommend appropriate actions to the Board with respect to the SEC investigation. On July 17, 2007, we announced that the Board of Directors had placed all five employees on administrative leave, pending further review of this matter. On July 18, the Board of Directors appointed J. Kerry Clayton as interim President and Chief Executive Officer and Michael J. Peninger as interim Chief Financial Officer of the Company. On August 9, 2007, Messrs. Steinman and Folse’s employment with the Company was terminated. Messrs. Pollock, Camacho, and Lamnin remain on administrative leave.

In relation to the SEC investigation discussed above, the SEC may impose fines and/or penalties on the Company and individuals involved; however, we have not accrued for fines and/or penalties since we cannot reasonably estimate the amount of such fines and/or penalties at this time.

Item 1A.

Risk Factors.

Our 2006 Annual Report on Form 10-K described our Risk Factors. As discussed in Note 10—Commitments and Contingencies on p. 19 and above in Item 1—Legal Proceedings, additional developments in the SEC investigation have occurred since we filed our last Form 10Q. The disclosures in the aforementioned sections are incorporated by reference into the Risk Factors.

Item 2.

Unregistered Sale of Equity Securities and Use of Proceeds.

Repurchase of Equity Securities:


Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Programs (1)	Maximum Number of Shares that may yet be Purchased under the Programs (1)
January 1, 2007 – January 31, 2007	360,000	$	56.12	360,000	9,955,951
February 1, 2007 – February 28, 2007	370,000		54.70	370,000	9,974,021
March 1, 2007 – March 31, 2007	691,833		53.50	691,833	9,250,329
April 1, 2007 – April 30, 2007	623,000		57.01	623,000	8,005,907
May 1, 2007 – May 31, 2007	647,700		59.78	647,700	7,096,088
June 1, 2007 – June 30, 2007	713,700		58.82	713,700	6,447,372

Total	3,406,233	$	56.86	3,406,233	6,447,372

(1)	Shares purchased pursuant to the November 10, 2006 publicly announced repurchase program.

Item 4.

Submission of Matters to a Vote of Security Holders.

The Board of Directors of the Company consists of three classes of directors, with the members of each class holding office until their successors are duly elected and qualified. At each Annual Meeting of the Stockholders of the Company, the successors to the class of directors whose term expires at such meeting are elected to hold office for a term expiring at the Annual Meeting of Stockholders held in the third year following the year of election. At the Annual Meeting held on May 17, 2007, the four nominees listed under (a) below were elected as directors to hold office for terms ending in 2010 or until their respective successors shall have been elected or qualified. The following directors, constituting the members of the two classes of directors whose terms did not expire at such annual meeting, continued to serve as directors of the Company after such meeting: Robert J. Blendon, Beth L. Bronner, David B. Kelso, Charles John Koch, H. Carroll Mackin, Michele Coleman Mayes, John Michael Palms and Robert B. Pollock.

In addition, at such annual meeting, the Company’s stockholders ratified the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm.

The number of votes cast for and against and abstentions as to each of these matters was as follows:

(a) Election of Directors:


Name of Director	Votes For	Votes Withheld
Michel Baise	112,097,986	1,261,441
Howard L. Carver	113,091,300	268,127
Juan N. Cento	112,994,186	365,241
Allen R. Freedman	112,254,034	1,105,393

(b) Ratification of Appointment of Independent Registered Public Accounting Firm:

Votes For	Votes Against	Abstentions
113,208,294	127,822	23,311

Item 6.

Exhibits.

The following exhibits either (a) are filed with this report or (b) have previously been filed with the SEC and are incorporated herein by reference to those prior filings. Exhibits are available upon request at the investor relations section of our website at www.assurant.com.


31.1		Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer.

31.2		Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer.

32.1		Certification of Chief Executive Officer of Assurant, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of Chief Financial Officer of Assurant, Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	ASSURANT, INC.

Date: August 9, 2007	By:	/s/ J. Kerry Clayton
	Name:	J. Kerry Clayton
	Title:	Interim President and Chief Executive Officer

Date: August 9, 2007	By:	/s/ Michael J. Peninger
	Name:	Michael J. Peninger
	Title:	Executive Vice President and Interim Chief Financial Officer