ASSET PURCHASE AND ASSUMPTION REINSURANCE AGREEMENT

Reinsurance Agreement

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UNION SECURITY INSURANCE COMPANY

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Title: ASSET PURCHASE AND ASSUMPTION REINSURANCE AGREEMENT
Governing Law: Ontario Date: 3/1/2007

Exhibit 10.1

UNION SECURITY INSURANCE COMPANY

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ASSURANT LIFE OF CANADA

ASSET PURCHASE AND ASSUMPTION REINSURANCE AGREEMENT

Dated as of April 1, 2006

TABLE OF CONTENTS


		Page
ARTICLE 1	INTERPRETATION	2

1.1	Definitions	2

1.2	Headings and Table of Contents	8

1.3	Number and Gender	8

1.4	Business Days	8

1.5	Currency	8

1.6	Statute References	8

1.7	Section and Schedule References	8

ARTICLE 2	PURCHASE OF ASSETS; ASSUMPTION OF LIABILITIES	8

2.1	Transfer of Assets	8

2.2	Assumption of Liabilities	8

2.3	Purchase Price	9

2.5	Preparation of Closing Statement.	9

2.6	Payment on Adjustment Date.	10

2.7	Fair Market Value.	11

2.8	Stated Capital	11

2.9	Allocation of Purchase Price	11

2.10	Tax Elections	11

2.11	Notification and Administration.	12

2.12	Non-Transferable and Non-Assignable Assets	12

2.13	Bulk Sales Compliance	13

2.14	Section 116	13

ARTICLE 3	CLOSING DELIVERIES	14

3.1	Vendor’s Closing Deliveries	14

3.2	Purchaser’s Closing Deliveries	14

3.3	Notices and Acknowledgements	14

ARTICLE 4	REPRESENTATIONS AND WARRANTIES	14

4.1	Representations and Warranties of the Vendor	14

4.2	Representations and Warranties of the Purchaser	16

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TABLE OF CONTENTS

(continued)

Page

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4.3	Survival of Representations and Warranties.	16

ARTICLE 5	INDEMNIFICATION	17

5.1	Indemnity by the Vendor	17

5.2	Indemnity by the Purchaser	17

5.3	Notice of Claim	17

5.4	Direct Claims	18

5.5	Third Party Claims	18

5.6	Settlement of Third Party Claims	19

5.7	Interest on Claims	19

ARTICLE 6	GENERAL	20

6.1	Co-operation in Filing of Returns	20

6.2	Non-Merger	20

6.3	Further Assurances	20

6.4	Expenses	20

6.5	Payment of Taxes	20

6.6	Notices	20

6.7	Time of Essence	21

6.8	Entire Agreement	21

6.9	Waiver	21

6.10	Severability	21

6.11	Attornment	22

6.12	Language	22

6.13	Governing Law	22

6.14	Successors and Assigns	22

6.15	Counterparts	22

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An extra section break has been inserted above this paragraph. Do not delete this section break if you plan to add text after the Table of Contents/Authorities. Deleting this break will cause Table of Contents/Authorities headers and footers to appear on any pages following the Table of Contents/Authorities.

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ASSET PURCHASE AND ASSUMPTION REINSURANCE AGREEMENT

THIS AGREEMENT is made as of the 1st day of April, 2006

BETWEEN:

UNION SECURITY INSURANCE COMPANY, an insurance company domesticated under the laws of the state of Iowa, carrying on business in Canada as Fortis Benefits Insurance Company,

(the “ Vendor ”)

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ASSURANT LIFE OF CANADA , an insurance company formed under the laws of Canada

(the “ Purchaser ”)

RECITALS

WHEREAS:

A.	The Vendor desires to sell, transfer, assign and convey the Assets to the Purchaser and to transfer and assign to the Purchaser the Assumed Liabilities of the Vendor, all of which relate to the insurance business in Canada carried on by the Vendor; and

B.	The Purchaser desires to purchase the Assets and to assume the Assumed Liabilities of the Vendor.

NOW THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties agree as follows:

ARTICLE 1

INTERPRETATION

1.1 Definitions . In this Agreement, the following terms shall have the meanings set out below unless the context requires otherwise:

“ Adjustment Date ” has the meaning given in Section 2.6.

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“ Affiliate ” means, with respect to any Person, any other Person who directly or indirectly controls, is controlled by, or is under direct or indirect common control with, such Person, and includes any Person in like relation to an Affiliate. A Person shall be deemed to control a Person if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise; and the term “controlled” shall have a similar meaning.

“ Agreement ” means this Agreement, including the Schedules to this Agreement, as it or they may be amended or supplemented from time to time, and the expressions “hereof” , “herein” , “hereto” , “hereunder” , “hereby” and similar expressions refer to this Agreement and not to any particular Section or other portion of this Agreement.

“ Applicable Law ” means, with respect to any Person, property, transaction, event or other matter, any Law relating or applicable to such Person, property, transaction, event or other matter. Applicable Law also includes, where appropriate, any interpretation of the Law (or any part) by any Person having jurisdiction over it, or charged with its administration or interpretation.

“ Assets ” means all of the Canadian property, assets, interests and rights of the Vendor that are Related to the Business including the following:

(a)

the Operating Assets;

(b)

the Investment Assets; and

(c)

the Other Intangibles.

“ Assumed Contractual Liabilities ” has the meaning given in Section 2.2.

“ Assumed Liabilities ” means, collectively, the Insurance Liabilities in Canada, the Assumed Contractual Liabilities in Canada and the Assumed Payables in Canada.

“ Assumed Payables ” means, collectively all trade accounts payable of the Vendor Related to the Business to the extent not settled or otherwise paid pursuant to Section 6.2.

“ Books and Records ” means originals or copies of all books, records, policies, files (including, without limitation, claims files), correspondence, documents and papers Related to the Business including sales and advertising materials, sales and purchases correspondence, trade association files, research and development records, lists of present and former customers and suppliers, personnel, employment and other records.

“ Business ” means the business of the Canadian branch operations of the Vendor, including offering and selling life insurance on or in respect of funeral arrangements.

“ Business Day ” means any day except Saturday, Sunday or any day on which banks are generally not open for business in the City of Toronto.

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“ Claim ” has the meaning given in Section 5.1.

“ Closing Date ” means April 1, 2006, or any other date agreed to by the Vendor and the Purchaser.

“ Closing Statement ” means a statement prepared by the Vendor setting out the current value of the Insurance Liabilities, the current value of the Assumed Payables and the fair market value of the Assets as of the Closing Time.

“ Closing Time ” means the moment in time immediately following • a.m. on the Closing Date.

“ Closing Time Assets Value ” means the Fair Market Value of the Assets, as determined in the manner set forth in Section 2.5.

“ Closing Time Assumed Payables Value ” means the value of the Assumed Payables as of the Closing Time, as determined in the manner set forth in Section 2.5.

“ Closing Time Insurance Liabilities Value ” means the value of the Insurance Liabilities as of the Closing Time, as determined in the manner set forth in Section 2.5.

“ Contracts ” means all the rights and interests of the Vendor to and in all of the contracts and agreements Related to the Business that are described in Schedule 1.1(b) .

“ Direct Claim ” has the meaning given in Section 5.4.

“ Excluded Assets ” means all assets, properties, interests and rights of the Vendor other than the Assets, but including the rights of the Vendor relating to this Agreement or any agreements or documents made pursuant to this Agreement; and the registered business name “Assurant Life”.

“ Fair Market Value ” means fair market value as at the Closing Time.

“ Governmental Entity ” means (i) any multinational, federal, provincial, municipal, local or other governmental or public department, central bank, court, commission, board, bureau, minister, body, agency or instrumentality, domestic or foreign; (ii) any subdivision, agent, commission, board or authority of any of the forgoing; or (iii) any quasi-governmental or private body exercising any regulatory, expropriation or taxing authority as provided for or permitted under legislation enacted by any of the foregoing.

“ including ” means “including without limitation”, and “ includes ” means “includes without limitation”.

“ Indemnified Party ” means a Person whom the Vendor or the Purchaser, as the case may be, has agreed to indemnify under Article 5.

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“ Indemnifying Party ” means, in relation to an Indemnified Party, the Party to this Agreement that has agreed to indemnify that Indemnified Party under Article 5.

“Insurance Liabilities” means all liabilities and obligations arising out of or relating to the Insurance Policies. The Insurance Liabilities shall include, without limitation (a) all liabilities for unpaid claims, incurred but not reported claims, benefits or other payments arising under or relating to the Insurance Policies, whether or not incurred before, on or after the Closing Time; (b) all loss adjustment expenses and expense reimbursement amounts arising out of or relating to the Insurance Policies; (c) all liabilities arising out of any changes to the terms and conditions of the Insurance Policies mandated by Applicable Law whether incurred before, on or after the Closing Time; (d) premium taxes due in respect of premiums written after the Closing Time with respect to the Insurance Policies; (e) assessments and similar charges with respect to the Insurance Policies in connection with the participation by the Vendor or the Purchaser, whether voluntary or involuntary, in any guaranty association or risk pool established or governed by any province or other jurisdiction, arising on account of premiums earned after the Closing Time; (f) all liabilities for amounts payable after the Closing Time for returns or refunds of premiums with respect to the Insurance Policies; (g) all liabilities arising out of Vendor’s Extra Contractual Obligations; and (h) all unclaimed property liabilities arising under or relating to the Insurance Policies with respect to amounts paid or received after the Closing Time.

“Insurance Policies” means group and individual life insurance and annuity policies written by the Vendor in connection with the Business and certificates under such group policies.

“ Investment Assets ” means the term or time deposits used as investment assets, bonds and other investment assets described on Schedule 1.1(a) .

“ Law ” means any law, rule, statute, regulation, order, judgment, decree, treaty or other requirement having the force of law, including the common law and civil law.

“ Lien ” means any lien, mortgage, charge, hypothec, pledge, security interest, prior assignment, option, warrant, lease, sublease, right to possession, encumbrance, claim, right or restriction which affects, by way of a conflicting ownership interest or otherwise, the right, title or interest in or to any particular property.

“ Net Adjustment Amount ” has the meaning given in Section 2.6.

“ Objecting Party ” has the meaning given in Section 2.5.

“ Objection Notice ” has the meaning given in Section 2.5.

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“ Operating Assets ” means the following:

(a)

all right, title and interest of the Vendor in and to the Insurance Policies, including, without limitation, the right to contest Insurance Policies and make all discretionary decisions with respect to the Insurance Policies on and after the Closing Time;

(b)

all cash on hand or held in accounts at banks or other depositaries, term or time deposits used as operating assets and similar cash–equivalent items;

(c)

all accounts receivable of the Vendor relating to all premiums due and all premiums payable under the Insurance Policies;

(d)

all agent balances;

(e)

all receivables owing to the Vendor from one or more of its Affiliates; and

(f)

the Personal Property.

“ Other Intangibles ” means the following:

(a)

the Contracts;

(b)

the Books and Records; and

(c)

all rights and interest under or pursuant to all warranties, representations and guarantees, express, implied or otherwise, of or made by suppliers or others that are Related to the Business.

“ Party ” means a party to this Agreement and any reference to a Party includes its successors and permitted assigns; and “ Parties ” means every Party.

“ Permitted Liens ” means:

(a)

Liens for Taxes if such Taxes are not due and payable;

(b)

mechanics’, construction, carriers’, workers’, repairers’, storers’ or other similar liens (inchoate or otherwise) which individually or in the aggregate are not material, arising or incurred in the ordinary course of business which have not been filed, recorded or registered in accordance with Applicable Law or of which notice has not been given to the Vendor; and

(c)

Liens by lessors on leased Personal Property.

“ Person ” is to be broadly interpreted and includes an individual, a corporation, a partnership, a trust, an unincorporated organization, the government of a country or any political subdivision thereof, or any agency or department of any such government, and the executors, administrators or other legal representatives of an individual in such capacity.

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“ Personal Property ” means all equipment, computer hardware, furniture, furnishings, motor vehicles and other chattels of the Vendor Related to the Business.

“ Prime Rate ” means the prime rate of interest per annum quoted by the Royal Bank of Canada from time to time as its reference rate of interest for Canadian dollar demand loans made to its commercial customers in Canada and which the Royal Bank of Canada refers to as its “prime rate”, as such rate may be changed from time to time.

“ Projected Assets Value ” means the Vendor’s good faith estimate of the Fair Market Value of the Assets.

“ Projected Assumed Payables Value ” means the Vendor’s good faith estimate of the value of the Assumed Payables as at the Closing Time.

“ Projected Insurance Liabilities Value ” means the Vendor’s good faith estimate of the value of the Insurance Liabilities as at the Closing Time.

“ Purchase Price ” has the meaning given in Section 2.3.

“ Related to the Business ” means, used primarily in, arising primarily from, or relating primarily to the Business.

“ Reviewing Accountants ” has the meaning given in Section 2.5.

“ Rights ” has the meaning given in Section 2.12.

“ Shares ” has the meaning set out in Section 2.4.

“ Taxes ” means all taxes, charges, fees, levies, imposts and other assessments, including all income, sales, use, goods and services, value added, capital, capital gains, alternative, net worth, transfer, profits, withholding, payroll, employer health, excise, franchise, real property and personal property taxes, and any other taxes, customs duties, fees, assessments or similar charges in the nature of a tax including Canada Pension Plan and provincial pension plan contributions, employment insurance payments and workers compensation premiums, together with any instalments with respect thereto, and any interest, fines and penalties, imposed by any governmental authority (including federal, state, provincial, municipal and foreign governmental authorities), and whether disputed or not.

“ Third Party ” has the meaning given in Section 5.6.

“ Third Party Claim ” has the meaning given in Section 5.4.

“Vendor’s Extra Contractual Obligations” means all liabilities for compensatory, consequential, exemplary, punitive or other special or similar damages which relate to or arise in connection with, and any settlement, defense or investigation costs incurred in connection with, any alleged or actual act, error, omission or other event in connection

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with the handling of any claims by the Vendor under any of the Insurance Policies prior to the Closing Time or in connection with the marketing, issuance, delivery, cancellation or administration of any of the Insurance Policies prior to the Closing Time.

1.2 Headings and Table of Contents . The division of this Agreement into Articles and Sections, the insertion of headings, and the provision of any table of contents are for convenience of reference only and shall not affect the construction or interpretation of this Agreement.

1.3 Number and Gender . Unless the context requires otherwise, words importing the singular include the plural and vice versa and words importing gender include all genders.

1.4 Business Days . If any payment is required to be made or other action is required to be taken pursuant to this Agreement on a day which is not a Business Day, then such payment or action shall be made or taken on the next Business Day.

1.5 Currency . All dollar amounts referred to in this Agreement are stated in lawful currency of Canada.

1.6 Statute References . Any reference in this Agreement to any statute or any section thereof shall, unless otherwise expressly stated, be deemed to be a reference to such statute or section as amended, restated or re-enacted from time to time.

1.7 Section and Schedule References . Unless the context requires otherwise, references in this Agreement to Sections or Schedules are to Sections or Schedules of this Agreement. The Exhibits and Schedules to this Agreement are as follows:

SCHEDULES

1.1(a)

Investment Assets

1.1(b)

Contracts

2.11(1)

Notifications

ARTICLE 2

PURCHASE OF ASSETS; ASSUMPTION OF LIABILITIES

2.1 Transfer of Assets . Effective as of the Closing Time, the Vendor agrees to sell, transfer, assign and convey to the Purchaser the Assets and the Purchaser agrees to purchase the Assets, subject to the terms and conditions of this Agreement.

2.2 Assumption of Liabilities .

(1)

Upon and subject to the terms and conditions of this Agreement, effective as of the Closing Time (a) the Vendor agrees to transfer and assign to the Purchaser the

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Insurance Policies and the Insurance Liabilities, and (b) the Purchaser agrees to accept, assume and to substitute itself in the Vendor’s place with respect to the Insurance Policies and the Insurance Liabilities as if had originally issued such Insurance Policies. The Purchaser shall perform all promises made by the Vendor and shall be entitled to all rights owed to the Vendor pursuant to the terms and conditions of the Insurance Policies.

(2)

Effective as of the Closing Time, the Purchaser agrees to assume and to pay, perform and discharge, or cause to be paid, performed or discharged, all of the liabilities, commitments and obligations under the Contracts (the “ Assumed Contractual Liabilities ”) and the Assumed Payables.

(3)

Except as provided in this Section 2.2 or otherwise in this Agreement, the Purchaser shall not assume and shall not be liable or responsible for any liabilities, commitments or obligations of the Vendor whatsoever.

2.3 Purchase Price .

The purchase price (the “ Purchase Price ”) payable by the Purchaser to the Vendor for the Assets, as adjusted in accordance with Section 2.6, shall be an amount equal to the Fair Market Value of the Assets.

2.4 Payment of Purchase Price.

The Purchase Price shall be paid and satisfied as follows:

(1)

As of the Closing Time:

(a)

as to an amount equal to the Projected Insurance Liabilities Value, by the assumption of the Insurance Liabilities in accordance with Section 2.2 (1);

(b)

as to an amount equal to the value of the Projected Assumed Payables Value, by the assumption of the Assumed Payables as contemplated by Section 2.2(2); and

(c)

as to the amount by which the Projected Assets Value exceeds the aggregate of the Projected Insurance Liabilities Value and Projected Assumed Payables Value by the issuance to the Vendor of the applicable number of common shares in the capital of the Purchaser (the “ Shares ”) at the issuance price of $1,000 per share.

(2)

On the Adjustment Date, the Net Adjustment Amount shall be paid, if applicable, in the manner provided for in Section 2.6.

2.5 Preparation of Closing Statement . The Vendor shall prepare and deliver to the Purchaser, as soon as reasonably practical after the Closing Time, and in any event not later than 75 days thereafter the Closing Statement. The Closing Statement shall be conclusive for the

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purposes of calculating the value of each of the Insurance Liabilities and the Assumed Payables and the fair market value of the Assets, each as of the Closing Time and shall be final and binding upon the Parties unless before the 10 ^th Business Day after the date on which the Closing Statement was delivered to the Purchaser, either of the Parties (the “ Objecting Party ”) gives to the other a written notice of objection (the “ Objection Notice ”) to any matter stated in the Closing Statement. The Objection Notice shall set out the reasons for the Objecting Party’s objection as well as the amount under dispute and reasonable details of the calculation of such amount. In the event that the Parties agree on the resolution of the dispute set out in the Objection Notice, the Parties shall confirm the resolution in writing and shall thereafter be bound by the resolution and any further monetary adjustment required thereby shall be made within 10 Business Days of the date of receiving the Objection Notice. In the event that the Parties are unable to settle any dispute with respect to the Closing Statement within 10 Business Days after the delivery by the Objecting Party to the other Party of the Objection Notice, the dispute shall forthwith, and in any event within 30 Business Days after the delivery by the Objecting Party of the Objection Notice, be referred to a nationally recognized accounting firm (the “ Reviewing Accountants ”). The Reviewing Accountants shall finally settle the dispute between the Parties and no recourse may thereafter be had with regard to the referred dispute to any court or tribunal. In making a determination, the Reviewing Accountants shall act as experts and not as arbitrators. All costs of the Reviewing Accountants shall be borne equally by the Purchaser and the Vendor.

2.6 Payment on Adjustment Date .

(1)

If an Objection Notice has not been delivered by either Party within the time limit prescribed by Section 2.5, then on the 10 ^th Business Day after delivery of the Closing Statement to the Purchaser pursuant to Section 2.5 (the “ Adjustment Date ”), an amount (the “ Net Adjustment Amount ”) which shall be equal to:

(i)

the Projected Assets Value minus the sum of the Projected Insurance Liabilities Value and the Projected Assumed Payables Value; minus

(ii)

the Closing Time Assets Value minus the sum of the Closing Time Insurance Liabilities Value and the Closing Time Assumed Payables Value;

and shall be paid in the following manner:

(a)

if the Net Adjustment Amount balance is negative, then the Purchaser will pay to the Vendor (as a Purchase Price adjustment) an amount equal to the Net Adjustment Amount by wire transfer, certified cheque or banker’s draft payable to or at the direction of the Vendor; or

(b)

if the Net Adjustment Amount balance is positive, then the Vendor will pay to the Purchaser (as a Purchase Price adjustment) an amount equal to the Net Adjustment Amount by wire transfer, certified cheque or banker’s draft payable to or at the direction of the Purchaser.

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(2)

If either Party gives an Objection Notice within the time limit prescribed by Section 2.5, then the Purchaser or the Vendor, as the case may be, shall pay the portion, if any, of the Net Adjustment Amount in respect of which there is no objection in accordance with Section 2.6 on the Adjustment Date. Upon the resolution of the dispute with respect to the Closing Statement, the Purchaser or the Vendor, as the case may be, shall pay any additional amounts or overpayments, as the case may be, as are determined to be payable in accordance with the provisions of Section 2.6.

2.7 Fair Market Value . The Parties acknowledge that it is their intention that the Purchase Price received by the Vendor for the transfer of the Assets (after adjustment pursuant to Section 2.6) be an amount equal to the Fair Market Value of the Assets, with the intention that no benefit be conferred on any Party or any Person, and that such amount is based on the Parties’ best estimate of the Fair Market Value of the Assets. If any taxing authority having jurisdiction determines or proposes to assess or reassess either or both Parties on the basis that the Purchase Price is not equal to the Fair Market Value of the Assets, as adjusted pursuant to Section 2.4, or proposes to make an assessment of tax on the basis that any benefit or advantage is or has been conferred on any Party or other Person by reason of the sale and purchase provided for herein, then subject to each of the Parties exhausting or waiving its rights of objection to and appeal from any actual or proposed assessment or reassessment by such taxing authority, the Parties agree to adjust the Purchase Price by adjusting the price for which the Shares were issued or taking or causing to be taken such actions as are necessary to adjust the Purchase Price to ensure that the Purchase Price is equal to the Fair Market Value of the Assets purchased pursuant to this Agreement. Thereafter, the Purchase Price will be deemed to be and always to have been the Fair Market Value of the Assets, as determined by the board of directors of the Purchaser after consultation with such taxing authority and the Parties shall make any such further elections or use their best efforts to amend any such previously filed elections as may be necessary or desirable in the opinion of the Vendor.

2.8 Stated Capital . The Vendor and the Purchaser agree that there shall be added to the stated capital account maintained by the Purchaser in respect of its common shares an amount equal to the maximum amount that the Purchaser may add to such stated capital as a result of the issuance of the Shares pursuant to the provisions of the Insurance Companies Act (Canada). Such amount shall be calculated and recorded in the records of the Purchaser no later than 90 days after the Closing Time.

2.9 Allocation of Purchase Price . The Purchase Price shall be allocated among the Assets in the manner agreed to by the Vendor and the Purchaser in writing within 60 days following the date hereof. The Purchaser and the Vendor shall follow such allocations in determining and reporting their liabilities for any Taxes and, without limitation, shall file their respective income tax returns pre

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