##### Table of Contents



United States
Securities and Exchange Commission
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2007
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
 For
the transition period from _______ to _______
 COMMISSION FILE NUMBER: 0-49762
 Triple-S Management Corporation
  Puerto Rico
    
    66-0555678(State or other jurisdiction of incorporation or
    
    (I.R.S. Employer Identification No.)organization)1441 F.D. Roosevelt AvenueSan Juan, Puerto Rico
    
    00920(Address of principal executive offices)
    
    (Zip code)
 (787) 749-4949
 Not applicable
 þ o
  o o þ
 o þ
  Title of each class
    
    Outstanding at September 30, 2007Common Stock, $1.00 par value
    
    26,772,000




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##### 



Triple-S Management Corporation
 FORM 10-Q
   PAGEPART I  FINANCIAL INFORMATIONItem 1. Financial StatementsConsolidated Balance Sheets as of September 30, 2007 and December 31, 2006
    
    
    3Consolidated Statements of Earnings for the three months and nine months
ended September 30, 2007 and 2006
    
    
    4Consolidated Statements of Stockholders Equity and Comprehensive Income
for the nine months ended September 30, 2007 and 2006
    
    
    5Consolidated Statements of Cash Flows for the nine months ended September
30, 2007 and 2006
    
    
    6Notes to Consolidated Financial Statements
    
    
    8Item 2. Managements Discussion and Analysis of Financial Condition and Results
of Operations
    
    
    20Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    32Item 4. Controls and Procedures
    
    
    33PART II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    33Item 1A Risk Factors
    
    
    33Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    34Item 3. Defaults Upon Senior Securities
    
    
    34Item 4. Submission of Matters to a Vote of Security Holders
    
    
    34Item 5. Other Information
    
    
    34Item 6. Exhibits
    
    
    35SIGNATURES
    
    
    36EX-10.1 AMENDMENT TO AGREEMENT WITH PUERTO RICO HEALTH INSURANCE ADMINISTRATIONEX-31.1 SECTION 302 CERTIFICATION OF THE CEOEX-31.2 SECTION 302 CERTIFICATION OF THE CFOEX-32.1 SECTION 906 CERTIFICATION OF THE CEOEX-32.2 SECTION 906 CERTIFICATION OF THE CFO
  2




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##### Table of Contents



Part I  Financial Information
 
 Item 1. Financial Statements
 TRIPLE-S MANAGEMENT CORPORATION AND SUBSIDIARIES
 
 Consolidated Balance Sheets
 (Dollar amounts in thousands, except per share data)
 (Unaudited)September 30,
    
    December 31,2007
    
    2006ASSETSInvestments and cash:Securities held for trading, at fair value:Equity securities
    
    $
    69,968
    
    
    
    83,447Securities available for sale, at fair value:Fixed maturities
    
    
    728,649
    
    
    
    702,566Equity securities
    
    
    73,406
    
    
    
    61,686Securities held to maturity, at amortized cost:Fixed maturities
    
    
    46,331
    
    
    
    47,989Policy loans
    
    
    5,491
    
    
    
    5,194Cash and cash equivalents
    
    
    95,973
    
    
    
    81,564Total investments and cash
    
    
    1,019,818
    
    
    
    982,446Premiums and other receivables, net
    
    
    205,034
    
    
    
    165,626Deferred policy acquisition costs and value of business acquired
    
    
    114,352
    
    
    
    111,417Property and equipment, net
    
    
    42,529
    
    
    
    41,615Net deferred tax asset
    
    
    8,363
    
    
    
    9,292Other assets
    
    
    34,465
    
    
    
    35,113Total assets
    
    $
    1,424,561
    
    
    
    1,345,509LIABILITIES AND STOCKHOLDERS EQUITYClaim liabilities:Claims processed and incomplete
    
    $
    168,914
    
    
    
    147,211Unreported losses
    
    
    162,401
    
    
    
    150,735Unpaid loss-adjustment expenses
    
    
    17,244
    
    
    
    16,736Total claim liabilities
    
    
    348,559
    
    
    
    314,682Liability for future policy benefits
    
    
    190,508
    
    
    
    180,420Unearned premiums
    
    
    98,838
    
    
    
    113,582Policyholder deposits
    
    
    46,136
    
    
    
    45,425Liability to Federal Employees Health Benefits Program
    
    
    19,637
    
    
    
    13,563Accounts payable and accrued liabilities
    
    
    134,345
    
    
    
    110,609Borrowings
    
    
    171,357
    
    
    
    183,087Income tax payable
    
    
    
    
    
    
    9,242Liability for pension benefits
    
    
    32,315
    
    
    
    32,300Total liabilities
    
    
    1,041,695
    
    
    
    1,002,910Stockholders equity:Common stock
    
    
    26,772
    
    
    
    26,733Additional paid-in capital
    
    
    123,993
    
    
    
    124,031Retained earnings
    
    
    249,618
    
    
    
    211,266Accumulated other comprehensive loss
    
    
    (17,517
    )
    
    
    (19,431
    )Total stockholders equity
    
    
    382,866
    
    
    
    342,599Total liabilities and stockholders equity
    
    $
    1,424,561
    
    
    
    1,345,509
  3




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TRIPLE-S MANAGEMENT CORPORATION AND SUBSIDIARIES
 
 Consolidated Statements of Earnings (Unaudited)
  (Dollar amounts in thousands, except per share data)
 Three months ended
    
    Nine months endedSeptember 30,
    
    September 30,2007
    
    2006
    
    2007
    
    2006REVENUES:Premiums earned, net
    
    $
    375,803
    
    
    
    390,431
    
    
    $
    1,101,614
    
    
    
    1,158,599Administrative service fees
    
    
    3,908
    
    
    
    3,725
    
    
    
    11,034
    
    
    
    10,356Net investment income
    
    
    11,229
    
    
    
    10,509
    
    
    
    33,397
    
    
    
    31,325Total operating revenues
    
    
    390,940
    
    
    
    404,665
    
    
    
    1,146,045
    
    
    
    1,200,280Net realized investment gains
    
    
    1,183
    
    
    
    363
    
    
    
    6,163
    
    
    
    1,324Net unrealized investment gain (loss) on trading securities
    
    
    588
    
    
    
    3,407
    
    
    
    (764
    )
    
    
    3,718Other income (expense), net
    
    
    (525
    )
    
    
    1,295
    
    
    
    1,842
    
    
    
    1,208Total revenues
    
    
    392,186
    
    
    
    409,730
    
    
    
    1,153,286
    
    
    
    1,206,530BENEFITS AND EXPENSES:Claims incurred
    
    
    310,033
    
    
    
    317,388
    
    
    
    915,374
    
    
    
    974,304Operating expenses
    
    
    57,944
    
    
    
    55,810
    
    
    
    173,439
    
    
    
    170,472Total operating costs
    
    
    367,977
    
    
    
    373,198
    
    
    
    1,088,813
    
    
    
    1,144,776Interest expense
    
    
    3,938
    
    
    
    4,493
    
    
    
    11,948
    
    
    
    12,387Total benefits and expenses
    
    
    371,915
    
    
    
    377,691
    
    
    
    1,100,761
    
    
    
    1,157,163Income before taxes
    
    
    20,271
    
    
    
    32,039
    
    
    
    52,525
    
    
    
    49,367INCOME TAX EXPENSE:Current
    
    
    4,575
    
    
    
    6,130
    
    
    
    11,573
    
    
    
    9,545Deferred
    
    
    206
    
    
    
    1,079
    
    
    
    152
    
    
    
    992Total income taxes
    
    
    4,781
    
    
    
    7,209
    
    
    
    11,725
    
    
    
    10,537Net income
    
    $
    15,490
    
    
    
    24,830
    
    
    $
    40,800
    
    
    
    38,830Basic net income per share (note 7)
    
    $
    0.58
    
    
    
    0.93
    
    
    $
    1.53
    
    
    
    1.45
  4




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TRIPLE-S MANAGEMENT CORPORATION AND SUBSIDIARIES
 
 Consolidated Statements of Stockholders Equity and
 Comprehensive Income (Unaudited)
   (Dollar amounts in thousands, except per share data)
 2007
    
    2006BALANCE AT JANUARY 1
    
    $
    342,599
    
    
    
    308,703Dividends
    
    
    (2,448
    )
    
    
    (6,231
    )Other
    
    
    1
    
    
    
    Comprehensive income (loss):Net income
    
    
    40,800
    
    
    
    38,830Net unrealized change in fair value of available for sale securities
    
    
    1,137
    
    
    
    (3,487
    )Defined benefit pension plan:Actuarial loss, net
    
    
    935
    
    
    
    Prior service cost, net
    
    
    27
    
    
    
    Net change in fair value of cash flow hedges
    
    
    (185
    )
    
    
    (30
    )Total comprehensive income
    
    
    42,714
    
    
    
    35,313BALANCE AT SEPTEMBER 30
    
    $
    382,866
    
    
    
    337,785
 5




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TRIPLE-S MANAGEMENT CORPORATION AND SUBSIDIARES
 
 Consolidated Statements of Cash Flows (Unaudited)
  (Dollar amounts in thousands, except per share data)
 Nine months endedSeptember 30,2007
    
    2006Net income
    
    $
    40,800
    
    
    
    38,830Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation and amortization
    
    
    5,413
    
    
    
    4,486Net amortization of investments
    
    
    556
    
    
    
    135Provision for doubtful receivables
    
    
    1,902
    
    
    
    1,588Deferred tax expense
    
    
    152
    
    
    
    992Net gain on sale of securities
    
    
    (6,163
    )
    
    
    (1,324
    )Net unrealized (gain) loss of trading securities
    
    
    764
    
    
    
    (3,718
    )Proceeds from trading securities sold:Equity securities
    
    
    38,309
    
    
    
    14,137Acquisition of securities in trading portfolio:Equity securities
    
    
    (19,172
    )
    
    
    (14,599
    )Loss on sale of property and equipment
    
    
    2
    
    
    
    22(Increase) decrease in assets:Premiums receivable
    
    
    (21,258
    )
    
    
    (34,552
    )Agent balances
    
    
    2,084
    
    
    
    (528
    )Accrued interest receivable
    
    
    (1,314
    )
    
    
    (21
    )Other receivables
    
    
    (4,289
    )
    
    
    (2,843
    )Reinsurance recoverable on paid losses
    
    
    (16,409
    )
    
    
    (3,637
    )Deferred policy acquisition costs and
value of business acquired
    
    
    (2,935
    )
    
    
    (4,066
    )Prepaid income tax
    
    
    (2,598
    )
    
    
    3,353Other assets
    
    
    2,942
    
    
    
    459Increase (decrease) in liabilities:Claims processed and incomplete
    
    
    21,703
    
    
    
    18,971Unreported losses
    
    
    11,666
    
    
    
    17,402Unpaid loss-adjustment expenses
    
    
    508
    
    
    
    1,414Liability for future policy benefits
    
    
    10,088
    
    
    
    10,254Unearned premiums
    
    
    (14,744
    )
    
    
    (3,832
    )Policyholder deposits
    
    
    1,192
    
    
    
    1,356Liability to FEHBP
    
    
    6,074
    
    
    
    (1,812
    )Accounts payable and accrued liabilities
    
    
    5,459
    
    
    
    3,970Income tax payable
    
    
    (9,242
    )
    
    
    4,677Net cash provided by
operating activities
    
    $
    51,490
    
    
    
    51,114
  6




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TRIPLE-S MANAGEMENT CORPORATION AND SUBSIDIARIES   Consolidated Statements of Cash Flows (Unaudited)   (Dollar amounts in thousands, except per share data)
 Nine months endedSeptember 30,2007
    
    2006CASH FLOWS FROM INVESTING ACTIVITIES:Proceeds from investments sold or matured:Securities available for sale:Fixed maturities sold
    
    $
    101,828
    
    
    
    16,151Fixed maturities matured
    
    
    25,733
    
    
    
    30,895Equity securities
    
    
    1,000
    
    
    
    1,209Fixed maturity securities held to maturity
    
    
    7,172
    
    
    
    342Acquisition of investments:Securities available for sale:Fixed maturities
    
    
    (147,357
    )
    
    
    (54,221
    )Equity securities
    
    
    (16,759
    )
    
    
    (11,517
    )Securities held to maturity:Fixed maturities
    
    
    (4,891
    )
    
    
    (1,688
    )Acquisition of business, net of $10,403 of cash acquired
    
    
    
    
    
    
    (27,793
    )Net disbursements for policy loans
    
    
    (297
    )
    
    
    (502
    )Net capital expenditures
    
    
    (6,329
    )
    
    
    (9,468
    )Net cash used in investing activities
    
    
    (39,900
    )
    
    
    (56,592
    )CASH FLOWS FROM FINANCING ACTIVITIES:Change in outstanding checks in excess of bank balances
    
    
    17,477
    
    
    
    490Repayments of short-term borrowings
    
    
    (43,559
    )
    
    
    (119,547
    )Proceeds from short-term borrowings
    
    
    43,559
    
    
    
    117,807Repayments of long-term borrowings
    
    
    (11,730
    )
    
    
    (2,093
    )Proceeds from long-term borrowings
    
    
    
    
    
    
    35,000Dividends paid
    
    
    (2,448
    )
    
    
    (6,231
    )Proceeds from policyholder deposits
    
    
    5,133
    
    
    
    4,389Surrenders of policyholder deposits
    
    
    (5,614
    )
    
    
    (10,213
    )Other
    
    
    1
    
    
    
    Net cash provided by financing activities
    
    
    2,819
    
    
    
    19,602Net increase in cash and cash equivalents
    
    
    14,409
    
    
    
    14,124Cash and cash equivalents at beginning of the period
    
    
    81,564
    
    
    
    49,050Cash and cash equivalents at end of the period
    
    $
    95,973
    
    
    
    63,174
  7




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TRIPLE-S MANAGEMENT CORPORATION AND SUBSIDIARIES
 
 Notes to Consolidated Financial Statements
  (Dollar amounts in thousands, except per share data)
  (1) Basis of Presentation
    (2) Recent Accounting Standards
  Accounting for Uncertainty in Income Taxes an Interpretation of FASB
Statement No. 109
 (3) Segment Information
   8




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TRIPLE-S MANAGEMENT CORPORATION AND SUBSIDIARIES  Notes to Consolidated Financial Statements   (Dollar amounts in thousands, except per share data)
 Three months ended
    
    Nine months endedSeptember 30,
    
    September 30,2007
    
    2006
    
    2007
    
    2006Operating revenues:Managed Care:Premiums earned, net
    
    $
    330,366
    
    
    
    346,668
    
    
    $
    965,909
    
    
    
    1,028,452Administrative service fees
    
    
    3,908
    
    
    
    3,725
    
    
    
    11,034
    
    
    
    10,356Intersegment premiums /service fees
    
    
    1,309
    
    
    
    1,335
    
    
    
    4,717
    
    
    
    4,224Net investment income
    
    
    4,848
    
    
    
    4,770
    
    
    
    14,338
    
    
    
    13,842Total managed care
    
    
    340,431
    
    
    
    356,498
    
    
    
    995,998
    
    
    
    1,056,874Life Insurance:Premiums earned, net
    
    
    21,974
    
    
    
    21,936
    
    
    
    66,837
    
    
    
    64,434Intersegment premiums
    
    
    92
    
    
    
    79
    
    
    
    264
    
    
    
    235Net investment income
    
    
    3,695
    
    
    
    3,285
    
    
    
    11,054
    
    
    
    10,117Total life
    
    
    25,761
    
    
    
    25,300
    
    
    
    78,155
    
    
    
    74,786Property and Casualty Insurance:Premiums earned, net
    
    
    23,463
    
    
    
    21,827
    
    
    
    68,868
    
    
    
    65,713Intersegment premiums
    
    
    154
    
    
    
    154
    
    
    
    462
    
    
    
    438Net investment income
    
    
    2,566
    
    
    
    2,340
    
    
    
    7,645
    
    
    
    7,020Total property and casualty
    
    
    26,183
    
    
    
    24,321
    
    
    
    76,975
    
    
    
    73,171Other segments - intersegment service revenues *
    
    
    10,683
    
    
    
    12,855
    
    
    
    32,325
    
    
    
    38,320Total business segments
    
    
    403,058
    
    
    
    418,974
    
    
    
    1,183,453
    
    
    
    1,243,151TSM operating revenues from external sources
    
    
    120
    
    
    
    114
    
    
    
    360
    
    
    
    346Elimination of intersegment premiums
    
    
    (1,555
    )
    
    
    (1,568
    )
    
    
    (5,443
    )
    
    
    (4,897
    )Elimination of intersegment service fees
    
    
    (10,683
    )
    
    
    (12,855
    )
    
    
    (32,325
    )
    
    
    (38,320
    )Consolidated operating revenues
    
    $
    390,940
    
    
    
    404,665
    
    
    $
    1,146,045
    
    
    
    1,200,280
 *
    
    Includes segments that are not required to be reported separately. These segments include the data
processing services organization as well as the third-party administrator of managed care services. 9




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TRIPLE-S MANAGEMENT CORPORATION AND SUBSIDIARIES   Notes to Consolidated Financial Statements   (Dollar amounts in thousands, except per share data)
 Three months ended
    
    Nine months endedSeptember 30,
    
    September 30,2007
    
    2006
    
    2007
    
    2006Operating income:Managed care
    
    $
    17,499
    
    
    
    22,377
    
    
    $
    39,396
    
    
    
    33,165Life insurance
    
    
    2,605
    
    
    
    3,089
    
    
    
    8,260
    
    
    
    9,069Property and casualty insurance
    
    
    1,508
    
    
    
    3,756
    
    
    
    6,494
    
    
    
    7,946Other segments *
    
    
    509
    
    
    
    505
    
    
    
    787
    
    
    
    1,009Total business segments
    
    
    22,121
    
    
    
    29,727
    
    
    
    54,937
    
    
    
    51,189TSM operating revenues from external sources
    
    
    120
    
    
    
    114
    
    
    
    360
    
    
    
    346TSM unallocated operating expenses
    
    
    (2,006
    )
    
    
    (1,120
    )
    
    
    (6,279
    )
    
    
    (3,762
    )Elimination of TSM
intersegment charges
    
    
    2,728
    
    
    
    2,746
    
    
    
    8,214
    
    
    
    7,731Consolidated operating income
    
    
    22,963
    
    
    
    31,467
    
    
    
    57,232
    
    
    
    55,504Consolidated net realized investment gains
    
    
    1,183
    
    
    
    363
    
    
    
    6,163
    
    
    
    1,324Consolidated net unrealized gain (loss) on
trading securities
    
    
    588
    
    
    
    3,407
    
    
    
    (764
    )
    
    
    3,718Consolidated interest expense
    
    
    (3,938
    )
    
    
    (4,493
    )
    
    
    (11,948
    )
    
    
    (12,387
    )Consolidated other income, net
    
    
    (525
    )
    
    
    1,295
    
    
    
    1,842
    
    
    
    1,208Consolidated income before taxes
    
    $
    20,271
    
    
    
    32,039
    
    
    $
    52,525
    
    
    
    49,367Depreciation expense:Managed care
    
    $
    1,167
    
    
    
    977
    
    
    $
    2,925
    
    
    
    2,786Life insurance
    
    
    193
    
    
    
    195
    
    
    
    532
    
    
    
    512Property and casualty insurance
    
    
    377
    
    
    
    101
    
    
    
    1,114
    
    
    
    340Total business segments
    
    
    1,737
    
    
    
    1,273
    
    
    
    4,571
    
    
    
    3,638TSM depreciation expense
    
    
    281
    
    
    
    283
    
    
    
    842
    
    
    
    1,121Consolidated depreciation
expense
    
    $
    2,018
    
    
    
    1,556
    
    
    $
    5,413
    
    
    
    4,759
 *
    
    Includes segments that are not required to be reported separately. These segments include the data
processing services organization as well as the third-party administrator of managed care services. 10




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TRIPLE-S MANAGEMENT CORPORATION AND SUBSIDIARIES   Notes to Consolidated Financial Statements   (Dollar amounts in thousands, except per share data)
 September 30,
    
    December 31,2007
    
    2006Assets:Managed care
    
    $
    633,387
    
    
    
    600,948Life insurance
    
    
    424,326
    
    
    
    407,994Property and casualty insurance
    
    
    354,444
    
    
    
    326,894Other segments *
    
    
    8,350
    
    
    
    7,807Total business segments
    
    
    1,420,507
    
    
    
    1,343,643Unallocated amounts related to TSM:Cash, cash equivalents, and investments
    
    
    10,346
    
    
    
    11,879Property and equipment,net
    
    
    22,801
    
    
    
    23,792Other assets
    
    
    3,044
    
    
    
    4,09636,191
    
    
    
    39,767Elimination entries-intersegment receivables and others
    
    
    (32,137
    )
    
    
    (37,901
    )Consolidated total assets
    
    $
    1,424,561
    
    
    
    1,345,509Significant noncash items:Net change in unrealized gain on securities available for sale:Managed care
    
    $
    (449
    )
    
    
    (1,560
    )Life insurance
    
    
    (690
    )
    
    
    (1,457
    )Property and casualty insurance
    
    
    2,184
    
    
    
    (183
    )Total business segments
    
    
    1,045
    
    
    
    (3,200
    )Amount related to TSM
    
    
    92
    
    
    
    (12
    )Consolidated net change in unrealized gain on
securities available for sale
    
    $
    1,137
    
    
    
    (3,212
    )Net change in defined benefit pension plan liability:Managed care
    
    $
    658
    
    
    
    3,795Life
    
    
    9
    
    
    
    212Property and casualty
    
    
    69
    
    
    
    197Other segments*
    
    
    205
    
    
    
    614Total business segments
    
    
    941
    
    
    
    4,818Amount related to TSM
    
    
    21
    
    
    
    134Consolidated net change in defined benefit pension
plan liability
    
    $
    962
    
    
    
    4,952
 *
    
    Includes segments that are not required to be reported separately. These segments
include the data processing services organization as well as the third-party
administrator of managed care services. 11




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##### Table of Contents



TRIPLE-S MANAGEMENT CORPORATION AND SUBSIDIARIES   Notes to Consolidated Financial Statements   (Dollar amounts in thousands, except per share data)
 (4) Investment in Securities
  September 30, 2007Gross
    
    GrossAmortized
    
    unrealized
    
    unrealized
    
    Estimated faircost
    
    gains
    
    losses
    
    valueTrading securities:Equity securities
    
    $
    54,215
    
    
    
    16,525
    
    
    
    (772
    )
    
    
    69,968Securities available for sale:Fixed maturities
    
    
    735,033
    
    
    
    1,969
    
    
    
    (8,353
    )
    
    
    728,649Equity securities
    
    
    65,586
    
    
    
    10,200
    
    
    
    (2,380
    )
    
    
    73,406800,619
    
    
    
    12,169
    
    
    
    (10,733
    )
    
    
    802,055Securities held to maturity:Fixed maturities
    
    
    46,331
    
    
    
    53
    
    
    
    (710
    )
    
    
    45,674$
    901,165
    
    
    
    28,747
    
    
    
    (12,215
    )
    
    
    917,697
 December 31, 2006Gross
    
    GrossAmortized
    
    unrealized
    
    unrealized
    
    Estimated faircost
    
    gains
    
    losses
    
    valueTrading securities:Equity securities
    
    $
    66,930
    
    
    
    17,436
    
    
    
    (919
    )
    
    
    83,447Securities available for sale:Fixed maturities
    
    
    714,113
    
    
    
    590
    
    
    
    (12,137
    )
    
    
    702,566Equity securities
    
    
    50,132
    
    
    
    13,112
    
    
    
    (1,558
    )
    
    
    61,686764,245
    
    
    
    13,702
    
    
    
    (13,695
    )
    
    
    764,252Securities held to maturity:Fixed maturities
    
    
    47,989
    
    
    
    383
    
    
    
    (1,491
    )
    
    
    46,881$
    879,164
    
    
    
    31,521
    
    
    
    (16,105
    )
    
    
    894,580
   12




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TRIPLE-S MANAGEMENT CORPORATION AND SUBSIDIARIES   Notes to Consolidated Financial Statements   (Dollar amounts in thousands, except per share data)
  (5) Premiums and Other Receivables
  September 30,
    
    December 31,2007
    
    2006Premium
    
    $
    68,696
    
    
    
    53,377Self-funded group receivables
    
    
    30,038
    
    
    
    24,854FEHBP
    
    
    9,942
    
    
    
    9,187Agents balances
    
    
    26,729
    
    
    
    28,813Accrued interest
    
    
    9,368
    
    
    
    8,054Reinsurance recoverable on paid losses
    
    
    57,294
    
    
    
    40,885Other
    
    
    23,099
    
    
    
    18,686225,166
    
    
    
    183,856Less allowance for doubtful receivables:Premiums
    
    
    13,195
    
    
    
    12,128Other
    
    
    6,937
    
    
    
    6,10220,132
    
    
    
    18,230Total premiums and other receivables
    
    $
    205,034
    
    
    
    165,626
 (6) Claim Liabilities
  Three months ended
    
    Nine months endedSeptember 30,
    
    September 30,2007
    
    2006
    
    2007
    
    2006Claim liabilities at beginning of period
    
    $
    344,816
    
    
    
    341,598
    
    
    $
    314,682
    
    
    
    297,563Reinsurance recoverable on claim liabilities
    
    
    (50,003
    )
    
    
    (29,173
    )
    
    
    (32,066
    )
    
    
    (28,720
    )Net claim liabilities at beginning of period
    
    
    294,813
    
    
    
    312,425
    
    
    
    282,616
    
    
    
    268,843Claim liabilities acquired from GA Life
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,771Incurred claims and loss-adjustment expenses:Current period insured events
    
    
    311,925
    
    
    
    317,413
    
    
    
    931,605
    
    
    
    975,170Prior period insured events
    
    
    (4,815
    )
    
    
    (6,163
    )
    
    
    (25,753
    )
    
    
    (12,471
    )Total
    
    
    307,110
    
    
    
    311,250
    
    
    
    905,852
    
    
    
    962,699Payments of losses and loss-adjustment expenses:Current period insured events
    
    
    288,469
    
    
    
    289,548
    
    
    
    711,175
    
    
    
    748,093Prior period insured events
    
    
    14,776
    
    
    
    20,010
    
    
    
    178,615
    
    
    
    178,103Total
    
    
    303,245
    
    
    
    309,558
    
    
    
    889,790
    
    
    
    926,196Net claim liabilities at end of period
    
    
    298,678
    
    
    
    314,117
    
    
    
    298,678
    
    
    
    314,117Reinsurance recoverable on claim liabilities
    
    
    49,881
    
    
    
    30,416
    
    
    
    49,881
    
    
    
    30,416Claim liabilities at end of period
    
    $
    348,559
    
    
    
    344,533
    
    
    $
    348,559
    
    
    
    344,533
 13




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##### Table of Contents



TRIPLE-S MANAGEMENT CORPORATION AND SUBSIDIARIES   Notes to Consolidated Financial Statements   (Dollar amounts in thousands, except per share data)
   (7) Capital Stock
    (8) Borrowings
  September 30,
    
    December 31,2007
    
    2006Secured loan payable of $20,000, payable in various different
installments up to August 1, 2007, with interest payable on a
monthly basis at a rate reset periodically of 130 basis points
over LIBOR selected (which was 6.67% December 31, 2006)
    
    $
    
    
    
    
    10,500Senior unsecured notes payable of $50,000 due September 2019.
Interest is payable semiannually at a fixed rate of 6.30%.
    
    
    50,000
    
    
    
    50,000Senior unsecured notes payable of $60,000 due December 2020.
Interest is payable monthly at a fixed rate of 6.60%.
    
    
    60,000
    
    
    
    60,000Senior unsecured notes payable of $35,000 due January 2021.
Interest is payable monthly at a fixed rate of 6.70%.
    
    
    35,000
    
    
    
    35,000Secured loan payable of $41,000, payable in monthly installments of
$137 up to July 1, 2024, plus interest at a rate reset periodically
of 100 basis points over LIBOR selected (which was 6.72% and
6.35% at September 30, 2007 and December 31, 2006, respectively)
    
    
    26,357
    
    
    
    27,587Total borrowings
    
    $
    171,357
    
    
    
    183,087
 
 14




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##### Table of Contents



TRIPLE-S MANAGEMENT CORPORATION AND SUBSIDIARIES   Notes to Consolidated Financial Statements   (Dollar amounts in thousands, except per share data)
 (9) Comprehensive Income
  AccumulatedUnrealized
    
    Liability for
    
    
    
    
    
    othergain (loss) on
    
    pension
    
    Cash flow
    
    comprehensivesecurities
    
    benefits
    
    hedges
    
    incomeBALANCE AT JANUARY 1
    
    $
    5
    
    
    
    (19,742
    )
    
    
    306
    
    
    
    (19,431
    )Net current period change
    
    
    1,137
    
    
    
    962
    
    
    
    (185
    )
    
    
    1,914BALANCE AT SEPTEMBER 30
    
    $
    1,142
    
    
    
    (18,780
    )
    
    
    121
    
    
    
    (17,517
    )
 (10) Income Taxes
    
 15




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##### Table of Contents



TRIPLE-S MANAGEMENT CORPORATION AND SUBSIDIARIES   Notes to Consolidated Financial Statements   (Dollar amounts in thousands, except per share data)
 (11) Pension Plan
  Three months ended
    
    Nine months endedSeptember 30,
    
    September 30,2007
    
    2006
    
    2007
    
    2006Components of net periodic benefit cost:Service cost
    
    $
    1,254
    
    
    
    1,350
    
    
    $
    4,194
    
    
    
    4,042Interest cost
    
    
    1,195
    
    
    
    1,151
    
    
    
    3,916
    
    
    
    3,454Expected return on assets
    
    
    (1,034
    )
    
    
    (954
    )
    
    
    (3,395
    )
    
    
    (2,880
    )Prior service cost
    
    
    14
    
    
    
    12
    
    
    
    44
    
    
    
    36Actuarial loss
    
    
    501
    
    
    
    602
    
    
    
    1,526
    
    
    
    1,794Net periodic benefit cost
    
    $
    1,930
    
    
    
    2,161
    
    
    $
    6,285
    
    
    
    6,446
 Employer contributions
  (12) Net Income Available to Stockholders and Net Income per Share
   Three months ended
    
    Nine months endedSeptember 30,
    
    September 30,2007
    
    2006
    
    2007
    
    2006Numerator for basic earnings per share:Net income available to stockholders
    
    $
    15,490
    
    
    
    24,830
    
    
    $
    40,800
    
    
    
    38,830Denominator for basic earnings per share:Weighted average of outstanding
common shares giving effect to
3,000-for-one stock split
    
    
    26,772,000
    
    
    
    26,733,000
    
    
    
    26,741,333
    
    
    
    26,728,333Basic net income per share giving effect
to 3,000-for-one stock split
    
    $
    0.58
    
    
    
    0.93
    
    
    $
    1.53
    
    
    
    1.45
 (13) Contingencies
  16




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TRIPLE-S MANAGEMENT CORPORATION AND SUBSIDIARIES   Notes to Consolidated Financial Statements   (Dollar amounts in thousands, except per share data)
  Sánchez Litigation
  Jordán et al Litigation
     17




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##### Table of Contents



TRIPLE-S MANAGEMENT CORPORATION AND SUBSIDIARIES   Notes to Consolidated Financial Statements   (Dollar amounts in thousands, except per share data)
   Thomas Litigation
       18




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##### Table of Contents



TRIPLE-S MANAGEMENT CORPORATION AND SUBSIDIARIES   Notes to Consolidated Financial Statements   (Dollar amounts in thousands, except per share data)
 Lens Litigation


Colón Litigation




Puerto
Rico Center for Municipal Revenue Collection




Puerto Rico House of Representatives Investigation




19



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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Cautionary Statement Regarding Forward-Looking Information
  Overview
     20




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Recent Developments
 Healthcare Reform Contracts
  Recent Accounting Standards
  Managed Care Membership
 As of September 30,2007
    
    2006Managed care enrollment:Commercial 1
    
    
    576,600
    
    
    
    589,785Reform 2
    
    
    352,722
    
    
    
    554,996Medicare Advantage
    
    
    48,291
    
    
    
    44,425Total
    
    
    977,613
    
    
    
    1,189,206Managed care enrollment by funding arrangement:Fully-insured
    
    
    816,068
    
    
    
    1,032,083Self-insured
    
    
    161,545
    
    
    
    157,123Total
    
    
    977,613
    
    
    
    1,189,206
 (1)
    
    Commercial membership includes corporate accounts, self-funded employers, individual
accounts, Medicare Supplement, Federal government employees and local government employees.(2)
    
    Enrollment as of September 30, 2006 includes 198,301 members of the Metro-North region. The
contract for this region was not renewed effective November 1, 2006. 21




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##### Table of Contents



Consolidated Operating Results
  Three months ended
    
    Nine months endedSeptember 30,
    
    September 30,(Dollar amounts in millions)
    
    2007
    
    2006
    
    2007
    
    2006Revenues:Premiums earned, net
    
    $
    375.8
    
    
    
    390.4
    
    
    $
    1,101.6
    
    
    
    1,158.6Administrative service fees
    
    
    3.9
    
    
    
    3.7
    
    
    
    11.0
    
    
    
    10.4Net investment income
    
    
    11.2
    
    
    
    10.5
    
    
    
    33.4
    
    
    
    31.3Total operating revenues
    
    
    390.9
    
    
    
    404.6
    
    
    
    1,146.0
    
    
    
    1,200.3Net realized investment gains
    
    
    1.2
    
    
    
    0.4
    
    
    
    6.2
    
    
    
    1.3Net unrealized gain (loss) on trading securities
    
    
    0.6
    
    
    
    3.4
    
    
    
    (0.8
    )
    
    
    3.7Other income (expense), net
    
    
    (0.5
    )
    
    
    1.3
    
    
    
    1.8
    
    
    
    1.2Total revenues
    
    
    392.2
    
    
    
    409.7
    
    
    
    1,153.2
    
    
    
    1,206.5Benefits and expenses:Claims incurred
    
    
    310.0
    
    
    
    317.4
    
    
    
    915.4
    
    
    
    974.3Operating expenses
    
    
    58.0
    
    
    
    55.8
    
    
    
    173.4
    
    
    
    170.5Total operating expenses
    
    
    368.0
    
    
    
    373.2
    
    
    
    1,088.8
    
    
    
    1,144.8Interest expense
    
    
    3.9
    
    
    
    4.5
    
    
    
    11.9
    
    
    
    12.4Total benefits and expenses
    
    
    371.9
    
    
    
    377.7
    
    
    
    1,100.7
    
    
    
    1,157.2Income before taxes
    
    
    20.3
    
    
    
    32.0
    
    
    
    52.5
    
    
    
    49.3Income tax expense
    
    
    4.8
    
    
    
    7.2
    
    
    
    11.7
    
    
    
    10.5Net income
    
    $
    15.5
    
    
    
    24.8
    
    
    $
    40.8
    
    
    
    38.8
 Three Months Ended September 30, 2007 Compared to Three Months Ended September 30, 2006
 Operating Revenues
  Net Unrealized Gain (Loss) on Trading Securities and Other Income(Expense), Net
  Claims Incurred
  22




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Operating Expenses
  Income Tax Expense
  Nine Months Ended September 30, 2007 Compared to Nine Months Ended September 30, 2006
 Operating Revenues
   Net Realized Investment Gains
  Net Unrealized (Loss) Gain on Trading Securities and Other Income (Expense), Net
  Claims Incurred
  23




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##### Table of Contents



Operating Expenses
  Income Tax Expense
  24




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##### Table of Contents



Managed Care Operating Results
 Three months ended
    
    Nine months endedSeptember 30,
    
    September 30,(Dollar amounts in millions)
    
    2007
    
    2006
    
    2007
    
    2006Medical operating revenues:Medical premiums earned, net:Commercial
    
    $
    177.8
    
    
    
    180.2
    
    
    $
    538.7
    
    
    
    540.7Reform
    
    
    85.4
    
    
    
    118.9
    
    
    
    243.8
    
    
    
    366.7Medicare Advantage
    
    
    67.9
    
    
    
    48.3
    
    
    
    185.7
    
    
    
    123.2Medical premiums earned, net
    
    
    331.1
    
    
    
    347.4
    
    
    
    968.2
    
    
    
    1,030.6Administrative service fees
    
    
    4.5
    
    
    
    4.3
    
    
    
    13.5
    
    
    
    12.4Net investment income
    
    
    4.8
    
    
    
    4.8
    
    
    
    14.3
    
    
    
    13.9Total medical operating revenues
    
    
    340.4
    
    
    
    356.5
    
    
    
    996.0
    
    
    
    1,056.9Medical operating costs:Medical claims incurred
    
    
    287.6
    
    
    
    295.6
    
    
    
    848.9
    
    
    
    909.4Medical operating expenses
    
    
    35.3
    
    
    
    38.5
    
    
    
    107.7
    
    
    
    114.3Total medical operating costs
    
    
    322.9
    
    
    
    334.1
    
    
    
    956.6
    
    
    
    1,023.7Medical operating income
    
    $
    17.5
    
    
    
    22.4
    
    
    $
    39.4
    
    
    
    33.2Additional data:Member months enrollment:Commercial:Fully-insured
    
    
    1,242,254
    
    
    
    1,304,711
    
    
    
    3,743,350
    
    
    
    3,995,526Self-funded
    
    
    483,459
    
    
    
    469,318
    
    
    
    1,447,287
    
    
    
    1,387,341Total commercial member months
    
    
    1,725,713
    
    
    
    1,774,029
    
    
    
    5,190,637
    
    
    
    5,382,867Reform
    
    
    1,066,016
    
    
    
    1,673,229
    
    
    
    3,199,546
    
    
    
    5,211,533Medicare Advantage
    
    
    142,831
    
    
    
    132,209
    
    
    
    407,675
    
    
    
    327,289Total member months
    
    
    2,934,560
    
    
    
    3,579,467
    
    
    
    8,797,858
    
    
    
    10,921,689Medical loss ratio
    
    
    86.9
    %
    
    
    85.1
    %
    
    
    87.7
    %
    
    
    88.2
    %Operating expense ratio
    
    
    10.5
    %
    
    
    10.9
    %
    
    
    11.0
    %
    
    
    11.0
    %
 Three Months Ended September 30, 2007 Compared to Three Months Ended September 30, 2006
 Medical Operating Revenues
  
    
    Medical premiums earned in the Reform business decreased by $33.5 million, or 28.2%, to
$85.4 million during the 2007 period. This fluctuation is due to a decrease in member
months enrollment in the Reform business by 607,213, or 36.3%, mainly as the result of the
termination of the contract for the Metro-North region effective November 1, 2006. The
member months enrollment of the Metro-North region was 598,765 during the three months
ended September 30, 2006. The effect of this decrease in membership was mitigated by an
increase in premium rates of approximately 8.7% effective July 1, 2007 and an increase of
approximately 6.7% effective November 1, 2006.
    
    Medical premiums generated by the Commercial business decreased by $2.4 million, or
1.3%, to $177.8 million during the three months ended September 30, 2007. This fluctuation
is primarily the result of a decrease in member months enrollment of 62,457, or 4.8%,
partially offset by an increase in average premium rates of 3.6%.
 25




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##### Table of Contents




    
    Medical premiums generated by the Medicare Advantage business increased during the three
months ended September 30, 2007 by $19.6 million, or 40.6%, to $67.9 million, primarily due
to an increase in member months enrollment of 10,622, or 8.0%. The increase in member
months is the net result of an increase of 30,391, or 38.7%, in the membership of our
Medicare Advantage products and a decrease of 19,769, or 36.8%, in the membership of our
PDP product. We expect that Medicare Advantage enrollment will continue to experience
growth, but a slower pace than in prior periods. In addition, during this period the
segment received a higher than expected retroactive payment of $2.5 million from the
Centers for Medicare and Medicaid Services (CMS) corresponding to premiums for active
members during the first two quarters of 2007.
 Medical Claims Incurred
  Medical Operating Expenses
  Nine Months Ended September 30, 2007 Compared to Nine Months Ended September 30, 2006
 Medical Operating Revenues
  
    
    Medical premiums earned in the Reform business decreased by $122.9 million, or 33.5%, to
$243.8 million during the 2007 period. This fluctuation is due to a decrease in member
months enrollment in the Reform business by 2,011,987, or 38.6%, mainly as the result of
the termination of the contract for the Metro-North region, the tightening of membership
restrictions by the Puerto Rico government, and the shift in membership of dual eligibles
to Medicare Advantage policies offered by us and our competitors. The member months
enrollment of the Metro-North region was 1,841,815 during the nine months ended September
30, 2006. The effect of this decrease in membership was mitigated by an increase in
premium rates, effective July 1, 2007, of approximately 8.7% and a retroactive increase in
rates of approximately 6.7% effective November 1, 2006.
    
    Medical premiums generated by the Commercial business decreased by $2.0 million, or
0.4%, to $538.7 million during the 2007 period. This decrease is primarily the result of a
decrease in member months enrollment of 252,176, or 6.3%, partially offset by an increase
in average premium rates of 6.3%.
    
    Medical premiums generated by the Medicare Advantage business increased during the nine
months ended September 30, 2007 by $62.5 million, or 50.7%, to $185.7 million, primarily
due to an increase in member months enrollment of 80,386, or 24.6%. The increase in member
months is the net result of an increase of 110,540, or 57.2%, in the membership of our
Medicare Advantage products and a decrease of 30,154, or 22.5%, in the membership of our
PDP product. We expect that Medicare Advantage enrollment will
 26




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##### Table of Contents



continue to experience
growth, but a slower pace than in prior periods. In addition, the segment recognized an
additional premium adjustment of $3.2 million related to the 2006 risk scores review
performed by CMS.
  Medical Claims Incurred
  Medical Operating Expenses
  Life Insurance Operating Results
  Three months ended
    
    Nine months endedSeptember 30,
    
    September 30,(Dollar amounts in millions)
    
    2007
    
    2006
    
    2007
    
    2006Operating revenues:Premiums earned, net:Premiums earned
    
    $
    24.1
    
    
    
    24.3
    
    
    $
    73.5
    
    
    
    67.2Premiums earned ceded
    
    
    (2.1
    )
    
    
    (2.2
    )
    
    
    (6.6
    )
    
    
    (7.1
    )Assumed premiums earned
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4.4Net premiums earned
    
    
    22.0
    
    
    
    22.1
    
    
    
    66.9
    
    
    
    64.5Commission income on reinsuarance
    
    
    0.1
    
    
    
    (0.1
    )
    
    
    0.2
    
    
    
    0.1Premiums earned, net
    
    
    22.1
    
    
    
    22.0
    
    
    
    67.1
    
    
    
    64.6Net investment income
    
    
    3.7
    
    
    
    3.3
    
    
    
    11.1
    
    
    
    10.1Total operating revenues
    
    
    25.8
    
    
    
    25.3
    
    
    
    78.2
    
    
    
    74.7Operating costs:Policy benefits and claims incurred
    
    
    11.1
    
    
    
    11.2
    
    
    
    34.4
    
    
    
    32.4Underwriting and other expenses
    
    
    12.1
    
    
    
    11.0
    
    
    
    35.5
    
    
    
    33.3Total operating costs
    
    
    23.2
    
    
    
    22.2
    
    
    
    69.9
    
    
    
    65.7Operating income
    
    $
    2.6
    
    
    
    3.1
    
    
    $
    8.3
    
    
    
    9.0Additional data:Loss ratio
    
    
    50.2
    %
    
    
    50.9
    %
    
    
    51.3
    %
    
    
    50.2
    %Operating expense ratio
    
    
    54.8
    %
    
    
    50.0
    %
    
    
    52.9
    %
    
    
    51.5
    %
 27




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##### Table of Contents



Three Months Ended September 30, 2007 Compared to Three Months Ended September 30, 2006
 Operating Revenues
  Policy Benefits and Claims Incurred
  Underwriting and Other Expenses
  Nine Months Ended September 30, 2007 Compared to Nine Months Ended September 30, 2006
 Operating Revenues
   Policy Benefits and Claims Incurred
  28




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##### Table of Contents



Underwriting and Other Expenses
  Property and Casualty Insurance Operating Results
 Three months ended
    
    Nine months endedSeptember 30,
    
    September 30,(Dollar amounts in millions)
    
    2007
    
    2006
    
    2007
    
    2006Operating revenues:Premiums earned, net:Premiums written
    
    $
    39.1
    
    
    
    41.5
    
    
    
    117.3
    
    
    
    112.6Premiums ceded
    
    
    (17.0
    )
    
    
    (17.4
    )
    
    
    (50.3
    )
    
    
    (46.7
    )Change in unearned premiums
    
    
    1.5
    
    
    
    (2.1
    )
    
    
    2.3
    
    
    
    0.2Premiums earned, net
    
    
    23.6
    
    
    
    22.0
    
    
    
    69.3
    
    
    
    66.1Net investment income
    
    
    2.5
    
    
    
    2.3
    
    
    
    7.6
    
    
    
    7.0Total operating revenues
    
    
    26.1
    
    
    
    24.3
    
    
    
    76.9
    
    
    
    73.1Operating costs:Claims incurred
    
    
    11.4
    
    
    
    10.6
    
    
    
    32.1
    
    
    
    32.5Underwriting and other expenses
    
    
    13.3
    
    
    
    10.0
    
    
    
    38.4
    
    
    
    32.7Total operating costs
    
    
    24.7
    
    
    
    20.6
    
    
    
    70.5
    
    
    
    65.2Operating income
    
    $
    1.4
    
    
    
    3.7
    
    
    
    6.4
    
    
    
    7.9Additional data:Loss ratio
    
    
    48.3
    %
    
    
    48.2
    %
    
    
    46.3
    %
    
    
    49.2
    %Operating expense ratio
    
    
    56.4
    %
    
    
    45.5
    %
    
    
    55.4
    %
    
    
    49.5
    %Combined ratio
    
    
    104.7
    %
    
    
    93.7
    %
    
    
    101.7
    %
    
    
    98.7
    %
 Three Months Ended September 30, 2007 Compared to Three Months Ended September 30, 2006
 Operating Revenues
   Claims Incurred
  Underwriting and Other Expenses
  29




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##### Table of Contents



Nine Months Ended September 30, 2007 Compared to Nine Months Ended September 30, 2006
 Operating Revenues
    Claims Incurred
  Underwriting and Other Expenses
  30




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##### Table of Contents



Liquidity and Capital Resources
 Cash Flows
  Nine months endedSeptember 30,(Dollar amounts in millions)
    
    2007
    
    2006Sources of cash:Cash provided by operating activities
    
    $
    51.5
    
    
    
    51.1Proceeds from long-term borrowings
    
    
    
    
    
    
    35.0Proceeds from short-term borrowings
    
    
    43.6
    
    
    
    117.8Proceeds from policyholder deposits
    
    
    5.1
    
    
    
    4.4Other
    
    
    17.4
    
    
    
    0.4Total sources of cash
    
    
    117.6
    
    
    
    208.7Uses of cash:Net purchases of investment securities
    
    
    (33.3
    )
    
    
    (18.8
    )Acquisition of GA Life, net of cash aquired
    
    
    
    
    
    
    (27.8
    )Capital expenditures
    
    
    (6.3
    )
    
    
    (9.5
    )Dividends
    
    
    (2.4
    )
    
    
    (6.2
    )Payments of long-term borrowings
    
    
    (11.7
    )
    
    
    (2.1
    )Net payments of short-term borrowings
    
    
    (43.6
    )
    
    
    (119.5
    )Net surrenders of policyholder deposits
    
    
    (5.6
    )
    
    
    (10.2
    )Other
    
    
    (0.3
    )
    
    
    (0.5
    )Total uses of cash
    
    
    (103.2
    )
    
    
    (194.6
    )Net increase in cash and cash equivalents
    
    $
    14.4
    
    
    
    14.1
        31




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##### Table of Contents



Financing and Financing Capacity
   
    
    On January 31, 2006, we issued and sold $35.0 million of our 6.7% senior unsecured notes
payable due January 2021 (the 6.7% notes).
 
    
    On December 21, 2005, we issued and sold $60.0 million of our 6.6% senior unsecured notes
due December 2020 (the 6.6% notes).
 
    
    On September 30, 2004, we issued and sold $50.0 million of its 6.3% senior unsecured notes
due September 2019 (the 6.3% notes).
        
 Item 3. Quantitative and Qualitative Disclosures about Market Risk
  32




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##### Table of Contents



Item 4. Controls and Procedures
  
 Part II  Other Information
 
 Item 1. Legal Proceedings
  
 Item IA. Risk Factors
  Certain of our current and former providers may bring materially dilutive claims against us.
   33




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##### Table of Contents



Heirs of certain of our former shareholders may bring materially dilutive claims against us.
   We could
be subject to possible regulatory actions in connection with alleged
illegal political contributions
    
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Submissions of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  34




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##### Table of Contents



Item 6. Exhibits
 Exhibits
    
    Description3
    (i)
    
    Amendment to Triple-S Management Corporations Amended and
Restated Articles of Incorporation, incorporated herein by
reference to Exhibit 3.1 to the Quarterly Report on Form 10-Q for
the quarter ended March 31, 2007 (File No. 0-49762).10.1
    
    
    Amendment to agreement between Puerto Rico Health Insurance
Administration and Triple-S, Inc. for the provision of health
insurance coverage to eligible population in the North and
South-West regions.10.2
    
    
    Agreement between Puerto Rico Health Insurance Administration and
Triple-S, Inc. for the provision of health insurance coverage to
eligible population in the North and South-West regions,
incorporated herein by reference to Exhibit 10.1 to the Quarterly
Report on Form 10-Q for the quarter ended June 30, 2007 (File No.
0-49762).10.3
    
    
    Blue Shield License and other Agreements with Blue Cross Blue
Shield Association, incorporated herein by reference to Exhibit
10.1 to the Quarterly Report on Form 10-Q for the quarter ended
March 31, 2007 (File No. 0-49762).11
    
    
    Statement re computation of per share earnings; an exhibit
describing the computation of the earnings per share for the
three months and nine months ended September 30, 2007 and 2006
has been omitted as the detail necessary to determine the
computation of earnings per share can be clearly determined from
the material contained in Part I of this Quarterly Report on Form
10-Q.12
    
    
    Statements re computation of ratios; an exhibit describing the
computation of the loss ratio, expense ratio and combined ratio
for the three months and nine months ended September 30, 2007 and
2006 has been omitted as the detail necessary to determine the
computation of the loss ratio, operating expense ratio and
combined ratio can be clearly determined from the material
contained in Part I of this Quarterly Report on Form 10-Q.31.1
    
    
    Certification of the President and Chief Executive Officer
required by Rule 13a-14(a)/15d-14(a).31.2
    
    
    Certification of the Vice President of Finance and Chief
Financial Officer required by Rule 13a-14(a)/15d-14(a).32.1
    
    
    Certification of the President and Chief Executive Officer
required pursuant to 18 U.S.C Section 1350.32.2
    
    
    Certification of the Vice President of Finance and Chief
Financial Officer required pursuant to 18 U.S.C Section 1350.
  35




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##### Table of Contents



SIGNATURES
  Triple-S Management Corporation
RegistrantDate:      November 14, 2007
    By:
    /s/ Ramón M. Ruiz-ComasRamón M. Ruiz-Comas, CPAPresident and
Chief Executive OfficerDate:      November 14, 2007
    By:
    /s/ Juan J. RománJuan J. Román, CPAVice President of Finance
and Chief Financial Officer 36