##### 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 June 30, 2009
 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: 001-33865
 Triple-S Management Corporation
  Puerto Rico
    
    66-0555678(State or other jurisdiction of
    
    (I.R.S. Employer Identification No.)incorporation or 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
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 o þ
  Title of each class
    
    Outstanding at July 31, 2009Common Stock Class A, $1.00 par value
    
    9,042,809Common Stock Class B, $1.00 par value
    
    20,361,063




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##### 



Triple-S Management Corporation
 FORM 10-Q
   PAGEPART I  FINANCIAL INFORMATIONItem 1. Financial StatementsConsolidated Balance Sheets as of June 30, 2009 and December 31, 2008
    
    
    3Consolidated Statements of Earnings for the three months and six months ended June 30, 2009 and 2008
    
    
    4Consolidated Statements of Stockholders Equity and Comprehensive Income (Loss) for the six months
ended June 30, 2009 and 2008
    
    
    5Consolidated Statements of Cash Flows for the six months ended June 30, 2009 and 2008
    
    
    6Notes to Consolidated Financial Statements
    
    
    8Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    22Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    31Item 4. Controls and Procedures
    
    
    31PART II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    33Item 1A. Risk Factors
    
    
    33Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    33Item 3. Defaults Upon Senior Securities
    
    
    33Item 4. Submission of Matters to a Vote of Security Holders
    
    
    33Item 5. Other Information
    
    
    33Item 6. Exhibits
    
    
    33SIGNATURES
    
    
    35EX-10.3EX-31.1EX-31.2EX-32.1EX-32.2
  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 (Unaudited)
(Dollar amounts in thousands, except per share data)
 June 30,
    
    December 31,2009
    
    2008AssetsInvestments and cash:Equity securities held for trading, at fair value
    
    $
    35,173
    
    
    
    32,184Securities available for sale, at fair value:Fixed maturities
    
    
    910,813
    
    
    
    887,684Equity securities
    
    
    63,889
    
    
    
    68,629Securities held to maturity, at amortized cost:Fixed maturities
    
    
    19,006
    
    
    
    21,753Policy loans
    
    
    5,521
    
    
    
    5,451Cash and cash equivalents
    
    
    42,699
    
    
    
    46,095Total investments and cash
    
    
    1,077,101
    
    
    
    1,061,796Premiums and other receivables, net
    
    
    249,393
    
    
    
    237,158Deferred policy acquisition costs and value of business acquired
    
    
    131,311
    
    
    
    126,347Property and equipment, net
    
    
    63,105
    
    
    
    58,448Net deferred tax asset
    
    
    29,169
    
    
    
    25,195Other assets
    
    
    27,223
    
    
    
    39,515Total assets
    
    $
    1,577,302
    
    
    
    1,548,459Liabilities and Stockholders EquityClaim liabilities:Claims processed and incomplete
    
    $
    194,055
    
    
    
    156,137Unreported losses
    
    
    150,792
    
    
    
    150,079Unpaid loss-adjustment expenses
    
    
    19,067
    
    
    
    17,494Total claim liabilities
    
    
    363,914
    
    
    
    323,710Liability for future policy benefits
    
    
    215,226
    
    
    
    207,545Unearned premiums
    
    
    96,780
    
    
    
    110,141Policyholder deposits
    
    
    48,072
    
    
    
    48,684Liability to Federal Employees Health Benefits Program (FEHBP)
    
    
    8,399
    
    
    
    11,157Accounts payable and accrued liabilities
    
    
    142,242
    
    
    
    148,713Income tax payable
    
    
    3,733
    
    
    
    Long-term borrowings
    
    
    168,487
    
    
    
    169,307Liability for pension benefits
    
    
    42,512
    
    
    
    44,103Total liabilities
    
    
    1,089,365
    
    
    
    1,063,360Stockholders equity:Common stock Class A, $1 par value. Authorized 100,000,000 shares; issued
and outstanding 9,042,809 at June
30, 2009 and December 31, 2008
    
    
    9,043
    
    
    
    9,043Common stock Class B, $1 par value. Authorized 100,000,000 shares; issued
and outstanding 20,361,063 and
22,104,989 shares at June 30, 2009
and
December 31, 2008, respectively
    
    
    20,361
    
    
    
    22,105Additional paid-in capital
    
    
    161,693
    
    
    
    179,504Retained earnings
    
    
    314,704
    
    
    
    292,112Accumulated other comprehensive loss
    
    
    (17,864
    )
    
    
    (17,665
    )Total stockholders equity
    
    
    487,937
    
    
    
    485,099Total liabilities and stockholders equity
    
    $
    1,577,302
    
    
    
    1,548,459
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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
    
    Six months endedJune 30,
    
    June 30,2009
    
    2008
    
    2009
    
    2008Revenues:Premiums earned, net
    
    $
    466,221
    
    
    
    419,157
    
    
    $
    918,705
    
    
    
    823,556Administrative service fees
    
    
    11,319
    
    
    
    3,920
    
    
    
    20,185
    
    
    
    7,633Net investment income
    
    
    13,360
    
    
    
    14,302
    
    
    
    25,901
    
    
    
    27,734Total operating revenues
    
    
    490,900
    
    
    
    437,379
    
    
    
    964,791
    
    
    
    858,923Net realized investment losses:Total other-than-temporary impairment losses
on securities
    
    
    (3,052
    )
    
    
    (2,383
    )
    
    
    (5,713
    )
    
    
    (2,383
    )Net realized gains, excluding other-than-temporary
impairment losses on securities
    
    
    1,427
    
    
    
    642
    
    
    
    2,361
    
    
    
    1,251Total net realized investment losses
    
    
    (1,625
    )
    
    
    (1,741
    )
    
    
    (3,352
    )
    
    
    (1,132
    )Net unrealized investment gain (loss) on trading securities
    
    
    5,652
    
    
    
    (951
    )
    
    
    3,176
    
    
    
    (7,201
    )Other income (expense), net
    
    
    704
    
    
    
    1,360
    
    
    
    325
    
    
    
    (161
    )Total revenues
    
    
    495,631
    
    
    
    436,047
    
    
    
    964,940
    
    
    
    850,429Benefits and expenses:Claims incurred
    
    
    398,420
    
    
    
    354,780
    
    
    
    792,952
    
    
    
    704,987Operating expenses
    
    
    68,603
    
    
    
    61,399
    
    
    
    136,855
    
    
    
    121,430Total operating costs
    
    
    467,023
    
    
    
    416,179
    
    
    
    929,807
    
    
    
    826,417Interest expense
    
    
    3,357
    
    
    
    3,926
    
    
    
    6,621
    
    
    
    7,599Total benefits and expenses
    
    
    470,380
    
    
    
    420,105
    
    
    
    936,428
    
    
    
    834,016Income before taxes
    
    
    25,251
    
    
    
    15,942
    
    
    
    28,512
    
    
    
    16,413Income tax expense (benefit):Current
    
    
    9,090
    
    
    
    4,291
    
    
    
    9,541
    
    
    
    4,107Deferred
    
    
    (2,499
    )
    
    
    (486
    )
    
    
    (3,621
    )
    
    
    (1,033
    )Total income taxes
    
    
    6,591
    
    
    
    3,805
    
    
    
    5,920
    
    
    
    3,074Net income
    
    $
    18,660
    
    
    
    12,137
    
    
    $
    22,592
    
    
    
    13,339Basic net income per share
    
    $
    0.64
    
    
    
    0.38
    
    
    $
    0.76
    
    
    
    0.41Diluted net income per share
    
    $
    0.63
    
    
    
    0.38
    
    
    $
    0.76
    
    
    
    0.41
  4




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TRIPLE-S MANAGEMENT CORPORATION AND SUBSIDIARIES  
 Consolidated Statements of Stockholders Equity and
Comprehensive Income (Loss) (Unaudited)    (Dollar amounts in thousands, except per share data)
 2009
    
    2008Balance at January 1
    
    $
    485,099
    
    
    
    482,538Share-based compensation
    
    
    2,452
    
    
    
    1,530Grant of restricted Class B common stock
    
    
    27
    
    
    
    20Repurchase and retirement of common stock
    
    
    (22,034
    )
    
    
    Other
    
    
    
    
    
    
    (14
    )Comprehensive income (loss):Net income
    
    
    22,592
    
    
    
    13,339Net unrealized change in fair value of available for sale securities, net of taxes
    
    
    (733
    )
    
    
    (14,012
    )Defined benefit pension plan:Actuarial loss, net
    
    
    664
    
    
    
    587Prior service credit, net
    
    
    (130
    )
    
    
    (147
    )Net change in fair value of cash flow hedges
    
    
    
    
    
    
    (56
    )Total comprehensive (loss) income
    
    
    22,393
    
    
    
    (289
    )Balance at June 30
    
    $
    487,937
    
    
    
    483,785
  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)
 Six months endedJune 30,2009
    
    2008Cash flows from operating activities:Net income
    
    $
    22,592
    
    
    
    13,339Adjustments to reconcile net income to net cash
provided by (used in) operating activities:Depreciation and amortization
    
    
    4,219
    
    
    
    3,572Net amortization of investments
    
    
    367
    
    
    
    377Provision for doubtful receivables
    
    
    7,012
    
    
    
    176Deferred tax benefit
    
    
    (4,192
    )
    
    
    (1,033
    )Net loss on sale of securities
    
    
    3,352
    
    
    
    1,132Net unrealized (gain) loss on trading securities
    
    
    (3,176
    )
    
    
    7,201Share-based compensation
    
    
    2,479
    
    
    
    1,530Proceeds from trading securities sold:Equity securities
    
    
    2,419
    
    
    
    22,094Acquisition of securities in trading portfolio:Equity securities
    
    
    (2,609
    )
    
    
    (7,766
    )Loss on sale of property and equipment
    
    
    
    
    
    
    11(Increase) decrease in assets:Premiums receivable
    
    
    (30,829
    )
    
    
    (43,157
    )Agents balances
    
    
    5,728
    
    
    
    670Accrued interest receivable
    
    
    947
    
    
    
    (3,720
    )Other receivables
    
    
    4,313
    
    
    
    268Reinsurance recoverable on paid losses
    
    
    826
    
    
    
    10,204Deferred policy acquisition costs and
value of business acquired
    
    
    (4,964
    )
    
    
    (4,214
    )Prepaid income tax
    
    
    6,510
    
    
    
    (6,796
    )Other assets
    
    
    5,782
    
    
    
    4,849Increase (decrease) in liabilities:Claims processed and incomplete
    
    
    37,918
    
    
    
    (4,371
    )Unreported losses
    
    
    713
    
    
    
    8,902Unpaid loss-adjustment expenses
    
    
    1,573
    
    
    
    1,134Liability for future policy benefits
    
    
    7,681
    
    
    
    6,488Unearned premiums
    
    
    (13,361
    )
    
    
    (30,933
    )Policyholder deposits
    
    
    457
    
    
    
    943Liability to FEHBP
    
    
    (2,758
    )
    
    
    (5,357
    )Accounts payable and accrued liabilities
    
    
    (7,604
    )
    
    
    (732
    )Income tax payable
    
    
    3,733
    
    
    
    Net cash provided by
(used in) operating
activities
    
    $
    49,128
    
    
    
    (25,189
    )
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TRIPLE-S MANAGEMENT CORPORATION AND SUBSIDIARIES  Consolidated Statements of Cash Flows (Unaudited)   (Dollar amounts in thousands, except per share data)
 Six months endedJune 30,2009
    
    2008Cash flows from investing activities:Proceeds from investments sold or matured:Securities available for sale:Fixed maturities sold
    
    $
    114,876
    
    
    
    153,393Fixed maturities matured/called
    
    
    123,995
    
    
    
    54,166Equity securities
    
    
    1,629
    
    
    
    2,019Securities held to maturity:Fixed maturities matured
    
    
    2,915
    
    
    
    19,526Acquisition of investments:Securities available for sale:Fixed maturities
    
    
    (250,641
    )
    
    
    (428,476
    )Equity securities
    
    
    (2,286
    )
    
    
    (16,717
    )Net (outflows) proceeds for policy loans
    
    
    (70
    )
    
    
    104Net capital expenditures
    
    
    (8,876
    )
    
    
    (7,119
    )Net cash used in investing
activities
    
    
    (18,458
    )
    
    
    (223,104
    )Cash flows from financing activities:Change in outstanding checks in excess of bank balances
    
    
    (10,143
    )
    
    
    15,649Change in short-term borrowings
    
    
    
    
    
    
    32,075Repayments of long-term borrowings
    
    
    (820
    )
    
    
    (819
    )Repurchase and retirement of common stock
    
    
    (22,034
    )
    
    
    Proceeds from policyholder deposits
    
    
    2,547
    
    
    
    5,895Surrenders of policyholder deposits
    
    
    (3,616
    )
    
    
    (3,383
    )Other
    
    
    
    
    
    
    6Net cash (used in) provided
by financing activities
    
    
    (34,066
    )
    
    
    49,423Net decrease in cash and
cash equivalents
    
    
    (3,396
    )
    
    
    (198,870
    )Cash and cash equivalents at beginning of the period
    
    
    46,095
    
    
    
    240,153Cash and cash equivalents at end of the period
    
    $
    42,699
    
    
    
    41,283
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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 Assets Acquired and Liabilities Assumed in a Business Combination That
Arise from Contingencies Business Combinations
 Recognition and Presentation of
Other-Than-Temporary Impairments
 Interim Disclosure about Fair
Value of Financial Instruments Disclosures about Fair
Value of Financial Instruments
 Determining Fair Value When the Volume and Level
of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions
That Are Not Orderly Fair Value Measurements
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TRIPLE-S MANAGEMENT CORPORATION AND SUBSIDIARIES  Notes to Consolidated Financial Statements   (Dollar amounts in thousands, except per share data)
  Subsequent Events (as amended).
  (3) Segment Information
   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
    
    Six months endedJune 30,
    
    June 30,2009
    
    2008
    
    2009
    
    2008Operating revenues:Managed Care:Premiums earned, net
    
    $
    417,226
    
    
    $
    373,439
    
    
    $
    820,897
    
    
    $
    732,550Administrative service fees
    
    
    11,319
    
    
    
    3,920
    
    
    
    20,185
    
    
    
    7,633Intersegment premiums /service fees
    
    
    1,495
    
    
    
    1,660
    
    
    
    2,948
    
    
    
    3,310Net investment income
    
    
    5,376
    
    
    
    6,075
    
    
    
    10,518
    
    
    
    11,677Total managed care
    
    
    435,416
    
    
    
    385,094
    
    
    
    854,548
    
    
    
    755,170Life Insurance:Premiums earned, net
    
    
    25,148
    
    
    
    22,783
    
    
    
    49,553
    
    
    
    44,912Intersegment premiums
    
    
    94
    
    
    
    93
    
    
    
    185
    
    
    
    185Net investment income
    
    
    4,383
    
    
    
    4,057
    
    
    
    8,387
    
    
    
    7,991Total life insurance
    
    
    29,625
    
    
    
    26,933
    
    
    
    58,125
    
    
    
    53,088Property and Casualty Insurance:Premiums earned, net
    
    
    23,846
    
    
    
    22,935
    
    
    
    48,254
    
    
    
    46,094Intersegment premiums
    
    
    154
    
    
    
    152
    
    
    
    307
    
    
    
    306Net investment income
    
    
    2,984
    
    
    
    3,059
    
    
    
    5,785
    
    
    
    6,023Total property and casualty insurance
    
    
    26,984
    
    
    
    26,146
    
    
    
    54,346
    
    
    
    52,423Other segments  intersegment service revenues *
    
    
    13,210
    
    
    
    11,205
    
    
    
    25,114
    
    
    
    22,273Total business segments
    
    
    505,235
    
    
    
    449,378
    
    
    
    992,133
    
    
    
    882,954TSM operating revenues from external sources
    
    
    618
    
    
    
    1,111
    
    
    
    1,212
    
    
    
    2,043Elimination of intersegment premiums
    
    
    (1,743
    )
    
    
    (1,905
    )
    
    
    (3,440
    )
    
    
    (3,801
    )Elimination of intersegment service fees
    
    
    (13,210
    )
    
    
    (11,205
    )
    
    
    (25,114
    )
    
    
    (22,273
    )Consolidated operating revenues
    
    $
    490,900
    
    
    $
    437,379
    
    
    $
    964,791
    
    
    
    858,923
 *
    
    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.
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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
    
    Six months endedJune 30,
    
    June 30,2009
    
    2008
    
    2009
    
    2008Operating income:Managed care
    
    $
    16,207
    
    
    
    13,970
    
    
    $
    21,982
    
    
    
    19,302Life insurance
    
    
    3,912
    
    
    
    3,200
    
    
    
    6,946
    
    
    
    5,705Property and casualty insurance
    
    
    2,802
    
    
    
    2,271
    
    
    
    4,149
    
    
    
    4,368Other segments *
    
    
    235
    
    
    
    179
    
    
    
    362
    
    
    
    288Total business segments
    
    
    23,156
    
    
    
    19,620
    
    
    
    33,439
    
    
    
    29,663TSM operating revenues from external sources
    
    
    618
    
    
    
    1,111
    
    
    
    1,212
    
    
    
    2,043TSM unallocated operating expenses
    
    
    (2,166
    )
    
    
    (2,016
    )
    
    
    (4,470
    )
    
    
    (4,156
    )Elimination of TSM intersegment charges
    
    
    2,269
    
    
    
    2,485
    
    
    
    4,803
    
    
    
    4,956Consolidated operating income
    
    
    23,877
    
    
    
    21,200
    
    
    
    34,984
    
    
    
    32,506Consolidated net realized investment losses
    
    
    (1,625
    )
    
    
    (1,741
    )
    
    
    (3,352
    )
    
    
    (1,132
    )Consolidated net unrealized gain (loss) on
trading securities
    
    
    5,652
    
    
    
    (951
    )
    
    
    3,176
    
    
    
    (7,201
    )Consolidated interest expense
    
    
    (3,357
    )
    
    
    (3,926
    )
    
    
    (6,621
    )
    
    
    (7,599
    )Consolidated other income (expense), net
    
    
    704
    
    
    
    1,360
    
    
    
    325
    
    
    
    (161
    )Consolidated income before taxes
    
    $
    25,251
    
    
    
    15,942
    
    
    $
    28,512
    
    
    
    16,413Depreciation expense:Managed care
    
    $
    1,413
    
    
    
    1,008
    
    
    $
    2,728
    
    
    
    1,992Life insurance
    
    
    165
    
    
    
    167
    
    
    
    310
    
    
    
    349Property and casualty insurance
    
    
    378
    
    
    
    367
    
    
    
    750
    
    
    
    739Total business segments
    
    
    1,956
    
    
    
    1,542
    
    
    
    3,788
    
    
    
    3,080TSM depreciation expense
    
    
    216
    
    
    
    230
    
    
    
    431
    
    
    
    492Consolidated depreciation expense
    
    $
    2,172
    
    
    
    1,772
    
    
    $
    4,219
    
    
    
    3,572
 June 30,
    
    December 31,2009
    
    2008Assets:Managed care
    
    $
    724,179
    
    
    
    678,889Life insurance
    
    
    469,010
    
    
    
    460,109Property and casualty insurance
    
    
    330,841
    
    
    
    337,869Other segments *
    
    
    12,482
    
    
    
    12,620Total business segments
    
    
    1,536,512
    
    
    
    1,489,487Unallocated amounts related to TSM:Cash, cash equivalents, and investments
    
    
    34,557
    
    
    
    58,480Property and equipment,net
    
    
    21,231
    
    
    
    21,648Other assets
    
    
    4,329
    
    
    
    4,07960,117
    
    
    
    84,207Elimination entries-intersegment receivables and others
    
    
    (19,327
    )
    
    
    (25,235
    )Consolidated total assets
    
    $
    1,577,302
    
    
    
    1,548,459
 *
    
    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
 Recognition and Presentation of
Other-Than-Temporary Impairments
     12




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TRIPLE-S MANAGEMENT CORPORATION AND SUBSIDIARIES  Notes to Consolidated Financial Statements   (Dollar amounts in thousands, except per share data)
 June 30, 2009Gross
    
    GrossAmortized
    
    unrealized
    
    unrealized
    
    Estimatedcost
    
    gains
    
    losses
    
    fair valueTrading securities:Equity securities
    
    $
    40,660
    
    
    
    3,152
    
    
    
    (8,639
    )
    
    
    35,173
 December 31, 2008Gross
    
    GrossAmortized
    
    unrealized
    
    unrealized
    
    Estimatedcost
    
    gains
    
    losses
    
    fair valueTrading securities:Equity securities
    
    $
    40,817
    
    
    
    2,781
    
    
    
    (11,444
    )
    
    
    32,184
 June 30, 2009Gross
    
    GrossAmortized
    
    unrealized
    
    unrealized
    
    Estimatedcost
    
    gains
    
    losses
    
    fair valueSecurities available for sale:Obligations of government-
sponsored enterprises
    
    $
    378,841
    
    
    
    4,317
    
    
    
    (2,527
    )
    
    
    380,631U.S. Treasury securities and
obligations of U.S.
government instrumentalities
    
    
    48,558
    
    
    
    3,596
    
    
    
    
    
    
    
    52,154Obligations of the
Commonwealth of Puerto Rico
and its instrumentalities
    
    
    186,918
    
    
    
    3,047
    
    
    
    (4,159
    )
    
    
    185,806Municipal securities
    
    
    52,617
    
    
    
    1,326
    
    
    
    (145
    )
    
    
    53,798Obligations of states of the
United States and political
subdivisions of the states
    
    
    4,004
    
    
    
    127
    
    
    
    
    
    
    
    4,131Corporate bonds
    
    
    103,391
    
    
    
    2,313
    
    
    
    (3,161
    )
    
    
    102,543Residential agency mortgage-backed securities
    
    
    18,553
    
    
    
    526
    
    
    
    (2
    )
    
    
    19,077Collateralized mortgage
obligations
    
    
    110,259
    
    
    
    4,707
    
    
    
    (2,293
    )
    
    
    112,673Total fixed maturities
    
    
    903,141
    
    
    
    19,959
    
    
    
    (12,287
    )
    
    
    910,813Equity securities
    
    
    65,829
    
    
    
    3,510
    
    
    
    (5,450
    )
    
    
    63,889Total
    
    $
    968,970
    
    
    
    23,469
    
    
    
    (17,737
    )
    
    
    974,702
 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)
 December 31, 2008Gross
    
    GrossAmortized
    
    unrealized
    
    unrealized
    
    Estimatedcost
    
    gains
    
    losses
    
    fair valueSecurities available for sale:Obligations of government-
sponsored enterprises
    
    $
    422,038
    
    
    
    7,991
    
    
    
    (220
    )
    
    
    429,809U.S. Treasury securities and
obligations of U.S.
government instrumentalities
    
    
    78,024
    
    
    
    11,961
    
    
    
    
    
    
    
    89,985Obligations of the
Commonwealth of Puerto Rico
and its instrumentalities
    
    
    121,934
    
    
    
    448
    
    
    
    (6,077
    )
    
    
    116,305Municipal securities
    
    
    31,415
    
    
    
    390
    
    
    
    (6
    )
    
    
    31,799Obligations of states of the
United States and political
subdivisions of the states
    
    
    4,196
    
    
    
    36
    
    
    
    (110
    )
    
    
    4,122Corporate bonds
    
    
    100,745
    
    
    
    1,625
    
    
    
    (7,399
    )
    
    
    94,971Residential agency mortgage-backed securities
    
    
    17,420
    
    
    
    425
    
    
    
    (3
    )
    
    
    17,842Collateralized mortgage
obligations
    
    
    103,891
    
    
    
    1,287
    
    
    
    (2,327
    )
    
    
    102,851Total fixed maturities
    
    
    879,663
    
    
    
    24,163
    
    
    
    (16,142
    )
    
    
    887,684Equity securities
    
    
    70,060
    
    
    
    1,752
    
    
    
    (3,183
    )
    
    
    68,629Total
    
    $
    949,723
    
    
    
    25,915
    
    
    
    (19,325
    )
    
    
    956,313
 June 30, 2009Gross
    
    GrossAmortized
    
    unrealized
    
    unrealized
    
    Estimatedcost
    
    gains
    
    losses
    
    fair valueSecurities held to maturity:Obligations of government-
sponsored enterprises
    
    $
    6,518
    
    
    
    101
    
    
    
    
    
    
    
    6,619Residential agency mortgage-backed securities
    
    
    1,385
    
    
    
    9
    
    
    
    (2
    )
    
    
    1,392U.S. Treasury securities and
obligations of U.S.
government instrumentalities
    
    
    1,486
    
    
    
    151
    
    
    
    
    
    
    
    1,637Corporate bonds
    
    
    8,878
    
    
    
    520
    
    
    
    
    
    
    
    9,398Certificates of deposit
    
    
    739
    
    
    
    
    
    
    
    
    
    
    
    739Total
    
    $
    19,006
    
    
    
    781
    
    
    
    (2
    )
    
    
    19,785
 14




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TRIPLE-S MANAGEMENT CORPORATION AND SUBSIDIARIES  Notes to Consolidated Financial Statements   (Dollar amounts in thousands, except per share data)
 December 31, 2008Gross
    
    GrossAmortized
    
    unrealized
    
    unrealized
    
    Estimatedcost
    
    gains
    
    losses
    
    fair valueSecurities held to maturity:Obligations of government-
sponsored enterprises
    
    $
    9,082
    
    
    
    240
    
    
    
    
    
    
    
    9,322Residential agency mortgage-backed securities
    
    
    1,749
    
    
    
    
    
    
    
    (7
    )
    
    
    1,742U.S. Treasury securities and
obligations of U.S.
government instrumentalities
    
    
    1,488
    
    
    
    379
    
    
    
    
    
    
    
    1,867Corporate bonds
    
    
    8,698
    
    
    
    698
    
    
    
    
    
    
    
    9,396Certificates of deposit
    
    
    736
    
    
    
    
    
    
    
    
    
    
    
    736Total
    
    $
    21,753
    
    
    
    1,317
    
    
    
    (7
    )
    
    
    23,063
  June 30, 2009Less than 12 months
    
    12 months or longer
    
    TotalGross
    
    
    
    
    
    Gross
    
    
    
    
    
    GrossEstimated
    
    unrealized
    
    Estimated
    
    unrealized
    
    Estimated
    
    unrealizedfair value
    
    losses
    
    fair value
    
    losses
    
    fair value
    
    lossesSecurities available for sale:Obligations of government-
sponsored enterprises
    
    $
    107,836
    
    
    
    (2,165
    )
    
    
    24,753
    
    
    
    (362
    )
    
    
    132,589
    
    
    
    (2,527
    )Obligations of the
Commonwealth of Puerto
Rico and its instrumentalities
    
    
    71,954
    
    
    
    (2,719
    )
    
    
    22,350
    
    
    
    (1,440
    )
    
    
    94,304
    
    
    
    (4,159
    )Municipal securities
    
    
    4,181
    
    
    
    (145
    )
    
    
    
    
    
    
    
    
    
    
    4,181
    
    
    
    (145
    )Corporate bonds
    
    
    6,660
    
    
    
    (496
    )
    
    
    24,890
    
    
    
    (2,665
    )
    
    
    31,550
    
    
    
    (3,161
    )Residential agency mortgage-backed securities
    
    
    179
    
    
    
    (1
    )
    
    
    36
    
    
    
    (1
    )
    
    
    215
    
    
    
    (2
    )Collateralized mortgage
obligations
    
    
    8,355
    
    
    
    (1,247
    )
    
    
    4,286
    
    
    
    (1,046
    )
    
    
    12,641
    
    
    
    (2,293
    )Total fixed maturities
    
    
    199,165
    
    
    
    (6,773
    )
    
    
    76,315
    
    
    
    (5,514
    )
    
    
    275,480
    
    
    
    (12,287
    )Equity securities
    
    
    26,387
    
    
    
    (4,160
    )
    
    
    13,798
    
    
    
    (1,290
    )
    
    
    40,185
    
    
    
    (5,450
    )Total for securities
available for sale
    
    $
    225,552
    
    
    
    (10,933
    )
    
    
    90,113
    
    
    
    (6,804
    )
    
    
    315,665
    
    
    
    (17,737
    )Securities held to maturity:Residential mortgage-backed securities
    
    $
    
    
    
    
    
    
    
    
    54
    
    
    
    (2
    )
    
    
    54
    
    
    
    (2
    )
 15




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TRIPLE-S MANAGEMENT CORPORATION AND SUBSIDIARIES  Notes to Consolidated Financial Statements   (Dollar amounts in thousands, except per share data)
 December 31, 2008Less than 12 months
    
    12 months or longer
    
    TotalGross
    
    
    
    
    
    Gross
    
    
    
    
    
    GrossEstimated
    
    unrealized
    
    Estimated
    
    unrealized
    
    Estimated
    
    unrealizedfair value
    
    losses
    
    fair value
    
    losses
    
    fair value
    
    lossesSecurities available for sale:Obligations of government-
sponsored enterprises
    
    $
    16,550
    
    
    
    (191
    )
    
    
    2,956
    
    
    
    (29
    )
    
    
    19,506
    
    
    
    (220
    )Obligations of the
Commonwealth of Puerto
Rico and its instrumentalities
    
    
    79,045
    
    
    
    (5,230
    )
    
    
    8,932
    
    
    
    (847
    )
    
    
    87,977
    
    
    
    (6,077
    )Municipal securities
    
    
    
    
    
    
    
    
    
    
    1,276
    
    
    
    (6
    )
    
    
    1,276
    
    
    
    (6
    )Obligations of states of the United
States and political subdivisions
of the states
    
    
    2,223
    
    
    
    (75
    )
    
    
    183
    
    
    
    (35
    )
    
    
    2,406
    
    
    
    (110
    )Corporate bonds
    
    
    31,324
    
    
    
    (2,688
    )
    
    
    29,044
    
    
    
    (4,711
    )
    
    
    60,368
    
    
    
    (7,399
    )Residential agency mortgage-backed securities
    
    
    1,374
    
    
    
    (2
    )
    
    
    36
    
    
    
    (1
    )
    
    
    1,410
    
    
    
    (3
    )Collateralized mortgage
obligations
    
    
    5,797
    
    
    
    (2,327
    )
    
    
    
    
    
    
    
    
    
    
    5,797
    
    
    
    (2,327
    )Total fixed maturities
    
    
    136,313
    
    
    
    (10,513
    )
    
    
    42,427
    
    
    
    (5,629
    )
    
    
    178,740
    
    
    
    (16,142
    )Equity securities
    
    
    18,571
    
    
    
    (2,190
    )
    
    
    9,651
    
    
    
    (993
    )
    
    
    28,222
    
    
    
    (3,183
    )Total for securities
available for sale
    
    $
    154,884
    
    
    
    (12,703
    )
    
    
    52,078
    
    
    
    (6,622
    )
    
    
    206,962
    
    
    
    (19,325
    )Securities held to maturity:Residential mortgage-backed securities
    
    $
    
    
    
    
    
    
    
    
    1,741
    
    
    
    (7
    )
    
    
    1,741
    
    
    
    (7
    )
   Obligations of Government-sponsored Enterprises, U.S. Treasury Securities and Obligations of U.S.
Government Instrumentalities, Obligations of States of the United States and Political Subdivisions
of the States, and Obligations of the Commonwealth of Puerto Rico and its Instrumentalities
 16




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TRIPLE-S MANAGEMENT CORPORATION AND SUBSIDIARIES  Notes to Consolidated Financial Statements   (Dollar amounts in thousands, except per share data)
  Corporate Bonds
 Mortgage-Backed Securities and Collateralized Mortgage Obligations
   Equity Securities
 17




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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
    
    Six months endedJune 30,
    
    June 30,2009
    
    2008
    
    2009
    
    2008Realized gains (losses):Fixed maturity securities:Securities available for sale:Gross gains from sales
    
    $
    1,814
    
    
    
    525
    
    
    
    3,057
    
    
    
    925Gross losses from sales
    
    
    (3
    )
    
    
    (109
    )
    
    
    (3
    )
    
    
    (118
    )Gross losses from other-than-temporary
impairments
    
    
    
    
    
    
    (2,355
    )
    
    
    (1,152
    )
    
    
    (2,355
    )Total debt securities
    
    
    1,811
    
    
    
    (1,939
    )
    
    
    1,902
    
    
    
    (1,548
    )Equity securities:Trading securities:Gross gains from sales
    
    
    102
    
    
    
    446
    
    
    
    320
    
    
    
    2,854Gross losses from sales
    
    
    (452
    )
    
    
    (199
    )
    
    
    (730
    )
    
    
    (2,507
    )Gross losses from other-than-temporary
impairments
    
    
    
    
    
    
    (28
    )
    
    
    
    
    
    
    (28
    )(350
    )
    
    
    219
    
    
    
    (410
    )
    
    
    319Securities available for sale:Gross gains from sales
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    118Gross losses from sales
    
    
    (34
    )
    
    
    (21
    )
    
    
    (283
    )
    
    
    (21
    )Gross losses from other-than-temporary
impairments
    
    
    (3,052
    )
    
    
    
    
    
    
    (4,561
    )
    
    
    (3,086
    )
    
    
    (21
    )
    
    
    (4,844
    )
    
    
    97Total equity securities
    
    
    (3,436
    )
    
    
    198
    
    
    
    (5,254
    )
    
    
    416Net realized gains (losses) on
securities
    
    $
    (1,625
    )
    
    
    (1,741
    )
    
    
    (3,352
    )
    
    
    (1,132
    )
  18




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TRIPLE-S MANAGEMENT CORPORATION AND SUBSIDIARIES  Notes to Consolidated Financial Statements   (Dollar amounts in thousands, except per share data)
  Amortized
    
    Estimatedcost
    
    fair valueSecurities available for sale:Due in one year or less
    
    $
    8,542
    
    
    
    8,617Due after one year through five years
    
    
    94,214
    
    
    
    93,731Due after five years through ten years
    
    
    251,022
    
    
    
    256,098Due after ten years
    
    
    420,551
    
    
    
    420,617Collateralized mortgage obligations
    
    
    110,259
    
    
    
    112,673Residential mortgage-backed securities
    
    
    18,553
    
    
    
    19,077$
    903,141
    
    
    
    910,813Securities held to maturity:Due in one year or less
    
    $
    1,664
    
    
    
    1,687Due after one year through five years
    
    
    8,878
    
    
    
    9,398Due after five years through ten years
    
    
    3,800
    
    
    
    3,851Due after ten years
    
    
    3,279
    
    
    
    3,457Residential mortgage-backed securities
    
    
    1,385
    
    
    
    1,392$
    19,006
    
    
    
    19,785
  Three months ended
    
    Six months endedJune 30,
    
    June 30,2009
    
    2008
    
    2009
    
    2008Changes in net unrealized gains (losses):Recognized in income:Equity securities  trading
    
    $
    5,652
    
    
    
    (951
    )
    
    
    3,176
    
    
    
    (7,201
    )Recognized in accumulated other
comprehensive loss:Fixed maturities  available for sale
    
    $
    4,405
    
    
    
    (21,545
    )
    
    
    (349
    )
    
    
    (9,992
    )Equity securities  available for sale
    
    
    7,205
    
    
    
    (6,284
    )
    
    
    (509
    )
    
    
    (6,652
    )$
    11,610
    
    
    
    (27,829
    )
    
    
    (858
    )
    
    
    (16,644
    )Not recognized in the consolidated
financial statements:Fixed maturities  held to maturity
    
    $
    (369
    )
    
    
    (659
    )
    
    
    (531
    )
    
    
    (57
    )
   19




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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)
  Three months ended
    
    Six months endedJune 30,
    
    June 30,2009
    
    2008
    
    2009
    
    2008Fixed maturities
    
    $
    11,745
    
    
    
    12,399
    
    
    
    22,869
    
    
    
    23,628Equity securities
    
    
    1,165
    
    
    
    1,322
    
    
    
    2,093
    
    
    
    2,318Policy loans
    
    
    99
    
    
    
    97
    
    
    
    197
    
    
    
    190Cash equivalents and interest-bearing deposits
    
    
    152
    
    
    
    159
    
    
    
    359
    
    
    
    886Other
    
    
    199
    
    
    
    325
    
    
    
    383
    
    
    
    712Total
    
    $
    13,360
    
    
    
    14,302
    
    
    
    25,901
    
    
    
    27,734
 (5) Premiums and Other Receivables
  June 30,
    
    December 31,2009
    
    2008Premiums
    
    $
    109,455
    
    
    
    90,315Self-funded group receivables
    
    
    46,975
    
    
    
    35,749FEHBP
    
    
    10,063
    
    
    
    9,600Agents balances
    
    
    32,763
    
    
    
    38,491Accrued interest
    
    
    10,855
    
    
    
    11,802Reinsurance recoverable
    
    
    41,355
    
    
    
    42,181Other
    
    
    19,684
    
    
    
    23,765271,150
    
    
    
    251,903Less allowance for doubtful receivables:Premiums
    
    
    17,121
    
    
    
    10,467Other
    
    
    4,636
    
    
    
    4,27821,757
    
    
    
    14,745Total premiums and other receivables
    
    $
    249,393
    
    
    
    237,158
 20




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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)
 (6) Claim Liabilities
  Three months ended
    
    Six months endedJune 30,
    
    June 30,2009
    
    2008
    
    2009
    
    2008Claim liabilities at beginning of period
    
    $
    362,583
    
    
    
    362,967
    
    
    
    323,710
    
    
    
    353,830Reinsurance recoverable on claim liabilities
    
    
    (29,387
    )
    
    
    (49,469
    )
    
    
    (30,432
    )
    
    
    (54,834
    )Net claim liabilities at beginning of period
    
    
    333,196
    
    
    
    313,498
    
    
    
    293,278
    
    
    
    298,996Incurred claims and loss-adjustment expenses:Current period insured events
    
    
    395,582
    
    
    
    350,022
    
    
    
    790,910
    
    
    
    708,326Prior period insured events
    
    
    (655
    )
    
    
    2,318
    
    
    
    (4,603
    )
    
    
    (8,903
    )Total
    
    
    394,927
    
    
    
    352,340
    
    
    
    786,307
    
    
    
    699,423Payments of losses and loss-adjustment expenses:Current period insured events
    
    
    382,372
    
    
    
    308,846
    
    
    
    554,527
    
    
    
    480,445Prior period insured events
    
    
    11,991
    
    
    
    37,101
    
    
    
    191,298
    
    
    
    198,083Total
    
    
    394,363
    
    
    
    345,947
    
    
    
    745,825
    
    
    
    678,528Net claim liabilities at end of period
    
    
    333,760
    
    
    
    319,891
    
    
    
    333,760
    
    
    
    319,891Reinsurance recoverable on claim liabilities
    
    
    30,154
    
    
    
    39,604
    
    
    
    30,154
    
    
    
    39,604Claim liabilities at end of period
    
    $
    363,914
    
    
    
    359,495
    
    
    
    363,914
    
    
    
    359,495
    21




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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) Fair Value Measurements
  Level Input:
    
    Input Definition:Level 1
    
    Inputs are unadjusted, quoted prices for
identical assets or liabilities in active
markets at the measurement date.Level 2
    
    Inputs other than quoted prices included in
Level I that are observable for the asset or
liability through corroboration with market data
at the measurement date.Level 3
    
    Unobservable inputs that reflect
managements best estimate of what market
participants would use in pricing the asset or
liability at the measurement date.
  (i) Cash and Cash Equivalents
  (ii) Investment in Securities
  (iii) Policy Loans
  (iv) Receivables, Accounts Payable, and Accrued Liabilities
  (v) Policyholder Deposits
  22




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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)
 (vi) Borrowings
  June 30, 2009
    
    December 31, 2008Carrying
    
    Fair
    
    Carrying
    
    Fairamount
    
    value
    
    amount
    
    valueLoans payable to bank
    
    $
    23,487
    
    
    
    23,487
    
    
    
    24,307
    
    
    
    24,3076.3% senior unsecured notes payable
    
    
    50,000
    
    
    
    46,000
    
    
    
    50,000
    
    
    
    46,2506.6% senior unsecured notes payable
    
    
    60,000
    
    
    
    55,800
    
    
    
    60,000
    
    
    
    55,8006.7% senior unsecured notes payable
    
    
    35,000
    
    
    
    32,830
    
    
    
    35,000
    
    
    
    34,059Totals
    
    $
    168,487
    
    
    
    158,117
    
    
    
    169,307
    
    
    
    160,416
  (vii) Derivative Instruments
   June 30, 2009Level 1
    
    Level 2
    
    Level 3
    
    TotalEquity securities held for trading
    
    $
    35,173
    
    
    
    
    
    
    
    
    
    
    
    35,173Securities available for sale:Fixed maturity securities
    
    
    52,154
    
    
    
    858,099
    
    
    
    560
    
    
    
    910,813Equity securities
    
    
    26,240
    
    
    
    35,902
    
    
    
    1,747
    
    
    
    63,889Derivatives (reported within other assets in
the consolidated balance sheets)
    
    
    
    
    
    
    1,201
    
    
    
    
    
    
    
    1,201Total
    
    $
    113,567
    
    
    
    895,202
    
    
    
    2,307
    
    
    
    1,011,076
 December 31, 2008Level 1
    
    Level 2
    
    Level 3
    
    TotalEquity securities held for trading
    
    $
    32,184
    
    
    
    
    
    
    
    
    
    
    
    32,184Securities available for sale:Fixed maturity securities
    
    
    89,985
    
    
    
    796,418
    
    
    
    1,281
    
    
    
    887,684Equity securities
    
    
    31,506
    
    
    
    36,037
    
    
    
    1,086
    
    
    
    68,629Derivatives (reported within other assets in
the consolidated balance sheets)
    
    
    
    
    
    
    1,674
    
    
    
    
    
    
    
    1,674Total
    
    $
    153,675
    
    
    
    834,129
    
    
    
    2,367
    
    
    
    990,171
 23




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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
    
    Six months endedJune 30, 2009
    
    June 30, 2009Fixed
    
    
    
    
    
    
    
    
    
    FixedMaturity
    
    Equity
    
    
    
    
    
    Maturity
    
    EquitySecurities
    
    Securities
    
    Total
    
    Securities
    
    Securities
    
    TotalBeginning balance
    
    $
    560
    
    
    
    1,086
    
    
    
    1,646
    
    
    
    1,281
    
    
    
    1,086
    
    
    
    2,367Total gains or losses:Realized in earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,024
    )
    
    
    
    
    
    
    (1,024
    )Unrealized in other accumulated
comprehensive income
    
    
    
    
    
    
    661
    
    
    
    661
    
    
    
    303
    
    
    
    661
    
    
    
    964Purchases and sales
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Transfers in and/or out of Level 3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Ending balance
    
    $
    560
    
    
    
    1,747
    
    
    
    2,307
    
    
    
    560
    
    
    
    1,747
    
    
    
    2,307
   (8) Share-Based Compensation
   
 24




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TRIPLE-S MANAGEMENT CORPORATION AND SUBSIDIARIES  Notes to Consolidated Financial Statements   (Dollar amounts in thousands, except per share data)
 (9) Comprehensive Loss
  AccumulatedNet unrealized
    
    Liability for
    
    othergain (loss) on
    
    pension
    
    comprehensivesecurities
    
    benefits
    
    lossBalance at January 1
    
    $
    5,602
    
    
    
    (23,267
    )
    
    
    (17,665
    )Net current period change
    
    
    (733
    )
    
    
    534
    
    
    
    (199
    )Balance at June 30
    
    $
    4,869
    
    
    
    (22,733
    )
    
    
    (17,864
    )
 (10) Income Taxes
   (11) Pension Plan
  Three months ended
    
    Six months endedJune 30,
    
    June 30,2009
    
    2008
    
    2009
    
    2008Components of net periodic benefit cost:Service cost
    
    $
    1,197
    
    
    
    1,508
    
    
    
    2,420
    
    
    
    2,825Interest cost
    
    
    1,346
    
    
    
    1,494
    
    
    
    2,676
    
    
    
    2,916Expected return on assets
    
    
    (947
    )
    
    
    (1,461
    )
    
    
    (1,912
    )
    
    
    (2,686
    )Prior service cost (credit)
    
    
    (106
    )
    
    
    (127
    )
    
    
    (213
    )
    
    
    (240
    )Actuarial loss
    
    
    547
    
    
    
    476
    
    
    
    1,090
    
    
    
    955Net periodic benefit cost
    
    $
    2,037
    
    
    
    1,890
    
    
    
    4,061
    
    
    
    3,770
 25




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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)
 Employer contributions
  (12) Net Income Available to Stockholders and Basic Net Income per Share
  Three months ended
    
    Six months endedJune 30,
    
    June 30,2009
    
    2008
    
    2009
    
    2008Numerator for earnings per share:Net income available to stockholders
    
    $
    18,660
    
    
    
    12,137
    
    
    $
    22,592
    
    
    
    13,339Denominator for basic earnings per share:Weighted average of common shares
    
    
    29,344,031
    
    
    
    32,142,809
    
    
    
    29,781,636
    
    
    
    32,142,809Effect of dilutive securities
    
    
    59,058
    
    
    
    41,550
    
    
    
    51,993
    
    
    
    38,420Denominator for diluted earnings per share
    
    
    29,403,089
    
    
    
    32,184,359
    
    
    
    29,833,629
    
    
    
    32,181,229Basic net income per share
    
    $
    0.64
    
    
    
    0.38
    
    
    $
    0.76
    
    
    
    0.41Diluted net income per share
    
    $
    0.63
    
    
    
    0.38
    
    
    $
    0.76
    
    
    
    0.41
 (13) Contingencies
    Hau et al Litigation (formerly known as Jordan et al)
  26




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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
  Dentists Association Litigation
     27




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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)
 Colón Litigation
  Puerto Rico Center for Municipal Revenue Collection
   Claims by Heirs of Former Shareholders
  28




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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)
 (14) Subsequent Event
   29




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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
     30




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##### Table of Contents



Recent Developments
 Acquisition of La Cruz Azul de Puerto Rico
  Healthcare Reform Contracts
  Special Additional Tax
  Recent Accounting Standards
  31




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##### Table of Contents



Managed Care Membership
 As of June 30,2009
    
    2008Managed care enrollment:Commercial 1
    
    
    615,138
    
    
    
    577,371Reform 2
    
    
    531,408
    
    
    
    344,104Medicare3
    
    
    70,802
    
    
    
    72,134Total
    
    
    1,217,348
    
    
    
    993,609Managed care enrollment by funding arrangement:Fully-insured
    
    
    838,828
    
    
    
    825,187Self-insured
    
    
    378,520
    
    
    
    168,422Total
    
    
    1,217,348
    
    
    
    993,609
 (1)
    
    Commercial membership includes corporate accounts, self-funded employers, individual
accounts, Medicare Supplement, U.S. Federal government employees and local government
employees.(2)
    
    Includes rated and self-funded members.(3)
    
    Includes Medicare Advantage as well as stand-alone PDP plan membership.
 Consolidated Operating Results
  Three months ended
    
    Six months endedJune 30,
    
    June 30,(Dollar amounts in millions)
    
    2009
    
    2008
    
    2009
    
    2008Revenues:Premiums earned, net
    
    $
    466.2
    
    
    
    419.2
    
    
    $
    918.7
    
    
    
    823.6Administrative service fees
    
    
    11.3
    
    
    
    3.9
    
    
    
    20.2
    
    
    
    7.6Net investment income
    
    
    13.4
    
    
    
    14.3
    
    
    
    25.9
    
    
    
    27.7Total operating revenues
    
    
    490.9
    
    
    
    437.4
    
    
    
    964.8
    
    
    
    858.9Net realized investment losses
    
    
    (1.6
    )
    
    
    (1.8
    )
    
    
    (3.3
    )
    
    
    (1.1
    )Net unrealized investment (loss) gain on trading securities
    
    
    5.6
    
    
    
    (1.0
    )
    
    
    3.2
    
    
    
    (7.2
    )Other income (expense), net
    
    
    0.7
    
    
    
    1.4
    
    
    
    0.3
    
    
    
    (0.2
    )Total revenues
    
    
    495.6
    
    
    
    436.0
    
    
    
    965.0
    
    
    
    850.4Benefits and expenses:Claims incurred
    
    
    398.4
    
    
    
    354.8
    
    
    
    792.9
    
    
    
    705.0Operating expenses
    
    
    68.6
    
    
    
    61.4
    
    
    
    136.9
    
    
    
    121.4Total operating expenses
    
    
    467.0
    
    
    
    416.2
    
    
    
    929.8
    
    
    
    826.4Interest expense
    
    
    3.3
    
    
    
    3.9
    
    
    
    6.6
    
    
    
    7.6Total benefits and expenses
    
    
    470.3
    
    
    
    420.1
    
    
    
    936.4
    
    
    
    834.0Income before taxes
    
    
    25.3
    
    
    
    15.9
    
    
    
    28.6
    
    
    
    16.4Income tax expense
    
    
    6.6
    
    
    
    3.8
    
    
    
    6.0
    
    
    
    3.1Net income
    
    $
    18.7
    
    
    
    12.1
    
    
    $
    22.6
    
    
    
    13.3
 32




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Three Months Ended June 30, 2009 Compared to Three Months Ended June 30, 2008
 Operating Revenues
    Net Realized Investment Losses
  Net Unrealized Gains on Trading Securities and Other Income, Net
  Claims Incurred
  Operating Expenses
  33




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##### Table of Contents



Six Months Ended June 30, 2009 Compared to Six Months Ended June 30, 2008
 Operating Revenues
    Net Realized Investment Losses
  Net Unrealized Gains on Trading Securities and Other Income, Net
  Claims Incurred
  Operating Expenses
  34




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##### Table of Contents



Managed Care Operating Results
 Three months ended
    
    Six months endedJune 30,
    
    June 30,(Dollar amounts in millions)
    
    2009
    
    2008
    
    2009
    
    2008Operating revenues:Medical premiums earned, net:Commercial
    
    $
    193.1
    
    
    
    179.7
    
    
    $
    383.0
    
    
    
    361.7Reform
    
    
    83.4
    
    
    
    80.9
    
    
    
    168.3
    
    
    
    161.9Medicare
    
    
    141.6
    
    
    
    113.6
    
    
    
    271.3
    
    
    
    210.5Medical premiums earned, net
    
    
    418.1
    
    
    
    374.2
    
    
    
    822.6
    
    
    
    734.1Administrative service fees
    
    
    12.0
    
    
    
    4.8
    
    
    
    21.5
    
    
    
    9.3Net investment income
    
    
    5.4
    
    
    
    6.1
    
    
    
    10.5
    
    
    
    11.7Total operating revenues
    
    
    435.5
    
    
    
    385.1
    
    
    
    854.6
    
    
    
    755.1Medical operating costs:Medical claims incurred
    
    
    373.9
    
    
    
    331.2
    
    
    
    744.1
    
    
    
    659.0Medical operating expenses
    
    
    45.4
    
    
    
    39.9
    
    
    
    88.5
    
    
    
    76.8Total medical operating costs
    
    
    419.3
    
    
    
    371.1
    
    
    
    832.6
    
    
    
    735.8Medical operating income
    
    $
    16.2
    
    
    
    14.0
    
    
    $
    22.0
    
    
    
    19.3Additional data:Member months enrollment:Commercial:Fully-insured
    
    
    1,275,849
    
    
    
    1,228,783
    
    
    
    2,536,750
    
    
    
    2,464,272Self-funded
    
    
    563,125
    
    
    
    499,317
    
    
    
    1,142,217
    
    
    
    995,379Total Commercial member months
    
    
    1,838,974
    
    
    
    1,728,100
    
    
    
    3,678,967
    
    
    
    3,459,651Reform:Fully-insured
    
    
    1,007,915
    
    
    
    1,031,631
    
    
    
    1,986,506
    
    
    
    2,065,291Self-funded
    
    
    572,873
    
    
    
    
    
    
    
    1,133,451
    
    
    
    Total Reform member months
    
    
    1,580,788
    
    
    
    1,031,631
    
    
    
    3,119,957
    
    
    
    2,065,291MedicareMedicare Advantage
    
    
    186,945
    
    
    
    183,086
    
    
    
    385,561
    
    
    
    340,877Stand-alone PDP
    
    
    29,314
    
    
    
    32,742
    
    
    
    58,971
    
    
    
    65,480Total Medicare member months
    
    
    216,259
    
    
    
    215,828
    
    
    
    444,532
    
    
    
    406,357Total member months
    
    
    3,636,021
    
    
    
    2,975,559
    
    
    
    7,243,456
    
    
    
    5,931,299Medical loss ratio
    
    
    89.4
    %
    
    
    88.5
    %
    
    
    90.5
    %
    
    
    89.8
    %Operating expense ratio
    
    
    10.6
    %
    
    
    10.5
    %
    
    
    10.5
    %
    
    
    10.3
    %
 Three Months Ended June 30, 2009 Compared to Three Months Ended June 30, 2008
 Medical Operating Revenues
  
    
    Medical premiums generated by the Medicare business increased during the three months
ended June 30, 2009 by $28.0 million, or 24.6%, to $141.6 million. The three months ended
June 30, 2009 include the net effect of approximately $12.8 million in adjustments related
to CMS final risk score adjustment for 2008 and the first quarter of
2009. The three months ended June 30, 2008 include the net effect
of approximately $1.4 million related to CMS final score
adjustments for 2007. In addition,
this business also has higher average premium rates by approximately
11% and there was a slight increase in
member months enrollment of 431, or 0.2%. The fluctuation in member months is the net
result of an increase of 3,859, or 2.1%, in the membership of our Medicare Advantage
products and a decrease of 3,428, or 10.5%, in the membership of our PDP product.
 35




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##### Table of Contents




    
    Medical premiums generated by the Commercial business increased by $13.4 million, or
7.5%, to $193.1 million during the three months ended June 30, 2009. This fluctuation is
primarily the result of an increase in member-months enrollment of 47,066, or 3.8% and
increase in average premium rates per member of approximately 3.5%.
    
    Medical premiums earned in the Reform business increased by $2.5 million, or 3.1%, to
$83.4 million during the three months ended June 30, 2009. This fluctuation is due to an
increase in premium rates, effective July 1, 2008, of approximately 10%, offset in part by
a lower member months enrollment in the Reforms fully-insured membership by 23,716, or
2.3% and a premium adjustment of approximately $4.2 million to
provide for unresolved prior year reconciling items with the
government of Puerto Rico.
  Medical Claims Incurred
  
    
    The medical claims incurred of the Medicare business increased by $9.2 million or 8.4%
during the 2009 period primarily due to the effect of an unfavorable reserve development
and an the increase in member months of 431, or 0.2%. The MLR for the three months ended
June 30, 2009 was 83.9% a reduction of 12.6 percentage points compared to same period of
prior year. This reduction in MLR is attributed to the effect of risk score premium
adjustments recorded during this period, as well as premium rate increases. Excluding the
effect of prior period reserve developments in the 2009 and 2008 period, as well as the
risk score premium adjustments, the MLR decreased by 5.9 percentage points. This decrease
is mostly due to the effect of lower medical cost as a result of improvement in utilization
trends and premium rate increases effective January 1, 2009.
    
    The medical claims incurred of the Commercial business increased by $35.2 million
during the 2009 period and its MLR increased by 12.7 percentage points during the three
months ended June 30, 2009. This fluctuation relates primarily to the increase in
member-months enrollment of 47,066, or 3.8%. The increase in the 2009 MLR is primarily due
to a lower reported MLR in the 2008 period, since the June 30, 2008 reserves experienced an
unfavorable development during the third quarter of 2008. Excluding the effect of
prior period reserve developments in the 2009 and 2008 period, the MLR increased by 2.8
percentage points. This variance in MLR is due to a higher than expected claims experience
in local government employees policy, mainly due to an increase in the utilization of
pharmacy and in-patient benefits.
    
    The medical claims incurred of the Reform business decreased by $1.7 million and its
MLR decreased by 5.1 percentage points during the three months ended June 30, 2009. The
lower MLR is primarily due to a favorable reserve development in the
2008 period, an
unfavorable reserve development in the 2009 period and the effect of
the premium adjustment to provide for unresolved prior year
reconciling items. Excluding the effect of these items in
the 2009 and 2008 period the MLR of this business decreased by
1.4 percentage points.
  Medical Operating Expenses
  36




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##### Table of Contents



Six Months Ended June 30, 2009 Compared to Six Months Ended June 30, 2008
 Medical Operating Revenues
  
    
    Medical premiums generated by the Medicare business increased during the six months
ended June 30, 2009 by $60.8 million, or 28.9%, to $271.3 million, primarily due to an
increase in member months enrollment of 38,175, or 9.4%, and higher
average premium rates of approximately 11%.
The fluctuation in member months is the net result of an increase of 44,684, or 13.1%, in
the membership of our Medicare Advantage products and a decrease of 6,509, or 9.9%, in the
membership of our PDP product. In addition, the six months ended June 30, 2009 include the
net effect of approximate $8.7 million in adjustments related to CMS final risk score
adjustment for 2008. The six months ended June  30, 2008 include
the net effect of approximately $1.4  million related to CMS
final risk score adjustments for 2007.
    
    Medical premiums generated by the Commercial business increased by $21.3 million, or
5.9%, to $383.0 million during the six months ended June 30, 2009. This fluctuation is
primarily the result of an increase in member months enrollment of 72,478, or 2.9% and
increase in average premium rates per member of approximately 2.9%.
    
    Medical premiums earned in the Reform business increased by $6.4 million, or 4.0%, to
$168.3 million during the six months ended June 30, 2009. This fluctuation is due to an
increase in premium rates, effective July 1, 2008, of approximately 10%, offset in part by
a lower member months enrollment in the Reforms fully-insured membership by 78,785, or
3.8% and a premium adjustment of approximately $5.5  million to
provide for unresolved prior year reconciling items with the
government of Puerto Rico.
  Medical Claims Incurred
  
    
    The medical claims incurred of the Medicare business increased by $45.8 million during
the 2009 period primarily due to the increase in member months of 38,175, or 9.4%. The
MLR for the six months ended June 30, 2009 was 90.0%, a reduction of 4.2 percentage points
compared to same period in 2008. This reduction in MLR is attributed to the effect of
risk score premium adjustments recorded during this period, as well as premium rate
increases. Excluding the effect of prior period reserve developments in the 2009 and 2008
period, as well as premium adjustments, the MLR decreased by 3.6 percentage points. This
decrease is mostly due to the effect of lower medical cost as a result of improvement in
utilization trends and premium rate increases effective January 1, 2009.
    
    The medical claims incurred of the Commercial business increased by $41.3 million
during the 2009 period and its MLR increased by 6.0 percentage points during the six months
ended June 30, 2009. The increase in the MLR is primarily due to the effect of prior
period reserve developments in the 2009 and 2008 periods. Excluding the effect of prior
period reserve developments, the MLR increased by 2.5 percentage points. This variance in
MLR is due to a higher than expected claims experience in the local government employees
policy, mainly in the utilization of pharmacy and in-patient benefits.
    
    The medical claims incurred of the Reform business decreased by $2.1 million and its
MLR decreased by 4.8 percentage points during the six months ended June 30, 2009. The
lower MLR is primarily due to a favorable reserve development in the
2009 period, an
unfavorable reserve development in the 2008 period and the effect of
the premium adjustment to provide for unresolved prior year
reconciling items. In addition, in 2008 we recognized a
retroactive adjustment reducing capitation rates. Excluding the effect of these items in
the 2009 and 2008 period the MLR of this business decreased by 1.3 percentage points.
 37




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##### Table of Contents



Medical Operating Expenses
  Life Insurance Operating Results
 Three months ended
    
    Six months endedJune 30,
    
    June 30,(Dollar amounts in millions)
    
    2009
    
    2008
    
    2009
    
    2008Operating revenues:Premiums earned, net:Premiums earned
    
    $
    26.7
    
    
    
    24.6
    
    
    $
    52.7
    
    
    
    48.8Premiums earned ceded
    
    
    (1.5
    )
    
    
    (1.8
    )
    
    
    (3.1
    )
    
    
    (3.9
    )Net premiums earned
    
    
    25.2
    
    
    
    22.8
    
    
    
    49.6
    
    
    
    44.9Commission income on reinsuarance
    
    
    
    
    
    
    0.1
    
    
    
    0.1
    
    
    
    0.2Premiums earned, net
    
    
    25.2
    
    
    
    22.9
    
    
    
    49.7
    
    
    
    45.1Net investment income
    
    
    4.4
    
    
    
    4.1
    
    
    
    8.4
    
    
    
    8.0Total operating revenues
    
    
    29.6
    
    
    
    27.0
    
    
    
    58.1
    
    
    
    53.1Operating costs:Policy benefits and claims incurred
    
    
    13.0
    
    
    
    11.2
    
    
    
    25.7
    
    
    
    23.2Underwriting and other expenses
    
    
    12.7
    
    
    
    12.6
    
    
    
    25.5
    
    
    
    24.2Total operating costs
    
    
    25.7
    
    
    
    23.8
    
    
    
    51.2
    
    
    
    47.4Operating income
    
    $
    3.9
    
    
    
    3.2
    
    
    $
    6.9
    
    
    
    5.7Additional data:Loss ratio
    
    
    51.6
    %
    
    
    48.9
    %
    
    
    51.7
    %
    
    
    51.4
    %Operating expense ratio
    
    
    50.4
    %
    
    
    55.0
    %
    
    
    51.3
    %
    
    
    53.6
    %
 Three Months Ended June 30, 2009 Compared to Three Months Ended June 30, 2008
 Operating Revenues
  Policy Benefits and Claims Incurred
  38




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##### Table of Contents



Underwriting and Other Expenses
  Six Months Ended June 30, 2009 Compared to six Months Ended June 30, 2008
 Operating Revenues
  Policy Benefits and Claims Incurred
  Underwriting and Other Expenses
  Property and Casualty Insurance Operating Results
 Three months ended
    
    Six months endedJune 30,
    
    June 30,(Dollar amounts in millions)
    
    2009
    
    2008
    
    2009
    
    2008Operating revenues:Premiums earned, net:Premiums written
    
    $
    37.6
    
    
    
    40.6
    
    
    
    70.7
    
    
    
    76.1Premiums ceded
    
    
    (16.7
    )
    
    
    (18.3
    )
    
    
    (29.5
    )
    
    
    (33.9
    )Change in unearned premiums
    
    
    3.1
    
    
    
    0.8
    
    
    
    7.4
    
    
    
    4.2Premiums earned, net
    
    
    24.0
    
    
    
    23.1
    
    
    
    48.6
    
    
    
    46.4Net investment income
    
    
    3.0
    
    
    
    3.0
    
    
    
    5.8
    
    
    
    6.0Total operating revenues
    
    
    27.0
    
    
    
    26.1
    
    
    
    54.4
    
    
    
    52.4Operating costs:Claims incurred
    
    
    11.6
    
    
    
    12.4
    
    
    
    23.2
    
    
    
    22.7Underwriting and other expenses
    
    
    12.6
    
    
    
    11.4
    
    
    
    27.0
    
    
    
    25.3Total operating costs
    
    
    24.2
    
    
    
    23.8
    
    
    
    50.2
    
    
    
    48.0Operating income
    
    $
    2.8
    
    
    
    2.3
    
    
    
    4.2
    
    
    
    4.4Additional data:Loss ratio
    
    
    48.3
    %
    
    
    53.7
    %
    
    
    47.7
    %
    
    
    48.9
    %Operating expense ratio
    
    
    52.5
    %
    
    
    49.4
    %
    
    
    55.6
    %
    
    
    54.5
    %Combined ratio
    
    
    100.8
    %
    
    
    103.1
    %
    
    
    103.3
    %
    
    
    103.4
    %
 39




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##### Table of Contents



Three Months Ended March 31, 2009 Compared to Three Months Ended March 31, 2008
 Operating Revenues
    Claims Incurred
  Underwriting and Other Expenses
  Six Months Ended June 30, 2009 Compared to Six Months Ended June 30, 2008
 Operating Revenues
   40




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##### Table of Contents



Claims Incurred
  Underwriting and Other Expenses
  Liquidity and Capital Resources
 Cash Flows
  Six months endedJune 30,(Dollar amounts in millions)
    
    2009
    
    2008Sources of cash:Net proceeds from short-term borrowings
    
    $
    
    
    
    
    32.1Proceeds from policyholder deposits
    
    
    2.5
    
    
    
    5.9Cash provided by operating activities
    
    
    49.1
    
    
    
    Other
    
    
    
    
    
    
    15.6Total sources of cash
    
    
    51.6
    
    
    
    53.6Uses of cash:Cash used in operating activities
    
    
    
    
    
    
    (25.2
    )Net purchases of investment securities
    
    
    (9.6
    )
    
    
    (216.0
    )Capital expenditures
    
    
    (8.9
    )
    
    
    (7.1
    )Repurchase and retirement of common stock
    
    
    (22.0
    )
    
    
    Payments of long-term borrowings
    
    
    (0.8
    )
    
    
    (0.8
    )Surrenders of policyholder deposits
    
    
    (3.6
    )
    
    
    (3.4
    )Other
    
    
    (10.1
    )
    
    
    Total uses of cash
    
    
    (55.0
    )
    
    
    (252.5
    )Net decrease in cash and cash equivalents
    
    $
    (3.4
    )
    
    
    (198.9
    )
  41




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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).
      42




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##### Table of Contents



Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
  
 Item 4.
    
    Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
    Remediation of Material Weakness
   
    
    Improved the governance process over the Corporations investment activities, by
including OTTI analysis on the quarterly agenda of our Investment Committee and by
reporting the results of the OTTI analysis to our Audit Committee.
    
    Amended and expanded the criteria for the selection of impaired investment positions
for OTTI evaluation increasing the scope of our evaluation.
 43




---



##### Table of Contents




    
    Prepared more robust supporting documentation for the OTTI analysis, including related
reports used when evaluating those impaired investments selected in accordance with our
selection criteria, addressing the reasons for the decline in value, period for which the
decline has been observed, an estimate of the anticipated recovery period and its related
probability of recoverability, credit ratings for the issue and issuer (when available) and
any changes thereto.
    
    Implemented a procedure designed to effectively disseminate the most recent
authoritative accounting pronouncements related to OTTI to ensure that employees involved
in the OTTI evaluation process receive the information on a timely basis.
  Changes in Internal Controls Over Financial Reporting
  
 Part II  Other Information
 
 Item 1.
    
    Legal Proceedings
  
 Item IA.
    
    Risk Factors
  
 Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
 Purchases of Equity Securities by the Issuer
  Total Number
    
    Approximateof Shares
    
    Dollar Value ofPurchased as
    
    Shares thatPart of
    
    May Yet BeTotal Number
    
    
    
    
    
    Publicly
    
    Purchasedof Shares
    
    Average Price
    
    Announced
    
    Under the(Dollar amounts in millions,except per share data)
    
    Purchased
    
    Paid per Share
    
    Programs1
    
    ProgramsJanuary 1, 2009 to January 31, 2009
    
    
    554,300
    
    
    $
    12.47
    
    
    
    554,300
    
    
    $
    19.1February 1, 2009 to February 28, 2009
    
    
    480,916
    
    
    
    12.45
    
    
    
    480,916
    
    
    
    13.1March 1, 2009 to March 30, 2009
    
    
    428,272
    
    
    
    11.98
    
    
    
    428,272
    
    
    
    8.0April 1, 2009 to April 30, 2009
    
    
    211,300
    
    
    
    12.77
    
    
    
    211,300
    
    
    
    5.2May 1, 2009 to May 31, 2009
    
    
    64,700
    
    
    
    13.28
    
    
    
    64,700
    
    
    
    4.4June 1, 2009 to June 30, 2009
    
    
    31,800
    
    
    
    13.98
    
    
    
    31,800
    
    
    
    3.9
 44




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##### Table of Contents



1
    
    In October 2008, the Board of Directors authorized a $40.0 million share
repurchase program, which commenced on December 8, 2008. 
 Item 3.
    
    Defaults Upon Senior Securities
  
 Item 4.
    
    Submissions of Matters to a Vote of Security Holders
   Nominee
    
    For
    
    Withheld
    
    Abstained
    
    Total*Luis A. Clavell-Rodríguez, MD
    
    
    16,843,821
    
    
    
    86,103
    
    
    
    53,858
    
    
    
    16,983,782Vicente León-Irizarry, CPA
    
    
    15,149,599
    
    
    
    1,746,215
    
    
    
    87,968
    
    
    
    16,983,782Jesús R. Sánchez-Colón, MD
    
    
    16,882,001
    
    
    
    28,851
    
    
    
    72,930
    
    
    
    16,983,782
 
 *
    
    There were no broker-non votes with respect to this matter. 
 Item 5.
    
    Other Information
  
 Item 6.
    
    Exhibits
 Exhibits
    
    
    Description10.1
    
    
    Blue Cross License Agreement by and between Blue Cross Blue
Shield Association and the Company, including revisions, if
any, adopted by the Member Plans through the March 19, 2009
meeting (incorporated herein by reference to Exhibit 10.1 to
TSMs Current Report on Form 8-K dated July 1, 2009 (File
No. 001-33865)).
 45




---



##### Table of Contents



Exhibits
    
    
    Description10.2
    
    
    Blue Cross Controlled Affiliate License Agreement by and
among Blue Cross Blue Shield Association, Triple-S Salud,
Inc. and the Company, including revisions, if any, adopted
by the Member Plans through the March 19, 2009 meeting
(incorporated herein by reference to Exhibit 10.2 to TSMs
Current Report on Form 8-K dated July 1, 2009 (File No.
001-33865)).10.3*
    
    
    Extension to the agreement between the Puerto Rico Health
Insurance Administration and Triple-S Salud, Inc. for the
provision of health insurance coverage to eligible
population in the North and South-West regions.11
    
    
    Statement re computation of per share earnings; an exhibit
describing the computation of the earnings per share for the
three months and six months ended June 30, 2009 and 2008 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.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.
 
 All other exhibits for which provision is made in the applicable accounting regulation of the
United States Securities and Exchange Commission are not required under the related instructions or
are inapplicable, and therefore have been omitted.*
    
    Filed herein. 46




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##### Table of Contents



SIGNATURES
  Triple-S Management CorporationRegistrantDate:
    
    August 5, 2009
    
    
    
    By:
    
    /s/ Ramón M. Ruiz-ComasRamón M. Ruiz-Comas, CPAPresident and
Chief Executive OfficerDate:
    
    August 5, 2009
    
    
    
    By:
    
    /s/ Juan J. RománJuan J. Román, CPAVice President of Finance
and Chief Financial Officer
 47