##### 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, 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
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ
  Title of each class
    
    Outstanding at October 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
   Part I  Financial InformationItem 1. Financial Statements
    
    
    3Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    30Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    43Item 4. Controls and Procedures
    
    
    43Part II Other InformationItem 1. Legal Proceedings
    
    
    45Item 1A. Risk Factors
    
    
    45Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    45Item 3. Defaults Upon Senior Securities
    
    
    45Item 4. Submissions of Matters to a Vote of Security Holders
    
    
    45Item 5. Other Information
    
    
    45Item 6. Exhibits
    
    
    46SIGNATURES
    
    
    47EX-10.4EX-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)
 September 30,
    
    December 31,2009
    
    2008AssetsInvestments and cash:Equity securities held for trading, at fair value
    
    $
    40,065
    
    
    
    32,184Securities available for sale, at fair value:Fixed maturities
    
    
    929,506
    
    
    
    887,684Equity securities
    
    
    65,296
    
    
    
    68,629Securities held to maturity, at amortized cost:Fixed maturities
    
    
    15,702
    
    
    
    21,753Policy loans
    
    
    5,736
    
    
    
    5,451Cash and cash equivalents
    
    
    54,698
    
    
    
    46,095Total investments and cash
    
    
    1,111,003
    
    
    
    1,061,796Premiums and other receivables, net
    
    
    252,523
    
    
    
    237,158Deferred policy acquisition costs and value of business acquired
    
    
    134,299
    
    
    
    126,347Property and equipment, net
    
    
    66,645
    
    
    
    58,448Net deferred tax asset
    
    
    36,832
    
    
    
    25,195Other assets
    
    
    31,611
    
    
    
    39,515Total assets
    
    $
    1,632,913
    
    
    
    1,548,459Liabilities and Stockholders EquityClaim liabilities:Claims processed and incomplete
    
    $
    206,707
    
    
    
    156,137Unreported losses
    
    
    151,815
    
    
    
    150,079Unpaid loss-adjustment expenses
    
    
    19,275
    
    
    
    17,494Total claim liabilities
    
    
    377,797
    
    
    
    323,710Liability for future policy benefits
    
    
    219,292
    
    
    
    207,545Unearned premiums
    
    
    95,993
    
    
    
    110,141Policyholder deposits
    
    
    48,031
    
    
    
    48,684Liability to Federal Employees Health Benefits Program (FEHBP)
    
    
    14,015
    
    
    
    11,157Accounts payable and accrued liabilities
    
    
    140,038
    
    
    
    148,713Long-term borrowings
    
    
    168,077
    
    
    
    169,307Liability for pension benefits
    
    
    41,476
    
    
    
    44,103Total liabilities
    
    
    1,104,719
    
    
    
    1,063,360Stockholders equity:Common stock Class A, $1 par value. Authorized 100,000,000 shares;
issued and outstanding 9,042,809 at September 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 September 30,
2009 and December 31, 2008, respectively
    
    
    20,361
    
    
    
    22,105Additional paid-in capital
    
    
    162,472
    
    
    
    179,504Retained earnings
    
    
    332,788
    
    
    
    292,112Accumulated other comprehensive income (loss)
    
    
    3,530
    
    
    
    (17,665
    )Total stockholders equity
    
    
    528,194
    
    
    
    485,099Total liabilities and stockholders equity
    
    $
    1,632,913
    
    
    
    1,548,459
  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 30,2009
    
    2008
    
    2009
    
    2008Revenues:Premiums earned, net
    
    $
    477,503
    
    
    
    433,219
    
    
    $
    1,396,208
    
    
    
    1,256,775Administrative service fees
    
    
    9,797
    
    
    
    4,448
    
    
    
    29,982
    
    
    
    12,081Net investment income
    
    
    12,955
    
    
    
    14,072
    
    
    
    38,856
    
    
    
    41,806Total operating revenues
    
    
    500,255
    
    
    
    451,739
    
    
    
    1,465,046
    
    
    
    1,310,662Net realized investment gain (losses):Total other-than-temporary impairment losses
on securities
    
    
    (240
    )
    
    
    (1,557
    )
    
    
    (5,953
    )
    
    
    (3,941
    )Net realized gains, excluding other-than-temporary
impairment losses on securities
    
    
    2,390
    
    
    
    456
    
    
    
    4,751
    
    
    
    1,708Total net realized investment gain (losses)
    
    
    2,150
    
    
    
    (1,101
    )
    
    
    (1,202
    )
    
    
    (2,233
    )Net unrealized investment gain (loss) on trading securities
    
    
    4,860
    
    
    
    (3,605
    )
    
    
    8,036
    
    
    
    (10,806
    )Other income (expense), net
    
    
    67
    
    
    
    (1,147
    )
    
    
    392
    
    
    
    (1,308
    )Total revenues
    
    
    507,332
    
    
    
    445,886
    
    
    
    1,472,272
    
    
    
    1,296,315Benefits and expenses:Claims incurred
    
    
    413,626
    
    
    
    365,585
    
    
    
    1,206,578
    
    
    
    1,070,572Operating expenses
    
    
    71,205
    
    
    
    63,572
    
    
    
    208,060
    
    
    
    185,002Total operating costs
    
    
    484,831
    
    
    
    429,157
    
    
    
    1,414,638
    
    
    
    1,255,574Interest expense
    
    
    3,338
    
    
    
    3,749
    
    
    
    9,959
    
    
    
    11,348Total benefits and expenses
    
    
    488,169
    
    
    
    432,906
    
    
    
    1,424,597
    
    
    
    1,266,922Income before taxes
    
    
    19,163
    
    
    
    12,980
    
    
    
    47,675
    
    
    
    29,393Income tax expense (benefit):Current
    
    
    2,096
    
    
    
    4,580
    
    
    
    11,637
    
    
    
    8,687Deferred
    
    
    (1,017
    )
    
    
    (1,071
    )
    
    
    (4,638
    )
    
    
    (2,104
    )Total income taxes
    
    
    1,079
    
    
    
    3,509
    
    
    
    6,999
    
    
    
    6,583Net income
    
    $
    18,084
    
    
    
    9,471
    
    
    $
    40,676
    
    
    
    22,810Basic net income per share
    
    $
    0.62
    
    
    
    0.29
    
    
    $
    1.37
    
    
    
    0.71Diluted net income per share
    
    $
    0.62
    
    
    
    0.29
    
    
    $
    1.37
    
    
    
    0.71
  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
    
    
    3,231
    
    
    
    2,392Grant of restricted Class B common stock
    
    
    27
    
    
    
    20Repurchase and retirement of common stock
    
    
    (22,034
    )
    
    
    Other
    
    
    
    
    
    
    (14
    )Comprehensive income (loss):Net income
    
    
    40,676
    
    
    
    22,810Net unrealized change in fair value of available for sale
securities, net of taxes
    
    
    20,299
    
    
    
    (24,210
    )Defined benefit pension plan:Actuarial loss, net
    
    
    1,103
    
    
    
    874Prior service credit, net
    
    
    (207
    )
    
    
    (220
    )Net change in fair value of cash flow hedges
    
    
    
    
    
    
    (56
    )Total comprehensive (loss) income
    
    
    61,871
    
    
    
    (802
    )Balance at September 30
    
    $
    528,194
    
    
    
    484,134
  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 30,2009
    
    2008Cash flows from operating activities:Net income
    
    $
    40,676
    
    
    
    22,810Adjustments to reconcile net income to net cash
provided by (used in) operating activities:Depreciation and amortization
    
    
    6,358
    
    
    
    5,419Net amortization of investments
    
    
    544
    
    
    
    739Provision (reversal of provision) for doubtful receivables
    
    
    10,070
    
    
    
    (2,243
    )Deferred tax benefit
    
    
    (4,638
    )
    
    
    (2,104
    )Net loss on sale of securities
    
    
    1,202
    
    
    
    2,233Net unrealized (gain) loss on trading securities
    
    
    (8,036
    )
    
    
    10,806Share-based compensation
    
    
    3,258
    
    
    
    2,392Proceeds from trading securities sold:Equity securities
    
    
    2,923
    
    
    
    23,480Acquisition of securities in trading portfolio:Equity securities
    
    
    (3,206
    )
    
    
    (9,367
    )Loss on sale of property and equipment
    
    
    
    
    
    
    11(Increase) decrease in assets:Premiums receivable
    
    
    (37,358
    )
    
    
    (50,744
    )Agents balances
    
    
    9,240
    
    
    
    2,787Accrued interest receivable
    
    
    1,131
    
    
    
    (2,484
    )Other receivables
    
    
    3,313
    
    
    
    (4,508
    )Reinsurance recoverable on paid losses
    
    
    (1,540
    )
    
    
    8,924Deferred policy acquisition costs and
value of business acquired
    
    
    (7,952
    )
    
    
    (8,083
    )Prepaid income tax
    
    
    6,172
    
    
    
    (6,901
    )Other deferred taxes
    
    
    (11,150
    )
    
    
    Other assets
    
    
    1,732
    
    
    
    9,918Increase (decrease) in liabilities:Claims processed and incomplete
    
    
    50,570
    
    
    
    5,840Unreported losses
    
    
    1,736
    
    
    
    (8,001
    )Unpaid loss-adjustment expenses
    
    
    1,781
    
    
    
    887Liability for future policy benefits
    
    
    11,747
    
    
    
    10,074Unearned premiums
    
    
    (14,148
    )
    
    
    (31,915
    )Policyholder deposits
    
    
    568
    
    
    
    1,407Liability to FEHBP
    
    
    2,858
    
    
    
    (6,243
    )Accounts payable and accrued liabilities
    
    
    (1,197
    )
    
    
    4,972Net cash provided by
(used in) operating
activities
    
    $
    66,654
    
    
    
    (19,894
    )
  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 30,2009
    
    
    2008Cash flows from investing activities:Proceeds from investments sold or matured:Securities available for sale:Fixed maturities sold
    
    $
    125,951
    
    
    
    162,802Fixed maturities matured/called
    
    
    151,898
    
    
    
    65,088Equity securities
    
    
    6,849
    
    
    
    4,449Securities held to maturity:Fixed maturities matured/called
    
    
    6,893
    
    
    
    20,107Acquisition of investments:Securities available for sale:Fixed maturities
    
    
    (294,628
    )
    
    
    (449,515
    )Equity securities
    
    
    (3,209
    )
    
    
    (17,069
    )Fixed maturity securities held to maturity
    
    
    (577
    )
    
    
    (554
    )Net (outflows) proceeds for policy loans
    
    
    (285
    )
    
    
    73Net capital expenditures
    
    
    (14,555
    )
    
    
    (12,116
    )Net cash used in investing activities
    
    
    (21,663
    )
    
    
    (226,735
    )Cash flows from financing activities:Change in outstanding checks in excess of bank balances
    
    
    (11,903
    )
    
    
    17,992Change in short-term borrowings
    
    
    
    
    
    
    31,795Repayments of long-term borrowings
    
    
    (1,230
    )
    
    
    (1,229
    )Repurchase and retirement of common stock
    
    
    (22,034
    )
    
    
    Proceeds from policyholder deposits
    
    
    3,708
    
    
    
    7,156Surrenders of policyholder deposits
    
    
    (4,929
    )
    
    
    (5,793
    )Other
    
    
    
    
    
    
    6Net cash (used in) provided by financing
activities
    
    
    (36,388
    )
    
    
    49,927Net increase (decrease) in cash and cash
equivalents
    
    
    8,603
    
    
    
    (196,702
    )Cash and cash equivalents at beginning of the period
    
    
    46,095
    
    
    
    240,153Cash and cash equivalents at end of the period
    
    $
    54,698
    
    
    
    43,451
  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
      8




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TRIPLE-S MANAGEMENT CORPORATION AND SUBSIDIARIES  Notes to Consolidated Financial Statements   (Dollar amounts in thousands, except per share data)
     (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
    
    Nine months endedSeptember 30,
    
    September 30,2009
    
    2008
    
    2009
    
    2008Operating revenues:Managed Care:Premiums earned, net
    
    $
    428,566
    
    
    
    387,052
    
    
    $
    1,249,463
    
    
    
    1,119,602Administrative service fees
    
    
    9,798
    
    
    
    4,449
    
    
    
    29,983
    
    
    
    12,082Intersegment premiums /service fees
    
    
    1,533
    
    
    
    1,587
    
    
    
    4,481
    
    
    
    4,897Net investment income
    
    
    5,435
    
    
    
    5,879
    
    
    
    15,953
    
    
    
    17,556Total managed care
    
    
    445,332
    
    
    
    398,967
    
    
    
    1,299,880
    
    
    
    1,154,137Life Insurance:Premiums earned, net
    
    
    24,645
    
    
    
    23,407
    
    
    
    74,198
    
    
    
    68,319Intersegment premiums
    
    
    108
    
    
    
    91
    
    
    
    293
    
    
    
    276Net investment income
    
    
    4,093
    
    
    
    4,156
    
    
    
    12,480
    
    
    
    12,147Total life insurance
    
    
    28,846
    
    
    
    27,654
    
    
    
    86,971
    
    
    
    80,742Property and Casualty Insurance:Premiums earned, net
    
    
    24,293
    
    
    
    22,761
    
    
    
    72,547
    
    
    
    68,855Intersegment premiums
    
    
    153
    
    
    
    152
    
    
    
    460
    
    
    
    458Net investment income
    
    
    2,998
    
    
    
    2,910
    
    
    
    8,783
    
    
    
    8,933Total property and casualty insurance
    
    
    27,444
    
    
    
    25,823
    
    
    
    81,790
    
    
    
    78,246Other segments  intersegment service revenues *
    
    
    13,889
    
    
    
    11,705
    
    
    
    39,003
    
    
    
    33,978Total business segments
    
    
    515,511
    
    
    
    464,149
    
    
    
    1,507,644
    
    
    
    1,347,103TSM operating revenues from external sources
    
    
    427
    
    
    
    1,125
    
    
    
    1,639
    
    
    
    3,168Elimination of intersegment premiums
    
    
    (1,794
    )
    
    
    (1,830
    )
    
    
    (5,234
    )
    
    
    (5,631
    )Elimination of intersegment service fees
    
    
    (13,889
    )
    
    
    (11,705
    )
    
    
    (39,003
    )
    
    
    (33,978
    )Consolidated operating revenues
    
    $
    500,255
    
    
    
    451,739
    
    
    $
    1,465,046
    
    
    
    1,310,662
 
 *
    
    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)
 Three months ended
    
    Nine months endedSeptember 30,
    
    September 30,2009
    
    2008
    
    2009
    
    2008Operating income:Managed care
    
    $
    10,098
    
    
    
    15,114
    
    
    $
    32,080
    
    
    
    34,416Life insurance
    
    
    3,992
    
    
    
    2,906
    
    
    
    10,938
    
    
    
    8,611Property and casualty insurance
    
    
    245
    
    
    
    2,884
    
    
    
    4,394
    
    
    
    7,252Other segments *
    
    
    451
    
    
    
    31
    
    
    
    813
    
    
    
    319Total business segments
    
    
    14,786
    
    
    
    20,935
    
    
    
    48,225
    
    
    
    50,598TSM operating revenues from external sources
    
    
    427
    
    
    
    1,125
    
    
    
    1,638
    
    
    
    3,168TSM unallocated operating expenses
    
    
    (2,178
    )
    
    
    (1,996
    )
    
    
    (6,648
    )
    
    
    (6,152
    )Elimination of TSM
intersegment
charges
    
    
    2,389
    
    
    
    2,518
    
    
    
    7,193
    
    
    
    7,474Consolidated operating income
    
    
    15,424
    
    
    
    22,582
    
    
    
    50,408
    
    
    
    55,088Consolidated net realized investment gains (losses)
    
    
    2,150
    
    
    
    (1,101
    )
    
    
    (1,202
    )
    
    
    (2,233
    )Consolidated net unrealized gain (loss) on
trading securities
    
    
    4,860
    
    
    
    (3,605
    )
    
    
    8,036
    
    
    
    (10,806
    )Consolidated interest expense
    
    
    (3,338
    )
    
    
    (3,749
    )
    
    
    (9,959
    )
    
    
    (11,348
    )Consolidated other income (expense), net
    
    
    67
    
    
    
    (1,147
    )
    
    
    392
    
    
    
    (1,308
    )Consolidated income before taxes
    
    $
    19,163
    
    
    
    12,980
    
    
    $
    47,675
    
    
    
    29,393Depreciation expense:Managed care
    
    $
    1,364
    
    
    
    1,093
    
    
    $
    4,092
    
    
    
    3,085Life insurance
    
    
    181
    
    
    
    172
    
    
    
    491
    
    
    
    521Property and casualty insurance
    
    
    378
    
    
    
    366
    
    
    
    1,128
    
    
    
    1,105Total business segments
    
    
    1,923
    
    
    
    1,631
    
    
    
    5,711
    
    
    
    4,711TSM depreciation expense
    
    
    216
    
    
    
    216
    
    
    
    647
    
    
    
    708Consolidated depreciation expense
    
    $
    2,139
    
    
    
    1,847
    
    
    $
    6,358
    
    
    
    5,419
 September 30,
    
    December 31,2009
    
    2008Assets:Managed care
    
    $
    753,808
    
    
    
    678,889Life insurance
    
    
    491,615
    
    
    
    460,109Property and casualty insurance
    
    
    337,185
    
    
    
    337,869Other segments *
    
    
    13,603
    
    
    
    12,620Total business segments
    
    
    1,596,211
    
    
    
    1,489,487Unallocated amounts related to TSM:Cash, cash equivalents, and investments
    
    
    36,306
    
    
    
    58,480Property and equipment,net
    
    
    21,793
    
    
    
    21,648Other assets
    
    
    3,957
    
    
    
    4,07962,056
    
    
    
    84,207Elimination entries-intersegment receivables and others
    
    
    (25,354
    )
    
    
    (25,235
    )Consolidated total assets
    
    $
    1,632,913
    
    
    
    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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TRIPLE-S MANAGEMENT CORPORATION AND SUBSIDIARIES  Notes to Consolidated Financial Statements   (Dollar amounts in thousands, except per share data)
 (4) Investment in Securities
      12




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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, 2009Gross
    
    GrossAmortized
    
    unrealized
    
    unrealized
    
    Estimatedcost
    
    gains
    
    losses
    
    fair valueTrading securities:Equity securities
    
    $
    40,692
    
    
    
    5,213
    
    
    
    (5,840
    )
    
    
    40,065
 December 31, 2008Gross
    
    GrossAmortized
    
    unrealized
    
    unrealized
    
    Estimatedcost
    
    gains
    
    losses
    
    fair valueTrading securities:Equity securities
    
    $
    40,847
    
    
    
    2,781
    
    
    
    (11,444
    )
    
    
    32,184
 September 30, 2009Gross
    
    GrossAmortized
    
    unrealized
    
    unrealized
    
    Estimatedcost
    
    gains
    
    losses
    
    fair valueSecurities available for sale:Obligations of government-
sponsored enterprises
    
    $
    363,776
    
    
    
    5,894
    
    
    
    (510
    )
    
    
    369,160U.S. Treasury securities and
obligations of U.S.
government instrumentalities
    
    
    48,375
    
    
    
    4,746
    
    
    
    
    
    
    
    53,121Obligations of the
Commonwealth of Puerto Rico
and its instrumentalities
    
    
    185,662
    
    
    
    6,493
    
    
    
    (1,659
    )
    
    
    190,496Municipal securities
    
    
    53,628
    
    
    
    2,088
    
    
    
    (160
    )
    
    
    55,556Obligations of states of the
United States and political
subdivisions of the states
    
    
    12,330
    
    
    
    721
    
    
    
    
    
    
    
    13,051Corporate bonds
    
    
    100,149
    
    
    
    7,132
    
    
    
    (940
    )
    
    
    106,341Residential agency mortgage-backed securities
    
    
    17,416
    
    
    
    768
    
    
    
    (1
    )
    
    
    18,183Collateralized mortgage
obligations
    
    
    119,105
    
    
    
    6,022
    
    
    
    (1,529
    )
    
    
    123,598Total fixed
maturities
    
    
    900,441
    
    
    
    33,864
    
    
    
    (4,799
    )
    
    
    929,506Equity securities
    
    
    63,890
    
    
    
    7,751
    
    
    
    (6,345
    )
    
    
    65,296Total
    
    $
    964,331
    
    
    
    41,615
    
    
    
    (11,144
    )
    
    
    994,802
 13




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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 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
 September 30, 2009Gross
    
    GrossAmortized
    
    unrealized
    
    unrealized
    
    Estimatedcost
    
    gains
    
    losses
    
    fair valueSecurities held to maturity:Obligations of government-
sponsored enterprises
    
    $
    3,229
    
    
    
    97
    
    
    
    
    
    
    
    3,326Residential agency mortgage-backed securities
    
    
    1,255
    
    
    
    25
    
    
    
    (1
    )
    
    
    1,279U.S. Treasury securities and
obligations of U.S.
government instrumentalities
    
    
    1,485
    
    
    
    202
    
    
    
    
    
    
    
    1,687Corporate bonds
    
    
    8,970
    
    
    
    546
    
    
    
    
    
    
    
    9,516Certificates of deposit
    
    
    763
    
    
    
    
    
    
    
    
    
    
    
    763Total
    
    $
    15,702
    
    
    
    870
    
    
    
    (1
    )
    
    
    16,571
 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
  September 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
    
    $
    59,417
    
    
    
    (418
    )
    
    
    19,923
    
    
    
    (92
    )
    
    
    79,340
    
    
    
    (510
    )Obligations of the
Commonwealth of Puerto
Rico and its instrumentalities
    
    
    34,022
    
    
    
    (770
    )
    
    
    37,743
    
    
    
    (889
    )
    
    
    71,765
    
    
    
    (1,659
    )Municipal securities
    
    
    2,681
    
    
    
    (125
    )
    
    
    148
    
    
    
    (35
    )
    
    
    2,829
    
    
    
    (160
    )Corporate bonds
    
    
    984
    
    
    
    (6
    )
    
    
    14,155
    
    
    
    (934
    )
    
    
    15,139
    
    
    
    (940
    )Residential agency mortgage-backed securities
    
    
    
    
    
    
    
    
    
    
    36
    
    
    
    (1
    )
    
    
    36
    
    
    
    (1
    )Collateralized mortgage
obligations
    
    
    11,067
    
    
    
    (291
    )
    
    
    6,839
    
    
    
    (1,238
    )
    
    
    17,906
    
    
    
    (1,529
    )Total fixed maturities
    
    
    108,171
    
    
    
    (1,610
    )
    
    
    78,844
    
    
    
    (3,189
    )
    
    
    187,015
    
    
    
    (4,799
    )Equity securities
    
    
    25,306
    
    
    
    (4,624
    )
    
    
    10,899
    
    
    
    (1,721
    )
    
    
    36,205
    
    
    
    (6,345
    )Total for securities
available for sale
    
    $
    133,477
    
    
    
    (6,234
    )
    
    
    89,743
    
    
    
    (4,910
    )
    
    
    223,220
    
    
    
    (11,144
    )Securities held to maturity:Residential mortgage-backed securities
    
    $
    
    
    
    
    
    
    
    
    54
    
    
    
    (1
    )
    
    
    54
    
    
    
    (1
    )
 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
    
    Nine months endedSeptember 30,
    
    September 30,2009
    
    2008
    
    2009
    
    2008Realized gains (losses):Fixed maturity securities:Securities available for sale:Gross gains from sales
    
    $
    65
    
    
    
    131
    
    
    
    3,122
    
    
    
    1,056Gross losses from sales
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    (117
    )Gross losses from other-than-temporary
impairments
    
    
    (240
    )
    
    
    (1,516
    )
    
    
    (1,393
    )
    
    
    (3,872
    )Total debt securities
    
    
    (175
    )
    
    
    (1,385
    )
    
    
    1,726
    
    
    
    (2,933
    )Equity securities:Trading securities:Gross gains from sales
    
    
    107
    
    
    
    433
    
    
    
    416
    
    
    
    3,377Gross losses from sales
    
    
    (104
    )
    
    
    (334
    )
    
    
    (823
    )
    
    
    (2,812
    )Gross losses from other-than-temporary
impairments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (28
    )3
    
    
    
    99
    
    
    
    (407
    )
    
    
    537Securities available for sale:Gross gains from sales
    
    
    2,322
    
    
    
    318
    
    
    
    2,322
    
    
    
    318Gross losses from sales
    
    
    
    
    
    
    (92
    )
    
    
    (283
    )
    
    
    (114
    )Gross losses from other-than-temporary
impairments
    
    
    
    
    
    
    (41
    )
    
    
    (4,560
    )
    
    
    (41
    )2,322
    
    
    
    185
    
    
    
    (2,521
    )
    
    
    163Total equity securities
    
    
    2,325
    
    
    
    284
    
    
    
    (2,928
    )
    
    
    700Net realized gains (losses) on
securities
    
    $
    2,150
    
    
    
    (1,101
    )
    
    
    (1,202
    )
    
    
    (2,233
    )
  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
    
    $
    15,963
    
    
    
    16,259Due after one year through five years
    
    
    84,148
    
    
    
    85,686Due after five years through ten years
    
    
    240,777
    
    
    
    249,853Due after ten years
    
    
    423,032
    
    
    
    435,927Collateralized mortgage obligations
    
    
    119,105
    
    
    
    123,598Residential mortgage-backed securities
    
    
    17,416
    
    
    
    18,183$
    900,441
    
    
    
    929,506Securities held to maturity:Due in one year or less
    
    $
    1,688
    
    
    
    1,703Due after one year through five years
    
    
    8,970
    
    
    
    9,516Due after five years through ten years
    
    
    510
    
    
    
    530Due after ten years
    
    
    3,279
    
    
    
    3,543Residential mortgage-backed securities
    
    
    1,255
    
    
    
    1,279$
    15,702
    
    
    
    16,571
  Three months ended
    
    Nine months endedSeptember 30,
    
    September 30,2009
    
    2008
    
    2009
    
    2008Changes in net unrealized gains (losses):Recognized in income:Equity securities  trading
    
    $
    4,860
    
    
    
    (3,605
    )
    
    
    8,036
    
    
    
    (10,806
    )Recognized in accumulated other comprehensive loss:Fixed maturities  available for sale
    
    $
    21,393
    
    
    
    (10,105
    )
    
    
    21,044
    
    
    
    (20,097
    )Equity securities  available for sale
    
    
    3,346
    
    
    
    (1,900
    )
    
    
    2,837
    
    
    
    (8,552
    )$
    24,739
        
    
    
    (12,005
    )
    
    
    23,881
    
    
    
    (28,649
    )Not recognized in the consolidated financial statements:Fixed maturities  held to maturity
    
    $
    90
        

    
    
    52
    
    
    
    (441
    )
    
    
    (5
    )
   19




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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 30,2009
    
    2008
    
    2009
    
    2008Fixed maturities
    
    $
    11,629
    
    
    
    12,390
    
    
    
    34,498
    
    
    
    36,045Equity securities
    
    
    891
    
    
    
    1,152
    
    
    
    2,984
    
    
    
    3,469Policy loans
    
    
    105
    
    
    
    97
    
    
    
    302
    
    
    
    287Cash equivalents and
interest-bearing deposits
    
    
    127
    
    
    
    111
    
    
    
    485
    
    
    
    937Other
    
    
    203
    
    
    
    322
    
    
    
    587
    
    
    
    1,068Total
    
    $
    12,955
    
    
    
    14,072
    
    
    
    38,856
    
    
    
    41,806
 (5) Premiums and Other Receivables
  September 30,
    
    December 31,2009
    
    2008Premiums
    
    $
    114,739
    
    
    
    90,315Self-funded group receivables
    
    
    47,846
    
    
    
    35,749FEHBP
    
    
    10,437
    
    
    
    9,600Agents balances
    
    
    29,251
    
    
    
    38,491Accrued interest
    
    
    10,671
    
    
    
    11,802Reinsurance recoverable
    
    
    43,721
    
    
    
    42,181Other
    
    
    20,673
    
    
    
    23,765277,338
    
    
    
    251,903Less allowance for doubtful receivables:Premiums
    
    
    19,925
    
    
    
    10,467Other
    
    
    4,890
    
    
    
    4,27824,815
    
    
    
    14,745Total premiums and other receivables
    
    $
    252,523
    
    
    
    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
    
    Nine months endedSeptember 30,
    
    September 30,2009
    
    2008
    
    2009
    
    2008Claim liabilities at beginning of period
    
    $
    363,914
    
    
    
    359,495
    
    
    
    323,710
    
    
    
    353,830Reinsurance recoverable on claim liabilities
    
    
    (30,154
    )
    
    
    (39,604
    )
    
    
    (30,432
    )
    
    
    (54,834
    )Net claim liabilities at beginning of period
    
    
    333,760
    
    
    
    319,891
    
    
    
    293,278
    
    
    
    298,996Incurred claims and loss-adjustment expenses:Current period insured events
    
    
    408,885
    
    
    
    360,013
    
    
    
    1,199,795
    
    
    
    1,068,339Prior period insured events
    
    
    1,731
    
    
    
    2,592
    
    
    
    (2,872
    )
    
    
    (6,311
    )Total
    
    
    410,616
    
    
    
    362,605
    
    
    
    1,196,923
    
    
    
    1,062,028Payments of losses and loss-adjustment expenses:Current period insured events
    
    
    354,477
    
    
    
    348,382
    
    
    
    909,004
    
    
    
    828,827Prior period insured events
    
    
    44,728
    
    
    
    20,095
    
    
    
    236,026
    
    
    
    218,178Total
    
    
    399,205
    
    
    
    368,477
    
    
    
    1,145,030
    
    
    
    1,047,005Net claim liabilities at end of period
    
    
    345,171
    
    
    
    314,019
    
    
    
    345,171
    
    
    
    314,019Reinsurance recoverable on claim liabilities
    
    
    32,626
    
    
    
    38,537
    
    
    
    32,626
    
    
    
    38,537Claim liabilities at end of period
    
    $
    377,797
    
    
    
    352,556
    
    
    
    377,797
    
    
    
    352,556
    21




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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 1 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
 The carrying amount approximates fair value because of the short-term nature of such instruments.
 (ii) Investment in Securities
  (iii) Policy Loans
  (iv) Receivables, Accounts Payable, and Accrued Liabilities
  (v) Policyholder Deposits
  22




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TRIPLE-S MANAGEMENT CORPORATION AND SUBSIDIARIES
 Notes to Consolidated Financial Statements   (Dollar amounts in thousands, except per share data)
 (vi) Borrowings
  September 30, 2009
    
    December 31, 2008Carrying
    
    Fair
    
    Carrying
    
    Fairamount
    
    value
    
    amount
    
    valueLoans payable to bank
    
    $
    23,077
    
    
    
    23,077
    
    
    
    24,307
    
    
    
    24,3076.3% senior unsecured notes payable
    
    
    50,000
    
    
    
    46,500
    
    
    
    50,000
    
    
    
    46,2506.6% senior unsecured notes payable
    
    
    60,000
    
    
    
    56,250
    
    
    
    60,000
    
    
    
    55,8006.7% senior unsecured notes payable
    
    
    35,000
    
    
    
    33,320
    
    
    
    35,000
    
    
    
    34,059Totals
    
    $
    168,077
    
    
    
    159,147
    
    
    
    169,307
    
    
    
    160,416
  (vii) Derivative Instruments
   September 30, 2009Level 1
    
    Level 2
    
    Level 3
    
    TotalEquity securities held for trading
    
    $
    40,065
    
    
    
    
    
    
    
    
    
    
    
    40,065Securities available for sale:Fixed maturity securities
    
    
    53,121
    
    
    
    876,065
    
    
    
    320
    
    
    
    929,506Equity securities
    
    
    23,268
    
    
    
    40,281
    
    
    
    1,747
    
    
    
    65,296Derivatives (reported within other assets in
the consolidated balance sheets)
    
    
    
    
    
    
    1,536
    
    
    
    
    
    
    
    1,536Total
    
    $
    116,454
    
    
    
    917,882
    
    
    
    2,067
    
    
    
    1,036,403
 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
    
    Nine months endedSeptember 30, 2009
    
    September 30, 2009Fixed
    
    
    
    
    
    
    
    
    
    FixedMaturity
    
    Equity
    
    
    
    
    
    Maturity
    
    EquitySecurities
    
    Securities
    
    Total
    
    Securities
    
    Securities
    
    TotalBeginning balance
    
    $
    560
    
    
    
    1,747
    
    
    
    2,307
    
    
    
    1,281
    
    
    
    1,086
    
    
    
    2,367Total gains or losses:Realized in earnings
    
    
    (240
    )
    
    
    
    
    
    
    (240
    )
    
    
    (1,264
    )
    
    
    
    
    
    
    (1,264
    )Unrealized
in other accumulated comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    303
    
    
    
    661
    
    
    
    964Purchases and sales
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Transfers in and/or out of Level 3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Ending balance
    
    $
    320
    
    
    
    1,747
    
    
    
    2,067
    
    
    
    320
    
    
    
    1,747
    
    
    
    2,067
 Three months and nine months ended September 30, 2008FixedMaturitySecuritiesBeginning balance
    
    $
    Total gains or losses:Realized in earnings
    
    
    Unrealized in other accumulated comprehensive income
    
    
    Purchases and sales
    
    
    Transfers in and/or out of Level 3
    
    
    1,567Ending balance
    
    $
    1,567
  (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
    
    (loss) incomeBalance at January 1
    
    $
    5,602
    
    
    
    (23,267
    )
    
    
    (17,665
    )Net current period change
    
    
    20,299
    
    
    
    896
    
    
    
    21,195Balance at September 30
    
    $
    25,901
    
    
    
    (22,371
    )
    
    
    3,530
 (10) Income Taxes
    25




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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 30,2009
    
    2008
    
    2009
    
    2008Components of net periodic benefit cost:Service cost
    
    $
    1,372
    
    
    
    1,385
    
    
    
    3,791
    
    
    
    4,210Interest cost
    
    
    1,614
    
    
    
    1,429
    
    
    
    4,290
    
    
    
    4,345Expected return on assets
    
    
    (1,135
    )
    
    
    (1,317
    )
    
    
    (3,047
    )
    
    
    (4,003
    )Prior service cost (credit)
    
    
    (127
    )
    
    
    (118
    )
    
    
    (340
    )
    
    
    (358
    )Actuarial loss
    
    
    718
    
    
    
    468
    
    
    
    1,809
    
    
    
    1,423Net periodic benefit cost
    
    $
    2,442
    
    
    
    1,847
    
    
    
    6,503
    
    
    
    5,617
 Employer contributions
  (12) Acquired Intangible Asset
  26




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TRIPLE-S MANAGEMENT CORPORATION AND SUBSIDIARIES
 Notes to Consolidated Financial Statements   (Dollar amounts in thousands, except per share data)
 (13) Net Income Available to Stockholders and Basic Net Income per Share
  Three months ended
    
    Nine months endedSeptember 30,
    
    September 30,2009
    
    2008
    
    2009
    
    2008Numerator for earnings per share:Net income available to stockholders
    
    $
    18,084
    
    
    
    9,471
    
    
    $
    40,676
    
    
    
    22,810Denominator for basic earnings per share:Weighted average of common shares
    
    
    29,265,472
    
    
    
    32,142,809
    
    
    
    29,607,691
    
    
    
    32,142,809Effect of dilutive securities
    
    
    107,462
    
    
    
    50,998
    
    
    
    64,876
    
    
    
    42,396Denominator for diluted earnings per share
    
    
    29,372,934
    
    
    
    32,193,807
    
    
    
    29,672,567
    
    
    
    32,185,205Basic net income per share
    
    $
    0.62
    
    
    
    0.29
    
    
    $
    1.37
    
    
    
    0.71Diluted net income per share
    
    $
    0.62
    
    
    
    0.29
    
    
    $
    1.37
    
    
    
    0.71
 (14) Contingencies
    Hau et al Litigation (formerly known as Jordan et al)
  27




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TRIPLE-S MANAGEMENT CORPORATION AND SUBSIDIARIES
 Notes to Consolidated Financial Statements   (Dollar amounts in thousands, except per share data)
  Dentists Association Litigation
     Colón Litigation
  Puerto Rico Center for Municipal Revenue Collection
  28




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TRIPLE-S MANAGEMENT CORPORATION AND SUBSIDIARIES
 Notes to Consolidated Financial Statements   (Dollar amounts in thousands, except per share data)
    Claims by Heirs of Former Shareholders
  Thomas Litigation
  (15) Subsequent Event
  29




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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 September 30,2009
    
    
    2008Managed care enrollment:Commercial 1
    
    
    745,933
    
    
    
    588,073Reform 2
    
    
    537,414
    
    
    
    340,710Medicare3
    
    
    69,290
    
    
    
    73,893Total
    
    
    1,352,637
    
    
    
    1,002,676Managed care enrollment by funding arrangement:Fully-insured
    
    
    890,987
    
    
    
    826,127Self-insured
    
    
    461,650
    
    
    
    176,549Total
    
    
    1,352,637
    
    
    
    1,002,676
 
 (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
    
    
    Nine months endedSeptember 30,
    
    
    September 30,(Dollar amounts in millions)
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008Revenues:Premiums earned, net
    
    $
    477.5
    
    
    
    433.2
    
    
    $
    1,396.2
    
    
    
    1,256.8Administrative service fees
    
    
    9.8
    
    
    
    4.5
    
    
    
    30.0
    
    
    
    12.1Net investment income
    
    
    12.9
    
    
    
    14.1
    
    
    
    38.9
    
    
    
    41.8Total operating revenues
    
    
    500.2
    
    
    
    451.8
    
    
    
    1,465.1
    
    
    
    1,310.7Net realized investment gain (losses)
    
    
    2.1
    
    
    
    (1.1
    )
    
    
    (1.2
    )
    
    
    (2.2
    )Net unrealized investment (loss) gain
on trading securities
    
    
    4.9
    
    
    
    (3.6
    )
    
    
    8.1
    
    
    
    (10.8
    )Other income (expense), net
    
    
    0.1
    
    
    
    (1.1
    )
    
    
    0.4
    
    
    
    (1.3
    )Total revenues
    
    
    507.3
    
    
    
    446.0
    
    
    
    1,472.4
    
    
    
    1,296.4Benefits and expenses:Claims incurred
    
    
    413.6
    
    
    
    365.6
    
    
    
    1,206.6
    
    
    
    1,070.6Operating expenses
    
    
    71.2
    
    
    
    63.6
    
    
    
    208.1
    
    
    
    185.0Total operating expenses
    
    
    484.8
    
    
    
    429.2
    
    
    
    1,414.7
    
    
    
    1,255.6Interest expense
    
    
    3.4
    
    
    
    3.8
    
    
    
    10.0
    
    
    
    11.4Total benefits and expenses
    
    
    488.2
    
    
    
    433.0
    
    
    
    1,424.7
    
    
    
    1,267.0Income before taxes
    
    
    19.1
    
    
    
    13.0
    
    
    
    47.7
    
    
    
    29.4Income tax expense
    
    
    1.0
    
    
    
    3.5
    
    
    
    7.0
    
    
    
    6.6Net income
    
    $
    18.1
    
    
    
    9.5
    
    
    $
    40.7
    
    
    
    22.8
 32




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##### Table of Contents



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




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Income tax expense
  Nine Months Ended September 30, 2009 Compared to nine Months Ended September 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



Income tax expense
  Managed Care Operating Results
 Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,(Dollar amounts in millions)
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008Operating revenues:Medical premiums earned, net:Commercial
    
    $
    217.3
    
    
    
    184.4
    
    
    $
    600.3
    
    
    
    546.1Reform
    
    
    89.4
    
    
    
    90.4
    
    
    
    257.7
    
    
    
    252.3Medicare
    
    
    122.7
    
    
    
    113.1
    
    
    
    394.0
    
    
    
    323.6Medical premiums earned, net
    
    
    429.4
    
    
    
    387.9
    
    
    
    1,252.0
    
    
    
    1,122.0Administrative service fees
    
    
    10.5
    
    
    
    5.2
    
    
    
    32.0
    
    
    
    14.5Net investment income
    
    
    5.4
    
    
    
    5.9
    
    
    
    15.9
    
    
    
    17.6Total operating revenues
    
    
    445.3
    
    
    
    399.0
    
    
    
    1,299.9
    
    
    
    1,154.1Medical operating costs:Medical claims incurred
    
    
    387.7
    
    
    
    343.8
    
    
    
    1,131.8
    
    
    
    1,002.8Medical operating expenses
    
    
    47.5
    
    
    
    40.1
    
    
    
    136.0
    
    
    
    116.9Total medical operating costs
    
    
    435.2
    
    
    
    383.9
    
    
    
    1,267.8
    
    
    
    1,119.7Medical operating income
    
    $
    10.1
    
    
    
    15.1
    
    
    $
    32.1
    
    
    
    34.4Additional data:Member months enrollment:Commercial:Fully-insured
    
    
    1,441,028
    
    
    
    1,234,011
    
    
    
    3,977,778
    
    
    
    3,698,285Self-funded
    
    
    812,780
    
    
    
    527,145
    
    
    
    1,954,997
    
    
    
    1,522,524Total Commercial member months
    
    
    2,253,808
    
    
    
    1,761,156
    
    
    
    5,932,775
    
    
    
    5,220,809Reform:Fully-insured
    
    
    1,011,294
    
    
    
    1,024,093
    
    
    
    2,997,800
    
    
    
    3,089,384Self-funded
    
    
    590,117
    
    
    
    
    
    
    
    1,723,568
    
    
    
    Total Reform member months
    
    
    1,601,411
    
    
    
    1,024,093
    
    
    
    4,721,368
    
    
    
    3,089,384MedicareMedicare Advantage
    
    
    179,878
    
    
    
    189,518
    
    
    
    565,439
    
    
    
    530,395Stand-alone PDP
    
    
    29,330
    
    
    
    31,894
    
    
    
    88,301
    
    
    
    97,374Total Medicare member months
    
    
    209,208
    
    
    
    221,412
    
    
    
    653,740
    
    
    
    627,769Total member months
    
    
    4,064,427
    
    
    
    3,006,661
    
    
    
    11,307,883
    
    
    
    8,937,962Medical loss ratio
    
    
    90.3
    %
    
    
    88.6
    %
    
    
    90.4
    %
    
    
    89.4
    %Operating expense ratio
    
    
    10.8
    %
    
    
    10.2
    %
    
    
    10.6
    %
    
    
    10.3
    %
 35




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##### Table of Contents



Three Months Ended September 30, 2009 Compared to Three Months Ended September 30, 2008
 Medical Operating Revenues
  
    
    Medical premiums generated by the Commercial business increased by $32.9 million, or
17.8%, to $217.3 million during the three months ended September 30, 2009. This
fluctuation is primarily the result of an increase in member months enrollment of 207,017,
or 16.8%, and an increase in average premium rates per member of approximately 1.5%.
Increase in member months was attributed to new members acquired from LCA effective July 1,
2009, which amount to 115,648 member months, or 55.9% of the increase in member months
enrollment experienced during this quarter and to new groups acquired during the period.
    
    Medical premiums generated by the Medicare business increased during the three months
ended September 30, 2009 by $9.6 million, or 8.5%, to $122.7 million, primarily due to a
higher average premium rates, particularly in our dual eligible product. Even though
premium rates increased, overall member months enrollment decreased by 12,204 or 5.5% when
compared with the same period during prior year. The fluctuation in member months
enrollment is the result of a decrease of 9,640, or 5.1%, in the membership of our Medicare
Advantage products and a decrease of 2,564 thousand, or 8.0%, in the membership of our PDP
product.
    
    Medical premiums earned in the Reform business decreased by $1.0 million, or 1.1%, to
$89.4 million during the three months ended September 30, 2009. This fluctuation is due to
lower member months enrollment in the Reforms fully-insured membership by 12,799, or 1.2%
and a premium adjustment of approximately $2.9 million to provide for unresolved
reconciling items with the Government of Puerto Rico.
  Medical Claims Incurred
  
    
    The medical claims incurred of the Commercial business increased by $28.2 million
during the 2009 period and its MLR decreased by 0.8 percentage points during the three
months ended September 30, 2009. This fluctuation relates primarily to the increase in
member months enrollment of 207,017, or 16.8%. The 2008 reported MLR is higher due to the
fact that it does not consider the favorable reserve development of the September 30, 2008
reserves. Excluding the effect of prior period reserve developments in the 2009 and 2008
period, the MLR increased by 0.8 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 and of the significant
increase in the utilization related to the AH1N1 flu, which increased our claims incurred
by approximately $2.1 million, or 100 basis points during the quarter.
    
    The medical claims incurred of the Medicare business increased by $13.2 million or
13.6% during the 2009 period and its MLR was 90.5%, 4.1 percentage points higher than the
MLR for same period of the prior year. Both increases are primarily due to the fact that
the claims incurred and MLR from last year do not consider the effect of an unfavorable
reserve development of the September 2008 reserves. Excluding the effect of prior period
reserve developments in the 2009 and 2008 periods, the 2009 MLR decreased by 3.0
 36




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##### Table of Contents



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 Reform business increased by $2.5 million and its
MLR increased by 3.8 percentage points during the three months ended September 30, 2009.
The higher MLR is primarily due to the fact that last year premiums rates were increased
effective July 2008 and that no increases were granted in 2009 quarter. Thus, this quarter
presents the effect of the trends in cost and utilization but no premium increases.
 Medical Operating Expenses
 08.
 Nine Months Ended September 30, 2009 Compared to Nine Months Ended September 30, 2008
 Medical Operating Revenues
  
    
    Medical premiums generated by the Medicare business increased during the nine months
ended September 30, 2009 by $70.4 million, or 21.8%, to $394.0 million, primarily due to an
increase in member months enrollment of 25,971 or 4.1%, and higher average premium rates of
approximately 11%. The fluctuation in member months is the net result of an increase of
25,044, or 4.6%, in the membership of our Medicare Advantage products and a decrease of
9,073, or 9.3%, in the membership of our PDP product. In addition, the nine months ended
September 30, 2009 include the net effect of approximate $8.7 million in adjustments
related to CMS final risk score adjustment for 2008. The nine months ended September 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 $54.2 million, or
9.9%, to $600.3 million during the nine months ended September 30, 2009. This fluctuation
is primarily the result of an increase in member months enrollment of 279,493, or 7.6% and
increase in average premium rates per member of approximately 2.8%. Increase in member
months was mainly attributed to new members acquired from LCA effective July 1, 2009, which
amount to 115,648 member months, or 41.4% of the increase in member months enrollment
experienced during this period and to new groups acquired during the period.
    
    Medical premiums earned in the Reform business increased by $5.4 million, or 2.1%, to
$257.7 million during the nine months ended September 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 91,584, or
3.0% and a premium adjustment of approximately $8.4 million to provide for unresolved
reconciling items with the Government of Puerto Rico.
  37




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Medical Claims Incurred
  
    
    The medical claims incurred of the Commercial business increased by $69.6 million during the 2009 period and its
MLR increased by 3.7 percentage points during the nine months ended September 30, 2009. The increase in claims was partially attributed to
the increase in members. The increase in the MLR is primarily due to the effect of prior period reserve developments in the 2009 and 2008 periods
and higher utilization trends. Excluding the effect of prior period reserve developments, the MLR increased by 2.3 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 and the effect of the AH1N1 flu of approximately $2.5 million, or 40 basis points.
    
    The medical claims incurred of the Medicare business increased by $59.0 million during the 2009 period primarily due to the higher
member months enrollment of this business. The MLR for the nine months ended September 30, 2009 was 90.1%, a reduction of 1.4 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 and lower utilization trends.
Excluding the effect of prior period reserve developments in the 2009 and 2008 period, as well as premium adjustments, the MLR decreased by 3.3 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 Reform business increased by $0.4 million and its MLR decreased by 1.7 percentage points during the nine months ended September 30, 2009.
The lower MLR is primarily due to reserve development in the 2009 and 2008 periods and the effect of the premium adjustment to provide for unresolved 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 remained in line with 2008 period.
 Medical Operating Expenses
  38




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##### Table of Contents



Life Insurance Operating Results
 Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,(Dollar amounts in millions)
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008Operating revenues:Premiums earned, net:Premiums earned
    
    $
    26.2
    
    
    
    25.2
    
    
    $
    79.1
    
    
    
    74.0Premiums earned ceded
    
    
    (1.5
    )
    
    
    (1.8
    )
    
    
    (4.6
    )
    
    
    (5.6
    )Net premiums earned
    
    
    24.7
    
    
    
    23.4
    
    
    
    74.5
    
    
    
    68.4Commission income on reinsuarance
    
    
    
    
    
    
    0.1
    
    
    
    
    
    
    
    0.2Premiums earned, net
    
    
    24.7
    
    
    
    23.5
    
    
    
    74.5
    
    
    
    68.6Net investment income
    
    
    4.1
    
    
    
    4.2
    
    
    
    12.5
    
    
    
    12.1Total operating revenues
    
    
    28.8
    
    
    
    27.7
    
    
    
    87.0
    
    
    
    80.7Operating costs:Policy benefits and claims incurred
    
    
    12.2
    
    
    
    12.0
    
    
    
    37.9
    
    
    
    35.2Underwriting and other expenses
    
    
    12.6
    
    
    
    12.7
    
    
    
    38.2
    
    
    
    36.8Total operating costs
    
    
    24.8
    
    
    
    24.7
    
    
    
    76.1
    
    
    
    72.0Operating income
    
    $
    4.0
    
    
    
    3.0
    
    
    $
    10.9
    
    
    
    8.7Additional data:Loss ratio
    
    
    49.4
    %
    
    
    51.1
    %
    
    
    50.9
    %
    
    
    51.3
    %Operating expense ratio
    
    
    51.0
    %
    
    
    54.0
    %
    
    
    51.3
    %
    
    
    53.6
    %
 Three Months Ended September 30, 2009 Compared to Three Months Ended September 30, 2008
 Operating Revenues
  Policy Benefits and Claims Incurred
  Underwriting and Other Expenses
  Nine Months Ended September 30, 2009 Compared to nine Months Ended September 30, 2008
 Operating Revenues
  39




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##### Table of Contents



Policy Benefits and Claims Incurred
  Underwriting and Other Expenses
  Property and Casualty Insurance Operating Results
 Three months ended
    
    Nine months endedSeptember 30,
    
    September 30,(Dollar amounts in millions)
    
    2009
    
    2008
    
    2009
    
    2008Operating revenues:Premiums earned, net:Premiums written
    
    $
    40.1
    
    
    
    39.5
    
    
    
    110.8
    
    
    
    115.6Premiums ceded
    
    
    (15.5
    )
    
    
    (17.8
    )
    
    
    (45.0
    )
    
    
    (51.7
    )Change in unearned premiums
    
    
    (0.2
    )
    
    
    1.2
    
    
    
    7.2
    
    
    
    5.4Premiums earned, net
    
    
    24.4
    
    
    
    22.9
    
    
    
    73.0
    
    
    
    69.3Net investment income
    
    
    3.0
    
    
    
    2.9
    
    
    
    8.8
    
    
    
    8.9Total operating revenues
    
    
    27.4
    
    
    
    25.8
    
    
    
    81.8
    
    
    
    78.2Operating costs:Claims incurred
    
    
    13.7
    
    
    
    9.8
    
    
    
    36.9
    
    
    
    32.5Underwriting and other expenses
    
    
    13.5
    
    
    
    13.1
    
    
    
    40.5
    
    
    
    38.4Total operating costs
    
    
    27.2
    
    
    
    22.9
    
    
    
    77.4
    
    
    
    70.9Operating income
    
    $
    0.2
    
    
    
    2.9
    
    
    
    4.4
    
    
    
    7.3Additional data:Loss ratio
    
    
    56.1
    %
    
    
    42.8
    %
    
    
    50.5
    %
    
    
    46.9
    %Operating expense ratio
    
    
    55.3
    %
    
    
    57.2
    %
    
    
    55.5
    %
    
    
    55.4
    %Combined ratio
    
    
    111.4
    %
    
    
    100.0
    %
    
    
    106.0
    %
    
    
    102.3
    %
 Three Months Ended September 30, 2009 Compared to Three Months Ended September 30, 2008
 Operating Revenues
   40




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##### Table of Contents



Claims Incurred
  Underwriting and Other Expenses
  Nine Months Ended September 30, 2009 Compared to Nine Months Ended September 30, 2008
 Operating Revenues
    Claims Incurred
  Underwriting and Other Expenses
  41




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##### Table of Contents



Liquidity and Capital Resources
 Cash Flows
  Nine months endedSeptember 30,(Dollar amounts in millions)
    
    2009
    
    2008Sources of cash:Net proceeds from short-term borrowings
    
    $
    
    
    
    
    31.8Proceeds from policyholder deposits
    
    
    3.7
    
    
    
    7.1Cash provided by operating activities
    
    
    66.7
    
    
    
    Other
    
    
    
    
    
    
    18.1Total sources of cash
    
    
    70.4
    
    
    
    57.0Uses of cash:Cash used in operating activities
    
    
    
    
    
    
    (19.9
    )Net purchases of investment securities
    
    
    (6.8
    )
    
    
    (214.7
    )Capital expenditures
    
    
    (14.7
    )
    
    
    (12.1
    )Repurchase and retirement of common stock
    
    
    (22.0
    )
    
    
    Payments of long-term borrowings
    
    
    (1.2
    )
    
    
    (1.2
    )Surrenders of policyholder deposits
    
    
    (4.9
    )
    
    
    (5.8
    )Other
    
    
    (12.2
    )
    
    
    Total uses of cash
    
    
    (61.8
    )
    
    
    (253.7
    )Net increase (decrease) in cash and cash equivalents
    
    $
    8.6
    
    
    
    (196.7
    )
       42




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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
  
 Item 4.
    
    Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  43




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##### Table of Contents



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.
    
    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
  44




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##### Table of Contents



Part II  Other Information
 
 Item 1.
    
    Legal Proceedings
  
 Item 1A.
    
    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 ValuePurchased as
    
    of Shares thatPart of
    
    May Yet BeTotal Number
    
    Average Price
    
    Publicly
    
    Purchasedof Shares
    
    Paid per
    
    Announced
    
    Under the(Dollar amounts in millions, except per share data)
    
    Purchased
    
    Share
    
    Programs1
    
    ProgramsJuly 1, 2009 to July 31, 2009
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    3.9August 1, 2009 to August 31, 2009
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3.9September 1, 2009 to September 30, 2009
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3.9
 
 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
  
 Item 5.
    
    Other Information
  45




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##### Table of Contents



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)).10.2
    
    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 (incorporated
herein by reference to Exhibit 10.3 to TSMs Quarterly
Report on Form 10-Q for the quarter ended June 30, 2009
(File No. 001-33865)).10.4*
    
    Extension to the agreement between the Puerto Rico Health
Insurance Administration and Triple-S Salud, Inc. for the
provision of the wraparound coverage for the Government
health insurance dual-eligible population.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 September 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.
  
 *
    
    Filed herein. 46




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##### Table of Contents



SIGNATURES
  Triple-S Management Corporation
RegistrantDate:      November 3, 2009
    By:
    /s/ Ramón M. Ruiz-ComasRamón M. Ruiz-Comas, CPAPresident and
Chief Executive OfficerDate:      November 3, 2009
    By:
    /s/ Juan J. RománJuan J. Román, CPAVice President of Finance
and Chief Financial Officer 47