##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K/A
 (Amendment No. 1)
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2007
 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 OF INCORPORATION)
    
    (I.R.S. ID)
 1441 F.D. Roosevelt Avenue, San Juan, PR 00920
(787) 749-4949
 Securities registered pursuant to Section 12(b) of the Act:
 Title of each class
    
    Name of each exchange on which registeredClass B common stock, $1.00 par value
    
    New York Stock Exchange
 Securities registered pursuant to Section 12(g) of the Act:
 o þ
 o þ
 þ o
 o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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Explanatory Note
   Page 2




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##### 



Triple-S Management Corporation
 FORM 10-K
   Item 7. Managements Discussion and Analysis of Financial
Condition and Results of Operations.
    
    
    4Item 9A. Controls and Procedures.
    
    
    32SIGNATURES
    
    
    34
  Page 3




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Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations.
  Overview
      Page 4




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Years ended December 31,(Dollar amounts in millions)
    
    2007
    
    2006
    
    2005Premiums earned, net:Managed care
    
    $
    1,301.8
    
    
    
    1,339.8
    
    
    
    1,279.5Life insurance
    
    
    88.9
    
    
    
    86.9
    
    
    
    17.1Property and casualty insurance
    
    
    96.9
    
    
    
    88.5
    
    
    
    86.8Intersegment premiums earned
    
    
    (4.0
    )
    
    
    (3.6
    )
    
    
    (3.2
    )Consolidated premiums earned, net
    
    $
    1,483.6
    
    
    
    1,511.6
    
    
    
    1,380.2Administrative service fees:Managed care
    
    $
    17.2
    
    
    
    16.9
    
    
    
    15.5Intersegment premiums earned
    
    
    (3.2
    )
    
    
    (2.8
    )
    
    
    (1.1
    )Consolidated administrative service fees
    
    $
    14.0
    
    
    
    14.1
    
    
    
    14.4Operating income:Managed care
    
    $
    57.4
    
    
    
    45.5
    
    
    
    16.1Life insurance
    
    
    10.7
    
    
    
    11.2
    
    
    
    3.0Property and casualty insurance
    
    
    10.7
    
    
    
    11.2
    
    
    
    12.3Intersegment premiums earned
    
    
    4.7
    
    
    
    5.4
    
    
    
    2.3Consolidated operating income
    
    $
    83.5
    
    
    
    73.3
    
    
    
    33.7
  Results of Operations
 Revenue
 General.
 Managed Care Premium Revenue.
  Page 5




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Administrative Service Fees.
 Other Premium Revenue.
 Investment Income and Other Income.
 Expenses
 Claims Incurred.
  Operating Expenses.
 Page 6




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Membership
   Medicare Selecto Medicare Optimo FarmaMed
  As of December 31,2007
    
    2006
    
    2005Commercial (1)
    
    
    574,251
    
    
    
    580,850
    
    
    
    612,218Reform (2)
    
    
    353,694
    
    
    
    357,515
    
    
    
    628,438Medicare (3)
    
    
    49,245
    
    
    
    41,141
    
    
    
    11,993Total
    
    
    977,190
    
    
    
    979,506
    
    
    
    1,252,649
 (1)
    
    Commercial membership includes corporate accounts, self-funded employers, individual
accounts, Medicare Supplement, Federal government employees and local government employees.(2)
    
    Enrollment for 2005 includes the Metro-North region. The contract for this region was not
renewed effective November 1, 2006.(3)
    
    Includes Medicare Advantage as well as stand-alone PDP plan membership. Significant Transactions
  Page 7




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Consolidated
 Year ended December 31, 2005Comparable(Dollar amounts in millions, except per share data)
    
    TSM
    
    GA Life
    
    BasisRevenues:Premiums earned, net
    
    $
    1,380.2
    
    
    
    61.6
    
    
    
    1,441.8Administrative service fees
    
    
    14.4
    
    
    
    
    
    
    
    14.4Net investment income
    
    
    29.1
    
    
    
    10.6
    
    
    
    39.7Total operating revenues
    
    
    1,423.7
    
    
    
    72.2
    
    
    
    1,495.9Net realized investment gains
    
    
    7.2
    
    
    
    4.4
    
    
    
    11.6Net unrealized investment loss in trading securities
    
    
    (4.7
    )
    
    
    
    
    
    
    (4.7
    )Other income, net
    
    
    3.7
    
    
    
    
    
    
    
    3.7Total revenues
    
    
    1,429.9
    
    
    
    76.6
    
    
    
    1,506.5Benefits and expenses:Claims incurred
    
    
    1,208.3
    
    
    
    29.0
    
    
    
    1,237.3Operating expenses
    
    
    181.7
    
    
    
    31.5
    
    
    
    213.2Total operating costs
    
    
    1,390.0
    
    
    
    60.5
    
    
    
    1,450.5Interest expense
    
    
    7.6
    
    
    
    1.4
    
    
    
    9.0Total benefits and expenses
    
    
    1,397.6
    
    
    
    61.9
    
    
    
    1,459.5Income before taxes
    
    
    32.3
    
    
    
    14.7
    
    
    
    47.0Income tax expense (benefit):Current
    
    
    4.0
    
    
    
    0.6
    
    
    
    4.6Deferred
    
    
    (0.1
    )
    
    
    (1.4
    )
    
    
    (1.5
    )Total income taxes
    
    
    3.9
    
    
    
    (0.8
    )
    
    
    3.1Net income
    
    $
    28.4
    
    
    
    15.5
    
    
    
    43.9
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Life and Disability Insurance Segment
 Year ended December 31, 2005Comparable(Dollar amounts in thousands)
    
    SVTS
    
    GA Life
    
    BasisOperating revenues:Net earned premiums:Earned premiums
    
    $
    24.2
    
    
    
    63.7
    
    
    
    87.9Earned premiums ceded
    
    
    (8.0
    )
    
    
    (2.1
    )
    
    
    (10.1
    )Assumed earned premiums
    
    
    0.4
    
    
    
    
    
    
    
    0.4Net earned premiums
    
    
    16.6
    
    
    
    61.6
    
    
    
    78.2Commission income on reinsurance
    
    
    0.5
    
    
    
    
    
    
    
    0.5Premiums earned, net
    
    
    17.1
    
    
    
    61.6
    
    
    
    78.7Net investment income
    
    
    3.0
    
    
    
    10.6
    
    
    
    13.6Total operating revenues
    
    
    20.1
    
    
    
    72.2
    
    
    
    92.3Operating costs:Policy benefits and claims incurred
    
    
    8.9
    
    
    
    29.0
    
    
    
    37.9Underwriting and other expenses
    
    
    8.2
    
    
    
    31.5
    
    
    
    39.7Total operating costs
    
    
    17.1
    
    
    
    60.5
    
    
    
    77.6Operating income
    
    $
    3.0
    
    
    
    11.7
    
    
    
    14.7
 Consolidated Operating Results
  Comparable(Dollar amounts in millions)
    
    2007
    
    2006
    
    Basis 2005
    
    2005Years ended December 31,Revenues:Premiums earned, net
    
    $
    1,483.6
    
    
    
    1,511.6
    
    
    
    1,441.8
    
    
    
    1,380.2Administrative service fees
    
    
    14.0
    
    
    
    14.1
    
    
    
    14.4
    
    
    
    14.4Net investment income
    
    
    47.2
    
    
    
    42.7
    
    
    
    39.7
    
    
    
    29.1Total operating revenues
    
    
    1,544.8
    
    
    
    1,568.4
    
    
    
    1,495.9
    
    
    
    1,423.7Net realized investment gains
    
    
    5.9
    
    
    
    0.8
    
    
    
    11.6
    
    
    
    7.2Net unrealized investment gain (loss)
on trading securities
    
    
    (4.1
    )
    
    
    7.7
    
    
    
    (4.7
    )
    
    
    (4.7
    )Other income, net
    
    
    3.2
    
    
    
    2.3
    
    
    
    3.7
    
    
    
    3.7Total revenues
    
    
    1,549.8
    
    
    
    1,579.2
    
    
    
    1,506.5
    
    
    
    1,429.9Benefits and expenses:Claims incurred
    
    
    1,223.8
    
    
    
    1,259.0
    
    
    
    1,237.3
    
    
    
    1,208.3Operating expenses
    
    
    237.5
    
    
    
    236.1
    
    
    
    213.2
    
    
    
    181.7Total operating costs
    
    
    1,461.3
    
    
    
    1,495.1
    
    
    
    1,450.5
    
    
    
    1,390.0Interest expense
    
    
    15.9
    
    
    
    16.6
    
    
    
    9.0
    
    
    
    7.6Total benefits and expenses
    
    
    1,477.2
    
    
    
    1,511.7
    
    
    
    1,459.5
    
    
    
    1,397.6Income before taxes
    
    
    72.6
    
    
    
    67.5
    
    
    
    47.0
    
    
    
    32.3Income tax expense
    
    
    14.1
    
    
    
    13.0
    
    
    
    3.1
    
    
    
    3.9Net income
    
    $
    58.5
    
    
    
    54.5
    
    
    
    43.9
    
    
    
    28.4
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Year ended December 31, 2007 compared with the year ended December 31, 2006
 Operating Revenues
   Net Realized Investment Gains
  Net Unrealized Gain (Loss) on Trading Securities and Other Income, Net
  Claims Incurred
  Operating Expenses
  Page 10




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Income tax expense
  Year ended December 31, 2006 compared with the year ended December 31, 2005
 Operating Revenues
   Net Realized Investment Gains
  Net Unrealized Gain (Loss) on Trading Securities and Other Income, Net
  Claims Incurred
  Operating Expenses
  Interest Expense
  Page 11




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Income Tax Expense
  Managed Care Operating Results
  (Dollar amounts in millions, except enrollment data)
    
    2007
    
    2006
    
    2005Years ended December 31,Medical operating revenues:Medical premiums earned, net:Commercial
    
    $
    718.7
    
    
    
    713.2
    
    
    
    734.5Reform
    
    
    327.5
    
    
    
    455.8
    
    
    
    510.8Medicare
    
    
    255.6
    
    
    
    170.8
    
    
    
    34.2Medical premiums earned
    
    
    1,301.8
    
    
    
    1,339.8
    
    
    
    1,279.5Administrative service fees
    
    
    17.2
    
    
    
    16.9
    
    
    
    15.5Net investment income
    
    
    19.7
    
    
    
    18.8
    
    
    
    17.0Total medical operating revenues
    
    
    1,338.7
    
    
    
    1,375.5
    
    
    
    1,312.0Medical operating costs:Medical claims incurred
    
    
    1,133.2
    
    
    
    1,173.6
    
    
    
    1,155.9Medical operating expenses
    
    
    148.1
    
    
    
    156.4
    
    
    
    140.0Total medical operating costs
    
    
    1,281.3
    
    
    
    1,330.0
    
    
    
    1,295.9Medical operating income
    
    $
    57.4
    
    
    
    45.5
    
    
    
    16.1Additional data:Member months enrollment:Commercial:Fully-insured
    
    
    4,983,980
    
    
    
    5,272,987
    
    
    
    5,632,249Self funded
    
    
    1,930,850
    
    
    
    1,861,833
    
    
    
    1,840,716Total commercial
    
    
    6,914,830
    
    
    
    7,134,820
    
    
    
    7,472,965Reform
    
    
    4,262,248
    
    
    
    6,484,270
    
    
    
    7,465,777Medicare
    
    
    554,040
    
    
    
    461,718
    
    
    
    71,947Total member months
    
    
    11,731,118
    
    
    
    14,080,808
    
    
    
    15,010,689Medical loss ratio
    
    
    87.1
    %
    
    
    87.6
    %
    
    
    90.3
    %Medical expense ratio
    
    
    11.2
    %
    
    
    11.5
    %
    
    
    10.8
    %
 Year ended December 31, 2007 compared with the year ended December 31, 2006
 Medical Operating Revenues
  
    
    Medical premiums earned in the Reform business decreased by $128.3 million, or 28.1%,
to $327.5 million during the 2007 period. This fluctuation is due to a decrease in member
months enrollment in the Reform business by 2,222,022, or 34.3%, mainly as the result of
the termination
 Page 12




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of the contract for the Metro-North region, the tightening of membership
restrictions by the Puerto Rico government, and the shift in membership of dual eligibles
to Medicare Advantage policies offered by us and our competitors. The member months
enrollment of the Metro-North region was 2,040,714 during the year ended December 31,
2006. The effect of this decrease in membership was mitigated by an increase in premium
rates, effective July 1, 2007, of approximately 8.7% and a retroactive increase in rates
of approximately 6.7% effective November 1, 2006.
 
    
    Medical premiums generated by the Medicare business increased during 2007 by $84.8
million, or 49.6%, to $255.6 million, primarily due to an increase in member months
enrollment of 92,322, or 20.0%. The increase in member months is the net result of an
increase of 135,238, or 48.1%, in the membership of our Medicare Advantage products and a
decrease of 42,916, or 23.8%, in the membership of our PDP product. We expect that
Medicare Advantage enrollment will continue to experience growth, but at a slower pace
than in prior periods. In addition, the segment recognized an additional premium
adjustment of $3.2 million related to the 2006 risk scores review performed by CMS.
    
    Medical premiums generated by the Commercial business increased by $5.5 million, or
0.8%, to $718.7 million during the 2007 period. This increase is primarily the result of
an increase in average premium rates of 6.5%, partially offset by a decrease in member
months enrollment of 289,007, or 5.5%.
  Medical Claims Incurred
  Medical Operating Expenses
  Year ended December 31, 2006 compared with the year ended December 31, 2005
 Medical Operating Revenues
  
    
    Medical premiums generated by the Medicare Advantage business increased during 2006 by
$136.6 million, or 399.4%, primarily due to an increase in member months enrollment of
389,771, or 541.7%. The increase in member months enrollment is the result of an increase
of 209,327, or 290.9%, in the membership of our Medicare Advantage product and a members
months
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enrollment 180,444 of our new PDP product. The increase in members of our Medicare
Advantage business reflects the initial ramp-up of this business, which commenced in 2005,
and the introduction of additional Medicare Advantage policies. In January 2006, we
expanded our Medicare Advantage business with the introduction of Medicare Platinofor the
dual-eligible population, the medically indigent Medicare-qualified beneficiaries. Also
in January 2006, we introduced a new PDP product, FarmaMed, which had premiums of $15.1
million during the 2006 period. In 2006, many members of our PDP business transferred to
one of our Medicare Advantage policies, we expect this trend to continue in 2007 and, as a
result, to experience a decrease in the enrollment of this business.
 
    
    During 2006, member months enrollment in the Reform business decreased by 981,507, or
13.1%, and premiums earned during the year decreased by $55.0 million, or 10.8%. This
business experienced a decrease in its member months as a result of the termination of the
Metro-North region effective November 1, 2006. Monthly premiums earned from the
Metro-North region averaged approximately $16.2 million in 2006. In addition, this
business also experienced a shift in membership by dual eligibles to Medicare Advantage
policies offered by us and our competitors and a tightening of membership restrictions by
the government of Puerto Rico. The effect of this decrease in membership was mitigated by
an increase in premium rates, effective August 1, 2005, of approximately 5.0%.
    
    Medical premiums generated by the Commercial sector decreased by $21.3 million, or
2.9%. This decrease was due to a decrease in member months of 359,262, or 6.4%, primarily
as a result of the loss of several fully-insured accounts due to aggressive pricing by our
competitors as well as qualified enrollees transferring to our or our competitors
Medicare Advantage policies and fully-insured groups changing to self-funded arrangements,
offset in part by an average increase in premium rates of approximately 3.7%.
  Medical Claims Incurred
  Medical Operating Expenses
  Life Insurance Operating Results
  Page 14




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Comparable(Dollar amounts in millions)
    
    2007
    
    2006
    
    Basis 2005
    
    2005Years ended December 31,Operating revenues:Premiums earned, netPremiums earned, net
    
    $
    97.4
    
    
    
    91.9
    
    
    
    87.9
    
    
    
    24.2Premiums earned ceded
    
    
    (8.8
    )
    
    
    (9.7
    )
    
    
    (10.1
    )
    
    
    (8.0
    )Assumed premiums earned
    
    
    
    
    
    
    4.4
    
    
    
    0.4
    
    
    
    0.4Net premiums earned
    
    
    88.6
    
    
    
    86.6
    
    
    
    78.2
    
    
    
    16.6Commission income on reinsurance
    
    
    0.3
    
    
    
    0.3
    
    
    
    0.5
    
    
    
    0.5Premiums earned, net
    
    
    88.9
    
    
    
    86.9
    
    
    
    78.7
    
    
    
    17.1Net investment income
    
    
    15.0
    
    
    
    13.7
    
    
    
    13.6
    
    
    
    3.0Total operating revenues
    
    
    103.9
    
    
    
    100.6
    
    
    
    92.3
    
    
    
    20.1Operating costs:Policy benefits and claims incurred
    
    
    45.7
    
    
    
    43.6
    
    
    
    37.9
    
    
    
    8.9Underwriting and other expenses
    
    
    47.5
    
    
    
    45.8
    
    
    
    39.7
    
    
    
    8.2Total operating costs
    
    
    93.2
    
    
    
    89.4
    
    
    
    77.6
    
    
    
    17.1Operating income
    
    $
    10.7
    
    
    
    11.2
    
    
    
    14.7
    
    
    
    3.0Additional data:Loss ratio
    
    
    51.4
    %
    
    
    50.2
    %
    
    
    48.2
    %
    
    
    52.0
    %Expense ratio
    
    
    53.4
    %
    
    
    52.7
    %
    
    
    50.4
    %
    
    
    48.0
    %
 Year ended December 31, 2007 compared with the year ended December 31, 2006
 Operating Revenues
   Policy Benefits and Claims Incurred
  Page 15




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Underwriting and Other Expenses
  Year ended December 31, 2006 compared with the year ended December 31, 2005
 Operating Revenues
   Policy Benefits and Claims Incurred
  Underwriting and Other Expenses
  Page 16




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Property and Casualty Insurance Operating Results
 (Dollar amounts in millions)
    
    2007
    
    2006
    
    2005Years ended December 31,Operating revenues:Premiums earned, net:Premiums written
    
    $
    170.9
    
    
    
    158.9
    
    
    
    151.1Premiums ceded
    
    
    (69.1
    )
    
    
    (65.7
    )
    
    
    (59.2
    )Change in unearned premiums
    
    
    (4.9
    )
    
    
    (4.7
    )
    
    
    (5.1
    )Premiums earned, net
    
    
    96.9
    
    
    
    88.5
    
    
    
    86.8Net investment income
    
    
    11.8
    
    
    
    9.6
    
    
    
    8.7Total operating
revenues
    
    
    108.7
    
    
    
    98.1
    
    
    
    95.5Operating costs:Claims incurred
    
    
    44.9
    
    
    
    41.7
    
    
    
    43.6Underwriting and other operating expenses
    
    
    53.1
    
    
    
    45.2
    
    
    
    39.6Total operating costs
    
    
    98.0
    
    
    
    86.9
    
    
    
    83.2Operating income
    
    $
    10.7
    
    
    
    11.2
    
    
    
    12.3Additional data:Loss ratio
    
    
    46.3
    %
    
    
    47.1
    %
    
    
    50.2
    %Expense ratio
    
    
    54.8
    %
    
    
    51.1
    %
    
    
    45.6
    %Combined ratio
    
    
    101.1
    %
    
    
    98.2
    %
    
    
    95.8
    %
 Year ended December 31, 2007 compared with the year ended December 31, 2006
 Operating Revenues
   Claims Incurred
  Underwriting and Other Operating Expenses
  Page 17




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Year ended December 31, 2006 compared with the year ended December 31, 2005
 Operating Revenues
   Claims Incurred
  Underwriting and Other Operating Expenses
  Page 18




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Liquidity and Capital Resources
 Cash Flows
  (dollar amounts in millions)
    
    2007
    
    2006
    
    2005Years ended December 31,Sources of cash:Cash provided by operating activities
    
    $
    115.9
    
    
    
    75.6
    
    
    
    50.8Net proceeds from investments sold
    
    
    1.0
    
    
    
    
    
    
    
    Proceeds from long-term borrowings
    
    
    
    
    
    
    35.0
    
    
    
    60.0Proceeds from short-term borrowings
    
    
    54.5
    
    
    
    117.8
    
    
    
    174.1Proceeds from annuity contracts
    
    
    6.1
    
    
    
    6.0
    
    
    
    11.5Net proceeds from initial public offering
    
    
    70.3
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    3.9Total sources of cash
    
    
    247.8
    
    
    
    234.4
    
    
    
    300.3Uses of cash:Net purchases of investment securities
    
    
    
    
    
    
    (9.3
    )
    
    
    (94.7
    )Acquisition of GA Life, net of cash acquired
    
    
    
    
    
    
    (27.8
    )
    
    
    Capital expenditures
    
    
    (9.4
    )
    
    
    (11.9
    )
    
    
    (7.6
    )Dividends
    
    
    (2.4
    )
    
    
    (6.2
    )
    
    
    Payments of long-term borrowings
    
    
    (12.1
    )
    
    
    (2.5
    )
    
    
    (5.1
    )Payments of short-term borrowings
    
    
    (54.5
    )
    
    
    (119.5
    )
    
    
    (174.0
    )Surrenders of annuity contracts
    
    
    (7.4
    )
    
    
    (16.0
    )
    
    
    (5.1
    )Other
    
    
    (3.4
    )
    
    
    (8.7
    )
    
    
    Total uses of cash
    
    
    (89.2
    )
    
    
    (201.9
    )
    
    
    (286.5
    )Net increase in cash and cash equivalents
    
    $
    158.6
    
    
    
    32.5
    
    
    
    13.8
 Year ended December 31, 2007 compared to year ended December 31, 2006
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Year ended December 31, 2006 compared to year ended December 31, 2005
        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). The 6.7% notes were privately placed to
various institutional accredited investors. The notes pay interest each month until the
principal becomes due and payable. These notes can be redeemed after five years at par,
in whole or in part, as determined by us. The proceeds obtained from this issuance were
used to finance the acquisition of 100% of the common stock of GA Life effective January
31, 2006.
    
    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). The 6.6% notes were privately placed to various
institutional accredited investors. The notes pay interest each month until the principal
becomes due and payable. These notes can be redeemed after five years at par, in whole or
in part, as determined by us. The proceeds obtained from this issuance were used to pay
the ceding commission to GA Life on the effective date of the coinsurance funds withheld
reinsurance agreement.
    
    On September 30, 2004, our managed care subsidiary issued and sold $50.0 million of its
6.3% senior unsecured notes due September 2019 (the 6.3% notes). The 6.3% notes are
unconditionally guaranteed as to payment of principal, premium, if any, and interest by
us. The notes were privately placed to various institutional accredited investors. The
notes pay interest semiannually until the principal becomes due and payable. These notes
can be prepaid after five years at par, in
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##### Table of Contents



whole or in part, as determined by our managed care subsidiary. Most of the proceeds
obtained from this issuance were used to repay $37.0 million of short-term borrowings. The
remaining proceeds were used for general business purposes.
       Planned Capital Expenditures
  Contractual Obligations
   
    
    Unearned premiums  This amount accounts for the premiums collected prior to the end of
coverage period and does not represent a future cash outflow. As of December 31, 2007, we
had $132.6 million in unearned premiums.
    
    Policyholder deposits  The cash outflows related to these instruments are not included
because they do not have defined maturities, such that the timing of payments and
withdrawals is uncertain. There are currently no significant policyholder deposits in
paying status. As of December 31, 2007, our policyholder deposits had a carrying amount
of $45.9 million.
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##### Table of Contents




    
    Other long-term liabilities  Due to the indeterminate nature of their cash outflows,
$59.4 million of other long-term liabilities are not reflected in the following table,
including $29.2 million of liability for the pension benefits and $21.3 million in
liabilities to the Federal Employees Health Benefit Plan.
 Contractual obligations by year(Dollar amounts in millions)
    
    Total
    
    2008
    
    2009
    
    2010
    
    2011
    
    2012
    
    ThereafterLong-term borrowings (1)
    
    $
    302.9
    
    
    
    12.6
    
    
    
    12.6
    
    
    
    12.5
    
    
    
    12.4
    
    
    
    12.2
    
    
    
    240.6Operating leases
    
    
    13.3
    
    
    
    5.3
    
    
    
    3.7
    
    
    
    2.2
    
    
    
    1.2
    
    
    
    0.5
    
    
    
    0.4Purchase obligations (2)
    
    
    235.5
    
    
    
    235.2
    
    
    
    0.1
    
    
    
    0.1
    
    
    
    0.1
    
    
    
    
    
    
    
    Claim liabilities (3)
    
    
    353.8
    
    
    
    228.7
    
    
    
    69.5
    
    
    
    16.9
    
    
    
    11.0
    
    
    
    8.6
    
    
    
    19.1Estimated obligation for future
policy benefits (4)
    
    
    945.4
    
    
    
    66.2
    
    
    
    57.9
    
    
    
    54.7
    
    
    
    52.2
    
    
    
    49.8
    
    
    
    664.6$
    1,850.9
    
    
    
    548.0
    
    
    
    143.8
    
    
    
    86.4
    
    
    
    76.9
    
    
    
    71.1
    
    
    
    924.7
 (1)
    
    As of December 31, 2007, our long-term borrowings consist of our managed care subsidiarys
6.3% senior unsecured notes payable (which are unconditionally guaranteed as to payment of
principal, premium, if any, and interest by us), our 6.6% senior unsecured notes payable, our
6.7% senior unsecured notes payable, and a loan payable to a commercial bank. Total
contractual obligations for long-term borrowings include the current maturities of long term
debt. For the 6.3%, 6.6% and 6.7% senior unsecured notes, scheduled interest payments were
included in the total contractual obligations for long-term borrowings until the maturity
dates of the notes in 2019, 2020, and 2021, respectively. We may redeem the notes starting
five years after issuance; however no redemption is considered in this schedule. The interest
payments related to our loan payable were estimated using the interest rate applicable as of
December 31, 2007. The actual amount of interest payments of the loans payable will differ
from the amount included in this schedule due to the loans variable interest rate structure.
See the Financing and Financing Capacity section for additional information regarding our
long-term borrowings.(2)
    
    Purchase obligations represent payments required by us under material agreements to purchase
goods or services that are enforceable and legally binding and where all significant terms are
specified, including: quantities to be purchased, price provisions and the timing of the
transaction. Other purchase orders made in the ordinary course of business for which we are
not liable are excluded from the table above. Estimated pension plan contributions amounting
to $5.0 million were included within the total purchase obligations. However, this amount is
an estimate which may be subject to change in view of the fact that contribution decisions are
affected by various factors such as market performance, regulatory and legal requirements and
plan funding policy.(3)
    
    Claim liabilities represent the amount of our claims processed and incomplete as well as an
estimate of the amount of incurred but not reported claims and loss-adjustment expenses. This
amount does not include an estimate of claims to be incurred subsequent to December 31, 2007.
The expected claims payments are an estimate and may differ materially from the actual claims
payments made by us in the future. Also, claim liabilities are presented gross, and thus do
not reflect the effects of reinsurance under which $54.8 million of reserves had been ceded at
December 31, 2007.(4)
    
    Our life insurance segment establishes, and carries as liabilities, actuarially determined
amounts that are calculated to meet its policy obligations when a policy matures or
surrenders, an insured dies or becomes disabled or upon the occurrence of other covered
events. A significant portion of the estimated obligation for future policy benefits to be
paid included in this table considers contracts under which we are currently not making
payments and will not make payments until the occurrence of an insurable event not under our
control, such as death, illness, or the surrender of a policy. We have estimated the timing
of the cash flows related to these contracts based on historical experience as well as
expectations of future payment patterns. The amounts presented in the table above represent
the
estimated cash payments for benefits under such contracts based on assumptions related to the
receipt of future premiums and assumptions related to mortality, morbidity, policy lapses,
renewals, retirements, disability incidence and other contingent events as appropriate for the
respective product Page 22




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##### Table of Contents



type. All estimated cash payments included in this table are not discounted
to present value nor do they take into account estimated future premiums on policies in-force
as of December 31, 2007, and are gross of any reinsurance recoverable. The $945.4 million
total estimated cash flows for all years in the table is different from the liability of future
policy benefits of $194.1 million included in our audited consolidated financial statements
principally due to the time value of money. Actual cash payments to policyholders could differ
significantly from the estimated cash payments as presented in this table due to differences
between actual experience and the assumptions used in the estimation of these payments. Off-Balance Sheet Arrangements
  Restriction on Certain Payments by the Corporations Subsidiaries
     Solvency Regulation
  Other Contingencies
 Legal Proceedings
   Page 23




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Guarantee Associations
    Critical Accounting Estimates
   Page 24




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Claim Liabilities
  Property andManaged
    
    Life
    
    Casualty(Dollar amounts in millions)
    
    Care
    
    Insurance
    
    Insurance
    
    ConsolidatedClaims processed and incomplete (1)
    
    $
    85.5
    
    
    
    26.6
    
    
    
    74.0
    
    
    
    186.1Unreported losses (2)
    
    
    111.3
    
    
    
    8.6
    
    
    
    30.1
    
    
    
    150.0Unpaid loss-adjustment expenses (3)
    
    
    4.8
    
    
    
    0.3
    
    
    
    12.6
    
    
    
    17.7$
    201.6
    
    
    
    35.5
    
    
    
    116.7
    
    
    
    353.8
 (1)
    
    The liability for claims processed and incomplete represents those claims that have been
incurred and reported to us that remain unpaid as of the balance sheet date. This amount
includes claims that have been investigated and adjusted but have not been paid as well as
those reported claims that have not gone through the investigation and adjustment process.(2)
    
    The liability for estimated unreported losses is the amount needed to provide for the
estimated ultimate cost of settling those claims related to insured events that have occurred
but have not been reported to us.(3)
    
    The liability for unpaid loss-adjustment expenses is the amount needed to provide for the
estimated ultimate cost required to investigate and adjust claims related to insured events
that have occurred as of the balance sheet date, whether or not the claims have been reported
to us at that date.   Managed Care Segment
   Page 25




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##### Table of Contents



(Dollar amounts in millions)
 Completion Factor1
    
    Claims Trend Factor2(Decrease) Increase
    
    (Decrease) IncreaseIn unpaid claim
    
    In claims trend
    
    In unpaid claimIn completion factor
    
    liabilities
    
    factor
    
    liabilities(0.6
    )%
    
    $
    8.7
    
    
    
    (0.6
    )%
    
    $
    6.3(0.4
    )%
    
    
    5.8
    
    
    
    (0.4
    )%
    
    
    4.2(0.2
    )%
    
    
    2.9
    
    
    
    (0.2
    )%
    
    
    2.00.2
    %
    
    
    (2.9
    )
    
    
    0.2
    %
    
    
    (2.0
    )0.4
    %
    
    
    (5.8
    )
    
    
    0.4
    %
    
    
    (4.5
    )0.6
    %
    
    
    (8.6
    )
    
    
    0.6
    %
    
    
    (6.3
    )
 
 1
    
    Assumes (decrease) increase in the completion factors for the most recent twelve
months.2
    
    Assumes (decrease) increase in the claims trend factors for the most recent twelve
months. Page 26




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##### Table of Contents



(Dollar amounts in millions
    
    2006
    
    2005
    
    2004Years ended December 31,Total incurred claims:As reported (1)
    
    $
    1,184.3
    
    
    
    1,148.2
    
    
    
    1,062.7On a retrospective basis
    
    
    1,160.7
    
    
    
    1,137.5
    
    
    
    1,070.4Variance
    
    $
    23.6
    
    
    
    10.7
    
    
    
    (7.7
    )Variance to total incurred claims as reported
    
    
    2.0
    %
    
    
    0.9
    %
    
    
    -0.7
    %
 (1)
    
    Includes total claims incurred less adjustments for prior year reserve development.   
    
    Through the management of our cash flows and investment portfolio.
    
    We have the ability to increase the premium rates throughout the year in the monthly
renewal process, when renegotiating the premiums for the following contract year of each
group as they become due. We consider the actual claims trend of each group when
determining the premium rates for the following contract year.
    
    We have available short-term borrowing facilities that from time to time address
differences between cash receipts and disbursements.
  Page 27




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Life Insurance Segment
     Property and Casualty Insurance Segment
      Page 28




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Liability for Future Policy Benefits
   Accounting and Reporting by
Insurance Enterprises
 Deferred Policy Acquisition Costs and Value of Business Acquired
   Page 29




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Impairment of Investments
     Page 30




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Allowance for Doubtful Receivables
    Other Significant Accounting Policies
  Recently Issued Accounting Standards
 The Fair Value Option for Financial
Assets and Financial Liabilities Fair Value Measurements
 Fair Value Measurement
 Page 31




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##### Table of Contents



Business Combinations Noncontrolling Interests in Consolidated Financial Statements  an
amendment to ARB No. 51
 
 Item 9A. Controls and Procedures.
 Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
  Changes in Internal Control Over Financial Reporting.
  Managements Report on Internal Control Over Financial Reporting
     Page 32




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Page 33




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SIGNATURES
  Triple-S Management Corporation
 By:
    
    /s/ Ramón M. Ruiz-Comas
    
    
    
    Date: November 20, 2008Ramón M. Ruiz-ComasPresident and Chief Executive OfficerBy:
    
    /s/ Juan J. Román
    
    
    
    Date: November 20,
2008Juan J. RománVice President of Finance
and Chief Financial Officer
  By:
    
    /s/ Luis A. Clavell-Rodríguez, MD
    
    
    
    Date: November 20, 2008Luis A. Clavell-Rodríguez, MDDirector and Chairman of the BoardBy:
    
    /s/ Vicente J. León-Irizarry, CPA
    
    
    
    Date: November 20, 2008Vicente J. León-Irizarry, CPADirector and Vice-Chairman of the BoardBy:
    
    /s/ Jesús R. Sánchez-Colón, DMD
    
    
    
    Date: November 20, 2008Jesús R. Sánchez-Colón, DMDDirector and Secretary of the BoardBy:
    
    /s/ Valeriano Alicea-Cruz, MD
    
    
    
    Date: November 20, 2008Valeriano Alicea-Cruz, MDDirectorBy:
    
    /s/ Mr. José Arturo Álvarez-Gallardo
    
    
    
    Date: November 20, 2008Mr. José Arturo Álvarez-GallardoDirectorBy:
    
    /s/ Ms. Carmen Ana Culpeper-Ramírez
    
    
    
    Date: November 20, 2008Ms. Carmen Ana Culpeper-RamírezDirectorBy:
    
    /s/ Porfirio E. Díaz-Torres, MD
    
    
    
    Date: November 20, 2008Porfirio E. Díaz-Torres, MDDirectorBy:
    
    /s/ Mr. Antonio F. Faría-Soto
    
    
    
    Date: November 20, 2008Mr. Antonio F. Faría-SotoDirector
 Page 34




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##### Table of Contents



By:
    
    /s/ Manuel Figueroa-Collazo, PE, Ph.D.
    
    
    
    Date: November 20, 2008Manuel Figueroa-Collazo, PE, Ph.D.DirectorBy:
    
    /s/ Jorge L. Fuentes-Benejam, PE
    
    
    
    Date: November 20, 2008Jorge L. Fuentes-Benejam, PEDirectorBy:
    
    /s/ José Hawayek-Alemañy, MD
    
    
    
    Date: November 20, 2008José Hawayek-Alemañy, MDDirectorBy:
    
    /s/ Jaime Morgan-Stubbe, Esq.
    
    
    
    Date: November 20, 2008Jaime Morgan-Stubbe, Esq.DirectorBy:
    
    /s/ Roberto Muñoz-Zayas, MD
    
    
    
    Date: November 20, 2008Roberto Muñoz-Zayas, MD
DirectorBy:
    
    /s/ Juan E. Rodríguez-Díaz, Esq.
    
    
    
    Date: November 20, 2008Juan E. Rodríguez-Díaz, Esq.DirectorBy:
    
    /s/ Adamina Soto-Martínez, CPA
    
    
    
    Date: November 20, 2008Adamina Soto-Martínez, CPADirector
 Page 35