8-K/A

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K/A

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): January 31, 2006

TRIPLE-S MANAGEMENT CORPORATION

(Exact Name of Registrant as Specified in Charter)

Puerto Rico
(State or Other Jurisdiction of Incorporation) 000-49762
(Commission File Number) 66-0555678
(IRS Employer Identification No.)

Registrant’s telephone number, including area code: 787-749-4949

1441 F.D. Roosevelt Avenue, San Juan, Puerto Rico 00920
(Address of Principal Executive Offices and Zip Code)

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d - 2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e - 4(c))

Item 2.01 Completion of Acquisition or Disposition of Assets.

On January 31, 2006, Triple-S Management Corporation (the “Corporation”) filed a Current Report on Form 8-K (the “Form 8-K) to report the completion of the acquisition of 100% of the issued and outstanding shares of common stock of Great American Life Assurance Company of Puerto Rico (“GA Life”) for $37.5 million. The closing was made in conformity with the terms of the Stock Purchase Agreement between the Corporation and Great American Financial Resources, Inc. that was initially announced by the Corporation on December 15, 2005. In response to parts (a) and (b) of Item 9.01 of such Form 8-K, the Corporation stated that it would file the required financial information by amendment as permitted by Instruction (a) (4) and (b) (2) of Item 9.01 to Form 8-K. This Form 8-K/A is being filed to provide the required financial information.

Item 9.01 Financial Statements and Exhibits.

(a)	Financial Statements of Business Acquired.
	The audited financial statements of GA Life for the year ended December 31, 2005 are filed as an Exhibit to this Form 8-K/A.
(b)	Pro Forma Financial Information
	The unaudited pro forma combined financial statements are filed as an Exhibit to this Form 8-K/A.
(c)	Exhibits.
	The following exhibits are being filed with this Form 8-K/A:

99.1	Audited financial statements of GA Life for the year ended December 31, 2005.
99.2	Unaudited pro forma combined financial statements as of and for the year ended December 31, 2005.

2

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	TRIPLE-S MANAGEMENT CORPORATION
Date: April 13, 2006	By:	/s/ Ramón M. Ruiz-Comas
	Name: Ramón M. Ruiz-Comas
	Title: President & Chief Executive Officer

3

EX-99.1

Exhibit 99.1

Audited Financial Statements

Great American Life Assurance Company of Puerto Rico
Years Ended December 31, 2005 and 2004

Great American Life Assurance Company of Puerto Rico

Audited Financial Statements

Years Ended December 31, 2005 and 2004

Contents

Report of Independent Auditors	1
Audited Financial Statements
Balance Sheets	2
Statements of Income	4
Statements of Changes in Shareholders’ Equity and Comprehensive Income	5
Statements of Cash Flows	6
Notes to Financial Statements	8

Report of Independent Auditors

The Board of Directors
Great American Life Assurance Company of Puerto Rico

We have audited the accompanying balance sheets of Great American Life Assurance Company of Puerto Rico (the Company) as of December 31, 2005 and 2004, and the related statements of income, changes in shareholders’ equity and comprehensive income and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As discussed in Note 14, to the accompanying financial statements, a prior period adjustment has been recorded due to a correction of certain deferred tax liabilities.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Great American Life Assurance Company of Puerto Rico at December 31, 2005 and 2004, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States.

/s/ Ernst & Young LLP

March 10, 2006

Stamp No. 2094023
affixed to
original of
this report.

Great American Life Assurance Company of Puerto Rico

Balance Sheets

	December 31
	2005		2004
			(As restated)
Assets
Investments:
Bonds	$	191,029,410	$	207,641,540
Common stocks		1,133,494		11,919,765
Preferred stocks		1,360,800		1,447,600
Policy loans		4,743,179		4,547,337
Total investments		198,266,883		225,556,242
Cash and cash equivalents		9,145,835		7,214,740
Premiums due and uncollected, net of allowance for doubtful accounts of $176,000 in 2005 and 2004		1,040,971		920,964
Agents balances, net of allowance for doubtful accounts of $689,190 and $739,190 in 2005 and 2004, respectively		2,304,698		2,007,865
Accrued investment income		2,708,717		3,028,214
Deferred policy acquisition costs		18,203,580		60,695,005
Value of business acquired		3,588,633		14,954,636
Property, equipment and leasehold improvements, at cost, net of accumulated depreciation of $3,711,310 in 2005 and $3,235,784 in 2004, respectively		1,259,663		1,302,727
EDP software, at cost, net of accumulated amortization of $631,968 and $565,384 in 2005 and 2004, respectively		229,624		158,666
Reinsurance recoverable on paid losses		504,920		500,510
Other assets		402,826		820,439
Total assets	$	237,656,350	$	317,160,008

2

Great American Life Assurance Company of Puerto Rico

Balance Sheets (continued)

	December 31
	2005		2004
			(As restated)
Liabilities and shareholders’ equity
Liabilities:
Future policy benefits:
Life	$	46,562,095	$	138,487,843
Unearned premium reserve		488,757		1,476,735
Accident and health		2,510,262		7,233,778
Policyholder account balances		3,738,731		8,430,636
Funds held under reinsurance treaties		118,635,142		—
Policy and contract claims:
Life and annuity		5,245,316		6,728,375
Accident and health		3,403,087		3,181,252
Amount due to reinsurers		400,000		—
Advance premiums		90,961		96,424
Deferred tax liability		3,709,020		7,090,331
Accounts payable and accrued expenses		6,082,798		6,869,687
Other liabilities		100,000		200,000
Total liabilities		190,966,169		179,795,061
Shareholders’ equity:
6% nonvoting preferred stock, par value $100 noncancelable:
Authorized 60,000 shares; none issued and outstanding		—		—
Common stock, par value $1 per share:
Authorized 3,000,000 shares; issued and outstanding, 2,500,000 in 2005 and 2004		2,500,000		2,500,000
Additional capital		36,762,429		50,870,000
Other comprehensive income		7,427,752		15,235,779
Retained earnings		—		68,759,168
Total shareholders’ equity		46,690,181		137,364,947
Total liabilities and shareholders’ equity	$	237,656,350	$	317,160,008

See accompanying notes.

3

Great American Life Assurance Company of Puerto Rico

Statements of Income

	Year Ended December 31
	2005			2004			2003
				(As restated)			(As restated)
Premiums and other considerations:
Life	$	65,705,398		$	61,953,580		$	57,194,505
Accident and health		4,474,578			4,771,313			5,511,266
Total premiums		70,179,976			66,724,893			62,705,771
Investment income		15,936,311			11,501,297			11,071,836
Total revenue		86,116,287			78,226,190			73,777,607
Death and other benefits:
Life		15,113,741			13,372,857			11,993,924
Accident and health		5,006,971			2,459,589			4,395,462
Other		3,613,761			3,068,865			3,111,957
Increase in future policy benefits		10,592,041			10,321,905			10,462,324
Interest expense		1,167,642			1,055,320			989,009
Commissions for acquiring and servicing policies		22,200,893			20,708,339			21,208,990
Increase in deferred policy acquisition cost		(7,626,575	)		(7,469,684	)		(9,647,975	)
Amortization of value of business acquired		1,484,003			1,671,317			2,201,112
General expenses		18,226,969			17,435,751			16,354,226
Total benefits and expenses		69,779,446			62,624,259			61,069,029
Earnings before income taxes		16,336,841			15,601,931			12,708,578
Income taxes:
Current		630,720			1,007,849			681,614
Deferred		(1,427,140	)		(326,480	)		(194,142	)
		(796,420	)		681,369			487,472
Net income	$	17,133,261		$	14,920,562		$	12,221,106

See accompanying notes.

4

Great American Life Assurance Company of Puerto Rico

Statements of Changes in Shareholders’
Equity and Comprehensive Income

Years Ended December 31, 2005 and 2004

						Accumulated
						Other
	Common		Additional			Comprehensive			Retained
	Stock		Capital			Income			Earnings			Total
Balance at January 1, 2003 (as restated)	$	800,000	$	50,870,000		$	14,045,315		$	46,067,466		$	111,782,781
Dividends declared		—		—			—			(1,249,986	)		(1,249,986	)
Comprehensive income:
Net income		—		—			—			12,221,106			12,221,106
Other comprehensive income:
Unrealized loss on securities, net of taxes of $(209,533)		—		—			(741,616	)		—			(741,616	)
Comprehensive income													11,479,490
Balance at December 31, 2003 (as restated)		800,000		50,870,000			13,303,699			57,038,586			122,012,285
Issuance of common stock		1,700,000		—			—			—			1,700,000
Dividends declared		—		—			—			(3,199,980	)		(3,199,980	)
Comprehensive income:
Net income		—		—			—			14,920,562			14,920,562
Other comprehensive income:
Unrealized gain on securities, net of taxes of $544,948		—		—			1,932,080			—			1,932,080
Comprehensive income													16,852,642
Balance at December 31, 2004 (as restated)		2,500,000		50,870,000			15,235,779			68,759,168			137,364,947
Issuance of common stock		—		—			—			—			—
Dividends declared and paid		—		—			—			(85,892,429	)		(85,892,429	)
Comprehensive income:
Net income		—		—			—			17,133,261			17,133,261
Other comprehensive income:
Unrealized loss on securities, net of taxes of $(1,954,171)		—		—			(7,808,027	)		—			(7,808,027	)
Comprehensive income													9,325,234
Return of capital		—		(14,107,571	)		—			—			(14,107,571	)
Balance at December 31, 2005	$	2,500,000	$	36,762,429			$7,427,752		$	—		$	46,690,181

See accompanying notes.

5

Great American Life Assurance Company of Puerto Rico

Statements of Cash Flows

	Year Ended December 31
	2005			2004			2003
				(As restated)			(As restated)
Operating activities
Net income	$	17,133,261		$	14,920,562		$	12,221,106
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on sale of investments		(4,388,980	)		(274,747	)		(256,567	)
Depreciation and amortization		1,584,762			1,604,035			1,346,442
Amortization of deferred policy acquisition Costs		9,792,884			9,420,421			7,877,541
Amortization of value of business acquired		2,231,735			2,494,053			3,133,904
Capitalization of business acquired		—			(171,233	)		—
Deferred tax liability change		(1,427,140	)		(326,480	)		(194,142	)
Changes in assets and liabilities:
Premiums receivable		(120,007	)		(113,447	)		30,011
Agents’ balances		(296,833	)		300,961			683,291
Other receivables		—			1,040,000			(1,040,000	)
Accrued investment income		319,497			(118,608	)		10,280
Deferred policy acquisition costs		(17,419,459	)		(16,890,105	)		(17,525,516	)
Value of business acquired		(747,732	)		(822,736	)		(932,792	)
Coinsurance treaty allowance — DAC		50,118,000			—			—
Coinsurance treaty allowance — VOBA		9,882,000			—			—
Reinsurance recoverable on paid losses		(4,410	)		745,144			(236,841	)
Other assets		(82,387	)		(288,496	)		(75,697	)
Future policy benefits		(97,637,242	)		12,760,431			11,983,986
Funds held under reinsurance		118,635,142			—			—
Policyholders account balances		(4,691,905	)		865,629			826,817
Policy and contracts claims		(1,261,224	)		(1,665,114	)		1,224,882
Amount due to reinsurer		400,000			—			—
Advance premiums		(5,463	)		(15,757	)		13,566
Accounts payable and accrued expenses		(886,889	)		809,475			(522,580	)
Net cash provided by operating activities		81,127,610			24,273,988			18,567,691
Investing activities
Principal returns of investments		5,811,524			5,573,460			11,084,730
Redemption of investment		7,960,154			1,000,000			4,390,000
Proceeds from sale of investments		33,329,895			10,595,041			40,107,612
Purchase of investments		(25,529,773	)		(35,219,635	)		(74,134,063	)
Purchase of property and equipment		(445,057	)		(545,480	)		(470,983	)
Purchase of EDP software		(127,416	)		(30,263	)		(130,320	)
Net (increase) decrease in policy loans		(195,842	)		(20,364	)		80,234
Issuance of common stock		—			1,700,000			—
Net cash provided by (used in) investing activities		20,803,485			(16,947,241	)		(19,072,790	)

(Continue)

6

Great American Life Assurance Company of Puerto Rico

Statements of Cash Flows (continued)

	Year Ended December 31
	2005			2004			2003
				(As restated)			(As restated)
Financing activities
Dividends paid		(85,892,429	)		(3,199,980	)		(1,249,986	)
Return of capital		(14,107,571	)		—			—
Net cash used in financing activities		(100,000,000	)		(3,199,980	)		(1,249,986	)
Net increase (decrease) in cash		1,931,095			4,126,767			(1,755,085	)
Cash and cash equivalents at beginning of year		7,214,740			3,087,973			4,843,058
Cash and cash equivalents at end of year	$	9,145,835		$	7,214,740		$	3,087,973
Supplemental disclosures of cash flow information
Income taxes paid	$	307,849		$	801,614		$	901,020
Change in unrealized gain on investment	$	9,762,198		$	(2,477,028	)	$	(950,790	)
Purchase of stock in subsidiary in exchange for note payable	$	—		$	(200,000	)	$	—

See accompanying notes.

7

Great American Life Assurance Company of Puerto Rico

Notes to Financial Statements

December 31, 2005

1. Nature of Organization and Summary of Significant Accounting Policies

Organization

Great American Life Assurance Company of Puerto Rico (the Company) is a 99.99% owned subsidiary of Great American Financial Resources Inc. The Company is organized under the laws of the Commonwealth of Puerto Rico and is engaged in the underwriting of life, annuity and accident and health insurance. The Company operates in Puerto Rico and the U.S. Virgin Islands. The Company is subject to the provisions of the Insurance Code and Regulations of the Commonwealth of Puerto Rico.

Basis of Presentation

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States that differ from statutory accounting practices prescribed or permitted for insurance companies by the Insurance Commissioner of the Commonwealth of Puerto Rico (the Insurance Commissioner).

Use of Estimates

The preparation of financial statements of insurance companies in accordance with accounting principles generally accepted in the United States (GAAP) requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Such estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed herein.

Statutory Accounting Practices

Great American Life Assurance Company of Puerto Rico, domiciled in Puerto Rico, prepares its statutory basis financial statements in accordance with accounting practices prescribed or permitted by the Insurance Commissioner. Currently, prescribed accounting practices are interspersed through state insurance laws and regulations, the NAIC’s Accounting Practices and Procedures Manual and a variety of other NAIC publications. Permitted statutory accounting practices encompass all accounting practices not so prescribed. Such practices may differ from state to state, from company to company within state, and may change in the future. The Company follows only prescribed accounting practices established by the NAIC and the Insurance Commissioner.

Recognition of Universal Life and Interest Sensitive Products
Revenue and Policy Benefits

Revenues from universal life and interest sensitive policies represent amounts assessed against policyholders. Included in such assessments are mortality charges, surrender charges actually paid and earned policy service fees. Policyholder account balances consist of the premiums received plus credited interest, less accumulated policyholder assessments. Amounts included in expense represent benefits in excess of account balances returned to policyholders.

8

Great American Life Assurance Company of Puerto Rico

Notes to Financial Statements (continued)

1. Nature of Organization and Summary of Significant Accounting Policies (continued)

Recognition of Universal Life and Interest Sensitive Products
Revenue and Policy Benefits (continued)

The liabilities related to guaranteed investment contracts and policyholders funds left on deposit with the Company generally are equal to the fund balances less applicable surrender charges.

The Company uses the retrospective deposit method to account for universal life and interest sensitive type contracts. Under this method, premiums received are not reported as revenues, but represent amounts assessed against policyholders, including mortality charges, surrender charges actually paid and earned policy service fees.

The annuity contracts are accounted for in a manner consistent with the accounting for interest-bearing financial instruments.

The revenues for limited payment contracts are recognized over the period that benefits are provided rather than on collection of premiums.

Premiums Earned and Policy Benefits on Traditional Insurance Products

Premiums on traditional life insurance are reported as earned when due. Premiums on accident and health and other short-term contracts are recognized as earned primarily on a pro rata basis over the contract period. Premiums on credit life policies are recognized as earned in proportion to the amounts of insurance in-force. Benefits and expenses are associated with earned premiums which result in recognition of profits over the life of the policy contracts. This association is accomplished by means of the provision for future policy benefits and the amortization of deferred policy acquisition costs.

Future Policy Benefits and Policy and Contract Claims

Future policy benefit reserves have been computed using the level premium method based on estimated future investment yield, mortality, and withdrawal experience. The interest rate assumption is 5.0% for all years in issue. Mortality has been calculated principally on select and ultimate tables in common usage in the industry. Withdrawals have been determined principally based on industry tables, modified by Company’s experience.

Unpaid claims and claims expenses are based on case-basis estimates for reported claims, and on estimates, based on experience, for unreported claims and claims expenses. The provision for policy and contract claims and claims expenses has been established to cover the estimated net cost of insured claims. The amounts are necessarily based on estimates of future rates of inflation and other factors and, accordingly, there can be no assurance that the ultimate liability will not exceed such estimates. The estimates are continually reviewed and adjusted as necessary as experience develops or new information becomes known. Such adjustments are included in current operations.

9

Great American Life Assurance Company of Puerto Rico

Notes to Financial Statements (continued)

1. Nature of Organization and Summary of Significant Accounting Policies (continued)

Fair Values of Financial Instruments

The Company used the following methods and assumptions in estimating its fair value disclosures for financial instruments:

Cash: The carrying amount reported in the balance sheets for cash approximates their fair value.

Investment Securities: Fair values for fixed maturity securities (including redeemable preferred stock) are based on quoted market prices, where available. For fixed maturity securities not actively traded, fair values are estimated using values obtained from independent pricing services, or, in the case of private placements, are estimated by discounting the expected future cash flows using current market rates applicable to the coupon rate, credit, and maturity of the investments. The fair values for equity securities are based on quoted market prices, where available; for equity securities that are not actively traded, estimated fair values are based on values of issues of comparable yield and quality.

Reinsurance: The carrying amounts reported for reinsurance recoverable on paid losses approximates their fair value.

Policy loans: Policy loans have no stated maturity dates and are part of the related insurance contract. Accordingly, it was considered not practicable to estimate their fair values.

Receivables and Payables: The fair value of premiums and agents’ balances, and accounts payable and other accrued expenses approximate their carrying value because of the short-term nature of these instruments.

Deferred Policy Acquisition Costs

Acquisition costs consisting of commissions, and certain expenses related to the production of life, annuity, accident and health, and credit business, are deferred. The amount of deferred policy acquisition cost is reduced by a provision for future maintenance and settlement expenses which are not provided through future premiums. The related amortization is provided, considering interest, over the anticipated premium-paying period of the related policies in proportion to the ratio of annual premium revenue to expected total premium revenue to be received over the life of the policies. Expected premium revenue is estimated by using the same mortality and withdrawal assumptions used in computing liabilities for future policy benefits. The method followed in computing deferred policy acquisition costs limits the amount of such deferred costs to their estimated net realizable value. In determining estimated net realizable value, the computations give effect to the premiums to be earned, related investment income, losses and loss expenses, and certain other costs expected to be incurred as the premium is earned. Costs deferred on universal life and interest sensitive products are amortized as a level percentage of the present value of anticipated gross profits from investment yields, mortality and surrender charges.

10

Great American Life Assurance Company of Puerto Rico

Notes to Financial Statements (continued)

1. Nature of Organization and Summary of Significant Accounting Policies (continued)

Deferred Policy Acquisition Costs (continued)

Estimates used are based on the Company’s experience as adjusted to provide for possible adverse deviations. These estimates are periodically reviewed and compared with actual experience. When it is determined that future expected experience differs significantly from that assumed, the estimates are revised for current and future issues.

Value of Business Acquired

The value assigned to the insurance in-force at the date of the acquisition is amortized using methods similar to those used to amortize the deferred policy acquisition costs.

Reinsurance

In the normal course of business, the Company cedes insurance under reinsurance agreements that provide a greater business diversification and allow management to limit disproportionate exposure to risks or other events that may cause unfavorable underwriting results.

The Company records its liabilities on policy and contract claims relating to unpaid benefits and benefits expenses net of the effects of the related reinsurance recovery. Premiums ceded and recoveries of benefits and benefit expenses have been reported as a reduction of premium income and claims incurred, respectively. Amounts recoverable from reinsurers are estimated on a manner consistent with the claim liability associated with the reinsured policy.

Investments

Investments in all debt securities and those equity securities with readily determinable market values are classified into one of three categories; held-to-maturity, trading or available-for-sale. Classification of investments is based upon management’s current intent. Debt securities which management has a positive intent and ability to hold until maturity are classified as securities held-to-maturity and are carried at amortized cost. Debt and equity securities that are purchased for short-term resale are classified as trading securities and carried at market value. All other debt and equity securities not included in the above two categories are classified as securities available-for-sale and are carried at market value, with unrealized gains and losses reported as a separate component of shareholders’ equity, net of tax. At December 31, 2005 and 2004 the Company did not have any investments categorized as held-to-maturity or trading securities.

11

Great American Life Assurance Company of Puerto Rico

Notes to Financial Statements (continued)

1. Nature of Organization and Summary of Significant Accounting Policies (continued)

Investments (continued)

Premiums and discounts on debt securities are amortized over the life of the security as an adjustment to yield using the effective interest method. Realized gains and losses and declines in value judged to be other-than-temporary on available-for-sale securities are included in net income. The cost of securities sold is based on a specific identification method. Interest and dividends on securities classified as available-for-sale are included in investment income.

Policy loans are reported at unpaid principal balances including accumulated interest but not in excess of cash surrender values.

Cash and Cash Equivalents

Cash of $9,145,835 and $7,214,740 at December 31, 2005 and 2004, respectively, consist principally of cash in bank accounts, overnight deposits and two certificates of deposits in domestic banking institutions amounting to $1,000,000 and $500,000 in 2005 and 2004, respectively. The Company considers all highly liquid investments acquired with a maturity of three months or less to be cash equivalents.

Property and Equipment

Property and equipment is recorded at cost. Depreciation and amortization on property, leasehold improvements, furniture, equipment and EDP software are calculated using the straight-line method over the estimated useful life of the respective assets or lease term, whichever is shorter.

Advertising Costs

Advertising costs are charged to operations as incurred. Advertising expenses for 2005, 2004 and 2003 amounted to approximately $368,000, $422,000 and $463,000, respectively.

Guaranty-Fund Assessments

Guaranty-fund assessments are accrued at the time the events occur on which assessments are expected to be based.

Deferred Income Tax

Deferred income tax is reflected for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases (temporary differences) and tax credit carry forwards.

12

Great American Life Assurance Company of Puerto Rico

Notes to Financial Statements (continued)

1. Nature of Organization and Summary of Significant Accounting Policies (continued)

Reporting Comprehensive Income

Comprehensive income consists of net income and all other changes in the equity of the enterprise during the year from transactions and other events. The components of comprehensive income of the Company consist of net income and unrealized net gains (losses) from investment securities classified as available for sale.

Concentration of Credit Risk

Financial instruments, which potentially may subject the Company to significant credit risks, consist principally of uncollected premiums and interest and other accounts receivable. A substantial majority of the business activity of the Company is with insureds and other customers located in Puerto Rico and, as such, the Company is subject to the risks associated with the economy of Puerto Rico. The Company establishes an allowance for doubtful accounts based on specific credit risk factors of each customer, in addition to other sources of information. Actual results could differ from these estimates.

Reclassifications

Certain amounts in 2004 and 2003 have been reclassified to conform with the 2005 presentation.

2. Investments

The Company classifies all its investments as available-for-sale. Investments in bonds at December 31, 2005 and 2004 are summarized as follows:

	2005
			Gross		Gross			Estimated
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
U.S. Treasury bonds	$	100,685,685	$	9,446,247	$	(772,796	)	$	109,359,136
Government National Mortgage Association		5,776,686		22,507		(52,369	)		5,746,824
Puerto Rico Government bonds		1,498,947		183,426		—			1,682,373
Corporate bonds		46,117,672		1,157,106		(110,128	)		47,164,650
Mortgage-backed securities		27,440,935		13,175		(377,683	)		27,076,427
Totals	$	181,519,925	$	10,822,461		(1,312,976	)	$	191,029,410

13

Great American Life Assurance Company of Puerto Rico

Notes to Financial Statements (continued)

2. Investments (continued)

	2004
			Gross		Gross			Estimated
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
U.S. Treasury bonds	$	111,111,614	$	10,275,000	$	(189,641	)	$	121,196,973
Government National Mortgage Association		7,372,316		76,184		(10,049	)		7,438,451
Puerto Rico Government bonds		2,057,591		188,589		—			2,246,180
Corporate bonds		53,393,098		3,125,149		12,066			56,530,313
Mortgage-backed securities		20,505,108		174,994		(450,479	)		20,229,623
Totals	$	194,439,727	$	13,839,916	$	(638,103	)	$	207,641,540

Mortgage-backed securities represent Government National Mortgage Association (GNMA) first mortgage pools which are guaranteed by the Federal Government.

The amortized cost and estimated fair value of the Company’s investments in bonds at December 31, 2005, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties:

	Amortized		Estimated
	Cost		Market Value
Due within one year	$	9,559,864	$	9,580,072
Due after one year through five years		23,124,060		23,363,650
Due after five years through ten years		45,928,536		46,238,870
Due after ten years		69,689,844		79,023,567
Mortgage-backed securities		33,217,621		32,823,251
	$	181,519,925	$	191,029,410

Management periodically evaluates portfolio investments with unrealized losses in order to determine if such losses can be considered other-than-temporary in accordance with guidelines published by those entities and organizations that promulgate and interpret accounting principles generally accepted in the United States. For purposes of this evaluation, management considers, in the case of fixed-income securities, the issuer’s credit rating and changes thereof and general levels and fluctuations in the relevant interest rate markets. In the case of equity securities, comparisons are made of the portfolio securities’ performance with that of broad market indices, applicable industry indices, published analysts’ evaluations of particular stocks and other relevant information.

14

Great American Life Assurance Company of Puerto Rico

Notes to Financial Statements (continued)

2. Investments (continued)

	Less than 12 months					12 months or more					Total
	Market		Unrealized			Market		Unrealized			Market		Unrealized
Description of Securities	Value		Losses			Value		Losses			Value		Losses
U.S. Treasury bonds	$	5,037,500	$	(27,501	)	$	20,037,800	$	(745,295	)	$	25,075,300	$	(772,796	)
Government National Mortgage Association		—		—			3,544,969		(52,369	)		3,544,969		(52,369	)
Mortgage-back securities		22,117,958		(280,895	)		4,171,354		(96,788	)		26,289,312		(377,683	)
Corporate bonds		11,801,250		(93,032	)		978,750		(17,096	)		12,780,000		(110,128	)
Total	$	38,956,708	$	(401,428	)	$	28,732,873	$	(911,548	)	$	67,689,581	$	(1,312,976	)

U.S. Treasury Securities and Obligations of U.S. Government Instrumentalities: The unrealized losses on the Company’s investments in U.S. Treasury securities and other obligations of U.S. government instrumentalities were mainly caused by interest rate increases. Because the Company has the ability and intent to hold these investments until a market price recovery or maturity, these investments are not considered other-than-temporarily impaired.

Corporate Debt Securities: The Company’s unrealized losses on investments in corporate debt securities are comprised of very small unrealized losses in eight of the corporate bonds, being the single largest loss approximately $27,000. The total corporate bonds portfolio is comprised of more than thirty high quality corporate bonds. Unrealized losses on these bonds were mainly caused by interest rate increases. Because the Company has the ability and intent to hold these investments until a market price recovery or maturity, these investments are not considered other-than-temporarily impaired.

Proceeds from the sales of investments in debt securities during 2005, 2004 and 2003 were $33,329,895, $10,595,041 and $40,107,612; gross gains of $5,298,826, $286,414 and $294,552, and gross losses of $909,846, $11,667 and $37,985 were realized on those sales on 2005, 2004 and 2003, respectively. These gains and losses are reported in the accompanying statements of earnings.

At December 31, 2005 and 2004, Puerto Rico Government bonds with a carrying value of $1,000,000, (market value of $1,172,020 and $1,152,700, respectively) were deposited with the Insurance Commissioner of the Commonwealth of Puerto Rico to comply with the deposit requirements of the Insurance Code of the Commonwealth of Puerto Rico.

15

Great American Life Assurance Company of Puerto Rico

Notes to Financial Statements (continued)

2. Investments (continued)

Unrealized gains and losses on investments in preferred and common stocks are reported directly as a component of shareholders’ equity and do not affect operations. The gross unrealized gains and losses, cost and fair value of those investments are summarized as follows:

			Gross		Gross
			Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
At December 31, 2005:
Common stocks	$	835,126	$	298,368	$	—		$	1,133,494
Preferred stocks		1,400,000		—		(39,200	)		1,360,800
Total	$	2,235,126	$	298,368	$	(39,200	)	$	2,494,294
At December 31, 2004:
Common stocks	$	5,637,761	$	6,282,004	$	—		$	11,919,765
Preferred stocks		1,400,000		47,600		—			1,447,600
Total	$	7,037,761	$	6,329,604	$	—		$	13,367,365

Common and Preferred Stock: The Company’s investment in marketable securities consist mainly of investments in common and preferred stock of domestic banking institutions, based on the past market performance of these securities, the minimal amount of unrealized losses on these securities, and the Company’s ability and intent to hold these investments for a period of time, these investments are not considered other-than-temporarily impaired.

During the year ended December 31, 2005, the Company recognized other-than-temporary impairments on its equity securities amounting to $382,951. No impairments were identified nor recognized by the Company during the years 2004 and 2003.

The Company’s investment income for the years ended December 31, 2005, 2004 and 2003 are as follows:

	2005			2004			2003
Interest in bonds	$	10,773,256		$	10,505,919		$	10,186,139
Interest-bearing deposits		183,422			45,108			33,810
Policy loans		335,447			336,310			320,461
Dividend income		262,828			345,880			282,796
		11,554,953			11,233,217			10,823,206
Less investment expenses		(7,622	)		(8,167	)		(7,937	)
Add other income		—			1,500			—
Add capital gains (losses)		4,388,980			274,747			256,567
Net investment income	$	15,936,311		$	11,501,297		$	11,071,836

16

Great American Life Assurance Company of Puerto Rico

Notes to Financial Statements (continued)

3. Deferred Policy Acquisition Costs

The movement of deferred policy acquisition costs for the years ended December 31, 2005, 2004 and 2003 is summarized as follows:

				Accident
	Life			and Health			Total
Balance at January 1, 2003	$	40,657,811		$	2,919,535		$	43,577,346
Additions		15,458,222			2,067,294			17,525,516
Amortization		(7,291,667	)		(585,874	)		(7,877,541	)
Net change		8,166,555			1,481,420			9,647,975
Balance at December 31, 2003		48,824,366			4,400,955			53,225,321
Additions		15,985,201			904,904			16,890,105
Amortization		(7,978,945	)		(1,441,476	)		(9,420,421	)
Net change		8,006,256			(536,572	)		7,469,684
Balance at December 31, 2004		56,830,622			3,864,383			60,695,005
Additions		16,614,062			805,397			17,419,459
Amortization		(8,686,029	)		(1,106,855	)		(9,792,884	)
Net change		7,928,033			(301,458	)		7,626,575
Coinsurance treaty allowance		(47,612,100	)		(2,505,900	)		(50,118,000	)
Balance at December 31, 2005	$	17,146,555		$	1,057,025		$	18,203,580

Commissions comprise most of the additions to deferred acquisition costs.

17

Great American Life Assurance Company of Puerto Rico

Notes to Financial Statements (continued)

4. Value of Business Acquired

The movement of value of business acquired for the years ended December 31, 2005, 2004 and 2003 is summarized as follows:

				Accident
	Life			and Health			Total
Balance at January 1, 2003	$	16,606,656		$	2,049,176		$	18,655,832
Interest		830,333			102,459			932,792
Amortization		(2,752,151	)		(381,753	)		(3,133,904	)
Net change		(1,921,818			(279,294	)		(2,201,112	)
Balance at December 31, 2003		14,684,838			1,769,882			16,454,720
Interest		734,242			88,494			822,736
Amortization		(2,359,464	)		(134,589	)		(2,494,053	)
Net change		(1,625,222	)		(46,095	)		(1,671,317	)
Capitalization of UTA business		171,233			—			171,233
Balance at December 31, 2004		13,230,849			1,723,787			14,954,636
Interest		661,543			86,189			747,732
Amortization		(2,000,371	)		(231,364	)		(2,231,735	)
Net change		(1,338,828	)		(145,175	)		(1,484,003	)
Coinsurance treaty allowance		(8,696,160	)		(1,185,840	)		(9,882,000	)
Balance at December 31, 2005	$	3,195,861		$	392,772		$	3,588,633

5. Property, Equipment and Leasehold Improvements

Property, equipment and leasehold improvements consist of:

	December 31
	2005			2004
Leasehold improvements	$	1,829,436		$	1,695,531
Furniture and fixtures		1,648,974			1,559,049
EDP equipment		1,492,563			1,283,931
		4,970,973			4,538,511
Less accumulated depreciation and amortization		(3,711,310	)		(3,235,784	)
	$	1,259,663		$	1,302,727

18

Great American Life Assurance Company of Puerto Rico

Notes to Financial Statements (continued)

6. Reinsurance

The Company cedes insurance to other insurers and reinsurers under various contracts that cover individual risks and entire classes of business. Reinsurance is primarily ceded on an excess of loss basis up to a maximum retention of $50,000. For certain new life products that have been issued since April 1999, the retention limit is $175,000. These reinsurance arrangements provide greater diversification of business and minimize the Company’s losses arising from large risks.

The future policy benefits reserve has been reduced by reinsurance ceded of approximately $124,534,000, $2,701,000 and $2,609,000 at December 31, 2005, 2004 and 2003, respectively. Additionally, death and other benefits have been reduced by reinsurance ceded of approximately $1,155,000, $1,427,000 and $1,474,000 in 2005, 2004 and 2003, respectively. Premiums ceded to other companies amounted to approximately $2,276,000, $1,383,000 and $1,449,000 for the years ended December 31, 2005, 2004 and 2003, respectively. Also, reinsurance recoverables amount to approximately $505,000 and $501,000 at December 31, 2005 and 2004, respectively.

On December 22, 2005, the Company entered into a coinsurance with funds withheld agreement with Seguros de Vida Triple-S (SVTS). Under the terms of this agreement the Company ceded 69% of all the business written as of and after the effective date of the treaty. The Company received a ceding commission allowance of $60,000,000 as a reimbursement of the policy acquisitions costs associated with the 69% participation of SVTS on the Company’s block of business ceded as of the effective date of the agreement. This commission allowance is considered a reduction of the Company’s DAC and VOBA balances as of the date of the agreement and was therefore deducted proportionally from the DAC and VOBA balances as of December 31, 2005.

SVTS’s 69% share of the Company’s future policy benefits reserves as of December 31, 2005 amounting to $118,635,142 is presented in the balance sheet as funds held under reinsurance treaties. This reserve is supported by certain investment assets specified in the coinsurance agreement, which consist of fixed income securities (U.S. Treasury securities), that will be included in a trust for the benefit of SVTS within 90 days of the effective date of the agreement.

In addition, the Company recorded approximately $400,000 of reinsurance premiums due to reinsurers related to SVTS participation on the Company’s insurance business from the date of the agreement to December 31, 2005.

In 2005 and 2004, the Company did not commute any ceded reinsurance.

The amounts ceded of future policy benefits reserve represent a contingent liability to the Company. If reinsurers are unable to meet existing obligations under the reinsurance agreements, the amounts ceded become a liability to the Company.

19

Great American Life Assurance Company of Puerto Rico

Notes to Financial Statements (continued)

6. Reinsurance (continued)

The Company, nor any of its related parties, control, either directly or indirectly, any reinsurers with which the Company conducts business. No policies issued by the Company have been reinsured with a foreign company which is controlled, either directly or indirectly, by a party not primarily engaged in the business of insurance. The Company does not have any reinsurance agreement in effect under which the reinsurer may unilaterally cancel the agreement. At December 31, 2005, there are no reinsurance agreements in effect such that the amount of losses paid or accrued exceeds the total premium collected. The net amount of reduction in surplus at December 31, 2005, if all reinsurance agreements were cancelled, is $124,325,000. There are no retrospectively rated contracts.

7. Unpaid Claims

The following table provides a reconciliation of the beginning and ending balances of unpaid claim liabilities, net of reinsurance recoverables, for the years ended December 31, 2005 and 2004:

	2005			2004			2003
Unpaid claim liabilities, at beginning of year	$	3,181,252		$	4,259,052		$	2,871,944
Add provision for claims, net of reinsurance, occurring in:
The current year		5,374,863			3,984,350			5,243,434
Prior years		(367,892	)		(1,524,761	)		(743,480	)
Incurred losses during the current year		5,006,971			2,459,589			4,499,954
Deduct payments for claims, net of reinsurance, occurring in:
The current year		2,917,536			2,076,296			1,841,965
Prior years		1,867,600			1,461,093			1,270,881
Claim payments during the current year		4,785,136			3,537,389			3,112,846
Unpaid claim liabilities, at end of year	$	3,403,087		$	3,181,252		$	4,259,052

The foregoing reconciliation reflects that redundancies in the December 31, 2005, 2004 and 2003 net reserves were $367,892, $1,524,761 and $743,480, respectively. These redundancies are the result of changes in estimate of insured events in prior years because of lower than anticipated losses.

20

Great American Life Assurance Company of Puerto Rico

Notes to Financial Statements (continued)

7. Income Taxes

As a qualified domestic life insurance company doing business in Puerto Rico, the Company is only subject to income tax on capital gains and on alternative minimum tax (AMT) as applicable, of the Puerto Rico tax laws. Income tax expense resulted from the application of the AMT. Capital gains were realized in 2005, 2004 and 2003.

The Company’s temporary differences consist of net unrealized gains and losses on securities available for sale. The resulting deferred tax liability of $3,709,020 and $7,090,331 at December 31, 2005 and 2004, respectively, consists of $1,952,439 related to the tax effect of the Company’s net unrealized gains in 2005 and $4,297,273 related to the tax effect of the Company’s net unrealized gains in 2004, on available for sale securities since the date of acquisition by Great American Financial Resources Inc. on December 10, 1997. The remaining deferred tax liability of $1,756,581 and $2,793,058, respectively, represents the tax effect of the difference between tax basis and fair value of available for sale securities that existed at December 10, 1997.

8. Operating Leases

The Company entered into a noncancelable operating lease agreement commencing on March 1, 2005 and expiring on February 28, 2010, for their central office facilities. In addition, the Company has other operating lease agreements for the occupancy of their district offices. The Company’s rent expense under these agreements amounted to approximately $1,343,500, $1,276,200 and $1,147,000 in 2005, 2004 and 2003, respectively.

The estimated minimum rentals under the terms of the operating leases for the Company for each of the next five years are summarized as follows:

	Amount
	Central		District
	Office		Offices
2006	$	774,000	$	602,215
2007		774,000		511,371
2008		774,000		358,128
2009		774,000		231,074
2010 and thereafter		1,676,974		357,571
Total	$	4,772,974	$	2,060,359

In addition, the Company has several other operating leases for equipment and vehicles used in their operations. Total rent expense under such leases amounted to approximately $320,000 and $329,000 in 2005 and 2004, respectively.

21

Great American Life Assurance Company of Puerto Rico

Notes to Financial Statements (continued)

9. Operating Leases (continued)

Future minimum rental payments under such leases are as follows:

2006	$	325,510
2007		265,364
2008		147,815
2009		144,407
2010 and thereafter		31,889
Total	$	914,985

10. Retirement Plan

Effective January 1, 2004, the Company is participating in the Great American Life Assurance Company of Puerto Rico Retirement and Savings Plan (GA Life), a defined contribution plan that covers substantially all the employees. Under the new Plan, every year the Board of Directors will determine how much it will contribute to the Plan.

Each employee’s share of the contributions to the Plan will be calculated by applying the employee’s compensation for the year to the ratio of the contribution approved by the Board of Directors to the total compensation of all participants to the Plan.

A contribution of 5% of qualifying salaries was approved by the Board of Directors, resulting in a total contribution to the retirement plan of $587,118, $540,000 and $307,000 in 2005, 2004 and 2003, respectively.

11. Comprehensive Income

The change in the fair value of available-for-sale investment securities that is included as comprehensive income in the accompanying statement of changes in shareholders equity and comprehensive income (loss) is as follows:

Unrealized holding gains on securities arising during the period	$	9,768,653
Less income tax		(2,340,901	)
	$	7,427,752

12. Contingencies

Pursuant to the Insurance Code of the Commonwealth of Puerto Rico, the Company is a member of the Puerto Rico Insurance Guaranty Association for Life and Disability. As a member, the Company is required to provide funds for the settlement of claims and reimbursement of unearned premiums of insurance policies issued by insolvent insurance companies. No assessments were made and no accruals for possible future assessments were provided during the years ended on December 31, 2005 and 2004.

22

Great American Life Assurance Company of Puerto Rico

Notes to Financial Statements (continued)

12. Contingencies (continued)

The Company is a defendant in various legal proceedings. Management, based on the opinion of its legal counsel, is of the opinion that the ultimate liability, if any, resulting from these pending proceedings and legal actions in the aggregate will not have a material effect on the Company’s financial statements.

13. Statutory Information

Information regarding statutory capital and surplus and net income according to accounting practices prescribed or permitted by the Insurance Commissioner of the Commonwealth of Puerto Rico follows:

Capital and surplus	$	13,227,749
Net income	$	15,696,419

The accumulated earnings of the Company are restricted as to payment of dividends by statutory limitations applicable to domestic insurance companies. These limitations restrict the payment of dividends by insurance companies generally to unrestricted unassigned surplus funds reported for statutory purposes, which aggregated to $10,747,756 and $42,254,873 at December 31, 2005 and 2004, respectively. Dividends of $100,000,000 and $3,199,981 were declared and paid during 2005 and 2004, respectively. A portion of the dividends amounting to $14,107,571 was recorded as a return of capital in 2005.

14. Prior Period Adjustment

An error was noted in the recording of deferred tax liability related to investments that were marked to market in 1997. The corresponding mark to market adjustment has been appropriately amortized as bond premium but the corresponding deferred tax liability was not. As a result, the deferred tax expense was overstated and the net income was understated for each of these years as follows:

	Increase in Net Income
Year	and Deferred Tax Expense
2004	$	191,028
2003		194,142
Prior to 2003		827,389
	$	1,212,559

Management restated the above stated amounts in 2004 and 2003 as an increase in deferred tax benefit and a decrease in deferred tax liability. The $827,389 was recorded as increase in retained earnings as of January 1, 2003.

23

Great American Life Assurance Company of Puerto Rico

Notes to Financial Statements (continued)

15. Subsequent Event

On December 15, 2005, the Board of Directors announced the approval of the sale of all the shares of common stock of Great American Life Assurance Company of Puerto Rico, previously owned by Great American Financial Resources (GAFRI) to Triple-S Management Corporation (TSMC). The acquisition by TSMC was completed on January 31, 2006. As a result of this acquisition, the Company is expected to be one of the leading providers of life insurance in Puerto Rico.

24

EX-99.2

Exhibit 99.2

Unaudited Pro Forma Combined Financial Statements
(Dollar amounts in thousands, except per share data)

On January 31, 2006, Triple-S Management Corporation (TSM or the “Corporation”) completed the acquisition of 100% of the issued and outstanding shares of common stock of Great American Life Assurance Company of Puerto Rico (“GA Life”) for $37.5 million. The closing was made in conformity with the terms of the Stock Purchase Agreement between the Corporation and Great American Financial Resources, Inc. that was executed on December 15, 2005. To finance this acquisition, on January 31, 2006, the Corporation closed the issuance of $35.0 million of its 6.70% Senior Unsecured Notes due January 2021 (the “Notes”) in a private placement to various institutional investors pursuant to a Note Purchase Agreement. Pursuant to the Note Purchase Agreement, the Corporation will pay interest on the outstanding balance of the Notes at the rate of 6.70% per annum from the date of the issuance of the Notes, payable monthly commencing on March 1, 2006, until such principal becomes due and payable.

For accounting purposes, this transaction will be accounted for as a purchase business combination with TSM treated as the acquirer, using TSM’s historical financial information and applying fair value estimates to the acquired assets and liabilities of GA Life as of January 31, 2006.

The preliminary unaudited pro forma combined balance sheet at December 31, 2005 combines the historical consolidated balance sheet of the Corporation and GA Life, giving effect to the acquisition as if it had been consummated on December 31, 2005. The preliminary unaudited pro forma combined statement of earnings for the year ended December 31, 2005 combines the historical consolidated statement of earnings of the Corporation and GA Life giving effect to the acquisition as if it had occurred on January 1, 2005. The historical financial statements have been adjusted to give effect to pro forma events that are (i) directly attributable to the acquisition, (ii) expected to have a continuing impact on the Corporation, and (iii) factually supportable.

The information provided in these unaudited pro forma combined financial statements should be read in conjunction with the:

• Accompanying notes to the unaudited pro forma combined financial statements;

• The Corporation’s separate historical audited consolidated financial statements as of and for the year ended December 31, 2005 included in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2005;

• GA Life’s separate historical audited financial statements as of and for the year ended December 31, 2005, included as Exhibit 99.1 of this Current Report on Form 8-K.

The preliminary unaudited pro forma combined financial statements have been prepared for information purposes only. The unaudited pro forma combined financial statements are not necessarily indicative of what the financial position or results of operations actually would have been had the acquisition been completed at the dates indicated. In addition, the unaudited pro forma combined financial statements do not pretend to project the future financial position or operating results of operations of the combined company. The unaudited pro forma combined financial statements do not consider the impact of possible revenue enhancements, expense efficiencies, synergies or asset dispositions.

The unaudited pro forma combined financial statements have been prepared using the purchase method of accounting with TSM treated as the acquirer. Accordingly, TSM’s estimated costs to acquire GA Life have been allocated to the acquired assets and liabilities based upon their estimated fair values at December 31, 2005. The allocation of the purchase price is preliminary and is dependent upon certain valuations and other studies that have not progressed to a stage where there is sufficient information to make a definitive allocation. Accordingly, the final purchase accounting adjustment may be materially different from the preliminary unaudited pro forma adjustments presented herein.

1

Unaudited Pro Forma Combined Balance Sheet
(Dollar amounts in thousands, except per share data)

	Historical			Historical		Reclassification			Adjustments (a)			Pro Forma			Pro Forma
	TSM			GA Life		TSM			GA Life			Adjustments			Combined
Investments and cash:
Securities held for trading, at fair value — equity securities	$	78,215			—		—			—			—			78,215
Securities available for sale, at fair value
Fixed maturities		515,174			191,029		—			—			—			706,203
Equity securities		51,810			2,494		—			—			—			54,304
Securities held to maturity, at amortized cost — fixed maturities		21,129			—		—			—			—			21,129
Policy loans		—			4,743		—			—			—			4,743
Cash and cash equivalents		48,978			9,146		—			—			(3,196	) (b)		54,928
Total investments and cash		715,306			207,412		—			—			(3,196	)		919,522
Premium and other receivables, net		244,038			6,559		—			—			(119,035	) (c)		131,562
Deferred policy acquisition costs and value of business acquired		81,568			21,793		—			—			1,217	(d)		104,578
Property and equipment		34,709			1,489		—			—			—			36,198
Net deferred tax asset		2,151			—		—			—			—			2,151
Other assets		59,690			403		—			—			(696	) (e)		59,397
Total assets	$	1,137,462			237,656		—			—			(121,710	)		1,253,408
Policy and claim liabilities:
Claims processed and incomplete	$	139,694			—		—			4,179			—			143,873
Future policy benefits		—			49,072		109,225			—			9,656	(f)		167,953
Unreported losses		143,224			8,648		—			(4,479	)		—			147,393
Unpaid loss-adjustment expenses		14,645			—		—			300			—			14,945
Total policy and claim liabilities		297,563			57,720		109,225			—			9,656			474,164
Future policy benefits reserve related to funds withheld reinsurance		118,635			—		(118,635	)		—			—			—
Funds held under reinsurance treaties		—			118,635		—			—			(118,635	) (g)		—
Unearned premiums		95,703			580		1,088			—			—			97,371
Annuity contracts		41,738			3,739		8,322			—			—			53,799
Liability to Federal Employees’ Health Benefits Program		4,356			—		—			—			—			4,356
Accounts payable and accrued liabilities		106,468			6,583		—			—			(1,096	) (h)		111,955
Short-term borrowings		1,740			—		—			—			—			1,740
Long-term borrowings		150,590			—		—			—			35,000	(i)		185,590
Deferred tax liability		—			3,709		—			—			55	(j)		3,764
Additional minimum pension liability		11,966			—		—			—			—			11,966
Total liabilities		828,759			190,966		—			—			(75,020	)		944,705
Common stock		356			2,500		—			—			(2,500	) (k)		356
Additional paid-in capital		150,408			36,762		—			—			(36,762	) (l)		150,408
Retained earnings		162,964			—		—			—			—			162,964
Accumulated other comprehensive income (loss)		(5,025	)		7,428		—			—			(7,428	) (m)		(5,025	)
Total stockholders’ equity		308,703			46,690		—			—			(46,690	)		308,703
Total liabilities and stockholders equity	$	1,137,462			237,656		—			—			(121,710	)		1,253,408

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Unaudited Pro Forma Combined Statement of Earnings
(Dollar amounts in thousands, except per share data)

	Historical			Historical			Reclassification			Adjustments (a)			Pro Forma			Pro Forma
	TSM			GA Life			TSM			GA Life			Adjustments			Combined
Revenue:
Premiums earned, net	$	1,380,204			70,180			—			—			—			1,450,384
Amounts attributable to self-funded arrangements		210,905			—			—			—			—			210,905
Less amounts attributable to claims under self-funded arrangements		(196,460	)		—			—			—			—			(196,460	)
		1,394,649			70,180			—			—			—			1,464,829
Net investment income		29,029			15,936			—			(4,389	)		(433)	(b)		40,143
Net realized investment gains		7,161			—			—			4,389			—			11,550
Net unrealized investment loss on trading securities		(4,709	)		—			—			—			—			(4,709	)
Other income, net		3,732			—			—			—			—			3,732
Total revenue		1,429,862			86,116			—			—			(433	)		1,515,545
Benefits, claims and expenses:
Benefits, claims and claim adjustment expenses		1,208,367			34,326			—			—			(376)	(c)		1,242,317
Operating expenses, net of reimbursement for services		181,703			32,801			(23,401	)		(9,793	)		—			181,310
Amortization of deferred policy acquisition costs and value of business acquired		—			1,484			23,401			9,793			301	(d)		34,979
Interest expense		7,595			1,168			—			—			2,345	(e)		11,108
Total benefits, claims and expenses		1,397,665			69,779			—			—			2,270			1,469,714
Income before taxes		32,197			16,337			—			—			(2,703	)		45,831
Income tax expense (benefit):
Current		3,924			631			—			—			(946)	(f)		3,609
Deferred		(160	)		(1,427	)		—			—			—			(1,587	)
Total income taxes		3,764			(796	)		—			—			(946	)		2,022
Net income	$	28,433			17,133			—			—			(1,757	)		43,809
Basic net income per share	$	3,193													(g)		4,920
Weighted average of common shares outstanding		8,904													(g)		8,904

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Notes to the Unaudited Pro Forma Combined Financial Statements
(Dollar amounts in thousands, except per share data)

Note 1 — Basis of Pro Forma Presentation

On January 31, 2006, Triple-S Management Corporation (TSM or the “Corporation”) completed the acquisition of 100% of the issued and outstanding shares of common stock of Great American Life Assurance Company of Puerto Rico (“GA Life”) for $37,500. The closing was made in conformity to the terms of a Stock Purchase Agreement between the Corporation and Great American Financial Resources, Inc. that was executed on December 15, 2005. In order to finance this acquisition on January 31, 2006, the Corporation closed the issuance of $35,000 million of its 6.70% Senior Unsecured Notes due January 2021 (the “Notes”) in a private placement to various institutional investors pursuant to a Note Purchase Agreement. Pursuant to the Note Purchase Agreement, the Corporation will pay interest on the outstanding balance of the Notes at the rate of 6.70% per annum from the date of the issuance of the Notes, payable monthly commencing on March 1, 2006, until such principal shall have become due payable.

For accounting purposes, this transaction will be accounted for as a purchase business combination with TSM treated as the acquirer, using TSM’s historical financial information and applying fair value estimates to the acquired assets and liabilities of GA Life as of January 31, 2006.

The preliminary unaudited pro forma combined balance sheet at December 31, 2005 combines the historical consolidated balance sheet of the Corporation and GA Life, giving effect to the acquisition as if it had been consummated on December 31, 2005. The preliminary unaudited pro forma combined statement of earnings for the year ended December 31, 2005 combines the historical consolidated statement of earnings of the Corporation and GA Life giving effect to the acquisition as if it had occurred on January 1, 2005. The historical financial statements have been adjusted to give effect to pro forma events that are (i) directly attributable to the acquisition, (ii) expected to have a continuing impact on the Corporation, and (iii) factually supportable.

Note 2 — Estimated Purchase Price Allocation

On the effective date of the stock purchase agreement the Corporation paid $37,500 to GA Life’s former parent company. In addition, the Corporation paid costs directly related to the acquisition of GA Life amounting to $696. These costs are considered part of the acquisition costs of GA Life. The Corporation intends to determine the fair value of acquired assets as of January 31, 2006. The purchase price will then be allocated the fair value of GA Life’s net assets, including the identified intangible net asset, which is the value of business acquired. For purposes of the unaudited pro forma financial statements, the Corporation used the estimated fair value of net acquired assets as of December 31, 2005 and a preliminary value has been assigned to the value of business acquired.

For purposes of the unaudited pro forma combined financial statements the purchase price allocation has been estimated as follows:

Cash payment to GA Life’s former parent company	$	37,500
Cash paid for costs directly related to the acquisition		696
Total purchase price	$	38,196
Net tangible assets acquired as of December 31, 2005	$	18,950
Intangible asset — Value of business acquired		23,010
Deferred tax liability		(3,764	)
Fair value of net assets acquired as of December 31, 2005	$	38,196

The estimated fair value of the value of business acquired was actuarially determined by discounting after-tax profits at a risk rate of return equal to roughly 12%. After-tax profits were forecasted based upon models of the in force as of December 31, 2005, actual invested assets as of that date and best-estimate actuarial assumptions regarding premium income, claims, persistency, expenses and investment income

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Notes to the Unaudited Pro Forma Combined Financial Statements
(Dollar amounts in thousands, except per share data)

accruing from invested assets plus reinvestment of positive cash flows. The best-estimate actuarial assumptions were based upon GA Life’s recent experience in each of its major life and health insurance product lines. The amount of value of business acquired is to be amortized, considering interest, over the anticipated premium-paying period of the related policies in proportion to the ratio of annual premium revenue to the expected total premium revenue to be received over the life of the policies.

A deferred tax liability was established, for pro forma financial statement purposes, related to the difference between the book basis and tax basis amounts of investment in securities. This deferred tax liability was estimated using an enacted capital gain tax rate of 20%.

These estimates are subject to change, based on actual information as of January 31, 2006, the actual date of the acquisition, and continuing refinement of the methodologies underlying actuarial estimates. As a result, the amount of the final purchase price allocation could differ materially from the amounts presented in the unaudited pro forma combined financial statements.

Note 3 — Pro Forma Adjustments

The pro forma adjustments related to the unaudited pro forma combined balance sheet as of December 31, 2005 assume that the acquisition occurred on December 31, 2005. The pro forma adjustments to the preliminary unaudited combined statement of earnings for the year ended December 31, 2005 assume that the acquisition occurred on January 1, 2005.

The following pro forma adjustments result from the estimated allocation of the purchase price for the acquisition based on the fair value of the assets and liabilities acquired from GA Life. The amounts and description related to the preliminary adjustments are as follows:

Adjustments to the Unaudited Pro Forma Combined Balance Sheet

(a) Reclassification adjustments — Certain reclassification adjustments were made to TSM and GA Life’s historical amounts to present certain balances in a consistent format. Even when the Corporation has completed a preliminary review of each entity’s financial reporting; additional reclassifications may be identified in the future.

(b) Cash and cash equivalents — On January 31, 2006, upon completing the acquisition of GA Life, TSM paid GA Life’s former parent company $37,500. In addition, TSM paid $696 of costs directly related to this acquisition (see note 2). These cash outflows were partially funded through the issuance and sale of TSM’s 6.7% Senior Unsecured Notes amounting to $35,000 (see item (h)). These transactions resulted in a net decrease in cash and cash equivalents of $3,196.

(c) Premiums and other receivables, net — Represents the combined amount of the following entries that eliminate transactions between the Corporation and GA Life:

•	Elimination of the funds withheld receivable recorded in TSM’s historical financial statements in accordance with the coinsurance funds withheld agreement with GA Life (see item (f)).	$	118,635
•	Elimination of the reinsurance assumed receivable recorded in TSM’s historical financial statements in accordance with the coinsurance funds withheld agreement with GA Life (see item (g)).		400
	Amount of pro forma adjustment	$	119,035

(d) Deferred policy acquisition costs and value of business acquired — As of December 31, 2005 GA Life had recorded a combined balance of deferred policy acquisition cost and value of business acquired amounting to $21,793. Therefore, in the unaudited pro forma combined balance sheet a pro forma

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Notes to the Unaudited Pro Forma Combined Financial Statements
(Dollar amounts in thousands, except per share data)

	adjustment of $1,217 was made in order to increase this balance to the estimated fair value of the value of business acquired determined in the preliminary purchase price allocation, which amounted to $23,010 (see note 2).
(e)	Other assets — Represents the elimination of the costs directly related to the acquisition of GA Life amounting to $696, which as of December 31, 2005 were included as an other asset and as accrued expenses in TSM’s historical financial statements (see item (f)).

(f) Future policy benefits — This pro forma adjustment of $9,656 was done to adjust the value of this liability to its estimated fair market value. Actuarial reserves for future contract obligations and related expenses were established for business subject to SFAS No. 60, Accounting and Reporting by Insurance Enterprises, based upon the same actuarial assumptions regarding premium income, claims, persistency and expenses, used in the development of the estimated fair value of the value of business acquired, with the addition of margins for adverse deviation. The reserve for each in force contract equal to the present value of anticipated benefits and expenses, less the present value of the amortization of net premiums, all discounted with interest at 5% per annum. Actuarial reserves for future contract obligations and related expenses were established for business subject to SFAS No. 97, Accounting and Reporting by Insurance Enterprises for Certain Long-Duration Contracts and for Realized Gains and Losses from the Sale of Investments, equal to the account value for each contract. These estimates are subject to change, based on actual information as of January 31, 2006, the actual date of the acquisition, and continuing refinement of the methodologies underlying these estimates. As a result, the final amount could differ materially from the amounts presented in the unaudited pro forma combined financial statements.

(g) Funds held under reinsurance treaties — Represents the elimination of the balance amounting to $118,635 recorded in GA Life’s historical financial statements in accordance with the coinsurance funds withheld agreement with the Corporation (see item (c)).

(h) Accounts payable and accrued liabilities — Represents the combined amount of the following entries:

•	Elimination of the costs directly related the acquisition of GA Life, which as of December 31, 2005 were included within the accrued expenses in TSM’s historical financial statements (see item (e)).	$	696
•	Elimination of the reinsurance ceded payable recorded in GA Life’s historical financial statements in accordance with the coinsurance funds withheld agreement with the Corporation (see item (c)).		400
	Amount of pro forma adjustment	$	1,096

(i) Long-term borrowings — Represents the issuance of the Corporation’s 6.7% Senior Unsecured Notes amounting to $35,000 (see item (b)).

(j) Deferred tax liability — As of December 31, 2005 GA Life has recorded a deferred tax liability amounting to $3,709. Therefore in the unaudited pro forma combined balance sheet a pro forma adjustment of $55 was made to increase this balance to the amount estimated in the preliminary purchase price allocation. No pro forma adjustment was made in the unaudited pro forma combined statement of earnings related to deferred taxes since the amount already considered in the statement of earnings approximates the deferred taxes charged to operations according to the balances determined upon the preliminary purchase price allocation.

(k) Common stock — Represents the elimination of GA Life’s common stock amounting to $2,500 for pro forma combination purposes.

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Notes to the Unaudited Pro Forma Combined Financial Statements
(Dollar amounts in thousands, except per share data)

(l) Additional paid-in capital — Represents the elimination of GA Life’s additional paid-in capital amounting to $36,762 for pro forma combination purposes.

(m) Accumulated other comprehensive income — Represents the elimination of GA Life’s accumulated other comprehensive income amounting to $7,428 for pro forma combination purposes.

Adjustments to the Unaudited Pro Forma Combined Statement of Earnings

(a) Reclassification adjustments — Certain reclassification adjustments were made to TSM and GA Life’s historical amounts to present certain balances in a consistent format. Even when the Corporation has completed a preliminary review of each entity’s financial reporting; additional reclassifications may be identified in the future.

(b) Net investment income — This pro forma adjustment represents GA Life’s anticipated additional bond premium amortization of approximately $433 due to the fair value accounting of its investment in securities.

(c) Benefits, claims and claim adjustment expenses — Represents the effect in the statement of earnings of the changes to the future policy benefits described for the balance sheet pro forma adjustment (f).

(d) Amortization of deferred policy acquisition costs and value of business acquired — Represents the effect in the statement of earnings of the adjustment to the value of business acquired described in note 2 and for the balance sheet pro forma adjustment (d).

(e) Interest expense — Represents the interest related to the 6.7% Senior Unsecured Notes amounting to $35,000. The annual interest expense related to this note amounts to $2,345.

(f) Current income tax expense — Represents the tax effect of the other pro forma adjustments done to the statement of earnings. The tax effect was estimated using an effective tax rate of 35% since TSM and GA Life are taxed differently under Puerto Rico income tax law. TSM is subject to Puerto Rico income taxes as a regular corporation at an enacted tax rate of 39%. GA Life, as a qualified domestic life insurance company doing business in Puerto Rico, is only subject to the alternative minimum tax and taxes on its capital gains, as applicable. The alternative minimum tax results in an effective tax rate of 11%.

(g) Earnings per share — Amount was calculated based on the historical combined net income of the Corporation and GA Life giving effect to the pro forma adjustments done to the statement of earnings as described above. TSM’s historical weighted average of shares was used to calculate the pro forma earnings per share.

7