10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2017

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from          to

COMMISSION FILE NUMBER:  001-33865

Triple-S Management Corporation

Puerto Rico	66-0555678
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1441 F.D. Roosevelt Avenue
San Juan, Puerto Rico	00920
(Address of principal executive offices)	(Zip code)

(787) 749-4949

(Registrant’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)
 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

  ☑ Yes  ☐ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

☑ Yes  ☐  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,”  “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.  (Check one):

Large accelerated filer  ☐	Accelerated filer  ☑
Non-accelerated filer  ☐	Smaller reporting company  ☐
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). 

☐ Yes  ☑ No

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Title of each class	Outstanding at June 30, 2017
Common Stock Class A, $1.00 par value	950,968
Common Stock Class B, $1.00 par value	23,494,170

Triple-S Management Corporation

FORM 10-Q

For the Quarter Ended June 30, 2017

Table of Contents

Part I – Financial Information		3
Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
	Cautionary Statement Regarding Forward-Looking Information	31
	Overview	31
	Recent Developments	32
	Recent Accounting Standards	34
	Managed Care Membership	34
	Consolidated Operating Results	35
	Managed Care Operating Results	38
	Life Insurance Operating Results	41
	Property and Casualty Operating Results	42
	Liquidity and Capital Resources	44
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	46
Item 4.	Controls and Procedures	46
Part II – Other Information		48
Item 1.	Legal Proceedings	48
Item 1A.	Risk Factors	48
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	49
Item 3.	Defaults Upon Senior Securities	49
Item 4.	Mine Safety Disclosures	49
Item 5.	Other Information	49
Item 6.	Exhibits	49
SIGNATURES		50

2

Part I – Financial Information

Item 1. Financial Statements

Triple-S Management Corporation

Condensed Consolidated Balance Sheets (Unaudited)

(dollar amounts in thousands, except share data)

	June 30, 2017			December 31, 2016
Assets
Investments and cash:
Securities available for sale, at fair value:
Fixed maturities	$	1,196,161		$	1,151,643
Equity securities		287,820			270,349
Securities held to maturity, at amortized cost:
Fixed maturities		2,835			2,836
Policy loans		8,716			8,564
Cash and cash equivalents		172,526			103,428
Total investments and cash		1,668,058			1,536,820
Premiums and other receivables, net		320,548			286,365
Deferred policy acquisition costs and value of business acquired		200,034			194,787
Property and equipment, net		69,083			66,369
Deferred tax asset		69,576			57,768
Goodwill		25,397			25,397
Other assets		52,672			51,493
Total assets	$	2,405,368		$	2,218,999
Liabilities and Stockholders' Equity
Claim liabilities	$	504,240		$	487,943
Liability for future policy benefits		331,427			321,232
Unearned premiums		175,561			79,310
Policyholder deposits		179,225			179,382
Liability to Federal Employees' Health Benefits and Federal Employees' Programs		40,363			34,370
Accounts payable and accrued liabilities		204,194			169,449
Deferred tax liability		22,203			18,850
Long-term borrowings		33,667			35,085
Liability for pension benefits		30,496			30,892
Total liabilities		1,521,376			1,356,513
Stockholders’ equity:
Triple-S Management Corporation stockholders' equity
Common stock Class A, $1 par value. Authorized 100,000,000 shares;issued and outstanding 950,968 at June 30, 2017and December 31, 2016, respectively		951			951
Common stock Class B, $1 par value. Authorized 100,000,000 shares; issued and outstanding 23,494,170 and 23,321,163 shares at June 30, 2017 and December 31, 2016, respectively		23,494			23,321
Additional paid-in capital		65,589			65,592
Retained earnings		739,267			730,904
Accumulated other comprehensive income		55,369			42,395
Total Triple-S Management Corporation stockholders' equity		884,670			863,163
Non-controlling interest in consolidated subsidiary		(678	)		(677	)
Total stockholders' equity		883,992			862,486
Total liabilities and stockholders' equity	$	2,405,368		$	2,218,999

See accompanying notes to unaudited condensed consolidated financial statements.

3

Triple-S Management Corporation

Condensed Consolidated Statements of Earnings (Unaudited)

(dollar amounts in thousands, except per share data)

	Three months ended June 30,					Six months ended June 30,
	2017		2016			2017			2016
Revenues:
Premiums earned, net	$	722,891	$	729,049		$	1,425,164		$	1,467,583
Administrative service fees		4,548		4,520			8,927			9,603
Net investment income		12,698		12,875			24,714			24,233
Other operating revenues		1,121		915			2,086			1,727
Total operating revenues		741,258		747,359			1,460,891			1,503,146
Net realized investment gains (losses):
Total other-than-temporary impairment losses on securities		-		(1,434	)		-			(1,434	)
Net realized gains, excluding other-than-temporary impairment losses on securities		4,054		2,954			4,390			3,012
Net realized investment gains on sale of securities		4,054		1,520			4,390			1,578
Other income, net		587		3,859			3,112			4,734
Total revenues		745,899		752,738			1,468,393			1,509,458
Benefits and expenses:
Claims incurred		611,297		622,087			1,232,160			1,248,781
Operating expenses		118,720		121,112			229,666			244,092
Total operating costs		730,017		743,199			1,461,826			1,492,873
Interest expense		1,721		1,954			3,407			3,836
Total benefits and expenses		731,738		745,153			1,465,233			1,496,709
Income before taxes		14,161		7,585			3,160			12,749
Income tax expense (benefit)		1,456		3,707			(5,202	)		5,416
Net income		12,705		3,878			8,362			7,333
Less: Net loss attributable to non-controlling interest		-		2			1			3
Net income attributable to Triple-S Management Corporation	$	12,705	$	3,880		$	8,363		$	7,336
Earnings per share attributable to Triple-S Management Corporation
Basic net income per share	$	0.52	$	0.16		$	0.35		$	0.30
Diluted net income per share	$	0.52	$	0.16		$	0.34		$	0.30

See accompanying notes to unaudited condensed consolidated financial statements.

4

Triple-S Management Corporation

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

(dollar amounts in thousands)

	Three months ended June 30,					Six months ended June 30,
	2017		2016			2017		2016
Net income	$	12,705	$	3,878		$	8,362	$	7,333
Other comprehensive (loss) income, net of tax:
Net unrealized change in fair value of available for sale securities, net of taxes		4,396		15,830			12,868		35,407
Defined benefit pension plan:
Actuarial loss, net		53		507			106		1,229
Prior service credit, net		-		(62	)		-		(150	)
Total other comprehensive income, net of tax		4,449		16,275			12,974		36,486
Comprehensive income		17,154		20,153			21,336		43,819
Comprehensive income attributable to non-controlling interest		-		2			1		3
Comprehensive income attributable to Triple-S Management Corporation	$	17,154	$	20,155		$	21,337	$	43,822

See accompanying notes to unaudited condensed consolidated financial statements.

5

Triple-S Management Corporation

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)

(dollar amounts in thousands)

	2017			2016
Balance at January 1	$	863,163		$	847,526
Share-based compensation		170			2,649
Stock issued upon the exercise of stock options		-			55
Repurchase and retirement of common stock		-			(14,616	)
Comprehensive income		21,337			43,822
Total Triple-S Management Corporation stockholders' equity		884,670			879,436
Non-controlling interest in consolidated subsidiary		(678	)		(673	)
Balance at June 30	$	883,992		$	878,763

See accompanying notes to unaudited condensed consolidated financial statements.

6

Triple-S Management Corporation

Condensed Consolidated Statements of Cash Flows (Unaudited)

(dollar amounts in thousands)

	Six months ended June 30,
	2017			2016
Cash flows from operating activities:
Net income	$	8,362			7,333
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		6,454			7,300
Net amortization of investments		4,787			3,981
Reductions to the allowance for doubtful receivables		(2,390	)		(313	)
Deferred tax (benefit) expense		(11,734	)		4,301
Net realized investment gain on sale of securities		(4,390	)		(1,578	)
Interest credited to policyholder deposits		2,144			2,436
Share-based compensation		170			2,313
(Increase) decrease in assets:
Premium and other receivables, net		(25,078	)		(63,589	)
Deferred policy acquisition costs and value of business acquired		(5,621	)		(3,562	)
Deferred taxes		(280	)		178
Other assets		(1,229	)		(31,425	)
Increase (decrease) in liabilities:
Claim liabilities		16,297			(9,901	)
Liability for future policy benefits		10,195			19,961
Unearned premiums		96,251			1,791
Liability to Federal Employees' Health Benefits and Federal Employees' Programs		5,993			(2,141	)
Accounts payable and accrued liabilities		33,774			52,350
Net cash provided by (used in) operating activities		133,705			(10,565	)

(Continued)

7

Triple-S Management Corporation

Condensed Consolidated Statements of Cash Flows (Unaudited)

(dollar amounts in thousands)

	Six months ended June 30,
	2017			2016
Cash flows from investing activities:
Proceeds from investments sold or matured:
Securities available for sale:
Fixed maturities sold	$	88,141		$	163,150
Fixed maturities matured/called		8,938			14,301
Equity securities sold		21,499			32,252
Securities held to maturity:
Fixed maturities matured/called		703			700
Acquisition of investments:
Securities available for sale:
Fixed maturities		(141,116	)		(150,005	)
Equity securities		(20,424	)		(136,104	)
Securities held to maturity:
Fixed maturities		(703	)		(609	)
Increase in other investments		(731	)		(1,383	)
Net change in policy loans		(152	)		(400	)
Net capital expenditures		(8,704	)		(2,716	)
Net cash used in investing activities		(52,549	)		(80,814	)
Cash flows from financing activities:
Change in outstanding checks in excess of bank balances		(8,545	)		4,074
Repayments of long-term borrowings		(1,212	)		(820	)
Repurchase and retirement of common stock		-			(14,560	)
Proceeds from policyholder deposits		8,166			7,942
Surrenders of policyholder deposits		(10,467	)		(6,935	)
Net cash used in financing activities		(12,058	)		(10,299	)
Net increase (decrease) in cash and cash equivalents		69,098			(101,678	)
Cash and cash equivalents:
Beginning of period		103,428			197,818
End of period	$	172,526		$	96,140

See accompanying notes to unaudited condensed consolidated financial statements.

8

Triple-S Management Corporation

Notes to Condensed Consolidated Financial Statements

(dollar amounts in thousands, except per share data)

(unaudited)

(1) Basis of Presentation

The accompanying condensed consolidated interim financial statements prepared by Triple-S Management Corporation and its subsidiaries are unaudited.  In this filing, the “Corporation”, the “Company”, “TSM”, “we”, “us” and “our” refer to Triple-S Management Corporation and its subsidiaries.  The condensed consolidated interim financial statements do not include all of the information and the footnotes required by accounting principles generally accepted in the U.S. (GAAP) for complete financial statements.  These condensed consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements included in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2016.

In the opinion of management, all adjustments, consisting of a normal recurring nature necessary for a fair presentation of such condensed consolidated interim financial statements, have been included.  The results of operations for the three months and six months ended June 30, 2017 are not necessarily indicative of the results for the full year ending December 31, 2017.

(2) Recent Accounting Standards

On May 10, 2017, the Financial Accounting Standard Board (FASB) issued guidance to provide clarity and reduce both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, Compensation-Stock Compensation, to a change in the terms and conditions of a share-based payment award.  The amendments in this update affect any entity that changes the terms or conditions of a share-based payment award.  This guidance indicates an entity should account for the effects of a modification unless the following criteria are met: (1) the fair value (or calculated value or intrinsic value, if such an alternative measurement method is used) of the modified award is the same as the fair value (or calculated value or intrinsic value, if such an alternative measurement method is used) of the original award immediately before the original award is modified. If the modification does not affect any of the inputs to the valuation technique that the entity uses to value the award, the entity is not required to estimate the value immediately before and after the modification, (2) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified, and (3) the classification of the modified award as an equity or liability instrument is the same as the classification of the original award immediately before the original award is modified. For all companies, these amendments, which should be applied on a prospective basis, are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years.  We are currently evaluating the impact the adoption of this guidance may have on the Company's consolidated financial statements.

On March 10, 2017, the FASB issued guidance to improve the presentation of defined benefit costs in the income statement.  In particular, the guidance requires that an employer report the service cost component in the same line item(s) as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented.  Additionally, this guidance allows only the service cost component to be eligible for capitalization, when applicable (e.g., as a cost of internally manufactured inventory or a self-constructed asset).  For public companies, these amendments, which should be applied on a prospective basis, are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years.  Since we do not present a subtotal of income from operations, the adoption of this guidance should not have a material impact on the presentation of the Company’s consolidated result of operations.

9

Triple-S Management Corporation

Notes to Condensed Consolidated Financial Statements

(dollar amounts in thousands, except per share data)

(unaudited)

On January 26, 2017, the FASB issued guidance to simplify the manner in which an entity is required to evaluate goodwill for impairment by eliminating Step 2 from the goodwill impairment test.  Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill.  Instead, under the amendments in this guidance, an entity should (1) perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount, and (2) recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, with the understanding that the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit.  Additionally, this guidance removes the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails such qualitative test, to perform Step 2 of the goodwill impairment test.  For public companies, these amendments, which should be applied on a prospective basis, are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years.  We are currently evaluating the impact the adoption of this guidance may have on the Company's consolidated financial statements.

Other than the accounting pronouncement disclosed above, there were no other new accounting pronouncements issued during the three months and six months ended June 30, 2017 that could have a material impact on the Corporation’s financial position, operating results or financial statements disclosures.

(3) Investment in Securities

The amortized cost for debt securities and cost for equity securities, gross unrealized gains, gross unrealized losses, and estimated fair value for available-for-sale and held-to-maturity securities by major security type and class of security at June 30, 2017 and December 31, 2016, were as follows:

	June 30, 2017
	Amortized cost		Gross unrealized gains		Gross unrealized losses			Estimated fair value
Securities available for sale:
Fixed maturities:
Obligations of government-sponsored enterprises	$	40,358	$	29	$	(4	)	$	40,383
U.S. Treasury securities and obligations of U.S. government instrumentalities		79,932		180		(115	)		79,997
Obligations of the Commonwealth of Puerto Rico and its instrumentalities		11,719		445		(3	)		12,161
Municipal securities		682,576		34,459		(393	)		716,642
Corporate bonds		278,417		15,626		(89	)		293,954
Residential mortgage-backed securities		11,877		35		(3	)		11,909
Collateralized mortgage obligations		41,129		97		(111	)		41,115
Total fixed maturities		1,146,008		50,871		(718	)		1,196,161
Equity securities:
Mutual funds		214,923		43,446		(6	)		258,363
Alternative investments		29,336		368		(247	)		29,457
Total equity maturites		244,259		43,814		(253	)		287,820
Total	$	1,390,267	$	94,685	$	(971	)	$	1,483,981

10

Triple-S Management Corporation

Notes to Condensed Consolidated Financial Statements

(dollar amounts in thousands, except per share data)

(unaudited)

	December 31, 2016
	Amortized cost		Gross unrealized gains		Gross unrealized losses			Estimated fair value
Securities available for sale:
Fixed maturities:
Obligations of government-sponsored enterprises	$	41,442	$	87	$	(15	)	$	41,514
U.S. Treasury securities and obligations of U.S.government instrumentalities		85,652		157		(9	)		85,800
Obligations of the Commonwealth of Puerto Rico and its instrumentalities		17,930		2,189		(68	)		20,051
Municipal securities		650,175		34,187		(559	)		683,803
Corporate bonds		263,351		12,182		(661	)		274,872
Residential mortgage-backed securities		684		34		-			718
Collateralized mortgage obligations		45,069		58		(242	)		44,885
Total fixed maturities		1,104,303		48,894		(1,554	)		1,151,643
Equity securities - Mutual funds		240,699		30,101		(451	)		270,349
Total	$	1,345,002	$	78,995	$	(2,005	)	$	1,421,992

	June 30, 2017
	Amortized cost		Gross unrealized gains		Gross unrealized losses		Estimated fair value
Securities held to maturity:
U.S. Treasury securities and obligations of U.S.government instrumentalities	$	618	$	166	$	-	$	784
Residential mortgage-backed securities		191		2		-		193
Certificates of deposit		2,026		-		-		2,026
Total	$	2,835	$	168	$	-	$	3,003

11

Triple-S Management Corporation

Notes to Condensed Consolidated Financial Statements

(dollar amounts in thousands, except per share data)

(unaudited)

	December 31, 2016
	Amortized cost		Gross unrealized gains		Gross unrealized losses		Estimated fair value
Securities held to maturity:
U.S. Treasury securities and obligations of U.S.government instrumentalities	$	619	$	158	$	-	$	777
Residential mortgage-backed securities		191		18		-		209
Certificates of deposit		2,026		-		-		2,026
Total	$	2,836	$	176	$	-	$	3,012

Gross unrealized losses on investment securities and the estimated fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of June 30, 2017 and December 31, 2016 were as follows:

	June 30, 2017
	Less than 12 months							12 months or longer							Total
	Estimated Fair Value		Gross Unrealized Loss			Number of Securities		Estimated Fair Value		Gross Unrealized Loss			Number of Securities		Estimated Fair Value		Gross Unrealized Loss			Number of Securities
Securities available for sale:
Fixed maturities
Obligations of government-sponsored enterprises	$	6,495	$	(4	)		2	$	-	$	-			-	$	6,495	$	(4	)		2
U.S. Treasury securities and obligations of U.S. governmental instrumentalities		41,408		(115	)		5		-		-			-		41,408		(115	)		5
Obligations of the Commonwealth of Puerto Rico and its instrumentalities		7,939		(3	)		5		-		-			-		7,939		(3	)		5
Municipal securities		90,575		(393	)		12		-		-			-		90,575		(393	)		12
Corporate bonds		32,355		(89	)		10		-		-			-		32,355		(89	)		10
Residential mortgage-backed securities		2,017		(3	)		1		-		-			-		2,017		(3	)		1
Collateralized mortgage obligations		25,454		(108	)		6		564		(3	)		1		26,018		(111	)		7
Total fixed maturities		206,243		(715	)		41		564		(3	)		1		206,807		(718	)		42
Equity securities
Mutual funds		1,994		(6	)		1		-		-			-		1,994		(6	)		1
Alternative investments		4,983		(129	)		7		2,431		(118	)		1		7,414		(247	)		8
Total equity securities		6,977		(135	)		8		2,431		(118	)		1		9,408		(253	)		9
Total for securities available for sale	$	213,220	$	(850	)		49	$	2,995	$	(121	)		2	$	216,215	$	(971	)		51

12

Triple-S Management Corporation

Notes to Condensed Consolidated Financial Statements

(dollar amounts in thousands, except per share data)

(unaudited)

	December 31, 2016
	Less than 12 months							12 months or longer							Total
	Estimated Fair Value		Gross Unrealized Loss			Number of Securities		Estimated Fair Value		Gross Unrealized Loss			Number of Securities		Estimated Fair Value		Gross Unrealized Loss			Number of Securities
Securities available for sale:
Fixed maturities
Obligations of government-sponsored enterprises	$	9,483	$	(15	)		1	$	-	$	-			-	$	9,483	$	(15	)		1
U.S. Treasury securities and obligations of U.S. governmental instrumentalities		12,937		(9	)		1		-		-			-		12,937		(9	)		1
Obligations of the Commonwealth of Puerto Rico and its instrumentalities		7,758		(68	)		5		-		-			-		7,758		(68	)		5
Municipal securities		84,252		(559	)		13		-		-			-		84,252		(559	)		13
Corporate bonds		105,054		(661	)		22		-		-			-		105,054		(661	)		22
Collateralized mortgage obligations		32,120		(239	)		8		784		(3	)		1		32,904		(242	)		9
Total fixed maturities		251,604		(1,551	)		50		784		(3	)		1		252,388		(1,554	)		51
Equity securities-Mutual funds		22,615		(451	)		4		-		-			-		22,615		(451	)		4
Total for securities available for sale	$	274,219	$	(2,002	)		54	$	784	$	(3	)		1	$	275,003	$	(2,005	)		55

The Corporation reviews the investment portfolios under the Corporation’s impairment review policy.  Given market conditions and the significant judgments involved, there is a continuing risk that declines in fair value may occur and material other-than-temporary impairments may be recorded in future periods.  The Corporation from time to time may sell investments as part of its asset/liability management process or to reposition its investment portfolio based on current and expected market conditions.

Obligations of Government-Sponsored Enterprises, Obligations of U.S. Government Instrumentalities and Municipal Securities:  The unrealized losses on the Corporation’s investments in obligations of Government-Sponsored Enterprises, U.S. Government Instrumentalities and Municipal Securities were mainly caused by fluctuations in interest rates and general market conditions.  The contractual terms of these investments do not permit the issuer to settle the securities at a price less than the par value of the investment.  In addition, these positions have investment grade ratings. Because the decline in fair value is attributable to changes in interest rates and not credit quality; because the Corporation does not intend to sell the investments and it is more likely than not that the Corporation will not be required to sell the investments before recovery of their amortized cost basis, which may be maturity; and because the Corporation expects to collect all contractual cash flows, these investments are not considered other-than-temporarily impaired.

Obligations of the Commonwealth of Puerto Rico and its Instrumentalities: Our holdings in Puerto Rico municipals can be divided in (1) escrowed bonds with a fair value of $7,939 and a gross unrealized loss of $3, and (2) senior lien bonds issued by the Puerto Rico Sales Tax Financing Corporation (Cofina) with a fair value of $4,222 and a gross unrealized gain of $445.  As of June 30, 2017, investments in escrow bonds are not considered other-than-temporarily impaired based on the length of time the funds have been in a loss position, the decline in estimated fair value is principally attributable to changes in interest rates, and the fact that these bonds are backed by US Government securities, and therefore have an implicit AA+/Aaa rating. 

There was no impairment on Cofina positions during the three months and six months ended June 30, 2017 and 2016.

13

Triple-S Management Corporation

Notes to Condensed Consolidated Financial Statements

(dollar amounts in thousands, except per share data)

(unaudited)

Corporate Bonds:  The unrealized losses of these bonds were principally caused by fluctuations in interest rates and general market conditions.  All corporate bonds with an unrealized loss have investment grade ratings.  Because the decline in estimated fair value is principally attributable to changes in interest rates; because the Company does not intend to sell the investments and it is more likely than not that the Company will not be required to sell the investments before recovery of their amortized cost basis, which may be maturity; and because the Company expects to collect all contractual cash flows, these investments are not considered other-than-temporarily impaired.

Residential Mortgage-Backed Securities and Collateralized Mortgage Obligations: The unrealized losses on investments in residential mortgage-backed securities collateralized mortgage obligations (“CMOs”) were mostly caused by fluctuations in interest rates and credit spreads. The contractual cash flows of these securities, other than private CMOs, are guaranteed by a U.S. government-sponsored enterprise. Any loss in these securities is determined according to the seniority level of each tranche, with the least senior (or most junior), typically the unrated residual tranche, taking any initial loss. The investment grade credit rating of our securities reflects the seniority of the securities that the Corporation owns. The Corporation does not consider these investments other-than-temporarily impaired because the decline in fair value is attributable to changes in interest rates and not credit quality; the Corporation does not intend to sell the investments and it is more likely than not that the Corporation will not be required to sell the investments before recovery of their amortized cost basis, which may be maturity; and because the Corporation expects to collect all contractual cash flows.

Mutual Funds and Alternative Investments:As of June 30, 2017, investments in mutual funds and alternative investments with unrealized losses are not considered other-than-temporarily impaired based on market conditions and the length of time the funds have been in a loss position.  There were no impairments on mutual funds and alternative investments during the three months and six months ended June 30, 2017.  During the three and six months ended June 30, 2016, we recorded an other-than-temporary impairment related to these mutual funds amounting to $1,434.

Maturities of investment securities classified as available for sale and held to maturity were as follows:

	June 30, 2017
	Amortized cost		Estimated fair value
Securities available for sale:
Due in one year or less	$	71,618	$	71,772
Due after one year through five years		324,426		327,707
Due after five years through ten years		131,235		137,195
Due after ten years		565,723		606,463
Residential mortgage-backed securities		11,877		11,909
Collateralized mortgage obligations		41,129		41,115
	$	1,146,008	$	1,196,161
Securities held to maturity:
Due in one year or less	$	2,026	$	2,026
Due after ten years		618		784
Residential mortgage-backed securities		191		193
	$	2,835	$	3,003

Expected maturities may differ from contractual maturities because some issuers have the right to call or prepay obligations with or without call or prepayment penalties.

14

Triple-S Management Corporation

Notes to Condensed Consolidated Financial Statements

(dollar amounts in thousands, except per share data)

(unaudited)

Information regarding realized and unrealized gains and losses from investments is as follows:

	Three months ended June 30,						Six months ended June 30,
	2017			2016			2017			2016
Realized gains (losses):
Fixed maturity securities:
Securities available for sale:
Gross gains from sales	$	384		$	912		$	401		$	1,873
Gross losses from sales		(517	)		(103	)		(636	)		(1,462	)
Total fixed maturity securities		(133	)		809			(235	)		411
Equity securities:
Securities available for sale:
Gross gains from sales		4,189			2,525			4,627			3,112
Gross losses from sales		(2	)		(380	)		(2	)		(511	)
Gross losses from other-than-temporary impairments		-			(1,434	)		-			(1,434	)
Total equity securities		4,187			711			4,625			1,167
Net realized gains on securities available for sale	$	4,054		$	1,520		$	4,390		$	1,578

	Three months ended June 30,					Six months ended June 30,
	2017			2016		2017			2016
Changes in net unrealized gains (losses):
Recognized in accumulated other comprehensive income:
Fixed maturities – available for sale	$	3,252		$	18,739	$	2,813		$	41,328
Equity securities – available for sale		2,768			2,908		13,911			9,677
	$	6,020		$	21,647	$	16,724		$	51,005
Not recognized in the consolidated financial statements:
Fixed maturities – held to maturity	$	(10	)	$	27	$	(8	)	$	63

The change in deferred tax liability on unrealized gains recognized in accumulated other comprehensive income during the six months ended June 30, 2017 and 2016 was $3,931 and $15,598, respectively.

As of June 30, 2017 and December 31, 2016, no individual investment in securities exceeded 10% of stockholders’ equity.

15

Triple-S Management Corporation

Notes to Condensed Consolidated Financial Statements

(dollar amounts in thousands, except per share data)

(unaudited)

(4) Premiums and Other Receivables, Net

Premiums and other receivables, net were as follows:

	June 30, 2017		December 31, 2016
Premium	$	107,058	$	91,528
Self-funded group receivables		51,646		57,728
FEHBP		15,582		14,321
Agent balances		40,340		25,495
Accrued interest		13,839		13,668
Reinsurance recoverable		55,772		58,295
Unsettled sales		6,715		-
Other		62,859		62,637
		353,811		323,672
Less allowance for doubtful receivables:
Premium		23,949		27,320
Other		9,314		9,987
		33,263		37,307
Total premium and other receivables, net	$	320,548	$	286,365

As of June 30, 2017 and December 31, 2016, the Company had premiums and other receivables of $63,565 and $57,750, respectively, from the Government of Puerto Rico, including its agencies, municipalities and public corporations.  The related allowance for doubtful receivables as of June 30, 2017 and December 31, 2016 were $14,853 and $18,812, respectively.

16

Triple-S Management Corporation

Notes to Condensed Consolidated Financial Statements

(dollar amounts in thousands, except per share data)

(unaudited)

(5) Fair Value Measurements

Our condensed consolidated balance sheets include the following financial instruments: securities available for sale, policy loans, policyholder deposits, and long-term borrowings.  We consider the carrying amounts of policy loans, policyholder deposits, and long-term borrowings to approximate their fair value due to the short period of time between the origination of these instruments and the expected realization or payment. Certain assets are measured at fair value on a recurring basis and are disclosed below. These assets are classified into one of three levels of a hierarchy defined by GAAP. For a description of the methods and assumptions that are used to estimate the fair value and determine the fair value hierarchy classification of each class of financial instrument, see the consolidated financial statements and notes thereto included in our 2016 Form 10-K.

The following tables summarize fair value measurements by level for assets measured at fair value on a recurring basis:

	June 30, 2017
	Level 1		Level 2		Level 3		Total
Securities available for sale:
Fixed maturity securities
Obligations of government-sponsored enterprises	$	-	$	40,383	$	-	$	40,383
U.S. Treasury securities and obligations of U.S government instrumentalities		79,997		-		-		79,997
Obligations of the Commonwealth of Puerto Rico and its instrumentalities		-		12,161		-		12,161
Municipal securities		-		716,642		-		716,642
Corporate bonds		-		293,954		-		293,954
Residential agency mortgage-backed securities		-		11,909		-		11,909
Collateralized mortgage obligations		-		41,115		-		41,115
Total fixed maturities		79,997		1,116,164		-		1,196,161
Equity securities - Mutual funds		173,957		84,406		-		258,363
Alternative investments - measured at net asset value		-		-		-		29,457
Total	$	253,954	$	1,200,570	$	-	$	1,483,981

Certain investments that are measured at fair value using the net asset value per share practical expedient have not been classified in the fair value hierarchy.  The fair value amount presented in this table is intended to facilitate the reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position.

	December 31, 2016
	Level 1		Level 2		Level 3		Total
Securities available for sale:
Fixed maturity securities
Obligations of government-sponsored enterprises	$	-	$	41,514	$	-	$	41,514
U.S. Treasury securities and obligations of U.S government instrumentalities		85,800		-		-		85,800
Obligations of the Commonwealth of Puerto Rico and its instrumentalities		-		20,051		-		20,051
Municipal securities		-		683,803		-		683,803
Corporate bonds		-		274,872		-		274,872
Residential agency mortgage-backed securities		-		718		-		718
Collateralized mortgage obligations		-		44,885		-		44,885
Total fixed maturities		85,800		1,065,843		-		1,151,643
Equity securities - Mutual funds		166,595		76,222		27,532		270,349
Total	$	252,395	$	1,142,065	$	27,532	$	1,421,992

17

Triple-S Management Corporation

Notes to Condensed Consolidated Financial Statements

(dollar amounts in thousands, except per share data)

(unaudited)

There were no transfers in and/or out of Level 3 and between Levels 1 and 2 during the three months and six months ended June 30, 2017 and 2016.  Level 3 securities are partnerships measured at fair value using the net asset value affected by changes in the fair market value of the investments held in these partnerships.

The alternative investments represent investments in partnerships which invest in several equity and private equity funds.  Portfolios are diversified by vintage year, stage, geography, business sectors and number of investments. These investments are not redeemable with the funds. Distributions from each fund are received as the underlying investments of the funds are liquidated. It is estimated that the underlying assets of the funds will be liquidated in the next 5 to 12 years. The fair values of the investments in this class have been estimated using the net asset value of the Company’s ownership interest in the partnerships. Total unfunded capital commitments for these positions as of June 30, 2017 amounted to $118,668.

18

Triple-S Management Corporation

Notes to Condensed Consolidated Financial Statements

(dollar amounts in thousands, except per share data)

(unaudited)

A summary of the carrying value and fair value by level of financial instruments not recorded at fair value on our condensed consolidated balance sheets are as follows:

	June 30, 2017
	Carrying		Fair Value
	Value		Level 1		Level 2		Level 3		Total
Assets:
Policy loans	$	8,716	$	-	$	8,716	$	-	$	8,716
Liabilities:
Policyholder deposits	$	179,225	$	-	$	179,225	$	-	$	179,225
Long-term borrowings:
Loans payable to bank - variable		33,968		-		33,968		-		33,968
Total long-term borrowings		33,968		-		33,968		-		33,968
Total liabilities	$	213,193	$	-	$	213,193	$	-	$	213,193

	December 31, 2016
	Carrying		Fair Value
	Value		Level 1		Level 2		Level 3		Total
Assets:
Policy loans	$	8,564	$	-	$	8,564	$	-	$	8,564
Liabilities:
Policyholder deposits	$	179,382	$	-	$	179,382	$	-	$	179,382
Long-term borrowings:
Loans payable to bank - variable		11,187		-		11,187		-		11,187
6.6% senior unsecured notes payable		24,000		-		24,000		-		24,000
Total long-term borrowings		35,187		-		35,187		-		35,187
Total liabilities	$	214,569	$	-	$	214,569	$	-	$	214,569

19

Triple-S Management Corporation

Notes to Condensed Consolidated Financial Statements

(dollar amounts in thousands, except per share data)

(unaudited)

(6) Claim Liabilities

A reconciliation of the beginning and ending balances of claim liabilities is as follows:

	Three months ended June 30, 2017									Six months ended June 30, 2017
	Managed Care			Other Business Segments *			Consolidated			Managed Care			Other Business Segments *			Consolidated
Claim liabilities at beginning of year	$	393,525		$	136,779		$	530,304		$	349,047		$	138,896		$	487,943
Reinsurance recoverable on claim liabilities		-			(35,898	)		(35,898	)		-			(38,998	)		(38,998	)
Net claim liabilities at beginning of year		393,525			100,881			494,406			349,047			99,898			448,945
Claims incurred
Current period insured events		580,608			26,282			606,890			1,183,241			54,508			1,237,749
Prior period insured events		(1,355	)		(1,196	)		(2,551	)		(16,695	)		(2,529	)		(19,224	)
Total		579,253			25,086			604,339			1,166,546			51,979			1,218,525
Payments of losses and loss-adjustment expenses
Current period insured events		576,135			14,944			591,079			926,585			22,917			949,502
Prior period insured events		25,208			11,586			36,794			217,573			29,523			247,096
Total		601,343			26,530			627,873			1,144,158			52,440			1,196,598
Net claim liabilities at end of year		371,435			99,437			470,872			371,435			99,437			470,872
Reinsurance recoverable on claim liabilities		-			33,368			33,368			-			33,368			33,368
Claim liabilities at end of year	$	371,435		$	132,805		$	504,240		$	371,435		$	132,805		$	504,240

	Three months ended June 30, 2016									Six months ended June 30, 2016
	Managed Care			Other Business Segments *			Consolidated			Managed Care			Other Business Segments *			Consolidated
Claim liabilities at beginning of year	$	381,448		$	143,618		$	525,066		$	348,297		$	143,468		$	491,765
Reinsurance recoverable on claim liabilities		-			(39,871	)		(39,871	)		-			(40,714	)		(40,714	)
Net claim liabilities at beginning of year		381,448			103,747			485,195			348,297			102,754			451,051
Claims incurred
Current period insured events		596,909			25,950			622,859			1,192,499			51,840			1,244,339
Prior period insured events		(6,728	)		(686	)		(7,414	)		(6,028	)		(2,934	)		(8,962	)
Total		590,181			25,264			615,445			1,186,471			48,906			1,235,377
Payments of losses and loss-adjustment expenses
Current period insured events		583,381			16,557			599,938			948,420			21,653			970,073
Prior period insured events		46,743			10,204			56,947			244,843			27,757			272,600
Total		630,124			26,761			656,885			1,193,263			49,410			1,242,673
Net claim liabilities at end of year		341,505			102,250			443,755			341,505			102,250			443,755
Reinsurance recoverable on claim liabilities		-			38,109			38,109			-			38,109			38,109
Claim liabilities at end of year	$	341,505		$	140,359		$	481,864		$	341,505		$	140,359		$	481,864

* Other Business Segments include the Life Insurance and Property and Casualty segments, as well as intersegment eliminations.

As a result of differences between actual amounts and estimates of insured events in prior years, the amounts included as incurred claims for prior period insured events differ from anticipated claims incurred.

20

Triple-S Management Corporation

Notes to Condensed Consolidated Financial Statements

(dollar amounts in thousands, except per share data)

(unaudited)

The favorable developments in the claims incurred and loss-adjustment expenses for prior period insured events for the three months and six months ended June 30, 2017 and 2016 are due primarily to better than expected utilization trends.  Reinsurance recoverable on unpaid claims is reported as premium and other receivables, net in the accompanying consolidated financial statements.

The claims incurred disclosed in this table exclude the portion of the change in the liability for future policy benefits expense, which amounted to $6,945 and $13,635 during the three months and six months ended June 30, 2017, respectively.  The change in the liability for future policy benefits during the three months and six months ended June 30, 2016 amounted to $6,642 and $13,404, respectively.

The following is information about total incurred but not reported (IBNR) liabilities plus expected development on reported claims included in the liability for unpaid claims adjustment expenses for the Managed Care segment as of June 30, 2017.

Incurred Year	Total of IBNR Liabilities Plus Expected Development on Reported Claims
2015		68,022
2016		46,181
2017		256,656

21

Triple-S Management Corporation

Notes to Condensed Consolidated Financial Statements

(dollar amounts in thousands, except per share data)

(unaudited)

(7) Long-Term Borrowings

A summary of the borrowings entered by the Company is as follows:

	June 30,		December 31,
	2017		2016
Senior unsecured notes payable of $60,000 issued on December 2005; due December 2020. Interest is payable monthly at a fixed rate of 6.60%.	$	-	$	24,000
Secured loan payable of $11,187, payable in monthly installments of $137 through October 1, 2023, plus interest at a rate reset periodically of 100 basis points over selected LIBOR maturity (which was 2.00% at June 30, 2017.)		10,367		11,187
Secured loan payable of $20,150, payable in monthly installments of $84 through January 1, 2024, plus interest at a rate reset periodically of 275 basis points over selected LIBOR maturity (which was 3.90% at June 30, 2017.)		19,730		-
Secured loan payable of $4,116, payable in monthly installments of $49 through January 1, 2024, plus interest at a rate reset periodically of 325 basis points over selected LIBOR maturity (which was 4.40% at June 30, 2017.)		3,871		-
Total borrowings		33,968		35,187
Less: unamortized debt issuance costs		301		102
	$	33,667	$	35,085

On December 28, 2016, TSM entered into a $35,500 credit agreement with a commercial bank in Puerto Rico. The agreement consists of three term loans: (i) Term Loan A in the principal amount of $11,187, (ii) Term Loan B in the principal amount of $20,150 and (iii) Term Loan C in the principal amount of $4,116.  Term Loan A was used to refinance the outstanding balance of the previous $41,000 secured loan payable with the same commercial bank in Puerto Rico.  Proceeds from Term Loans B and C were received on January 11, 2017 and were used to prepay the outstanding principal amount plus accrued interest of the 6.6% Senior Unsecured Notes due January 2021 ($24,000), and fund a portion of a debt service reserve for the Loan (approximately $200).  Interest payable commenced on January 1, 2017, in the case of Term Loan A, and on February 1, 2017, in the case of Term Loan B and Term Loan C.  The Credit Agreement includes certain financial and non-financial covenants, including negative covenants imposing certain restrictions on the Corporation’s business.

On March 11, 2016 Triple-S Salud, Inc. (TSS) entered into a $30,000 revolving loan agreement with a commercial bank in Puerto Rico. This unused line of credit had an interest rate of LIBOR plus 220 basis points and contained certain financial and non-financial covenants that are customary for this type of facility. This revolving loan agreement matured on March 11, 2017, and was not renewed.

On April 18, 2017, Triple-S Advantage, Inc. (TSA) entered into a $10,000 revolving loan agreement with a commercial bank in Puerto Rico. This line of credit has an interest rate of 30-day LIBOR plus 25 basis points, matures on April 17, 2018, and includes certain financial and non-financial covenants that are customary for this type of facility.  As of June 30, 2017, there is no outstanding balance in this line of credit.

22

Triple-S Management Corporation

Notes to Condensed Consolidated Financial Statements

(dollar amounts in thousands, except per share data)

(unaudited)

(8) Pension Plan

The components of net periodic benefit cost for the three months and six months ended June 30 were as follows:

	Three months ended June 30,						Six months ended June 30,
	2017			2016			2017			2016
Components of net periodic benefit cost:
Service cost	$	-		$	878		$	-		$	2,128
Interest cost		1,798			1,939			3,596			4,701
Expected return on assets		(2,199	)		(2,054	)		(4,398	)		(4,980	)
Amortization of prior service benefit		-			(102	)		-			(246	)
Amortization of actuarial loss		86			831			172			2,014
Settlement loss		631			-			631			-
Net periodic benefit cost	$	316		$	1,492		$	1		$	3,617

Effective January 31, 2017, the Company froze the pay and service components of amounts used to calculate pension benefits for active employees who participated in the pension plan. Therefore, as of the Effective Date, active employees in the pension plan will not accrue additional benefits for future service and eligible compensation received.

Employer Contributions:  The Corporation disclosed in its audited consolidated financial statements for the year ended December 31, 2016 that it expected to contribute $4,000 to the pension program in 2017.  As of June 30, 2017, the Corporation has not made contributions to the pension program.

23

Triple-S Management Corporation

Notes to Condensed Consolidated Financial Statements

(dollar amounts in thousands, except per share data)

(unaudited)

(9) Comprehensive Income

The accumulated balances for each classification of other comprehensive income, net of tax, are as follows:

	Three months ended June 30,						Six months ended June 30,
	2017			2016			2017			2016
Net Unrealized Gain on Securities Beginning Balance	$	70,843		$	82,055		$	62,371		$	62,478
Other comprehensive income before reclassifications		7,639			18,193			16,380			37,817
Amounts reclassified from accumulated other comprehensive income		(3,243	)		(2,363	)		(3,512	)		(2,410	)
Net current period change		4,396			15,830			12,868			35,407
Ending Balance		75,239			97,885			75,239			97,885
Liability for Pension Benefits Beginning Balance		(19,923	)		(36,221	)		(19,976	)		(36,855	)
Amounts reclassified from accumulated other comprehensive income		53			445			106			1,079
Ending Balance		(19,870	)		(35,776	)		(19,870	)		(35,776	)
Accumulated Other Comprehensive Income Beginning Balance		50,920			45,834			42,395			25,623
Other comprehensive income before reclassifications		7,639			18,193			16,380			37,817
Amounts reclassified from accumulated other comprehensive income		(3,190	)		(1,918	)		(3,406	)		(1,331	)
Net current period change		4,449			16,275			12,974			36,486
Ending Balance	$	55,369		$	62,109		$	55,369		$	62,109

(10) Share-Based Compensation

Share-based compensation expense recorded during the three months and six months ended June 30, 2017 was $1,613 and $170, respectively. Share-based compensation expense recorded during the three months and six months ended June 30, 2016 was $1,228 and $2,313, respectively. The lower expense during the six months ended June 30, 2017 results from a decrease in the 2014 and 2015 grants expected performance shares payouts. There was no cash received from stock option exercises during the six months ended June 30, 2017 and 2016.

24

Triple-S Management Corporation

Notes to Condensed Consolidated Financial Statements

(dollar amounts in thousands, except per share data)

(unaudited)

(11) Net Income Available to Stockholders and Net Income per Share

The following table sets forth the computation of basic and diluted earnings per share:

	Three months ended June 30,				Six months ended June 30,
	2017		2016		2017		2016
Numerator for earnings per share:
Net income attributable to TSM available to stockholders	$	12,705	$	3,880	$	8,363	$	7,336
Denominator for basic earnings per share:
Weighted average of common shares		24,246,591		24,624,070		24,195,211		24,609,749
Effect of dilutive securities		36,687		45,364		50,220		58,892
Denominator for diluted earnings per share		24,283,278		24,669,434		24,245,431		24,668,641
Basic net income per share attributable to TSM	$	0.52	$	0.16	$	0.35	$	0.30
Diluted net income per share attributable to TSM	$	0.52	$	0.16	$	0.34	$	0.30

(12) Contingencies

The following information supplements and amends, as applicable, the disclosures in Note 24 to the Consolidated Financial Statements of the Company’s 2016 Annual Report on Form 10-K.  Our business is subject to numerous laws and regulations promulgated by Federal, Puerto Rico, USVI, Costa Rica, BVI, and Anguilla governmental authorities. Compliance with these laws and regulations can be subject to government review and interpretation, as well as regulatory actions unknown and unasserted at this time. The Commissioner of Insurance of Puerto Rico, as well as other Federal, Puerto Rico, USVI, Costa Rica, BVI, and Anguilla government authorities, regularly make inquiries and conduct audits concerning the Company's compliance with such laws and regulations. Penalties associated with violations of these laws and regulations may include significant fines and exclusion from participating in certain publicly funded programs and may require the Company to comply with corrective action plans or changes in our practices.

We are involved in various legal actions arising in the ordinary course of business. We are also defendants in various other litigations and proceedings, some of which are described below.  Where the Company believes that a loss is both probable and estimable, such amounts have been recorded.  Although we believe our estimates of such losses are reasonable, these estimates could change as a result of further developments in these matters. In other cases, it is at least reasonably possible that the Company may incur a loss related to one or more of the mentioned pending lawsuits or investigations, but the Company is unable to estimate the range of possible loss which may be ultimately realized, either individually or in the aggregate, upon their resolution.  The outcome of legal proceedings is inherently uncertain and pending matters for which accruals have not been established have not progressed sufficiently to enable us to estimate a range of possible loss, if any.  Given the inherent unpredictability of these matters, it is possible that an adverse outcome in one or more of these matters could have a material effect on the consolidated financial condition, operating results and/or cash flows of the Company.

Additionally, we may face various potential litigation claims that have not been asserted to date, including claims from persons purporting to have rights to acquire shares of the Company on favorable terms pursuant to agreements previously entered by our predecessor managed care subsidiary, Seguros de Servicios de Salud de Puerto Rico, Inc. (SSS), with physicians or dentists who joined our provider network to sell such new provider shares of SSS at a future date (Share Acquisition Agreements) or to have inherited such shares notwithstanding applicable transfer and ownership restrictions.

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Triple-S Management Corporation

Notes to Condensed Consolidated Financial Statements

(dollar amounts in thousands, except per share data)

(unaudited)

ASES Audits

On July 2, 2014, ASES notified TSS that the results of an audit conducted in connection with the government health plan contract for several periods between October 2005 and September 2013, reflected an overpayment of premiums made to TSS pursuant to prior contracts with ASES in the amount of $7,900. The alleged overpayments were related to duplicated payments or payments made for deceased members, and ASES requested the reimbursement of the alleged overpayment. On January 16, 2015, TSS filed an injunction against ASES under the case Triple-S Salud, Inc. v. Administración de Seguros de Salud de Puerto Rico. TSS contends that ASES’ request for reimbursement has no merits on several grounds, including a 2011 settlement between both parties covering the majority of the amount claimed by ASES, and that ASES, under the terms of the contracts, was responsible for certifying the membership. TSS also amended its claim to include the Puerto Rico Health Department (PRHD), as it asserts the PRHD is an indispensable party for the resolution of this matter and to seek the payment of approximately $5,000, since the premiums paid to TSS should have been higher than what ASES actually paid given the additional risk assumed by TSS. The case was assigned to a Special Commissioner, who on March 17, 2017 issued a report recommending the court to dismiss the complaint in favor of TSS. On May 26, 2017, the court issued a partial judgement dismissing the complaint in favor of TSS with respect to the alleged overpayments for the period between October 2005 and September 2010, which represented approximately $7,400 of the total alleged claim. After this partial dismissal, the only remaining claim pending to be adjudicated is for the alleged overpayments for the 2011-2013 period, which amounts to approximately $500. On July 27, 2017, ASES appealed the court’s partial judgement. TSS will oppose ASES’ appeal and will continue to conduct a vigorous defense of this matter.

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Triple-S Management Corporation

Notes to Condensed Consolidated Financial Statements

(dollar amounts in thousands, except per share data)

(unaudited)

(13) Segment Information

The operations of the Corporation are conducted principally through three business segments: Managed Care, Life Insurance, and Property and Casualty Insurance.  The Corporation evaluates performance based primarily on the operating revenues and operating income of each segment.  Operating revenues include premiums earned, net, administrative service fees, net investment income, and revenues derived from other segments.  Operating costs include claims incurred and operating expenses.  The Corporation calculates operating income or loss as operating revenues less operating costs.

The following tables summarize the operations by reportable segment:

	Three months ended June 30,						Six months ended June 30,
	2017			2016			2017			2016
Operating revenues:
Managed Care:
Premiums earned, net	$	661,365		$	668,932		$	1,301,512		$	1,347,312
Administrative service fees		4,548			4,520			8,927			9,603
Intersegment premiums/service fees		1,631			1,652			3,165			3,137
Net investment income		4,146			4,107			8,038			7,587
Total managed care		671,690			679,211			1,321,642			1,367,639
Life Insurance:
Premiums earned, net		39,858			38,591			80,156			77,557
Intersegment premiums		111			202			302			339
Net investment income		6,330			6,412			12,417			12,326
Total life insurance		46,299			45,205			92,875			90,222
Property and Casualty Insurance:
Premiums earned, net		21,668			21,526			43,216			42,714
Intersegment premiums		154			154			307			307
Net investment income		2,134			2,325			4,058			4,254
Total property and casualty insurance		23,956			24,005			47,581			47,275
Other segments: *
Intersegment service revenues		2,259			2,617			3,845			5,162
Operating revenues from external sources		1,154			959			2,154			1,815
Total other segments		3,413			3,576			5,999			6,977
Total business segments		745,358			751,997			1,468,097			1,512,113
TSM operating revenues from external sources		55			1			133			5
Elimination of intersegment premiums/service fees		(1,896	)		(2,008	)		(3,494	)		(3,783	)
Elimination of intersegment service revenues		(2,259	)		2,518			(3,845	)		(27	)
Other intersegment eliminations		-			(5,149	)		-			(5,162	)
Consolidated operating revenues	$	741,258		$	747,359		$	1,460,891		$	1,503,146

* Includes segments that are not required to be reported separately, primarily the data processing services organization and the health clinic.

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Triple-S Management Corporation

Notes to Condensed Consolidated Financial Statements

(dollar amounts in thousands, except per share data)

(unaudited)

	Three months ended June 30,						Six months ended June 30,
	2017			2016			2017			2016
Operating income (loss):
Managed care	$	2,920		$	(3,780	)	$	(15,662	)	$	(4,421	)
Life insurance		4,990			5,054			8,925			10,652
Property and casualty insurance		3,775			3,388			5,842			5,499
Other segments *		1			(182	)		144			(361	)
Total business segments		11,686			4,480			(751	)		11,369
TSM operating revenues from external sources		55			1			133			5
TSM unallocated operating expenses		(2,900	)		(2,707	)		(5,117	)		(5,874	)
Elimination of TSM intersegment charges		2,400			2,386			4,800			4,773
Consolidated operating income (loss)		11,241			4,160			(935	)		10,273
Consolidated net realized investment gains		4,054			1,520			4,390			1,578
Consolidated interest expense		(1,721	)		(1,954	)		(3,407	)		(3,836	)
Consolidated other income, net		587			3,859			3,112			4,734
Consolidated income before taxes	$	14,161		$	7,585		$	3,160		$	12,749
Depreciation and amortization expense:
Managed care	$	2,649		$	2,839		$	4,888		$	5,773
Life insurance		318			249			598			504
Property and casualty insurance		138			150			252			311
Other segments*		163			166			323			319
Total business segments		3,268			3,404			6,061			6,907
TSM depreciation expense		196			196			393			393
Consolidated depreciation and amortization expense	$	3,464		$	3,600		$	6,454		$	7,300

* Includes segments that are not required to be reported separately, primarily the data processing services organization and the health clinic.

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Triple-S Management Corporation

Notes to Condensed Consolidated Financial Statements

(dollar amounts in thousands, except per share data)

(unaudited)

	June 30, 2017			December 31, 2016
Assets:
Managed care	$	1,156,585		$	1,013,872
Life insurance		841,401			816,920
Property and casualty insurance		377,020			349,159
Other segments *		27,031			26,034
Total business segments		2,402,037			2,205,985
Unallocated amounts related to TSM:
Cash, cash equivalents, and investments		9,889			17,033
Property and equipment, net		22,130			22,380
Other assets		20,842			21,646
		52,861			61,059
Elimination entries-intersegment receivables and others		(49,530	)		(48,045	)
Consolidated total assets	$	2,405,368		$	2,218,999

* Includes segments that are not required to be reported separately, primarily the data processing services organization and the health clinic.

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Triple-S Management Corporation

Notes to Condensed Consolidated Financial Statements

(dollar amounts in thousands, except per share data)

(unaudited)

(14) Subsequent Events

The Company evaluated subsequent events through the date the financial statements were issued.  No events, other than those described in these notes, have occurred that require adjustment or disclosure pursuant to current Accounting Standards Codification.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

In this Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A), the “Corporation”, the “Company”, “TSM”, “we”, “us” and “our” refers to Triple-S Management Corporation and its subsidiaries.  The MD&A included in this Quarterly Report on Form 10-Q is intended to update the reader on matters affecting the financial condition and results of operations for the three months and six months ended June 30, 2017.  Therefore, the following discussion should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Annual Report on Form 10-K filed with the United States Securities and Exchange Commission as of and for the year ended December 31, 2016 and the MD&A included therein, and our unaudited consolidated financial statements and accompanying notes as of and for the three months and six months ended June 30, 2017 included in this Quarterly Report on Form 10-Q.

Cautionary Statement Regarding Forward-Looking Information

This Quarterly Report on Form 10-Q and other of our publicly available documents may include statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including, among other things: statements concerning our business and our financial condition and results of operations.  These statements are not historical, but instead represent our belief regarding future events, any of which, by their nature, are inherently uncertain and outside of our control.  These statements may address, among other things, future financial results, strategy for growth, and market position.  It is possible that our actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements.  The factors that could cause actual results to differ from those in the forward-looking statements are discussed throughout this form.  We are not under any obligation to update or alter any forward-looking statement (and expressly disclaims any such obligations), whether as a result of new information, future events or otherwise.  Factors that may cause actual results to differ materially from those contemplated by such forward looking statements include, but are not limited to, rising healthcare costs, business conditions and competition in the different insurance segments, government action and other regulatory issues.

Overview

We are one of the most significant players in the managed care industry in Puerto Rico and have over 55 years of experience in this industry.  We offer a broad portfolio of managed care and related products in the Commercial, Medicaid and Medicare Advantage markets.  In the Commercial market we offer products to corporate accounts, U.S. federal government employees, local government employees, individual accounts and Medicare Supplement.  We also participate in the Government of Puerto Rico Health Insurance Plan (a government of Puerto Rico-funded managed care program for the medically indigent that is similar to the Medicaid program in the U.S.) (Medicaid), by administering the provision of health benefits in designated service regions in Puerto Rico.  See details of the Medicaid contract in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2016 under the sub-caption “We are dependent on a small number of government contracts to generate a significant amount of the revenues of our managed care business.”

We have the exclusive right to use the Blue Cross Blue Shield (BCBS) name and mark throughout Puerto Rico, the U.S. Virgin Islands, Costa Rica, the British Virgin Islands and Anguilla.  As of June 30, 2017, we served approximately 1,006,000 members across all regions of Puerto Rico.  For the six months ended June 30, 2017 and 2016, our managed care segment represented approximately 92% of our total consolidated premiums earned.  We also have significant positions in the life insurance and property and casualty insurance markets.

We participate in the managed care market through our subsidiaries, Triple-S Salud, Inc. (TSS), Triple-S Advantage, Inc. (TSA), and Triple-S Blue, Inc. I.I. (TSB).  TSS, TSA and TSB are Blue Cross Blue Shield Association (BCBSA) licensees, which provides us with exclusive use of the Blue Cross and Blue Shield name and mark throughout Puerto Rico, the U.S. Virgin Islands, Costa Rica, the British Virgin Islands, and Anguilla.

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We participate in the life insurance market through our subsidiary, Triple-S Vida, Inc., and in the property and casualty insurance market through our subsidiary, Triple-S Propiedad, Inc. (TSP).

Intersegment revenues and expenses are reported on a gross basis in each of the operating segments but eliminated in the consolidated results.  Except as otherwise indicated, the numbers for each segment presented in this Quarterly Report on Form 10-Q do not reflect intersegment eliminations.  These intersegment revenues and expenses affect the amounts reported on the financial statement line items for each segment, but are eliminated in consolidation and do not change net income.  See note 13 of the Condensed Consolidated Financial Statements included in Quarterly Report on Form 10-Q.

Our revenues primarily consist of premiums earned, net and administrative service fees.  These revenues are derived from the sale of managed care products in the Commercial market to employer groups, individuals and government-sponsored programs, principally Medicare and the Government of Puerto Rico Health Insurance Plan.  Premiums are derived from insurance contracts and administrative service fees are derived from self-funded contracts, under which we provide a range of services, including claims administration, billing and membership services, among others.  Revenues also include premiums earned from the sale of property and casualty and life insurance contracts, and investment income and revenues derived from other segments.  Substantially all of our earnings are generated in Puerto Rico.

Claims incurred include the payment of benefits and losses, mostly to physicians, hospitals and other service providers, and to policyholders.  Each segment’s results of operations depend to a significant extent on their ability to accurately predict and effectively manage claims.  A portion of the claims incurred for each period consists of claims reported but not paid during the period, as well as a management and actuarial estimate of claims incurred but not reported during the period.  Operating expenses consist primarily of compensation, commission payments to brokers and other overhead business expenses.

We use operating income as a measure of performance of the underwriting and investment functions of our segments.  We also use the loss ratio and the operating expense ratio as measures of performance.  The loss ratio is claims incurred divided by premiums earned, net, multiplied by 100.  The operating expense ratio is operating expenses divided by premiums earned; net and administrative service fees, multiplied by 100.

Recent Developments

Puerto Rico Economy

During the past decade, Puerto Rico has been facing economic and fiscal challenges and its economy has been contracting.  In response to the Commonwealth of Puerto Rico (the “Commonwealth”) fiscal and economic crisis, on June 30, 2016, the U.S. Congress enacted the Puerto Rico Oversight, Management and Economic Stability Act (“PROMESA”), which, among other things, established a Federally-appointed oversight board (the “Oversight Board”) comprised of seven members with ample powers over the finances of the Commonwealth and its instrumentalities.  PROMESA also established a temporary stay on litigation to enforce rights or remedies related to financial liabilities of the Commonwealth, its instrumentalities and municipalities, which expired on May 1, 2017.  Finally, PROMESA established two separate mechanisms to restructure the debts of the Commonwealth, its public corporations and municipalities. The first mechanism permits modifications of financial indebtedness with the consent of a supermajority of affected financial creditors. The second mechanism, known as Title III, is a court-supervised debt-adjustment process, which is modeled after Chapter 9 of the U.S. Bankruptcy Code.

On February 28, 2017, the Governor of Puerto Rico submitted a 10-year fiscal plan to the Oversight Board, for its review and approval.  After certain revisions, a final plan was approved by the Oversight Board on March 13, 2017, which includes spending reductions of $25.7 billion. The plan implies larger concessions from bondholders since there would be approximately $8 billion available for debt service payments over the next 10 years, compared to around $35 billion that is owed over that period.  The plan also proposes (i) certain significant changes to the Commonwealth’s healthcare delivery model in order to reduce expenses and (ii) the elimination of subsidies to the municipalities, many of which have contracts for the provision of healthcare or other insurance products with our subsidiaries. The Oversight Board also required and approved fiscal plans for several government instrumentalities, including the Puerto Rico Aqueduct and Sewer Authority, the Puerto Rico Electric Power Authority (“PREPA”), and the Puerto Rico Highways and Transportation Authority (“PRHTA”), among others.

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On May 3, 2017, after not reaching an agreement with its creditors, the Oversight Board filed an order seeking the protection of the provisions of Title III of PROMESA for the Commonwealth. Subsequently, the Oversight Board filed Title III petitions with respect to the Puerto Rico Sales Tax Financing Corporation (“COFINA” by its Spanish acronym), which issued the sales and use tax-backed bonds, the Employee Retirement System, PRHTA and PREPA. While the proceedings under Title III of PROMESA are ongoing, all enforcement and collection actions against the Commonwealth and these instrumentalities by its creditors are stayed. As a result of this court-supervised debt-adjustment process, the principal and interest payments due on general obligation, sales and use tax-backed bonds, and bonds from these government instrumentalities will likely be restructured and such restructuring could lead to significant additional losses on such holdings. Further, on May 30, 2017, pursuant to a court order under COFINA’s Title III proceeding, funds held by the trustee of the COFINA bonds have not been applied for the payment of such bonds pending the resolution of various legal disputes. On June 6, 2017, S&P downgraded COFINA to “D”. Although as of the date hereof, these entities are the only instrumentalities for which the Oversight Board has sought the restructuring authority provided by PROMESA, in the future, the Oversight Board may use the restructuring mechanisms of PROMESA for other instrumentalities of the Commonwealth, including it municipalities.

Although the Oversight Board has not sought the protection of Title III of PROMESA for the Puerto Rico Health Insurance Administration (“ASES” by its Spanish acronym), the instrumentality responsible for the administration of the Government’s health plan, ASES may be affected by the Commonwealth’s fiscal plan and the proceedings commenced for the Commonwealth under Title III of PROMESA because its state-based funding is solely dependent on appropriations from the Government’s general fund.  Notwithstanding the Government’s statement in recent legislation that its public policy includes guaranteeing the continuity of public services in essential areas such as health, security, education, social work and development, among others, it is uncertain how the Commonwealth’s Title III proceeding will affect ASES and the contracts administered by it.

If the liquidity of the Government of Puerto Rico, its agencies, municipalities and public corporations becomes significantly affected as a result of their inability to raise funding in the market or generate enough revenues, we may face credit losses in our premium and fees receivables from these and other government related entities.  As of June 30, 2017, the Company had premiums and other receivables of $63.6 million from the Government of Puerto Rico, including its agencies, municipalities and public corporations with a related allowance for doubtful receivables of $14.9 million.  We also hold several positions categorized as Obligations of the Commonwealth of Puerto Rico, including one COFINA bond, which are susceptible to the aforementioned recent developments in the economy, see note 3 to the unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q.

Legislation

On July 23, 2017, the Commonwealth enacted Act 47-2017 (“Act 47”), which, among other things, imposes restrictions on utilization review (“UR”) processes related to hospitalizations and the ability of  managed care organizations (“MCO”s), to conduct internal review processes at any level of appeal. Act 47 also creates a statutory cause of action against MCOs for intervening with the “diagnostic and medical treatment of a patient” making them joint and severally liable in those cases in which the patient suffers damages as a direct or indirect result of such intervention. Act 47 orders the Puerto Rico Patient's Advocate Office and the Puerto Rico Health Insurance Administration (“ASES”), to adopt the necessary regulations to ensure compliance with the provisions of Act 47 within 60 days of its enactment. Act 47 specifically orders ASES to regulate UR according to the United States’ national standards. We are closely monitoring how Act 47 and its regulations will impact the Company.

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Puerto Rico Government Health Reform Program

On June 30, 2017, TSS agreed to extend its contract with ASES for the provision of health services in the Metro North and West regions of the Puerto Rico Government’s health insurance program, which expired on June 30, 2017, for a three-month period beginning July 1, 2017 and ending September 30, 2017.  This extension is intended to ensure the continuity of services while the parties conclude negotiations for the renewal of the contract through the remainder of the Puerto Rico Government’s 2017-2018 fiscal year, which ends June 30, 2018.  Under the contract extension, ASES will increase its payment to TSS from a rate of $165.93 to $183.38 per member per month (PMPM) for the Metro North region and from $138.37 to $148.99 PMPM for the West region.  The new rates reflect cost and utilization trends for the 2016-2017 fiscal year and are subject to CMS approval, which is expected to occur during the 90 day extension period.  ASES will continue to pay current PMPM rates until CMS approves new PMPM rates, at which time ASES will pay the cumulative difference between both rates.  Upon reaching an agreement on outstanding terms of the contract renewal, the new rates will also apply for the remainder of the 2017-2018 fiscal year. See Item 1A.   Risk Factors—Risks Related to Our Business – “We are dependent on a small number of government contracts to generate a significant amount of the revenues of our managed care business.’’ included in our Annual Report on Form 10-K for the year ended December 31, 2016.

Recent Accounting Standards

For a description of recent accounting standards, see note 2 to the unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q.

Managed Care Membership

	As of June 30,
	2017		2016
Managed care enrollment:
Commercial 1		498,393		528,902
Medicare		121,240		116,215
Medicaid		386,070		402,661
Total		1,005,703		1,047,778
Managed care enrollment by funding arrangement:
Fully-insured		839,299		868,157
Self-insured		166,404		179,621
Total		1,005,703		1,047,778

(1) Commercial membership includes corporate accounts, self-funded employers, individual accounts, Medicare Supplement, Federal government employees and local government employees.

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Consolidated Operating Results

The following table sets forth the Corporation’s consolidated operating results.  Further details of the results of operations of each reportable segment are included in the analysis of operating results for the respective segments.

	Three months ended June 30,				Six months ended June 30,
(dollar amounts in millions)	2017		2016		2017			2016
Revenues:
Premiums earned, net	$	722.9	$	729.1	$	1,425.2		$	1,467.6
Administrative service fees		4.5		4.5		8.9			9.6
Net investment income		12.7		12.9		24.7			24.2
Other operating revenues		1.1		0.9		2.1			1.7
Total operating revenues		741.2		747.4		1,460.9			1,503.1
Net realized investment gains		4.1		1.5		4.4			1.6
Other income, net		0.6		3.8		3.1			4.7
Total revenues		745.9		752.7		1,468.4			1,509.4
Benefits and expenses:
Claims incurred		611.3		622.1		1,232.2			1,248.8
Operating expenses		118.7		121.1		229.6			244.1
Total operating expenses		730.0		743.2		1,461.8			1,492.9
Interest expense		1.7		1.9		3.4			3.8
Total benefits and expenses		731.7		745.1		1,465.2			1,496.7
Income before taxes		14.2		7.6		3.2			12.7
Income tax expense (benefit)		1.5		3.7		(5.2	)		5.4
Net income attributable to TSM		12.7		3.9		8.4			7.3

Three Months Ended June 30, 2017 Compared to Three Months Ended June 30, 2016

Operating Revenues

Consolidated premiums earned, net for the three months ended June 30, 2017 decreased by $6.2 million, or 0.9%, to $722.9 million when compared to the three months ended June 30, 2016.  This decrease primarily reflects lower premiums in the Managed Care segment by $7.6 million mainly due to lower Medicare risk score revenue adjustments and lower membership in the segment’s Medicaid and Commercial businesses. These decreases were partially offset by higher Life Insurance premiums, and by the Medicaid profit sharing accrual recorded during the three months ended June 30, 2016.

Net Realized Investment Gains

Consolidated net realized investment gains are the result of sales of debt and equity securities classified as available for sale, following our asset/liability management and tax planning strategies.  The net realized gains for the period ending June 30, 2016 were partially offset by $1.4 million other-than-temporary impairments related to certain equity investments.

Other Income, Net

The $3.2 million decrease in consolidated other income reflects the collection of interest charged for late payment related to the current Medicaid contract during the three months ended June 30, 2016.

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Claims Incurred

Consolidated claims incurred decreased by $10.8 million, or 1.7%, to $611.3 million during the three months ended June 30, 2017, mostly due to lower claims in the Managed Care segment.  The decrease in Managed Care claims primarily reflects lower claims incurred in the segment’s Commercial and Medicaid businesses primarily driven by lower enrollment, better claim experience in the Commercial business, offset in part by higher pharmacy claims trends in the Medicare and Medicaid businesses, and enhanced benefits in the Medicare 2017 offerings.  The consolidated loss ratio decreased by 70 basis points to 84.6%.

Operating Expenses

Consolidated operating expenses during the three months ended June 30, 2017 decreased by $2.4 million, or 2.0%, to $118.7 million. The lower operating expenses are mostly the result of the decrease in the Health Insurance Providers Fee (HIP fee) of $10.7 million due to the 2017 tax holiday, offset by increase in general operating expenses totaling approximately $8.1 million.  For the three months ended June 30, 2017, the consolidated operating expense ratio decreased 20 basis points to 16.3%.

Income Taxes

Consolidated income tax expense decreased by $2.2 million, to an expense of $1.5 million for the three months ended June 30, 2017.  The year over year change primarily results from the prior year reassessment done by the Property and Casualty segment of the tax rate used to measure several temporary differences, which increased the deferred tax rate from 20% to 39%, resulting in an increase to the 2016 deferred tax expense of $2.6 million.

Six Months Ended June 30, 2017 Compared to Six Months Ended June 30, 2016

Operating Revenues

Consolidated premiums earned, net for the six months ended June 30, 2017 decreased by $42.4 million, or 2.9%, to $1,425.2 million when compared to the six months ended June 30, 2016.  This decrease primarily reflects lower premiums in the Managed Care segment by $45.7 million mainly due to lower membership in the segment’s Medicaid and Commercial businesses.

Net Realized Investment Gains

Consolidated net realized investment gains are the result of sales of debt and equity securities classified as available for sale, following our asset/liability management and tax planning strategies.  The net realized gains for the period ended June 30, 2016 were partially offset by $1.4 million other-than-temporary impairments related to certain equity investments.

Other Income, Net

The $1.6 million decrease in consolidated other income reflects the collection of interest charged for late payment related to the current Medicaid contract during the six months ended June 30, 2016.

Claims Incurred

Consolidated claims incurred decreased by $16.6 million, or 1.3%, to $1,232.2 million during the six months ended June 30, 2017, mostly due to lower claims in the Managed Care segment.  The decrease in Managed Care claims primarily reflects lower claims incurred in the segment’s Commercial and Medicaid businesses primarily driven by lower enrollment, better claim experience in the Commercial business, offset in part by higher pharmacy claims trends in the Medicare and Medicaid businesses, and enhanced benefits in the Medicare 2017 offerings.  The consolidated loss ratio increased by 140 basis points to 86.5%.

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Operating Expenses

Consolidated operating expenses during the six months ended June 30, 2017 decreased by $14.5 million, or 5.9%, to $229.6 million as compared to the operating expenses during the six months ended June 30, 2016.  The lower operating expenses and expense ratio are mostly the result of the decrease in the HIP Fee of $21.6 million due to the 2017 moratorium offset by increase in general operating expenses totaling approximately $6.7 million.  For the six months ended June 30, 2017, the consolidated operating expense ratio decreased 50 basis points to 16.0%.

Income Taxes

Consolidated income taxes decreased by $10.6 million, to a net benefit of $5.2 million for the six months ended June 30, 2017.  The year over year change in income taxes primarily results from a loss before taxes incurred in the 2017 period in the Managed Care segment.

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Managed Care Operating Results

	Three months ended June 30,						Six months ended June 30,
(dollar amounts in millions)	2017			2016			2017			2016
Operating revenues:
Medical premiums earned, net:
Commercial	$	203.3		$	215.0		$	408.4		$	430.5
Medicare		266.6			273.1			524.3			534.0
Medicaid		191.8			181.2			369.5			383.4
Medical premiums earned, net		661.7			669.3			1,302.2			1,347.9
Administrative service fees		5.8			5.8			11.4			12.1
Net investment income		4.1			4.1			8.0			7.6
Total operating revenues		671.6			679.2			1,321.6			1,367.6
Medical operating costs:
Medical claims incurred		579.2			590.2			1,166.5			1,186.5
Medical operating expenses		89.5			92.8			170.8			185.5
Total medical operating costs		668.7			683.0			1,337.3			1,372.0
Medical operating income (loss)	$	2.9		$	(3.8	)	$	(15.7	)	$	(4.4	)
Additional data:
Member months enrollment:
Commercial:
Fully-insured		1,001,638			1,063,422			2,014,843			2,159,704
Self-funded		501,500			540,221			1,008,667			1,083,247
Total Commercial member months		1,503,138			1,603,643			3,023,510			3,242,951
Medicare member months		363,257			351,108			726,984			715,535
Medicaid member months		1,169,090			1,206,345			2,342,363			2,428,237
Total member months		3,035,485			3,161,096			6,092,857			6,386,723
Medical loss ratio		87.5	%		88.2	%		89.6	%		88.0	%
Operating expense ratio		13.4	%		13.7	%		13.0	%		13.6	%

Three Months Ended June 30, 2017 Compared to Three Months Ended June 30, 2016

Medical Operating Revenues

Medical premiums earned for the three months ended June 30, 2017 decreased by $7.6 million, or 1.1%, to $661.7 million when compared to the medical premiums earned during the three months ended June 30, 2016.  This decrease is principally the result of the following:

• Premiums earned by the Commercial business decreased by $11.7 million, or 5.4%, to $203.3 million.  This fluctuation primarily reflects lower fully-insured member enrollment during the quarter of approximately 61,800 member months and $3.6 million related to the suspension of the HIP fee pass-through; offset by an increase in average premium rates of approximately 5%.

• Premiums earned by the Medicare business decreased by $6.5 million, or 2.4%, to $266.6 million, primarily reflecting a lower risk score revenue adjustment in 2017 by $17.5 million, lower average premium rates due to a reduction in the 2017 Medicare reimbursement rates; offset in part by an increase in member month enrollment of approximately 12,000 lives.

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• Premiums earned by the Medicaid business amounted to $191.8 million, $10.6 million, or 5.8% higher than the same period last year.  Increase primarily reflects the $14.6 million profit sharing accrual that decreased premiums during the 2016 period and the $11.6 million premium collection related to our compliance with the contract’s incentive metrics. These increases were partially offset by lower fully-insured member months enrollment by approximately 37,000 lives, the 4% decrease in the average premium rates that went into effect July 1, 2016, and $2.6 million related to the suspension of the HIP fee pass-through as a result of the 2017 moratorium.

Medical Claims Incurred

Medical claims incurred during the three months ended June 30, 2017 decreased by $11.0 million, or 1.9%, to $579.2 million when compared to the three months ended June 30, 2016.  The medical loss ratio (MLR) of the segment decreased 70 basis points during the 2017 period, to 87.5%.  This fluctuation is primarily attributed to the net effect of the following:

• The medical claims incurred of the Commercial business decreased by $28.2 million, or 14.7%, during the 2017 period mostly driven by lower enrollment. The MLR, at 80.6%, was 860 basis point lower than the same quarter last year.  Adjusting for the effect of prior period reserve developments, the Commercial MLR would have been 83.1%, 450 basis points lower than the adjusted MLR for last year primarily reflecting claim trends that are lower than our premium trends following the continuity of our underwriting discipline.

• The medical claims incurred of the Medicare business increased by $5.9 million, or 2.5%, during the 2017 period and its MLR increased by 430 basis points, to 90.9%.  Adjusting for the effect of prior period reserve developments in 2017 and 2016 and moving the risk score revenue adjustments to their corresponding period, the Medicare MLR would have been approximately 94.3% this quarter, about 300 basis points higher than last year, primarily reflecting higher trends in Part B drugs, pharmacy benefits and the improvement of benefits in 2017 products taking advantage of the HIP fee moratorium.

• The medical claims incurred in the Medicaid business increased by $11.3 million, or 7.0%, during the 2017 period and its MLR increased by 100 basis points, to 90.3%.    Adjusting for the effect of prior period reserve developments in 2017 and 2016, as well as for the impact of the profit sharing accrual and this year’s quality incentive premiums, the Medicaid MLR would have been approximately 96.0% this quarter, about 580 basis points higher than last year.  The higher MLR primarily reflects increased pharmacy and outpatient claim trends and the lower premium rates that went into effect July 1, 2016.

Medical Operating Expenses

Medical operating expenses for the three months ended June 30, 2017 decreased by $3.3 million, or 3.6%, to $89.5 million when compared to the three months ended June 30, 2016.  The operating expense ratio decreased by 30 basis points to 13.4% in 2017.  The lower operating expenses and expense ratio are mostly the result of the decrease in the HIP Fee of $10.7 million due to the 2017 moratorium offset by increase in personnel costs, general operating expenses of totaling approximately $6.9 million.

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Six Months Ended June 30, 2017 Compared to Six Months Ended June 30, 2016

Medical Operating Revenues

Medical premiums earned for the six months ended June 30, 2017 decreased by $45.7 million, or 3.4%, to $1,302.2 million when compared to the medical premiums earned during the six months ended June 30, 2016.  This decrease is principally the result of the following:

• Premiums earned by the Commercial business decreased by $22.1 million, or 5.1%, to $408.4 million.  This fluctuation primarily reflects lower fully-insured enrollment during the year of approximately 144,900 member months and $7.2 million related to the suspension of the HIP fee pass-through; offset by an increase in average premium rates of approximately 5%.

• Premiums earned by the Medicaid business decreased by $13.9 million, or 3.6% to $369.5 million.  Decrease primarily reflects lower fully-insured member months enrollment by approximately 85,900 lives, and the 4.0% decrease in average premium rates that went into effect July 1, 2016.  Also contributing to the lower premiums during this period was a $5.3 million related to the suspension of the HIP fee pass-through as a result of the 2017 moratorium.  Decreases are partially offset by the impact of the profit sharing accrual in the 2016 period that decreased premiums by $10.6 million and by the $11.6 million premium collection related to our compliance with the contract’s quality incentive metrics.

• Premiums earned by the Medicare business decreased by $9.7 million, or 1.8%, to $524.3 million.  Decrease primarily reflects lower risk score revenue by $20.9 million as well as lower average premium rates due to a reduction in the 2017 Medicare reimbursement rates.  These decreases were partially offset by an increase in member month enrollment of approximately 11,000 lives.

Medical Claims Incurred

Medical claims incurred during the six months ended June 30, 2017 decreased by $20.0 million, or 1.7%, to $1,166.5 million when compared to the six months ended June 30, 2016.  The MLR of the segment increased 160 basis points during the 2017 period, to 89.6%.  This fluctuation is primarily attributed to the net effect of the following:

• The medical claims incurred of the Commercial business decreased by $35.8 million, or 9.6%, during the 2017 period mostly driven by lower enrollment. The MLR, at 82.1%, was 390 basis point lower than the same period last year.  Adjusting for the effect of prior period reserve developments, the Commercial MLR would have been 82.8%, 390 basis points lower than the adjusted MLR for last year primarily reflecting claim trends that are lower than our premium trends following the continuity of our underwriting discipline.

• The medical claims incurred in the Medicaid business increased by $3.0 million, or 0.9%, during the 2017 period and its MLR increased by 420 basis points, to 93.9%.  Adjusting for the effect of prior period reserve developments in 2017 and 2016, as well as for the impact of the profit sharing accrual and this year’s quality incentive premiums, the Medicaid MLR would have been approximately 95.4% this quarter, about 620 basis points higher than last year.  The higher MLR primarily reflects increased pharmacy and outpatient claim trends and the lower premium rates that went into effect July 1, 2016.

• The medical claims incurred of the Medicare business increased by $12.9 million, or 2.7%, during the 2017 period and its MLR increased by 410 basis points, to 92.4%.  Adjusting for the effect of prior period reserve developments in 2017 and 2016 and moving the risk score revenue adjustments to their corresponding period, the Medicare MLR would have been approximately 94.1% this quarter, about 210 basis points higher than last year, primarily reflecting higher trends in Part B drugs, pharmacy benefits and the improvement of benefits in 2017 products taking advantage of the HIP fee moratorium.

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Medical Operating Expenses

Medical operating expenses for the six months ended June 30, 2017 decreased by $14.7 million, or 7.9%, to $170.8 million when compared to the six months ended June 30, 2016.  The operating expense ratio decreased by 60 basis points to 13.0% in 2017.  The lower operating expenses and expense ratio are mostly the result of the decrease in the HIP Fee of $21.6 million due to the 2017 moratorium offset by increase in general operating expenses of totaling approximately $6.7 million.

Life Insurance Operating Results

	Three months ended June 30,						Six months ended June 30,
(dollar amounts in millions)	2017			2016			2017			2016
Operating revenues:
Premiums earned, net:
Premiums earned	$	41.8		$	39.7		$	83.6		$	79.5
Assumed earned premiums		0.5			1.2			1.4			2.7
Ceded premiums earned		(2.3	)		(2.1	)		(4.5	)		(4.3	)
Premiums earned, net		40.0			38.8			80.5			77.9
Net investment income		6.3			6.4			12.4			12.3
Total operating revenues		46.3			45.2			92.9			90.2
Operating costs:
Policy benefits and claims incurred		21.9			21.9			45.6			43.4
Underwriting and other expenses		19.4			18.2			38.4			36.2
Total operating costs		41.3			40.1			84.0			79.6
Operating income	$	5.0		$	5.1		$	8.9		$	10.6
Additional data:
Loss ratio		54.8	%		56.4	%		56.6	%		55.7	%
Operating expense ratio		48.5	%		46.9	%		47.7	%		46.5	%

Three Months Ended June 30, 2017 Compared to Three Months Ended June 30, 2016

Operating Revenues

Premiums earned, net increased by $1.2 million, or 3.1% to $40.0 million as the result of premium growth in the segment’s Individual Life and Cancer lines of business, as well as growth in the Costa Rica operations.

Policy Benefits and Claims Incurred

Policy benefits and claims incurred remained at $21.9 million, the same as the 2016 period, despite the higher volume of business during the year.  The loss ratio for the period decreased to 54.8% in 2017, or 160 basis points, reflecting the higher volume of premiums during this quarter.

Underwriting and Other Expenses

Increase in underwriting and other expenses of $1.2 million, or 6.6%, to $19.4 million mostly reflects higher commissions following the segment’s premium growth.  In addition, the segment has incurred in higher development and marketing expenses related to the expansion of the Costa Rica operations.  As a result, the segment’s operating expense ratio increased to 48.5%, or 160 basis points.

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Six Months Ended June 30, 2017 Compared to Six Months Ended June 30, 2016

Operating Revenues

Premiums earned, net increased by $2.6 million, or 3.3% to $80.5 million as the result of premium growth in the segment’s Individual Life and Cancer lines of business, as well as growth in the Costa Rica operations.

Policy Benefits and Claims Incurred

Policy benefits and claims incurred increased by $2.2 million, or 5.1% to $45.6 million, mostly as the result of the higher volume of business during the year, particularly in the Cancer and Individual Life lines of business.  The loss ratio for the period increased to 56.6% in 2017, or 90 basis points, reflecting the higher volume in the Cancer line of business, which has a higher loss ratio, as well as to a higher claims experience in this particular line of business.

Underwriting and Other Expenses

Increase in underwriting and other expenses of $2.2 million, or 6.1%, to $38.4 million mostly reflects higher commissions following the segment’s premium growth mentioned above.  In addition, the segment has incurred in higher development and marketing expenses related to the expansion of the Costa Rica operations.  As a result, the segment’s operating expense ratio increased to 47.7%, or 120 basis points.

Property and Casualty Insurance Operating Results

	Three months ended June 30,						Six months ended June 30,
(Dollar amounts in millions)	2017			2016			2017			2016
Operating revenues:
Premiums earned, net:
Premiums written	$	46.4		$	40.9		$	73.8		$	68.5
Premiums ceded		(16.6	)		(13.1	)		(26.7	)		(23.5	)
Change in unearned premiums		(8.0	)		(6.1	)		(3.6	)		(2.0	)
Premiums earned, net		21.8			21.7			43.5			43.0
Net investment income		2.1			2.3			4.1			4.3
Total operating revenues		23.9			24.0			47.6			47.3
Operating costs:
Claims incurred		10.9			10.8			21.5			20.6
Underwriting and other expenses		9.3			9.8			20.3			21.2
Total operating costs		20.2			20.6			41.8			41.8
Operating income	$	3.7		$	3.4		$	5.8		$	5.5
Additional data:
Loss ratio		50.0	%		49.8	%		49.4	%		47.9	%
Operating expense ratio		42.7	%		45.2	%		46.7	%		49.3	%

Three Months Ended June 30, 2017 Compared to Three Months Ended June 30, 2016

Operating Revenues

Total premiums written increased by $5.5 million, or 13.4%, to $46.4 million driven by higher sales of Commercial products, particularly Commercial property products, mainly as a result of the acquisition of a large account during the 2017 period.

The premiums ceded to reinsurers increased by $3.5 million, or 26.7%, mostly reflecting higher premiums written in Commercial insurance products during the three months ended June 30, 2017.

The change in unearned premiums presents an increase of $1.9 million mostly reflecting the segments higher premiums written in 2017.

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Claims Incurred

Claims incurred increased by $0.1 million, or 0.9%, to $10.9 million during the three months ended June 30, 2017.  The loss ratio increased by 20 basis points, to 50.0% during this period.

Underwriting and Other Expenses

Underwriting and other operating expenses decreased by $0.5 million, or 5.1%, to $9.3 million mostly due to a lower net commission expense during the three months ended June 30, 2017.  The operating expense ratio was 42.7%, 250 basis points lower than last year.

Six Months Ended June 30, 2017 Compared to Six Months Ended June 30, 2016

Operating Revenues

Total premiums written increased by $5.3 million, or 7.7%, to $73.8 million, driven by higher sales of Commercial property and Commercial liability products, mainly as a result of the acquisition of a large account, as well as to higher sales of Personal package products.

The premiums ceded to reinsurers increased by $3.2 million, or 13.6%, mostly reflecting higher premiums written in Commercial insurance products during the six months ended June 30, 2017.

The change in unearned premiums presents an increase of $1.6 million mostly reflecting the segments higher premiums written in 2017.

Claims Incurred

Claims incurred increased by $0.9 million, or 4.4%, to $21.5 million during the six months ended June 30, 2017.  The loss ratio increased by 150 basis points, to 49.4% during this period, primarily as a result of an unfavorable loss experience in the Commercial and Personal Auto lines of business.

Underwriting and Other Expenses

Underwriting and other operating expenses decreased by $0.9 million, or 4.2%, to $20.3 million mostly due to lower personnel costs.  The operating expense ratio was 46.7%, 260 basis points lower than last year.

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Liquidity and Capital Resources

Cash Flows

A summary of our major sources and uses of cash for the periods indicated is presented in the following table:

	Six months ended June 30,
(dollar amounts in millions)	2017			2016
Sources (uses) of cash:
Cash provided by (used in) operating activities	$	133.7		$	(10.6	)
Net purchases of investment securities		(43.0	)		(76.3	)
Net capital expenditures		(8.7	)		(2.7	)
Proceeds from long-term borrowings		24.3			-
Payments of long-term borrowings		(25.5	)		(0.8	)
Proceeds from policyholder deposits		8.2			7.9
Surrenders of policyholder deposits		(10.5	)		(6.9	)
Repurchase and retirement of common stock		-			(14.6	)
Other		(9.4	)		2.3
Net increase (decrease) in cash and cash equivalents	$	69.1		$	(101.7	)

Cash flow from operating activities increased by $144.3 million for the six months ended June 30, 2017 as compared to the six months ended June 30, 2016, principally due to an increase in premium collections of $85.0 million, lower claims paid by $44.0 million, a decrease in cash paid to suppliers and employees of $9.2 million, and lower incomes tax paid by $5.7 million.   The higher premium collections follow the collection in advance of the July 2017 Medicare premiums from CMS.

During the six months ended June 30, 2017, we received the remaining $24.3 million from a loan with a commercial bank related with a credit agreement entered into in December 2016.  These proceeds were used to prepay the outstanding principal amount of $24.0 million of the 6.6% senior unsecured notes.  See note 7 to the unaudited condensed consolidated financial statements included in this quarterly report on Form 10-Q.

There were no repurchase and retirement of common stock during the six months ended June 30, 2017.

The fluctuation in the Other uses/sources of cash is attributed to changes in the amount of outstanding checks over bank balances.

Net capital expenditures increased by $6.0 million during the six months ended June 30, 2017 as compared to the six months ended June 30, 2016, principally due to initiatives related to information technology in the Managed Care segment.

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Financing and Financing Capacity

We have several short-term facilities available to address timing differences between cash receipts and disbursements.  These short-term facilities are mostly in the form of arrangements to sell securities under repurchase agreements.  As of June 30, 2017, we had $60.0 million of available credit under these facilities.  There are no outstanding short-term borrowings under these facilities as of June 30, 2017.

On December 21, 2005, we issued and sold $60.0 million of our 6.6% senior unsecured notes originally due December 2020 (the 6.6% notes).  These unsecured notes were paid in full on January 11, 2017.

On December 28, 2016, TSM entered into a $35.5 million credit agreement with a commercial bank in Puerto Rico. The agreement consists of three term loans: (i) Term Loan A in the principal amount of $11.2 million, (ii) Term Loan B in the principal amount of $20.2 million and (iii) Term Loan C in the principal amount of $4.1 million. Term Loan A matures in October 2023 while the Term Loans B and C mature in January 2024.  Term Loan A was used to refinance the previous $41.0 million secured loan payable with the same commercial bank in Puerto Rico.  Proceeds from Term Loans B and C were received on January 11, 2017 and were used to prepay the outstanding principal amount plus accrued interest of the 6.6% senior unsecured notes due January 2021 ($24.0 million).  Pursuant to the credit agreement, interest is payable on the outstanding balance of the Loan at the following annual rate: (i) 1% over LIBOR for Term Loan A, (ii) 2.75% over LIBOR for Term Loan B, and (iii) 3.25% over LIBOR for Term Loan C.  The loan includes certain financial and non-financial covenants, which are customary for this type of facility, including but not limited to, restrictions on the granting of certain liens, limitations on acquisitions and limitations on changes in control and dividends.  Failure to meet these covenants may trigger the accelerated payment of the outstanding balance.  As of June 30, 2017 we are in compliance with these covenants.

On March 11, 2016 TSS entered into a $30.0 million revolving loan agreement with a commercial bank in Puerto Rico. This unused line of credit had an interest rate of LIBOR plus 220 basis points and includes certain financial and non-financial covenants that are customary for this type of facility. This revolving loan agreement matured on March 11, 2017, and was not renewed.

On April 18, 2017, TSA entered into a $10.0 million revolving loan agreement with a commercial bank in Puerto Rico. This line of credit has an interest rate of 30-day LIBOR plus 25 basis points, and contains certain financial and non-financial covenants that are customary for this type of facility.  As of June 30, 2017, there is no outstanding balance in this line of credit.

We anticipate that we will have sufficient liquidity to support our currently expected needs.

Further details regarding the senior unsecured notes and the credit agreements are incorporated by reference to “Item 7.—Management Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2016.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are exposed to certain market risks that are inherent in our financial instruments, which arise from transactions entered into in the normal course of business.  We have exposure to market risk mostly in our investment activities.  For purposes of this disclosure, “market risk” is defined as the risk of loss resulting from changes in interest rates and equity prices.  No material changes have occurred in our exposure to financial market risks since December 31, 2016.  A discussion of our market risk is incorporated by reference to “Item 7A. Quantitative and Qualitative Disclosures about Market Risk” of our Annual Report on Form 10-K for the year ended December 31, 2016.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

In connection with the preparation of this Quarterly Report on Form 10-Q, management, under the supervision and with the participation of the chief executive officer and chief financial officer, conducted an evaluation of the effectiveness of the “disclosure controls and procedures” as of the end of this period (as such term is defined under Exchange Act Rule 13a-15(e)) of the Corporation and its subsidiaries. Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms and that such information is accumulated and communicated to management, including the chief executive officer and chief financial officer, to allow timely decisions regarding required disclosures. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.  There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility that judgments in decision-making can be faulty, and breakdowns as a result of simple errors or mistake. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.  The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Based on their evaluation as of June 30, 2017, the Company’s chief executive officer and chief financial officer have concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were not effective because of the material weakness in our internal control over financial reporting described below.  Notwithstanding the material weakness in our internal control over financial reporting as of June 30, 2017, management has concluded that the consolidated financial statements included in this Quarterly Report on Form 10-Q present fairly, in all material respects, our financial position, results of operations and cash flows for the periods presented.

Management’s Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting and for the assessment of the effectiveness of “internal control over financial reporting,” as defined under Exchange Act Rule 13a-15(f). The Company’s internal control over financial reporting is a process designed by, or under the supervision of, the Company’s chief executive officer and chief financial officer, and effected by the Company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s consolidated financial statements for external purposes in accordance with generally accepted accounting principles (“GAAP”), and includes those policies and procedures that:

· pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

· provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and

· provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the consolidated financial statements.

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A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management, under the supervision and with the participation of the chief executive officer and chief financial officer, assessed the effectiveness of the Company’s internal control over financial reporting as of June 30, 2017 based on criteria described in the “Internal Control—Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) on May 14, 2013.  Based on that assessment and those criteria, management has concluded that the Company’s internal control over financial reporting was not effective as of June 30, 2017 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s consolidated financial statements for external reporting purposes in accordance with GAAP due to the material weakness described below.

As the result of an inspection from the Public Company Accounting Oversight Board, our independent registered public accounting firm requested that we re-evaluate certain internal controls related to the review process of the Managed Care claims paid data input in our incurred but not reported (“IBNR”) actuarial model. As the result of this re-evaluation, management agreed that controls were not appropriately designed to validate that the claims paid information in the lag triangles used in the IBNR actuarial models is reviewed with enough precision to ascertain data is accurately presented by incurred date.  This deficiency was determined to be a material weakness as of June 30, 2017. Management has concluded that the Company’s consolidated financial statements as of and for the three months and six months ended June 30, 2017, included in this Quarterly Report on Form 10-Q present fairly, in all material respects, our financial position, results of operations and cash flows for the periods presented.

Remediation Plan

The main factor contributing to the material weakness were changes in our actuarial department during 2016. As a consequence, the preventive control over the accuracy of the incurred date component of the Managed Care claims paid data within the claim lags ceased to be fully effective. Although we engage an external actuarial consulting firm to support our claims reserving process, we did not ask them to do detailed testing over the incurred date component in order to ascertain the preciseness of the lag triangles. Even though this control deficiency is considered a material weakness, management has concluded that the consolidated financial statements included in this Quarterly Report on Form 10-Q present fairly, in all material respects, our financial position, results of operations and cash flows for the periods presented.

Management has designed a remediation plan to correct the material weakness described above and improve the design of internal controls. The remedial activities put in place include the following:

· After hiring additional personnel in the actuarial department, effective 2017 we reinforced the review process over the accuracy of the claims paid data within the claim lags.

· In addition we strengthened the claims paid reconciliation process to include the incurred date component within the claim lags on a monthly and historical basis.

We have completed the aforementioned activities as of the date of this amendment and believe that we have strengthened the Company’s internal control over financial reporting addressing the identified material weakness. However, control weaknesses are not be considered remediated until new internal controls have been operational for a period of time, are tested, and management concludes that these controls are operating effectively. We will continue to monitor the effectiveness of these remediation measures and we will make any changes to the design of this plan and take such other actions that we deem appropriate given the circumstances.

Changes in Internal Controls Over Financial Reporting

Other than as described in the aforementioned remediation plan, no changes in our internal control over financial reporting (as such term is defined in Exchange Act Rule 13a-15(f)) occurred during the fiscal quarter ended June 30, 2017 that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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Part II – Other Information

Item 1. Legal Proceedings

For a description of legal proceedings that have experienced significant developments during this quarter, see note 13 to the unaudited condensed consolidated financial statements included in this quarterly report on Form 10-Q.

Item 1A.   Risk Factors

For a description of our risk factors see Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2016.

The following text updates the disclosure included in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2016, under the sub-caption “The health care reform law and the implementation of that law could have a material adverse effect on our business, financial condition, cash flows, or results of operations.”

On January 20, 2017, President Trump signed an Executive Order directing federal agencies with authorities and responsibilities under the Patient Protection and Affordable Care Act of 2010 as amended by the Health Care and Education Reconciliation Act of 2010 (ACA) to waive, defer, grant exemptions from, or delay the implementation of any provision of the ACA that would impose a fiscal or regulatory burden on states, individuals, healthcare providers, health insurers, or manufacturers of pharmaceuticals or medical devices. Further, in January 2017, Congress voted to adopt a budget resolution for fiscal year 2017, or the Budget Resolution, that authorizes the implementation of legislation that would repeal portions of the ACA. Following the passage of the Budget Resolution, on March 6, 2017, the U.S. House of Representatives introduced legislation known as the American Health Care Act (AHCA), which, if enacted, would amend or repeal significant portions of the ACA. Among other changes, the AHCA would sunset the annual insurance industry assessment as of December 31, 2017, essentially eliminate the individual and employer mandates by eliminatingpenalties and providing retroactive relief for failing to maintain or provide minimum essential coverage, and permit insurers to charge individuals a 30% surcharge on premiums for failing to demonstrate continuous coverage. The AHCA would also make significant changes to Medicaid by, among other things, making the ACA Medicaid expansion optional for states, repealing the ACA requirement that state Medicaid plans provide the same essential health benefits that are required by plans available through the exchanges, implementing a per capita cap on federal payments to states beginning in fiscal year 2020, and changing certain eligibility requirements.  On May 4, 2017, the U.S. House of Representatives approved the AHCA to repeal portions of the ACA.

The U.S. Senate spent several months developing its alternative to the AHCA, culminating in several votes on various substitute amendments during the last week of July 2017.  None of the Senate substitutes, including a skinny package that would have repealed coverage mandates but maintained subsidies, were able to pass in the U.S. Senate.   While it is uncertain when or if the provisions in the AHCA will become law, or the extent to which any such changes may impact our business, it is clear that Congress is taking concrete steps to repeal and replace certain aspects of the ACA.

48

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

Item 6. Exhibits

Exhibits	Description
3(i)(c)	Articles of Incorporation of Triple-S Management Corporation, incorporated by reference to Exhibit 3(i)(c) to TSM’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2008 (File No. 001-33865).
10.1*	Amendment to Extend Contract for the Provision of Physical & Behavioral Health Services under the Government Health Plan Program
31.1*	Certification of the President and Chief Executive Officer required by Rule 13a-14(a)/15d-14(a).
31.2*	Certification of the Executive Vice President and Chief Financial Officer required by Rule 13a-14(a)/15d-14(a).
32.1*	Certification of the President and Chief Executive Officer required pursuant to 18 U.S.C Section 1350.
32.2*	Certification of the Executive Vice President and Chief Financial Officer required pursuant to 18 U.S.C Section 1350.

All other exhibits for which provision is made in the applicable accounting regulation of the United States Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore have been omitted.

* Filed herein.

49

SIGNATURES

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

			Triple-S Management Corporation
			Registrant
Date:	August 9, 2017	By:	/s/ Roberto García-Rodríguez
			Roberto García-Rodríguez
			President and Chief Executive Officer
Date:	August 9, 2017	By:	/s/ Juan J. Román-Jiménez
			Juan J. Román-Jiménez
			Executive Vice President and Chief Financial Officer

50

EX-10.1

Exhibit 10.1

AMENDMENT TO EXTEND CONTRACT FOR THE PROVISION OF PHYSICAL &

BEHAVIORAL HEALTH SERVICES UNDER THE GOVERNMENT HEALTH PLAN

PROGRAM

WHEREAS, Administración de Seguros de Salud de Puerto Rico (“ASES”) and Triple-S Salud, Inc. (the “Contractor” and together with ASES, the “Parties”) have executed a Contract for the Provision of Physical Health and Behavioral Health Services Under the Government Health Plan within the Commonwealth of Puerto Rico for the Metro North and West Service Regions, (hereinafter referred to as the “Agreement”), pursuant to which ASES pays the Contractor a fixed monthly per capita amount for the rendering of services to beneficiaries of the Government Health Plan during the Commonwealth of Puerto Rico’s 2016-2017 fiscal year (the "Current PMPM Payments");

WHEREAS, pursuant to Article 21.6 of the Agreement, ASES exercised its option to renew the Agreement for a period of one year, beginning July 1, 2017 and ending June 30, 2018 (the "Renewal");

WHEREAS, Article 21.6 provides that “the terms of the renewal shall be negotiated, but any increase in PMPM Payment shall be subject to ASES’s determination that the proposed new amount is actuarially sound”;

WHEREAS, the Parties agreed on new PMPM Payments of $183.38 in the Metro North Service Region and $148.99 in the West Service Region (the “New PMPM Payments”) for the term of the Renewal, and ASES determined that such payments are actuarially sound;

WHEREAS, the Parties continue negotiating other terms of the Renewal and must obtain approval from the Centers for Medicare & Medicaid Services (“CMS”) of ASES’ actuarial certification of the New PMPM Payments before ASES can apply such payments to services rendered under the Renewal;

WHEREAS,the Parties have agreed to amend the Agreement to extend its term for a period of three (3) months and provide a mechanism to adjust payments to the Contractor to account for the difference between the Current PMPM Payment and the New PMPM Payment once CMS approves ASES’ actuarial certification; and

WHEREAS,all remaining provisions of the Agreement will remain in full force and effect during the Extension Period.

NOW THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, the adequacy and receipt of which are hereby acknowledged, the Parties have agreed to amend the Agreement as follows:

AGREED EXTENSION

FIRST: THE PARTIES HEREBY EXTEND the Agreement for one (1) additional term of three (3) months, to expire on September 30, 2017 (the "Extension Period");

SECOND: All provisions of the Agreement will remain in full force and effect during the Extension Period, including the terms of the physical and behavioral health services provided under the Agreement, with the exception of the Per Member Per Month (“PMPM”) Payments set forth in Section 22.1.1.1 of the Agreement, which are hereby amended to reflect the New PMPM Payments, provided that such rates will be subject to CMS approval of ASES’ actuarial certification (the “CMS Approval”);

THIRD: The Parties hereby acknowledge and accept that within 30 days of the CMS Approval, ASES will pay the cumulative difference between the New PMPM Payments and the Current PMPM Payments effectuated between July 1, 2017 and the date of CMS Approval, and will prospectively pay the New PMPM Payments until the expiration or earlier termination of the Extension Period;

FOURTH: The Parties further agree that in the event CMS does not approve the New PMPM Payments, the Parties will commit to engage their respective actuaries in a joint exercise to address any CMS objections until the CMS Approval is obtained, and upon such approval, the parties agree that the rates approved by CMS shall become the New PMPM Payments of the Extension Period and the Renewal for all intents and purposes.  Furthermore, if the Parties are unable to agree by July 31, 2017 on other terms of the Renewal that are still subject to negotiation as of the signing of this Extension Agreement, ASES shall grant the Contractor the right to not enter into the Renewal.

ACKNOWLEDGED BY THE PARTIES by their duly authorized representatives on this 30^th day of June, 2017.

Administración de Seguros de Salud de Puerto Rico (ASES)

/s/ Angela M. Ávila Marrero

Ms. Angela M. Ávila Marrero, Executive Director

Triple-S Salud, Inc.

/s/ Madeline Hernández Urquiza

Madeline Hernández Urquiza, President

2

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Roberto García-Rodríguez, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Triple-S Management Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August 9, 2017	By:	/s/ Roberto García-Rodríguez
			Roberto García-Rodríguez
			President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Juan J. Román-Jiménez, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Triple-S Management Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August 9, 2017	By:	/s/ Juan J. Román-Jiménez
			Juan J. Román-Jiménez
			Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Triple-S Management Corporation (the Company) on Form 10-Q for the period ended June 30, 2017 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Roberto García-Rodríguez, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

a) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

b) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	August 9, 2017	By:	/s/ Roberto García-Rodríguez
			Roberto García-Rodríguez
			President and Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to the Corporation and will be retained by the Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Triple-S Management Corporation (the Company) on Form 10-Q for the period ended June 30, 2017 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Juan J. Román-Jiménez, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

a) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

b) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	August 9, 2017	By:	/s/ Juan J. Román-Jiménez
			Juan J. Román-Jiménez
			Executive Vice President and Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to the Corporation and will be retained by the Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information	6 Months Ended
	Jun. 30, 2017 shares
Entity Information [Line Items]
Entity Registrant Name	TRIPLE-S MANAGEMENT CORP
Entity Central Index Key	0001171662
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q2
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2017
Common Class A [Member]
Entity Information [Line Items]
Entity Common Stock, Shares Outstanding	950,968
Common Class B [Member]
Entity Information [Line Items]
Entity Common Stock, Shares Outstanding	23,494,170

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Securities available for sale, at fair value:
Fixed maturities	$ 1,196,161	$ 1,151,643
Equity securities	287,820	270,349
Securities held to maturity, at amortized cost:
Fixed maturities	2,835	2,836
Policy loans	8,716	8,564
Cash and cash equivalents	172,526	103,428
Total investments and cash	1,668,058	1,536,820
Premiums and other receivables, net	320,548	286,365
Deferred policy acquisition costs and value of business acquired	200,034	194,787
Property and equipment, net	69,083	66,369
Deferred tax asset	69,576	57,768
Goodwill	25,397	25,397
Other assets	52,672	51,493
Total assets	2,405,368	2,218,999
Liabilities and Stockholders' Equity
Claim liabilities	504,240	487,943
Liability for future policy benefits	331,427	321,232
Unearned premiums	175,561	79,310
Policyholder deposits	179,225	179,382
Liability to Federal Employees' Health Benefits and Federal Employees' Programs	40,363	34,370
Accounts payable and accrued liabilities	204,194	169,449
Deferred tax liability	22,203	18,850
Long-term borrowings	33,667	35,085
Liability for pension benefits	30,496	30,892
Total liabilities	1,521,376	1,356,513
Triple-S Management Corporation stockholders' equity
Additional paid-in capital	65,589	65,592
Retained earnings	739,267	730,904
Accumulated other comprehensive income	55,369	42,395
Total Triple-S Management Corporation stockholders' equity	884,670	863,163
Non-controlling interest in consolidated subsidiary	(678)	(677)
Total stockholders' equity	883,992	862,486
Total liabilities and stockholders' equity	2,405,368	2,218,999
Common Stock Class A [Member]
Triple-S Management Corporation stockholders' equity
Common stock	951	951
Common Stock Class B [Member]
Triple-S Management Corporation stockholders' equity
Common stock	$ 23,494	$ 23,321

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Jun. 30, 2017	Dec. 31, 2016
Class A Common Stock [Member]
Triple-S Management Corporation stockholders' equity
Common stock, par value (in dollars per share)	$ 1	$ 1
Common stock, authorized (in shares)	100,000,000	100,000,000
Common stock, issued (in shares)	950,968	950,968
Common stock, outstanding (in shares)	950,968	950,968
Class B Common Stock [Member]
Triple-S Management Corporation stockholders' equity
Common stock, par value (in dollars per share)	$ 1	$ 1
Common stock, authorized (in shares)	100,000,000	100,000,000
Common stock, issued (in shares)	23,494,170	23,321,163
Common stock, outstanding (in shares)	23,494,170	23,321,163

XML

Condensed Consolidated Statements of Earnings (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Revenues:
Premiums earned, net	$ 722,891	$ 729,049	$ 1,425,164	$ 1,467,583
Administrative service fees	4,548	4,520	8,927	9,603
Net investment income	12,698	12,875	24,714	24,233
Other operating revenues	1,121	915	2,086	1,727
Total operating revenues	741,258	747,359	1,460,891	1,503,146
Net realized investment gains (losses):
Total other-than-temporary impairment losses on securities	0	(1,434)	0	(1,434)
Net realized gains, excluding other-than-temporary impairment losses on securities	4,054	2,954	4,390	3,012
Net realized investment gains on sale of securities	4,054	1,520	4,390	1,578
Other income, net	587	3,859	3,112	4,734
Total revenues	745,899	752,738	1,468,393	1,509,458
Benefits and expenses:
Claims incurred	611,297	622,087	1,232,160	1,248,781
Operating expenses	118,720	121,112	229,666	244,092
Total operating costs	730,017	743,199	1,461,826	1,492,873
Interest expense	1,721	1,954	3,407	3,836
Total benefits and expenses	731,738	745,153	1,465,233	1,496,709
Income before taxes	14,161	7,585	3,160	12,749
Income tax expense (benefit)	1,456	3,707	(5,202)	5,416
Net income	12,705	3,878	8,362	7,333
Less: Net loss attributable to non-controlling interest	0	2	1	3
Net income attributable to Triple-S Management Corporation	$ 12,705	$ 3,880	$ 8,363	$ 7,336
Earnings per share attributable to Triple-S Management Corporation
Basic net income per share (in dollars per share)	$ 0.52	$ 0.16	$ 0.35	$ 0.30
Diluted net income per share (in dollars per share)	$ 0.52	$ 0.16	$ 0.34	$ 0.30

XML

Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Condensed Consolidated Statements of Comprehensive Income (Unaudited) [Abstract]
Net income	$ 12,705	$ 3,878	$ 8,362	$ 7,333
Other comprehensive (loss) income, net of tax:
Net unrealized change in fair value of available for sale securities, net of taxes	4,396	15,830	12,868	35,407
Defined benefit pension plan:
Actuarial loss, net	53	507	106	1,229
Prior service credit, net	0	(62)	0	(150)
Total other comprehensive income, net of tax	4,449	16,275	12,974	36,486
Comprehensive income	17,154	20,153	21,336	43,819
Comprehensive income attributable to non-controlling interest	0	2	1	3
Comprehensive income attributable to Triple-S Management Corporation	$ 17,154	$ 20,155	$ 21,337	$ 43,822

XML

Condensed Consolidated Statements of Stockholders' Equity (Unaudited) $ in Thousands	USD ($)
Balance at Dec. 31, 2015	$ 847,526
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation	2,649
Stock issued upon the exercise of stock options	55
Repurchase and retirement of common stock	(14,616)
Comprehensive income	43,822
Total Triple-S Management Corporation stockholders' equity at Jun. 30, 2016	879,436
Non-controlling interest in consolidated subsidiary at Jun. 30, 2016	(673)
Balance at Jun. 30, 2016	878,763
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Comprehensive income	20,155
Total Triple-S Management Corporation stockholders' equity at Jun. 30, 2016	879,436
Non-controlling interest in consolidated subsidiary at Jun. 30, 2016	(673)
Balance at Jun. 30, 2016	878,763
Balance at Dec. 31, 2016	863,163
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation	170
Stock issued upon the exercise of stock options	0
Repurchase and retirement of common stock	0
Comprehensive income	21,337
Total Triple-S Management Corporation stockholders' equity at Jun. 30, 2017	884,670
Non-controlling interest in consolidated subsidiary at Jun. 30, 2017	(678)
Balance at Jun. 30, 2017	883,992
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Comprehensive income	17,154
Total Triple-S Management Corporation stockholders' equity at Jun. 30, 2017	884,670
Non-controlling interest in consolidated subsidiary at Jun. 30, 2017	(678)
Balance at Jun. 30, 2017	$ 883,992

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Cash flows from operating activities:
Net income	$ 8,362	$ 7,333
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	6,454	7,300
Net amortization of investments	4,787	3,981
Reductions to the allowance for doubtful receivables	(2,390)	(313)
Deferred tax (benefit) expense	(11,734)	4,301
Net realized investment gain on sale of securities	(4,390)	(1,578)
Interest credited to policyholder deposits	2,144	2,436
Share-based compensation	170	2,313
(Increase) decrease in assets:
Premium and other receivables, net	(25,078)	(63,589)
Deferred policy acquisition costs and value of business acquired	(5,621)	(3,562)
Deferred taxes	(280)	178
Other assets	(1,229)	(31,425)
Increase (decrease) in liabilities:
Claim liabilities	16,297	(9,901)
Liability for future policy benefits	10,195	19,961
Unearned premiums	96,251	1,791
Liability to Federal Employees' Health Benefits and Federal Employees' Programs	5,993	(2,141)
Accounts payable and accrued liabilities	33,774	52,350
Net cash provided by (used in) operating activities	133,705	(10,565)
Securities available for sale:
Fixed maturities sold	88,141	163,150
Fixed maturities matured/called	8,938	14,301
Equity securities sold	21,499	32,252
Securities held to maturity:
Fixed maturities matured/called	703	700
Securities available for sale:
Fixed maturities	(141,116)	(150,005)
Equity securities	(20,424)	(136,104)
Securities held to maturity:
Fixed maturities	(703)	(609)
Increase in other investments	(731)	(1,383)
Net change in policy loans	(152)	(400)
Net capital expenditures	(8,704)	(2,716)
Net cash used in investing activities	(52,549)	(80,814)
Cash flows from financing activities:
Change in outstanding checks in excess of bank balances	(8,545)	4,074
Repayments of long-term borrowings	(1,212)	(820)
Repurchase and retirement of common stock	0	(14,560)
Proceeds from policyholder deposits	8,166	7,942
Surrenders of policyholder deposits	(10,467)	(6,935)
Net cash used in financing activities	(12,058)	(10,299)
Net increase (decrease) in cash and cash equivalents	69,098	(101,678)
Cash and cash equivalents:
Beginning of period	103,428	197,818
End of period	$ 172,526	$ 96,140

XML

Basis of Presentation

6 Months Ended

Jun. 30, 2017

Basis of Presentation [Abstract]

Basis of Presentation

(1) Basis of Presentation

The accompanying condensed consolidated interim financial statements prepared by Triple-S Management Corporation and its subsidiaries are unaudited.  In this filing, the “Corporation”, the “Company”, “TSM”, “we”, “us” and “our” refer to Triple-S Management Corporation and its subsidiaries.  The condensed consolidated interim financial statements do not include all of the information and the footnotes required by accounting principles generally accepted in the U.S. (GAAP) for complete financial statements.  These condensed consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements included in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2016.

In the opinion of management, all adjustments, consisting of a normal recurring nature necessary for a fair presentation of such condensed consolidated interim financial statements, have been included.  The results of operations for the three months and six months ended June 30, 2017 are not necessarily indicative of the results for the full year ending December 31, 2017.

XML

Recent Accounting Standards

6 Months Ended

Jun. 30, 2017

Recent Accounting Standards [Abstract]

Recent Accounting Standards

(2) Recent Accounting Standards

On May 10, 2017, the Financial Accounting Standard Board (FASB) issued guidance to provide clarity and reduce both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, Compensation-Stock Compensation, to a change in the terms and conditions of a share-based payment award.  The amendments in this update affect any entity that changes the terms or conditions of a share-based payment award.  This guidance indicates an entity should account for the effects of a modification unless the following criteria are met: (1) the fair value (or calculated value or intrinsic value, if such an alternative measurement method is used) of the modified award is the same as the fair value (or calculated value or intrinsic value, if such an alternative measurement method is used) of the original award immediately before the original award is modified. If the modification does not affect any of the inputs to the valuation technique that the entity uses to value the award, the entity is not required to estimate the value immediately before and after the modification, (2) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified, and (3) the classification of the modified award as an equity or liability instrument is the same as the classification of the original award immediately before the original award is modified. For all companies, these amendments, which should be applied on a prospective basis, are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years.  We are currently evaluating the impact the adoption of this guidance may have on the Company's consolidated financial statements.

On March 10, 2017, the FASB issued guidance to improve the presentation of defined benefit costs in the income statement.  In particular, the guidance requires that an employer report the service cost component in the same line item(s) as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented.  Additionally, this guidance allows only the service cost component to be eligible for capitalization, when applicable (e.g., as a cost of internally manufactured inventory or a self-constructed asset).  For public companies, these amendments, which should be applied on a prospective basis, are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years.  Since we do not present a subtotal of income from operations, the adoption of this guidance should not have a material impact on the presentation of the Company’s consolidated result of operations.

On January 26, 2017, the FASB issued guidance to simplify the manner in which an entity is required to evaluate goodwill for impairment by eliminating Step 2 from the goodwill impairment test.  Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill.  Instead, under the amendments in this guidance, an entity should (1) perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount, and (2) recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, with the understanding that the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit.  Additionally, this guidance removes the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails such qualitative test, to perform Step 2 of the goodwill impairment test.  For public companies, these amendments, which should be applied on a prospective basis, are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years.  We are currently evaluating the impact the adoption of this guidance may have on the Company's consolidated financial statements.

Other than the accounting pronouncement disclosed above, there were no other new accounting pronouncements issued during the three months and six months ended June 30, 2017 that could have a material impact on the Corporation’s financial position, operating results or financial statements disclosures.

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Investment in Securities

6 Months Ended

Jun. 30, 2017

Investment in Securities [Abstract]

Investment in Securities

(3) Investment in Securities

The amortized cost for debt securities and cost for equity securities, gross unrealized gains, gross unrealized losses, and estimated fair value for available-for-sale and held-to-maturity securities by major security type and class of security at June 30, 2017 and December 31, 2016, were as follows:

	June 30, 2017
	Amortized cost		Gross unrealized gains		Gross unrealized losses			Estimated fair value
Securities available for sale:
Fixed maturities:
Obligations of government-sponsored enterprises	$	40,358	$	29	$	(4	)	$	40,383
U.S. Treasury securities and obligations of U.S. government instrumentalities		79,932		180		(115	)		79,997
Obligations of the Commonwealth of Puerto Rico and its instrumentalities		11,719		445		(3	)		12,161
Municipal securities		682,576		34,459		(393	)		716,642
Corporate bonds		278,417		15,626		(89	)		293,954
Residential mortgage-backed securities		11,877		35		(3	)		11,909
Collateralized mortgage obligations		41,129		97		(111	)		41,115
Total fixed maturities		1,146,008		50,871		(718	)		1,196,161
Equity securities:
Mutual funds		214,923		43,446		(6	)		258,363
Alternative investments		29,336		368		(247	)		29,457
Total equity maturites		244,259		43,814		(253	)		287,820
Total	$	1,390,267	$	94,685	$	(971	)	$	1,483,981

	December 31, 2016
	Amortized cost		Gross unrealized gains		Gross unrealized losses			Estimated fair value
Securities available for sale:
Fixed maturities:
Obligations of government-sponsored enterprises	$	41,442	$	87	$	(15	)	$	41,514
U.S. Treasury securities and obligations of U.S.government instrumentalities		85,652		157		(9	)		85,800
Obligations of the Commonwealth of Puerto Rico and its instrumentalities		17,930		2,189		(68	)		20,051
Municipal securities		650,175		34,187		(559	)		683,803
Corporate bonds		263,351		12,182		(661	)		274,872
Residential mortgage-backed securities		684		34		-			718
Collateralized mortgage obligations		45,069		58		(242	)		44,885
Total fixed maturities		1,104,303		48,894		(1,554	)		1,151,643
Equity securities - Mutual funds		240,699		30,101		(451	)		270,349
Total	$	1,345,002	$	78,995	$	(2,005	)	$	1,421,992

	June 30, 2017
	Amortized cost		Gross unrealized gains		Gross unrealized losses		Estimated fair value
Securities held to maturity:
U.S. Treasury securities and obligations of U.S.government instrumentalities	$	618	$	166	$	-	$	784
Residential mortgage-backed securities		191		2		-		193
Certificates of deposit		2,026		-		-		2,026
Total	$	2,835	$	168	$	-	$	3,003

	December 31, 2016
	Amortized cost		Gross unrealized gains		Gross unrealized losses		Estimated fair value
Securities held to maturity:
U.S. Treasury securities and obligations of U.S.government instrumentalities	$	619	$	158	$	-	$	777
Residential mortgage-backed securities		191		18		-		209
Certificates of deposit		2,026		-		-		2,026
Total	$	2,836	$	176	$	-	$	3,012

Gross unrealized losses on investment securities and the estimated fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of June 30, 2017 and December 31, 2016 were as follows:

	June 30, 2017
	Less than 12 months							12 months or longer							Total
	Estimated Fair Value		Gross Unrealized Loss			Number of Securities		Estimated Fair Value		Gross Unrealized Loss			Number of Securities		Estimated Fair Value		Gross Unrealized Loss			Number of Securities
Securities available for sale:
Fixed maturities
Obligations of government-sponsored enterprises	$	6,495	$	(4	)		2	$	-	$	-			-	$	6,495	$	(4	)		2
U.S. Treasury securities and obligations of U.S. governmental instrumentalities		41,408		(115	)		5		-		-			-		41,408		(115	)		5
Obligations of the Commonwealth of Puerto Rico and its instrumentalities		7,939		(3	)		5		-		-			-		7,939		(3	)		5
Municipal securities		90,575		(393	)		12		-		-			-		90,575		(393	)		12
Corporate bonds		32,355		(89	)		10		-		-			-		32,355		(89	)		10
Residential mortgage-backed securities		2,017		(3	)		1		-		-			-		2,017		(3	)		1
Collateralized mortgage obligations		25,454		(108	)		6		564		(3	)		1		26,018		(111	)		7
Total fixed maturities		206,243		(715	)		41		564		(3	)		1		206,807		(718	)		42
Equity securities
Mutual funds		1,994		(6	)		1		-		-			-		1,994		(6	)		1
Alternative investments		4,983		(129	)		7		2,431		(118	)		1		7,414		(247	)		8
Total equity securities		6,977		(135	)		8		2,431		(118	)		1		9,408		(253	)		9
Total for securities available for sale	$	213,220	$	(850	)		49	$	2,995	$	(121	)		2	$	216,215	$	(971	)		51

	December 31, 2016
	Less than 12 months							12 months or longer							Total
	Estimated Fair Value		Gross Unrealized Loss			Number of Securities		Estimated Fair Value		Gross Unrealized Loss			Number of Securities		Estimated Fair Value		Gross Unrealized Loss			Number of Securities
Securities available for sale:
Fixed maturities
Obligations of government-sponsored enterprises	$	9,483	$	(15	)		1	$	-	$	-			-	$	9,483	$	(15	)		1
U.S. Treasury securities and obligations of U.S. governmental instrumentalities		12,937		(9	)		1		-		-			-		12,937		(9	)		1
Obligations of the Commonwealth of Puerto Rico and its instrumentalities		7,758		(68	)		5		-		-			-		7,758		(68	)		5
Municipal securities		84,252		(559	)		13		-		-			-		84,252		(559	)		13
Corporate bonds		105,054		(661	)		22		-		-			-		105,054		(661	)		22
Collateralized mortgage obligations		32,120		(239	)		8		784		(3	)		1		32,904		(242	)		9
Total fixed maturities		251,604		(1,551	)		50		784		(3	)		1		252,388		(1,554	)		51
Equity securities-Mutual funds		22,615		(451	)		4		-		-			-		22,615		(451	)		4
Total for securities available for sale	$	274,219	$	(2,002	)		54	$	784	$	(3	)		1	$	275,003	$	(2,005	)		55

The Corporation reviews the investment portfolios under the Corporation’s impairment review policy.  Given market conditions and the significant judgments involved, there is a continuing risk that declines in fair value may occur and material other-than-temporary impairments may be recorded in future periods.  The Corporation from time to time may sell investments as part of its asset/liability management process or to reposition its investment portfolio based on current and expected market conditions.

Obligations of Government-Sponsored Enterprises, Obligations of U.S. Government Instrumentalities and Municipal Securities:  The unrealized losses on the Corporation’s investments in obligations of Government-Sponsored Enterprises, U.S. Government Instrumentalities and Municipal Securities were mainly caused by fluctuations in interest rates and general market conditions.  The contractual terms of these investments do not permit the issuer to settle the securities at a price less than the par value of the investment.  In addition, these positions have investment grade ratings. Because the decline in fair value is attributable to changes in interest rates and not credit quality; because the Corporation does not intend to sell the investments and it is more likely than not that the Corporation will not be required to sell the investments before recovery of their amortized cost basis, which may be maturity; and because the Corporation expects to collect all contractual cash flows, these investments are not considered other-than-temporarily impaired.

Obligations of the Commonwealth of Puerto Rico and its Instrumentalities: Our holdings in Puerto Rico municipals can be divided in (1) escrowed bonds with a fair value of $7,939 and a gross unrealized loss of $3, and (2) senior lien bonds issued by the Puerto Rico Sales Tax Financing Corporation (Cofina) with a fair value of $4,222 and a gross unrealized gain of $445.  As of June 30, 2017, investments in escrow bonds are not considered other-than-temporarily impaired based on the length of time the funds have been in a loss position, the decline in estimated fair value is principally attributable to changes in interest rates, and the fact that these bonds are backed by US Government securities, and therefore have an implicit AA+/Aaa rating. 

There was no impairment on Cofina positions during the three months and six months ended June 30, 2017 and 2016.

Corporate Bonds:  The unrealized losses of these bonds were principally caused by fluctuations in interest rates and general market conditions.  All corporate bonds with an unrealized loss have investment grade ratings.  Because the decline in estimated fair value is principally attributable to changes in interest rates; because the Company does not intend to sell the investments and it is more likely than not that the Company will not be required to sell the investments before recovery of their amortized cost basis, which may be maturity; and because the Company expects to collect all contractual cash flows, these investments are not considered other-than-temporarily impaired.

Residential Mortgage-Backed Securities and Collateralized Mortgage Obligations: The unrealized losses on investments in residential mortgage-backed securities collateralized mortgage obligations (“CMOs”) were mostly caused by fluctuations in interest rates and credit spreads. The contractual cash flows of these securities, other than private CMOs, are guaranteed by a U.S. government-sponsored enterprise. Any loss in these securities is determined according to the seniority level of each tranche, with the least senior (or most junior), typically the unrated residual tranche, taking any initial loss. The investment grade credit rating of our securities reflects the seniority of the securities that the Corporation owns. The Corporation does not consider these investments other-than-temporarily impaired because the decline in fair value is attributable to changes in interest rates and not credit quality; the Corporation does not intend to sell the investments and it is more likely than not that the Corporation will not be required to sell the investments before recovery of their amortized cost basis, which may be maturity; and because the Corporation expects to collect all contractual cash flows.

Mutual Funds and Alternative Investments:As of June 30, 2017, investments in mutual funds and alternative investments with unrealized losses are not considered other-than-temporarily impaired based on market conditions and the length of time the funds have been in a loss position.  There were no impairments on mutual funds and alternative investments during the three months and six months ended June 30, 2017.  During the three and six months ended June 30, 2016, we recorded an other-than-temporary impairment related to these mutual funds amounting to $1,434.

Maturities of investment securities classified as available for sale and held to maturity were as follows:

	June 30, 2017
	Amortized cost		Estimated fair value
Securities available for sale:
Due in one year or less	$	71,618	$	71,772
Due after one year through five years		324,426		327,707
Due after five years through ten years		131,235		137,195
Due after ten years		565,723		606,463
Residential mortgage-backed securities		11,877		11,909
Collateralized mortgage obligations		41,129		41,115
	$	1,146,008	$	1,196,161
Securities held to maturity:
Due in one year or less	$	2,026	$	2,026
Due after ten years		618		784
Residential mortgage-backed securities		191		193
	$	2,835	$	3,003

Expected maturities may differ from contractual maturities because some issuers have the right to call or prepay obligations with or without call or prepayment penalties.

Information regarding realized and unrealized gains and losses from investments is as follows:

	Three months ended June 30,						Six months ended June 30,
	2017			2016			2017			2016
Realized gains (losses):
Fixed maturity securities:
Securities available for sale:
Gross gains from sales	$	384		$	912		$	401		$	1,873
Gross losses from sales		(517	)		(103	)		(636	)		(1,462	)
Total fixed maturity securities		(133	)		809			(235	)		411
Equity securities:
Securities available for sale:
Gross gains from sales		4,189			2,525			4,627			3,112
Gross losses from sales		(2	)		(380	)		(2	)		(511	)
Gross losses from other-than-temporary impairments		-			(1,434	)		-			(1,434	)
Total equity securities		4,187			711			4,625			1,167
Net realized gains on securities available for sale	$	4,054		$	1,520		$	4,390		$	1,578

	Three months ended June 30,					Six months ended June 30,
	2017			2016		2017			2016
Changes in net unrealized gains (losses):
Recognized in accumulated other comprehensive income:
Fixed maturities – available for sale	$	3,252		$	18,739	$	2,813		$	41,328
Equity securities – available for sale		2,768			2,908		13,911			9,677
	$	6,020		$	21,647	$	16,724		$	51,005
Not recognized in the consolidated financial statements:
Fixed maturities – held to maturity	$	(10	)	$	27	$	(8	)	$	63

The change in deferred tax liability on unrealized gains recognized in accumulated other comprehensive income during the six months ended June 30, 2017 and 2016 was $3,931 and $15,598, respectively.

As of June 30, 2017 and December 31, 2016, no individual investment in securities exceeded 10% of stockholders’ equity.

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Premiums and Other Receivables, Net

6 Months Ended

Jun. 30, 2017

Premiums and Other Receivables, Net [Abstract]

Premiums and Other Receivables, Net

(4) Premiums and Other Receivables, Net

Premiums and other receivables, net were as follows:

	June 30, 2017		December 31, 2016
Premium	$	107,058	$	91,528
Self-funded group receivables		51,646		57,728
FEHBP		15,582		14,321
Agent balances		40,340		25,495
Accrued interest		13,839		13,668
Reinsurance recoverable		55,772		58,295
Unsettled sales		6,715		-
Other		62,859		62,637
		353,811		323,672
Less allowance for doubtful receivables:
Premium		23,949		27,320
Other		9,314		9,987
		33,263		37,307
Total premium and other receivables, net	$	320,548	$	286,365

As of June 30, 2017 and December 31, 2016, the Company had premiums and other receivables of $63,565 and $57,750, respectively, from the Government of Puerto Rico, including its agencies, municipalities and public corporations.  The related allowance for doubtful receivables as of June 30, 2017 and December 31, 2016 were $14,853 and $18,812, respectively.

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Fair Value Measurements

6 Months Ended

Jun. 30, 2017

Fair Value Measurements [Abstract]

Fair Value Measurements

(5) Fair Value Measurements

Our condensed consolidated balance sheets include the following financial instruments: securities available for sale, policy loans, policyholder deposits, and long-term borrowings.  We consider the carrying amounts of policy loans, policyholder deposits, and long-term borrowings to approximate their fair value due to the short period of time between the origination of these instruments and the expected realization or payment. Certain assets are measured at fair value on a recurring basis and are disclosed below. These assets are classified into one of three levels of a hierarchy defined by GAAP. For a description of the methods and assumptions that are used to estimate the fair value and determine the fair value hierarchy classification of each class of financial instrument, see the consolidated financial statements and notes thereto included in our 2016 Form 10-K.

The following tables summarize fair value measurements by level for assets measured at fair value on a recurring basis:

	June 30, 2017
	Level 1		Level 2		Level 3		Total
Securities available for sale:
Fixed maturity securities
Obligations of government-sponsored enterprises	$	-	$	40,383	$	-	$	40,383
U.S. Treasury securities and obligations of U.S government instrumentalities		79,997		-		-		79,997
Obligations of the Commonwealth of Puerto Rico and its instrumentalities		-		12,161		-		12,161
Municipal securities		-		716,642		-		716,642
Corporate bonds		-		293,954		-		293,954
Residential agency mortgage-backed securities		-		11,909		-		11,909
Collateralized mortgage obligations		-		41,115		-		41,115
Total fixed maturities		79,997		1,116,164		-		1,196,161
Equity securities - Mutual funds		173,957		84,406		-		258,363
Alternative investments - measured at net asset value		-		-		-		29,457
Total	$	253,954	$	1,200,570	$	-	$	1,483,981

Certain investments that are measured at fair value using the net asset value per share practical expedient have not been classified in the fair value hierarchy.  The fair value amount presented in this table is intended to facilitate the reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position.

	December 31, 2016
	Level 1		Level 2		Level 3		Total
Securities available for sale:
Fixed maturity securities
Obligations of government-sponsored enterprises	$	-	$	41,514	$	-	$	41,514
U.S. Treasury securities and obligations of U.S government instrumentalities		85,800		-		-		85,800
Obligations of the Commonwealth of Puerto Rico and its instrumentalities		-		20,051		-		20,051
Municipal securities		-		683,803		-		683,803
Corporate bonds		-		274,872		-		274,872
Residential agency mortgage-backed securities		-		718		-		718
Collateralized mortgage obligations		-		44,885		-		44,885
Total fixed maturities		85,800		1,065,843		-		1,151,643
Equity securities - Mutual funds		166,595		76,222		27,532		270,349
Total	$	252,395	$	1,142,065	$	27,532	$	1,421,992

There were no transfers in and/or out of Level 3 and between Levels 1 and 2 during the three months and six months ended June 30, 2017 and 2016.  Level 3 securities are partnerships measured at fair value using the net asset value affected by changes in the fair market value of the investments held in these partnerships.

The alternative investments represent investments in partnerships which invest in several equity and private equity funds.  Portfolios are diversified by vintage year, stage, geography, business sectors and number of investments. These investments are not redeemable with the funds. Distributions from each fund are received as the underlying investments of the funds are liquidated. It is estimated that the underlying assets of the funds will be liquidated in the next 5 to 12 years. The fair values of the investments in this class have been estimated using the net asset value of the Company’s ownership interest in the partnerships. Total unfunded capital commitments for these positions as of June 30, 2017 amounted to $118,668.

A summary of the carrying value and fair value by level of financial instruments not recorded at fair value on our condensed consolidated balance sheets are as follows:

	June 30, 2017
	Carrying		Fair Value
	Value		Level 1		Level 2		Level 3		Total
Assets:
Policy loans	$	8,716	$	-	$	8,716	$	-	$	8,716
Liabilities:
Policyholder deposits	$	179,225	$	-	$	179,225	$	-	$	179,225
Long-term borrowings:
Loans payable to bank - variable		33,968		-		33,968		-		33,968
Total long-term borrowings		33,968		-		33,968		-		33,968
Total liabilities	$	213,193	$	-	$	213,193	$	-	$	213,193

	December 31, 2016
	Carrying		Fair Value
	Value		Level 1		Level 2		Level 3		Total
Assets:
Policy loans	$	8,564	$	-	$	8,564	$	-	$	8,564
Liabilities:
Policyholder deposits	$	179,382	$	-	$	179,382	$	-	$	179,382
Long-term borrowings:
Loans payable to bank - variable		11,187		-		11,187		-		11,187
6.6% senior unsecured notes payable		24,000		-		24,000		-		24,000
Total long-term borrowings		35,187		-		35,187		-		35,187
Total liabilities	$	214,569	$	-	$	214,569	$	-	$	214,569

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Claim Liabilities

6 Months Ended

Jun. 30, 2017

Claim Liabilities [Abstract]

Claim Liabilities

(6) Claim Liabilities

A reconciliation of the beginning and ending balances of claim liabilities is as follows:

	Three months ended June 30, 2017									Six months ended June 30, 2017
	Managed Care			Other Business Segments *			Consolidated			Managed Care			Other Business Segments *			Consolidated
Claim liabilities at beginning of year	$	393,525		$	136,779		$	530,304		$	349,047		$	138,896		$	487,943
Reinsurance recoverable on claim liabilities		-			(35,898	)		(35,898	)		-			(38,998	)		(38,998	)
Net claim liabilities at beginning of year		393,525			100,881			494,406			349,047			99,898			448,945
Claims incurred
Current period insured events		580,608			26,282			606,890			1,183,241			54,508			1,237,749
Prior period insured events		(1,355	)		(1,196	)		(2,551	)		(16,695	)		(2,529	)		(19,224	)
Total		579,253			25,086			604,339			1,166,546			51,979			1,218,525
Payments of losses and loss-adjustment expenses
Current period insured events		576,135			14,944			591,079			926,585			22,917			949,502
Prior period insured events		25,208			11,586			36,794			217,573			29,523			247,096
Total		601,343			26,530			627,873			1,144,158			52,440			1,196,598
Net claim liabilities at end of year		371,435			99,437			470,872			371,435			99,437			470,872
Reinsurance recoverable on claim liabilities		-			33,368			33,368			-			33,368			33,368
Claim liabilities at end of year	$	371,435		$	132,805		$	504,240		$	371,435		$	132,805		$	504,240

	Three months ended June 30, 2016									Six months ended June 30, 2016
	Managed Care			Other Business Segments *			Consolidated			Managed Care			Other Business Segments *			Consolidated
Claim liabilities at beginning of year	$	381,448		$	143,618		$	525,066		$	348,297		$	143,468		$	491,765
Reinsurance recoverable on claim liabilities		-			(39,871	)		(39,871	)		-			(40,714	)		(40,714	)
Net claim liabilities at beginning of year		381,448			103,747			485,195			348,297			102,754			451,051
Claims incurred
Current period insured events		596,909			25,950			622,859			1,192,499			51,840			1,244,339
Prior period insured events		(6,728	)		(686	)		(7,414	)		(6,028	)		(2,934	)		(8,962	)
Total		590,181			25,264			615,445			1,186,471			48,906			1,235,377
Payments of losses and loss-adjustment expenses
Current period insured events		583,381			16,557			599,938			948,420			21,653			970,073
Prior period insured events		46,743			10,204			56,947			244,843			27,757			272,600
Total		630,124			26,761			656,885			1,193,263			49,410			1,242,673
Net claim liabilities at end of year		341,505			102,250			443,755			341,505			102,250			443,755
Reinsurance recoverable on claim liabilities		-			38,109			38,109			-			38,109			38,109
Claim liabilities at end of year	$	341,505		$	140,359		$	481,864		$	341,505		$	140,359		$	481,864

* Other Business Segments include the Life Insurance and Property and Casualty segments, as well as intersegment eliminations.

As a result of differences between actual amounts and estimates of insured events in prior years, the amounts included as incurred claims for prior period insured events differ from anticipated claims incurred.

The favorable developments in the claims incurred and loss-adjustment expenses for prior period insured events for the three months and six months ended June 30, 2017 and 2016 are due primarily to better than expected utilization trends.  Reinsurance recoverable on unpaid claims is reported as premium and other receivables, net in the accompanying consolidated financial statements.

The claims incurred disclosed in this table exclude the portion of the change in the liability for future policy benefits expense, which amounted to $6,945 and $13,635 during the three months and six months ended June 30, 2017, respectively.  The change in the liability for future policy benefits during the three months and six months ended June 30, 2016 amounted to $6,642 and $13,404, respectively.

The following is information about total incurred but not reported (IBNR) liabilities plus expected development on reported claims included in the liability for unpaid claims adjustment expenses for the Managed Care segment as of June 30, 2017.

Incurred Year	Total of IBNR Liabilities Plus Expected Development on Reported Claims
2015		68,022
2016		46,181
2017		256,656

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Long-Term Borrowings

6 Months Ended

Jun. 30, 2017

Long-Term Borrowings [Abstract]

Long-Term Borrowings

(7) Long-Term Borrowings

A summary of the borrowings entered by the Company is as follows:

	June 30,		December 31,
	2017		2016
Senior unsecured notes payable of $60,000 issued on December 2005; due December 2020. Interest is payable monthly at a fixed rate of 6.60%.	$	-	$	24,000
Secured loan payable of $11,187, payable in monthly installments of $137 through October 1, 2023, plus interest at a rate reset periodically of 100 basis points over selected LIBOR maturity (which was 2.00% at June 30, 2017.)		10,367		11,187
Secured loan payable of $20,150, payable in monthly installments of $84 through January 1, 2024, plus interest at a rate reset periodically of 275 basis points over selected LIBOR maturity (which was 3.90% at June 30, 2017.)		19,730		-
Secured loan payable of $4,116, payable in monthly installments of $49 through January 1, 2024, plus interest at a rate reset periodically of 325 basis points over selected LIBOR maturity (which was 4.40% at June 30, 2017.)		3,871		-
Total borrowings		33,968		35,187
Less: unamortized debt issuance costs		301		102
	$	33,667	$	35,085

On December 28, 2016, TSM entered into a $35,500 credit agreement with a commercial bank in Puerto Rico. The agreement consists of three term loans: (i) Term Loan A in the principal amount of $11,187, (ii) Term Loan B in the principal amount of $20,150 and (iii) Term Loan C in the principal amount of $4,116.  Term Loan A was used to refinance the outstanding balance of the previous $41,000 secured loan payable with the same commercial bank in Puerto Rico.  Proceeds from Term Loans B and C were received on January 11, 2017 and were used to prepay the outstanding principal amount plus accrued interest of the 6.6% Senior Unsecured Notes due January 2021 ($24,000), and fund a portion of a debt service reserve for the Loan (approximately $200).  Interest payable commenced on January 1, 2017, in the case of Term Loan A, and on February 1, 2017, in the case of Term Loan B and Term Loan C.  The Credit Agreement includes certain financial and non-financial covenants, including negative covenants imposing certain restrictions on the Corporation’s business.

On March 11, 2016 Triple-S Salud, Inc. (TSS) entered into a $30,000 revolving loan agreement with a commercial bank in Puerto Rico. This unused line of credit had an interest rate of LIBOR plus 220 basis points and contained certain financial and non-financial covenants that are customary for this type of facility. This revolving loan agreement matured on March 11, 2017, and was not renewed.

On April 18, 2017, Triple-S Advantage, Inc. (TSA) entered into a $10,000 revolving loan agreement with a commercial bank in Puerto Rico. This line of credit has an interest rate of 30-day LIBOR plus 25 basis points, matures on April 17, 2018, and includes certain financial and non-financial covenants that are customary for this type of facility.  As of June 30, 2017, there is no outstanding balance in this line of credit.

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Pension Plan

6 Months Ended

Jun. 30, 2017

Pension Plan [Abstract]

Pension Plan

(8) Pension Plan

The components of net periodic benefit cost for the three months and six months ended June 30 were as follows:

	Three months ended June 30,						Six months ended June 30,
	2017			2016			2017			2016
Components of net periodic benefit cost:
Service cost	$	-		$	878		$	-		$	2,128
Interest cost		1,798			1,939			3,596			4,701
Expected return on assets		(2,199	)		(2,054	)		(4,398	)		(4,980	)
Amortization of prior service benefit		-			(102	)		-			(246	)
Amortization of actuarial loss		86			831			172			2,014
Settlement loss		631			-			631			-
Net periodic benefit cost	$	316		$	1,492		$	1		$	3,617

Effective January 31, 2017, the Company froze the pay and service components of amounts used to calculate pension benefits for active employees who participated in the pension plan. Therefore, as of the Effective Date, active employees in the pension plan will not accrue additional benefits for future service and eligible compensation received.

Employer Contributions:  The Corporation disclosed in its audited consolidated financial statements for the year ended December 31, 2016 that it expected to contribute $4,000 to the pension program in 2017.  As of June 30, 2017, the Corporation has not made contributions to the pension program.

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Comprehensive Income

6 Months Ended

Jun. 30, 2017

Comprehensive Income [Abstract]

Comprehensive Income

(9) Comprehensive Income

The accumulated balances for each classification of other comprehensive income, net of tax, are as follows:

	Three months ended June 30,						Six months ended June 30,
	2017			2016			2017			2016
Net Unrealized Gain on Securities Beginning Balance	$	70,843		$	82,055		$	62,371		$	62,478
Other comprehensive income before reclassifications		7,639			18,193			16,380			37,817
Amounts reclassified from accumulated other comprehensive income		(3,243	)		(2,363	)		(3,512	)		(2,410	)
Net current period change		4,396			15,830			12,868			35,407
Ending Balance		75,239			97,885			75,239			97,885
Liability for Pension Benefits Beginning Balance		(19,923	)		(36,221	)		(19,976	)		(36,855	)
Amounts reclassified from accumulated other comprehensive income		53			445			106			1,079
Ending Balance		(19,870	)		(35,776	)		(19,870	)		(35,776	)
Accumulated Other Comprehensive Income Beginning Balance		50,920			45,834			42,395			25,623
Other comprehensive income before reclassifications		7,639			18,193			16,380			37,817
Amounts reclassified from accumulated other comprehensive income		(3,190	)		(1,918	)		(3,406	)		(1,331	)
Net current period change		4,449			16,275			12,974			36,486
Ending Balance	$	55,369		$	62,109		$	55,369		$	62,109

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Share-Based Compensation

6 Months Ended

Jun. 30, 2017

Share-Based Compensation [Abstract]

Share-Based Compensation

(10) Share-Based Compensation

Share-based compensation expense recorded during the three months and six months ended June 30, 2017 was $1,613 and $170, respectively. Share-based compensation expense recorded during the three months and six months ended June 30, 2016 was $1,228 and $2,313, respectively. The lower expense during the six months ended June 30, 2017 results from a decrease in the 2014 and 2015 grants expected performance shares payouts. There was no cash received from stock option exercises during the six months ended June 30, 2017 and 2016.

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Net Income Available to Stockholders and Net Income per Share

6 Months Ended

Jun. 30, 2017

Net Income Available to Stockholders and Net Income per Share [Abstract]

Net Income Available to Stockholders and Net Income per Share

(11) Net Income Available to Stockholders and Net Income per Share

The following table sets forth the computation of basic and diluted earnings per share:

	Three months ended June 30,				Six months ended June 30,
	2017		2016		2017		2016
Numerator for earnings per share:
Net income attributable to TSM available to stockholders	$	12,705	$	3,880	$	8,363	$	7,336
Denominator for basic earnings per share:
Weighted average of common shares		24,246,591		24,624,070		24,195,211		24,609,749
Effect of dilutive securities		36,687		45,364		50,220		58,892
Denominator for diluted earnings per share		24,283,278		24,669,434		24,245,431		24,668,641
Basic net income per share attributable to TSM	$	0.52	$	0.16	$	0.35	$	0.30
Diluted net income per share attributable to TSM	$	0.52	$	0.16	$	0.34	$	0.30

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Contingencies

6 Months Ended

Jun. 30, 2017

Contingencies [Abstract]

Contingencies

(12) Contingencies

The following information supplements and amends, as applicable, the disclosures in Note 24 to the Consolidated Financial Statements of the Company’s 2016 Annual Report on Form 10-K.  Our business is subject to numerous laws and regulations promulgated by Federal, Puerto Rico, USVI, Costa Rica, BVI, and Anguilla governmental authorities. Compliance with these laws and regulations can be subject to government review and interpretation, as well as regulatory actions unknown and unasserted at this time. The Commissioner of Insurance of Puerto Rico, as well as other Federal, Puerto Rico, USVI, Costa Rica, BVI, and Anguilla government authorities, regularly make inquiries and conduct audits concerning the Company's compliance with such laws and regulations. Penalties associated with violations of these laws and regulations may include significant fines and exclusion from participating in certain publicly funded programs and may require the Company to comply with corrective action plans or changes in our practices.

We are involved in various legal actions arising in the ordinary course of business. We are also defendants in various other litigations and proceedings, some of which are described below.  Where the Company believes that a loss is both probable and estimable, such amounts have been recorded.  Although we believe our estimates of such losses are reasonable, these estimates could change as a result of further developments in these matters. In other cases, it is at least reasonably possible that the Company may incur a loss related to one or more of the mentioned pending lawsuits or investigations, but the Company is unable to estimate the range of possible loss which may be ultimately realized, either individually or in the aggregate, upon their resolution.  The outcome of legal proceedings is inherently uncertain and pending matters for which accruals have not been established have not progressed sufficiently to enable us to estimate a range of possible loss, if any.  Given the inherent unpredictability of these matters, it is possible that an adverse outcome in one or more of these matters could have a material effect on the consolidated financial condition, operating results and/or cash flows of the Company.

Additionally, we may face various potential litigation claims that have not been asserted to date, including claims from persons purporting to have rights to acquire shares of the Company on favorable terms pursuant to agreements previously entered by our predecessor managed care subsidiary, Seguros de Servicios de Salud de Puerto Rico, Inc. (SSS), with physicians or dentists who joined our provider network to sell such new provider shares of SSS at a future date (Share Acquisition Agreements) or to have inherited such shares notwithstanding applicable transfer and ownership restrictions.

ASES Audits

On July 2, 2014, ASES notified TSS that the results of an audit conducted in connection with the government health plan contract for several periods between October 2005 and September 2013, reflected an overpayment of premiums made to TSS pursuant to prior contracts with ASES in the amount of $7,900. The alleged overpayments were related to duplicated payments or payments made for deceased members, and ASES requested the reimbursement of the alleged overpayment. On January 16, 2015, TSS filed an injunction against ASES under the case Triple-S Salud, Inc. v. Administración de Seguros de Salud de Puerto Rico. TSS contends that ASES’ request for reimbursement has no merits on several grounds, including a 2011 settlement between both parties covering the majority of the amount claimed by ASES, and that ASES, under the terms of the contracts, was responsible for certifying the membership. TSS also amended its claim to include the Puerto Rico Health Department (PRHD), as it asserts the PRHD is an indispensable party for the resolution of this matter and to seek the payment of approximately $5,000, since the premiums paid to TSS should have been higher than what ASES actually paid given the additional risk assumed by TSS. The case was assigned to a Special Commissioner, who on March 17, 2017 issued a report recommending the court to dismiss the complaint in favor of TSS. On May 26, 2017, the court issued a partial judgement dismissing the complaint in favor of TSS with respect to the alleged overpayments for the period between October 2005 and September 2010, which represented approximately $7,400 of the total alleged claim. After this partial dismissal, the only remaining claim pending to be adjudicated is for the alleged overpayments for the 2011-2013 period, which amounts to approximately $500. On July 27, 2017, ASES appealed the court’s partial judgement. TSS will oppose ASES’ appeal and will continue to conduct a vigorous defense of this matter.

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Segment Information

6 Months Ended

Jun. 30, 2017

Segment Information [Abstract]

Segment Information

(13) Segment Information

The operations of the Corporation are conducted principally through three business segments: Managed Care, Life Insurance, and Property and Casualty Insurance.  The Corporation evaluates performance based primarily on the operating revenues and operating income of each segment.  Operating revenues include premiums earned, net, administrative service fees, net investment income, and revenues derived from other segments.  Operating costs include claims incurred and operating expenses.  The Corporation calculates operating income or loss as operating revenues less operating costs.

The following tables summarize the operations by reportable segment:

	Three months ended June 30,						Six months ended June 30,
	2017			2016			2017			2016
Operating revenues:
Managed Care:
Premiums earned, net	$	661,365		$	668,932		$	1,301,512		$	1,347,312
Administrative service fees		4,548			4,520			8,927			9,603
Intersegment premiums/service fees		1,631			1,652			3,165			3,137
Net investment income		4,146			4,107			8,038			7,587
Total managed care		671,690			679,211			1,321,642			1,367,639
Life Insurance:
Premiums earned, net		39,858			38,591			80,156			77,557
Intersegment premiums		111			202			302			339
Net investment income		6,330			6,412			12,417			12,326
Total life insurance		46,299			45,205			92,875			90,222
Property and Casualty Insurance:
Premiums earned, net		21,668			21,526			43,216			42,714
Intersegment premiums		154			154			307			307
Net investment income		2,134			2,325			4,058			4,254
Total property and casualty insurance		23,956			24,005			47,581			47,275
Other segments: *
Intersegment service revenues		2,259			2,617			3,845			5,162
Operating revenues from external sources		1,154			959			2,154			1,815
Total other segments		3,413			3,576			5,999			6,977
Total business segments		745,358			751,997			1,468,097			1,512,113
TSM operating revenues from external sources		55			1			133			5
Elimination of intersegment premiums/service fees		(1,896	)		(2,008	)		(3,494	)		(3,783	)
Elimination of intersegment service revenues		(2,259	)		2,518			(3,845	)		(27	)
Other intersegment eliminations		-			(5,149	)		-			(5,162	)
Consolidated operating revenues	$	741,258		$	747,359		$	1,460,891		$	1,503,146

* Includes segments that are not required to be reported separately, primarily the data processing services organization and the health clinic.

	Three months ended June 30,						Six months ended June 30,
	2017			2016			2017			2016
Operating income (loss):
Managed care	$	2,920		$	(3,780	)	$	(15,662	)	$	(4,421	)
Life insurance		4,990			5,054			8,925			10,652
Property and casualty insurance		3,775			3,388			5,842			5,499
Other segments *		1			(182	)		144			(361	)
Total business segments		11,686			4,480			(751	)		11,369
TSM operating revenues from external sources		55			1			133			5
TSM unallocated operating expenses		(2,900	)		(2,707	)		(5,117	)		(5,874	)
Elimination of TSM intersegment charges		2,400			2,386			4,800			4,773
Consolidated operating income (loss)		11,241			4,160			(935	)		10,273
Consolidated net realized investment gains		4,054			1,520			4,390			1,578
Consolidated interest expense		(1,721	)		(1,954	)		(3,407	)		(3,836	)
Consolidated other income, net		587			3,859			3,112			4,734
Consolidated income before taxes	$	14,161		$	7,585		$	3,160		$	12,749
Depreciation and amortization expense:
Managed care	$	2,649		$	2,839		$	4,888		$	5,773
Life insurance		318			249			598			504
Property and casualty insurance		138			150			252			311
Other segments*		163			166			323			319
Total business segments		3,268			3,404			6,061			6,907
TSM depreciation expense		196			196			393			393
Consolidated depreciation and amortization expense	$	3,464		$	3,600		$	6,454		$	7,300

* Includes segments that are not required to be reported separately, primarily the data processing services organization and the health clinic.

	June 30, 2017			December 31, 2016
Assets:
Managed care	$	1,156,585		$	1,013,872
Life insurance		841,401			816,920
Property and casualty insurance		377,020			349,159
Other segments *		27,031			26,034
Total business segments		2,402,037			2,205,985
Unallocated amounts related to TSM:
Cash, cash equivalents, and investments		9,889			17,033
Property and equipment, net		22,130			22,380
Other assets		20,842			21,646
		52,861			61,059
Elimination entries-intersegment receivables and others		(49,530	)		(48,045	)
Consolidated total assets	$	2,405,368		$	2,218,999

* Includes segments that are not required to be reported separately, primarily the data processing services organization and the health clinic.

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Subsequent Events

6 Months Ended

Jun. 30, 2017

Subsequent Events [Abstract]

Subsequent Events

(14) Subsequent Events

The Company evaluated subsequent events through the date the financial statements were issued.  No events, other than those described in these notes, have occurred that require adjustment or disclosure pursuant to current Accounting Standards Codification.

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Basis of Presentation (Policies)

6 Months Ended

Jun. 30, 2017

Basis of Presentation [Abstract]

Basis of Presentation

The accompanying condensed consolidated interim financial statements prepared by Triple-S Management Corporation and its subsidiaries are unaudited.  In this filing, the “Corporation”, the “Company”, “TSM”, “we”, “us” and “our” refer to Triple-S Management Corporation and its subsidiaries.  The condensed consolidated interim financial statements do not include all of the information and the footnotes required by accounting principles generally accepted in the U.S. (GAAP) for complete financial statements.  These condensed consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements included in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2016.

In the opinion of management, all adjustments, consisting of a normal recurring nature necessary for a fair presentation of such condensed consolidated interim financial statements, have been included.  The results of operations for the three months and six months ended June 30, 2017 are not necessarily indicative of the results for the full year ending December 31, 2017.

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Recent Accounting Standards (Policies)

6 Months Ended

Jun. 30, 2017

Recent Accounting Standards [Abstract]

Recent Accounting Standards

On May 10, 2017, the Financial Accounting Standard Board (FASB) issued guidance to provide clarity and reduce both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, Compensation-Stock Compensation, to a change in the terms and conditions of a share-based payment award.  The amendments in this update affect any entity that changes the terms or conditions of a share-based payment award.  This guidance indicates an entity should account for the effects of a modification unless the following criteria are met: (1) the fair value (or calculated value or intrinsic value, if such an alternative measurement method is used) of the modified award is the same as the fair value (or calculated value or intrinsic value, if such an alternative measurement method is used) of the original award immediately before the original award is modified. If the modification does not affect any of the inputs to the valuation technique that the entity uses to value the award, the entity is not required to estimate the value immediately before and after the modification, (2) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified, and (3) the classification of the modified award as an equity or liability instrument is the same as the classification of the original award immediately before the original award is modified. For all companies, these amendments, which should be applied on a prospective basis, are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years.  We are currently evaluating the impact the adoption of this guidance may have on the Company's consolidated financial statements.

On March 10, 2017, the FASB issued guidance to improve the presentation of defined benefit costs in the income statement.  In particular, the guidance requires that an employer report the service cost component in the same line item(s) as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented.  Additionally, this guidance allows only the service cost component to be eligible for capitalization, when applicable (e.g., as a cost of internally manufactured inventory or a self-constructed asset).  For public companies, these amendments, which should be applied on a prospective basis, are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years.  Since we do not present a subtotal of income from operations, the adoption of this guidance should not have a material impact on the presentation of the Company’s consolidated result of operations.

On January 26, 2017, the FASB issued guidance to simplify the manner in which an entity is required to evaluate goodwill for impairment by eliminating Step 2 from the goodwill impairment test.  Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill.  Instead, under the amendments in this guidance, an entity should (1) perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount, and (2) recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, with the understanding that the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit.  Additionally, this guidance removes the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails such qualitative test, to perform Step 2 of the goodwill impairment test.  For public companies, these amendments, which should be applied on a prospective basis, are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years.  We are currently evaluating the impact the adoption of this guidance may have on the Company's consolidated financial statements.

Other than the accounting pronouncement disclosed above, there were no other new accounting pronouncements issued during the three months and six months ended June 30, 2017 that could have a material impact on the Corporation’s financial position, operating results or financial statements disclosures.

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Investment in Securities (Tables)

6 Months Ended

Jun. 30, 2017

Investment in Securities [Abstract]

Amortized Cost and Estimated Fair Value for Available-for-Sale and Held-to-Maturity Securities by Major Security Type and Class of Security

The amortized cost for debt securities and cost for equity securities, gross unrealized gains, gross unrealized losses, and estimated fair value for available-for-sale and held-to-maturity securities by major security type and class of security at June 30, 2017 and December 31, 2016, were as follows:

	June 30, 2017
	Amortized cost		Gross unrealized gains		Gross unrealized losses			Estimated fair value
Securities available for sale:
Fixed maturities:
Obligations of government-sponsored enterprises	$	40,358	$	29	$	(4	)	$	40,383
U.S. Treasury securities and obligations of U.S. government instrumentalities		79,932		180		(115	)		79,997
Obligations of the Commonwealth of Puerto Rico and its instrumentalities		11,719		445		(3	)		12,161
Municipal securities		682,576		34,459		(393	)		716,642
Corporate bonds		278,417		15,626		(89	)		293,954
Residential mortgage-backed securities		11,877		35		(3	)		11,909
Collateralized mortgage obligations		41,129		97		(111	)		41,115
Total fixed maturities		1,146,008		50,871		(718	)		1,196,161
Equity securities:
Mutual funds		214,923		43,446		(6	)		258,363
Alternative investments		29,336		368		(247	)		29,457
Total equity maturites		244,259		43,814		(253	)		287,820
Total	$	1,390,267	$	94,685	$	(971	)	$	1,483,981

	December 31, 2016
	Amortized cost		Gross unrealized gains		Gross unrealized losses			Estimated fair value
Securities available for sale:
Fixed maturities:
Obligations of government-sponsored enterprises	$	41,442	$	87	$	(15	)	$	41,514
U.S. Treasury securities and obligations of U.S.government instrumentalities		85,652		157		(9	)		85,800
Obligations of the Commonwealth of Puerto Rico and its instrumentalities		17,930		2,189		(68	)		20,051
Municipal securities		650,175		34,187		(559	)		683,803
Corporate bonds		263,351		12,182		(661	)		274,872
Residential mortgage-backed securities		684		34		-			718
Collateralized mortgage obligations		45,069		58		(242	)		44,885
Total fixed maturities		1,104,303		48,894		(1,554	)		1,151,643
Equity securities - Mutual funds		240,699		30,101		(451	)		270,349
Total	$	1,345,002	$	78,995	$	(2,005	)	$	1,421,992

	June 30, 2017
	Amortized cost		Gross unrealized gains		Gross unrealized losses		Estimated fair value
Securities held to maturity:
U.S. Treasury securities and obligations of U.S.government instrumentalities	$	618	$	166	$	-	$	784
Residential mortgage-backed securities		191		2		-		193
Certificates of deposit		2,026		-		-		2,026
Total	$	2,835	$	168	$	-	$	3,003

	December 31, 2016
	Amortized cost		Gross unrealized gains		Gross unrealized losses		Estimated fair value
Securities held to maturity:
U.S. Treasury securities and obligations of U.S.government instrumentalities	$	619	$	158	$	-	$	777
Residential mortgage-backed securities		191		18		-		209
Certificates of deposit		2,026		-		-		2,026
Total	$	2,836	$	176	$	-	$	3,012

Securities in Continuous Unrealized Loss Position

Gross unrealized losses on investment securities and the estimated fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of June 30, 2017 and December 31, 2016 were as follows:

	June 30, 2017
	Less than 12 months							12 months or longer							Total
	Estimated Fair Value		Gross Unrealized Loss			Number of Securities		Estimated Fair Value		Gross Unrealized Loss			Number of Securities		Estimated Fair Value		Gross Unrealized Loss			Number of Securities
Securities available for sale:
Fixed maturities
Obligations of government-sponsored enterprises	$	6,495	$	(4	)		2	$	-	$	-			-	$	6,495	$	(4	)		2
U.S. Treasury securities and obligations of U.S. governmental instrumentalities		41,408		(115	)		5		-		-			-		41,408		(115	)		5
Obligations of the Commonwealth of Puerto Rico and its instrumentalities		7,939		(3	)		5		-		-			-		7,939		(3	)		5
Municipal securities		90,575		(393	)		12		-		-			-		90,575		(393	)		12
Corporate bonds		32,355		(89	)		10		-		-			-		32,355		(89	)		10
Residential mortgage-backed securities		2,017		(3	)		1		-		-			-		2,017		(3	)		1
Collateralized mortgage obligations		25,454		(108	)		6		564		(3	)		1		26,018		(111	)		7
Total fixed maturities		206,243		(715	)		41		564		(3	)		1		206,807		(718	)		42
Equity securities
Mutual funds		1,994		(6	)		1		-		-			-		1,994		(6	)		1
Alternative investments		4,983		(129	)		7		2,431		(118	)		1		7,414		(247	)		8
Total equity securities		6,977		(135	)		8		2,431		(118	)		1		9,408		(253	)		9
Total for securities available for sale	$	213,220	$	(850	)		49	$	2,995	$	(121	)		2	$	216,215	$	(971	)		51

	December 31, 2016
	Less than 12 months							12 months or longer							Total
	Estimated Fair Value		Gross Unrealized Loss			Number of Securities		Estimated Fair Value		Gross Unrealized Loss			Number of Securities		Estimated Fair Value		Gross Unrealized Loss			Number of Securities
Securities available for sale:
Fixed maturities
Obligations of government-sponsored enterprises	$	9,483	$	(15	)		1	$	-	$	-			-	$	9,483	$	(15	)		1
U.S. Treasury securities and obligations of U.S. governmental instrumentalities		12,937		(9	)		1		-		-			-		12,937		(9	)		1
Obligations of the Commonwealth of Puerto Rico and its instrumentalities		7,758		(68	)		5		-		-			-		7,758		(68	)		5
Municipal securities		84,252		(559	)		13		-		-			-		84,252		(559	)		13
Corporate bonds		105,054		(661	)		22		-		-			-		105,054		(661	)		22
Collateralized mortgage obligations		32,120		(239	)		8		784		(3	)		1		32,904		(242	)		9
Total fixed maturities		251,604		(1,551	)		50		784		(3	)		1		252,388		(1,554	)		51
Equity securities-Mutual funds		22,615		(451	)		4		-		-			-		22,615		(451	)		4
Total for securities available for sale	$	274,219	$	(2,002	)		54	$	784	$	(3	)		1	$	275,003	$	(2,005	)		55

Maturities of Investment Securities Classified as Available for Sale and Held to Maturity

Maturities of investment securities classified as available for sale and held to maturity were as follows:

	June 30, 2017
	Amortized cost		Estimated fair value
Securities available for sale:
Due in one year or less	$	71,618	$	71,772
Due after one year through five years		324,426		327,707
Due after five years through ten years		131,235		137,195
Due after ten years		565,723		606,463
Residential mortgage-backed securities		11,877		11,909
Collateralized mortgage obligations		41,129		41,115
	$	1,146,008	$	1,196,161
Securities held to maturity:
Due in one year or less	$	2,026	$	2,026
Due after ten years		618		784
Residential mortgage-backed securities		191		193
	$	2,835	$	3,003

Realized Gains and Losses from Investments

Information regarding realized and unrealized gains and losses from investments is as follows:

	Three months ended June 30,						Six months ended June 30,
	2017			2016			2017			2016
Realized gains (losses):
Fixed maturity securities:
Securities available for sale:
Gross gains from sales	$	384		$	912		$	401		$	1,873
Gross losses from sales		(517	)		(103	)		(636	)		(1,462	)
Total fixed maturity securities		(133	)		809			(235	)		411
Equity securities:
Securities available for sale:
Gross gains from sales		4,189			2,525			4,627			3,112
Gross losses from sales		(2	)		(380	)		(2	)		(511	)
Gross losses from other-than-temporary impairments		-			(1,434	)		-			(1,434	)
Total equity securities		4,187			711			4,625			1,167
Net realized gains on securities available for sale	$	4,054		$	1,520		$	4,390		$	1,578

Changes in Net Unrealized Gains (Losses)

	Three months ended June 30,					Six months ended June 30,
	2017			2016		2017			2016
Changes in net unrealized gains (losses):
Recognized in accumulated other comprehensive income:
Fixed maturities – available for sale	$	3,252		$	18,739	$	2,813		$	41,328
Equity securities – available for sale		2,768			2,908		13,911			9,677
	$	6,020		$	21,647	$	16,724		$	51,005
Not recognized in the consolidated financial statements:
Fixed maturities – held to maturity	$	(10	)	$	27	$	(8	)	$	63

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Premiums and Other Receivables, Net (Tables)

6 Months Ended

Jun. 30, 2017

Premiums and Other Receivables, Net [Abstract]

Premiums and Other Receivables, Net

Premiums and other receivables, net were as follows:

	June 30, 2017		December 31, 2016
Premium	$	107,058	$	91,528
Self-funded group receivables		51,646		57,728
FEHBP		15,582		14,321
Agent balances		40,340		25,495
Accrued interest		13,839		13,668
Reinsurance recoverable		55,772		58,295
Unsettled sales		6,715		-
Other		62,859		62,637
		353,811		323,672
Less allowance for doubtful receivables:
Premium		23,949		27,320
Other		9,314		9,987
		33,263		37,307
Total premium and other receivables, net	$	320,548	$	286,365

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2017

Fair Value Measurements [Abstract]

Fair Value Measurements by Level for Assets Measured at Fair Value on a Recurring Basis

The following tables summarize fair value measurements by level for assets measured at fair value on a recurring basis:

	June 30, 2017
	Level 1		Level 2		Level 3		Total
Securities available for sale:
Fixed maturity securities
Obligations of government-sponsored enterprises	$	-	$	40,383	$	-	$	40,383
U.S. Treasury securities and obligations of U.S government instrumentalities		79,997		-		-		79,997
Obligations of the Commonwealth of Puerto Rico and its instrumentalities		-		12,161		-		12,161
Municipal securities		-		716,642		-		716,642
Corporate bonds		-		293,954		-		293,954
Residential agency mortgage-backed securities		-		11,909		-		11,909
Collateralized mortgage obligations		-		41,115		-		41,115
Total fixed maturities		79,997		1,116,164		-		1,196,161
Equity securities - Mutual funds		173,957		84,406		-		258,363
Alternative investments - measured at net asset value		-		-		-		29,457
Total	$	253,954	$	1,200,570	$	-	$	1,483,981

	December 31, 2016
	Level 1		Level 2		Level 3		Total
Securities available for sale:
Fixed maturity securities
Obligations of government-sponsored enterprises	$	-	$	41,514	$	-	$	41,514
U.S. Treasury securities and obligations of U.S government instrumentalities		85,800		-		-		85,800
Obligations of the Commonwealth of Puerto Rico and its instrumentalities		-		20,051		-		20,051
Municipal securities		-		683,803		-		683,803
Corporate bonds		-		274,872		-		274,872
Residential agency mortgage-backed securities		-		718		-		718
Collateralized mortgage obligations		-		44,885		-		44,885
Total fixed maturities		85,800		1,065,843		-		1,151,643
Equity securities - Mutual funds		166,595		76,222		27,532		270,349
Total	$	252,395	$	1,142,065	$	27,532	$	1,421,992

Carrying Value and Fair Value by Level of Financial Instruments not Recorded at Fair Value on Consolidated Balance Sheet

A summary of the carrying value and fair value by level of financial instruments not recorded at fair value on our condensed consolidated balance sheets are as follows:

	June 30, 2017
	Carrying		Fair Value
	Value		Level 1		Level 2		Level 3		Total
Assets:
Policy loans	$	8,716	$	-	$	8,716	$	-	$	8,716
Liabilities:
Policyholder deposits	$	179,225	$	-	$	179,225	$	-	$	179,225
Long-term borrowings:
Loans payable to bank - variable		33,968		-		33,968		-		33,968
Total long-term borrowings		33,968		-		33,968		-		33,968
Total liabilities	$	213,193	$	-	$	213,193	$	-	$	213,193

	December 31, 2016
	Carrying		Fair Value
	Value		Level 1		Level 2		Level 3		Total
Assets:
Policy loans	$	8,564	$	-	$	8,564	$	-	$	8,564
Liabilities:
Policyholder deposits	$	179,382	$	-	$	179,382	$	-	$	179,382
Long-term borrowings:
Loans payable to bank - variable		11,187		-		11,187		-		11,187
6.6% senior unsecured notes payable		24,000		-		24,000		-		24,000
Total long-term borrowings		35,187		-		35,187		-		35,187
Total liabilities	$	214,569	$	-	$	214,569	$	-	$	214,569

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Claim Liabilities (Tables)

6 Months Ended

Jun. 30, 2017

Claim Liabilities [Abstract]

Reconciliation of Beginning and Ending Balances of Claim Liabilities

A reconciliation of the beginning and ending balances of claim liabilities is as follows:

	Three months ended June 30, 2017									Six months ended June 30, 2017
	Managed Care			Other Business Segments *			Consolidated			Managed Care			Other Business Segments *			Consolidated
Claim liabilities at beginning of year	$	393,525		$	136,779		$	530,304		$	349,047		$	138,896		$	487,943
Reinsurance recoverable on claim liabilities		-			(35,898	)		(35,898	)		-			(38,998	)		(38,998	)
Net claim liabilities at beginning of year		393,525			100,881			494,406			349,047			99,898			448,945
Claims incurred
Current period insured events		580,608			26,282			606,890			1,183,241			54,508			1,237,749
Prior period insured events		(1,355	)		(1,196	)		(2,551	)		(16,695	)		(2,529	)		(19,224	)
Total		579,253			25,086			604,339			1,166,546			51,979			1,218,525
Payments of losses and loss-adjustment expenses
Current period insured events		576,135			14,944			591,079			926,585			22,917			949,502
Prior period insured events		25,208			11,586			36,794			217,573			29,523			247,096
Total		601,343			26,530			627,873			1,144,158			52,440			1,196,598
Net claim liabilities at end of year		371,435			99,437			470,872			371,435			99,437			470,872
Reinsurance recoverable on claim liabilities		-			33,368			33,368			-			33,368			33,368
Claim liabilities at end of year	$	371,435		$	132,805		$	504,240		$	371,435		$	132,805		$	504,240

	Three months ended June 30, 2016									Six months ended June 30, 2016
	Managed Care			Other Business Segments *			Consolidated			Managed Care			Other Business Segments *			Consolidated
Claim liabilities at beginning of year	$	381,448		$	143,618		$	525,066		$	348,297		$	143,468		$	491,765
Reinsurance recoverable on claim liabilities		-			(39,871	)		(39,871	)		-			(40,714	)		(40,714	)
Net claim liabilities at beginning of year		381,448			103,747			485,195			348,297			102,754			451,051
Claims incurred
Current period insured events		596,909			25,950			622,859			1,192,499			51,840			1,244,339
Prior period insured events		(6,728	)		(686	)		(7,414	)		(6,028	)		(2,934	)		(8,962	)
Total		590,181			25,264			615,445			1,186,471			48,906			1,235,377
Payments of losses and loss-adjustment expenses
Current period insured events		583,381			16,557			599,938			948,420			21,653			970,073
Prior period insured events		46,743			10,204			56,947			244,843			27,757			272,600
Total		630,124			26,761			656,885			1,193,263			49,410			1,242,673
Net claim liabilities at end of year		341,505			102,250			443,755			341,505			102,250			443,755
Reinsurance recoverable on claim liabilities		-			38,109			38,109			-			38,109			38,109
Claim liabilities at end of year	$	341,505		$	140,359		$	481,864		$	341,505		$	140,359		$	481,864

* Other Business Segments include the Life Insurance and Property and Casualty segments, as well as intersegment eliminations.

Incurred But Not Reported (IBNR) Liabilities Plus Expected Development on Reported Claims Included in the Liability for Unpaid Claims Adjustment Expenses

The following is information about total incurred but not reported (IBNR) liabilities plus expected development on reported claims included in the liability for unpaid claims adjustment expenses for the Managed Care segment as of June 30, 2017.

Incurred Year	Total of IBNR Liabilities Plus Expected Development on Reported Claims
2015		68,022
2016		46,181
2017		256,656

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Long-Term Borrowings (Tables)

6 Months Ended

Jun. 30, 2017

Long-Term Borrowings [Abstract]

Summary of Borrowings

A summary of the borrowings entered by the Company is as follows:

	June 30,		December 31,
	2017		2016
Senior unsecured notes payable of $60,000 issued on December 2005; due December 2020. Interest is payable monthly at a fixed rate of 6.60%.	$	-	$	24,000
Secured loan payable of $11,187, payable in monthly installments of $137 through October 1, 2023, plus interest at a rate reset periodically of 100 basis points over selected LIBOR maturity (which was 2.00% at June 30, 2017.)		10,367		11,187
Secured loan payable of $20,150, payable in monthly installments of $84 through January 1, 2024, plus interest at a rate reset periodically of 275 basis points over selected LIBOR maturity (which was 3.90% at June 30, 2017.)		19,730		-
Secured loan payable of $4,116, payable in monthly installments of $49 through January 1, 2024, plus interest at a rate reset periodically of 325 basis points over selected LIBOR maturity (which was 4.40% at June 30, 2017.)		3,871		-
Total borrowings		33,968		35,187
Less: unamortized debt issuance costs		301		102
	$	33,667	$	35,085

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Pension Plan (Tables)

6 Months Ended

Jun. 30, 2017

Pension Plan [Abstract]

Schedule of Components of Net Periodic Benefit

The components of net periodic benefit cost for the three months and six months ended June 30 were as follows:

	Three months ended June 30,						Six months ended June 30,
	2017			2016			2017			2016
Components of net periodic benefit cost:
Service cost	$	-		$	878		$	-		$	2,128
Interest cost		1,798			1,939			3,596			4,701
Expected return on assets		(2,199	)		(2,054	)		(4,398	)		(4,980	)
Amortization of prior service benefit		-			(102	)		-			(246	)
Amortization of actuarial loss		86			831			172			2,014
Settlement loss		631			-			631			-
Net periodic benefit cost	$	316		$	1,492		$	1		$	3,617

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Comprehensive Income (Tables)

6 Months Ended

Jun. 30, 2017

Comprehensive Income [Abstract]

Accumulated Balances of Other Comprehensive Income, Net of Tax

The accumulated balances for each classification of other comprehensive income, net of tax, are as follows:

	Three months ended June 30,						Six months ended June 30,
	2017			2016			2017			2016
Net Unrealized Gain on Securities Beginning Balance	$	70,843		$	82,055		$	62,371		$	62,478
Other comprehensive income before reclassifications		7,639			18,193			16,380			37,817
Amounts reclassified from accumulated other comprehensive income		(3,243	)		(2,363	)		(3,512	)		(2,410	)
Net current period change		4,396			15,830			12,868			35,407
Ending Balance		75,239			97,885			75,239			97,885
Liability for Pension Benefits Beginning Balance		(19,923	)		(36,221	)		(19,976	)		(36,855	)
Amounts reclassified from accumulated other comprehensive income		53			445			106			1,079
Ending Balance		(19,870	)		(35,776	)		(19,870	)		(35,776	)
Accumulated Other Comprehensive Income Beginning Balance		50,920			45,834			42,395			25,623
Other comprehensive income before reclassifications		7,639			18,193			16,380			37,817
Amounts reclassified from accumulated other comprehensive income		(3,190	)		(1,918	)		(3,406	)		(1,331	)
Net current period change		4,449			16,275			12,974			36,486
Ending Balance	$	55,369		$	62,109		$	55,369		$	62,109

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Net Income Available to Stockholders and Net Income per Share (Tables)

6 Months Ended

Jun. 30, 2017

Net Income Available to Stockholders and Net Income per Share [Abstract]

Computation of Basic and Diluted Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share:

	Three months ended June 30,				Six months ended June 30,
	2017		2016		2017		2016
Numerator for earnings per share:
Net income attributable to TSM available to stockholders	$	12,705	$	3,880	$	8,363	$	7,336
Denominator for basic earnings per share:
Weighted average of common shares		24,246,591		24,624,070		24,195,211		24,609,749
Effect of dilutive securities		36,687		45,364		50,220		58,892
Denominator for diluted earnings per share		24,283,278		24,669,434		24,245,431		24,668,641
Basic net income per share attributable to TSM	$	0.52	$	0.16	$	0.35	$	0.30
Diluted net income per share attributable to TSM	$	0.52	$	0.16	$	0.34	$	0.30

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2017

Segment Information [Abstract]

Operating Revenues by Major Operating Segment

The following tables summarize the operations by reportable segment:

	Three months ended June 30,						Six months ended June 30,
	2017			2016			2017			2016
Operating revenues:
Managed Care:
Premiums earned, net	$	661,365		$	668,932		$	1,301,512		$	1,347,312
Administrative service fees		4,548			4,520			8,927			9,603
Intersegment premiums/service fees		1,631			1,652			3,165			3,137
Net investment income		4,146			4,107			8,038			7,587
Total managed care		671,690			679,211			1,321,642			1,367,639
Life Insurance:
Premiums earned, net		39,858			38,591			80,156			77,557
Intersegment premiums		111			202			302			339
Net investment income		6,330			6,412			12,417			12,326
Total life insurance		46,299			45,205			92,875			90,222
Property and Casualty Insurance:
Premiums earned, net		21,668			21,526			43,216			42,714
Intersegment premiums		154			154			307			307
Net investment income		2,134			2,325			4,058			4,254
Total property and casualty insurance		23,956			24,005			47,581			47,275
Other segments: *
Intersegment service revenues		2,259			2,617			3,845			5,162
Operating revenues from external sources		1,154			959			2,154			1,815
Total other segments		3,413			3,576			5,999			6,977
Total business segments		745,358			751,997			1,468,097			1,512,113
TSM operating revenues from external sources		55			1			133			5
Elimination of intersegment premiums/service fees		(1,896	)		(2,008	)		(3,494	)		(3,783	)
Elimination of intersegment service revenues		(2,259	)		2,518			(3,845	)		(27	)
Other intersegment eliminations		-			(5,149	)		-			(5,162	)
Consolidated operating revenues	$	741,258		$	747,359		$	1,460,891		$	1,503,146

* Includes segments that are not required to be reported separately, primarily the data processing services organization and the health clinic.

Operating Income (Loss) and Depreciation and Amortization Expense

	Three months ended June 30,						Six months ended June 30,
	2017			2016			2017			2016
Operating income (loss):
Managed care	$	2,920		$	(3,780	)	$	(15,662	)	$	(4,421	)
Life insurance		4,990			5,054			8,925			10,652
Property and casualty insurance		3,775			3,388			5,842			5,499
Other segments *		1			(182	)		144			(361	)
Total business segments		11,686			4,480			(751	)		11,369
TSM operating revenues from external sources		55			1			133			5
TSM unallocated operating expenses		(2,900	)		(2,707	)		(5,117	)		(5,874	)
Elimination of TSM intersegment charges		2,400			2,386			4,800			4,773
Consolidated operating income (loss)		11,241			4,160			(935	)		10,273
Consolidated net realized investment gains		4,054			1,520			4,390			1,578
Consolidated interest expense		(1,721	)		(1,954	)		(3,407	)		(3,836	)
Consolidated other income, net		587			3,859			3,112			4,734
Consolidated income before taxes	$	14,161		$	7,585		$	3,160		$	12,749
Depreciation and amortization expense:
Managed care	$	2,649		$	2,839		$	4,888		$	5,773
Life insurance		318			249			598			504
Property and casualty insurance		138			150			252			311
Other segments*		163			166			323			319
Total business segments		3,268			3,404			6,061			6,907
TSM depreciation expense		196			196			393			393
Consolidated depreciation and amortization expense	$	3,464		$	3,600		$	6,454		$	7,300

* Includes segments that are not required to be reported separately, primarily the data processing services organization and the health clinic.

Assets

	June 30, 2017			December 31, 2016
Assets:
Managed care	$	1,156,585		$	1,013,872
Life insurance		841,401			816,920
Property and casualty insurance		377,020			349,159
Other segments *		27,031			26,034
Total business segments		2,402,037			2,205,985
Unallocated amounts related to TSM:
Cash, cash equivalents, and investments		9,889			17,033
Property and equipment, net		22,130			22,380
Other assets		20,842			21,646
		52,861			61,059
Elimination entries-intersegment receivables and others		(49,530	)		(48,045	)
Consolidated total assets	$	2,405,368		$	2,218,999

* Includes segments that are not required to be reported separately, primarily the data processing services organization and the health clinic.

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Investment in Securities, Amortized Cost and Estimated Fair Value by Major Security Type and Class of Security (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Available-for-sale debt securities, amortized cost basis [Abstract]
Amortized cost	$ 1,146,008	$ 1,104,303
Gross unrealized gains	50,871	48,894
Gross unrealized losses	(718)	(1,554)
Estimated fair value	1,196,161	1,151,643
Available-for-sale equity securities, amortized cost basis [Abstract]
Amortized cost	244,259
Gross unrealized gains	43,814
Gross unrealized losses	(253)
Estimated fair value	287,820	270,349
Available-for-sale securities, amortized cost basis [Abstract]
Amortized cost	1,390,267	1,345,002
Gross unrealized gains	94,685	78,995
Gross unrealized losses	(971)	(2,005)
Estimated fair value	1,483,981	1,421,992
Securities held to maturity [Abstract]
Amortized cost	2,835	2,836
Gross unrealized gains	168	176
Gross unrealized losses	0	0
Estimated fair value	3,003	3,012
Obligations of Government-sponsored Enterprises [Member]
Available-for-sale debt securities, amortized cost basis [Abstract]
Amortized cost	40,358	41,442
Gross unrealized gains	29	87
Gross unrealized losses	(4)	(15)
Estimated fair value	40,383	41,514
U.S. Treasury Securities and Obligations of U.S. Government Instrumentalities [Member]
Available-for-sale debt securities, amortized cost basis [Abstract]
Amortized cost	79,932	85,652
Gross unrealized gains	180	157
Gross unrealized losses	(115)	(9)
Estimated fair value	79,997	85,800
Obligations of the Commonwealth of Puerto Rico and Its Instrumentalities [Member]
Available-for-sale debt securities, amortized cost basis [Abstract]
Amortized cost	11,719	17,930
Gross unrealized gains	445	2,189
Gross unrealized losses	(3)	(68)
Estimated fair value	12,161	20,051
Municipal Securities [Member]
Available-for-sale debt securities, amortized cost basis [Abstract]
Amortized cost	682,576	650,175
Gross unrealized gains	34,459	34,187
Gross unrealized losses	(393)	(559)
Estimated fair value	716,642	683,803
Corporate Bonds [Member]
Available-for-sale debt securities, amortized cost basis [Abstract]
Amortized cost	278,417	263,351
Gross unrealized gains	15,626	12,182
Gross unrealized losses	(89)	(661)
Estimated fair value	293,954	274,872
Residential Mortgage-backed Securities [Member]
Available-for-sale debt securities, amortized cost basis [Abstract]
Amortized cost	11,877	684
Gross unrealized gains	35	34
Gross unrealized losses	(3)	0
Estimated fair value	11,909	718
Collateralized Mortgage Obligations [Member]
Available-for-sale debt securities, amortized cost basis [Abstract]
Amortized cost	41,129	45,069
Gross unrealized gains	97	58
Gross unrealized losses	(111)	(242)
Estimated fair value	41,115	44,885
Mutual Funds [Member]
Available-for-sale equity securities, amortized cost basis [Abstract]
Amortized cost	214,923	240,699
Gross unrealized gains	43,446	30,101
Gross unrealized losses	(6)	(451)
Estimated fair value	258,363	270,349
Alternative Investments [Member]
Available-for-sale equity securities, amortized cost basis [Abstract]
Amortized cost	29,336
Gross unrealized gains	368
Gross unrealized losses	(247)
Estimated fair value	29,457
U.S. Treasury Securities and Obligations of U.S. Government Instrumentalities [Member]
Securities held to maturity [Abstract]
Amortized cost	618	619
Gross unrealized gains	166	158
Gross unrealized losses	0	0
Estimated fair value	784	777
Residential Mortgage-backed Securities [Member]
Securities held to maturity [Abstract]
Amortized cost	191	191
Gross unrealized gains	2	18
Gross unrealized losses	0	0
Estimated fair value	193	209
Certificates of Deposit [Member]
Securities held to maturity [Abstract]
Amortized cost	2,026	2,026
Gross unrealized gains	0	0
Gross unrealized losses	0	0
Estimated fair value	$ 2,026	$ 2,026

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Investment in Securities, Securities in Continuous Unrealized Loss Position (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017 USD ($) Security	Jun. 30, 2016 USD ($)	Jun. 30, 2017 USD ($) Security	Jun. 30, 2016 USD ($)	Dec. 31, 2016 USD ($) Security
Available-for-sale securities, continuous unrealized loss position, estimated fair value [Abstract]
Less than 12 months	$ 213,220		$ 213,220		$ 274,219
12 months or longer	2,995		2,995		784
Total	216,215		216,215		275,003
Available-for-sale securities, continuous unrealized loss position, gross unrealized loss [Abstract]
Less than 12 months	(850)		(850)		(2,002)
12 months or longer	(121)		(121)		(3)
Total	$ (971)		$ (971)		$ (2,005)
Available-for-sale, securities in unrealized loss positions, number of securities [Abstract]
Less than 12 months | Security	49		49		54
12 months or longer | Security	2		2		1
Total | Security	51		51		55
Estimated fair value	$ 1,196,161		$ 1,196,161		$ 1,151,643
Impairment losses from other-than-temporary impairments	0	$ 1,434	0	$ 1,434
Obligations of Government-sponsored Enterprises [Member]
Available-for-sale securities, continuous unrealized loss position, estimated fair value [Abstract]
Less than 12 months	6,495		6,495		9,483
12 months or longer	0		0		0
Total	6,495		6,495		9,483
Available-for-sale securities, continuous unrealized loss position, gross unrealized loss [Abstract]
Less than 12 months	(4)		(4)		(15)
12 months or longer	0		0		0
Total	$ (4)		$ (4)		$ (15)
Available-for-sale, securities in unrealized loss positions, number of securities [Abstract]
Less than 12 months | Security	2		2		1
12 months or longer | Security	0		0		0
Total | Security	2		2		1
Estimated fair value	$ 40,383		$ 40,383		$ 41,514
U.S. Treasury Securities and Obligations of U.S. Government Instrumentalities [Member]
Available-for-sale securities, continuous unrealized loss position, estimated fair value [Abstract]
Less than 12 months	41,408		41,408		12,937
12 months or longer	0		0		0
Total	41,408		41,408		12,937
Available-for-sale securities, continuous unrealized loss position, gross unrealized loss [Abstract]
Less than 12 months	(115)		(115)		(9)
12 months or longer	0		0		0
Total	$ (115)		$ (115)		$ (9)
Available-for-sale, securities in unrealized loss positions, number of securities [Abstract]
Less than 12 months | Security	5		5		1
12 months or longer | Security	0		0		0
Total | Security	5		5		1
Estimated fair value	$ 79,997		$ 79,997		$ 85,800
Obligations of the Commonwealth of Puerto Rico and Its Instrumentalities [Member]
Available-for-sale securities, continuous unrealized loss position, estimated fair value [Abstract]
Less than 12 months	7,939		7,939		7,758
12 months or longer	0		0		0
Total	7,939		7,939		7,758
Available-for-sale securities, continuous unrealized loss position, gross unrealized loss [Abstract]
Less than 12 months	(3)		(3)		(68)
12 months or longer	0		0		0
Total	$ (3)		$ (3)		$ (68)
Available-for-sale, securities in unrealized loss positions, number of securities [Abstract]
Less than 12 months | Security	5		5		5
12 months or longer | Security	0		0		0
Total | Security	5		5		5
Estimated fair value	$ 12,161		$ 12,161		$ 20,051
Municipal Securities [Member]
Available-for-sale securities, continuous unrealized loss position, estimated fair value [Abstract]
Less than 12 months	90,575		90,575		84,252
12 months or longer	0		0		0
Total	90,575		90,575		84,252
Available-for-sale securities, continuous unrealized loss position, gross unrealized loss [Abstract]
Less than 12 months	(393)		(393)		(559)
12 months or longer	0		0		0
Total	$ (393)		$ (393)		$ (559)
Available-for-sale, securities in unrealized loss positions, number of securities [Abstract]
Less than 12 months | Security	12		12		13
12 months or longer | Security	0		0		0
Total | Security	12		12		13
Estimated fair value	$ 716,642		$ 716,642		$ 683,803
Corporate Bonds [Member]
Available-for-sale securities, continuous unrealized loss position, estimated fair value [Abstract]
Less than 12 months	32,355		32,355		105,054
12 months or longer	0		0		0
Total	32,355		32,355		105,054
Available-for-sale securities, continuous unrealized loss position, gross unrealized loss [Abstract]
Less than 12 months	(89)		(89)		(661)
12 months or longer	0		0		0
Total	$ (89)		$ (89)		$ (661)
Available-for-sale, securities in unrealized loss positions, number of securities [Abstract]
Less than 12 months | Security	10		10		22
12 months or longer | Security	0		0		0
Total | Security	10		10		22
Estimated fair value	$ 293,954		$ 293,954		$ 274,872
Residential Mortgage-backed Securities [Member]
Available-for-sale securities, continuous unrealized loss position, estimated fair value [Abstract]
Less than 12 months	2,017		2,017
12 months or longer	0		0
Total	2,017		2,017
Available-for-sale securities, continuous unrealized loss position, gross unrealized loss [Abstract]
Less than 12 months	(3)		(3)
12 months or longer	0		0
Total	$ (3)		$ (3)
Available-for-sale, securities in unrealized loss positions, number of securities [Abstract]
Less than 12 months | Security	1		1
12 months or longer | Security	0		0
Total | Security	1		1
Estimated fair value	$ 11,909		$ 11,909		718
Collateralized Mortgage Obligations [Member]
Available-for-sale securities, continuous unrealized loss position, estimated fair value [Abstract]
Less than 12 months	25,454		25,454		32,120
12 months or longer	564		564		784
Total	26,018		26,018		32,904
Available-for-sale securities, continuous unrealized loss position, gross unrealized loss [Abstract]
Less than 12 months	(108)		(108)		(239)
12 months or longer	(3)		(3)		(3)
Total	$ (111)		$ (111)		$ (242)
Available-for-sale, securities in unrealized loss positions, number of securities [Abstract]
Less than 12 months | Security	6		6		8
12 months or longer | Security	1		1		1
Total | Security	7		7		9
Estimated fair value	$ 41,115		$ 41,115		$ 44,885
Fixed Maturities [Member]
Available-for-sale securities, continuous unrealized loss position, estimated fair value [Abstract]
Less than 12 months	206,243		206,243		251,604
12 months or longer	564		564		784
Total	206,807		206,807		252,388
Available-for-sale securities, continuous unrealized loss position, gross unrealized loss [Abstract]
Less than 12 months	(715)		(715)		(1,551)
12 months or longer	(3)		(3)		(3)
Total	$ (718)		$ (718)		$ (1,554)
Available-for-sale, securities in unrealized loss positions, number of securities [Abstract]
Less than 12 months | Security	41		41		50
12 months or longer | Security	1		1		1
Total | Security	42		42		51
Mutual Funds [Member]
Available-for-sale securities, continuous unrealized loss position, estimated fair value [Abstract]
Less than 12 months	$ 1,994		$ 1,994		$ 22,615
12 months or longer	0		0		0
Total	1,994		1,994		22,615
Available-for-sale securities, continuous unrealized loss position, gross unrealized loss [Abstract]
Less than 12 months	(6)		(6)		(451)
12 months or longer	0		0		0
Total	$ (6)		$ (6)		$ (451)
Available-for-sale, securities in unrealized loss positions, number of securities [Abstract]
Less than 12 months | Security	1		1		4
12 months or longer | Security	0		0		0
Total | Security	1		1		4
Impairment losses from other-than-temporary impairments	$ 0	1,434	$ 0	1,434
Alternative Investments [Member]
Available-for-sale securities, continuous unrealized loss position, estimated fair value [Abstract]
Less than 12 months	4,983		4,983
12 months or longer	2,431		2,431
Total	7,414		7,414
Available-for-sale securities, continuous unrealized loss position, gross unrealized loss [Abstract]
Less than 12 months	(129)		(129)
12 months or longer	(118)		(118)
Total	$ (247)		$ (247)
Available-for-sale, securities in unrealized loss positions, number of securities [Abstract]
Less than 12 months | Security	7		7
12 months or longer | Security	1		1
Total | Security	8		8
Impairment losses from other-than-temporary impairments	$ 0		$ 0
Equity Securities [Member]
Available-for-sale securities, continuous unrealized loss position, estimated fair value [Abstract]
Less than 12 months	6,977		6,977
12 months or longer	2,431		2,431
Total	9,408		9,408
Available-for-sale securities, continuous unrealized loss position, gross unrealized loss [Abstract]
Less than 12 months	(135)		(135)
12 months or longer	(118)		(118)
Total	$ (253)		$ (253)
Available-for-sale, securities in unrealized loss positions, number of securities [Abstract]
Less than 12 months | Security	8		8
12 months or longer | Security	1		1
Total | Security	9		9
Impairment losses from other-than-temporary impairments	$ 0	1,434	$ 0	1,434
Escrow Bonds [Member]
Available-for-sale, securities in unrealized loss positions, number of securities [Abstract]
Estimated fair value	7,939		7,939
Gross unrealized gains (losses)			(3)
Cofina Bonds [Member]
Available-for-sale, securities in unrealized loss positions, number of securities [Abstract]
Estimated fair value	4,222		4,222
Impairment losses from other-than-temporary impairments	$ 0	$ 0	0	$ 0
Gross unrealized gains (losses)			$ 445

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Investment in Securities, Maturities of Investment Securities (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Securities available for sale, Amortized Cost [Abstract]
Due in one year or less, amortized cost	$ 71,618
Due after one year through five years, amortized cost	324,426
Due after five years through ten years, amortized cost	131,235
Due after ten years, amortized cost	565,723
Residential mortgage-backed securities, amortized cost	11,877
Collateralized mortgage obligations, amortized cost	41,129
Amortized cost	1,146,008	$ 1,104,303
Securities available for sale, Estimated Fair Value [Abstract]
Due in one year or less, estimated fair value	71,772
Due after one year through five, estimated fair value	327,707
Due after five years through ten years, estimated fair value	137,195
Due after ten years, estimated fair value	606,463
Residential mortgage-backed securities, estimated fair value	11,909
Collateralized mortgage obligations, estimated fair value	41,115
Total, estimated fair value	1,196,161	1,151,643
Securities held to maturity, Amortized Cost [Abstract]
Due in one year or less, amortized cost	2,026
Due after ten years, amortized cost	618
Residential mortgage-backed securities, amortized cost	191
Amortized cost	2,835	2,836
Securities held to maturity, Estimated Fair Value [Abstract]
Due in one year or less, estimated fair value	2,026
Due after ten years, estimated fair value	784
Residential mortgage-backed securities, estimated fair value	193
Estimated fair value	$ 3,003	$ 3,012

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Investment in Securities, Realized Gains and Losses from Investments (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017 USD ($) Investment	Jun. 30, 2016 USD ($)	Jun. 30, 2017 USD ($) Investment	Jun. 30, 2016 USD ($)	Dec. 31, 2016 Investment
Securities available for sale [Abstract]
Gross losses from other-than-temporary impairments	$ 0	$ (1,434)	$ 0	$ (1,434)
Net realized gains on securities available for sale	4,054	1,520	4,390	1,578
Recognized in accumulated other comprehensive income [Abstract]
Available-for-sale securities	6,020	21,647	16,724	51,005
Not recognized in the consolidated financial statements [Abstract]
Deferred tax liability on unrealized gains	$ 3,931	15,598	$ 3,931	15,598
Number of individual investment in securities exceeding 10% of stockholders' equity | Investment	0		0		0
Fixed Maturities Securities [Member]
Securities available for sale [Abstract]
Gross gains from sales	$ 384	912	$ 401	1,873
Gross losses from sales	(517)	(103)	(636)	(1,462)
Gross realized gains (losses)	(133)	809	(235)	411
Recognized in accumulated other comprehensive income [Abstract]
Available-for-sale securities	3,252	18,739	2,813	41,328
Not recognized in the consolidated financial statements [Abstract]
Held to maturity	(10)	27	(8)	63
Equity Securities [Member]
Securities available for sale [Abstract]
Gross gains from sales	4,189	2,525	4,627	3,112
Gross losses from sales	(2)	(380)	(2)	(511)
Gross losses from other-than-temporary impairments	0	(1,434)	0	(1,434)
Gross realized gains (losses)	4,187	711	4,625	1,167
Recognized in accumulated other comprehensive income [Abstract]
Available-for-sale securities	$ 2,768	$ 2,908	$ 13,911	$ 9,677

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Premiums and Other Receivables, Net (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Premiums and Other Receivables [Line Items]
Premium	$ 107,058	$ 91,528
Self-funded group receivables	51,646	57,728
FEHBP	15,582	14,321
Agent balances	40,340	25,495
Accrued interest	13,839	13,668
Reinsurance recoverable	55,772	58,295
Unsettled sales	6,715	0
Other	62,859	62,637
Premiums and other receivables, total	353,811	323,672
Less allowance for doubtful receivables [Abstract]
Premium	23,949	27,320
Other	9,314	9,987
Premiums and other receivables, allowance	33,263	37,307
Total premium and other receivables, net	320,548	286,365
Government of Puerto Rico [Member]
Premiums and Other Receivables [Line Items]
Premiums and other receivables, total	63,565	57,750
Less allowance for doubtful receivables [Abstract]
Premiums and other receivables, allowance	$ 14,853	$ 18,812

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Fair Value Measurements, Fair Value Measurements by Level for Assets Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Securities available for sale [Abstract]
Fixed maturities	$ 1,196,161	$ 1,151,643
Equity securities	287,820	270,349
Obligations of Government-sponsored Enterprises [Member]
Securities available for sale [Abstract]
Fixed maturities	40,383	41,514
U.S. Treasury Securities and Obligations of U.S. Government Instrumentalities [Member]
Securities available for sale [Abstract]
Fixed maturities	79,997	85,800
Obligations of the Commonwealth of Puerto Rico and Its Instrumentalities [Member]
Securities available for sale [Abstract]
Fixed maturities	12,161	20,051
Municipal Securities [Member]
Securities available for sale [Abstract]
Fixed maturities	716,642	683,803
Corporate Bonds [Member]
Securities available for sale [Abstract]
Fixed maturities	293,954	274,872
Residential Agency Mortgage-backed Securities [Member]
Securities available for sale [Abstract]
Fixed maturities	11,909	718
Collateralized Mortgage Obligations [Member]
Securities available for sale [Abstract]
Fixed maturities	41,115	44,885
Mutual Funds [Member]
Securities available for sale [Abstract]
Equity securities	258,363	270,349
Escrow Bonds [Member]
Securities available for sale [Abstract]
Fixed maturities	7,939
Cofina Bonds [Member]
Securities available for sale [Abstract]
Fixed maturities	4,222
Fair Value, Measurements, Recurring [Member]
Securities available for sale [Abstract]
Fixed maturities	1,196,161	1,151,643
Alternative investments - measured at net asset value	29,457
Total	1,483,981	1,421,992
Fair Value, Measurements, Recurring [Member] | Level 1 [Member]
Securities available for sale [Abstract]
Fixed maturities	79,997	85,800
Alternative investments - measured at net asset value	0
Total	253,954	252,395
Fair Value, Measurements, Recurring [Member] | Level 2 [Member]
Securities available for sale [Abstract]
Fixed maturities	1,116,164	1,065,843
Alternative investments - measured at net asset value	0
Total	1,200,570	1,142,065
Fair Value, Measurements, Recurring [Member] | Level 3 [Member]
Securities available for sale [Abstract]
Fixed maturities	0	0
Alternative investments - measured at net asset value	0
Total	0	27,532
Fair Value, Measurements, Recurring [Member] | Obligations of Government-sponsored Enterprises [Member]
Securities available for sale [Abstract]
Fixed maturities	40,383	41,514
Fair Value, Measurements, Recurring [Member] | Obligations of Government-sponsored Enterprises [Member] | Level 1 [Member]
Securities available for sale [Abstract]
Fixed maturities	0	0
Fair Value, Measurements, Recurring [Member] | Obligations of Government-sponsored Enterprises [Member] | Level 2 [Member]
Securities available for sale [Abstract]
Fixed maturities	40,383	41,514
Fair Value, Measurements, Recurring [Member] | Obligations of Government-sponsored Enterprises [Member] | Level 3 [Member]
Securities available for sale [Abstract]
Fixed maturities	0	0
Fair Value, Measurements, Recurring [Member] | U.S. Treasury Securities and Obligations of U.S. Government Instrumentalities [Member]
Securities available for sale [Abstract]
Fixed maturities	79,997	85,800
Fair Value, Measurements, Recurring [Member] | U.S. Treasury Securities and Obligations of U.S. Government Instrumentalities [Member] | Level 1 [Member]
Securities available for sale [Abstract]
Fixed maturities	79,997	85,800
Fair Value, Measurements, Recurring [Member] | U.S. Treasury Securities and Obligations of U.S. Government Instrumentalities [Member] | Level 2 [Member]
Securities available for sale [Abstract]
Fixed maturities	0	0
Fair Value, Measurements, Recurring [Member] | U.S. Treasury Securities and Obligations of U.S. Government Instrumentalities [Member] | Level 3 [Member]
Securities available for sale [Abstract]
Fixed maturities	0	0
Fair Value, Measurements, Recurring [Member] | Obligations of the Commonwealth of Puerto Rico and Its Instrumentalities [Member]
Securities available for sale [Abstract]
Fixed maturities	12,161	20,051
Fair Value, Measurements, Recurring [Member] | Obligations of the Commonwealth of Puerto Rico and Its Instrumentalities [Member] | Level 1 [Member]
Securities available for sale [Abstract]
Fixed maturities	0	0
Fair Value, Measurements, Recurring [Member] | Obligations of the Commonwealth of Puerto Rico and Its Instrumentalities [Member] | Level 2 [Member]
Securities available for sale [Abstract]
Fixed maturities	12,161	20,051
Fair Value, Measurements, Recurring [Member] | Obligations of the Commonwealth of Puerto Rico and Its Instrumentalities [Member] | Level 3 [Member]
Securities available for sale [Abstract]
Fixed maturities	0	0
Fair Value, Measurements, Recurring [Member] | Municipal Securities [Member]
Securities available for sale [Abstract]
Fixed maturities	716,642	683,803
Fair Value, Measurements, Recurring [Member] | Municipal Securities [Member] | Level 1 [Member]
Securities available for sale [Abstract]
Fixed maturities	0	0
Fair Value, Measurements, Recurring [Member] | Municipal Securities [Member] | Level 2 [Member]
Securities available for sale [Abstract]
Fixed maturities	716,642	683,803
Fair Value, Measurements, Recurring [Member] | Municipal Securities [Member] | Level 3 [Member]
Securities available for sale [Abstract]
Fixed maturities	0	0
Fair Value, Measurements, Recurring [Member] | Corporate Bonds [Member]
Securities available for sale [Abstract]
Fixed maturities	293,954	274,872
Fair Value, Measurements, Recurring [Member] | Corporate Bonds [Member] | Level 1 [Member]
Securities available for sale [Abstract]
Fixed maturities	0	0
Fair Value, Measurements, Recurring [Member] | Corporate Bonds [Member] | Level 2 [Member]
Securities available for sale [Abstract]
Fixed maturities	293,954	274,872
Fair Value, Measurements, Recurring [Member] | Corporate Bonds [Member] | Level 3 [Member]
Securities available for sale [Abstract]
Fixed maturities	0	0
Fair Value, Measurements, Recurring [Member] | Residential Agency Mortgage-backed Securities [Member]
Securities available for sale [Abstract]
Fixed maturities	11,909	718
Fair Value, Measurements, Recurring [Member] | Residential Agency Mortgage-backed Securities [Member] | Level 1 [Member]
Securities available for sale [Abstract]
Fixed maturities	0	0
Fair Value, Measurements, Recurring [Member] | Residential Agency Mortgage-backed Securities [Member] | Level 2 [Member]
Securities available for sale [Abstract]
Fixed maturities	11,909	718
Fair Value, Measurements, Recurring [Member] | Residential Agency Mortgage-backed Securities [Member] | Level 3 [Member]
Securities available for sale [Abstract]
Fixed maturities	0	0
Fair Value, Measurements, Recurring [Member] | Collateralized Mortgage Obligations [Member]
Securities available for sale [Abstract]
Fixed maturities	41,115	44,885
Fair Value, Measurements, Recurring [Member] | Collateralized Mortgage Obligations [Member] | Level 1 [Member]
Securities available for sale [Abstract]
Fixed maturities	0	0
Fair Value, Measurements, Recurring [Member] | Collateralized Mortgage Obligations [Member] | Level 2 [Member]
Securities available for sale [Abstract]
Fixed maturities	41,115	44,885
Fair Value, Measurements, Recurring [Member] | Collateralized Mortgage Obligations [Member] | Level 3 [Member]
Securities available for sale [Abstract]
Fixed maturities	0	0
Fair Value, Measurements, Recurring [Member] | Mutual Funds [Member]
Securities available for sale [Abstract]
Equity securities	258,363	270,349
Fair Value, Measurements, Recurring [Member] | Mutual Funds [Member] | Level 1 [Member]
Securities available for sale [Abstract]
Equity securities	173,957	166,595
Fair Value, Measurements, Recurring [Member] | Mutual Funds [Member] | Level 2 [Member]
Securities available for sale [Abstract]
Equity securities	84,406	76,222
Fair Value, Measurements, Recurring [Member] | Mutual Funds [Member] | Level 3 [Member]
Securities available for sale [Abstract]
Equity securities	$ 0	$ 27,532

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Fair Value Measurements, Reconciliation of Assets Measured at Fair Value Using Significant Unobservable Inputs (Level 3) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Fair Value Measurements [Abstract]
Transfers into level 3	$ 0	$ 0	$ 0	$ 0
Transfers out of level 3	0	0	0	0
Level 1 to level 2 transfers	0	0	0	0
Level 2 to level 1 transfers	$ 0	$ 0	$ 0	$ 0

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Fair Value Measurements, Summary of Carrying Value and Fair Value by Level of Financial Instruments Not Recorded at Fair Value (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Liabilities [Abstract]
Unfunded capital commitments	$ 118,668
Minimum [Member]
Liabilities [Abstract]
Estimated liquidation period for underlying assets of funds	5 years
Maximum [Member]
Liabilities [Abstract]
Estimated liquidation period for underlying assets of funds	12 years
6.6% Senior Unsecured Notes Payable [Member]
Liabilities [Abstract]
Debt instrument, fixed interest rate		6.60%
Carrying Value [Member]
Assets [Abstract]
Policy loans	$ 8,716	$ 8,564
Liabilities [Abstract]
Policyholder deposits	179,225	179,382
Long-term borrowings	33,968	35,187
Total liabilities	213,193	214,569
Carrying Value [Member] | Loans Payable [Member] | Loans Payable to Bank - Variable [Member]
Liabilities [Abstract]
Long-term borrowings	33,968	11,187
Carrying Value [Member] | Notes Payable [Member] | 6.6% Senior Unsecured Notes Payable [Member]
Liabilities [Abstract]
Long-term borrowings		24,000
Fair Value [Member]
Assets [Abstract]
Policy loans	8,716	8,564
Liabilities [Abstract]
Policyholder deposits	179,225	179,382
Long-term borrowings	33,968	35,187
Total liabilities	213,193	214,569
Fair Value [Member] | Loans Payable [Member] | Loans Payable to Bank - Variable [Member]
Liabilities [Abstract]
Long-term borrowings	33,968	11,187
Fair Value [Member] | Notes Payable [Member] | 6.6% Senior Unsecured Notes Payable [Member]
Liabilities [Abstract]
Long-term borrowings		24,000
Fair Value [Member] | Level 1 [Member]
Assets [Abstract]
Policy loans	0	0
Liabilities [Abstract]
Policyholder deposits	0	0
Long-term borrowings	0	0
Total liabilities	0	0
Fair Value [Member] | Level 1 [Member] | Loans Payable [Member] | Loans Payable to Bank - Variable [Member]
Liabilities [Abstract]
Long-term borrowings	0	0
Fair Value [Member] | Level 1 [Member] | Notes Payable [Member] | 6.6% Senior Unsecured Notes Payable [Member]
Liabilities [Abstract]
Long-term borrowings		0
Fair Value [Member] | Level 2 [Member]
Assets [Abstract]
Policy loans	8,716	8,564
Liabilities [Abstract]
Policyholder deposits	179,225	179,382
Long-term borrowings	33,968	35,187
Total liabilities	213,193	214,569
Fair Value [Member] | Level 2 [Member] | Loans Payable [Member] | Loans Payable to Bank - Variable [Member]
Liabilities [Abstract]
Long-term borrowings	33,968	11,187
Fair Value [Member] | Level 2 [Member] | Notes Payable [Member] | 6.6% Senior Unsecured Notes Payable [Member]
Liabilities [Abstract]
Long-term borrowings		24,000
Fair Value [Member] | Level 3 [Member]
Assets [Abstract]
Policy loans	0	0
Liabilities [Abstract]
Policyholder deposits	0	0
Long-term borrowings	0	0
Total liabilities	0	0
Fair Value [Member] | Level 3 [Member] | Loans Payable [Member] | Loans Payable to Bank - Variable [Member]
Liabilities [Abstract]
Long-term borrowings	$ 0	0
Fair Value [Member] | Level 3 [Member] | Notes Payable [Member] | 6.6% Senior Unsecured Notes Payable [Member]
Liabilities [Abstract]
Long-term borrowings		$ 0

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Claim Liabilities, Reconciliation of Beginning and Ending Balances of Claim Liabilities (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Reconciliation of beginning and ending balances of claim liabilities [Roll Forward]
Claim liabilities at beginning of year		$ 530,304	$ 525,066	$ 487,943	$ 491,765
Reinsurance recoverable on claim liabilities		(35,898)	(39,871)	(38,998)	(40,714)
Net claim liabilities at beginning of year		494,406	485,195	448,945	451,051
Claims incurred [Abstract]
Current period insured events		606,890	622,859	1,237,749	1,244,339
Prior period insured events		(2,551)	(7,414)	(19,224)	(8,962)
Total		604,339	615,445	1,218,525	1,235,377
Payments of losses and loss-adjustment expenses [Abstract]
Current period insured events		591,079	599,938	949,502	970,073
Prior period insured events		36,794	56,947	247,096	272,600
Total		627,873	656,885	1,196,598	1,242,673
Net claim liabilities at end of year		470,872	443,755	470,872	443,755
Reinsurance recoverable on claim liabilities		33,368	38,109	33,368	38,109
Claim liabilities at end of year		504,240	481,864	504,240	481,864
Change in liability for future policy (benefits) expense		6,945	6,642	13,635	13,404
Managed Care [Member]
Reconciliation of beginning and ending balances of claim liabilities [Roll Forward]
Claim liabilities at beginning of year		393,525	381,448	349,047	348,297
Reinsurance recoverable on claim liabilities		0	0	0	0
Net claim liabilities at beginning of year		393,525	381,448	349,047	348,297
Claims incurred [Abstract]
Current period insured events		580,608	596,909	1,183,241	1,192,499
Prior period insured events		(1,355)	(6,728)	(16,695)	(6,028)
Total		579,253	590,181	1,166,546	1,186,471
Payments of losses and loss-adjustment expenses [Abstract]
Current period insured events		576,135	583,381	926,585	948,420
Prior period insured events		25,208	46,743	217,573	244,843
Total		601,343	630,124	1,144,158	1,193,263
Net claim liabilities at end of year		371,435	341,505	371,435	341,505
Reinsurance recoverable on claim liabilities		0	0	0	0
Claim liabilities at end of year		371,435	341,505	371,435	341,505
Other Business Segments [Member]
Reconciliation of beginning and ending balances of claim liabilities [Roll Forward]
Claim liabilities at beginning of year	[1]	136,779	143,618	138,896	143,468
Reinsurance recoverable on claim liabilities	[1]	(35,898)	(39,871)	(38,998)	(40,714)
Net claim liabilities at beginning of year	[1]	100,881	103,747	99,898	102,754
Claims incurred [Abstract]
Current period insured events	[1]	26,282	25,950	54,508	51,840
Prior period insured events	[1]	(1,196)	(686)	(2,529)	(2,934)
Total	[1]	25,086	25,264	51,979	48,906
Payments of losses and loss-adjustment expenses [Abstract]
Current period insured events	[1]	14,944	16,557	22,917	21,653
Prior period insured events	[1]	11,586	10,204	29,523	27,757
Total	[1]	26,530	26,761	52,440	49,410
Net claim liabilities at end of year	[1]	99,437	102,250	99,437	102,250
Reinsurance recoverable on claim liabilities	[1]	33,368	38,109	33,368	38,109
Claim liabilities at end of year	[1]	$ 132,805	$ 140,359	$ 132,805	$ 140,359

[1] Other Business Segments include the Life Insurance and Property and Casualty segments, as well as intersegment eliminations.

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Claim Liabilities, Incurred But Not Reported (IBNR) Liabilities Plus Expected Development on Reported Claims Included in the Liability for Unpaid Claims Adjustment Expenses (Details) - Managed Care [Member] $ in Thousands	Jun. 30, 2017 USD ($)
Incurred Year 2015 [Member]
Insurance Claims Development, Net of Reinsurance [Abstract]
Total of IBNR liabilities plus expected development on reported claims	$ 68,022
Incurred Year 2016 [Member]
Insurance Claims Development, Net of Reinsurance [Abstract]
Total of IBNR liabilities plus expected development on reported claims	46,181
Incurred Year 2017 [Member]
Insurance Claims Development, Net of Reinsurance [Abstract]
Total of IBNR liabilities plus expected development on reported claims	$ 256,656

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Long-Term Borrowings (Details) $ in Thousands				6 Months Ended
	Apr. 18, 2017 USD ($)	Dec. 28, 2016 USD ($) Loan	Mar. 11, 2016 USD ($)	Jun. 30, 2017 USD ($)	Dec. 31, 2016 USD ($)
Summary of long-term borrowings [Abstract]
Total borrowings				$ 33,968	$ 35,187
Less: unamortized debt issuance costs				301	102
Long-term borrowings				33,667	35,085
Outstanding balance line of credit				$ 0
Triple-S Salud, Inc [Member]
Summary of long-term borrowings [Abstract]
Maximum borrowing capacity			$ 30,000
Triple-S Salud, Inc [Member] | LIBOR [Member]
Summary of long-term borrowings [Abstract]
Basis spread on variable rate			2.20%
Triple-S Advantage, Inc [Member]
Summary of long-term borrowings [Abstract]
Maximum borrowing capacity	$ 10,000
Triple-S Advantage, Inc [Member] | LIBOR [Member]
Summary of long-term borrowings [Abstract]
Basis spread on variable rate	0.25%
Variable rate, term				30 days
Senior Notes [Member] | 6.60% Senior Unsecured Notes Payable, Due December 2020 [Member]
Summary of long-term borrowings [Abstract]
Total borrowings				$ 0	24,000
Debt instrument, principal amount				$ 60,000
Debt instrument, maturity date				Dec. 31, 2020
Debt instrument, fixed interest rate				6.60%
Secured Debt [Member] | Term Loan A [Member]
Summary of long-term borrowings [Abstract]
Total borrowings				$ 10,367	11,187
Debt instrument, principal amount				$ 11,187
Debt instrument, maturity date				Oct. 01, 2023
Debt instrument, monthly installment payment				$ 137
Debt instrument, variable interest rate				2.00%
Basis spread on variable rate				1.00%
Secured Debt [Member] | Term Loan B [Member]
Summary of long-term borrowings [Abstract]
Total borrowings				$ 19,730	0
Debt instrument, principal amount				$ 20,150
Debt instrument, maturity date				Jan. 01, 2024
Debt instrument, monthly installment payment				$ 84
Debt instrument, variable interest rate				3.90%
Basis spread on variable rate				2.75%
Secured Debt [Member] | Term Loan C [Member]
Summary of long-term borrowings [Abstract]
Total borrowings				$ 3,871	$ 0
Debt instrument, principal amount				$ 4,116
Debt instrument, maturity date				Jan. 01, 2024
Debt instrument, monthly installment payment				$ 49
Debt instrument, variable interest rate				4.40%
Basis spread on variable rate				3.25%
Commercial Bank in Puerto Rico [Member]
Summary of long-term borrowings [Abstract]
Number of term loans issued | Loan		3
Proceeds from debt issuance used to fund portion of debt service reserve		$ 200
Maximum borrowing capacity		35,500
Commercial Bank in Puerto Rico [Member] | Term Loan A [Member]
Summary of long-term borrowings [Abstract]
Debt instrument, principal amount		11,187
Commercial Bank in Puerto Rico [Member] | Term Loan B [Member]
Summary of long-term borrowings [Abstract]
Debt instrument, principal amount		20,150
Commercial Bank in Puerto Rico [Member] | Term Loan C [Member]
Summary of long-term borrowings [Abstract]
Debt instrument, principal amount		4,116
Commercial Bank in Puerto Rico [Member] | Secured Loans Payable, Due July 2024 [Member]
Summary of long-term borrowings [Abstract]
Long-term debt refinanced amount		$ 41,000
Commercial Bank in Puerto Rico [Member] | Senior Notes [Member] | 6.60% Senior Unsecured Notes Payable, Due January 2021 [Member]
Summary of long-term borrowings [Abstract]
Debt instrument, maturity date				Jan. 31, 2021
Debt instrument, fixed interest rate		6.60%
Repaid principal amount of notes		$ 24,000

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Pension Plan (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Components of net periodic benefit cost [Abstract]
Service cost	$ 0	$ 878	$ 0	$ 2,128
Interest cost	1,798	1,939	3,596	4,701
Expected return on assets	(2,199)	(2,054)	(4,398)	(4,980)
Amortization of prior service benefit	0	(102)	0	(246)
Amortization of actuarial loss	86	831	172	2,014
Settlement loss	631	0	631	0
Net periodic benefit cost	$ 316	$ 1,492	1	$ 3,617
Expected employer future contributions					$ 4,000
Employer contribution			$ 0

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Comprehensive Income (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Accumulated Other Comprehensive Income Loss [Line Items]
Balance			$ 862,486
Other comprehensive income before reclassifications	$ 7,639	$ 18,193	16,380	$ 37,817
Amounts reclassified from accumulated other comprehensive income	(3,190)	(1,918)	(3,406)	(1,331)
Total other comprehensive income, net of tax	4,449	16,275	12,974	36,486
Balance	883,992	878,763	883,992	878,763
Net Unrealized Gain on Securities [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Balance	70,843	82,055	62,371	62,478
Other comprehensive income before reclassifications	7,639	18,193	16,380	37,817
Amounts reclassified from accumulated other comprehensive income	(3,243)	(2,363)	(3,512)	(2,410)
Total other comprehensive income, net of tax	4,396	15,830	12,868	35,407
Balance	75,239	97,885	75,239	97,885
Liability for Pension Benefits [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Balance	(19,923)	(36,221)	(19,976)	(36,855)
Amounts reclassified from accumulated other comprehensive income	53	445	106	1,079
Balance	(19,870)	(35,776)	(19,870)	(35,776)
Accumulated Other Comprehensive Income [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Balance	50,920	45,834	42,395	25,623
Balance	$ 55,369	$ 62,109	$ 55,369	$ 62,109

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Share-Based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Share-Based Compensation [Abstract]
Share-based compensation expense	$ 1,613	$ 1,228	$ 170	$ 2,313
Stock option exercises during period (in shares)			0	0

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Net Income Available to Stockholders and Net Income per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Numerator for earnings per share [Abstract]
Net income attributable to TSM available to stockholders	$ 12,705	$ 3,880	$ 8,363	$ 7,336
Denominator for basic earnings per share [Abstract]
Weighted average of common shares (in shares)	24,246,591	24,624,070	24,195,211	24,609,749
Effect of dilutive securities (in shares)	36,687	45,364	50,220	58,892
Denominator for diluted earnings per share (in shares)	24,283,278	24,669,434	24,245,431	24,668,641
Basic net income per share attributable to TSM (in dollars per share)	$ 0.52	$ 0.16	$ 0.35	$ 0.30
Diluted net income per share attributable to TSM (in dollars per share)	$ 0.52	$ 0.16	$ 0.34	$ 0.30

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Contingencies (Details) - Triple-S Salud, Inc [Member] - USD ($) $ in Thousands	Jul. 02, 2014	May 26, 2017
Loss Contingencies [Line Items]
Overpayment of premium	$ 7,900
Amount of claims for damages	$ 5,000
Overpayment of premium dismissed		$ 7,400
Remaining payments		$ 500

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Segment Information (Details) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2017 USD ($)	Jun. 30, 2016 USD ($)	Jun. 30, 2017 USD ($) Segment	Jun. 30, 2016 USD ($)	Dec. 31, 2016 USD ($)
Segment Information [Abstract]
Number of operating segments | Segment				3
Operating revenues [Abstract]
Premiums earned, net		$ 722,891	$ 729,049	$ 1,425,164	$ 1,467,583
Administrative service fees		4,548	4,520	8,927	9,603
Net investment income		12,698	12,875	24,714	24,233
Total revenues		745,899	752,738	1,468,393	1,509,458
Consolidated operating revenues		741,258	747,359	1,460,891	1,503,146
Operating income (loss) [Abstract]
Consolidated operating income (loss)		11,241	4,160	(935)	10,273
Consolidated net realized investment gains		4,054	1,520	4,390	1,578
Consolidated interest expense		(1,721)	(1,954)	(3,407)	(3,836)
Consolidated other income, net		587	3,859	3,112	4,734
Consolidated income before taxes		14,161	7,585	3,160	12,749
Depreciation and amortization expense [Abstract]
Depreciation and amortization expense		3,464	3,600	6,454	7,300
Assets [Abstract]
Assets		2,405,368		2,405,368		$ 2,218,999
Cash, cash equivalents, and investments		1,668,058		1,668,058		1,536,820
Property and equipment, net		69,083		69,083		66,369
Other assets		52,672		52,672		51,493
Unallocated Amount to Segment [Member]
Operating revenues [Abstract]
TSM operating revenues from external sources		55	1	133	5
Operating income (loss) [Abstract]
TSM operating revenues from external sources		55	1	133	5
TSM unallocated operating expenses		(2,900)	(2,707)	(5,117)	(5,874)
Depreciation and amortization expense [Abstract]
Depreciation and amortization expense		196	196	393	393
Assets [Abstract]
Assets		52,861		52,861		61,059
Cash, cash equivalents, and investments		9,889		9,889		17,033
Property and equipment, net		22,130		22,130		22,380
Other assets		20,842		20,842		21,646
Other Segments [Member]
Operating revenues [Abstract]
TSM operating revenues from external sources	[1]	1,154	959	2,154	1,815
Total revenues	[1]	3,413	3,576	5,999	6,977
Operating income (loss) [Abstract]
Operating income (loss)	[1]	1	(182)	144	(361)
TSM operating revenues from external sources	[1]	1,154	959	2,154	1,815
Assets [Abstract]
Assets	[1]	27,031		27,031		26,034
Reportable Segment [Member]
Operating revenues [Abstract]
Total business segments		745,358	751,997	1,468,097	1,512,113
Operating income (loss) [Abstract]
Operating income (loss)		11,686	4,480	(751)	11,369
Depreciation and amortization expense [Abstract]
Depreciation and amortization expense		3,268	3,404	6,061	6,907
Assets [Abstract]
Assets		2,402,037		2,402,037		2,205,985
Reportable Segment [Member] | Managed Care [Member]
Operating revenues [Abstract]
Premiums earned, net		661,365	668,932	1,301,512	1,347,312
Administrative service fees		4,548	4,520	8,927	9,603
Net investment income		4,146	4,107	8,038	7,587
Total revenues		671,690	679,211	1,321,642	1,367,639
Operating income (loss) [Abstract]
Operating income (loss)		2,920	(3,780)	(15,662)	(4,421)
Depreciation and amortization expense [Abstract]
Depreciation and amortization expense		2,649	2,839	4,888	5,773
Assets [Abstract]
Assets		1,156,585		1,156,585		1,013,872
Reportable Segment [Member] | Life Insurance [Member]
Operating revenues [Abstract]
Premiums earned, net		39,858	38,591	80,156	77,557
Net investment income		6,330	6,412	12,417	12,326
Total revenues		46,299	45,205	92,875	90,222
Operating income (loss) [Abstract]
Operating income (loss)		4,990	5,054	8,925	10,652
Depreciation and amortization expense [Abstract]
Depreciation and amortization expense		318	249	598	504
Assets [Abstract]
Assets		841,401		841,401		816,920
Reportable Segment [Member] | Property and Casualty Insurance [Member]
Operating revenues [Abstract]
Premiums earned, net		21,668	21,526	43,216	42,714
Net investment income		2,134	2,325	4,058	4,254
Total revenues		23,956	24,005	47,581	47,275
Operating income (loss) [Abstract]
Operating income (loss)		3,775	3,388	5,842	5,499
Depreciation and amortization expense [Abstract]
Depreciation and amortization expense		138	150	252	311
Assets [Abstract]
Assets		377,020		377,020		349,159
Reportable Segment [Member] | Other Segments [Member]
Depreciation and amortization expense [Abstract]
Depreciation and amortization expense	[1]	163	166	323	319
Intersegment Elimination [Member]
Operating revenues [Abstract]
Elimination of intersegment premiums/service fees		(1,896)	(2,008)	(3,494)	(3,783)
Elimination of intersegment service revenues		(2,259)	2,518	(3,845)	(27)
Other intersegment eliminations		0	(5,149)	0	(5,162)
Operating income (loss) [Abstract]
Elimination of TSM intersegment charges		2,400	2,386	4,800	4,773
Assets [Abstract]
Assets		(49,530)		(49,530)		$ (48,045)
Intersegment Elimination [Member] | Managed Care [Member]
Operating revenues [Abstract]
Intersegment premiums/service fees		1,631	1,652	3,165	3,137
Intersegment Elimination [Member] | Life Insurance [Member]
Operating revenues [Abstract]
Intersegment premiums/service fees		111	202	302	339
Intersegment Elimination [Member] | Property and Casualty Insurance [Member]
Operating revenues [Abstract]
Intersegment premiums/service fees		154	154	307	307
Intersegment Elimination [Member] | Other Segments [Member]
Operating revenues [Abstract]
Intersegment premiums/service fees	[1]	$ 2,259	$ 2,617	$ 3,845	$ 5,162

[1] Includes segments that are not required to be reported separately, primarily the data processing services organization and the health clinic.