QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices) |
(Zip code) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Accelerated filer ☐ |
|
Non-accelerated filer ☐ |
Smaller reporting company |
Emerging growth company |
Title of each class |
Outstanding at June 30, 2019 |
|
Common Stock Class A, $1.00 par value |
||
Common Stock Class B, $1.00 par value |
3 |
|||
Item 1. |
3 |
||
Item 2. |
29 |
||
29 |
|||
29 |
|||
30 |
|||
31 |
|||
32 |
|||
33 |
|||
35 |
|||
38 |
|||
39 |
|||
40 |
|||
Item 3. |
41 |
||
Item 4. |
42 |
||
42 |
|||
Item 1. |
42 |
||
Item 1A. |
42 |
||
Item 2. |
43 |
||
Item 3. |
43 |
||
Item 4. |
43 |
||
Item 5. |
43 |
||
Item 6. |
44 |
||
45 |
|||
June 30, 2019 |
December 31, 2018 |
|||||||
Assets |
||||||||
Investments and cash: |
||||||||
Fixed maturities available for sale, at fair value |
$ |
$ |
||||||
Fixed maturities held to maturity, at amortized cost |
||||||||
Equity investments, at fair value |
||||||||
Other invested assets, at net asset value |
||||||||
Policy loans |
||||||||
Cash and cash equivalents |
||||||||
Total investments and cash |
||||||||
Premiums and other receivables, net |
||||||||
Deferred policy acquisition costs and value of business acquired |
||||||||
Property and equipment, net |
||||||||
Deferred tax asset |
||||||||
Goodwill |
||||||||
Other assets |
||||||||
Total assets |
$ |
$ |
||||||
Liabilities and Stockholders’ Equity |
||||||||
Claim liabilities |
$ |
$ |
||||||
Liability for future policy benefits |
||||||||
Unearned premiums |
||||||||
Policyholder deposits |
||||||||
Liability to Federal Employees’ Health Benefits and Federal Employees’ Programs |
||||||||
Accounts payable and accrued liabilities |
||||||||
Deferred tax liability |
||||||||
Long-term borrowings |
||||||||
Liability for pension benefits |
||||||||
Total liabilities |
||||||||
Stockholders’ equity: |
||||||||
Triple-S Management Corporation stockholders’ equity |
||||||||
Common stock Class A, $ |
||||||||
Common stock Class B, $ |
||||||||
Additional paid-in capital |
||||||||
Retained earnings |
||||||||
Accumulated other comprehensive income |
||||||||
Total Triple-S Management Corporation stockholders’ equity |
||||||||
Non-controlling interest in consolidated subsidiary |
( |
) |
( |
) |
||||
Total stockholders’ equity |
||||||||
Total liabilities and stockholders’ equity |
$ |
$ |
||||||
Three months ended June 30, |
Six months ended June 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
Revenues: |
||||||||||||||||
Premiums earned, net |
$ |
$ |
$ |
$ |
||||||||||||
Administrative service fees |
||||||||||||||||
Net investment income |
||||||||||||||||
Other operating revenues |
||||||||||||||||
Total operating revenues |
||||||||||||||||
Net realized investment gains (losses) |
( |
) |
||||||||||||||
Net unrealized investment gains (losses) on equity investments |
( |
) |
( |
) |
||||||||||||
Other income, net |
||||||||||||||||
Total revenues |
||||||||||||||||
Benefits and expenses: |
||||||||||||||||
Claims incurred |
||||||||||||||||
Operating expenses |
||||||||||||||||
Total operating costs |
||||||||||||||||
Interest expense |
||||||||||||||||
Total benefits and expenses |
||||||||||||||||
Income (loss) before taxes |
( |
) |
( |
) |
||||||||||||
Income tax expense (benefit) |
( |
) |
( |
) |
||||||||||||
Net income (loss) |
( |
) |
( |
) |
||||||||||||
Net (loss) income attributable to non-controlling interest |
( |
) |
( |
) |
||||||||||||
Net income (loss) attributable to Triple-S Management Corporation |
$ |
$ |
( |
) |
$ |
$ |
( |
) |
||||||||
Earnings per share attributable to Triple-S Management Corporation |
||||||||||||||||
Basic net income (loss) per share |
$ |
$ |
( |
) |
$ |
$ |
( |
) |
||||||||
Diluted net income (loss) per share |
$ |
$ |
( |
) |
$ |
$ |
( |
) |
||||||||
Three months ended June 30, |
Six months ended June 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
Net income (loss) |
$ |
$ |
( |
) |
$ |
$ |
( |
) |
||||||||
Other comprehensive income (loss), net of tax: |
||||||||||||||||
Net unrealized change in fair value of available for sale securities, net of taxes |
( |
) |
( |
) |
||||||||||||
Defined benefit pension plan: |
||||||||||||||||
Actuarial loss, net |
||||||||||||||||
Total other comprehensive income (loss), net of tax |
( |
) |
( |
) |
||||||||||||
Comprehensive income (loss) |
( |
) |
( |
) |
||||||||||||
Comprehensive (loss) income attributable to non-controlling interest |
( |
) |
( |
) |
||||||||||||
Comprehensive income (loss) attributable to Triple-S Management Corporation |
$ |
$ |
( |
) |
$ |
$ |
( |
) |
||||||||
Class A Common Stock |
Class B Common Stock |
Additional Paid-in Capital |
Retained Earnings |
Accumulated Other Comprehensive Income (Loss) |
Triple-S Management Corporation Stockholders’ Equity |
Non-controlling Interest in Consolidated Subsidiary |
Total Stockholders’ Equity |
|||||||||||||||||||||||||
Balance, December 31, 2018 |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
||||||||||||||||||||||
Share-based compensation |
||||||||||||||||||||||||||||||||
Repurchase and retirement of common stock |
( |
) |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||
Comprehensive income (loss) |
( |
) |
||||||||||||||||||||||||||||||
Balance, March 31, 2019 |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
||||||||||||||||||||||
Share-based compensation |
||||||||||||||||||||||||||||||||
Repurchase and retirement of common stock |
||||||||||||||||||||||||||||||||
Comprehensive income (loss) |
( |
) |
||||||||||||||||||||||||||||||
Balance, June 30, 2019 |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
||||||||||||||||||||||
Balance, December 31, 2017 |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
||||||||||||||||||||||
Share-based compensation |
||||||||||||||||||||||||||||||||
Repurchase and retirement of common stock |
( |
) |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||
Comprehensive income (loss) |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||||
Cumulative effect adjustment due to implementation of ASU 2016-01 |
( |
) |
||||||||||||||||||||||||||||||
Balance, March 31, 2018 |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
||||||||||||||||||||||
Share-based compensation |
||||||||||||||||||||||||||||||||
Repurchase and retirement of common stock |
( |
) |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||
Comprehensive loss |
( |
) |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||
Cumulative effect adjustment due to implementation of ASU 2016-01 |
||||||||||||||||||||||||||||||||
Balance, June 30, 2018 |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
$ |
( |
) |
$ |
||||||||||||||||||||
Six months ended June 30, |
||||||||
2019 |
2018 |
|||||||
Cash flows from operating activities: |
||||||||
Net income (loss) |
$ |
$ |
( |
) |
||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
||||||||
Depreciation and amortization |
||||||||
Net amortization of investments |
||||||||
Additions to the allowance for doubtful receivables |
||||||||
Deferred tax expense (benefit) |
( |
) |
||||||
Net realized investment gain on sale of securities |
( |
) |
( |
) |
||||
Net unrealized (gains) losses on equity investments |
( |
) |
||||||
Interest credited to policyholder deposits |
||||||||
Share-based compensation |
||||||||
Decrease (increase) in assets: |
||||||||
Premium and other receivables, net |
||||||||
Deferred policy acquisition costs and value of business acquired |
( |
) |
( |
) |
||||
Deferred taxes |
||||||||
Other assets |
( |
) |
( |
) |
||||
(Decrease) increase in liabilities: |
||||||||
Claim liabilities |
( |
) |
||||||
Liability for future policy benefits |
||||||||
Unearned premiums |
( |
) |
||||||
Liability to Federal Employees' Health Benefits and Federal Employees' Programs |
||||||||
Accounts payable and accrued liabilities |
( |
) |
||||||
Net cash provided by operating activities |
||||||||
Six months ended June 30, |
||||||||
2019 |
2018 |
|||||||
Cash flows from investing activities: |
||||||||
Proceeds from investments sold or matured: |
||||||||
Securities available for sale: |
||||||||
Fixed maturities sold |
$ |
$ |
||||||
Fixed maturities matured/called |
||||||||
Securities held to maturity: |
||||||||
Fixed maturities matured/called |
||||||||
Equity investments sold |
||||||||
Other invested assets sold |
||||||||
Acquisition of investments: |
||||||||
Securities available for sale: |
||||||||
Fixed maturities |
( |
) |
( |
) |
||||
Securities held to maturity: |
||||||||
Fixed maturities |
( |
) |
( |
) |
||||
Equity investments |
( |
) |
( |
) |
||||
Other invested assets |
( |
) |
( |
) |
||||
(Increase) decrease in other investments |
( |
) |
||||||
Net change in policy loans |
( |
) |
( |
) |
||||
Net capital expenditures |
( |
) |
( |
) |
||||
Net cash provided by (used in) investing activities |
( |
) |
||||||
Cash flows from financing activities: |
||||||||
Change in outstanding checks in excess of bank balances |
( |
) |
||||||
Repayments of long-term borrowings |
( |
) |
( |
) |
||||
Repurchase and retirement of common stock |
( |
) |
( |
) |
||||
Proceeds from policyholder deposits |
||||||||
Surrenders of policyholder deposits |
( |
) |
( |
) |
||||
Net cash provided by (used in) financing activities |
( |
) |
||||||
Net increase in cash and cash equivalents |
||||||||
Cash and cash equivalents: |
||||||||
Beginning of period |
||||||||
End of period |
$ |
$ |
||||||
| (1) | Basis of Presentation |
| (2) | Significant Accounting Policies |
June 30, 2019 |
||||||||||||||||
Amortized cost |
Gross unrealized gains |
Gross unrealized losses |
Estimated fair value |
|||||||||||||
Fixed maturities available for sale |
||||||||||||||||
Obligations of government-sponsored enterprises |
$ |
$ |
$ |
$ |
||||||||||||
U.S. Treasury securities and obligations of U.S. government instrumentalities |
||||||||||||||||
Municipal securities |
||||||||||||||||
Corporate bonds |
||||||||||||||||
Residential mortgage-backed securities |
( |
) |
||||||||||||||
Collateralized mortgage obligations |
||||||||||||||||
Total fixed maturities available for sale |
$ |
$ |
$ |
( |
) |
$ |
||||||||||
June 30, 2019 |
||||||||||||||||
Amortized cost |
Gross unrealized gains |
Gross unrealized losses |
Estimated fair value |
|||||||||||||
Fixed maturities held to maturity |
||||||||||||||||
U.S. Treasury securities and obligations of U.S. government instrumentalities |
$ |
$ |
$ |
$ |
||||||||||||
Residential mortgage-backed securities |
||||||||||||||||
Certificates of deposit |
||||||||||||||||
Total |
$ |
$ |
$ |
$ |
||||||||||||
June 30, 2019 |
||||||||||||||||
Amortized cost |
Gross unrealized gains |
Gross unrealized losses |
Estimated fair value |
|||||||||||||
Other invested assets - Alternative investments |
$ |
$ |
$ |
( |
) |
$ |
||||||||||
December 31, 2018 |
||||||||||||||||
Amortized Cost |
Gross Unrealized Gains |
Gross Unrealized Losses |
Estimated Fair Value |
|||||||||||||
Securities available for sale |
||||||||||||||||
Fixed maturities |
||||||||||||||||
Obligations of government- sponsored enterprises |
$ |
$ |
$ |
( |
) |
$ |
||||||||||
U.S. Treasury securities and obligations of U.S. government instrumentalities |
||||||||||||||||
Obligations of the Commonwealth of Puerto Rico and its instrumentalities |
||||||||||||||||
Municipal securities |
( |
) |
||||||||||||||
Corporate bonds |
( |
) |
||||||||||||||
Residential mortgage-backed securities |
||||||||||||||||
Collateralized mortgage obligations |
||||||||||||||||
Total fixed maturities |
$ |
$ |
$ |
( |
) |
$ |
||||||||||
December 31, 2018 |
||||||||||||||||
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 |
$ |
$ |
$ |
$ |
||||||||||||
Residential mortgage-backed securities |
||||||||||||||||
Certificates of deposit |
||||||||||||||||
Total |
$ |
$ |
$ |
$ |
||||||||||||
December 31, 2018 |
||||||||||||||||
Amortized cost |
Gross unrealized gains |
Gross unrealized losses |
Estimated fair value |
|||||||||||||
Other invested assets - Alternative investments |
$ |
$ |
$ |
( |
) |
$ |
||||||||||
June 30, 2019 |
||||||||||||||||||||||||||||||||||||
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 |
||||||||||||||||||||||||||||
Fixed maturities available for sale |
||||||||||||||||||||||||||||||||||||
Residential mortgage-backed securities |
$ |
$ |
( |
) |
$ |
$ |
( |
) |
||||||||||||||||||||||||||||
Total fixed maturities |
$ |
$ |
( |
) |
$ |
$ |
$ |
$ |
( |
) |
||||||||||||||||||||||||||
Other invested assets - Alternative investments |
$ |
$ |
( |
) |
$ |
$ |
( |
) |
$ |
$ |
( |
) |
||||||||||||||||||||||||
December 31, 2018 |
||||||||||||||||||||||||||||||||||||
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 |
||||||||||||||||||||||||||||
Fixed maturities available for sale |
||||||||||||||||||||||||||||||||||||
Obligations of government- sponsored enterprises |
$ |
$ |
( |
) |
$ |
$ |
$ |
$ |
( |
) |
||||||||||||||||||||||||||
Municipal securities |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||||||||
Corporate bonds |
( |
) |
( |
) |
||||||||||||||||||||||||||||||||
Total fixed maturities |
$ |
$ |
( |
) |
$ |
$ |
( |
) |
$ |
$ |
( |
) |
||||||||||||||||||||||||
Other invested assets - Alternative investments |
$ |
$ |
( |
) |
$ |
$ |
( |
) |
$ |
$ |
( |
) |
||||||||||||||||||||||||
June 30, 2019 |
||||||||
Amortized cost |
Estimated fair value |
|||||||
Fixed maturities available for sale |
||||||||
Due in one year or less |
$ |
$ |
||||||
Due after one year through five years |
||||||||
Due after five years through ten years |
||||||||
Due after ten years |
||||||||
Residential mortgage-backed securities |
||||||||
Collateralized mortgage obligations |
||||||||
$ |
$ |
|||||||
Fixed maturities held to maturity |
||||||||
Due in one year or less |
$ |
$ |
||||||
Due after ten years |
||||||||
Residential mortgage-backed securities |
||||||||
$ |
$ |
|||||||
Three months ended June 30, |
Six months ended June 30 |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
Realized gains (losses) |
||||||||||||||||
Fixed maturity securities: |
||||||||||||||||
Securities available for sale: |
||||||||||||||||
Gross gains |
$ |
$ |
$ |
$ |
||||||||||||
Gross losses |
( |
) |
( |
) |
( |
) |
( |
) |
||||||||
Total fixed securities |
( |
) |
( |
) |
||||||||||||
Equity investments: |
||||||||||||||||
Gross gains |
||||||||||||||||
Gross losses |
( |
) |
( |
) |
( |
) |
( |
) |
||||||||
Total equity investments |
||||||||||||||||
Other invested assets: |
||||||||||||||||
Gross gains |
||||||||||||||||
Gross losses |
( |
) |
( |
) |
( |
) |
||||||||||
Total other invested assets |
||||||||||||||||
Net realized investment gains (losses) |
$ |
$ |
( |
) |
$ |
$ |
||||||||||
Three months ended June 30, |
Six months ended June 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
Changes in net unrealized gains (losses): |
||||||||||||||||
Recognized in accumulated other comprehensive income (loss): |
||||||||||||||||
Fixed maturities – available for sale |
$ |
$ |
( |
) |
$ |
$ |
( |
) |
||||||||
Other invested assets |
||||||||||||||||
$ |
$ |
( |
) |
$ |
$ |
( |
) |
|||||||||
Not recognized in the consolidated financial statements: |
||||||||||||||||
Fixed maturities – held to maturity |
$ |
$ |
( |
) |
$ |
$ |
( |
) |
||||||||
June 30, 2019 |
December 31, 2018 |
|||||||
Premium |
$ |
$ |
||||||
Self-funded group receivables |
||||||||
FEHBP |
||||||||
Agent balances |
||||||||
Accrued interest |
||||||||
Reinsurance recoverable |
||||||||
Other |
||||||||
Less allowance for doubtful receivables: |
||||||||
Premium |
||||||||
Other |
||||||||
Total premium and other receivables, net |
$ |
$ |
||||||
June 30, 2019 |
||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
Fixed maturity securities available for sale |
||||||||||||||||
Obligations of government-sponsored enterprises |
$ |
$ |
$ |
$ |
||||||||||||
U.S. Treasury securities and obligations of U.S government instrumentalities |
||||||||||||||||
Municipal securities |
||||||||||||||||
Corporate bonds |
||||||||||||||||
Residential agency mortgage-backed securities |
||||||||||||||||
Collateralized mortgage obligations |
||||||||||||||||
Total fixed maturities |
$ |
$ |
$ |
$ |
||||||||||||
Equity investments |
$ |
$ |
$ |
$ |
||||||||||||
December 31, 2018 |
||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
Fixed maturity securities |
||||||||||||||||
Obligations of government-sponsored enterprises |
$ |
$ |
$ |
$ |
||||||||||||
U.S. Treasury securities and obligations of U.S government instrumentalities |
||||||||||||||||
Obligations of the Commonwealth of Puerto Rico and its instrumentalities |
||||||||||||||||
Municipal securities |
||||||||||||||||
Corporate bonds |
||||||||||||||||
Residential agency mortgage-backed securities |
||||||||||||||||
Collateralized mortgage obligations |
||||||||||||||||
Total fixed maturities |
$ |
$ |
$ |
$ |
||||||||||||
Equity investments |
$ |
$ |
$ |
$ |
||||||||||||
Three months ended |
Six months ended |
|||||||
June 30, 2019 |
June 30, 2019 |
|||||||
Beginning Balance |
$ |
$ |
||||||
Realized gains |
||||||||
Unrealized in other accumulated comprehensive income |
||||||||
Purchases |
||||||||
Sales |
||||||||
Capital Distributions |
||||||||
Ending Balance |
$ |
$ |
||||||
June 30, 2019 |
||||||||||||||||||||
Carrying |
Fair Value |
|||||||||||||||||||
Value |
Level 1 |
Level 2 |
Level 3 |
Total |
||||||||||||||||
Assets: |
||||||||||||||||||||
Policy loans |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||
Liabilities: |
||||||||||||||||||||
Policyholder deposits |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||
Long-term borrowings: |
||||||||||||||||||||
Loans payable to bank - variable |
||||||||||||||||||||
Total liabilities |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||
December 31, 2018 |
||||||||||||||||||||
Carrying |
Fair Value |
|||||||||||||||||||
Value |
Level 1 |
Level 2 |
Level 3 |
Total |
||||||||||||||||
Assets: |
||||||||||||||||||||
Policy loans |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||
Liabilities: |
||||||||||||||||||||
Policyholder deposits |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||
Long-term borrowings: |
||||||||||||||||||||
Loans payable to bank - variable |
||||||||||||||||||||
Total liabilities |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||
| (7) | Claim Liabilities |
Six months ended June 30, 2019 |
||||||||||||
Managed Care |
Other Business Segments * |
Consolidated |
||||||||||
Claim liabilities at beginning of period |
$ |
$ |
$ |
|||||||||
Reinsurance recoverable on claim liabilities |
( |
) |
( |
) |
||||||||
Net claim liabilities at beginning of period |
||||||||||||
Claims incurred |
||||||||||||
Current period insured events |
||||||||||||
Prior period insured events |
( |
) |
( |
) |
( |
) |
||||||
Total |
||||||||||||
Payments of losses and loss-adjustment expenses |
||||||||||||
Current period insured events |
||||||||||||
Prior period insured events |
||||||||||||
Total |
||||||||||||
Net claim liabilities at end of period |
||||||||||||
Reinsurance recoverable on claim liabilities |
||||||||||||
Claim liabilities at end of period |
$ |
$ |
$ |
|||||||||
Six months ended June 30, 2018 |
||||||||||||
Managed Care |
Other Business Segments * |
Consolidated |
||||||||||
Claim liabilities at beginning of period |
$ |
$ |
$ |
|||||||||
Reinsurance recoverable on claim liabilities |
( |
) |
( |
) |
||||||||
Net claim liabilities at beginning of period |
||||||||||||
Claims incurred |
||||||||||||
Current period insured events |
||||||||||||
Prior period insured events |
( |
) |
||||||||||
Total |
||||||||||||
Payments of losses and loss-adjustment expenses |
||||||||||||
Current period insured events |
||||||||||||
Prior period insured events |
||||||||||||
Total |
||||||||||||
Net claim liabilities at end of period |
||||||||||||
Reinsurance recoverable on claim liabilities |
||||||||||||
Claim liabilities at end of period |
$ |
$ |
$ |
|||||||||
Incurred Year |
Total of IBNR Liabilities Plus Expected Development on Reported Claims |
|||
2018 |
$ |
|||
2019 |
||||
Three months ended June 30, |
Six months ended June 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
Components of net periodic benefit cost: |
||||||||||||||||
Interest cost |
$ |
$ |
$ |
$ |
||||||||||||
Expected return on assets |
( |
) |
( |
) |
( |
) |
( |
) |
||||||||
Amortization of actuarial loss |
||||||||||||||||
Settlement loss |
||||||||||||||||
Net periodic benefit cost |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
||||
| (9) | Reinsurance |
| • | Casualty excess of loss treaty provides reinsurance for losses up to $ |
| • | Medical malpractice excess of loss treaty provides reinsurance for losses up to $ |
| • | Property reinsurance treaty includes proportional cessions and a per risk excess of loss contract limiting losses to $ |
| • | Catastrophe protection is purchased limiting losses to $ |
Three months ended |
Six months ended |
|||||||||||||||
June 30, |
June 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
Net Unrealized Gain on Securities Beginning Balance |
$ |
$ |
$ |
$ |
||||||||||||
Unrealized loss reclassified to beginning retained earnings as a result of implementation new accounting pronouncement |
( |
) |
||||||||||||||
Other comprehensive income (loss) before reclassifications |
( |
) |
( |
) |
||||||||||||
Amounts reclassified from accumulated other comprehensive (loss) income |
( |
) |
( |
) |
( |
) |
||||||||||
Net current period change |
( |
) |
( |
) |
||||||||||||
Ending Balance |
||||||||||||||||
Liability for Pension Benefits Beginning Balance |
( |
) |
( |
) |
( |
) |
( |
) |
||||||||
Amounts reclassified from accumulated other comprehensive income |
||||||||||||||||
Ending Balance |
( |
) |
( |
) |
( |
) |
( |
) |
||||||||
Accumulated Other Comprehensive Income (Loss) Beginning Balance |
||||||||||||||||
Unrealized loss reclassified to beginning retained earnings as the result of implementing new accounting pronouncement |
( |
) |
||||||||||||||
Other comprehensive income (loss) before reclassifications |
( |
) |
( |
) |
||||||||||||
Amounts reclassified from accumulated other comprehensive (loss) income |
( |
) |
( |
) |
( |
) |
||||||||||
Net current period change |
( |
) |
( |
) |
||||||||||||
Ending Balance |
$ |
$ |
( |
) |
$ |
$ |
( |
) |
||||||||
| (11) | Share-Based Compensation |
Three months ended June 30, |
Six months ended June 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
Numerator for earnings per share: |
||||||||||||||||
Net income (loss) attributable to TSM available to stockholders |
$ |
$ |
( |
) |
$ |
$ |
( |
) |
||||||||
Denominator for basic earnings per share: |
||||||||||||||||
Weighted average of common shares |
||||||||||||||||
Effect of dilutive securities |
||||||||||||||||
Denominator for diluted earnings per share |
||||||||||||||||
Basic net income (loss) per share attributable to TSM |
$ |
$ |
( |
) |
$ |
$ |
( |
) |
||||||||
Diluted net income (loss) per share attributable to TSM |
$ |
$ |
( |
) |
$ |
$ |
( |
) |
||||||||
| (13) | Contingencies |
Three months ended June 30, |
Six months ended June 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
Operating revenues: |
||||||||||||||||
Managed Care: |
||||||||||||||||
Premiums earned, net |
$ |
$ |
$ |
$ |
||||||||||||
Administrative service fees |
||||||||||||||||
Intersegment premiums/service fees |
||||||||||||||||
Net investment income |
||||||||||||||||
Total managed care |
||||||||||||||||
Life Insurance: |
||||||||||||||||
Premiums earned, net |
||||||||||||||||
Intersegment premiums |
||||||||||||||||
Net investment income |
||||||||||||||||
Total life insurance |
||||||||||||||||
Property and Casualty Insurance: |
||||||||||||||||
Premiums earned, net |
||||||||||||||||
Intersegment premiums |
||||||||||||||||
Net investment income |
||||||||||||||||
Total property and casualty insurance |
||||||||||||||||
Other segments: * |
||||||||||||||||
Intersegment service revenues |
||||||||||||||||
Operating revenues from external sources |
||||||||||||||||
Total other segments |
||||||||||||||||
Total business segments |
||||||||||||||||
TSM operating revenues from external sources |
||||||||||||||||
Elimination of intersegment premiums/service fees |
( |
) |
( |
) |
( |
) |
( |
) |
||||||||
Elimination of intersegment service revenues |
( |
) |
( |
) |
( |
) |
( |
) |
||||||||
Consolidated operating revenues |
$ |
$ |
$ |
$ |
||||||||||||
| * |
Three months ended June 30, |
Six months ended June 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
Operating income (loss): |
||||||||||||||||
Managed care |
$ |
$ |
$ |
$ |
||||||||||||
Life insurance |
||||||||||||||||
Property and casualty insurance |
( |
) |
( |
) |
||||||||||||
Other segments * |
( |
) |
( |
) |
||||||||||||
Total business segments |
( |
) |
( |
) |
||||||||||||
TSM operating revenues from external sources |
||||||||||||||||
TSM unallocated operating expenses |
( |
) |
( |
) |
( |
) |
( |
) |
||||||||
Elimination of TSM intersegment charges |
||||||||||||||||
Consolidated operating income (loss) |
( |
) |
( |
) |
||||||||||||
Consolidated net realized investment gains (losses) |
( |
) |
||||||||||||||
Consolidated net unrealized investment gains (losses) on equity investments |
( |
) |
( |
) |
||||||||||||
Consolidated interest expense |
( |
) |
( |
) |
( |
) |
( |
) |
||||||||
Consolidated other income, net |
||||||||||||||||
Consolidated income (loss) before taxes |
$ |
$ |
( |
) |
$ |
$ |
( |
) |
||||||||
Depreciation and amortization expense: |
||||||||||||||||
Managed care |
$ |
$ |
$ |
$ |
||||||||||||
Life insurance |
||||||||||||||||
Property and casualty insurance |
||||||||||||||||
Other segments* |
||||||||||||||||
Total business segments |
||||||||||||||||
TSM depreciation expense |
||||||||||||||||
Consolidated depreciation and amortization expense |
$ |
$ |
$ |
$ |
||||||||||||
| * | Includes segments that are not required to be reported separately, primarily the health clinics and the data processing services organization. |
June 30, 2019 |
December 31, 2018 |
|||||||
Assets: |
||||||||
Managed care |
$ |
$ |
||||||
Life insurance |
||||||||
Property and casualty insurance |
||||||||
Other segments * |
||||||||
Total business segments |
||||||||
Unallocated amounts related to TSM: |
||||||||
Cash, cash equivalents, and investments |
||||||||
Property and equipment, net |
||||||||
Other assets |
||||||||
Elimination entries-intersegment receivables and others |
( |
) |
( |
) |
||||
Consolidated total assets |
$ |
$ |
||||||
| * | Includes segments that are not required to be reported separately, primarily the health clinics and the data processing services organization. |
As of June 30, |
||||||||
2019 |
2018 |
|||||||
Managed care enrollment: |
||||||||
Commercial 1 |
436,407 |
457,089 |
||||||
Medicare |
128,670 |
111,667 |
||||||
Medicaid |
364,495 |
404,338 |
||||||
Total |
929,572 |
973,094 |
||||||
Managed care enrollment by funding arrangement: |
||||||||
Fully-insured |
811,594 |
828,054 |
||||||
Self-insured |
117,978 |
145,040 |
||||||
Total |
929,572 |
973,094 |
||||||
| (1) | Commercial membership includes corporate accounts, self-funded employers, individual accounts, Medicare Supplement, Federal government employees and local government employees. |
Three months ended June 30, |
Six months ended June 30, |
|||||||||||||||
(dollar amounts in millions) |
2019 |
2018 |
2019 |
2018 |
||||||||||||
Revenues: |
||||||||||||||||
Premiums earned, net |
$ |
859.5 |
$ |
741.8 |
$ |
1,627.5 |
$ |
1,493.8 |
||||||||
Administrative service fees |
2.5 |
4.1 |
5.1 |
7.4 |
||||||||||||
Net investment income |
15.0 |
15.7 |
30.4 |
29.5 |
||||||||||||
Other operating revenues |
1.6 |
1.5 |
3.2 |
2.6 |
||||||||||||
Total operating revenues |
878.6 |
763.1 |
1,666.2 |
1,533.3 |
||||||||||||
Net realized investment gains (losses) |
2.4 |
(0.9 |
) |
3.6 |
2.0 |
|||||||||||
Net unrealized investment gains (losses) on equity investments |
3.3 |
(0.8 |
) |
23.0 |
(17.0 |
) |
||||||||||
Other income, net |
1.7 |
0.5 |
2.9 |
1.7 |
||||||||||||
Total revenues |
886.0 |
761.9 |
1,695.7 |
1,520.0 |
||||||||||||
Benefits and expenses: |
||||||||||||||||
Claims incurred |
706.3 |
692.1 |
1,329.5 |
1,311.1 |
||||||||||||
Operating expenses |
134.1 |
134.6 |
266.7 |
267.7 |
||||||||||||
Total operating expenses |
840.4 |
826.7 |
1,596.2 |
1,578.8 |
||||||||||||
Interest expense |
1.8 |
1.8 |
3.6 |
3.5 |
||||||||||||
Total benefits and expenses |
842.2 |
828.5 |
1,599.8 |
1,582.3 |
||||||||||||
Income (loss) before taxes |
43.8 |
(66.6 |
) |
95.9 |
(62.3 |
) |
||||||||||
Income tax expense (benefit) |
12.9 |
(27.9 |
) |
30.2 |
(27.5 |
) |
||||||||||
Net income (loss) attributable to TSM |
$ |
30.9 |
$ |
(38.7 |
) |
$ |
65.7 |
$ |
(34.8 |
) |
||||||
Three months ended June 30, |
Six months ended June 30, |
|||||||||||||||
(dollar amounts in millions) |
2019 |
2018 |
2019 |
2018 |
||||||||||||
Operating revenues: |
||||||||||||||||
Medical premiums earned, net: |
||||||||||||||||
Commercial |
$ |
200.8 |
$ |
194.7 |
$ |
399.3 |
$ |
393.5 |
||||||||
Medicare |
366.0 |
279.8 |
698.6 |
567.7 |
||||||||||||
Medicaid |
227.0 |
203.8 |
401.4 |
404.1 |
||||||||||||
Medical premiums earned, net |
793.8 |
678.3 |
1,499.3 |
1,365.3 |
||||||||||||
Administrative service fees |
3.6 |
5.1 |
7.3 |
9.4 |
||||||||||||
Net investment income |
5.5 |
5.9 |
11.4 |
10.8 |
||||||||||||
Total operating revenues |
802.9 |
689.3 |
1,518.0 |
1,385.5 |
||||||||||||
Medical operating costs: |
||||||||||||||||
Medical claims incurred |
670.7 |
583.8 |
1,260.7 |
1,167.6 |
||||||||||||
Medical operating expenses |
102.9 |
104.1 |
205.9 |
205.9 |
||||||||||||
Total medical operating costs |
773.6 |
687.9 |
1,466.6 |
1,373.5 |
||||||||||||
Medical operating income |
$ |
29.3 |
$ |
1.4 |
$ |
51.4 |
$ |
12.0 |
||||||||
Additional data: |
||||||||||||||||
Member months enrollment: |
||||||||||||||||
Commercial: |
||||||||||||||||
Fully-insured |
955,463 |
940,484 |
1,908,515 |
1,901,774 |
||||||||||||
Self-funded |
353,961 |
439,675 |
716,451 |
889,453 |
||||||||||||
Total commercial |
1,309,424 |
1,380,159 |
2,624,966 |
2,791,227 |
||||||||||||
Medicare |
385,835 |
334,887 |
769,443 |
673,227 |
||||||||||||
Medicaid |
1,092,132 |
1,201,743 |
2,121,868 |
2,373,088 |
||||||||||||
Total member months |
2,787,391 |
2,916,789 |
5,516,277 |
5,837,542 |
||||||||||||
Medical loss ratio |
84.5 |
% |
86.1 |
% |
84.1 |
% |
85.5 |
% |
||||||||
Operating expense ratio |
12.9 |
% |
15.2 |
% |
13.7 |
% |
15.0 |
% |
||||||||
| • | Medical premiums generated by the Medicare business increased by $86.2 million, or 30.8% to $366.0 million, primarily reflecting an increase in enrollment by approximately 51,000 member months, and higher average premium rates reflecting an increase in the average membership risk score. |
| • | Medical premiums generated by the Medicaid business increased by $23.2 million, or 11.4% to $227.0 million, primarily reflecting higher average premium rates in 2019 offset in part by a decrease in membership of approximately 110,000 member months, and $3.6 million related to the suspension of the HIP fee pass-through in 2019. The decrease in membership follows the lower membership assigned to us by ASES when implementing the new contract effective November 1, 2018. The increase in average premium rates is due to the change in model brought by the new contract, where we now insure members across Puerto Rico which have a higher average premium rates per member, compared to the previous contract where we covered only two service regions with lower premium rates per member. |
| • | Medical premiums generated by the Commercial business increased by $6.1 million, or 3.1%, to $200.8 million. This fluctuation primarily reflects higher enrollment during the quarter by approximately 15,000 member months, and higher average premium rates, offset in part by $3.0 million related to the suspension of the HIP fee pass-through in 2019. |
| • | The medical claims incurred in the Medicare business increased by $54.2 million, or 21.9%, during the 2019 period mostly driven by higher enrollment. The MLR, at 82.4% was 600 basis points lower than the same period last year. Adjusting for the effect of prior period reserve developments in 2019 and 2018 and moving the risk score revenue adjustments to their corresponding period, the Medicare MLR would have been approximately 83.2% this quarter, about 70 basis points higher than last year reflecting higher premiums during the 2019 period and the impact of cost containment initiatives. |
| • | The medical claims incurred in the Medicaid business increased by $26.5 million, or 14.7%, during the 2019 period. The MLR, at 91.1%, was 260 basis point higher than the same period last year. Adjusting for the effect of prior period reserve developments, the Medicaid MLR would have been approximately 91.1%, for the quarter, 530 basis points higher than the adjusted MLR for last year reflecting the higher required target MLR of the current Medicaid contract and the impact of the elimination in 2019 of the HIP fee. The current Medicaid contract requires a minimum MLR of 92%, including allocation of healthcare quality improvement expenses. |
| • | The medical claims incurred in the Commercial business increased by $6.3 million, or 4.0%, during the 2019 period. The MLR, at 80.9% was 70 basis points higher than the same period last year. Adjusting for the effect of prior period reserve developments, the Commercial MLR would have been 82.6%, 140 basis points lower than the adjusted MLR for last year. |
| • | Medical premiums generated by the Medicare business increased by $130.9 million, or 23.1%, to $698.6 million, primarily reflecting an increase in member months enrollment by approximately 96,000 and higher average premium rates, mainly reflecting higher membership risk score in 2019. |
| • | Medical premiums generated by the Commercial business increased by $5.8 million, or 1.5%, to $399.3 million. This fluctuation primarily reflects higher member enrollment during the year by approximately 7,000 member months and higher average premium rates, offset in part by $6.0 million related to the suspension of the HIP fee pass-through in 2019. |
| • | Medical premiums generated by the Medicaid business decreased by $2.7 million or 0.7% to $401.4 million. This decrease primarily reflects lower enrollment by approximately 251,000 member months, the impact of the profit sharing accrual, which lowered 2019 premiums by $5.2 million, and $7.3 million related to the suspension of the HIP fee pass-through in 2019. The decrease in membership follows the lower membership assigned to us by ASES when implementing the new Medicaid contract effective November 1, 2018. The increase in average premium rates is due to the change in model brought by the new contract, where we now insure members across Puerto Rico which have a higher average premium rates per member, compared to the previous contract where we covered only two service regions with lower premium rates per member. |
| • | The medical claims incurred in the Medicare business increased by $78.8 million, or 16.0%, during the 2019 period mostly driven by higher enrollment. The MLR, at 81.5% was 490 basis points lower than the same period last year. Adjusting for the effect of prior period reserve developments in 2019 and 2018 and moving the risk score revenue adjustments to their corresponding period, the Medicare MLR would have been approximately 84.3% this year, about 210 basis points higher than last year reflecting higher premiums during the 2019 period and the impact of cost containment initiatives. |
| • | The medical claims incurred in the Commercial business increased by $9.1 million, or 2.9%, during the 2019 period. The MLR, at 81.9%, was 110 basis point higher than the same period last year. Adjusting for the effect of prior period reserve developments, the Commercial MLR would have been 82.3%, 110 basis points lower than the adjusted MLR for last year. |
| • | The medical claims incurred in the Medicaid business increased by $5.2 million, or 1.4%, during the 2019 period. The MLR, at 90.7%, was 180 basis point higher than the same period last year. Adjusting for the effect of prior period reserve developments, the Medicaid MLR would have been approximately 91.4% this period, 470 basis points higher than the adjusted MLR for last year reflecting the higher required target MLR of the current Medicaid contract and the impact of the elimination in 2019 of the HIP fee. |
Three months ended June 30, |
Six months ended June 30, |
|||||||||||||||
(dollar amounts in millions) |
2019 |
2018 |
2019 |
2018 |
||||||||||||
Operating revenues: |
||||||||||||||||
Premiums earned, net: |
||||||||||||||||
Premiums earned |
$ |
46.8 |
$ |
43.1 |
$ |
92.4 |
$ |
86.1 |
||||||||
Assumed earned premiums |
0.3 |
0.5 |
1.0 |
1.3 |
||||||||||||
Ceded premiums earned |
(2.1 |
) |
(2.2 |
) |
(4.2 |
) |
(4.5 |
) |
||||||||
Premiums earned, net |
45.0 |
41.4 |
89.2 |
82.9 |
||||||||||||
Net investment income |
6.8 |
6.6 |
13.4 |
12.7 |
||||||||||||
Total operating revenues |
51.8 |
48.0 |
102.6 |
95.6 |
||||||||||||
Operating costs: |
||||||||||||||||
Policy benefits and claims incurred |
27.3 |
23.5 |
53.3 |
48.5 |
||||||||||||
Underwriting and other expenses |
19.3 |
19.2 |
38.4 |
38.1 |
||||||||||||
Total operating costs |
46.6 |
42.7 |
91.7 |
86.6 |
||||||||||||
Operating income |
$ |
5.2 |
$ |
5.3 |
$ |
10.9 |
$ |
9.0 |
||||||||
Additional data: |
||||||||||||||||
Loss ratio |
60.7 |
% |
56.8 |
% |
59.8 |
% |
58.5 |
% |
||||||||
Operating expense ratio |
42.9 |
% |
46.4 |
% |
43.0 |
% |
46.0 |
% |
||||||||
Three months ended June 30, |
Six months ended June 30, |
|||||||||||||||
(dollar amounts in millions) |
2019 |
2018 |
2019 |
2018 |
||||||||||||
Operating revenues: |
||||||||||||||||
Premiums earned, net: |
||||||||||||||||
Premiums written |
$ |
36.4 |
$ |
32.8 |
$ |
67.3 |
$ |
66.4 |
||||||||
Premiums ceded |
(10.3 |
) |
(12.8 |
) |
(23.7 |
) |
(27.5 |
) |
||||||||
Change in unearned premiums |
(4.3 |
) |
2.8 |
(2.5 |
) |
8.1 |
||||||||||
Premiums earned, net |
21.8 |
22.8 |
41.1 |
47.0 |
||||||||||||
Net investment income |
2.4 |
2.8 |
4.9 |
5.2 |
||||||||||||
Total operating revenues |
24.2 |
25.6 |
46.0 |
52.2 |
||||||||||||
Operating costs: |
||||||||||||||||
Claims incurred |
9.4 |
85.9 |
18.0 |
96.9 |
||||||||||||
Underwriting and other expenses |
10.0 |
10.7 |
19.7 |
23.2 |
||||||||||||
Total operating costs |
19.4 |
96.6 |
37.7 |
120.1 |
||||||||||||
Operating (loss) income |
$ |
4.8 |
$ |
(71.0 |
) |
$ |
8.3 |
$ |
(67.9 |
) |
||||||
Additional data: |
||||||||||||||||
Loss ratio |
43.1 |
% |
376.8 |
% |
43.8 |
% |
206.2 |
% |
||||||||
Operating expense ratio |
45.9 |
% |
46.9 |
% |
47.9 |
% |
49.4 |
% |
||||||||
Six months ended June 30, |
||||||||
(dollar amounts in millions) |
2019 |
2018 |
||||||
Sources (uses) of cash: |
||||||||
Cash provided by operating activities |
$ |
26.3 |
$ |
130.7 |
||||
Net purchases of investment securities |
25.5 |
(41.5 |
) |
|||||
Net capital expenditures |
(10.7 |
) |
(9.1 |
) |
||||
Payments of long-term borrowings |
(1.6 |
) |
(1.6 |
) |
||||
Proceeds from policyholder deposits |
8.2 |
11.6 |
||||||
Surrenders of policyholder deposits |
(11.4 |
) |
(14.7 |
) |
||||
Repurchase and retirement of common stock |
- |
(16.4 |
) |
|||||
Other |
12.4 |
(2.0 |
) |
|||||
Net increase in cash and cash equivalents |
$ |
48.7 |
$ |
57.0 |
||||
Exhibits |
Description |
11 |
Statement re computation of per share earnings; an exhibit describing the computation of the earnings per share for the three and six months ended June 30, 2019 and 2018 has been omitted as the detail necessary to determine the computation of earnings per share can be clearly determined from the material contained in Part I of this Quarterly Report on Form 10-Q. |
Certification of the President and Chief Executive Officer required by Rule 13a-14(a)/15d-14(a). |
|
Certification of the Executive Vice President and Chief Financial Officer required by Rule 13a-14(a)/15d-14(a). |
|
Certification of the President and Chief Executive Officer required pursuant to 18 U.S.C Section 1350. |
|
Certification of the Executive Vice President and Chief Financial Officer required pursuant to 18 U.S.C Section 1350. |
Triple-S Management Corporation |
|||||
Registrant |
|||||
Date: |
August 8, 2019 |
By: |
/s/ Roberto García-Rodríguez |
||
Roberto García-Rodríguez |
|||||
President and Chief Executive Officer |
|||||
Date: |
August 8, 2019 |
By: |
/s/ Juan J. Román-Jiménez |
||
Juan J. Román-Jiménez |
|||||
Executive Vice President and Chief Financial Officer |
|||||
| 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 8, 2019
|
By:
|
/s/ Roberto García-Rodríguez
|
||
|
Roberto García-Rodríguez
|
|||||
|
President and Chief Executive Officer
|
|||||
| 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 8, 2019
|
By:
|
/s/ Juan J. Román-Jiménez
|
||
|
Juan J. Román-Jiménez
|
|||||
|
Executive Vice President and Chief Financial Officer
|
|||||
| 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 8, 2019
|
By:
|
/s/ Roberto García-Rodríguez
|
||
|
Roberto García-Rodríguez
|
|||||
|
President and Chief Executive Officer
|
|||||
| 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 8, 2019
|
By:
|
/s/ Juan J. Román-Jiménez
|
||
|
Juan J. Román-Jiménez
|
|||||
|
Executive Vice President and Chief Financial Officer
|
|||||
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares |
Jun. 30, 2019 |
Dec. 31, 2018 |
|---|---|---|
| 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) | 22,200,045 | 21,980,492 |
| Common stock, outstanding (in shares) | 22,200,045 | 21,980,492 |
Condensed Consolidated Statements of Earnings (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
| Revenues: | ||||
| Premiums earned, net | $ 859,493 | $ 741,770 | $ 1,627,495 | $ 1,493,804 |
| Administrative service fees | 2,456 | 4,066 | 5,088 | 7,414 |
| Net investment income | 15,062 | 15,707 | 30,438 | 29,462 |
| Other operating revenues | 1,591 | 1,588 | 3,168 | 2,659 |
| Total operating revenues | 878,602 | 763,131 | 1,666,189 | 1,533,339 |
| Net realized investment gains (losses) | 2,364 | (921) | 3,679 | 2,021 |
| Net unrealized investment gains (losses) on equity investments | 3,323 | (776) | 22,992 | (16,975) |
| Other income, net | 1,705 | 494 | 2,874 | 1,657 |
| Total revenues | 885,994 | 761,928 | 1,695,734 | 1,520,042 |
| Benefits and expenses: | ||||
| Claims incurred | 706,304 | 692,138 | 1,329,494 | 1,311,127 |
| Operating expenses | 134,084 | 134,612 | 266,747 | 267,746 |
| Total operating costs | 840,388 | 826,750 | 1,596,241 | 1,578,873 |
| Interest expense | 1,831 | 1,825 | 3,619 | 3,515 |
| Total benefits and expenses | 842,219 | 828,575 | 1,599,860 | 1,582,388 |
| Income (loss) before taxes | 43,775 | (66,647) | 95,874 | (62,346) |
| Income tax expense (benefit) | 12,849 | (27,901) | 30,165 | (27,514) |
| Net income (loss) | 30,926 | (38,746) | 65,709 | (34,832) |
| Net (loss) income attributable to non-controlling interest | (5) | 1 | (8) | 1 |
| Net income (loss) attributable to Triple-S Management Corporation | $ 30,931 | $ (38,747) | $ 65,717 | $ (34,833) |
| Earnings per share attributable to Triple-S Management Corporation | ||||
| Basic net income (loss) per share (in dollars per share) | $ 1.35 | $ (1.68) | $ 2.88 | $ (1.50) |
| Diluted net income (loss) per share (in dollars per share) | $ 1.35 | $ (1.68) | $ 2.87 | $ (1.50) |
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
| Condensed Consolidated Statements of Comprehensive Income (Loss) Unaudited) [Abstract] | ||||
| Net income (loss) | $ 30,926 | $ (38,746) | $ 65,709 | $ (34,832) |
| Other comprehensive income (loss), net of tax: | ||||
| Net unrealized change in fair value of available for sale securities, net of taxes | 14,929 | (8,202) | 28,370 | (15,096) |
| Defined benefit pension plan: | ||||
| Actuarial loss, net | 56 | 131 | 112 | 262 |
| Total other comprehensive income (loss), net of tax | 14,985 | (8,071) | 28,482 | (14,834) |
| Comprehensive income (loss) | 45,911 | (46,817) | 94,191 | (49,666) |
| Comprehensive (loss) income attributable to non-controlling interest | (5) | 1 | (8) | 1 |
| Comprehensive income (loss) attributable to Triple-S Management Corporation | $ 45,916 | $ (46,818) | $ 94,199 | $ (49,667) |
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands |
Common Stock [Member]
Class A Common Stock [Member]
|
Common Stock [Member]
Class B Common Stock [Member]
|
Additional Paid-in Capital [Member] |
Retained Earnings [Member] |
Accumulated Other Comprehensive Income (Loss) [Member] |
Triple-S Management Corporation [Member] |
Noncontrolling Interest in Consolidated Subsidiary [Member] |
Total |
|---|---|---|---|---|---|---|---|---|
| Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
| Cumulative effect adjustment due to implementation of ASU 2016-01 | ASU 2016-01 [Member] | $ 0 | $ 0 | $ 0 | $ 39,882 | $ (39,882) | $ 0 | $ 0 | $ 0 |
| Balance at Dec. 31, 2017 | 951 | 22,627 | 53,142 | 785,390 | 51,254 | 913,364 | (682) | 912,682 |
| Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
| Share-based compensation | 0 | 285 | 106 | 0 | 0 | 391 | 0 | 391 |
| Repurchase and retirement of common stock | 0 | (580) | (14,095) | 0 | 0 | (14,675) | 0 | (14,675) |
| Comprehensive income (loss) | 0 | 0 | 0 | 3,914 | (6,763) | (2,849) | 0 | (2,849) |
| Balance at Mar. 31, 2018 | 951 | 22,332 | 39,153 | 829,186 | 4,609 | 896,231 | (682) | 895,549 |
| Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
| Cumulative effect adjustment due to implementation of ASU 2016-01 | ASU 2016-01 [Member] | 0 | 0 | 0 | 0 | 0 | 0 | 1 | 1 |
| Share-based compensation | 0 | 0 | 2,151 | 0 | 0 | 2,151 | 0 | 2,151 |
| Repurchase and retirement of common stock | 0 | (89) | (2,254) | 0 | 0 | (2,343) | 0 | (2,343) |
| Comprehensive income (loss) | 0 | 0 | 0 | (38,747) | (8,071) | (46,818) | 0 | (46,818) |
| Balance at Jun. 30, 2018 | 951 | 22,243 | 39,050 | 790,439 | (3,462) | 849,221 | (681) | 848,540 |
| Balance at Dec. 31, 2018 | 951 | 21,980 | 34,021 | 761,970 | 3,062 | 821,984 | (676) | 821,308 |
| Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
| Share-based compensation | 0 | 177 | 1,409 | 0 | 0 | 1,586 | 0 | 1,586 |
| Repurchase and retirement of common stock | 0 | (1) | (15) | 0 | 0 | (16) | 0 | (16) |
| Comprehensive income (loss) | 0 | 0 | 0 | 34,786 | 13,497 | 48,283 | (3) | 48,280 |
| Balance at Mar. 31, 2019 | 951 | 22,156 | 35,415 | 796,756 | 16,559 | 871,837 | (679) | 871,158 |
| Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
| Share-based compensation | 0 | 44 | 4,276 | 0 | 0 | 4,320 | 0 | 4,320 |
| Repurchase and retirement of common stock | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Comprehensive income (loss) | 0 | 0 | 0 | 30,931 | 14,985 | 45,916 | (5) | 45,911 |
| Balance at Jun. 30, 2019 | $ 951 | $ 22,200 | $ 39,691 | $ 827,687 | $ 31,544 | $ 922,073 | $ (684) | $ 921,389 |
Basis of Presentation |
6 Months Ended | ||
|---|---|---|---|
Jun. 30, 2019 | |||
| 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 the information and the footnotes required by accounting principles generally accepted in the United States of America (GAAP or U.S. GAAP) for complete financial statement presentation pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). 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, 2018.
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, 2019 are not necessarily indicative of the results for the full year ending December 31, 2019.
|
Significant Accounting Policies |
6 Months Ended | ||
|---|---|---|---|
Jun. 30, 2019 | |||
| Significant Accounting Policies [Abstract] | |||
| Significant Accounting Policies |
Recently Adopted Accounting Standards
On February 25, 2016, the Financial Accounting Standards Board (FASB) issued guidance to increase transparency and comparability among organizations by requiring the recognition of a lease right-of-use (ROU) asset and a lease liability, initially measured at the present value of the lease payment on the balance sheet, for both finance and operating leases with lease terms of more than 12 months. The classification of finance or operating will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. Lessors are required to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. In July 2018, the FASB issued the following guidance “Leases – Targeted Improvements” and “Codification Improvement to Leases” to assist in the implementation of leases and address certain technical corrections and improvement to the recently issued lease standard. Amendments include an additional transition method that allows entities to apply the new standard on the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings, as well as a new practical expedient for lessors and other implementation considerations. For public companies, the amended guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company adopted the standard effective January 1, 2019 recognizing approximately $8,800 in ROU assets and lease liabilities for its operating leases in its condensed consolidated balance sheet. ROU assets are included within the other assets and the lease liabilities are included within the accounts payable and accrued liabilities line items in the accompanying condensed consolidated balance sheet. No cumulative effect adjustment to opening balance of retained earnings on the adoption date was required. Most of the operating leases are related to real estate. The Company adopted the following two accounting policies as a result of the adoption of the standard: (1) to not separate lease components from nonlease components and (2) to not apply the recognition requirements of ASC 842 to short-term leases. In addition, the Company implemented control processes and procedures, as necessary, based on changes resulting from the new standard.
Future Adoptions of Accounting Standards
On April 25, 2019, the FASB issued Accounting Standard Update (ASU) 2019-04: Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. The amendment in this update represent changes to clarify, correct errors in or improve the codification. Such amendments should make the codification easier to understand and easier to apply by eliminating inconsistencies and providing clarifications. Within the clarifications was the FASB’s intent to include all reinsurance recoverables within the scope of ASU 2016-13 (Topic 326). For public companies, the improvements related to ASU 2016-13 (Topic 326) and ASU 2016-01 (Topic 825) 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 condensed consolidated financial statements.
Other than the accounting pronouncement disclosed above, there were no other new accounting pronouncements issued during the three months ended June 30, 2019 that could have a material impact on the Corporation’s financial position, operating results or financials statement disclosures.
|
Investment in Securities |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 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 the Company’s investments in securities by major security type and class of security at June 30, 2019 and December 31, 2018, were as follows:
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, 2019 and December 31, 2018 were as follows:
The Company reviews the available for sale and other invested assets portfolios under the Company’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.
Residential mortgage-backed securities: The unrealized losses on these investments were mostly caused by fluctuations in interest rates and credit spreads. The contractual cash flows of these securities 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 Company owns. The Company 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 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.
Alternative investments: As of June 30, 2019, 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.
Maturities of investment securities classified as available for sale and held to maturity were as follows:
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.
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Realized and Unrealized Gains (Losses) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Realized and Unrealized Gains (Losses) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Realized and Unrealized Gains (Losses) |
(4) Realized and Unrealized Gains (Losses)
Information regarding realized and unrealized gains and losses from investments is as follows:
The change in deferred tax liability on unrealized gains recognized in accumulated other comprehensive income (loss) during the six months ended June 30, 2019 and 2018 was $7,446 and $6,147, respectively.
As of June 30, 2019, and December 31, 2018, no individual investment in securities exceeded 10% of stockholders’ equity.
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Premiums and Other Receivables, Net |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Premiums and Other Receivables, Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Premiums and Other Receivables, Net |
(5) Premiums and Other Receivables, Net
Premiums and other receivables, net were as follows:
As of June 30, 2019, and December 31, 2018, the Company had premiums and other receivables of $92,120 and $54,329, respectively, from the Government of Puerto Rico, including its agencies, municipalities and public corporations. The related allowance for doubtful receivables as of June 30, 2019 and December 31, 2018 were $14,703 and $20,984, respectively.
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Fair Value Measurements |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Fair Value Measurements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Measurements |
(6) Fair Value Measurements
Our condensed consolidated balance sheets include the following financial instruments: securities available for sale, equity investments, 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. 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 2018 Annual Report on Form 10-K.
The following tables summarize fair value measurements by level for assets measured at fair value on a recurring basis:
There were no transfers between Levels 1 and 2 during the three and six months ended June 30, 2019 and 2018.
A reconciliation of the beginning and ending balances of assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months and six months ended June 30 is as follows:
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
The fair value of investment securities is estimated based on quoted market prices for those or similar investments. Additional information pertinent to the estimated fair value of investment in securities is included in Note 3.
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 at June 30, 2019 and December 31, 2018 are as follows:
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Claim Liabilities |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Claim Liabilities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Claim Liabilities |
A reconciliation of the beginning and ending balances of claim liabilities is as follows:
* Other Business Segments include the Life Insurance and Property and Casualty segments, as well as intersegment eliminations.
* Other Business Segments include the Life Insurance and Property and Casualty segments, as well as intersegment eliminations.
The actual amounts of claims incurred in connection with insured events occurring in a prior period typically differ from estimates of such claims made in the prior period. Amounts included as incurred claims for prior period insured events reflect the aggregate net amount of these differences.
The claims incurred disclosed in this table exclude the portion of the change in the liability for future policy benefits expense, which amounted to $9,297 and $17,994 during the three months and six months ended June 30, 2019, respectively. The change in the liability for future policy benefits during the three months and six months ended June 30, 2018 amounted to $7,414 and $13,593, 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, 2019.
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Pension Plan |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Pension Plan [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pension Plan |
(8) Pension Plan
The components of net periodic benefit cost were as follows:
Employer Contributions: The Company disclosed in its audited consolidated financial statements for the year ended December 31, 2018 that it expected to contribute $2,000 to the pension program in 2019. As of June 30, 2019, the Company has contributed $2,000 to the pension program.
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Reinsurance |
6 Months Ended | ||||||||||
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Jun. 30, 2019 | |||||||||||
| Reinsurance [Abstract] | |||||||||||
| Reinsurance |
Triple-S Propiedad, Inc. (TSP) uses facultative reinsurance, pro rata, and excess of loss reinsurance treaties to manage its exposure to losses, including those from catastrophe events. TSP has geographic exposure to catastrophe losses from hurricanes and earthquakes. The incidence and severity of catastrophes are inherently unpredictable. Under these treaties, TSP ceded premiums written were $10,245 and $12,688 for the three months ended June 30, 2019 and 2018, respectively, and $ 23,674 and $27,466 for the six months ended June 30, 2019, and 2018, respectively. During the six months ended June 30, 2019 and 2018, TSP ceded claims incurred amounting to $679 and $69,594, respectively, related to losses caused by Hurricanes Irma and Maria.
Principal reinsurance agreements are as follows:
All principal reinsurance contracts are for a period of one year and are subject to modifications and negotiations in each renewal. TSP’s current property and catastrophe reinsurance program was renewed effective April 1, 2019 for a twelve months period ending March 31, 2020. Other contracts were renewed as expiring on January 1, 2019.
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Comprehensive Income (Loss) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Comprehensive Income (Loss) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Comprehensive Income (Loss) |
(10) Comprehensive Income (Loss)
The accumulated balances for each classification of other comprehensive income (loss), net of tax, are as follows:
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Share-Based Compensation |
6 Months Ended | ||
|---|---|---|---|
Jun. 30, 2019 | |||
| Share-Based Compensation [Abstract] | |||
| Share-Based Compensation |
Share-based compensation expense recorded during the three months ended June 30, 2019 and 2018 was $4,320 and $2,151, respectively. Share-based compensation expense recorded during the six months ended June 30, 2019 and 2018 was $5,907 and $2,543, respectively. During the six months ended June 30, 2019, 602 shares were repurchased and retired as the result of non-cash tax withholdings upon vesting of shares. There were no non-cash tax withholdings during the three months ended June 30, 2019. During the three months and six months ended June 30, 2018, 8,525 and 24,796 shares, respectively, were repurchased and retired as the result of non-cash tax withholdings upon vesting of shares.
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Net Income (Loss) Available to Stockholders and Net Income (Loss) per Share |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net Income (Loss) Available to Stockholders and Net Income (Loss) per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net Income (Loss) Available to Stockholders and Net Income (Loss) per Share |
(12) Net Income (Loss) Available to Stockholders and Net Income (Loss) per Share
The following table sets forth the computation of basic and diluted earnings per share:
The Company excluded the effect of dilutive securities during the three months and six months ended June 30, 2018 because their effect would have been anti-dilutive given the net loss attributable to stockholders in those periods. If the Company had generated income from continuing operations during the three months and six months ended June 30, 2018, the effect of restricted stock awards on the diluted shares calculation would have been an increase in shares of 80,929 and 92,933 shares, respectively.
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Contingencies |
6 Months Ended | ||
|---|---|---|---|
Jun. 30, 2019 | |||
| Contingencies [Abstract] | |||
| Contingencies |
The following information supplements and amends, as applicable, the disclosures in Note 24 to the Consolidated Financial Statements of the Company’s 2018 Annual Report on Form 10-K. The Company’s business is subject to numerous laws and regulations promulgated by Federal, Puerto Rico, U.S. Virgin Islands (USVI), Costa Rica, British Virgin Islands (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.
The Company is 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 adverse effect on the consolidated financial condition, operating results and/or cash flows of the Company.
Additionally, the Company 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.
Claims by Heirs of Former Shareholders
The Company and TSS are defending five individual lawsuits: Vera Sanchez, et al, v. Triple-S; Olivella Zalduondo, et al, v. Seguros de Servicios de Salud, et al; Montilla Lopez, et al v. Seguros de Servicio de Salud, et al; Cebollero Santamaria v. Triple-S Salud, Inc., et al; and Ruiz de Porras, et al, v. Triple-S Salud, Inc. All claims were filed in the Puerto Rico Court of First Instance by persons who claim to have inherited a total of 62 shares of the Company or one of its predecessors or affiliates (before giving effect to the 3,000-for-one stock Split). While each case presents unique facts and allegations, the lawsuits generally allege that the redemption of the shares by the Company pursuant to transfer and ownership restrictions contained in the Company’s (or its predecessors’ or affiliates’) articles of incorporation and bylaws was improper. Consequently, the remedy requested by the plaintiffs to be recognized as shareholders of the Company in the corresponding proportion.
As a result of the Puerto Rico Supreme Court’s decision to deny the applicability of the statute of limitations contained in the local securities law, these claims are being litigated on their merits.
On January 11, 2019, local Court of Appeals confirmed Court of First Instance’s partial summary judgement in Wanda Irizarry Antonmattei, et al., v. Seguros de Servicios de Salud de Puerto Rico, Inc., et al. ordering the Company to issue 63,000 stock shares in favor of Plaintiffs. On April 23, 2019, the Supreme Court denied the Company’s petition for certiorari. The Company and Plaintiffs entered into a private settlement agreement on July 11, 2019 under which the Company issued Plaintiffs 48,602 shares of Class A common stock thus concluding this litigation.
In Montilla López, et al. v. Seguros de Servicios de Salud, et al. local Court of First Instance entered summary judgment in favor of Company dismissing all claims on November 2, 2018. Plaintiffs filed an Appeal before Puerto Rico Court of Appeals and the Puerto Rico Supreme Court, both of which have been denied. Plaintiff’s request for reconsideration is pending before the Supreme Court.
In re Blue Cross Blue Shield Antitrust Litigation
TSS is a co-defendant with multiple Blue Plans and the Blue Cross Blue Shield Association (BCBSA) in a multi-district class action litigation filed by a group of providers and subscribers on July 24, 2012 and October 1, 2012, respectively, that has since been consolidated by the United States District Court for the Northern District of Alabama, Southern Division, in the case captioned In re Blue Cross Blue Shield Association Antitrust Litigation. Essentially, provider plaintiffs allege that the exclusive service area requirements of the Primary License Agreements with the Blue Plans constitute an illegal horizontal market allocation under federal antitrust laws. As per provider plaintiffs, the quid pro quo for said “market allocation” is a horizontal price fixing and boycott conspiracy implemented through BCBSA and whose benefits are allegedly derived through the BCBSA’s BlueCard/National Accounts Program. Among the remedies sought, provider plaintiffs seek increased compensation rates and operational changes. In turn, subscriber plaintiffs allege that the alleged conspiracy to allocate markets have prevented subscribers from being offered competitive prices and resulted in higher premiums for Blue Plan subscribers. Subscribers seek damages for the amounts that the Blue Plan premiums allegedly have been artificially inflated as a result of the alleged antitrust violations. Both actions seek injunctive relief.
Prior to consolidation, motions to dismiss were filed by several plans, including TSS - whose request was ultimately denied by the court without prejudice. On April 6, 2015, plaintiffs filed suit in the United States District Court of Puerto Rico against TSS. Said complaint, nonetheless, is believed not to preclude TSS’ jurisdictional arguments. Since inception, the Company has joined BCBSA and other Blue Plans in vigorously contesting these claims. On April 5, 2018, the United States District Court for the Northern District of Alabama, Southern Division, issued it’s ruling on the parties’ respective motions for partial summary judgment on the standard of review applicable to plaintiffs’ claims under Section 1 of the Sherman Act and subscriber plaintiffs’ motion for partial summary judgment on the Blue Plan’s single entity defense. After considering the “undisputed” facts (for summary judgment purposes only) and evidence currently on record in the light most favorable to defendants, the court essentially found that: (a) the combination of Exclusive Service Areas and the National Best Efforts Rule are subject to the Per Se standard of review; (b) there remain genuine issues of material fact as to whether defendants’ conduct can be shielded by the “single entity” defense; and (c) claims concerning the BlueCard Program and uncoupling rules are due to be analyzed under the Rule of Reason standard.
On April 16, 2018 Defendants moved the Federal District Court for the Northern District of Alabama to certify for immediate interlocutory appeal the court’s April 5, 2018 Standard of Review Ruling. On June 12, 2018 Hon. Judge Proctor agreed to grant Defendant’s motion for certification pursuant to 28 U.S.C. §1292(b). Defendants filed their Notice of Appeal on July 12, 2018. On December 12, 2018, the Court of Appeals for the Eleventh Circuit denied Defendants’ petition to appeal the District Court’s Standard of Review Ruling. The parties re-commenced mediation in April 2019.
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Segment Information |
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| Segment Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Segment Information |
(14) Segment Information
The Company’s operations are conducted principally through three business segments: Managed Care, Life Insurance, and Property and Casualty Insurance. The Company 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 for the three months and six months ended June 30, 2019 and 2018:
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Subsequent Events |
6 Months Ended |
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Jun. 30, 2019 | |
| Subsequent Events [Abstract] | |
| Subsequent Events |
(15) Subsequent Events
On July 16, 2019, the Company announced that its Board of Directors authorized the conversion (Conversion) of the Company’s remaining issued and outstanding Class A common shares into Class B common shares, effective August 7, 2019.
As the result of a recent litigation settlement, the Company will issue 48,602 Class A shares to the heirs of a former shareholder preceding the Conversion. The issuance of these new Class A shares will entitle all Class B shareholders to certain anti-dilution rights; therefore, all holders of Class B shares at the close of business on July 26, 2019 (Record Date) will receive a share dividend of 0.051107 Class B shares for every Class B share they own as of that time, as determined by the anti-dilution formula in the Company’s articles of incorporation. The Class B share dividend will be payable on August 6, 2019; cash will be paid in lieu of fractional shares so that shareholders receive a whole number of shares of common stock. After the issuance of the Class A shares described above and the Class B share dividend, the Company’s total outstanding common stock is expected to be approximately 24,334,000 shares.
Effective upon the Company’s public announcement on August 7, 2019, all Class A holders of record will receive one Class B share for each Class A share held. Upon the Conversion, all remaining outstanding Class A shares will be automatically cancelled and extinguished, and the Company will maintain a single class of common shares.
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Basis of Presentation (Policies) |
6 Months Ended |
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Jun. 30, 2019 | |
| 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 the information and the footnotes required by accounting principles generally accepted in the United States of America (GAAP or U.S. GAAP) for complete financial statement presentation pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). 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, 2018.
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, 2019 are not necessarily indicative of the results for the full year ending December 31, 2019.
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Significant Accounting Policies (Policies) |
6 Months Ended |
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Jun. 30, 2019 | |
| Significant Accounting Policies [Abstract] | |
| Recently Adopted Accounting Standards | Recently Adopted Accounting Standards
On February 25, 2016, the Financial Accounting Standards Board (FASB) issued guidance to increase transparency and comparability among organizations by requiring the recognition of a lease right-of-use (ROU) asset and a lease liability, initially measured at the present value of the lease payment on the balance sheet, for both finance and operating leases with lease terms of more than 12 months. The classification of finance or operating will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. Lessors are required to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. In July 2018, the FASB issued the following guidance “Leases – Targeted Improvements” and “Codification Improvement to Leases” to assist in the implementation of leases and address certain technical corrections and improvement to the recently issued lease standard. Amendments include an additional transition method that allows entities to apply the new standard on the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings, as well as a new practical expedient for lessors and other implementation considerations. For public companies, the amended guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company adopted the standard effective January 1, 2019 recognizing approximately $8,800 in ROU assets and lease liabilities for its operating leases in its condensed consolidated balance sheet. ROU assets are included within the other assets and the lease liabilities are included within the accounts payable and accrued liabilities line items in the accompanying condensed consolidated balance sheet. No cumulative effect adjustment to opening balance of retained earnings on the adoption date was required. Most of the operating leases are related to real estate. The Company adopted the following two accounting policies as a result of the adoption of the standard: (1) to not separate lease components from nonlease components and (2) to not apply the recognition requirements of ASC 842 to short-term leases. In addition, the Company implemented control processes and procedures, as necessary, based on changes resulting from the new standard.
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| Future Adoptions of Accounting Standards | Table of ContentsFuture Adoptions of Accounting Standards
On April 25, 2019, the FASB issued Accounting Standard Update (ASU) 2019-04: Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. The amendment in this update represent changes to clarify, correct errors in or improve the codification. Such amendments should make the codification easier to understand and easier to apply by eliminating inconsistencies and providing clarifications. Within the clarifications was the FASB’s intent to include all reinsurance recoverables within the scope of ASU 2016-13 (Topic 326). For public companies, the improvements related to ASU 2016-13 (Topic 326) and ASU 2016-01 (Topic 825) 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 condensed consolidated financial statements.
Other than the accounting pronouncement disclosed above, there were no other new accounting pronouncements issued during the three months ended June 30, 2019 that could have a material impact on the Corporation’s financial position, operating results or financials statement disclosures.
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Investment in Securities (Tables) |
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| 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 the Company’s investments in securities by major security type and class of security at June 30, 2019 and December 31, 2018, were as follows:
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| Securities in Continuous Unrealized Loss Position | Table of ContentsGross 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, 2019 and December 31, 2018 were as follows:
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| Maturities of Investment Securities Classified as Available for Sale and Held to Maturity |
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Realized and Unrealized Gains (Losses) (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Realized and Unrealized Gains (Losses) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Realized Gains and Losses from Investments | Information regarding realized and unrealized gains and losses from investments is as follows:
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| Changes in Net Unrealized Gains (Losses) |
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Premiums and Other Receivables, Net (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Premiums and Other Receivables, Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Premiums and Other Receivables, Net |
Premiums and other receivables, net were as follows:
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Fair Value Measurements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 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:
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| Reconciliation of Assets Measured at Fair Value on Recurring Basis | Table of ContentsA reconciliation of the beginning and ending balances of assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months and six months ended June 30 is as follows:
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
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| 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 at June 30, 2019 and December 31, 2018 are as follows:
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Claim Liabilities (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Claim Liabilities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reconciliation of Beginning and Ending Balances of Claim Liabilities |
* Other Business Segments include the Life Insurance and Property and Casualty segments, as well as intersegment eliminations.
* Other Business Segments include the Life Insurance and Property and Casualty segments, as well as intersegment eliminations.
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| 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, 2019.
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Pension Plan (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pension Plan [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Components of Net Periodic Benefit | The components of net periodic benefit cost were as follows:
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Comprehensive Income (Loss) (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Comprehensive Income (Loss) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accumulated Balances of Other Comprehensive Income (Loss), Net of Tax | The accumulated balances for each classification of other comprehensive income (loss), net of tax, are as follows:
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Net Income (Loss) Available to Stockholders and Net Income (Loss) per Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Net Income (Loss) Available to Stockholders and Net Income (Loss) 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:
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Segment Information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Segment Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating Revenues by Major Operating Segment | The following tables summarize the operations by reportable segment for the three months and six months ended June 30, 2019 and 2018:
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| Operating Income (Loss) and Depreciation and Amortization Expense | 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 the information and the footnotes required by accounting principles generally accepted in the United States of America (GAAP or U.S. GAAP) for complete financial statement presentation pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). 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, 2018.
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, 2019 are not necessarily indicative of the results for the full year ending December 31, 2019.
On February 25, 2016, the Financial Accounting Standards Board (FASB) issued guidance to increase transparency and comparability among organizations by requiring the recognition of a lease right-of-use (ROU) asset and a lease liability, initially measured at the present value of the lease payment on the balance sheet, for both finance and operating leases with lease terms of more than 12 months. The classification of finance or operating will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. Lessors are required to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. In July 2018, the FASB issued the following guidance “Leases – Targeted Improvements” and “Codification Improvement to Leases” to assist in the implementation of leases and address certain technical corrections and improvement to the recently issued lease standard. Amendments include an additional transition method that allows entities to apply the new standard on the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings, as well as a new practical expedient for lessors and other implementation considerations. For public companies, the amended guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company adopted the standard effective January 1, 2019 recognizing approximately $8,800 in ROU assets and lease liabilities for its operating leases in its condensed consolidated balance sheet. ROU assets are included within the other assets and the lease liabilities are included within the accounts payable and accrued liabilities line items in the accompanying condensed consolidated balance sheet. No cumulative effect adjustment to opening balance of retained earnings on the adoption date was required. Most of the operating leases are related to real estate. The Company adopted the following two accounting policies as a result of the adoption of the standard: (1) to not separate lease components from nonlease components and (2) to not apply the recognition requirements of ASC 842 to short-term leases. In addition, the Company implemented control processes and procedures, as necessary, based on changes resulting from the new standard.
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| Assets |
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Significant Accounting Policies (Details) - ASU 2016-02 [Member] |
Jun. 30, 2019
USD ($)
|
|---|---|
| Recently Adopted Accounting Standards [Abstract] | |
| Operating leases, ROU assets | $ 8,800 |
| Operating leases, lease liabilities | $ 8,800 |
Investment in Securities, Fixed Maturities Held to Maturity (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
|---|---|---|
| Fixed maturities held to maturity [Abstract] | ||
| Amortized cost | $ 1,853 | $ 2,492 |
| Gross unrealized gains | 163 | 127 |
| Gross unrealized losses | 0 | 0 |
| Estimated fair value | 2,016 | 2,619 |
| U.S. Treasury Securities and Obligations of U.S. Government Instrumentalities [Member] | ||
| Fixed maturities held to maturity [Abstract] | ||
| Amortized cost | 616 | 617 |
| Gross unrealized gains | 161 | 125 |
| Gross unrealized losses | 0 | 0 |
| Estimated fair value | 777 | 742 |
| Residential Mortgage-backed Securities [Member] | ||
| Fixed maturities held to maturity [Abstract] | ||
| Amortized cost | 165 | 190 |
| Gross unrealized gains | 2 | 2 |
| Gross unrealized losses | 0 | 0 |
| Estimated fair value | 167 | 192 |
| Certificates of Deposit [Member] | ||
| Fixed maturities held to maturity [Abstract] | ||
| Amortized cost | 1,072 | 1,685 |
| Gross unrealized gains | 0 | 0 |
| Gross unrealized losses | 0 | 0 |
| Estimated fair value | $ 1,072 | $ 1,685 |
Investment in Securities, Other Invested Assets - Alternative Investments (Details) - Other Invested Assets - Alternative investments [Member] - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
|---|---|---|
| Other invested assets - Alternative investments [Abstract] | ||
| Amortized cost | $ 86,379 | $ 72,627 |
| Gross unrealized gains | 2,461 | 2,042 |
| Gross unrealized losses | (401) | (654) |
| Estimated fair value | $ 88,439 | $ 74,015 |
Premiums and Other Receivables, Net (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
|---|---|---|
| Premiums and other receivables, net [Abstract] | ||
| Premium | $ 148,316 | $ 94,613 |
| Self-funded group receivables | 27,065 | 31,184 |
| FEHBP | 14,066 | 14,030 |
| Agent balances | 36,588 | 30,224 |
| Accrued interest | 11,544 | 12,426 |
| Reinsurance recoverable | 303,321 | 399,202 |
| Other | 108,120 | 88,807 |
| Premiums and other receivables, total | 649,020 | 670,486 |
| Less allowance for doubtful receivables [Abstract] | ||
| Premium | 27,358 | 32,487 |
| Other | 12,139 | 9,555 |
| Premiums and other receivables, allowance | 39,497 | 42,042 |
| Total premium and other receivables, net | 609,523 | 628,444 |
| Government of Puerto Rico [Member] | ||
| Premiums and other receivables, net [Abstract] | ||
| Premiums and other receivables, total | 92,120 | 54,329 |
| Less allowance for doubtful receivables [Abstract] | ||
| Premiums and other receivables, allowance | $ 14,703 | $ 20,984 |
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, 2019 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
| Fair Value Measurements [Abstract] | |||
| Level 1 to level 2 transfers | $ 0 | $ 0 | $ 0 |
| Level 2 to level 1 transfers | 0 | 0 | $ 0 |
| Reconciliation of beginning and ending balances of assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) [Roll Forward] | |||
| Beginning Balance | 5,049 | 3,805 | |
| Realized gains | 0 | 0 | |
| Unrealized in other accumulated comprehensive income | 81 | 75 | |
| Purchases | 0 | 1,250 | |
| Sales | 0 | 0 | |
| Capital Distributions | 0 | 0 | |
| Ending Balance | $ 5,130 | $ 5,130 |
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, 2019
USD ($)
|
|---|---|
| Incurred Year 2018 [Member] | |
| Insurance Claims Development, Net of Reinsurance [Abstract] | |
| Total of IBNR liabilities plus expected development on reported claims | $ 30,365 |
| Incurred Year 2019 [Member] | |
| Insurance Claims Development, Net of Reinsurance [Abstract] | |
| Total of IBNR liabilities plus expected development on reported claims | $ 334,088 |
Pension Plan (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
|---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Dec. 31, 2018 |
|
| Components of net periodic benefit cost [Abstract] | |||||
| Interest cost | $ 1,741 | $ 1,693 | $ 3,482 | $ 3,386 | |
| Expected return on assets | (2,217) | (2,281) | (4,434) | (4,562) | |
| Amortization of actuarial loss | 90 | 215 | 179 | 430 | |
| Settlement loss | 375 | 325 | 750 | 650 | |
| Net periodic benefit cost | $ (11) | $ (48) | (23) | $ (96) | |
| Expected employer future contributions | $ 2,000 | ||||
| Employer contribution | $ 2,000 | ||||
Reinsurance (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
| Reinsurance [Abstract] | ||||
| Period of reinsurance contracts | 1 year | |||
| TSP [Member] | ||||
| Reinsurance [Abstract] | ||||
| Ceded premiums written | $ 10,245 | $ 12,688 | $ 23,674 | $ 27,466 |
| TSP [Member] | Catastrophe [Member] | ||||
| Reinsurance [Abstract] | ||||
| Retention limit amount | 24,500 | |||
| Increase in amount of claim covered | 70,000 | |||
| Maximum amount of claim to be covered, per person | 815,000 | |||
| Amount of claim covered after retention | 845,000 | |||
| TSP [Member] | Hurricanes Irma and Maria [Member] | ||||
| Reinsurance [Abstract] | ||||
| Claims ceded | 679 | $ 69,594 | ||
| TSP [Member] | Minimum [Member] | Casualty Excess of Loss Treaty [Member] | ||||
| Reinsurance [Abstract] | ||||
| Amount of claim covered, per person | 225 | |||
| TSP [Member] | Minimum [Member] | Medical Malpractice Excess of Loss [Member] | ||||
| Reinsurance [Abstract] | ||||
| Amount of claim covered, per person | 150 | |||
| TSP [Member] | Minimum [Member] | Property Reinsurance Treaty [Member] | ||||
| Reinsurance [Abstract] | ||||
| Amount of claim covered, per person | 375 | |||
| TSP [Member] | Minimum [Member] | Catastrophe [Member] | ||||
| Reinsurance [Abstract] | ||||
| Amount of claim covered, per person | 5,000 | |||
| TSP [Member] | Maximum [Member] | Casualty Excess of Loss Treaty [Member] | ||||
| Reinsurance [Abstract] | ||||
| Amount of claim covered, per person | 12,000 | |||
| TSP [Member] | Maximum [Member] | Medical Malpractice Excess of Loss [Member] | ||||
| Reinsurance [Abstract] | ||||
| Amount of claim covered, per person | 3,000 | |||
| TSP [Member] | Maximum [Member] | Property Reinsurance Treaty [Member] | ||||
| Reinsurance [Abstract] | ||||
| Amount of claim covered, per person | 30,000 | |||
| TSP [Member] | Maximum [Member] | Catastrophe [Member] | ||||
| Reinsurance [Abstract] | ||||
| Amount of claim covered, per person | $ 775,000 | |||
Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
| Accumulated balances for each classification of other comprehensive income, net of tax [Roll Forward] | ||||
| Balance | $ 871,158 | $ 895,549 | $ 821,308 | $ 912,682 |
| Total other comprehensive income (loss), net of tax | 14,985 | (8,071) | 28,482 | (14,834) |
| Balance | 921,389 | 848,540 | 921,389 | 848,540 |
| Net Unrealized Gain on Securities [Member] | ||||
| Accumulated balances for each classification of other comprehensive income, net of tax [Roll Forward] | ||||
| Balance | 40,749 | 29,462 | 27,308 | 76,238 |
| Unrealized loss reclassified to beginning retained earnings as the result of implementing new accounting pronouncement | 0 | 0 | 0 | (39,882) |
| Other comprehensive income (loss) before reclassifications | 16,820 | (8,939) | 31,313 | (13,479) |
| Amounts reclassified from accumulated other comprehensive (loss) income | (1,891) | 737 | (2,943) | (1,617) |
| Total other comprehensive income (loss), net of tax | 14,929 | (8,202) | 28,370 | (15,096) |
| Balance | 55,678 | 21,260 | 55,678 | 21,260 |
| Liability for Pension Benefits [Member] | ||||
| Accumulated balances for each classification of other comprehensive income, net of tax [Roll Forward] | ||||
| Balance | (24,190) | (24,853) | (24,246) | (24,984) |
| Amounts reclassified from accumulated other comprehensive (loss) income | 56 | 131 | 112 | 262 |
| Balance | (24,134) | (24,722) | (24,134) | (24,722) |
| Accumulated Other Comprehensive Income (Loss) [Member] | ||||
| Accumulated balances for each classification of other comprehensive income, net of tax [Roll Forward] | ||||
| Balance | 16,559 | 4,609 | 3,062 | 51,254 |
| Unrealized loss reclassified to beginning retained earnings as the result of implementing new accounting pronouncement | 0 | 0 | 0 | (39,882) |
| Other comprehensive income (loss) before reclassifications | 16,820 | (8,939) | 31,313 | (13,479) |
| Amounts reclassified from accumulated other comprehensive (loss) income | (1,835) | 868 | (2,831) | (1,355) |
| Total other comprehensive income (loss), net of tax | 14,985 | (8,071) | 28,482 | (14,834) |
| Balance | $ 31,544 | $ (3,462) | $ 31,544 | $ (3,462) |
Share-Based Compensation (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
| Share-Based Compensation [Abstract] | ||||
| Share-based compensation expense | $ 4,320 | $ 2,151 | $ 5,907 | $ 2,543 |
| Shares repurchased and retired as a result of non-cash tax withholdings upon vesting of shares (in shares) | 0 | 8,525 | 602 | 24,796 |
Net Income (Loss) Available to Stockholders and Net Income (Loss) per Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
| Numerator for earnings per share [Abstract] | ||||
| Net income (loss) attributable to TSM available to stockholders | $ 30,931 | $ (38,747) | $ 65,717 | $ (34,833) |
| Denominator for basic earnings per share [Abstract] | ||||
| Weighted average of common shares (in shares) | 22,830,399 | 23,016,447 | 22,794,297 | 23,146,318 |
| Effect of dilutive securities (in shares) | 64,601 | 0 | 72,394 | 0 |
| Denominator for diluted earnings per share (in shares) | 22,895,000 | 23,016,447 | 22,866,691 | 23,146,318 |
| Basic net income (loss) per share attributable to TSM (in dollars per share) | $ 1.35 | $ (1.68) | $ 2.88 | $ (1.50) |
| Diluted net income (loss) per share attributable to TSM (in dollars per share) | $ 1.35 | $ (1.68) | $ 2.87 | $ (1.50) |
| Restricted Stock [Member] | ||||
| Net Income (Loss) Available to Stockholders and Net Income (Loss) per Share [Abstract] | ||||
| Anti-dilutive securities excluded from diluted earnings per share calculation (in shares) | 80,929 | 92,933 | ||
Contingencies (Details) - Claims by Heirs of Former Shareholders [Member] |
6 Months Ended | |||
|---|---|---|---|---|
|
Jul. 16, 2019
shares
|
Jul. 11, 2019
shares
|
Jan. 11, 2019
shares
|
Jun. 30, 2019
Lawsuit
shares
|
|
| Contingencies [Abstract] | ||||
| Number of defending individual lawsuits | Lawsuit | 5 | |||
| Number of shares claimed to have inherited (in shares) | 62 | |||
| Stock split conversion ratio | 3,000 | |||
| Number of shares awarded to plaintiff (in shares) | 63,000 | |||
| Class A Common Stock [Member] | Subsequent Event [Member] | ||||
| Contingencies [Abstract] | ||||
| Number of shares awarded to plaintiff (in shares) | 48,602 | 48,602 |
Segment Information (Details) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||||
|---|---|---|---|---|---|---|---|---|
|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2018
USD ($)
|
Jun. 30, 2019
USD ($)
Segment
|
Jun. 30, 2018
USD ($)
|
Dec. 31, 2018
USD ($)
|
||||
| Segment Information [Abstract] | ||||||||
| Number of operating segments | Segment | 3 | |||||||
| Operating revenues [Abstract] | ||||||||
| Premiums earned, net | $ 859,493 | $ 741,770 | $ 1,627,495 | $ 1,493,804 | ||||
| Net investment income | 15,062 | 15,707 | 30,438 | 29,462 | ||||
| Consolidated operating revenues | 878,602 | 763,131 | 1,666,189 | 1,533,339 | ||||
| Operating income (loss) [Abstract] | ||||||||
| Consolidated operating income (loss) | 38,214 | (63,619) | 69,948 | (45,534) | ||||
| Consolidated net realized investment gains (losses) | 2,364 | (921) | 3,679 | 2,021 | ||||
| Consolidated net unrealized investment gains (losses) on equity investments | 3,323 | (776) | 22,992 | (16,975) | ||||
| Consolidated interest expense | (1,831) | (1,825) | (3,619) | (3,515) | ||||
| Consolidated other income, net | 1,705 | 494 | 2,874 | 1,657 | ||||
| Consolidated income (loss) before taxes | 43,775 | (66,647) | 95,874 | (62,346) | ||||
| Depreciation and amortization expense [Abstract] | ||||||||
| Depreciation and amortization expense | 3,540 | 3,576 | 7,045 | 6,986 | ||||
| Assets [Abstract] | ||||||||
| Assets | 2,837,065 | 2,837,065 | $ 2,760,248 | |||||
| Cash, cash equivalents, and investments | 1,766,452 | 1,766,452 | 1,682,086 | |||||
| Property and equipment, net | 85,710 | 85,710 | 81,923 | |||||
| Other assets | 63,479 | 63,479 | 48,229 | |||||
| Unallocated Amount to Segment [Member] | ||||||||
| Operating revenues [Abstract] | ||||||||
| TSM operating revenues from external sources | 377 | 410 | 828 | 808 | ||||
| Operating income (loss) [Abstract] | ||||||||
| TSM operating revenues from external sources | 377 | 410 | 828 | 808 | ||||
| TSM unallocated operating expenses | (3,137) | (2,585) | (5,169) | (4,795) | ||||
| Depreciation and amortization expense [Abstract] | ||||||||
| Depreciation and amortization expense | 196 | 196 | 393 | 393 | ||||
| Assets [Abstract] | ||||||||
| Assets | 88,192 | 88,192 | 102,072 | |||||
| Cash, cash equivalents, and investments | 32,541 | 32,541 | 57,818 | |||||
| Property and equipment, net | 23,159 | 23,159 | 21,733 | |||||
| Other assets | 32,492 | 32,492 | 22,521 | |||||
| Other Segments [Member] | ||||||||
| Operating revenues [Abstract] | ||||||||
| TSM operating revenues from external sources | [1] | 1,591 | 1,588 | 3,168 | 2,659 | |||
| Consolidated operating revenues | [1] | 3,598 | 1,637 | 7,141 | 2,947 | |||
| Operating income (loss) [Abstract] | ||||||||
| Operating income (loss) | [1] | (730) | 427 | (1,122) | 602 | |||
| TSM operating revenues from external sources | [1] | 1,591 | 1,588 | 3,168 | 2,659 | |||
| Depreciation and amortization expense [Abstract] | ||||||||
| Depreciation and amortization expense | [1] | 193 | 172 | 378 | 340 | |||
| Assets [Abstract] | ||||||||
| Assets | [1] | 25,307 | 25,307 | 20,705 | ||||
| Reportable Segment [Member] | ||||||||
| Operating revenues [Abstract] | ||||||||
| Consolidated operating revenues | 882,539 | 764,463 | 1,673,756 | 1,536,114 | ||||
| Operating income (loss) [Abstract] | ||||||||
| Operating income (loss) | 38,571 | (63,844) | 69,483 | (46,347) | ||||
| Depreciation and amortization expense [Abstract] | ||||||||
| Depreciation and amortization expense | 3,344 | 3,380 | 6,652 | 6,593 | ||||
| Assets [Abstract] | ||||||||
| Assets | 2,824,039 | 2,824,039 | 2,710,020 | |||||
| Reportable Segment [Member] | Managed Care [Member] | ||||||||
| Operating revenues [Abstract] | ||||||||
| Premiums earned, net | 793,355 | 677,994 | 1,498,405 | 1,364,596 | ||||
| Net investment income | 5,479 | 5,914 | 11,357 | 10,771 | ||||
| Consolidated operating revenues | 802,935 | 689,297 | 1,517,979 | 1,385,452 | ||||
| Operating income (loss) [Abstract] | ||||||||
| Operating income (loss) | 29,302 | 1,417 | 51,412 | 12,035 | ||||
| Depreciation and amortization expense [Abstract] | ||||||||
| Depreciation and amortization expense | 2,792 | 2,804 | 5,549 | 5,445 | ||||
| Assets [Abstract] | ||||||||
| Assets | 1,237,890 | 1,237,890 | 1,078,262 | |||||
| Reportable Segment [Member] | Managed Care [Member] | Administrative Service Fee [Member] | ||||||||
| Operating revenues [Abstract] | ||||||||
| Consolidated operating revenues | 2,456 | 4,066 | 5,088 | 7,414 | ||||
| Reportable Segment [Member] | Life Insurance [Member] | ||||||||
| Operating revenues [Abstract] | ||||||||
| Premiums earned, net | 44,511 | 41,180 | 88,233 | 82,269 | ||||
| Net investment income | 6,822 | 6,619 | 13,382 | 12,677 | ||||
| Consolidated operating revenues | 51,841 | 48,015 | 102,601 | 95,543 | ||||
| Operating income (loss) [Abstract] | ||||||||
| Operating income (loss) | 5,215 | 5,331 | 10,855 | 8,956 | ||||
| Depreciation and amortization expense [Abstract] | ||||||||
| Depreciation and amortization expense | 273 | 296 | 545 | 596 | ||||
| Assets [Abstract] | ||||||||
| Assets | 912,550 | 912,550 | 863,470 | |||||
| Reportable Segment [Member] | Property and Casualty Insurance [Member] | ||||||||
| Operating revenues [Abstract] | ||||||||
| Premiums earned, net | 21,627 | 22,596 | 40,857 | 46,659 | ||||
| Net investment income | 2,384 | 2,764 | 4,871 | 5,206 | ||||
| Consolidated operating revenues | 24,165 | 25,514 | 46,035 | 52,172 | ||||
| Operating income (loss) [Abstract] | ||||||||
| Operating income (loss) | 4,784 | (71,019) | 8,338 | (67,940) | ||||
| Depreciation and amortization expense [Abstract] | ||||||||
| Depreciation and amortization expense | 86 | 108 | 180 | 212 | ||||
| Assets [Abstract] | ||||||||
| Assets | 648,292 | 648,292 | 747,583 | |||||
| Intersegment Elimination [Member] | ||||||||
| Operating revenues [Abstract] | ||||||||
| Premiums earned, net | (2,307) | (1,693) | (4,422) | (3,295) | ||||
| Consolidated operating revenues | (2,007) | (49) | (3,973) | (288) | ||||
| Operating income (loss) [Abstract] | ||||||||
| Elimination of TSM intersegment charges | 2,403 | 2,400 | 4,806 | 4,800 | ||||
| Assets [Abstract] | ||||||||
| Assets | (75,166) | (75,166) | $ (51,844) | |||||
| Intersegment Elimination [Member] | Managed Care [Member] | ||||||||
| Operating revenues [Abstract] | ||||||||
| Premiums earned, net | 1,645 | 1,323 | 3,129 | 2,671 | ||||
| Intersegment Elimination [Member] | Life Insurance [Member] | ||||||||
| Operating revenues [Abstract] | ||||||||
| Premiums earned, net | 508 | 216 | 986 | 597 | ||||
| Intersegment Elimination [Member] | Property and Casualty Insurance [Member] | ||||||||
| Operating revenues [Abstract] | ||||||||
| Premiums earned, net | 154 | 154 | 307 | 307 | ||||
| Intersegment Elimination [Member] | Other Segments [Member] | ||||||||
| Operating revenues [Abstract] | ||||||||
| Consolidated operating revenues | [1] | $ 2,007 | $ 49 | $ 3,973 | $ 288 | |||
| ||||||||
Subsequent Events (Details) - shares |
Jul. 16, 2019 |
Jul. 11, 2019 |
Jan. 11, 2019 |
Aug. 07, 2019 |
Aug. 06, 2019 |
Jun. 30, 2019 |
Dec. 31, 2018 |
|---|---|---|---|---|---|---|---|
| Claims by Heirs of Former Shareholders [Member] | |||||||
| Stock Transactions [Abstract] | |||||||
| Number of shares awarded to plaintiff (in shares) | 63,000 | ||||||
| Class A Common Stock [Member] | |||||||
| Stock Transactions [Abstract] | |||||||
| Outstanding common stock (in shares) | 950,968 | 950,968 | |||||
| Forecast [Member] | |||||||
| Stock Transactions [Abstract] | |||||||
| Outstanding common stock (in shares) | 24,334,000 | ||||||
| Subsequent Event [Member] | |||||||
| Stock Transactions [Abstract] | |||||||
| Dividends payable, record date | Jul. 26, 2019 | ||||||
| Share dividend (in shares) | 0.051107 | ||||||
| Dividends payable date | Aug. 06, 2019 | ||||||
| Number of shares of Class B Common Stock to be issued for each Class A share in stock conversion (in shares) | 1 | ||||||
| Subsequent Event [Member] | Class A Common Stock [Member] | Claims by Heirs of Former Shareholders [Member] | |||||||
| Stock Transactions [Abstract] | |||||||
| Number of shares awarded to plaintiff (in shares) | 48,602 | 48,602 |