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 September 30, 2019 |
Common Stock Class B, $1.00 par value |
3 |
|||
Item 1. |
3 |
||
Item 2. |
30 |
||
30 |
|||
30 |
|||
31 |
|||
34 |
|||
34 |
|||
35 |
|||
37 |
|||
40 |
|||
41 |
|||
42 |
|||
Item 3. |
43 |
||
Item 4. |
44 |
||
Part II – Other Information |
44 |
||
Item 1. |
44 |
||
Item 1A. |
44 |
||
Item 2. |
45 |
||
Item 3. |
45 |
||
Item 4. |
45 |
||
Item 5. |
45 |
||
Item 6. |
46 |
||
47 |
|||
September 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 September 30, |
Nine months ended September 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 September 30, |
Nine months ended September 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 |
||||||||||||||||||||||||||||||||
Comprehensive income (loss) |
( |
) |
||||||||||||||||||||||||||||||
Balance, June 30, 2019 |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
||||||||||||||||||||||
Share-based compensation |
||||||||||||||||||||||||||||||||
Issuance of Common Stock |
||||||||||||||||||||||||||||||||
Stock dividend |
( |
) |
||||||||||||||||||||||||||||||
Dividend |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||||
Common Stock Class A conversion to Class B |
( |
) |
||||||||||||||||||||||||||||||
Comprehensive income (loss) |
( |
) |
||||||||||||||||||||||||||||||
Balance, September 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) income |
( |
) |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||
Balance, June 30, 2018 |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
$ |
( |
) |
$ |
||||||||||||||||||||
Share-based compensation |
||||||||||||||||||||||||||||||||
Repurchase and retirement of common stock |
( |
) |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||
Comprehensive (loss) income |
( |
) |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||
Balance, September 30, 2018 |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
$ |
( |
) |
$ |
||||||||||||||||||||
Nine months ended September 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 used in operating activities |
( |
) |
( |
) |
||||
Nine months ended September 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 in other investments |
( |
) |
( |
) |
||||
Net change in policy loans |
( |
) |
( |
) |
||||
Net capital expenditures |
( |
) |
( |
) |
||||
Net cash 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 used in financing activities |
( |
) |
( |
) |
||||
Net decrease in cash and cash equivalents |
( |
) |
( |
) |
||||
Cash and cash equivalents: |
||||||||
Beginning of period |
||||||||
End of period |
$ |
$ |
||||||
| (1) | Basis of Presentation |
| (2) | Significant Accounting Policies |
| (3) | Investment in Securities |
September 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 |
$ |
$ |
$ |
( |
) |
$ |
||||||||||
September 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 |
$ |
$ |
$ |
$ |
||||||||||||
September 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 |
$ |
$ |
$ |
( |
) |
$ |
||||||||||
September 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 |
||||||||||||||||||||||||||||||||||||
Obligations of government- sponsored enterprises |
$ |
$ |
( |
) |
$ |
$ |
$ |
$ |
( |
) |
||||||||||||||||||||||||||
Corporate bonds |
( |
) |
( |
) |
||||||||||||||||||||||||||||||||
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 |
$ |
$ |
( |
) |
$ |
$ |
( |
) |
$ |
$ |
( |
) |
||||||||||||||||||||||||
September 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 |
||||||||
$ |
$ |
|||||||
| (4) | Realized and Unrealized Gains (Losses) |
Three months ended September 30, |
Nine months ended September 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 September 30, |
Nine months ended September 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 |
$ |
$ |
( |
) |
$ |
$ |
( |
) |
||||||||
| (5) | Premiums and Other Receivables, Net |
September 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 |
$ |
$ |
||||||
| (6) | Goodwill |
| (7) | Fair Value Measurements |
September 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 |
Nine months ended |
|||||||
September 30, 2019 |
September 30, 2019 |
|||||||
Beginning Balance |
$ |
$ |
||||||
Realized gains |
||||||||
Unrealized in other accumulated comprehensive income |
||||||||
Purchases |
||||||||
Sales |
||||||||
Capital Distributions |
||||||||
Ending Balance |
$ |
$ |
||||||
| (8) | Claim Liabilities |
Nine months ended September 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 |
$ |
$ |
$ |
|||||||||
Nine months ended September 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 |
||||
| (9) | Pension Plan |
Three months ended September 30, |
Nine months ended September 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 |
$ |
$ |
$ |
$ |
( |
) |
||||||||||
| (10) | 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 $ |
| (11) | Stockholder’s Equity |
| (12) | Comprehensive Income (Loss) |
Three months ended |
Nine months ended |
|||||||||||||||
September 30, |
September 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 |
$ |
$ |
( |
) |
$ |
$ |
( |
) |
||||||||
| (13) | Share-Based Compensation |
| (14) | Net Income (Loss) Available to Stockholders and Net Income (Loss) per Share |
Three months ended September 30, |
Nine months ended September 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 |
$ |
$ |
( |
) |
$ |
$ |
( |
) |
||||||||
| (15) | Contingencies |
| (16) | Segment Information |
Three months ended September 30, |
Nine months ended September 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 September 30, |
Nine months ended September 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 |
$ |
$ |
$ |
$ |
||||||||||||
September 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 |
$ |
$ |
||||||
| (17) | Subsequent Events |
As of September 30, |
||||||||
2019 |
2018 |
|||||||
Managed care enrollment: |
||||||||
Commercial 1 |
442,069 |
453,823 |
||||||
Medicare |
128,660 |
111,389 |
||||||
Medicaid |
354,230 |
394,149 |
||||||
Total |
924,959 |
959,361 |
||||||
Managed care enrollment by funding arrangement: |
||||||||
Fully-insured |
805,882 |
819,267 |
||||||
Self-insured |
119,077 |
140,094 |
||||||
Total |
924,959 |
959,361 |
||||||
| (1) | Commercial membership includes corporate accounts, self-funded employers, individual accounts, Medicare Supplement, Federal government employees and local government employees. |
Three months ended |
Nine months ended |
|||||||||||||||
September 30, |
September 30, |
|||||||||||||||
(dollar amounts in millions) |
2019 |
2018 |
2019 |
2018 |
||||||||||||
Revenues: |
||||||||||||||||
Premiums earned, net |
$ |
815.0 |
$ |
742.4 |
$ |
2,442.5 |
$ |
2,236.3 |
||||||||
Administrative service fees |
2.6 |
3.8 |
7.7 |
11.2 |
||||||||||||
Net investment income |
15.2 |
16.2 |
45.6 |
45.6 |
||||||||||||
Other operating revenues |
3.1 |
1.6 |
6.3 |
4.2 |
||||||||||||
Total operating revenues |
835.9 |
764.0 |
2,502.1 |
2,297.3 |
||||||||||||
Net realized investment gains (losses) |
1.1 |
(0.9 |
) |
4.8 |
1.1 |
|||||||||||
Net unrealized investment gains (losses) on equity investments |
1.3 |
5.6 |
24.3 |
(11.3 |
) |
|||||||||||
Other income, net |
0.5 |
1.9 |
3.4 |
3.6 |
||||||||||||
Total revenues |
838.8 |
770.6 |
2,534.6 |
2,290.7 |
||||||||||||
Benefits and expenses: |
||||||||||||||||
Claims incurred |
680.0 |
648.6 |
2,009.5 |
1,959.7 |
||||||||||||
Operating expenses |
136.9 |
141.0 |
403.6 |
408.8 |
||||||||||||
Total operating expenses |
816.9 |
789.6 |
2,413.1 |
2,368.5 |
||||||||||||
Interest expense |
2.1 |
2.0 |
5.7 |
5.5 |
||||||||||||
Total benefits and expenses |
819.0 |
791.6 |
2,418.8 |
2,374.0 |
||||||||||||
Income (loss) before taxes |
19.8 |
(21.0 |
) |
115.8 |
(83.3 |
) |
||||||||||
Income tax expense (benefit) |
5.9 |
(3.4 |
) |
36.1 |
(30.9 |
) |
||||||||||
Net income (loss) attributable to TSM |
$ |
13.9 |
$ |
(17.6 |
) |
$ |
79.7 |
$ |
(52.4 |
) |
||||||
Three months ended |
Nine months ended |
|||||||||||||||
September 30, |
September 30, |
|||||||||||||||
(dollar amounts in millions) |
2019 |
2018 |
2019 |
2018 |
||||||||||||
Operating revenues: |
||||||||||||||||
Medical premiums earned, net: |
||||||||||||||||
Commercial |
$ |
203.1 |
$ |
197.3 |
$ |
602.4 |
$ |
590.8 |
||||||||
Medicare |
367.1 |
283.6 |
1,065.7 |
851.3 |
||||||||||||
Medicaid |
176.3 |
199.8 |
577.7 |
603.9 |
||||||||||||
Medical premiums earned, net |
746.5 |
680.7 |
2,245.8 |
2,046.0 |
||||||||||||
Administrative service fees |
3.6 |
4.9 |
10.9 |
14.3 |
||||||||||||
Net investment income |
5.7 |
6.8 |
17.0 |
17.5 |
||||||||||||
Total operating revenues |
755.8 |
692.4 |
2,273.7 |
2,077.8 |
||||||||||||
Medical operating costs: |
||||||||||||||||
Medical claims incurred |
645.2 |
566.1 |
1,905.9 |
1,733.6 |
||||||||||||
Medical operating expenses |
105.2 |
112.1 |
311.0 |
317.9 |
||||||||||||
Total medical operating costs |
750.4 |
678.2 |
2,216.9 |
2,051.5 |
||||||||||||
Medical operating income |
$ |
5.4 |
$ |
14.2 |
$ |
56.8 |
$ |
26.3 |
||||||||
Additional data: |
||||||||||||||||
Member months enrollment: |
||||||||||||||||
Commercial: |
||||||||||||||||
Fully-insured |
964,321 |
939,110 |
2,872,836 |
2,840,884 |
||||||||||||
Self-funded |
356,059 |
427,791 |
1,072,510 |
1,317,244 |
||||||||||||
Total commercial |
1,320,380 |
1,366,901 |
3,945,346 |
4,158,128 |
||||||||||||
Medicare |
386,995 |
334,836 |
1,156,438 |
1,008,063 |
||||||||||||
Medicaid |
1,065,885 |
1,191,681 |
3,187,753 |
3,564,769 |
||||||||||||
Total member months |
2,773,260 |
2,893,418 |
8,289,537 |
8,730,960 |
||||||||||||
Medical loss ratio |
86.4 |
% |
83.2 |
% |
84.9 |
% |
84.7 |
% |
||||||||
Operating expense ratio |
14.0 |
% |
16.4 |
% |
13.8 |
% |
15.4 |
% |
||||||||
| • | Medical premiums generated by the Medicare business increased by $83.5 million, or 29.4% to $367.1 million, primarily reflecting an increase in enrollment by approximately 52,000 member months, and higher average premium rates reflecting an increase in the average membership risk score. |
| • | Medical premiums generated by the Commercial business increased by $5.8 million, or 2.9%, to $203.1 million. This fluctuation primarily reflects higher fully-insured enrollment during the quarter by approximately 25,000 member months, and higher average premium rates, offset in part by $2.9 million related to the suspension of the HIP fee pass-through in 2019. |
| • | Medical premiums generated by the Medicaid business decreased by $23.5 million, or 11.8% to $176.3 million, primarily reflecting a decrease in membership of approximately 126,000 member months, and $3.6 million related to the suspension of the HIP fee pass-through in 2019. The premiums for the quarter were also lowered by a retroactive adjustment done by ASES following the reclassification of a portion of the High Cost High Need (HCHN) population into lower premium rates. The decrease in membership follows the lower membership assigned to us by ASES when implementing the new contract effective November 1, 2018. |
| • | The medical claims incurred in the Medicare business increased by $69.7 million, or 30.6%, during the 2019 period. The MLR, at 81.1% was 80 basis points higher than the same period last year. The higher MLR mostly reflects lower favorable prior period reserve development in 2019 when compared to the prior year and improved benefits in the 2019 product offerings. |
| • | The medical claims incurred in the Commercial business increased by $5.4 million, or 3.3%, during the 2019 period. The MLR, at 84.7% was 20 basis points higher than the same period last year, mostly reflecting the impact of the elimination of the HIP fee pass-through in 2019, offset in part by favorable prior period reserve developments. |
| • | The medical claims incurred in the Medicaid business increased by $4.0 million, or 2.3%, during the 2019 period. The MLR, at 99.6%, was 1,370 basis point higher than the same period last year, the increased MLR reflects required target MLR of the current Medicaid contract, the impact of the elimination in 2019 of the HIP fee pass-through, and a timing difference in the recognition of member acuity in premiums. The current Medicaid contract requires a minimum MLR of 92%, including allocation of healthcare quality improvement expenses. |
| • | Medical premiums generated by the Medicare business increased by $214.4 million, or 25.2%, to $1,065.7 million, primarily reflecting an increase in member months enrollment by approximately 148,000 and higher average premium rates, mainly reflecting higher membership risk score in 2019. |
| • | Medical premiums generated by the Commercial business increased by $11.6 million, or 2.0%, to $602.4 million. This fluctuation primarily reflects higher fully-insured member enrollment during the year by approximately 32,000 member months and higher average premium rates, offset in part by $9.0 million related to the suspension of the HIP fee pass-through in 2019. |
| • | Medical premiums generated by the Medicaid business decreased by $26.2 million or 4.3% to $577.7 million. This decrease primarily reflects lower enrollment by approximately 377,000 member months, the $6.3 million impact of the profit sharing accrual, and $10.9 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 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 $148.5 million, or 20.7%, during the 2019 period mostly driven by higher enrollment. The MLR, at 81.4% was 300 basis points lower than the same period last year, driven by favorable prior period reserve developments in 2019 and the impact of cost containment initiatives. These decreases were offset in part by improved benefits in the 2019 product offerings. |
| • | The medical claims incurred in the Commercial business increased by $14.6 million, or 3.0%, during the 2019 period. The MLR, at 82.8%, was 80 basis point higher than the same period last year, mostly reflecting the elimination of the HIP fee pass through in 2019. |
| • | The medical claims incurred in the Medicaid business increased by $9.2 million, or 1.7%, during the 2019 period. The MLR, at 93.4%, was 550 basis point higher than the same period last year. The increased MLR reflects the higher required target MLR of the current Medicaid contract, the impact of the elimination in 2019 of the HIP fee pass-through, and a timing difference in the recognition of member acuity in premiums. The current Medicaid contract requires a minimum MLR of 92%, including allocation of healthcare quality improvements expenses. |
Three months ended |
Nine months ended |
|||||||||||||||
September 30, |
September 30, |
|||||||||||||||
(dollar amounts in millions) |
2019 |
2018 |
2019 |
2018 |
||||||||||||
Operating revenues: |
||||||||||||||||
Premiums earned, net: |
||||||||||||||||
Premiums earned |
$ |
47.3 |
$ |
43.7 |
$ |
139.7 |
$ |
129.7 |
||||||||
Assumed earned premiums |
0.6 |
0.7 |
1.6 |
2.0 |
||||||||||||
Ceded premiums earned |
(2.1 |
) |
(2.1 |
) |
(6.2 |
) |
(6.6 |
) |
||||||||
Premiums earned, net |
45.8 |
42.3 |
135.1 |
125.1 |
||||||||||||
Net investment income |
6.7 |
6.4 |
20.0 |
19.1 |
||||||||||||
Total operating revenues |
52.5 |
48.7 |
155.1 |
144.2 |
||||||||||||
Operating costs: |
||||||||||||||||
Policy benefits and claims incurred |
25.9 |
25.3 |
79.2 |
73.8 |
||||||||||||
Underwriting and other expenses |
20.0 |
17.7 |
58.4 |
55.8 |
||||||||||||
Total operating costs |
45.9 |
43.0 |
137.6 |
129.6 |
||||||||||||
Operating income |
$ |
6.6 |
$ |
5.7 |
$ |
17.5 |
$ |
14.6 |
||||||||
Additional data: |
||||||||||||||||
Loss ratio |
56.6 |
% |
59.8 |
% |
58.6 |
% |
59.0 |
% |
||||||||
Operating expense ratio |
43.7 |
% |
41.8 |
% |
43.2 |
% |
44.6 |
% |
||||||||
Three months ended |
Nine months ended |
|||||||||||||||
September 30, |
September 30, |
|||||||||||||||
(dollar amounts in millions) |
2019 |
2018 |
2019 |
2018 |
||||||||||||
Operating revenues: |
||||||||||||||||
Premiums earned, net: |
||||||||||||||||
Premiums written |
$ |
40.0 |
$ |
33.3 |
$ |
107.4 |
$ |
99.7 |
||||||||
Premiums ceded |
(12.3 |
) |
(12.6 |
) |
(36.0 |
) |
(40.1 |
) |
||||||||
Change in unearned premiums |
(4.0 |
) |
(0.5 |
) |
(6.5 |
) |
7.5 |
|||||||||
Premiums earned, net |
23.7 |
20.2 |
64.9 |
67.1 |
||||||||||||
Net investment income |
2.5 |
2.5 |
7.4 |
7.7 |
||||||||||||
Total operating revenues |
26.2 |
22.7 |
72.3 |
74.8 |
||||||||||||
Operating costs: |
||||||||||||||||
Claims incurred |
10.2 |
58.2 |
28.3 |
155.1 |
||||||||||||
Underwriting and other expenses |
9.4 |
11.4 |
29.1 |
34.5 |
||||||||||||
Total operating costs |
19.6 |
69.6 |
57.4 |
189.6 |
||||||||||||
Operating income (loss) |
$ |
6.6 |
$ |
(46.9 |
) |
$ |
14.9 |
$ |
(114.8 |
) |
||||||
Additional data: |
||||||||||||||||
Loss ratio |
43.0 |
% |
288.1 |
% |
43.6 |
% |
231.1 |
% |
||||||||
Operating expense ratio |
39.7 |
% |
56.4 |
% |
44.8 |
% |
51.4 |
% |
||||||||
Nine months ended |
||||||||
September 30, |
||||||||
(dollar amounts in millions) |
2019 |
2018 |
||||||
Sources (uses) of cash: |
||||||||
Cash used in operating activities |
$ |
(3.5 |
) |
$ |
(3.9 |
) |
||
Net sales (purchases) of investment securities |
0.7 |
(52.5 |
) |
|||||
Net capital expenditures |
(14.7 |
) |
(12.3 |
) |
||||
Payments of long-term borrowings |
(2.4 |
) |
(2.4 |
) |
||||
Proceeds from policyholder deposits |
15.1 |
14.7 |
||||||
Surrenders of policyholder deposits |
(16.5 |
) |
(21.4 |
) |
||||
Repurchase and retirement of common stock |
- |
(22.4 |
) |
|||||
Other |
2.7 |
8.3 |
||||||
Net decrease in cash and cash equivalents |
$ |
(18.6 |
) |
$ |
(91.9 |
) |
||
| • | In August 2019, TSS and TSV became members of the FHLBNY, which provides access to collateralized advances. The borrowing capacity of TSS and TSV is up to 30% of their admitted assets as disclosed in the most recent filing to the Commissioner of Insurance but is constrained by the amount of collateral held at the FHLBNY. As of September 30, 2019, the borrowing capacity is $83.2 million for TSS and $49.2 million for TSV. |
| • | As of September 30, 2019, TSS has $60.0 million of available credit under repurchase agreements with broker-dealers, which are short term borrowing facilities using securities as collateral. |
| • | TSA has a $10.0 million revolving loan agreement with a commercial bank in Puerto Rico. This line of credit has an interest rate of 30-day LIBOR plus 25 basis points and contains certain financial and non-financial covenants that are customary for this type of facility. This line of credit matured on April 30, 2019 and was renewed for an additional year. |
Exhibits |
Description |
Amendment to the contract between Administración de Seguros de Salud de Puerto Rico (ASES) and Triple-S Salud, Inc. to administer the provision of physical & behavioral health services under the Government Health Plan Program. |
|
11 |
Statement re computation of per share earnings; an exhibit describing the computation of the earnings per share for the three and nine months ended September 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: |
November 7, 2019 |
By: |
/s/ Roberto García-Rodríguez |
|
Roberto García-Rodríguez |
||||
President and Chief Executive Officer |
||||
Date: |
November 7, 2019 |
By: |
/s/ Juan J. Román-Jiménez |
|
Juan J. Román-Jiménez |
||||
Executive Vice President and Chief Financial Officer |
| I. |
AMENDMENTS
|
| 1. |
Article II Definition of “Annual Open Enrollment Period” shall be amended and replaced in its entirety as follows:
|
| 2. |
Immediately following Section 5.3.10, a new Section 5.3.11
shall be inserted stating as follows:
|
| 5.3.11 |
If an Enrollee’s Effective Date of Disenrollment occurs during an inpatient hospital admission, the Contractor the Enrollee was enrolled with on the date of
admission (for purposes of this section, the “disenrolling Contractor”) is responsible for covered inpatient facility and professional
services associated with the inpatient hospital admission. This responsibility continues from the date of admission until the date the Enrollee is discharged from the inpatient stay. The disenrolling Contractor shall not request and/or
require that the disenrolled Enrollee be discharged from the inpatient facility for transfer to another inpatient facility. Should a discharge and transfer to another inpatient facility be medically necessary, the disenrolling Contractor
shall notify the treating providers to work with the Enrollee’s new Contractor to facilitate the discharge, transfer, and authorization of services as needed. The Enrollee’s new Contractor is responsible for coordinating delivery of care
pursuant to this Contract once discharge has occurred, including any subsequent professional services and shall work with the inpatient facility to facilitate discharge planning and authorize services as necessary.
|
| 3. |
Immediately following Section 7.7.11.8, a new Section 7.7.11.9 shall be inserted stating as follows:
|
| 7.7.11.9 |
Nutritional supplements for adults with PKU when medically necessary;
|
| 4. |
Section 7.7.11.9 shall be redesignated as section 7.7.11.10 and all subsections are redesignated accordingly in sequential order (i.e.,
subsection 7.7.11.9.1 shall be redesignated as 7.7.11.10.1., et seq). Section 7.7.11.10 shall be redesignated as section 7.7.11.11. Section 7.7.11.11 shall be redesignated as section 7.7.11.12. Section 7.7.11.12 shall be redesignated as
section 7.7.11.13. Section 7.7.11.13 shall be resdesignated as section 7.7.11.14. Section 7.7.11.14 shall be redesignated as section 7.7.11.15 and all subsections are redesignated accordingly in sequential order (i.e., subsection
7.7.11.14.1 shall be redesignated as 7.7.11.15.1., et seq).
|
| 5. |
Section 7.7.11.14.15, redesignated as section 7.7.11.15.15 shall be amended and replaced in its entirety as follows:
|
| 6. |
Immediately following section 7.7.11.14.16, redesignated as 7.7.11.15.16, a new Section 7.7.11.15.17 shall be inserted stating as follows:
|
| 7. |
Section 7.7.11.15 shall be redesignated as 7.7.11.16.
|
| 8. |
Immediately following Section 10.1.5., a new Section 10.1.5.1 shall be inserted stating as follows:
|
| 10.1.5.1 |
The Contractor shall ensure that facilities subject to the federal emergency preparedness requirements as conditions of participation in Medicare and Medicaid are
compliant with such requirements. A facilities’ certification of compliance for Medicare participation is sufficient for purposes of Medicaid participation. The impacted facilities and requirements are specified in Appendix Z of CMS’
State Operations Manual, available at https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/SurveyCertEmergPrep/Downloads/Advanced-Copy-SOM-Appendix-Z-EP-IGs.pdf.
|
| 9. |
Section 10.2.2.1 shall be amended and replaced in its entirety as follows:
|
| 10.2.2.1 |
The Contractor shall develop a training curriculum for Providers consisting of twenty (20) hours per year divided into five (5) hours per quarter. The curriculum
shall be submitted to ASES for review and prior written approval according to the timeframe specified in Attachment 12 to this Contract. ASES shall have the right to make recommendations or request coverage of specific topics for
inclusion in the curriculum. The Contractor is obligated to offer twenty (20) hours per year of Provider training of which fifteen (15) hours shall be considered mandatory at least every two (2) years. Trainings may be coordinated and
provided jointly with other Plan Vital contractors. Provider participation lists shall be shared with other Plan Vital contractors, and all mandatory training hours taken by Providers with other Plan Vital contractors shall be accepted by
Contractor as meeting the requirements of this section. The curriculum will focus on topics of importance to professional practice and Plan Vital requirements and participating Providers should be encouraged to attend trainings. The
curriculum shall include a description of how the Contractor will educate Providers on Contract requirements and shall also include, at a minimum:
|
| 10. |
Section 13.6.2 shall be amended and replaced in its entirety as follows:
|
| 11. |
Section 18.1.11 shall be amended as follows:
|
| 12. |
The table in Section 18.1.11 pertaining to the due date for Annual Report deliverables is amended and replaced in its entirety as follows:
|
| 13. |
Section 21.4 shall be amended and replaced in its entirety as follows:
|
| 21.4 |
The PMPM Payments shall be negotiated for every rating period covered by the Contract (namely from November 1, 2018 to October 31, 2019, November 1, 2019 to June
30, 2020, and July 1, 2020 to September 30, 2021). Any increase in the PMPM Payment shall be subject to ASES’s determination that the proposed new amount if actuarially sound.
|
| 14. |
A new Section 21.4.1 shall be inserted under the existing Section 21.4 as follows:
|
| (a) |
ASES shall continue to pay Contractors at the PMPM Payment rates that existed during the Expired Rating Period;
|
| (b) |
As soon as practicable, but in no event more than fifteen (15) days following the expiration of the Expired Rating Period, the parties shall complete in good faith
the review of updated PMPM Payments (the “Updated PMPM Payments”).
|
| (c) |
Following agreement upon Updated PMPM Payments, the parties shall execute an amendment to Attachment 11 of the Contract setting forth the Updated PMPM Payments.
Such amendment and the Updated PMPM Payments shall be effective as of November 1st 2019 as if the Updated PMPM Payments had been agreed upon at the expiration of the Expired Rating Period, provided that,
|
| (1) |
Notwithstanding the foregoing, because Updated PMPM Payment rates are subject to CMS and FOMB approval, ASES will continue to pay Contractors at the PMPM Payment
rates that existed during the Expired
|
| (2) |
within thirty (30) calendar days following CMS’ and the FOMB’s approval of Updated PMPM Payment rates, the Parties shall begin to reconcile any difference between
(i) PMPM Payments that ASES made to Contractors after the Expired Rating Period and (ii) Updated PMPM Payment rates.
|
| 15. |
Section 22.2.1 shall be amended and replaced in its entirety as follows:
|
| 16. |
Section 23.3.4 shall be amended and replaced in its entirety as follows:
|
| II. |
RATIFICATION
|
| III. |
EFFECT; CMS APPROVAL
|
| A. |
This Amendment, including any attachments, is subject to approval by the United States Department of Health and Human Services Centers for Medicare and Medicaid
Services (“CMS”), and ASES shall submit this Amendment for CMS approval.
|
| IV. |
AMENDMENT EFFECTIVE DATE
|
| V. |
ENTIRE AGREEMENT
|
|
/s/ Rafael Rodríguez Mercado
|
10/31/2019
|
||
|
Mr. Rafael Rodríguez Mercado, Board of Directors’ Chairman
|
Date
|
||
|
EIN: 66-0500678
|
|||
|
/s/__ Madeline Hernández Urquiza
|
10/31/2019
|
||
|
Ms. Madeline Hernández Urquiza, President
|
Date
|
||
|
EIN: 66-0555677
|
|||
|
|
Page 7 |
|
| 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:
|
November 7, 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: |
November 7,
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: |
November 7, 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: |
November 7,
2019 |
By: |
/s/ Juan J. Román-Jiménez | ||
| Juan J. Román-Jiménez | |||||
| Executive Vice President and Chief Financial Officer |
Realized and Unrealized Gains (Losses) (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 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:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Changes in Net Unrealized Gains (Losses) |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation |
9 Months Ended | ||
|---|---|---|---|
Sep. 30, 2019 | |||
| Share-Based Compensation [Abstract] | |||
| Share-Based Compensation |
Share-based compensation expense recorded during the three months ended September 30, 2019 and 2018 was $2,817 and $919, respectively. Share-based compensation expense recorded during the nine months ended September 30, 2019 and 2018 was $8,723 and $3,462, respectively. During the nine months ended September 30, 2019 and 2018, 602 and 24,796 shares, respectively, 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 September 30, 2019 and 2018.
|
Subsequent Events |
9 Months Ended | ||
|---|---|---|---|
Sep. 30, 2019 | |||
| Subsequent Events [Abstract] | |||
| Subsequent Events |
In October 2019, the Company’s Board of Directors authorized an expansion of the existing Class B share repurchase program, authorizing up to $25,000 in repurchases, effective hours after the publication of the press release issued on November 7, 2019 announcing the commencement of such program.
|
Pension Plan (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
|---|---|---|---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2019 |
Sep. 30, 2018 |
Dec. 31, 2018 |
|
| Components of net periodic benefit cost [Abstract] | |||||
| Interest cost | $ 1,748 | $ 1,713 | $ 5,230 | $ 5,099 | |
| Expected return on assets | (2,209) | (2,255) | (6,643) | (6,817) | |
| Amortization of actuarial loss | 98 | 240 | 277 | 670 | |
| Settlement loss | 555 | 395 | 1,305 | 1,045 | |
| Net periodic benefit cost | $ 192 | $ 93 | 169 | $ (3) | |
| Expected employer future contributions | $ 2,000 | ||||
| Employer contribution | $ 2,000 | ||||
Basis of Presentation |
9 Months Ended | ||
|---|---|---|---|
Sep. 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 nine months ended September 30, 2019 are not necessarily indicative of the results for the full year ending December 31, 2019.
|
Condensed Consolidated Statements of Earnings (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2019 |
Sep. 30, 2018 |
|
| Revenues: | ||||
| Premiums earned, net | $ 815,021 | $ 742,445 | $ 2,442,516 | $ 2,236,249 |
| Administrative service fees | 2,607 | 3,802 | 7,695 | 11,216 |
| Net investment income | 15,176 | 16,168 | 45,614 | 45,630 |
| Other operating revenues | 3,167 | 1,575 | 6,335 | 4,234 |
| Total operating revenues | 835,971 | 763,990 | 2,502,160 | 2,297,329 |
| Net realized investment gains (losses) | 1,087 | (956) | 4,766 | 1,065 |
| Net unrealized investment gains (losses) on equity investments | 1,267 | 5,632 | 24,259 | (11,343) |
| Other income, net | 485 | 1,943 | 3,359 | 3,600 |
| Total revenues | 838,810 | 770,609 | 2,534,544 | 2,290,651 |
| Benefits and expenses: | ||||
| Claims incurred | 680,010 | 648,580 | 2,009,504 | 1,959,707 |
| Operating expenses | 136,882 | 141,026 | 403,629 | 408,772 |
| Total operating costs | 816,892 | 789,606 | 2,413,133 | 2,368,479 |
| Interest expense | 2,062 | 2,000 | 5,681 | 5,515 |
| Total benefits and expenses | 818,954 | 791,606 | 2,418,814 | 2,373,994 |
| Income (loss) before taxes | 19,856 | (20,997) | 115,730 | (83,343) |
| Income tax expense (benefit) | 5,910 | (3,430) | 36,075 | (30,944) |
| Net income (loss) | 13,946 | (17,567) | 79,655 | (52,399) |
| Net (loss) income attributable to non-controlling interest | (2) | 0 | (10) | 1 |
| Net income (loss) attributable to Triple-S Management Corporation | $ 13,948 | $ (17,567) | $ 79,665 | $ (52,400) |
| Earnings per share attributable to Triple-S Management Corporation | ||||
| Basic net income (loss) per share (in dollars per share) | $ 0.59 | $ (0.77) | $ 3.44 | $ (2.27) |
| Diluted net income (loss) per share (in dollars per share) | $ 0.58 | $ (0.77) | $ 3.43 | $ (2.27) |
Segment Information (Tables) |
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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 nine months ended September 30, 2019 and 2018:
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| Operating Income (Loss) and Depreciation and Amortization Expense |
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| Assets |
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Claim Liabilities (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Claim Liabilities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reconciliation of Beginning and Ending Balances of Claim Liabilities | A reconciliation of the beginning and ending balances of claim liabilities is as follows:
* 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 September 30, 2019.
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Investment in Securities, Other Invested Assets - Alternative Investments (Details) - Other Invested Assets - Alternative investments [Member] - USD ($) $ in Thousands |
Sep. 30, 2019 |
Dec. 31, 2018 |
|---|---|---|
| Other invested assets - Alternative investments [Abstract] | ||
| Amortized cost | $ 94,338 | $ 72,627 |
| Gross unrealized gains | 3,445 | 2,042 |
| Gross unrealized losses | (699) | (654) |
| Estimated fair value | $ 97,084 | $ 74,015 |
Premiums and Other Receivables, Net |
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| Premiums and Other Receivables, Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Premiums and Other Receivables, Net |
Premiums and other receivables, net were as follows:
As of September 30, 2019, and December 31, 2018, the Company had premiums and other receivables of $57,430 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 September 30, 2019 and December 31, 2018 were $17,138 and $20,984, respectively.
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Pension Plan |
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| Pension Plan [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 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 September 30, 2019, the Company has contributed $2,000 to the pension program.
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Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2019 |
Sep. 30, 2018 |
Sep. 30, 2019 |
Sep. 30, 2018 |
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| Condensed Consolidated Statements of Comprehensive Income (Loss) Unaudited) [Abstract] | ||||
| Net income (loss) | $ 13,946 | $ (17,567) | $ 79,655 | $ (52,399) |
| Other comprehensive income (loss), net of tax: | ||||
| Net unrealized change in fair value of available for sale securities, net of taxes | 9,290 | (6,216) | 37,660 | (21,312) |
| Defined benefit pension plan: | ||||
| Actuarial loss, net | 61 | 147 | 173 | 409 |
| Total other comprehensive income (loss), net of tax | 9,351 | (6,069) | 37,833 | (20,903) |
| Comprehensive income (loss) | 23,297 | (23,636) | 117,488 | (73,302) |
| Comprehensive (loss) income attributable to non-controlling interest | (2) | 0 | (10) | 1 |
| Comprehensive income (loss) attributable to Triple-S Management Corporation | $ 23,299 | $ (23,636) | $ 117,498 | $ (73,303) |
Significant Accounting Policies |
9 Months Ended | ||
|---|---|---|---|
Sep. 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.
On March 5, 2019, the FASB issued guidance for Leases (Topic 842): Codification Improvements. The amendments in this update include issues brought to the FASB’s attention through interactions with stakeholders in order to clarify its intent when applying the guidance. The issues were: (1) determining the fair value of the underlying asset by lessors that are not manufacturers or dealers; (2) presentation on the statement of cash flows of sales type and direct financing leases; and (3) transition disclosures related to Topic 250, Accounting Changes and Error Corrections. The amendments in this update for Issue 1 affect all lessors that are not manufacturers or dealers. Issue 2 affects all lessors that are depository and lending entities within the scope of Topic 942, and Issue 3 affect all entities that are lessees or lessors. For public companies, the amendments for Issue 1 and Issue 2, will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The amendments for Issue 3 are effective to the original transition requirements on Topic 842 and were implemented in January 1, 2019. The adoption of this guidance did not have a material impact on the presentation of the Company’s consolidated result of operations.
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 pronouncements disclosed above, there were no other new accounting pronouncements issued during the three months and nine months ended September 30, 2019 that could have a material impact on the Corporation’s financial position, operating results or financials statement disclosures.
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