1171662--3/20/2007--TRIPLE-S_MANAGEMENT

related topics

{regulation, government, change}

{loss, insurance, financial}

{loan, real, estate}

{debt, indebtedness, cash}

{system, service, information}

{personnel, key, retain}

{capital, credit, financial}

{regulation, change, law}

{condition, economic, financial}

{interest, director, officer}

{operation, natural, condition}

{operation, international, foreign}

{control, financial, internal}

{acquisition, growth, future}

{financial, litigation, operation}

Heirs of certain of our former shareholders may bring materially dilutive claims against us. Risks Related to Our Business Our inability to contain managed care costs may adversely affect our business and profitability. Our inability to implement increases in premium rates on a timely basis may adversely affect our business and profitability. Our profitability may be adversely affected if we are unable to maintain our current provider agreements and to enter into other appropriate agreements. A reduction in the enrollment in our managed care programs could have an adverse effect on our business and profitability. We are dependent on a small number of government contracts to generate a significant amount of the revenues of our managed care business. A change in our managed care product mix may impact our profitability. Our failure to accurately estimate incurred but not reported claims would affect our reported financial results. The termination or modification of our license agreements to use the Blue Shield name and mark could have an adverse effect on our business, financial condition and results of operations. Our ability to manage our exposure to underwriting risks in our life insurance and property and casualty insurance businesses depends on the availability and cost of reinsurance coverage. If our reinsurers do not pay our claims or do not pay them in a timely manner, we may incur losses. As a holding company, we are largely dependent on rental payments, dividends and other payments from our subsidiaries, although the ability of our regulated subsidiaries to pay dividends or make other payments to us is subject to the regulations of the Commissioner of Insurance, including maintenance of minimum levels of capital, as well as covenant restrictions in their indebtedness. Our results may fluctuate as a result of many factors, including cyclical changes in the insurance industry. We may be subject to regulatory and investigative proceedings, which may find that our policies, procedures and contracts do not fully comply with complex and changing healthcare regulations. As a Medicare Advantage program participant, we are subject to complex regulations. If we fail to comply with these regulations, we may be exposed to criminal sanctions and significant civil penalties, and our Medicare Advantage contracts may be terminated. The revised rate calculation system for Medicare Advantage established by the MMA could reduce our profitability. CMS s risk adjustment payment system and budget neutrality factors make our revenue and profitability difficult to predict and could result in material retroactive adjustments to our results of operations. If during the open enrollment season our Medicare Advantage members enroll in another Medicare Advantage plan, they will be automatically unenrolled from our plan, possibly without our immediate knowledge. We face intense competition to attract and retain employees and independent agents and brokers. Our investment portfolios are subject to varying economic and market conditions. The geographic concentration of our business in Puerto Rico may subject us to economic downturns in the region. We may not be able to retain our executive officers and significant employees, and the loss of any one or more of these officers and their expertise could adversely affect our business. The success of our business depends on developing and maintaining effective information systems. We are required to evaluate our internal control over financial reporting under Section 404 of Sarbanes Oxley, and any adverse results from such evaluation could result in a loss of investor confidence in our financial reports and have an adverse effect on our stock price. We face risks related to litigation. Large-scale natural disasters may have a material adverse effect on our business, financial condition and results of operations. Covenants in our credit agreements and note purchase agreements may restrict our operations. We expect to pursue acquisitions in the future. Risks Relating to the Regulation of Our Industry Changes in governmental regulations, or the application thereof, may adversely affect our business, financial condition and results of operations. If we are deemed to have violated the insurance company change of control statutes in Puerto Rico, we may suffer adverse consequences. Our insurance subsidiaries are subject to minimum capital requirements. Our failure to meet these standards could subject us to regulatory actions. We are required to comply with laws governing the transmission, security and privacy of health information.

Full 10-K form ▸

1171662--3/20/2007--TRIPLE-S_MANAGEMENT_CORP